Beware of Facility Fees

Members would be well advised to keep an eye out for a new wrinkle in provider billing – facility fees, resembling resort fees often tacked on to daily room charges at upscale hotels. These fees, being charged by some hospital-owned clinics in addition to the charge for physician services, are said to be the result of hospitals acquiring more and more physician practices. They are also one more reason to look closely at provider billing.

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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 The EMAC was effective 1/1/14 to replace the MA Fair Share Contribution when it was repealed in lieu of the ACA.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.

IRS Reverses HSA Family Contribution Limits – Again!

In March, due to the new inflation-adjustment calculations required under the Tax Cuts and Jobs Bill Act, the IRS announced in revenue ruling 2018-27 that the previously released (in May 2017) $6,900 family contribution limit would be reduced to $6,850. Since excess contributions are subject to a 6% excise tax, many employers and individuals who front-loaded their HSA contributions in January were now looking at a penalty for overfunding their HSA for 2018, as well as income tax due on the excess. The IRS received enough complaints from stakeholders asserting that implementing the $50 reduction to the limitation would impose numerous unanticipated administrative and financial burdens that they have actually reversed their decision and will go back to the $6,900 family contribution limit for 2018. The revised inflation-adjustment calculation established under the Tax bill has been put on hold until 2019.

National Prescription Drug Take-Back Day is April 28th

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National Prescription Drug Take-Back Day will take place on Saturday, April 28th, from 10 a.m. to 2 p.m. and is a great opportunity for those who missed the previous events, or who have subsequently accumulated unwanted, unused prescription drugs, especially medications including opioids such as codeine, hydrocodone, oxycodone, morphine or fentanyl, to safely dispose of those medications.

Since the first Take-Back day in 2010, over 9 million pounds of unwanted or expired medications have been surrendered for safe and proper disposal at over 9,000 sites. Click here to find a collection site near you.

Workers Retiring Later

The Society of Actuaries reports that nearly one in five Americans in their early 70s are still working. A big reason cited is that the age at which people can claim full Social Security benefits is currently 66. With actuarial tables showing that a 65-year old male can expect to live an additional 20 years, working longer has become a necessity, since retirement may very well last far longer than previously anticipated.

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How a Broken Healthcare System Impacts People’s Lives

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As a Third Party Administrator, employers and plan members count on us to make their health benefits work. While that sounds easy enough, it can be anything but easy when ordinary working families are forced to face exorbitant hospital bills.

One couple recently found themselves confronted with a very difficult situation when their son needed a medical procedure that would be considered routine in ordinary circumstances. However, what happened was anything but ordinary. The hospital rejected the couple’s insurance, saying that because they had gone out of network, they would be required to pay $9,000 up front for their child’s tonsillectomy and another $10,000 or more immediately following the procedure.

Their health plan, which we manage for their employer, has been partially self-funded for several years. In addition, the employer recently replaced their PPO network with reference based (or cost plus) pricing, a strategy that enables the plan to define pricing limits and ensure a much more transparent view of healthcare expenses.

In this particular case, we worked with the parents, their regular pediatrician and ELAP Services to arrange for the procedure to be performed at a local, affiliated surgical center – at a fraction of the price quoted by the original hospital. Their total cost was less than $2,000, approximately one tenth of the cost the original provider intended to charge. It took a great deal of work and cooperation to achieve this outcome, but the case serves as an excellent example of what can be done when a health plan has been designed to encourage open dialogue between patients, trusted advisors and providers.

More and more, hardworking Americans are facing extraordinary healthcare costs and struggling to pay their bills. NerdWallet Health conducted a study and found that a debt collection agency will contact 1 in 5 American adults regarding medical debt. This means there are approximately 51 million people who are unprepared and unable to deal with the rising cost of healthcare.

Another aspect of healthcare that is seldom discussed is the challenge facing small and mid-sized employers struggling to provide adequate healthcare to their workers. Rising costs have made it nearly impossible for many companies to hire new employees or invest in their businesses in other ways. Sadly, millions of Americans have seen their standard of living eroded by the cost shifting that has occurred.

As these parents and their employer have discovered, alternatives like reference based pricing are helping to build bridges between employers and hospitals. “While a good deal of experience is required to design these plans and manage them over time, the opportunity for cost savings is so significant that more and more employers are moving in this direction,” said Brooks Goodison, President of Diversified Group. One of New England’s most experienced Third Party Administrators, Diversified Group has responded to the growing demand. “With or without reference based pricing, Diversified has long been committed to pursuing mutually rewarding partnerships between employers and community-based health care facilities,” added Goodison. “Open communication, cooperation and innovation by businesses and healthcare providers are musts if the issue of runaway healthcare costs is ever going to be resolved.”

As cases like this have long shown, the price for a given healthcare procedure in the same locale can vary greatly, often with little difference in quality. When employers use reference based or cost plus pricing, the plan and area hospitals typically agree on a pricing schedule for covered benefits by using Medicare plus a predetermined margin. Visit Diversified Group online to learn more about reference based pricing and view a brief educational video by ELAP Services, Inc.

Should You Consider a Direct Primary Care Physician (DPC)?

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It Could Be Your Path to Value and Transparency!

Direct financial relationships between individuals or employers and primary care physicians are gaining in popularity – and for good reason. In contrast to the traditional fee-for-service payment arrangement, where physicians are reimbursed according to the volume of services they provide, direct primary care (DPC) shifts the focus to value.

In most DPC arrangements, physicians charge a monthly, quarterly or annual membership fee, covering all or most primary care services, including acute and preventive care. The fee can be paid by an individual or by a sponsoring organization such as an employer-sponsored healthcare plan. Patients say they enjoy a more personalized experience, including easier access, shorter wait times and an opportunity to spend more time with their physician.

Many physicians say fee-for-service arrangements are the cause of increasingly shorter primary care appointments and an over-reliance on outside tests, prescription drugs and referrals to specialists. Because continuous care relationships enable them to focus more on preventive care, DPC physicians believe they can provide better outcomes. As the transition to value-based care evolves, direct primary care will certainly play a bigger role.

The way we see it – anything that can lead to high quality, lower cost healthcare is certainly worth a look!

Tell Us How You Feel!

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