The Future of Health Care in Obama’s Second Term
Source: thehealthcareblog.com
By: JOANNE CONROY, MD
Although members of the Obama team are now celebrating their election victory, the next four years will not be smooth sailing. Ignoring the campaign rhetoric, there is still much more work to be done in order to reshape our health care system; the effect on academic medical centers and teaching hospitals will be significant.
The political conscience is still being driven by the fear of the fiscal cliff, which dominates most Washington conversations. Both political parties agree that health care is a significant contributor to our present and future deficit and that we have to figure out how to deliver more care at a lower cost. But, they argue about what to call it, who gets credit, and whether the solution is bigger government involvement or a dominant private market?The potential cuts to NIH funding and graduate medical education support do not go away with another four Obama years. We anticipate that the president will reform the tax code and transform how we deliver health care. The latter will be his lasting legacy.
However, in all this chaos, there are opportunities. While we no longer hope for a bipartisan middle ground on health care — and rancor will certainly escalate if President Obama is reelected — to many people, the Affordable Care Act is starting to look like a tangible business opportunity. Every insurer is looking at the 30 million uninsured people who will receive coverage through a mix of subsidized private insurance for middle-class households and expanded Medicaid for low-income people. These new markets could be worth $50 billion to $60 billion in premiums in 2014, and as much as $230 billion annually within seven years. The structure and implementation of these programs present specific challenges for AMCs.
Medicaid:
Academic medical centers currently deliver 28 percent of inpatient care for Medicaid recipients and 40 percent of uninsured care in the United States — in only 6 percent of the acute care facilities. We have the Medicaid specialty care market cornered — because no one else will accept these patients. The expansion of Medicaid will create stress in our historical access points: emergency rooms and primary care offices. We will be overwhelmed if we do not dramatically reengineer where we deliver care and rethink who should deliver care for what conditions. We will experience costs that quickly spiral out of control if we just expand our current system.
Obama’s re-election removes the indecision about whether to opt in or opt out for many state governors. Most insurers are betting on the fact that dual eligibles (patients who are disabled or poor enough to qualify for both Medicaid and Medicare) will be moved into the managed Medicaid plans. This will require active care management, better EHRs, geomapping of resource utilization, and a greater understanding of the impact of social determinants of health on this population. It will be interesting to see if the role of the insurer really expands to manage the outcome instead of just the cost.
Health Exchanges:
The implementation of the exchanges poses challenges for states, because they are supposed to be self-sustaining by 2015. Their ability to achieve this comes down to demographics and the size of their insured pool. Small high-risk pools will need to be intensively managed (like the District of Columbia), in contrast to larger populations that can be more loosely managed as they develop state-wide infrastructure. For academic medicine, the exchanges will present specific challenges. Our services could be subject to higher deductibles, copays and even co-insurance if the exchanges choose to tier providers according to cost. As a result, our care could be inaccessible to many patients without means.
There has also been very little discussion about how to transition graduate medical education support into the exchange market. Currently Medicare, Medicaid, and other insurers support the educational mission through explicit or implicit support. Supporting the training of the health care workforce has been considered a public good that increases access and quality for patients. Medicare Advantage programs use a “carve out” to preserve this support, but this option has not yet been part of the exchange discussions.
Physician Shortages:
The Center for Workforce Studies at the AAMC estimates that the nation will face significant physician shortages by 2020. As the newly insured begin to seek care in 2014, and as we anticipate these shortages, one must wonder who will care for these patients? By 2017, the number of physician retirees will be close to the number of new medical school graduates. While medical schools as a whole have been expanding the number of students they admit, there may not be enough residency positions to accommodate them. The Obama team can ignore the growing physician shortage — but at their peril. Unfortunately, we also continue to debate within specialty societies about who should provide the services, rather than talking about how we can deliver care as a team more efficiently. Use of interprofessional teams holds great promise for improving the efficiency of the physician workforce, and we anticipate that the administration will continue to support innovative reforms in health care delivery.
