Identifies Areas of Compliance and Opportunities to Continue Health Care Payment Transformation

Early in March, Insurance Commissioner Trinidad Navarro and Cristine Vogel, the Director of the Department’s Office of Value-Based Health Care Delivery, issued the Annual Review of Carrier Progress Towards Meeting Affordability Standards. Vogel leads the Department’s efforts relating to value-based care, primary care, pharmacy benefit managers, and other health-policy initiatives, including grant programs. After establishing affordability standards in 2021 and 2022, the Office collected data from insurance carriers concerning their projected compliance with the affordability standards for 2023, the first year of affordability standard implementation.

“The statutory charge of the Office is to “reduce health-care costs by increasing the availability of high quality, cost-efficient health insurance products with stable, predictable, and affordable rates,” said Commissioner Navarro. “I am pleased that overall, carriers project compliance with the affordability standards set by the Office.”

The 2023 projections show that carriers will increase their investment in primary care spending to seven percent of their total medical spend ($40 million) and will hit the mandated 8.5 percent of total spend toward primary care programs that have engaged in care transformation activities. This results in an $8 million increase from 2022. Additionally, carriers were required to limit price growth for hospital and other non-professional services increases to 5.5 percent. All carriers project compliance for each of the three required service categories – inpatient hospital, outpatient hospital, and other medical. A key finding of the Report is that the Office estimates these limits saved Delawareans $2 million to $12 million in 2023, depending on the price increases hospitals would have otherwise negotiated with carriers.

Critical to successful implementation of value-based care delivery programs, are carriers non-fee-for-service (FFS) reimbursement to primary care providers. Compliance with the affordability standards for does not require carriers increase payment equally across all providers, and therefore, the increased investment will generally lean toward larger practices already engaged in care transformation activities. Projections for 2023 show that on a per member per month (PMPM) basis, primary care investment has increased from $11 PMPM in 2022 to $29 PMPM in 2023 for those practices engaged in value-based care programs.

“Helping to bend the health care curve towards more affordable care is critically important in these times of ever-increasing hospital and medication prices,” said Commissioner Navarro. “The data in the 2023 Report make it clear to me that we can keep making progress toward higher-quality care at a lower cost.”

“Delaware continues to make progress in its innovative efforts to address care quality and cost,” said Director Vogel. However, she stressed that there is room for progress. Key challenges include the fact that the fully-insured portion of total health care spending is relatively small, carriers with low membership appear reluctant to design value-based programs, provider practices with low attributed members appear reluctant to invest in value-based infrastructure, and there is a lack of multi-payer program alignment (e.g., care delivery, payment, etc.).

Vogel also pointed out what she considers to be a critical challenge, namely that the Department regulates a small portion of the health insurance industry. “We regulate the fully-insured segment, which comprises only 10 percent of the total health insurance market and is therefore too small to drive change alone.” Vogel further commented, “we remain committed and engaged to collaborate with the industry to find ways to continue this great progress toward value-based care”.

An additional hurdle may come from a new strategy under consideration by carriers, namely, to separate hospital and physician fees for self-insureds from fully insureds. If this strategy were to be implemented, Vogel opined that the hospital price growth cap of CPI+1 would apply to only fully insured and not self-insured, as hospitals would not be held to the price growth cap for self-insured rates. Carriers and providers would need to re-think their care delivery approaches, since bifurcating the market will likely add administrative burdens and market inefficiencies.

Vogel continues to search for policy solutions. At the March 13th meeting of the Delaware Primary Reform Collaborative, she suggested that Delaware could consider ways to include additional payer types (e.g., Medicaid, self-funded) to increase the size of the market and result in more impactful results for value-based care programs. She is also seeking creative solutions for carriers with low membership counts to be able to offer non-FFS programs, opportunities to provide certain care transformation activities in a more “centralized” manner (for smaller practices) and expanding her Office’s ability to require financial amounts within categories of non-FFS activities. The Office is working on a supplemental report which will further explore these challenges and opportunities.

