August 25, 2017 – Northwell Out of Insurance Biz

PRESIDENT’S MESSAGE Charles Rothberg, MD August 25, 2017 Volume 17 Number 33

Dear Colleagues: Yesterday, Northwell announced that it will close its insurer, CareConnect, due in large part to the flawed risk adjustment. While physicians won’t be asked to absorb the losses—as was the case with the shuttering of insurer Health Republic almost two years ago—both of these situations suggest that if we want to encourage new entrants into the insurance market, regulators need to understand what “adjustments” do to the playing field. Northwell was required to pay almost half its revenue into the pool (even though the ACA requires that 80% of premiums be spent on medical care). Both Congress and the ACA sought to promote new entrants to create a more competitive insurance market—but in attempting to level the playing field it has instead tilted it even further. The risk adjustment was based on a flawed methodology that absurdly considered factors beyond actual claims experience. It scored non-financial factors like co-morbid disease—which was derived from insurer’s own data and the mining of physician records, but didn’t at all correlate with financial experience. Established, deep-pocketed insurers were able to mine data better to exploit this flawed methodology. New insurers were drained out of business. This kind of dangerous “misunderstanding” on the part of regulators and policy makers is why I cannot easily welcome so-called “value based payment” reforms. Sincerely, Charles Rothberg, MD MSSNY President Please send your comments to comments@mssny.org


enews large Northwell Will Shutter CareConnect Over ACA Uncertainty, Costs Yesterday, CareConnect, which includes 22 hospitals, including North Shore University Hospital, Northern Westchester Hospital, and Lenox Hill Hospital, reported that they will exit the insurance market in 2018 “because of the uncertainty of the Affordable Care Act’s future” and costs. About 126,000 CareConnect policyholders “would remain covered while they transfer to new health providers.” CareConnect parent Northwell Health highlighted a $112 million payment into the ACA’s risk-adjustment pool this year, which represented 44 percent of CareConnect’s 2016 revenue from its small group health plan. CareConnect faced another such payment and “said it never received $150 million from the federal government in risk-corridor payments.” Newsday (NY) (8/24) The New York Times (8/24) quotes Northwell CEO Michael Dowling saying in an interview that the politics are “so poisonous at the moment that nobody wants to sit down collectively and, in my view, do their duty to fix the things that need to get fixed…“It has become increasingly clear that continuing the CareConnect health plan is financially unsustainable, given the failure of the federal government and Congress to correct regulatory flaws that have destabilized insurance markets and their refusal to honor promises of additional funding.” CareConnect was started in 2013 as a way for Northwell to direct patients to its hospitals and doctors, promising a simple, limited network of health providers and lower prices. But the business faced the same pressures many other insurers faced in the Affordable Care Act marketplaces. Many misjudged the business, charging too little for premiums and then taking losses as patients used more care than they projected. Bloomberg News (8/24)  DFS re Careconnect’s Withdrawal from NY Health Insurance Market “While it is unfortunate that the continued uncertainty across the nation due to the repeated actions of the federal government to undermine the Affordable Care Act at this time in the insurance cycle has caused CareConnect to begin an orderly wind down from the market, we recognize that this decision will help Northwell focus on its core mission to deliver healthcare services to New Yorkers. In spite of recent federal efforts to destabilize markets and threats to dismantle or not enforce the ACA, New York’s healthcare market remains robust and consumers across New York have real choice of coverage. DFS will work with CareConnect on an orderly transition to ensure that all of its members know their full options and continue to receive healthcare coverage without interruption. Once again we call on the federal government to end this continued uncertainty, immediately act to protect our markets by fully paying the cost-sharing subsidies for good and not piecemeal, making the overdue risk corridor payments, fully enforcing the individual mandate, and stopping once and for all the partisan attacks on healthcare for all Americans. We appreciate that some members of Congress are seeking to turn this corner in a bipartisan manner and to maintain the ACA’s protections to stabilize markets.” Iroquois Healthcare Alliance to Syracuse Post-Standard: Comprehensive Medical Liability Reform is Needed to Help Recruit Doctors in New York State Noting that “upstate New York is suffering from a shortage of doctors”, this week Iroquois Healthcare Alliance President Gary Fitzgerald responded to an offensive letter to the editor from NYPIRG Executive Director Blair Horner that had appeared in the Syracuse Post-Standard that had called for the Governor to sign the potentially disastrous medical liability expansion bill that had passed the Legislature prior to the end of Session. To read the Iroquois letter, click here.  The Iroquois Healthcare Alliance represents numerous hospitals and health systems across upstate New York.  The NYPIRG letter to the editor had been a response to an August 1 op-ed from Onondaga County Medical Society President Dr. Mary Abdulky calling for the Governor to veto this legislation. The IHA letter noted that “the bill for which Horner advocates is a lone piece of medical malpractice liability legislation, hastily passed in the well-known Albany-style darkness during the end of the legislative session…What makes sense, what is crucially needed and what will result in fewer doctors fleeing this state, is a comprehensive package of medical liability legislation that also addresses the ability to recruit and retain doctors in New York state, especially those in our Upstate rural and underserved areas. Also this week, an op-ed from Dutchess County President-elect Dr. Jay Jalaj urging Governor Cuomo to veto this legislation was in the Poughkeepsie Journal. Physicians must continue to contact the Governor at 518-474-8390 to urge that he veto this legislation, as well as sending a letter from here.


