Experimenting with Transparency and Decision Support to Inform Health Plan Selection

Tara Ragone

Cross-Posted at HealthLawProf Blog

As we prepare for the second open enrollment period for the health insurance marketplaces to begin in just over one month, transparency offers a potential means of empowering consumers to make better decisions regarding the health plans they choose.

Some states are making strides in this area. The New Hampshire Insurance Department was an early leader on the transparency front, creating a website called NH HealthCost in 2005 to provide information on the costs of medical services based on claims data collected from the state’s insurers and stored as part of the Comprehensive Health Care Information System. Although the site was down for months earlier this year because of problems encountered when it changed vendors, it is back up and running and promises that “significant changes” are in store. Currently, however, it only offers data on the costs of a few dozen medical services, such as MRIs, CT scans, ultrasounds, X-rays, colonoscopies, and emergency room visits.

Beginning October 1, 2014, insurers in Massachusetts must provide information about the full-range of costs for medical care on their websites. As Martha Bebinger reported earlier this week, there are some limitations to the disclosures. For one, the prices are not standardized among carriers, and thus some reported prices include all charges related to a particular medical service whereas others exclude related costs, such as charges to read the test or facility fees. In addition, carriers sometimes use different terminology to refer to the same procedure. Such differences make it difficult for consumers to make meaningful comparisons. There also are few prices available for inpatient care, and there is limited information about the quality of care provided at different costs. Consumers will need to log into their account, and the program will calculate each consumer’s particular deductible, co-pay, and co-insurance amounts based on what claims they already submitted in a plan year.

Although these efforts to make the cost of healthcare more transparent are important, consumers already tend to over-focus on cost when choosing health insurance. A Kaiser Family Foundation survey, for example, found that twenty-seven percent of consumers who purchased non-group coverage for 2014 identified cost as the most important factor in choosing a plan. In contrast, only eleven percent identified choice of doctors or providers as the most important factor.

Recent articles about out of network bills by Elisabeth Rosenthal and others are important reminders of how important it is for consumers to balance cost with access to needed providers, among other salient factors. Yet surveys by McKinsey & Co. and the Commonwealth Fund similarly found that roughly a quarter of consumers who enrolled in exchange plans did not know whether they had chosen a broad or narrow network plan, and McKinsey found that this number increased to forty-two percent for consumers who previously were not insured. The Commonwealth Fund survey further found that thirty-nine percent of adults who enrolled in an exchange plan or Medicaid through the marketplace did not know which doctors were included in their plan.

An August 2014 report of physician network transparency by the Urban Institute highlighted Massachusetts’ Health Connector as a model of transparency in many respects. For one, it includes a dedicated “provider network disclosure” section for each plan that makes plain whether the plan has a general or limited provider network and identifies in red lettering under each plan name if the plan includes a narrow network of providers. It also embeds provider directories for all plans in its state marketplace with full search functionality, which helps “alleviate the complexity and confusion around network-based plan choice.”

Although Healthcare.gov received praise in the report for displaying plan type directly beneath each plan’s name and including a hover definition, it was criticized for not embedding provider directories. And as Margot Sanger-Katz reported earlier this week, Healthcare.gov still will not have the capacity to permit consumers to identify which doctors and hospitals are participating with particular plans or to compare networks among different plan options in the fall 2014 open enrollment period. Consumers in the twenty-seven FFM states instead must navigate insurers’ external websites, which have varied greatly in terms of content and user-friendliness. For example, as the Urban Institute report noted, “[m]ost Marketplace websites link to carrier pages where it is difficult to associate a directory with a particular Marketplace plan because network names do not always match Marketplace plan names, and a single insurer can have different networks that apply to different plans.”

Although an FFM state cannot change Healthcare.gov, it can make information available to consumers to aid consumer choice, either by directly providing this information to consumers or by regulating carriers offering plans in its state.

The Pacific Business Group on Health’s Helping Vulnerable Consumers in the Exchange Project offers a number of transparency resources for states with and without exchanges to use as they build, or require insurers to build, consumer choice decision support. It is important to proceed thoughtfully because behavioral economists have found that too much information is not necessarily good. The jackpot question is how to improve transparency on multiple fronts without overwhelming consumers with too much information.

