Kayt Sukel

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One of the main goals of the ACA, sometimes referred to as Obamacare, was to provide affordable health insurance to every American.

The law’s passage in 2010 made it possible for nearly 54 million Americans-previously denied coverage due to pre-existing medical conditions-to purchase coverage, as well as landmark provisions to protect those who developed an expensive medical condition while insured from being unexpectedly dropped by their health plan.

By all accounts, such provisions helped a record number of Americans procure medical insurance coverage-and, by extension, reduce healthcare costs and avoid medical bankruptcies.

Yet, with the elimination of the individual mandate penalty in 2017, and other policy changes that have forced up the cost of premiums, many Americans are looking for options off the healthcare exchange.

One such option is the short-term limited duration insurance (STLDI) plan, loosely defined as bare bones medical coverage that can last up to 12 months with the potential for renewal. 

® Editorial Advisor Margaret Murray, chief executive officer of the Association for Community Affiliated Plans (ACAP), said such plans “are not really insurance,”-and refers to them as “junk insurance.” With a new 2018 HHS rule that dramatically expands access to this type of coverage, she worries that their availability will hurt consumers.

Private Insurance’s Costs are Skyrocketing

“Insurance brokers may offer these plans to consumers and those consumers may not realize that they largely reverse ACA protections regarding pre-existing conditions and coverage limits,” she says. “These plans don’t cover what you think they will cover, the insurance companies can cancel your policy at any time, and they can deny your access to maternity care and certain drugs. It’s not really major medical insurance and it’s not always easy for your average consumer to see that.”

The Trump Administration contends, with rising insurance premiums, that such short-term plans make health insurance more affordable for the average American.

Cathryn Donaldson, a spokesperson for America’s Health Insurance Plans, a health insurance trade association, says such plans “can provide a temporary bridge for those who are going through a life transition or gap in coverage such as having a baby or changing jobs.” 

Yet, Karen Pollitz, a senior fellow at the Kaiser Family Foundation, says STLDI plans embody the old adage about getting what you pay for. STLDI are not required to comply with many of the ACA’s most important protections, which means insurance companies can exclude coverage for pre-existing conditions, charge higher premiums based on health status, impose annual and/or lifetime caps, and opt out of coverage for things like maternity care or mental health treatment. They can also revoke coverage at will.

“Under the ACA, it used to be that short term and minimum essential coverage [MEC] policies had to have a prominent warning printed on the front place that said, if you buy this, you are not getting full coverage and may even owe a tax penalty,” she explains. “Those warnings are no longer there and that’s of concern.”

Furthermore, late last year, HHS put forth a final rule extending the duration of STLDI from a mere three months up to 364 days. In addition, insurers can offer renewals and extensions for up to three years. What is even more concerning, Murray says, is the current Administration is now actively promoting the use of private web broker sites to market STLDI. This can make it more difficult for consumers to understand which plans offer comprehensive medical coverage and which are the riskier STLDI plans.

“The current administration says such plans offer consumers more affordable options-and more choice,” Murray explains. “But the marketing for these plans is really disingenuous. It’s not just that they are just short-term. They don’t cover what people think they will cover. They are very profitable for insurance companies. But they can be very costly for consumers, who likely won’t realize they don’t have comprehensive coverage until they are sick or injured.”

Over the past few months, several high-profile publications like 

 have printed stories about the dangers, and unexpected costs, of STLDI for consumers.

“It’s like you are in the market for a car and someone offers you a really affordable roller-skate,” says Pollitz. “But a roller-skate is not the same thing as a car. It’s not going to get you as far if you really need to travel. And it’s going to cost you more in the long run.”

Murray also cautions more widespread adoption of such plans can affect the entire insurance market, siphoning cost-conscious consumers from risk pools and driving up premium costs for everyone.

“There are always some young invincibles, who think they won’t get sick-and there are some invincibles, too-and they will be attracted by the lower premiums,” she says. “But in doing so, that will leave people who are sicker to pay higher rates by moving people out of the ACA marketplace.”

