With another busy year of health reform coverage coming to an end soon, the authors of Health Reform Talk are taking a brief break after today.
Health Reform Talk will resume its regular insights into health reform the week of January 2.
Happy Holidays and Happy New Year!!
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Friday, December 23, 2011
Wednesday, December 21, 2011
HHS issues essential health benefits bulletin
The Department of Health and Human Services (HHS) has issued a bulletin outlining the approach it intends to pursue in rulemaking to define essential health benefits. The Patient Protection and Affordable Care Act (ACA) requires health insurance plans offered in the individual and small group markets, both inside and outside of the Affordable Insurance Exchanges (Exchanges), to offer a comprehensive package of items and services, known as essential health benefits (EHB).
The bulletin addresses only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments, and coinsurance. The cost-sharing features will be addressed in future bulletins, and cost-sharing rules will determine the actuarial value of the plan.
HHS indicates that it is releasing this intended approach to give consumers, states, employers and issuers timely information as they work toward establishing Exchanges and making decisions for 2014. According to HHS, this approach was developed with significant input from the public, as well as reports from the Department of Labor, the Institute of Medicine, and research conducted by HHS.
Intended regulatory approach. The HHS bulletin indicates that its goal is to pursue an approach that will:
• encompass the 10 categories of services identified in the statute;
• reflect typical employer health benefit plans;
• reflect balance among the categories;
• account for diverse health needs across many populations;
• ensure there are no incentives for coverage decisions, cost sharing or reimbursement rates to discriminate impermissibly against individuals because of their age, disability, or expected length of life;
• ensure compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA);
• provide states a role in defining EHB; and
• balance comprehensiveness and affordability for those purchasing coverage.
Benchmark plan types. HHS indicates it intends to propose that EHB be defined by a benchmark plan selected by each state. The selected benchmark plan would serve as a reference plan, reflecting both the scope of services and any limits offered by a “typical employer plan” in that state as required by ACA Sec. 1302(b)(2)(A). This approach is based on the approach established by Congress for the Children’s Health Insurance Program (CHIP) and for certain Medicaid populations.
States are permitted to select a single benchmark to serve as the standard for qualified health plans inside the Exchange operating in their state and plans offered in the individual and small group markets in their state.
States would choose one of the following health insurance plans as a benchmark:
1) the three largest small group plans in the state;
2) the three largest state employee health plans;
3) the three largest federal employee health plan options; or
4) the largest HMO plan offered in the state’s commercial market.
The benefits and services included in the health insurance plan selected by the state would be the EHB package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.
Consistent with the law, states must ensure the EHB package covers items and services in at least ten categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all ten categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan (FEHBP), to determine the type of benefits that will be included in the EHB package.
Defraying the cost of additional benefits. ACA Sec. 1311(d)(3)(B) requires states to defray the costs of state-mandated benefits in excess of EHB for individuals enrolled in any qualified health plan either in the individual market or in the small group market. Similar to other Exchange decisions, the state may select the benchmark plan.
According to HHS, the approach for 2014 and 2015 would provide a transition period for states to coordinate their benefit mandates while minimizing the likelihood the state would be required to defray the costs of these mandates in excess of EHB. In the transitional years of 2014 and 2015, if a state chooses a benchmark subject to state mandates – such as a small group market plan – that benchmark would include those mandates in the state EHB package.
Alternatively, a state also could select a benchmark such as an FEHBP plan that may not include some or all of the state’s benefit mandates, and, therefore, under ACA Sec. 1311(d)(3)(B), the state would be required to cover the cost of those mandates outside the state EHB package.
Updating EHB. ACA Secs. 302(b)(4)(G) and (H) direct the Secretary to periodically review and update EHB. As required by the ACA, HHS will assess whether enrollees have difficulties with access for reasons of coverage or cost, changes in medical evidence or scientific advancement, market changes not reflected in the benchmarks and the affordability of coverage as it relates to EHB. HHS invites comments on approaches to gathering information and making this assessment and also encourages public input on the entire proposed approach outlined in the bulletin. Comments are due by January 31, 2012 and can be sent to EssentialHealthBenefits@cms.hhs.gov.
SOURCE: Essential Health Benefits Bulletin, Center for Consumer Information and Insurance Oversight, December 16, 2011.
The bulletin addresses only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments, and coinsurance. The cost-sharing features will be addressed in future bulletins, and cost-sharing rules will determine the actuarial value of the plan.
HHS indicates that it is releasing this intended approach to give consumers, states, employers and issuers timely information as they work toward establishing Exchanges and making decisions for 2014. According to HHS, this approach was developed with significant input from the public, as well as reports from the Department of Labor, the Institute of Medicine, and research conducted by HHS.
