Will Your Medical Billing Payer Mix Change in 2022?

Have you noticed changes in your medical billing payer mix? Covid dislocations affected most practices in 2020. But since then, the impacts have been modest on a nationwide basis. However, some practices and hospitals have seen more dramatic impacts. 

To see what changes are likely in 2022, let’s start with a picture of where Americans are getting their health insurance in 2021.

medical billing payer mix
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Several factors drove this distribution. 

  • In 2020, the loss of employer coverage as employees were laid off, estimated at two to three million.
  • Offset by (larger) increases in Medicaid and ACA exchange enrollment
  • In 2021, ACA and Medicaid enrollment has continued to grow

2022 At a Glance

  • Commercial insurers are aggressively pushing Medicare Advantage plans and expect to take an ever-larger share of Medicare patients, despite concerns about the cost to the federal government.
  • The subsidies driving up Medicaid and ACA enrollment will continue, at least through 2022.
  • ACA exchanges have significantly more plan choices, a longer enrollment period and more assistance available.
  • A large number of uninsured are eligible for Medicaid or Exchange plans.
  • Commercial insurers are pushing telehealth options for 2022
  • The effects of the labor shortage may start to show up with more employees having coverage and/or better coverage

How each of these dynamics affects your medical billing payer mix in 2022 depends on your local conditions (more or fewer uninsured, Medicaid expansion state or not, etc.). Understanding the health insurance dynamics can help your practice get ready for 2022.

Employer provided health plans in 2022

Trends in employer provided insurance are expected to continue in 2022: somewhat higher employee premiums, cost-sharing and deductibles. As KFF explains in its recent report,

  • On average, covered workers contribute 17% of the premium for single coverage and 28% of the premium for family coverage. Covered workers in small firms on average contribute a higher percentage of the premium for family coverage than covered workers in large firms (24% vs. 37%). Covered workers in firms with a relatively large share of lower-wage workers have higher average contribution rates for family coverage than those in firms with a smaller share of lower-wage workers (35% vs. 27%).
  • Deductibles have increased in recent years due to both higher deductibles within plan types and higher enrollment in HDHP/SOs.

Family premiums for employer-sponsored health insurance rose 4% to average $22,221 in 2021, according to the 2021 benchmark KFF Employer Health Benefits Survey. On average, workers are contributing $5,969 toward the cost of family coverage, with employers paying the rest. The annual change in premiums roughly matches the year-to-year rise in workers’ wages (5%) and inflation (1.9%), though what workers and employers pay toward premiums over time has risen more quickly. Since 2011, average family premiums have increased 47%, more than wages (31%) or inflation (19%).

Fifty-eight percent of small firms and 99% of large firms offer health benefits to at least some of their workers, with an overall offer rate of 59%. 

The pandemic has introduced new factors that may eventually have impacts. As KFF says in the introduction to its new report on Employer Provided insurance,

  • “Whether and how employers structure benefits to support a potentially more far-flung workforce will be an important topic for the next few years. Similarly, it remains to be seen whether telemedicine will continue to grow as a source of access to care, or fade back to a more specialized option that is primarily available in difficult situations and hard to reach locations.”

Some insurers are aggressively expanding their telehealth options.

  • Starting in January, Cigna employer plans will have access to MDLive’s network for virtual primary care providers for routine care, sick visits, prescription refills or any needed follow-up care after a wellness visit.
  • Cigna is also launching virtual-first health plans to select employers in 2022. The plans, which will initially be available to large, self-insured employers, include a $0 co-pay for access to MDLive primary care providers, chronic condition management and care navigation.
  • UnitedHealth plans to roll out a virtual-first primary care product by the end of this year, combining its Optum physician network with payer UnitedHealthcare’s network offerings. 

A “wildcard” factor that will affect companies and your medical billing payer mix in 2022 is the labor shortage, which has led to enhanced benefits for both retention and recruiting purposes.  In the longer run, more employers are expected to offer healthcare and to a broader population. In the shorter term, i.e. 2022 employer plans are likely to be similar to 2021, but with more participants, especially in communities where the labor shortage is most acute.

