Aging workforce means rethinking benefit strategies
More gray hair in the workforce is becoming the norm as more workers are putting off retirement.
The Center for Retirement Research at Boston College found workers are delaying retirement because of a lack of traditional defined benefit pension benefits, a later Social Security retirement age for full benefits and the declining number of employer-provided retiree health benefit programs. However, there are some that keep working for financial reasons or because it keeps them busy and sharp.
The Boston College researchers expect the average retirement age to increase by a full year from the current age of 61.8 to 62.8 over the next three decades.
Joanne Sammer, a New Jersey-based business and financial writer, shared with shrm.org how the older worker can affect your company's benefit plans.
Workplace Implications
An older workforce has significant implications for employers and the organizational culture. There are plenty of positive aspects of having more older workers in an organization. For one thing, many older workers are talented, well-trained, and have deep life and workplace experience that can be invaluable to any organization. But the value that comes from having older workers does not necessarily accrue automatically. Companies can cultivate this value by:
• Fostering generational ties. “Employers should develop strategies for capitalizing on the positive opportunities that multigenerational workforces can create, such as mentoring, knowledge transfer, diversity of perspectives, and cross-training on technology and other skills,” said Debra Friedman, member of law firm Cozen O’Connor in Philadelphia.
At the same time, employers will need to manage some of the challenges associated with older workers. “When employees stay in the organization longer, the balance of generations and the gaps between them become greater,” said Chris Cordery, senior vice president of sales at RealMatch, a recruitment technology firm in New York
Cordery suggested that employers pay close attention to how various generations interact and work together. Designing events and activities that allow employees from multiple generations to get to know each other and socialize a bit can also help prevent or ease any tensions in the workplace, he said.
• Offering accommodations. There are legal issues to consider as well. For example, “employers may experience a higher volume of Family and Medical Leave Act leave requests from its aging workforce, as older employees may have more serious health conditions and/or need to care for aging parents and spouses,” said Friedman.
Older workers may also require more accommodations in their work environment. In these cases, employers need to be vigilant in making sure the organization and individual managers and supervisors are well-versed on various legal requirements for making such accommodations, including the federal Americans with Disabilities Act and relevant state and local laws.
“Employers also should be proactive in training their workforces to prevent age bias in recruiting, hiring, performance management, retention and workforce reorganizations,” said Friedman.
• Phasing retirement. Just because employees are staying in the workforce longer does not mean that they want to keep working forever. Employers can offer flexible work arrangements, such as flexible hours and scheduling, and telecommuting opportunities. These efforts can include a formal phased retirement program that allows employees to keep working while reducing their hours, and potentially their responsibilities, over time.
“An employee who is aging may still want to play a vital role in the organization, but may not be able to contribute in the same way and at the same speed,” said Beth Zoller, legal editor for XpertHR USA, a provider of HR information resources. “If a worker is no longer able to perform a specific job, the employer should evaluate whether an employee’s skills and talents may be used elsewhere in the company.”
The Benefits Question
Benefits and compensation can also reveal the differences between older and younger workers. “Employees later in their careers may be more motivated by a 401(k) match, while employees earlier in their careers may be more excited about educational reimbursement,” said Jackie Breslin, director of human capital services at HR services provider TriNet in San Leandro, Calif.
Because older individuals tend to have higher health care expenses, employers with a large number of older workers could see higher health benefit costs. Friedman urged employers to implement wellness programs that can help the entire workforce to identify and manage any chronic health conditions.
Zoller suggested employers increase their workplace safety efforts to help older workers. For example, employers could install guardrails, better lighting and other improvements to help ease the strain on older workers.
Growing Awareness
Employers are recognizing the trend toward longer work lives and the implications for the workplace. A 2014 survey of nearly 2,000 HR professionals by the Society for Human Resource Management found that 36 percent were aware of the aging workforce trend and were examining their internal policies and management practices to address the change, while 20 percent had already done so and determined no changes were necessary. Another 19 percent were just becoming aware of these issues.
