Join The Phia Group’s Ron Peck and Brady Bizarro as they discuss Brady’s recent trip to Austin and presentation at the Texas Association of Benefit Administrators; with a focus on employee engagement, new ideas for cost containment, and an in depth analysis of pending litigation challenging the legality of ObamaCare. Yeah… You’ll want to tune in for this one.
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By: Kelly Dempsey, Esq. & Corrie Cripps
ACA changes are few and far between these days – a lot of talk, but not a lot of action…yet. There are two things health plans should pay attention to and one is likely a welcome change. The less exciting of the two is a quick update to the preventive care rules, while the more exciting proposal is relating to the exclusion of certain prescription drug charges from the out-of-pocket maximum. While this proposal doesn’t solve all the drug copay card problems at once, it’s a step to help plans control prescription drug spend.
New Preventive Care Guideline
The United States Preventive Services Task Force (USPSTF) issued a brand new “B” recommendation on February 12, 2019. The new recommendation requires plans to provide interventions to prevent perinatal depression. The USPSTF found that counseling can help prevent perinatal depression in persons at increased risk, and recommends that clinicians provide or refer pregnant and postpartum persons who are at increased risk to counseling interventions.
As a reminder, this new recommendation impacts non-grandfathered plans. Non-grandfathered plans are required to provide coverage for certain preventive care services in-network at 100% with no cost-sharing. Included in the list of services are USPSTF guidelines with an A or B rating. Employers that offer robust medical plans, as well as limited medical benefit plans, such as preventive only plans, will need to make the necessary modifications. Timing of applicability of new recommendations is a little confusing, as such, Phia’s best practices are to implement new guidelines into plans with the first plan year beginning on or after the recommendation is issued.
Drug Copay Cards and Out-of-Pocket Maximums
Annually the U.S. Department of Health and Human Services (HHS) issues proposed regulations with benefit and payment parameters. Generally this just means employers and plans are put on notice regarding inflation updates to certain figures such as the ACA out-of-pocket maximum limits. This year HHS is throwing a likely welcome curveball - HHS has proposed to allow self-insured group health plans to except certain cost-sharing from the maximum out-of-pocket limit if certain things occur related to prescription drugs. The rule would allow plans to exclude from the out-of-pocket totals the amount the plan must pay when a plan participant selects a brand drug when a medically appropriate generic drug is available and amounts associated with drug manufacturer coupons for specific prescription brand drugs that have a generic equivalent.
By: Ron E. Peck, Esq.
Why do employers offer health benefits to employees? Some might point to the Patient Protection and Affordable Care Act (“PPACA” or “ObamaCare”) and say the law forces them to do so. Yet, prior to the law’s passage in 2010, many (if not most) employers voluntarily offered health benefits to their employees. There are a number of reasons for this, but suffice it to say, it was meant to attract and retain the best talent.
Indeed, once upon a time, health benefits were just that – “benefits.” Now, it’s assumed health insurance is included in an employment package, and what was once a benefit is now an entitlement.
Why does this matter? It matters for many reasons, but as it relates to reference-based pricing, or “RBP,” it matters insofar as RBP ultimately – more often than not – puts the patient (“a/k/a” the employee or their family) in the crosshairs when disputes arise between providers of healthcare services, and the benefit plans that utilize an RBP pricing methodology.
Perhaps – long ago – when health benefits were welcomed as “icing on the cake,” the fact that an individual may be limited in who or whom they could utilize for care, or risk being balance billed the difference between what the plan pays and what the provider charges, would not have been so onerous. The employee might have thought, “Heck! It’s better than nothing; and I suppose I could avoid the bill by selecting a provider that works with my plan.”
Today, however, not only do we expect to receive health benefits, but we are outraged when our out of pocket expenses increase. This attitude, on the part of plan participants, is anathema to RBP.
At the same time, recall that RBP is a response to changing opinions as they relate to networks, and PPOs. Looking back in time, one of the values inherent in PPOs was a discount off of provider billed charges. It was assumed – “back in the day” – that the billed charges against which the discount applied were reasonable, and as such, getting discounts on top of reasonable charges had value. The fact that the provider, by agreeing to accept the network rate as payment in full, had the secondary impact of protecting patients from balance billing, was just icing on the cake.
Today, however, we recognize that billed charges are so exorbitant, that network discounts do next to nothing to counter the abuse, and thereby are worthless. As a result, the thing that once was a secondary benefit of network enrollment – balance billing protection for the patient – has become, more or less, the only valuable element of a network. Yes; if asked why they are still using a network, most plans would not state it’s for the discount, but rather, it’s to avoid balance billing and protect patients.
