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.
Health Care Law to Cut Deficit, Says Budget Office
Copyright 2012 ProQuest Information and Learning
All Rights Reserved
Copyright 2012 Morning Sentinel
Morning Sentinel (Waterville, Maine)
BY RICARDO ALONSO-ZALDIVAR AND ANDREW TAYLOR
Associated Press
WASHINGTON -- President Barack Obama's health care overhaul will shrink rather than increase the nation's huge federal deficits over the next decade, Congress' nonpartisan budget scorekeepers said Tuesday, supporting Obama's contention in a major election-year dispute with Republicans.
About 3 million fewer uninsured people will gain health coverage because of last month's Supreme Court ruling granting states more leeway, and that will cut the federal costs by $84 billion, the Congressional Budget Office said in the biggest changes from earlier estimates.
Republicans have insisted that Obamacare will actually raise deficits -- by "trillions," according to presidential candidate Mitt Romney. But that's not so, the budget office said.
The office gave no updated estimate for total deficit reductions from the law, approved by Congress and signed by Obama in 2010. But it did estimate that Republican legislation to repeal the overhaul -- passed recently by the House -- would itself boost the deficit by $109 billion from 2013 to 2022.
"Repealing the (health care law) will lead to an increase in budget deficits over the coming decade, though a smaller one than previously reported," budget office director Douglas Elmendorf said in a letter to House Speaker John Boehner, R-Ohio.
The law's mix of spending cuts and tax increases would more than offset new spending to cover uninsured people, Elmendorf explained.
Tuesday's budget projections were the first since the Supreme Court upheld most of the law last month but gave states the option of rejecting a planned expansion of Medicaid for their low-income residents. As a consequence, the budget office said the law will cover fewer uninsured people.
Thirty million uninsured people will be covered by 2022, or about 3 million fewer than projected this spring before the court ruling, the report said.
As a result, taxpayers will save about $84 billion from 2012 to 2022. That brings the total cost of expanding coverage down to $1.2 trillion, from about $1.3 trillion in the previous estimate.
The Congressional Budget Office has consistently projected that Obama's overhaul will reduce the deficit, although previous estimates aren't strictly comparable with Tuesday's report because of changes in the law and other factors.
At the time it was approved in 2010, CBO estimated the law would reduce the deficit by $143 billion from 2010 to 2019. And CBO estimated that last year's Republican repeal legislation would increase deficits by $210 billion from 2010 to 2021.
That may sound like a lot of money, but it's actually a hair-thin margin at a time when federal deficits are expected to average around $1 trillion a year for the foreseeable future.
When the law is fully in effect, 92 percent of citizens and legal residents are estimated to have coverage, as compared to 81 percent now.
Democrats hailed Tuesday's estimates as vindication for the president. "This confirms what we've been saying all along: theAffordable Care Act saves lots of money," said Senate Majority Leader Harry Reid, D-Nev.
Actually, the government will spend more. It just won't go onto the national credit card because the health care law will be paid for with a combination of spending cuts and tax increases.
GOP leaders sought to shift attention from claims about the deficit and focused instead on the additional spending. "What we know from today's CBO report ... is that the new health care law is dramatically increasing health care spending and costs," said Senate Republican leader Mitch McConnell of Kentucky.
Republicans said they remain unswervingly committed to repealing what they dismiss as Obamacare. When combined with other budget-cutting measures, GOP leaders say that repeal will ultimately reduce deficits. Romney says if elected he will begin to dismantle the law his first day in office.
Medicaid has been one big question hanging over the future of Obama's law since the Supreme Court ruled.
Some GOP-led states, such as Texas and Florida, say they will not go forward with the expansion. Others are uncommitted, awaiting the voters' verdict on Obama in November.
Although the federal government would bear all of the initial cost of that expansion, many states would have to open their Medicaid programs to low-income childless adults for the first time.
CBO analysts did not try to predict which specific states would jump in and which would turn down the Medicaid expansion. Instead, they assumed that many states would eventually cut deals with the federal government to expand their programs to some degree.
As a result, the budget office estimates that more than 80 percent of the low-income uninsured people eligible under the law live in states that partially or fully expand their programs.
The big coverage expansion under the law doesn't start until 2014, with middle-class uninsured people signing up for subsidized private plans and more low-income people picked up through Medicaid.
