7 Ways to Manage Medical Cost for Employers (Infographic)

medical cost

*Discover more resources about MedCost Care Management programs hereOr browse through seven ways to manage medical cost:

  1. Complex Case Management 
  2. Inpatient Management
  3. Outpatient Management
  4. Telehealth Services
  5. Nurse Health Coaching
  6. Maternity Management
  7. Behavioral Health

To print this infographic, click on the title and scroll to “PRINT THIS PAGE” at the bottom.MedCost

House Republicans Introduce Health Care Reform Legislation

health reformBy Brad Roehrenbeck, General Counsel & VP, Legal Services, Compliance

On Monday, House Republicans unveiled the long-awaited legislation intended to overhaul former President Barack Obama’s signature health care legislation, the Patient Protection and Affordable Care Act (ACA). The bill, titled the American Health Care Act (AHCA), would make major changes to the ACA that impact individuals, employers, insurers, and providers in significant ways, as summarized below.

Provisions Impacting Employer-Sponsored Coverage

The most significant development impacting employers under the proposed law is removal of the employer mandate.

  • Large employers would no longer face penalties for failing to offer coverage that meets the minimum value and minimum essential coverage requirements of the ACA. 
  • Additionally, the proposed bill would repeal the widely unpopular excise tax on high-cost coverage (the so-called Cadillac Tax) and offer tax credits to small businesses for providing coverage to employees. 
  • The law would also require employers to indicate on Form W2 the months of coverage each employee was eligible for coverage. (Note: It appears the legislation is intended also to eliminate the ACA’s annual employer 1094/1095 reporting under Section 6056 of the Code. That would be a natural by-product of the employer mandate repeal, but the bill does not appear to eliminate this obligation expressly. This may be addressed in a future amendment to the bill.) 

Changes to Account-Based Plans

health reformThe AHCA would make some significant changes to the rules governing HSA accounts for the first time since 2004.

  • The bill would increase the annual HSA contribution limit to equal the out-of-pocket maximum amount established for that year under the HSA rules (currently $6,550 for self-only coverage and $13,100 for family coverage).
  • The rules would also be modified to allow both spouses (if over 55) to make “catch-up” contributions to the same HSA account.
  • Also, a new special rule would allow HSA account holders to use HSA funds to pay for health care services performed up to 60 days prior to the account being established.
  • The bill would also reduce the excise tax on distributions not used for medical expenses from 20% to 10%.
  • Finally, the AHCA would remove the ACA’s cap on contributions to health FSA plans.

Changes to the Individual Market

While leaving in place popular provisions of the ACA such as the requirements that insurers cover dependents up to the age of 26 and pre-existing conditions, the AHCA would otherwise significantly redesign the ACA’s changes to the individual market.

  • First, the bill does away with the individual mandate and repeals the cost-sharing subsidies and premium tax credits made available under the ACA to individuals who enroll in coverage on the exchanges.
  • In turn, the AHCA puts in place refundable tax credits that individuals could use to defray the cost of coverage, including coverage outside the exchanges.
  • Like under the ACA, these tax credits are eligible for advance payment. The amount of the credits will vary based on age and income, and excess payments can be deposited directly into an HSA account.
  • Tax credits are not available for any coverage that includes abortion services.

health reformIn place of the individual mandate, to incentivize individuals to maintain coverage, the bill provides for increased premiums (30% for 12 months) for individuals who have had a gap in coverage of at least 63 days.

  • The bill also creates the “Patient and State Stability Fund,” which provides significant payments to states ($10 to $15 billion per year through 2026) to help stabilize the individual and small group insurance markets and to assist high-risk patients.
  • Also, beginning in 2020, the ACA’s requirements around essential health benefits will sunset.
  • Finally, the bill allows carriers greater flexibility to vary premiums based on age by up to a 5:1 ratio, up from 3:1 under the ACA.

Changes in the Medicaid Program

Unsurprisingly, the AHCA would repeal the ACA’s expansion of the Medicaid program.