This awareness is critical. The changes and accommodations necessary for older workers are not extensive. They simply require employers to have open eyes, ears and minds in order to see potential challenges and pressure points for older workers and take steps to alleviate them.
Joanne Sammer is a New Jersey-based business and financial writer.
7 tips to get employees listening to your benefit chat
Employees care about their health care benefits. It's an important part of why they get up and go to work each day.
However, when it comes to open enrollment, many zone out and often forget the pile of paperwork offered each year to figure out what's happening with their benefits.
Alison Davis, founder and CEO of Davis and Company, offers 7 tips to cut the clutter and get employees to listen.
1. Tell the 'Why?' behind changes.
Tell the "why" behind changes. Why does your company offer benefits? How does the package stack up against the competition? Answer these questions for your employees, and then share the reasoning behind your decisions. Chances are, you thought carefully about changes, looked through the data, and made strategic decisions based on cost-benefit analysis. Walk employees through that process.
2. Use the inverted pyramid to organize information.
This classic structure puts the most relevant information first and saves the details for lower down in the message. And it works for any kind of communication, from e-mail to enrollment packages to benefits meetings.
3. Focus on what employees need to do.
In these information-overloaded times, employees want you to cut to the chase and tell them what action is required. So be clear, with content such as "Five decisions you need to make" and "A three-step process for choosing your benefits."
4. Be visual.
Instead of long narrative copy, break content into easily scannable segments. For example, create a table that captures key changes to next year's benefits. Or add a sidebar with a checklist of decision items. And whenever possible, use icons, photos, or sketches to illustrate your points.
5. Avoid the urge to sugarcoat.
Communicating benefits is often a "bad news, bad news" proposition. Sometimes costs increase; other times benefits are eliminated. To maintain credibility, it's important to communicate honestly. Tell employees why a change was made, how costs were managed, and how they can choose and spend wisely.
6. Don't be shy about celebrating good things.
Use communication to remind employees about benefits that are designed to make their lives better, such as flexible spending account debit cards, preventive care, discount gym memberships, and free financial advice.
7. Be service-oriented.
Include tips, advice, and Q&As that will help employees be smarter consumers and live healthier. Here are some examples of service-oriented topics you can integrate into your communications:
- How to determine if you're saving enough for retirement
- Low-impact ways to get more exercise
- How I saved $300 on my prescriptions
- Five often overlooked discounts offered by the company medical plan
RELATED: Why Companies Are Wasting The Money They Spend on Pay and Benefits
Kaiser Family Foundation finds states refusing Medicaid expansion paying more
The Kaiser Family Foundation surveyed Medicaid directors in all 50 states to get an overview of how the Affordable Care Act and its implementation is affecting the program.
Today, KFF posted the results of the survey on their website. The extensive report focuses on state Fiscal Year 2015 and state Fiscal Year 2016.
NPR.org offers a synopsis of the findings. The bottom line: the 22 states that didn't expand Medicaid eligibility as part of Obamacare last year saw their costs increase twice as fast as states that extended benefits to more low-income residents.
Those states not broadening their Medicaid coverage saw costs rise 6.9 percent in the fiscal year that ended Sept. 30. The 29 states that accepted the offer for President Obama to foot the bill for expanding Medicaid only saw a 3.4 percent rise in cost.
Those states with the modest increase in cost saw Medicaid participation grow by 18 percent. That's 3 times as much as the states that sat out.
Before Obamacare, Medicaid was not an option for able-bodied adults who didn't ahve children. The expansion opened the door to all adults with incomes up to 138 percent of the povertly level to enroll. In 2015, the federal government paid the entire bill for those people. Next year, the federal share tapers to 90 percent.
The Medicaid enrollment is expected to slow down in 2016, according to the KFF survey.
Click here to read the Kaiser Family Foundation survey report.
Senate bill aims to expand telehealth services for veterans
A bill introduced in the Senate aims to improve health care for disabled or rural veterans by expanding telehealth services.
