Tag Archives: Healthcare Reform

Healthcare price transparency requirements and considerations

In November 2019, the Centers for Medicare and Medicaid Services (CMS) released a final rule establishing requirements for hospitals operating in the United States to establish, update, and make public a list of their standard charges for items and services they provide. The provisions of the final rule go into effect on January 1, 2021.

The lack of price transparency in the U.S. healthcare market is well known. There are several reasons that can make estimating costs before care difficult for consumers. One of the main challenges is the variation in billed charges and negotiated rates between insurance companies and providers. The majority of Americans have health insurance coverage through insurance companies (or payers), which negotiate prices with hospitals and providers. The negotiated prices between payers and providers have historically been confidential and subject to nondisclosure agreements.

Health economists and other experts believe that transparency in pricing is key to healthcare cost containment. Opponents of the policies adopted in the CMS final rule say that these requirements will impose a significant burden on hospitals and may lead to confusion without providing any relevant information.

In this paper, Milliman actuaries and consultants provide a summary of key provisions of the final rule that apply to hospitals, briefly touching on topics that require additional consideration by parties affected by the rule.

What will China’s new health insurance industry look like?

With implementation measures for the National Health and Wellness Conference and the Healthy China 2030 initiative under discussion, 21 ministries and commissions jointly released the “Action Plan for Promoting the High Quality Development of the Healthcare Industry 2019-2022.” The plan promotes, in the development of health insurance products, the use of special needs medical services, innovative medical technologies and drugs and high-end medical devices, as well as health intervention procedures such as disease risk assessments, disease prevention and physical fitness activities. All of these new health service elements should be closely integrated into the healthcare industry.

In this paper, Milliman’s Jiang Guanjun and Qinqin Huang, former editor of Insurance Society of China, discuss the future of health insurance under this new action plan. Specifically, they provide:

  1. An analysis of current issues in health insurance development
  2. Information on developing new health insurance
  3. Information on opportunities and resource support under the new health insurance

China’s diagnosis-related group payment reform

The Chinese government has been actively promoting the structural reform of its healthcare system. Healthcare payment reform is expected to move ahead quickly with a pilot implementation of multiple social health insurance payment model types.  The country’s National Healthcare Security Administration (NHSA) indicated that it would develop a diagnosis-related group (DRG) standard suited to China’s healthcare system as well as social health insurance management capabilities.

In this article, Milliman consultants Jiang Guanjun and Qiuwen Peng examine the transition from the currently mainstream fee-for-service model to the DRG payment model, the history of DRG in foreign markets, and the potential challenges of having a DRG payment model in China’s system.

Congress has questions about single-payer healthcare. Milliman has answers.

Recently, single-payer healthcare proposals have emerged in Congress. In January, Rep. John Yarmuth, the Chairman of the House Budget Committee, sent a letter to the Congressional Budget Office (CBO) posing questions about a potential single-payer system in the United States. Because there are many different potential single-payer systems, Milliman developed three distinct scenarios as ways of showing the varied answers to the Congressman’s nine questions.

To learn more, read the article “Congress asked nine questions about single payer. Here are 27 answers.”

Shifting drug coverage from Part B to D

The Fiscal Year 2019 Budget proposes to give the U.S. Department of Health and Human Services (HHS) authority to move certain drugs currently covered under Medicare Fee-for-Service Part B to Part D in order to leverage the negotiating power of Medicare Part D plans. Unlike in Part B, Part D drug prices are negotiated between manufacturers and private Part D plan sponsors. The objective of shifting drugs to Part D is that private insurers could potentially lower the net price of drugs through cost and utilization control mechanisms already in place for Part D drugs but not currently used for Part B.

According to the “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs,” HHS may send President Trump a report to identify particular Medicare Part B drugs or classes where lower prices could be obtained by Part D. A benefit to Medicare from shifting drugs to Part D is the introduction of another payer, the pharmaceutical manufacturer, to share in the cost of the drug. Pharmaceutical manufacturers will pay 70% of the cost for brand drugs in the Part D coverage gap in 2019 for applicable beneficiaries. As a result, some drug spending liable to Medicare in traditional Part B would be shifted to the manufacturer.

To learn more about the proposals aiming to shift certain drugs from Part B to Part D and to change Medicare’s system for administering Part B drugs, read this article by Mark Koransky.

How have individual market enrollment and Affordable Care Act subsidies data changed?

The Patient Protection and Affordable Care Act (ACA) introduced many changes to the individual health insurance market beginning in calendar year (CY) 2014, including new rating rules and federal financial assistance to purchase health insurance through the insurance marketplaces. It is important to understand the condition and stability of the individual health insurance market and how the ACA has affected its health insurance consumers.

To support this understanding, actuaries Paul Houchens, Jason Clarkson, and Zachary Fohl prepared Milliman’s second annual profile of the individual health insurance market for each state along with the District of Columbia (DC). The profile summarizes insurer financials, marketplace enrollment, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces, incorporating recently released data from the 2018 open enrollment period and early 2018 effectuated enrollment snapshot.

This information is vital for stakeholders for a number of reasons, including:

1. Future legislation or administrative actions. While the pace of new healthcare reform legislation will likely slow in 2018 with the upcoming mid-term elections, data from the individual marketplace can be useful in informing future policy decisions both at the federal and state level.

2. 1332 State Innovation Waiver (1332 Waiver). The information in our state profile reports can enable a state to better understand the funding and coverage requirements that must be adhered to under Section 1332 of the ACA.

3. Marketplace enrollment trends. One important measure of risk pool stability is enrollment.

4. Cost-sharing reduction (CSR) termination. From CY 2014 through the first nine months of CY 2017, insurers received direct federal payments for the cost of providing CSR variants. However, effective October 2017, CSR payments were terminated by the federal government.

To read the full article which summarizes 2018 individual market enrollment and ACA subsidies, click here.