  • It would also put into place a per-capital allotment of federal Medicaid dollars to the states, which is expected to rein in the future federal financial commitment to the program.
  • Similar to other provisions, the bill would bar Medicaid dollars from being used on abortion providers.
  • It would also require states to disenroll high-dollar lottery winners and incentivize states to assess participant eligibility on a more frequent basis. (Note: The bill will also reverse major cuts to the Medicare Disproportionate Share Hospital program, which provides safety net funding to more than 3,000 hospitals that disproportionately treat indigent patients).

Repeal of ACA Taxes

Finally, the AHCA would repeal numerous taxes—in addition to the Cadillac Tax discussed above—that either have gone into effect or are expected to become effective under the ACA.

  • Among those are:
    • The insurer tax (effectively a federal insurance premium tax),
    • The prescription medication tax,
    • The tax on over-the-counter medications,
    • The medical device tax.
    • It would also eliminate taxes on high-income earners that were levied under the ACA to help pay for the law.

health reformRepublicans have signaled an aggressive timeline for deliberations on the law. Committee hearings are expected to take place immediately, and the bill could reach the floor of the House in as little as one week.

President Trump has forecasted that he would like to sign the bill by Easter. We will continue to monitor developments, including any changes in the bill as it moves through the legislative process.MedCost

This blog post should not be considered as legal advice.

The Colonoscopy Screening That May Have Saved His Life

Sean Yacobi’s Story

colonoscopy screening

Sean Yacobi with his wife and children

Sean Yacobi had no symptoms when he decided to get his first colonoscopy. He made the decision after receiving a MedCost letter, urging him to get screened. What happened next was a total surprise.

I got a notification about getting a colonoscopy because I turned 50. I was a little anxious about my first colonoscopy to know that everything was alright. I felt fine, so I was taken aback when the doctors came in after the procedure that took longer than normal.

The doctor matter-of-factly said: “I found something. Nine times out of 10 it will be colorectal cancer.” The next few weeks were difficult because of the unknown. I got the good news that it had not spread and that they had caught it early, thanks to being screened.

I went that night, got blood work and set up with my oncologist. I felt like I needed an assistant to keep up with all the appointments.

With something like cancer, it’s typical to close up emotionally. When MedCost offered me participation in the Complex Case Management Program, I was a little skeptical. I’m a trial attorney. I wondered if MedCost was making sure I didn’t go past my benefit limits. But I found out that it’s been all about my care, and connecting the dots with all my different treatments.

I’ve had radiation therapy and inpatient surgery, followed by chemotherapy. It’s bewildering. There are difficulties beyond the illness. It’s just nice to know that above and beyond insurance coverage, MedCost’s Case Management gives you some peace of mind.

If you are dealing with medical insurance, you need support. Don’t be a lone ranger. Sometimes it’s humbling for men in general – I run my own business. It’s hard to realize I can’t solve everything on my own. If help is there, take advantage of it.

I’ve been willing to talk to MedCost people to tell them what’s going on. My Case Manager has a gentle manner that is very encouraging.

medicalYou have got to face things head on. When I talked to my gastroenterologist, he said: “It’s a good thing you came in.” I asked him what would have happened if I had waited five years for that screening. He said: “The news would not have been this good. It’s still early – you’re going to be okay.”

I’m going to focus on the finish line to get this behind me. This has made some positive changes in my life. After my surgery, when I was trying to get up and walk, I saw a lot of people who weren’t doing well. I heard people moaning in pain. Sometimes you need to see that to be thankful for what you’ve got.

I’ve got a lot to live for. God puts you with people that can help you. MedCost has been my sponsor. They got me to the screening and saved my life.MedCost

****

If you are 50+ or have a family history or other risk factors for colorectal cancer, your health plan may provide a free colonoscopy. Check your health plan benefits for more details. Colorectal cancer can progress without any symptoms such as rectal bleeding or pain. Don’t wait to be screened.

 ****

This testimony was published with permission from C. Sean Yacobi. To print, click on the title and scroll to “PRINT THIS PAGE” at the bottom.

