UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court

UnitedHealth Group
June 11, 2012

UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court.

UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals.

“The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs. These provisions make sense for the people we serve, and it is important to ensure they know these provisions will continue,” said Stephen J. Hemsley, president and CEO of UnitedHealth Group. “These provisions are compatible with our mission and continue our operating practices.”

These protections are effective immediately, and will remain available to current and future customers and members. The company is not establishing any sunset provisions.

UnitedHealthcare recognizes the value of coverage for children up to age 19 with pre-existing conditions. One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage.

The specific provisions being extended by UnitedHealthcare are:

Preventive Health Care Services without Co-Pays

Providing Dependent Coverage Up to Age 26

Eliminating Lifetime Limits

No Rescissions, Except for Fraud

Providing Clear and Timely Options for Appeals

http://www.unitedhealthgroup.com/newsroom/news.aspx?id=59c64ad7-908b-4806-931f-aed3beff7ba0

Comment: 

By Don McCanne, MD

You have to hand it to UnitedHealth’s public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.

If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.

UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.

UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating – driving up premiums for lower-cost, healthier patients – are more significant measures that could impair their competitiveness if they acted unilaterally. We won’t see these policy changes unless ACA is upheld and all insurers are required to comply.

Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios – spending less on patients-  is a business activity that is rewarded with higher stock valuations).

UnitedHealth’s “generosity” in conceding the very modest positions they listed in their release applies only to the individual and small group markets – a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply – certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.

We can’t blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices – a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.

Is that what America is about? Let’s take care of the kids, even up to age 26, but not the sick ones? What other country does that?

UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court

UnitedHealth Group
June 11, 2012
UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court.
UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals.
“The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs. These provisions make sense for the people we serve, and it is important to ensure they know these provisions will continue,” said Stephen J. Hemsley, president and CEO of UnitedHealth Group. “These provisions are compatible with our mission and continue our operating practices.”
These protections are effective immediately, and will remain available to current and future customers and members. The company is not establishing any sunset provisions.
UnitedHealthcare recognizes the value of coverage for children up to age 19 with pre-existing conditions. One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage.
The specific provisions being extended by UnitedHealthcare are:
Preventive Health Care Services without Co-Pays
Providing Dependent Coverage Up to Age 26
Eliminating Lifetime Limits
No Rescissions, Except for Fraud
Providing Clear and Timely Options for Appeals
http://www.unitedhealthgroup.com/newsroom/news.aspx?id=59c64ad7-908b-4806-931f-aed3beff7ba0

You have to hand it to UnitedHealth’s public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.
If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.
UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.
UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating – driving up premiums for lower-cost, healthier patients – are more significant measures that could impair their competitiveness if they acted unilaterally. We won’t see these policy changes unless ACA is upheld and all insurers are required to comply.
Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios – spending less on patients-  is a business activity that is rewarded with higher stock valuations).
UnitedHealth’s “generosity” in conceding the very modest positions they listed in their release applies only to the individual and small group markets – a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply – certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.
We can’t blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices – a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.
Is that what America is about? Let’s take care of the kids, even up to age 26, but not the sick ones? What other country does that?

Federal Employees Health Program Experiences Lack Of Competition In Some Areas, Raising Cost Concerns For Exchange Plans

By Timothy D. McBride, Abigail R. Barker, Lisa M. Pollack, Leah M. Kemper and Keith J. Mueller
Health Affairs, June 2012
The Affordable Care Act calls for creation of health insurance exchanges designed to provide private health insurance plan choices. The Federal Employees Health Benefits Program is a national model that to some extent resembles the planned exchanges. Both offer plans at the state level but are also overseen by the federal government. We examined the availability of plans and enrollment levels in the Federal Employees Health Benefits Program throughout the United States in 2010. We found that although plans were widely available, enrollment was concentrated in plans owned by just a few organizations, typically Blue Cross/Blue Shield plans. Enrollment was more concentrated in rural areas, which may reflect historical patterns of enrollment or lack of provider networks.
http://content.healthaffairs.org/content/31/6/1321.abstract