Health care reform will continue to move forward, imperfect as it may be. I have great hopes for bipartisan solutions, but I won’t hold my breath. The really hard work is not over; it has just begun.
Obama Wins Re-election: Health Care Reform Law Here to Stay
After hard-fought campaigns by both candidates, President Barack Obama has been re-elected for a second term in office. Obama’s victory in the election, along with last summer’s Supreme Court decision upholding the health care reform law, cements the Democratic Party’s dedication to the legislation.
While opponents of the law have called for its repeal, health care reform’s supporters consider the legislation to be the major achievement of Obama’s first term. Obama’s re-election, along with continued Democratic control of the Senate, means that implementation of the law will now continue without additional roadblocks.
WHAT DO EMPLOYERS HAVE TO DO NEXT?
With the landscape of employer-provided health care potentially changing over the next few years, employers should consider their future plans related to their role in employee health care. They may have to make some big decisions about whether to continue providing coverage to their employees. The “pay or play” penalties provide some incentive for employers to continue coverage, since they will be at risk for significant penalties if they do not. However, employers may decide that paying the penalty is more cost-effective than continuing to pay the ever-increasing costs of health care for employees and their families.
On the other hand, uncertainty among employees about the quality and cost of individual health coverage continues to make employer-provided health coverage an attractive recruiting and retention tool. Because of these advantages, most employers plan to continue offering coverage for now. The additional uncertainty for employers, with compliance obligations hinging on court decisions and the political process, has made many companies hesitant to make any large-scale changes.
Whatever their future decisions may be, employers that will continue to sponsor group health plans for the near future must prepare for upcoming deadlines. Significant health care reform provisions with looming effective dates include:
Summary of Benefits and Coverage
Health plans and issuers must provide an SBC to participants and beneficiaries that includes information about health plan benefits and coverage in plain language. The deadline for providing the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period is the first open enrollment period that begins on or after Sept. 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after Sept. 23, 2012.
60-Days’ Notice of Plan Changes
A health plan or issuer must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated SBC or a separate summary of material modifications. This 60-day notice requirement becomes effective when the SBC requirement goes into effect for a health plan.
$2,500 Limit on Health FSA Contributions
The health care law will limit the amount of salary reduction contributions to health flexible spending accounts to $2,500 per year for plan years beginning on or after Jan. 1, 2013.
W-2 Reporting
Beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are issued in January 2013.
Preventive Care for Women
Effective for plan years beginning on or after Aug. 1, 2012, non- grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements. Calendar year plans must comply effective Jan. 1, 2013.
Employee Notice of Exchanges
Effective March 1, 2013, employers must provide a notice to employees regarding the availability of the health care reform insurance exchanges. HHS has indicated that it plans on issuing model exchange notices in the future for employers to use.
Additional Medicare Tax for High-wage Workers
In 2013, health care reform increases the hospital insurance tax rate by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). Employers will have to withhold additional amounts once employees earn over $200,000 in a year.
WHAT GUIDANCE WILL WE SEE?
Regulations on a number of issues remain outstanding. The regulatory agencies responsible for implementation and enforcement of the health care reform law—the Departments of Labor, Treasury and Health and Human Services— began issuing additional guidance once the Supreme Court upheld the law. Additional guidance is expected now that the election is over.
Issues that will likely be addressed in future guidance include:
Employer Pay or Play Mandate
The agencies are expected to, and have indicated that they will, issue more guidance for employers to help them determine how to comply with the shared responsibility provisions of the law.
Automatic Enrollment
The Department of Labor is required to issue regulations implementing the rule requiring large employers that offer health coverage to automatically enroll new employees in the health plan (and re-enroll current participants).
Nondiscrimination Rules for Fully-insured Plans
Under health care reform, non-grandfathered fully- insured plans will not be able to discriminate in favor of highly-compensated employees with respect to their health benefits. The IRS delayed the effective date of this rule for additional regulations, which have yet to be issued.
State governments may also take further steps to establish the health insurance exchanges required by the health care reform law. The federal government will step in and set up exchanges for states that fail to establish their own exchanges. Many states have delayed implementation and will need to accelerate their efforts if they want to run their own exchanges.
