Payers & Providers Midwest Edition – March 22, 2011

8/7/2019 Payers & Providers Midwest Edition March 22, 2011

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What can you tell us aboutpolicy rescissions in Illinois?

On our web site is a study bythe National Association ofInsurance Commissioners of thelargest carriers in all the states,looking for rates of rescission. Byvolume Illinois was highest in thecountry. It was 48% higher thanthe No. 2 state, California. On aper capita basis Illinois wassecond to New Mexico. Thenotable coincidence is that BlueCross of New Mexico is owned

by Health Care Services Corp.,which also owns Blue Cross ofIllinois.

What are your policy tools to ght this?Illinois law reposes with the insurer very

broad discretion. The federal law, active Sept.23, 2010, limited the grounds on whichrescissions can occur to fraudulent statementson the application by the applicant. Thats asignicant improvement. We remainconcerned, because the insurers in our statehave demonstrated an inability to act in aresponsible manner with respect torescissions. We continue to engage in

educating policymakers aboutthis problem.

Wed like health insuranceconsumers to have the samerights that they have as autoor homeowner insurancepolicyholders in Illinois. Youhave the right to a hearing witthe department based on thecancellation of the auto orhomeowner policies. A healthinsurance policyholder doesnot.

Under the reform law, howdoes the core underwritingfunction change? WellPoint,for instance, has regarded its

underwriting prowess as a source ofcompetitive advantage.

The companies will still have to price basedon anticipated risk. The factors on which thatpricing can be based, though, will be limitedto age, geography, and smoking status. No

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Michael T. McRaith, the Illinois director of insurance since 2005, was named on Thursday to be chief of thnew Federal Insurance Ofce, charged with overseeing parts of the Dodd-Frank nancial reform act.

The appointment was announced by Treasury Secretary Timothy Geithner during a meeting of theFinancial Stability Oversight Council. McRaith will serve as a non-voting member of that body. The newofce will come under the umbrella of the Treasury Department.

The new ofce will be largely advisory and will not have regulatory power as such. It will compilereports and analysis, make recommendations to federal agencies on insurance matters, and will have alimited preemption power over state rules that affect international insurance. McRaith was the subject of acover interview in last weeks issue ofPayers & Providers. Asked about the likelihood of his being appointto the federal post, he declined to comment, except to add that the creation of this ofce is a signicantstep forward for the country. It involves an intersection of insurance regulation with other nancial sectorHealth insurance is specically excluded.

Below is Part 2 of an extensive interview he gave on March 11, just prior to his appointment.
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In Brief

Medical Error KillsProminent Chicago

Business Leader

The death of one of Chicagos mostwell-respected business leaders lastweek has been attributed to a neverevent that occurred in the Universityof Chicago Medical Center.

James Tyree, 53, chairman andCEO ofMesirow Financial, adiversied nancial servicescompany with $51 billion in assetsunder management, died March 16of an air embolism after removal of adialysis catheter, according to aChicago Tribune report, citing theCook County Medical ExaminersOfce.

An intravascular air embolism canobstruct a vein or artery and can

occur during a medical procedure. Insome cases it can be absorbed intothe blood, but in patients withcomplications or underlyingweaknesses of the heart or lungs, itcan be fatal.

Tyree had suffered from diabetesfor 25 years and had received akidney and pancreas transplant in2006. He was diagnosed withstomach cancer in the fall and hadbeen hospitalized last week withpneumonia.

Tyree organized the investor groupthat purchased the Chicago Sun-

Times newspaper when it was inbankruptcy and on the verge ofcollapse in 2009, and was thenewspaper groups chairman.

Tyree was prominent in civicorganizations in Chicago, anddonated more than $500,000 a yearto diabetes charities and research. Hehad served on the board of theUniversity of Chicago MedicalCenter.

Continued on Page 3

NEWS

McRaith Interview, Part 2 (Continued from Page One)

longer will health status or gender be drivingfactors in the cost of insurance.

Having said that, the limitation on riskfactors for pricing means that manycompanies will have to be large enough towithstand some risk volatility in thepolicyholder pool. The ACA does allow for riskadjustment.

For example, if Company A and Company Beach have 100,000 policyholders, and at theend of the year Company B has a high numberof transplants, serious illnesses, babies bornearly, ICU before death -- higher claimsexperience overall -- then there would be a riskadjustment. After the fact, insurers who havehigher risk proles will be reinsured by otherparticipants in the market.

