Employer Mandate - Delay and Final Regulations

This past Monday (February 10, 2014) the Treasury Department issued long awaited FINAL REGULATIONS pertaining to the Affordable Care Act's (ACA) "employer mandate", aka "employer shared responsibility"; or "pay or play".  There is a great deal of information and guidance contained in these regulations, thus, I will not attempt to address all of it in this post.  Rather, I'll provide some of the highlights, and embed some links to direct you to more comprehensive details.  To review what, how, and whom the employer mandate affects, click - http://sstevenshealthcare.blogspot.com/2013/06/understanding-employer-shared.html

It is imperative that readers/stakeholders understand there are two (2) aspects to this release:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Replacement Bill Proposed ~ C.A.R.E. Act

From the time the Affordable Care Act (ACA) was signed into law on March 23, 2010, after having been passed by congress on a 100% partisan basis by the Democrat party, the Republican party has largely expressed opposition to the law.  In fact, the Republican controlled House of Representatives has passed upwards of 40 bills seeking to completely repeal the ACA.  However these bills never made it to the Democrat controlled Senate floor for a full vote, and thus "died on the vine".  Perhaps no other issue facing our country has seen the level of opposition and discourse than has health care "reform".

For the second time since the ACA's passage, a replacement bill has been proposed, and interestingly, its origination is the U.S. Senate.  (Note: Late in 2013, Sen. John McCain and Rep. Tom Price introduced companion ACA replacement bills, which have not gained much traction in either chamber.)  Last week (01/27/2014) Republican Senators Orrin Hatch (UT), Tom Coburn (OK), and Richard Burr (NC) introduced the "Patient Choice, Affordability, Responsibility, and Empowerment Act", or CARE.  Shortly thereafter (01/30/2014) House of Representatives leader Eric Cantor announced the House would be - "taking up a bill that mirrors the Hatch, Coburn, Burr bill later this year".

There are three (3) reasons to believe this bill, or some variation thereof, may actually have a chance of replacing the ACA:

1. In the President's state of the union address last week, he welcomed the offering of other health care reform solutions;
2. The midterm elections could result in a change in the control of the U.S. Senate; and
3. There is growing sentiment the ACA is not the best way forward for health care reform (according to several polls).

Here is a broad brush look at what the CARE Act seeks to accomplish:

• Maintains several ACA provisions including: subsidies to help low income individuals purchase coverage; dependent eligibility to age 26; and bans on lifetime and annual coverage limits.
• Removal of several ACA provisions including: employer mandate; individual mandate; minimum coverage requirements, the ban on pre-existing condition exclusions; and most of the taxes and fees. State health insurance exchanges would become optional.  (Note: under the proposal, pre-existing condition limitations would not apply to those who maintained continuous individual or group coverage, much the same as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires of group health plans now.)
• An income tax on employer provided health insurance of 35% of the portion of premium the employer pays.  Currently, employer provided health insurance is tax free.  This provision would impact roughly 150 million people who currently receive health insurance through their employer.
• Income tax credits for individuals who don't have access to employer provided coverage, the uninsured, and the poor. The amount of the tax credit, available to individuals earning up to three times the federal poverty rate, would be based on age rather than need, and would increase commensurately with age.  Interestingly, under the proposal, eligible tax credit recipients can opt to use the credits to pay for coverage or care.
• Medicaid reform - the bill would make changes to Medicaid, providing states with a fixed amount of money per person enrolled to reduce spending.
• Medical malpractice reforms
• Improving Health Savings Accounts (HSA)
• Health care transparency to better equip patients to be better health care consumers

For those interested in a more in-depth overview of the CARE Act, here is a link to it's Legislative Proposal - http://www.hatch.senate.gov/public/_cache/files/bf0c9823-29c7-4078-b8af-aa9a12213eca/The%20Patient%20CARE%20Act%20-%20LEGISLATIVE%20PROPOSAL.pdf

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In Healthcare, Time is of the Essence!

[This week's blog post borrows heavily from a recent blog post written by Dr. Gregory Sorensen, CEO of Siemens Healthcare - http://blogs.hbr.org/2014/01/to-cut-health-costs-focus-on-the-first-minutes-of-care/.]
We've all heard the expression - "time is of the essence".  But a recent blog post I came across (see above) compelled me to share with my readers the incredible application of this expression to the health care industry.  Not only does effective triage and initial diagnosis portend better outcomes, it also has a significant impact on efficiency and costs.  And let's face it…at a time when health care consumes nearly a fifth of our nation's gross domestic product (GDP), finding ways to cut health care costs is critical.

So it got my attention when Dr. Sorensen reported in his blog that - "It is in the first 15 minutes of a medical encounter that up to half of all medical costs are set in motion.   Placing this in a dollars and cents perspective, nearly $1.4 trillion is impacted by what happens in less time than it takes to listen to Led Zeppelin's "Stairway to Heaven".  Coincidentally, 15 minutes is also the average amount of time a primary care physician spends with a patient.  