Don’t Get Hit With Fines Under Health Care Reform
By Bonnie Lee
Source: smallbusiness.foxbusiness.com
With more than 500 provisions, the Patient Protection and Affordable Care Act contains hefty tax implications for small business owners.
Of the 500 provisions in health-care reform, more than 40 of these provisions affect the Internal Revenue Code, including incentives and tax breaks to individuals and small businesses to offset health-care expenses.
Some of the provisions also impose penalties for individuals and businesses that do not obtain health-care coverage for themselves or their employees. According to The Treasury Inspector General of Tax Administration which performed an audit of this law, “Revenue provisions contained in the legislation are designed to generate $438 billion to help pay for the overall cost of health care reform. Additionally, new reporting requirements have been established.”
One overlooked section in the reform fines both small businesses and corporations up to $500,000 for being discriminatory with their health insurance.
The Affordable Care Act requires businesses that offer health insurance to provide it to at least 70% of the employees. It also requires that company executives not discriminate by having better insurance plans for some of their employees. The IRS penalty for companies with 50 or more employees that are found to be discriminatory may be fined as much as $100 per day per person or 10% of the annual premiums whichever is less--up to a maximum of $500,000.
Brett Goldstein, director of retirement planning at American Investment Planners in Jericho, NY states, “Many businesses have health insurance or better benefits for owners and top employees. However under The Affordable Care Act, offering health insurance or different insurance to just a few key employees will be considered discriminatory.”
What constitutes discrimination under The Affordable Care Act? Goldstein says that offering the top employees health insurance with shorter waiting periods or lower premiums could be discriminatory and lead to fines.
Differences in health plans can exist between different classes of employees. For example, a company can have different benefits for salaried employees vs. hourly employees, but not for “executives” vs. other employees.
The IRS temporarily suspended the health insurance non-discrimination rules in 2010. However now that the Supreme Court has upheld the law, the IRS will now have to come up with specific rules regarding health insurance non-discrimination.
“Hopefully when the IRS issues regulations on health insurance non-discrimination they will relax some of the rules in the Affordable Care Act, such as the fines,” says Goldstein. “In the meantime, every business needs to be reviewing their health insurance to see if they are discriminating in favor of the owners and top paid employees.”
And it isn’t just businesses that will be penalized. According to the TIGTA audit report, an annual excise tax will be imposed on health insurance providers whose written net premiums exceed $25 million. It’s based on market share, with the total industry fee starting at $8 billion in 2014 and rising to $14.3 billion in 2018 and an indexed amount after that. And if an insurance provider fails to file their premiums report, they will be assessed a penalty of $10,000 plus the lesser of $1,000 times the number of days late or the amount of the tax imposed for which the report was required. This tax does not apply to employers who self-insure their employees or certain government entities. This becomes effective after December 31, 2013. And of course, the American way is to pass on any tax increases as well as additional administrative costs to customers.
HEALTH CARE LAW SAVES $3.9 BILLION ON PRESCRIPTION DRUGS FOR PEOPLE WITH MEDICARE IN 2012 ALONE
States News Service
Source: Lexis Nexis
BALTIMORE, MD
The following information was released by the Centers for Medicare & Medicaid Services:
As a result of the Affordable Care Act, over 5.2 million seniors and people with disabilities have saved over $3.9 billion on prescription drugs since the law was enacted. The Centers for Medicare and Medicaid Services (CMS) also released data today showing that in the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs in donut hole coverage gap for an average of $629 in savings this year.
Millions of people with Medicare have been paying less for prescription drugs thanks to the health care law, said CMS Acting Administrator Marilyn Tavenner. Seniors and people with disabilities have already saved close to $4 billion. In 2020, the donut hole will be closed thanks to the Affordable Care Act.
These savings are automatically applied to prescription drugs that people with Medicare purchase, after they hit the Medicare Part D prescription drug coverage gap or donut hole. Since the law was enacted, seniors and people with disabilities have had several opportunities to save on prescription drugs:
In 2010, people with Medicare who hit the donut hole received a one-time $250 rebate. These rebates totaled $946 million for 2010;
In 2011, people with Medicare began receiving a 50 percent discount on covered brand name drugs and 7 percent coverage of generic drugs in the donut hole. Last year, these discounts totaled over $2.3 billion in savings;
This year, Medicare coverage for generic drugs in the coverage gap has risen to 14 percent. For the first six months of the year, people with Medicare have saved $687 million.