We want to encourage companies toparticipate, encourage them to price fairly and

not defensively. If a company is concerned thatit might have a highly risky policyholder base,it might price more defensively than would befair to employers and to families. The riskadjustment allows this company to besupported in the market by other companiesthat have a healthier policyholder prole.

So there would be some kind of pool?Its retrospective, and it can also be

prospective. Its intended right now for planssold on the exchange as a way of incentivizingcompanies to participate. Those companieswill support one another and help assure thatno one company assumes too much risk.

The exchanges are primarily intended for

individuals and small businesses, where therewould theoretically be the highest volatility inclaims experience.

Medical loss ratios are capped at 80%. Is thisrealistic? Wont insurers be able to game this?

We have heard that concern since the lawpassed. At NAIC, states from all over thecountry worked together to develop a standardby which the 80% will be judged. Its notideologically driven. The numerator is pay-ments by insurers for health care. The denom-inator is premiums paid to insurers, less taxes.

We expect most responsible companieswill adhere to the standard and to theregulation on this topic. Its possible there will

be companies that try to abuse it.The number, 80%, is high for many

companies. For small employers andindividuals, it is very difcult for smallercompanies to satisfy. The larger companies, theUnitedHealthcares and Blue Crosses, can getto it more easily.

For a company that has 20,000 individualpolicyholders, a relatively small bloc, thevolatility from year to year can be tremendous.For larger companies, it is not going to be asdisruptive. We do believe the loss ratio rule isgoing to be helpful to consumers.

This will be regulated on the state level. Isthere an opportunity for insurance companiesto play one state against the other, in terms oftightness of regulation?

That certainly happens today. But the lossratios are calculated on a state by state basis,not a national basis.

Does it apply exclusively to individual andsmall policies, or all policies?

For large-group policies the threshold is85%. Thats a function of the law of largenumbers. For large employers with 5,000 to10,000 people insured, its much easier to hit aloss ratio of 85%.

Waivers have been in the news recently. Mainejust requested and received a waiver of theMLR cap. Does this weaken the impact of thelaw?

The law allows the state to request a waiverif the imposition of the loss ratio would result indisruption of the individual health insurancemarket.

The Maine superintendent determined that ifthe companies writing individual healthinsurance in Maine had to meet an 80% lossratio in 2011, it would be disruptive to themarket. Families and consumers seekingindividual insurance would have fewer options

Whats the likelihood of a disruption in IllinoisWere evaluating data that we received and

intend to make an announcement one way oranother in the near future.

Will Illinois have its own insurance exchange?

The department has engaged with 200different interested parties, through formalworking groups, and interactions. The decisionthat the state should establish its own exchangeis unanimous. The other contours of thatexchange, however, are less unanimous, andremain open items.

A bill will be introduced soon to establish aquasi-state agency with an independent boardof directors to operate an exchange. If that lawpasses, that board would providerecommendations to the state legislature, as thelegislature decides whether and how theexchange should operate.

It would be like a public authority model?

Yes. No members of the legislature orexecutive branch would serve as votingmembers. Not the director of the Department oInsurance. There would be ex ofcio members,such as legislators, serving on the board, but noas voting members.

The development of an exchange involvesthousands of decisions, large and small. Wewant to be of service to the legislature as it sortsthrough those difcult issues.


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Page 3Payers & Providers

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NEWS

In Brief

Judge Bars WisconsinBudget Law from

Entering into Effect

A Wisconsin judge issued a temporary

restraining order prohibiting therecently passed state budget law frombeing implemented. The budget billcontained provisions to shrink laborunion negotiating rights and to re-quire public employees to pay more oftheir health benet costs, as reportedin Payers & Providers on March 15.

Judge Maryann Sumi, of the circuitcourt in Madison, said she plans tohold a hearing in April on a lawsuitthat claims Republican legislatorsfailed to honor the Wisconsin openmeetings law in their rush to pass thebill, which was ercely opposed byDemocratic lawmakers and their laborunion allies.

HealthPartners Mails

Food Coupons to

Alter Eating Habits

About 80,000 people insured throughHealthPartners in Minnesota will soonreceive coupons in the mail givingthem discounts on healthier foods. Butthese wont be discounts on beets,bok choy, or quinoa.