CHALLENGES FOR IMPLEMENTATION
As we get closer to full implementation of the health care reform law, questions linger about whether the framework is in place for all pieces to be operational by their deadlines. Insufficient staffing of the responsible agencies is one potential issue, along with employer and state government hesitation or inability to implement certain parts of the law. Compliance efforts are likely to pick up now that the election is over.
Most small businesses don’t offer health coverage
Source: www.benefitspro.com
By Kathryn Mayer
A new study finds only 49 percent of workers in small businesses with fewer than 50 employees were offered and eligible for health insurance through their employer in 2010, down from 58 percent in 2003.
Larger firms are much more likely to provide health benefits. About 90 percent of workers in firms with 100 or more employees were offered and eligible for health insurance in both 2003 and 2010, according to the report from the Commonwealth Fund.
Low-wage workers in small businesses were the least likely to be offered and eligible for coverage: Just one-third of workers making less than $15 an hour in small firms were both offered and eligible to enroll in their employer’s health plan, compared to 70 percent of small firm workers making over $15 an hour.
Report coauthor and Commonwealth Fund Vice President Sara Collins says the report “highlights a nearly decade-long trend of declining health insurance coverage and rising costs for workers in small businesses, particularly those who make less than $15 an hour.”
“As a result, many people who work for small businesses can’t afford the health care they need or have medical bills they are unable to pay,” she says.
About half small business employees (45 percent) reported trouble paying medical bills in 2010, and 46 percent reported that they skipped needed medical care because of cost, the report says. That’s about ten percent higher than those workers working in larger firms.
Small business workers were also more likely to be dissatisfied with their health insurance, with 29 percent rating it fair or poor, compared to 16 percent of those at larger businesses. They also don’t have as much choice when it comes to health plan options.
But Commonwealth researchers say health reform should help address and solve some of these problems by offering premium tax credits to certain small businesses and by granting subsidies to many uninsured workers toward their purchase of health insurance beginning in 2014.
“The Affordable Care Act should mitigate this trend by improving the affordability and comprehensiveness of health insurance both for small-business owners who want to offer health benefits and for workers in small businesses who can't get coverage through their jobs.”
The Commonwealth Fund is a nonpartisan research foundation that supports PPACA. Though they argue the law will help small businesses, opponents say the law will burden small businesses while raising taxes.
10 tips for saving money on health care
By Kathryn Mayer
Source: www.benefitspro.com
Though we argue a lot about what solutions we need to fix our country's health care industry, we can usually at least agree on what one of the problems is: It's too expensive.
According to a recent survey, more than half of Americans see high costs associated with medical care and health coverage as the most pressing health care problem. Even more, health care costs are keeping patients away from the doctor with about one in three saying it has made them put off medical treatment and skip or postpone a regular doctor’s visit.
“Medical costs are among the biggest budget busters, especially when health issues are unexpected,” says Mike Sullivan, director of education for Take Charge America, a national non-profit credit counseling agency. “While some bills can’t be prevented, you may be surprised that you can drastically cut your overall health care expenses by questioning, negotiating and shopping around.”
Sullivan offers the following 10 tips for saving money on health care.
Stay healthy
First and foremost, commit to healthy living. Eat well, exercise and steer clear of unhealthy habits like smoking and excessive drinking. According to the Kaiser Family Foundation, medical expenses for an obese person are about 42 percent higher than someone of healthy weight. Likewise, the Center for Disease Control and Prevention says it costs 18 percent more to insure a smoker.
Take preventive action
Preventive care is crucial for keeping health care costs down over time, and many insurance plans now provide preventive-care screenings without charging deductibles and copays. Annual well-visits give your doctor an opportunity to provide necessary medical advice and identify health concerns before they become major issues.
Choose in-network providers
If you have medical insurance, choose in-network health care providers to keep your out-of-pocket costs down. This applies to your family doctor, specialists, health care facilities and even medical labs.
