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16
AUG
2013

Insurance Exchange

 THE INSURANCE EXCHANGE

August 15, 2013

Harold Ingram

 

Enrollment will begin October 1, 2013, in the federally administered Insurance Exchange for Mississippi.  Currently there are still a lot of questions to be answered.  How much will insurance cost through the Exchange?  Will there be only two insurers to participate?  Will patients have to give up current insurance plans because of the Affordable Care Act (ACA) and participate in the Exchange?  Is a provider required to participate?  Who will be the “Navigators” to help enroll people in the Exchange?

One of the objectives of the Exchange is to provide individuals and families without insurance coverage the opportunity to obtain coverage at a competitive price.  Under the program, individuals would be placed in a pool large enough to share risk across a broader spectrum of patients and thereby command lower premiums. The key to this philosophy is the requirement for younger, healthier people to enroll.  However, reduced premiums may not actually be realized.  Other aspects of the ACA affecting coverage requirements may influence a rise in insurance costs, especially for those people with high deductibles and limited coverage plans.

The Exchange offers insurers the opportunity to offer four different levels of coverage at varying levels of expense to people seeking coverage through the Exchange.  Also, there will be subsidies to patients based upon income level.  The individual expense for the levels of coverage have not been set at this time.

Currently, two insurers, Humana and Magnolia Health Plans (Centene), have agreed to participate.  However, the only counties in which both will offer coverage are Desoto, Hinds, Madison, and Rankin.  Included in Appendix A is a list of the counties covered by each carrier.

The Humana plan will be administered through First Choice.  Providers currently enrolled with First Choice received letters earlier indicating that First Choice would have a network company that would be participating in the Exchange.  At that time, the carrier was not identified.  The letter indicated that unless a provider specifically opted  out, it would be assumed that the provider would offer services to patients covered by the Exchange plan at a 5% reduction of the First Choice fee schedule.  For providers choosing to  participate but not currently enrolled in First Choice, they should initiate enrollment activity soon.  Participation approval can take several months.

Although Magnolia Health Plans (Centene) participation activity can be addressed directly with the company, Mississippi Physicians Care Network (MPCN) will also be facilitating participation activity and should probably be contacted initially by interested providers.  MPCN issued letters in the latter part of May to their network providers who were participating in MScan program with Magnolia Health Plans.  This letter was accompanied by an addendum which the provider was required to sign if he chose to participate.  As with First Choice, providers who have not signed the addendum and wish to participate with Magnolia Health Plans need to act quickly, contacting MPCN for enrollment.

As information continues to trickle in, more is being understood about the impact of the ACA, including the Exchange.  One exchange issue that is causing concern focuses on patients who stop paying premiums to an exchange participating insurer.  Under current guidelines, the insurer must continue to offer coverage to the patient for up to 90 days after the patient becomes delinquent in premium payments. However, the insurer is only required to provide benefit payments of the first 30 days. It is the insurer’s responsibility to notify participating providers that a patient is delinquent and has the potential to have his coverage terminated. The specifics on how the insurer will notify providers is unclear at this time.

If services are provided to an exchange patient after being delinquent for more than 30 days and the patient is terminated, those provider claims could be denied by the insurer.  Under those circumstances the provider would have to seek payment directly from the patient.  Administratively, processes would need to be implemented to address this issue.  For example, it may be necessary to verify the status of each exchange patient each time they visit the clinic, assuming the insurer had a means of identifying delinquent patients.  Whereas it is good office policy verify insurance coverage for each patient every visit, it may not be practically feasible to do so.  The degree of risk associated with such circumstances will probably not be known until the process to notify providers of delinquent patients is presented and evaluated.

As an unintended consequence of the ACA, it may have removed an incentive to encourage patients to  keep premium payments current. In circumstances where pre-existing conditions exist, prior to the ACA, it might prove difficult for a patient to obtain other insurance coverage because of pre-existing condition exclusions. That would encourage the patient to keep the insurance from lapsing.  Some have speculated that savvy patients may even try to game the system by making 9 premium payments but getting a full year’s benefit because of the 90-day termination specification.

