Among the many lessons this pandemic is teaching us, the need for providers and private payers to lock arms and play respective parts in times of crisis must rank high on the priority list. Our brave caregivers in settings all around the country are screening, testing, and treating patients at a rapidly increasing pace, while the revenues those providers depend on have largely evaporated, virtually overnight. It is a “perfect storm” scenario–the need for “all hands on deck,” when the typical activities and patient volume generating the revenues (non-emergent care and procedures) to support those investments is nowhere to be found. With the CARES Act revenue relief provisions, the federal government has stepped up and started the process. Now is the time for private payers to do the same.
That is not to say that nothing is being done in the private payer market. Many of the private payers have stepped up to waive patient cost-sharing payments (copayments, deductibles, and coinsurance) and provide 100% coverage for the testing and treatment associated with COVID-19. But that isn’t enough.
So, what else can be done during this extraordinary time? Now is not the time to be timid or bound to the ordinary. Now is the time to be creative and extraordinary. To that end, we offer a few suggestions providers can employ to bolster private payer engagement in providing the necessary economic relief:
- Reach out to your state’s insurance commissioners (who regulate private payers in the commercial markets), encouraging them to consider the following questions:
- Can states allow the release of payers’ capital reserves to be deployed to providers and be replenished within a defined future time period?
- Can states relax risk-based capital requirements on a temporary basis?
- Can states require payers to offer “advance payments” to providers similar to those provided by CMS within the CARES Act?
- Reach out to your private payers to explore the following:
- Medicare Advantage (MA) – MA payers are required to meet an 85% medical loss ratio (MLR) under CMS rules. Could MA payers establish a Periodic Interim Payment (PIP) process to pay a fixed amount based on historical payments? As another option, can MA payers increase reimbursement rates on a temporary basis to offset the drop in utilization?
- Managed Medicaid – Many states have shifted state Medicaid programs to the private market. In those cases, states pay a monthly, fixed amount to the private payers to manage the care for these beneficiaries. Could Managed Medicaid payers establish a PIP process similar to MA?
- Commercial – Commercial products include the individual exchange, small group, and large group markets. For these products, payers are again required to meet minimum MLR levels. Can these payers consider a PIP process for their products?
- Value-based programs (VBP) – Many providers participate in VBPs besides their base fee-for-services payments. Providers can earn additional payments when meeting specific quality and performance targets. These programs could be severely impacted by the current COVID-19 environment and affect provider payments. Could the payer advance the payments based on historical performance, and settle in a future period? Are there other incentive programs that could be extended based on historical performance?
One payer, Blue Cross of Idaho, just released an announcement Monday, March 30, that it will be offering advance payments to the providers once per month in April, May, and June, and will recover the interest-free payments during the fourth quarter of 2020. We need more private payers to adopt similar steps to Blue Cross of Idaho!
Payers are looking for other ways to support our healthcare system. The ideas outlined above may bring the support needed during this unprecedented time.
If you would like more information about strategies for payer support, or would like help with any COVID-19-related guidance, visit our COVID-19 hub, or contact one of our PYA executives below at (800) 270-9629.
