Here’s how health plans can break the ice with providers on member experience

Health Care Current | February 26, 2019

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies, and provides updates and insights on policy, regulatory, and legislative changes.

My Take

Here’s how health plans can break the ice with providers on member experience

A certain level of tension can hang over the negotiating table when health systems and physicians sit down with health plans. This historically adversarial atmosphere is not surprising given the often-tough conversations over payment combined with a health plan’s interest in influencing practice patterns, quality scores, coding, and utilization. While there might not be much romance between providers and health plans, their shared goal of improving patient care and leveraging data could lead to closer and more collegial relationships.

Students of managed care will remember the many versions of health plan–provider alignments, namely group and staff-model health maintenance organizations (HMOs) and provider-sponsored plans. Recently we have seen examples of health plans joining the physician-practice acquisition trend, which is already popular among health systems and venture capital firms. We are also seeing more risk-sharing payment arrangements between payers and health systems. Even outside of such ventures, health plans often look for other ways to enhance the patient experience and improve outcomes.

What do health plans want?

Forging closer relationships with health systems and physicians could help health plans attract customers (i.e., members, patients, and caregivers). Moreover, collaborating with health care practitioners on the frontlines of delivering care could help create superior member and patient experiences, improve outcomes, and lower costs.

Many patients value relationships with their physicians more than other types of interactions (such as cost or convenience), according to a recent Deloitte study that we commissioned to analyze the consumer experience with health plans. Another recent survey of health care consumers validates this point: Consumers trust information from providers more than any other source. Consumers also seek personalized encounters with their providers, and a good “bedside manner” is something the typical health care consumer still demands.

What do physicians want?

While physicians are willing to manage cost—something that both public and private payers want them to do—they often lack the data and tools to do it. The Deloitte 2018 Survey of US Physicians found that two-thirds of physicians receive some quality and productivity information from multiple sources. However, this situation is considerably different when it comes to cost-related information. Our survey found that while 72 percent of physicians see value in cost data (particularly at the point of care), just 28 percent of them said they receive such information from health plans. Cost data might include prices for resources used with their own patients or for the physicians and facilities to which they refer. It also might include estimated out-of-pocket costs. This lack of information can limit a physician’s ability to perform certain tasks. Forty-three percent of physicians said they are not able to find low-cost lab and imaging options, and 36 percent cannot identify high-quality skilled nursing facilities (SNFs), rehab services, or home-health agencies.

Physicians said they would also like to see improvements in some of their insurance-related administrative tasks (e.g., dealing with prior authorizations, verifying a patient’s eligibility and deductible status, handling denials and appeals, and looking up information in formularies). Nearly 20 percent of surveyed physicians said this is one type of activity they prefer to either avoid or optimize.

How might we bring these parties together?

We wanted to find out how to create a closer relationship between health plans and providers. We surveyed health care practitioners (e.g., physicians, nurse practitioners, physician assistants, nurses, and practice administrators) from 300 primary and specialty-care practices. We focused on the following five areas where health plans have existing capabilities and applications—as well as data—that can help improve value (cost and quality) and enhance the patient experience:

  • Care coordination: Aligning care across multiple providers or sites
  • Cost transparency: Knowing the costs associated with the patient’s care
  • Chronic-care management: Caring for patients who have complex or chronic conditions 
  • Wellness and prevention: Enabling and ensuring that patients stay healthy
  • Practice performance: Meeting the financial and quality goals of the practice

Physicians are interested in solutions from health plans

Two-thirds of our survey respondents said they are open to using solutions from health plans. They see health plans as having an edge over some other entities when it comes to data and insights. That said, other stakeholders are also offering this type of information, and many physicians would prefer to receive solutions from health systems. Non-physician respondents were more open than physicians to working with different entities. This might point to administrative demands on non-physician staff, which are often underserved and could be addressed by health plan solutions (such as tools that can determine eligibility and out-of-pocket costs).

Health plans that want to forge closer relationships with physicians should consider working more closely—and more boldly—with health systems. As I noted above, many physicians see health systems as preferred partners (a health system might own a physician’s practice). Since health care practitioners prefer to work with health systems, health plans should partner closely with health systems when designing and delivering solutions. After all, disruptors from outside of the industry are threatening the business models of both health plans and health systems.

Improving the patient experience—enhancing quality, providing better information—is an obvious area of alignment for health plans, health systems, and physicians. Each group has an interest in addressing gaps in care to improve both star ratings and Health Effectiveness Data and Information Set (HEDIS) scores, as well as performance measures used for physicians.

But health plans can, and should, be bolder in their collaborations with health systems. Imagine network contract negotiations that bring new voices from both sides for cross-functional care delivery design sessions. Such sessions could identify opportunities for partnerships in data and analytics, which could lead to data- and insight-sharing provisions being incorporated into network contracts. Health plans and health systems, for example, might agree to share cost savings if they also share data and insights that help reduce costs.