Insurance Commissioner Trinidad Navarro highlights successes, resilience

The Delaware Department of Insurance published today a series of statistics outlining performance and productivity during 2020. These metrics show successes notwithstanding the pandemic and operational changes such as working remotely. These data have been shared visually in the Department of Insurance 2020 Year in Review infographic.

“Despite facing challenges including COVID-19 and natural disasters, our team showed resolve and resilience in serving residents over the past year. From conducting our first ever Mental Health Parity examinations, to returning $21.5 million in health premiums to residents and small businesses, to responding to thousands of consumer inquiries and complaints, the challenges of 2020 did not slow us down,” said Commissioner Navarro. “I couldn’t be prouder to lead a department that makes a difference every day.”

As COVID-19 arrived in Delaware, the department acted swiftly to ensure cost did not hinder residents seeking testing or care and prepared for the eventual vaccine. Over several months, the department kept in frequent contact with both insurers and healthcare providers, supporting the Governor and General Assembly in efforts to increase access to telemedicine and working with the Governor’s office on a temporary moratorium on policy cancellations as the economy adjusted. With the pandemic came increased scam attempts, and as chair of the National Anti-Fraud Task Force, Commissioner Navarro helped identify national trends in these efforts, while also serving on the Coronavirus Anti-Fraud Coalition locally. Throughout the year, the department’s fraud unit took on 545 cases, and joined the Healthcare Fraud Prevention Partnership.

Voices for change sang loud throughout 2020, and the department joined them, participating in the NAIC Special Session on Race and Diversity in the Insurance Sector, and the Special Executive Committee on Race and Insurance. In this group, regulators from across the nation are examining diversity and inclusion within the industry, engaging with stakeholders on these issues and how they impact access to the industry and insurance products, and analyzing the sector to find and correct processes that would disadvantage people of color either directly or by proxy.

In August, Delaware experienced multiple catastrophic storms. Tornadoes ravaged communities and homes, and the department arrived in those neighborhoods shortly after to talk to residents and assure them that assistance would be provided. 7,125 total claims were filed as a result of the estimated $10 million in damages caused by these events.

Throughout the year, the department’s Consumer Services Division managed 3,630 complaints, recovering $941,104 for residents. When the department could not solve claim complaints through contact with insurers, the arbitration team helped residents earn fairer settlements without having to go to court. 302 settlements put a total of $702,000 in the pockets of policyholders.

The Delaware Medicare Assistance Bureau (DMAB), which provides Medicare beneficiaries counseling and assistance with plan selection, enrollment, and any Medicare issues, quickly implemented virtual meeting options and held 24 total outreach education events. DMAB provided 5,118 one-on-one counseling sessions to residents, an increase over 2019 despite the lack of in-person events and meetings. The work of this team in assisting with the selection of plans saved beneficiaries $286,956 in premium costs.

While DMAB worked with Medicare beneficiaries, the department worked to decrease the cost of care for all residents while increasing accessibility, including through long-term efforts like regulating Pharmacy Benefit Managers and standing up the Office of Value-Based Care. Partly as a result of successes in creating affordability, $21.5 million was returned to health insurance marketplace policyholders and participating small businesses, as the insurer’s Medical Loss Ratio calculation showed they were spending less on health claims. For the second straight year, the department approved a decrease to Health Insurance Marketplace rates, and ultimately saw a 5% increase in 2021 plan enrollment.

In 2020, the department completed the state’s first Mental Health Parity exams. Thousands of violations were uncovered, resulting in $597,000 in fines as insurers worked to correct issues and create a less discriminatory environment in the future. In total, the Market Conduct Division completed 12 exams and one multi-state exam. Insurers were fined a total of $1.1 million, the most in recent years.

