Final ACA wellness rules issued
Original article from eba.benefitnews.com
By Amy Gordon and Jamie Weyeneth
On May 29, the U.S. Departments of the Treasury, Labor (DOL) and Health and Human Services issued final regulations amending the 2006 HIPAA nondiscrimination wellness regulations to implement the employer wellness program provisions of the Affordable Care Act. The final rules retain the two categories of wellness programs – “participatory wellness programs” and “health-contingent wellness programs.” The final rules do not deviate extensively from the proposed regulations issued in November 2012, although the content has been reorganized to more clearly set forth the requirements for each type of wellness program. The participatory wellness program rules are basically unchanged from the current 2006 regulations – participatory wellness programs comply with the HIPAA nondiscrimination requirements as long as the participant does not have to satisfy any additional standards and participation in the program is made available to all similarly situated individuals, regardless of health status. However, the final rules update and expand on the requirements for health-contingent wellness programs, which condition a reward on a participant’s satisfaction of a standard related to a health factor.
Under the final rules, there are two types of health-contingent wellness programs – “activity-only” programs and “outcome-based” programs. An activity-based wellness program provides a reward if an individual performs or completes an activity related to a health factor, but it does not require the individual to satisfy any specific health outcome. Examples include walking or exercise programs in which a reward is provided just for participation, or rewards for taking a health risk assessment without requiring any further action. An outcome-based wellness program requires an individual to either attain or maintain a specific health outcome – for example, not smoking or achieving certain results in biometric screenings – in order to obtain a reward.
All health-contingent wellness programs must meet five requirements:
1. Eligible individuals must be given an opportunity to qualify for the reward at least once per year.
2. Generally, the reward may not exceed 30% of the total cost of employee-only coverage (including both the employee and employer portion of the cost of coverage). If dependents are permitted to participate, the reward can be calculated on the basis of 30% of the cost of coverage in which the employee and any dependents are enrolled. In the case of a program designed to reduce or prevent tobacco use, the maximum reward amount is 50% of the total cost of coverage. The reward limit is cumulative for all health-contingent wellness programs.
3. The program must be reasonably designed to promote health or prevent disease.
4. For an activity-based wellness program, the full reward must be available to all similarly situated individuals by offering a reasonable alternative standard for obtaining a reward if it is either unreasonably difficult due to a medical condition to satisfy or medically inadvisable to attempt to satisfy the otherwise applicable standard. A wellness program can require verification from a physician that an individual’s health factor makes it unreasonably difficult or medically inadvisable to attempt to satisfy the regular standard.
For an outcome-based wellness program, the full reward must be available to anyone who does not meet the standard based on the initial measurement, test, or screening. The alternative standard cannot be a requirement to meet a different level of the same standard without additional time to comply – for example, if the initial standard is to achieve a body mass index of less than 30, the reasonable alternative standard cannot be to achieve a BMI of less than 31 on that same date, but it might be reasonable to require the individual to reduce his or her BMI by a smaller amount over the course of a year or other realistic period of time. If the individual’s physician joins in the individual’s request for an alternative standard, the physician can be involved in setting (and adjusting) a second alternative standard, consistent with medical appropriateness.
An alternative standard is not reasonable under either type of program unless the time commitment required to satisfy the standard is reasonable. If the alternative standard requires completion of an educational or diet program, the employer must assist the individual in finding the program, and the individual cannot be required to pay for the cost of the program. The alternative standard must accommodate the recommendations of an individual’s personal physician as to medical appropriateness.
5. The availability of a reasonable alternative standard to qualify for the reward must be disclosed in all materials describing the terms of the wellness program. For an outcome-based wellness program, a similar statement must be included in a notice that the individual did not satisfy the initial outcome-based standard. Sample language is provided in the final rule.
The final rules apply to both grandfathered and non-grandfathered group health plans in both the insured and self-insured markets and are effective for plan years beginning on or after January 1, 2014. Plan sponsors and issuers should review their current wellness programs and health plan communications in light of these final rules.
Highlights of Rules on Essential Health Benefits and Actuarial Value
On Nov. 20, 2012, the Department of Health and Human Services (HHS) issued a proposed rule that addresses a number of questions surrounding essential health benefits and determining actuarial and minimum value. This rule is still in the "proposed" stage, which means that there may - and likely will - be changes when the final rules are issued.