Coverage for both brand name and generic drugs in the gap will continue to increase over time until 2020, when the coverage gap will be closed.
Employers Lack Confidence in PPACA Understanding
By Rebecca Moore
Source: PLANSPONSOR
Just 40 percent of HR decision makers from large organizations are very confident about their understanding of employer requirements under the Patient Protection and Affordable Care Act (PPACA), according to an ADP Research Institute survey.
Even fewer respondents in small companies (20 percent) and midsized companies (17 percent) expressed that same level of confidence.
Worries Grow as Health Care Companies Send Jobs Overseas
Don Lee, Tribune Washington Bureau
Chattanooga Times Free Press (Tennessee)
WASHINGTON -- After years of shipping data-processing, accounting and other back-office work abroad, some health care companies are starting to shift clinical services and decision-making on medical care overseas, primarily to India and the Philippines.
Some of the jobs being sent abroad include so-called pre-service nursing, where nurses at insurance companies, for example, help assess patient needs and determine treatment methods.
Outsourcing such tasks goes beyond earlier steps by health care companies to farm out reading of X-rays and other diagnostic tests to health professionals overseas. Those previous efforts were often done out of necessity, to meet overnight demands, for instance.
But the latest outsourcing, which has contributed to the loss of hundreds of domestic health jobs, is done for financial reasons. And the outsourcing of nursing functions, in particular, may be the most novel - and possibly the most risky - of the jobs being shifted.
At the forefront of the trend is WellPoint Inc., one of the nation's largest health insurers and owner of Anthem Blue Cross, California's biggest for-profit medical insurer.
In 2010, WellPoint formed a separate business unit, Radiant Services, aimed at advancing outsourcing and other cost-saving strategies. WellPoint has eliminated hundreds of jobs in the U.S. over the last 18 months as it has moved jobs overseas, a company spokeswoman acknowledged.
The spokeswoman, Kristin Binns, said WellPoint's shifting of clinical jobs overseas was a small part of the outsourcing and being done through Radiant because it has the technical expertise and can ensure compliance with laws.
Nursing organizations, however, were cautious.
"It's obviously a very disturbing trend," said Chuck Idelson, a spokesman for the California Nurses Assn. "There are serious questions if you're talking about utilization reviews ... and making recommendations on procedures."
Nursing experts said there also may be licensing issues as states generally require certification for those practicing and dispensing health information.
Current and former Radiant executives declined to comment or weren't available.
It's not clear how many other U.S. health care companies have contracted with Radiant or other outsourcing specialists, but industry experts said companies were increasingly looking at more healthcare tasks that could be outsourced globally as they face greater cost pressures and sweeping changes in how they do business.
Aetna Inc. has an arrangement with EXL Service, a U.S.-based company with operations in Manila, to provide "targeted care-management support," spokeswoman Cynthia Michener said.
Health Net Inc., which is laying off dozens of information technology and accounting workers whose jobs are being sent to India, said its outsourcing has generally been confined to administrative and IT functions. UnitedHealth Group, the nation's largest health insurer, didn't respond to inquiries.
Outsourcing jobs out of the country has become a hot issue in the presidential campaign: President Barack Obama is pounding Republican challenger Mitt Romney for his private equity company's involvement with companies that sent jobs abroad.
Although such outsourcing has been going on for years, American manufacturers in recent years have brought some jobs back to the U.S. as labor costs have risen in China and elsewhere.
Some experts argued that sending jobs abroad could help U.S. companies by enabling them to tap global talent and efficiencies, making them more profitable. When U.S. companies are stronger, the thinking goes, it creates more opportunities for Americanworkers. Also, shifting operations to lower-wage countries can help consumers by holding down prices.
Outsourcing jobs to places such as the Philippines can save U.S. health care companies 30 percent in labor costs, according to experts. But the practice remains controversial, especially with the U.S. unemployment rate hovering above 8 percent.
Patient advocates worry about crucial decisions involving a patient's care being in the hands of foreign insurance adjusters. Analysts said there was another concern as well: patient privacy.