Alternatively, states may look to use decision support resources developed by others. A team of business, law, health care management, and technology professors at the University of Pennsylvania partnered with a veteran insurance company executive to launch Picwell in September 2014, which uses predictive analytics to offer personalized recommendation and decision-support technology to healthcare consumers. As its site explains:

The first technology of its kind, Picwell marries Big Data, predictive analytics, behavioral economics, and machine learning with consumer friendly user interfaces and engagement tools that integrate directly into healthcare exchanges and benefits platforms. The end result enables exchanges to quickly and seamlessly organize and analyze more than 900,000 variables that affect plan selection and present the highest recommended plans to participants based on their individual needs.

It was announced this week that Picwell will use its predictive recommendation engine to analyze the plan choices consumers made during the 2014 open enrollment period using deidentified data from state exchanges, beginning with Minnesota’s insurance exchange, MNsure.

The Robert Wood Johnson Foundation also is sponsoring the Plan Choice Challenge, which offers cash prizes to developers who design an “an app that will help consumers compare health plan cost sharing features and choose the best plan.” RWJF narrowed the field to six finalists in late September 2014 and plans to announce a winner in February 2015, following submission of Phase II plans in January 2015.

Many questions remain, including how to standardize available information so that consumers may make apples to apples comparisons, how to educate consumers about how to use these resources, and how to monitor these tools for accuracy and to ensure they are not subject to manipulation or industry capture. There is much work to be done, but I hope the experimentation continues.

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Professor John Jacobi In NJ BIZ & NJ Spotlight on New Jersey Health Reform

May 23, 2013 by · Leave a Comment
Filed under: Health Law 

jacobi_johnProfessor John Jacobi took part in the Council on State Public Affairs’ “New Jersey State of Health” symposium, covered by NJ BIZ and NJ Spotlight. The symposium brought together the state’s leading health policy experts to discuss and formulate responses to the challenges wrought by the implementation of the ACA.

NJ Spotlight reports that:

The discussion on the future of long-term future of healthcare followed panel discussions on the implementation of the health benefit exchange and Medicaid eligibility expansion, key features of the 2010 Affordable Care Act that are both scheduled to beginning covering more New Jersey residents on January 1, 2014.

Seton Hall health law professor John V. Jacobi noted the challenge involved in informing uninsured residents about the new options. The exchange will be an online marketplace in which uninsured people can buy coverage and learn whether they are eligible for federal subsidies.

NJ Biz notes that:

Seton Hall Law School Professor John V. Jacobi said that between Medicaid expansion and the subsidized health plans to be sold on the exchange, “there will certainly be hundreds of thousands of people covered,” among New Jersey’s nearly 1 million uninsured.

“There are several barriers to getting those people covered, and one is the information deficit,” Jacobi said. “People who are uninsured are typically very busy people who struggle to make their rent and put food on the table, and they are not engaged in the rollout of the ACA. So getting navigators and health educators and information to those people is going to be very important.”

The federal Department of Health and Human Services has allocated $1.5 million to fund navigators in New Jersey, which health care experts have said won’t be adequate.

[Assemblyman Herb Conaway Jr. (D-Delran), chair of the Assembly health committee] said outreach to the public will be crucial. The state Department of Banking and Insurance still has an unspent federal grant of nearly $7.6 million it received to help plan a state-run exchange; the state opted instead for HHS to build the exchange for New Jersey. DOBI is talking to HHS about how that money can be used, and Conaway said it’s key that navigators get that money.

“It’s really going to be those community-based organizations that know how to reach and communicate with (the uninsured) that are going to be so important for reaching the people who need to be in the exchange,” he said. “That certainly would be an appropriate use for that money.”

Jacobi said the uninsured in New Jersey, “are mostly people associated with the workplace. Most are in families with workers, full-time or part-time workers, and dependents of workers,” who either can’t afford to buy insurance at their workplace, or their employer doesn’t offer it.

Read the NJ BIZ article, “Health panel reveals concerns about Obamacare rollout, future”

Read the NJ Spotlight article, “Healthcare Leaders Envision a Shared Future”

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PPACA’s Expansion of ERISA: External Review Processes

May 17, 2013 by · Leave a Comment
Filed under: Health Law 

Melissa_Cartine_Headshot2The Patient Protection and Affordable Care Act (PPACA) has, in large part,  overhauled the American health care system— and the national dialogue that has resulted from PPACA’s enactment is seemingly infinite.  The focus of this post, however, is one particular topic that has not often been a part of the national dialogue.  It addresses PPACA’s expansion of the Employee Retirement Income and Security Act (ERISA) by requiring that external reviews be incorporated into employee benefits plans claim procedures.[1]

First, it is important to understand ERISA’s requirements prior to PPACA’s expansion of the statute.  The purpose of ERISA is to protect the rights of individuals participating in employee benefit plans.[2]  Among the types of employee benefit plans that ERISA regulates are group health plans.[3] To effectuate its purpose, ERISA mandates that if an employer chooses to establish an employee benefits plan, such a plan will fulfill certain requirements.[4]  One requirement is that plan participants who receive an adverse determination of benefits are afforded the opportunity to have such a determination reviewed:

            In accordance with regulations of the Secretary, every employee benefit plan shall—

            (1) provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant, and

            (2) afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the  decision denying the claim.

