Meeting Minutes – 2/21/17

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MPPA Meeting Thursday February 21, 2017 at 6 PM in Central Medical Building, St. Paul.

Those present: President Lee Beecher, Bob Geist, Dave Racer, Hannelore Brucker, Scott Jensen, Carl Burkland, Lye Swenson, Don Gehrig, Wayne Zuehlke, Mike Ainslie, and Dave Feinwachs.

  1. Scott Jensen discussed details of the Health care re-insurance law, liability insurance, scope of practice problems, cost of new drugs, creating a whole state insurance area to avoid subsidizing the expensive SE area, the repeal of HMO non-profit law, and any willing provider(AWP) law.
  2. Dave Feinwachs gave an excellent presentation entitled “The Anatomy of Fraud”. He recounted the federal court’s finding of fraud in MI Blue Cross vs. Hi-Lex, an ERISA company robbed for 20 years by the insurance corporation, which defense said that all HMOs pocket the ERISA rebates or they would go broke—the judge found this egregiously illegal fraud and found for the plaintiff, Hi-Lex. The same pattern of fraud is suspect in the nation’s Medicaid HMO systems including in MN where independent forensic audits have been side-tracked. The question is whether the state and federal CMS have been paying too much, because the HMOs self-report spending of state money without oversight. The concern is that non-profit HMO profits (9.04%) may be exorbitant and even may be underestimated. Medicaid HMO systems may have more serious problems than just high costs, poor provider pay, and pre-authorization access barriers.
  3. Bob Geist presented the Medicaid Family Medical Accounts (FMA) program: SF 1302 and HF 1552. The companion bills will need amendments to fill two blanks (regarding copays and prefunding of the FMA debit card) and about 8 other changes are being considered. The goal of the FMA program is Empowerment of Families, to wit: 1) Free choice of program: FMA or HMO, 2) Free choice of provider, 3) Ownership of health care resources on a debit card—a potential bridge out of Medicaid, 4) Fair to patients, providers, and the Medicaid system, and 5) Open TPA encounter payment data to identify the sick needing more intense community services. The new bullet point handout rationale is attached on2—toss out any old versions.
  4. Lee Beecher and Dave Racer noted a pending book, Passion for Patients. It recounts Lee’s experiences in medicine: from medical school, to specialization, to medical director, then to private practice, and eventually to a cash only practice.
  5. Next meeting will be announced—probably late March or early April.

Respectfully submitted, Robert W. Geist MD, Secretary pro-tem

Family Medical Accounts (FMAs) for Medicaid: A program to promote cost savings, improved access, and equity, when families are empowered with money[1]

update 2-2-17

  • Major Medicaid funded Medical coverage—Medical Assistance (MA) benefit schedule
    • Insures unpredictable and unaffordable risk (catastrophic expense)—consider re-insurance bids
    • Insures preventive/prenatal services/well child and baby care/meds for some chronic conditions (diabetes, hi BP, cholesterol, epilepsy etc.), and so forth.
  • Deductible FMA Medicaid funded debit card
    • “self-Insurance” for predictable and affordable risk (routine outpatient expense)
    • FMAs are money, not vouchers for insurance.
    • Debit card is cash for medical out-patient care. There is no FMA charge for inpatient or outpatient surgery center care; there is no personal cash gap, because the enrollee has FMA money.
    • Electronic deposit banked by state (or contracted private bank)
    • Personal/family Ownership à a bridge to private sector if become ineligible.
      • FMA unspent money roll-over and portability.[2]
    • State benefit set flexibility added to CMS allowable [213(d)] services.
    • Choice of provider: state network and/or any willing provider out of network.
    • TPA coordination of all accounts (FMA; major med; investment)—state shall contract.
    • Patient/family money = economic equity and medical market power
      • Medicaid “cash gap” is eliminated before major medical coverage.
      • Patient-centered quality care with market power choice for care personalization, timeliness, continuity, and trust in referral.
    • State financial risk low: program eliminates high transaction costs.
      • Funding: Medicaid by MN State/CMS money (no change)
      • Decreased administrative costs and family prudence may cause decreased inflation rate akin to that seen in the private sector.
      • The initial program excludes the dual eligible Medicare-Medicaid and disabled populations—it could be later expanded and even could include MNCare.