That’s one reason why ACAP, as well as six other health organizations, filed a lawsuit in the U.S. District Court for the District of Columbia on September 14, 2018 in order to roll back the new STLDI rule and stop the expansion of such plans. Murray said the HHS rule violates the ACA, “undercutting plans that comply” with the still active legislation. They argue the Trump Administration is using these new rules to try to overturn the ACA-which they have not yet been able to successfully repeal in Congress.

“We thought this was important enough that it was worth suing the federal government in order to try and stop it,” she says. “We had hoped to get a summary judgment last year because we wanted to stop the spread of STLDI plans for the 2020 open enrollment. Unfortunately, we didn’t get that. The judge ruled against us. But we are appealing it-and the hope is that we will have a decision to stop these things being sold in 2021.

Donaldson says it is vital the healthcare community educate consumers about the risks of STLDI plans and make sure they are better aware of what sort of comprehensive plans are available on the Healthcare.gov marketplace.

“While alternative plans such as association health plans and STLDI may present more affordable premiums, they are not a replacement for comprehensive coverage and may not cover the treatments or prescriptions an individual may need throughout the year,” she says.

“We understand that life happens and there may be all manner of reasons why you are separated from coverage,” she says. “But it is becoming harder and harder to distinguish these plans from real coverage especially now that they are now being aggressively marketed to people all over the country. And it’s vital that people understand that 90% of consumers will play less than the listed price on Healthcare.gov marketplace because they qualify for subsidies. It really does pay to take the time to look before you sign up for one of these short-term plans.”

Kayt Sukel is a science and health writer based outside Houston.

Articles

More consumers are purchasing short-term limited duration insurance plans-which will likely have long-lasting effects to consumers and the insurance market as a whole.

Fighting for Coverage

In yet another blow to the ACA, the U.S. Court of Appeals for the 5

 Circuit ruled the individual mandate, or the law’s requirement that individuals have healthcare coverage, is unconstitutional. In addition to this long-awaited decision, the panel also stated it will send the case back down to a lower court in order to determine whether the law can stand without the individual mandate provision. Legal and healthcare experts believe this move all but ensures that this case will eventually end up on the Supreme Court docket-and continued uncertainty for tens of millions of Americans who rely on the law for health insurance as the suit winds its way through the courts.

Filed in early 2018 on behalf of a group of Republican governors and state attorneys general, 

 made the argument that Congress’ elimination of a tax penalty for not having insurance, the ACA’s stick to help enforce coverage, rendered the law unconstitutional. They stated that, as the 2012 Supreme Court decision upholding ACA did so on the basis of Congress’ constitutionally mandated taxing powers, the lack of a tax penalty makes all the tenets of the healthcare legislation null and void. A U.S. District Judge, Reed O’Connor, agreed with that argument late last year, ruling the entire law unconstitutional. The ruling was immediately appealed to the higher court by a coalition of Democratic-led states.

Fewer Americans See Healthcare In Crisis Mode

In yesterday’s decision, two of the Republican-appointed judges on the 5th Circuit panel stated that Americans cannot be compelled to buy healthcare coverage as “the attributes that saved the statute because it could be read as a tax no longer exist.” Yet, the judges did not fully support O’Connor’s read of the case. As such, they will be returning the suit back to U.S. District Court for the Northern District of Texas to answer two key questions: First, which parts of the ACA “are indeed inseverable” without a tax-enforced mandate and, second, whether the ruling should only apply to the Republican-led states that brought the original suit to overturn the law.

California Attorney General Xavier Becerra, who leads the group who is working to save the health law, has already announced that he will appeal the decision to the Supreme Court. Supporters of the law say, even without the tax penalty, the law works well and is helping millions of Americans lead healthier lives. They hope that the Supreme Court will see that and rule for the ACA.

But nothing is certain. To date, the highest court in the land has upheld the ACA in two separate cases. But with the addition of two new Trump appointees, a third legal victory is nowhere near guaranteed -and any changes to the law could have widespread implications for the entire healthcare industry, especially around the ACA’s protections for pre-existing conditions and lifetime caps for coverage.

A new ruling on the ACA adds more uncertainty about the law’s future.

