States Crack Down on Balance Billing

Healthcare CostsCurrently, only 21 states offer some protection against balance billing and most existing laws apply to emergency services required from out-of-network providers. Few, if any, address balance bills received for treatment by an out-of-network provider in an in-network hospital. In Pennsylvania, the Governor and General Assembly have introduced two bills aimed at taking consumers out of the middle of the reimbursement process. These bills have come after several other states have adopted more comprehensive laws that prohibit balance billing entirely.

Some measures addressed in Connecticut, New York, Maryland, Florida and New Jersey include:

  • Protections in emergency department and in-network hospital settings
  • Prohibiting providers from balance billing and requiring carriers to hold their members harmless
  • Adopting reimbursement rate standards and a payment dispute resolution process
  • Applying these laws to all types of managed care products, including HMOs and PPOs

The goal of the proposals is to keep covered persons out of the middle of carrier-provider payment disputes. In non-emergency procedures, healthcare facilities in New Jersey are required to disclose whether they are in-network and advise the covered person to ask if their physician is in or out-of-network. Individual healthcare professionals must inform the patient if they do not participate in the person’s plan network and provide a billing estimate and applicable CPT codes. With healthcare costs continuing to rise and a lack of federal regulations, we can expect more states to take measures to protect healthcare consumers. We will strive to keep our clients informed as changes develop.

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Transparency in healthcare: The case for an employer bill of rights

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This article was published on January 31, 2019 on Employee Benefit News, written by Steve Kelly.

Today more than ever before, benefits and human resources professionals are struggling to provide their teams with quality coverage at affordable rates. Costs have skyrocketed for the more than 150 million Americans who receive healthcare coverage through their workplace — more than doubling since 2008, according to the Kaiser Family Foundation.

Private health spending by businesses has steadily grown year after year and accounts for 20% of the $3.3 trillion of total health spending in the U.S. Businesses are finding that they can’t afford to wait any longer. They need to take control of their healthcare costs and seek resources to make changes to the plans they currently offer.

With the complexities surrounding the decision-making process for benefits programs, businesses often feel unaware, or worse yet, misled when it comes to their foundational rights regarding health plans.

Enter the Employer Bill of Rights — an initiative to help business owners empower themselves to learn and exercise the basic rights often overlooked in today’s healthcare system and take an activist role as they investigate and select healthcare options.

Knowledge is power

The employer bill of rights is rooted in the mission that every business owner needs to take responsibility for providing the best possible benefits program to their employees. Businesses can utilize the employer bill of rights as a tool and learn how to pay for healthcare like any other business expense.

With the employer bill of rights, employers are empowered to:

1. Pay a fair amount for healthcare.
Healthcare costs are often the second largest operating expense after employee wages. Employers do not have to accept the status quo for their health plan and pay significantly inflated medical expenses.

2. Know what healthcare services actually cost.
A traditional PPO health plan typically leaves the employer in the dark about how plan parameters were set by the insurer and medical provider. Businesses have a right to know the cost of medical services.

3. Audit medical bills.
Billing mistakes and inflation of medical charges are common. Businesses and individuals have a right to carefully evaluate healthcare expenses. A line-by-line auditing of medical bills helps ensure the charges are accurate and fair.

4. Explore your health plan options.
By partnering with an informed and experienced healthcare consultant, employers can discover health plan options beyond the traditional PPO model. A self-funded health plan, where employers pay for medical claims as services are rendered instead of providing ongoing and advanced payments to an insurance company, can take employers on the path toward more control over healthcare spending.

Self-funding is on the rise, with the number of businesses deciding to self-insure increasing by nearly $37 between 1996 and 2015, according to the Employee Benefit Research Institute.

5. Offer your employees a comprehensive and affordable benefits program.
Employees count on their employer-sponsored health plans to be reliable and financially feasible. Employers have a right to offer healthcare solutions that minimize the financial burden on the plan member.

6. Design a health plan to meet your unique needs.
The best health plans are well-rounded and flexible. Employers have the right to customize their health plan to determine the approach that best suits the needs of their business and team. Unlike traditional health plans, self-funded plans are customizable.

