State regulators investigate if 'steering' has boosted premiums

As health insurance shoppers brace this week for final word on premium hikes, Minnesota regulators said that "inappropriate steering" of patients with high-cost health conditions into the individual market could be one factor driving higher rates.

In a letter this month to federal regulators, the state Commerce Department said it has heard from insurers about cases where health care providers are driving enrollments in individual market health plans "for reasons that benefit the provider and may put the patient at major financial, benefit and network risk."

Commerce doesn't name any particular health care providers, but suggests there is a high concentration of patients with end-stage kidney disease in the state's market for people who buy health insurance on their own.

Last month, the federal Centers for Medicare and Medicaid Services (CMS) issued a call for information on any such practices due to concerns that some health care providers might steer consumers out of Medicare and Medicaid plans, and into commercial policies that provide higher reimbursement rates to clinics.

"We strongly encourage [the federal government] to focus its attention on the inappropriate steering of patients from public programs into commercial products for reasons that put provider profit before patient health and well-being," wrote Kristi Bohn, the Commerce Department's director for regulatory and policy analysis, in a Sept. 22 letter to CMS.

"Further, the cost to consumers purchasing insurance in the individual market should be taken into consideration as they are bearing the financial cost of very few high-cost patients who have coverage options outside the individual market," Bohn wrote.

The concerns focus on the individual market, where about 5 percent of Minnesota residents purchase coverage. It's the market for people who are self-employed or don't get health insurance from an employer or government program.

This year, questions have mounted about the sustainability of the exchanges because health insurers have lost so much money on the business. Part of the problem, insurers said, is that enrollees as a group have used more care than expected.

In August, when CMS issued its request for information about inappropriate steering, it also sent letters to all Medicare-enrolled dialysis facilities and centers about the announcement.

"We are concerned about reports that some organizations may be engaging in enrollment activities that put their profit margins ahead of their patients' needs," said Andy Slavitt, the acting CMS administrator, in a statement. "These actions can limit benefits for those who need them, potentially result in greater costs to patients, and ultimately increase the cost of [exchange] coverage for everyone."

In response to the federal government's request, Commerce issued its letter this month. It summarized a Commerce analysis showing there were about 241 end-stage kidney disease patients in Minnesota's individual market during 2015. Few if any of those patients should be in the individual market, Commerce said, because they usually have access to Medicare and/or Medicaid coverage.

Dialysis clinics reject any suggestions that they are inappropriately steering patients to particular health plans.

"We do not engage in inappropriate steering of patients into marketplace plans," Robert Sepucha, a spokesman for Fresenius Medical Care's North America division in Massachusetts, said in a statement. "It is wrong for anyone — be they providers or insurers — to put their economic interest above the best interest of patients by improperly steering them into coverage not of their own choosing."

Denver-based DaVita Kidney Care, which is another large dialysis operator in Minnesota, said it is required by CMS to provide education to patients about their right to pick the best insurance option for their needs. The ACA created new options for individuals who previously could not access adequate coverage, the company said in a statement.

"Some patients have chosen to pursue that option, in the spirit of the ACA, because they determined that commercial insurance offered unique benefits to them including access to transplants, etc.," the company said. "Dialysis patients have long had the right to choose the insurance best for them and their families — they are not obligated to enroll in Medicare if they choose not to."

Like Commerce, the companies have submitted letters to CMS about the issue, as well, in which they also deny that any inappropriate steering has taken place.