Monday, December 21, 2009Monday, December 21, 2009
The Health Insurance Exchange is required to offer a Basic, Enhanced, Premium, and/or Premium Plus health care plans. To participate in the Exchange, a carrier must offer at least a Basic plan within the carrier’s service area (geographical premium rating area). It appears the carrier will be restricted to one Basic plan within the service area. (Will there be more than one carrier per geographical premium rating area, most likely.) The carrier may also offer one Enhanced plan within the specified service area. In addition, if the carrier offers an Enhanced plan, they may also offer one Premium plan, within the service area. Finally, if the carrier offers a Premium plan, the carrier will be allowed to offer “one or more” Premium Plus plans for the service areas. (Will there be a restriction on the number of Premium Plus plans offered?)
The Basic plan is actuarially equivalent to 70 percent of the full value of the benefits provided under the reference benefits package, i.e., “essential benefits package”. Special attention is applied to Affordable Credit Eligible Individuals who are covered by the Exchange plans. The benefits offered in the Basic plan are adjusted to provide reduced cost-sharing based on their respective income tier. (Does this mean the “benefits” are reduced OR does it mean that the deductibles, co-pays, and/or co-insurances are modified for lower income individuals?) The Enhanced and Premium plans both offer the same benefits found in the Basic and also offer lower levels of member cost sharing, i.e., less out-of-pocket expenses for the member. (Premium levels will have to be adjusted to reflect the actuarial offset between the Basic and the Enhanced and Premium plans cost-sharing amounts.) The Premium Plus Plan offers the same benefits found in the Basic plan and also includes dental and vision care; provided those benefits have been approved by the Commissioner. The costs of these additional benefits are to be separate and distinct from the health care costs.
The Act directs the Commissioner to create a range of permissible variations in the cost-sharing for the Basic, Enhanced, and Enhanced plans. That variation is within the range of plus or minus 10%. Tiering in cost-sharing is also permitted relative to participation of preferred providers and prescription drugs. (The concept here is that carriers may be able to negotiate discounts, as they do today, with certain providers (provider networks) and pharmaceutical firms (formularies), allowing some cost sharing to passed on to the members.)
Over the years, many individual states have mandated that certain medical procedures be included in individual and group insurance policies sold within their respective states. Health care plans that are “self-insured” are generally exempt from such mandated benefits while those that are “fully-insured” are not. The Act does not exempt Exchange plans from offering state specific mandated benefits. However, states must reimburse the Commissioner for premiums amounts above the affordability premium credits, if such mandated benefits result in a net increase.
As might be expected, carriers will be allowed to provide health care plans thorough the Exchange only after successfully completing a bid solicitation, review, and negotiation process overseen by the Commissioner. The Commissioner will also be able to deny those premiums and/or premium increases that are “excessive”. (Of course this later step will have some form of an appeals process.)
Monday, December 21, 2009
Friday, December 18, 2009
Health Insurance Exchange
Thursday, December 17, 2009
The Affordable Health Care for America Act directs that a “Health Insurance Exchange” be created within Health Choices Administration under the oversight of Commissioner. The role of the Exchange to provide affordable access to quality health insurance and includes provisions for a “public health insurance option”. (As we know, the public option may not be included in the reconciled House and Senate bills.) Assuming that it is included in the final bills, the Commissioner will set the standard for health care, i.e., the reference or essential health care benefits package, negotiate with health care insurance carriers, facilitate enrollment of members and employers, and create risking pooling methods.
Who is eligible to enroll via the Exchange? Anyone who is NOT enrolled in a qualified health care plan or who otherwise has “acceptable coverage”, including legal dependents. Employers are considered eligible to enroll if they fall into one of three categories: smallest (1-25 ees), smaller (26-50 ees), and small (51-100 ees). After 2 years following enactment, the Commissioner may define employers with greater than 100 employees as “Exchange-eligible employers”. The plan is to phase in these categories over the first, second, and third years following the enactment date, starting with the smallest employers. Since we are over half way through the month, it seems unlikely the Senate can finalize and pass their version of health care for a January 1, 2010 effective date.
Who is exempted from Exchange plans? Individuals enrolled in a qualified “group” health care plan, Medicare/Medicaid members, individuals covered by the Child Insurance Health Insurance Plan (CHIP), members of the military, VA participants, and individuals covered by an approved state high-risk pool. It is therefore possible that individuals could move into and out of edibility status over time as their personal circumstances change. Consider the active employee who becomes eligible for Medicare or the child of an employee who is approved for CHIP.