Senators Joni Ernst (R-Iowa) and Mazie Hirono (D-Hawaii) introduced the Veterans E-Health & Telemedicine Support or VETS Act last week.
The bipartisan legislation would allow Department of Veterans Affairs Physicians to practice across state lines. The physicians would also be able to provide telehealth services, including mental health care, to patients in the comfort and privacy of their own homes.
The current law allows the Veterans Administration to waive state licensure requirements only if both the patient and physician are physically at a VA facility. And home telehealth requires both physician and patient to be in the same state. These barriers can deter veterans from seeking medical help.
An announcement of the bill was posted to Sen. Ernst's website with the following comments included.
“The bipartisan Veterans E-Health & Telemedicine Support Act moves us one step closer to achieving more affordable, patient-centered health care that our veterans deserve by embracing telehealth services to offer physician care and health treatment beyond the walls of a VA facility,” said Senator Ernst. “Telehealth care is an innovative and important means to meet the wide-ranging needs of veterans in Iowa and nationwide, including the invisible struggles of mental health care.”
“Our nation has a moral obligation to provide the best care for all veterans,” said Senator Hirono. “This legislation would eliminate the added burden of traveling long distances, or even to different states, in order to see a doctor. The VETS Act will build on a VA telemedicine program that is proven to work and removes barriers to accessing care particularly for veterans in rural areas like Hawaii’s Neighbor Islands.”
Click here to read the announcement.
Click here to view the bill.
Pay attention to Medicare Part D Coverage and 5 other things you should know during open enrollment
Once a year Medicare beneficiaries get the chance once a year to make a change. Open enrollment runs from Oct. 15 through Dec. 7.
Medicare beneficiaries can choose from original Medicare which is provided by the government or Medicare Advantage which is offered by private health insurance companies.
Beneficiaries can also change their Part D plans which provides prescription drug coverage.
Part B Premiums May Be Increasing for Some People
A report this month in the AARP Bulletin, based on data from the Medicare Boards of Trustees, finds 1 in 7 Medicare beneficiaries could see their Part B premiums increase as much as 52 percent next year.
The increase will go into effect if there is no cost-of-living adjustment for Social Security in 2016, but it will apply mainly to those already paying higher premiums because of their income and affect those who pay premiums directly to the government. Most people making direct payments are doing so because they are delaying Social Security benefits, a strategy that can increase their future monthly payments.
“Should folks in the latter situation sign up for Social Security now?” asks Patricia Barry, a features editor for AARP Publications who wrote the AARP report and author of "Medicare For Dummies.” Under the law, those who have their Part B premiums deducted from Social Security cannot be subject to a premium increase.
Barry says applying for Social Security in October may allow people to save money on premiums in the short run but could cost them more in the future. “They might be giving up higher [Social Security] payments for the rest of their lives for the sake of what could well turn out to be just one year of inflated Part B premiums.”
Pay Special Attention to Your Part D Coverage
Although it’s a smart idea to review your health insurance options each open enrollment period, experts say most plans stay largely the same each year. Instead, most people will find changes in Part D plans.
“It’s something [consumers] want to check into every single year,” says Kristin Romel, a health and life agent with Alpine North Insurance Agency in Alpena, Michigan.
Romel explains that many companies use a claims-based system for determining prescription drug costs and coverage. A medication for which they had a large number of claims may end up moving into a tier with higher copays. However, other insurers may not have had the same number of claims for those drugs, and the out-of-pocket costs for those prescriptions might remain lower in other plans.
Barry’s research supports this finding. In the last few years, she has analyzed what different Part D plans in the same state charge as copays for the same drug. “Those copays vary enormously, often by more than $100 for a 30-day supply, and sometimes by a lot more,” she says.
The Network May Be More Important Than the Price
Those shopping for a Medicare Advantage plan may gravitate toward the option with the lowest premium. However, there is more than price to consider.
“Patients should be scrutinizing the providers [in a plan’s network],” says Colin LeClair, senior vice president of business and product development for ConcertoHealth, a health care provider for dual-eligible Medicare and Medicaid patients. “The quality of providers is far more important than cost.”