Even something as straightforward as medical transcription can raise questions, said Uwe Reinhardt, a healthcare economist at Princeton University. Over the last year, Iowa Health System and hospitals in Utah and Washington state have joined other medical centers that have outsourced the transcribing of doctors' notes and other records.
"Suppose I'm an AIDS patient," Reinhardt said. "That person in India would know - and (the information) could be valuable to someone.... For the U.S., there's nothing more personal than health care."
Dr. Kaveh Safavi, head of the North American health practice for Accenture, a major consulting and outsourcing company that has partnered with WellPoint's Radiant, said nearly all countries have laws for protecting patient privacy.
And to safeguard patients' records, he said, heath care companies store and maintain their records locally.
As for outsourcing services that are more clinical in nature, he said, "People are looking at all the tasks that can safely and responsibly be moved. It's still an emerging market. We're still trying to understand the market's tolerance for it."
In general, hospitals are moving more slowly than health insurers to send jobs overseas. But with financial pressures intensifying and the uptake of electronic record-keeping accelerating, analysts and industry people see more consolidation and outsourcing ahead.
"When you have people's medical, billing and other records kept electronically, then it opens it up to establishing a call center virtually anywhere," said Steve Trossman, a Los Angeles spokesman for the Service Employees International Union, which represents hospital workers. "There is no longer a reason for it to be physically in the same place as the paper records."
Moreover, the health care reform law could prod insurers to move more jobs to cheaper-wage countries. The new law requires companies to spend 80 percent to 85 percent of premiums on medical care, limiting the amount available for administrative expenses.
Few have been as aggressive as WellPoint, which made a profit of $2.65 billion last year on revenue of $60.7 billion. WellPoint's total employment at the end of last year was 37,700, down from 40,500 two years earlier.
In one of its recent efforts, WellPoint laid off pre-service nurses in Colorado and Nevada so the work could be done in Manila, according to a Labor Department filing by a WellPoint human resource manager in Denver. WellPoint spokeswoman Binns said none of the decisions that involve denial of procedures or treatment for patients is made overseas.
(EDITORS: STORY CAN END HERE)
Overall, Binns said, fewer than 2.5 percent of the 37,000 employees, or at most 925 workers, had lost jobs in the last 18 months as a result of work sent overseas. Only about 50 of those positions involved clinical management of care, she said.
WellPoint's "sourcing strategies have enabled us to make our services more effective, accessible and affordable to our customers, while allowing us to expand our programs and maintain our service levels," she said.
WellPoint's offshoring covers a wide range of departments and tasks involving claims, enrollment, billing, post-service clinical claims review, utilization management and pre-service nursing, according to filings made by company managers and state government officials. Both were helping secure federal trade-assistance benefits for WellPoint workers who have lost jobs because of outsourcing or import competition.
Shannon Cunningham of Columbus, Ohio, who processed medical claims for WellPoint, was laid off last month after a colleague went to the Philippines to train people to do her job.
Cunningham, 43, said she received eight weeks of severance pay. She and others working in medical claims earned $30,000 to $40,000 a year with health benefits, she said.
"I know other countries need work," said Cunningham, a company employee for three years. But "I just felt like it wasn't fair. We're having a rough time too."
Failing to See
By Marli D. Riggs
Source: eba.benefitnews.com
Baby boomers are not taking advantage of available eye care benefits, leading to lost productivity
Despite employees reporting a strong interest in their company vision program, today's workforce isn't taking full advantage of the coverage — especially baby boomers.
Baby boomers (age 45-64) are only slightly more likely than younger employees to enroll in their vision benefit (79% vs. 75%), according to Transitions Optical's Employee Perceptions of Vision Benefits survey.
"1-out-of-4 employees that have an opportunity to enroll in the program do not," says Pat Huot, director of managed vision care and online retail for Transitions Optical.
"Of those that do enroll, 1-out-of-3 employees in the baby-boomer age range and 1-out-of-4 in the 65-plus range have not used their vision plan at all in the last year."
Huot believes the industry is trying to make it easier for employers to help employees become connected with the importance of the annual exam and all of the other touch points associated with it, "but if employees don't use the benefit, there's no opportunity there for them to realize that benefit."
