BOSTON—Minuteman Health (www.minutemanhealth.org) today praised the Centers for Medicare & Medicaid Services for issuing its Notice of Benefit and Payment Parameters for 2018 but said the measure lacks the scope and urgency necessary to sufficiently address the flaws within the current Risk Adjustment formula.
To illustrate the need for broader and more accelerated improvements, Minuteman pointed out that nearly 24 percent of the $16.6 million it has been ordered to pay to other Massachusetts and New Hampshire carriers under the recent Risk Adjustment assessment is due to the company’s premiums being lower than the statewide average premium in each state.
In Massachusetts, Minuteman’s average individual premium was $254 per month, compared to the statewide average premium of $418, a 33 percent difference. Under the current Risk Adjustment formula, $2 million, or 33 percent, of Minuteman’s $6 million assessment in Massachusetts was attributable to the company’s lower premiums. The story is similar in New Hampshire.
“In essence, our company and our members are being hit with a steep penalty simply because our plans are more affordable. This has nothing to do with spreading the risk among plans based on the ratio of healthy and non-healthy members. It’s basically a tax on greater efficiency and affordability. The proposed rules do nothing to address this,” said Tom Policelli, CEO. “CMS has acknowledged that there are flaws in the Risk Adjustment program, which we appreciate. But the 2018 parameters don’t do enough to address them.”
The proposed rules not only do not address the penalty assessed on issuers that are lower cost, they also do not address other significant concerns such as estimation bias. In addition, many of the proposed changes to the risk adjustment program will not go into effect until 2018.
“Insurance premiums are increasing, issuers are exiting the exchange, competition is dropping, and issuers staying on the exchange are considering whether to offer Bronze products at all. CMS needs to stabilize the market now, not a few years from now,” said Policelli.
Minuteman in July filed a lawsuit in Boston federal district court against U.S. Health and Human Services (HHS) Secretary Sylvia Burwell, Centers for Medicaid and Medicare Services (CMS) administrator Andrew Slavitt and their respective agencies, claiming that the federal Risk Adjustment program has illegally cost Minuteman and its members millions of dollars.
The company also filed several Freedom of Information Act requests with CMS seeking detailed information about the current Risk Adjustment policy.
As part of its effort to bring attention to inequities in the RA policy, Minuteman helped found CHOICES, a national coalition of health care plans organized to work with federal and state regulators on ideas for improving current Risk Adjustment formula. The recently released results of the 2015 Risk Adjustment program underscore CHOICES’ concern that the Risk Adjustment program destabilizes the insurance market.
Minuteman Health, Inc. is non-profit health maintenance organization (HMO) committed to removing inefficiencies from today’s health insurance system to provide high-quality care, cut administrative costs and reduce premiums for individuals and businesses in Massachusetts and New Hampshire.
Minuteman Health’s In-Plan Provider network includes over 11,300 hospitals, physicians, and specialists who provide high quality care at lower costs in Massachusetts and New Hampshire. Updates on Minuteman Health’s evolving provider network can be found at www.minutemanhealth.org.
Minuteman is marketed in Massachusetts through its website, brokers, Health Services Administrators (www.HSAinsurance.com) and the Massachusetts Health Connector. It is marketing in New Hampshire through its website, brokers, and the Federal Healthcare Exchange.
CHOICES members are non-profit as well as investor-owned, health system-sponsored and independent, and newer entrants as well as companies with decades of experience as members of their local communities. The group came together to examine what gaps may exist between the policy intent and the practical reality of the ‘3Rs’ programs today. Such gaps are to be expected in any launch of a new methodology, and CHOICES looks forward to continuing to work productively with CMS to replace old assumptions with the current data.
CHOICES founding members include Minuteman Health, Health New England (Massachusetts), HealthyCT (Connecticut), Land of Lincoln (Illiniois), Melody Health Care (Colorado), New Mexico Health Connections, Evergreen Health (Maryland), Bright Health Plans (Minnesota), Cox Health Plans (Missouri), Medical Associates Health Plans (Iowa), and the National Alliance of State Health CO-OPS (NASHCO).
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