Our next blog installment turns to Non-Group Health Plans (NGHPs). While the reporting requirements for Group Health Plans are largely uniform, the same cannot be said for NGHPs. If professionals are not aware of the requirements and the potential consequences, these distinctions can lead to confusion, or worse, to double damages and a minimum fine of $1000 per day per unreported beneficiary. The most recent NGHP policy guidance covers several forms of liability insurance (including self-insurance), no-fault insurance, and workers compensation in several states of existence and decay, such as NGHPs that are in bankruptcy, those that are acquired by larger entities, those that are in the liquidation process, and those that are general self-insurance pools. Although we cannot cover every conceivable variation here, we set forth below what NGHPs are and what generally they will be required to report, so that counsel and compliance professionals can identify whether their organization is affected.
Generally, NGHPs are liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans. The intent behind the NGHP reporting requirements is that if a Medicare beneficiary is injured and another payer (such as a workers’ compensation plan) is responsible for paying for the medical treatment of the beneficiary, then the other party should be the primary payer. Unlike GHPs, there is no blanket requirement that all NGHPs register with Medicare, but those that have reportable information must register at least a quarter before submitting a report. NGHPs are required to submit a report when there is an Ongoing Responsibility for Medicals (ORM) or there is a Total Payment Obligation to the Claimant (TPOC).
An ORM must be reported when there is ongoing compensation to a party for medical care associated with a claim. ORM reports do not include dollar amounts, but do report the start and end dates for payments made for ongoing medical expenses. Additionally, an ORM report should include information about the cause of illness, injury, or incident associated with the claim so that Medicare can determine those claims for which the NGHP is the primary payer and those claims for which Medicare or another payer is designated as primary. An ORM report is separate and distinct from a TPOC report. TPOC reports are made when the sum of a total settlement, judgment, award, or other payment obligation is established. Notably, the TPOC “date” is not when the funds are actually paid, but when the obligation is established. There are various Mandatory Reporting Thresholds that are outlined by CMS in Chapter III of its NGHP User Guide, depending on the type of insurance and the date of payment. All dates listed in the User Guide have passed as of the date of this post and all thresholds have been reached (April 1, 2017 was the last listed date in the charts). However, while a TPOC may have been technically established before a listed date, it may not have been paid or technically reported at the present time. As an example of the reporting requirement, the User Guide provides that after January 1, 2017, where the total TPOC amount is over $750.00 for Liability Insurance (including self-insurance), Section 111 Reporting is or was required in the quarter beginning April 1, 2017.
NGHPs should be aware of these reporting requirements, and the person or group responsible for overseeing compliance should be well versed in the intricacies of the payment structure and the CMS’s manual guidance, which is set out in six detailed reporting manuals issued on December 15, 2017.
As discussed earlier, NGHPs are the primary payer in certain instances, and failure to uphold this responsibility can result in litigation. GEICO, an NGHP, is currently involved in litigation for allegedly failing to reimburse a Medicare Advantage plan which made payments to beneficiaries. The plaintiffs filed two separate class action suits against GEICO—one involving injured beneficiaries covered by GEICO and another involving tortfeasors carrying GEICO insurance who later settled with the beneficiaries. In both suits, the plaintiffs allege that Medicare Advantage plans made payments to beneficiaries that GEICO was statutorily required to pay in the first instance. GEICO filed a motion to dismiss, arguing that the plaintiffs lacked standing because the plaintiffs did not suffer an injury. The plaintiffs responded that the Medicare Advantage plans assigned their rights of recovery to the plaintiffs, convincing the court that this assignment gives the plaintiffs standing. GEICO also argued that the amended complaint lacks the necessary specificity to proceed. The court noted that while the plaintiffs did not include a lot of detail in their amended complaint, the information included was sufficient to overcome a motion to dismiss, and that more specific information would need to be produced in discovery or the defendants would be entitled to file for summary judgment.
The rules governing NGHPs are summarized in the following chart:
Liabilities for Non-Compliance
Non-Group Health Plans
(NGHPs) (Liability Insurance, No-Fault Insurance, and Workers’ Compensation)
· Reporting requirements differ among NGHPs and are fact specific
· Must register with BCRC on the COBSW if NGHP has a reasonable expectation of having to report in the future
· May register on behalf of itself or its direct subsidiary (may not register on behalf of its sibling or parent company)
· May use agent for administrative duties, but RRE retains liability.