Provisions that Particularly Affect Insured Small Employers
Beginning in 2014, nongrandfathered insurance coverage in the individual and small group markets will be required to provide coverage for "essential health benefits" (EHBs) at certain levels of coverage. The proposed rule:
- Confirms that these policies, whether provided through or outside of an exchange, will be required to:
- cover the 10 essential health benefits:
- ambulatory/outpatient
- emergency
- hospitalization
- maternity and newborn care
- mental health and substance use
- prescription drugs
- rehabilitative and habilitative services and devices - e.g., speech, physical and occupational therapy
- laboratory services
- preventive and wellness services and chronic disease management
- pediatric services, including pediatric dental and vision care
- provide coverage that meets the "metal" standards (an actuarial value of 60, 70, 80 or 90 percent; actuarial value means the percentage of allowed costs the plan is expected to pay for a standard population)
- meet cost-sharing requirements (in most instances, the deductible for in-network services could not exceed $2,000 per person or $4,000 per family, and the out-of-pocket limit for in-network services could not exceed the high deductible health plan limit for health savings account eligibility, which is currently $6,050 per person or $12,100 per family)
- cover the 10 essential health benefits:
- Confirms that each state would choose its own EHB package, based on a "base-benchmark" plan already available in the state. Many states have already chosen their base-benchmark plan; those who have not done so have until Dec. 26, 2012, to make their selection or the federal government will make the selection for them. Information on state elections to date and the policy that will apply if no choice is made is here: Additional Information on Proposed State Essential Health Benefits Benchmark Plans | cciio.cms.gov
- Provides a way to cover any gaps in EHB coverage under the base-benchmark plan (because many plans do not currently cover habilitative care or pediatric vision / dental services)
- Provides that other policies in the exchange and small-group market must generally provide the same coverage within each EHB category as the base-benchmark plan, but that they may substitute an actuarially equivalent benefit within a category
- States that HHS will provide a calculator that must be used in most situations to determine actuarial value
- Provides that a plan that is within 2 percent of the metal standard would be acceptable (for instance, a plan with an actuarial value of 68 percent to 72 percent would be considered a "silver" plan)
- Provides that state mandates in place as of Dec. 31, 2011, would be considered EHBs
- Provides that current year employer contributions to a health savings account (HSA) or a health reimbursement arrangement (HRA) would be considered as part of the actuarial value calculation
Provisions that Particularly Affect Self-Funded and Large Employers
- States that HHS and the IRS would provide a minimum value calculator and safe harbor plan designs that self-funded and large-group plans could use to determine whether the plan provides minimum value (the safe harbor plan designs were not included in the proposed rule)
- Provides that current-year employer contributions to an HSA or a HRA would be considered as part of the minimum value calculation
- Resolves an ambiguity in the law and provides that the restrictions on maximum deductibles would not apply to self-funded and large-employer plans.
States get more time on exchanges
Source: benefitspro.com
By: Kathryn Mayer
The Obama administration is giving states extra time to decide whether they’ll work on implementing a key feature of health reform.
Health and Human Services Secretary Kathleen Sebelius told state governors in a letter Friday that they can have another three months to decide if they will split the task of running an exchange with the HHS or if they want to leave it entirely up to the government.
Sebelius said she still wants states to tell HHS their intentions by the original Nov. 16 deadline, but they now have until Dec. 14 to submit blueprints showing how they would operate the exchanges. Those who want to partner with the federal government have until Feb. 15 to tell the federal government so.
The move may be a concession to the many states who had said they were waiting until after the presidential election to comply with the PPACA mandates. Many Republicans and opponents of reform hoped that Republican Mitt Romney would win and begin work on repealing the law.
Under the Patient Protection and Affordable Care Act, exchanges would operate in every state to allow individuals to buy health insurance. Exchanges can be run by individual states, by the federal government or by a combination of the two under an arrangement known as a “state partnership exchange.” The exchanges are scheduled to begin operating on Jan. 1, 2014.
“This Administration is committed to providing significant flexibility for building a marketplace that best meets your state's needs,” Sebelius wrote in her Nov. 9 letter. “We intend to issue further guidance to assist you in the very near future.”
Though the law intended that each state run its own exchange, many governors have refused to do so. Others have complained there hasn’t been enough guidance from the government on how to do so. For those that don’t intend to set up an exchange, the government will set up one for them.
Despite the looming deadline, most states haven’t told the government what their plans are for their state exchange. About 15 states are working on setting up their own.
Since last week's election, a handful of states, including Texas and Florida, have said they will not pursue a state-based exchange. Some conservative groups have been encouraging states to not take action on exchanges, telling them that resistance shows the government their dissatisfaction with health reform.
Employer Compliance Alert: The HIPAA Police are Here
After several years during which the Department of Health and Human Services (HHS) operated essentially in “complaint-driven” mode with respect to enforcement of the HIPAA Privacy and Security Rules, recent activity suggests a trend toward stricter HIPAA enforcement. The latest evidence comes in a recently-announced settlement between HHS and the Massachusetts Eye and Ear Infirmary and Massachusetts Eye and Ear Associates, Inc. (collectively, MEEI).
In this settlement, MEEI has agreed to pay $1.5 million to settle potential violations of the HIPAA Security Rule. MEEI also agreed to develop a corrective action plan that includes reviewing and revising its existing Security Rule policies and procedures and retaining an independent monitor for a three-year period to conduct semi-annual assessments of MEEI’s compliance with the corrective action plan and report back to HHS.
HHS began its investigation of MEEI after MEEI submitted a breach report, as required by the HIPAA Breach Notification Rule. The report indicated that an unencrypted personal laptop containing the electronic protected health information (ePHI) of MEEI patients and research subjects had been stolen. The HHS investigation concluded that MEEI had failed to comply with certain requirements of the HIPAA Security Rule – particularly with respect to the confidentiality of ePHI maintained on portable devices – and that those failures had continued over an extended period of time.