7. Defend the best interests of your business and your employees when paying for healthcare.
Surprise medical bills and inflated prices are common, but healthcare finances do not have to be handled alone. Employers and individuals have the right to access advocacy services that support fair and reasonable healthcare payments and help employers meet their fiduciary responsibility.

8. Make direct connections with providers and health systems.
Fair outcomes can be achieved when people work together. By creating direct partnerships with providers and health systems in their communities, employers can become good stewards of healthcare by building bridges and driving quality healthcare experiences for all.

The path to activism

Change in healthcare is possible when businesses take charge and challenge the status quo. As we continue to see the rise of self-funded health plans, the growth of reference-based, or metric-based, pricing is following suit.

The reference-based pricing approach starts at the bottom with an actual cost amount, then adds a fair profit margin to calculate a total cost of service. Simply stated, it allows employers to utilize rational limits of payment to medical providers instead of relying on the traditional PPO model.

Businesses can be activists for change by standing up against out-of-control healthcare costs, and they can start by adopting the employer bill of rights and investigating reference-based pricing. By innovating their healthcare solutions and turning away from insurance plans which have failed to adapt to the changing healthcare landscape, business owners have the opportunity to improve the health plans they offer their employees, transform their bottom line and help spark reform for businesses across the country.

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How Should Your Plan Address Medical Marijuana?

medical-marjuanaThere is a lot of misinformation surrounding medical cannabis, which can make it difficult to establish a plan document that accurately outlines its use. One particular obstacle is the lack of verified and sourced research regarding the medicinal use of cannabis, creating confusion around what the drug can and should be used for.

To address this confusion, benefit plans should limit coverage to areas where existing evidence supports the use. Create a benefit description that reflects approved applications determined by your state, while also limiting the care option to those members whose previous treatment options have failed. Experts agree that plan documents should clearly indicate that medical cannabis will not be authorized as a first line therapy.

Other parameters can be set, such as financial limitations within a certain time period, eligible products and dosages and even eligible suppliers. When addressing cost considerations, it’s important to know that medical cannabis should not be viewed as an alternative to prescription painkillers and opioids, but rather an add-on which does not eliminate those other costs.

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Who says your health plan has to cost 5% more every year?

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Done right, self-funding provides the flexibility needed to control costs.

A 2018 Kaiser Employer Survey showed that the cost of employer-based, family coverage rose to $19,616, an increase of 5 percent from the prior year. While this increase may be considered moderate or acceptable by many employers, we work hard to help our self-funded clients raise the bar (or in this case lower the bar).

In contrast to fully-insured plans, partial self-funding gives employers the freedom to write their own plan document. This enables our clients to adopt a totally different mindset – a “take charge” attitude that not only allows a plan to meet employees’ needs but encourages members to do what they can to keep costs in check.

After focusing on plan design and cost management, we turn our attention to claims data. While others may be quick to pay claims, we help clients look closely at claim costs each month. We use the data to identify trends, treatment patterns or chronic conditions that have the potential to result in a high dollar claim. When we see something that raises a red flag, we go to work on it immediately, looking for ways to minimize costs while striving to achieve the best possible outcome.

The bottom line is that sitting back and hoping that healthcare costs won’t increase next year will not accomplish a thing. Managing the rising cost of healthcare takes know-how, expert administration and the ability to act when cost saving opportunities surface. These are the things we do for our clients each and every day. To raise the bar for your health plan, give us a call at your convenience.

Tell Us How You Feel!

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IRS Publishes PCOR Fees through September 2019

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of health insurance policies and plan sponsors of self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI), which was established by the Affordable Care Act (ACA). The institute assists, through research, patients, clinicians, purchasers and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine. The institute compiles and distributes comparative clinical effectiveness research findings. Under the ACA, all medical plans are responsible for paying the Patient-Centered Outcomes Research fee to the IRS, based on the number of plan participants. If the plan is insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is self-insured, the employer/plan sponsor must file the Form 720 for the second quarter and pay the fee to the IRS directly.

The IRS recently published its PCOR fee for policy and plan years ending January through September 2019 and the applicable dollar amount is $2.45, which is multiplied by the number of covered lives determined for the appropriate period.