Intended regulatory approach. The HHS bulletin indicates that its goal is to pursue an approach that will:
• encompass the 10 categories of services identified in the statute;
• reflect typical employer health benefit plans;
• reflect balance among the categories;
• account for diverse health needs across many populations;
• ensure there are no incentives for coverage decisions, cost sharing or reimbursement rates to discriminate impermissibly against individuals because of their age, disability, or expected length of life;
• ensure compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA);
• provide states a role in defining EHB; and
• balance comprehensiveness and affordability for those purchasing coverage.
Benchmark plan types. HHS indicates it intends to propose that EHB be defined by a benchmark plan selected by each state. The selected benchmark plan would serve as a reference plan, reflecting both the scope of services and any limits offered by a “typical employer plan” in that state as required by ACA Sec. 1302(b)(2)(A). This approach is based on the approach established by Congress for the Children’s Health Insurance Program (CHIP) and for certain Medicaid populations.
States are permitted to select a single benchmark to serve as the standard for qualified health plans inside the Exchange operating in their state and plans offered in the individual and small group markets in their state.
States would choose one of the following health insurance plans as a benchmark:
1) the three largest small group plans in the state;
2) the three largest state employee health plans;
3) the three largest federal employee health plan options; or
4) the largest HMO plan offered in the state’s commercial market.
The benefits and services included in the health insurance plan selected by the state would be the EHB package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.
Consistent with the law, states must ensure the EHB package covers items and services in at least ten categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. If a state selects a plan that does not cover all ten categories of care, the state will have the option to examine other benchmark insurance plans, including the Federal Employee Health Benefits Plan (FEHBP), to determine the type of benefits that will be included in the EHB package.
Defraying the cost of additional benefits. ACA Sec. 1311(d)(3)(B) requires states to defray the costs of state-mandated benefits in excess of EHB for individuals enrolled in any qualified health plan either in the individual market or in the small group market. Similar to other Exchange decisions, the state may select the benchmark plan.
According to HHS, the approach for 2014 and 2015 would provide a transition period for states to coordinate their benefit mandates while minimizing the likelihood the state would be required to defray the costs of these mandates in excess of EHB. In the transitional years of 2014 and 2015, if a state chooses a benchmark subject to state mandates – such as a small group market plan – that benchmark would include those mandates in the state EHB package.
Alternatively, a state also could select a benchmark such as an FEHBP plan that may not include some or all of the state’s benefit mandates, and, therefore, under ACA Sec. 1311(d)(3)(B), the state would be required to cover the cost of those mandates outside the state EHB package.
Updating EHB. ACA Secs. 302(b)(4)(G) and (H) direct the Secretary to periodically review and update EHB. As required by the ACA, HHS will assess whether enrollees have difficulties with access for reasons of coverage or cost, changes in medical evidence or scientific advancement, market changes not reflected in the benchmarks and the affordability of coverage as it relates to EHB. HHS invites comments on approaches to gathering information and making this assessment and also encourages public input on the entire proposed approach outlined in the bulletin. Comments are due by January 31, 2012 and can be sent to EssentialHealthBenefits@cms.hhs.gov.
SOURCE: Essential Health Benefits Bulletin, Center for Consumer Information and Insurance Oversight, December 16, 2011.
Monday, December 19, 2011
Supreme Court sets schedule for written briefs in health reform cases
The Supreme Court has issued the briefing schedule for the three health reform cases on the constitutionality of the Patient Protection and Affordable Care Act (ACA).
What’s due and when?
Individual mandate (aka minimum coverage provision)
January 6 – Brief of the Solicitor General (SG) on the minimum coverage provision issue (HHS v. Florida (No. 11-398))
February 6 – Respondents’ briefs
March 7 – SG reply brief
Anti-Injunction Act
January 6 – Brief of the Court-appointed amicus curiae (aka friend of the court) on the Anti-Injunction Act issue (HHS v. Florida (No. 11-398))
February 6 – Briefs of the SG and respondents
February 27 – Reply briefs of the SG and respondents
March 12 – Reply brief of the Court-appointed amicus curiae
Severability
January 6 – Briefs of petitioners on the severability issue (National Federation of Independent Business v. Sebelius (No. 11-393) and Florida v. HHS (No. 11-400))
January 27 – Brief of the SG
February 17 – Brief of the Court-appointed amicus curiae
March 13 – Reply briefs of the SG and petitioners
Medicaid
January 10 — Petitioners’ brief on the Medicaid issue (Florida v. HHS (No. 11-400))
February 10 – Brief of the Solicitor General
March 12 – Reply brief
What’s due and when?
