Insurance Pact rules tightened

by Lesley Politi on December 23, 2008

Insurance pact rules tightened

Cost-cutting, patient protections added

New contracts for health insurance companies that provide state-subsidized coverage to thousands of Massachusetts’ working poor will include aggressive incentives for cost-cutting, but will also contain new provisions to protect patients, under an agreement reached yesterday by state regulators.

The Connector Authority Board approved the guidelines for contracts with the managed care companies that will insure the 162,000 residents covered by Commonwealth Care.

The insurance is for people who don’t qualify for health coverage at work and earn too much to qualify for Medicaid.

The new contracts will be sent out for bid in January and go into effect July 1.

Under the new rules, companies will be limited to a 2 percent increase over what was paid to carriers this fiscal year. That is substantially less than the 8 or 9 percent increases in the private sector.

But companies that bid lower than the going rate will be rewarded by receiving more customers. Under the new state rules, the lowest bidders will automatically get to pick up people who drop coverage, wait more than three months to reenroll, and do not then select a plan when they reenter.

The automatic assignment will apply only to the lowest-income patients of Commonwealth Care, the roughly 84,600 people who receive totally subsidized care.

Previously, some board members said they worried that the new process would mean many Commonwealth Care patients would end up in health plans that didn’t include their regular doctors, creating upheaval for consumers who already are struggling with financial and other issues. But the new guidelines include protections that prohibit bouncing a patient to a cheaper plan if that plan does not include the patient’s regular doctors. Patients with serious, chronic illnesses would also be protected from this auto-enrollment provision.

“This is an aggressive plan, but we think it’s reasonable,” said Jon Kingsdale, executive director of the Health Connector.

Companies would also receive incentive payments of $2 a month for each patient who receives a comprehensive annual physical, if the company improves the rate of those physicals by at least 5 percentage points. A similar $1 monthly incentive is added for the companies to report on a quarterly basis how their patients are using emergency rooms.

Some recent surveys have indicated that patients, including those covered by Commonwealth Care, continue to use emergency rooms for routine care, which is expensive and drives up overall health costs.



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