The PCOR program will sunset in 2019. The last payment will apply to plan years that end by September 30, 2019 and that payment will be due in July 2020. There will not be any PCOR fee for plan years that end on October 1, 2019 or later.

The PCOR fee is paid by the health insurer for fully insured plans. All self-insured medical plans, including health FSAs and HRAs must pay the fee unless they are considered an excepted benefit:

    • A health FSA is an excepted-benefit as long as the employer does not contribute more than $500/year to the accounts and offers another medical plan with non-excepted benefits.
    • An HRA is an excepted-benefit if it only reimburses for excepted-benefits (e.g., limited-scope dental and vision expenses or long-term care coverage) and is not integrated with the group medical plan.

The PCOR fee is calculated off the average number of lives covered during the policy year. That means that all parties enrolled will have to be accounted for such as dependents, spouses, retirees, and COBRA beneficiaries. Depending on when the plan starts and ends also can determine the fee per form. Participating employees and dependents are counted as covered lives. For HRA and health FSA plans, just count each participating employee as a covered life.

Clients who have elected to have Diversified Group assist with the PCOR fee calculation can expect an email in June 2019 which will include a copy of the completed Form 720 and a PCOR calculation worksheet with supporting documentation. For the current year, clients will need to file the Form 720 by July 31, 2019.

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There’s More to Know About AHPs

bundled-costsMany employers will find it interesting that AHPs will continue to be categorized as MEWAs – Multiple Employer Welfare Arrangements. This consideration will make association health plans subject to some state regulations that severely restrict the formation of self-funded MEWAs.

Having to comply with the rules of each state will make AHPs more difficult to organize. While associations can create a plan that extends across state lines, they will have to follow the rules of the state they are in that has the most restrictive laws. As an example, an AHP based in New Jersey that extends into New York would still have to follow the more restrictive laws of New York.

Even though the regulations are more restrictive than many would like, AHPs should enable many small employers to offer their employees better health benefits at more affordable rates.

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Pharma cash flows to doctors for consultant work despite scrutiny

This article was published on January 6, 2019 on ctmirror.org, written by Sujata Srinivasan.

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Image Source: ctmirror.org

With physicians’ compensation from pharmaceutical and medical device companies under increasing scrutiny, payments to doctors in Connecticut for consultant work rose to $8.5 million in 2017, up from $8 million in 2016.

Payments for meals, travel and gifts also increased from $3.2 million in 2016 to $3.5 million in 2017, data from the Centers for Medicare & Medicaid Services show.

Of the total $27.2 million in payments, $4.37 million – or 16 percent – went to 10 doctors holding licenses in Connecticut.

The highest paid doctor was Dr. Paul Sethi, an orthopedic surgeon in Greenwich, who accepted slightly more than $1 million in 2017 in royalty fees, consulting work, and other services from several companies, including Arthrex Inc., and Pacira Pharmaceuticals Inc., maker of Exparel. The drug, Exparel, is marketed as an alternative to opioid painkillers post-surgery. Sethi frequently takes to Twitter to promote the use of a non-opioid alternative and is listed on the Pacira website in a case study. He did not respond to C-HIT’s request for an interview.

Dr. Robert Alpern, dean of the Yale School of Medicine, received $524,611 for his work as a director on the boards of Abbott Laboratories and AbbVie Inc. Alpern said that he does not provide paid lectures, does not speak for the pharmaceutical companies, does not see patients or write prescriptions, and that his work on the boards is “fully disclosed to Yale University and Yale New Haven Hospital.”

“I recuse myself from any decisions related to either of these companies,” Alpern said.

The financial relationships between pharmaceutical and medical device companies and doctors, as well as teaching hospitals, have been disclosed since 2013, under the Affordable Care Act. The law is intended to provide transparency into the business connections between health care providers and the industry.

The law is also driving some doctors—like infectious diseases specialist Dr. Roger Echols of Easton—to give up their license to practice medicine. “It’s why I did not revive mine last year,” he said, referring to 2016.

Echols was paid $526,881 in 2017 for his work as a consultant primarily for Japan-headquartered Shionogi & Co., best known as the maker of the cholesterol drug Crestor. Echols said he stopped seeing patients and prescribing medication years ago, when he transitioned to the pharmaceutical industry.