Individual mandate (aka minimum coverage provision)
January 6 – Brief of the Solicitor General (SG) on the minimum coverage provision issue (HHS v. Florida (No. 11-398))
February 6 – Respondents’ briefs
March 7 – SG reply brief
Anti-Injunction Act
January 6 – Brief of the Court-appointed amicus curiae (aka friend of the court) on the Anti-Injunction Act issue (HHS v. Florida (No. 11-398))
February 6 – Briefs of the SG and respondents
February 27 – Reply briefs of the SG and respondents
March 12 – Reply brief of the Court-appointed amicus curiae
Severability
January 6 – Briefs of petitioners on the severability issue (National Federation of Independent Business v. Sebelius (No. 11-393) and Florida v. HHS (No. 11-400))
January 27 – Brief of the SG
February 17 – Brief of the Court-appointed amicus curiae
March 13 – Reply briefs of the SG and petitioners
Medicaid
January 10 — Petitioners’ brief on the Medicaid issue (Florida v. HHS (No. 11-400))
February 10 – Brief of the Solicitor General
March 12 – Reply brief
Friday, December 16, 2011
CMS says new rules will increase transparency in health care
The Centers for Medicare & Medicaid Services (CMS ) are issuing, on December 19, 2011, a long-awaited proposed rule designed to increase public awareness of financial relationships between drug and device manufacturers and certain health care providers. The CMS says that the resulting transparency should lead to improved, lower cost health care. Manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, or the Children’s Health Insurance Program will soon have to report to CMS any payments or other "transfers of value" they make to physicians and teaching hospitals, and manufacturers and group purchasing organizations (GPOs) will have to disclose ownership or investment interests by physicians or physicians' family members, and any transfers or payments of value to those physicians. The regulations implement ACA Sec. 6002, which added Sec. 1128G to the Social Security Act.
Information was originally supposed to be collected by manufacturers and GPOs by January 1, 2012, as required by the ACA, but the CMS is giving them a break and only requiring the gathering of information once the final regulations are published, since the proposed regulations were apparently issued later than originally anticipated. The data will probably have to be reported to the CMS by the end of March 2013.
Officials at the CMS seem quite excited about the potential advantages to health care consumers that the regulations will provide. According to Peter Budetti, M.D., CMS deputy administrator for Program Integrity. “Disclosure of these relationships will discourage the inappropriate influence on clinical decision-making that sometimes occurs while still allowing legitimate partnerships.” Budetti added that, "If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it," Under the ACA, violations of the reporting requirements will result in civil monetary penalties up to $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report.
It remains to be seen how much value this will really create for consumers, however. Applicable manufacturers' and group purchasing organizations' payment and ownership information is to be published by the CMS on a public website, and the regulations specify that the information provided must be downloadable, searchable, and easily aggregated. But, how many consumers really look at government websites, or any websites at all, before going to the doctor? A patient's choice of physician is arguably based more on whether or not the physician is covered under the patient's healthcare plan, on word-of-mouth, or on general availability and geographic location, than on any data to be found on websites so far.
The American Medical Association has a website with general physician information, including physician specialties and medical schools attended, and WebMD has a search tool allowing prospective patients to look for doctors by specialty and location, with some information provided about which doctors accept which plans. There's an assortment of sites out there with comments and ratings by patients of doctors they've seen, but how many people know about and use similar information already in existence on government websites? The Centers for Disease Control and Prevention (CDC), for example, has up-to-date data and statistics on a wide range of topics, such as nursing homes and fertility clinics, but many people may be unaware of the information they can obtain before making important medical decisions. Hopefully, the CMS won't end its efforts to increase transparency with the issuance of final regulations, expected sometime in 2012, and will, instead, work to make the general public aware of the new website. The information is expected to be made public by September 30, 2013. If you feel like adding your two cents' worth to the CMS, it is accepting comments until Feb. 17, 2012. The proposed rule is downloadable at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2011-32244.pdf .
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
Information was originally supposed to be collected by manufacturers and GPOs by January 1, 2012, as required by the ACA, but the CMS is giving them a break and only requiring the gathering of information once the final regulations are published, since the proposed regulations were apparently issued later than originally anticipated. The data will probably have to be reported to the CMS by the end of March 2013.
Officials at the CMS seem quite excited about the potential advantages to health care consumers that the regulations will provide. According to Peter Budetti, M.D., CMS deputy administrator for Program Integrity. “Disclosure of these relationships will discourage the inappropriate influence on clinical decision-making that sometimes occurs while still allowing legitimate partnerships.” Budetti added that, "If your doctor is taking money from manufacturers of prescription drugs, suppliers of wheelchairs or other devices, you deserve to know about it," Under the ACA, violations of the reporting requirements will result in civil monetary penalties up to $150,000 annually for failing to report, and $1,000,000 for knowingly failing to report.