While it may hard to gauge the quality of unknown physicians, Medicare beneficiaries should at least check a plan’s network to see if their preferred doctors and facilities participate. “You’ve got to be careful with little, fly-by-night companies,” Romel says. “Are hospitals actually going to take that insurance?”
Your Mailbox Is Full, but the Best Help May be Found Elsewhere
Barry has a simple piece of advice when it comes to all those brochures you’ve received: “Ignore that avalanche of mailings from Medicare plans that are coming through the door.”
Instead, use the plan finder at Medicare.gov to look over your options. Your State Health Insurance Assistance Program may also be able to help you navigate your choices. LeClair says he finds a lot of his company’s clients bring their stack of mailings to the doctor’s office.
“Physicians should not be advising patients on which plan to use,” LeClair says, “but they can help [patients] understand them.”
65-Year-Olds Need to Enroll Even If They Delay Social Security
Open enrollment is only for those who are already enrolled in Medicare, but John Piershale, a certified financial planner and wealth advisor with Piershale Financial Group in Crystal Lake, Illinois, says now is a good time to remind 65-year-olds that they need to enroll in Medicare, or they will face penalties.
For those filing for Social Security by age 65, enrollment in Medicare is typically automatic. However, those waiting to claim Social Security until a later age will need to be proactive about enrolling. The initial enrollment period runs for seven months and includes the three months before your birthday month, your birthday month and the three months after it.
Failing to enroll in Medicare during this period results in a 10 percent increase in Part B premiums for every year you delay enrolling. “A lot of people don’t know about [the penalty], and there is no way to fix it,” Piershale says.
The Biggest Change to Medicare Is One You Can't See
One of the biggest changes coming to Medicare is one that won’t be immediately obvious to patients, LeClair says. Many insurance companies are moving toward outcome-based contracts with providers, which could change how patients are seen by doctors. These contracts are intended to reward physicians who are, for example, successfully managing chronic conditions and reducing hospital admissions.
“Historically, [insurers] paid physicians on a fee-for-service model,” LeClair says. That system encouraged physicians to move through patients quickly and possibly order unnecessary testing and other services. “Now you have providers focused on doing less and providing better outcomes,” LeClair says.
From a patient perspective, an emphasis on positive outcomes may mean shorter wait times to get in to see a doctor and more time spent with a physician once you’re in the office.
Until outcome-based care becomes standard, Medicare beneficiaries can use the annual open enrollment period to switch to a new plan with different providers if they are unhappy with their options. However, to make the most of the opportunity, you’ll need to compare more than just the price. “Don’t go cheap on your health insurance,” Romel advises. “Don’t put a price tag on your health.”
President Obama silently signs PACE Act into law
There was no fanfare when President Barack Obama signed into law a bipartisan change to the Affordable Care Act (ACA). The PACE Act was signed alongside eight other bills on Wednesday evening.
The PACE Act, known in longform as the Protecting Affordable Coverage for Employees Act, was approved overwhelmingly by Congress last week. It redefines a small employer from one with 50 employees or fewer to an employer with 100 employees or fewer.
RELATED: ACA tweaks help small employers, but add confusion
The change was intended to stabilize the group market under the ACA. However, small businesses raised concern the change would mean higher premiums for their employees.
The bill's Republican co-author, Sen. Tim Scott (R-South Carolina) released a statement Thursday praising President Obama for signing the bill. However, Scott remains "committed to a full repeal of the health care law."
Since 2009, there have been few changes to the healthcare law.
14 tips to help your company implement wearables in wellness programs
Fitbit, Garmin, and Mio are just a few of the companies offering everyone the chance to keep track of their fitness level throughout the day. Features include tracking steps, sleep and workouts.
Companies, like Target, are finding ways to implement wearable technology into their Wellness Programs. The programs, a part of employee benefits packages, can help lower healthcare costs, reduce absenteeism and increase productivity.
Implementing the wearable technology is a viable option, but without proper implementation it could create legal challenges.
