payers & providers california edition – issue of april 28, 2011

8/7/2019 Payers & Providers California Edition Issue of April 28, 2011

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Aetna, Inc. has backed off a proposalsubmitted to the California Department ofInsurance earlier this year to raise rates on itsindividual policyholders an average of 17.9%,

and instead will raise rates just 12.2%.Aetna twice agreed to reduce the rate

hike after a review by InsuranceCommissioner Dave Jones, having led arequest for a 15.6% increase last month butsince reducing it further. The new rates go intoeffect for about 43,000 policyholders on July1.

Aetna policyholders will benet fromAetnas decision to lower their proposed July1st rate increase, Jones said in a statementissued late Wednesday night. He added thatthe change will save Aetnas enrollees about$6.8 million in premiums over the next year.

Last year, Aetna sought and receivedpermission to raise rates an average of 19% onits approximately 65,000 individualpolicyholders in California, although somesaw their premiums go up as much as 30%.

In a ling with the DOI last month, Aetnaclaimed its medical costs increased 14.9% in2010. It projected an increase of 12.5% for2011.

An Aetna spokesperson would onlyconrm that it was working with DOI on itsrate application and declined furtherimmediate comment.

Im not ready to declare victory until I

take a look at the new ling, but I will say the

insurers are aware of both the federal healthreform law, and a bill in the Legislature thatwould provide more scrutiny and require theirapplications be much more rigorous in terms

of what theyre putting forward for rateincreases, said Anthony Wright, executivedirector ofHealth Access, a Sacramento-basedadvocacy organization.

Aetnas rate ling was made public atvirtually the same time the Assembly HealthCommittee approved AB 52 Tuesday. That billwould allow state regulators to reject ratehikes considered excessive, and permit civillitigation by consumers to potentially blockrate increases. The federal Patient Protectionand Affordable Care Act also requires insurersto publicly announce rate increases inadvance of their imposition.

Currently, no regulatory body inCalifornia has the right to reject healthinsurance premium increases outright, butinsurers are clearly under increased pressureto keep their rates in line. Jones publiclyannounced his support for AB 52 in twostatements issued by his ofce on Wednesday.

Blue Shield of California last monthbacked off on a series of rate hikes that wouldhave increased some premiums for individualpolicyholders by as much as 87%. TheDepartment of Managed Health Care recentlysent a letter to the San Francisco-based health

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May 4-7

May 11-13

Calendar

28 April 2011

June 3-5

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[email protected]

the details of your event, or call(877) 248-2360, ext. 3. It will be

published in the Calendar section,space permitting.

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California Edition

Aetna Seeks A Smaller Rate HikeRegulatory Pressures May be Forcing Moderations

Continued on Next Page
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Payers & Providers Page 2

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In Brief

Orange CountySupervisors Vote

Against Cal-OptimaProduct Expansion

The Orange County Board ofSupervisors took the first steptoward prohibiting its quasi-publicMedi-Cal managed care healthplan from enrolling commercialmembers.

The board voted unanimouslyearlier this week to amend Cal-Optimas charter to prohibit it fromentering into commercial ventures.A second vote in May is scheduledto finalize the change.

The move was prompted byconcerns in Orange Countysbusiness and political communitiesthat Cal-Optima would competeon Californias health insurance

exchange when it began sellingcoverage in 2014.

The exchanges are part of thePatient Protection and AffordableCare Act, which has little popularsupport in the mostly conservativecounty. Several Medi-Cal managedcare plans statewide haveannounced their intent to competeon the exchanges.

Moreover, business leaderswere unhappy with the notion thatCal-Optima could takemembership away fromcommercial health plans.

Molina Issues 3-for-2Stock Split

Long Beach-based Medicaidmanaged care insurer MolinaHealthcare will issue a three-for-two split of its stock.

Each Molina shareholder willreceive a dividend of one share ofstock for every two shares they

Continued on Page 3

NEWS

Rate Hikes (Continued from Page One)

plan asking to justify the imposition of a37.5% average premium increase that wentinto effect on Jan. 1. It sent a similar letter to

Anthem Blue Cross asking why it intends toraise rates on May 1 for products regulated bythe agency more than similar products underthe DOIs jurisdiction.

Our action...helps to further rein inthe wild west of rate increases for consumersin the individual health coverage market,"said DMHC spokesperson Lynne Randolph.

Judy Dugan, research director forConsumer Watchdog, a Santa Monica-basedadvocacy group, said plans such as Aetnawere not only greater public scrutiny, but mayalso have overestimated the cost of providingcare to their members. If their medical cost

trends came in low enough, they would haveto refund premiums to policyholders, whichthey dont want to do, she said.

Dugan, whose organization has

endorsed AB 52 and won a voter initiativevictory governing automobile insurance rateincreases back in the late 1980s, added that

criticism from regulators and the public onlyhas a limited effect.Jawboning only works for a little while.