Will Exchange eligible employers be required to make a financial contrition towards the cost of a qualified health care plan? Yes, for full time employees, 72.5% for individual and 65% for family coverage of the lowest cost qualified health benefits plan offered. The contribution for part time employees, will be a proportion based on the employee’s weekly hours and the full time threshold hours set by the Commissioner and the Secretaries of Labor, Health and Human Services, and Treasury. Will Exchange eligible employers be required to make a contribution for employees who are covered as a spouse by another employer’s plan? No, however, if the employee declines coverage in the employer’s Exchange plan and then enrolls in an individual Exchange plan, the employer will be financially responsible.
This later point seems to be in contradiction to the language of the Act that speaks to automatic enrollment of Exchange eligible employees. If it works like auto enrollment in 401(k) plans, at the employee’s plan entry date, the employee is automatically enrolled with a default contribution and investment option. However, the employee is provided an opportunity to cancel/chnage prior to commencement of the actual deductions. Why would the employee be allowed to decline the employer’s plan and opt for individual coverage? It must be in the name of choice. Under traditional insurance underwriting rules, an employer sponsored plan generally must meet minimum contribution and participation levels. Allowing individuals to selectively decline enrollment would undermine those underwriting rules. Will this create an opportunity for adverse selection to occur among and between employer Exchange group plan and individual Exchange plans? Do the traditional underwriting rules and adverse selection even apply under the concept of “universal coverage”?
The Affordable Health Care for America Act directs that a “Health Insurance Exchange” be created within Health Choices Administration under the oversight of Commissioner. The role of the Exchange to provide affordable access to quality health insurance and includes provisions for a “public health insurance option”. (As we know, the public option may not be included in the reconciled House and Senate bills.) Assuming that it is included in the final bills, the Commissioner will set the standard for health care, i.e., the reference or essential health care benefits package, negotiate with health care insurance carriers, facilitate enrollment of members and employers, and create risking pooling methods.
Who is eligible to enroll via the Exchange? Anyone who is NOT enrolled in a qualified health care plan or who otherwise has “acceptable coverage”, including legal dependents. Employers are considered eligible to enroll if they fall into one of three categories: smallest (1-25 ees), smaller (26-50 ees), and small (51-100 ees). After 2 years following enactment, the Commissioner may define employers with greater than 100 employees as “Exchange-eligible employers”. The plan is to phase in these categories over the first, second, and third years following the enactment date, starting with the smallest employers. Since we are over half way through the month, it seems unlikely the Senate can finalize and pass their version of health care for a January 1, 2010 effective date.
Who is exempted from Exchange plans? Individuals enrolled in a qualified “group” health care plan, Medicare/Medicaid members, individuals covered by the Child Insurance Health Insurance Plan (CHIP), members of the military, VA participants, and individuals covered by an approved state high-risk pool. It is therefore possible that individuals could move into and out of edibility status over time as their personal circumstances change. Consider the active employee who becomes eligible for Medicare or the child of an employee who is approved for CHIP.
Will Exchange eligible employers be required to make a financial contrition towards the cost of a qualified health care plan? Yes, for full time employees, 72.5% for individual and 65% for family coverage of the lowest cost qualified health benefits plan offered. The contribution for part time employees, will be a proportion based on the employee’s weekly hours and the full time threshold hours set by the Commissioner and the Secretaries of Labor, Health and Human Services, and Treasury. Will Exchange eligible employers be required to make a contribution for employees who are covered as a spouse by another employer’s plan? No, however, if the employee declines coverage in the employer’s Exchange plan and then enrolls in an individual Exchange plan, the employer will be financially responsible.
This later point seems to be in contradiction to the language of the Act that speaks to automatic enrollment of Exchange eligible employees. If it works like auto enrollment in 401(k) plans, at the employee’s plan entry date, the employee is automatically enrolled with a default contribution and investment option. However, the employee is provided an opportunity to cancel/chnage prior to commencement of the actual deductions. Why would the employee be allowed to decline the employer’s plan and opt for individual coverage? It must be in the name of choice. Under traditional insurance underwriting rules, an employer sponsored plan generally must meet minimum contribution and participation levels. Allowing individuals to selectively decline enrollment would undermine those underwriting rules. Will this create an opportunity for adverse selection to occur among and between employer Exchange group plan and individual Exchange plans? Do the traditional underwriting rules and adverse selection even apply under the concept of “universal coverage”?
