medicare
Why Medicare hospital spending is down
Health policy gurus have been scratching their heads a little bit lately, because the amount of money Medicare’s trust fund has spent on hospital care in the latter half of 2022 is still well below what they expected. Now, the government’s top health care actuary has some answers.
Paul Spitalnic, the chief actuary at CMS, spoke during a webinar hosted by the American Academy of Actuaries last week and detailed three reasons for the tempered hospital spending among beneficiaries in the traditional Medicare program:
- The pandemic, of course. Adults who are 65 and older continue to be the most vulnerable to Covid (this demographic makes up only 13% of reported Covid cases, but 75% of Covid deaths). Medicare beneficiaries who survived Covid also are less costly.
- People who are eligible for both Medicare and Medicaid — people who are poor, older, and often have severe disabilities or serious health conditions — increasingly are moving to Medicare Advantage.
- Hip and knee replacements have moved to outpatient settings, which has taken pressure off Medicare’s Part A trust fund that pays for hospital care.
employers
A small update on a juicy ERISA lawsuit
This past December, a consortium of self-insured unions in Connecticut sued Elevance Health, which we covered in this very newsletter. It’s a novel lawsuit that alleges the Blue Cross Blue Shield insurer blocked the unions from obtaining their own claims data and that Elevance overcharged the unions by willingly overpaying providers. Now, it’s going deeper.
In March, Elevance asked the judge to dismiss the suit, calling it a “garden-variety contract dispute.” But last week, the unions finally filed a response. They argued Elevance is a “fiduciary” under ERISA — the big sprawling law that governs employers and the medical benefits they offer to workers — even though Elevance is only acting as the unions’ administrator. It’s a big swing, and if successful, would overhaul relationships between self-insured employers and their health insurance carriers.
For anyone who loves ERISA, or for those who just want to learn more how self-insured medical plans work, this case is a must-watch. You can read the unions’ latest filing here. And you can read why Elevance absolutely does not think it’s a fiduciary under ERISA here.