Theyre not going to keep rates lower foreverbecause theyre getting a tut, tut from thegovernment, she said.

And despite what appears to be apotential future of more moderate premiumincreases, Wright remained concerned thatAetnas hike would still put nancial pressureon its policyholders.

Im not sure most consumers wouldcheer a double-digit hike (in lieu of) a 30%increase, said Wright, who sits on the Payers

& Providers editorial board. Were still goingto take a closer look at those lings, and westill have work to do.

Continued on Next Page

CDPH Fines Nursing Facility $100,000Citation Stems From 2010 Strangulation of Patient

The California Department of Public Healthhas issued the most severe citation under state

law and levied a $100,000 administrativepenalty against a Bay Area skilled nursingfacility where a patient was allegedlymurdered by a staff member last year.

The penalty was issued against the SanFrancisco Nursing Center formerly knownas the Convalescent Center Mission Streetfor violating state regulations prohibiting theabuse of patients. It stemmed from a bizarreand gruesome incident that took place on thepremises on March 22, 2010.

According to the CDPH and publishedreports, an employee walked into a patient

room and caught 33-year-old nursing assisMaximo Hong Fajardo, Jr. allegedly pinchthe nostrils of 87-year-old patient BarbaraMcIver while covering her face with a pilloFajardo ed the facility and proceeded tocarjack and crash two vehicles and attempto carjack a third vehicle when bystandersapprehended him.
https://www.managedcarestore.com/pandp/p&pwhitepapers.htm


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Page 3Payers & Providers

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CDPH (Continued from Page One)

The primary lobbying group for the stateshealth maintenance organizations says billspending in the Legislature mandatingadditional healthcare coverage would imposemore than $709 million in additionalpremiums on Californians a claim the stateagency in charge of analyzing such legislationcalled inaccurate.

The California Association of HealthPlans declared that 12 pending bills thatmandate expanding coverage for benets suchas autism, breast cancer screenings, mentalhealth services and acupuncture could add asmuch as $790.1 million to premiums ifpassed. The group used analyses compiled bythe California Health Benets ReviewProgram, which briefs the Legislature onhealthcare bills.

CAHP spokesperson Nicole KasabianEvans said the impact on premiums was muchhigher than in past years. During the previous

own. The distribution will bemade on May 20 for shareholdersof record on May 9. Trading basedon the split will commence onMay 23. The issuance is expectedto increase Molinas float byabout 15 million shares, to just

under 46 million.We are pleased to expandthe opportunity for additionalinvestors to participate in oursuccess and to provide existingshareholders with a stockdividend to reward them for theircontinuing confidence in ourcompany, said Molina ChiefExecutive Officer J. Mario Molina,M.D.

Molina trades on the NewYork Stock Exchange under thesymbol of MOH. Shares weredown slightly Wednesday, the daythe split was announced, but thestock is trading near its 52-week

high of $42 per share.

Blue Shield ClaimsInitiative On Green

Front

Blue Shield of California hasclaimed it has reduced theamount of paper it uses incommunications by 45% over thepast two years, preventing thedischarge of more than 3,500 tonsof greenhouse gases, 26 milliongallons of wastewater and 1,100tons of solid waste.

The San Francisco-basednon-profit health plan disclosedthe data as part of its report onsocial responsibility initiatives.

"We're committed toreporting tangible numbers thatdemonstrate the impact of oursocial responsibility workwherever possible," said NancyShaw, corporate socialresponsibility manager for BlueShield of California. "Bymeasuring our efforts, we're ableto track our progress on initiativesthat benefit the environment, thecommunity, and our members.

McIver was non-responsive, and it was laterdetermined she died of asphyxiation.Fajardo, who had been licensed as a nursingassistant since 1999 and had no criminalrecord, has since been charged with McIversmurder. He is expected to go on trial laterthis year.

In its report, the CDPH noted thatFajardo had been hired and assigned to carefor seven patients, even though he had noprior experience caring for elderly or frailpatients. He was given no formal orientationor informed of his specic duties andobligations to the patients. The alleged attack

on McIver who suffered from dementia occurred on Fajardos rst day on the job aftera two-week training period. No formalevaluation of Fajardo took place during histraining period. The nursing director refused tocheck on Fajardo the day of the allegedmurder, even though a colleague repeatedlyinformed her he appeared disoriented.

The CDPH issues three classes ofcitations, with AA being the most severe. The$100,000 ne is also the highest permittedunder law. The facility could lose its license ifit receives another AA citation within twoyears.

Plans Say Bills Are Too BurdensomeClaims Pending Legislation Could Cost $709M

legislative session, the potential impact onpremiums was $280 million, and $400 milliin the session prior to that, according to CAHdata.

However, CHBRP took issue with the wCAHP performed its calculations. We don'tagree with CAHP's methods of adding up allthe dollars of the marginal impact of each ofthe bills since if all the bills were to pass intolaw there would be overlap, said directorSusan Philip. For example, Philip noted thattwo pharmacy benet bills currently pendingwould likely be consolidated into a single biat a future date.