Commissioner Navarro’s approval of a rate decrease in Workers’ Compensation saved Delaware employers $4 million throughout the year. This fall, he confirmed the fourth consecutive decrease in rates, which will be an 11.56% decrease in 2021 loss costs and an 8.8% decrease in the residual market. Increasing safety in the workplace decreases accidents and helps these costs stay low, and the Workplace Safety Program engaged 1,083 participating companies, earning a total safety credit of $7 million on their combined total premium of nearly $66 million.

After being named a finalist for the International Captive Insurance Domicile of the Year, the Captive Division licensed 70 new captives in 2020, including 67 conditional licenses. To date, no other state has released data to indicate they licensed more captives than Delaware last year. The work of the captive division reduced taxpayer burden by contributing $1 million to the City of Wilmington and $2.9 million to the State of Delaware General Fund in Fiscal Year 2020.

The department licensed a total of 220,977 professionals, 37,885 whose licenses were processed by the department over the last year. The rates and forms team reviewed a total of 1,251 rates, forms, and advertisements related to life and health insurance, and 27,258 property and casualty submissions. Through the department’s participation in the National Association of Insurance Commissioner’s Life Policy Locator, $1.45 million was found and returned to beneficiaries.

The department’s milestone year began with an in-depth, months-long process of accreditation with the National Association of Insurance Commissioners (NAIC) inside the Bureau of Examination, Rehabilitation and Guaranty (BERG) and the department as a whole. While undergoing the arduous accreditation process, BERG also conducted 55 financial examinations of companies in 2020, with 56 exams currently in progress.

“Each year, people ask me what my priority will be,” said Commissioner Navarro. “But my answer is always the same: the residents of Delaware. We will continue to prioritize consumers each and every day, and we are proud to show such strong results after a challenging year.”

Department of Insurance 2020 Year in Review infographic

DOVER, DELAWARE – Delaware State Auditor Kathy McGuiness and Insurance Commissioner Trinidad Navarro together will host a virtual Fraud Town Hall via Facebook live on Wednesday, October 21, 2020 beginning at 3:00 pm.

The Auditor’s Office and the Department of Insurance want to jointly raise awareness of the types of fraud schemes both agencies regularly encounter and ways consumers can protect themselves from becoming victims.

“Over the past several months, we’ve seen an increase in fraud complaints brought on by the coronavirus pandemic,” said State Auditor Kathy McGuiness. “Our responsibility as a watchdog is to ensure proper safeguards and internal controls are in place to combat it.”

“As the largest consumer protection office in the state, the Department of Insurance reviews more than 525 fraud referrals a year, filing 531 civil and 15 criminal cases last year,” said Insurance Commissioner Trinidad Navarro. “With new technologies entering the insurance and healthcare arena, and Open Enrollment for Medicare and the Affordable Care Act taking place in the coming months, it is more important than ever that we work together to detect, prevent, and respond to fraud.”

Delawareans are understandably fearful of the repercussions from the health and economic crisis and rightfully want to know what their elected officials are doing to protect them from fraud and scams. The Fraud Town Hall will provide them answers.

Watch live at FB.me/DeTv302.

Learn about the Delaware Auditor’s Office and Department of Insurance online at https://auditor.delaware.gov and https://insurance.delaware.gov/.

Contact: Alaina Sewell, Executive Assistant, Alaina.Sewell@delaware.gov, 302-857-3931

Thousands of Highmark 2019 plan participants and groups to receive checks

After announcing a reduction of Delaware Health Insurance Marketplace rates for the upcoming enrollment year, Insurance Commissioner Trinidad Navarro has more good news for residents who purchase insurance on the Delaware Health Insurance Marketplace, those who purchase Highmark Blue Cross Blue Shield Delaware plans outside of the exchange in the individual market, and for Highmark small group policyholders, announcing more than $21.5 million in rebates for 2019 participants.