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DFS Fines MVP $200,000 for Improperly Denying Claims and Charging Co-Pays and Deductibles for Preventative Services Companies Agree to Pay Restitution to 356 Members and to Correct Problems

Financial Services Superintendent Maria T. Vullo announced the Department of Financial Services (DFS) has fined MVP Health Plan Inc. and MVP Health Insurance Company $200,000 for incorrectly applying cost-sharing to members’ claims and improperly denying some claims for preventive healthcare services.  The companies agreed to pay the fine and to correct claims processing procedures in a consent order reached with DFS.  The companies have agreed to make restitution, including interest, to 356 of its members. The companies have agreed to make restitution, including interest, totaling approximately $9,000 to 356 of its members.  MVP Health Plan Inc. is a not-for-profit health maintenance organization; MVP Health Insurance Company is a for-profit insurer that sells small group policies and policies to individuals.  The two companies insure approximately 100,000 members in New York’s individual and small group markets. The violations, which occurred between 2011 and 2013, were uncovered in a DFS examination of the insurers.  The DFS examination found that some members’ claims were improperly denied by the insurers.  In other cases, members were erroneously charged cost-sharing expenses, such as improper co-payments or deductible charges.  The violations involved instances of improperly processing claims involving more than a dozen kinds of healthcare screening or preventive services.  These included screening for breast, cervical and colorectal cancer, depression, hearing loss and obesity in children and adults. In addition to restitution and the fine, the consent order directs the companies to update their claims processing system, provide training for claims examiners, and explain to providers how to handle certain mandated services under the federal Affordable Care Act and New York law. The DFS consent order requires the companies to provide DFS with documentation to verify that they have complied with the terms of the order. More Than 400,000 New Yorkers Paid Penalty for Going Uninsured in 2015 The New York Post (8/21) reports that 405,610 New York tax payers, more than 4 percent of total tax filers in the state, paid a combined “shared responsibility payment” fee of more than $186 million under the Affordable Care Act in 2015. The Post reports the comparatively healthy, uninsured young people are so-called “invincibles.” These tax filers “failed to obtain health insurance in 2015” and were required to pay a tax penalty under the ACA. The article notes that ACA penalty fees are set to rise in 2016 and 2017. AMA and Physicians’ Advocacy Institute Submits Detailed Comments to CMS to Reduce MIPS Program Hassles The American Medical Association this week submitted detailed comments to CMS regarding their proposed changes to the MACRA MIPS and APM programs for the 2018 performance year (which will impact payment for care provided to Medicare patients in the year 2020).  The Physicians Advocacy Institute, of which MSSNY is a board member along with 9 other state medical societies, also submitted detailed comments to CMS. For more information about the AMA comments, click here.   For more information about the MACRA resources the PAI provides for physicians, click here. Among the comments raised in the AMA and PAI letters to CMS:

