2018 Massachusetts EMAC Payment Update

In August of 2017, Massachusetts passed H.3822 “An Act Further Regulating Employer Contributions to Health Care”. The purpose of the act is to reinforce the finances of the Commonwealth’s Medicaid and Children’ s Health Insurance (CHIP) programs (MassHealth). Since the implementation of the Affordable Care Act, many states have seen health coverage shift from private employers to the state’s Medicaid program. Primarily due to expanded Medicaid eligibility, many more employed individuals are taking subsidized care through the exchanges and Medicaid versus their employer’s plan. Currently Massachusetts covers 1 in every 4 residents on MassHealth.

To help ease some of this fiscal burden, effective January 1, 2018, the Commonwealth has instituted a temporary, two year, two tiered assessment on employers expected to collect $400 million over 2018 and 2019.

Employer Assessments:

    • Tier One – An increase in the Employer Medical Assistance Contribution (EMAC)* rate currently paid by employers, resulting in a maximum per employee annual contribution of $77 in 2018 and 2019 instead of the current $51;
    • Tier Two – A separate, targeted EMAC payment requiring employers to pay an additional 5% of wages on the first $15,000 in annual earnings ($750 maximum per employee) for each non-disabled employee who is enrolled in a state-subsidized health plan, MassHealth or ConnectorCare – regardless of whether the employer offers a group health plan or whether the employee is a full or part-time employee.

*EMAC is a MA payroll tax paid by employers. Its purpose is to help finance the cost of subsidized care for low income MA residents. The EMAC was effective 1/1/14 to replace the MA Fair Share Contribution when it was repealed in lieu of the ACA. EMAC applies to employers with 6 or more employees in a quarter. Contributions to EMAC are paid on the first $15,000 of each employee’s wages.

The program will be administered by the Department of Unemployment Assistance (DUA). The DUA will match quarterly wage reports with MassHealth and ConnectorCare records to determine which employers owe the assessment and how much. The amount owed will appear on the employer’s DUA statement in the section showing the employer’s Unemployment Insurance liability. Payment is due on or before the last day of the month succeeding the quarter in which wages were paid and reported. Employers can check to see if the state’s calculations match their own records online after the EMAC Supplement is calculated.

For more information/FAQs from the DUA, click here.

HIRD Form is Back
Employers will be required to annually submit a new version of the HIRD (health insurance responsibility disclosure) form, also beginning in 2018 to verify information that is currently self-reported by individuals who apply for public health insurance programs. The new Massachusetts healthcare coverage form is an annual report on the employer’s offer of health insurance to its employees, including information on eligibility, cost, benefit design and employee contributions. The final version of the form and regulations governing its completion will be available in early March for employers to use in their 2018 healthcare reporting. More guidance on the form and when/how to file will be forthcoming. Employers who knowingly falsify the form or fail to file it face a penalty of $1,000-$5,000, according to state law.

The human side of healthcare: When treatment is at risk because profit takes priority

health-benefits

This article was published on April 06, 2018 on CTViewPoints, written by Steve Kelly.

For the New Haven parents of one young boy who needed a tonsillectomy, the news was grim. Not because his diagnosis was risky or complicated, but because the family’s hospital rejected their health insurance and demanded $9,000 up front for the procedure. By the time their son would be eating ice chips and Jell-O post-surgery, a minimum of $10,000 more would be due.

This inflexible posture taken by a reputable Connecticut provider in the face of a healthcare consumer in need is disturbing. Fortunately for Americans, the U.S. provides access to much of the finest medical care in the world – skilled doctors and nurses and clinicians whose priority is patient care. Unfortunately, the broken part of our healthcare system is the way we pay, and it trickles down from the facilities to the employers to the employees to the families.

An independent study conducted by Castlight Health, a San Francisco-based healthcare price transparency company, shows pricing variations for common procedures that are sometimes five-fold within the same geographic area. Every single day hardworking people are hit with charges that are difficult to understand and challenging to justify.

Remarkably, after extensive time and effort in wrangling with the facility, the New Haven parents were able to have their child’s same physician perform the procedure at an affiliated local surgical center instead, for a prices of less than $2,000, or about one tenth of the cost.