 

 

 

Judge Issues National Injunction Against Certain ACA Rule 1557 Provisions

michael-berwanger-109-by-192By Michael Berwanger, JD, Director, Quality Management & Compliance

On December 31, 2016, Judge Reed O’Connor of the United States District Court for the Northern District of Texas entered a nationwide injunction in Franciscan Alliance v. Burwell. The order prohibited the Department of Health and Human Services (HHS) from enforcing certain provisions of its nondiscrimination rule promulgated under ACA section 1557, namely those that prohibit discrimination on the basis of gender identity or termination of pregnancy.

The remaining provisions of the rule—prohibiting discrimination on the basis of disability, race, color, age, national origin, or sex other than gender identity—are in effect as scheduled, mostly beginning January 1, 2017.

MedCost published a summary of Section 1557 here. HHS has published a summary here and FAQs here. Section 1557 applies antidiscrimination laws to entities receiving assistance under certain federal agencies. These rules have required various plan changes from self-funded plans to implement the protections afforded under the rules.

ACA rule 1557In the December 31 ruling, Judge O’Connor stated that “[w]hile this lawsuit involves many issues of great importance—state sovereignty, expanded healthcare coverage, anti-discrimination protections, and medical judgment—ultimately, the question before the Court is whether Defendants exceeded their authority under the ACA in the challenged regulations’ interpretation of sex discrimination and whether the regulation violates the Religious Freedom Restoration Act as applied to Private Plaintiffs.”

Finding that HHS exceeded its authority under the ACA, he enjoined the agency from enforcing the provisions of Section 1557 regarding plan changes for nondiscrimination on the basis of gender identity and pregnancy termination until further judicial or legislative action.

For more information about Section 1557, consult your broker, legal advisor or the Department of Health and Human Services.MedCost

This blog post should not be considered as legal advice.

ACA Reporting Due Early 2017

ACA DeadlinesBy Michael Berwanger, JD, Director, Quality Management & Compliance

In early 2017, employers and insurance carriers must report information to employees and the IRS about coverage offered to employees under employer-sponsored health plans during calendar year 2016.

Background

The Patient Protection and Affordable Care Act (ACA) requires self-funded employers to satisfy two reporting obligations under Sections 6055 and 6056 of the Internal Revenue Code, relating to health coverage offered to employees and about those employees who are covered under the plan.

The purpose of the reporting obligations is to allow the IRS access to data needed to monitor compliance with both the employer and individual mandates. The reporting also may be used by affected employees in assessing their own compliance with the individual mandate and/or in seeking subsidized coverage on the federal and state exchanges established under the ACA (as described in this blog post).

Section 60ACA reporting55 Reporting Compliance

Under Section 6055 of the Internal Revenue Code, all self-funded employers must annually report information to the IRS and to any individual who is covered under a health plan offered by the employer.

Currently, many employers do not have access to Social Security numbers for non-employed dependents, creating a fairly significant compliance burden to collect that data. The regulations require that employers exercise “reasonable collection efforts” to obtain that information. (Typically, an employer will satisfy that standard by documenting at least two efforts to request the data from those individuals). This same information must be reported to employees, along with basic contact information for the employer.

Section 6056 Reporting Compliance

The second reporting obligation, under Code Section 6056, applies only to “Applicable Large Employers.” Applicable Large Employers are those employers with at least 50 full-time equivalent employees and to whom the ACA’s employer mandate applies.

Unlike Section 6055 reporting, all of this information also must be provided separately to each employee, full-time, part-time, or otherwise. You can read helpful IRS guidance about 6056 reporting here.

IRS Forms 1094 and 1095

The compliance obligations are complex, and the IRS has developed forms (Forms 1094-B, 1095-B, 1094-C, and 1095-C) to provide consistency in reporting and to help simplify the process for employers.

Applicable Large Employers (ALEs) who offer coverage under a self-funded health plan may use Form 1095-C, which combines the reporting obligations of Sections 6055 and 6056 in a single form for reporting to both the IRS and individuals. When the forms are provided to the IRS, the Applicable Large Employer also must submit a transmittal form, Form 1094-C. Forms 1095-C and 1094-C, along with instructions, can be accessed here.

Small employers with fewer than 50 full-time equivalent employees are only required to meet one of the reporting obligations, the Minimum Essential Coverage reporting under Section 6055. Small employers may use Form 1095-B, with transmittal Form 1094-B. These forms, along with instructions, can be accessed onACA reporting the IRS web site here.

