John A. Marcille

John A. Marcille

As we were putting this issue of Managed Care to bed late last month, the U.S. Supreme Court issued an opinion with important implications for our readers. In upholding states' authority to impose third-party review of HMO coverage denials, the high court sought to resolve conflicting decisions by two appellate courts about the legality of such laws in Illinois and Texas.

HMOs, the court ruled 5–4, have all but assumed the role of insurer, thus putting them under the realm of state regulation. Health plans — which, intuitively, would seem to support any measure intended to stop disputes from growing into full-blown lawsuits — groused that the opinion makes it harder to operate in multiple states, whose disparate regulatory standards are a challenge.

Plans' hands are full with potential avenues for liability. Capitation is at the heart of suits filed in U.S. District Court on behalf of physicians and health plan members. Seven HMOs that capitate physicians are accused of conspiring to withhold necessary care, in violation of RICO, the Racketeer Influenced and Corrupt Organizations Act. The 11th Circuit Court of Appeals will decide whether the HMOs are open to racketeering claims.

The multiple dimensions of capitation's slump, reported in this month's cover story, seem to be a touchy subject for HMOs, many of which were loath to go on the record for this story. Among national health plans, Anthem and PacifiCare declined requests for interviews, and Cigna and Aetna ignored them altogether.

Capitation may be down, but it's not out. If you believe that cap is an incentive to provide too little care, then you must believe that fee-for-service is an incentive to provide too much of it. If plans are to keep coverage decisions reasonable and fair, they'll need tools that involve physicians and patients in the decision-making process. Capitation is one of those.


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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.