managed care – Duane Morris Health Law

Emergency Order Issued by Governor Baker of Massachusetts

On April 9, 2020, Governor Baker issued an emergency order (the “Order”), mandating that insurers cover all medically necessary emergency department and inpatient services costs of COVID-19 treatment at both out-of-network (“OON”) and in-network hospitals and other medical facilities, without any cost to the patient, setting the OON reimbursement rate at 135% of Medicare, and prohibiting providers from balance billing. The Governor appears to have relied on § 7 of the Massachusetts emergency preparedness and response law in issuing the Order. Section 7 gives the Governor broad powers during a state of emergency, including “[r]egulation of the business of insurance and protection of the interests of the holders of insurance policies and contracts and of beneficiaries thereunder and of the interest of the public in connection therewith.”

Provider Concerns with the Emergency Order

From a provider perspective, the Order raises at least three concerns. First, the OON payment is based on the Medicare rate, a rate set by the government, not intended to reflect market rates. Second, the Order does not include the right to resolve payment disputes between an insurer and a provider. Third, the excessively low reimbursement rate is problematic because emergency departments, and the physicians staffing them, face unprecedented financial strain because of the ongoing COVID-19 pandemic. To address and allay these concerns, physician groups generally advocate a commercially reasonable payment, based on local charges as determined through a known independent, transparent, and verifiable database (such as FAIR Health), using baseball-style binding arbitration to resolve payment disputes between the insurer and the provider.

Continue reading “An Executive Order’s Potential for Setting a Precedent With Regard to the Reimbursement Rate for Out-of-Network Emergency Services”

In January 2018, The Office of the Auditor General for the State of Illinois published its Performance Audit (“Audit Report”) of Medicaid Managed Care Organizations (“Medicaid MCOs”) for Fiscal Year 2016. What was unleashed was a startling review of the Medicaid MCOs’ performance over FY 2016 in administering the Medicaid Program for what was then called the Integrated Care Program (“ICP”) or Medicare/Medicaid Alignment Initiative (“MMAI”) Programs. You may recall these ICP and MMAI Medicaid MCO programs in Illinois involved almost a dozen Medicaid MCOs that covered about 70% of the State of Illinois Medicaid recipients.

The Audit Report played into health care providers’ deepest fears in Illinois: showing that Medicaid Managed Care may not be working as it was intended; namely, to reduce costs and improve quality of care in the Medicaid Program in Illinois. For example, long term care providers in Illinois had to fight tooth and nail with Medicaid MCOs under the ICP and MMAI programs, experiencing cumbersome Medicaid contracts, denied claims, delayed claims, and worse yet, a prior authorization administration problem (administrative MCO delay) which in some instances prevented residents from receiving care timely. Most, but not all, of those issues are still being resolved, but providers had hoped that there was a good reason for this madness involving Medicaid MCOs: better and lower cost care for Medicaid beneficiaries. Continue reading “Illinois Posts Medicaid Managed Care Performance Report”