Most bills would impact premiums nomore than one-tenth of 1%, according toPhilip. But SB 155, a bill that would requiremore maternity service coverage by preferredprovider organizations, could impactpremiums by as much as 3.5%. However, thbill was not included in the CAHP analysisbecause it does not represent PPOs.
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Payers & Providers PageOPINION

Small Practices Avoid EHR InstallatioChanges Must Be Made to Encourage Adoption

Brad Melis is executive vice president of

ChartLogic in Salt Lake City.

9-21:)!;6!1%2/+3)0!).)*&!?31*+0(&!%&!'(&)*+!,!'*-./0)*+!'1%2/+3/456!

778@!A4!(441(2!/40/./01(2!+1%+B*/>C/-4!/+!DEE!(!&)(*!

FD$GE!/4!%12H!1>!C-!$#!+1%+B*/%)*+I@!^-++!]-20%)*56!(&)*+(40>*-./0)*+@B-: Op-ed submissions of up to 600 words are

welcomed. Please e-mail proposals to

[email protected],

With the federal governments electronic healthrecord (EHR) incentive program hitting high-gear, early signs are that it is a success.

The program for providers ling for thepayments through the Medicaid system beganon Jan. 6 in about a dozen states and hasalready distributed $37 million in payments.The Medicare system incentive program willbegin nationwide on April 18. !These payments will be awarded to physiciansand hospitals that have demonstratedmeaningful use of EHRs througheither Medicaid or Medicare.

The governments goal is to

have virtually 100% of the nationsphysicians and hospitals using andexchanging EHRs for patient data.!However, we are seeing sometrends that indicate a substantialnumber of physicians, primarily insmall medical groups, will be leftout. !

A survey conducted in early2010 by SK&A found that only28% of solo practitioners hadadopted EHRs, while 71% ofphysicians in large medicalgroups (26+ doctors) had done so. A more

recent survey, conducted after the meaningfuluse program was launched by the NationalCenter for Health Statistics (NCHS), found thatwhile 41% of ofce-based physicians areplanning to achieve meaningful use and qualifyfor the incentives, 14% said they were notplanning on qualifying or applying forpayments.!

Who are these reluctant physicians whoremain dependent upon paper records? Studiesshow them to be solo practitioners orphysicians in smaller, independent medicalgroups that are not closely afliated with ahospital. They tend to be older physicians who

are not comfortable with computers or theInternet. !

We cant afford to ignore small medicalgroups. About 40% of all physicians are solopractitioners or work in a medical group of sixor less. When the federal incentive programends in four years, if we have 20 or 25% of thenations physicians unable to collect andtransmit EHRs, it will be considered a failure.For example, imagine a 1,000-mile interstatehighway with a gap every 100 miles, requiring

all the trafc to exit and take back roads.Bottlenecks and trafc jams would be a way life, commerce could not ow smoothly andtransportation costs would be high. !

Three steps in particular will help improvEHR adoption rates among small medicalgroups:

1. EHR systems must improve their usabWhile most EHR systems have improved steain terms of speed and ease of use in recentyears, some physicians still nd them difcul

use. One area that holds signicapotential is voice recognition. Molder physicians are used to

dictating their notes. AdvancedEHRs now incorporate dictationand voice commands. !2. Health information exchanges(HIEs) must expand. HIEs arecurrently operating only in scatteregions around the country.. It is

very difcult for physicians torealize signicant value fromEHRs when they cannot send areceive information from otherphysicians and hospitals. !3. EHR vendors must become

more involved with the meaningful use progr

Vendors must become more committed tohelping physician customers meet themeaningful use standards. Too often, vendorsfeel their obligation is to simply get their EHRinstalled in a physicians ofce.

Second, vendors should take the time toinvolved in working with federal ofcials inshaping Stages 2 and 3 of the meaningful useprogram.

There will be no turning back the clock; era of EHRs has arrived. Small, independentmedical groups face a unique set of challengwhen implementing EHRs and connecting tolarger regional networks. Our national drive

adopt EHRs and move to a new level ofefciency and accountability will not becomplete until we get these physiciansincorporated into the new world of connectiv

By Brad Melis


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MARKETPLACE/EMPLOYMENTPayers & Providers Page 5

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Required Skills and Experience: B.A. or B.S. degree; skill set related to effective projectmanagement, including strong work ethic, attention to detail, time management, abilityto prioritize, problem solving, adaptability, and willingness to learn; and prior experiencewith health care operations or research preferred.To apply for a position or for more information about COPE Health Solutions, pleasevisit our website at: http://copehealthsolutions.org/careers .


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Payers & Providers MARKETPLACE/EMPLOYMENT Page 6

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payers & providers california edition – issue of april 28, 2011

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