· Ongoing Responsibility for Medicals (ORM) Reporting: Must report existence of ongoing payments associated with medicals to beneficiaries
· Total Payment Obligation to the Claimant (TPOC) Reporting: Must report the sum of a total settlement, judgment, etc. in accordance with price and date schedules found in NGHP User Guide Chapter III: Policy Guidance
· Must report all claims where injured party is or was a Medicare Beneficiary
· Failure to report results in a minimum fine of $1,000 a day per unreported beneficiary, with CMS reserving the right to collect double damages
This is part 4 of 7 in the Medicare Secondary Payer Compliance series. Subscribe to our blog for future updates. Part 3 can be accessed here: Medicare Secondary Payer Compliance: Group Health Plans (Part III)
Andrew Kuder, a Law Clerk (not admitted to the practice of law) in the firm’s Newark office, contributed significantly to the preparation of this post.
Image by photo by Carlos Martinez, courtesy of Margaret Flowers) Permission Details DMCA
Margaret Flowers: Hello, Joan. Thank you for reaching out to me.
The Democratic Party’s think tank, Center for American Progress (CAP), calls their plan “Medicare Extra for All,” but it is actually an impediment to National Improved Medicare for All, which we support. Far from being Medicare for All, CAP’s plan would only give people under 65 years of age the chance to buy a Medicare plan, including the private insurance-run Medicare Advantage plans. It would keep the very complicated and costly private insurance-based system that we currently have and the for-profit health facilities that cost more and have poorer health outcomes. Their plan protects the profits of private health insurers.
Our movement views private health insurers as the problem and prevents them from standing between patients and the care they need. National Improved Medicare for All, or NIMA, would create a single national health insurance that includes every person in the country from birth to death and covers all necessary health care, including dental, vision and hearing care, medications, mental health and long term care and more. Patients choose where they go for care and patients and health professionals decide what care they need.
NIMA will control health care costs through proven methods by significantly reducing bureaucracy, negotiating fair prices for drugs and services and taking the profit motive out of the healthcare system. This savings allows the system to provide better benefits.
CAP’s proposal will still be very expensive, will leave people without insurance or with inadequate insurance and will allow private health insurers to continue to limit where people go for care and what care they receive.
It is interesting that CAP calls their plan “Medicare Extra for All,” because the fact that they use a name similar to what we support shows the movement for National Improved Medicare for All, or NIMA, is very strong. It is also a problem that they use this name because it is fooling some people into supporting it.
JB: This is very disappointing news. What are the press doing about making distinctions and emphasizing the differences between the two similarly named but very dissimilar plans?
MF: The commercial media is marketing the CAP plan as better than National Improved Medicare for All by calling it “more politically feasible.” It is disappointing to see progressive media outlets such as HuffPost embracing it as “liberal” and “ambitious.”
I view the CAP plan as quite the opposite. While it might be more politically palatable to members of Congress because they can appear to be supportive of Medicare for All while protecting the profits of the health industries that fund their campaigns, it is impractical because it will fail to solve the healthcare crisis.
The healthcare crisis in the United States will continue until we take effective steps to solve it. NIMA is the smallest step we can take because it places everyone in the same system at once, controls healthcare costs and uses that savings to provide comprehensive coverage. Anything less than that will fail because it will be too expensive and will leave people out. Beyond NIMA, there will still be work to do to open hospitals in rural areas and low income communities where they have closed, increase the number of primary care health professionals and more.
When it comes to what is politically feasible, that is a factor that people can change. In fact, it is changing as more people support NIMA and politicians are being forced to take a stand on it. The new CAP plan undermines the work that has been done to build support for NIMA by offering legislators an alternative that sounds good, but isn’t.
Joan Brunwasser is a co-founder of Citizens for Election Reform (CER) which since 2005 existed for the sole purpose of raising the public awareness of the critical need for election reform. Our goal: to restore fair, accurate, transparent, secure elections where votes are cast in private and counted in public. Because the problems with electronic (computerized) voting systems include a lack of (more…)
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The U.S. Justice Department on Monday ditched most of its lawsuit over UnitedHealth Group’s Medicare Advantage billing practices.
In a brief notice to a federal district court in Los Angeles, the Justice Department said it wouldn’t update its lawsuit to revive claims over the accuracy of UnitedHealth’s Medicare Advantage billing data. Instead, the federal government will only litigate whether the data used to secure more than $1 billion in Medicare Advantage payments was invalid.