It remains to be seen how much value this will really create for consumers, however. Applicable manufacturers' and group purchasing organizations' payment and ownership information is to be published by the CMS on a public website, and the regulations specify that the information provided must be downloadable, searchable, and easily aggregated. But, how many consumers really look at government websites, or any websites at all, before going to the doctor? A patient's choice of physician is arguably based more on whether or not the physician is covered under the patient's healthcare plan, on word-of-mouth, or on general availability and geographic location, than on any data to be found on websites so far.
The American Medical Association has a website with general physician information, including physician specialties and medical schools attended, and WebMD has a search tool allowing prospective patients to look for doctors by specialty and location, with some information provided about which doctors accept which plans. There's an assortment of sites out there with comments and ratings by patients of doctors they've seen, but how many people know about and use similar information already in existence on government websites? The Centers for Disease Control and Prevention (CDC), for example, has up-to-date data and statistics on a wide range of topics, such as nursing homes and fertility clinics, but many people may be unaware of the information they can obtain before making important medical decisions. Hopefully, the CMS won't end its efforts to increase transparency with the issuance of final regulations, expected sometime in 2012, and will, instead, work to make the general public aware of the new website. The information is expected to be made public by September 30, 2013. If you feel like adding your two cents' worth to the CMS, it is accepting comments until Feb. 17, 2012. The proposed rule is downloadable at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2011-32244.pdf .
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
Wednesday, December 14, 2011
School-based health centers receive more funding via ACA
First our nation's young were allowed to stay on their parents' insurance until the age of 26. Now, the younger set is seeing another advantage from the Patient Protection and Affordable Care Act (ACA). The Health Resources and Services Administration (HRSA), a division of the U.S. Department of Health and Human Services (HHS), has just announced that more than $14 million ($14,552,020, to be exact) has been awarded to 45 American school-based health centers (SBHCs). SBHCs are typically open every school day and staffed by a team of health providers. The HRSA oversees the School-Based Health Center Capital Program.
A total of $200 million in funding from 2010 – 2013, created by the ACA via the School-Based Health Center Capital Program, is available to improve delivery and support expansion of services at SBHCs. Clinics that are recipients of the awards already serve 112,000 children, and the HHS estimates that the $14 million in grants just awarded (the second in a series of awards that will be made available to SBHCs) will allow them to treat an estimated additional 53,000 children in 29 States, by expanding their capacity and modernizing their facilities. In fiscal year 2011, $95 million was awarded to 278 SBHCs.
The HHS is anticipating that the additional funds awarded will allow employers to hire more employees, aside from more healthcare workers, to meet the SBHCs' increasing needs. SBHCs are expected to require additional construction, renovation and new equipment.
An SBHC is often operated as a partnership between the school and a community health organization, such as a community health center, hospital, or local health department that serves as the sponsoring facility for the SBHC. Services, which are a combination of primary care, mental health care, substance abuse counseling, case management, dental health, nutrition education, health education and health promotion, are determined locally through a collaborative approach between the families and students, the community, the school district, and associated health providers. The focus of SBHCs is said to be on prevention and early intervention.
The recipients of these latest grants are in Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Mississippi, North Carolina, New Mexico, Texas, Washington, Wisconsin, and West Virginia.
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
A total of $200 million in funding from 2010 – 2013, created by the ACA via the School-Based Health Center Capital Program, is available to improve delivery and support expansion of services at SBHCs. Clinics that are recipients of the awards already serve 112,000 children, and the HHS estimates that the $14 million in grants just awarded (the second in a series of awards that will be made available to SBHCs) will allow them to treat an estimated additional 53,000 children in 29 States, by expanding their capacity and modernizing their facilities. In fiscal year 2011, $95 million was awarded to 278 SBHCs.
The HHS is anticipating that the additional funds awarded will allow employers to hire more employees, aside from more healthcare workers, to meet the SBHCs' increasing needs. SBHCs are expected to require additional construction, renovation and new equipment.
An SBHC is often operated as a partnership between the school and a community health organization, such as a community health center, hospital, or local health department that serves as the sponsoring facility for the SBHC. Services, which are a combination of primary care, mental health care, substance abuse counseling, case management, dental health, nutrition education, health education and health promotion, are determined locally through a collaborative approach between the families and students, the community, the school district, and associated health providers. The focus of SBHCs is said to be on prevention and early intervention.
The recipients of these latest grants are in Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Louisiana, Illinois, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Mississippi, North Carolina, New Mexico, Texas, Washington, Wisconsin, and West Virginia.
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
Monday, December 12, 2011
Former CMS administrator Berwick takes aim at ACA's critics
Donald Berwick, MD, whose last day on the job as former administrator of the Centers for Medicare and Medicaid Services (CMS) was December 2, 2011, targeted critics of the Patient Protection and Affordable Care Act (ACA) and exhorted fellow medical professionals to support the purposes of the ACA, in a recent speech at the 23rd Annual National Forum on Quality Improvement in Health Care in Florida. The Forum, sponsored by the Institute for Healthcare Improvement, attracted approximately 6,000 healthcare workers and executives. Berwick was accepting the Picker Award for Excellence. The 65-year-old Berwick, a pediatrician and Harvard professor, has been known to publicly profess his admiration for the British healthcare system.
