In early April, a federal rule took effect enabling patients to view their medical records without paying any fees and without waiting days or weeks. As a result, many patients will be able to find test results, clinical notes from their doctor and other medical information posted to their electronic portal as soon as they are available. While most physicians and patients view this as long overdue, a few obstacles have arisen. In some cases, test results can be made available to a patient before their physician has seen them. This can be a problem if further explanation or comments are appropriate. Doctors are also concerned about sensitive comments being seen by a parent of an adolescent who wants to keep the information confidential.
The AMA is pushing for modifications that would provide for brief delays when results involve a difficult diagnosis, such as cancer. Representatives of the Office of the National Coordinator for Health Information Technology, the federal agency overseeing the rule, have emphasized that patients can always decide whether they want to look at results or wait and review them with their doctor. Also, the rule does not require that parents be given access to protected health information if they did not already have that right under HIPAA. Some electronic health records enable doctors to withhold results, a step the doctor can discuss with their patient prior to ordering the test. While the overall response is positive, discussions will likely continue as patients become better informed about the tools available.
In the American Rescue Plan Act (ARPA), which was signed into law by President Biden on March 11, 2021, there are several provisions for healthcare plans, including a 100% subsidy of coverage premiums for eligible COBRA enrollees. The subsidies, which will run from April 1, 2021 through September 30, 2021, will be paid to employers by the federal government as payroll tax credits.
The subsidy will last for six months at most, ending on the earlier of the individual’s maximum period of COBRA coverage (generally 18 months) or September 30, 2021. Subsidies will also end early for individuals who become eligible for coverage under another group health plan or Medicare. Those employees who terminate employment voluntarily are not eligible for the subsidy.
Notices are Required
Employers should talk with their TPA about notice requirements and to determine who may be eligible for the subsidy. As a result of the eligibility period running through April, 2021, a list must be compiled including individuals who terminated employment as far back as November of 2019. A Notice of Assistance must be provided to individuals who become eligible to elect COBRA coverage between April 1 and September 30, 2021. Eligible workers who haven’t elected COBRA by April 1 and those who elected COBRA but then discontinued it must also be notified, since former employees have an extended election period running for 60 days after April 1, 2021.
Finally, a Notice of Expiration must be provided between 45 and 15 days prior to the subsidy expiring, unless the subsidy is expiring because the individual has become eligible for coverage by another group health plan or Medicare. The DOL is expected to issue new model COBRA forms within 30 days of the March 11, 2021 enactment date. In addition, individuals are required to notify the group health plan if they forfeit eligibility because they have become eligible for another group health plan or Medicare.
An important part of the Consolidated Appropriations Act of 2021 is the No Surprises Act, intended to address surprise bills and protect healthcare consumers who receive a “balance bill” for amounts charged by a provider but not paid by their health plan. The law, scheduled to take effect on January 1, 2022, will protect patients that go to an out-of-network facility for emergency treatment, patients needing to be airlifted to the nearest emergency room by an out-of-network provider and patients receiving treatment from an out-of-network provider at an in-network facility.
The new law establishes uniform, basic federal requirements for insured and self-funded group health plans, however states may adopt even stricter standards for insurers and providers in their jurisdiction. To date, 17 states have adopted comprehensive balance bill laws to protect their residents. Guidance for several situations will need to be provided prior to year-end, including how plans will distinguish between in-network and out-of-network providers in self-funded plans using reference based pricing without a traditional PPO network. Industry sources expect these regulations to be issued by mid-year.
Encouraging members and their dependents to take their prescriptions as directed by their doctor or pharmacist has long been a concern for health plans. As the Covid-19 pandemic continues to spike in most parts of the country, the problem has intensified, with experts estimating that the increased cost to our healthcare system may be nearly $300 billion annually.
Traditional challenges of rising costs and a failure to read and understand health information have been exacerbated by the fear of in-person doctor visits. Overcoming these issues requires increased communication and support because there is no doubt that when people fail to take their medications as prescribed, health plans often end up dealing with higher claim costs down the road.
A Higher Level of Support
Providing a high level of support can help many members avoid serious medical complications in the future. Collaborating with a PBM or member advocate to send a text message when a refill is due can be a big help. Some plans offer a lower copay as an incentive to fill prescriptions on time.
Taking the time to understand a member’s needs and concerns can go a long way in increasing medication adherence. While concerns about using generic alternatives, copay assistance programs and transportation are common, addressing language barriers, disabilities and other social factors are measures that can make a big difference. Providing a higher level of support will not only produce higher quality outcomes, but lower pharmacy benefit costs as well.