Experts from various industries came together at Fitbit's recent Captivate 2015 conference and created a list of best practices and lessons learned from their experiences with wellness programs tied to wearables.
James Martin with CIO.com compiled a list of the best tips from those speakers in San Francisco.
Employee wellness plans, privacy and compliance
1) Show employees their personal information is secure
Several speakers emphasized that organizations should show (not tell) employees that health and fitness data is secure.
Some employees initially hesitate to share step counts or other health data with their employers, according to Jim Huffman, senior vice president and head of U.S. Health and Wellness Benefits for Bank of America. These people worry that the information could negatively affect their insurance premiums, chances for promotions or opportunities for raises.
Bank of America is "loud and clear" when it regularly addresses such fears in employee communications and assures staff such information won't be used against them. Buffman said companies have to "prove it," too. In the second year of its wellness program, for example, Bank of America didn't increase health insurance premium rates for any of its U.S. employees, even though the company's own costs rose. Bank of America leaders felt it was important to "pay it forward" and demonstrate to employees that participating in its fitness programs is only beneficial. However, Huffman adds that organizations will "always have a portion of employees who will not share their information."
2) Go above and beyond to protect employee data
Wellness and fitness program managers should "take extraordinary steps" to protect sensitive information collected via wellness programs, Huffman said. He also suggested that companies work closely with HR managers to assure staff that their wellness program teams don't have access to sensitive data, such as employee health insurance claims.
Eric Dreiband, a partner with law firm Jones Day, stressed the importance of maintaining a secure "firewall" between data collected by wearable technology and personnel records. The goal is to keep staff health and fitness data away from supervisors or other decision makers, so that it cannot inadvertently affect employee pay or promotions.
If that data isn't kept separate, and there's an employee complaint, the government could investigate and file a lawsuit, according to Dreiband. The Equal Employment Opportunity Commission sued companies in the past because their wellness programs allegedly violated federal anti-discrimination laws when they coerced people to participate.
3) Stay up to data on relevant regulations
Organizations that use wearables to collect employee data need to be clear on the potential compliance and legal issues related to the Affordable Care Act (ACA), Health Insurance Portability and Accountability Act (HIPAA), and Americans with Disabilities Act (ADA), Dreiband said. Wellness plans that collect medical information, such as heart rate and blood pressure, must be voluntary and may not carry a penalty for non-participation in any way, or they could violate the ADA, for example.
Putting employee fitness data to work
4) Compare anonymous fitness data and business goals
Whenever possible, it's a good idea to tie aggregated, anonymous data from corporate wellness program or fitness challenges to metrics that measure business goals, according to Liz Boehm, experience innovation network director for Vocera, a healthcare communication system vendor.
By combining these data sets, senior management can see how (or if) wellness program engagement helps the company achieve fewer manufacturing errors, lower employee turnover rates, or achieve other business goals. These insights can help keep senior executives bullish on the company's wellness and fitness programs, and convince skeptics the programs are worth the effort and expense.
5) Don't overthink baselines
Companies should avoid getting bogged down when they try to determine baselines for the wellness and fitness program data they want to measure, according to Jennifer Benz, CEO of Benz Communications, which specializes in helping organizations communicate health and wellness programs to employees. (Notable Benz clients include Intuit and Adobe.)
"There's already a lot of great baseline data out there, so you don't have to figure out precisely where your organization is to figure out how to measure improvements."
6) Keep it simple
Companies shouldn't get carried away and try to measure too many things, Benz said.
"Most successful organizations find a couple of metrics to track that are key to their overall business environment," she said.
Wellness programs can often have a "halo effect," as well, giving employees a better sense of their health, according to Benz, which is "something you may not be able to measure, but will be able to see and hear among people in your organization."
Tips for enhanced communication, outreach for fitness programs
7) No silver bullet
There is no single communications channel that's best for raising employee awareness and engagement, according to Benz. So, it's best to embrace multiple channels and formats. Most employees have preferred ways of receiving information, such as viewing online video or reading infographics and email, and the way to reach the largest audience is by using more communication methods.
