by admin | Mar 12, 2012 | Health Care Reform, healthcare, Hospitals, PPACA, Small Business Group Health
Out of Control Out of Network Charges
Few healthcare changes have been more impacted than the out of control out of network charges billed to patients. The health care reform bill known as PPACA has for the most part been insignificant in the Northeast, in particular, as many state laws have already addressed issues such as pre-existing conditions, contraception, coverage rescissions and maximum loss ratios (MLR).
Instead, the market forces are reshaping the medical field into significant insurance & provider consolidation, larger hospital groups and flattening provider reimbursements. The problem is pointed out in Out of Network Medical Costs Affecting NY State Across investigation report commissioned by Governor Cuomo recognizing the unexpected out-of-network claim problem. Officials say that this is now “an overwhelming amount of consumer complaints.” Some examples cited in the report An Unwelcome Surprise – “a neurosurgeon charged $159,000 for an emergency procedure for which Medicare would have paid only $8,493.” Another example: ” a consumer went to an in-network hospital for gallbladder surgery with a participating surgeon. The consumer was not informed that a non-participating anesthesiologist would be used, and was stuck with a $1,800 bill. Providers are not currently required to disclose before they provide services whether they are in-network.” The average out-of-network radiology bill was 33 times what Medicare pays, officials say.
To make matters worse, Health Insurers have reduced their out of network recognized charges from private industry index UCR (usual customary and reasonable) to the Medicare Index known as RBRVS ( Resource Based Relative Value Scale ). Insurers moved away from UCR after then-NYS D.A. Mario Cuomo in 2009 forced Unitedhelatcare Group (owners of Inginex) to settle $50 Million in a conflict of interest allegation. D.A. Cuomo future hopes for UCR were to that it be overseen by a non-profit entity. So much for best laid plans.
Today, 90% of SMB members have in network only benefits but the few remaining consumers are paying for eroding out of network benefits with little transparencies and necessary protection from new out of network billing practices. The NY Dept of Financial services is calling for providers in non-emergency situations to disclose whether or not all services are in-network, what out-of-network charges will be and how much insurers will cover.
Insurers such as Aetna are taking action – with lawsuits throughout the country such as Aetna sues 9 N.J. doctors for “unconscionable” fees. Another Aetna lawsuit is discussed extensively in a law blog: In New Lawsuit, Health Insurers Allege Fraud and Kickbacks Against Out-of-Network Providers Who Forgive Patients’ Financial Responsibility.
In an ominous statement” “Failure to recognize this historical out-of-network avalanche will result in shocking financial disasters, as experienced by so many hospitals in 2003″
by admin | Sep 1, 2011 | Health Care Reform, Health Care Refrom, healthcare, Hospitals, NY News, Tax
Ever Wonder why in a Metropolis of 25 Million there are maybe 5 insurers left?
New York Taxes – As published with the NYS Insurance Dept.
New York adds more insurance taxes than any other state in the country. These consist of both direct taxes and a number of “hidden” taxes amounting to a total of over $4.1 billion in taxes passed on to our customers in the form of higher premiums. These taxes include:
• NYS Premium Tax- this 1.75% tax is on all HMO and insurance contracts and is projected to raise $353 million for the State in 2010. Empire alone pays $103.9 million to the State in premium taxes (this amount includes a special surcharge for customers in the MTA service area).
• Covered Lives Assessment- this “hidden tax” is a charge on all fully and self insured “covered lives” and raises, statewide, projected to raise $1.16 billion for the State in 2010. Empire alone will pay about $296.2 million in covered lives assessments in 2010. The purpose of the Covered Lives Assessment is raise funds for a variety of state programs and for the state Budget. The Assessment is included in claims costs for purposes of calculating the MLR.
• HCRA Surcharge- this is a 9.63% surcharge on all hospital discharges projected to raise $2.33 billion in 2010. Empire alone will pay approximately $379.4 million to the State in HCRA surcharges in 2010. The purpose of the HCRA Surcharge is to raise funds for a variety of state programs and for the state Budget. The Assessment is included in claims costs for purposes of calculating the MLR. NYS Insurance Department “332” Assessment- while this assessment is legitimately intended to fund the cost of the Insurance Department’s regulatory activities there is a “hidden tax” whereby a large portion of the revenue generated by the assessment is used to fund other programs funded not directly related to insurance regulation and is projected to raise $270 million from New York’s health insurers and HMO’s in 2010. Empire will pay the state $57.9 million in 332 assessments for 2010.