ACA in Limbo After New Individual Mandate Ruling

Digital health, or the use of technology to help enhance healthcare – from the back office to the examining room-has long been heralded as a way to help improve patient outcomes as well as lower healthcare costs. Yet, to date, digital health partnerships have not yielded as much value as anticipated. A new survey, sponsored by global law firm, Ropes & Gray LLP, and conducted by Crain’s Custom Studio, Crain’s New York Business’s content marketing division, entitled 

From Innovations to Solutions: Building Strategic Partnerships in an Evolving Digital Health Landscape

, suggests serious disconnects between healthcare organizations and technology companies-disconnects which result in provider organizations and other life sciences companies being unable to recoup the value, and coveted payer reimbursements, they seek.

Christine Moundas, partner with Ropes & Gray’s healthcare practice group, says the law firm was inspired to conduct the survey as digital health is becoming an increasing area of interest for a wide array of their clients, ranging from healthcare providers and life sciences organizations to technology companies and private equity investors.
	
	“It’s an area that has had a ton of movement in the past several years and we’ve now seen some very interesting new partnerships between healthcare and life sciences organizations with technology companies,” she explains. “We felt it would be a good time to step back to assess the pertinent issues surrounding digital health and how they may be affecting the industry as a whole.”

The survey, which received responses from 284 individuals representing both healthcare organizations and digital health vendors, most of whom held senior management positions, demonstrated that 60 percent of respondents felt that healthcare’s “strongly entrenched business and reimbursement models” make it difficult to bring successful digital health products to market. In addition, nearly half of the survey respondents stated technology companies do not understand the healthcare market-which also impedes that success. When asked about the greatest obstacle to pursuing digital health solutions, 18 percent selected lack of reimbursement by insurers and payer organizations – and an additional quarter of respondents said reimbursement issues also obstruct digital health partnerships.

Moundas says that many of the responses were not so surprising, given what she and other attorneys in Ropes & Gray’s Digital Health practice see on a regular basis but she said it was “heartening” to see so much consensus across the survey.

Physician Consolidation Leads to Higher Healthcare Costs

“Respondents, regardless of industry, all circled around the same kinds of issues when they expressed their take on challenges to digital health adoption and partnerships,” she says. “They agreed the major roadblocks continue to be evidence of efficacy, meeting regulatory and compliance requirements, and data security and privacy standards. That gives us some clear takeaways on what the industry needs to work on to go forward-and what companies who are considering digital health partnerships need to think through as they structure these arrangements.”

Reimbursement issues also came up again and again as an impediment to digital health.  Moundas says while the different players in digital health may have different concerns about current reimbursement streams, they are all very interested in ways to make these kinds of initiatives provide the greatest value.

“Electronic health records were funded by the American Recovery and Reinvestment Act of 2009, which created a funding stream for providers to adopt them,” she says. “But for other digital health opportunities, ranging from health information exchanges or digital health apps, there’s not a clear path to creating a sustainable business model. And both provider organizations and technology companies are really struggling with that-and it’s an ongoing issue that will have to be addressed. Right now, we have a bit of a chicken-and-egg problem where many are nervous to get into the digital health area because they can’t make a business case with current reimbursement streams. And changing reimbursement decisions can’t happen, naturally, until there’s enough adoption to show that the value is clear.”

That’s why Moundas says it is so important for organizations across the digital health space to continue to work through the identified challenges to find a path forward for building these strategic partnerships.

“Digital health is a complex undertaking, but it is one with tremendous promise for value,” she says. “It’s where the industry is headed. So, we are advising all involved to think carefully about these challenges and obstacles and look to the successful models that are already out there, so they can find their own way forward. When these partnerships are done right, they really do have tremendous value.”

A recent study suggests healthcare organizations see reimbursement concerns-as well as differences in business culture – as roadblocks to embracing digital health partnerships.

Reimbursement Remains a Barrier to Digital Health Adoption 

, French researchers from Inserm and public assistance hospitals in Paris found that a pediatric patient’s socioeconomic status is strongly linked to length of stay and the overall cost of care. They suggested that reforming hospital payments to offset such social determinants of health (SDoH) could both help hospitals reduce their costs while improving the quality of care for such vulnerable patients.

While it might be easy to say France’s healthcare system is too different to draw comparisons, Matthew Davis, MD, MAPP, interim chair, department of pediatrics, Ann & Robert H. Lurie Children’s Hospital of Chicago and Northwestern University Feinberg School of Medicine, and colleague Kristin Kan, MD, MPH, MSc, published 

an invited commentary in the same journal issue arguing

 that the United States could also benefit from adjusting Medicaid payments in order to better provide care and support to lower income pediatric patients.

