Archives for September 16, 2016

CMS touts nationwide drop in avoidable hospital readmissions

Thanks to the Hospital Readmissions Reduction Program (HRRP) and other initiatives, CMS stated that Medicare beneficiaries were spared approximately 100,000 readmissions in 2015, while the HHS Assistant Secretary for Planning and Evaluation (ASPE) estimates that they have avoided 565,000 readmissions since 2010. Potentially avoidable hospital readmissions occurring within 30 days of discharge account for $17 billion in Medicare spending each year, according to CMS. Initiatives like the HRRP and the Partnership for Patients improve patient care by, for example, encouraging hospitals to ensure that patients are discharged with appropriate medications and instructions for follow-up care and schedule follow-up appointments.

Initiatives

The HRRP was established pursuant to section 3025 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). It provides hospitals with monetary incentives for reducing avoidable readmissions by penalizing those with excessive readmissions for targeted clinical conditions. In fiscal years (FYs) 2013 and 2014, the targeted conditions were acute myocardial infarction, heart failure, and pneumonia. FY 2015 also included readmissions for chronic obstructive pulmonary disease (COPD) and total hip and knee replacements. FY 2017 will include readmissions for coronary artery bypass graft surgery. CMS assessed more than $420 million in penalties against hospitals in FY 2016 (see Medicare readmission penalties exceed $500M for FY 2017, Health Reform WK-EDGE, August 10, 2016). In addition to reducing avoidable readmissions, the Partnership for Patients aims to specifically improve transitions of patients among care settings.

Reductions

Readmissions fell by 8 percent nationwide from 2010 to 2015. Forty-nine states and the District of Columbia experienced decreased readmission rates; the readmission rate in Vermont increased by only one-tenth of a percent, or the equivalent of 21 readmissions. Rates decreased by more than 5 percent in 43 states and by more than 10 percent in 11 states.

Highlight on Illinois: Exchange rates rise in the Land of Lincoln

Illinois residents purchasing individual health insurance plans through the Patient Protection and Affordable Care (ACA) (P.L. 111-148) could pay rate increases in 2017 as high as 55 percent, according to rate information released by the Illinois Department of Insurance (DOI). The agency submitted rate increases to the federal government ranging from 43 percent to 55 percent, depending on the type of plan—bronze, silver, gold.

Filings

The submitted rates are not final. Although the DOI has submitted the 2017 rate filings to CMS, the rates will not be finalized by federal CMS until October, 2016. Additionally, network and premium information will not be available until that time. The DOI announced that the rate information was published as early as possible to allow Illinois families to make better-informed decisions regarding health care coverage. The DOI acknowledged the rate increases as “a very difficult outcome for consumers.”

Rates

The average rate increase across all ratings areas for the lowest bronze plan is 44 percent. The rate change is lowest in Kane, Du Page, Will, and Kankakee counties, where the rate change is a 10 to 25 percent increase. Counties like Lake and Cook have a 40 to 60 percent increase, whereas counties including La Salle and McLean have a 20 to 40 percent increase for their lowest bronze plans.

The average rate increase across all ratings areas for the lowest silver plan is 45 percent. Counties like Cook and Kendall saw a 40 to 60 percent increase, whereas counties like Du Page, Sangamon, and McLean saw increases of 25 to 40 percent. The average rate increase across all ratings areas for the second lowest silver plan is 43 percent.

The highest average rate increase across all ratings areas is for the lowest gold plan—an increase of 55 percent. Although several counties do not have gold plan offerings, rate increases in some counties, including Peoria County, are as high as 60 to 70 percent. Rate increases for the lowest gold plan in counties like Cook, McLean and Sangamon are 40 to 60 percent.

In practical application, the new rates mean that a 21-year-old nonsmoker who purchases the lowest-priced silver plan in Cook County in 2017 could pay a premium of $221.13 a month—an increase from $152.42 a month in 2016. In Lake and McHenry counties the increases are more dramatic for the same consumer, $268.03 a month in 2017, up from $212.23 a month. However, for some, the rate increase is not as massive as it seems because 75 percent of Illinois exchange enrollees receive tax credits to offset premium costs.

Cause

The DOI attributed the rate increases to several factors, including the federal government’s failure to make payments to insurers promised as part of the ACA and an overall increase in medical and pharmaceutical costs. Additionally, the DOI pointed to the fact that, until 2017, policyholders are permitted to keep non-ACA compliant plans, a factor that the DOI said has harmed insurers’ risk pools and placed upward pressure on plan costs.