The consequences
Studies by The Vision Council, an Alexandria, Va.-based nonprofit optical trade group, show about $8 billion is lost by employers every year due to lost productivity that stems from employee vision issues.
"This is mainly because employees' eyes are either not in focus or they have debilitating eye conditions that aren't managed well, so they just aren't as productive as they could be," says Dr. John Lahr, the medical director at Cincinnati-based EyeMed Vision Care.
Dr. Lahr, who has been in the field for nearly four decades, talks about the need for correction, which becomes more prevalent as employees age. The crystal lens of the eye where cataracts form, he says, is very elastic and loses that elasticity as people age.
"Usually, those between 40 and 45 cannot focus optimally for close vision and require reading glasses, or if they already have glasses they might need a multi-focal application to be able to read," he says.
"This factor really hits the worker that's in their 40's, 50's and 60's and is looking at a computer screen daily," adds Dr. Lahr. "If you measure that distance in which they are viewing it's usually 22 to 24 inches, where the normal reading distance is 16 to 18 inches."
He adds that the focus of glasses or contacts for everyday use is not optimal for the computer screen.
"In turn, employees lose a lot of productivity because they get eye strain, headaches, and they're also leaning forward in unnatural positions."
"In 2006, the very first baby boomer turned 60," says Transitions Optical's Huot. "As a snapshot of where we are as a country in terms of an aging workforce, it amazes me that every 10 seconds from that point in 2006 until 2023 someone in the U.S. will turn 60."
At age 40 employees should start protecting their eyes against serious diseases such as cataracts and macular degeneration - neither of which has symptoms in the early stages, says Dr. Lahr.
He adds that these diseases are much more prevalent in blacks and Hispanics.
"We find there are profiles where we can draw to try to assess risks and try to be more cautious with those individuals."
The obstacles
According to the Employee Perceptions of Vision Benefits survey, not having vision or eye health problems is the most commonly cited reason for not enrolling in a vision plan. This shows a lack of understanding of the importance of preventative eye care, says Transitions Optical's Huot.
He and his team encourage brokers to motivate their clients by giving them an interactive set of tools.
For example, his company's Healthy Sight Calculator helps clients educate their employees, calculate costs and learn about potential ROI with their vision plan.
"High profile tools, such as an online calculator, are designed to help the employees become more engaged around how a vision benefit connects to total health care versus" mentioning it as an afterthought in a larger presentation about health benefits, he says.
"We have yet to meet that broker that says, 'My clients can't wait to talk about vision!,'" adds Huot with a laugh.
EyeMed Vision Care tries to create an awareness of routine eye care and the associated benefits by providing an identification card that plan participants can put in their wallet to serve as a reminder during the year, says Dr. Lahr.
A personal experience
A decade ago Patrick Tibbs of Everence Financial Advisors in Indiana began to experience pressure in his eyes. He went in for a routine eye exam where the ophthalmologist determined his symptoms could be a cause of glaucoma.
Tibbs now goes once a year to have his eyes checked and glasses dispensed. He says by taking preventative steps for his own vision he feels a personal satisfaction knowing that employees are doing the same.
Vision care benefits are "near and dear to my heart," he says.
Vision benefits play a key part in motivating employees to see an eye doctor for a comprehensive exam.
EyeMed Vision Care's Dr. Lahr has seen in studies that those who have vision care coverage are more likely to get preventive eye exams even if they don't have symptoms.
"Our average utilization of a voluntary benefit where an employee defers money out of their paycheck we see about 35%," he says.
One factor keeping that utilization rate from rising is a misguided assumption that "if I see well [then] there's nothing wrong with my eyes."
Tibbs says baby boomers who are paying higher premiums for health insurance at the same time they're seeing their 401(k) values drop, yet still having to cover dependents with out-of-pocket costs, could be avoiding routine eye care "because they can't afford to pay $75 to $100 for an eye exam, then pay $300 for a pair of glasses."
Vision care is the summer
In the summer months employees' calendars are filled with vacations, parties and other outdoor festivities. Protecting eyes from ultraviolet rays is a must - but that is not the only one to be careful of, says Dr. John Lahr, medical director at Cincinnati-based EyeMed Vision Care.
In ophthalmology there is a new acronym to account for as a contributor to the development of cataracts and macular degeneration: high-energy visible light.
