More healthcare providers drop out of Medicaid

HealthPocket
February 26, 2015
Medicaid Acceptance by Healthcare Providers Drops to 1-out-of-3
By Kev Coleman

When HealthPocket first investigated Medicaid acceptance in 2013, it
found that only 43% of the healthcare providers examined were formally
listed as accepting Medicaid. Since the original 2013 study, Medicaid
enrollment has continued to rise as the Affordable Care Act has led many
states to increase the income eligibility range for the program.
Medicaid, along with the Child Health Insurance Program (CHIP),
currently covers approximately 1-in-5 people in the United States. This
year, the temporary increase in Medicaid payments to primary care
physicians discontinues with only 15 states indicating that they intend
to maintain the payment increase (fully or partially). The reduction in
Medicaid reimbursement to primary care physicians has brought with it a
concern that Medicaid acceptance, already low among healthcare
providers, will drop further.

HealthPocket found that in 2015 only 34% of the healthcare providers
examined were listed as accepting Medicaid insurance. This represents a
21% decrease from the listings of Medicaid acceptance found in the 2013
data for the same categories of healthcare providers.

Since both the 2013 analysis and 2015 analysis relied upon the same
government data source and provider record parameters, the marked
decline in Medicaid acceptance is significant. In particular, the data
calls into question whether the temporary increase in Medicaid payments
to primary care physicians effected any lasting improvements to Medicaid
acceptance.

Why Do Some Healthcare Providers Avoid Medicaid?

A common explanation given for Medicaid lower acceptance is the
program's reimbursement rate to healthcare providers. Medicaid typically
pays 61% of what Medicare pays for the same outpatient physician
services. To make matters worse, the Medicare payment benchmark is
already lower than payments for the same services from private insurers.
It is estimated that Medicare typically pays 80% of what commercial
health insurers pay. Consequently, in comparison to commercial health
insurance from private insurance companies, Medicaid payments represent
a reduction on a reduction.

One of state governments' responses to the problem is the use of managed
care organizations to serve some portion of a state's Medicaid
population. However, as a 2014 Health & Human Services study noted,
state standards regarding the ratio of primary care physicians to
Medicaid managed care enrollees can vary widely (1-to-100 to 1-to-2,500)
as do their methods for determining compliance with these standards.
Consequently, Medicaid enrollees can face the prospect of long distances
and/or long waits to access care under the program.

From the Conclusion

HealthPocket's comparison of Medicaid acceptance listings from 2013 to
2015 illuminates an alarming trend for those dependent on Medicaid for
their healthcare: a reduction in Medicaid acceptance occurring during a
period of Medicaid enrollee expansion. How federal and state governments
will reverse this trend remains to be seen. The temporary increase in
Medicaid payments to primary care physicians from 2013 to 2014 does not
appear to have produced a lasting increase in Medicaid acceptance and
the expiration of this increase may contribute to further healthcare
provider attrition from the Medicaid program.

http://www.healthpocket.com/healthcare-research/infostat/medicaid-acceptance-doctors-health-care-providers-2015

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Guest Comment by Richard Gottfried, Chair, Committee on Health, New York
State Assembly, and sponsor of A05062 (S03525), "The New York Health Act":

"If the Medicaid recipient's doctor were paid the same as my doctor,
this wouldn't be a problem. And if we were all in the same health plan,
the wealthy and well-connected would see to it that their doctors were
paid fairly, and the rest of us (and our doctors) would share the
benefit. If we're all in the same boat, we'll all do better."

The soaring complexity of administrative processing systems

Gartner
("Gartner is the world's leading information technology research and
advisory company.")
January 28, 2015
Market Guide for Healthcare Payers' Core Administrative Processing Systems
Analyst: Constance Sjoquist

View Summary

Payer CIOs need to enhance, append or replace their existing core
administrative systems to more effectively compete in an increasingly
complex healthcare environment. Vendors are developing newer or
re-engineering existing solutions to meet this demand.


Market Direction

Historically, the vendor options for core claims administrative systems
have been somewhat limited. A handful of legacy solutions have dominated
the payer space for years. Often highly customized to a payer's unique
business environment or utilized only for a specific line of business
(LOB), core administration systems have been expensive and difficult to
replace, upgrade, enhance or consolidate without incurring significant
risk or downtime.

In the last several years, an enormous amount of change has occurred in
the healthcare market and is impacting payers' requirements of their
core administrative solutions. New demands include the need to comply
with an increased number of regulatory requirements, manage a growing
number of contractual arrangements and support new distribution
channels. Payers are finding it necessary to make the shift from a
historical group to a largely individual membership base and are seeking
new and differentiated capabilities that will help ensure they can
remain relevant and competitive.