Two final rules related to the President’s promise to lower the cost of prescription drugs were recently announced by President Donald Trump. The first, known as the “most favored nation” rule, would lower the price of 50 Medicare Part B drugs to those paid by other wealthy countries. This pricing would apply only to Medicare beneficiaries. The second rule, intended to simplify drug pricing and pass available discounts to consumers, would eliminate the rebates drug manufacturers currently pay to Pharmacy Benefit Managers (PBMs) on higher priced brand name prescription drugs. Interestingly, in another recent action, drug manufacturers filed a lawsuit to stop the Trump administration from allowing states to import certain prescription drugs. Their suits argue that the last-minute steps by the President would expose the public to safety risks while not achieving any significant economic advantages for the public.
With enrollment in Medicare Part D and specialty drug costs exploding, it’s no surprise that forecasts predict 7 percent annual growth for PBMs over the next several years. Two trends noted in the report were the continued acquisition or startup of PBMs by insurance carriers and the need for employers to better understand their options when comparing proposals.
When the independent think tank finds that on average, prices paid to hospitals by younger, healthier policyholders were 100 percent higher than what Medicare would have paid for the same procedures, it’s easy to understand the impact that payment contracts based on what Medicare pays can have on health plan costs.
In contrast to traditional fully insured plans, self-funded health plans with reference based pricing (RBP) enable consumers to learn the cost of treatment before they receive it. This is the advantage of basing provider payments on publicly available cost and quality data rather than arbitrary network discounts. And because Medicare varies its pricing by geographic region, providers are compensated fairly, and medical price inflation can be controlled.
From Big to Small
While very large employers were early adopters, the model is becoming far more commonplace among smaller groups that partially self-fund. TPAs are helping some of these plans realize overall savings in the 20 percent range and for a plan with 300 members, this can mean annual savings of $1 million or more.
In a marketplace that has lacked transparency and accountability for far too long, Medicare reference is proving to be not only a market disruptor, but an approach that can help employer-sponsored health benefits thrive. Contact us if you want to learn more about how a RBP plan could work for you.
In 2017, according to the Centers for Medicare and Medicaid Services, healthcare spending for every man, woman and child in the U.S. totaled nearly $11,000 – more than any other wealthy country. The interesting thing is that very few of us really know what goes into this number or who pays the bills. Here are a few facts you may find interesting.
The average cost of employer-based health insurance for a family in 2019 was $19,616.
The Census Bureau reports that 91.5% of Americans have health insurance coverage.
In 2017, the average ER visit cost about $1,400 – an increase of 176% in 10 years.
Federal, state and local governments currently pay for about 45% of all healthcare services.
From 2000 to 2016, spending on prescription drugs rose by 69% – more than any other component.
The Kaiser Family Foundation reports that in the past year, 50% of Americans put off needed healthcare because of cost.
In a recent decision by the U.S. District Court for the District of Columbia, the AHA lost its bid to avoid having to disclose rates hospitals negotiate with insurers. While an appeal is expected, this is a win for the administration, which is committed to providing patients with understandable information about the cost of medical services.
The rule approved last year required hospitals to post a list of standard charges and rates they charge for diagnostic-related groups (DRGs). These charges were, however, posted as “chargemaster rates” – a format that meant little to the general public. By requiring that hospitals post median prices negotiated with commercial health insurers, CMS believes that providers will be forced to compete on price and that consumers will be better able to make informed choices.
In other developments, the Trump administration was stopped from requiring that drug companies disclose prices in their TV commercials. The President also brokered an agreement with drug companies and insurers to limit Medicare recipients’ copays on insulin to $35 a month. This will go into effect in 2021.
Inflation-adjusted limits for contributions to health savings accounts and high deductible health plans for the coming year were just announced. According to the announcement, eligible individuals with self-only HDHP coverage will be able to contribute $3,600 to their HSA in 2021, an increase of $50 from 2020. Those with family coverage will be able to contribute $7,200 in 2021 and those who are 55 years of age or older will be able to make an additional “catch-up” contribution of $1,000 to their HSA.
While minimum deductibles for HDHPs will remain the same for 2021 plan years at $1,400 for self-only coverage and $2,800 for family coverage, the maximum limits for out-of-pocket expenses will increase to $7,000 for individual coverage and $14,000 for family coverage.