What started out as a streamlining of the state’s health insurance rate review process has morphed into a costlier bill with two new appendages and a life of its own.
When S.152 passed out of the Senate, it only contained language that provided the Green Mountain Care Board with the “sole authority” to approve, modify and deny health insurance rates. It’s a move that lawmakers and insurers laud as a win-win-win for themselves and consumers.
But on Tuesday, the House Health Care Committee voted 8-3 to pass out the bill with two new amendments, which would create the Office of the Health Care Advocate and a pilot program for physicians to operate without prior authorizations from health insurers. The three representatives who voted against the overall bill were the three Republicans on the committee.
Rep. Paul Poirier, I-Barre, spearheaded the amendment for the creation of the advocate’s office, which will replace the Office of the Health Care Ombudsman. For fiscal year 2014, the bill appropriates $250,000 to Vermont Legal Aid, which currently runs the ombudsman’s office, to manage the advocate’s office. The advocate’s office is tasked — in part — with helping Vermonters who encounter problems related to the state’s new health benefit exchange, Vermont Health Connect, which will become the sole health insurance marketplace for individuals and businesses with 50 or fewer employees come 2014.
Trinka Kerr, director of the ombudsman’s office, said the bill would take two key measures for her office: It would give the office a reliable source of funding to carry out its contractual and statutory obligations. And the legislation tasks the office with helping businesses with fewer than 10 full-time employees. Currently, Kerr’s office only helps individuals and sole proprietors.
“We represent the public in (health insurance) rate review and certificate of need proceedings (for medical facilities), as it is now,” Kerr said. “One of the main things this (bill) would do is give us a consistent, predictable funding source …We’ve never been fully funded to do all of the things that are in our list of duties.”
The $250,000 appropriation in fiscal year 2014 would come at the beginning of calendar year 2014, halfway through the fiscal year, when the exchange takes full effect. This appropriation would cover an estimated $215,000 shortfall in the office’s operating budget.
But it comes at a cost to consumers, and the House Health Care Committee decided that consumers should pay for the office that exists to assist them with health insurance-related problems.
Under the bill, beginning on Jan. 1, 2014, the monthly premium payment “for each health insurance policy issued” in Vermont would include a 22-cent assessment, or an extra $2.64 on Vermonters’ annual payments for health insurance. The bill mandates that health insurance materials must “clearly communicate” that this fee is going to the Office of the Health Care Advocate and must include contact information for the office.
The 22-cent tax is estimated to raise $393,423.50 in FY 2014. In FY 2015, the assessment would raise $786,847 because it would last the length of the entire year. This amount would cover what Kerr’s office expects to be a $783,404 shortfall in funding, as grants recede and the office brings on new employees, like a health policy analyst to track federal and state legislation for consumers.
Rep. Chris Pearson, P-Burlington, who sits on the House Health Care Committee, is a leading proponent of the bill.
“It creates a clear responsibility of the role of a consumer advocate in the health care rate process and in the reform process in general,” he said. “The whole thing is structured for the public interest, but it’s hard to regulate insurance and have an eye out for consumers. So a lot of us have long believed that we should have an independent office playing that role.”
In the future, Pearson and others would like to augment the powers of this office to better represent the public in Green Mountain Care Board proceedings and in a possible single payer system.
But the state’s largest health insurance company is not on board with this plan at the present.
“We think the intent of that part of the bill is more appropriate when it’s in connection with the state’s longer term vision on health care reform, which includes Green Mountain Care, the single payer-type program,” said Leigh Tofferi, who lobbies for Blue Cross Blue Shield of Vermont. “Implementing this change right now is only going to add to the cost of health care and it’s not going to improve the consumer experience.”
When House Health Care voted 9-2 last week to attach this amendment onto the rate review bill, committee Chair Mike Fisher, D-Lincoln, voted against it.
He said that providing Vermonters with a strong voice “is vitally important in today’s health care regulatory world,” but he is concerned that this bill is not the right vehicle. Since the rate review bill is something that the Green Mountain Care Board and insurance companies are clamoring for, he didn’t want to jeopardize a “must-pass bill” by adding language that may prove controversial.
A win-win-win?
As the Green Mountain Care Board has begun reviewing proposed health insurance rates, in accordance with Act 48 passed in 2011, Chair Anya Rader Wallack says the board has found that process “is not ideal.”
“It ends up being quite long because there’s a full review by the Department of Financial Regulation of every rate filing, and then they send a recommendation to us and there’s another 30-day period where we can act on their recommendation,” she said.
What ends up happening, Wallack explained, is that the review process is duplicated. This ends up consuming more department time, more board time and slows down the rate review process for health insurers and their consumers.
“What we’re proposing is instead of having a two-step process, where first it goes through them and then goes through us, we have a one-step process where we take (the department’s) advice on the narrow focus of health insurance solvency but otherwise we own the process, which should result in it being simpler, faster and more understandable for all parties involved,”she said.
According to the board’s estimates, the bill would reduce the process from roughly 120 days to less than 90 days.
Michael Donofrio, legal counsel to the board, says that the bill makes the rate review process more transparent and available to the public. The board will hold public hearings on proposed rates and post them on their website. Donofrio also pointed out that the new process would give consumers a market advantage when compared to the current situation.
“What happens sometimes now is because the review process takes so long, the rate isn’t decided until after the point in time when the consumer had to decide whether to renew or enroll in the plan,” he said. “If the rate’s higher than what was anticipated at that time, then it’s a bit of bad news for the consumer. That dynamic should be greatly reduced.”
This is the part of the bill that passed out of the Senate. The health insurers are strong proponents of this initiative.
“We support the bill as it came from the Senate, and we don’t support parts of the bill that were added in the House Health Care Committee,” Tofferi said.
Prior authorization pilot program and DVHA reporting
One of the biggest points of contention among physicians and health insurance providers is insurers requiring doctors to obtain prior coverage authorizations for certain treatments and medications. To read more about this dispute, click here.
“Insurers contend it saves a lot of money to have this,” said Rep. George Till, the only physician in the House. “The doctors say if they’re approving more than 90 percent of these, how can there possibly be that much savings?”
Physicians say that the prior authorization process creates a huge administrative burden.
“It’s a real bother with many different insurers and Medicare, Medicaid all having different menus of what requires a prior authorization, having different criteria of what they will approve and disapprove, and it becomes a lot of work for an office to do this,” Till said. “It’s one of the main sources of dissatisfaction in the medical community.”
The version of S.152 that passed out of the House committee tasks the Green Mountain Care Board with developing and implementing a pilot program or programs to measure “the change in system costs within primary care associated with eliminating prior authorization requirements for imaging, medical procedures, prescription drugs, and home care.”
Till said primary care physicians, in particular, grapple the most with these requirements.
After creating a pilot program, where primary care physicians can operate free of prior authorizations, the board will monitor the program for cost savings, and then report back to the committee.
Till touted this measure as a way to attract doctors to Vermont from across the country.
Lastly, the bill would require the Department of Vermont Health Access to report claims denials and other data related to the department’s administering of the state’s Medicaid program.
All private insurers must currently provide this information to the state, and under this bill the department running Medicaid would, too.