Popular third-party premium-support payments also draw greater scrutiny.

Aug. 29—The Centers for Medicare & Medicaid Services’ (CMS) is looking for providers steering Medicare- and Medicaid-eligible individuals to plans offered on the government-run marketplace. A tandem focus on third parties providing patients with premium assistance is less clear.

“We have heard anecdotal reports that individuals who are eligible for Medicare and/or Medicaid benefits are receiving premium and other cost-sharing assistance from a third party so that the individual can enroll in individual market plans for the provider’s financial benefit,” CMS wrote in its request for information (RFI). “In some cases, a healthcare provider may estimate that the higher payment rate from an individual market plan compared to Medicare or Medicaid is sufficient to allow it to pay a patient’s premiums and still financially gain from the higher reimbursement rates.”

This practice may have a negative impact on the individual market risk pool, raise overall healthcare system costs, result in higher out-of-pocket costs to enrollees, and be harmful to patients and care coordination because of changes to provider networks and drug formularies, according to CMS.

Patients directed to marketplace plans for renal dialysis services and then undergoing kidney transplants will not be eligible for Medicare Part B coverage of their immunosuppressant drugs if they enroll in Medicare at a later date, CMS noted.

Different aspects of provider cost sharing were mentioned in the RFI and, in an accompanying news release. CMS warned it also was “considering potential regulatory and operational options to prohibit or limit premium payments and routine waiver of cost-sharing for qualified health plans by healthcare providers.”

“Currently, third-party payment of premiums and cost sharing of qualified health plans in the individual market by healthcare providers such as physicians, medical facilities or affiliated non-profit organizations are discouraged, but the ultimate decision about accepting those payments are left to health insurance companies,” CMS stated in the release.

Continuity is Key

Hospitals have worked with not-for-profit organizations, such as United Way agencies, to help a patient continue with coverage they already had and prevent disruptions in care, Mark Rukavina, principal at Community Health Advisors, said in an interview.

“That makes sense, it’s good for the patient, it’s good for the provider,” Rukavina said. But he would advise clients against “shopping around” among insurance options.

“Medicaid, generally speaking, will provide the best protection for people with low incomes,” Rukavina said. “That’s what it is designed to do.”

Kidney Cases

In addition to issuing the RFI, CMS sent letters to all Medicare-enrolled dialysis centers summarizing its concerns. There was speculation in some published reports the that agency’s actions were sparked by recent lawsuits by Blue Shield of California and UnitedHealthcare of Florida alleging that some dialysis providers were engaging in the very patient-steering behavior that CMS was asking about.

Fresenius Medical Care North America, a German kidney-care provider with a U.S. headquarters in Waltham, Mass., said in a statement that it does not engage in steering patients away from Medicare or Medicaid coverage. But many Americans with kidney failure are unable to obtain or can’t afford the health insurance of their choice without outside help, Fresnius said.

“We look forward to working with CMS, insurers, and the community to put in place any reforms that are necessary to ensure that charities like the AKF can continue their important work and avoid abuses that could threaten the viability and sustainability of exchange plans," the company said.

The National Kidney Foundation (NKF) responded in a similar fashion. Medicare does not meet the health and financial needs of all end-stage-renal-disease (ESRD) patients who need to retain the option of private insurance, NKF said in a written statement.

“Many dialysis patients rely on third-party premium assistance to help pay for their choice in insurance coverage, whether it be for private health insurance coverage or supplemental Medicare insurance known as Medi-gap,” the NKF said in the statement. “We share CMS’s concern about the potential steering of patients by provider-affiliated organizations, but are equally concerned about health insurance companies that attempt to limit dialysis patients’ choices through discriminatory policies.”

Pooling Resources

Other reports linked the RFI to news that major insurance companies were scaling back their offerings of marketplace plans and CMS was looking to take action to stabilize the markets by strengthening the risk pool.

The U.S. Department of Health & Human Services (HHS) has expressed concern about the effect of payment assistance by hospitals and other providers on the risk pool since the launch of the Affordable Care Act’s marketplace.

“HHS has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces,” a Nov. 4, 2013 CMS memo stated. “HHS discourages this practice and encourages issuers to reject such third-party payments.”

The American Hospital Association has renewed a push in the opposite position. In an Aug. 24 letter to HHS Secretary Sylvia Burwell, the AHA argued that allowing third-party payments was one way to stabilize the health insurance marketplace. 

Such payments should continue as long as they follow two “guardrails” CMS described in a Feb. 7, 2014 memo: that any cost-sharing payments cover an entire policy year and that payments are based on financial need and not health status, Richard Pollack, president and CEO of the AHA, wrote in the letter.

To be clear, the AHA is urging support for people not eligible for Medicare or Medicaid, while the CMS RFI is focused on eligible individuals.

While not specifically addressing third-party payments, CMS stated that it was looking at imposing civil monetary penalties on providers if their actions result in late-enrollment penalties for Medicare-eligible individuals.

Timothy Jost, professor emeritus at the Washington and Lee University School of Law, wrote in the Health Affairs blog that issuing the RFI may be all the action CMS has to take to curb any further steering of patients away from Medicare or Medicaid.

Andis Robeznieks is a freelance writer based in Chicago. Follow Andis on Twitter at @AndisRobeznieks.

Publication Date: Monday, August 29, 2016