What you need to know about the coronavirus right now 6-12-20

(Reuters) – Here’s what you need to know about the coronavirus right now:

Second-wave fears

Governors of U.S. states that are COVID-19 hotspots pressed ahead with economic reopenings that have raised fears of a second wave of infections.

The moves by states such as Florida and Arizona came as Treasury Secretary Steven Mnuchin said the United States could not afford to let the novel coronavirus shut its economy again and global stocks tanked on worries of a pandemic resurgence.

In Europe, health experts said the risk of a second wave of COVID-19 infections big enough to require lockdowns to be reimposed is moderate to high.

India reported a record daily increase of cases and became the world’s fourth worst-hit country, raising the prospect of the return of a lockdown just days after it was lifted.

Insurers beat back virus claims

U.S. property and casualty insurers have cast the coronavirus pandemic as an unprecedented event whose cost to small businesses they are neither able nor required to cover.

The industry has warned it could cost them $255 billion to $431 billion a month if they are required, as some states are proposing, to compensate firms for income lost and expenses owed due to virus-led shutdowns, an amount it says would make insurers insolvent.

A Reuters examination of the estimate, however, suggests the possible bill may not be so onerous.

British economy battered

The UK economy shrank by a quarter in the March-April period as entire sectors were shuttered by the coronavirus lockdown.

“This is catastrophic, literally on a scale never seen before in history,” Paul Johnson, director of the Institute for Fiscal Studies think tank, said. “The real issue is what happens next.”

The Organisation for Economic Co-operation and Development says Britain – with its huge services industries that are hit hard by social distancing measures – could suffer the worst downturn among the countries it covers, with an 11.5% contraction this year.

Bottlenecks? Glass vial makers prepare for vaccine

Drugmakers are warning of a potential shortage of vials to bottle future COVID-19 vaccines, but their rush to secure supplies risks making matters worse.

Schott AG, the world’s largest maker of speciality glass for vaccine vials, says it has turned down requests to reserve output from major pharmaceutical firms because it does not want to commit resources before it is clear which vaccines will work.

“We have to keep the door open to give capacity to those who really are successful in the end. We don’t want to be portrayed in the press as the ones who were unable to package the best vaccine,” Chief Executive Frank Heinricht told Reuters.

Roping in the drones

Airspace Systems, a California startup company that makes drones that can hunt down and capture other drones, on Thursday released new software for monitoring social distancing and protective face-mask wearing from the air.

The software analyzes video streams captured by drones and can identify when people are wearing masks, standing close together or points where people gather in clusters. Airspace aims to sells the system to cities and police departments.

The company says the system does not use facial recognition and does not save images of people or pass those images to its customers. Even with those protections in place, the system is still “a step toward robots that are monitoring our behavior,” said Jay Stanley, a senior policy analyst with the American Civil Liberties Union’s Speech, Privacy and Technology Project.

(Compiled by Linda Noakes, Editing by Timothy Heritage)

U.S. watchdog finds $6.7 billion in questionable Medicare payments to insurers

By Chad Terhune

(Reuters) – A U.S. government watchdog is raising fresh concerns that health insurers are exaggerating how sick Medicare patients are, receiving billions of dollars in improper payments as a result.

Health insurers selling Medicare Advantage plans to seniors and the disabled received an estimated $6.7 billion in 2017 after adding diagnoses to patients’ files that were not supported by their medical records, according to a report released on Thursday by the U.S. Health and Human Services (HHS) Inspector General’s Office.

Inspectors found that Medicare Advantage insurers had added diagnoses for diabetes, heart disease and other conditions in 99.3% of chart reviews of patient information, even though they did not appear in records from doctors, hospitals or other medical providers. Insurers deleted incorrect diagnoses less than 1% of the time, they found.

The additional diagnoses boosted government payments to insurers by an estimated $6.9 billion, while the deleted information trimmed payouts by nearly $200 million, producing a net benefit of $6.7 billion for the companies.

“We could not see any services with the diagnosis and that raised a number of concerns,” Linda Ragone, a regional inspector general in Philadelphia and co-author of the report, said in a phone interview. “There is a vulnerability here that needs to be addressed.”

The report highlighted a group of 4,616 Medicare Advantage enrollees for whom insurers added a diagnosis that resulted in a higher payment, even though there was no record of the person receiving any medical services during the year under review.

Medicare Advantage plans are privately-run alternatives to traditional Medicare. They served 22 million people – or 1 in 3 of those eligible for the government healthcare program – at a cost of $210 billion in 2018.

