Most Popular Stories
- Sentara uses dashboard to drive improvement with EHR data
- CDC awards grant to build online connections between hospital labs, public health agencies
- New app will give docs access to records 'anytime, anywhere'
- Best EMRs named by Black Book Rankings
- First responders get a hand with new EMS smartphone app
- New FDA rule tackles segment of mobile health, leaves others untouched
- Study: Pay-for-performance doesn't work
- Hospitals take online reservations for ER appointments
- VA hospital cancels surgeries after discovery of dirty tools
- Medical records for 1.7 million people stolen from van
- Patient advocates often connect in ways doctors can't
- Venture capitalists see a potential bonanza in health IT
- AHIP's Exchange Conference Series - Part I, Winter Program
March 9-10, 2011 — Washington D.C.
- 3rd Health Plan Innovation Congress
March 16-18, 2011 — Orlando, FL
- 3rd Int'l mHealth Networking Conference
Mar 30-31, 2011 — Chicago, IL
- DIA 2011: Convergence of Science, Medicine, and Health
June 19-23, 2011 — Chicago, Illinois - McCormick Place
FierceHealthPayer provides the latest news about the fast-changing and heavily regulated area of healthcare reimbursement. Join thousands of healthcare plan executives who get FierceHealthPayer via weekly email. Sign up today!
Anthem Blue Cross cancels rate hike, but BCBS New Mexico wins approval
The share prices of WellPoint, UnitedHealth Group, Aetna and Cigna fell from 3 percent to 9 percent on April 30 just days after many of those same insurers posted significant earnings gains for the first quarter of fiscal year 2010. The problem: Investor concerns about future profits in the face of contentious rate hikes. The biggest news impacting the slide was that Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company in Woodland Hills, Calif., withdrew requested premium rate increases as high as 39 percent for individual California policyholders after an outside actuary working for state regulators determined that the WellPoint subsidiary's application was "seriously flawed," reports the Los Angeles Times.
Anthem overstated the future medical costs it used to support the rate increases, which averaged 25 percent, according to the consultant Axene Health Partners. Fixing what state Insurance Commissioner Steve Poizner describes as "all kinds of methodological mistakes" could reduce the average rate hike to 15 percent. California requires insurers to spend 70 percent of premium revenues on medical claims, and after correcting for the methodological flaws, Anthem no longer meets the threshold for one of seven insurance products in the rate filing. Rectifying Anthem's overstatement of medical costs (due to inflating the effect of aging) could trim the average rate hike by 10.2 percent, says Axene.
Anthem will re-file revised individual-market rate requests with the California Department of Insurance and California Department of Managed Health Care "as soon as possible, likely sometime in May," says the company. The re-filing will "address inadvertent miscalculations" related to future medical cost estimates. In addition, the resubmitted rate filings will comply early with Anthem's "current understanding" of the federal Patient Protection and Affordable Care Act (PPACA) requirement that insurers maintain an 80 percent medical-loss ratio in the individual market. (The PPACA mandate goes into effect on January 1, 2011, and all the rules for implementation have yet to be written, so early compliance is a best-guess scenario.)
Kathleen Sebelius, secretary of the Department of Health and Human Services, called Anthem's decision "good news" and "much-needed temporary relief" for more than 800,000 Californians. HHS' new Office of Consumer Information and Insurance Oversight (OCIIO) "will closely monitor the industry," she noted. "[W]e will not hesitate to act to prevent exorbitant premium hikes." Santa Monica, Calif.-based Consumer Watchdog urged Congress to investigate whether WellPoint officials "made misrepresentations" in recent congressional hearings when they stated the Anthem rate increases were actuarially sound, as well as advocating the passage of national legislation introduced by Sen. Diane Feinstein (D-Calif.) to prevent unjustified rate increases.
Meanwhile, Albuquerque-based Blue Cross and Blue Shield of New Mexico (BCBS NM) crafted a deal with state regulators to win an average 21 percent rate hike after originally requesting a 24.6 percent increase. While that may seem like good news for the insurer, the public relations debacle appears to be just getting started. A state Public Regulation Commission member decried the rate increase approval as "a backroom deal" because the agreement was struck just prior to a scheduled public hearing, and one state senator predicted the settlement would result in legislation to change rate setting in New Mexico. The increase will affect about 40,000 New Mexico individual policyholders retroactive to April 1. Under the deal, BCBS NM will be required to provide 60 days' advanced notice for future rate increases.
To learn more:
- read these Los Angeles Times reports: article 1 or article 2
- read this Anthem press release
- read Sebelius' statement
- visit the OCIIO website
- read this Consumer Watchdog press release
- read this New Mexico Independent article
State rate hike round-up: News from coast to coast
Anthem Blue Cross faces class-action lawsuit as rate hike decision looms
Senate HELP committee eyes regulation of health insurance premiums
Check out more news by topic
Affordable Care | AHA | AHIMA | AMA | American Hospital Association | American Medical Association | American Recovery and Reinvestment Act | ARRA | Centers for Medicare and Medicaid Services | Cerner | Charity Care | Cigna | Computerized Physician Order Entry | CPOE | David Blumenthal | Department of Health and Human Services | Electronic Health Records | Electronic Medical Records | EMR Adoption | Epic Systems | e-Prescribing | GE Healthcare | HCA | Health 2.0 | Health Information Exchange | Health Insurance Portability and Accountability Act | Health Plans | Health Reform | Healthcare Costs | Healthcare Financial Management Association | Healthcare Reform | HFMA | HHS | HIMSS | HIPAA | Home Monitoring | Hospital Construction | Hospital Corporation of America | Hospital Finance | Hospital Layoffs | Hospital Strikes | Humana | Ingenix | Interoperability | Kaiser Permanente | Kathleen Sebelius | Mayo Clinic | McKesson | Meaningful Use | Medicaid | Medical Group Management Association | Medical Malpractice | Medicare | Medicare Fraud | Medicare Part D | Medicare Reimbursement | MGMA | mHealth Initiative | Moody's Investors Service | Office of the National Coordinator for Health Information Technology | Patient Collections | Patient Privacy | Patient Safety | Pay for Performance | Personal Health Records | Physician Compensation | RAC | Recovery Audit Contractor | Remote Monitoring | Remote Patient Monitoring | Siemens | Telehealth | Telemedicine | UnitedHealth Group | Wellpoint | Wireless Health |
Home | Subscribe | Advertise | Mobile Edition | RSS | Privacy | Site Map
THE FIERCEMARKETS NETWORKFierceFinance | FierceFinanceIT | FierceComplianceIT | FierceHealthcare | FierceHealthFinance | FierceHealthIT | Hospital Impact | FierceMobileHealthcare | FierceHealthPayer | FiercePracticeManagement | FierceEMR | FierceCIO | FierceCIO:TechWatch | FierceContentManagement | FierceMobileIT | FierceGovernmentIT | FierceBiotech | FierceBiotech Research | FiercePharma | FierceVaccines | FierceBiotechIT | FiercePharma Manufacturing | FierceMedicalDevices | FierceDrugDelivery | FierceIPTV | FierceOnlineVideo | FierceTelecom | FierceVoIP | FierceBroadbandWireless | FierceDeveloper | FierceMobileContent | FierceWireless | FierceWireless:Europe | FierceCable
© 2011 FierceMarkets. All rights reserved.