RI Health Insurance Commissioner talks “next generation” standards – Richard Asinof

by Richard Asinof, ConvergenceRI, contributing writer

PART One

CRANSTON – It’s been a wicked busy time for the R.I. Office of the Health Insurance Commissioner. Last week saw the release of the approved rates for commercial health insurance premiums for 2023 in the individual, small group, and large group sectors.

And, for the first time, in addition to OHIC’s rate review, the Rhode Island Attorney General conducted an independent review of rate filings in all markets, and submitted comments and actuarial reports on each rate filing to OHIC.

While OHIC made modifications resulting in some $22,880,000 in savings, compared to the original requests made by health insurers, OHIC Commissioner Patrick Tigue expressed his belief that the rates were “higher than I would otherwise like to see them,” because of inflationary pressures.

“I am completely confident that we produced, again, the most affordable rates we could while ensuring that they were still in the public interest,” Tigue explained. “To be a little more concrete about it, you won’t see any rate approvals that are in double digits, and so, all of them across the individual market, the small group market, and the larger group market, across all payers, are again, under 10 percent.”

New responsibilities
At the same time, OHIC was busily preparing for its new major responsibilities to participate in the rate-review process that the R.I. General Assembly enacted this past session, in response to widespread complaints about the failure to increase Medicaid rates.

The agency is tasked with crunching the numbers and preparing regular reports to assist in this new rate-review initiative. OHIC’s responsibilities include:

•  “An assessment and detailed reporting on social and human services program rates, including rates currently being paid, and the date of the last increase,” to be published by Jan. 1, 2023.

• In addition, “OHIC will conduct an assessment and report on utilization trends from Jan. 1, 2017 through Dec. 31, 2021, for social and human services programs.”

• Further, OHIC will be conducting “an assessment and reporting of national and regional Medicaid rates in comparison to Rhode Island social and human service provider rates,” to be published by April 1, 2023.”

Translated, OHIC will be driving the new rate-setting initiative by creating and publishing a comprehensive, inclusive database of Medicaid rates, trends, and comparisons with regional and national markets.

New affordability standard for behavioral health
But, the really big news, which OHIC Commissioner Patrick Tigue shared with ConvergenceRI during an in-depth, one-on-one, in-person interview on Tuesday afternoon, Sept. 17, was the agency’s plans to release in October a new regulatory affordability standard, targeting investments in the commercial insurance marketplace to support community-based behavioral health services.

The new behavioral health regulatory standard is the first of its kind in the nation, according to Tigue, a response to the growing unmet need and growing demand for such services in Rhode Island.

“We are characterizing this as our ‘next generation’ affordability standard,” Tigue told ConvergenceRI, a regulatory policy that builds upon the Office’s “long-standing affordability standards.”

What the Office has done to support investments in primary care, Tigue continued, “is absolutely critical, and we are continuing that. But we recognize the need to [invest] in behavioral health …to have a more equitable health care system and one that is more equitably financed.”

Here is the ConvergenceRI interview with OHIC Commissioner Patrick Tigue, delving into the ongoing efforts by the agency to manage the costs and benefits of the health care delivery system in Rhode Island. In PART One, Commissioner Tigue discusses the ongoing work of the agency and its challenges.

[In PART Two, Commissioner Tigue talks about the need to create a more unified approach to the current health care delivery system.]

ConvergenceRI: Have you been enjoying ConvergenceRI?
TIGUE: I have been enjoying it, Richard. I took note this week of your article on the Lifespan financial reporting. And, also, I have been followed your reporting on the Senate Commission recommendations on EOHHS over the past month. So, yes, it has been valuable, and I’ve enjoyed reading it.

ConvergenceRI: Did you find the reporting to be accurate?
TIGUE: I think both the information that was released and your reporting on it, I think, did frame, for the reader, all of the issues that I think are relevant.

Specifically, my own observations about it, not specific to what you wrote, but inclusive of it, are really that: if we think of our hospital system here in the state globally, inclusive of Lifespan, which is the largest system, I think we have a need in the state, from a public policy perspective, to ensure that our hospitals are financially stable, so that they can deliver high-quality care to Rhode Islanders.

But, at the same time, we have to look very seriously at cost structure and efficiency. I think both of those issues need to be treated with equal seriousness. That’s my genuine view about it. I think your reporting did highlight both of those issues.