Thursday, December 17, 2009
Health Care Reform: House vs. Senate
Wednesday, December 16, 2009
While the House passed its version (HR 3962) of national health care reform earlier this month, the Senate continues to debate its own bill (HR 3590). It now appears that a number of changes are being considered, including the so-called “public option”. Regardless of the contents of the Senate’s final version, the two separate laws must eventually be reconciled to eliminate any differences between the House and Senate versions before the “law” can be implemented. The task of reconciling almost 4,000 pages contained in the combined documents is no mean undertaking (the devil is in the details). Although, the reconciled version will most assuredly not contain 4,000 pages, it can be expected that the final version will still be a significantly sized document. What’s more, you can expect that the final law will be amended over time, as is the case for virtually all major legislative acts, i.e., ERISA.
Whether you are a supporter or not of a public health care option, you must acknowledge that today we have a number of such options funded in part by local, State, and/or Federal taxpayer monies in the form of Medicare, Medicaid, Children's Health Insurance Program (CHIP), State high-risk pool programs, VA, TriCare, FEP, … et al. In addition, many health care providers write-off indigent care and care provided to others who fail to pay. In the case of indigent care, these write-offs may be fully or partially reimbursed by local, State, and/or Federal entities. And in the cases of taxable organizations, such write-offs (bad debt) may be deductible against earnings. In any case, the cost of such care eventually becomes the financial burden of the taxpaying public either directly through taxation or higher health care costs, i.e., increased insurance premiums.
Based on the findings of a USA Today/Gallup poll released yesterday, December 16, 2009, 48% of those polled would advise their Senators to vote against healthcare and 46% to vote in favor of healthcare, with 6% offering no opinion. The poll was based on phone interviews with 1,025 adults, 18 and older taken between 12/11 and 12/13, 2009. The poll had a 95% confidence level with a margin of error of ±4 percentage points. See the complete poll at:
http://www.gallup.com/poll/124715/Majority-Americans-Not-Backing-Healthcare-Bill.aspx
While 48% is not an absolute majority, there are a number of individuals who are unable to put their full support behind the current health care legislation. On the other hand, 46% (no small number) of those polled felt that legislative action was needed and they are willing to support their elected officials in national health care reform. It is safe to say, that Americans are almost equally divided between what course of action to take relative to this debate. Whatever is the final outcome, half of Americans are going to be dissatisfied with the results, at best. At worst, no one will be pleased with the final product and it will be a source of discontent for both supporters and non-supporters.
There is much at stake with health care reform. It is suggested that as a nation, we are at a competitive disadvantage relative to other nations due to the added cost the American health care system places on our manufactured goods. We are told that Americans spend more on health care per capta than others and receive less value than those who spend less, i.e., Britain, France, Germany. It is reported that a significant portion (47m +/-) of the US population is uninsured and thus represents a loss of productivity for those Americans and an avoidable and unnecessary economic burden on the country.
As someone who has witnessed the growth in health care expenses and the difficult decisions individuals, employees, and employers have been forced to make, the outcome of the current national health care reform will have a far reaching impact.
While the House passed its version (HR 3962) of national health care reform earlier this month, the Senate continues to debate its own bill (HR 3590). It now appears that a number of changes are being considered, including the so-called “public option”. Regardless of the contents of the Senate’s final version, the two separate laws must eventually be reconciled to eliminate any differences between the House and Senate versions before the “law” can be implemented. The task of reconciling almost 4,000 pages contained in the combined documents is no mean undertaking (the devil is in the details). Although, the reconciled version will most assuredly not contain 4,000 pages, it can be expected that the final version will still be a significantly sized document. What’s more, you can expect that the final law will be amended over time, as is the case for virtually all major legislative acts, i.e., ERISA.
Whether you are a supporter or not of a public health care option, you must acknowledge that today we have a number of such options funded in part by local, State, and/or Federal taxpayer monies in the form of Medicare, Medicaid, Children's Health Insurance Program (CHIP), State high-risk pool programs, VA, TriCare, FEP, … et al. In addition, many health care providers write-off indigent care and care provided to others who fail to pay. In the case of indigent care, these write-offs may be fully or partially reimbursed by local, State, and/or Federal entities. And in the cases of taxable organizations, such write-offs (bad debt) may be deductible against earnings. In any case, the cost of such care eventually becomes the financial burden of the taxpaying public either directly through taxation or higher health care costs, i.e., increased insurance premiums.
Based on the findings of a USA Today/Gallup poll released yesterday, December 16, 2009, 48% of those polled would advise their Senators to vote against healthcare and 46% to vote in favor of healthcare, with 6% offering no opinion. The poll was based on phone interviews with 1,025 adults, 18 and older taken between 12/11 and 12/13, 2009. The poll had a 95% confidence level with a margin of error of ±4 percentage points. See the complete poll at:
http://www.gallup.com/poll/124715/Majority-Americans-Not-Backing-Healthcare-Bill.aspx
While 48% is not an absolute majority, there are a number of individuals who are unable to put their full support behind the current health care legislation. On the other hand, 46% (no small number) of those polled felt that legislative action was needed and they are willing to support their elected officials in national health care reform. It is safe to say, that Americans are almost equally divided between what course of action to take relative to this debate. Whatever is the final outcome, half of Americans are going to be dissatisfied with the results, at best. At worst, no one will be pleased with the final product and it will be a source of discontent for both supporters and non-supporters.