Assess urgency
If you need to see a doctor after hours, consider an urgent care or convenience-care clinic over the ER. You can save hundreds of dollars for relatively minor issues like a sprained ankle or the flu.
Maximize your deductible.
If you’re close to meeting (or have already met) your insurance deductible, schedule any necessary medical procedures or physician visits in the same calendar year. Your deductible starts over at year’s end, and waiting to schedule procedures means you’ll pay a larger share of the cost.
Inquire about medical necessities
Some medical procedures are urgent and necessary, others are less so. If money is tight—especially if you’re a private-pay patient—ask your doctor about the feasibility of delaying your procedure.
Negotiate costs
If you need to see a doctor and you’re paying out of pocket, be sure to compare prices. It’s important to know, too, that many providers will negotiate prices or provide cash discounts to private-pay patients. While the ER is no place to barter, consider this tactic for non-urgent or elective procedures.
Review your coverage
If you’re self-insured, review your coverage annually to make sure you’re not under- or over-insured. If you’re insured through work, evaluate your plan during open enrollment. With health-care reform changes and a variety of insurance plans to choose from, the coverage you selected last year may no longer be the best option.
Find Rx discounts
Many pharmacies extend special offers on prescription drugs. One pharmacy may advertise a $4 cholesterol medication while another may offer a low-price on blood-pressure meds. Be sure to shop around. If you have multiple prescriptions, it may be more cost effective to fill them at separate pharmacies. Additionally, ask your doctor to prescribe generics whenever possible.
Consider online and mail-order prescriptions
Search Web and mail-order pharmacies for deep discounts. Some even offer a three-month supply of drugs for the same price as one month at a neighborhood pharmacy.
Rise of medical costs tops projections
Source: Bloomberg News Service
Medical prices accelerated faster than some projections last year and the number of uninsured is rising, according to data that show the U.S. goal of expanding health care is veering onto a more difficult road.
Costs for people with employer-sponsored insurance plans jumped 4.6% in 2011, more than the government’s 3.9% estimate for the entire health system, the Health Care Cost Institute, which analyzed claims from UnitedHealth Group Inc., Aetna Inc. and Humana Inc., said Tuesday. A study by the U.S. Centers for Disease Control and Prevention found the number of people without insurance climbed 1.7% in the first quarter of 2012.
The data pose a challenge for the Obama administration as it carries out the 2010 Patient Protection and Affordable Care Act, which promises to expand coverage to 30 million Americans starting in 2014 and trim health costs. The CDC reported that 47.3 million people lacked insurance, and the health institute said hospitals and doctors raised prices at a clip that outstripped demand.
“If you don’t bend the cost curve, ultimately insurance gets more expensive,” said Douglas Holtz-Eakin, the president of the American Action Forum, a Washington-based advocacy group that opposes the health law. “It’s a big problem for the Affordable Care Act.”
The overhaul law may be contributing to higher costs, said Martin Gaynor, an economics professor at Carnegie Mellon University and chairman of the Washington-based Health Care Cost Institute. The act tries to limit insurers’ administrative expenses and profits by requiring companies to spend at least 80% of their premium revenue on medical services. To meet that threshold, they may be letting prices rise, he said.
‘Unintended consequences’
“Like anything else, sometimes these things can have unintended consequences,” Gaynor said in a telephone interview.
Health care costs for 40 million workers covered by UnitedHealth, Aetna and Humana – three of the four largest U.S. health insurers by revenue – increased to $4,547 a person, from $4,349 a year earlier, according to the institute. The group, created last year to analyze claims data from major insurers, found that charges for hospital emergency rooms rose 9.1% in 2011, after adjusting for a reduction in the intensity of care they delivered.
That means emergency rooms “did less for more money,” said David Newman, executive director of the institute.
The law also has encouraged consolidation among hospitals and doctors, which may lead to greater pricing power, said Holtz-Eakin, who once who ran the nonpartisan Congressional Budget Office after leaving the Bush administration in 2003.
A White House spokesman, Nick Papas, referred questions to the Department of Health and Human Services.