Instead, theyll get coupons forthings like sugar-free Jell-O, dietV-8, or high-protein pasta allprocessed foods.

The idea is to encourage people to

make easy, step-by-step changes intheir diets, instead of expecting themto switch from high-salt, high-fat dietsto healthy fruits and veggies in oneleap. Such a dramatic change ineating habits isnt likely to happen,experts say.

An associate medical director atHealthPartners said that approachinglifestyle changes in absolutists termsdoesnt generally work.

Members with diabetes willreceive packets of coupons targetinglow-sugar foods, while those withhigh blood pressure will get couponsfor low-sodium items.

The Medicare Payment Advisory Commissionhas recommended that hospitals and

physicians receive a 1% payment increase in2012. The advisory to Congress came as partof MedPACs annual March review forpayment updates.

The commission also targeted home healthagencies and hospice providers for enhancedscrutiny. It said Secretary of Health andHuman Services Kathleen Sebelius shouldalter the home health payment system toenforce quality guidelines and introduceprospective payment methodologies. HHSshould change the payment to hospices sothey receive more per diem at the beginningof a stay than at the end.

MedPAC suggested that the Ofce of theInspector General should review activities i

counties that have aberrant home healthutilization and should suspend payment anenrollment of new providers where signicafraud is found. OIG should also look intonancial relationships between hospices andlong-term care facilities, to see whetherconicts of interest are inuencing admissioto hospice, and also investigate hospicemarketing and admissions practices.

The commission recommended rateincreases of 0.5% for ambulatory surgicalcenters and 1% for outpatient dialysis, but nincrease for inpatient rehabilitation and longterm care hospitals.

Medical providers in Ohio will see theirpayments reduced under a budget proposalunveiled last week by Gov. John Kasich, aRepublican.

Medicaid spending would increase but thehealth system would be restructured with theintent to save $1.4 billion over the next twoyears, compared to what would have beenspent by the state. More than 2 million Ohioansare covered by Medicaid, and it accounts for athird of state spending. The state faces an $8billion budget decit, assuming no changes toMedicaid.

The governors proposal would continue to

pay for dental and vision care for poor people,and would shift funding toward home care andaway from nursing homes. By contrast,hospitals, physicians, nursing homes, andmanaged-care plans would sustainreimbursement cuts totaling almost $1.1 billionover two years.

Kasich wants providers to practice outcome-based medicine. Under a suggested pricingsystem, quality of care will gure in thepayment amount.

In his introductory letter, Kasich said thatMedicaid had come to be regarded as the thirdrail of budget policy. A perpetual unwillingness

to tackle the difcult work of trying to containprograms costs may have appeased certaininuential groups but it has only led to higherand higher tax burdens for Ohioans and

broken, less responsive programs forvulnerable Ohioans. That mindset ends withthis budget.

Without reforms, Kasich said, Medicaidcosts would rise by 15.4% over the next twoyears and crowd out other priorities. Suchrunaway growth isnt the hallmark of acompassionate society but of a neglectful onMaking sure Medicaid is sustainable allowsthe care that vulnerable Ohioans need tocontinue, and gives taxpayers theaccountability they deserve, he wrote.

The Ohio Hospital Association said thepolicy changes would probably reduce

payments to hospitals by $478 million. Theassociation supported the governors proposby proposing to extend the hospital franchisefee, which had been due to expire. The feehelps the state obtain matching funds from tfederal government and will raise $1.2 billioin extra revenue.

Hospitals look forward to working withthe administration and Ohio GeneralAssembly to achieve a mutual goal totransform healthcare in Ohio, saidassociation President James R. Castle.

The Ohio State Medical Association alsopledged to work with the governors ofce o

the budget. The Ohio Health CareAssociation, the lobby for nursing homes, sathe budget threatens the quality of care forthe most vulnerable among us.

Ohio Governor to Reform MedicaidKasich Favors Outcomes Measures in Payments

MedPAC Suggests 1% Rate RiseAdvises Tighter Rein on Home Health, Hospice


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MARKETPLACE/EMPLOYMENTPayers & Providers Page 5

HEALTHCARE CONSULTING OPPORTUNITY

Project Manager / Senior ConsultantFor Consulting Practice

Health Dimensions Group is one of the nations leading rms advising hospitals, post acute providers and managed longterm care providers in all aspects of post acute operations. We are leading the development of innovative care modelsthat will thrive under a reformed health care system.

