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Medicare delays full crackdown on private health insurance plans

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The Biden administration on Friday finalized new rules designed to cut widespread overbilling by private Medicare Advantage plans, but softened the approach after intense lobbying from the industry.

Regulators are still working on rules that will cut billions of dollars a year from insurers. But they will make changes in phases over three years rather than all at once, and that will lessen the immediate impact.

In the short term, private health plans will still be able to receive payments that Medicare officials don’t see fit. The system will eventually eliminate the extra funds that insurers receive to cover patients diagnosed with fewer than 2,000, including 75 that appear to be the subject of widespread manipulation.

But the extended schedule could also alleviate concerns raised by health plans, doctors and others that a broad policy change could lead to unforeseen consequences, such as increased premiums or reduced benefits for Medicare Advantage recipients.

In the two months after the proposal went public, insurers and their allies launched a costly, high-profile lobbying campaign using television commercials to pressure lawmakers on Capitol Hill and recruit thousands of people to comment against it.

A senior Medicare official in the country acknowledged on Friday that industry outrage had influenced the shape of the new rules.

“We’ve been very comfortable with our policies, but we always want to hear what stakeholders have to say,” said Chiquita Brooks-Lasur, administrator for the Centers for Medicare and Medicaid Services. She said the desire for a slower policy change was “what we really heard from our comments and we wanted to respond.”

The new payment formula is a reaction to a growing body of evidence that for more than a decade, private insurance companies have been using the formula to collect overpayments from the federal government. The plans are eligible for additional payments for patients who may be more expensive to treat, prompting many to go to great lengths to diagnose as many diseases in their clients as possible. Insurers collect tens of billions of dollars of additional payments per year, according to various estimates.

Nearly every major insurance company participating in the program has settled or faced a federal fraud lawsuit for this behavior. Evidence of overpayment is documented. academic research, government guard dog reports and plan audits.

Despite excesses and fears that Medicare Advantage too often denies needed care, about half of all Medicare beneficiaries are now enrolled in private plans that receive more than $400 billion a year in government spending. It remains popular with consumers, who often receive lower premiums and benefits such as vision and dental services not available in the state’s basic Medicare plan.

The program has also become profitable for major insurance companies. recently research from the Kaiser Family Foundation found that insurers make about twice as much gross margin with Medicare plans as they do with their other lines of business. Humana recently announced that it will stop offering commercial insurance to focus on Medicare, which serves older Americans and the disabled, and Medicaid, which primarily serves the low-income population.

The new rule will eventually eliminate additional payments for many diagnoses that were commonly reported by Medicare Advantage plans but that Medicare did not report as high-volume health care. These diagnostic codes included some of those specifically targeted by private plans, such as “complicated” diabetes and a form of severe malnutrition commonly seen in countries experiencing famine.

Under a three-year phased implementation, insurers will receive payouts based on one-third of the new formula in the first year and two-thirds in the old one. Overall, Medicare estimates that Medicare Advantage plans will pay 3.32 percent more next year than this year. Under the initial limits proposed by the administration, that increase would have been about 1 percent. Previous changes to the payment model also took three years.

Opponents of the policy argued that the change could reduce the benefits to the plan’s clients and could have a disproportionate impact on the poor and minorities. Slower deployment did not soften them.

“While we appreciate that CMS has moved to a phased approach, the underlying policy has not fundamentally changed,” the post reads. Mary Beth Donahue, president of the Better Medicare Alliance, an industry group that spent eight figures on anti-policy television ads. We remain concerned about the unintended consequences of this risk adjustment policy for older people.”

But the Alliance of Community Health Plans, a group that represents non-profit insurers, said in a statement that it welcomes the new approach: “We support changes to the risk adjustment model to focus on delivering results for consumers and removing key incentives for aggressive documentation. ”

Insurers have often challenged the agency’s Medicare actions in court, but it’s not clear if any insurers will challenge this policy.

Some proponents and experts say the new formula is too timid. The Medicare Payments Advisory Commission (MedPAC), which recommends the policy to Congress, wrote in commentary letter that the proposed changes, while “correct in direction, are not sufficient to address the problem of excess Medicare spending.”

Mark Miller, former chief executive of MedPAC, urged Medicare to go even further than its original proposal. He is now an executive vice president of Arnold Ventures, a political and advocacy organization closely associated with the group that funded TV advertising protecting change. He described the final approach as disappointing. “They are basically bowing to the plans,” he said in an email.

In February, weeks after the proposal was made, top health officials in the Biden administration came out strongly in defense of the change. In series tweetHealth and Human Services Minister Xavier Becerra described criticism of the policy as “disinformation spread by highly paid industry hackers and their allies.” In an interview with The New York Times, D. Mina Seshamani, a senior Medicare official, said she intends to “hold the industry accountable for cheating the system.”

