Anthem or Anathema?
Healthy Families, a government program to provide health insurance to low income children is administered by Anthem Blue Cross, a for-profit insurance company. Last month, Anthem decided to offer new contracts to all Healthy Families providers paying roughly 1/3 the previous rates. In the setting of our national and state budget crisis, primary care offices were asked to accept drastic cuts in reimbursement rates, and many did. The California Medical Association (CMA) estimates that as many as 50% of the healthy families providers accepted the new, slashed reimbursement rates. The providers who refused to sign a fiscally impossible contract were subject to angry calls and tirades from scared and frustrated families, because (of course) Anthem let the physicians break the news to the patients. At our pediatric office patients cancelled numerous appointments, while others paid cash to have their children seen. Local families were unable to find providers who were taking Healthy Families, and they flooded the Anthem line with complaints. Anthem is required by law to provide an adequate network of providers, and that may be the only motivation for them to deal fairly with medical providers. Anthem continues to try and get primary care providers to accept unsustainable rates, and while they make some concessions to those who hold out, this cycle is bound repeat itself when the next round of contract renewals come up. They can't loose. There is no downside to them for squeezing doctors.
Consider these facts compiled by the CMA:
1. Although Blue Cross will likely hide behind the State’s ongoing budget situation as the reason they’re cutting rates, there has been NO reduction to the amount the State has paid them for Healthy Families business. In 2008, Blue Cross of California collected over $11 billion in premiums. $2.1 billion of that came from public programs (Medi-Cal, Healthy Families, etc.). In September of 2009 the California Assembly and Senate passed AB 1422 (Bass), the California Children and Families Act of 1998 which would give even more government funds to the administrators of Healthy Families. AB 1422 contains a 2.35% tax upon the total operating revenue of Medi-Cal managed care plans until January 1, 2011. The proposal is expected to generate $150 million annually. Approximately 38% of the revenue resulting from this tax will be returned to the plans through higher reimbursement rates and the remaining 62% of the revenue will be directed to the Healthy Families Program (HFP).
2. Every year that CMA has published the Knox-Keene Report, Blue Cross has recorded the lowest "medical loss ratio" (the amount spent of medical care) of any major plan. In the 2008 report, Blue Cross had a 79% MLR, below the statutory 85% requirement.
3. Recissions are the insurance industry’s outrageous, systematic practice of canceling health care coverage for patients who get seriously ill and need expensive medical treatment. According to the New York Times, a former top insurance executive reported that rescission was one of his company’s standard techniques to cut costs and improve the company’s stock price, and a congressional investigation into rescission found that three insurers, including Blue Cross of California, used this technique to cancel more than 20,000 policies over five years, saving the companies $300 million in claims.
I wonder if the CEO of Blue Cross has offerred to cut his income by two-thirds? Something makes me doubt that very much.
Healthy Families, a government program to provide health insurance to low income children is administered by Anthem Blue Cross, a for-profit insurance company. Last month, Anthem decided to offer new contracts to all Healthy Families providers paying roughly 1/3 the previous rates. In the setting of our national and state budget crisis, primary care offices were asked to accept drastic cuts in reimbursement rates, and many did. The California Medical Association (CMA) estimates that as many as 50% of the healthy families providers accepted the new, slashed reimbursement rates. The providers who refused to sign a fiscally impossible contract were subject to angry calls and tirades from scared and frustrated families, because (of course) Anthem let the physicians break the news to the patients. At our pediatric office patients cancelled numerous appointments, while others paid cash to have their children seen. Local families were unable to find providers who were taking Healthy Families, and they flooded the Anthem line with complaints. Anthem is required by law to provide an adequate network of providers, and that may be the only motivation for them to deal fairly with medical providers. Anthem continues to try and get primary care providers to accept unsustainable rates, and while they make some concessions to those who hold out, this cycle is bound repeat itself when the next round of contract renewals come up. They can't loose. There is no downside to them for squeezing doctors.
Consider these facts compiled by the CMA:
1. Although Blue Cross will likely hide behind the State’s ongoing budget situation as the reason they’re cutting rates, there has been NO reduction to the amount the State has paid them for Healthy Families business. In 2008, Blue Cross of California collected over $11 billion in premiums. $2.1 billion of that came from public programs (Medi-Cal, Healthy Families, etc.). In September of 2009 the California Assembly and Senate passed AB 1422 (Bass), the California Children and Families Act of 1998 which would give even more government funds to the administrators of Healthy Families. AB 1422 contains a 2.35% tax upon the total operating revenue of Medi-Cal managed care plans until January 1, 2011. The proposal is expected to generate $150 million annually. Approximately 38% of the revenue resulting from this tax will be returned to the plans through higher reimbursement rates and the remaining 62% of the revenue will be directed to the Healthy Families Program (HFP).
2. Every year that CMA has published the Knox-Keene Report, Blue Cross has recorded the lowest "medical loss ratio" (the amount spent of medical care) of any major plan. In the 2008 report, Blue Cross had a 79% MLR, below the statutory 85% requirement.
3. Recissions are the insurance industry’s outrageous, systematic practice of canceling health care coverage for patients who get seriously ill and need expensive medical treatment. According to the New York Times, a former top insurance executive reported that rescission was one of his company’s standard techniques to cut costs and improve the company’s stock price, and a congressional investigation into rescission found that three insurers, including Blue Cross of California, used this technique to cancel more than 20,000 policies over five years, saving the companies $300 million in claims.
I wonder if the CEO of Blue Cross has offerred to cut his income by two-thirds? Something makes me doubt that very much.
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