There is much at stake with health care reform. It is suggested that as a nation, we are at a competitive disadvantage relative to other nations due to the added cost the American health care system places on our manufactured goods. We are told that Americans spend more on health care per capta than others and receive less value than those who spend less, i.e., Britain, France, Germany. It is reported that a significant portion (47m +/-) of the US population is uninsured and thus represents a loss of productivity for those Americans and an avoidable and unnecessary economic burden on the country.
As someone who has witnessed the growth in health care expenses and the difficult decisions individuals, employees, and employers have been forced to make, the outcome of the current national health care reform will have a far reaching impact.
Tuesday, December 15, 2009
Other Laws and Requirements
Tuesday, December 15, 2009
Laws, rules, and regulations do not live in isolation from other laws, rules, and regulations. Rather they must coexist in an environment full of amendments, exceptions, and caveats. I am often asked to provide or obtain a “hard and fast rule” for some specific situation. Usually my response and the response others include a number of exceptions. The Affordable Health Care for America Act is going to be no exception.
The Act does not relieve carriers, providers, and plan sponsors form complying with the various State and Federal laws, including the Hawaii Prepaid Health Care Act. The Hawaii Prepaid Health Care Act is considered to be “qualified health benefits plan” and has met the “essential benefits package” test to the extent that the Secretary of Labor finds that the Act “is substantially equivalent … to the essential benefits package”. The Act is silent and does not specifically address Massachusetts’s health care reform of 2006, which has severed as somewhat of a model for the current national health care reform. Are the carriers, providers, and plan sponsors in Massachusetts somehow exempted from the Act? Are health care plans that meet the requirements under the Massachusetts law to be afforded the same treatment as Hawaii?
One interesting aspect of the Act is the repeal of the exception of health insurers, including malpractice insurers, form antitrust laws. While efforts to repeal this provision in the antitrust laws date back to the Regan era, it appears to have been successful with the passage of the current Act. It is somewhat difficult to predict the outcome of such a repeal since insurers are regulated by State insurance commissioners to a high degree. When Christine Varney, an antitrust official at the Department of Justice, testified before Congress. she reported that “the most egregiously anti-competitive claims, … are virtually always found immune.” Varney testified that repeal of certain antitrust laws, “would allow competition to have a greater role in reforming health … insurance markets than would otherwise be the case.” Does increased competition “always” resulting lower costs? Does increased competition “always” result in better services or products? Why were health insurers exempted from antitrust in the first place? Did some wise person conclude 60 years ago that it was in the national best interest to exempt insurers?
Since significant savings are expected through the deployment of electronic health care recordkeeping systems (EHR), the Secretary of Health and Human Services is required to study methods to increase their use in small providers (How big is small?) Methods might include monetary incentives to implement such systems, development of low cost software, make VA software available to providers, provide training, and provide implementation support.
in addition, this subtitle of the Act addresses issues as wide ranging as discrimination, whistleblower protection, collective bargaining, state and federal laws regarding abortion, rights of conscience on abortion.
Laws, rules, and regulations do not live in isolation from other laws, rules, and regulations. Rather they must coexist in an environment full of amendments, exceptions, and caveats. I am often asked to provide or obtain a “hard and fast rule” for some specific situation. Usually my response and the response others include a number of exceptions. The Affordable Health Care for America Act is going to be no exception.
The Act does not relieve carriers, providers, and plan sponsors form complying with the various State and Federal laws, including the Hawaii Prepaid Health Care Act. The Hawaii Prepaid Health Care Act is considered to be “qualified health benefits plan” and has met the “essential benefits package” test to the extent that the Secretary of Labor finds that the Act “is substantially equivalent … to the essential benefits package”. The Act is silent and does not specifically address Massachusetts’s health care reform of 2006, which has severed as somewhat of a model for the current national health care reform. Are the carriers, providers, and plan sponsors in Massachusetts somehow exempted from the Act? Are health care plans that meet the requirements under the Massachusetts law to be afforded the same treatment as Hawaii?
