Law Commons^™

Reform At Risk — Mandating Participation In Alternative Payment Plans, Scott Levy, Nicholas Bagley, Rahul Rajkumar

Articles

In an ambitious effort to slow the growth of health care costs, the Affordable Care Act created the Center for Medicare and Medicaid Innovation (CMMI) and armed it with broad authority to test new approaches to reimbursement for health care (payment models) and delivery-system reforms. CMMI was meant to be the government’s innovation laboratory for health care: an entity with the independence to break with past practices and the power to experiment with bold new approaches. Over the past year, however, the Department of Health and Human Services (HHS) has quietly hobbled CMMI, imperiling its ability to generate meaningful data …

Small Change, Big Consequences — Partial Medicaid Expansions Under The Aca, Adrianna Mcintyre, Allan M. Joseph, Nicholas Bagley

Articles

Though congressional efforts to repeal and replace the Affordable Care Act (ACA) seem to have stalled, the Trump administration retains broad executive authority to reshape the health care landscape. Perhaps the most consequential choices that the administration will make pertain to Medicaid, which today covers more than 1 in 5 Americans. Much has been made of proposals to introduce work requirements or cost sharing to the program. But another decision of arguably greater long-term significance has been overlooked: whether to allow “partial expansions” pursuant to a state Medicaid waiver. Arkansas has already submitted a waiver request for a partial expansion, …

Encouraging Insurers To Regulate: The Role (If Any) For Tort Law, Kyle D. Logue

Articles

Insurance companies are financially responsible for a substantial portion of the losses associated with risky activities in the economy. The more insurers can lower the risks posed by their insureds, the more competitively they can price their policies, and the more customers they can attract. Thus, competition forces insurers to be private regulators of risk. To that end, insurers deploy a range of techniques to encourage their insureds to reduce the risks of their insured activities, from charging experience-rated premiums to discounting premium rates for insureds who make specific behavioral changes designed to reduce risk. Somewhat paradoxically, however, tort law …

The Unintended Effects Of Government-Subsidized Weather Insurance, Omri Ben-Shahar, Kyle D. Logue

Articles

Catastrophes from severe weather are perhaps the costliest accidents humanity faces. While we are still a long way from technologies that would abate the destructive force of storms, there is much we can do to reduce their effect. True, we cannot regulate the weather, but through smart governance and correct incentives we can influence human exposure to the risk of bad weather. We may not be able to control wind or storm surge, but we can prompt people to build sturdier homes with stronger roofs far from floodplains. We call these catastrophes "natural disasters," but they are the result of …

How Insurance Substitutes For Regulation, Omri Ben-Shahar, Kyle D. Logue

Articles

Legal regulation of behavior requires information. Acquiring information about the regulated party's conduct, setting benchmarks by which that conduct is measured, and establishing the correct scale of payoffs for violating or following regulation are costly and require expertise and motivation. Thus, economic theories of rulemaking are often based on the relative information advantages that different regulatory bodies have and how that information can be harnessed to enhance incentives and thereby improve welfare. Government regulators, on average, do not have informational advantages. They are not paid for performance and thus may lack adequate incentives. They are not disciplined by market forces …

Outsourcing Regulation: How Insurance Reduces Moral Hazard, Omri Ben-Shahar, Kyle D. Logue

Michigan Law Review

This Article explores the potential value of insurance as a substitute for government regulation of safety. Successful regulation of behavior requires information in setting standards, licensing conduct, verifying outcomes, and assessing remedies. In various areas, the private insurance sector has technological advantages in collecting and administering the information relevant to setting standards and could outperform the government in creating incentives for optimal behavior. We explore several areas that are regulated more by private insurance than by government. In those areas, the role of the law diminishes to the administration of simple rules of absolute liability or no liability, and affected …

The Virtues Of Medicare, Jill R. Horwitz

Reviews

Most of us look forward to a heaven where people don't get sick. But if they do, health care would be traded among fully informed patients and providers in perfectly competitive and frictionless markets. In that perfect world, sick citizens simply shop for doctors the way they shop for other consumer goods. The better doctors, like the most elegant hotel rooms and fanciest cars, would cost more than inferior doctors. Patients would consult their utility meters and, with appropriate attention to discounting over an infinite lifetime, choose accordingly. After each treatment, the patients would know the quality of their outcome …

Increasing Consumer Power In The Grievance And Appeal Process For Medicare Hmo Enrollees, Kenneth J. Pippin

University of Michigan Journal of Law Reform

Federal law requires that Health Maintenance Organizations (HMOs) and Managed Care Organizations (MCOs) provide Medicare beneficiaries with specific grievance and appeal rights for challenging adverse decisions of these organizations. The Health Care Financing Administration (HCFA) is charged with enforcing these regulations. Currently, however, HCFA contracts with HMOs, allowing them to enroll Medicare beneficiaries despite the fact that many of the statutory and regulatory requirements are ignored by the Medicare HMOs. This is problematic because the elderly Medicare population may not be able to independently and adequately challenge the HMO's denial of care or reimbursement. Because HCFA has been reluctant and …