The more than 150 million Americans who get their healthcare coverage from their employer are equally at risk for denial by a healthcare facility. Yet inexplicably absent from mainstream news coverage of healthcare reform are the challenges facing those employers – employers who struggle to provide adequate healthcare to their workers.

In many cases, health plan costs rise annually and far faster than a company’s earnings. This negatively impacts multiple areas of business and the very employees the plans are designed to protect. These rising costs lead to less hiring of new employees, less investment back into the business, less competitiveness in their market space, and a gradual erosion of their employees’ standard of living. Suddenly, the conversation shifts to rising healthcare costs being not simply an economic issue but arguably a quality-of-life issue for the workforce, rather than an insurance regulation discussion.

For many of these employers, options are few. Each year, the open enrollment period serves up more of the same – ineffective traditional PPO models that are constructed on vague cost details with misleading discounts based on inflated prices, all underscored by a pervading lack of control.

Trading a PPO for an approach known as reference-based pricing is both a viable alternative and a business-saving strategy that’s gaining significant traction. Referenced-based pricing restores information and control to employers and their workforce because the coverage plan defines pricing limits upon which claims will be paid. It’s been around for over a decade, and has been adopted by thousands of employers for its cost-saving benefits and transparent view into healthcare expenses.

An approach like referenced-based pricing builds bridges between employers and hospitals while making healthcare a community-centric solution that supports open dialogue between patients and providers. These direct relationships are the remedy to America’s ineffective insurance process that has failed to contain costs or improve quality. Instead of health benefits being provided through insurance company intermediaries, addressing healthcare costs needs to be between the medical providers and the employers in the communities they serve.

Collaboration and direct partnerships between employers and their community medical facilities is a proven approach for resolving the issue of high healthcare costs. It’s past time for businesses and the medical community to innovate and provide a viable alternative for affordable healthcare that employers, and their 150 million employees, can count on here in Connecticut and nationwide.

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Are Costs Really Beyond Anyone’s Control?

Healthcare CostsIn at least one big city, a major carrier is providing 100% coverage to public employees for MRIs, CT Scans and other imaging services only when free-standing, non-hospital based facilities are used. What do you know? Independent TPAs have been helping self-funded health plans do things like this for years.

Too many people have long considered rising healthcare costs to be a condition we simply must live with. Fact is there are alternatives, most of which can only be implemented when the plan’s best interests are first and foremost.

Detailed Reporting Needed

In contrast to a fully-insured plan or self-funding with a carrier-owned ASO, using an independent TPA enables the plan to make informed decisions based on detailed reporting – reporting that the plan owns.

There is no secret to controlling plan costs. It requires discipline and the tools to monitor individual parts of the plan, such as prescription drugs, imaging, chronic disease management and more. Analyzing expenditures such as these can yield huge savings over the course of a year, but only when your administrator is free of carriers or provider affiliations. Having checks and balances in place can make all the difference.

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CMS Modifies Bundled Pay Requirements

dg-bundled-paymentsWhile hospitals in 34 geographic areas will still be required to participate in the Comprehensive Care for Joint Replacement Model, hundreds of acute care hospitals in other areas have received a reprieve. In addition to modifying CJR model compliance, CMS recently finalized plans to cancel the Episode Payment and Cardiac Rehabilitation Incentive Payment Models, both of which were scheduled to become effective on January 1, 2018.

While a number of hospitals will voluntarily participate in the CJR model and others have expressed interest to participate in the two cancelled models, the agency said there would not be enough time to restructure the models prior to the planned 2018 start date. Even though some have criticized the Trump administration for a lack of interest in value-based care, the administration has expressed a strong commitment to value-based payment, but says it prefers voluntary models.

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Want to tackle rising health costs? Consider self-funding ancillary lines

This article was published on February 05, 2018 on Employee Benefit News, written by Liisa Granfors-Hunt.

If your medical plan is fully insured, switching to self-funding (and covering catastrophic claims) can be downright intimidating, even with stop-loss insurance. That’s why many employers are sticking a toe in the financial risk pool by self-funding one or two ancillary lines of coverage.

