► Minuteman Health NewsroomOctober 20, 2016

Minuteman Health Official: Cost Trend Hearings Should Have Included Risk Adjustment Decision

Boston—Minuteman Health Chief Administrative Officer Susan Brown today expressed disappointment that the Cost Trend hearings conducted by the Massachusetts Health Policy Commission on October 17 and 18 did not include any discussion regarding the Risk Adjustment program, which Minuteman and many other carriers contend is a destabilizing factor in the healthcare marketplace.

Brown called the lack of Risk Adjustment discussion during the Cost Trend hearings a “missed opportunity.”

“Any discussion of health care cost growth must include a discussion of a program that issuers across the nation agree is in urgent need of revision. The current Risk Adjustment formula causes market instability, decreased competition and higher premiums. It punishes the very companies who are promoting alternative, innovative cost containment models,” Brown said.

In its “Examination of Health Care Cost Trends and Cost Drivers” report released this month, Massachusetts Attorney General Maura Healey concluded that the Risk Adjustment program is a barrier to cost containment initiatives and a destabilizing factor in the marketplace. Her report found: “The Risk Adjustment program in its current form creates challenges in Massachusetts for payers seeking to use product design as a cost containment tool in the small group market. Furthermore, the Risk Adjustment program leads to pricing instability because the transfer amounts are unknown to payers during rate setting and are not calculated or assessed until long after the claims year is over. This issue merits close scrutiny from the Massachusetts Division of Insurance, the Connector, and policymakers as the Commonwealth seeks to promote stable insurance markets that encourage innovation based on value."

In testimony during the Division of Insurance’s small group hearings for the second quarter of 2016, carriers said that Risk Adjustment has resulted in “greater uncertainty and volatility in the market” and has placed some companies at a “competitive disadvantage.” Carriers also expressed concern about the difficulty of setting aside enough reserves to cover possible payments long before they know how much those payments might be.

Brown encouraged the Health Policy Commission and other regulators to explore various reform approaches, including those forwarded by Consumers for Health Options and Insurance Coverage in Exchanges in States (CHOICES), a national advocacy group founded by Minuteman.

 

About Minuteman

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.

 

About CHOICES

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).
 
 

Media Contact:
Jim Borghesani
617-833-9327

jim@pri-media.com
 

Lisa McTighe
Director of Marketing and Communications
855-644-1776

lisamctighe@minutemanhealth.org