One interesting aspect of the Act is the repeal of the exception of health insurers, including malpractice insurers, form antitrust laws. While efforts to repeal this provision in the antitrust laws date back to the Regan era, it appears to have been successful with the passage of the current Act. It is somewhat difficult to predict the outcome of such a repeal since insurers are regulated by State insurance commissioners to a high degree. When Christine Varney, an antitrust official at the Department of Justice, testified before Congress. she reported that “the most egregiously anti-competitive claims, … are virtually always found immune.” Varney testified that repeal of certain antitrust laws, “would allow competition to have a greater role in reforming health … insurance markets than would otherwise be the case.” Does increased competition “always” resulting lower costs? Does increased competition “always” result in better services or products? Why were health insurers exempted from antitrust in the first place? Did some wise person conclude 60 years ago that it was in the national best interest to exempt insurers?
Since significant savings are expected through the deployment of electronic health care recordkeeping systems (EHR), the Secretary of Health and Human Services is required to study methods to increase their use in small providers (How big is small?) Methods might include monetary incentives to implement such systems, development of low cost software, make VA software available to providers, provide training, and provide implementation support.
in addition, this subtitle of the Act addresses issues as wide ranging as discrimination, whistleblower protection, collective bargaining, state and federal laws regarding abortion, rights of conscience on abortion.
Monday, December 14, 2009
Health Choices Administration
Monday, December 14, 2009
The Health Choices Administration Commissioner, Inspector General For The Health Choices Administration, and the Ombudsman for the health choices administration are responsible for the overall day-to-day operation and administration of the agency under the oversight of Congress and in cooperation with State attorneys general ,insurance regulators, National Association of Insurance Commissioners, appropriate State agencies, Federal Trade Commission, other, Federal agencies, and Indian tribes and tribal organizations.
The Health Choices Commissioner and the Inspector General For The Health Choices Administration are both appointed by the President and confirmed by the Senate. The Ombudsman is appointed by the Commissioner. (I am sure the Commissioner will “consult” with the President and others concerning this appointment. Conceptually, this means that as Presidents come and go, these officials may also so change and so may the “flavor” of the agency?)
The Commissioner’s role will be to establish qualified heath care plan standards, the Health Insurance Exchange, and individual health insurance affordability credits. In addition, the Commissioner is required to promote accountability on the part of those entities offering health care coverage (carriers, providers, plan sponsors), conduct compliance examinations and audits, and recover the of costs of those examinations and audits. (I assume this will be through monetary penalties?)
A major function of the Commissioner will be to collect data, data on plans offered, procedures covered, financial aspects of plans, … etc. This will be used for various reasons including the measurement of the agency’s success or failure in “promoting quality and value, protecting consumers, and addressing disparities in health care”. Along with collecting data, the Commissioner is charged with the setting of standard medical definitions and terms.
By direction, the Commissioner is required to consult, coordinate, and cooperate with numerous Federal, State agencies and regulatory bodies in an effort to deliver effective and efficient enforcement of the Act’s administration. While this may sound somewhat negative, the Commissioner is required to “achieve uniform standards that adequately protect consumers … that does not unreasonably affect employers and insurers”.
The Act creates a Commissioner and an Inspector General, but then a Health Insurance Ombudsman is also created. The Ombudsman is responsible for receiving complaints and providing assistance, presumably from and to consumers, i.e., the public and to do so in a “linguistically appropriate manner”. In addition, the Ombudsman will be responsible for submitting annual reports to both Congress and the Commissioner.
How long is it going to require for the Commissioner to pull together the various and numerous bodies he has to consult, coordinate, and cooperate with in order to come up with a workable solution to the current health care system? As carriers, providers, and plan sponsors; are we going to be faced with one, two or more years before final rules and regulations are published?
The Health Choices Administration Commissioner, Inspector General For The Health Choices Administration, and the Ombudsman for the health choices administration are responsible for the overall day-to-day operation and administration of the agency under the oversight of Congress and in cooperation with State attorneys general ,insurance regulators, National Association of Insurance Commissioners, appropriate State agencies, Federal Trade Commission, other, Federal agencies, and Indian tribes and tribal organizations.
The Health Choices Commissioner and the Inspector General For The Health Choices Administration are both appointed by the President and confirmed by the Senate. The Ombudsman is appointed by the Commissioner. (I am sure the Commissioner will “consult” with the President and others concerning this appointment. Conceptually, this means that as Presidents come and go, these officials may also so change and so may the “flavor” of the agency?)
The Commissioner’s role will be to establish qualified heath care plan standards, the Health Insurance Exchange, and individual health insurance affordability credits. In addition, the Commissioner is required to promote accountability on the part of those entities offering health care coverage (carriers, providers, plan sponsors), conduct compliance examinations and audits, and recover the of costs of those examinations and audits. (I assume this will be through monetary penalties?)