Thus, we must ask ourselves – how much will we pay to avoid balance billing and protect patients? If a provider charges $60,000, there is a discount of 30% ($18,000), $42,000 is thus expected as payment, and the reasonable fee is $5,000, is it worth $37,000 to protect the patient from balance billing? If not, what will you pay – instead – to protect patients, if anything?
This is ultimately the question every plan contemplating RBP must ask itself. How much more, beyond reasonable charges, am I willing to pay to protect my plan participants?
Piling onto this, politicians, lawmakers, regulators and courts seem more than happy to offset the rising cost of healthcare onto the benefit plans as well. From FAQs released by the DOL, indicating that a failure to offer “adequate access” (“a/k/a” a network) will result in balance billed amounts counting against maximum out of pockets – and thus make the remainder of the billed charges owed and payable by the plan, to court decisions overturning previous rulings that determined hospitals can’t force patients to agree to pay whatever the hospital charges and sought to calculate fair prices when no fee was agreed upon, those in power seem dead set on allowing providers to charge whatever they want, and protect patients from any undue out of pocket expenses – by forcing plans to either contract with providers, or pay the cost.
I have personally advocated for working directly with providers, identifying value, and finding ways to create win-win scenarios without increasing how much the plan pays; instead offering providers things of value – other than cash – that incentivizes them to accept plan maximums as payment in full. Yet, this effort is put into serious jeopardy whenever anyone “forces” a plan to enter into contracts or networks with providers. Politicians and providers seem to treat (or want to treat) “networks” like a silver bullet. The issue is, however, that networks are just a nice label for a “contract.” If any rule or law “requires” a payer to enter into a contract with a payee, and failure to do so results in penalties for the payer, it puts an unfair advantage in the hands of the payee. One key to successful negotiation – whether it be a provider network deal, buying real estate, or settling a law suit – if both sides don’t have something to gain, something to lose, and the freedom to leave the table, the “deal” won’t be fair.
As a result, the DOL FAQs, case law, and proposed laws that would “force” a payer (plan, carrier, etc.) to broaden their network, and force them to sign a deal with a provider, will result in one-sided deals, as providers know that the payer cannot “leave the table” without a deal.
These are all things one must consider when asking themselves whether to RBP or not to RBP.
In this episode of Faces of Phia, Adam and Brady interview the superpowered controller of The Phia Group. From adventures in the Steel City to conquering “nice problems to have,” the team covers it all in this candid discussion.
By: Erin Hussey, Esq.
There has been a lot of talk lately about the progressive push for Medicare-for-All. For instance, Rep. Pramila Jayapal (D-Wash.) is seeking to introduce an updated bill called the Medicare for All Act of 2019. If passed, this bill would transform the U.S. health care system as it would essentially create a “single-payer” system run by the government. Medicare-for-All has also created a lot of uncertainty. For example, Medicare does not cover certain long-term care and does not include coverage for hearing, dental, vision or foot care, but supposedly the bill proposes to add some of these benefits.
Given the uncertainty of how a Medicare-for-All model would work in the U.S., there could be more support for a bill that was introduced on February 13th, called the Medicare at 50 Act. Sen. Debbie Stabenow (D-MI) and Rep. Brian Higgins (D-N.Y.) introduced this bill which details a Medicare buy-in option for Americans ages 50 to 64, who have not reached the Medicare eligible age of 65. This would allow individuals in that age range to buy Medicare plans instead of purchasing on the Obamacare marketplaces if they do not have coverage through their employer, or as an alternative option if they do have coverage through their employer. Stabenow believes this will allow for lower premiums than what is offered on the individual market and the bill would allow those who qualify for the marketplace subsidies to utilize those funds to buy into Medicare. She also believes the bill would get bipartisan support and that it’s something that could work right now, whereas Medicare-for-all is a more drastic undertaking for the U.S.
To add another layer to the above, Sen. Brian Schatz (D-Hawaii) and Rep. Ben Ray Luján (D-N.M.) re-introduced a bill on February 14th called the State Public Opinion Act. This bill would allow those who are not already eligible for Medicaid to buy into a state Medicaid plan regardless of their income.
We will be watching to see how these bills play out and to see how much support they receive from both sides of the aisle.