Berwick made a point of taking aim at the ongoing accusations that the ACA will bring about death panels and rationed care. Berwick characterized the death panel rhetoric as "hogwash" and "fabricated out of nothing but fear and lies." He added that "The true rationers are those who...stand in the way of change....." Berwick went on to say that "When the 17 million American children who live in poverty cannot get the immunizations and blood tests they need, that is rationing. When disabled American lack the help to keep them out of institutions and in their homes and living independently, that is rationing...And it is beneath us as a great nation to allow that to happen."
Berwick's made a number of notable contributions at the CMS, including helping start up the Partnership for Patients program, which, according to healthcare.gov, is designed to improve healthcare quality, safety, and affordability. It is a shared effort by hospital leaders, employers, physicians, nurses, and patient advocates along with state and federal governments.
Unfortunately, Berwick's time at the CMS, after being appointed by President Obama, was a short 18 months, which was the longest he could stay without Congress' approval. Berwick made a point of stating that Congress' approval rating is at an all-time low of 9%. He is succeeded by acting administrator Marilyn B. Tavenner.
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
Berwick made a point of taking aim at the ongoing accusations that the ACA will bring about death panels and rationed care. Berwick characterized the death panel rhetoric as "hogwash" and "fabricated out of nothing but fear and lies." He added that "The true rationers are those who...stand in the way of change....." Berwick went on to say that "When the 17 million American children who live in poverty cannot get the immunizations and blood tests they need, that is rationing. When disabled American lack the help to keep them out of institutions and in their homes and living independently, that is rationing...And it is beneath us as a great nation to allow that to happen."
Berwick's made a number of notable contributions at the CMS, including helping start up the Partnership for Patients program, which, according to healthcare.gov, is designed to improve healthcare quality, safety, and affordability. It is a shared effort by hospital leaders, employers, physicians, nurses, and patient advocates along with state and federal governments.
Unfortunately, Berwick's time at the CMS, after being appointed by President Obama, was a short 18 months, which was the longest he could stay without Congress' approval. Berwick made a point of stating that Congress' approval rating is at an all-time low of 9%. He is succeeded by acting administrator Marilyn B. Tavenner.
For more information. For a comprehensive analysis of the Patient Protection and Affordable Care Act, and additional information on health reform and other developments in employee benefits, just click here.
Friday, December 9, 2011
Getting Tough On Fraud In MEWAs
The Patient Protection and Affordable Care Act (ACA) provides for protections for businesses and workers with health benefits that are provided through a multiple employer welfare arrangement (MEWAs) and the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) has just issued two proposed rules towards that goal. The proposed rules were published in the December 6 Federal Register.
According to EBSA, “MEWAs frequently have been used by scam artists and criminals to defraud consumers, thus leaving unsuspecting patients with substantial unpaid medical claims.” For employers or employee organizations that have paid premiums or made contributions to a MEWA, and thought they were doing the right thing for their workers and their families, the impact also can be significant, EBSA noted.
The proposed rules call for MEWAs to adhere to enhanced reporting requirements so that employers, workers, and their families will not unexpectedly be cut off from needed health care services. The rules also will increase the DOL’s enforcement authority to protect participants in such plans and allow the department to shut down MEWAs engaged in fraud or other activities that present an immediate danger to the public safety or welfare.
Through MEWAs, unrelated employers, typically small businesses, seek to provide health care and other benefits to their workers at purportedly lower cost than through other traditional forms of coverage, EBSA explained.
The promoters, marketers and operators of MEWAs often have taken advantage of gaps in the law to avoid state insurance regulations, such as a requirement to maintain sufficient funding and adequate reserves to pay the health care claims of workers and their families. In the worst situations, operators of MEWAs have drained their assets through excessive administrative fees or outright embezzlement, resulting in harm to participants and their families. In some cases, individuals incur significant medical bills before they learn that claims are not being paid—and that they are liable and need to pay their medical bills themselves. The ACA includes provisions designed to remedy these gaps.
According to EBSA, “MEWAs frequently have been used by scam artists and criminals to defraud consumers, thus leaving unsuspecting patients with substantial unpaid medical claims.” For employers or employee organizations that have paid premiums or made contributions to a MEWA, and thought they were doing the right thing for their workers and their families, the impact also can be significant, EBSA noted.