Incomplete picture
Erin Shields, a spokeswoman for the department, said the institute’s report looked at a segment of the health care system. “In recent years, overall health care cost growth has reached record lows and the health care law drives costs down,” she said in an e-mail.
Rising costs in 2011 may have been a one-time phenomenon, said Charles Roehrig, director of the Altarum Institute’s Center for Sustainable Health Spending in Ann Arbor, Mich. His group calculates that spending for the health system increased 5.2% in 2011, and this year will rise about 4%, similar to the rates in 2010 and 2009.
“I might be dismayed if the data for 2012 showed it was going up even faster still,” Roehrig said by telephone.
More uninsured
The report from the Atlanta-based CDC showed the number of people without health insurance rose to 47.3 million in the first quarter, from 46.5 million a year earlier. The finding contrasts with a Sept. 12 Census Bureau report that said the number of uninsured Americans declined by more than 1 million in 2011 from 2010.
The CDC data, collected from a survey of about 35,000 households conducted throughout the year, is considered “preliminary” and the first-quarter sample has “larger variances” than full-year data, Karen Hunter, a CDC spokeswoman, said in an e-mail.
While the two federal agencies use different methodology to gather their data, both documented a decrease in the number of people ages 19 to 25 who lack insurance. The CDC said that 27.5% of people in that age group were uninsured in the first quarter.
Workers Flounder with Health Care Decision
By Editorial Staff
Source: https://eba.benefitnews.com
Open enrollment deadlines are just around the corner, and a new survey suggests the choices aren’t getting any easier for many workers.
According to a report from Aetna, Americans rank choosing health care benefits as the second most difficult life decision, behind only saving for retirement. Aetna’s survey shows those who stress over health benefits decisions cite confusing and complicated information (88%), conflicted data (84%) and difficulty knowing which plan is right for them (83%).
“The … results showed that consumers understand the importance of health benefits. However, they don’t feel they have the resources they need to make an educated decision,” says Mark T. Bertolini, Aetna’s chairman and CEO “We need to make the process of choosing and using health benefits easier for consumers.”
Conducted in July with results released last week, the survey finds Americans split on the Patient Protection and Affordable Care Act, though 75% think that all of its key elements are important for them or their families. Forty-one percent of respondents said they need more information on health care reform to understand its impact.
Reducing medical costs remains a major economic and political issue, even though 42% of Americans reportedly never or rarely monitor out-of-pocket health care expenses. This is despite the fact that more than one in five respondents had to dip into their savings in the past year to help cover medical bills.
The survey further finds that more than 40% of respondents have skipped a prescription dose, halted their medication or delayed a needed medical procedure. What’s worse, those in fair or poor health (76%) or with chronic conditions (57%) are the most likely to engage in those dangerous behaviors.
Wendy Shanahan-Richards, national medical director for Aetna, says the survey illustrates the need for health plans data to walk the line between concise and digestible and thorough and comprehensive information.
“The [survey] results help us better understand the challenges that consumers are facing today,” Shanahan-Richards says. “We want to arm consumers with as much useful, easy-to-understand information as possible to help them make more informed health benefits choices and take better control of their health.”
55 billion reasons for consumer-driven care
Source: Benefitspro.com
In a report this week, we found out something we already knew—but probably not to this extent.
Our country’s health care system squanders a ridiculous $750 billion a year. That’s roughly 30 cents of every medical dollar spent. It happens through unneeded care, excessive administrative expenses and data, fraud and other problems, a report by the Institute of Medicine revealed.
Let’s go over some numbers. America spent $2.6 trillion on health care last year. And a third of that spending did nothing to make any of us any healthier. Our health care costs are rising faster than inflation, and it’s literally bankrupting many of us. It’s also killing us. By one estimate, the report says, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state.
So what is going on?
The report breaks down the sources of overspending: Unnecessary services tops the list at $210 billion, followed by inefficiently delivered services ($130 billion), excessive administrative costs ($190 billion), prices that are simply too high ($105 billion), fraud ($75 billion) and missed prevention opportunities ($55 billion).
