Health and Government Operations Committee Briefing: June 9, 2020

On June 9th, 2020, Maryland’s Health and Government Operations Committee gave a briefing, featuring updates from the Maryland Insurance Administration, the Maryland Hospital Association, Maryland Health Services Cost Review Commission. Find key takeaways below.

Todd Switzer
Chief Actuary, Maryland Insurance Administration

General Rate Review Process & Timing

1. Maryland Insurance Article § 11-603(c)(2) requires that rates must not be excessive, inadequate, or unfairly discriminatory and must be reasonable in relation to benefits. Otherwise the Commissioner “…shall disapprove or modify a proposed premium rate filing.”
2. “Actuarial Standards of Practice” (ASOP) # 8 describe an approach where assumptions need to be supported and reasonable individually and in aggregate.
3. Key assumptions and context include 1) annual claims cost trend, 2) risk adjustment, 3) morbidity (relative health status of the pool), 4) prescription drug rebates, 5) operating expenses, 6) profit charge, 7) minimum loss ratio rebates, 8) actual gain/loss experience and surplus position, 9) COVID-19, 10) the special open enrollments, 11) absolute value of the premium, 12) federal 1332 waiver and reinsurance program, 13) UnitedHealthcare’s reentry to the “Individual Non-Medigap” market.
4. TIMING: All rate filings received by 05/29/20, MIA public rate hearing scheduled for 07/15/20. CMS releases actual 2019 risk adjustments payments 07/15/20, MHBE Board meets on 07/20/20 to vote on reinsurance parameters (e.g., $20,000 pooling level), rate filing data updated through 06/30/20 by 07/31/20, rates approved no later than 09/15/20, 2021 open enrollment begins 11/01/20.

COVID-19

1. Only one of the four carriers elected to adjust 2021 costs due to the COVID-19 pandemic in their initial filings for any market, citing uncertainty. UnitedHealthcare files a 1.02 factor in “Individual Non-Medigap” market only.
2. As more data emerges the MIA plans to evaluate the impacts of such factors as 1) deferred care / pent-up demand, 2) a potential COVID-19 resurgence in the Fall of 2020, 3) economic impacts to individuals and employers, 4) lasting utilization changes due to telemedicine, 5) postponement of chronic care management and preventive care, 6) enrollment shifts between markets such as group to individual to Medicaid, 7) zero insured cost shares for diagnosis and treatment, 8) mental and behavioral health care pattern changes, 9) the suspension of prior authorizations, and 10) a vaccine. These factors have both upward and downward impacts to cost.

What’s Been Filed – 2021 ACA?

INDIVIDUAL NON-MEDIGAP MARKET

1. The composite 2021 renewal is -4.8% following 2019 and 2020 approvals of -13.2% and -10.3%, respectively. The 2021 range by legal entity is -12.0% to -1.1%.
2. From 04/30/19 to 04/30/20, total enrollment has grown by +11,724 members to 207,099 or +6.0%, driven in large part by the COVID-19 and “Maryland Easy Enrollment Health Insurance Plan” special open enrollment periods (SEPs).
3. UnitedHealthcare (UHC) will reenter in 2021 offering coverage in 14 of Maryland’s 24 counties. The number of counties where consumers have only one choice of carrier will decrease from thirteen to eight. UHC’s reentry will affect the amount of the federal “Advance Premium Tax Credit” (APTC) subsidy in some way. It may reset the “second-lowest-cost Silver plan” (SLCSP) reference point. This will be an important consideration for which more analysis will be done.

SMALL GROUP MARKET

1. The composite, filed 2021 renewal is 5.3% for all four quarters following 2019 and 2020 approvals of 5.0% and 3.0%, respectively. The 2021 range by legal entity is -9.0% to 10.4%.
2. From 02/28/19 to 02/29/20, total enrollment has grown by +3,690 member to 266,102 or +1.4%.

