By Tamara Mathias via Reuters.com

After years of lobbying in Washington, U.S. telehealth providers have the first hints that the dam could break on public funding for an industry they say could save taxpayers billions.

Four bills that could be signed into law over the next year carry the solutions to barriers that have prevented the United States’ huge over-65 health program Medicare from reimbursing doctors’ and medical visits, which often start over the phone.

The bills come at a time when the industry’s claims of cost savings – powered by apps and mass smartphone usage – have begun to gain traction with private insurers striving to save on healthcare costs.

One issue for public spending on telehealth has been the inability to charge across state lines. Another is that Medicare does not recognize medical consultations that do not happen in person as the equivalent of a visit to the doctor.

The fate of legislative amendments that unlock these barriers is far from clear in a fractured U.S. Congress, but investors and some of the world’s big healthcare providers are already circling firms like the U.S. sector’s dominant player Teladoc Inc.

Analysts say Teladoc racked up 75 percent of reported video or phone visits, according to 2016 estimates, but European insurance company Allianz Group earlier this month committed $59 million to American Well, one of a handful of smaller privately-run operations expanding in the sector.

Apple Inc’s Heart Study app, which flags irregular heart rhythms in users wearing Apple Watches, allows them to instantly connect with a doctor using American Well’s technology.

American Well Chief Executive Roy Schoenberg says that while revenue is steadily rising in the industry, it could grow 10-fold if payment parity, state-line and location-based constraints were lifted.

“There is a big black line between the availability of telehealth services to Americans under the age of 65 and Americans that are above the age of 65,” Schoenberg said.

“This (legislation) would be an earthquake.”
TELEHEALTH COSTS SAVINGS

Private insurers who cover the medical expenses of nearly 70 percent of U.S. adults aged 18-64 are attracted by costs that analysts say are at most a third of traditional face-to-face care.

Cowen and Co analyst Charles Rhyee estimates the average cost of a telehealth call is between $40-$50 compared to around $150 for an urgent care visit, and nearly $1,500 for a trip to the emergency room.

Rhyee also estimates that roughly $135 billion of Medicare’s annual $675 billion in spending could be done by telehealth.

Whether legislators agree may depend substantially on a report from MedPAC, the Medicare Payment Advisory Commission that advises Congress on Medicare payments, which is due by mid-March.

Critics question whether the service will be quite so wallet-friendly when used en masse, warning of costs from telehealth visits that supplement, rather than substitute, in-person visits.

“The healthcare system is still being educated in terms of the value of telehealth and where it’s best suited,” says Matthew Gillmor, an analyst with brokerage Baird.

Still, Jason Gorevic, chief executive of Teladoc, points hopefully to the furthest along of the four bills – the telehealth-friendly CHRONIC Care Act – which was recently approved by the Senate and seeks to promote home-based care and expand the remote treatment of stroke and dialysis patients.

“The current crystal ball on Washington looks like the Centers For Medicare And Medicaid Services will allow Medicare Advantage plans to include telehealth in their bid for the 2020 plan year,” Gorevic told Reuters.

By Tammy Luby at CNN Money

That didn’t take long.

Three consumer advocacy groups are suing the Trump administration seeking to stop it from allowing states for the first time to impose work requirements on certain Medicaid recipients.

The National Health Law Program, along with the Kentucky Equal Justice Center and the Southern Poverty Law Center, filed the suit in federal court in Washington, D.C., on Wednesday. The move comes less than two weeks after the Trump administration released guidelines for states to add work requirements to Medicaid and then granted Kentucky permission to do just that.

The suit charges that the approval of Kentucky’s waiver — which also requires many Medicaid recipients to pay premiums and locks them out of the program for up to six months if they violate certain rules — runs counter to Medicaid’s objective of providing the poor with access to health care. The work requirement, which can also be fulfilled through volunteering, going to job training and participating in other activities, applies to working age, non-disabled adults.

The 79-page complaint was filed on behalf of 15 Kentucky residents who are on Medicaid and would be harmed by the state’s new rules, according to the advocates. It cites a 62-year-old man who suffers from diabetes, arthritis and high-blood pressure and is unlikely to be able to comply with the work requirement or purchase coverage on his own. “Without Medicaid going forward, his health would be in jeopardy,” the groups say.

Republicans have long wanted to add work requirements to Medicaid, and Congress tried to do so in its unsuccessful attempts to repeal the Affordable Care Act last year. The Trump administration took matters into its own hands, encouraging states to file waivers that would transform the safety net program. At least nine states are waiting for approval to add work mandates and other provisions, and several governors have recently said that they will make similar requests.