ERISA § 503, 29 U.S.C § 1133.[5]  Essentially, Section 503 requires that an employee benefits plan make available to plan participants claim procedures that enable a challenge to an adverse benefit determination.[6]  Pre-PPACA, the review of adverse benefit determinations was an internal process, without any independent, external review of the determination.[7]

As previously mentioned, the enactment of PPACA expanded upon ERISA’s claim procedures requirement. [8]  PPACA’s addition of external review processes aligns ERISA with the spirit of health care reform, which is to provide access to affordable health care to as many Americans possible.    Since only an internal review process of an adverse benefit determination was formerly required for purposes of ERISA, the concern was that many Americans were, and would be, denied essential medical coverage.[9]  Under the new requirement, the external review process provides that an independent review organization will make a final determination of the plan participant’s determination upon the exhaustion of the employee benefits plan internal claims process.[10]  Thus, the external review process serves as a check on internal review processes and is the final, binding determination regarding health care coverage.[11]  But it is important to note that in keeping with PPACA’s goal to cut health care costs, such an external review process may also result in the denial of health care coverage where the independent review organization deems medical treatment unnecessary.[12]  In addition, PPACA’s modifications of ERISA do not extend to grandfathered health plans, which are plans instituted on or before March 23, 2010.[13]


[2] Kennedy, Kathryn J., and Paul T. Schultz, III.  Employee Benefits Law: Qualifications and ERISA Requirements.  2nd Ed.  New York: LexisNexis, 2012.

[4] Kennedy, Kathryn J., and Paul T. Schultz, III.  Employee Benefits Law: Qualifications and ERISA Requirements.  2nd Ed.  New York: LexisNexis, 2012.

[5] ERISA § 503, 29 U.S.C. § 1133.

[7] Id. 

[8] Id. 

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TIM JOST INTERVIEWS ANDY KOPPELMAN ABOUT KOPPELMAN’S NEW BOOK, THE TOUGH LUCK CONSTITUTION (Oxford University Press 2013).

March 22, 2013 by · 4 Comments
Filed under: Health Law, Health Reform 
Andrew Koppelman 2

Professor Andrew Koppelman

Q. (Tim Jost) Your book explains, for the general reader, what was at stake in the health care fight and what the Supreme Court did.  Why should the general reader care?  All this is old news.

A. (Andy Koppleman) If you’re sitting on a hill, and a large boulder rolls past you, it’s a good idea to look uphill to see if any more boulders are coming.  The history matters because it shows that there are real dangers.

Last spring, the Supreme Court came within one vote of taking health insurance away from more than 30 million people.  Chief Justice John Roberts declined to join the four judges who wanted to do that, but he embraced all their principles.  Those principles are nasty.  All five judges think that universal health care would be unconstitutional.  All are suspicious of a law that asks the healthy and rich to support medical care for the sick and poor.  All of them are still on the Supreme Court.  They continue to exercise political power over the rest of us.  Americans need to understand what happened.

Q.  So what do you tell us that we don’t already know from the news stories?

A.  My book explains why Obama decided to include the unpopular provision requiring everyone to have insurance.  I also show that the Republicans, who originally proposed that idea, turned against it just because they wanted to deny Obama a victory.  Most importantly, I show where they got the idea that the mandate was somehow a violation of an important liberty.

Q.  Why did the constitutional case take the form it did?

A.  The Republicans’ objection to the Act was a combination of politics and substance.  Some of them honestly thought it was bad policy.  But you can’t challenge a law in court because you don’t like the policy.  You need to make a constitutional objection.  The constitutional objection was invented, in sketchy form, just as the bill neared passage and almost instantly became Republican Party orthodoxy.  It relied on an extreme libertarian philosophy, which holds that, if you get sick and can’t pay for it, that’s your tough luck.  The challengers’ arguments would have struck down the Act even if the alternative was a huge population of uninsured.  The dark heart of the case against the ACA is the notion that the law’s trivial burden on individuals was an outrageous invasion of liberty, even when the alternative was a regime in which millions were needlessly denied decent medical care.