The Project Manager will have a high degree of direct client interaction, be responsible for managing multiple projects,and participate in the business development and sale of consulting projects.

Responsibilities include preparing and managing projects to include: strategic plans and feasibility studies for a range of

post acute providers, such as long term acute care hospitals, rehabilitation hospitals, skilled nursing facilities, andassisted living communities. In addition the Project Manager will be involved with PACE (Program for All-Inclusive Carefor the Elderly), as well as health care reform planning projects and operational reviews.

The position requires a Masters degree in business or related eld and a minimum of 5 years of consulting and/ orhospital, post acute or managed care planning or operational experience. Prior consulting experience in long-term/acutecare preferred. Health Dimensions Group is based in Minneapolis, MN, but this position may be home based and workfrom any location as the job will require substantial travel to work with clients throughout the nation.

Health Dimensions Group is a values driven organization and offers a competitive wage and benet package. Pleasesend resume to: [email protected].

Human ResourcesHealth Dimensions Group, Inc.

4400 Baker Road, Suite 100

Minneapolis, MN 55343

Phone: 763-537-5700


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Payers & Providers MARKETPLACE/EMPLOYMENT Page 6

VICE PRESIDENT OF MANAGED CARE

Established over half a century ago, Indianapolis, Indiana based Community Health Network ("the Network") is a leading not-prot health care system. A member of the VHA, the Network is focused on improving the health and well-being of Indianaresidents. The Network is comprised of 5 hospitals, 90 sites of care, 5 nursing homes, Indiana's largest home care company, 1ambulatory surgery centers in Indiana and Michigan, 500+ physicians and nurse practitioners, including a 250+ member primgroup practice; and is supported by more than 11,000 employees. The Network ranks among the top integrated health carenetworks in the nation; and has the prestigious distinction of being among the top most wired health systems for the past tenyears.

Indianapolis is the state capital of Indiana and is Indiana's largest city; the 14th largest city in the U.S., and the fastest growingregion in the Midwest. Indianapolis has a diversied economy, contributing to the elds of education, healthcare, and nance

Tourism is a vital part of the economy of Indianapolis, and the city plays host to numerous conventions and sporting events. Othese, perhaps the most well known are sporting events such as: the annual Indianapolis 500, the outstanding Colts football aPacers basketball games. Indianapolis is in close proximity to many recreational sites, state parks and beautiful lakes. Thepopulation of the metropolitan area is estimated at more than 2,000,000.

The Vice President for Managed Care plans, develops, and executes strategic initiatives that optimize linkage among Communpayers, and provider networks and products. Specic responsibilities include:

Developing a vision of the optimal relationship of the Network with each prospective payer partner. Designing strategies and initiatives to optimize linkage among the Network, payers, and provider networks and produ Building and strengthening professional and organizational relationships with payers, employers, and business coaliti Providing leadership for the operational and nancial analysis and evaluation of payer and provider contracts. Serving as the chief negotiator and organizational spokesperson in contract negotiations with payers and provider

networks. Spearheading Network discussions with the appropriate internal clinical and administrative constituencies to determi

optimal contract terms, including quality and nancial performance standards.

Successful candidates will have a Bachelor' Degree, and will also possess the following:

At least ten years of experience working in developing and strengthening payer-provider relations, including contractnegotiation experience.

Demonstrated excellent relationship and communication skills. Demonstrated strength in inspiring condence with internal and external constituencies. Demonstrated ability to engage colleagues in deliberations about issues, challenges, and positioning, with an interest

listening and achieving consensus on direction.

Demonstrated ability to incorporate quantitative research as key element of payer negotiation strategies.

Prospective candidates should submit a cover letter and resume by March 31, 2011 to:

Annie Freeman8180 Clearvista Parkway, Suite 109

Indianapolis, In [email protected]!


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Page 7Payers & Providers MARKETPLACE/EMPLOYMENT

It costs up to $27,000 to fill a healthcare job*

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SEEKING A NEW POSITION?

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Payers & Providers Midwest Edition – March 22, 2011

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