A major function of the Commissioner will be to collect data, data on plans offered, procedures covered, financial aspects of plans, … etc. This will be used for various reasons including the measurement of the agency’s success or failure in “promoting quality and value, protecting consumers, and addressing disparities in health care”. Along with collecting data, the Commissioner is charged with the setting of standard medical definitions and terms.
By direction, the Commissioner is required to consult, coordinate, and cooperate with numerous Federal, State agencies and regulatory bodies in an effort to deliver effective and efficient enforcement of the Act’s administration. While this may sound somewhat negative, the Commissioner is required to “achieve uniform standards that adequately protect consumers … that does not unreasonably affect employers and insurers”.
The Act creates a Commissioner and an Inspector General, but then a Health Insurance Ombudsman is also created. The Ombudsman is responsible for receiving complaints and providing assistance, presumably from and to consumers, i.e., the public and to do so in a “linguistically appropriate manner”. In addition, the Ombudsman will be responsible for submitting annual reports to both Congress and the Commissioner.
How long is it going to require for the Commissioner to pull together the various and numerous bodies he has to consult, coordinate, and cooperate with in order to come up with a workable solution to the current health care system? As carriers, providers, and plan sponsors; are we going to be faced with one, two or more years before final rules and regulations are published?
Sunday, December 13, 2009
Consumer Protections and Information Standards
Saturday, December 12, 2009
Previously, I noted that to be a “qualified health benefits plan”, a plan must meet provisions for affordable coverage, essential benefits, and consumer protection. Similar to ERISA and other “worker rights” laws, the Act outlines appeals and informational dissemination processes.
The Act grants the ability to the Health Choices Commissioner (Commissioner) and the Secretary of Labor (Secretary) to jointly establish, standardize, coordinate, and “harmonize” various consumer, provider, and carrier marketing protections and informational practices. This standards apply to plans offered through Health Insurance Exchanges and may apply to non-Exchange and other plans “only to the extent specified by the Commissioner”.
The Act outlines mechanisms to protect consumers, providers, carriers, and others:
o Timely grievance/appeals process for internal/external claims reviews/payments
o Accurate/timely informational/plan transparency/disclosures, including enrollee/participant rights
o Plain language use (Similar to requirements in ERISA for SPD’s, SMM’s, & SAR’s)
o Cost-sharing transparency (deductibles, co-pays, coinsurance) (Many plans currently provide this via enrollment materials and/or web portals.)
o Reimbursement transparency between the carrier and provider (How will provider confidentiality be maintained?)
o Pharmacy benefit managers (PBM) transparency, statistical reports on numbers of Rx’s, average payments , mail-order vs retail, discounts, rebates, generic vs name-brand, enrollment turnover, and other information.
o Confidential annual public PBM transparency reports by Commissioner.
o Annual PBM reports by Commissioner to: State/Federal law enforcement (fraud), Comptroller General, Medicare Payment Advisory Commission, Secretary of Health and Human Services, and Director Congressional Budget Office
o Penalties for PBM’s who fail to comply or falsify information.
o Standardization of coordination/subrogation of benefits/claims process
o Administrative simplification of processes
o State prohibitions on discrimination against health care providers
o Protection of physician Rx information/Congressional biased marketing/sales practices report
o Dissemination of advance care planning information
o Information related to other “end-of-life” planning tools
o Does not promote suicide, assisted suicide, euthanasia, or mercy killing. regardless of legality
o Does not require advanced directive or a physician’s order for life sustaining treatment or other end-of-life planning document
o Does not require consent to restrictions on the amount, duration, or scope of
medical benefits otherwise covered under a plan
o Advanced directive defined: includes living will, comfort care order, or
durable power of attorney for health care
o No restrictions on palliative/hospice care or service for pain or discomfort
o No preemption of state law regarding advance planning, palliative
care, or end-of-life decision-making.
How will plans be able to achieve “administrative simplification” with all of this additional compliance and reporting requirements? Will new reporting requirements add to the cost of Rx and PBM’s?
Previously, I noted that to be a “qualified health benefits plan”, a plan must meet provisions for affordable coverage, essential benefits, and consumer protection. Similar to ERISA and other “worker rights” laws, the Act outlines appeals and informational dissemination processes.
The Act grants the ability to the Health Choices Commissioner (Commissioner) and the Secretary of Labor (Secretary) to jointly establish, standardize, coordinate, and “harmonize” various consumer, provider, and carrier marketing protections and informational practices. This standards apply to plans offered through Health Insurance Exchanges and may apply to non-Exchange and other plans “only to the extent specified by the Commissioner”.