"This is the blue spectrum which we would see longer wavelength that is closer to the UV spectrum," says Dr. Lahr. "It has been studied through longitudinal studies which measured people's development of the two key eye diseases," cataracts and macular degeneration. "Since both of these eye diseases are much more prevalent in individuals that have high exposures to UV light, now they're starting to break down where they are when they're exposed," he adds.
As employees age, they have a heightened risk for cataracts that can impair performance at work," says Indiana broker Patrick Tibbs. "Out of 20 million people with cataracts it's estimated that 20% of those are caused by ultraviolet rays. Having proper eye wear is important and it will help with productivity." -Marli D. Riggs
White House Tells States to Get On Board with Healthcare Reform
By Sam Baker
Source: thehill.com
The Obama administration is aggressively pushing states to implement the healthcare reform law now that the Supreme Court has upheld it.
In the two weeks since the court issued its decision, the Health and Human Services Department has pushed out new grants, new policies and a new rhetorical standby: It’s time to get onboard.
“The volume of activity has certainly gone up,” said Alan Weil, executive director of the National Academy for State Health Policy.
HHS has been steadfastly implementing the Affordable Care Act since President Obama signed it in 2010, and state outreach has always been part of that effort — the department has awarded hundreds of millions of dollars in implementation grants.
But some Republican governors dug in their heels against implementing at least the biggest pieces of a law they thought the Supreme Court might strike down. With that possibility out of the way, HHS is making another big push to bring states onboard.
"Now that the Supreme Court has issued a decision, we want to work with you to achieve our ultimate shared goal of ensuring that every American has access to affordable, quality healthcare," HHS Secretary Kathleen Sebelius wrote in a letter to governors this past Tuesday.
She has echoed that message several times since the court issued its historic 5-4 decision upholding most of the Affordable Care Act, and Obama sounded a similar theme when the ruling was announced.
The administration has matched it’s “let’s move on” rhetoric with policy.
The day after the Supreme Court announced its decision, HHS unveiled new funding opportunities designed to help states plan for their insurance exchanges. HHS officials said they expected to receive funding requests from states that had previously resisted the idea of an exchange.
“I think there will be some renewed, ‘Let’s at least figure out what this will look like,’” Weil said.
Exchanges are new, centralized marketplaces where individuals and small businesses will buy private insurance. The ACA calls on each state to set up its own exchange and authorizes a federally run fallback in any state that doesn’t act. Exchanges have to be up and running by 2014, so HHS has to certify in 2013 whether each state will be able to build its own.
Some Republican governors who said they were waiting for the Supreme Court are now saying they won’t implement the law until they see how November’s elections shake out and whether Republicans pick up enough seats to try to repeal the law.
“Saying you’re going to wait is, in effect, making a decision,” Weil said. “If the calendar has made up your mind, then you have made up your mind.”
Although some red-state delays are pure politics, Weil said many states were legitimately leery of stepping up to such a massive undertaking when there seemed to be a good chance the Supreme Court would render all of that effort moot.
Waiting for the court “wasn’t a crazy thing to do,” he said. He expects some of those states to apply for new grant money and look more seriously at what a state-run exchange would entail.
“Gambling on the outcome of an election is a real gamble,” he said. “And so I think there are a lot of states that are realizing that with only one hurdle left, there’s a very real chance this law is going to be around. They are renewing their efforts to figure out what it means for them.”
HHS is trying to make that process easy. Federal officials made it abundantly clear at the outset that they want each state to set up its own exchange, which most policy experts agree would be better than a federal exchange.
The department said last year, in its first proposed rules on exchanges, that it would certify state-based exchanges after 2014, in case states weren’t ready on time but could get there eventually.
Weil was surprised by that policy at the time. But it’s consistent, he said, with HHS’s announcement after the Supreme Court ruling that states could receive exchange planning grants through the end of 2014. Many observers assumed planning grants would be cut off at the beginning of the year.
HHS also made a point last week to explicitly remind states that planning grants are for planning — states don’t have to set up an exchange just because they took federal planning money, and they don’t have to pay the money back if they ultimately decide to let the federal government handle their exchanges.
“We expect that, as states study their options, they will recognize that this is a good deal,” Medicare Administrator Marilyn Tavenner said in a letter to Republican governors.
