In the course of writing about the ongoing Federal Benefits Open Season, the FEHBlog overlooked linking to this Tammy Flanagan article in govexec.com. Ms. Flanagan also discussed Open Season on a Federal News Radio program last Friday.
Healthcare Dive takes a look at why insurers are flocking to Medicare Advantage.
Payers see MA as a stable market. That’s evident in the fact that MA premiums are expected to decrease by 6% next year. Insurance companies like stability. Insurers increase premiums by double digits when there isn’t stability, which is the case with the ACA exchanges.
KFF.org explains that
Since 2006, Medicare has paid plans under a bidding process. Plans submit “bids” based on estimated costs per enrollee for services covered under Medicare Parts A and B; all bids that meet the necessary requirements are accepted. The bids are compared to benchmark amounts that are set by a formula established in statute and vary by county (or region in the case of regional PPOs). If a plan’s bid is higher than the benchmark, enrollees pay the difference between the benchmark and the bid in the form of a monthly premium, in addition to the Medicare Part B premium. If the bid is lower than the benchmark, the plan and Medicare split the difference between the bid and the benchmark; the plan’s share is known as a “rebate,” which must be used to provide supplemental benefits to enrollees. Payments to plans are then adjusted based on enrollees’ risk profiles [plus some other stuff explained on the KFF.org website]
FEHBP certainly is stable market but no one is predicting a looming premium decrease. Both MA and FEHBP carriers are subject to a profit limiting 85% medical loss ratio. Under the FEHBP, the government contribution formula works like the MA benchmark but perhaps it’s not as not as efficient as the MA approach. It’s an interesting intellectual exercise.
ICD10 Monitor reports that the American Medical Association has released 2018 changes to its CPT codes and descriptors. HIPAA requires that these CPT codes, which describe outpatient medical services, must be used in HIPAA standard electronic transactions. The Monitor notes that the 2018 changes amount to 312 edits.