Changes from reporting year 2015 to 2016 for forms 1094-C and 1095-C can be found here.

Changes from reporting year 2015 to 2016 for forms 1094-B and 1095-B can be found here.

Compliance Deadline

Filings will begin in early 2017 for the 2016 calendar year.

*Form 1095-C must be provided to all employees (full-time, part-time, or otherwise) by March 2, 2017.

*All Forms 1095-C, along with the transmittal form, 1094-C, must be provided to the IRS by February 28, 2017 (if in paper form), or March 31, 2017 (if filed electronically). 

Note: Employers filing more than 250 information returns (Form 1095-C) must do so electronically.MedCost

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2016 ACA Employer Deadlines Extended

2016 ACA Employer Deadlines

By Michael Berwanger, JD, Director, Quality Management & Compliance

The Internal Revenue Service (IRS) released Notice 2016-70, which extends the due date for furnishing to individuals the 2016 Form 1095-B (titled Health Coverage), and the 2016 Form 1095-C (titled Employer-Provided Health Insurance Offer and Coverage), from January 31, 2017 to March 2, 2017.

Self-funded employers should note that the filing deadlines remain unchanged. The Notice states that the “Treasury and the [Internal Revenue] Service have determined that there is no similar need for additional time for employers, insurers, and other providers of minimum essential coverage to file with the Service the 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C.”

Employer Deadlines

Therefore, the due dates for filing 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS remain:

February 28, 2017 (for paper filing)

March 31, 2017 (for e-filing)

Employers may obtain a 30-day extension for filing with the IRS by filing Form 8809 on or before the forms’ due date.

The IRS has also extended last year’s good-faith transition relief for inaccurate information on the forms. Recognizing the “challenges involved in developing new procedures and systems to accurately collect and report information in compliance with new reporting requirements,” the IRS has provided relief to incorrect and incomplete information reported on the statement or return.

Please note: The good-faith relief applies only to data on the forms, not failure to comply with due dates.MedCost

 

IRS Announces 2017 FSA Limits

By Michael Berwanger, JD, Director, Quality Management & Compliance

The Internal Revenue Service recently announced the tax year 2017 annual inflation adjustments for more than 50 tax provisions.

Notably, for the first time in two years and consistent with industry expectations, the IRS has increased the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health Flexible Spending Accounts (FSA) from $2,550 to $2,600.

The Revenue Procedure 2016-55 provides details about these annual adjustments. The tax year 2017 adjustments generally are used on tax returns filed in 2018.

2017 FSA

 

 

 

For guidance on FSAs, please review the IRS Frequently Asked Questions page.

 

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Got Employees? 5 Tips for a Smooth Open Enrollment

open enrollmentIt’s that time of the year that presents headaches for HR professionals and admin staff—open enrollment. But your company’s benefits administration doesn’t have to resemble a Halloween Fright Night. Here are five best practices to streamline your employees’ enrollment period and leave you with a basket of sweet candy:

1. Create a realistic schedule for open enrollment by beginning with the end in mind.

Your open enrollment period should end no later than 30 days prior to the end of your plan year or renewal date. Once you determine the ending date of open enrollment, back up from there to schedule open enrollment meetings, print forms or materials, distribute or mail open enrollment packets, etc.

2. Collect all required information for each plan participant (employee or dependent).

This may include information for each plan participant such as:

  •  Last Name, First Name and Middle Initial (exactly as provided in previous enrollments)
  •  Social Security Number (unique and accurate identifying information for each dependent)
  •  Address
  •  Date of Birth (unique and accurate identifying information for each dependent)
  •  Gender
  •  Hire Date (if an employee)
  •  Coverage Effective Date
  •  Product Coverage (Medical, Dental, Flex)
  •  Date of Termination, if applicable, and Reason for Term
       (especially needed for COBRA)
  •  E-mail address (useful to promote programs and services available through benefits plan)

3. Remind employees that “good data in equals good data out.”

open enrollmentStress the importance of completing all fields on any enrollment or waiver forms. It’s in every plan participant’s best interest to review and verify new and existing data during open enrollment since it directly affects coverage for the upcoming plan year. Decisions regarding participants’ eligibility and coverage under the health plan—as well as that of their dependents—are made based on the information provided during open enrollment.