U.S. District Judge Michael Fitzgerald pared down the suit earlier in February, determining that any statements UnitedHealth made about the data’s accuracy wouldn’t have affected whether the government paid the Medicare Advantage claims.
UnitedHealth’s vice president of communications Matt Burns said the company will “continue to contest aggressively the remaining claims.”
Medicare Advantage plans are paid a flat per-beneficiary fee from the CMS for covering individuals. The agency adjusts payments to take into account sicker members by using risk scores. There have been several whistle-blower lawsuits in recent years alleging health plans inflate members’ risk scores to secure higher payments.
UnitedHealth, Aetna, Health Net, Humana and Cigna’s Bravo Health are all under federal scrutiny for potential upcoding issues.
The federal government has seen both of its False Claims Act suits over UnitedHealth’s Medicare Advantage billing fall flat in the last several months. In October, the Justice Department dropped a similar lawsuit alleging UnitedHealth and its affiliated plans exaggerated how sick its patients were to score millions of dollars in inflated Medicare Advantage payments.
Erica Teichert assigns, edits and directs news coverage for Modern Healthcare’s website and magazine. She previously served as the publication’s New York bureau chief and legal reporter. Before joining Modern Healthcare in 2016, she worked at Law360 as legal newswire’s first D.C. bureau chief after three years as a court reporter covering the U.S. Supreme Court, D.C. Circuit and other federal courts and agencies. Prior to that, she worked as an associate editor for FierceMarkets. She has a bachelor’s degree in communications with a print journalism emphasis from Brigham Young University.
A new government report found that about half of all Medicare payments for chiropractic services between 2010 and 2015 were improper, costing some $250 to $300 million annually. Medicare beneficiaries also paid millions of dollars out of their own pockets in co-pays for chiropractic services deemed improper. Yet, despite years of proposed solutions to combat waste, fraud and abuse by chiropractors, necessary controls have not been implemented and remain inadequate to prevent several billion in further losses to the Medicare Trust Funds.
There is a simple solution to this problem, but it will take Congressional action, something that is in short supply these days. We’ll return to the solution in a moment, but first let’s take a look at this government report and some background information on Medicare payments for chiropractic services.
“Medicare Needs Better Controls to Prevent Fraud, Waste, and Abuse Related to Chiropractic Services”
Last month, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued yet another in a series of reports aimed at reducing improper Medicare payments to chiropractors, this one titled “Medicare Needs Better Controls to Prevent Fraud, Waste, and Abuse Related to Chiropractic Services.” OIG’s frustration with the Centers for Medicare & Medicaid Services (CMS) for failing to act on previous recommendations practically leaps from the pages.
Medicare, as the OIG notes, covers chiropractic services for manual manipulation of the spine to correct a subluxation, which can be diagnosed either by physical examination or by x-ray. According to the Medicare Benefit Policy Manual (Medicare Manual), the chiropractor must identify the precise level of the subluxation to substantiate a Medicare payment claim. While Medicare won’t pay for an x-ray to identify a subluxation, the x-ray can be used as documentation that the subluxation is there.
(At this point, faithful Part B) services, which include doctor’s office visits, physical and occupational therapy, and outpatient surgery.
The OIG also found that, as the number of chiropractic services (again, limited to subluxation correction) a patient receives increases, the percentage of improper claims increases. In a 2013 nationwide review, 76% of claims for between 1 and 12 services were unallowable under Medicare coverage rules. Unallowable claims rose to an eye-popping 100% for patients receiving 31 or more services.
This most recent OIG report is one of at least 17 government reports since 1986 ferreting out chiropractic fraud and imploring CMS to employ more effective controls on improper chiropractic payments, especially those for maintenance therapy. (Chirobase lists all the reports here.) Unfortunately, some improvements aimed at addressing improper payments have backfired.
Instead of preventing fraud, the AT modifier has been turned into an instrument of fraud. Chiropractors simply slap it on all claims, knowing they’ll get paid regardless of whether it’s appropriate. In 2015, claims for all but 30 of the nearly 14 million chiropractic services paid by Medicare had the AT modifier, which is regularly used to get paid for uncovered maintenance therapy, according to the OIG report. Another anti-fraud mechanism – requiring the date of initial treatment on the claim, used as an affirmation that documentation of medical necessity is on file – is similarly misused. Chiropractors simply include the date on all claims even though, in two separate investigations, at least 90% did not appropriately document medical necessity.
