Private insurance and financial assistance for dialysis patients: A provider’s perspective

The controversy over third party payers continues to heat up, and health care plans and providers are often at odds. Even though a lawsuit halted the Center for Medicare & Medicaid Services’ interim final rule, insurance companies are still allowed to deny payments from many third parties, including the American Kidney Fund, for qualified health plans provided on the federal marketplace. Most recently, BlueCross BlueShield of Tennessee implemented a policy at the beginning of the year that prohibits the American Kidney Fund from paying premiums for dialysis patients who qualify under its Health Insurance Premium Program.

Representatives from DaVita Kidney Care answered some questions about how they assist patients in choosing health care coverage, and reasons why some dialysis patients might choose private insurance over Medicare or Medicaid.

NN&I: We’ve heard reports that some insurance companies are denying 3rd party payments for Medigap? Can you provide some information on this?

DaVita: We have heard from a number of dialysis patients who have received letters from their insurers that they will no longer be able to use financial help from charities for paying their premiums. This is a disturbing trend. Despite strong profits, some insurance companies incorrectly claim that such support is distorting the system.

In reality, dialysis patients receiving charitable assistance are typically using it to continue coverage they have maintained – and paid for – for years. What’s really going on is that some insurance companies are trying to push high-cost patients out of their plans and it appears their first targets are kidney disease patients, who are some of the most vulnerable members of our communities.

Most charities are dedicated to supporting patients with a particular illness, such as HIV/AIDS, hemophilia, or kidney failure. In fact, a patient receiving charitable assistance is a signal to the insurer that he or she has an expensive disease and has fallen on hard times. Blocking this critical financial support is a direct attempt to push them out of the insurer’s plan. Unfortunately, for most patients this happens right when they need the coverage the most.

So far, most insurers engaged in this activity are only targeting patients on individual (or ACA) plans. Recently, however, we have seen the first example of an insurance company trying to use the same tactics to push patients out of their Medigap plans. This is particularly concerning, since the very same insurance companies often encourage their customers to opt into Medicare which has the effect of lowering the insurer’s costs.

Yet without Medigap insurance, which covers the out-of-pocket costs imposed by Medicare, individuals who move to Medicare likely face payments as high as $10,000 or more in a single year.

For patients who are unable to keep their commercial insurance because of their disease, that cost can be a devastating blow – both financially and emotionally as they try to also fight their disease.

NN&I: Do you think insurance companies should be allowed to deny payments from 3rd parties?

DaVita: No, certainly not in the dialysis context. One of the fundamental concepts of health insurance is that your insurance should be there when it counts and that you have a choice. Patients with a severe chronic condition, such as kidney disease, often can’t work because of their illness. Allowing insurers to deny charitable assistance for these patients means they lose their insurance as well. Why are we letting insurance companies tell people how they choose to pay for their premiums? As a society, we should not allow this to happen.

Attempts by health insurers to scare off or dump their sickest members are not new. Consumer protection provisions exist in both federal and state laws, which ban insurance companies from discriminating against patients based on their disease or medical need.

Their restrictions against financial assistance are not happenstance but targeted, and therefore by definition discriminatory. The challenge is enforcement. A number of patients’ cases have been brought to the attention of states’ Departments of Insurance and are being investigated for potential discrimination. Some patients may not know that they have these rights and are needlessly losing their much-needed coverage.

NN&I: Who counsels DaVita patients on insurance coverage options? How are the counselors trained, and by whom?

DaVita: Under the Centers for Medicare & Medicaid Services’ Conditions for Coverage, dialysis providers are required to provide extensive education and support to their patients. As part of this comprehensive support, we provide patients with information about their insurance options and financial assistance programs that may be available, including third party charities.

At DaVita, this support is provided by licensed social workers and a dedicated team of insurance counselors. Given the complex medical needs of dialysis patients and the ever-changing landscape of regulations and insurance challenges, our insurance counselors undergo rigorous training on a regular basis, including a two-month apprenticeship with our most experienced counselors.

In addition, we routinely advise patients about other sources of information available to them, such as CMS materials about the pros and cons of Medicare enrollment. We often find that family members play an important role in helping patients research their options, and we encourage their involvement. Above all, we are committed to the fundamental principle that our patients make their own decisions at all times, based on their personal needs and preferences.

NN&I: Can you provide some examples of why private insurance might be a better choice for some patients?

DaVita: Many kidney disease patients come into dialysis with a commercial plan that they have had for years. Because of their disease, they are eligible for Medicare, a unique feature of the program. While Medicare may be a gift for many, it is not right for everyone because of the co-pay requirements.