In response, vendors in the healthcare core administrative space have
begun to significantly shift their product strategy or market focus to
address new payer challenges. While this has brought about innovation
and choice, it has also led to a disparate market, causing confusion
over what exactly the essential elements of a core administrative system
are. Vendors that once dominated the market have recently merged or have
been acquired, causing uncertainty around their future product road
maps. Some vendors have completely dropped their product offerings for a
particular LOB or have shifted their technology strategy to offer only
nonlicensed software solutions.

Gartner receives a steady volume of inquiries and requests for
information on core administrative vendors, as these run the business
applications that necessitate an enormous amount of a payer's IT
resources and budget. Healthcare payers are looking to modernize their
application portfolios, comply with government regulations and lower
their cost of doing business. Payers are also seeking functionality that
will allow them to support new health models, such as accountable care
organizations (ACOs), pay for performance (PFP) and value-based networks
(VBNs). Inquiries focus on who can provide new technology approaches to
the development, deployment and management of existing core
administrative applications, as well as which vendors offer solutions to
support future payer needs.

Core administrative vendors are challenged to adapt and develop their
solutions to address these disruptive changes in the healthcare
industry, as well as to adapt to rapid advancements in technology.

Industry disruptions include:

* The shift from a wholesale (group) to a retail (consumer) decision
maker requiring greater support for user-specific preferences

* Demand for transparency tools to support member enrollment, care and
payment decisions

* Providers becoming risk-bearing entities requiring real-time
information on payment and reconciliation in their provider applications
that parallels payers' application status

* Establishment of payer/provider contractual arrangements requiring
increased coordination of information and workflows and greater
accountability of services and payments

* Ongoing regulation and compliance changes requiring timely updates,
audits and reports

* The expanding number of distribution channels requiring increased
support for enrollment and related services

The healthcare market is expected to continue along a path of rapid
change and innovation. There is great uncertainty as to where the market
is headed and what technologies will be necessary to adapt and succeed.
Core administrative vendors are aggressively vying for position and are
competing to manage current expectations and address future client demands.

http://www.gartner.com/technology/reprints.do?id=1-28X3CQW&ct=150129&st=sb

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Comment by Don McCanne

This report from Gartner is instructive in that it demonstrates the
profound increase in administrative complexity in health care, much of
which is directly attributable to a dependency on markets as opposed
what we would have under a publicly administered single payer system.
Administrative functions in health care are essential, but it is the
private sector that has created a bureaucratic quagmire. Gartner is just
trying to help the private sector make sense of it.

This does not let the government off the hook. By supporting the current
fragmented, dysfunctional model of health care financing, the government
is placing a greater burden on the private sector. We are all paying the
price in higher costs and in bearing the the burden of systemic
inefficiencies. By design, a single payer system would reduce this
administrative complexity.

Majority must refund a portion of their ACA premium tax credit

H&R Block
February 24, 2015
H&R Block: Taxpayers Following ACA Rules, Refunds Take a Hit

So far in the 2015 tax season, H&R Block (NYSE: HRB), the world's
largest consumer tax services provider, is seeing a majority (52
percent) who enrolled in insurance via the state or federal Marketplaces
paying back a portion of the Advance Premium Tax Credit (APTC). The
average amount paid back is $530, decreasing the tax refund on average
by 17 percent, according to analysis almost six weeks into the 2015 tax
season.

The average tax penalty for not having insurance was $172, an indication
that most taxpayers are paying more than the flat-fee of $95 per
uncovered adult penalty many consumers anticipated.

"The level of payback of the Advance Premium Tax Credit is significant
in that it's costing taxpayers a large percentage of their refund – a
refund many of them count on to pay household expenses," said Mark
Ciaramitaro, vice president of H&R Block health care and tax services.

For next tax filing season, it is important to note that the base
penalty will increase to the greater of $325 or 2 percent of household
income for 2015.

http://newsroom.hrblock.com/hr-block-taxpayers-following-aca-rules-refunds-take-hit/

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Comment by Don McCanne

So far, 52 percent of those receiving a tax credit last year to help pay
their premiums for the ACA exchange plans are having to pay back an
average of $530 - certainly an unpleasant surprise for individuals
subsisting on modest budgets.

Fortunately, for most individuals that repayment will be through a
reduction in their tax refunds rather than an additional payment to be
made from funds on hand. Nevertheless, many people look forward to
receiving their tax refunds in order to be able to meet other important
expenses.

Under a single payer system, there is no premium to be paid and thus no
need for subsidies based on income. It is much simpler and even more
equitable to fund the entire system through progressive taxes.