Washington Initiatives

Rep. Charles Norwood, the Georgia Republican, has introduced legislation that would amend the Employment Retirement Income Security Act in a way that would benefit employers but spell bad news for plans.

The Responsibility in Managed Care Act closes a loophole in ERISA, which has shielded health plans from medical malpractice lawsuits. We've seen that proposal before — it's contained in Norwood's bill that would regulate consumer protection in managed care, the Patient Access to Responsible Care Act. What's new? The ERISA amendment specifically exempts employers from liability and also prevents insurance companies from going after employers to recoup costs for malpractice litigation.

Employers had been hesitant to support PARCA without a safe harbor from malpractice suits. "We're going to hold insurance companies, not employers, responsible for medical decisions — such as withholding treatment — that often lead to the horror stories we see on television," said Norwood spokesman John Stone.

Expect Long And Loud Debate Over Protections

The chairman of the House subcommittee on employer-employee relations, Illinois Republican Rep. Harris Fawell, promises to hold hearings on consumer protections in managed care soon — and there's no shortage of bills in the hopper.

Tops on the agenda will be Norwood's PARCA; legislation expected to be introduced by the Republican leadership, based on the Health Care Bill of Rights and Freedoms that was announced in December by Texas Sen. Phil Gramm, chairman of the health care subcommittee, and the Clinton administration's yet-to-be seen consumer bill of rights. The Clinton bill — which will follow recommendations put forth by a presidential advisory commission — is expected to contain provisions and protections that the administration cannot implement through executive action.

Expect considerable managed care-bashing throughout the spring as supporters from the various camps hold hearings and "town meetings" to point out inadequacies in the system. Leaders on both sides of the aisle see managed care reform as a "hot button" issue that will resonate with voters in November. Barring a high-profile health care catastrophe, though, don't expect a floor vote on any of these measures until shortly before the 1998 elections. Most likely bet: passage of a watered-down version of PARCA, which has wide support — more than 90 House co-sponsors are already on board from both parties.

The HMO community remains divided. Any measure that improves quality in managed care plays into the hands of established plans, which view higher standards as a way of putting the financial squeeze on newer, leaner managed care organizations. Some older plans are forced to sacrifice quality to compete with younger organizations on price. That's why some HMOs are willing to accept the disclosure provisions in the Norwood bill, which mandates that plans inform customers "in plain English" what is and isn't covered under their plans.

Democrats Ready To Turn Their Guns On Medicare Fraud

Medicare, the quintessential Democratic entitlement program, is now under heavy attack for fraud, waste and abuse — from Democrats. Leading the search-and-destroy mission is Sen. Harry Reid of Nevada, chairman of the party's policy committee.

"We're going to make Medicare fraud a top priority on the Senate agenda this year," Reid said, citing an instance in which Medicare was billed $400 for physical therapy. The "therapy" amounted to teaching an elderly man how to use a walker.

Accusing Republicans of trying to "covertly" destroy the Great Society program, Reid said he wants to divert money saved by ferreting out fraud to other programs that benefit the elderly, a popular idea with older constituents.

Look for the Department of Health and Human Services to announce "National Senior Waste Patrol" demonstration programs that will train nurses and accountants to work with the elderly to identify and eliminate fraud. Thirteen states already have similar programs in place.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.