By doing this, the administration has “effectively rewritten the statute, bypassing congressional restrictions, overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country,” the complaint reads.

A spokesman for the Centers for Medicare and Medicaid Services declined to comment. The agency’s administrator, Seema Verma, has said that work requirements will help recipients gain independence.

Medicaid covers nearly 75 million low-income children, adults, elderly and disabled Americans. The broadening of Medicaid to low-income adults under Obamacare — roughly 11 million have qualified for coverage under the health reform law’s Medicaid expansion provision — further spurred GOP efforts to add work mandates.

The Obama administration did not approve any state waivers that would impose work requirements, saying it was not in keeping with the program’s mission. Consumer advocates and health policy experts fear that such a requirement could prove a big hurdle for many recipients, leaving them without the care they need.

By Howard Gleckman via Forbes.com

Last year, a friend with complex medical needs had multiple stays at a skilled nursing facility (SNF). He was a member of a Medicare Advantage managed care plan and, as a result, could choose among only a handful of in-network facilities within a reasonable distance of his home. The care he received at the available facility was poor and since observing his experience, I wondered whether it was typical for a Medicare Advantage member. A new Brown University study suggests it might be.

Last year, about 19 million Americans, one-third of Medicare participants, were enrolled in MA plans. This model holds the promise of fully integrating health care and long-term services and supports—a great benefit for frail older adults. But critics worry that when managed care organizations are at financial risk for the cost of care, they may skimp on quality to save money. That certainly was my concern when visiting my friend. And a new study in the journal Health Affairs (paywall) suggests that fear may be well-founded when it comes to skilled nursing care.

Quality of care

The research, by David Meyers, Vince Mor, and Momotazur Rahman at Brown University, concludes that seniors in traditional fee-for-service Medicare are more likely to be admitted to high quality nursing facilities than MA enrollees. And they found that members of lower-quality MA plans were the most likely to receive care in the poorest quality SNFs.

The paper used two ways to measure SNF quality: the Centers for Medicare and Medicaid Services (CMS) star rating system (1 is the lowest and 5 is the highest ) and hospital readmission rates.

Many MA plans rely heavily on so-called narrow networks of providers, such as doctors, hospitals, and nursing facilities. Ideally, those networks should be based on value–a combination of quality and price. But there is some evidence that plans may focus primarily on cost. In effect, they send their members to those providers with which they can negotiate the best price. Quality of care is much less important.

By contrast, those in traditional Medicare may pick any facility for post-acute rehabilitation, as long as a bed is available. (Remember, this study is about Medicare post-acute care, not long-term care which is not paid for by either fee-for-service Medicare or managed care).

Limitations

As the authors acknowledge, their study has some significant limitations. One is that the CMS rating system is not an especially good indicator of patient outcomes. The star ratings are based primarily on safety measures rather than on the quality of life that is so important to frail older adults. Similarly, there is little evidence that a facility with, say, a four star rating produces better patient outcomes than one with three stars. Still, the paper raises important questions.

The paper touches on another critical issue: Are MA plans being short-sighted by steering their members to low-quality nursing facilities. In the case of my friend, the poor quality of his SNF care may have led to at least some of his many hospitalizations. And those hospital admissions likely cost the insurance company more than it saved by using a low-cost SNF.

The Health Affairs article shows that members of low-quality MA plans were admitted to SNFs with significantly higher hospitalization rates than those in higher quality managed care plans or seniors in traditional Medicare. But the paper did not look at whether those Medicare Advantage patients themselves were hospitalized more frequently than similar patients in traditional Medicare. That may be the subject for another study.

The lesson for consumers is clear: When deciding whether to choose between traditional Medicare and Medicare Advantage, or when picking among MA plans, take the time to learn which nursing facilities (and, for that matter, hospitals) are in their networks. It may not matter much when you first enroll in Medicare (SNF utilization is relatively low for 65-year-olds) but it may be critically important when you face a health care crisis down the road.

That due diligence won’t be perfect. After all, plans switch network providers all the time. But it may give you some sense of the insurer’s priorities.

By Russ Alan Price via Forbes.com

With the doubling of the federal estate tax exemption levels, a substantial number of wealthy families will no longer need to pay the tax. There are a number of very valuable implications for these families. Also, for many wealthy families who will still need to pay a federal estate tax, there are also steps they might want to consider.

While some professionals argue that the federal estate tax will come back sometime in the future at lower exemption levels, the wealthy – including the super-rich – are already starting to turn to their advisors to restructure their estates to benefit from the new law. According to Pat Rufolo, Chairman of the Private Client Services Group, McElroy, Deutsch, Mulvaney & Carpenter, LLP, “For families who no longer have to pay federal estate taxes, revisiting their estate plans is probably a very good idea. In working with our clients who no longer need to pay this tax, we’re seeing many ways to make their estate plans more efficient, less complicated, and considerably less costly for their families in the long term. For example, one area we’re finding tremendous cost savings concerns the life insurance premiums they’ve been paying for coverage they now no longer need.”