Other issues:

  • Community and bipartisan political support to be established.
  • Federal waivers—a problem if feds favor corporations or hostile to families owning money.
  • Affordable Medicaid might be achievable using FMAs.
  • Poor pay of Medicaid providers is an important issue if Medicaid “coverage” is to mean adequate access. (At least providers would have immediate debit card payment and near nil AR problem.)
  • Expansion of the FMA concept the disabled is possible later (e.g., using Connecticut’s Intensive Care Management (ICM) program[3] or a Personal Health Budgets for complex needs.)[4]

Goals: Joseph V. Kennedy (PhD—economics; M.S; J.D.), a noted economist has written that, “Government policy is far more effective when it channels market forces than when it overrides them”.[5] Individuals owning and controlling the resources that the government shares with them are likely to be prudent, while gaining equity in choice of medical care access and quality. “Ownership of resources is the path to a decent life free of poverty and dependency: a goal for all Americans.”4

* Overhead best estimate by CMS: CMS Health Care Industry Market Update—Managed Care March 24, 2003:15 [23.7%]. http://www.cms.hhs.gov/CapMarketUpdates/Downloads/hcimu32403.pdf [No longer accessible].

  • Connecticut total program overhead reduced from MCO 12.5% to state TPA 5%.
  • MN: all health insurance companies = 7.3%; “big 5” = 8.74%; “self-insured” (ERISA?) = 4.5%. http://www.health.state.mn.us/divs/hpsc/dap/cdireports/grppurch/admn2014.pdf
    • Question: do Medicaid HMO reserves include Medicaid money?
  • Medicare contractor (TPA) claims payment expense 3% (all other administrative costs hidden in other government departments.) file:///C:/Users/Owner/Desktop/Documents/Overhead%20public%20vs%20private%204-24-09.pdf

** Preventive and chronic disease care is paid by the Major-Medical Insurance or MA (as in most private sector HDHPs) including meds for diabetes, hi BP, cholesterol, and epilepsy.

Poor pay of Medicaid providers is an important issue if Medicaid “coverage” is to mean adequate access.

  • At least providers would have immediate debit card payment eliminating AR problem.
  • Additional coordination fees will be paid primary care providers.
  • Legislators must allow payments to cover the real cost of delivering services and for any willing provider-like coverage
  • If there are savings from eliminating corporate transaction costs (overhead), increased provider pay could be available.

 

For a more details, contact: Robert W. Geist MD at rgeistmd@comcast.net

[1] Geist RW. Family medical accounts: a potential solution to Minnesota Medicaid problems. MNPhysician. January 2017;30(10):1,18,42. McKinsey and Co CDHC Report, June 2005. Scandlen G. Working as intended. Consumers for Health Care Choices Report. Nov. 2007 www.chcchoices.org.. Phelps CE. Chap. 5. Empirical studies of medical care demand and applications. In: Health Economics. Addison-Wesley. Boston, MA,2003:137-148. Sullivan ME. Blue Cross Blue Shield member experience survey 10-20-08. Kaiser Family Foundation survey 2007. AHIP 2008 Census of HDHPs and HSAs http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf (accessed 5-28-08)

[2] State FMA controls possible, since the account is not a fed qualified HSA insurance policy, but rather a state/fed program of money.

[3]https://www.cga.ct.gov/med/committees/med1/2013/0213/20130213ATTACH_Intensive%20Care%20Management%20Program%20and%20CSS%20Presentation.pdf

[4] O’Shea L, Bindman AB. Personal Health Budgets for Patients with Complex Needs. N Eng J Med. 2016;375(19):1815-1817  

[5] Kennedy JV. Introduction ix, and Chap. 7 Affordable health care: In: Ending Poverty. Rowan & Littlefield Publishers Inc. Lanham, Maryland. 2008

About the author

Minnesota Physician-Patient Alliance

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