“If the healthcare industry does not consider social determinants of health, the industry will continue to ignore a major influence on patterns of health and health care utilization,” Davis says. “Over the last 10 to 20 years, the healthcare industry has invested healthy in analytics and interventions that try to leverage typical tools of healthcare itself. While those will continue to be important going forward, the leaders in the healthcare industry will be the ones who are able to distinguish themselves by understanding social and environmental influences on child and adult health-and acting to address them in partnership with patients and providers.”

Recent evidence suggests the absence of SDoH considerations in reimbursement models fundamentally distorts payment patterns for the hospitals that are more likely to serve more economically disadvantaged populations. Davis said this is a big problem-and one that has many unintended consequences for balancing costs and care.

“When such hospitals-which often are academic medical centers-experience payments that are lower than needed to appropriately care for individuals at socioeconomic disadvantage, then the academic resources and medical know-how of such institutions are put at risk for 

 socioeconomic strata, not just the populations that are socioeconomically disadvantaged,” he says.

Missed Savings from Mergers and Acquisitions

The answer, Davis and Kan stated, is to find ways to amend Medicaid reimbursements to include these vital SDOH factors. While Davis admitted that including such SDoH in reimbursement strategies remains a challenge, especially considering that most current reimbursement systems do not incorporate data about social factors for patients, making adjustments to add in that information should be relatively straightforward.

 “It’s highly likely that a payer will know the ZIP code of a residence for the patient,” he says. “The ZIP code is an extraordinarily informative connector to many social determinant measures such as poverty, education, employment, and access to healthy foods.”

Davis said that payer organizations will play a central role in implementing the kinds of changes that will allow SDoH to be addressed in reimbursements, considering they largely control the mechanics of reimbursement. But he said policy makers and hospital industry itself could also help ensure that the market makes room for different reimbursement arrangements that take SDoHs into account.

“If the potential policy remedies depend exclusively on legislative or regulatory changes in order to occur, then it is possible they could take effect with such policy advances in a short time period-as soon as a year or two, depending on policymakers’ priorities,” Davis says. “On the other hand, if the healthcare industry itself recognizes and leverages the value of considering social determinants of health in reimbursement arrangements, then the market may drive the adoption of SDoH in reimbursement even faster and farther than policy change alone could accomplish.”

Regardless, Davis and Kan said that it critical that the industry moves toward including consideration of SDoH into future payment models-to both lower costs and help patients.

“Considering SDoH in reimbursement presents an appealing opportunity not only to address inequities in reimbursement for hospitals, but also to make certain that hospitals that serve patients at high risk for poor health continue to have access to hospitals that are most accustomed to serving them,” Davis says.

Could per-person adjustments to Medicaid payments help better address social inequalities that affect overall health?

Considering Social Determinants of Health in Reimbursement

Earlier this month, CMS released the much anticipated 

final calendar year (CY) 2020 rule for the Medicare Outpatient Prospective Payment System (OPPS)

. While many were expecting specific guidance regarding CMS’s controversial proposal for greater hospital pricing transparency regarding privately negotiated rates within the rule-in fact, per the American Hospital Association (AHA), hospitals have already committed resources to complying with the new proposal requirements-the new conditions were noticeably absent. Instead, CMS briefly acknowledged pricing transparency in a few sentences, noting that the agency was still considering the many messages it received regarding the proposed final rule during an open comment period.

Lovisa Gustafson, MBA, assistant vice president at the Commonwealth Fund, says there was a lot of speculation on why the provisions were missing from the CY 2020 OPPS final rule.

“In terms of the transparency requirements being pulled out as a stand-alone rule, the truth is we didn’t know the exact reason,” she says. “Many speculated that it was to partition the broader CY 2020 rule from the complexity, and potential legal challenges of the transparency provisions.”

Yet, just two weeks later, on November 15, 2019, 

CMS unexpectedly dropped the final ruling regarding hospital transparency

new proposed transparency provisions regarding coverage for insurers

In a public announcement of the two rules

, HHS Secretary Alex Azar called the provisions “revolutionary changes for our healthcare system.”