The Institute of Medicine found that between 20 - 50 percent of health care spending is either wasted or unnecessary.  Perhaps more compelling is the fact that studies show that much of this inefficiency is directly attributable to care that never should have been provided, primarily due to incorrect diagnosis. In short, what happens in that first 15 minutes is extremely important.  Driving this point home, Dr. Sorensen provides the following observations:

• Diagnoses that are missed, wrong or delayed affect an estimated 10 to 20 percent of cases, numbers much greater than drug errors or surgery on the wrong patient or body part;

• As far back as 1991, the Harvard Medical Practice Group study found that diagnostic error accounts for 17 percent of preventable errors in hospitalized patients, while autopsy studies covering four decades reveal that nine percent of patients experienced a major diagnostic error that went undetected while they were alive;

• A 2012 study found that 40,500 people die each year due to fatal diagnostic errors in U.S. intensive care units, nearly equal to the lives taken annually by breast cancer;

• In a review of 25 years of U.S. malpractice claim payouts, from 1986 through 2010, researchers at Johns Hopkins found that diagnostic errors—not surgical mistakes or improper medication—accounted for 35 percent of total claims, generated payments of nearly $39 billion and resulted in death or disability almost twice as often as other error categories;

• A 2009 report published in the Journal of the American Medicine Association found that diagnostic errors account for 40,000 to 80,000 hospital deaths in the U.S. each year, with errors of diagnosis being the most common, the most costly, and the most deadly form of medical error;

• A recent commentary on a Texas VA study as reported by Kaiser Health News estimates that “with more than half a billion primary care visits annually in the United States . . . at least 500,000 missed diagnostic opportunities occur at U.S. primary care visits, most resulting in considerable harm.”

To better address this challenge, Dr. Sorensen offered the following four ideas:

1. BETTER COORDINATION OF CARE - The Affordable Care Act endeavors to change the way health care providers are paid, moving away from quantity of care to quality of care.
2. TECHNOLOGY - Studies have linked the use of software to better diagnosis and treatment protocols, resulting in significant reductions in hospital stays.
3. RESEARCH - Innovations that improve pathology result in more correct diagnosis and treatment which again, reduce costs.
4. BETTER BASELINES - Shockingly, not a single hospital in the U.S. tracks or counts diagnostic errors.  Doing so would allow for the establishment of relativity's that would no doubt result in the prevention of errors.

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ACA's Insurance Company Bailouts

1. Patient Centered Outcomes Research Institute Fee
2. Transitional Reinsurance Fee
3. Health Insurance Tax

These are three (3) of the more than 18 new taxes, fees, and deduction changes that have been created/implemented in order to fund the Affordable Care Act (ACA), aka Obamacare.  The later two (2) have not yet been imposed/collected, but the bell rings this year (2014) for their collection and remittance to Uncle Sam.  This week I thought I would delve into the ear marking of some of this revenue, and what many are calling the ACA's "insurance company bailout". 

The ACA contains three (3) separate and distinct "bailout programs" embedded within it's 2,700 pages.  They are the Reinsurance Program (temporary), Risk Adjustment Mechanism, and Risk Corridor.  In short, each program is designed to protect insurance companies that participate in the health care marketplaces/exchanges, from costs and losses.  The Congressional Budget Office (CBO) has projected the ACA to direct some $1,071,000,000,000.00 (that's trillion with a T) over the 10 year period from 2014 - 2023, to eligible insurers.  Here's a brief description of each of these programs.

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

What's Causing Health Care Spending to Slow?

Those of us in the health care industry (both delivery and financing) are pleasantly surprised, albeit cautiously optimistic, to learn that health care spending has slowed rather dramatically in recent years.  In fact, for the first time ever, the percentage of our Gross Domestic Product (GDP) attributable to health care has decreased from 17.3% in 2011 to 17.2% in 2012 ($2.8 trillion).  Fellow health care stakeholders may find it interesting that in1960; health care consumed a mere 5% of our nation’s GDP.  Put another way, in 2012 health care spending grew by 3.7%, which is virtually identical to the spending percentage growth in 2009, 2010, and 2011.  By contrast, in 2002, health care spending grew by a whopping 9.7%.

So while this is great news for the nation, it begs a couple of questions: 1. What is/are the cause(s) of the decline in health care spending; and 2. Is the trend temporary or sustainable?  Let’s examine some of the contributing factors associated with the recent trend.  

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Marketplace/Exchange Update

Happy New Year to all my friends, colleagues, and subscribers throughout the land!  As you may have noticed, this blog went “dormant” over the holidays, which was as much a relief for my readers; I’m sure, as it was for me.  So now here we are in 2014, and back to business, and weekly blog posts!

I thought I’d start the new year off with a brief update on what’s happening with the public health insurance marketplaces/exchanges.  Last month involved a flurry of activity, guidance and extensions announced just prior to the holidays.  Here’s the latest…

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Compliance Checkup (2014 Strategies Deployed)

 

As the 2014 open enrollment season comes to a close (bringing an overwhelming sense of relief and joy to HR professionals and Benefits Brokers/Consultants throughout the land!), I thought I’d review the major Affordable Care Act (ACA) related compliance issues addressed in preparation for the new (benefits) year. 

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx