Bill restricting third-party premium payment for patients with ESRD wins California Senate committee approval
A California bill that would restrict the American Kidney Fund and other third-party organizations from helping patients on dialysis pay commercial health plan premiums was recently approved by the California Senate Committee on Health and will move on to the appropriations committee before getting a full Senate vote.
The committee approval is a victory for health plans in the state, that claim dialysis providers steer patients away from Medicare and MediCal coverage and push them to sign up for commercial health plans that typically pay higher rates.
Under SB 1156, sponsored by Sen. Connie Leyva, third-party payers would have to:
certify that patients are not eligible for Medicare, Medi-Cal or Covered California subsidies and would have to disclose to regulators of their intention to pay a patient’s premiums in advance;
ensure continuity of care for consumers by requiring third-party payers to pay premiums for the full-plan year, even if the patient stops treatments that benefit the provider; and
prove they meet these requirements. “Failure by the third-party payer to meet these requirements means the financially interested provider is only entitled to a predetermined payment rate for any services provided to that patient,” Leyva said in a press release. That rate would be the same as Medicare rates.
The bill also impacts health care providers who operate addiction centers.
Leyva said in a press release that the bill has support from America’s Health Insurance Plans, Association of California Life and Health Insurance Companies, Blue Shield of California, California Association of Health Plans, California Labor Federation, California Rural Legal Assistance Foundation and the Service Employees International Union of California, which is trying to get voter approval in November on a ballot question that would limit profits for dialysis companies in the state.
“SB 1156 will help to put an end to predatory business practices that allow some providers to make millions of dollars on the backs of patients undergoing dialysis or addiction treatment,” Leyva said in a press release. “By protecting genuine third-party payment mechanisms that actually prioritize the needs of their patients, SB 1156 will ensure that the health and well-being of patients is always the top priority and will stop dishonest companies from profiting from someone else’s pain and suffering. I remain committed to ending these risky health care schemes that hurt patients and drive up health care costs for Californians.”
Statement from the AKF
In a statement emailed to Healio Nephrology after the vote, the AKF wrote, “We are disappointed that the Senate Health Committee put insurers’ profits and special interests ahead of the real needs of low-income people living with kidney failure in their districts ... Insurers want to dump dialysis patients off their plans and with today’s vote, they are one step closer to their goal.”
The AKF said it provides premium assistance for close to 4,000 California residents.
Dialysis providers have historically charged commercial health plans higher rates for dialysis care compared to the Medicare rate because they say they cannot be profitable with payments based on Medicare pricing for dialysis care alone. The AKF’s Health Insurance Premium Program, or HIPP, accepts donations from dialysis providers to help patients pay for their insurance premiums. However, CMS and some health plans have accused some dialysis companies of steering patients into Affordable Care Act health exchange plans and other commercial health plans instead of Medicare and Medicaid plans so they can charge higher prices for dialysis care. The HIPP program paid for premiums for those commercial plans, which CMS has said did not always offer the same or better benefits as Medicare and Medicaid plans. The AKF has since adopted new guidelines for HIPP, including reviewing a patient’s choice of plans before agreeing to pay the premium.
The AKF also helps patients pay for other medical bills not covered by insurance; California is one of two states that specifically bar patients younger than 65 years of age with end-stage renal disease from supplemental Medicare coverage.
Impact of dialysis care costs on employer plans
In addition to the pressure dialysis providers are facing in California about third-party payment of premiums, a coalition of insurance companies is petitioning HHS Secretary Alex Azar to take federal action on the issue. Groups including America’s Health Insurance Plans, the Blue Cross and Blue Shield Association, ERISA Industry Committee, Families USA, National Alliance of Healthcare Purchaser Coalitions and others sent a letter to Azar on April 17 requesting that HHS “take immediate action to address recent disclosures confirming inappropriate steering of individuals with end-stage renal disease (ESRD) who are eligible for Medicare or Medicaid into commercial coverage.”
“The abuse of third-party payments undermines the system for everyone, including good actors who are sincerely invested in ensuring patients have access to the right care and coverage,” according to the letter. “For this reason, while rules governing third-party payments should enable legitimate organizations who are acting in good faith to provide consumer support, we strongly urge that CMS re-issue its rule on steering in the individual market and prohibit third-party payments made directly or indirectly by a financially interested party. Policymakers should also consider actions to protect the employer market from inappropriate steering,”
AKF president LaVarne A. Burton said in a letter to Azar that the coalition letter had “misleading statements, omissions, half-truths and outright falsehoods,” aiming to limit coverage options for kidney patients by forcing them off private insurance and onto government health programs.
“This letter should send a chill down the spine of every person with a chronic disease,” Burton said in a statement. “Which disease will be rejected by insurers and employers for health coverage next — cancer, diabetes, obesity or asthma? Because they won't just stop with kidney failure.” – by Mark E. Neumann