Medicaid in 2022

CMS data shows that Medicaid enrollment grew by more than 11 million people — a 16% increase — from February 2020 to April 2021, supported in part by more flexible regulations during the pandemic. That momentum appears to have continued partly due to a more substantial special enrollment period in the spring and summer of this year. 

As a result, the number of uninsured American’s has been stable to decreasing during 2021. That is good news for hospitals and practices that serve these populations, especially those in rural areas. On the other hand, it is worth noting that the uninsured rate is almost double the national rate in those states that have not expanded Medicaid.  

As part of the Families First Coronavirus Response Act passed in March, states are receiving a 6.2% increase in the federal Medicaid match rate. In exchange, states are not allowed to disenroll any beneficiaries from Medicaid during the Public Health Emergency (PHE). 

So a key factor for Medicaid in 2022 will be when the PHE (currently due to expire on January 16) is allowed to expire.

ACA Healthcare Exchanges in 2022

ACA enrollment has also continued its momentum in 2021, with HHS reporting that 2.1 million people signed up for ACA coverage on HealthCare.gov (used in 35 states), during the special enrollment period from Feb. 15 to Aug. 15. The 15 state-run exchanges signed up 738,000 people. Six states and the District of Columbia are continuing their special enrollment periods through the rest of 2021.

Expanded income-based subsidies in the American Rescue Plan Act have made plans much more attractive to low income individuals and families.

Since these subsidies will continue through 2022, most observers expect to see increases in ACA enrollment. Especially considering that open enrollment is extended by an additional 30 days, the administration quadrupled the number of assistants helping consumers navigate the enrollment process and relaunched a program partnering with community organizations to provide outreach and education about the marketplace.

  • “This time around, the millions of marketplace shoppers can generally expect lower premiums, more choice in health plans and more robust subsidies that will reduce costs — at least for next year, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation who studies health care reform.” (NY Times)

Many Uninsured Eligible for Medicaid or Exchange Plans

According to KFF, a majority of people who remained uninsured in 2020 are eligible for financial assistance for coverage either through Medicaid/CHIP or the Marketplace. 

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Traditional Medicare in 2022

Little change except for ongoing rate tweaks in favor of primary care at the expense of specialists. Of course, the downward revision to overall rates in the CMS Final Rule has many physicians concerned. Intense lobbying is hoped to convince Congress to reduce these impacts; see this article.  

Medicare Advantage in 2022

More than 26 million people are currently in Medicare Advantage plans, mostly HMOs and PPOs from commercial insurers paid to provide Medicare benefits to enrollees. This represents 42 percent of all Medicare enrollees. MA enrollment has doubled in the last ten years.

Per KFF, a record 3,834 Medicare Advantage plans will be available for 2022. That’s an increase of 8 percent from 2021, and the largest number of plans available in more than a decade.

  • “In 2022, a typical beneficiary will have 39 plans to choose from in their local market. But the number of Medicare Advantage plans available varies greatly across the country, with an average of 42 plans in metropolitan areas and 25 plans in non-metropolitan areas. In 2022, 25 percent of beneficiaries live in a county where they can choose among 50 Medicare Advantage plans.”

Medicare Advantage enrollment is concentrated in plans operated by UnitedHealthcare, Humana, and Blue Cross Blue Shield affiliates.

It should be noted that Medicare Advantage is not without its detractors, including claims that insurers are gaming risk adjustment practices to inflate profits. A series of recent articles in Health Affairs by former acting CMS Administrator Don Berwick and former Trinity Health CEO Richard Gilfillan sheds light on coding practices that have made the MA space extremely lucrative for insurers. But industry advocates counter that the criticisms are unfair and that patients get better care in MA plans compared to traditional Medicare. One study estimates overpayments to commercial insurers providing MA plans at over $100 million from 2010 to 2019 including $34 billion in 2018 and 2019 alone.