Gerard Scimeca – Chairman, CASE
April 16, 2020

In news that should surprise absolutely nobody, America’s healthcare professionals have answered the challenge of the current pandemic with extraordinary dedication and grace. Doctors, nurses, technicians, and countless other support staff are serving as our frontline defense in this all-out war, putting their own health and safety at risk through grueling hours of work and sacrifice away from home.

As our medical industry is stretched to the limit, it is entirely proper that Washington responded by meeting all of our healthcare providers’ funding needs in the massive Covid relief package (CARES Act) passed last month. This aid package includes a pool of over $100 billion to ensure hospitals and other providers have the resources they need to meet the growing number of affected patients. The bill also offers hefty increases in Medicare and Medicaid reimbursements. Providers are not only working overtime to treat the disease and stem its spread, they are paying a literal price by foregoing elective procedures and less critical care that fund a substantial percentage of their operating costs.

Federal aid isn’t the only assistance hospitals are receiving; they are also getting a welcome boost from insurance providers, who are making numerous accommodations to help them weather the storm. In parts voluntary and by mandate, insurers are waiving co-pays, deductibles and coinsurance, while expanding coverage of benefits and services, and extending grace periods.

And like hospitals and other care providers, insurers are prioritizing Covid patients, by expanding the use of telemedicine for doctor-patient appointments, eliminating patient cost sharing for testing and setting aside prior authorization requirements to speed treatments. In some instances, insurers are working with hospitals to pre-pay reimbursements in advance of services. These substantial steps not only offer needed relief to care providers, but are playing a pivotal role in America’s fight to beat this disease.

Unfortunately some hospitals and other providers are now lobbying on the federal and state level for mandates that would force insurers to pay reimbursements in advance for services, regardless of whether the provider has demonstrated actual need. This is an entirely unnecessary and ill-conceived idea that would only serve to push insurers to a breaking point, leading to utter disaster for consumers and patients across the spectrum.

Let’s not forget, though it is entirely deserved, hospitals and other like providers received all of their funding requests in the CARES Act. Insurers, meanwhile, received no federal relief. But while far less publicized, the economic downturn, layoffs and furloughs are hitting insurers just as hard as many others in our economy. With higher costs to treat the pandemic and millions of workers dropping coverage, insurers of all sizes are being squeezed as their revenue shrinks. The numbers simply don’t add up that insurers can dole out reimbursements on an expedited schedule for services and procedures that may not even be performed.

The current instances where insurers are voluntarily granting accelerated payments are working because it is targeted to hospitals and providers with a high percentage of Medicare and Medicaid patients who disproportionately strain medical resources. Insurers have made significant sacrifices as many have, with a focus directed at fighting the pandemic. This is no time to pile more mandates on them unrelated to that mission.

And as with any mandate, consumers would inevitably bear the burden, through higher costs and reduced services, either in their immediate future or after the crisis has been abated. When employers look to reinstate coverage to rehired workers, they will likely be aghast at the increased costs caused by this pre-payment mandate, just as consumers will be when they see the added costs with which they’ll be burdened.

Insurers are further mandated to keep a substantial amount of cash in reserves to meet risk requirements for the protection of their insured. Many small or independent insurers who have never dealt with the significant outlays of an accelerated payment arrangement would be at risk of becoming insolvent. The projected costs of care and treatment for Covid-19 now stand at a whopping $556 billion, a figure that surpasses the capital and surpluses of the entire commercial insurance industry. Demanding even more resources under current conditions jeopardizes our entire system of healthcare delivery with an arbitrary and astronomical price tag. It is a prescription to undermine Americans’ healthcare security and harm our efforts toward a swift victory against the pandemic.

We must certainly take every step necessary to support our healthcare providers, the doctors, nurses, specialists, technicians and hospitals carrying the torch during this dark hour. But coming together as a nation to fight Covid-19 should not mean more mandates to drain capital pools of insurers as they shoulder their fair share of the load in this battle. It’s a cost-killer, an unnecessary obstacle on the road to wellness, and destabilizes the delivery of healthcare when we can least afford it.