This month, the CHIR team celebrated the end of the school year with new health policy research. For the latest installment of our monthly research roundup, we reviewed studies on access to providers in Medicaid managed care networks, how the Employee Retirement Income Security Act (ERISA) affects state cost containment reforms, and the health coverage implications of the Biden administration’s recent changes to the public charge rule for immigrant communities.

Avital B. Ludomirsky, William L. Schpero, Jacob Wallace, Anthony Lollo, Susannah Bernheim, Joseph S. Ross, and Chima D. Ndumele, In Medicaid Managed Care Networks, Care Is Highly Concentrated Among a Small Percentage of Physicians, Health Affairs, May 2022. Researchers analyzed physician participation in Medicaid managed care plans—which cover more than 70 percent of all Medicaid beneficiaries—in Kansas, Louisiana, Michigan, and Tennessee from 2015-2017, evaluating whether plans were meeting network adequacy standards and whether beneficiaries could actually access the physicians listed in their provider network directory.

What it Finds

• Over one third of the physicians listed in the studied managed care plan provider directories treated ten or fewer Medicaid beneficiaries in a year.
• The largest share of physicians (42.9 percent) listed in the studied provider directories treated between 11-150 Medicaid beneficiaries in a year; 23.7 percent of physicians treated over 150 beneficiaries; 17.1 percent treated between 1-10 enrollees; and 16.3 percent were “ghost” providers, treating no Medicaid patients in an outpatient setting, despite being under contract to do so.
  • Researchers found state variation in the share of physicians constituting ghost providers, with the proportion of ghost physicians ranging from a low of 13.4 percent in one state to 24.9 percent in another.
  • There was also state variation across specialties: psychiatrists comprised the highest share of ghost physicians, at 35.5 percent, while only 11 percent of pediatricians were ghost physicians.
• Treatment of Medicaid beneficiaries was highly concentrated among a small number of physicians, with 25 percent of primary care physicians, cardiologists, and psychiatrists treating beneficiaries accounting for 86.2 percent, 69.2 percent, and 86.5 percent of claims, respectively.
• Although the evaluated provider directories guaranteed a certain ratio of providers to Medicaid beneficiaries in fulfillment of network adequacy standards, excluding ghost and “peripheral” physicians (who are listed in provider directories but treated 10 or fewer Medicaid beneficiaries in a year) from network adequacy calculations significantly increased the provider to beneficiary ratio; for example, the average ratio of primary care physicians to Medicaid beneficiaries changed from 1:440 to 1:654.

Why it Matters

Network adequacy standards for both Medicaid and marketplace health plans are often lacking and vary widely across states. This study suggests that provider directories—which are often used to assess network adequacy—are unreliable illustrations of provider access, indicating a need for better network adequacy oversight. The finding that treatment of Medicaid patients is concentrated among relatively few physicians also merits further evaluation as well as development of policies that encourage plans to contract with more providers that are valued by and actually treat Medicaid beneficiaries.

Elizabeth Y. McCuskey, State Cost-Control Reforms and ERISA Preemption, Commonwealth Fund, May 16, 2022. The author reviewed over 300 state bills related to health care costs passed between 2019-2021 to analyze how ERISA preemption impacts state health reforms.