Even practicing doctors, Echols said, are now declining payment when they meet with him to discuss drug research. “They’ve gone so far that they won’t even allow us to provide a bagel or a cup of coffee at a meeting because that has to be reported.”

Overall, non-research payments to Connecticut doctors fell 8 percent from $29.7 million in 2016 to $27.2 million in 2017, the data show. Much of the decline occurred in royalty and license fees on sales of drugs and medical devices, charitable contributions, and ownership or investments in companies.

In research payments to Connecticut doctors, pharma and medical device companies paid $901,196 in 2017, down from $1.1 million in 2016, according to the data.

Nationally in 2017, doctors were paid $2.82 billion by 1,525 pharma and medical devices companies. Research payments totaled $4.66 billion.

Dual role of doctors

The dual role of doctors as providers of health care to patients and marketers for drug and medical device companies has been scrutinized for several years and has been the subject of extensive research.

One report, published in a medical cancer journal that examined several studies concluded, “All the money and attention drug representatives shower on doctors has its intended effect: building relationships with doctors and ultimately changing how they prescribe.”

A study published in October 2017 by the U.S. Library of Medicine, National Institutes of Health; found that gifts from pharmaceutical companies result in higher drug costs: “More prescriptions per patient, more costly prescriptions, and a higher proportion of branded prescriptions.”

“There is strong evidence that pharma payments are associated with higher prescribing of the promoted medications, and with higher costs,” said Ellen Andrews, executive director of the Connecticut Health Policy Project.

Dr. Bruce E. Strober, a professor of dermatology at UConn Health, said, “Nearly all my colleagues—anybody who is a specialist in the field—do speak for drug companies, and I am compensated for my time, yes. Unequivocally, it does not alter my prescribing habits.”

Strober received $174,279 in 2017 primarily in consulting fees from Eli Lilly and Co., Bristol-Myers Squibb Co., Sanofi Genzyme, Novartis Pharma AG and Amgen Inc., among others. In 2016, the latest year on record, Strober made out 61 prescriptions for Amgen’s Enbrel amounting to $239,996, according to a C-HIT analysis of Medicare Part D data.  The same year, Amgen paid him $17,000.

Many doctors see their role as merely educating their peers, and being compensated for their time and expertise.

Dr. Mark Milner, an ophthalmologist in Hamden, received $186,125 in 2017 primarily in consulting and speaking fees from pharma companies specializing in dry eye, including Allergan Inc., maker of the blockbuster drug Restasis.

“There is nothing unethical if I am paid for my time. I give a comprehensive dry eye lecture whether I’m sponsored by Allergan, or Shire [North] or Bausch [formerly Valeant],” Milner said.

Dr. Steven Thornquist, a Waterbury-based ophthalmologist and former president of the Connecticut State Medical Society (CSMS), said, “The onus is on the individual physician to be ethical. I don’t think patients should give their doctor the third degree.”

It’s a fine line. Dr. Claudia Gruss, CSMS president, said physicians should decline a cash gift. “At the same time, there are certain physician experts that other physicians look up to, and educational events allow a very frank interchange between physicians in the field. We don’t want to decrease productive collaboration.” In 2017, Gruss received $120.94 in the general category – the category includes food and beverage at medical conferences.

Dr. Niranjan Sankaranarayanan, a nephrologist in Bloomfield, does not accept money for consulting and speaking engagements from pharma companies, though he did earlier in his career. “I was naïve. They invited me to talk about a medication that I was already prescribing, but after one or two talks, I didn’t feel comfortable,” he said. “This is a gray zone. They entice you with more and more, and there is no ceiling to this,” Sankaranarayanan said.  He received $201.60 in general category in 2017.

Medical ethicists say the public must know that their physicians very often have complex interests. “Medicare has databases but more research needs to be done on incentives ad kickbacks,” said Dr. Howard Forman, a Yale professor of diagnostic radiology, economics and public health, who often speaks about medical ethics.

“We have to prove cause-causation rather than correlation. It’s pernicious how the money flows,” said Forman.

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