Managed Care Spotlight: 2020 Year in Review and 2021 Outlook
The past year saw significant developments in managed care regulation at the federal and state levels and we anticipate the rapid pace of change will continue through 2021. In this webinar, we analyzed the most significant legal developments affecting health plans in 2020 and explored what to expect in 2021. Our thought leaders discussed the impact of managed care regulations on a broad range of industry subsectors, from plans and providers to vendors and pharmacy benefit managers.
The Biden administration seeks to set a tone of order and predictability in its COVID-19 relief and response efforts. These efforts include a swath of executive orders on topics such as data aggregation, support for the National Guard and strategies for vaccine distribution. The acting secretary of Health and Human Services also recently sent a letter to state governors stating that the agency will likely extend the public health declaration—and its attendant regulatory flexibilities—through 2021.
The direct contracting model is the next step in the evolution of the Medicare accountable care organization portfolio. The model allows participating organizations to take on a greater level of financial risk, including the Centers for Medicare & Medicaid Services’ version of global capitation. The direct contracting global or professional options may be particularly attractive to managed care organizations, because these options allow new entrants with low or no fee-for-service beneficiaries.
The coming year will likely see a continued trend toward financial risk assumption in value-based contracting. Within this trend, there are two common variations. In one, the provider or intermediary entity takes on broad financial risk for a large patient population with diverse demographics and health statuses. In the other common variation, risk sharing is focused on specific populations, such as individuals with a particular disease or significant chronic conditions.
Plan/provider joint venture health plans will continue to pick up steam in 2021. These arrangements allow the provider organization to have an economic interest in a health plan without having to build out administrative capabilities. In turn, the plan is able to align itself with a key provider network in one or more markets and potentially take advantage of co-branding opportunities.
Managed care organizations should prepare for the implementation of the No Surprises Act, which authorizes a suite of reforms to mitigate surprise billing. Signed into law on December 27, 2020, as part of the Consolidated Appropriations Act of 2021, the legislation applies to group health plans, issuers offering group or individual insurance, and providers. The implementation of the Act will involve multiple rulemakings, and the final rules likely will raise preemption questions, as many states have their own statutes and regulations regarding surprise billing.
Watch the recording and download the slides here.