Many of the services health care practitioners find valuable are not commonly available today and cannot be developed using off-the-shelf tools. To get value out of their data (and to deliver solutions that seamlessly integrate with physician practice workflows) health plans could consider partnering with electronic health record (EHR) vendors, data integration companies, practice management companies, and public health entities.

Developing new solutions is not the only way to strengthen partnerships. For instance, health plans may start with easing existing administrative requirements on physician practices through process redesign, automation, or analytics. Draft regulations around interoperability would, if adopted, affect health plans, health systems, and physician practices (see the February 19, 2019 Health Care Current). Solutions for data-sharing to meet regulatory requirements can also be explored.

Treat each other as partners

As with any good relationship, meaningful dialogue might be the best place to begin. Health plans, health systems, and providers should acknowledge their differences—and identify common goals. Solutions that address unmet needs, complement existing capabilities, and provide insights that physician practices cannot get elsewhere could be well-received. Health plans should view physician practices as partners in care and develop an intimate understanding of practice workflows, the needs of individual physician practices, and the benefits sought by different users within the practice (such as physicians, care teams, and administrative staff).

Strengthening the relationship between health plans and health care practitioners to form a true partnership might take time, but the goal on all sides—to improve patient experience and outcomes—aligns.

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In the News

CMS proposes Medicare coverage for CAR T-cell cancer treatment

On February 15, the US Centers for Medicare and Medicaid Services (CMS) proposed covering Chimeric Antigen Receptor (CAR) T-cell therapy under “Coverage with Evidence Development” (CED). CAR T-cell therapy is a form of immunotherapy approved by the US Food and Drug Administration (FDA) that uses an individual patient’s own T-cells to develop a unique treatment to fight certain cancers (see the May 15, 2018 Health Care Current). Until now, there has been no Medicare policy covering CAR T-cell therapy, so local Medicare Administrative Contractors (MACs) have been deciding on coverage and payment.

The agency’s proposed National Coverage Determination (NCD) would require nationwide Medicare coverage for CAR T-cell therapy if accompanied by evidence-development. The evidence would need to be based on data added to a CMS-approved registry or as part of a clinical study with two years of patient follow-up. Data from registries and studies can help CMS identify the patients who benefit the most from CAR T-cell therapies, which can assist with future coverage determinations. CMS has issued seven NCDs for drugs and biologics in the past seven years.

In a November blog, Deloitte discussed the potential of immuno-oncology, which leverages the immune system to treat various forms of cancer.

(Source: CMS, CMS proposes Coverage with Evidence Development for Chimeric Antigen Receptor (CAR) T-cell Therapy, February 15, 2019)

Health care spending projected to increase 5.5 percent annually until 2027

CMS’s Office of the Actuary projects the average annual growth in health care spending will be 0.8 percent higher than the average annual growth in the gross domestic product (GDP) over the next eight years. If the projections prove accurate, health care would make up 19.4 percent of the US economy by 2027—up from 17.9 percent in 2017.

Contributors to this spending growth include economic and demographic factors, such as changes in projected income growth and enrollment shifts from private health insurance to Medicare as baby boomers continue to age into the program. Spikes in health care prices are expected to contribute to spending growth, which is projected to increase by an average 2.5 percent per year. Average annual spending growth in Medicare (7.4 percent) is expected to exceed that in Medicaid (5.5 percent) and private health insurance (4.8 percent), mostly due to shifts in enrollment.

If the projections are correct, government spending will make up 47 percent of total health care spending in 2027, rising from 45 percent in 2017.

(Source: CMS, CMS Office of the Actuary Releases 2018-2027 Projections of National Health Expenditures, February 20, 2019)

Federal government owes millions in cost-sharing reduction cases

Several health insurers have won major lawsuits involving cost-sharing reduction (CSR) payments. The lawsuits aim to recover billions in CSR subsidy payments that were discontinued in October 2017. Three cases were brought before Judge Margaret Sweeney in the US Court of Federal Claims. In a class-action lawsuit brought by Wisconsin’s Common Ground Health Cooperative, Sweeney ruled that the federal government must pay unpaid CSRs from 2017 and 2018. Common Ground estimated that it is owed up to $13 million in CSR payments for 2017 and $60 million for 2018. The judge also ruled in favor of Maine Community Health Options and Community Health Choice, which are owed an estimated $5.7 million and $11.2 million in CSR payments, respectively.

Since CSR payments were discontinued, many plans, with the support of their state insurance commissioners, redesigned their benefits in a practice called silver-loading, which raises the premiums on silver plans to make up for the lost payments from the federal government. In a January 2019 proposed Notice of Payment and Benefit Parameters, CMS requested comments on how to end silver-loading (see the January 22, 2019 Health Care Current).

Hospitals seek 340B payment recalculation

Last December, a federal judge in the District of Columbia ruled that the US Department of Health and Human Services (HHS) overstepped its authority when it cut Medicare payments to hospitals for drugs in the 340B drug-discount program. The court issued an injunction to halt the final rule (see the January 8, 2019 Health Care Current). The hospital groups that sued HHS asked the court to ensure the agency recalculates payments to make up for the cuts. Specifically, the groups asked that hospitals receive the same Average Sales Price (ASP) plus 6 percent rate that hospitals received in 2017, with interest. According to HHS, doing this would require recalculating all hospital payments to ensure the system remains budget-neutral.

Additionally, the hospital groups asked the court to give HHS 30 days to eliminate its plan to further reduce 340B payments in 2019. According to the groups, a 30-day timeline would ensure the cuts are addressed prospectively.

Previously, the 2018 Hospital Outpatient Prospective Payment System (OPPS) final rule reduced payments for covered outpatient drugs under the 340B program to ASP minus 22.5 percent for most hospital-affiliated providers, and the 2019 final rule applies this payment methodology to off-campus hospital clinics. In November 2018, HHS issued a regulation to implement the new 340B ceiling price (and penalties) beginning on January 1, 2019 (see the December 4, 2018 Health Care Current).


Supreme Court rejects state bid to revive generic drug-pricing law

On February 19, the US Supreme Court left in place a lower-court ruling that struck down a Maryland law against generic drug price-gouging. In 2017, Maryland passed a law allowing the state’s Attorney General to sue generic drug manufacturers for “unconscionable” increases in drug prices. The US Court of Appeals for the Fourth Circuit had blocked this law because it required out-of-state manufacturers and wholesalers to abide by Maryland law, which could interfere with interstate commerce.

Hospital associations seek further DSH payment delay

Several hospital associations are seeking further delay on Medicaid Disproportionate Share Hospital (DSH) payment cuts, according to a February 19 letter to Congress. Medicaid DSH payments offset the cost of uncompensated care for hospitals that serve a large portion of Medicaid beneficiaries and uninsured patients. DSH payment cuts were part of the Affordable Care Act (ACA) and are scheduled to go into effect in 2020—after a six-year delay.

The rationale for the DSH payment cuts was that increased Medicaid coverage through state-expansion efforts would reduce uncompensated care for hospitals. The policy was not revisited after the Supreme Court decision that made Medicaid expansion optional. Moreover, hospitals say that Medicaid underpayment—and underinsurance—persist, which pose further financial challenges.

Hospitals, insurer groups propose efforts to curb ‘surprise billing’

On February 20, six major associations sent congressional leaders an eight-point plan to protect patients from unexpected—and often costly—medical bills, a practice known as “surprise billing.” The plan includes the following provisions:

  • Preventing providers from balance billing, which is when patients receive bills that exceed their cost-sharing obligations.
  • Ensuring patient access to emergency care and to comprehensive provider networks.
  • Allowing health plans and providers to retain the ability to negotiate payment rates.

Additionally, several other stakeholders, including health plans and business groups, are urging lawmakers to pass legislation banning balance billing for involuntary or emergency care. In a draft letter, these stakeholders outline new requirements that would help inform patients whether they will receive in-network care. The draft letter also seeks payment limits for out-of-network care, which would set payment rates closer to in-network hospital reimbursements.

Efforts to curb surprise billing have bipartisan support. A group of senators recently sent a letter to health plans and hospitals requesting data on surprise medical billing practices (see the February 12, 2019 Health Care Current).

Breaking Boundaries

Digital program for low-back pain appears effective at avoiding surgery

Low-back pain is the world’s leading cause of disability. Researchers estimate that 80 percent of adults experience low-back pain at some point in their lives. It is the most common cause of job-related disability, and it is a significant contributor to missed work days. Researchers in California recently tested the effectiveness of a digital self-management program to see if such programs could help improve symptoms among low-back pain patients—and possibly reduce the rate of invasive surgery.

Most medical experts agree that surgery should be considered only after trying less-invasive and less-risky therapies. Surgery is not always successful, and there is little evidence to identify which procedures work best for various types of pain. Less-risky interventions include physical therapy, exercise, and cognitive behavioral therapy, but results are hard to predict because these interventions are highly dependent on the individual patient’s level of engagement.

Researchers studied a digital-care program in a 12-week randomized controlled trial with 177 participants. The intervention group received the 12-week digital program. This program consisted of exercise therapy, educational articles, team discussions, one-on-one coaching, cognitive behavioral therapy, and activity and symptom tracking. Patients participated from their homes through an app and a tablet. Participants in the control group were only provided three educational articles. All participants were able to stay on the treatment plan they had when they started the study, which could include physician visits and pain medication. The rate of opioid medication use was low overall, with only 9 percent of the total population taking opioids to manage their pain. The digital programs allowed researchers to easily track participation rates, rather than relying on self-reporting.

Results of the study showed that the digital-care intervention’s group pain scores improved 52 percent, compared to just 3 percent for the control group. Interest in surgery among the intervention group also declined by 52 percent, while interest in surgery among the control group increased by 53 percent. Though more research is needed, the authors of the study said that the digital care program could lead to cost savings by avoiding invasive surgery—and could reduce opioid use for low-back pain.

(Source: Raad Shebib et al, Randomized controlled trial of a 12-week digital care program in improving low back pain, Journal of Digital Medicine, January 7, 2019)

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