Medicare Compliance & Reimbursement

Health plans need to make the most of their good fortune, or else.

Employers and others are fed up with rising prices and lack of transparency in the U.S. health-care system, and they'll jump ship to embrace a national single-payer model if providers and insurers don't step up to make the current system work.
 
That was the message delivered by Rep. Paul Ryan (R-WI) and House Ways and Means Committee Chair Bill Thomas (R-CA) at a policy conference of America's Health Insurance Plans March 10.

"We'll have single payer in this country in about five years if we don't focus on consumerism" to drive down costs, Ryan said.

Health savings accounts enacted in last year's Medicare legislation are part of the last best hope for keeping a private system, and it's up to insurers to make them -- and other products -- with incentives for prudent consumer purchasing work, said Ryan. "You are going to determine the fork in the road." Whether the U.S. health care future relies "on socialism or consumerism is going to be determined by those of you in this room," he told the insurers.

HSAs Show Promise, Fortis Says

Early data from major HSA player Fortis Health shows that HSAs won't segment risks in the system by skimming off only the "healthy and wealthy" people, Ryan said. Forty percent of buyers are people who were previously uninsured, a significant number aren't in excellent health, and one-fifth of buyers "have combined incomes of under $125,000."

Ryan acknowledged that financial institutions lawmakers are counting on to provide investment vehicles to pair with HSA owners' high-deductible health coverage aren't stepping into the arena "as fast as they need to."

Roy Ramthum, senior advisor for health initiatives at the Treasury Department, said, "My guess is that until some of these accounts reach a certain dollar threshold," financial companies will hold back. The threat of frequent small withdrawals from already small accounts isn't conducive to longer-term, higher-yield investment vehicles, he explained.

But Ryan told MLR that heavy use of HSAs by middle-income people or people with more health needs might actually be an incentive for some financial institutions to get involved, since they share lawmakers' goal of encouraging more Americans to save.

Remaining uncertainties about HSA regulations -- which Treasury won't issue formally and in full until 2005 -- are behind the financial sector's go-slow approach, he said.

How to define preventive care -- which Congress exempted from HSAs' high deductibles -- and what deductibles if any should apply to prescription drugs are two of the biggest puzzles Treasury is wrestling with as it prepares the rules that will govern HSAs, said Ramthum. Guidance on preventive care and other issues will be issued later this month and will have "broad ramifications" for which health plans can qualify.
 
Medicare Funds Aren't For Building Market Share

Insurers aren't only on the hook for staving off encroaching health-care socialism, Thomas told AHIP later in the day. Also on the horizon: a Medicare showdown between private comprehensive plans and the traditional government-run fee-for-service program. Private plans must clearly demonstrate that they can provide care just a little more efficiently, relative to government-run FFS.

When Congress offered extra money to Medicare private health plans in last year's prescription-drug law it wasn't "because we believe in one health-care delivery system" -- i.e., private comprehensive health plans -- above any other. "We don't," said Thomas.

The purpose of the funding was to allow Medicare's private plans to improve their information technology, disease- and care-management capabilities, pay-for-quality schemes and wellness programs in preparation for the showdown. Health-plan money in the prescription-drug law is not for building market share.

"If your business ploy is to take the money," build market share now, then "ride it until the money runs out," that's "not a good ploy," Thomas said. "If we use FFS as the baseline, and you can't beat them, nobody will continue to pay you more."