DENTAL – STAND-ALONE – INDIVIDUAL, NON-MEDIGAP MARKET

1. The composite, filed 2021 renewal is +0.2% following 2019 and 2020 approvals of 3.6% and -0.7%, respectively. The 2021 range by legal entity is -1.3% to 1.9%.
2. From 02/28/19 to 02/29/20, total enrollment has grown by +4,419 members to 60,276 or +7.9%.
3. So far in 2020 we’ve seen the percentage of Individual insureds enhancing their coverage to include stand-alone dental rise from 28% to 30%.

David Cooney
Associate Commissioner of Life and Health, Maryland Insurance Administration

 Telehealth Coverage

• MIA Response:
  • Reevaluation of existing law (§ 15-139 of the Insurance Article)
  • Outreach to carriers to work toward collaborative solution
• Carrier Response – Extensive Voluntary Accommodations:
  • Expansion of telehealth systems and platforms
  • Increased scope of services eligible for telehealth coverage
  • Waiver of cost-sharing for telehealth visits
  • Telehealth coverage of phone-only consultations
  • Reimbursement parity between virtual consultations and in-person consultations
  • Extension of accommodations to self-funded clients
• Ongoing Stakeholder Concerns:
  • Lack of uniformity
  • Need for more easily accessible disclosure of covered services and coding standards
  • Phasing out of accommodations as pandemic subsides

15-139 of the Insurance Article

• (1) In this section, “telehealth” means, as it relates to the delivery of health care services, the use of interactive audio, video, or other telecommunications or electronic technology by a licensed health care provider to deliver a health care service within the scope of practice of the health care provider at a location other than the location of the patient.
• (2) “Telehealth” does not include:
  1. (i) an audio-only telephone conversation between a health care provider and a patient;
  2. (ii) an electronic mail message between a health care provider and a patient; or
  3. (iii) a facsimile transmission between a health care provider and a patient.
• (b) This section applies to:
  • (1) insurers and nonprofit health service plans that provide hospital, medical, or surgical benefits to individuals or groups on an expense-incurred basis under health insurance policies or contracts that are issued or delivered in the State; and
  • (2) health maintenance organizations that provide hospital, medical, or surgical benefits to individuals or groups under contracts that are issued or delivered in the State.

• (c)(1) An entity subject to this section:
  • (i) shall provide coverage under a health insurance policy or contract for health care services appropriately delivered through telehealth; and
  • (ii) may not exclude from coverage a health care service solely because it is provided through telehealth and is not provided through an in-person consultation or contact between a health care provider and a patient.
  • (2) The health care services appropriately delivered through telehealth shall include counseling for substance use disorders.

• (d) Reimbursement and deductible. — An entity subject to this section:
  • (1) shall reimburse a health care provider for the diagnosis, consultation, and treatment of an insured patient for a health care service covered under a health insurance policy or contract that can be appropriately provided through telehealth;
  • (2) is not required to:

Prior Authorization and Other Utilization Review Requirements

• Stakeholder concerns as the pandemic unfolded and a massive surge in hospitalizations was feared:
  • Anticipated strain on hospital resources during the peak of the crisis would make utilization review requirements unreasonably burdensome at a time when all available resources would be needed solely for patient care
  • Expiration of previously granted authorizations for elective surgeries would cause unnecessary delays in care once the pandemic subsided
  • Lack or uniformity between markets and carriers
• MIA Response:
  • Outreach to carriers to work toward collaborative solution
  • Revision to regulations to enhance emergency powers
• Carrier Response:
  • Voluntary accommodations and relaxation or requirements
  • Extension of accommodations to self-funded clients

Q&A

Delegate Bonnie Cullison: When do you expect to have a rate review that includes the consideration of Covid? Do you expect the flexibility around preauthorization’s will continue after the emergency?

David Cooney: A lot of the accommodations were really temporary things that were appropriate while the pandemic is going on. I expect those to continue for a few more months.

Delegate Matthew Morgan: What is going to happen with the copays?

David Cooney: Any kind of copays are coinsurance for testing, and diagnosis and if a vaccine is developed.