Ultimately, the goal is "to change wellness behavior, not communications behavior," Boehm said.
Bank of America uses "every form of communications possible" to detail updates, features and benefits related to its wellness program and health challenges, according to Huffman, including the company Intranet, email, "snail mail" sent to employee homes, and team meetings. Before opening each day, Bank of America branches also have "team huddles," which are ideal for communicating information about company wellness programs.
8) Share employees' positive experiences
Several speakers at the San Francisco Fitbit conference said sharing testimonials is an excellent way to engage employees in wellness programs or fitness challenges.
"People love to read stories about their colleagues," Benz said. For example, an 'average Joe' who was a smoker for 20 years successfully completed a cessation program offered by one of Benz's corporate clients. The company highlighted 'Joe's' accomplishment in one of its employee newsletters, and nearly 100 fellow employees emailed him to say the story inspired them to join the program, Benz said. Joe also told his company benefits manager that, after all the recognition he received for quitting, he "definitely can't start smoking again."
Boehm added that organizations should find testimonials from all levels of the company and "keep putting them out there." Employees featured in testimonials can be a wellness program's "best advocates."
9) Focus over generality in communications
Unfortunately, there's no one-size-fits-all approach to effective communication, Boehm said. "The more tailored your communications are (to individual interests), the more engagement you'll get." You're trying to get people to change their behavior, she said. But if your approach is too broad or general, employees might think the message doesn't apply to them.
10) Be timely and proactive
Organizations' communications should be timely and relevant whenever possible, according to Benz. She suggests following the "TaskRabbit model" by striving to make communications "helpful for others" and giving employees information they can act on. For example, if an employee needs an MRI, a company might provide information on affordable facilities that perform the test before the employee makes an appointment.
More tips for successful corporate wellness programs
11) It's not all about the Benjamins
It's never a good idea to depend solely on financial incentives to motivate employees. Many employers choose to increase financial incentives to motivate staff health improvement, but the majority of workers don't take full advantage of the incentives, according LuAnn Heinen, vice president, National Business Group on Health (NBGH).
In 2015, 79 percent of employers will offer monetary health incentives, up from 63 percent five years earlier, according to a 2015 NBGH and Fidelity Investments survey, which Heinen cited. The same survey also found the average maximum incentive amount rose to $693 this year compared to $594 in 2014, while only 47 percent of employees earn the full incentive amount, and 26 percent earn just a portion of the total.
Though important, financial incentives, as well as future health rewards don't always motivate sustainable participation in wellness challenges and fitness programs, Heinen said. The promise of fun, overall better quality of life, and higher energy levels are often more effective motivators, she said.
12) Help employees help themselves
Creativity can go a long way toward giving employees easy options to care for themselves. For example, mindfulness — the act of "being in the moment" —is gaining popularity in corporate wellness programs, according to Heinen. Pitney Bowes, for example, offers five-minute guided meditation for employees over the phone.
13) More physical activity isn't always better
The goal of increasing physical activity isn't always appropriate for all workers. Some workers, such as nurses or employees in packing and shipping departments are always on their feet, so increasing steps isn't necessarily a wise move, Boehm said. Instead, decreasing steps can make these types or workers more efficient in their jobs and "give them energy to focus on what matters most" at work and at home.
14) Cheaters never prosper
Organization shouldn't worry about fitness challenge "cheaters," or people who manipulate their fitness data. Companies that roll out a Fitbit Wellness program can enable or disable employees from manually logging steps, according to Amy McDonough, vice president and general manager, Fitbit Wellness. However, McDonough says Fitbit has "found that with good communications and transparency about how a program ties to incentives and what data is being shared, the majority of employees will be honest and will keep each other honest."
ACA tweaks help small employers, but add confusion
Medicare Part D Notices Due October 15
The Creditable Coverage notification requirements for Medicare eligible employees are required by the Centers for Medicare and Medicaid Services (CMS) on October, 15th of each year.