The report did not identify specific insurers. UnitedHealth Group Inc <UNH.N>, Humana Inc <HUM.N> and CVS Health Corp <CVS.N> through its ownership of Aetna, are among the biggest sellers of Medicare Advantage plans. Together, the three companies have 54% of the market, according to the Kaiser Family Foundation.

America’s Health Insurance Plans (AHIP), an industry trade group, said the rate of improper payments in the Medicare Advantage program has been decreasing.

“Everyone agrees that Medicare Advantage payments must be fair and accurate, and we continue to work with (Medicare) to improve payment accuracy,” said AHIP spokeswoman Kristine Grow.

The U.S. government pays Medicare Advantage insurers based on a risk score for each enrollee. The formula pays more for sicker patients, creating a financial incentive for insurers to inflate risk scores.

The U.S. Centers for Medicare and Medicaid Services (CMS) should be doing more to prevent insurers from exploiting this vulnerability, the inspector general said.

In a Nov. 1 letter to the inspector general’s office cited in the report, CMS challenged the $6.7 billion estimate of payments linked to chart reviews as too high. The agency agreed with the report’s recommendations for increased oversight and audits.

CMS in a statement said it is “committed to ensuring that Medicare Advantage plans submit accurate information to CMS so that payments to plans are appropriate.”

Prior to these findings, Medicare estimated it had made $40 billion in overpayments to insurers from 2013 to 2016 due to diagnoses submitted by health plans not supported by medical records.

(Reporting by Chad Terhune; Editing by Bill Berkrot)

As California fires blaze, homeowners fear losing insurance

Local residents react as numerous homes burn on a hillside during a wind driven wildfire in Ventura. REUTERS/Mike Blake

By Suzanne Barlyn

(Reuters) – California homeowners and regulators have a new fear about wildfires ravaging the state: that insurers will drop coverage.

Massive, out-of-season fires in northern and southern California are causing billions of dollars in claims and challenging expectations of when and where to expect blazes. State law gives insurers more leeway to drop coverage than to raise rates, and some are taking the opportunity, concerning California Insurance Commissioner Dave Jones.

Homes in the Sierra Nevada foothills were dropped after wildfires swept through the region in recent years, and some other Northern California homes also have been cut from rosters, Jones said.

“We may see more of it,” he added in an interview. Insurers must renew fire victims’ policies once, but after that homeowners could be driven to unusual, expensive policies.

Retired firefighter Dan Nichols of Oroville, California was surprised when Liberty Mutual dropped his coverage this year, following a wildfire in the region.

“I was shocked and angry,” said Nichols, 70, by email.

Liberty Mutual must “responsibly manage” its overall exposure to California’s wildfires as part of a strategy to safeguard its ability to pay homeowners’ claims, a spokesman said. The insurer still issues policies in California and its strategy is not in response to recent fires, he said.

Nichols found a better deal through AAA, but others are not as lucky. In San Andreas, a community northeast of San Francisco, homeowners typically use specialty insurers, known as “surplus lines carriers,” for policies that cost about 20 to 40 percent more than a mainstream insurer, said Fred Gerard, who owns an insurance agency in the area.

Insurers must be cautious by not covering too many homes in one area, said Janet Ruiz, a spokeswoman for the industry’s Insurance Information Institute. “They tend to spread their risk so they can pay claims,” Ruiz said.

COMPUTER MODELS

Drier weather and higher variability of weather patterns often seen as effects of climate change have led insurers to turn to new computer models that provide house-by-house predictions of risk, using factors such as local topography and brush cover, a change from past practices that were based on a region’s history of blazes.

“Relying solely on company history leaves many (insurers) exposed,” said Matt Nielsen, Senior Director, Global Governmental and Regulatory Affairs at modeler RMS. A new wave of models coming out next year will “revolutionize the way insurers understand and manage risk for wildfires,” he said.

“You can’t control mother nature, but you can identify her target zones,” wrote rival Verisk Analytics Inc in a brochure for its FireLine model.

Jones said the state was reviewing the new models, partly in light of drier weather conditions, more frequent, unpredictable and severe fires, and climate change.

A California poll by consumer advocacy group United Policyholders found that computer scoring was a reason for a significant number of policy cancellations in the last few years.

United Policyholders Executive Director Amy Bach said that the differences in scores generated by various models raised questions about their accuracy.

“We want to make sure it’s a fair system,” Bach said.

(Reporting by Suzanne Barlyn; Editing by Peter Henderson and James Dalgleish)