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Blog

Low-cost carriers in ACA: insights from the 2018-2021 market experience

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This week, our In Focus highlights a white paper from Wakely, an HMA Company, exploring the potential design elements and expected effects of a public option or a low-cost plan being newly introduced in the Affordable Care Act (ACA) individual market.

1332 state innovation waivers have been in place for a number of years and allow states to implement programs that increase access to and the affordability of healthcare coverage, subject to approval by the Department of Health and Human Services (HHS) and Department of Treasury (Treasury). Nearly all waiver programs in effect in 2021 employ a reinsurance program aimed at reducing the overall claim costs and premiums for members by reimbursing issuers for a portion of claim costs over a specified threshold.

A number of states have been exploring other ways to structure a waiver program, including introducing a public option plan into ACA markets (individual and small group plans subject to the ACA market reforms). The definition of a “public option plan” has evolved over time and can vary, but more commonly refers to a privately funded health plan with some level of government oversight or additional requirements established to improve consumer value and facilitate cost containment.

A public option plan aims to further increase access to coverage and affordability by offering a new qualified health plan, typically with a lower premium relative to existing premiums in the market. A public option plan specifically aims to extend a more affordable coverage to individuals who are currently not eligible for ACA subsidies (e.g., family glitch, non-citizens, and those with higher incomes). The plan could be structured in a variety of ways such as a state-sponsored product, state employee health plan buy-in, Medicaid plan buy-in, or a private plan offered by existing issuers. Colorado and Washington will require health plans to offer public option plans with a target premium reduction relative to other plans in the market, with constrained rate increases over time, giving health plans the opportunity to arrive at the lower premiums through their own means, for the 2023 plan year. Lower premiums would likely be achieved through a combination of lower provider reimbursement and lower risk margins.

Given the nature of premium subsidization in the individual ACA market, where premium subsidies are tied to the second lowest cost silver (SLCS) plan in the market, the introduction of a lower cost public option plan has a mixed impact on market growth and the types of member segments that benefit. Since Washington State is the only Exchange that currently offers a public option plan, there is minimal experience available to understand the impact a public option plan may have on the market. As a result, our goal was to look at states where a new issuer has entered a market as a low-cost plan over the last four years, to better understand plan enrollment migration (how many members switch to the low-cost carrier), competitors’ reactions, and the reduction in premium needed to incentivize members to take up coverage. This market dynamic potentially closely mimics a public option plan that offers lower premiums being introduced in a market. Over the last four years (2018-2021), we identified 51 instances of new issuers entering an individual on-Exchange market. Of those 51 new entrances, 25 met our criteria of a low-cost plan.

The analysis showed mixed impacts of a low-cost plan introduction in ACA markets, with minimal impact on the uninsured, but with improved affordability, particularly for the unsubsidized. The detailed observations are discussed further in this paper.

Link to White Paper

Please contact Ksenia Whittal at [email protected] with any questions.

HMA News

Health Management Associates Acquires Medical Audit Resource Services, Inc.

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Today, Jay Rosen, founder, president, and co-chairman of Health Management Associates (HMA), announced the firm’s acquisition of Medical Audit Resource Services, Inc. (MARSI).

Founded in 1991, MARSI specializes in medical coding support, physician education and healthcare revenue cycle management. MARSI’s experts provide coding and auditing services for hospitals and physicians using inpatient, outpatient and risk adjusted reimbursement methodologies. Other clients include commercial fee-for-service plans as well as risk-adjusted plans.

“MARSI is recognized nationally for the expertise of its team and the results they deliver for clients. They will add enormous value to our healthcare delivery system, actuarial and revenue cycle work,” Rosen said. “I am excited to welcome such talented professionals to HMA as we continue to expand the ways in which we can meet our clients’ current and emerging needs.”

MARSI has been a pioneer in several areas that are now standard operating procedure among healthcare providers and their contracted service providers, including over-code identification, physician queries, pre-bill auditing, coder and physician training, and clinical documentation improvement.

