Managing autism treatment in self-funded plans

Self-funded plans frequently deal with issues at the intersection of physical health, behavioral health, medical science, and government regulation. One emerging issue that relates to each of these areas is Applied Behavior Analysis (ABA) treatment for autism spectrum disorders (ASD).

ABA is one of the fastest growing state benefit mandates. Today, 46 states mandate some form of autism coverage with varying degrees of benefit coverage and limits. ABA is a prime example of the type of coverage required by state mandates.

The prevalence of ASD has risen precipitously. In the early 1980s, population prevalence was estimated at 0.05% (five of 10,000 children). The most recent studies estimate prevalence to be 1.5% (one in 68 children). Traditionally, commercial insurers excluded or minimally covered treatment for ASD. However, more recent federal mental health parity laws and essential health benefit requirements (EHBs) of the Patient Protection and Affordable Care Act (ACA) have served to increase access to ASD treatments.

ABA is a behavioral strategy to improve socially significant behaviors to a meaningful degree. Targeted behaviors include adaptive living skills such as gross/fine motor skills, social skills, communication, reading, eating, and dressing. The ABA treatment regimen typically involves highly structured, intensive interventions for up to 30 or 40 hours per week. The course of treatment can last many years, from diagnosis at early ages (e.g., ages 3 to 4) through adolescence (and sometimes beyond).

While self-funded employer-sponsored plans are not required to comply with state mandates under federal law (ERISA), they are not immune from the trend toward greater ABA coverage driven by state mandates for insured plans.

Challenges for self-insured plan sponsors include:

Medical necessity. Medical carriers will often advise that ABA is not medically necessary for its self-insured customers but will cover it for its insured business to meet state mandate requirements. This makes it difficult for plan sponsors to explain to members why it is not covered under their plan.
Cost. Assuming conservatively the average age of diagnosis is 4 years and average age of completion is 15 years, adding this benefit can be a long-term expense to the plan. Cost estimates range between $25,000 and $50,000 per case per year.
Utilization management. If plan sponsors decide to cover ABA, then it is important to make sure members access school-/community-based services, which play a significant and progressive role in offsetting plan costs.
Network management and provider credentialing. As demand for ABA services grows, plan sponsors may want to review credentialing and network utilization to assure ongoing access to qualified providers for these services.
Compliance. Plan sponsors must not run afoul of the Mental Health Parity and Addiction Equity Act (MHPAEA), which prohibits plans from restricting mental health benefits more so than physical health benefits.
Related benefits. Even if a plan specifically excludes coverage for ASD treatment and diagnosis, members with autism are most likely already receiving related functional health benefits such as physical therapy and speech therapy (habilitative and rehabilitative). It is important to understand the interconnectedness of benefit administration and the underlying equities.

The increasing prevalence of ASD, the growth in state ASD benefit mandates, and the widespread treatment of ASD through ABA can affect self-funded plan sponsors, requiring them to think comprehensively about balancing member needs and access with care cost and care management.

This article first appeared on LaborPress.org.

U.S. group disability insurers experience market consolidation, 7.3% growth in new sales in 2017

Milliman recently released the results of its 2017 U.S. Group Disability Market Survey, a comprehensive report that analyzes the short- and long-term disability (STD/LTD) market, including sales and in-force business.

In total, 25 disability insurers representing over 90% of the market contributed data to the survey, which provides analysis of premiums, cases, and covered lives in 2016 and 2017 for all participating companies. The report ranks participating companies by both STD and LTD in-force premium and new sales totals, and offers insight into current trends in the group disability market.

We’re continuing to see strong growth in the marketplace despite consolidation among U.S. group disability insurers. And while the market consolidation may have played a factor in poorer performance for some insurers in 2017 compared to previous years, overall new sales for STD and LTD markets are up by a combined 7.3%.

Survey highlights include:

• Combined STD and LTD in-force premium for participants was approximately $16.7 billion in 2017 compared with $16.0 billion in 2016.
• STD new sales premiums saw an 8.5% increase from 2016 to 2017, while LTD new sales premiums increased by 6.6%.
• Unum, Lincoln Financial Group, and Cigna retained the top three spots for new STD sales premium in 2017. Unum, The Hartford, and MetLife took the top three spots for new LTD sales premium.
• Average STD premium per life increased by 0.9% for in-force business, and by 2.0% for new sales; average LTD premium per life increased by 2.7% for in-force business and by 3.3% for new sales.

Copies of the full report are only available to participating companies. For a summary of results, click here.

