Although the ACA is still the law of the land—despite being somewhat dismantled, other healthcare policies continue to take shape and are being implemented. Here, healthcare experts detail three policies that MCOs will want to keep a close eye on.
Short-term Limited Duration Coverage Final Rule
What it is: The Department of Health and Human Services, Labor, and Treasury issued a final rule that lengthens the time period that short-term, limited-duration health plans can remain effective from three months to three years. The August 1 ruling was developed in response to an executive order by President Trump in October 2017 that directed the federal government to expand access to short-term plans, association health plans, and health reimbursement arrangements, says Susan Feigin Harris, JD, partner at the law firm Morgan Lewis.
Short-term plans are intended to fill gaps in coverage that may occur when an individual is transitioning from one plan or coverage to another one, such as being in between jobs or needing coverage outside of an enrollment period, Feigin Harris says. These plans are exempt from federal market requirements that are applicable to health insurance sold on the exchange, because they aren’t considered health insurance.
Status: Although some states requested a delay in implementation to allow them to put certain protections in place, “CMS appears to have ignored this request, as the rule becomes effective 60 days after publication in the Federal Register,” Feigin Harris says.
Potential implications: As a result of the final rule, short-term, limited-duration health plans can now be offered for 12 months at a time with renewals that do not exceed 36 months. “Short-term issuers can charge higher premiums based on health status, exclude coverage for pre-existing conditions, or emergency room care, impose lifetime or annual caps, opt not to cover certain conditions and benefits, rescind coverage, and require higher out-of-pocket costs,” says Feigin Harris.
With the expansion of short-term, limited duration coverage, Feigin Harris predicts a higher incidence of consumer confusion over what type of coverage they are purchasing and a fear by industry providers that patients who think they have coverage may not be aware of growing limitations in coverage and payment obligations. “There will likely be a higher incidence of uninsured and underinsured individuals, as well as bad debt in obtaining and paying for healthcare coverage, especially emergency coverage,” she says.
In HHS’ and Department of Labor and Department of Treasury’s comments on the ruling, the agencies note that the rule could lead to further worsening of the marketplace risk pool by keeping healthy individuals out of the individual market for longer time periods, increasing premiums for individual market plans, and possibly causing an increase in uninsured individuals.
Feigin Harris expects these plans will indeed make it more expensive to provide health insurance on the market if young, healthy individuals abandon the market in favor of short-term limited duration plans due solely to cost. “With sicker patients who need access to the full protections afforded by insurance sold on the exchange, costs will rise, leading to what some economists have termed the ‘death spiral’ in insurance rates,” she says.
Telehealth Coverage Proposal
What it is: CMS issued an annual proposed Physician Fee Schedule on July 12 that included expanding telehealth options using communication technology.
Specifically, CMS recommended new billing codes to permit physicians to conduct virtual check-ins (i.e., brief phone or video calls) to assess whether an in-person visit is required and use asynchronous “store and forward” communications—in which patients upload basic medical history and clinical information via pictures or videos on a web-based platform, says Joyce Cowan, JD, a partner at Morgan Lewis.
The proposal is CMS’s first major foray into expanding telehealth services since the 2008 Medicare Improvements for Patients and Providers Act. “In the past decade, both providers and consumers have clamored for greater access to telehealth services,” Jacob Harper, JD, an associate at Morgan Lewis, adds. “States and insurers have recognized the value of expanding telehealth access and coverage, however, CMS has been limited by its existing statutory structure that covers (and pays for) telehealth services only when a patient is in an originating site that is located in a county outside a metropolitan statistical area or in a rural health professional shortage area.” Because of the existing statute that CMS must follow, it cannot alter the current telehealth requirements. Instead, it is creating a new category of telehealth-like services that it posits don’t fall under that statutory restriction.
Furthermore, the existing statute effectively permits only live audio-visual interactions, so CMS can’t alter that requirement for existing services either. This has largely limited Medicare coverage of telehealth services to inpatient specialist consults (i.e., a patient with heart disease in a rural Wyoming hospital might receive a cardiac consult from a specialist in New York). While commercial insurers have covered ailments that providers treated via telehealth, Medicare has not. The proposed rule establishes a separate category of services that skirt around this existing requirement.
“Now, perhaps taking a signal from Congress’s passage of the Bipartisan Budget Act of 2018 (which gives great flexibility to Medicare Advantage plans to provide telehealth services starting in 2020), CMS has acted,” Cowan says. “If finalized, the rule could give Medicare Advantage plans new tools to control unnecessary costs and promote increasing care coordination through more frequent patient communication.”
Status: The Final Rule will likely come out in late October or early November, Cowan says.
Potential implications: “If adopted, CMS anticipates that these new services will incentivize physicians, particularly those monitoring established patients with chronic conditions, to treat patients without having an office visit,” Cowan says. “Many managed care organizations have recognized that telehealth helps avoid unnecessary in-person services.”
If a doctor thinks a complaint during a virtual check-in is serious enough to warrant an in-person visit, the patient is scheduled for an appointment and the virtual encounter is bundled into the in-person emergency and management code. However, if the physician can address the patient’s needs virtually, the provider would receive separate, albeit much lower, payment.
“Although all states don’t permit this technology, CMS’s blessing will likely compel universal adoption of this technology everywhere,” says Jacob Harper, JD, an associate at Morgan Lewis. “These technologies enable doctors to provide primary care services in a highly cost-effective manner.”
Hospital Safety Reporting Ruling
What it is: In May, CMS announced that it would no longer report 18 key quality and patient-safety indicators, such as hospital-acquired infections, to the Hospital Inpatient Quality Reporting Program (IQRP). “This was concerning to payers and consumer groups, because it would limit transparency in hospital operations and make it more difficult for them to make informed judgments about the quality of services offered at hospitals,” says Robert H. Iseman, Esq, partner at the law firm Rivkin Radler LLP. The reports had been made to IQRP since the George W. Bush administration.
But those concerns were dissipated when CMS announced on August 2 that the same information will be made available through Hospital Compare, a website developed by the Medicare program in conjunction with consumer advocates, Iseman says.
Status: CMS delayed implementing the rule until August 2019 in order to put the new public reporting procedures in place. “CMS attempted to save hospitals the cost of duplicate reporting by no longer requiring the subject metrics and reports to be made as part of IQRP, while ensuring transparency by making the information publicly available elsewhere,” Iseman says.
Potential implications: Leah Binder, MA, MGA, president and CEO, The Leapfrog Group, which promotes transparency of patient safety and healthcare quality data for consumers, payers, and purchasers, says CMS will also include these patient safety and infection measures in its Value-Based Purchasing (VBP) Program as well as the Hospital-Acquired Condition (HAC) Reduction Program. “This means hospitals will continue to receive payment incentives for these measures in both programs established under the ACA,” Binder says.
The new regulations preserve complete information to consider when entering into contracts with health systems. Risk-adjusted infection rates and patient safety indicators are not replicable by individual payouts, so CMS’ requirement to report them is a critical tool for payers, Binder says.
According to a CMS spokesperson, “It is important for all Hospital Compare users, including payers, to know that they will see no difference in the publicly reported data for these measures when they are removed from the Hospital IQR program and remain solely in the HAC Reduction Program and VBP.”
Karen Appold is a medical writer in Lehigh Valley, Pennsylvania.