Fundamentally, patients have three options:

Some patients drop their commercial plan and switch to Medicare. Patients typically choose this option only if they can get obtain another form of secondary insurance to help with Medicare’s extra costs – either through Medigap or Medicaid. Without secondary insurance, the out-of-pocket costs associated with Medicare can easily exceed $10,000 in a single year.

Some patients stay on their commercial plan and add Medicare as secondary coverage. These patients maintain the network and benefits of their commercial plan, and Medicare helps cover their out-of-pocket costs.

Some patients choose to stay on their commercial plan, without adding Medicare. Patients typically choose this option if their commercial plan is comprehensive, with good benefits and low out-of-pocket costs.

The tradeoffs are complex, and patient decisions depend on their individual medical needs and goals as well as their financial circumstances and preferences. Across the board, however, patients cite four common reasons for wanting to retain commercial coverage:

Continuity of coverage: many patients strongly prefer keeping the coverage they already have, preserving access to family physicians, specialists, and other health care providers they have seen for years and understand their individual medical needs.

Transplantation: obtaining a kidney transplant is the most important goal for tens of thousands of dialysis patients, and those who have commercial insurance are significantly more likely to get a living kidney transplant. This is partly due to better access to the health care services needed to qualify for the transplant list, and partly due to transplant center requirements for adequate insurance coverage.

Overall costs: patients compare the total costs of commercial coverage (premiums and out-of-pocket costs) with the total cost of enrolling in Medicare, including Part B and Part D premiums, deductibles, coinsurance or Medigap premiums, additional costs for services not covered by Medicare, and additional premiums to obtain other coverage for their spouse and children.

Stability: The government is regularly changing health care policies and regulations, which creates uncertainty in the industry and subsequently for patients. Given such uncertainty, patients often want to keep their commercial coverage they have had for years for stability and certainty.

NN&I: The American Kidney Fund acknowledged that HIPP support is only for dialysis patients, and if a patient gets a kidney transplant, the support will end after one quarter. Can you walk us through how DaVita might help a patient who needs to switch from a private plan to Medicare or Medicaid because they are no longer eligible for premium assistance due to a recent or upcoming transplant?

DaVita: Many kidney disease patients stay on their commercial plan in order to maximize their chances of receiving a transplant. This enables them to address health issues that would otherwise disqualify them. Our research has shown that transplant rates among our patients with commercial insurance are ten times higher than for our patients on Medicaid.

Once the patient receives a transplant, patients can choose to enroll in Medicare up to 12 months post-transplant.

NN&I: During a J.P. Morgan-sponsored health care conference, CEO Kent Thiry said that early on, ACA organizers had asked DaVita to place posters up in dialysis clinics encouraging patients to enroll in exchange plans? Do you believe the government initially encouraged dialysis patients to enroll in exchange plans, and then changed its tune?

DaVita: The previous administration explicitly asked many health care providers, including dialysis providers like DaVita, to post ACA information in their offices and clinics as part of their education efforts on the new options for patients. Even without such a request, CMS Conditions for Coverage required all dialysis providers to educate their patients about the new ACA plans. With the change in administrations and insurance companies looking for ways to maximize their bottom lines, we will be watching closely to ensure those suffering from kidney disease do not suffer as a result of any new changes by their insurance companies.

NN&I: How do you see third-party payments fitting into the evolving American health care system?

DaVita: Charitable assistance provides a vital safety net for patients who are no longer able to work as a result of their illness and it has worked for decades. Health insurers should be explicitly required to accept such premium payments so that the most vulnerable patients can maintain their insurance when they need it most. The alternative – allowing health insurers to reject charitable assistance selectively or across the board – would let insurance companies push tens of thousands of high-cost patients out of their plans.

In turn, we believe charities should provide such assistance without any strings attached, and for long enough to guarantee recipients have continuous coverage throughout the treatment of their condition. Neither the charity, insurance companies, health care providers, or the government should be allowed to restrict the patient’s ability to choose and maintain the coverage that works best for them. Of course there also have to be guardrails to prevent abuse.

Finally, we see an urgent need for regulators to exercise their responsibility to protect consumers from discrimination by their health plan. It is clear that some insurance companies are already targeting dialysis patients and this could just be the starting point, putting patients suffering from other diseases that have high costs to treat in the insurance companies’ crosshairs. When bad actor insurers get away with this behavior, they hurt not only the patients they are pushing out, but it also penalizes the insurers that follow the rules and creates a distorted marketplace.