The most commonly self-funded ancillary benefits are dental and short-term disability, followed by vision. These benefits are relatively low risk: Chances are, your employees don’t typically use dental services much beyond bi-annual checkups and a filling here and there. Short-term disability is a popular benefit for employees needing maternity leave. However, if you plan accordingly, these claims won’t drastically affect the benefit spend.

Self-funding can save money and provide a greater level of transparency into how a benefits plan is performing. Here’s where you can save money: When insurance companies price products, they determine the premium by reviewing actuarial data, setting aside a portion to pay current claims, reserves to pay future claims, plus a profit. Why let the insurance company hold your reserves? By self-funding, employers hold that money.

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Photo Source: Employee Benefit News

If you’re interested in trying self-funding for dental or short-term disability coverages, you’ll need some claims data to work with. When you self-fund a benefit such as dental care, an underwriter will review your claims history, taking into account the number of people covered under the plan, and determine what your expected claims will be based on past data and future trends. You’ll set a budget that includes your fee for plan administration, based and your expected claims. We don’t recommend self-funding the benefit the first year you offer it.

What to consider

When self-funding short term disability, depending on your comfort level, there are varying levels of help to administer the plan. Third-party administrators can handle the full range of managing a self-funded plan, such as adjudicating the claim, calculating the amount to pay and actually paying the claim. This takes some of the pressure off of plan sponsors who are completely new to self-funding, but, as with anything that conveys value, TPAs come at a cost. Therefore, you may choose to handle most of this responsibility yourself, including calculating the benefit and drawing the check. But before you make that decision, assess the availability and knowledge of your internal resources.

For both dental and short term disability, compliance is key. Depending on how your plan is structured, you may be responsible for complying with state and federal regulations that your carrier handled previously. When setting up your plan, it’s vital to ensure that you understand where responsibilities lie so you can remain compliant.

Risk should be your primary concern. Sure, this may seem obvious — for ancillary benefits such as dental and short-term disability, the risk is relatively low. Self-funding an insurance benefit means you should watch how the plan is performing more closely than you would if it were fully insured.

One example of potential savings

For companies who weigh the risk and begin self-funding dental, the savings can be very real. One company offered an employer paid dental plan to its 420 eligible employees. The plan averaged 394 enrolled members over 18 months. During that same 18-month period, the employer paid $567,474 in premiums. The insurance company paid $481,617 in dental claims, equaling a difference of $85,857. Even after adding a $4.50 per employee per month administration fee to the claims cost, the employer would have saved nearly $54,000, or 9.5% of the total cost.

Medical costs continue to rise steeply; self-funding some of your ancillary cove rages can give you greater insight into how your program is performing and help you save money.

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Empowering Employees: Big Talk, Little Action

dg-empoweringTelemedicine offers a lot of potential for everyone – added convenience for busy families and lower costs than a traditional office visit. But as helpful as this service can be, it will only make a difference if it is used.

Low utilization is not unique to telemedicine. It’s a common problem with many new, well designed and well-intended health care services. Encouraging plan members to actually use new offerings is a challenge for employer groups, large and small. And while utilization is often higher in self-funded health plans, all employers need help turning talk into action. Here are a few ideas to consider:

It’s all about them – With health care consuming more of everyone’s income and attention, we all have a vested interest in our benefits. And while wonderful tools like telemedicine keep coming to the table, you need to look at these offerings from your member’s perspective rather than your own. Talk with your employees; ask if a service will help them and listen to their feedback. If it can add real value to your employee’s lives, utilization will follow.

Talk about health, not cost – Research indicates that when it comes to their health and well-being, there are many things members would prefer to hear about than fees and costs. A majority are interested in improving their health. It takes time, but focusing on current health risks and personalizing communications as much as possible will help members want to get more engaged.

Educate to empower – Transparency tools and online portals are no different than other modern advances. If people don’t understand them, they will never catch on. Like telemedicine, unless employees understand how to use it and when they can use it, they will never realize the benefit of having an experienced, board certified physician, with access to their medical records, available to help them 24/7.

While it seems that other new disruptive innovations, such as Alexa, catch fire overnight, they do take time. Since your employee communication budget likely pales in comparison to those driving consumers to Amazon, talk with your TPA about new ways to zero in on the needs of your employees. Doing so can lead to increased utilization and a happier, healthier workforce in 2018 and beyond.

