Policy & Regulation News

Patients Led to Private Plans to Boost Claims Reimbursement?

Some providers may have steered patients to private insurance plans in order to collect higher claims reimbursement rates, according to CMS.

By Jacqueline LaPointe

- The federal agency is investigating whether some healthcare providers or provider-affiliated organizations are encouraging individuals eligible for Medicare and/or Medicaid to enroll in individual market plans under the Affordable Care Act in order to receive higher claims reimbursement rates.

CMS investigating if providers steer patients away from Medicare to get higher claims reimbursement rates

On its website, CMS called on healthcare stakeholders to provide any information on providers, such as dialysis centers, that may be inappropriately steering patients away from Medicare or Medicaid coverage to boost their profits. CMS also sent letters to all dialysis facilities currently enrolled in Medicare.

“Ensuring access to high quality patient care is a top priority for us,” said Andy Slavitt, CMS Acting Administrator. “We are concerned about reports that some organizations may be engaging in enrollment activities that put their profit margins ahead of their patients’ needs. These actions can limit benefits for those who need them, potentially result in greater costs to patients, and ultimately increase the cost of Marketplace coverage for everyone.”

While providers may see higher claims reimbursement rates under marketplace plans, CMS expressed concerns that changing a beneficiary’s network of providers could cause serious disruptions to care coordination and continuity efforts.

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  • CMS also stated that inappropriately steering beneficiaries away from Medicare and Medicaid services counteracts the federal agency’s efforts to address potential problems in the health insurance marketplace that may impact the integrity of the program for all stakeholders. Provider actions could also increase the costs of individual insurance plans in the market and prevent patients from enrolling in the most appropriate plan.

    “It is improper to influence people away from Medicare or Medicaid coverage for the purpose of financial gain,” said Shantanu Agrawal, MD, CMS Deputy Administrator and Director of the Center for Program Integrity. “Our goal is to protect patients from being unduly influenced in their decisions about their health insurance options, and to protect the integrity of all the programs we oversee.”

    In the request for information, CMS stated that providers may face financial penalties if their actions cause late enrollment fees for Medicare eligible individuals who were guided to a private plan and are delayed from enrolling in Medicare.

    Additionally, the federal agency urged the public to comment on potential regulatory and operational options to restrict premium payments and routine waivers of cost-sharing for qualified health insurance plans by healthcare providers.

    Health insurance companies are allowed to accept third-party premium payments and cost-sharing arrangements from healthcare providers for qualified health plans in the individual marketplace. Although, CMS discourages companies from allowing third-party payments.

    Some private payers have recently complained to CMS that third-party premium payments destabilize the risk pool in the Affordable Care Act because premiums for high-cost and sicker patients should be covered by a federal healthcare program, like Medicare. Health coverage costs have drastically increased due to sicker patients being guided away from Medicare and Medicaid, causing insurers to boost premiums for policyholders.

    In July, UnitedHealth sued Massachusetts-based American Renal Associates for steering dialysis patients to UnitedHealth insurance plans because providers would receive significantly higher claims reimbursement rates, reported the Wall Street Journal. The lawsuit stated that the provider group would only be reimbursed about $300 or less per dialysis session, but it was able to bill UnitedHealth nearly $4,000 a session by encouraging patients to enroll in a private plan.

    Third-party premium payments and cost-sharing has become a major issue for private payers and the federal government, especially as some of the larger health insurers are planning to reduce their participation in or exit health insurance exchanges under the Affordable Care Act.

    In addition to the prohibition of third-party premium payments, CMS also proposed to develop regulations that update Medicare and Medicaid provider enrollment rules, impose financial penalties for providers that do not submit correct information about consumers enrolling in a plan, and allow health insurance companies to limit their reimbursements to providers to Medicare-based amounts for specific services and items of care.

    The federal agency intends for investigation and potential regulations to build on existing integrity initiatives that are designed to improve and expand the health insurance marketplace, such as reducing improper use of special enrollment periods.

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