Supporters of the Affordable Care Act claim that the the state insurance exchanges would provide a robust market of private plans. One need look only as far as the Federal Employees Health Benefits Program (FEHBP) – the largest employer-sponsored private health insurance program in the nation – to see that such markets tend to concentrate dominant players. Instead of the magic of market competition, we can anticipate only more pain characteristic of dysfunctional or non-existent markets.
Single payer, anyone?
Comment from QotD reader Joel Segal

I have been on FEHBP plan for the past 12 years, and therefore can credibly speak about the positive and negative aspects of the program.
With the FEHBP plan, I have been able to receive medically necessary care, and the program has covered a good percentage of the costs of my CPAP and bi-pap machines that I use for my severe obstructive sleep apnea. Before I was on the FEHBP plan, I could not receive medically necessary health care services for my sleep apnea and other chronic health conditions. I was forced to become a “health care beggar,” borrowing money from friends, family members, and people of good will just to pay for some of my most serious health care needs. However, despite my charitable friends, for years, I went without the needed care, and remained sick, disabled, and often unable to work a full time job or work at all.
Without the FEHBP plan, I would have become permanently disabled, or developed other serious life-threatening health complications such as heart problems, which often result from untreated sleep apnea. The worst aspect of the FEHBP plan are the steep out-of-pocket costs for hospital visits, doctor’s visits, and other treatment that I need to live a healthy life. Having a chronic illness such as sleep apnea, means high out-of-pocket costs for CPAP masks, sleep studies, and new machines — which are often several hundreds of dollars per year, and sometimes a few thousand dollars per year. My co-pays are often very steep, and there have been many times where providers tried to deny me care that I truly needed, because I could not afford to pay prior balanced billing charges. But, because I demanded that I be treated in their offices (or begged for care!) they let me get the care. Most people are very fearful of their health care providers, and often leave doctor’s offices having been denied medically necessary care due to unpaid bills. This is just a reality of our current for-profit health care system.
I owe approximately $8,000 in co-pays over the last 5 years under the FEHBP, and have paid out-of-pocket approximately $15,000 for medically necessary care over the last 12 years. The problem with the FEHBP plan is that it typically covers 70-80 percent of the bill, leaving the patient who uses the health care system the most with enormous co-pays and medical bills. For young and healthy persons who get sick with the flu or a cold, and see a doctor perhaps twice a year, the program works fine. The people who suffer the most under the FEHBP plan are government employees who have chronic illnesses, or have an emergency surgery or procedure, and must pay the 20 percent of the bill that the plan does not cover.
We need a universal single-payer program like H.R. 676 or H.R. 1200, which will contain rising health care costs, while providing the highest standard of universal health care to all Americans.
Sincerely,
Joel Segal
Universal Single Payer Advocate

Risk Adjustment Data Validation of Payments Made to PacifiCare of Texas for Calendar Year 2007