“We are excited to join an organization that shares our commitment to integrity and excellence,” said Dr. Todd M. Husty, MARSI owner, founder, and chief medical officer. “HMA is home to an unmatched breadth and depth of experience and expertise. We look forward to the new opportunities we will have to serve our clients and extend our reach.”

MARSI will continue to operate as Medical Audit Resource Services, an HMA Company, under the leadership of Dr. Husty. Terms of the transaction were not disclosed.

Founded in 1985, HMA is an independent, national research and consulting firm specializing in publicly funded healthcare and human services policy, programs, financing, and evaluation. Clients include government, public and private providers, health systems, health plans, community-based organizations, institutional investors, foundations, and associations. With offices in more than 20 locations across the country and over 500 multidisciplinary consultants coast to coast, HMA’s expertise, services, and team are always within client reach.

MARSI: https://himexperts.com/

Blog

Oklahoma to transition to Medicaid Managed Care

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This week, our In Focus section reviews a new Oklahoma law to implement Medicaid managed care by October 1, 2023. The law, signed by Governor Kevin Stitt on May 26, 2022, requires the state to issue a request for proposals and to award at least three Medicaid managed care contracts to health plans or provider-led entities like accountable care organizations.

Provider-led entities would receive preferential treatment, with at least one targeted to receive a contract. However, if no provider-led entity submits a response, the state will not be required to contract with one.

Goals of the legislation include:

  • Improve health outcomes for Medicaid members and the state as a whole;
  • Ensure budget predictability through shared risk and accountability;
  • Ensure access to care, quality measures, and member satisfaction;
  • Ensure efficient and cost-effective administrative systems and structures; and
  • Ensure a sustainable delivery system that is a provider-led effort and that is operated and managed by providers to the maximum extent possible.

Plans would provide physical health, behavioral health, and prescription drug services. Covered beneficiaries would include traditional Medicaid members and the state’s voter-approved expansion population, but not the aged, blind, and disabled population eligible for SoonerCare.

Plans will need to contract with at least one local Oklahoma provider organization for a model of care containing care coordination, care management, utilization management, disease management, network management, or another model of care as approved by OHCA.

Oklahoma will also issue separate RFPs for a Medicaid dental benefit manager plan and a Children’s Specialty plan.

Background

Oklahoma currently does not have a fully capitated, risk-based Medicaid managed care program. The majority of the state’s more than 1.2 million Medicaid members are in SoonerCare Choice, a Primary Care Case Management (PCCM) program in which each member has a medical home. Other programs include SoonerCare Traditional (Medicaid fee-for-service), SoonerPlan (a limited benefit family planning program), and Insure Oklahoma (a premium assistance program for low-income people whose employers offer health insurance). Prior efforts to transition to Medicaid managed care have encountered roadblocks, starting in 2017 with a failed attempt to move aged, blind, and disabled members to managed care.

More recently, in June 2021, the Oklahoma Supreme Court struck down a planned transition of the state’s traditional Medicaid program to managed care, ruling that the Oklahoma Health Care Authority does not have the authority to implement the program without legislative approval.

Contracts had been awarded to Blue Cross Blue Shield of Oklahoma, Humana, Centene/Oklahoma Complete Health, and UnitedHealthcare. Centene/Oklahoma Complete Health also won an award for the SoonerSelect Specialty Children’s Health Plan program, covering foster children, juvenile justice-involved individuals, and children either in foster care or receiving adoption assistance.

Link to Senate Bill 1337

Case Study

Texas Action Plan: Strategic Plan Development

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Background:
Texas Health Action (THA) is a community informed, non-profit organization dedicated to providing access to culturally affirming, quality health services in a safe and supportive environment. THA provides sexual health and behavioral health programs and services with an expertise in serving LGBTQIA+ people and those impacted by, or at risk of, HIV in Texas.