The proposed rules call for MEWAs to adhere to enhanced reporting requirements so that employers, workers, and their families will not unexpectedly be cut off from needed health care services. The rules also will increase the DOL’s enforcement authority to protect participants in such plans and allow the department to shut down MEWAs engaged in fraud or other activities that present an immediate danger to the public safety or welfare.
Through MEWAs, unrelated employers, typically small businesses, seek to provide health care and other benefits to their workers at purportedly lower cost than through other traditional forms of coverage, EBSA explained.
The promoters, marketers and operators of MEWAs often have taken advantage of gaps in the law to avoid state insurance regulations, such as a requirement to maintain sufficient funding and adequate reserves to pay the health care claims of workers and their families. In the worst situations, operators of MEWAs have drained their assets through excessive administrative fees or outright embezzlement, resulting in harm to participants and their families. In some cases, individuals incur significant medical bills before they learn that claims are not being paid—and that they are liable and need to pay their medical bills themselves. The ACA includes provisions designed to remedy these gaps.
Wednesday, December 7, 2011
Group Health Premiums Continued To Rise After Reform, But At Smaller Rate
Eighteen months following enactment of health care reform, the cost of group medical benefits continued to rise but those cost increases moderated, according to the November 2011 Employee Benefits Market Survey, conducted by The Council of Insurance Agents & Brokers (CIAB).
“Our latest survey indicated that premium increases have ebbed somewhat after initial shock and uncertainty following enactment of ACA in 2010,” said Ken A. Crerar, president and CEO of The CIAB. “The market has begun to adjust to initial new requirements in health care reform, but some uncertainty may persist as additional aspects are phased in over the next several years,” he added.
Although this survey revealed that all groups—small, medium and large—faced significant price hikes for group health care coverage during the last six months, small groups of 50 or fewer employees saw the largest hikes, with 39 percent receiving increases of 11 percent to 20 percent, compared with 62 percent reporting increases in that range in the CIAB’s May 2011 survey. Thirty-five percent of small groups received smaller increases ranging from 1 percent to 10 percent, compared to 13 percent in the earlier survey. Ten percent of small groups received no changes or price decreases compared to 3 percent in the earlier study.
In medium-size groups with 51 to 500 employees, 69 percent experienced hikes in the range of 6 percent to 15 percent, compared with 75 percent in the May survey. Sixteen percent experienced increases of 1 percent to 5 percent, no change, or decreases, compared to 8 percent in the May 2011 survey. Large accounts of greater than 500 employees also saw some moderation in pricing. Fourteen percent experienced no change or price decreases, compared to 5 percent in the May survey. For the majority (61 percent) of large accounts, prices rose in the range of 1 percent to 10 percent. Prices rose more than 10 percent for 9 percent of large accounts, compared to 21 percent which had increases of that magnitude in the May survey.
Comments from brokers on group medical plan pricing presented a nuanced picture consistent with adjustments underway to ACA, according to the survey. “As a whole, recent renewals have been lower than any other time I can remember,” said one broker. “The trend is lower, renewals more reasonable,” commented another. “We have seen more competitive new business rates coupled with lower renewals,” a third broker added.
Other brokers saw prices rise due to the impact of ACA, but noted that increases were tempered by continued interest in and movement toward consumer driven health plans and wellness plans. These plans typically have higher deductibles. “Interest in high deductible (plans) is taking off,” said one broker. “Deductibles and co-insurance continue to rise to keep the rates down,” another broker commented. Still another noted, “Carriers, especially trusts, seem to be more willing to come off of the original renewal position. (There is) continued interest in high deductible plans, HSAs (health savings accounts).”
Still another development that emerged in this and previous surveys is that carriers and employers are offering fewer options since enactment of the ACA. “In the small to medium account range, we have noticed a tightening of the amount of plan options offered to groups,” one respondent wrote.
In the CIAB’s May 2011 survey, 100 percent of responding group benefit consultants expressed some level of concern about the impact of the ACA on their business, with 59 percent being “very concerned.” By this latest survey that concern had moderated to 97 percent of respondents expressing some level of concerns, with 51% “very concerned” and 46 percent “somewhat concerned.”
“Our latest survey indicated that premium increases have ebbed somewhat after initial shock and uncertainty following enactment of ACA in 2010,” said Ken A. Crerar, president and CEO of The CIAB. “The market has begun to adjust to initial new requirements in health care reform, but some uncertainty may persist as additional aspects are phased in over the next several years,” he added.
Although this survey revealed that all groups—small, medium and large—faced significant price hikes for group health care coverage during the last six months, small groups of 50 or fewer employees saw the largest hikes, with 39 percent receiving increases of 11 percent to 20 percent, compared with 62 percent reporting increases in that range in the CIAB’s May 2011 survey. Thirty-five percent of small groups received smaller increases ranging from 1 percent to 10 percent, compared to 13 percent in the earlier survey. Ten percent of small groups received no changes or price decreases compared to 3 percent in the earlier study.