Ms. Brooks-Lasour’s comments on Friday were more measured, highlighting the “stakeholder” perspective on Medicare. She said she doesn’t feel like Medicare is giving in to industry pressure.

The pay change is one of a number of hardline program rules recently proposed or completed by the administration. Another proposal provides for tighter controls on industry marketing and makes it harder to plan to deny medical care to patients. And the rule, finally approved in January, requires plans to reimburse the government for a larger share of the overpayments found in audits.

While the Medicare Advantage program has long enjoyed strong bipartisan support on Capitol Hill, few leading lawmakers have come forward in this round to defend the plans despite all the lobbying. Republicans on the committees that oversee the programs wrote letters to Medicare officials asking technical questions about the change, but avoided harshly criticizing the policy. On Tuesday, 17 Democrats in the House of Representatives sent a letter to Medicare representatives asking them to delay implementation but not cancel it.

Bill Cassidy of Louisiana, a physician who is the top Republican on the Senate Committee on Health, Education, Labor and Pensions, and Senator Jeff Merkley, a Democrat of Oregon, introduced legislation on Tuesday, it will take further steps to prevent “unreasonable payments, coding or diagnoses.”

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Amazon spent $14 million on anti-union consultants in 2022

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Amazon spent over $14.2 million last year to outside consultants whose job it was to convince workers not to unionize, according to new disclosures filed on Friday with the Department of Labor.

The unusually high spending on anti-union consultants shows just how determined the online trading giant is to prevent collective bargaining among its employees. The company remained union-free in the US until last year, when upstart Amazon Labor Union (ALU) successfully set up a warehouse in Staten Island, New York.

Amazon has more than 100 warehouses in the US and has been able to keep unions at bay since the ALU. upset victory last April. However, workers rejected union proposals at two other warehouses in New York following a vote in Staten Island.

Labor consultants were a key element in the company’s counter-campaign, speaking out on anti-union topics at so-called “closed meetings” with workers. According to the documents, the company pays firms about $3,000 a day, plus expenses for each consultant.

“Amazon managed to stay union-free in the US until last year, when upstart Amazon Labor Union set up a warehouse in Staten Island.”

Employers and their consultants are required to disclose their agreements with the Department of Labor so that workers understand who the company has hired and how much it has paid to lobby for their unionization. The deadline for employers to inform the government of their 2022 spending was on Friday.

It is relatively rare for companies to report labor consultant spending in excess of $1 million in a single year, let alone $14 million. However, according to Amazon’s latest annual report, it has around 1.5 million employees worldwide and generated $514 billion in sales last year. The company has faced union action in Alabama, New York, California and elsewhere in the United States.

Amazon spent $4.3 million on anti-union consultants in 2021, according to HuffPost.

Workers at Amazon’s West Coast Airline Center in San Bernardino, Calif., protest in front of the building October 14, 2022 over claims of unsafe working conditions and low wages.

FREDERIC J. BROWN via Getty Images

Connor Spence, a Staten Island Amazon worker and ALU organizer, told HuffPost last year that he and other workers investigated anti-union consultants in his warehouse to expose them and their fees to other workers. They also openly contested counselors in meetings to undermine their message.

“Their job is to operate in the shadows,” Spence said at the time. “When you expose them for who they are, it becomes very difficult for them to do their job.”

ALU is still trying to secure the first contract with Amazon for workers at the Staten Island plant, known as JFK8. In addition, Amazon disputed the election results, in which the union received 2,654 votes to 2,131, accusing the organizers and the National Labor Relations Board of illegally distorting the vote.

Amazon’s challenge ultimately failed, and the union was formalized in January. But the company is still wasted time and avoiding negotiations with the union for nearly nine months.

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The rise of app-exclusive gym memberships

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Remember when impatient fitness enthusiasts had to wait months for their peloton to arrive? Or when cycling enthusiasts were outraged when SoulCycle sessions filled in 42 seconds? Those were the good old days.

Today, those who crave lavish workouts can do anything but get on their knees and beg to be admitted to app-only gyms. Over the past four years, about a dozen fitness centers (although some owners may prefer to call them “health centers” or “social health clubs”) have opened across the country, requiring letters of recommendation, wordy applications, job interviews and deep diving. through social media to decide if you are fit to be fit.

In June, Corey Zigman decided she wanted to join Hometown, a fitness club that opened in Los Angeles that same month. So the 44-year-old property developer went on a tour and filled out an application that included questions about who she knew at Heimat and what her social media accounts were. Then she began to wait. And waited. And waited.

It was almost a month before Ms. Zigman received an acceptance letter, but some of her friends did not apply either.

“It was awkward,” she said. “Everyone seemed to want memberships, but they just didn’t give them out.”

Ms. Zigman paid more than $350 a month for cycling and Pilates classes, a co-working space, a pool, astrology workshops, a nap room, a salt sauna, and more. Her friends are still waiting to know their fate.

