One of the greatest frustrations our self-funded (and to a lesser extent, fully-insured) clients voice is that – despite the hundreds of thousands or millions of dollars they pay the insurers to assist in managing their health plan spend – too often it appears the insurers are complicit in the rising healthcare spend by not aggressively managing the behavior of the provider community.
Over the years, we’ve seen countless abuses; physical therapists bilking the employer’s out-of-network benefits for endless services but only charging the member a copay, out-of-state non-network facilities submitting egregious billed charges (of which the carriers sometimes take a percentage of savings), in-network facilities taking advantage of the scheduled fee structure and “turbocharging” the carrier for unnecessarily long stays or acute diagnosis codes, emergency rooms performing rudimentary services but price-gouging the plan and the member for thousands of dollars. And of course, who can forget the drug manufacturers setting outrageous prices while the pharmacy benefit managers (PBMs) turn a blind eye and instead negotiate larger rebates? Is it any wonder some clients have explored radical solutions in recent years, like reference based reimbursements and oppressively narrow networks?
Two recent developments with Anthem, the parent company of Empire BlueCross BlueShield, will likely provide our clients with some encouragement:
First, Anthem announced that they are piloting the concept of no longer reimbursing for truly “non-emergent” visits to the emergency room. Instead of acting as a clearinghouse for every ridiculous claim dollar to run through the plan, Anthem is effectively messaging to the member and provider community that inane healthcare decisions will no longer be tolerated. A throat culture or sore arm will not get reimbursed for $2,000 just because the setting of care “justifies” absurd reimbursements.
More recently, Anthem announced that they will no longer reimburse MRI and imaging exams administered at a hospital as an outpatient service. The costs of these commoditized services are often five to ten times those of a free-standing location; just because of the cost structure, inefficiencies and disincentive of the large hospital systems.
While these two changes will initially only affect insured business (and not necessarily in every state) it will be welcome news for many in the employer community – the real bearer of these runaway costs. Thoughtful efforts by insurers to reign in the underlying spend will always be applauded. If healthcare is ever going to be fixed in this country, the provider community needs to be held accountable as well.