Latest / Becker’s Healthcare Podcast / Navigating Payer Challenges and Out-of-Network Policies with Jakob Emerson

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Navigating Payer Challenges and Out-of-Network Policies with Jakob Emerson · Becker’s Healthcare Podcast

• 0:02
  This is where health care leadership comes together.
• 0:04
  Becker's sixteenth annual meeting brings more than 3,500
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  hospital and health system executives and nearly 800
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  speakers to Chicago April.
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  This year's event includes keynote conversations with Dallas
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  Cowboys legend Troy Aikman and former president George
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  w Bush. For the agenda and event details,
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  visit beckershospitalreview.com
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  and click on the events tab in the
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  upper right. We're looking forward to hosting you
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  in Chicago.
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  This is Scott Becker with the Beckers HealthCare
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  podcast.
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  I'm thrilled to be joined by Jacob Emerson.
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  Jacob covers the payer industry better than anybody
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  in the country.
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  He gives us regular updates on what he's
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  watching with the country's payers and the dynamic
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  between payers and health systems and consumers, quite
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  frankly.
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  Jacob, let me tee it up and ask
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  you to take it away. What are a
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  couple of the key issues that you're watching
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  currently?
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  Hey, Scott. It's good to talk with you.
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  I thought two big stories we could talk
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  about.
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  One happened
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  last month in December where we saw
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  Optum's CEO
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  and Mark Cuban,
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  have a very lively conversation in in Washington
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  over pharmacy cost, PBMs,
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  all that good stuff that they both focus
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  on. And then
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  another story that our readers have been really
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  interested in recently is a a new policy
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  from
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  Anthem slash Elavance and a 10% hospital penalty
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  that they are going to put on claims
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  from hospitals
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  when they use out of network providers. So,
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  for example, if a physician group is out
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  of network with Anthem, but the hospital is
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  not applying a 10% penalty on that hospital
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  for using that out of network provider. And
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  I can explain more details there in terms
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  of what that entails.
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  Thank you. First, let's talk about the Conroy
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  Cuban discussion debate. I saw some of it
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  around Twitter and x, but didn't really understand
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  what was going on. Yeah. I saw your
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  article on it. Tell us what what happened.
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  What was that? Yeah. And I you know,
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  we were one of the only outlets that
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  covered this because it was, it was actually
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  difficult to get our hands on the footage.
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  But,
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  basically, the two the two individuals, they sat
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  down. It was mid December,
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  last year in in Washington for at an
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  event hosted by Johns Hopkins, and
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  it was, moderated by one of their health
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  policy professors. And, basically,
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  you know,
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  they they talked about oh, I mean, a
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  lot of things. It was an hour long
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  conversation.
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  But it was it was centered really, I
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  would say, on pharmacy benefit managers, which, of
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  course, Optum or OptumRx is one of the
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  largest in the country.
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  And and then they talked about the rebate
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  system,
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  the just the high cost overall of pharmaceuticals,
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  especially specialty drugs in this country.
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  And then, you know, some of the the
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  opaqueness
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  of that industry, which, you know, everybody is
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  familiar with. I think everybody is very confused
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  for the most part by this industry because
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  of how complicated it it is, how opaque
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  it is in terms of these contracts, and
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  how these companies all work together.
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  And so that also then, you know, kinda
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  led to them talking about price transparency or
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  lack thereof
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  for both employers and health plans, and then
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  also then for consumers on the ground and
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  ultimately what they pay at the pharmacy counter,
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  and why that is often so confusing,
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  in The US. So there's a lot of
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  different things, but as you can imagine, it
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  got pretty contentious at points at points. There
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  were expletives,
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  thrown out at at some points with,
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  Mark Cuban straight up just saying bullshit to
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  stuff that doctor Kanye doctor Conway was saying.
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  So, you know, watching it overall was was
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  pretty interesting, and and I can detail if
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  you'd like a little bit more about what
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  specifically,
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  they talked about slash debated.