Delegate Sheree Sample-Hughes: What should we do to make telehealth a standard practice?

David Cooney: That would require a statutory change. It would be a straightforward change to the law.

Delegate Robbyn Lewis: How will the MIA make the market ready for a surge?

David Cooney: We have been monitoring all the data from the Department of Health. We have Emergency Power Regulation if we need that authority.

Delegate Terri Hill: Are we having a hard time with cost sharing? Things that hospitals deem as COVID related the insurance companies are deeming as not COVID related.

David Cooney: We have not observed that in Maryland. That is something we are on the lookout for.

Delegate Harry Bhandari: Why was there a lack of uniformity? How can we fix it moving forward?

David Cooney: The lack of uniformity was due to the limitations in our law. We only have authority over the commercial market.

Bob Atlas
President, Maryland Hospital Association 

Federal Financial Support

Coronavirus Aid, Relief, and Economics Security (CARES) Act

• Public Health and Social Services Emergency Fund-PHSSEF Grants
• Medicare and Medicaid Provider Relief Funds
• Rural Hospitals & Clinics
• High Impact Areas
• COVID treatment for Uninsured Patients

Accelerated Payment for Providers and Hospitals

Allows advance Medicare payments at 100% with a zero percent loan terms.

HHS Assistant Secretary for Preparedness and Response (ASPR)

State Hospital Association COVID-19 Preparedness and Response Activities Grants

Leslie Simmons
Executive Vice President, LifeBridge Health and Chair

Hospital Recovery & Path Forward

• Creating a Patient Centric COVID “minimized” Hospital:
  • Isolating COVID patients to certain areas in Hospital
  • Emergency Department dedicated COVID triage staging area
  • Dedicated COVID inpatient unit for ICU & acute care patients
  • Continued screening for all individuals entering Hospital
  • Continued more restrictive entry for all individuals entering Hospital
  • Testing of all patients in advance for elective procedures
• Promoting use Emergency Room Campaign “open for business”
• Elective surgery schedule reopened May 11

Q&A

Delegate Joseline Pena-Melnyk: Do you think you are going to be off on your target goals?

Bob Atlas: A lot of the measures we are subject to are relative to the rest of the country. We are studying the deviations.

Delegate Ariana Kelly: Do you have data on positive cases within the healthcare workforce at the hospitals and any potential fatalities?

Bob Atlas: We have not been collecting data on positive cases within the workforce.

Leslie Simmons: Out of the over 10,000 employees we only have a 2% positive rate, and we have had no deaths.

Delegate Samuel Rosenberg: You mentioned a significant increase in gowns as an example. Do you know if that is covered by our price gouging law?

Bob Atlas: Generally not because most of the purchasing is happening outside of the state.

Delegate Robbyn Lewis: What is the most common type of telehealth service you are offering?

Leslie Simmons: It’s a large array or primary care, mental health, specialty care.

Delegate Karen Young: How can hospitals ensure those suffering from mental illness and substance use has support?

Leslie Simmons: We are taking a critical look at all the programs we offer and seeing how we can expand them. We have implemented many programs as well to connect with our employees and now the challenge is to continue to do the same for the community.

Delegate Matthew Morgan: Are we still adding more capacity for beds?

Bob Atlas: The expansion has largely stopped. We have discovered that we didn’t need as many beds as we anticipated.

Delegate Matthew Morgan: When would COVID no longer be considered an emergency from hospital standards?

Bob Atlas: We still have a pandemic with no vaccine. We don’t have a true treatment so we need to continue to maintain readiness. Hospitals know how to manage the patients that come in. We need to maintain vigilance and social distancing. We cant let our guard down.

Delegate Bonnie Cullison: How are hospitals preparing for a second surge?

Leslie Simmons: We have been continuing to source PPE and stockpiling so we will be more prepared for a surge. We are fine tuning our conservation methods. We are learning every day.

Delegate Terri Hill: Are you seeing much change in regard to disposable gowns vs. laundered gowns?

