“A 26-28% increase in insurance premiums which is a very significant increase for working families. That is about $1,000 per individual and in between 3,000 and 4,000 per family annually just for this (GMH rates) increase,” Jeff Larsen of Take Care Insurance said during a public for GMHA rates increase, October 22.
Senator Dennis Rodriguez, Jr. called for a public hearing to discuss the island’s lone government civilian hospital proposed rates increase that is from a low of 12% to as high as 2,449%. The increase is well above the 5% yearly increase that GMHA is allowed for under the law, thus the need for legislature action.
During the public hearing, GMHA’s CFO Benita Manglona states that the hospital already had an across the board 5% increase in fees last April. This had a “very nominal impact based on the utilization that is about $3 million up to August,” she said. Aside from the April raise, the last time the hospital had an increase in rates was way back 2010, she added.
For his part, Jeff Larsen states that “The rate increases that are being proposed are significant, and in our analysis it shows a more substantial increase. Healthcare trends generally are increasing between 5 and 7%. So an annual increase of 5% is pretty much in line with what most hospitals and healthcare providers suggest annually. That is also mostly in line with what health insurers provide us in terms of their healthcare trends as well.
“GMHA frequently adds new services to their charge master and when they add those new services those are at current market rates. As they add new fees they are keeping pace with market rates.
“There are some fees that are increasing by a staggering 500% to 2,500%, and clearly, something more should be done about either the increases all at once or having those ginormous increases’ impact rates for insurance customers which will primarily be the impact, because the 3Ms (Medicare, Medicaid, and MIP) pay a set amount, so the rates are going to impact the private commercial insurance companies.
“Of the fees that are increasing, a substantial number of those fees are provided by a third party. Radiology and nuclear medicine are not provided directly by the hospital. Nuclear medicine is provided by Guam Medical Imaging Consultants.”
“Effectually, those people that can’t pay those premiums will become Medicaid payers and those are the people that, quite frankly aren’t paying the bills now.” Larsen added.
Take Care has 35,000 members in over 300 businesses on Guam.
Anthony Mendiola of Stay Well Insurance on the other hand GMHA should be “creative in coming up with rates, packages, or arrangements so that the impact of the price would be controlled or mitigated. What this increase will do, will raise the out-of-pocket as well.”
Mendiola said they are “not opposed to increases, we are just proposing something gradual so that the impact will not be as much.”
Improved collection versus increased rates
The senators present during the hearing did not take the proposed rates increase sitting down. Vice Speaker BJ Cruz grilled Manglona on improved collection vis-à-vis increased rates which would redound to wider billing and collection ratio.
Manglona said that for last year, the hospital has a total billing of $160 million and was able to collect $80 million (part of that is receivables from the past).
So, “you’re collecting 50% of what you’re billing,” Cruz said, to which Manglona retorted “We are working on trying to beef up on our collection.” We are working on an RFP (request for proposals) for a call center so there will be people dedicated just calling for patients to pay their bills,” she added.
Cruz went on to ask of the hospital has any certified billers, to which Manglona answered, “We are working on that. It does not happen overnight.” She said there are people training for it, but they haven’t passed the test yet. She added they tried getting certified billers from the states but it did not work the way they expected it to, and the hospital staff had to redo the billing themselves.
Cruz is concerned that not all employees have health insurance.
“I don’t want the end of my career to be book ended by having to buy a hospital because you completely priced yourself out, and the other hospital, both of you trying to outdo each other in charging and having the insurance companies decide it’s cheaper to just send all of us on a plane to either Los Angeles or to Manila.
“If you’re collecting 100% of your billable and you’re still short, then I would say yes, we will increase the rates. But if you’re not collecting it, what’s the point?” Cruz said.
Senator Mike San Nicolas echoes Cruz’s ideas saying to the hospital representatives to “work on billings and collection to at least up to 80% versus the 50% before we begin something like this. This is the way too high, I think it’s in the wrong area.”
Effect on cancer patients
San Nicolas further laments that the rates increase affects mostly the services for cancer patients. Not being able to hold back his exasperation, he said he lost his grandmother from cancer. “It is the megacatastrophic treatments that drive up the cost of everybody else’s premiums. So yes, insurance rates will go up. And if you have cancer and if you don’t have insurance, you’re going to have to pick between getting your biopsy or paying your mortgage. We are looking more on the bottom line versus on the patient. Whole domino effect on the community,” San Nicolas said.
Who bears the brunt?
As it is, the self-paying patients bear the brunt. They have no means to negotiate for the fees and just have to take it. The privately insured patients will also have to pay higher premiums and will have to pay higher out-of-pockets. It will not have an effect however on Medicaid, Medicare, and MIP patients, nor does it affect these 3M’s.
Rodriguez’s committee has 45 days to work on the bill, otherwise, it will lapse into law. Concerned lawmakers said that this bill should at least go into voting./The Junction News team