In medium-size groups with 51 to 500 employees, 69 percent experienced hikes in the range of 6 percent to 15 percent, compared with 75 percent in the May survey. Sixteen percent experienced increases of 1 percent to 5 percent, no change, or decreases, compared to 8 percent in the May 2011 survey. Large accounts of greater than 500 employees also saw some moderation in pricing. Fourteen percent experienced no change or price decreases, compared to 5 percent in the May survey. For the majority (61 percent) of large accounts, prices rose in the range of 1 percent to 10 percent. Prices rose more than 10 percent for 9 percent of large accounts, compared to 21 percent which had increases of that magnitude in the May survey.
Comments from brokers on group medical plan pricing presented a nuanced picture consistent with adjustments underway to ACA, according to the survey. “As a whole, recent renewals have been lower than any other time I can remember,” said one broker. “The trend is lower, renewals more reasonable,” commented another. “We have seen more competitive new business rates coupled with lower renewals,” a third broker added.
Other brokers saw prices rise due to the impact of ACA, but noted that increases were tempered by continued interest in and movement toward consumer driven health plans and wellness plans. These plans typically have higher deductibles. “Interest in high deductible (plans) is taking off,” said one broker. “Deductibles and co-insurance continue to rise to keep the rates down,” another broker commented. Still another noted, “Carriers, especially trusts, seem to be more willing to come off of the original renewal position. (There is) continued interest in high deductible plans, HSAs (health savings accounts).”
Still another development that emerged in this and previous surveys is that carriers and employers are offering fewer options since enactment of the ACA. “In the small to medium account range, we have noticed a tightening of the amount of plan options offered to groups,” one respondent wrote.
In the CIAB’s May 2011 survey, 100 percent of responding group benefit consultants expressed some level of concern about the impact of the ACA on their business, with 59 percent being “very concerned.” By this latest survey that concern had moderated to 97 percent of respondents expressing some level of concerns, with 51% “very concerned” and 46 percent “somewhat concerned.”
Monday, December 5, 2011
States' Continue Own Health Reform Efforts
As the various provisions of the Affordable Care Act are implemented over time, the states continue to apply their own health care reform and cost-containment measures. Below we review some of the states’ recent actions.
California. Gov. Jerry Brown has signed a pair of bills designed to close a loophole that denies women maternity services. More than 200,000 women between the ages of 19 and 44 in California have health insurance plans that do not cover maternity care. The first bill requires health insurance companies to provide maternity coverage as a part of their individual insurance plans, and the second bill requires group health insurance policies to provide women with maternity coverage. These laws take effect on Jan. 1, 2012. Mr. Brown also signed a bill that makes insurers cover autism therapy, including behavioral health treatments. The law will be in effect from July 1, 2012, through July 1, 2014.
Indiana. The Obama Administration has denied a waiver for the Healthy Indiana Plan, the state’s Medicaid program, which means that over 45,000 state residents will lose coverage under the plan unless Indiana makes coverage changes that are more acceptable to the Obama Administration. In 2007, Indiana enacted the plan, an expansion of Medicaid that used consumer-driven (high-deductible) health plans with a spending account supposedly to encourage low-income beneficiaries to take a more active role in their own care. The state also has been promoting so-called consumer-driven health plans to its employee population. The Healthy Indiana Plan’s waiver expires at the end of 2012.
Louisiana. Helped by a $10 million federal grant, state officials and industry leaders have launched a web-based medical records exchange. Supporters of the platform indicated that the Louisiana Health Information Exchange is a way to link disparate health care providers, from primary care doctors to hospitals and pharmacists, so they can collectively provide better and cheaper patient care.
Minnesota. Gov. Mark Dayton has announced that a competitive-bidding process for state health insurance programs will save $242 million over the next two years. The measure was a part of his drive to improve government efficiency. The state required HMOs to competitively bid for state contracts in the seven-county metro area, and the savings will reduce the money taxpayers spend for health care without cutting any services.
New York. Gov. Andrew Cuomo has signed a bill that will require insurers to cover screening, diagnosis, and treatment for autism spectrum disorders. The law includes routine toddler screenings, behavioral health treatments, speech therapy, occupational therapy, and physical therapy. The measure was vetoed last year by former Gov. David Paterson as too expensive, but Mr. Cuomo said the current bill puts an important $45,000 annual cap on the coverage insurance companies would have to fund. The law takes effect Nov. 1, 2012, for insurance policies issued or renewed after that date.