“If there isn’t a need for life insurance to pay estate taxes, then the issue is how clients should best unwind or modify their existing life insurance policies,” says Frank Seneco, president of the advanced planning firm, Seneco & Associates. “The best approach is dependent on the specifics of each situation. Some possibilities include life settlements, converting existing policies into private placement life insurance policies, and adjusting the death benefit thereby lowering the premiums.”

“In deciding on what actions to take, it is important to remember that other taxes might impact the wealth holder at death such as state estate taxes. Additionally, the use of various sophisticated planning strategies can likely provide many of the wealthy with solutions enabling them to achieve their estate planning goals with much less expensive complexity,” says Rufulo.

The new tax law is highly advantageous to the wealthy in numerous ways. By reexamining and reworking their estate plans, many of the rich and even the super-rich will be able to use some highly cost-effective solutions to ensure their loved ones will get meaningfully more of their wealth at their death.

By Jake Harper via NPR.org

Kentucky got the green light from the federal government Friday to require people who get Medicaid to work. It’s a big change from the Obama administration, which rejected overtures from states that wanted to add a work requirement.

Medicaid’s chief federal officer is Seema Verma; her home state of Indiana submitted plans for a work requirement last year, and the approval letter could come any day now. Under the proposal, people would have to average 20 hours a week of work or another qualifying activity — such as volunteering or getting an education — to get Medicaid.

The goal is to increase employment among Medicaid recipients. But Sara Rosenbaum, a professor of health law and policy at George Washington University, says there’s a problem with that — most people on Medicaid are already working, or looking for work. Or they’re caring for a child or family member, or they’re sick or disabled.

Many of those people would be exempt from a work requirement, and states could also make some allowances for people battling addiction. When you consider all those exemptions, says Rosenbaum, “There is this very, very tiny slice of [of the population] who can work and simply choose not to work and apply for public assistance.”

And even if states create programs that help people find jobs, and provide things like childcare and transportation, Rosenbaum says, there’s no evidence that they would lead to more employment. And those programs are expensive.

“If you do a work program, it costs real money,” she says, “and the federal government has said, ‘we won’t pay any of those costs.’ “

What’s more likely, Rosenbaum says, is that states will basically say, ‘Get a job on your own, or get off Medicaid.’ “

And what that does, she says, is create a hurdle for everybody on Medicaid. People who are working are going to have to prove they are employed, so even people with jobs could stand to lose their insurance because of red tape. In fact, the state of Indiana’s own projections show that with a work requirement, Medicaid will cover fewer people and cost more.

Adam Mueller is an attorney at Indiana Legal Services, which helps people navigate that state’s Medicaid program. He says people already lose coverage because the program can be confusing, and there are administrative errors.

“Somewhere along the way, paperwork gets lost; there’s a miscommunication,” he says, “Folks have sometimes had difficulty proving something as easy as residency.”

And people on Medicaid often deal with crises – they may move a lot, or change phone numbers, which makes it hard to keep track of paperwork. Adding a work requirement on top of all that, Mueller says, would make staying enrolled even harder.

“There are a lot of things that can trip folks up, and that could lead to falling through the cracks,” he says.

Judith Solomon, of the Center for Budget and Policy Priorities, points out that expanded Medicaid helps some employers, too.

“We have an economic structure where there are people whose employment doesn’t provide health care,” she says.

If employees lose Medicaid, get sick and can’t make it to work, she says that’s bad for business.

Verma told reporters during a conference call Thursday that the requirement is supposed to help people.

“People moving off of Medicaid is a good outcome,” she said, “because we hope that that means they do not need the program anymore, that they have transitioned to a job that provides health insurance or that they can afford insurance on their own. This policy helps people achieve the American dream.”

But advocates say the main purpose of Medicaid is to provide health insurance, not increase employment. And until now, the federal government agreed.

Susan Jo Thomas heads Covering Kids and Families of Indiana, which advocates for health coverage in the state. Under Medicaid’s new management, she says, the philosophy surrounding work requirements has changed.

“I don’t know if it jibes with my view of Medicaid, but my view of Medicaid now is irrelevant,” she says. “It’s what Seema Verma and the administration and the folks who are at CMS decide.”

Thomas says she is taking more of a wait and see approach — the details of the work requirement have yet to be ironed out. She says if too many people lose insurance, she’ll be raising concerns with the state.