  • The AMA and PAI letters express support for the proposed expansion of the low-volume threshold from 100 annual Medicare patients and $30,000 in annual allowed Medicare Part B Charges to 200 patients and $90,000, and urges CMS to notify individuals and groups as soon as possible that they qualify for the low-volume threshold exemption;
  • The AMA and PAI letters express support for CMS’ proposal to maintain the cost category weight at zero for the 2018 performance period, similar to 2017. The AMA letter noted that it believes CMS needs additional time to develop, test, and refine new episode-based cost measures prior to including them in the MIPS program in future years.
  • The AMA and PAI letters express support for CMS’ proposal within the Advancing Care Information (ACI) category of MIPS to extend certified electronic health record technology (CEHRT) flexibility for performance year 2018 and the proposed hardship exemption for small practices.
  • The AMA and PAI letters express support for CMS proposal to maintain the data completeness criteria for quality category measures at 50% for the 2018 MIPS performance period, and express concerns with a proposal to increase this threshold to 60% for the 2019 MIPS performance period.
  • The AMA letter notes its opposition to including items or services beyond the physician fee schedule, especially Part B drugs, when determining MIPS eligibility, applying the MIPS payment adjustment, and in cost score calculations.
  • The AMA letter contains a number of recommendations to simplify the overall MIPS scoring methodology, including setting a low performance threshold, maintaining the 70-point additional performance threshold, eliminating bonus points from the calculation of future performance thresholds, maintaining stability in program requirements in future years, and increasing the reliability threshold.

AMA President Dr. David Barbe said in a statement. “CMS has been a good partner in smoothing out the bumps but the program still needs to be more understandable and less burdensome. The complexity is an obstacle to the goal of promoting innovative approaches to encourage higher value care. We applaud CMS’ decision to allow for another transition year for MIPS, recognizing the challenges physicians face both bureaucratic and technological. The willingness to compromise will help physicians and patients alike.” NYC Public Hospitals Treating Larger Share of Mental Health Patients The New York Times (8/22) reports that mental health patients are being increasingly treated by the city’s strained public health system, as private hospitals divert patients and close psychiatric beds. Public hospitals’ share of psychiatric beds was more than three times those in private hospitals, according to the Independent Budget Office report released last month. Anthony Feliciano, director of the Commission on the Public’s Health System, a citywide health advocacy organization, said, “The public hospitals are taking care of a lot more of the most vulnerable population, while the private hospitals get away with not doing it.”


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High School Hours Begin Too Early in Day; 8:30 AM Is Optimal Start Time A recent report by the National Center for Education Statistics found that “only a fraction of high schools are starting later than 8:30AM, which is what the American Academy of Pediatrics recommends.” Pediatricians have argued that early school start times can result in sleep deprivation for teenagers and, “in turn, a decline in academic performance, an increased risk of car accidents and physical and mental health issues.” The accident could have been consequences of dui, one has to be careful. The average start time for US high schools is 7:59AM, according to the study. Only 13 percent of high schools start later than 8:30AM, while 46 percent start before 8AM.


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JAMA: Hospital Should Do More for Patients Admitted for Heroin Overdoses study published Tuesday in JAMA stated that not enough is being done “during hospital encounters” to intervene in patients’ opioid addictions. The study found that “among people who had overdosed on heroin, the filling of opioid prescriptions fell by 3.5 percent, while medication-assisted treatment increased by only 3.6 percent,” following their hospitalizations. The study covered “more than 6,000 people who survived an overdose from an opioid.” The study’s lead author, Julie Donahue, said, “Forty percent of those with a heroin overdose and 60 percent of those with a prescription opioid overdose filled a prescription in the six months after overdose for the very kind of medication that contributed to the overdose in the first place.” Survey: Physicians Are Warming Up to Single-Payer Model In a recent Merritt Hawkins survey, 56 percent of doctors were found to support single-payer healthcare. The results represent a big change from those of the same survey in 2008, where 58 percent of respondents opposed a single-payer system. The change is due to three main reasons, according to Merritt Hawkins, a physician recruitment firm who spoke to more than 1,000 doctors for the survey. First, doctors seek clarity and stability in healthcare reform. Next, it’s a generational issue, as young doctors come up, there is less resistance to a single-payer format. And lastly, there is a feeling of resignation among doctors who believe single-payer is inevitable so it should be adopted sooner rather than later. Influenza Vaccine Payment Allowances Annual Update for 2017-2018 Season


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