The State will soon see a major push to enroll people in the Exchange through groups known as “Navigators”.  A navigator is someone who can assist people in the enrollment process, helping them understand the various options and associated expenses.  Navigators will also reach out to communities informing them of the Exchange (also referred to as the Marketplace).  The Navigator Organizations receiving grants to provide this service for Mississippi are:

Oak Hill Missionary Baptist Church Ministries (anticipated grant amount $317,742)

University of Mississippi Medical Center                     (anticipated grant amount $831,986)

Oak Hill will service the lower Delta area training clergy to be health ambassadors reaching out to uninsured residents to assist in the enrollment process.  UMC will cover the entire State educating and assisting in enrollment in Medicaid, CHIP, and the Exchange.

Providers need to decide as soon as possible whether or not they want to participate. In some areas the Exchange may offer providers a significant opportunity to acquire additional insured patients if prices are reasonable.  The cost to patients for the various levels has not been identified and will be impacted by patients’ income.  As mentioned earlier, First Choice will assume a provider will participate unless the provider replied to a previous letter from First Choice indicating he wished to opt out.  However, First Choice may allow providers to opt out now if the provider notifies First Choice prior to October.

Unlike First Choice, providers wishing to participate in the Magnolia Health Plans program will need to initiate enrollment activity.  It is not automatic even if the providers currently participate in the MScan Magnolia Health Plans program.  MPCN should be contacted as a first step in the participation process.

As with the Insurance Exchange or Marketplace, it is important that providers and clinics maintain vigilance as the full impact of the ACA unfolds.  There may be a number of unanticipated and unintended consequences as full enactment of the ACA is realized.

 

Appendix A

Counties Served by Exchange Providers

 Humana

Adams                         Grenada                                  Leflore                         Smith

          Alcorn                          Hancock                                  Lincoln                         Sunflower

             Amite                           Hinds*                                     Madison*                     Tallahatchie

          Attala                           Holmes                                    Marion                         Tishomingo

   Bolivar                         Humphreys                          Montgomery                Walthall

           Carroll                         Jefferson                                 Pearl River                  Washington

Choctaw                      Jefferson Davis                       Pike                             Wayne

    Covington                    Jones                                      Rankin*                       Wilkinson

Desoto*                       Lawrence                                Scott                            Winston

      Franklin                       Leake                                      Sharkey                       Yalobusha

 

 

Magnolia Health Plans

 

         Benton                         Harrison                                  Madison*                     Quitman

     Calhoun                       Hinds*                                     Marshall                      Rankin*

         Chickasaw                   Issaquena                               Monroe                        Simpson

     Claiborne                     Itawamba                                Neshoba                      Stone

Clarke                          Jackson                                   Newton                        Tate

       Clay                             Jasper                                     Noxubee                      Tippah

          Coahoma                    Kemper                                   Oktibbeha                    Tunica

         Copiah                         Lafayette                                 Panola                         Union

           Desoto*                       Lamar                                      Perry                           Warren

              Forrest                         Lauderdale                           Pontotoc                      Webster

         George                        Lee                                          Prentiss                        Yazoo

              Greene                                   Lowndes

 * Counties in which both companies participate

26
JUL
2013

Sunshine Law

As part of the Affordable Care Act (ACA), manufacturers of devices, biologicals, medical supplies, and drugs that are covered by Medicare, Medicaid, and/or CHIPS are required to report to CMS payments or transfers of value for items, such as lunches, travel, gifts, etc. given to physicians when the value is $100 or more in a calendar year.  The first data collection period begins August 1, 2013 and will be reported next year to CMS, which will in turn publish it for the public to review.  The first reporting period will only be for August through December of this year.  Beginning in 2014, the reporting period will be for the entire year.  Although the mandate for reporting this information has been placed upon the manufactures, clinics may want to monitor what is allocated to their physicians to ensure manufacturers are reporting correctly.