Attempts to educate chiropractors and beneficiaries about improper payments are, in the OIG’s opinion, poorly executed or simply ignored. CMS doesn’t mention maintenance therapy in its explanation of benefits and fails to tell beneficiaries that some chiropractic services, like massage and acupuncture, aren’t covered. A CMS you tube video on improving documentation is largely ignored by chiropractors.
The OIG thinks CMS could save millions of dollars by establishing a threshold beyond which chiropractic services (say, for example, 30 services a year) would be covered only if supported by medical review, a strategy employed by many private insurers and some Medicare contractors. The OIG estimates that this strategy alone would have saved Medicare almost $100 million, and patients over $24 million in co-pays, over a 2-year period. CMS doesn’t agree with this strategy and won’t implement it. In fact, CMS’s overall attitude seems to be that a few billion for chiropractic services is a small piece of the pie and it would prefer to go after bigger fish.
A better solution
I have a better idea for saving billions paid for chiropractic services: Stop paying for treatment of chiropractic subluxations. After over a century of claiming the detection and correction of subluxations is beneficial to health, chiropractors have never been able to prove these subluxations exist. All other healthcare professions, including medical doctors and physical and occupational therapists, reject the chiropractic subluxation. (An orthopedic subluxation – the partial dislocation of a joint – is a different thing altogether.) As well, in 2015, several foreign chiropractic colleges banded together to reject teaching of subluxation “theory” except as an historical concept. Even some chiropractors admit there’s no evidence:
No supportive evidence is found for the chiropractic subluxation being associated with any disease process or of creating suboptimal health conditions requiring intervention. Regardless of popular appeal, this leaves the subluxation construct in the realm of unsupported speculation. This lack of supportive evidence suggests the subluxation construct has no valid clinical applicability.
The General Chiropractic Council, the regulatory body for U.K. chiropractors agrees, finding that the chiropractic vertebral subluxation complex
is an historical concept [and] . . . is not supported by any clinical research evidence that would allow claims to be made that it is the cause of disease or health concerns.
Somebody tell Congress. The Medicare law defines the term “physician” to include chiropractors and covers chiropractors for “medical and other health services,” but
only with respect to treatment by means of manual manipulation of the spine to correct a subluxation . . .
In this, Congress was simply picking up the term “subluxation” from the states’ definition of a chiropractor’s scope of practice. In the early 1900s, the term “subluxation” was included in state chiropractic licensing laws to distinguish chiropractic practice from medical practice, laws passed to prevent chiropractors from being arrested for the unlicensed practice of medicine. At the time, it was a reference to the original definition of the word fabricated by “magnetic healer” D. D. Palmer, the inventor of chiropractic, out of thin air. Since then, subluxation has been redefined numerous times by chiropractors, without their even having bothered to prove such a thing exists, or agreeing on how to find one or its clinical significance.
Since Congress didn’t provide a definition of “subluxation,” Medicare chose this one out of the many available, a consensus definition cobbled together in the early 1990s by various chiropractic groups (1) and vague enough to satisfy the warring factions that permeate chiropractic practice:
a motion segment, in which alignment, movement integrity, and/or physiological function of the spine are altered although contact between joint surfaces remains intact.
CMS has washed its hands of any attempt to reconcile the chiropractic notion of the subluxation with its medical meaning, or the fact that no other health care profession believes the chiropractic version exists:
Implementation of the chiropractic benefit requires an appreciation of the differences between chiropractic theory and experience and traditional medicine due to fundamental differences regarding etiology and theories of pathogenesis of disease. Judgments about the reasonableness of chiropractic treatment must be based on the application of chiropractic principles.
In other words, Congress pretends this pseudoscience is fact, so we are forced to go along with it.
At least CMS limits subluxation correction to neuromusculoskeletal conditions, a limitation not obvious in the Medicare law and incongruent with the chiropractic concept of the subluxation, which they view as a contributing factor to any number of diseases and disorders. This notion is the origin of forbidden maintenance therapy: chiropractors promote the idea that regular “spinal checkups” for subluxation detection and correction to promote health and prevent disease.
In addition to wasting money on treating non-existent pathologies, location of “the precise level of the subluxation,” as required by Medicare, means that patients are being subjected to radiation for no good reason so chiropractors can document their (supposed) diagnosis. (It is sickening to see x-ray after x-ray of patients, including children, in chiropractic textbooks, instructing students on detecting subluxations via x-ray film.) To add insult to injury, Medicare doesn’t pay for the x-ray, meaning the patient must pay out-of-pocket.