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  Jacob, do do us a favor. Tell us,
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  what are a couple of the issues that
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  they that they talked about? It it seems
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  like in The US, we've got this massive
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  cost structure going on in health care between
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  the payers, the health systems, everybody else, the
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  the pharmaceutical companies. It just seems like it's
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  become so inflated and so challenging, and and
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  health systems are having a very hard time
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  making all the numbers work anyways. But what
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  did they what are some of the details
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  of what they discussed? Yeah. Let me let
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  me just go through, some of the high
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  level points that really stood out to me
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  when I listened to this conversation, Scott.
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  And, of course, they diverged on a number
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  of issues.
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  But I thought what was interesting was when
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  the moderator asked them specifically just how they
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  would rewrite national
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  health care policy. And Mark Cuban straight up
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  just said, break up the big insurance companies,
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  so that they can't own PBMs, they can't
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  own providers, they can't own their own technology,
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  to make them all independent companies, which I
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  think is easier said than done, but definitely
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  points to,
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  the wider trend, of course, that we've seen
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  over these last five, ten, fifteen years of
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  these massive conglomerates,
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  buying up almost every part of the health
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  care industry, including UnitedHealth Group, which is probably
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  the best example of it because they are
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  the largest.
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  And doctor Conway did push back talking about
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  how, you know, Optum specifically, they don't own,
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  more than about 10 to 12,000 physicians directly
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  or or the medical groups that they they
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  work in, but they contract with almost 90,000
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  of them.
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  So, you know, kind of a kind of
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  a tricky way of, I think, of explaining
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  it. But at the end of the day,
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  you know, United, like I mentioned, it they
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  are the largest health care company, largest insurer,
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  PBM. They have the data firm with Change
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  Healthcare. They own a ton of ASC is
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  in medical clinics.
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  But but doctor Conaway said that he believes
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  that at the end of the day, it's
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  it's a cost issue. It's ultimately what the
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  pharmaceutical companies
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  are charging, and and that is fair given
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  if you just look at GLP ones, we
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  know that they're extremely expensive compared to what
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  they cost in in Europe. So,
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  so he is correct there.
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  He he also said that, you know, just
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  getting rid of, like, a PBM, for example,
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  would or would basically transfer
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  a lot of the those those pharmaceutical costs
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  directly to health plans, to unions, to to
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  government bodies,
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  employers in general,
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  because he argues that his PBM, OptumRx, is
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  basically negotiating
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  those those prices,
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  for them. So that things would be much
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  more expensive if they didn't exist. And then,
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  you know, Mark Cuban responded, well, why are
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  we the only country in the world that
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  has the concept of pharmacy benefit managers? So
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  there's that. And then Mark Cuban talked about,
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  you know, just the opaqueness of of the
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  industry, like I like I mentioned earlier, Scott,
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  and how a lot of employers,
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  you know, when they contract self funded employers,
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  when they contract with PBMs or with health
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  plans, that it is very difficult, if not
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  impossible, to actually look through,
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  their their their claims data. That a lot
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  of and and they've sued for it, and
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  a lot of them, have not won.
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  But it but it is true that health
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  insurers, pharmacy benefit managers, whether you consider those
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  the same thing,
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  they don't wanna give up complete medical claims
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  data,
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  because,
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  well, there's probably a lot of reasons, and
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  I think Mark Cuban would be the better
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  one to to say exactly why.
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  But that is a very real thing is
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  that employers right now don't really know the
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  full extent of, I think, where their money
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  is going under these these contracts with these
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  large companies.
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  So debated that, debated PBM rebates, and how
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  they affect what patients are paying at the
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  pharmacy counter. But I think one last thing
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  I wanted to say on this, Scott, is
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  that
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  broadly and, like, contextually, what it what is
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  really fascinating about this is Mark Cuban only
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  law launched cost plus drugs,
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  in 2022,
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  focusing originally on generics and pretty much still
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  very focused on that with a few more
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  biosimilars and specialties that they've rolled out since.