Q.  What about the legal arguments?

A.  These are less complex than many people think.  Insurance is part of commerce among the several states.  Congress can regulate it.  Therefore, Congress can prohibit health insurers from discriminating on the basis of preexisting conditions.  Under the Necessary and Proper Clause, it gets to decide what means it may employ to make that regulation effective.  I explain how the challengers tried, and failed, to get around this simple argument.

Q.  Much of your book deals with the history of these constitutional provisions that formed the basis for the ACA litigation.  Why should we care about this history?

There are two reasons.  One is that, in interpreting any law, it is helpful to know the reasons why the law was passed.  The second is that the framers of the Constitution were very bright people, and their insights are useful in addressing today’s problems.

The Constitution was adopted specifically in order to give Congress power adequate to address the nation’s problems.  That is its fundamental and overriding purpose.  The health care issue is one that the states had tried and failed to address: only Massachusetts did it, and its circumstances were very unusual.  A situation in which neither the states nor the federal government could solve the country’s problems was what we had under the Articles of Confederation.  It is precisely what the Constitution was intended to prevent.

Q.  What are the boulders that you suggest may still be coming down the hill?

A.  The real moral force behind the challenge to the ACA wasn’t any technical legal argument.  It was most clearly stated at the oral argument, by Justice Antonin Scalia.  The counsel for the United States argued that the state legitimately could compel Americans to purchase health insurance, because the country is obligated to pay for the uninsured when they get sick.  Scalia responded:  “Well, don’t obligate yourself to that.”

Q.  Does Justice Scalia really think that there’s no obligation to care for sick people?  Why was he saying this?

A.  The answer has to do with the structure of constitutional law.  If you want to trash the ACA –- and Scalia did –- you have to assert constitutional limits that would exist even if there were no other way to deliver medical care to everyone.

This is why so many people (including, in the end, a near-majority of the Court) who were not Tough Luck Libertarians at all, who would find that philosophy repellent, nonetheless found themselves saying Tough Luck Libertarian things, and making claims based on a Tough Luck Constitution –- a constitution in which there is no realistic path to universal health care.  That Constitution won’t be attractive unless Tough Luck Libertarianism is right that it is acceptable to deny people the medical care they need.  The challengers to the ACA talked a lot about slippery slopes – at the bottom of this one was a law requiring you to buy broccoli – but there’s a slope in the other direction as well.  Once you decide that it’s acceptable to hold your nose and make this kind of argument, it will be easier next time.

Q.  The NFIB case which the Supreme Court decided was only one of dozens of cases that have been brought challenging the Affordable Care Act.  One of those cases brought by Liberty University challenged that provision of the ACA requiring large employers to offer health insurance to their employees or pay a tax penalty.  Liberty University lost that case in the Fourth Circuit Court of Appeals, but the Supreme Court remanded it for reconsideration.  Is there any possibility the courts will find that Congress lacks the power to require large employers to offer health insurance?  Would Tough Luck Libertarianism go this far?

A. It’s hard to see how.  The employer mandate is described as a tax in the statute.  The individual mandate isn’t, but the Court upheld it as a tax.  Chief Justice Roberts also objected to the mandate because you don’t have to do anything to be subject to it.  To be subject to the employer mandate, you have to decide to employ people.  Congress has had the power to regulate economic transactions for nearly a century.  Even the Roberts Court isn’t going to change that.

Q.  Several states are refusing to implement the insurance market reforms imposed by the ACA and one state is considering legislation that would prohibit the licensure of an insurance plan that would participate in an ACA exchange.  Does the Supreme Court’s decision give any hope to states that are still refusing to assist in implementing the ACA?

A. If states won’t participate in the health exchanges, then the Federal government can and will do it for them.  That has already been happening.  It has been well settled for years that state laws designed to disrupt the operation of a federal law are unconstitutional.