What it Finds

• ERISA preemption prevents state regulation of self-funded employer health plans, reducing the impact of cost-containment reforms on the employer-sponsored insurance (ESI) market. However, after the Supreme Court held in Rutledge v. PCMA that a state law regulating pharmacy benefit managers (PBM) contracting with self-funded plans was not preempted by ERISA, states also have a variety of tools to pursue broader cost-containment efforts.
  • ERISA preempts cost-sharing caps on prescription drugs such as insulin, making these state reforms unenforceable against self-funded employer plans. But after Rutledge, reforms that seek to reduce the cost of prescription drugs by targeting manufacturers or intermediaries such as PBMs are not preempted by ERISA.
  • Provider reimbursement is another area where ERISA preempts state reforms that require insurers to reimburse certain medical services, such as telehealth. While states can regulate how much providers charge for telehealth, they cannot impose service-specific reimbursement obligations on self-funded employers, although they can regulate other provider charges, such as banning providers from charging facility fees for services delivered through telemedicine.
  • Similarly, self-funded plans are exempt from state benefit mandates.
  • Many states have enacted laws protecting consumers from surprise medical bills. The 2020 federal No Surprises Act adds protections for self-funded employer plan enrollees. After Rutledge, states can likely strengthen surprise billing protections like enforcing surprise billing requirements against third-party administrators of self-funded plans.
  • Robust demographic data collection is an important baseline practice for states pursuing reforms, particularly when it comes to identifying health equity concerns. For instance, an all-payer claims database can provide states with broad oversight and a deeper understanding of the distribution of health care costs across different communities. However, ERISA preempts states from requiring self-funded employer plans to provide this data. State efforts to require patient data reporting by providers are not preempted by ERISA.
  • Currently, ERISA should not interfere with bills that generate funding for public option health plans through payroll assessments on employers who may operate self-funded plans (although the author notes that they may be subject to legal challenges).

Why it Matters

In 2021, the Kaiser Family Foundation Employer Health Benefits Annual Survey found that 64 percent of workers with ESI—which covers a majority of non-elderly adults—are enrolled in self-funded plans. Although states have tried numerous strategies to reform and contain health care costs, from alternative payment models to price transparency, ERISA preemption remains a barrier to regulating self-funded payers. However, the Rutledge ruling empowers states to tackle costs at the provider and intermediary level, paving the way for states to enact more comprehensive prescription drug price, provider reimbursement, surprise billing, and other coverage reforms.

Drishti Pillai and Samantha Artiga, 2022 Changes to the Public Charge Inadmissibility Rule and the Implications for Health Care, KFF, May 5, 2022. In March of 2021, the Biden administration rescinded the previous administration’s public charge rule that considered health care assistance programs, such as Medicaid and marketplace subsidies, in “public charge” determinations, which can impact individuals’ ability to obtain permanent residency status or admission to the U.S. In February of 2022, the Biden administration proposed rules codifying guidance on public charge determinations that is currently in effect. This report examines implications of the proposed rule, for which public comments are currently under review.

What it Finds

• Previous research has suggested that the 2019 expansion of public charge admissibility led to decreased participation in health care assistance programs among immigrant individuals and families, especially in Hispanic communities. Increased immigration-related fears and confusion coincided with the onset of the COVID-19 pandemic and also impacted uptake of the COVID-19 vaccine by immigrant communities.
• The proposed rule seeks to combat these troubling effects on participation in public assistance programs, such as Medicaid and CHIP. Under the proposed rules, the guidance currently in effect would be codified so that use of non-cash public assistance programs like Medicaid, other than “long-term institutionalization,” such as in a nursing home, would not be considered in a public charge determination under federal regulations.
• If finalized, the proposed rule would make changes to the guidance currently in effect so that applying for a public benefit or living in the same household with someone who receives applicable public benefits would not be used for a public charge determination.
• The proposed rule also reverses the 2019 practice of “heavily weighting” certain factors—either negatively or positively—in a public charge determination. (Previously, for example, an uninsured individual with a medical condition requiring expensive treatment would be “heavily weighted” as a negative factor in a public charge determination.)
• While the proposed rule is an important step towards easing fears of accessing health coverage and services, the authors note that more community-level outreach efforts are necessary to help restore trust in immigrant communities.

Why it Matters

Large health coverage gaps persist for immigrant communities. A 2020 KFF survey found that 26 percent of lawfully present immigrants and 42 percent of undocumented immigrants were uninsured. However, 81 percent of the former group was eligible for coverage through the ACA. As the authors note, community-level outreach efforts are critical to alleviating deep-rooted fears about using public programs. Increased investment in enrollment assistance and navigator programs, especially for communities with limited English proficiency, should be a priority. Further, given undocumented individuals’ lack of access to the ACA’s marketplaces and associated financial assistance, additional policy solutions are needed to improve health care access.