While the Supreme Court cleared away one major area of uncertainty, it also raised a new question for states to answer: Do they want to participate in the healthcare law’s Medicaid expansion?
As written, states would have had to participate or give up all of their federal Medicaid funding. But the Supreme Court said that setup was unconstitutional and states must have the right to opt out of the expansion while keeping the rest of their programs intact.
The quickest decisions came from Republican governors with an eye for the national stage, including Texas’s Rick Perry and Louisiana’s Bobby Jindal, who lumped Medicaid and the exchanges together and said they wouldn’t do anything to implement “ObamaCare.”
The practical considerations between the two programs, though, are very different. (For example, there is no federal fallback for states that don’t accept the Medicaid expansion.) And though states had time to at least think about exchanges while they waited for the Supreme Court, the Medicaid decision is altogether new.
“On exchanges, states have been thinking about it and following this whole discussion. (Medicaid) was like dropped out of the sky,” Weil said. “No one has spent the last year thinking about whether or not they wanted to do the Medicaid expansion.”
CHANGING TIMES
Companies are seeking alternate health coverage offerings in the face of a shaky economy and the potential impact of the health care reform law, according to a new report by J.D. Power and Associates. The study found that employers are considering such options as defined contributions, vouchers and exchange purchasing in an effort to control spiraling health care costs. Employers, however, seem committed overall to continuing to offer health benefits. The study found that only 13 percent of fully insured employers and 14 percent of self-insured companies said they probably or definitely will not offer employer-sponsored benefits in the future.
PPACA Ruling Answers Some Questions, Leaves Others Hanging
The wait is over -- sort of.
Companies that had been delaying action on the Patient Protection and Affordable Care Act (PPACA) should now start making plans to comply, experts say. Yet while the Supreme Court's 5-4 ruling in June preserved the law, the full impact of PPACA's regulations remains to be seen.
For now, employers should prepare to meet the most immediate requirements, according to the law firm Morgan Lewis. In a recent web posting, the firm notes that companies should pay attention to the provisions that apply in 2012 and 2013, including:
- Reporting medical coverage value on 2012 W-2s
- Preparing to receive and properly distribute any medical loss ratio rebates
- Preparing to provide a summary of benefits and coverage in their 2013 enrollment packet
- Finishing updates to their summary plan description for any plan design changes from PPACA in 2011 and 2012
- Implementing an annual $2,500 cap on health care spending account contributions (beginning with 2013 plan years)
- Preparing for the patient-centered outcomes fee due in July 2013 ($1 per covered life for 2012. Insurers will remit the fee for fully insured plans; self-insured plans will pay it directly.)
Some other requirements, however, are far from crystal clear, according to a report in Business Insurance. For instance, the "pay or play" provision in the law requires employers with 50 or more workers that don't offer coverage to full-time employees to pay a penalty of $2,000 per worker. But the government has yet to clarify if the full fee would apply if employers mistakenly misclassify employees. Current regulations also fail to explain how the law applies to employees whose hours fluctuate weekly or monthly.
The IRS and other agencies are expected to release more guidance in the coming months, which should clear up some questions for employers. Yet the federal government itself and many states likely won't be able to meet all the deadlines on actions required to actually implement many of the major provisions, which start in 2014, according to Kaiser Health News.
The biggest stumbling block will be setting up the health care exchanges -- online marketplaces where some businesses and consumers will shop for coverage.
"Except in a few states, it's impossible to do this in the time allowed -- it's going to have to slip," said Joseph Antos of the American Enterprise Institute in the KHN report.
Even if some states are able to establish exchanges on time, the federal government's exchange -- which states can opt to use instead of creating their own -- likely won't be up and running anytime soon, said Cheryl Smith of Leavitt Partners.
"The 2014 start is untenable for federally compliant exchanges," Smith told KHN. "They have to verify income, they have to verify residency, they have to verify citizenship, and do all that through different federal agencies. Before [federal subsidies] can flow, every one of those things has to be done."
Some experts say that, barring a major political change in Washington, employers will be coping with PPACA in the years to come. Still, nothing can be ruled out until after the November elections, others note.
"Other chapters in the political front [regarding PPACA] have yet to be written," Dave Guilmette of Cigna Corp. told Business Insurance.