The ACP Advocate Blog
by Bob Doherty
Monday, November 22, 2010
Insurance companies to spend more $ on patients? Now that’s a reason for thanksgiving.
Today, the Department of Health and Human Services released an interim final rule to require that health insurers spend more money on patients and less on themselves. The rule codifies a provision in the Affordable Care Act, which requires that large insurers spend 85% of the premium collected on patient care - for small insurers, it will be 80% - instead of on their own bureaucracies and profit. Starting in 2012, health plans that aren’t in compliance will have to send a rebate to their enrollees (or the enrollee’s employer) for the difference.
One of the more interesting decisions made by HHS is that quality improvement activities that are “grounded in evidence-based practices, take into account the specific needs of patients and be designed to increase the likelihood of desired health outcome that can be objectively measured” don't count against meeting the 80-85% trigger for a rebate. According to the agency, “Insurers are not required to provide initial evidence in order to designate an activity as quality improving when they first implement it, however to ensure value, the insurer will have to show measurable results stemming from the QI activity in order to continuing to claim that it does in fact improve quality.”
As Joe Biden said in a different context, the new regulations are a big [blankety-blank] deal for patient and physicians. Insurers will have a strong incentive to keep their administrative costs down. This means that more of the premium collected will go for patient care expenses, which can include payments to the physicians who deliver the care.
Physicians and patients also will benefit from HHS’ determination that claims administration and utilization review processes are not “patient care expenses” (as the insurance industry argued) but administrative ones. This will create an incentive for insurers to streamline and eliminate excessive (and costly) claims and utilization review requirements that do not directly result in measurable improvements in quality.
Many pre-certification requirements could very well fall in to the category of an unnecessary administrative expense that insurers may decide to forgo. Today, the American Medical Association released a survey of physicians’ experiences with pre-certification. The AMA reports that its survey of “approximately 2,400 physicians indicates that health insurer requirements to preauthorize care has delayed or interrupted patient care, consumed significant amounts of time, and complicated medical decisions.”
It is conceivable that insurers may try to persuade HHS that pre-certification is a quality improvement activity to protect patients from being subjected to unnecessary (and potentially harmful) tests and procedures. To qualify as a quality improvement activity, though, they would have to show that the pre-certification requirements are based on evidence, and subsequently would have to demonstrate “measurable results stemming from the QI activity in order to continuing to claim that it does in fact improve quality.”
In other words, this would turn the table from physicians having to constantly justify to insurers that the things they do for patients are evidence-based and improve quality, to insurers have to justify that their pre-certification rules are evidence-based and improve quality. Now, that is something to be thankful for!
Today’s questions: Do you think that the new rules to require insurance companies to spend more on patient care and less on administration will benefit physicians and patients? How?
P.S. Speaking of thanks, I will be taking a few days off to celebrate thanksgiving with my family, so you won’t see any more of my blogs until next week. I do want to thank all of you who read (put up with may be a better description!) this blog, and especially those of you who have taken the time to post your comments (yes, including those of you that take strong exception!). Happy Thanksgiving to you and your loved ones.
About the Author
Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog
Email Bob Doherty: TheACPAdvocateblog@acponline.org.Follow @BobDohertyACP
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