Rebate considerations for prescription drug stakeholders

The prescription drug distribution chain is complex and involves several stakeholders. There are generally six in the supply and demand of prescription drugs: pharmaceutical manufacturers, health insurers (including self-insured employers), pharmacy benefit managers (PBMs), pharmacies, wholesalers, and patients.

These stakeholders’ contracts determine how much a patient’s health insurance pays for prescription drugs and the patient’s out-of-pocket costs. Pharmaceutical manufacturer rebates are one of the key drivers that influence how health insurers cover prescription drugs. Rebates affect the finances of all stakeholders involved in the prescription drug distribution chain.

Prescription drug rebates are generally paid by a pharmaceutical manufacturer to a PBM, who then shares a portion with the health insurer. Rebates are mostly used for high-cost brand-name prescription drugs in competitive therapeutic classes where there are interchangeable products (rarely for generics), and aim to incentivize PBMs and health insurers to include the pharmaceutical manufacturer’s products on their formularies and to obtain preferred “tier” placement.

The May 2018 “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs” from the U.S. Department of Health and Human Services targets rebates as part of its goal to lower prescription drug prices. In this article, Milliman’s Gabriela Dieguez, Maggie Alston, and Samantha Tomicki explain the finances associated with rebates and their impact on health insurer coverage decisions.

National Health Protection Scheme: Short-term and long-term challenges

India’s National Health Protection Scheme (NHPS), when fully implemented, will be the largest of its kind in the world and is likely to be a boon for Indian healthcare consumers. The short-term and long-term challenges of the NHPS should be reviewed and tackled differently by each stakeholder—the central government, state governments, the provider community, and the insurer community. Milliman’s Abhishek Agrawal provides more perspective in this paper.

Healthcare costs for typical American family reach $28,166 despite low annual rate of increase

Milliman today released the 2018 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider organization (PPO) plan. In 2018, costs for this family will increase by 4.5%, approaching the lowest rate on record. Last year’s 4.3% increase was the lowest in the MMI’s 18-year history, and points to the recent deceleration in healthcare cost increases.

“There are two ways of looking at this year’s MMI,” said Chris Girod, coauthor of the Milliman Medical Index. “On the one hand it’s heartening to see the rate of healthcare cost increase remain low. On the other hand, we’re still talking about more than $28,000 in total healthcare costs for the typical American family.”

So is the American healthcare system bending the cost curve? What could be behind this apparent moderation in the annual rate of increase?

“We asked key stakeholders across the healthcare system what might be driving the decline in growth rates,” said Sue Hart, coauthor of the MMI. “Several common themes emerged, in particular provider engagement, more effective provider contracting, value-driven plan design, and spillover effects from public program initiatives.”

For the third straight year, prescription drug cost trends are down, though at 6% the rate of increase still exceeds other components of the MMI.

“Prescription drug costs have steadied, but this trend is volatile and hard to predict,” said Scott Weltz, coauthor of the MMI. “High-cost drugs can have a big impact on trends, as we witnessed a few years ago when hepatitis C treatments hit the market. Alternatively, point-of-sale rebates could push a consumer’s costs in the other direction, particularly for people taking high-cost drugs. As the environment evolves, changes in drug prices can be deployed quite quickly.”

To view the complete MMI, click here.

Medicaid buy-in and Section 1332 State Innovation Waiver considerations

Some states are looking for ways to offer more comprehensive or lower-cost health insurance on the individual market and to entice more of those currently uninsured to purchase coverage. One option currently getting the attention of states is Medicaid buy-in.

A Medicaid buy-in option is different from Medicaid expansion efforts under the Patient Protection and Affordable Care Act (ACA). A Medicaid buy-in approach can build on a state’s existing Medicaid program infrastructure and offer a Medicaid-like plan to specified residents.

Under a Medicaid buy-in proposal, the core target population would typically be those who are purchasing insurance using advanced premium tax credits (APTCs) or who are eligible for APTCs but uninsured. A Medicaid-buy in may allow individuals not eligible for commercial group coverage to purchase a Medicaid-like plan. This type of proposal may allow a state to replace or augment the current insurance marketplace and ACA premium assistance structure under federal waiver authorities.

States could use their own funds and/or leverage federal funding to develop a buy-in program authorized by a Section 1332 State Innovation Waiver. A state’s goals for a Medicaid buy-in through a 1332 Waiver could be further supported by a Section 1115 Demonstration Waiver or other Medicaid coverage changes.

In this paper, Milliman’s Paul Houchens, Christine Mytelka, and Susan Philip discuss buy-in proposals, exploring the opportunities at a high level and laying out key considerations for states as they weigh their options.