The one part of the Court’s decision that empowers the states to stay out of the federal scheme is Chief Justice Roberts’s decision that states could refuse to provide Medicaid to their poorest citizens.  The Court ruled that the states could turn down the Medicaid expansion while continuing to participate in the old Medicaid program.  One might have expected that no state would turn down such a good deal: the federal government will pick up 100% of the costs until 2016, with its contribution gradually declining to 90% in 2020 and thereafter.  And there is added pressure to take the money, because previous forms of federal aid were cut off.  Hospital associations agreed to accept cuts to their reimbursement rates, expecting that this would be more than made up by money from patients newly insured through Medicaid.  States refusing the money would not only be hurting their own working poor.  They’d be rejecting a huge infusion of cash into their economies, creating many, many jobs –- good jobs, for doctors and well-paid medical technicians.  That money has a powerful multiplier effect, creating jobs outside the health sector as well.

Many Republican governors have now turned down the money, but that number is shrinking.  Gov. Rick Scott of Florida, for instance, recently changed his mind.  The big question mark is Texas.  One in four Texans is uninsured.  The ACA would insure almost two million of them.  The expansion would give Texas an additional $52.5 billion from 2014-2019, which is more than half of the state’s annual budget.  Gov. Rick Perry has insisted that he won’t take the money.  If you are a hospital executive in Texas, you probably have a fiduciary duty to do all you can to defeat Rick Perry.  Meanwhile, the Court has succeeded in hurting millions of people.  Four days before Perry announced his decision, the federal Agency for Healthcare Research and Quality ranked Texas as having the worst health care in the nation.  This is the Court’s notion of “liberty.”
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Timothy S. Jost holds the Robert L. Willett Family Professorship of Law at the Washington and Lee University School of Law. He is a co-author of the casebook, Health Law, used widely throughout the United States in teaching health law, and of a treatise and hornbook by the same name. His other publications are simply to numerous to list.

Andrew Koppelman is John Paul Stevens Professor of Law, Northwestern University.  He has written extensively about the legal debate surrounding the Affordable Care Act for Salon. His latest book, The Tough Luck Constitution and the Assault on Healthcare Reform, will be published by Oxford University Press on March 22, 2013 and available online and through bookstores everywhere.

“Andrew Koppelman has magnificently captured the current legal, political and policy-related lay of the land in Washington. His insightful analysis here should be mandatory reading for anyone concerned about the future of health care in America.”

Tom Daschle, former Senate Majority Leader

 

 

 

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Tara Ragone in Modern Healthcare on potential impact of U.S. Supreme Court hospital antitrust decision

March 5, 2013 by · Leave a Comment
Filed under: Antitrust, Health Law 

tara-ragoneResearch Fellow & Lecturer in Law Tara Ragone appeared in Modern Healthcare on the potential impact of a recent U.S. Supreme Court decision which found a hospital not exempt from antitrust scrutiny, despite its claim to be protected from such through “state action immunity doctrine,” which, according to Modern Healthcare, “gives states wide latitude to regulate competition.”

The Court’s decision was unanimous, citing the fact that although the hospital system in question, Phoebe Putney Health System, “operates public hospitals under a $1-a-year lease from the Albany-Dougherty Hospital Authority,” it did not dispute that its latest hospital acquisition would give it “control of 86% of  a six county market after the sale.” The Court, according to Modern Healthcare, ruled that Phoebe Putney’s financial relationship with the state was not sufficient to render its state action immunity defense tenable, and that “states must expressly grant antitrust immunity to local entities.”

The Modern Healthcare article notes, however, that the decision may also have impact on Medicaid ACOs under the ACA.

Modern Healthcare writes:

And it also could affect Medicaid ACOs. “The state action doctrine has been expanded, expanded, expanded to essentially immunize them,” [Matthew] Cantor said. “The Supreme Court is going to look a bit wary about stark anti-competitive behavior.”

But Tara Adams Ragone, a research fellow and lecturer at Seton Hall University School of Law who has written about how to structure Medicaid ACOs to avoid antitrust scrutiny, noted that the laws in New Jersey, New York, Oregon and Washington do state that they intend to authorize anti-competitive behavior.

“It doesn’t change things from my analysis,” she said about the Phoebe Putney decision. Yet she added that states may have to review statutes that don’t contain that explicit language.

The Phoebe Putney decision also doesn’t address the second prong of the state action doctrine, which requires states to actively oversee the anti-competitive behavior. “That’s where there’s a lot of work to be done,” she said.

Ragone and Cantor pointed out that it’s still unclear whether the FTC and U.S. Justice Department even intend to challenge ACOs as anti-competitive. A classic antitrust case involves entities colluding to fix prices—but the whole goal of an ACO is to reduce costs.

Read the full Modern Healthcare article, “Phoebe Putney dealt legal blow by Supreme Court.”

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