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Canceled doctor’s appointments and postponed elective surgeries as a result of Covid-19 have left hospitals in dire financial straits. But fewer appointments means more cash remains in the pockets of health insurance companies as they pay out less money to cover those procedures.
Vermont insurance companies BlueCross BlueShield of Vermont, MVP Health Care, and Cigna must file 2021 rates on May 8 with the regulatory Green Mountain Care Board. At meetings with regulators and legislators Wednesday, insurance representatives defended themselves against questions about whether they’re making money from the crisis.
The companies may be paying for fewer appointments now, but the care “will be scheduled eventually,” Susan Gretkowski, a lobbyist for MVP, assured lawmakers.
But with the health care system in financial upheaval, state officials are grappling with how to ensure that any unspent money goes back to Vermonters, not insurers.
The priority should be safeguarding Vermonters’ pocketbooks, Green Mountain Care Board Chair Kevin Mullin said in an interview. “I don’t think [insurers] should be profiting off of this tragedy,” he said. The care board would ensure after the companies cover their own administrative costs, any additional cash would be directed to the health care system or returned to consumers.
But, he added, it could be months or years before the board would be able to make that decision.
Commissioner of the Vermont Department of Financial Regulation Mike Pieciak agreed that it was too early to determine the impact of Covid-19 on insurers. “There are a lot of unknowns,” Pieciak told lawmakers. “There are a lot of variables.”
Covid-19 has overturned normal operations in the health care world, and with that, insurers’ assumptions for the future.
Fewer appointments and fewer doctor’s visits mean that insurance companies are paying less to doctors and hospitals for medical care. The total number of Covid-19 patients has remained below the state’s best-case-scenario projections.
That’s good news for Vermonters, but less so for hospitals’ bottom lines. The state’s hospitals are collectively losing about $100 million a month, a revenue decrease of between 40% and 80%, according to Jeff Tieman, president and CEO of the Vermont Association of Hospitals and Health Systems.
That trend has meant that claims at BlueCross BlueShield of Vermont have decreased between 40% and 60%, CEO and President Don George told the Green Mountain Care Board Wednesday. Claims from doctors outside the hospital have decreased between 20% and 33%. Prescription claims have gone up 7% to 17%, he said.
Executives at MVP Health Care, which is based in New York, said claims were down about 35%, though the company did not provide Vermont-specific numbers.
At the same time, insurance officials said it’s too early to assume that insurance companies will reap a profit from the pandemic.
There may be a surge in patients who have postponed medical appointments due to the virus, said George during testimony. Some — though likely not all — of the people who have postponed appointments will still need to schedule visits, he said. Their conditions could have deteriorated during the weeks of quarantine, making care more expensive.
It’s unclear how long the pandemic will last; the number of Covid-19 patients may spike again, or multiple times in the coming years.
Insurers will also have to continue to cover the cost of Covid-19 testing, treatment, and eventually, a vaccine, Piecak said.
“There’s a bunch of factors moving in opposite directions,” said JoAnn Volk, a research professor for Georgetown University Center on Health Insurance Reforms. So many questions are up in the air, she said. “How many people get Covid, how severe their health care needs are,” whether telehealth will increase, who will go to the doctor and when, and how the pandemic will unfold. Actuaries have said, “we just don’t have any idea where this lands,” she said.
Meanwhile, regulators have to decide how to safeguard consumer interests. Insurance costs increased more than 10% for Vermonters last year. Insurers have to file their claims on May 8.
The national advice to insurers? Whatever assumptions you’re using to predict the future, “just back them up” with data, she said. “Regulators will have to take a close eye on plans filed and make sure [insurance companies] are able to substantiate their claims,” Volk said. “It should not be used as an opportunity to overshoot.”
Vermonters are already feeling the financial impacts of Covid-19.
An informal, voluntary survey conducted by the Office of the Health Care Advocate earlier this month found that a quarter of the 2,500 people who filled out the survey said they were concerned they wouldn’t be able to afford their medical bills.
About 15% of the total said were concerned about their ability to pay for their insurance premiums, but just 3%, or 71 people, said they may have to drop their insurance. Those numbers aren’t representative, said Health Care Advocate Mike Fisher. But the information does offer a glimpse of the challenges Vermonters are facing.
According to Richard Odorizzi, vice president of operations for MVP Health Care, the company has seen about a 25% drop in payments as a result of the virus.
Since the virus was first reported in Vermont, the state has rolled out requirements for insurers to spare residents from Covid-related expenses. In March, the Department of Financial Regulation ruled that insurance companies must cover the cost of testing. The state also promised to cover the cost of testing those without insurance.
Later in the month, the department allowed patients to get a 30-day medication refill early, and urged insurers to cover telemedicine. On April 14, the state required private insurance companies to cover all Covid-19 treatment, including hospitalization, without copay.
Private insurance companies have responded with changes of their own.
Insurers across the board are offering payment plans and flexibility for those who can’t pay their monthly premiums.
BlueCross BlueShield is offering to pay doctors and hospitals upfront as an advanced payment to keep them afloat, said spokesperson Sara Teachout.
The three main insurance companies, BlueCross, MVP and Cigna, have all agreed to pay doctors the same amount for telemedicine visits as they did previously for in-person visits.
MVP Health Care is not charging customers any copay for telemedicine, even if those visits are unrelated to Covid-19.
That care has skyrocketed. Telemedicine visits are up tenfold at the six hospitals that make up University of Vermont Health Network. Prior to Covid-19, the network averaged about 60 telehealth appointments a week. Now, the number is more than 6,000 visits.
The number of providers using telemedicine is up from 207 last year to 2,165 in 2020, according to Teachout. That likely undercounts the number, because hospitals only count as one provider. Telemedicine claims have increased 2,000% this year, she said.
Telemedicine only covers the less complicated issues. It doesn’t include routine, but more lucrative procedures, such as mammograms and colonoscopies, or orthopedic or plastic surgeries.
If BlueCross BlueShield did make money on the pandemic, George said the company wouldn’t pocket the profits.
“We’re not operating under the assumption that there will be winners or losers, or that we will end up with a windfall in this,” he said. But if it did, the money would help “mitigate future rate increases.”
Mullin said in scenario, the cash should be returned to ratepayers or sent to cash-strapped hospitals.
But such a discussion is too preliminary, he added. “It’s something that we have to figure out carefully after we have enough data to make an intelligent decision,” Mullin said. “We’re just not there yet.”
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