The Act outlines mechanisms to protect consumers, providers, carriers, and others:
o Timely grievance/appeals process for internal/external claims reviews/payments
o Accurate/timely informational/plan transparency/disclosures, including enrollee/participant rights
o Plain language use (Similar to requirements in ERISA for SPD’s, SMM’s, & SAR’s)
o Cost-sharing transparency (deductibles, co-pays, coinsurance) (Many plans currently provide this via enrollment materials and/or web portals.)
o Reimbursement transparency between the carrier and provider (How will provider confidentiality be maintained?)
o Pharmacy benefit managers (PBM) transparency, statistical reports on numbers of Rx’s, average payments , mail-order vs retail, discounts, rebates, generic vs name-brand, enrollment turnover, and other information.
o Confidential annual public PBM transparency reports by Commissioner.
o Annual PBM reports by Commissioner to: State/Federal law enforcement (fraud), Comptroller General, Medicare Payment Advisory Commission, Secretary of Health and Human Services, and Director Congressional Budget Office
o Penalties for PBM’s who fail to comply or falsify information.
o Standardization of coordination/subrogation of benefits/claims process
o Administrative simplification of processes
o State prohibitions on discrimination against health care providers
o Protection of physician Rx information/Congressional biased marketing/sales practices report
o Dissemination of advance care planning information
o Information related to other “end-of-life” planning tools
o Does not promote suicide, assisted suicide, euthanasia, or mercy killing. regardless of legality
o Does not require advanced directive or a physician’s order for life sustaining treatment or other end-of-life planning document
o Does not require consent to restrictions on the amount, duration, or scope of
medical benefits otherwise covered under a plan
o Advanced directive defined: includes living will, comfort care order, or
durable power of attorney for health care
o No restrictions on palliative/hospice care or service for pain or discomfort
o No preemption of state law regarding advance planning, palliative
care, or end-of-life decision-making.
How will plans be able to achieve “administrative simplification” with all of this additional compliance and reporting requirements? Will new reporting requirements add to the cost of Rx and PBM’s?
Friday, December 11, 2009
Essential Benefits Package
Friday, December 11, 2009
While the Act mandates and enumerates coverage for various benefits, nothing prevents a plan from offering benefits beyond what the Act defines as “Essential”. Those plans that operate inside and outside the Health Insurance Exchange may continue to provide the essential benefits identified in the Act and even offer additional coverage. However, these benefits must be “offered under a separate policy, contract, or certificate of insurance.” The Act provides for inclusion of any and all medical practices, provided those practices are medically appropriate for the patient being treated.
The Act requires the Secretary of Labor to survey employer-sponsored plans to determine what benefits are included in those plans. The Secretary is then required to report his findings to the Health Benefits Advisory Committee and to the Secretary of Health and Human Services. This report will then be used by the Office of the Actuary of the Centers for Medicare & Medicaid Services to determine the “average prevailing employer-sponsored coverage in the” first year after enactment. This now becomes a benchmark or “reference package” with which to develop the benefits of the “Essential Benefits Package”.
The Act does set certain “minimum” services to be included:
o Hospitalization, outpatient/outpatient clinic, including emergency services
o Professional/physicians/other health professionals
o Medically required equipment/supplies
o Prescription drugs
o Rehabilitative/habilitative care
o Mental health/substance abuse, including behavioral health care
o Preventive services including recommended vaccines
o Maternity care.
o Well-baby/well-child care
o Oral health, vision/hearing services for children under 21
o (Adult oral health is pending a study by the Secretary of Health and Human Services)
o Durable medical equipment, prosthetics, orthotics/supplies
o Assessment/counseling cervices associated with domestic violence
The Act prohibits cost sharing for preventive services, (This is not an uncommon practice in many plans today). However, total cost sharing is capped at $5,000 and $10,000 annually for individual and family coverage, respectively. These amounts will be indexed and potentially adjusted annually. Cost sharing will be restricted to “co-payments” rather than “co-insurance”, where possible. (For most of the plans I have managed, it will be difficult for members to reach these levels with current co-payments around $30 to $50.) The goal is to provide benefit coverage that is 70% of the “full actuarial value of the benefits provided under the reference benefits package”. The “reference benefits package” are those services defined in the “Essential Benefits Package” without any cost sharing provisions.
In order for a carrier to participant in the Health Insurance Exchange, they are not “required” to offer abortion coverage, carriers and/or plan sponsors may include or exclude such services as they see fit. The public heath care option also appears to be free to offer or not offer abortion services “based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved.” (Depending on the final outcome current developing legislation, this may change for the public option.)
