health insurance: Insurers

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Republican Governors Want Health Law Flexibility, Could Help Insurers With Reform

The Wall Street Journal: "More than a dozen Republican governors-elect plotted ways to unravel the Democrats' health-care overhaul and to give states more freedom in regulating programs like Medicaid during a meeting late Wednesday with incoming Speaker John Boehner and Senate Minority Leader Mitch McConnell. ... From Pennsylvania to New Mexico, newly elected Republican governors are preparing to tackle huge budget deficits at a time of high unemployment and shrinking federal money" (King, 12/1).

Bloomberg/Indianapolis Business Journal: The Republican governors, who will control 29 states in January, could help insurers deal with the health law, and as a result, they "may face fewer restrictions and pay out less in benefits, said Michael Leavitt, a former health secretary under President George W. Bush. ... The health-care law requires insurers to spend at least 80 percent of policy premiums on patient care, instead of profits or administrative costs. Governors next year can request a waiver from the federal government if they conclude the mandate will destabilize insurance markets, said Leavitt, now a consultant to states and hospitals" (12/1).

The Hill reports, meanwhile, that Tea Party lawmakers that were elected in November are "balking at the House Republican leadership's plan to simultaneously repeal and replace President Obama's healthcare law. The resistance from conservative lawmakers is a clear indication of the challenge Republican leaders face in their uphill battle to rescind the law. The emerging friction in the GOP conference also reflects the difficult transition from campaigning in the minority party to governing in the majority." Some lawmakers simply want repeal of the law. Tea party members like Michele Bachmann, R-Minn., want "to make that argument why free-market healthcare is a good thing," she said, while GOP party leadership like incoming House Majority Leader Eric Cantor, R-Va., said leadership will offer a replacement health bill (Hooper, 12/1).

Kaiser Health News: And the roles of health players in influencing the health law debate are becoming more clear. "The drug industry's chief lobbyists - the Pharmaceutical Research and Manufacturers of America - raised and spent at least $101.2 million in 2009 on advocacy efforts during the contentious health care debate, according to IRS documents the group filed in mid-November. Former PhRMA CEO Billy Tauzin says the lobby used the money - special contributions from member companies - for broadcast and print advertising, grassroots and direct lobbying, polling and consulting" (Vaida and Weaver, 12/1).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews

Survey Shows Health Insurers Change Prescription Medications To Save Money, Overrule Doctors' Orders Without Seeing Patient

A survey by the Global Healthy Living Foundation, a non-profit patient advocacy group, shows that up to 70 percent of prescription medications are changed by health insurers, denying patients the drugs their doctors prescribe.

According to GHLF Executive Director, Louis Tharp, "This disturbing finding is not a simple case of switching a brand-name drug for a generic one, a common and generally accepted practice used for many illnesses, and one GHLF supports.

"We found that health insurance companies throughout the U.S. switch one brand-name drug for another simply because the switched drug is cheaper," Tharp said.

"If the drugs are identical, physicians generally have no objection, the survey found, but national medical groups have said most drugs are not identical," Tharp added, "and switching can cause adverse reactions and poor recovery rates."

The survey also found instances of patients with chronic conditions who were responding well to a particular drug, but relapsed after being switched to a cheaper drug. "When patients are switched so the health insurance company can save a few pennies, and then the patient's chronic condition worsens, not just the patient, but the entire economy suffers when these people miss work, are admitted to hospitals or can't take care of their families," Tharp said.

The foundation is conducting an additional national survey to measure the incidence of what are known as "fail-first practices" where health insurers require a patient to fail on a cheaper drug before being considered for the original drug their physician has prescribed. One surprise in the data show that some insurers require a patient to fail on a drug that is not approved by the FDA to treat the diagnosed condition before being allowed to take medication that has been FDA approved.

"This is very worrying," Tharp said, "and we are working with other advocacy groups, State Insurance Commissioners, the FDA, and State Attorneys General to see what action can be taken to stop this dangerous practice."

Tharp advised patients and physicians to go to www.failfirsthurts.org, a website created by the Global Healthy Living Foundation, for information about how to avoid having prescription drugs switched by health insurance companies, and how to effectively complain when this happens.

Switching is a practice that is starting to get a lot of attention, Tharp said. "Legislation pending in New York, California and Missouri would outlaw this practice," and, he added, "Louisiana passed a law last year prohibiting it."

Tharp expects several more state legislatures to take up the issue in 2011 because, "legislators realize that health insurers are practicing medicine without a state-issued medical license when they come between the physician and patient."

California's Largest Insurers Fined Nearly $5 Million

News outlets report on the insurance industry.

Los Angeles Times: "California's seven largest health plans were fined nearly $5 million in total Monday for failing to properly pay medical claims submitted by thousands of doctors and hospitals over the last three years. Insurance regulators said the companies also would pay 'tens of millions of dollars' in restitution to medical providers whose claims were underpaid or incorrectly rejected. The fines cap an 18-month investigation by the California Department of Managed Health Care into the payment practices of Aetna Inc., Anthem Blue Cross of California, Blue Shield of California, Cigna Corp., Health Net Inc., Kaiser Foundation Health Plan and UnitedHealthcare/PacifiCare" (Helfand, 11/30).

San Francisco Chronicle: "The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent. ... Patrick Johnston, the head of the state insurance trade group, said in general, health insurers are paying claims in a timely manner, but will work with the state to improve their performance" (Colliver, 11/30).

The Wall Street Journal: "UnitedHealth Group Inc. projected lower earnings next year, becoming the second big insurer to signal caution recently as the companies start to anticipate the sting from the federal health overhaul. ... The forecast comes in the wake of new rules from the Obama administration last week governing how much health plans must pay out for health care compared with profit and administrative costs. The rules are one of several factors, including the economic climate and other aspects of the health law, likely to affect insurers next year" (Johnson, 11/30).

The New York Times, on how the role of HMOs has changed: "When employers first introduced H.M.O. plans to their workers in the early 1990s, the plans were considered bargains," but "[t]oday, these plans are no longer a best buy, according to an analysis released Monday by consultants Aon Hewitt. ... The analysis of rates paid by 160 large companies, representing one million participants, show that H.M.O. plans have become increasingly expensive," costing more on average than a P.P.O plan. "Over the years, H.M.O.'s have changed from a health plan that sharply limited a patient's choice to one that now offers much more generous coverage than other plans that might require large upfront deductibles or significant co-payments for a doctor's visit" (Abelson, 11/29).

Minneapolis Star Tribune: Meanwhile, "Minnesota's major health insurers are ramping up incentive payments to hospitals and clinics that succeed in cutting waste and keeping patients well. The goal is to slow the growth of overall medical spending and eventually reverse it. On Tuesday, Blue Cross and Blue Shield of Minnesota plans to announce new contracts with four big health systems - Allina Hospitals and Clinics, Essentia Health, Fairview Health Services and HealthEast Care System. Under the new model, incentive payments could eventually make up about a third of total payments to these systems, up from about 10 percent currently" (Yee, 11/29).

St. Paul Pioneer Press: The incentive payments aim to "to reduce incentives for doctors and hospitals to boost their revenues by performing more procedures. 'More care is not always better care,' said Jim Eppel, senior vice president of health management and commercial markets at Blue Cross. In 2008, Minnetonka-based Medica launched a total cost of care contract with the Fairview health system and has since expanded it to other health systems in the Twin Cities region. Officials with Bloomington-based HealthPartners and Golden Valley-based PreferredOne said they also have implemented some of these contracts this year" (Snowbeck, 11/29).