Each of these taxes is increased regularly by the State and contributes significantly to annual increases in rates. The competition in the health insurance industry is already at a dangerous low level. Negotiating with insurers has become an overwhelming challenge in the large group market.
by admin | Aug 18, 2011 | group health insurance, healthcare, Hospitals
After balancing the budget and announcing $2.4 trillion in government spending cuts over ten years, politicians and media pundit are insisting that it is only the beginning of the attack on health care, pensions and other social programs.
So why is balancing the budget and cutting medicare so bad for the Privately Insured? After all, the Democrats have made sure the automatic cuts leave Medicare benefits untouched, and the Republicans have blocked any new taxes.
Everyone is content right? Or so it seems. But the truth is that cutting payments to Medicare providers will mean some Americans are going to pay more. It may not be called a tax, but if you’re covered by private health insurance, money will be coming out of your pocket nonetheless.
Here’s how cuts in Medicare affects the rest: If a hospital provides a service that costs $1,000,000, and the government elects to pay just $980,000, the $20,000 gap doesn’t disappear. The hospital has to cover it somehow. It will likely do so by shifting the costs to commercial insurers, which eventually means higher premiums. This cost shifting is nothing new-it’s been happening for years-but more cuts will just make it worse.
NY Hospitals in particular have felt Federal Funding cuts for teaching hospitals over the last decade. This has been a contributing factor to St. Vincents declaring bankruptcy last January. Many surviving hospitals however have the size to negotiate effectively with private insurers to make up that funding short fall.
So guess who makes up that difference? The fact remains, if you don’t deal with underlying costs, you’re not fixing the problem, you’re just covering it up.
![Westchester Medical Center and Empire Blue Cross end contract]()
by admin | Nov 3, 2010 | healthcare, Hospitals, Small Business Group Health
The teaching hospital of Valhalla and Empire no longer have a contractual agreement effective 11/1. This effects the commercial product and not the Medicare plan – MediBlue.
This comes up on the heels of the rancorous recent dispute between Empire and Stellaris Hospital Systems which was finally resolved after 5 months without a contract. Disputes like these are becoming industry wide- see Hospital Contract Non-Negotiation. Unusually, the dispute between Empire and Westchester Medical Center came as a rather surprise without the typical 11th hour press releases by both parties.
Size matters when it comes to these disputes. Empire is still #1 insurer with close to 5 million members. While the hospital serves the Westchester community and is a vital resource they do not have the scale as the 4 member hospital like Stellaris Hospital Systems which includes Phelps Memorial, Lawrence Hosp, White Plains Hosp, and Northern Westchester Hosp.
More info on Empire Blue Cross’s position can be reviewed here. We are awaiting further the hospitals position to share with clients and partners. For more customized information and how to navigate this please contact us:
Millennium Medical Solutions Corp.
200 Business Park Drive
Armonk, NY 10504
914-207-6161
![Westchester Medical Center and Empire Blue Cross end contract]()
by admin | Apr 23, 2010 | healthcare, Hospitals, NY News
Just a heads up on a topic that will be all too familiar going forward. We see this as a trend and not the exception. As hospital systems have consolidated in reaction to negative market condition and increasing costs of doing business. But size is better when it comes to negotiating with insurers. We are seeing profitable hospitals asking for 15% rate increase form prior years. They can do this because insurer network marketability is on the quality and size of network.
Current News:
Aetna: Effective 4/5/2010, Beth Israel Medical Center – Petrie Division, Beth Israel Medical Center – Kings Highway Division; Long Island College Hospital; New York Eye & Ear Infirmary; and St. Luke’s Roosevelt Hospital Center – Roosevelt Division, and St. Luke’s Roosevelt Hospital Center – St. Luke’s Division (the “Continuum Hospitals”) were terminated from the Metro NY Aetna network. The hospitals will remain participating and will be accepting In Network Rates until the end of the cooling off period on 6/5/2010.
Continuum had almost lost United/Oxford Health Net in march and Empire or Wellpoint last Spring.
Empire Effective 4/1/10 has lost Stellaris Health Network in Westchester. Those hospitals include Phelps Memorial, Lawrence Hosp, White Plains Hosp, and Northern Westchester Hosp. They were asking for double digit increases for each year of a mutli-year contract, which would have had to be passed on to our members in the form of higher premiums. Our Empire clients will be covered in those facilities for emergencies, as well as services that have already been pre-authorized and approved.
A released Empire Fact Sheet of the contract termination is available
While this happened somewhat in prior years things usually were worked out at 11th hour after a cooling of period. Whats troubling now is that there is little common ground to stand on. We believe in the short term they will get reworked as both Mammoth Corp need each other but this will be a serious concern worth watching.
