HPC on lookout for health insurance merger impacts

Boston Statehouse
Health insurance_167596

Tablet with Health insurance online and money.

BOSTON (SHNS) – The state Health Policy Commission plans to monitor the recent merger of Tufts Health Plan and Harvard Pilgrim Health Care, keeping an eye on what the transaction means for the prices people pay for insurance, overall medical spending, and the state of the health care system.

Commission chair Stuart Altman said that while the HPC is not among the agencies that was responsible for reviewing and green-lighting the merger — a list that included the U.S. Department of Justice, the state Division of Insurance, and Attorney General Maura Healey’s office — the combination of two major players in the state’s health insurance landscape constitutes an “important change.”

“For the commissioners and the staff, I want to make it very clear we are not just going to let this go without continuing to monitor its activities,” he said at a Wednesday meeting.

Altman said the commission has the authority to review how the new organization adheres to the state’s cost-growth benchmark, and Kate Scarborough Mills, who leads the HPC’s market oversight and transparency department, said the commission will monitor the deal as part of its regular duties and “focused research efforts”.

“Specifically, many of the potential benefits of the transaction to members and premium payers really turn on the parties truly integrating their operations to achieve efficiencies and provide administrative simplification, but even if those efficiencies are achieved, it will be critical to ensure that they actually translate into savings for ratepayers,” Mills said.

The health plans’ merger took effect on Jan. 1. The companies have said their new organization, to be based in Canton, will serve 2.4 million members, and forecast that $100 million in savings due to “administrative synergies” will be directly applied to mitigate premium increases and member out-of-pocket burdens.

Mills said Tufts and Harvard Pilgrim are not proposing many short-term changes, and that they’ve said “that any system migration or integration that could impact product offerings or services will be undertaken only after significant and thorough planning to avoid any disruption to constituents.”

New state laws have tasked the Health Policy Commission, a state agency created under a 2012 health care cost control law, with conducting a series of studies, and those projects’ timelines were outlined during the meeting.

A health care law Gov. Charlie Baker signed on New Year’s Day directs the HPC to study the use of telehealth services, including costs and access, and the impact of COVID-19 on the Massachusetts health care system. Both of those studies are to be done in consultation with another state entity, the Center for Health Information and Analysis.

An interim report on COVID-19 impacts is due April 1, with a final report by January 2022. The law gives the HPC one year for an interim telehealth report and another year after that to produce a final version.

That same law also calls for Health and Human Services Secretary Marylou Sudders, in consultation with the HPC, CHIA and the Division of Insurance, to make recommendations by Sept. 1, 2021 on establishing out-of-network billing rates.

This year’s state budget, signed into law on Dec. 11, gives the commission until June 15, 2021 to analyze and make recommendations around potential entry into a multi-state nurse licensure compact, which so far includes 34 states but not Massachusetts.

“I think it’s a testament to the work of the HPC that the Legislature keeps asking the HPC to do more and more,” commissioner Tim Foley said. He asked if the agency’s budget had also been increased.

“This is a lot of work, there is no doubt about it,” HPC Executive Director David Seltz replied. “This is an ambitious agenda on top of a health care system that is still very much struggling, a workforce that has been extremely taxed as you know, and our role is increasing.”

Seltz said the HPC budget was “approved at the amount we had requested” in January 2020, a level that does not reflect demands of the COVID-19 crisis and new mandates.

The fiscal 2021 budget allocates about $10 million for the HPC, up from roughly $9.8 million in the previous year’s budget.

“We’re going to have to make this work with what we have,” Seltz said, adding that the agency is “well poised” for the new studies because of its previous research.

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