Today's Top Stories
1. AHIP: High-deductible health insurance plans grow 18%
2. Insurers share claims data with HHS to fight fraud
3. Should insurers outsource clinical services?
4. Aetna-provider plan offers price guarantees to stay competitive
5. WellPoint earnings fall 8%, but board supports CEO
Editor's Corner: Don't leave money on the table: Improve your Medicare Advantage quality rating
Also Noted: Spotlight On... Blue Cross launches new logo, ad campaign
Regence addresses rate hike at hearing; Highmark settles antitrust lawsuit; and much more...
News From the Fierce Network:
1. Study: Medicaid expansion linked to fewer deaths
2. Hospitals fail to use readmission best practices
3. Health reform could 'rock the business landscape'
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Prepayment Fraud, Waste and Abuse (FWA) Detection: The rate of health care FWA is on the rise, estimated to be 10-15 percent all claims. This FREE white paper reveals the advanced analytic strategies payers are using to stop fraud before payment is made, preventing billions of dollars in unnecessary loss. Download now!
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Don't leave money on the table: Improve your Medicare Advantage quality rating
Not improving your Medicare Advantage star quality rating is like leaving money on the table and walking away; it just doesn't make sense. I reached that conclusion after speaking with L.E.K. Consulting's Joe Johnson, who laid out a clear explanation of why the Medicare Advantage 5-Star Quality Rating System, in particular, is beneficial for insurers and why improving overall quality care is also worth the time, resources and financial commitment necessary to reap big rewards.
Through its quality ratings, Medicare Advantage pays bonuses to private insurers that receive 3 to 3.5 stars out of 5 on Medicare's rating scale, which includes more than 50 measures from five different rating systems.
By simply improving from a 3-star to 4-star rating, insurers can accrue an additional $50 per member per month, on average.
"There are certainly benefits when it comes to the revenue generation standpoint," Johnson, who is senior manager with L.E.K.'s healthcare services practice, told FierceHealthPayer.
--> READ THE FULL COMMENTARY
Read more about: Medicare Advantage star quality, Fierce Exclusive
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Today's Top News
1. AHIP: High-deductible health insurance plans grow 18%
High-deductible health plans, with their high up-front costs and low premiums, are becoming more popular, according to a new report from America's Health Insurance Plans (AHIP).
The report tracked health plans with a deductible of at least $1,200 for individuals or $2,400 for families. It found that enrollment increased 18 percent from 2011 and now cover about 13.5 million people, reported The Hill's Healthwatch. Although high-deductible plans used to attract mostly people buying their own coverage, now the biggest customer base comes from large employers.
AHIP found that large group coverage grew the fastest since last year, representing about 59 percent of all plans. Forty-nine percent of all high-deductible plan enrollees in the individual market were at least 40 years old; 26 percent were younger than 20 years old, and 25 percent were between the ages of 20 and 39.
The states with the highest high-deductible plan enrollment are California (1,001,943), Texas (755,432), Illinois (717,384), Ohio (662,999) and Florida (539,778).
To learn more:
- read the AHIP report
- see The Hill's Healthwatch article
Related Articles:
Blue Shield sued for 'death spiral' practices
Health savings account enrollment jumps 26% in large group plans
Consumer-directed plans offer short-term benefits
High-deductible plans linked to fewer preventive services
Consumer-driven, high-deductible plans grow
Read more about: America's Health Insurance Plans (AHIP)
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2. Insurers share claims data with HHS to fight fraud
Hoping to clamp down on healthcare fraud, private payers like UnitedHealth and WellPoint are partnering with the U.S. Department of Health & Human Services to share more claims information and fraud prevention best practices.
Also joining the initiative announced Thursday are America's Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association and Humana, as well as agencies including the Justice Department and the Federal Bureau of Investigation.
"In the past, we followed a 'pay-and-chase' model, paying claims first--then only later tracking down the ones we discovered to be fraudulent. Now, we're taking away the crooks' head start," HHS Secretary Kathleen Sebelius said.
The partnership particularly aims to share information on "specific schemes, utilized billing codes and geographical fraud hotspots" to catch scam artists before they defraud insurers and prevent, for example, fraudulent billing to multiple insurers for care provided to the same patient on the same day in two different places, LifeHealthPro reported.