“Now, more than ever, we need to make sure that every resident and small business can afford the health insurance they need for their families and employees. These rebates, combined with the ACA health insurance rate reduction for the coming year, do just that,” said Commissioner Navarro. “This is just one of many ways we are working to reduce the cost-of-care our residents experience in the health care system.

For the first time in the history of Delaware’s individual health insurance market, more than $12.6 million will be returned to 19,273 policyholders, with the average rebate being $656. Highmark small groups, often small businesses, will receive more than $8.8 million in cumulative return. 2,779 groups will receive an average rebate of $3,198, with more than 175 groups receiving rebates over $10,000. Employers can consider using these dollars to enhance benefits, reduce premiums for employees in future policy years or provide refunds directly to group health plan participants.

Communications will be sent to policyholders in September and checks for both individual policyholders and small groups will be sent the week of September 21. Those in the individual market with rebate questions can contact Highmark at 800-544-6679. Small group employers with rebate questions can contact their insurance producer, or Highmark at 800-241-5704.

These rebates are required by the Delaware Department of Insurance according to Medical Loss Ratio (MLR) measurements set by the Affordable Care Act, which are meant to ensure that insurers are spending a majority of premiums on health claims and clinical services, not taking those dollars for profit or administrative expenses. The rebate system creates balance when data shows that this ratio was off in a previous year. Not every policy will receive a rebate. MLR review for the 2020 plan year will shine a light on changes in insurance usage due to COVID-19 and will be released in 2021.

On August 31, Commissioner Navarro announced the Delaware Health Insurance Marketplace would see an average decrease in rates of 1% for individual plans. Highmark small group plans will see an average premium decrease of 3%.

Second consecutive year of reductions in health insurance rates

In a year when the nation’s attention is firmly focused on healthcare and its costs, Delaware Insurance Commissioner Trinidad Navarro has announced another reduction in rates on the Delaware Health Insurance Marketplace. Despite insurer costs related to COVID-19 testing and treatment, Commissioner Navarro negotiated an average decrease of 1% in health insurance rates. Highmark Blue Cross Blue Shield Delaware, who offers the state’s Affordable Care Act health plans, initially submitted a reduction of 0.5%. The Commissioner’s final rate announcement comes after an independent actuarial review and public comments on the insurer’s proposal.

“I am proud to announce today the second consecutive rate decrease for Delaware’s Affordable Care Act plans. Amid a global pandemic, it is more important than ever for residents to have access to affordable insurance. Given the difficult economic climate, more people are relying on the Marketplace for the coverage they need,” said Commissioner Navarro. “With this decrease, we send a strong message about the effectiveness of the ACA during its 10th anniversary year. We will continue to fight to ensure access to affordable coverage for all Delawareans.”

In 2019, after successfully applying for a 1332 reinsurance waiver, the state was able to negotiate an average rate decrease of 19% for 2020 plans. This year’s modest reduction reflects market stabilization following the implementation of reinsurance.

After the rate reductions for the 2020 plan year, enrollment spiked by 6.3% during the traditional enrollment period. As of the start of the year, nearly 24,000 Delaware residents participated in marketplace-offered plans. While the federal government has not opened enrollment in response to COVID-19, residents losing employer-sponsored health coverage due to the economic impacts of the pandemic may qualify for special enrollment outside of the traditional enrollment period.

Open enrollment for the Marketplace takes place between November 1 and December 15 each year. However, residents may qualify to enroll or change plans based on special circumstances, such as a loss of qualifying health coverage, change of income, becoming a parent, and several other qualifying factors. Find out if you qualify for special enrollment.

The news of the second consecutive rate decrease comes as the department is implementing other consumer cost-of-care protection efforts, including regulating Pharmacy Benefit Managers to control and reduce medication cost, and continuing efforts to create an Office of Value-Based Healthcare Delivery to focus on primary care affordability and availability.

The proposed rate decrease does not apply to Medicare, Medicaid, or those with group or individual policies outside of the Marketplace.

More information on the rate review process