4. Educate employees about the “not-so-flexible” guidelines of flexible spending accounts (FSAs), if available through your plan.

In addition to the advantages of flexible spending accounts, make sure your employees also know about the guidelines for FSAs. The most important thing for employees to remember is that FSAs are “use it or lose it” accounts. Contributions made to an FSA during a calendar year can be used only for eligible expenses incurred during the same year—unless your plan provides for either a grace period or a carryover. If your plan doesn’t provide for a carryover, employees need to be aware that any money remaining in an FSA account after the claim filing period at the end of the year (and after the grace period, if applicable) is forfeited in accordance with IRS regulations.

5. If your employees have flex debit cards, remind them to save all receipts for purchases made with the card.

open enrollmentSince a flex debit card deducts payment for an eligible health care expense directly from an FSA account, employees may think that saving health care receipts is unnecessary. Some claims for reimbursement, however, may require substantiation. Encourage employees to save all receipts for flex debit card purchases in case they receive a substantiation request or their tax return is audited by the IRS. Employees should hold on to their cards even if the allocated FSA total amount has already been used.

Our next blog will contain five more tips to plan and prepare for open enrollment like a pro. Subscribe to our blog to receive it automatically!*

 

*To sign up for the blog, go to the left margin under “STAY UP TO DATE.” The only requirement is your email address. 

 

A Pharmacist Looks at the Opioid Epidemic

By Zafeira Sarrimanolis, PharmD, MedCost Clinical Consultant

The statistics prove it — more Americans die from accidental drug overdoses each year than from traffic accidents. Data from 2014 showed more deaths from drug overdoses than any other year on record.[i]  Approximately six out of 10 of those deaths involved opioids.[ii]

opioid epidemicSource: Centers for Disease Control and Prevention[iii]

The week of September 18-24 was designatedPrescription Opioid and Heroin Epidemic Awareness Week.”[iv] As a pharmacist, I know that opioid medications can be beneficial in controlling certain types of pain. However, this benefit must be weighed against the risks associated with these medications.

The Epidemic

The number of opioid prescriptions in the US quadrupled from 1999 to 2014, while the number of American reporting chronic pain remained constant.[v]

Opioid pain medications like Opana, OxyContin and Percocet were originally used to treat short term-pain, such as after a surgery or accident, and for long-term pain associated with cancer. Today, we see these medications prescribed and utilized more commonly for all forms of pain and over longer periods of time.

The diagram below highlights opioid prescribing patterns in the US. In some states, including NC, the number of painkiller prescriptions per 100 people is equal to or exceeds 100.[vi]

opioid epidemicThere are many sources of misused opioid prescriptions. The majority, approximately 60%, of misusers obtain opioid medications from a friend or relative, either for free, by stealing or by buying them.[vii] 

 

The Dangers

Imagine you are in a car accident and have persistent back pain that makes it difficult for you to sit and stand

comfortably. The doctor prescribes an opioid medication used regularly to control your pain.  Soon you find that you have become dependent on this medication—even after your back feels better.

This scenario happens more often than we think. The danger of opioids is that they can become addictive to any user. For this reason, they should only be prescribed in appropriate cases.

In addition to risk for addiction, these medications are dangerous because of side effects like sedation and respiratory depression. These effects can be compounded when combined with other medications. For example, a common drug interaction with Xanax (a medication used for anxiety) can lead to slowed breathing, oversedation and possible death.

Action Steps

The fight against the opioid epidemic requires action from everyone. Prescribers and pharmacies are more regularly monitoring those taking opioid medications. In North Carolina, the Board of Medicine and Board of Pharmacy have strategies to control these medications to decrease utilization and death from opioid abuse and overdose.

The opioid reversal agent, naloxone, is more readily available from retail pharmacies. Efforts are being made to increase access to treatment for addiction. Communities are educating the public on the dangers of opioids and offeopioid epidemring “take-back” programs for disposal of unused opioid medications.