"Today's transparency announcement may be a more significant change to American healthcare markets than any other single thing we've done, by shining light on the costs of our shadowy system and finally putting the American patient in control,” he said.

The requirements still include a publication of price lists as well as privately negotiated rates between hospitals and insurers on 300 shoppable healthcare services. While CMS said it was carefully reviewing the more than 1,400 comments it received on the proposed rule-notes cautioning that the provisions would not decrease healthcare costs and would likely hurt the very consumers the government claimed they are supposed to help-the final rule was nearly indistinguishable from the proposed version.

“The rule is pretty consistent with the original,” says Gustafson. “They are giving hospitals a bit of time for the provisions to take effect, waiting until 2021, because they understand there is a lot that hospitals will need to do to conform to the new rules. But they certainly were not watered down, which can sometimes happen with lobbying or review of comments during the comment period.”

While many were surprised by Friday’s announcement, Gustafson says that there were hints CMS was thinking about expanding the requirements to apply to payers. As Seema Verma, the Administrator of CMS, recently noted in an interview with the 

, the agency would prefer “a less disjointed approach,” indicating the agency was working on a combined plan that would include provisions to both provider and payer organizations. The proposed coverage requirements include giving consumers “real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability,” as well as providing a public website to share negotiated rates for in-network and out-of-network providers. The proposed rule, like the previous hospital transparency rule, is now open for public comment.

While Gustafson says there was already uncertainty across the industry about the potential fall-out for the hospital transparency rules even before they were finalized, there remains quite a bit of ambiguity about how it, as well as its insurance counterpart, will affect the healthcare market now that they’ve been given the green light.

“There are people who have very different views on what will happen when these prices become transparent,” she says. “Economic theory would say that price competition should lead to lower prices over time, which is good for consumers. And there are a number of different ways this information could be used, say by employers, to improve plans and lower the cost of care. But the truth is, we just don’t know. We have never had this kind of price transparency before. And we don’t know what the effects may be because we haven’t had a controlled experiment to see how it might affect the healthcare market. We will just have to wait and see.”

CMS has put forth pricing transparency provisions for both hospitals and insurers – but what will they really mean for healthcare?

Continued Uncertainty Regarding Hospital Pricing Transparency 

As such, both payer and provider organizations are looking for creative, sustainable ways to reduce waste and improve the quality of care for patients, especially those who are living with chronic or complex medical conditions. With CMS already collecting data for its first oncology performance measure, 

OP-35: Admissions and Emergency Department Visits for Patients Receiving Outpatient Chemotherapy

, which will affect payments come 2020, many healthcare organizations are taking a long, hard look at where they can prevent, or at least significantly reduce, cancer readmissions.

It’s not a surprise. As noted by the Agency for Healthcare Research and Quality (AHRQ), hospital readmissions, regardless of condition, are remarkably expensive, with collective costs hovering just over $41 billion a year for patients who return to the hospital within 30 days of discharge. But Alok Khorana, MD, a medical oncologist at the Cleveland Clinic, says readmissions are becoming more of a focal issue for cancer care, as more patients are treated in an outpatient setting.

“In the past, cancer patients were generally admitted while they were worked up, staying in the hospital for 10 to 14 days,” he explains. “Today, there is pressure to make hospital stays as brief as possible, which means that many patients are discharged without all of their issues being completely resolved. Since cancer is such a complex condition, with both acute and chronic elements, we often see that readmission rates in the cancer population are higher than those in the general medical population.”

But given cancer’s complexity, what can healthcare stakeholders across the industry do to better prevent cancer readmissions?

Given how little time patients stay in the hospital today, the Cleveland Clinic embarked on a process improvement project to improve outpatient care transitions. Khorana says the project started as a way of looking at “common sense” steps to reduce readmissions. He said their first lesson learned what that a significant portion of cancer readmissions are simply inevitable given this disease’s level of complexity.

“This is important for regulators and for payer organizations to understand,” he says. “In many cases, readmission is the right thing to do for patients. It cannot be avoided no matter what the provider may do.”

Yet, to help reduce the number of readmissions in cases that were preventable, he and his colleagues focused on improving care transitions, providing patients with more support once they were discharged.