ConvergenceRI: Thank you. Nothing burns me up more than the arrogance of certain communications offices when they choose not to respond to my media inquiries.
TIGUE: I think it is really important to always be responsive to the news media. I think you know that, Richard. I think it’s important, certainly in the public sector, to always be as transparent and responsive as possible, and that is what I try to focus on for us.

ConvergenceRI: The last time we met, I believe I said you had been given the “hot potato.” Once again, Patrick, you have been given the hot potato. You may not characterize it as such. You are about to release your decision about the rates.
TIGUE: Sure, we issued the approval, actually, on Friday of last week [Sept. 16]. And we will be releasing them publicly tomorrow [Wednesday, Sept. 21].

ConvergenceRI: Is there anything surprising about the rate decision, that is different than past years, or out of the ordinary.
TIGUE: I don’t think so. I think, in terms of our statutory charge, which I know you are familiar with, Richard, which is that we review rates under fundamentally two criteria.

The first is that they are actuarially sound, which means that they are adequate to cover an insurer’s reasonably expected costs. And, a second equally important criteria is that all of the rates are in the public interest. Which, the Office has traditionally construed as an affordability standard.

Are the rates as affordable as we can make them? Yes, because of the impact they have on consumers and employers here in Rhode Island.

I am completely confident that we produced the most affordable rates we could while ensuring that they were still in the public interest.

To be a little more concrete about it, you won’t see any rate approvals that are in double digits, and so, all of them – across the individual market, the small group market, and the larger group market, across all payers, are under 10 percent.

This is a very difficult year. And, the rates are higher than I would otherwise like to see them. But the reason, fundamentally, why they are higher than perhaps we had seen in some cases, in past years, is primarily due to the macroeconomic impact of inflation, the anticipated effect that that is going to have on provider rates.

ConvergenceRI: Could you define what you mean by “macroeconomic impact” and “inflation.”
TIGUE: I am happy to explain that a bit more. In simpler terms, as I think we are all aware, and anyone who follows the news, I know has seen or experienced in their lives, inflation, meaning the general rise in prices, has been incredibly high, relative to historical norms. That’s not just true, of course, here in Rhode Island, that’s been true, nationally. And so, obviously, that has an impact on the health care sector as well.

And the type of impact it has, for instance, is not only in things like the labor costs that providers have to pay, but also in all the administrative costs that providers have – their utilities, and other expenses.

What the health insurers are projecting, and after we scrutinized it, in many cases we found this to be credible, is that providers are likely to have a need to raise their prices. To address these particular increased expenses as a result of inflation, insurers would need to be funded in their premiums to be able to afford to pay for those expected increases in provider prices. I want to be clear: we scrutinized those projections very, very closely.

It is not something that we took for granted, or took on good faith. We looked at, for each insurer, if what they were building in for expected provider price increases was reasonable, and again, we made reductions in almost every case, to all of the insurers to and all of their rates. But, that being said, we did need to account, under our statutory standards, of having actuarially sound rates and having rates in the public interest. We had to account for these projected expenses. And so, that is what is producing higher rates than I would otherwise like to see.

ConvergenceRI: In terms of looking at the market, when you look at breaking down labor costs, the labor costs that were accrued by everyone within the health care system, are they essentially a product of the failure to raise – and this is my observation – Medicaid rates for providers over a period of at least 10 years?

Both commercial insurers and other insurers have artificially kept – and the legislature, too – has artificially kept the rates for Medicaid low, in my opinion. Which has damaged the health care workforce, and it has damaged the ability to deliver services. And, it has not necessarily rectified. My apologies for the long-winded question, but how do we begin to get to the fundamental issues of responsibility – or irresponsibility – around the setting of rates for things that are not in your control, but that have a direct impact on what you can do, that have a direct impact on what you can do, by the law, by the standards for commercial insurers that you regulate? Did I ask that question right?
TIGUE: You did; it is an excellent question. As I think you know, Richard, one of OHIC’s statutory charges, one of its purposes, in the statute, is, among other things, but this is a really critical one for this issue that you are raising, is to view the health care system as a comprehensive entity.

That’s a part [of our charge], even, as you said, we do not have direct jurisdiction over government payers, like Medicare and Medicaid. And so, that statutory purpose really informs my own thinking about this issue.

What I would say is this: I think it is certainly true that we need to, ultimately, achieve for how we finance our health care system what I would characterize as a “rationalized reimbursement system.”

What do I mean by that? I mean a reimbursement system that fundamentally functions across payers – across Medicare, across Medicaid, and across the commercial market. We want a system, again, that does two things: it supports the financial sustainability of our providers, so that they can deliver high-quality care, and support and achieve population health outcomes for Rhode Island’s population.

