BY VIRGIL DICKSON | APRIL
2, 2018
Private insurance companies have shown little
interest in partnering with states on multi-payer reform initiatives aimed at
cutting healthcare expenditures, according to a new analysis.
State alternative pay models launched under the
CMS' State Innovation Models (SIM) initiative had little impact on health
expenditures in several states, RTI Consulting found in an analysis prepared for and released by the CMS on Friday.
Their failure stemmed partly from private payers' middling interest in the
experiments, the analysis said.
The CMS launched the SIM initiative in 2013 and
gave six states $33 million to $45 million each to launch alternative pay
models that could bring down costs for Medicare and Medicaid beneficiaries as
well as individuals on private plans.
However, "all states struggled with
effective engagement of private payers and insurers to expand (value-based pay
models) beyond existing efforts and to achieve alignment across multiple
payers," the report said. "Private payers were reluctant to change their
established design of insurance products in response to a single state's
recommendations, and they preferred maintaining their flexibility to make
product design changes in response to their clients' needs."
Payer issues differed from state to state. In Minnesota, private payers said they were reluctant to share information they considered proprietary. In Maine, they said they felt their feedback was not incorporated enough in SIM efforts.
Regardless of reason, states' outcomes were generally similar. "Engagement in any level of all-payer reform did not materialize as originally envisioned," the report said.
Private payers' reluctance to participate in individual states' multi-payer models makes sense because they are more interested in aligning to national models that limit their administrative effort, according to Dr. Andrei Gonzales, director of value-based reimbursement initiatives at McKesson Health Solutions.
Payers also have a competitive edge when they have different pay arrangements with different providers as they are better able to control costs by offering different rates to different clinicians and hospitals, according to David Sayen, senior vice president of client relations at Gorman Health Group, a consulting firm.
"People don't want to be in a big pool where their products are the same as everyone else," Sayen said.
The results may be bad news for providers that have been pushing for multi-payer reform initiatives. Those providers have grown increasingly worried that having different reporting standards for different payers is too burdensome.
The average family physician has a contractual relationship with seven or more payers and 38% have contractual relationships with more than 10 payers, according to the American Academy of Family Physicians.
Access to care could be impacted if states, federal regulators and private payers fail to better coordinate pay standards, according to Lawton Robert Burns, professor of healthcare management at the Wharton School at the University of Pennsylvania.
"Eventually, some of the more desirable providers may not want to participate in insurance or Medicare," Burns said referring to some specialists.
A similar phenomenon is already taking place in the behavioral health space as more providers are expected to be paid upfront for care and leaving it to the patients to get reimbursed by payers.
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Payer issues differed from state to state. In Minnesota, private payers said they were reluctant to share information they considered proprietary. In Maine, they said they felt their feedback was not incorporated enough in SIM efforts.
Regardless of reason, states' outcomes were generally similar. "Engagement in any level of all-payer reform did not materialize as originally envisioned," the report said.
Private payers' reluctance to participate in individual states' multi-payer models makes sense because they are more interested in aligning to national models that limit their administrative effort, according to Dr. Andrei Gonzales, director of value-based reimbursement initiatives at McKesson Health Solutions.
Payers also have a competitive edge when they have different pay arrangements with different providers as they are better able to control costs by offering different rates to different clinicians and hospitals, according to David Sayen, senior vice president of client relations at Gorman Health Group, a consulting firm.
"People don't want to be in a big pool where their products are the same as everyone else," Sayen said.
The results may be bad news for providers that have been pushing for multi-payer reform initiatives. Those providers have grown increasingly worried that having different reporting standards for different payers is too burdensome.
The average family physician has a contractual relationship with seven or more payers and 38% have contractual relationships with more than 10 payers, according to the American Academy of Family Physicians.
Access to care could be impacted if states, federal regulators and private payers fail to better coordinate pay standards, according to Lawton Robert Burns, professor of healthcare management at the Wharton School at the University of Pennsylvania.
"Eventually, some of the more desirable providers may not want to participate in insurance or Medicare," Burns said referring to some specialists.
A similar phenomenon is already taking place in the behavioral health space as more providers are expected to be paid upfront for care and leaving it to the patients to get reimbursed by payers.
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