Clearing The Way For An Effective Federal-State Partnership In Health Reform, Eleanor D. Kinney

University of Michigan Journal of Law Reform

At century's end, states have assumed a very different role in the design, implementation, and operation of health service programs than they did twenty-five years ago. In the current volatile political atmosphere particularly at the federal level, states have taken up the mantle of healthcare reform in the final years of the 1990s. Yet there remain problems and difficulties with the current federal-state relationship in health reform. The critical question is whether states can successfully accomplish genuine reform given its politically charged, complex and costly nature. This question takes on particular significance for the most important reform-expanding coverage to the …

Managed Care Regulation: Can We Learn From Others? The Chilean Experience, Timothy Stoltzfus Jost

University of Michigan Journal of Law Reform

Because the United States relies on private insurance for financing health care to a much greater degree than do other nations, and because managed care as a form of private insurance is further developed in the United States than elsewhere, it is arguable that we have little to learn from other nations about managed care regulation. This Article tests this hypothesis with respect to Chile, a country where private insurance is widespread and managed care is emerging. It concludes that by studying the experience of other nations we might gain a larger perspective on the context of our concerns in …

Democratizing Hmo Regulation To Enforce The "Rule Of Rescue", Kent G. Rutter

University of Michigan Journal of Law Reform

Despite heightened public concern about HMOs, misguided regulatory measures have not guaranteed HMO patients access to the treatment options many consider vital. This Note recommends four changes to the current regulatory system that would preserve HMOs' ability to control health care costs while allowing patients and doctors, rather than lawmakers or HMO administrators, to set health care priorities.

Regulating Viatical Settlements: Is The Invisible Hand Picking The Pockets Of The Terminally Ill?, Russell J. Herron

University of Michigan Journal of Law Reform

The newly emerging viatical settlement industry has attracted considerable attention from both insurance regulators and advocates for the terminally ill. In a viatical settlement, a terminally ill person names a viatical settlement company as beneficiary under his life insurance policy in exchange for an immediate lump-sum cash payment of less than face value of the policy. To date, viatical settlement payments to people with AIDS (PWAs) have been disturbingly low as a percentage of the face value of PWA policies. This Note examines the few enacted viatical settlement regulations and the National Association of Insurance Commissioners' model regulations as they …

Regulation Through The Looking Glass: Hospitals, Blue Cross, And Certificate-Of-Need, Sallyanne Payton, Rhoda M. Powsner

Michigan Law Review

A clear focus on the commitment of the public health and hospital establishments to the large teaching hospital and their belief in rationalizing the health care system through community-based planning allows us to understand the ideas and institutions that have produced our present system of hospital regulation. It can also help us to understand the structure and behavior of the hospital industry and can illuminate current controversies over health care policy.

What follows is a narrative account of the development of regional planning and certificate-of-need legislation. As part of that story, we trace the evolution of the Blue Cross, explain …

The Expanding Jurisdiction Of The Securities And Exchange Commission: Variable Annuities And Bank Collective Investment Funds, John W. Erickson

Michigan Law Review

The Securities and Exchange Commission is presently attempting to assert jurisdiction over certain aspects of two industries traditionally exempt from federal securities regulation-insurance and banking. The SEC claims that two recently developed investment vehicles-variable annuities in the insurance field and pooled funds of managing agency accounts in the banking field-are virtually the same as mutual funds, which are subject to SEC regulation under the Investment Company Act of 1940. (A mutual fund is essentially a fund (usually in corporate form), the participants' contributions to which are collectively invested in a portfolio of securities, each participation representing a pro rata interest …

Insurance - Federal Regulation - Authority Of Federal Trade Commission To Regulate False Advertising By Insurance Companies As Affected By The Mccarran-Ferguson Act, Charles C. Moore S.Ed.

Michigan Law Review

Petitioner, the FTC, issued cease and desist orders prohibiting respondent health and accident insurance companies, doing business in interstate commerce, from disseminating allegedly false and deceptive advertising through the medium of local agents. These orders, issued pursuant to the FTC act, sought to proscribe such activity both in states that had statutes prohibiting unfair and deceptive practices and in states that did not. The Courts of Appeals for the Fifth and Sixth Circuits concluded that the FTC had no authority to regulate such advertising in states which had prohibitory legislation. On certiorari to the United States Supreme Court, held, …

Insurance - Supervision By The State - What Constitutes The Insurance Business, Thomas E. Wilson

Michigan Law Review

Plaintiff, a corporation, advertised that any person who bought goods from certain selected stores would be entitled to receive coupons, and when his coupons amounted to a certain sum he would be entitled to certain death and security benefits up to specified amounts. Plaintiff brought suit against the Insurance Commissioner of Pennsylvania to enjoin him from interfering with the plaintiff's business. Held, that the plaintiff was carrying on an insurance business and was subject to supervision by the Insurance Commissioner. Hunt v. Public Mutual Benefit Foundation, (C. C. A. 3d, 1938) 94 F. (2d) 749, certiorari denied (U. …