Though we’ve come a long way in health innovation—such as the management of previously fatal conditions—the report said, the American health care system is still falling short on “basic dimensions of quality, outcomes, costs and equity.”
Not that this is news. We know this. It’s apparent every time we see health report numbers or look at our own medical bills.
The question is what we can do about it.
The Institute of Medicine has recommendations: Fully adopt mobile technologies and electronic health records; increase transparency about the costs and outcomes of care; use better data; and move toward a system that rewards doctors for quality, not quantity, of care.
Sure, these are good ideas, but whether they'll happen any time soon is really a mystery. Sadly, it’s out of consumers’ hands.
But preventive care isn’t. There’s something each of us can do—get checked, get necessary and recommended health screenings, eat healthy, exercise, don’t smoke, be proactive about problems—the list goes on. Older people, the report notes, have a big problem with preventive care, and it’s especially problematic because they're more prone to serious and costly health woes.
It’s also worth noting that the report comes at an interesting time. The presidential race is tighter than anyone thought—and health reform and Medicare cuts are sources of major contention. President Obama didn’t even give mention the signature piece of his presidency, the PPACA, during his nomiation acceptance speech at the Democratic National Convention.
Seems like there’s a lot we—and Washington—can do to drastically cut health care costs while also improving care that doesn’t cost another trillion or so dollars to implement.
Employers Stressing Health Incentives for Employees
Source: Insurance Journal and Aon Hewitt
U.S. employers are increasingly utilizing monetary and other incentives to encourage employees and their families to become active in health and fitness programs and take better care of themselves, according to new survey findings from Aon Hewitt.
Aon Hewitt’s survey of nearly 2,000 U.S. employers representing over 20 million U.S. employees and their dependents found that 84 percent now offer employees incentives for participating in a health risk questionnaire (HRQ) and almost two-thirds (64 percent) offer an incentive for participation in biometric screenings. Just over half (51 percent) provide incentives to employees who participate in health improvement and wellness programs.
The use of monetary incentives, in particular, has increased over the past year. In 2012, 59 percent of employers used monetary incentives to promote participation in wellness and health improvement programs, up from 37 percent in 2011. The use of monetary incentives for participating in disease/condition management programs almost tripled in 2012, from 17 percent in 2011 to 54 percent
A growing number of employers are beginning to link incentives to a result, as opposed to simply participating in a program. Of companies that offer incentives, 58 percent offer some form of incentive for completing lifestyle modification programs, such as quitting smoking or losing weight. About one-quarter offer incentives for progress or attainment made towards meeting acceptable ranges for biometric measures such as blood pressure, body mass index, blood sugar and cholesterol.
“Programs and tools like HRQs and biometric screenings can make employees more aware of their health status and of the opportunities to improve their health, but alone they won’t move the needle when it comes to health improvement and mitigating cost,” said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt. “Incentives solely tied to participation tend to become entitlement programs, with employees expecting to be rewarded without any sense of accountability for better health. To truly impact employee behavior change, more and more organizations realize they need to closely tie rewards to outcomes and better results rather than just enrollment.”
Employers also are requiring more of participants in order for them to be eligible for enhanced benefits, such as value-based insurance designs (VBID). Of the 46 percent of organizations that incorporate some type of VBID approach in their health plans, almost one in three require completion of a HRQ or require participation in a program such as disease management or smoking cessation programs to receive the enhanced benefits. This is a 33 percentage point increase from 2011, where nine out of 10 employers did not impose any requirements.
Despite the evidence of increased employer interest in tying incentives to results, Winkler said Aon Hewitt’s survey shows room for improvement. More than 80 percent of employers provide an incentive to complete a health questionnaire, yet less than 10 percent provide an incentive to address the results of the questionnaire. Additionally, more than 60 percent of employers provide an incentive to complete biometric screening, but less than 10 percent provide an incentive to take any action.
“Employers know that eight health behaviors, including risks such as lack of physical activity and failure to complete recommended preventive screenings, drive 15 chronic conditions that lead to higher medical costs and increased absence from work. An effective incentive strategy rewarding those who take action to improve their health is fundamental for improving health and reducing cost,” said Stephanie Pronk, clinical health improvement leader for Health & Benefits at Aon Hewitt.