Leslie Simmons: We did purchase more washers and dryers. We have converted 3 of our 5 hospitals to cloth reusable gowns.

Delegate Susan Krebs: How are hospitals working with the nursing homes and the health departments? How do you get reimbursed for that?

Leslie Simmons: The hospital was able to partner with the local health department and offer some PPE assistance and help them with managing the patient population. At this point reimbursement is a question mark to us.

Katie Wunderlich
Executive Director, Maryland Health Services Cost Review Commission

Maryland’s Unique Healthcare System

• Enables cost containment for the public
• Improves quality through care redesign
• Avoids cost shifting across payers
• Provides equitable funding of uncompensated care
• Supports state-designated health information exchange (CRISP)
• Funds investments in population health
• Creates a stable and predictable system for hospitals
• Makes Maryland a leader in linking quality and payment

Key Advantages to Maryland Health Model

• The Total Cost of Care Model provides essential protections and assurance to Maryland hospitals that is not available in other states where hospitals work on a FFS basis
  • Maryland’s “Global Budget Revenue” (GBR) system is based on population, rather than volume and provides hospitals additional financial stability, especially during times of volume volatility
  • A proactive, State-based response is not dependent on federal action
  • State granted additional limited “corridor capacity” to address volume trough and preparations for Covid-19 treatment (balancing hospital pricing vs. consumer affordability)
• Protections exist for hospital regulated revenues, but not for unregulated revenues
  • Financial picture, Maryland hospitals Fiscal 2019
    • Net operating revenue for regulated services totaled $15 billion (with a profit of $1.2 billion)
    • Net operating revenue for unregulated services totaled $1.8 billion (with a profit loss of $0.86 billion)
  • GBR provides stability for hospital regulated services, but does not protect unregulated services
  • Nationally, hospitals have lost on average 40-60 percent of volumes (inpatient and outpatient) since March. FFS hospitals outside of Maryland lose that revenue.
  • In Maryland, regulatory protections allow hospitals under GBR to recoup the majority of the regulated revenue, through flexible charging corridors and rolling over “undercharges” not charged in the current fiscal year.

COVID-19: Overview of HSCRC Action Plan

• As Maryland responds to the crisis and change of health care delivery associated with individuals affected by COVID-19, HSCRC staff have developed an action plan to ensure hospitals have the funding needed to combat the virus during the trough, surge, and post-surge phases.

1. 1. Align with Federal Partners
      • HSCRC is working closely with federal partners to ensure Maryland hospitals have access to federal relief aid to combat COVID-19 and to assure compliance with the Total Cost of Care contract.
   2. Address Regulatory & Policy Barriers

• HSCRC has modified/suspended policies and established new mechanisms to aid hospitals in preparing for the potential increase in patients affected by COVID-19.

1. 1. Ensure Hospital Financial Stability

• HSCRC is working to establish policies, modify rate setting methodologies, and identify all available funding to support hospitals during the COVID-19 pandemic.

1. 1. Support State Planning

• State Surge Activation Planning Team
• Identification of Racial and Ethnic Health Disparities related to COVID-19
• Physician Support
• Long-Term Care/Congregate Living Facilities

Q&A

Delegate Joseline Pena-Melnyk: Do you anticipate getting an amendment on the contract with CMMI?

Katie Wunderlich: We are monitoring our performance closely and our working with CMMI closely. We only have data from before March, but we will continue to monitor. There are still factors to be considered.

Delegate Samuel Rosenberg: If there is no additional federal money what impact will that have?

Katie Wunderlich: We have been projecting the amount of the undercharge. Because the volume has dropped they have not been able to charge their full GBR. Additional federal funds would help provide resources and revenue now to hospitals.

Delegate Terri Hill: Are you now looking at how our model and healthcare may be affected as we are seeing late effects from the COVID infection?

Katie Wunderlich: It’s an issue that is concerning to us. It is important to us with how well we are doing on our goals to improve health of our population.