In July, the US Senate passed the Comprehensive Addiction and Recovery Act, the first major federal legislation on addiction in 40 years. The purpose of this law is to expand education, strengthen state monitoring programs and create new treatment programs.

Real progress can only result when doctors, nurses, pharmacists, patients, government officials, community leaders and the family and friends of those affected work together to put an end to the opioid epidemic.

Pharmacist on Staff for Clients

As the new MedCost Pharmacist, I discuss pharmacy management strategies with clients and brokers to control the explosion of drug costs. Prior authorizations, step therapy programs and quantity limits can be frustrating and disruptive. But we know that these utilization management strategies are key in controlling costs. 

Our partnership with OptumRx, ensures that members take safe, effective medications appropriate for their conditions, while implementing cost-saving strategies.

Opioid epidemic

 

 

 

 

 

 

 

 


Source: 
Mercer National Survey of Employer-Sponsored Health Plan -2015l[i]

Our goal at MedCost is to help ensure that our clients’ covered members are being treated appropriately and safely, without the risk of exorbitantly high costs. This will not only be the most cost-effective strategy, but it can result in members with healthier, happier lives.MedCost

 

[i] “The Opioid Epidemic: By the Numbers,” US Health & Human Services, June 15, 2016, http://www.hhs.gov/sites/default/files/Factsheet-opioids-061516.pdf (accessed September 26, 2016)

[ii] “Injury Prevention & Control: Opioid Overdose,” Centers for Medicaid and Medicare Services, https://www.cdc.gov/drugoverdose/data/index.html (accessed September 22, 2016).

[iii] Ibid.

[iv]Office of the White House Press Secretary, September 16, 2016, https://www.whitehouse.gov/the-press-office/2016/09/16/presidential-proclamation-prescription-opioid-and-heroin-epidemic (accessed September 22, 2016).

[v] Guideline for Prescribing Opioids for Chronic Pain, Centers for Medicaid and Medicare Services, March 16, 2016, http://www.cdc.gov/mmwr/volumes/65/rr/rr6501e1.htm (accessed September 22, 2016).

[vi]  “Injury Prevention & Control: Opioid Overdose,” Centers for Medicaid and Medicare Services, http://www.cdc.gov/drugoverdose/data/prescribing.html (accessed September 22, 2016).

[vii] Ibid.

[viii] Bruce Lee, “With the Excise Tax in Their Sights, Employers Hold Health Benefits Cost Growth to 3.8% in 2015,” Mercer, November 19, 2015, http://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2015.html (accessed September 22, 2016).

Employee Deductibles Rise Faster Than Wages

ks110111-medEmployer health insurance expenses continued to rise by relatively low amounts this year, aided by moderate increases in total medical spending but also by workers taking a greater share of the costs, new research shows.

Average premiums for employer-sponsored family coverage rose 3.4% for 2016, down from annual increases of nearly twice that much before 2011 and double digits in the early 2000s, according to a survey by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

But 3.4% is still faster than recent economic growth, which determines the country’s long-run ability to afford health care.

And the tame premium increases obscure out-of-pocket costs that are being loaded on employees in the form of higher deductibles and copayments. Another new study suggests those shifts have prompted workers and their families to use substantially fewer medical services.

For the first time in Kaiser’s annual survey, more than half the workers in plans covering a single person face a deductible of at least $1,000. Deductibles for family plans are typically even higher.

Deductibles are what consumers pay out of pocket before the insurance kicks in. Employers sometimes contribute to pre-tax accounts to help workers pay such costs.

Employers have been flocking to high-deductible plans in recent years, arguing that exposure to medical costs makes consumers better shoppers.wingeddollar-sm

It also saves employers money. Having workers pay more out of pocket shaved half a percentage point off premium increases of employer-sponsored plans in each of the past two years, Kaiser researchers calculated.

Since 2011, the average deductible for single coverage has soared 63%, according to the survey, while workers’ earnings have gone up by only 11%.

Microsoft PowerPoint - 20160825 Cumulative Slides [Read-Only]

 

 

(Kaiser Health News, Jay Hancock and Shefali Luthra, September 14, 2016)