The Silver Lining of 401(k) Fee Disclosures
By Jonathan Anderson
Source: benefitspro.com
In all of the recent – and perhaps herculean - efforts to develop and distribute fee disclosures, a proverbial “silver lining” actually exists.
Service providers have spent much time, effort, and expense (sometimes great) in complying with the Department of Labor’s service provider fee disclosures, effective July 1, 2012.
I also realize that service providers and employers, now focused on providing participants with the participant fee disclosures, generally effective August 30, 2012, are expending similar time, effort, and money it took for the service provider disclosures.
I further recognize the disclosures contain some additional fiduciary obligations that could be challenging (e.g. reporting to the DOL any service providers with deficient disclosures; possibly being penalized and/or sued for breaches of fiduciary duty; et cetera).
However, there is a silver lining surrounding the valuable and critical benefits resulting from the disclosures.
Service Provider Disclosures:
One of the first benefits is that plan fiduciaries now have a more compact and precise tool to help determine the actual services provided by a vendor, and the reasonableness of the fees for such, to a plan.
Since determining the reasonableness of the services and fees under a service provider arrangement has always been a requirement of the fiduciaries (to avoid a prohibited transaction), the disclosures should simplify what had been a complex process for most fiduciaries. For other fiduciaries, perhaps this will be the first time a formal determination of an arrangement’s reasonableness has actually been made.
With the new disclosure, the determination process has been made easier for the plan fiduciaries, and can allow them to make more informed decisions.
The same benefit applies with respect to documenting the process of determining of an arrangement’s reasonableness. By having a disclosure describing and summarizing the services, fees, and the parties providing the services and receiving the fees, the fiduciaries’ documentation process has been simplified. In addition, documenting the process could aid the plan sponsor/plan fiduciaries defend any legal claim that the services and fees were not reasonable.
Another benefit is that the disclosures allow fiduciaries to use more of an “apples-to-apples” comparison of one service provider’s services and fees to another service provider’s services and fees. Comparisons may be used to further justify staying with the current service provider, or to explore whether switching to a different provider might be better.
Yet another benefit is the disclosures allow fiduciaries to help identify whether any changes to the current arrangement should be explored and/or made. For instance, after reviewing the disclosures made about the investment alternatives in the required summary chart format, perhaps the plan fiduciaries may decide to add or modify the investment alternatives from which a participant may choose to invest his/her account balances.
Administration Launches New Effort Against Healthcare Fraud
By Elise Viebeck
Source: thehill.com
The Obama administration announced a new plan to crack down on healthcare fraud, which costs taxpayers and industry tens of billions of dollars per year.
Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius said the new effort will cut down on illicit healthcare billings by coordinating public and private fraud-fighting.
Health insurers have been at odds with the administration over parts of the Affordable Care Act, but several have signed on to the new effort, including WellPoint, UnitedHealth Group and the industry's main lobby, America's Health Insurance Plans (AHIP).
AHIP President and CEO Karen Ignagni called the partnership a "major step forward in the fight against fraud and abuse."
"By sharing data, information, and best practices across all payers," she said in a statement, "this partnership will ... provide a powerful deterrent to would-be perpetrators looking to prey on patients and steal money from taxpayers."
Details of the expected collaborations were not released, but the announcement described how stakeholders might curb fraud by sharing information on specific schemes.
Better coordination could avert the payment of an illicit claim billed to multiple insurers, for example.
"Bringing additional healthcare industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes," Holder said in a statement.
He praised the Obama administration's efforts on healthcare fraud, which have recovered $10.7 billion over the last three years, according to the federal Health department.
Sebelius said the healthcare law has made better tools available to combat fraud, such as tougher sentences for criminals.
"Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our healthcare system," she said in a statement.
"This partnership puts criminals on notice that we will find them and stop them before they steal healthcare dollars."
Fraud in Medicare costs about $60 billion annually, according to estimates.