In other New York news, the state’s Department of Financial Services has ordered 11 health insurers to refund $114.5 million to policyholders under minimum medical spending requirements. Implemented in June 2010, health insurers are now required to spend 82 cents of every dollar collected in premiums on medical care or refund the difference to policyholders. The federal Patient Protection and Affordable Care Act imposes a similar minimum medical loss ratio requirement on insurers nationally beginning in 2011. The refunds in New York will be paid to holders of group and individual health insurance policies that cover 573,748 people in the state.
California. Gov. Jerry Brown has signed a pair of bills designed to close a loophole that denies women maternity services. More than 200,000 women between the ages of 19 and 44 in California have health insurance plans that do not cover maternity care. The first bill requires health insurance companies to provide maternity coverage as a part of their individual insurance plans, and the second bill requires group health insurance policies to provide women with maternity coverage. These laws take effect on Jan. 1, 2012. Mr. Brown also signed a bill that makes insurers cover autism therapy, including behavioral health treatments. The law will be in effect from July 1, 2012, through July 1, 2014.
Indiana. The Obama Administration has denied a waiver for the Healthy Indiana Plan, the state’s Medicaid program, which means that over 45,000 state residents will lose coverage under the plan unless Indiana makes coverage changes that are more acceptable to the Obama Administration. In 2007, Indiana enacted the plan, an expansion of Medicaid that used consumer-driven (high-deductible) health plans with a spending account supposedly to encourage low-income beneficiaries to take a more active role in their own care. The state also has been promoting so-called consumer-driven health plans to its employee population. The Healthy Indiana Plan’s waiver expires at the end of 2012.
Louisiana. Helped by a $10 million federal grant, state officials and industry leaders have launched a web-based medical records exchange. Supporters of the platform indicated that the Louisiana Health Information Exchange is a way to link disparate health care providers, from primary care doctors to hospitals and pharmacists, so they can collectively provide better and cheaper patient care.
Minnesota. Gov. Mark Dayton has announced that a competitive-bidding process for state health insurance programs will save $242 million over the next two years. The measure was a part of his drive to improve government efficiency. The state required HMOs to competitively bid for state contracts in the seven-county metro area, and the savings will reduce the money taxpayers spend for health care without cutting any services.
New York. Gov. Andrew Cuomo has signed a bill that will require insurers to cover screening, diagnosis, and treatment for autism spectrum disorders. The law includes routine toddler screenings, behavioral health treatments, speech therapy, occupational therapy, and physical therapy. The measure was vetoed last year by former Gov. David Paterson as too expensive, but Mr. Cuomo said the current bill puts an important $45,000 annual cap on the coverage insurance companies would have to fund. The law takes effect Nov. 1, 2012, for insurance policies issued or renewed after that date.
In other New York news, the state’s Department of Financial Services has ordered 11 health insurers to refund $114.5 million to policyholders under minimum medical spending requirements. Implemented in June 2010, health insurers are now required to spend 82 cents of every dollar collected in premiums on medical care or refund the difference to policyholders. The federal Patient Protection and Affordable Care Act imposes a similar minimum medical loss ratio requirement on insurers nationally beginning in 2011. The refunds in New York will be paid to holders of group and individual health insurance policies that cover 573,748 people in the state.
Friday, December 2, 2011
Most insurers have already met health reform’s medical loss ratio standards, GAO says
The early results are in and, as of last year, most insurers have already met the new medical loss ratio (MLR) standards imposed by the 2010 health reform law, the Patient Protection and Affordable Care Act (PPACA), according to newly-released figures from the Government Accountability Office (GAO).
Under the PPACA, beginning in 2011, insurers are required to spend most of their customers' premium payments on medical care rather than on administrative costs or profit. In the large group market, insurers have to spend at least 85 percent of the premium payments on medical care and, in the small group market, they need to spend 80 percent on medical care. If they fail to meet these MLR rules, health reform legislation requires insurers to pay rebates to their enrollees.
These early GAO results are truly preliminary as 2011 numbers don’t have to be submitted to the Department of Health and Human Services (HHS) until June of 2012. However, these numbers are interesting as early indicators of compliance. Based on the early numbers, the GAO says, nearly two-thirds (64 percent) of all credible insurers would have met or exceeded the 2011 MLR standards. According to the GAO, a “higher percentage of insurers in the large and small group markets met or exceeded the standards compared to those in the individual market. Insurers in the individual market averaged higher nonclaims expenses, including expenses for brokers' commissions and fees, than those in other markets.” Seventy-seven percent of large group market insurers and 70 percent of small group market insurers would’ve met or exceeded the MLR standards, the GAO reports, while only 43 percent of insurers in the individual market would’ve met the standards.
In addition, the health reform law requires insurers to report MLRs by state. The GAO reports that, based on the early numbers, it found a “wide range” of reported MLRs for multistate insurers.
Overall, the GAO finds, 85 percent of insured Americans are covered in the large or small group markets. Only 15 percent of insureds are covered in the individual market.
