New Insurance Data Could Put Insurers on Hook for 2015

The Oregon Health Policy Board appears poised to recommend that insurance companies report a set of cost containment metrics in their April rate filings. The data could create a baseline to make them more accountable for future cost increases.
The Oregon Health Policy Board has moved away from recommending any dramatic changes to the Insurance Division’s rate approval process for next year, but new informational data requirements for the health insurers about cost containment strategies may give way to new teeth for the Division in 2015.
Under the policy board’s proposals which were discussed earlier this week, health insurance companies will have to provide the Insurance Division with a list of baseline cost containment metrics when they file their annual financial reports in April that include information about CEO salaries. 
That data exists inside the all-payer, all-claims database, but the Division will not be able to use that data to alter rates next year. Instead, the numbers are needed for the state to take that next step in 2015, according to Jesse Ellis O’Brien, the healthcare advocate for the Oregon State Public Interest Research Group.
O’Brien agreed that 2014 is too early to make any changes, even as he welcomed adding the new information to the process:
“It would be holding the insurance companies responsible in a way that even I think would be unfair. The open enrollment period will have just ended when the new filing period begins,” he told The Lund Report. “The conversation going forward is what to do with that baseline data.”
By 2015, O’Brien said it would be possible to use follow-up data to force insurers that want to raise their rates to show how they’re meeting those metrics.
Indeed, while the Health Policy Board made a lot of grand but vague talk about adapting the Oregon Health Plan reforms to the public employee and private market, it was the possibility of giving more teeth to the Insurance Division that ruffled the feathers of some insurance company representatives, including Lisa Trussel of Health Net Health Plan:
“Requiring new things for the carriers to report for 2015 is going to be stressful,” Trussel said. She urged the policy board and Insurance Division to kick the can down the road to 2017 before making any changes to the rate approval process for the individual and small-business markets, which are under the Division’s purview for rate requests. “Let’s get Cover Oregon [the health insurance exchange] up and running,” she added.
Cover Oregon has been plagued by technological failures since its launch Oct. 1, and remains unable to enroll anyone online, leading Gov. John Kitzhaber to announce last week that the state will resort to old-fashioned paper applications to ensure everyone who applies can get coverage by Jan. 1. An estimated 100 temporary workers are being hired by Cover Oregon to facilitate that process. 
“This is about more than a website. This is about making sure that every Oregonian who wants health insurance coverage is able to get it,” according to the governor.
Issue Divides Democrats
Strengthening the review process for individual insurance premiums has been a point of great contention, openly dividing members of the Democratic Party, with House Democrats and Sen. Chip Shields of Portland unable to get any reforms past Senate Republicans and reluctant Democrats such as Sen. Laurie Monnes Anderson of Gresham and Sen. Elizabeth Steiner Hayward of Portland.
During the legislative session earlier this year, Monnes Anderson argued that Oregon already requires a lot from insurance companies seeking approval for premium hikes, while Shields countered that argument saying that doesn’t mean more couldn’t be done. 
According to Shields, premium rates in Oregon’s individual and small business markets are still higher than other states such as Washington and Arizona despite a competitive market and a strong Insurance Division.
Kitzhaber took up the cause in June, charging the policy board with coming up with ways to enhance the Insurance Division process, in a letter he sent, spurring the board to begin its recent reform discussion. 
The policy board is definitely interested in expanding the reforms that started with the Oregon Health Plan to coordinate coverage and contain costs by changing the way physicians and hospitals get paid. Getting private insurers to comply with these same reforms remains the open question.
The state’s Medicaid program has been restructured into locally run coordinated care organizations, in which the health plan and providers share financial risk using a global budget and instituting primary care homes. 
CCOs Show Impressive Gains
The CCO reform has already produced some impressive results, as Oregon Health Authority Chief of Policy Tina Edlund announced Tuesday. Emergency department use for those covered by CCOs is down 18 percent while hospitalization for a chronic condition like congestive heart failure is down 29 percent, compared to data from 2011 under the old system.
Meanwhile, outpatient primary care visits were up 18 percent and spending on primary care was up 7 percent since 2011. The data confirmed earlier reporting in The Lund Report from preliminary findings shared by Sen. Alan Bates, D-Medford, and Dean Andretta, acting director of Willamette Valley Community Health, the Salem CCO.
For some, the Insurance Division’s oversight is the most obvious tool for the state to prod insurers to adopt those same kind of reforms, but policy board chairman Eric Parsons deferred to the new RFP by the Public Employees Benefit Board, saying it held a lot of promise. PEBB, which provides coverage to state employees and their dependents, has opened the bidding process to prospective insurers including coordinated care organizations.
“Health plans and providers are gearing up to respond to the PEBB RFP,” Parsons said. “They’re going to want to push this into the market.”
The state employee insurance plan RFP has been designed to reward insurance companies that administer plans using the reform now underway by the CCOs. Those reforms will likely not be as comprehensive as the CCOs, but private insurers have used arrangements like accountable care organizations elsewhere to encourage providers to change the way they bill and do business.
But Felisa Hagins, a policy board member who represents the Service Employees International Union, challenged the ability for PEBB or the Oregon Educators Benefit Board to lead reforms in the private insurance market.
While PEBB and OEBB have enormous market share in Eastern Oregon or Salem, she pointed out they are a small-time player in the state’s largest market — Portland.
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