Sebastian Chope, President and CEO of RSG Group North America, who owns Heimat, said he’s been very clear about the people he wants – and doesn’t want – to visit at his fitness center.

“For those who look to the gym as a selfie opportunity, a place solely dedicated to performance-oriented workouts or a workout that needs to be done, you can probably find a more affordable gym that can provide it all.” — Mr Chope. said. “We don’t seek to attract people who keep to themselves and don’t see the point in associating with like-minded people.”

Instead, he says, Heimat welcomes “people who cultivate this spirit of mindfulness with their peers.” These people are usually between the ages of 30 and 30, as evidenced by the main component of the Heimat.

Potential members in healing placeThe “social health club,” which opened in West Hollywood in 2019 and New York’s Flatiron neighborhood in 2022, must go through an application process and an interview.

Memberships range from $595 to $2,750 per month and offer everything from cryotherapy, intravenous drips, a hyperbaric oxygen chamber, a lymphatic compression suit, meditation sessions, sound baths, and more.

“We are looking for people who represent the brand well, and they should inspire others to take care of themselves,” the doctor said. Jonathan Leary, founder and CEO, who also described the average participant as a young professional in their 30s. Remedy has limited membership to 200 in Los Angeles and 300 in New York, but Dr. Leary declined to say what percentage of people who applied were accepted or the number of people who are currently on the waiting list.

However, he tried to describe what makes an ideal Remedy member: someone, in his words, “who will shine brightly and help teach people about the changes that need to happen.”

According to John Atwood, managing partner at Atwood Consulting in Boston, which specializes in health clubs, the “who” for most of these gyms tend to be “cool” people.

“If you make widgets in Akron, Ohio, you may not be interested in them even if you have an apartment in New York,” Mr. Atwood said, comparing the selection process to how exclusive club bouncers select people to enter. to their institutions. “They’re looking for cool people.”

However, “cool” has a slightly different interpretation depending on the gym.

IN Ghost, which opened in Williamsburg in 2019, members are accepted as long as they are “idea leaders, creatives, founders, or executives,” said Akib Mamun, the gym’s chief executive and founder, though he added that its “wellness line” is not exclusive to any profession. Membership, which costs up to $300 per month, is limited and requires an application, an in-person interview, and an internal verification process.

and in Pilates formatstudios with offices in the Upper East Side, Soho and Los Angeles, where membership is by referral only, the goal is to create a “close-knit community of like-minded people including, but not limited to, entrepreneurs, executives, athletes, celebrities, mothers before and postpartum and more,” said Liana Levy, owner and founder.

Mr. Atwood, a consultant, said the concept of exclusive gyms came about after the evolution of discount gyms versus boutique clubs. Inexpensive gyms like Planet Fitness and XSport Fitness, which charge around $49 for a monthly membership, are highly profitable business models because they fill gyms with as many people as possible. Then there were boutique fitness centers like Barry’s Boot Camp (about $40 a session) or Orange Theory (about $150 a month) that paved the way for exclusive upscale clubs.

Another example is the Monarch Athletic Club located in West Hollywood. To join, an applicant must pass a medical clearance as well as a physical therapy and exercise assessment – all done at home – that a doctor. Ryan Greene, Managing Partner of Monarch and Chief Medical Officer specializing in osteopathic medicine, describes it as “multiple levels of milestones.”

Once an applicant passes these “checkpoints”, they may be asked to pay a membership fee ranging from $595 to $2,000 per month. At the highest level, members receive unlimited personal training and physical therapy, intravenous therapy, access to their doctors, ice baths, group fitness classes, and saunas.

Dr. Green said that while health is a universal right, he decided to make Monarch, which opened in January 2020, an exclusive club because he wanted its members to be active. Some people, he says, find that because they pay more, they can just show up and assume their sessions will be booked for them with white-glove service. He said they were not the type of people he needed. Instead, Monarch is looking for a community of like-minded people motivated to get well. And sign up for your own sessions.

However, some have tried the exclusivity model only to find that inclusivity draws a large crowd. Nessfitness center with trampolines and cardio equipment on the outskirts of Tribeca and Chinatown in New York, opened in 2019 by recommendation only.

“If you were having a dinner party, you wouldn’t put your address on a flyer and post it all over town as an open invitation,” said founder Colette Dong. “You would curate a group of friends who you think get along well with each other.”

But two years later, according to Ms. Dong, she opened some of her classrooms to public bookings.

This spring, as Ness plans to open its second physical location in Bridgehampton, New York, Ms. Dong said she’s going to try again, but by invitation only.

“It creates a better community and environment, which is really important when you’re first exercising, getting back into your routine, or trying to stick to a goal,” Ms Dong said. “You just don’t want to do it in front of a bunch of strangers.”

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