COVID-19: Time for Health Insurers to Step Up

As the country’s health care sector mobilizes to respond to the COVID-19 pandemic, the health insurance industry must not sit on the sidelines. Health plans administer the distribution of over $1 trillion annually to health care providers in private insurance dollars, and almost that much in Medicaid and Medicare funds. The key decisions they make include how and how much they pay providers, and what benefits they pay for. While there are contractual and legal obligations governing these terms, health plans also have considerable administrative flexibility. At this time, their payment and benefit policies must prioritize prevention and easy access to detection and treatment of the virus—and improve the ability of communities to respond to its longer-term effects.

Improving Detection and Prevention

Analysis from Manatt Health indicates that most states took quick action as COVID-19 began to spread to clarify that insurers must cover the costs of testing for the virus. This was a necessary but small step, with distressingly little impact on public health to date, because of limited access to the test.

In an effort to reduce infection rates, primary care providers have been retooling the way they deliver care to their patients to emphasize telephone, email, and video consultation. If well- supported, this shift to virtual visits should encourage social distancing, meet the needs of concerned patients, reduce unnecessary emergency room volumes, and increase provider productivity.

Health insurer payment and coverage policies for telehealth service coverage, payment, and patient cost sharing can promote this necessary shift, or inhibit it by making it less accessible for the patient and less financially viable for providers. Many health plans are revisiting their telehealth policies to ensure that telehealth primary care services are paid for and covered at parity with in-person visits, regardless of the mode or site of delivery. Medicare took an early lead on this and insurers should follow suit. Any additional expenses paid by insurers as a result of increased visit volume will be minor given primary care’s minimal share of total health care expenses to begin with.

If insurers will not do implement these changes voluntarily, insurance regulators have the capacity to define the rules consistently for the entire industry, as was done this week in both Washington State and Rhode Island.

Promoting Treatment

Insurers have started to sound alarm bells about the effects of COVID-related utilization on their current financial reserves and the future premiums they will charge employers. At best this is premature. Attention should instead be focused on the health care providers who are needed to combat COVID-19, have sacrificed revenues to do so by canceling elective procedures, for example, and are particularly vulnerable financially because of pre-existing weak finances. Three groups would seem to take priority:

• Rural hospitals, which have freed up capacity and foregone needed revenues to be ready for COVID-related treatment;
• Primary care practices that have cancelled well-person and follow-up visits and converted care models to lower-paying virtual visits;
• Behavioral health providers that have similarly transitioned to a virtual visit model.

For each of these groups, where there is documented financial vulnerability, commercial insurers, and the self-insured clients whose accounts they administer, should be expected to play their proportionate role in short-term support, primarily through an interim payment model. These payments—made in advance and based on historical average payments—can be reconciled in the future based on actual utilization. In effect, they are no-cost loans secured by guaranteed future services. Insurers are already collecting their premiums and making advances in limited situations to guarantee cash flow. (This is a separate responsibility from unreimbursed or additional COVID-related expenses, which are addressed by the newly passed COVID economic stimulus package.)

Moving more money into advanced payments not only facilitates non-face-to-face services but also hastens a transition away from fee-for-service payment to a prepaid fixed budget model for reimbursement. Payments to primary care providers have been inching in that direction with risk-adjusted care management fees as in Medicare’s payment models. While providers have often been reluctant to relinquish fee-for-service methodologies, those fixed payments are looking more attractive every day.

Keeping People Connected

Health plans with Medicaid- and Medicare-enrolled populations have particular responsibilities and opportunities in the COVID pandemic. Many of these enrollees were physically fragile before the virus’ arrival. Now, not only are they more vulnerable to the toll of infection, they are at greater risk of the mental and physical toll of social isolation.

Like health care workers who assume certain risks in providing care to COVID patients, health plan care management staff have a responsibility to engage with these enrollees, and to use health plan benefit administration flexibility to assure that they are receiving necessary services, such as home-delivered food, pharmaceuticals, and durable medical equipment, as well as staying socially connected to maintain their health. A capacity for flexibility and responsiveness is precisely why governments elected to contract with private health plans for managed care services in the first place.

In addition to statutory obligations, health insurers have contractual and moral obligations with their enrollees. They have financial reserves that have been developed for occasions of heightened risk. They have responsibilities to the communities where their employees live and work. They rely on trusted partnerships with providers to carry out their functions. Now is the time for employers, state regulators, provider partners, and the general public to hold insurers accountable for playing a constructive role in our collective response to the challenges we face.

Christopher F. Koller is president of the Milbank Memorial Fund and was the health insurance commissioner for the State of Rhode Island from 2005 to 2013.