This is a friendly reminder that all plan sponsors are required to notify their employees about their creditable coverage status. For your convenience, the model notification letters for both credible and non-credible coverage provided by CMS for this year can be found below and are in Word document format.
What do the ICD-10 codes mean for health providers, employers and HR managers?
After two years of delays, the new ICD-10 codes are live in hospitals across the country.
The tends of thousands of new government-mandated codes describe diseases and hospital procedures in the billing process. The codes are aimed to cover everything that medical professionals may be called on to treat.
X98.0XXD Assault by steam or hot vapors, subsequent encounter #icd10
— EveryICD10 (@EveryICD10) October 1, 2015
Y31.XXXS Falling, lying or running before or into moving object, undetermined intent, sequela #icd10
— EveryICD10 (@EveryICD10) October 1, 2015
Y92.141 Dining room in prison as the place of occurrence of the external cause #icd10 — EveryICD10 (@EveryICD10) October 1, 2015
Read more codes via @EveryICD10 on Twitter.
How do these codes affect health insurance companies, employers and their human resource departments. Forbes.com contributor Bruce Japsen covers that part of the story.
From erroneous medical bills to denied health services, Americans may need patience grappling with insurance claims beginning today, the much-anticipated launch of tens of thousands of new government-mandated “ICD-10” codes used to describe diseases and hospital procedures in the billing process.
At least one analysis says one in four of the nation’s doctor practices aren’t ready for the transition to International Classification of Diseases, Tenth Revision, known as “ICD-10.” After two years of delays, medical care providers have to be ready for the conversion to 140,000 new codes that they will use in order to bill government and private insurers.
Health insurance companies, employers and their human resources departments have been working with patients and health plan enrollees, warning of potential problems. Aon Hewitt (AON ), a large employee benefits consultancy, says there is potential for doctors and hospitals to use outdated codes and potentially bill patients for services that could be covered.
“This is a complex conversion that could initially lead to disruptions across the medical field,” said Chris Miles, senior vice president of Aon Hewitt’s health group. “Providers may see overall delays in claims processing, and some individuals may have insurance claims that are denied for services that were provided, but not properly coded.”
The conversion is being required by the Centers for Medicare & Medicaid Services to provide more specificity to the existing coding system. The outgoing ICD-9 codes have limited information about medical conditions and hospital procedures while the new ICD-10 code “sets provide flexibility to accommodate future healthcare needs, facilitating timely electronic processing of claims by reducing requests for additional information to providers,” the Centers for Medicare and Medicaid Services (CMS) has told doctors.
“The impact of the ICD-10 switchover on the healthcare system will not be fully understood until after claims processing begins on Oct. 1,” American Medical Association president Dr. Steven Stack said earlier this week.
But physician groups admit there could be challenged based on surveys they’ve conducted of their colleagues.
Medical Group Management Association president and chief executive Dr. Halee Fischer-Wright said a recent “survey showed 20% or more of physician practices have not received the billing system updates necessary for ICD-10.”
“This could significantly disrupt the submission of patient claims,” Fischer-Wright added.
ICD-10 conversion has been a massive undertaking for private insurers as well since they will use the codes in their claims processing and paying doctors and other providers of medical care. It has added significant capital expenses to health insurance companies, impacting the likes of Anthem WLP +% (ANTM), Aetna AET -0.93% (AET), Cigna CI -0.75% (CI), Humana HUM +0.06% (HUM) and UnitedHealth Group UNH -1.75% (UNH).
Benefits experts say health plan enrollees could see a delay in authorization for certain tests and procedures if doctors aren’t adequately coding the services. Insurance claims also could be denied.
But the shift to new codes is a good thing overall, particularly as doctors and hospitals move away from fee-for-service medicine to a healthcare system that pays providers based on outcomes and quality.
“Transferring to the new medical claim codes will allow key industry stakeholders to better track and manage diseases, measure the quality of care and evaluate patient outcomes—all of which support the shift toward value-based payment plans,” Miles said.