Essential Health Benefits Balancing Coverage and Cost (2012) / Chapter Skim
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2 Approaches to Determining Covered Benefits and Benefit Design
2 Approaches to Determining Covered Benefits and Benefit Design
Pages 25-46
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From page 25... ...
This background material helped to inform the committee's development of policy foundations and criteria in the next chapter. UNDERSTANDING TERMS The committee's charge is to advise on the definition and updating of the essential health benefits, and the committee noted that this task incorporates three aspects: the content of the covered benefits, the elements of benefit design, and the administration of those benefits.
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From page 26... ...
The overall premium will reflect which services are included, included but with limits, or excluded; deductible and co-payment levels or co-insurance requirements; the net work of providers; the insured group's risk profile; the degree of medical management in the policy; and health plan administrative expenses, overhead, and profits. A plan with more excluded services, a narrower network of providers, more restrictive visit limits, and higher employee deductible and cost sharing will tend to have a less expensive premium for a comparable set of covered benefits.
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What Does It Mean? Covered Benefits The scope of covered benefits is outlined in an insurance contract or explanation of coverage document (alternately, called evidence of coverage or summary of benefits)
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. By the same token, services that can potentially lead to reduced costs as well as better patient outcomes, such as some preventive care and early interventions, lead some plans to adopt medical management programs to encourage use of these services (e.g., some value-based insurance design plans)
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From page 29... ...
The concept of actuarial equivalence, however, will be useful for the CMS Actuary to apply to determine if the EHB are equal in scope to the typical employer plan, and for the Secretary to determine if any state-specified package is equivalent to the nationally defined EHB package. Actuarial equivalence calculations generally consider covered benefits, cost-sharing requirements (deductibles, co-insurance, co-payments [including by service type]
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Deciding Covered Benefits vs. Medical Necessity Determination During a presentation to the committee, Dr.
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From page 31... ...
Garber stated that if payment changes put more financial risk on the shoulders of providers, then providers "will have more of a stake in ensuring that only effective care and necessary care is delivered, so medical necessity decision making may turn out to play a lesser role." The nation is, however, "years off from the time when medical necessity decisions will be unnecessary or much less prominent in determining which care is delivered" (Garber, 2011)
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From page 32... ...
UNDERSTANDING CONTRIBUTORS TO COSTS Goals for coverage decisions and medical necessity determinations are for safe, effective, and appropriate care while using resources wisely. Despite such lofty goals, we know, for example, that unnecessary care is delivered (NEHI, 2008; Schuster et al., 2005)
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From page 33... ...
. Evolution of Insurance Coverage and Cost Drivers The contents of health insurance policies today reflect their historical development, but health insurance is not static and is adapting to today's health burdens, emerging evidence, and cost drivers in the market.
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Cost Drivers The major drivers of health care costs are recognized as new technologies, more intensive testing, growing chronic disease burden, increased utilization (growing and aging population) , and consumer or provider demand for state-of-the-art care (Table 2-1)
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From page 35... ...
Although there is not a desire to stifle innovation in medical sci ence, rising costs will affect the affordability of coverage in the private sector and in public programs, including subsidization of insurance in the health insurance exchanges. As new technologies become available, important questions are not only whether something is safe and effective, but also whether it will provide benefits beyond comparable treatments and which patients will benefit.
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From page 36... ...
From these various inputs and internal analyses, insurers examine whether this information should lead to changes in covered benefits and development of clinical policies applied in medical necessity determinations, as illustrated for WellPoint's process in Figure 2-3. Aetna similarly selects new and existing technologies for detailed review based on contextual considerations including the quantity of use and the importance of questions that have arisen regarding the specific medical technology; the potential impact of the technology on the company and its members; the availability of evidence in the peer-reviewed literature, guidelines, and consensus statements; changes in regulatory status; whether the technology relates to a rare condition; or other information that is material to the status of the medical technology (McDonough, 2011)
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has various paths for reviewing benefit coverage to make medical policy decisions.
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SOURCE: BCBSA, 2011. BOX 2-4 UnitedHealthcare's Hierarchy of Criteria for Benefit or Coverage Determination Federal and state mandates (e.g., Centers for Medicare & Medicaid Services [CMS]
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. This hierarchy of evidence and its application are used to define covered benefits and to establish the basis for medical necessity decisions.
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. Rather, the legislature "draws a line" on the list beyond which it cannot pay -- in 2011 at line 502 (Oregon Health Services Commission, 2011a)
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Approaches to VBID call for lowering cost sharing for high-value services and raising 8 Personal communication with Mark Gibson, Center for Evidence-Based Policy, Oregon Health and Science University, February 9, 2011.
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TABLE 2-2 The State of Oregon Uses a Prioritized List of Services to Make Coverage Decisions Line Number Examples of Services Coverage 1 Maternity care Covered 101 Medical treatment of acute lymphocytic leukemia 201 Surgical treatment of brain hemorrhage 301 Treatment for rheumatic heart disease 401 Laser therapy to prevent retinal tear 501 Treatment for noninflammatory vaginal disorders 551 Treatment for back pain without neurologic impairment Not Covered 651 Treatment for calcium deposits SOURCE: Oregon Health Services Commission, 2011b.
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From page 43... ...
The state of Minnesota reported a savings of 7 percent after instituting an incentive program in 2002 for enrollees to see efficient providers; primary care clinics are ranked annually on overall claims-based cost and divided into four tiers, with patients facing higher cost sharing when utilizing clinics with the highest overall costs (MedPAC, 2011)
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From page 44... ...
, an organization of business leaders, health plans, and providers seeking to reduce the rate of increase of health care costs, is actively leading efforts to incorporate value-based design in the private sector. With an estimated 8-12 percent premium reduction, the OHLC proposed a benefit package with three tiers of service, in which the middle one -- level 2 -- resembles most traditional plans with a deductible and co-insurance for most services, but the level 1 tier would cover prescription drugs, some lab, imaging, and other ancillary services related to six chronic conditions -- coronary disease, congestive heart failure, chronic obstructive pulmonary disease, diabetes, asthma, and depression -- with minimal or no cost sharing.
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2011. PowerPoint Presentation to the IOM Committee on the Determination of Essential Health Benefits by Sharon Levine, Associate Executive Medical Director, The Permanente Medical Group, Costa Mesa, CA, March 2.
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From page 46... ...
PowerPoint Presentation to the IOM Committee on the Determination of Essential Health Benefits by Jeanene Smith, Administrator, Office for Oregon Health Policy and Research and Somnath Saha, Staff Physi cian, Portland VA Medical Center and Chair, Oregon Health Services Commission, Costa Mesa, CA, March 2. Smith, S
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