Because separate claims can look legitimate, using new technology to analyze data across multiple private and public payers will help law enforcement officials better identify and prevent healthcare fraud, according to Reuters.
"There are mutual interests here in doing a better job at detecting what's probably some $80 billion-plus per year in fraudulent payments across private and public sectors," Richard Migliori, UnitedHealth's executive vice president of health services, told Bloomberg. "There's lot of enthusiasm for doing this right."
The coalition's board, data analysis committee and information-sharing committee start meeting in September. Meanwhile, working groups with government officials and private payer representatives are setting up the coalition's structure and drafting an initial work plan, LifeHealthPro noted.
To learn more:
- check out the LifeHealthPro article
- see the Reuters article
- read the Bloomberg article
- see the HHS announcement
Related Articles:
Insurers barred from state for fraud scheme
Screen for risky providers to root out fraud
Aetna pinches off fraud with data-mining, info-sharing tech
WellPoint combats fraud with diverse anti-fraud team
How to prevent fraud on a shoestring
Prosecution is key to fraud prevention
Fraud prevention: Do you know what the criminals are up to?
Read more about: Healthcare Fraud
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3. Should insurers outsource clinical services?
Outsourcing certain administrative services has proven successful for health insurers. Some companies, including WellPoint, are starting to send even more business functions overseas in hopes of saving more money.
The second largest health insurer has begun outsourcing clinical services, including pre-service nursing programs that help patients assess their needs and determine treatment methods, to countries like India and the Philippines, the Los Angeles Times reported.
WellPoint's "sourcing strategies have enabled us to make our services more effective, accessible and affordable to our customers, while allowing us to expand our programs and maintain our service levels," spokeswoman Kristin Binns told the Times. But she clarified that employees overseas do not make decisions about denial of procedures or treatment.
In 2010, WellPoint formed a separate business unit called Radiant Services to help advance outsourcing various services, including laying off pre-service nurses in Colorado and Nevada and transferring those jobs to Manila. Since creating Radiant Services, WellPoint has since eliminated thousands of jobs in the U.S., dropping its total employment from 40,500 to 37,700.
However, Binns said that fewer than 2.5 percent of WellPoint's current 37,000 employees have lost jobs because of outsourcing, and only about 50 of the eliminated positions involved clinical management of care.
Although WellPoint is sending some clinical jobs offshore, Binns said it's a small part of its overall outsourcing program, which affects multiple departments and functions involving claims, enrollment, billing, post-service clinical claims review, utilization management and pre-service nursing.
But WellPoint isn't the only insurer beefing up its outsourcing. Aetna has an arrangement in place with EXL Service, a U.S.-based company with operations in Manila, to provide "targeted care-management support," spokeswoman Cynthia Michener told the Times.
Health Net has been farming out administrative and IT jobs to other countries. It recently laid off dozens of IT and accounting employees to outsource those jobs to India.
Blue Cross and Blue Shield of North Carolina (BCBSNC) also has outsourced some IT functions, including contracting with a U.S.-based company with facilities in India to extract and analyze data from its electronic data warehouses.
"People are looking at all the tasks that can safely and responsibly be moved," said Kaveh Safavi, head of the North American health practice for Accenture, which has partnered with WellPoint's Radiant. "It's still an emerging market. We're still trying to understand the market's tolerance for it."
To learn more:
- read the Los Angeles Times article
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Hospitals outsource services to save money
Read more about: Wellpoint
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4. Aetna-provider plan offers price guarantees to stay competitive
Aetna is partnering with the nation's 10th largest provider group to sell new health plans that offer price guarantees for employers and limits members' premium increases.
By partnering with Aurora Health Care's network of 1,500 physicians, 15 hospitals and 160 clinics in Wisconsin and Illinois, Aetna aims to gain a competitive advantage in the market, where it lags far behind UnitedHealth, Humana and Anthem Blue Cross Blue Shield, the Milwaukee Journal Sentinel reported.
Members of the Aetna-Aurora health plan will receive care from Aurora's hospitals and doctors; otherwise, they will face much higher out-of-pocket expenses for services received outside the Aurora network. The health plan also will provide cost savings specific to employers, potentially saving them an average of 10 percent of past claims expenses, the Business Journal reported.