The Challenge:
In 2021, THA underwent a merger that created a need for the development of a unified vision, direction, and business model to align and expand sexual health and behavioral health services. When THA began the process of creating a new strategic direction and priorities, HMA was engaged to support the development of a three-year strategic plan reflecting changes present in a post-COVID-19 pandemic world. The objective of the strategic planning process was to create a dynamic and actionable plan, while refining and reestablishing the organization’s Mission, Vision, Values and Beliefs.

Blog

Behavioral health crises drive bipartisan action in Congress

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Agreement about the severity of the nation’s mental health and substance use disorder crises is rising above the partisan politics in Congress. In fact, these are among a handful of issues driving work on bipartisan legislation across all the key House and Senate committees with jurisdiction over behavioral health programs and policies this year.

On May 18, the U.S. House of Representatives Energy and Commerce Committee unanimously approved the “Restoring Hope for Mental Health and Well-Being Act of 2022” (H.R. 7666). This legislation incorporates a collection of bipartisan bills to update and reauthorize over 30 Substance Abuse and Mental Health Services Administration (SAMHSA) and Health Resources and Services Administration (HRSA) programs addressing the mental health and substance use disorder (SUD) crisis. The bill also advances initiatives to strengthen the 9-8-8 National Suicide Prevention Lifeline implementation efforts, invest in the crisis response continuum of care, and support strategic opioid crisis response plans among numerous other policies. Energy and Commerce is one of several House committees planning to advance behavioral health bills this year.

U.S. Senate committee leaders have been similarly engaged in developing bipartisan proposals to address mental health and substance use disorders. Senate Health, Education, Labor and Pensions (HELP) and Finance committee leaders are expected to reveal their proposals as soon as this summer. The Finance Committee’s proposal will focus on Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) policies and could reflect findings from the committee’s report, “Mental Health Care in the United States: The Case for Federal Action.” Similarly, HELP members Sens. Chris Murphy (D-CT) and Bill Cassidy (R-LA) introduced the Mental Health Reform Reauthorization Act to extend several expiring mental health programs, which could be incorporated in that Committee’s comprehensive proposal. Across committees, there has been an interest in strengthening parity, supporting integration of primary and behavioral health care, increasing access to youth mental health screenings, scheduling fentanyl analogues, and easing requirements for prescribing Medication Assisted Treatment.

What To Expect

Congressional leaders have consistently expressed their desire to advance bipartisan legislation to address the urgent needs and gaps in the mental health and SUD care delivery systems, as well as support education and research.  While these are key areas to watch, the diminishing number of legislative days on the congressional calendar and climate surrounding November’s mid-term elections create uncertainty for the timing and scope of Congress’ work. It remains to be seen whether a package of health care proposals, such as reauthorization of the U.S. Food and Drug Administration’s user fee programs, the Cures 2.0 legislation to advance biomedical research, mental health and substance use disorder legislation, and the PREVENT Act could be sent to President Biden’s desk before the end of September.

HMA companies are supporting clients impacted by the policy changes being discussed and the program funding addressed in these legislative proposals. Understanding the landscape for federal change allows state and local governments and stakeholders to plan for and shape these opportunities. For more information, please contact Andrea Maresca, Principal, Federal Policy, HMA; Matt Gallivan, Director, Leavitt Partners; and Laura Pence, Director, Leavitt Partners.

Blog

New paper highlights seven ways stakeholders can help alleviate medical debt without unintended consequences

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As efforts continued at the beginning of 2022 to implement the No Surprises Act aimed at preventing surprise medical bills that patients are often unable to pay, the Kaiser Family Foundation published a report that estimates nearly one in 10 adults have medical debt, and that Americans’ total medical debt could be as high as $195 billion. About a week later the nation’s top three debt collection firms announced planned changes to medical debt practices designed to reduce the strain of medical debt on patients, and appease a Consumer Financial Protection Bureau that has made credit reporting and medical debt a priority. Less than a month later, the Biden Administration announced several initiatives aimed at alleviating issues related to medical debt for Americans.

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