The MEEI settlement is just the latest in a string of recent penalties and settlements stemming from alleged HIPAA privacy and security violations. From 2003 through 2010, HHS reported that it had received nearly 58,000 privacy complaints and, of those, had resolved more than 52,000. In fact, during this initial eight-year period after the HIPAA Privacy Rule went into effect, HHS did not impose a single civil monetary penalty for HIPAA violations.
In February of 2011, however, HHS imposed a $4.3 million penalty against Cignet Health of Prince George’s County, Maryland. HHS found that Cignet had failed to respond to patients’ requests for access to their medical records and that Cignet refused to cooperate in HHS’s investigation. Later that same month, Massachusetts General Hospital entered into a $1 million settlement with HHS arising out of an incident in which an employee left paper records containing the PHI of 192 patients, including patients with HIV/AIDS, on the subway.
The recent increase in enforcement efforts may be partially attributable to the fact that the available civil penalties increased dramatically as a result of the Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009. The HITECH Act provides HHS with substantial leverage in settlement negotiations.
These steep penalties and settlements should serve as a reminder of how important it is to comply with the HIPAA Privacy and Security Rules. Health plan sponsors should review their existing policies and procedures and remain vigilant in their training of employees.
Julia M. Vander Weele
HHS Shaming Power Has Little Effect on Health Plans
By Lisa V. Gillespie
Last September, after the Patient Protection and Affordable Care Act gave the Department of Health and Human Services authority to review premium rates in states that didn't have strong enough review programs, the agency began handing down decrees of "unreasonable" premium rates for insurers that proposed increasing rates by an average of 10% or more - meaning HHS can publically shame an insurer.
"HHS and states are really coming down hard on just about any carrier, which is creating a lot of angst at the carrier level and hand wringing. HHS seems very proud of it; so, this is a hot topic [among] insurance carriers and state-level bureaucrats," says Alan Cohen, chief strategy officer and co-founder of Liazon, a private health insurance exchange that serves mainly small employers. "But, in another realm where benefits managers live, this is a nonevent; they're not paying attention. Maybe they read it in the newspaper, but what matters to them is what the effect will be to their renewal." Cohen says that, depending on the size of the employer, rate increases may differ. Even if an employer is going with one insurer who is increasing rates, the company may not be any better off with another carrier.
Reviews politically motivated
Others experts think that the HHS reviews are politically motivated.
"Benefits managers don't pay attention to regulatory squabbles as rates are filed and improved," says Mike Turpin, executive vice president of USI, an insurance and financial services broker. "And I think they're getting conditioned [to] health care reform politics. They're not as enraged; they're kind of numb to it."
Further, employers may empathize with insurers, says Steven Friedman, chair of the employee benefits practice at Littler Mendelson. More than 13.5 million people now have health savings accounts complementing high-deductible health plans, according to the 2012 HSA Census by America's Health Insurance Plans.
"Employers often see themselves on the same side of the insurance companies in terms of trying to limit costs for participants covered under health plans," Friedman says. "The increases in annual premiums are viewed as industry wide phenomena, and employers will annually bid for the best coverage that is the most cost-efficient. I'm not sure the insurers are being tarred by the employers, because health care costs seem to rise universally."
Rate review offers transparency
PPACA requires states to report on trends in premium increases and recommend whether certain plans should be excluded from health insurance exchanges beginning in 2014, based on unjustified premium increases. HHS also may make that decision in states where rate review programs lack sufficient strength. Small employers in public exchanges will be able to see upfront which companies have been flagged for "unreasonable" hikes and be able to go to another insurer.
"[PPACA's] rate review policies bring an unprecedented level of scrutiny and transparency to health insurance rate increases. They ensure that, in every state, every proposed increase of 10% or more is evaluated by independent experts to assess whether they are based on reasonable assumptions and sound data," a CMS spokesperson tells EBN. "Rate review is expected to help moderate premium increases and provide consumers and employers with greater value for their premium dollar. Additionally, health insurance companies must provide easy-to-understand information to their customers about their reasons for significant rate increases, as well as publicly justify and post on their website any unreasonable rate increases. These protections allow consumers and employers in every state to learn more about their insurance premiums. All of this information is available at companyprofiles.healthcare.gov."
"Thanks to the Affordable Care Act, consumers are no longer in the dark about their health insurance premiums," said HHS Secretary Sebelius in a press release earlier this year. "It's time for these companies to immediately rescind these unreasonable rate hikes, issue refunds to consumers or publicly explain their refusal to do so."
However, industry groups say that it's not premium hikes that are driving up costs, but underlying medical and administrative costs. "New medical technologies that have high costs associated, new benefit mandates - all of those will drive up the cost, which is where the focus should be," says Robert Zirkelbach, press secretary for AHIP. He says the focus should be on providers, as opposed to insurers. "You saw this during reform, when [the debate] focus was on premiums and largely ignored cost drivers. If you want to bring down the cost, then that's where they lie."
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.