Office of Inspector General
Department of Health and Human Services, May 2012
Executive Summary
Background
Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS), makes monthly capitated payments to MA organizations for beneficiaries enrolled in the organizations’ health care plans (beneficiaries). Subsections 1853(a)(1)(C) and (a)(3) of the Social Security Act require that these payments be adjusted based on the health status of each beneficiary. CMS uses the Hierarchical Condition Category (HCC) model (the CMS model) to calculate these risk-adjusted payments.
Under the CMS model, MA organizations collect risk adjustment data, including beneficiary diagnoses, from hospital inpatient facilities, hospital outpatient facilities, and physicians during a data collection period. MA organizations identify the diagnoses relevant to the CMS model and submit these diagnoses to CMS. CMS categorizes the diagnoses into groups of clinically related diseases called HCCs and uses the HCCs and demographic characteristics to calculate a risk score for each beneficiary. CMS then uses the risk scores to adjust the monthly capitated payments to MA organizations for the next payment period.
PacifiCare of Texas (PacifiCare) is an MA organization owned by UnitedHealth Group. For calendar year (CY) 2007, PacifiCare had multiple contracts with CMS, including contract H4590, which we refer to as “the contract.” Under the contract, CMS paid PacifiCare approximately $1.3 billion to administer health care plans for approximately 118,000 beneficiaries.
Objective
Our objective was to determine whether the diagnoses that PacifiCare submitted to CMS for use in CMS’s risk score calculations complied with Federal requirements.
Summary of Findings
The diagnoses that PacifiCare submitted to CMS for use in CMS’s risk score calculations did not always comply with Federal requirements. The risk scores calculated using the diagnoses that PacifiCare submitted for 57 of the 100 beneficiaries in our sample were valid. The risk scores for the remaining 43 were invalid because the diagnoses were not supported for one or both of the following reasons:
* The documentation did not support the associated diagnosis.
* The diagnosis was unconfirmed.
PacifiCare did not have written policies and procedures for obtaining, processing, and submitting diagnoses to CMS. Furthermore, PacifiCare’s practices were not effective in ensuring that the diagnoses it submitted to CMS complied with the requirements of the 2006 Risk Adjustment Data Basic Training for Medicare Advantage Organizations Participant Guide (the 2006 Participant Guide) and the 2007 Risk Adjustment Data Training for Medicare Advantage Organizations Participant Guide (the 2007 Participant Guide). UnitedHealth Group officials stated that the providers were responsible for the accuracy of the diagnoses that PacifiCare submitted to CMS.
As a result of these unsupported and unconfirmed diagnoses, PacifiCare received $183,247 in overpayments from CMS. Based on our sample results, we estimated that PacifiCare was overpaid approximately $115,422,084 in CY 2007.
http://www.oig.hhs.gov/oas/reports/region6/60900012.pdf

As you know, Medicare beneficiaries have the option of leaving the traditional Medicare program and obtaining their care through private insurers offering Medicare Advantage plans. These private plans receive from the government monthly capitation payments (a set dollar amount for each beneficiary enrolled). To protect the private insurers from the higher spending required for sicker patients, the capitation payments are adjusted upward based on how ill the patients are. This is known as risk adjustment. Sounds reasonable. So what’s the deal here?
Keep in mind that the traditional Medicare program is designed to serve patients whereas the private Medicare Advantage plans are private businesses designed primarily to make money. So how can these private plans meet their business obligation of keeping their spending down while increasing their revenues?
Quite simple. Game risk adjustment. Report many of the patients as having more serious disorders than they really do in order to increase the capitation payments. Although the insurers have denied that they do this, the Office of the Inspector General has caught them red-handed.
Based on this chicanery, UnitedHealth’s PacifiCare was overpaid about $115 million for this one contract alone. That is almost $1000 excess for each of the 118,000 beneficiaries enrolled!
The Affordable Care Act is perpetuating and expanding our fragmented health care financing system which is dependent to a great extent on private insurers. To avoid the problems of favorable selection (insurers enrolling only healthy patients and keeping the extra profits) and adverse selection (the government being stuck with the losses of high cost patients after the healthier are siphoned off), the Act calls for risk selection.
The problem is that we do not know how to detect and correct for all of the games that the insurers play to work risk adjustment to their own advantage. It has been estimated that risk adjustment captures only about 10 percent of the overpayments that the private insurers gain through this gaming. As further adjustments are added, the insurers simply find new ways around the system. These are not necessarily illegal maneuvers but are rather simply “good business practices.”
Our own government stewards from the OIG, working for us, have exposed this scheme that is being used to skim off our tax dollars. So what are we going to do about it? Don’t you think it’s time to get rid of the amoral business ethic in health care financing and instead place in charge people dedicated to a service ethic?  We can do this by establishing our own single payer national health program. But first we have to elect people who place public service above all. Supporting the 1 percent isn’t working.

Copernicus Healthcare

Health Care Wars: How Market Ideology and Corporate Power Are Killing Americans

By John Geyman, M.D.