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  And and he's already, four years later, sitting
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  here on a not even four years later,
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  sitting here on a stage with the CEO
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  of one of the largest health care companies
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  in in the country, in the world,
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  and debating him directly on these issues. And
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  so to me, that really spells just how
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  quickly he's gained,
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  in influence within this within this industry, but
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  also that how how,
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  how much appetite there is for disruption
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  within it. The the fact that he's risen
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  so quickly,
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  and is now, you know, going head to
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  head with one of the largest PBMs, I
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  think, is is says a lot about where
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  the industry in general in in pharmaceuticals
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  is going.
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  Yeah. No. It's it's literally remarkable.
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  And and and talk a bit about what's
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  going on with the elephants
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  out of network issue in health systems. Talk
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  a bit about that. Yeah. So this has
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  been getting a lot of attention from the
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  hospital associations
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  and from federal lawmakers,
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  alike. And it's just for the provider community
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  in general because, of course, Anthem is,
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  I believe, the second largest insurance company in
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  the country with anywhere from 45 to 50,000,000
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  members
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  all over the country. And so this basically
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  affects
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  all providers. And, basically, this this new policy
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  went into effect on January 1, and it
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  imposes a 10% penalty on
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  claims coming from hospitals that involve out of
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  network providers for their Anthem Blue Cross Blue
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  Shield commercial plans along with a potential even
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  for network termination. And, basically, that means that
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  if the hospital, for example, was using a
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  physician group or an anesthesiologist
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  or that was not in network with Anthem
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  that treated the patient, but the patient went
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  to the hospital because that hospital was in
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  network, then Anthem can then apply that 10%
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  penalty. And and, basically, what Anthem here is
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  arguing is it comes down to some of
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  the unintended effects we're now seeing play out,
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  from the no surprises acts and and the,
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  that arbitration
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  process that was set up, to basically allow
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  out of network bills to be mediated between
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  insurers and providers. And Anthem has has basically
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  been saying through this policy and and, honestly,
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  very publicly,
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  their executive their CEO has been saying it.
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  They've been saying it through lawsuits,
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  that this system is being gamed and that
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  there's a lot of, according to them, private
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  equity groups, third party billing companies that are
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  really encouraging out of network billing to secure
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  massive arbitration,
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  awards. And it is true that, providers at
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  this point are winning about 80% of,
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  those arbitration,
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  that go or those issues that go to
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  arbitration. So insurers definitely are are losing here.
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  But as you can imagine, hospitals are not,
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  you know, very,
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  not very pleased with this because they're basically
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  saying, we can't figure out when a patient
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  comes to us whether, you know, their health
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  plan covers us and the physician group or
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  either or. We can't do that at the
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  time of the service, and so this is
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  just gonna create a lot of billing issues
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  for patients.
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  And then so, like I said, hospital,
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  American Hospital Association, Federation of American Hospitals, and
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  then 14 physician lawmakers in Congress
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  all coming out saying, Anthem, do not put
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  this into place. It did go into place
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  on the first.
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  But as as you can as you can
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  tell, just very controversial
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  not something I think we've seen from insurers
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  as of as of yet besides this, and
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  all really going back to the to the
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  no surprises act.
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  Fascinating. And it it's amazing that providers are
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  winning 80% of those claims. Is that what
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  you said? That's according to some of the
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  most recent research,
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  that,
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  yeah, providers are winning 80% of cases that
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  reach arbitration,
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  under under the NSA.
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  Simply absolutely fascinating.
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  Jacob, I wanna thank you as always for
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  joining us on the Becker's Healthcare podcast.
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  I get more information in a shorter period
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  of time on what's really going on with
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  payers and providers,
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  than with talking to you than anybody else.
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  I wanna thank you for joining us. Thank
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  you so much. Thank you, Scott.