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Negotiations get ugly between hospital and UHC
FLATLINING Podcast Recap
We here at Flatlining understand that not everyone will have time to tune into the podcast or may just want to get the highlights of what was discussed. So, this week we are launching the FLATLINING Podcast Recap, a text version of the podcast that will catch you up on last week’s show.
It’s a quick read on the latest analysis from Ron and Matthew. The post will have the same headline as the podcast, pull salient points from the discussion, and link back to the podcast if you want to listen to the full version when it’s convenient.
It’s all in our effort to keep our clients, subscribers, and those interested in the business of healthcare informed.
Healthcare News Round-Up
Air date: September 12, 2023
In this episode, the prior authorization issue takes front and center. Several of the big insurance companies have responded to recent media coverage and congressional interest in prior authorization complaints, with changes to their policies. Referencing an article in Becker's, Fulcrum CEO Ron Howrigon said that even a small reduction in prior authorization burden on physicians could help patients some, but don’t mistake the motivation by the payers, “I think they are intentionally overstating the impact of it.” said Ron.
He said this is likely a tactic used to placate some of their customers as they begin to look more into this issue. One quote offered by a payer would “move from a world of authorizations to clinical decision support.” Ron explained that the payer is likely saying that they are using AI and systems like PXDX to approve or deny care, and likely will continue to do so in the future.
He points out that patients and doctors understand that medicine is both an art and science and that the benefit of physician experience should not be underestimated or turned over to a computer model.
As Ron has said before, those behind these algorithms aren’t held accountable for medical outcomes. According to the article in Becker’s, nine out of ten physicians agree that prior authorizations have negatively affected outcomes for patients. “When they [payers] talk about it’s all about patient safety, oh no it isn’t, it’s about money,” said Ron.
ACA Enrollment Up
The Affordable Care Act (ACA) saw some record enrollment recently in the individual marketplace plans and Ron and Matthew discuss how this could affect provider reimbursement. Ron explains that, like much in the healthcare business, it depends. The key factor is where the new enrollees are coming from, if an enrollee to a marketplace plan is coming from Medicare Ron said that could be good for a provider. If they are coming from an employer-based plan, reimbursement could be lower. In total though he doesn’t see much impact as the two scenarios kind of balance out.
What concerns him most is the question of why is there an increase and how this impacts the federal budget. About four of five of these plans receive subsidies, many more than in just 2015 which results in driving up the federal deficit. The increase in ACA-compliant plans is also a result of increased subsidies Ron said. He explains that when someone is on one of these low-cost non-compliant plans, and government subsidies provide the chance for someone to upgrade, people are going to take that opportunity.
Contract Negotiations in the Court
Finally, in an area very familiar to the team at Fulcrum Strategies, the South Carolina-based Prisma health system, not a Fulcrum client, sued United Healthcare (UHC) for violating its confidentiality agreement in their contract and for “false and misleading” statements to the press about its proposed rates.
Prisma Health argues that its rate information was protected under the confidentiality clause and UHC had no right to release it. The Judge recently ruled against Prisma. Ron’s advice to providers who find themselves in contract loggerheads with a payer is to first understand that the payer is a for-profit company and what they will do for profit. Then talk about quality of care and what you do best, if you are a doctor, you save lives, if you are a hospital, you deliver babies and do surgeries, you serve the community. On the other side is a for-profit insurance company. Ron explains that you don’t want to have a money argument; you want to have a quality-of-care argument.
For other healthcare business insights, be sure to check out all our past podcast episodes along with other healthcare news and analysis brought to you by Fulcrum Strategies on FLATLINING.net.