INSIDE THE ISSUE

> Massive Blue Cross Settlement
> The IV Solution Shortage
> Report Slams Medicare Advantage Plans
> Brown University Health
> Post-Acute Care Guide

MONDAY REPORT

Blue Cross Blue Shield Settles Antitrust Case for $2.8 Billion

The Blue Cross Blue Shield Association, a national collection of 33 independent, community-based and locally operated Blue Cross companies, has settled a multi-billion antitrust case against it brought by hospitals, physician groups, and other providers.

Blue Cross Blue Shield will place $2.8 billion into a settlement fund to be dispersed to providers and will invest hundreds of millions into its Blues to make system improvements that will ultimately benefit the hospitals, physicians, and patients that deal with the large insurer. Specifically, the changes will affect how the local Blues will process claims, and reduce the administrative burdens that hospitals and physicians have pushed back against for years.

Provider plaintiffs have asked the court to preliminarily approve the settlement, which would resolve their claim that the Blues violated the antitrust laws by, among other things, agreeing to allocate markets through the use of exclusive service areas and to fix the prices paid to providers through the BlueCard Program.

Among the injunctive relief measures the settlement requires are prompt pay commitments; service level agreements; creation of a system-wide information platform that will allow significantly improved access to eligibility, benefits, prior authorization, and claims status tracking; and revisions to prior authorization standards.

There is also a requirement for compliance and monitoring for five years.

“The settlement comes as a welcome relief for providers 12 years after the inquiry into Blue Cross’s actions began,” said MHA Senior Director of Managed Care Karen Granoff. “Throughout that time, MHA has worked collaboratively with the Massachusetts Blue Cross plan on BlueCard issues, and last week’s settlement will help advance those efforts. We look forward to significant improvements in claims processing, communication, and service from Blue Cross Blue Shield and its member plans as well as additional contracting opportunities with the Blues as a result of the settlement.”

A hearing on the motion to approve the settlement most likely will occur in November. Once approved, notices will go out to all class members describing the settlement and deadlines. Organizations can decide whether they want to opt out of the settlement class and prosecute their own case against the Blues. The court will determine an opt-out deadline. With information and resources, MHA will assist its membership through the recovery process.

Federal and Local Efforts Address IV Solution Shortage

The federal government has issued a broad warning saying its agencies would not tolerate any attempts to price gouge the limited supply of IV fluids. The Department of Justice, Federal Trade Commission, and the Consumer Financial Protection Bureau encouraged providers to report violations at www.justice.gov/DisasterComplaintForm or www.reportfraud.ftc.gov.

Last week, Massachusetts legislators enlisted Congressional support for emergency funding for the Food and Drug Administration (FDA) to allow it to address the IV shortage issue.

In a letter to Congressional leaders, the Members of Congress wrote, “As the FDA works with Baxter and other companies to ramp up domestic production of lifesaving IV supplies, it’s clear that preparations must begin immediately to exhaust every other avenue to mitigate a potential shortfall. … To aid the FDA in addressing the nationwide shortage of IV liquids and prevent the adverse health outcomes that could result, Congress has a responsibility to allocate emergency funding for the FDA to enhance its resources and consider other measures to help hospitals ensure access to patient care as part of any disaster relief supplemental legislation.”

Massachusetts Rep. Lori Trahan led the effort. Among the 48 Representatives signing the letter were Massachusetts Reps. Seth Moulton, James McGovern, Stephen Lynch, William Keating, Ayanna Pressley, and Jake Auchincloss.

“For Massachusetts’ healthcare system, which is already reeling from one crisis after another, this is a massive disruption with a very real impact on patient care,” said MHA’s President & CEO Steve Walsh. “While every hospital is taking necessary conservation measures and working together to coordinate supply, some organizations have had to take the step of pausing planned procedures and there is continued concern about the status of IV fluid availability in the near future. MHA and our members are deeply grateful for the advocacy of Rep. Trahan, members of the Massachusetts delegation, and their colleagues to ensure our providers have the critical resources they need to deliver timely care for patients.”

Since Hurricane Helene damaged the Baxter plant in North Carolina in September, MHA has been convening its membership to address the issue. Last Friday, more than 100 members participated in an MHA call to share the latest IV solution conservation strategies.

A Harsh Assessment of National Medicare Advantage Insurers

The Democratic Majority of the U.S. Senate’s Permanent Subcommittee on Investigations last week issued a report on the three largest Medicare Advantage insurers that control 60% of the market – and the report had very little good to say about the insurers’ practices.

The report’s title – Refusal of Recovery: How Medicare Advantage Insurers Have Denied Patients Access to Post-Acute Care – outlines the gist of the report. That is, the insurers –UnitedHealthcare, Humana, and CVS – “are intentionally using prior authorization to boost profits by targeting costly yet critical stays in post-acute care facilities.”

Specifically, the subcommittee report found that between 2019 and 2022, “UnitedHealthcare, Humana, and CVS each denied prior authorization requests for post-acute care at far higher rates than they did for other types of care, resulting in diminished access to post-acute care for Medicare Advantage beneficiaries.”

The companies increasingly rely on automation and predictive technologies to increase their prior authorization denial rate while reducing the amount of time it took to review a prior auth request.

“UnitedHealthcare’s denial rates for skilled nursing facilities experienced particularly dramatic growth during the period covered by this report,” the majority wrote. “The denial rate in 2019 was nine times lower than it was in 2022. UnitedHealthcare also processed far more home health service authorizations for Medicare Advantage members during this period, underscoring concerns about insurers rejecting placements in post-acute care facilities in favor of less costly alternatives.”

The 56-page report confirms what has already been well-known and documented in Massachusetts. In fact, the Senate report cites MHA’s May 2024 report Causes & Consequences: Inside the Healthcare Crisis, which found that insurance practices constrain bed availability for incoming acute care patients, as well as those seeking post-acute care.

Another MHA report from November 2023 – Better Care, Lower Costs: How Massachusetts Can Lead on Sensible Insurance Reform – identified $1.75 billion in annual waste due to, among other things, wasted resources expended while attempting to reconcile insurance company denied claims; excessive time spent contesting claims denials; and claims processing delays.

MHA’s monthly throughput surveys, which most recently showed 2,149 patients stuck in acute care hospital beds unable to access post-acute care, identified delays in getting prior authorization approvals from insurers as a leading cause of the problem.

The Senate subcommittee report, derived from more than 280,000 pages of documents from the three insurers, solidifies the argument against the insurance practices, especially in the newer area of automated denials.

“While the Subcommittee continues to investigate the use of predictive technologies by Medicare Advantage insurers, the data obtained so far is troubling regardless of whether the decisions reflected in the data were the result of predictive technology or human discretion,” the report reads. “It suggests Medicare Advantage insurers are intentionally targeting a costly but critical area of medicine—substituting judgment about medical necessity with a calculation about financial gain.”

New Entrant into Mass. Hospital Market Changes Its Name

Other name changes are in the works. By agreement with the Archdiocese of Boston, which operated the Caritas Christi hospitals in Massachusetts that Stewart bought, the new owners of those facilities (Brown University Health, Boston Medical Center, and Lawrence General Hospital) must eventually change the hospitals’ names.

Newly Updated Post-Acute Care Guide from MHA

The guide cuts through the confusion to provide patients, their families, or the person entrusted with their care a roadmap that will assist them in understanding their care needs, learning about services that meet their needs, talking to their health insurance company, finding out more about their providers, and making the choice that is right for them.

In addition to the provider and patient guides, MHA also offers free flyers and checklists that healthcare organizations can print and display in their facilities.

John LoDico, Editor