In this can’t miss episode of Empowering Plans, Brady and Ron dissect the President’s State of the Union Address, and focus in on how it will impact those of us servicing health benefit plans – and the entire healthcare industry. This one is going to be huge.
Valentine’s Day is upon us, and we’re feeling the love. Too often we, as an industry, spend our time discussing issues, problems, and concerns, and don’t dedicate enough time to the features and opportunities that make self-funding great. We focus so much on “how we save” self-funding, that we forget to celebrate the reasons why self-funding is worth saving in the first place. Join the team as they discuss what makes self-funding such a great option for so many employers and employees, as well as the incredibly cool new innovations rolling out in 2019, that will be sure to make self-funding a sweetheart for even more employers this year and beyond.
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By: Jon Jablon, Esq.
This is a topic we’ve discussed numerous times in memos, phone calls, conferences, webinars, and any other time reference-based pricing is discussed – and it continues to be a relevant topic throughout the industry. A health plan utilizing some sort of RBP will get the most bang for its buck if the language in its SPD is strong – and of course if the language is weak, the plan’s payment methodology will be extremely difficult to enforce, and could even subject the Plan Administrator to liability.
Simply put: if your plan is using reference-based pricing – whether for all claims, only out-of-network claims, facility only, or any other subset of claims – your plan must have clear and accurate language.
Clear language describes what the plan will pay in a comprehensible manner. An example of clear verbiage is “This plan’s benefits equal 150% of the applicable Medicare rate, when such rate can be calculated by the Plan Administrator.”
An example of unclear verbiage is “All claims are paid at 150% of Medicare. Participating facility claims are subject to this rate only if the physician is nonparticipating. All facility claims are paid at the lesser of the reference based pricing amount or 70% of billed charges when inside the plan’s service area.” (Both examples are direct quotes from SPDs.)
Accuracy is just as important as clarity, if not more; an example of accurate verbiage is “When a given service is performed by an in-network provider, the Maximum Allowable Charge will be the PPO rate applicable to that provider. For all other claims, this plan pays the lesser of the following factors…”.
An example of inaccurate verbiage is “All in network claims are subject to code review and will be paid based on an amount deemed usual and reasonable and customary by this Plan, including but not limited to a multiple of the prevailing Medicare allowance.” (Again, both quotes are taken from real SPDs).
These are just a few examples of what we see on a daily basis; as medical providers begin to treat RBP differently than ever before, it is similarly more important than ever to make sure the plan’s language is optimal.
As a final note, the idea that language needs to be strong, clear, and accurate applies to all plans – not just those using RBP. It just so happens that RBP is a bit more novel than other traditional plan designs, so RBP language is sometimes less well-established in many SPDs. But together, as an industry, we can fix that!
By: Brady Bizarro, Esq.
In 2012, the annual cost of insulin needed to treat patients with type 1 diabetes was $2,864. Today, the cost has risen to over $6,000. For working-class families already struggling to keep up with everyday expenses, this increased economic burden has forced some to choose between food and life-saving medication. CBS News has reported that more than one-quarter of Americans living with diabetes have cut back on their insulin usage to ration their supply, and that can be dangerous. Skyrocketing insulin prices are just one example of high prescription drug costs, which the Trump administration has made it a priority to address.
We have written a lot before about the administration’s proposals to lower drug costs: from ending pharmacy gag rules to outlawing the use of co-pay coupons, ideas for controlling costs were in no short supply. Ideas and tweets, however, have a limited impact. Real legislation is needed to produce meaningful reform, and as we are now well into 2019, there are indications that bipartisan action may be on the horizon.
Soon after taking over powerful congressional committees, Democrats began scheduling hearings and reaching out to drug companies asking for detailed information regarding their pricing practices. On February 7th, Democrats, including 2020 hopeful Senator Sherrod Brown (D-OH), unveiled a bill that would allow Medicare, the largest purchaser of pharmaceuticals in the country, to negotiate drug prices directly with drug manufacturers. The Medicare Negotiation and Competitive Licensing Act would permit such negotiations and strip drug manufacturers of their patent protection for a drug if those negotiations failed. For self-funded plans, this is key. Not only would negotiated Medicare rates provide a benchmark for pricing (as is the case for most medical services), but failed negotiations would allow generic versions of expensive drugs to market much earlier than previously allowed by law.
For now, lawmakers are hoping to get President Trump to support this bill. The president’s support would put significant pressure on Republican congressmen to support the bill. As always, we will bring you the latest developments as they unfold.