Blue Cross Chutzpah in Michigan, Is Horizon Omnia doing the same thing using a tiered system with criteria they are secretive about?
A number of hospitals and large medical interests have challenged the Horizon Omnia plans for a good reason; they are enriching the largest hospital monopolies in NJ, while offering a small discount to the public buying these plans.
The truth is, the public does not know what they are buying and many are finding out their favorite doctors are Tier 2, which are doctors who are in Horizon’s network that the plan made more expensive, by front loading them with high deductibles and higher co payments. Basically, they made them more expensive, in network – out of network providers. If that sounds confusing to you, they finally figured out how to bait and switch the public into buying a product that insures their family, and makes certain providers much more expensive for dubious reasons as well as some fine hospitals. These doctors are in network, so they charge the same as Tier 1, but they are subject to a deductible and higher co-pay, which was what used to happen with out of network providers. If that sounds unfair….. you be the judge.
This is precisely what was done in Michigan, except, they did it within their own plan; the tier 2 is more expensive, yet they pay the providers the same (unless they can prove otherwise), and are making access to some of the most effective providers more expensive, while fooling the public that they are getting a discount, which actually is costing them more since they pay more out of pocket. Still confused?; that is by design.
What was their criteria for Tier 1 and Tier 2 you may ask? The court challenges have so far born little fruit, however, it is only a matter of time that a higher court who does not answer to state politics will likely overrule this mess. Chiropractors have two doctors per county with marginal practices chosen as Tier 1, which Horizon contends falls within the fairness conditions of the Obamacare law. Compare this to over 80% of the physical therapists being chosen as Tier 1, while chiropractors have higher satisfaction rates and have been shown to be usually more cost effective.
How did that happen and who made that “cost effective” decision behind the scenes? Horizon left out smaller hospitals while indemnifying larger hospital system monopolies in back door dealings. Nobody has any idea what the larger hospitals vs. the smaller hospitals are charging and getting paid, and this lack of transparency leaves one to suspect there is more to this story. Most hospitals would match the deals made by Horizon if they were allowed to do so, and it is quite likely Horizon will likely do some back door deals to prevent a lawsuit from getting through on a legal challenge.
For the public, saving 15% when you buy your overpriced health insurance is a small discount, except when you realize the people you want to visit will cost you more than that in deductible alone; buyer beware. How did our state premiums for insurance go up so much in the last six years, while we steadily paid more of the bill? Did healthcare costs really go up that much or is the monopolistic approach of the healthcare industry robbing us blind?
Recently, Blue Cross Blue Shield of Michigan who owns 60% of the market there did back door deals that landed them in a class action suit. Apparently, they were negotiating with large health care interests to make sure the insurer got better reimbursement deals than other plans, asking hospitals to charge other insurers more. So much for trusting back door deals. This is clearly an action that would make us all pay more than we used to for healthcare services which are already ridiculously priced by hospital systems. Monopolies are never good for society, and Horizon is a near monopoly, insuring close to 50% of NJ, as well as the large hospital systems they most recently indemnified as Tier 1.
The class action against this Michigan Insurer also shows that even though there were winners in the suit, the terms that can be negotiated may not force those who did wrong to admit public they did wrong. I believe it is just a matter of time that a NJ Class action suit develops against this tiering idea. All it takes is one judge to give the hospitals who are currently suing a win, and this will open the door.
Most of us are hard working people just trying to keep up with everything, and it seems like the insurance industry, as well as the politicians are using healthcare as another way to make us work harder and take home less, while getting less for the healthcare dollars we are spending. Something needs to change.
You can read about the Michigan Blue Cross Blue Shield suit here.
How the Class-Action System Works (and Doesn’t)
JUNE 8, 2016
By Noah Feldman
Class-action lawsuits are necessary as a way to police corporations — but there”™s always a chance that they”™ll be settled in an effort to keep a company’s dirty laundry from being aired.
In a decision Tuesday that polices the policing mechanism, an appeals court reversed an order to permanently seal the records of a particularly embarrassing class action brought against Blue Cross Blue Shield of Michigan. The decision was correct — and also a warning to lawyers against exploiting a range of pitfalls in the legal system.
The case arose from a classic abuse of power by Michigan”™s largest health insurer. At the time of the events that formed the basis of the class-action suit, Blue Cross Blue Shield of Michigan had more than a 60% market share of commercial healthcare in the state.
Abusing that market power, the insurer negotiated deals with numerous Michigan healthcare providers under the most-favored-nation provision that guarantees the best available terms to a client. The deal arranged for BCBS to pay higher reimbursement rates to hospitals, so long as the care providers agreed to charge even higher rates to BCBS’s competitors. The net effect was to raise healthcare costs for all Michigan consumers, while enhancing BCBS’s market share.
The Department of Justice sued BCBS, and private lawyers quickly filed a class-action suit demanding cash damages for customers who paid more money as a result of the insurance company”™s abusive practice.
The events that followed showed the importance of the private suit alongside the government”™s efforts. The Michigan legislature passed a law outlawing most-favored-nation clauses in the health insurance industry. Because that achieved the same goals as the Department of Justice lawsuit, the department dropped its suit.
Without the private class action continuing, BCBS would have paid no price at all for its previous wrongdoing. In fact, the Michigan state law served the interests of the insurer in so far as it made the federal lawsuit go away.
In the run-up to trial, lawyers for the class that was filing suit introduced expert testimony suggesting that the class had suffered $118 million in damages. BCBS responded by entering settlement negotiations with the plaintiffs”™ lawyers.
The two sides agreed on $30 million in damages, which as a percentage of the potential settlement after trial isn”™t unreasonable. It”™s worth noting, however, that as part of the agreement, the BCBS agreed not to challenge an award of $10 million in attorneys”™ fees and more than $1 million for an administrator — typically another lawyer ““ to hand out what was left of the damages to those actually injured.
One more thought; how did healthcare get so expensive that we needed to massively shift health care costs on to the public over the past 15 years, while healthcare costs went up 400%.
- Promotion of fragmented care – why is healthcare so complicated, and why does this bloated machine need so many people, to do a job that years ago was done well by primary care? That started with the HMO model that underpaid primary care and increased the need for specialists. The model has to change. This also does not include the fact that most doctors used to visit their own patients in the hospital until they were no longer paid. Now, high priced hospitalists do this and according to most doctors I have visited, do not communicate with admitting doctors as well as they would like them to, for a lot more money. $$$$$
- Failure to manage chronic pain – look at Opioid overuse, a symptom of the primary care problem and the lack of understanding most medical specialists have of why people hurt. Chiropractors are badly underused by the system, and orthopedics’ offices are full of patients who do not need a procedure, but could have felt better less expensively and in a safer way with a chiropractor.
- Big hospital systems, who charge a huge amount more than they do in other countries with similar costs of living.
- Too expensive a system for educating doctors. Salaries need to be astronomical to allow them to live and pay off a $350k loan as well.
- Insurance companies spending money on advertising to help bolster an image tarnished by denied claims, poor fee schedules, bizarre incentives and the need to grow and consume.
- Too many procedures that do not work, and are useless, and often harmful.
- The lack of government involvement in finding cures for what ails us. Do drug companies really want to cure cancer, or develop expensive convoluted ways to treat it?
- Total lack of oversight of drug company prices. The margins are insane compared to other countries.