And, two, we also need to have a system that is efficient as possible and has as much affordability for Rhode Islanders and employers as possible.

We need a financing system, across payer types, which [can] accomplish both of those goals. And, I would argue – I think Rhode Island is a part of this, but it is not unique to the Rhode Island health care market – that we do not have a payment system that is rationalized along the lines that I discussed,

Specifically, traditionally, government payers in general – and I think it is a fair statement to say, that in many cases, government payers, meaning Medicare and Medicaid, often times, do not have reimbursement rates that are adequate to support providers in delivering high-quality health care. Similarly, on the commercial side, we have reimbursement rates that are often in excess of what is necessary to provide high-quality health care to the population.

And so, if we are thinking systemically – ultimately, where we need to go – I think, we need a system that addresses where we have “under-investment” and addresses where we have “over-investment.”

While, at the same time, looking very hard at different provider sectors and their own cost structure, and calling upon providers to be more efficient

So, simply said, Richard, I really believe that ultimately, we need a health-care financing system that is affordable, that is high-quality, and that really has shared accountability across payers and providers, supported by government, to achieve [better] health outcomes for Rhode Islanders. Period.

ConvergenceRI: What would that look like? Does it translate into Rhode Island becoming its own health insurer? As a consumer, I must admit, I often don’t understand how the market works.
TIGUE: As a former Medicaid director, what I have thought about, something that a friend said to me when I took on that role, was this: I absolutely believed it then and I continue to believe it now – Medicaid is the most important means to achieve social justice in American life. If not the most important, certainly it is among them. And so, it’s really important to think about the role of Medicaid in our health care system, for that reason.

And, obviously, it has a very significant role in our state – and in states across the country. Medicaid has really significant state fiscal impact.

What I think we need to do, Richard, concretely from a policy standpoint, and now I will speak, like I was doing with the commercial market, the area I have direct jurisdiction over now: We have to remediate the areas of historic under-investment that are producing poor health outcomes. An example of that, I think it is absolutely clear, we need to invest, to continue to invest more, this is in the commercial market, we have to invest more in our behavioral health system, particularly our community-based behavioral health system.

Next month, OHIC will be putting forward a proposed rule making, proposed regulations, that would establish a behavioral health spending standard, analogous to what the Office has done over the years for primary care, in its primary care spending standard.

So, this would be conceptually requiring commercial payers, insurers, to shift more money into community-based behavioral health, in order to improve access, outcomes and to achieve more affordability by delivering more accessible and higher-quality outcomes.

ConvergenceRI: Has that ever been done in any other state?
TIGUE: Not to my knowledge.

ConvergenceRI: So, you are launching a precedent-setting “affordability standard” for behavioral health care. Is that correct?
TIGUE: It is a new affordability standard; we are characterizing this as our “next generation affordability standard.”

We are going to build on the Office’s long-standing affordability standard. We are trying to move into new areas with the same spirit. Again, what the Office has done to support primary care, that is absolutely critical and we are continuing that. But this is added to that. We recognize the need to address behavioral health. Those are the things that we need to do, Richard, to have a more equitable health care system, and one that is more equitably financed. Again, that is just one example. But I think that it is really important. And, I have committed to maximizing the leverage my office has to do that in the commercial market.

But, to think about it, in terms of how does that fit into creating a continuum across Medicare, Medicaid, and the commercial marketplace.

ConvergenceRI: You have governance over the commercial market. You have absolutely no governance over Medicare and Medicaid and ERISA-based [self-insured] health plans.
TIGUE: That’s right, that’s right.

ConvergenceRI: But, what you are doing is, you’re setting the standard to say, we are going to be leaders in the commercial market to do this, as a way to incent the other players, the other stakeholders, to do this in the other markets.Is that accurate?
TIGUE: The way I think about it is: We want to be part of the solution, Richard. We want to be part of the solution to these issues. So, we are maximizing our authority and our policy-making in the fully insured commercial market, where we have authority.

But, we absolutely hope that other markets will be able to follow our lead. Ultimately, our goal is to achieve greater affordability, greater access, and greater quality for all Rhode Islanders who interact with the health care system.

ConvergenceRI: When will you be announcing this?
TIGUE: We anticipate that the proposed regulations, our hope is that they will be out by the end of next month, October.

ConvergenceRI: Have you gotten any preliminary feedback? I assume you have had discussions with commercial insurers to gather their feedback and response in advance of doing this. Are they on board?
TIGUE: We have had a lot of informal dialogue with both payers, with providers, with consumer advocates, with my colleagues in state government around this specific, new affordability standard, the behavioral health spending standard.

Because again, before you go through a formal regulatory process, it’s really valuable to get as much input as you possibly can, so that you can put forward the best policy as possible. And, to be clear, the regulatory process absolutely allows and requires public comment, so the opportunity is there for us to make additional adjustments.

But again, we have had a series of informal dialogues over the past year, and then some, to really try to understand the views of the many stakeholders in the system, including payers but certainly not limited to them.

I would characterize the reaction of the payers generally is, I think, that they have voiced, at least to me, directional support for this, because I think many recognize the needs we have in our behavioral health system.

However, I would say, I would certainly anticipate, whenever you take a conceptual idea and put it into regulatory requirements, there might be particular issues that are raised, and we will take a look at those as they are actually raised.

But I do think it is fair to characterize generally the reaction as being directional support, at least in concept. But, as we know, Richard, the devil is always in the details.

ConvergenceRI: That’s really exciting. I know from when we talked last year, that you were in the beginning stages of putting this together, and you are moving it into reality, which is, once again, clearly [addressing] a strong, unmet in the Rhode Island marketplace. Congratulations.
TIGUE: I think that is a little premature, but thank you.

ConvergenceRI: It is a continuum of effort on your part to take the idea from conception into birth.
TIGUE: I would really be remiss if I didn’t acknowledge the OHIC team here, my staff. I certainly could not do any of that, without their efforts, and with this, as with all things, in my view, I am so fortunate, honestly, to have the hardest-working staff, in my opinion, that I think is out there. We wouldn’t be able to move forward without them.

PART TWO

In a time of health care crises, OHIC puts the focus on finding solutions

Few would argue with the fact that we are living through a time when the health care delivery system in Rhode Island is disrupted, boiling over in crisis after crisis.

Emergency physician Dr. Megan Ranney, MD, MPH, normally a voice of optimism, recently described the situation in a tweet, saying: “The current model of health care is so broken,” in response to an article published on Saturday, Sept. 24, in The New York Times, entitled: “Profits over Patients.”

The story’s main headline read: “They Were Entitled To Free Care. Hospitals Hounded Them To Pay.” As the subhead explained: “With the help of a consulting firm [McKinsey & Company], the [nonprofit] Providence hospital system trained staff to wring money out of patients, even those eligible for free care.”

In a follow-up tweet, Dr. Ranney quoted at length from the article: “The Times found that the consequences have been stark. Many nonprofit hospitals were ill equipped for a flood of critically sick COVID-19 patients because they had been operating with skeleton staffs in an effort to cut costs and boost profits. Others lacked the intensive care units and other resources to weather a pandemic because the nonprofit chains that owned them had focused on investments in rich communities at the expense of poorer ones.

The excerpt continued: “And, as Providence [hospital system] illustrates, some hospital systems have not only reduced their emphasis on providing free care to the poor but also developed elaborate systems to convert needy patients into sources of revenue. The result, in the case of Providence, is that thousands of poor patients were saddled with debts that they never should have owed, The Times found”

For OHIC Commissioner Patrick Tigue, in an in-depth, one-on-one, in-person interview with ConvergenceRI, when looking at the overall health care delivery system in Rhode Island, the future focus needed to be on creating what he called “a rationalized reimbursement system.”

To do this, Tigue continued, it required creating the space to have that kind of in-depth conversations that are often missing in the abrupt debate and dialogue around health care policy and regulations.

In PART One, Commissioner Tigue revealed his innovative plans to create a “next generation” affordability standard, focused on creating an investment strategy for commercial insurers to invest in community-based behavioral health services, the first of its kind in the nation.

In PART Two of the ConvergenceRI interview, Commissioner Tigue detailed his intention to find common ground across all payers to create a more equitable financial structure for a continuum of care in Rhode Island, focused on affordability, quality, and better health outcomes. And, his continuing plans to introduce more additional, “next generation” affordability standards, including one focused on health equity for the commercial payers.

ConvergenceRI: In the past, within your regulatory framework, you have done assessments around parity that have found the commercial insurers to be less than stellar, my words, in their performance. And, you have “punished” them, once again, my words, assessing financial penalties to have them make amends for their lack of parity, mandated by law. Is this the best way to improve the outcomes around parity in behavioral health care for commercial insurers in the Rhode Island market?
TIGUE: I’m glad you asked the question, because it goes back to OHIC’s functions as an agency. You can really divide our functions into two large categories: one is policy reforms, like the one we talked about, the behavioral health spending standard, based on the primary care spending standard.

The other function, which is equally important, is regulatory enforcement – market conduct examinations or investigations into insurers’ non-compliance – and then taking corrective action, or imposing sanctions on insurers who haven’t been complying

The reason I mention that, in this context, in response to your question, is that I don’t see the behavioral health-spending standard as a way to remediate non-compliance, with behavioral health parity. But, I see it as a way to advance behavioral health access, in order to continue to address the issues around behavioral health parity.

Both [strategies] need to be done in complementary fashion; they are two separate but complementary approaches. Let me give you an example of what we are doing with regulatory enforcement.

We are fortunate to have received a CMS [Centers for Medicare and Medicaid Services] grant to be able to push forward with our behavioral health regulatory enforcement. One really important part of that grant that we are in the process of developing is what will become a semi-annual – meaning twice a year – meaning a twice-a-year, dedicated, behavioral health parity oversight and reporting process for the payers here in the state of Rhode Island.

Simply put, they will have to report to the Office, twice a year, on a series of standard variables, that will allows us to assess their compliance with the behavioral health parity law. And then the Office will be able to take actions, based on the outcomes for those assessments.

So, that’s one example of a regulatory enforcement mechanism. But I think you really said it best, a minute ago, when you said that there were two streams, in order to achieve a policy goal of a high-functioning behavioral health care system, in the commercial market.

In Rhode Island, we need both policy reform to address the issues that are there, and we also need regulatory enforcement actions, to ensure that commercial payers are following the law. It is a both/and, not an either/or approach.

ConvergenceRI: As part of the new law enacted by the R.I. General Assembly during the last session, OHIC was given specific responsibilities to develop a comprehensive assessment and to produce reports regarding the rates for human and social services programs under the umbrella of R.I EOHHS. Can you describe what those responsibilities are?
TIGUE: As part of the FY 2023 budget, OHICs powers and duties were amended to undertake a review of the social and human services programs, and the rates paid by the state to providers of those services.

Reports will be prepared in three tranches: The first is due on January 1, 2023; the second is due on April 1, 2023, and the final set of reports is due on Sept. 1, 2023.

And then, the report will be due every other year, on Sept. 1. A fair way to read the new law is to think of the first two reports, the January and April reports, as foundational reports, as level-setting reports.

OHIC’s role is to be an independent, credible source of information, and to make that information available not only to EOHHS and its agencies under its authority, but also to the Governor and the General Assembly.

ConvergenceRI: And, to the public?
TIGUE: Absolutely. It is all going to be completely public. The law specifically requires the September report to have an opportunity for public input, responses and feedback.

The law doesn’t specifically require it, but because of OHIC’s tradition of strong, transparent public feedback, we will be forming our own advisory council, similar to the Health Insurance Advisory Council, which will convent for the first time, later this month, in September.

The Council will provide OHIC with advice on how to carry out its duties under the review of the social and human services programs. It will be comprised mostly of consumer advocates but also providers.

But the most valuable thing about it, Richard, is it will be fully transparent. I’ve committed to meeting at least monthly, more likely more than that at the outset. We are going to do all this work in the light of day. And, the value for me in that is two-fold.

First, we will benefit from everyone’s feedback, up front, so that we have the benefit of everyone’s best thinking.

ConvergenceRI: Some critics of the process have raised the issue about the process of hiring a consultant to assist your agency with the work, worried that this is just another example of state government paying for a high-priced business consulting firm.
TIGUE: That is an entirely fair question. I can tell you how we are handling the issue. The General Assembly, and the Governor, in signing the legislation, recognized that it needed to have the administrative capacity within state government to do this work well.

I can tell you that we have hired a dedicated FTE for this position; they will start at the end of next week, working directly with myself and my chief of staff, Cory King, to carry out this work.

OHIC certainly has the expertise that is relevant to this, when we are looking at the commercial health insurance premiums. But this analysis requires a distinct kind of expertise in working with the social and human services system. I wouldn’t describe this as simply outsourcing the work.

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Richard Asinof is the founder and editor of ConvergenceRI, an online subscription newsletter offering news and analysis at the convergence of health, science, technology and innovation in Rhode Island.

To read more stories by Richard Asinof: https://rinewstoday.com/richard-asinof/