This brings up a question: If Congress boots subluxation correction from Medicare coverage, should chiropractors be covered for any services at all?
On the one hand, however chiropractors see themselves, the public views them as “back doctors” (as does Medicare) and there is some less-than-robust evidence that generic spinal manipulation is effective for certain types of back pain. (Spinal manipulation is not synonymous with the chiropractic “adjustment” to treat the fictional subluxation, although chiropractors do use spinal manipulation as a means of making an “adjustment,” as here.)
As one solution, Congress could decide to cover spinal manipulation by chiropractors to the same extent it covers spinal manipulation by a physical therapist or medical doctor for medically necessary treatment of back pain, but it would need to exclude the subluxation as a proper diagnosis. Even in cases where spinal manipulation may be an appropriate treatment for back pain, it should not be based on a diagnosis of the non-existent chiropractic subluxation.
On the other hand, given the chiropractic track record for cheating Medicare, one wonders if they wouldn’t just fudge the diagnosis and continue improperly providing maintenance therapy. And it’s not like patients would be deprived of spinal manipulation in medically appropriate cases without them; they have other providers to choose from, providers who wouldn’t be so quick to use cervical manipulation for neck pain or cervicogenic headache, with their attendant risks.
Trying to amend the law creates a risk that chiropractors will use it as an opening to push for their dream of Medicare recognition of chiropractors as physicians who, in the words of the American Chiropractic Association:
should be allowed to practice to and be reimbursed for the fullest extent of their licensure, training and competencies.
It is a dream the ACA has been pushing to fruition for years, a piece of their larger plan to rebrand chiropractors as primary care providers with state licensing laws to match, efforts that are sometimes rewarded by states granting them huge scope of practice expansions. (These efforts continue in the 2018 state legislative sessions.)
Of course, the ACA would be put in the unfortunate position of arguing that Congress, having seen fit to kick chiropractors out of Medicare for repeated fraud, both in the form of pretending that subluxations exist for over 100 years and bilking Medicare to the tune of several billion dollars, should now grant them vastly expanded coverage under Medicare. Doesn’t sound like a winning argument, but you can bet they’ll try anyway.
Whatever the solution, taxpayers and Medicare beneficiaries shouldn’t be paying for treatment of phantom spinal lesions, whether allowed by law for covered ailments or via cheating by chiropractors billing for “maintenance therapy.” If you agree, tell your Congressional Representative and Senators.
(1) Gatterman MI, Foundations of Chiropractic: Subluxation (2nd Ed.), Elsevier Mosby (2005), at p. 8-9
PORTLAND — Maine Medical Center and Scarborough-based North East Mobile Health Services will pay more than $1.4 million to settle federal complaints about false Medicare claims.
The fines were announced Feb. 23 by U.S. Attorney Halsey B. Frank. NEMHS will pay $825,000. Maine Medical Center will pay $600,000.
NEMHS settled allegations the company violated the federal False Claims Act by billing Medicare for ambulance services that were not medically necessary for patients discharged from the hospital. In settling, Frank said, the company also acknowledged it knowingly kept Medicare over-payments.
“Although NEMHS Mobile Health Services continues to deny that all the transports were not medically necessary, NEMHS Mobile Health Services has agreed to repay the claims, the cost of which is less than defending a lawsuit,” NEMHS spokesman Jason Sulham said Monday.
The four-count complaint against NEMHS sought triple the amount of damages sustained by the government because of the alleged false billing, in accordance with the False Claims Act.
Maine Medical Center settled allegations its staff gave inaccurate or incomplete information regarding the need for ambulance services for discharged passengers.
“Maine Medical Center’s settlement agreement with the U.S. Attorney’s Office is the unfortunate result of a legal process that at times penalizes hospitals for prioritizing safe patient care,” hospital spokesman Clay Holtzman said in a Feb. 23 press release.
In a 30-page civil complaint filed in U.S. District Court, the government said NEMHS provided MMC with an “Ambulance Certification Statement” template to allow discharged patients to leave the hospital by ambulance.
NEMHS has a “preferred provider” contract with the hospital. This gives the company “initial rights to each MMC transport,” according to the complaint.
The complaint said patients who did not meet the criteria for “bed confinement” were taken home or to assisted living centers by ambulance, as opposed to a private vehicle or by a van built to accommodate wheelchairs. Those methods are not covered by Medicare.