The reason this may be of interest to physicians is because it will be made public.  Once CMS publishes it, patients, whistleblowers, media outlets, and others will be able to access it.  If physicians wish to continue to receive lunches, travel, honoraria, or other benefits from device and drug companies, they should monitor what the manufacturers will report concerning the value of the items or services received.  Given a scenario where a device manufacturer has a problem with an item it manufactures, the negative publicity from it might spill over to a physician who has received benefits from the company.  By searching the CMS database, media outlets might identify and publicize the names of physicians receiving benefits from the company that manufactured the defective device. This could present a sticky public relations situation for a physician receiving significant payments from that manufacturer.

Clinics and physicians may want to evaluate current policies as they relate to items provided by companies covered under the Sunshine Law.  Although it will not be necessary to curtail benefits such as paid lunches, some clinics may choose to do so rather than increase the administrative burden required to monitor the activity.

It appears that the intent of this provision of the ACA is to highlight compensation in any form received from device manufacturers and drug companies by physicians in an attempt to limit the impact of such compensation on what the physician recommends for the treatment of the patient.  With the availability of this information, correlations between a physician’s recommendations and compensation received might be developed.   From the correlations, inferences could be made concerning the physician’s choice of products and factors influencing the physician’s decision.

If a physician receives something of value from a manufacturer but does not use or promote anything from that manufacturer that CMS considers a “covered item”, the manufacturer may still be required to report the valued amount to CMS.  If the manufacturer has any “covered item” that it produces, it has the responsibility of reporting all payments and transfers of value to CMS for all physicians where the value of payments or services is $100 or more in a year.  For example, if a DME representative takes a physician to dinner but the physician utilizes nothing that the DME company has that is covered by Medicare, it would seem reasonable that nothing would have to be reported.  However, that may not be the case.  If the DME company produces a brace that is utilized by physicians in another specialty, the company would be required to report the value of the meal to CMS.  In essence, if a manufacturer has even one item that is covered by Medicare, Medicaid, and/or CHIPS, “perks” for all physicians must be reported.

Reporting is on an individual physician basis and not by group.  Therefore, reported items must be broken down in such a way that the value can be allocated at an individual level.  For example, a drug representative may bring lunch to an office for five staff personnel and a single physician.  If the meal costs $120, the amount allocated to the physician for that meal would be $20 (i.e. $120 divided by 6).  If a meal is provided for staff only, the value of the meal is not reportable to CMS for any physician in the clinic.

Basically, anything that is provided by a manufacturer that can be associated with a specific physician will probably be reported.  This would include honoraria, travel, meals, meeting fees, tickets to ballgames, gifts, etc.  As could be expected, there are exceptions.  For example, a manufacturer contributing money to a society sponsored conference that did not provide payment for any specific physician would not be required to report this for any physician.  Lunches provided for all physicians attending a seminar would likely not be reportable.  However, if a manufacturer took the physician out for dinner at a conference, that would be reportable.

In addition to manufacturers, Group Purchasing Organizations, GPO’s, also have reporting requirements.  However, these are limited to ownership relationships.  The GPO is required to report any ownership interest by a physician or a member of the physician’s family and distributions they receive from the GPO.  Discounts received through a GPO are not reportable.

Manufacturers are required to provide their reports to CMS by March 31st.  CMS will publish this information by September 30th.  There will be a 45 day period in which a physician may contest the amount reported by the manufacturer allowing for corrections to be made.  Physicians who have signed up on the CMS website associated with Open Payments will be notified that a report has been made.  However, the physician must initiate the process by enrolling.  As it currently stands, the physician is responsible for enrollment and should not delegate it to a staff member.

Clinics should develop internal controls to monitor reportable items.  For in-office activities such as lunches, the clinic should identify the physicians that eat and identify how the organization providing the meal will be allocating the value to the physicians.  Also, for physicians that attend out of town meetings, a mechanism for capturing any items provided by manufacturer representatives should be developed.

It would be helpful to develop relationships with the reporting organizations whereby the organization would provide a physician access to the information they will be reporting before sending it to CMS.  This would allow corrections before CMS has access to the information.  Although it may be corrected once it is sent to CMS, it is unclear how soon corrections could or would be made.

For additional information, CMS has an Open Payments Fact Sheet that is helpful.  That information is available at: http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/Downloads/Physician-fact-sheet.pdf