The recent episode of Monitor Mondays’ lead story prompts a deeper assessment of the ecomonic plight of bigness is the U.S.
This week’s Monitor Monday was one I couldn’t miss. “Too Big To Fail” was the lead story, about the size and consolidation of the Advantage Plan carriers as reported by Edward M. Roche, JD, PhD. I look forward to Dr. Roche’s next installment. Roche provided some useful information on how, in the end, a few companies controlled the Advantage Plan marketplace.
This discussion reminded me of the financial crisis of 2007 and 2008 that wiped out trillions in wealth and the existence of many Wall Street investment banks such as Bear Sterns. Were the big banks too big to fail? That was the question facing a hurried congress being pressed to pass a trillion-dollar bailout of the investment banking industry.
To many the answer was no, no they are not. It was bad underwriting and poor oversight by Freddie Mac that lead to the collapse of the real estate market. In the opinion of some, poorly run companies, no matter of size can and should fail. The Too Big to Fail voices carried the day, the big got bigger and fewer, the American taxpayer a trillion dollars deeper in debt. The economy went into the Great Recession anyway. It was all a shell game.
The question of too big to fail in regard to Advantage Plans and the 2007-2008 financial crisis have nothing in common, right? Well, maybe a lot. The common factor: the federal government or its agencies failed to regulate and oversee. Freddie Mac failed to enforce reasonable underwriting. With Advantage plans, the federal government has, with the aid and abetting of the various state regulators, abdicated oversight to the point that compliance with the Managed Care Manual is unenforced.
In the view of some, plans are encouraged by the Centers for Medicare & Medicaid Services (CMS) to ignore the rules. I believe Ronald Hirsch, MD put this forth as I was grousing about what Advantage plans were able to get away with. CMS seems to be promoting the privatization of Medicare at the expense of program integrity. Mixed into this traditional Medicare demands a huge administrative burden, as another presenter healthcare attorney Knicole Emanuel, articulated. Advantage plans? Hardly any. So there is that.
Roche detailed how entities that appear to be small within a local or regional market, are really part of a much larger entity. This is very evident here in California where major payers enter into capitated agreements with highly local medical groups giving the appearance of local control. When the total picture comes into focus, however, the enormity of control by a few companies begs the question: are they too big to fail, or too big to resist.
We providers do have a way to make peace with the march of consolidation. A webinar this week put on by Optum, a company highly effective and playing both sides of the field, offered sound advice in dealing with commercial payers. At contract negotiation time, seek to remove ambiguities in contract language. Look for opportunities for Joint Operations Committees to address ongoing challenges with a win-win mindset. This advice sounded encouraging.
Another fascinating report came from the aforementioned Ms. Emmanuel. In addition to the huge administrative burden placed on providers by traditional Medicare, appeals take on a trial-like adversarial form, but without the constitutional “equal protection rights.” This had me reaching back to my own administrative law judge (ALJ) experiences, albeit some years back. The accusers, the layers of Medicare auditors, never showed up at the hearings. Instead of the contractors presenting evidence the ALJ would ask us, “So, what did the MAC have to say?” We were presenting evidence against ourselves. We could present no evidence we had not at the lower appeal levels.
How can this be? How are the equal protection provisions be set aside so glibly? Well, first there’s CFR 42, Section 405.1036. Yes, that CFR 42. In it CMS and its contractors cannot be called, compelled or subpoenaed to appear at ALJ hearings without the Council’s permission. Equal protection rights have limits not found in courts of law.
Many years back the appeals team, of which I was a part, won what I was told was the first partial overturn of a DRG denial. The ALJ agreed we were not entitled to the DRG, but we shouldn’t be paid nothing, ordering Noridian to pay us the observation hours and allowables. Soon after others had the same experience. Then the wins stopped. Turns out that judicial independence is flexible in administrative law. CMS ordered the ALJ’s to knock this partial overturn stuff off and off for good.
There is, of course, taking your appeal to a District Court of jurisdiction. Some interesting things have indeed been accomplished there.
Risk adjustment has entered a new era. We are no longer operating in a documentation optimization environment; we are operating in an enforcement and recalibration
Hotly anticipated performance targets and payment amounts for the Centers for Medicare & Medicaid Services (CMS) Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model
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