“At issue here, patients transported to and from Maine Medical Center via NEMHS ambulance were often found walking around their homes or hospital rooms, walked themselves to NEMHS ambulances and then sat down on the stretchers, or were able to sit comfortably in chairs or wheelchairs,” the complaint said.
NEMHS then billed Medicare for the transportation and was reimbursed at about 50 percent by the federal program providing health care to senior citizens. Medicare typically covered about 50 percent of the ambulance fee, ranging from $185 to $200 in government-cited examples.
The complaint said of 949 patients discharged from MMC following knee replacements from 2010-2012, 800 were taken to assisted-care facilities or home health care by NEMHS.
“The vast majority of these total knee replacement patients were transported approximately 10 to 20 minutes by NEMHS via ambulance, (and) did not meet the medical necessity requirements for ambulance transfer,” the complaint said, although it did not specify how many cases made up the “vast majority.”
Sulham, of NEMHS, said, “In all instances, all providers were acting in the best medical interest of the patient and the required documentation from medical personnel certified the ambulance transports were medically necessary. As such, reimbursement claims were submitted to Medicare and processed.”
The complaint also said NEMHS staff provided training to MMC staff in 2010 and 2011 in determining medical necessity for ambulance use and how to make sure documentation conformed to Medicare billing standards.
In 2014, MMC staff took part in a training session not attended by NEMHS staff that indicated discharged patients were getting ambulance services that were not medically necessary, according to the complaint.
When hospital staff spoke to NEMHS about the new information, the complaint alleges an unnamed NEMHS vice president said the company instruction was correct.
“Each case examined was based on medical necessity determined by a qualified medical provider. However, as the settlement agreement explicitly states, in order to ‘avoid delay, uncertainty, inconvenience, and expense of protracted litigation’ MMC has agreed to a settlement that is modest relative to the potential legal costs, and one that makes clear the hospital’s position that it did nothing wrong,” Holtzman said.
David Harry can be reached at 781-3661 ext. 110 or firstname.lastname@example.org. Follow him on Twitter: .
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As the ground continues to shift on health care coverage, I answer readers’ queries this week about changes to Medicare drug lists and insurance plans that don’t meet health law standards and.
Q: I picked a Medicare Part D drug plan that covered all the drugs I take. But as soon as I got my first Novolin R prescription filled, they notified me that they don’t cover it anymore. Can they just switch it like that?
Medicare drug plans can change their list of covered drugs, called formularies. If they’re doing so at the start of the new calendar year, as appears to have happened in your case, the plan may notify you of the change when you fill the prescription for the first time in the new year. At that time, the plan would typically give you a 30-day “transition” refill so you can switch to another drug that’s on the formulary, according to Juliette Cubanski, associate director of the Program On Medicare Policy at the Kaiser Family Foundation. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)
, which explores health care coverage and costs.
To contact Michelle with a question or comment, click here.
If you and your doctor think it’s important that you have Novolin R and not another insulin drug that is similar, you can ask your plan to make an exception to allow you to continue to take the medication.
To go that route, you would need to get your doctor to “make the case for why that formulary drug is not the right drug” for you, said Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center, an advocacy group.
Q: I lost my job last year and my employer coverage ended in January. I bought a new plan through the marketplace that went into effect last month. I just received policy information, and it states that because the plan does not cover major medical services, I may have to pay additional taxes to the government. I was told that the plan didn’t cover major medical but wasn’t told about any taxes. Will I be fined next year?
It sounds like you bought a plan that doesn’t comply with the Affordable Care Act’s requirements, and if that’s the case you may indeed have to pay a penalty for not having comprehensive coverage when you file your taxes next year.
repealed the individual penalty for not having health insurance, but that provision doesn’t take effect until 2019. So, for 2018, you may be charged the greater of $695 or 2.5 percent of your household income.
The federal- and state-run marketplaces established by the ACA sell only comprehensive plans that cover 10 essential health benefits, including “major medical” services like hospitalization and prescription drugs.
But some insurance broker websites call themselves marketplaces too, said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms. These companies may sell other insurance products like short-term or accident coverage alongside comprehensive plans that comply with the law.
Ever since the health law was passed, “There have been opportunistic companies trying to take advantage of consumer confusion to make money,” Corlette said.