How Current Accreditation Approaches Impact Reduction of Hospital Readmissions

“Cancer patients receive really intensive care while they are in the hospital, from a variety of different clinical staff,” he explains. “The key is to not take all of that away once they went home. We started a program where an oncology nurse checked in with patients within 48 hours of discharge, and then they had a follow-up appointment with the provider within five days of discharge, to help provide continuity of care and answer any questions. We discovered that there were a lot of areas where we could help prevent readmissions just by adding in those extra contacts.”

In fact, by putting this standardized discharge protocol in place, the Cleveland Clinic was able to reduce the readmission rate in medical oncology by approximately 4.5%. 

“It was a modest improvement-but a sustainable one,” he says. “In terms of dollars, we are talking about millions of dollars in savings over the long term. And the patients, of course, have the benefit of not ending up back in the hospital.”

But, given that some cancer readmissions are unavoidable, how might healthcare organizations better predict who is at the highest risk of a readmission?

Carl Schmidt, MD, a surgical oncologist formerly at Ohio State University College of Medicine who is now based at West Virginia University Cancer Institute, hoped to develop a model that could estimate the risk of readmission for individual patients. With such a model in place, oncologists could better determine where to best put care management resources after discharge.

“In our original analysis, we estimated that probably about 1 in 5 readmissions was preventable,” he says. “So, in that 20%, there may be things we can do to stop them from happening. Those patients may just need more interventions. But since some of those interventions are costly, you don’t want to give them to everyone. You want to figure out who really needs them.”

He and a team of colleagues developed a logistic regression model using high-risk factors including abnormal sodium levels, low white blood cell count, solid malignancy, and emergency department visits, among others. When they validated the model, it could reliably predict which patients would go on to be readmitted with about 70% accuracy. He believes future models could use artificial intelligence (AI) tools to improve that percentage.

“Our model was pretty simple, but it still allowed us to flag patients who might need some additional support,” he says. “But healthcare organizations, particularly academic centers with the resources, could come up with a better predictive model using neural networking or other AI methods that offer more precise predictions.”

Justin Bekelman, MD, a radiation oncologist at the University of Pennsylvania’s Perelman School of Medicine who has studied how to be reduce unplanned acute care for patients with cancer, including hospital readmissions, says there is a huge opportunity for healthcare stakeholders to think creatively about how address cancer readmissions. He agrees with Schmidt that predictive analytics will likely play an integral role.

“Today, there are not truly validated predictive analytics that can identify patients who are at the highest risk of readmission,” he says. “But in addition, healthcare organizations can also use those kind of big data approaches to simple find ways to dramatically improve the care of patients with cancer-that will reduce readmissions, too.”

Bekelman, as well as Schmidt and Khorana, all argue that addressing this issue isn’t something that healthcare organizations can do alone. There is a role for payers, too-either by funding larger scale research efforts or by providing predictive models and tools for their provider partners to use to improve care for this patient population. Jessica Saba, PharmD, director of Value Based and Population Health at Highmark, Inc., a large Blue Cross Blue Shield plan serving Pennsylvania, West Virginia, and Delaware, says it’s certainly something that health plans like hers are actively working on.

“Cancer care, traditionally, represents quite a large bit of healthcare spend-and there are many direct and indirect ways to try to manage that,” she says. “And, certainly, analytics is an emerging area for Highmark and we are looking at ways that data can help. We are working quite hard to provide more tools and insights to our physician partners so they can more effectively manage these cases.”

For his part, Schmidt says he is buoyed by the amount of academic research being done on this issue. And he hopes that healthcare organizations, both of the provider and payer variety, are not only paying close attention to the studies-but looking for ways that they can get involved to help.

“This is about a lot more than just readmission numbers,” he says. “Trying to reduce them in payer contracts or with quality metrics that say something like, ‘Oh, you need to drop your readmission rate from 14% to 13.2%,’ isn’t going to work. Healthcare stakeholders need to collaborate and come up with better, smarter models so we can understand and undertake evidence-based measures that will provide the best quality care for our patients-and, with that, reduce readmissions along the way.”

As more healthcare organizations look to curb hospital readmission rates, they are taking a hard look at one of medicine’s most complex conditions-cancer.