State regulation blamed for helping drive up health costs
Efforts by state officials, physician groups and health insurers to come up with a compromise on changes to the “80th-percentile” rule on medical payments are still foundering. About 20 people from the different group met in mid-August to explore ideas, but physicians rejected several proposals put forward by state officials. State Sen. Cathy Giessel organized the meeting. We’re told state budget director Pat Pitney sat in.
The rule is a state regulation requiring insurers to reimburse providers for procedures at the 80th-percentile of average costs for the procedure in Alaska. It has the effect of ratcheting up the required payments over time particularly if the pool of physicians is small, which is the case in Alaska in many specialty fields. Insurers and business leaders blame the rule as a factor in helping drive up health care costs in Alaska, whiHealth ch are the highest in the nation. The rule was originally a consumer protection measure to protect against large balances owed for out-of-network providers if reimbursements by insurers were low, for example at 50 percent.
One proposal from the state officials was to set the minimum reimbursement at 300 percent of Alaska Medicare rates for procedures (Alaska Medicare is already 127 percent above national rates). Physicians rejected this, we were told.
A second state proposal was to broaden the geographic area in which procedure rates were averaged by including Seattle (the logic is that many Alaskans go to Seattle for specialized treatment). This was rejected too. Physicians then advanced an idea of tying reimbursement to an average of costs of medical code groups. This was seen by the state as complex and non-transparent, but the physicians were requested to develop the idea further. The goal, if agreement can be reached, is a bill presented to the new Legislature in January. Bringing down medical costs is a key priority for the state, which spends $1.4 billion a year in various health expenditures.
Nome health cost sticker shock
Nome Public School employees, and the school district, are feeling severe sticker shock over a huge runup in health plan costs after the district went self-insured. Total costs increased 108 percent and premiums for employees, who pay 15 percent of costs, more than doubled. A typical school worker including a spouse and children on a family plan saw monthly premiums go from $385/month to $801/month. The spike was caused by a number of workers with serious health conditions filing claims.
Providence contract with nurses
Providence Alaska Medical Center reached a three-year contract with its 1,200 nurses that includes pay raises and paid time-off benefits. The union must ratify the contract.
Alaska health care employment continues to be strong. The number of jobs in the industry increased by 900 in the first six months of 2018 compared with the same period of 2017, state labor economists say.