If you aren’t happy with your plan, you may still be able to switch. Losing your employer coverage qualifies you for a 60-day special enrollment period to pick a new plan. Since it appears you’re still in that window, you may be able to choose a comprehensive plan.
To ensure you’re using your state’s official marketplace, go to and click on “see if I can change.” That will take you to your state marketplace, even if you live in one of the dozen or so states that run their own exchanges.
This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.
A Stanford scholar’s new research finds that even though members of an advisory committee for Medicare are biased toward physician specialties, the partiality often bridges across specialty lines and may improve the quality of its price-setting recommendations.
David Chan (Image credit: Julie Silver)
For the first time, David Chan, a faculty fellow at the Stanford Institute for Economic Policy Research, and his colleague Michael Dickstein from New York University, gained access to more than 4,000 fee proposals that were reviewed over a 21-year span by the committee, which is part of the American Medical Association (AMA). Their independent analysis is in a working paper, released Feb. 26 by the National Bureau of Economic Research.
The finding is a surprising insight. Until now, behind-closed-doors deliberations meant nobody has known for sure how the physician-based committee reaches its recommendations for health care service prices, which Medicare typically adopts. And longstanding criticisms of conflicts of interest have been largely based on anecdotal evidence and the assumption that tasking doctors with setting their own prices must be the equivalent of the fox guarding the henhouse.
But according to the empirical research, even if committee members were entirely neutral, only 1.9 percent of the $70 billion Medicare spends annually on physician care would be redistributed across all services.
“Though the analysis is not a complete vindication of the AMA committee, we find that committee bias has subtle implications for different medical fields and for Medicare,” said Chan, an assistant professor of medicine at Stanford.
“Primary care doctors once thought to be disadvantaged by the presence of specialty physicians on the committee actually benefit from shared interests with other types of physicians,” he says. “And overall, Medicare gets higher-quality information when the committee has connections with specialties.”
Benefits of bias
In their research, Chan and Dickstein, an assistant professor of economics at NYU, set out to uncover whether committee members exhibit bias in their recommendations and, if they do, how much it affects overall prices.
Since 1992, Medicare has tasked the AMA committee, formally known as the Relative Value Scale Update Committee (RUC), with calculating the time and effort component which, together with service costs, accounts for 96 percent of the Medicare reimbursement rate. Most private insurers also establish their payment rates based on Medicare pricing.
The lopsided composition of the committee – specialists significantly outnumber primary care physicians – has also fueled suspicions that prices for complex procedures are rising quickly because doctors on the committee are inclined to increase the cost of the procedures that either fall under or are closely related to their practice areas.
After reviewing internal deliberations on 4,423 fee proposals from 1992 to 2013, the researchers found an increased likelihood that committee members will recommend higher prices for specialties they are connected with. For example, a spinal surgeon on the committee is likely to agree with a price increase for a hand surgery procedure because both share revenue from orthopedic procedures.
The researchers then measured how closely connected a proposed price change was to the specialties represented on the committee and the effect that affiliation had on the recommended reimbursement. They found that the more connected the overall committee was to specialties representing a procedure, the more likely it was to go along with a suggested rate increase.
So why would Medicare rely on a biased industry group to determine its prices? The evidence, Chan said, suggests an explanation: The lack of impartiality on the committee is offset by the finding that the information members contribute to the price-setting process is of higher quality than input from neutral advisers.
“There is this trade-off between bias and the quality of information,” Chan explained. “An unbiased but very imprecise price may be worse than a biased price that is closer to the truth.”
Positive impact on primary care
Contrary to common perception, the researchers also suggest that primary care doctors are not always harmed by these biases. They found that services performed by primary care doctors and specialists often overlap, which means that Medicare pricing policies affect them in similar ways more often than people think. For example, primary care physicians who are internists and family medicine doctors perform some procedures that cardiologists and radiologists do. So, if the price of an electrocardiogram goes up, primary care doctors stand to gain financially from the procedure as much as cardiologists and cardiothoracic surgeons.
And because primary care specialties already benefit from affiliations with other specialties, doubling the number of internists on the committee and quadrupling the number of family medicine practitioners would increase their specialty revenues by less than 1 percent.
Further, the analysis showed that such shared interests – and the closer connection between committee members and the specialties communicating the costs of a procedure – helped boost the overall quality of information behind committee decisions.
“There are very likely several features in Medicare’s pricing structure that disadvantage primary care,” Chan said. “But our research suggests that the arrangement of the RUC is not one of them.”