To keep the health plan prices low, Aurora is guaranteeing that costs will increase at a slower rate and if those costs increase less than projected or if Aurora meets certain quality measures, Aetna will provide financial bonuses.
"We think of this as reinventing the business model," Aetna CEO Mark Bertolini told Bloomberg. "It's no longer us telling the providers what to do. It's the providers managing the risk of the population they're serving and being rewarded for a positive outcome."
Aetna will begin offering the new plan in January, Bloomberg noted.
To learn more:
- read the Milwaukee Journal Sentinel article
- see the Business Journal article
- check out the Bloomberg article
Related Articles:
Fierce Q&A: Aetna's ACO chief says tech a 'foundational requirement' of accountable care
Aetna, Cigna, Blues unveil new ACOs
Aetna fined $1M for not covering services, false advertising
Aetna partners with Inova in narrow network plan
Payer-provider data transparency key to ACO success
Read more about: Aetna, payer-provider relationships
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5. WellPoint earnings fall 8%, but board supports CEO
WellPoint's second quarter net income fell 8 percent--the fifth straight quarter that the insurer's earnings dropped from the previous year's quarter. The results at the second largest insurer has frustrated investors with CEO Angela Braly and other top executives heading the company.
In the last three months, WellPoint earned $643.6 million, compared to the $701.6 million year-over-year. Although revenue grew 2 percent to $15.17 billion, it was still about $100 million below analysts' average estimates, Reuters reported.
Enrollment also fell 1.9 percent to 33.5 million, down 169,000 because of increased competition in California, Georgia and Virginia, according to the Indianapolis Star.
Amid such a disappointing earnings report, WellPoint's board of directors issued an unusual statement supporting Braly and her senior leaders, saying the board "has been fully involved in the strategy WellPoint is pursuing and is supportive of the strategy and our management team," The Wall Street Journal reported.
Investors have been questioning WellPoint's performance for several quarters, particularly since the company has undergone a high turnover rate with Braly at the helm. "Time may be running out for WellPoint's management team," Citi Analyst Carl McDonald said in a research note. "Several large (share) holders were already frustrated by WellPoint, and this earnings report won't do much to improve the relationship."
To learn more:
- read the Reuters article
- see the Wall Street Journal article (subscription required)
- check out the Indianapolis Star article
Related Articles:
WellPoint profits drop 8% as enrollment falls, expenses rise
Senior care causes WellPoint profits to drop 39%
Changing enrollment linked to WellPoint profit drop, Aetna revenue dip
Aetna, WellPoint Q1 earnings rise
Read more about: Wellpoint, Angela Braly
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Also Noted
SPOTLIGHT ON... Blue Cross launches new logo, ad campaign
Independence Blue Cross (IBX) has launched a new logo, tagline and advertising campaign for the first time in 20 years. The Philadelphia-based insurer's new logo includes the word "Independence" followed by the iconic blue cross graphic, the Philadelphia Business Journal reported. With the new branding, IBX wants to highlight the benefits of a coordinated healthcare system that focuses on health and wellness.
"This new campaign highlights our commitment to building a better healthcare system--to 'changing the game,'" IBX CEO Daniel Hilferty said in a statement. "At Independence Blue Cross, we see a day when patients, physicians, nurses and hospitals are all seamlessly connected through improved coordination, better access to information and doctor-patient accountability, resulting in better quality care and lower costs. And we are the company that is making it happen," Hilferty said. Article
> Regence Blue Cross Blue Shield and Providence Health Plan will address the Oregon insurance department about their rate increase requests, the Portland Business Journal reported. Regence wants to raise rates by 9.6 percent, and Providence requested a 15.7 hike. Article
> Blue Cross Blue Shield of Nebraska will sell health plans in the Omaha area that allow consumers to save money by using doctors and hospitals affiliated with the Nebraska Medical Center and Nebraska Methodist Health System, according to the Omaha World-Herald. Article
> Highmark has reached a tentative settlement with real estate firm Royal Mile, which alleged that Highmark and UPMC conspired to raise insurance premiums, the Pittsburgh Post-Gazette reported. Article
> The insurance industry is still profitable, with UnitedHealth, CIGNA, WellPoint, Aetna, Humana and Coventry Health Care reporting year-over-year earnings growth, according to NASDAQ. Article
> And Finally… Your job = death sentence. Article
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