From the Preface

We have been told from time immemorial in this country that free markets, unfettered by government interference, are the fix for any of our problems. The notion that a competitive private marketplace gives us more information, choice, efficiency and value has been repeated so often for so long that it has become a meme (a self-replicating idea that is perpetuated regardless of its merits). Although this idea has become as American as apple pie and might work in some sectors of the economy, it does not work that way in health care.

The shared prosperity that followed World War II gave rise to the American dream that brought new hope and opportunities for much of our population. But over the last 30 years, under a relentless attack by conservatives and willing Democrats, this dream is disappearing.

This book takes an evidence-based approach to assess and describe the track record of health care markets as they actually work. As you will see, it is a story of profiteering, greed and waste with very little accountability. I hope that this book is useful in informing the public, policymakers and politicians of the real problems with markets. We will need a strong and powerful unified grassroots movement to push our leaders toward real reform.

http://www.copernicus-healthcare.org/

Comment: 

By Don McCanne, MD

It has long been recognized that health care does not follow the rules of free markets, yet the United States continues to rely on a fragmented, dysfunctional financing system that fails to adequately correct for these market deficiencies. In Health Care Wars, John Geyman shows us how this has been a disaster, while providing us with hope through the prospect of our empowerment as both patients and taxpayers.

Copernicus Healthcare

Health Care Wars: How Market Ideology and Corporate Power Are Killing Americans

By John Geyman, M.D.

From the Preface

We have been told from time immemorial in this country that free markets, unfettered by government interference, are the fix for any of our problems. The notion that a competitive private marketplace gives us more information, choice, efficiency and value has been repeated so often for so long that it has become a meme (a self-replicating idea that is perpetuated regardless of its merits). Although this idea has become as American as apple pie and might work in some sectors of the economy, it does not work that way in health care.

The shared prosperity that followed World War II gave rise to the American dream that brought new hope and opportunities for much of our population. But over the last 30 years, under a relentless attack by conservatives and willing Democrats, this dream is disappearing.

This book takes an evidence-based approach to assess and describe the track record of health care markets as they actually work. As you will see, it is a story of profiteering, greed and waste with very little accountability. I hope that this book is useful in informing the public, policymakers and politicians of the real problems with markets. We will need a strong and powerful unified grassroots movement to push our leaders toward real reform.

http://www.copernicus-healthcare.org/

Comment: 

By Don McCanne, MD

It has long been recognized that health care does not follow the rules of free markets, yet the United States continues to rely on a fragmented, dysfunctional financing system that fails to adequately correct for these market deficiencies. In Health Care Wars, John Geyman shows us how this has been a disaster, while providing us with hope through the prospect of our empowerment as both patients and taxpayers.

Copernicus Healthcare

Health Care Wars: How Market Ideology and Corporate Power Are Killing Americans

By John Geyman, M.D.
From the Preface
We have been told from time immemorial in this country that free markets, unfettered by government interference, are the fix for any of our problems. The notion that a competitive private marketplace gives us more information, choice, efficiency and value has been repeated so often for so long that it has become a meme (a self-replicating idea that is perpetuated regardless of its merits). Although this idea has become as American as apple pie and might work in some sectors of the economy, it does not work that way in health care.
The shared prosperity that followed World War II gave rise to the American dream that brought new hope and opportunities for much of our population. But over the last 30 years, under a relentless attack by conservatives and willing Democrats, this dream is disappearing.
This book takes an evidence-based approach to assess and describe the track record of health care markets as they actually work. As you will see, it is a story of profiteering, greed and waste with very little accountability. I hope that this book is useful in informing the public, policymakers and politicians of the real problems with markets. We will need a strong and powerful unified grassroots movement to push our leaders toward real reform.
http://www.copernicus-healthcare.org/

It has long been recognized that health care does not follow the rules of free markets, yet the United States continues to rely on a fragmented, dysfunctional financing system that fails to adequately correct for these market deficiencies. In Health Care Wars, John Geyman shows us how this has been a disaster, while providing us with hope through the prospect of our empowerment as both patients and taxpayers.