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Unnecessary Medical Care: More Common Than You Might Imagine

This article was published on February 1, 2018 on National Public Radio, Inc, written by Marshall Allen.

Photo Source: NPR, Inc.

It’s one of the intractable financial boondoggles of the U.S. health care system: Lots and lots of patients get lots and lots of tests and procedures that they don’t need.

Women still get annual cervical cancer testing even when it’s recommended every three to five years for most women. Healthy patients are subjected to slates of unnecessary lab work before elective procedures. Doctors routinely order annual electrocardiograms and other heart tests for people who don’t need them.

That all adds up to substantial expense that drives up the cost of care for all of us. Just how much, though, is seldom tallied. So, the Washington Health Alliance, a nonprofit dedicated to making care safer and more affordable, decided to find out.

The group scoured the insurance claims from 1.3 million patients in Washington state who received one of 47 tests or services that medical experts have flagged as overused or unnecessary.

What the group found should cause both doctors, and their patients, to rethink that next referral. In a single year:

  • More than 600,000 patients underwent a treatment they didn’t need, treatments that collectively cost an estimated $282 million.
  • More than a third of the money spent on the 47 tests or services went to unnecessary care.
  • 3 in 4 annual cervical cancer screenings were performed on women who had adequate prior screenings – at a cost of $19 million.
  • About 85 percent of the lab tests to prep healthy patients for low-risk surgery were unnecessary — squandering about $86 million.
  • Needless annual heart tests on low-risk patients consumed $40 million.

Susie Dade, deputy director of the alliance and primary author of the report released Thursday, said almost half the care examined was wasteful. Much of it comprised the sort of low-cost, ubiquitous tests and treatments that don’t garner a second look. But “little things add up,” she said. “It’s easy for a single doctor and patient to say, ‘Why not do this test? What difference does it make?'”

ProPublica has spent the past year examining how the American health care system squanders money, often in ways that are overlooked by providers and patients alike. The waste is widespread – estimated at $765 billion a year by the National Academy of Medicine, about a fourth of all the money spent each year on health care.

The waste contributes to health care costs that have outpaced inflation for decades, making patients and employers desperate for relief. This week Amazon, Berkshire Hathaway and JPMorgan Chase rattled the industry by pledging to create their own venture to lower their health care costs.

Wasted spending isn’t hard to find once researchers — and reporters — look for it. An analysis in Virginia identified $586 million in wasted spending in a single year. Minnesota looked at fewer treatments and found about $55 million in unnecessary spending.

Dr. H. Gilbert Welch, a professor at The Dartmouth Institute who writes books about overuse, said the findings come back to “Economics 101.” The medical system is still dominated by a payment system that pays providers for doing tests and procedures. “Incentives matter,” Welch said. “As long as people are paid more to do more they will tend to do too much.”

Dade said the medical community’s pledge to “do no harm” should also cover saddling patients with medical bills they can’t pay. “Doing things that are unnecessary and then sending patients big bills is financial harm,” she said.

Officials from Washington’s hospital and medical associations didn’t quibble with the alliance’s findings, calling them an important step in reducing the money wasted by the medical system. But they said patients bear some responsibility for wasteful treatment. Patients often insist that a medical provider “do something,” like write a prescription or perform a test. That mindset has contributed to problems like the overuse of antibiotics — one of the items examined in the study.

The report may help change assumptions made by providers and patients that lead to unnecessary care, said Jennifer Graves, vice president for patient safety at the Washington State Hospital Association. Often a prescription or technology isn’t going to provide a simple cure, Graves said. “Watching and waiting” might be a better approach, she said.

To identify waste, the alliance study ran commercial insurance claims through a software tool called the Milliman MedInsight Health Waste Calculator. The services were provided during a one-year period starting in mid-2015. The claims were for tests and treatments identified as frequently overused by the U.S. Preventive Services Task Force and the American Board of Internal Medicine Foundation’s Choosing Wisely campaign. The tool categorized the services one of three ways: necessary, likely wasteful or wasteful.

The report’s “call to action” said overuse must become a focus of “honest discussions” about the value of health care. It also said the system needs to transition from paying for the volume of services to paying for the value of what’s provided.

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