Payer and provider executives alike are grappling with a nearly crippling level of uncertainty on how regulations and rules will change their business.
"Risk comes from not knowing what you're doing."
—Warren Buffett
How do you run a business in a highly regulated market where the rules are seemingly in a constant state of flux? Health plans across the country are facing this quandary on deadlines that are often measured in days and weeks, not the months and years it takes for most businesses to react effectively to a changing market.
While health plan executives are reluctant to go on the record, I have been inundated with a flood of hushed complaints over the past two months from insurance industry insiders who say they are grappling with a nearly crippling level of uncertainty.
You do not have to look hard to find examples of what they are talking about.
On the new public exchanges for individual health insurance policies, carriers have faced a bewildering maze of business challenges from quarters that are largely beyond their control. Just in the past two months, federal regulators have changed or considered changing key ground rules for the new public exchanges, including the decision to allow individuals to keep insurance policies that do not comply with the Patient Protection and Affordable Care Act until fall 2016. For its part, the Centers for Medicare and Medicaid Services released a 148-page document that included details about proposed Medicare payment rate changes in the fiscal year starting in October.
People inside and outside the health plan community are still trying to figure out what CMS is likely to do when the agency sets the final Medicare fee-for-service and Medicare Advantage payment rates early next month. I was among the horde of health plan executives, analysts, and journalists under orders to decipher the CMS guidance on Medicare payments.
The agency released its guidance document just before 5 p.m. on Friday, Feb. 21. When I called a government affairs executive at one of the large health plans on Monday, Feb. 24, she said her staff "had been working all weekend" to understand the regulators' intent, but they still had more work to do before they could offer a comment.
Whether you have been working in the private sector for decades or are finishing Economics 101 in college, this level of complexity and uncertainty should send shivers down your spine. My spine variously tingled and contorted over the several days it took to get a handle on CMS' Medicare payment document.
To get a handle on the crushing complexity flowing from reform efforts in the healthcare industry, let the wisdom of the free market be your guide.
Last month, publisher Wolters Kluwer Law & Business opened the Health Reform KnowlEdge Center to provide a comprehensive consulting service to payers and providers struggling to keep up with the pace of change. "We have been hearing a lot of cries for help over the past two years," says center director Nicole Stone. "It became clear to our clients that this new [healthcare reform law] wasn't going away. … They needed to prepare themselves for what was coming in the future."
Stone says healthcare providers and payers have been overwhelmed with more than 700 new laws and regulations since President Obama signed the PPACA in March 2010. "There's so much out there that particularly providers need to comply with," she says, such as the imminent adoption of the ICD-10 code sets for medical diagnoses and inpatient procedures. "I don't know how anyone stays on top of all that information and can still do their own job."
Several Wolters Kluwer clients have hired lawyers and analysts "just to keep track of the health reform changes," Stone says
The KnowlEdge Center employs 30 full-time staff members to keep tabs on changes in laws and regulations, Stone says. "You also have to be aware of what the President is doing on the side," she says in a pointed reference to the White House-driven decision to allow individuals to keep non-PPACA-compliant policies through fall 2016.
Good business leaders are always looking down the road to gauge the opportunities and challenges ahead. When Stone looks to the future, she sees strong demand for her product, healthcare reform information, for many years to come.
"It's incredibly complex and it's only going to get more complex over time," she says. The troubled rollout of the PPACA public exchanges is set to be followed by a new set of challenges. "There's going to be more litigation, a new administration, and more changes put into place that are going to be incredibly difficult."
Join our webcast on "Hospitals Developing Health Plans: Key Steps to Becoming a Provider-Payer," featuring executives from North Shore-LIJ Health System CareConnect Insurance Co. and Sanford Health System, on March 28, 2014, 1:00–2:30 p.m. ET. Register today.
Christopher Cheney is the CMO editor at HealthLeaders.