The Act creates a Health Benefits Advisory Committee, chaired by the Surgeon General and composed of nine members appointed by the President, nine members appointed by the Comptroller General, and up to eight additional members “as the President may appoint”. Committee members serve a 3-year term, except initial member’s terms will be adjusted to stagger their appointments. Members are intended to be representatives reflecting a broad spectrum of health care experts including: providers, patients, employers, labor, carriers, financing/delivery, oral health, racial/ethnic disparities, health care needs of the disabled, governmental agencies, physician/health professionals, and child/adolescent health care. The role of the Committee will be to develop recommendations for the Secretary concerning “benefit standards” and provide periodic updates to its recommendations based on State and public input.
The “benefit standards” is measured relative to the Essential Benefits Package discussed earlier, in addition, the Committee will make recommendations for two additional levels of plans: an Enhanced and a Premium Plan. The Enhanced plan will have a cost sharing level equal to 85% of the actuarial value of the Essential Benefits Package and Premium plan will have a cost sharing level equal to 95%. (This is similar to the Massachusetts Health Care Reform law that provides for a Bronze, Silver, and Gold option from which individuals may select.)
While the Act mandates and enumerates coverage for various benefits, nothing prevents a plan from offering benefits beyond what the Act defines as “Essential”. Those plans that operate inside and outside the Health Insurance Exchange may continue to provide the essential benefits identified in the Act and even offer additional coverage. However, these benefits must be “offered under a separate policy, contract, or certificate of insurance.” The Act provides for inclusion of any and all medical practices, provided those practices are medically appropriate for the patient being treated.
The Act requires the Secretary of Labor to survey employer-sponsored plans to determine what benefits are included in those plans. The Secretary is then required to report his findings to the Health Benefits Advisory Committee and to the Secretary of Health and Human Services. This report will then be used by the Office of the Actuary of the Centers for Medicare & Medicaid Services to determine the “average prevailing employer-sponsored coverage in the” first year after enactment. This now becomes a benchmark or “reference package” with which to develop the benefits of the “Essential Benefits Package”.
The Act does set certain “minimum” services to be included:
o Hospitalization, outpatient/outpatient clinic, including emergency services
o Professional/physicians/other health professionals
o Medically required equipment/supplies
o Prescription drugs
o Rehabilitative/habilitative care
o Mental health/substance abuse, including behavioral health care
o Preventive services including recommended vaccines
o Maternity care.
o Well-baby/well-child care
o Oral health, vision/hearing services for children under 21
o (Adult oral health is pending a study by the Secretary of Health and Human Services)
o Durable medical equipment, prosthetics, orthotics/supplies
o Assessment/counseling cervices associated with domestic violence
The Act prohibits cost sharing for preventive services, (This is not an uncommon practice in many plans today). However, total cost sharing is capped at $5,000 and $10,000 annually for individual and family coverage, respectively. These amounts will be indexed and potentially adjusted annually. Cost sharing will be restricted to “co-payments” rather than “co-insurance”, where possible. (For most of the plans I have managed, it will be difficult for members to reach these levels with current co-payments around $30 to $50.) The goal is to provide benefit coverage that is 70% of the “full actuarial value of the benefits provided under the reference benefits package”. The “reference benefits package” are those services defined in the “Essential Benefits Package” without any cost sharing provisions.
In order for a carrier to participant in the Health Insurance Exchange, they are not “required” to offer abortion coverage, carriers and/or plan sponsors may include or exclude such services as they see fit. The public heath care option also appears to be free to offer or not offer abortion services “based on the law as in effect as of the date that is 6 months before the beginning of the plan year involved.” (Depending on the final outcome current developing legislation, this may change for the public option.)
The Act creates a Health Benefits Advisory Committee, chaired by the Surgeon General and composed of nine members appointed by the President, nine members appointed by the Comptroller General, and up to eight additional members “as the President may appoint”. Committee members serve a 3-year term, except initial member’s terms will be adjusted to stagger their appointments. Members are intended to be representatives reflecting a broad spectrum of health care experts including: providers, patients, employers, labor, carriers, financing/delivery, oral health, racial/ethnic disparities, health care needs of the disabled, governmental agencies, physician/health professionals, and child/adolescent health care. The role of the Committee will be to develop recommendations for the Secretary concerning “benefit standards” and provide periodic updates to its recommendations based on State and public input.
The “benefit standards” is measured relative to the Essential Benefits Package discussed earlier, in addition, the Committee will make recommendations for two additional levels of plans: an Enhanced and a Premium Plan. The Enhanced plan will have a cost sharing level equal to 85% of the actuarial value of the Essential Benefits Package and Premium plan will have a cost sharing level equal to 95%. (This is similar to the Massachusetts Health Care Reform law that provides for a Bronze, Silver, and Gold option from which individuals may select.)
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