Health Law Navigator : Midwest Health Care Lawyers & Attorneys for Community Health & Regulatory Compliance in Kansas, Missouri & Nebraska

The following post provides Ken Mason's analysis of the recently issued regulations regarding "grandfathered" employer health plans:

Agencies Clarify "Grandfathering" Under Health Care Reform

As explained in our May 2010 article, the Affordable Care Act imposed a number of benefit mandates on employer health plans, most of which will take effect with the first plan year beginning after September 23, 2010. However, ceratin plans that were in existence on March 23, 2010 (the Act's enactment date) enjoy limited "grandfather" protection. Some of the benefit mandates do nto apply at all to these grandfathered plans, while others apply only at a later date. Unfortunately, the ACT did little to define the scope of this grandfather protection. The three agenceis charged with administering the Act have now issued interim final regulations providing useful guidance on this topic:

Advantages of Grandfathered Status

Even grandfathered plans must comply with many of the Act’s benefit mandates. Such plans are exempt, however, from the following mandates:

• Required coverage for emergency services at in-network levels;
• Required first-dollar coverage for certain preventive services (immunizations and screenings), subject to no deductible;
• A prohibition on restricting the designation of primary care providers or requiring referrals for OB/GYN services;
• Required coverage of routine expenses for participation in clinical trials;
• Enhanced claim appeal procedures, including implementation of an external appeals process; and
• A prohibition on discriminating in favor of highly compensated individuals (i.e., applying the same nondiscrimination rules to both insured and self-funded plans).

Due to these exemptions, many plan sponsors will want to retain their plan’s grandfathered status for as long as that proves to be feasible.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

Benefits in Brief, a website for our Employee Benefits Practice Group 
here at Spencer Fane, recently published a newsletter describing the significant aspects of the Health Reform Bill that employers need to consider and respond to now.

Please enjoy the introductory article by Kenneth A. Mason, leader of the Employee Benefits Practice Group.

Health Care Reform: The Near Term         
Kenneth A. Mason

Congressional passage of comprehensive health care reform legislation means that employers and other health plan sponsors can no longer take a wait-and-see approach to this subject. Like it or not, change is coming. And while many key provisions do not take effect until 2014, a surprising number of changes will apply to employer-based health coverage well before then. We are therefore devoting this entire issue of our quarterly newsletter to a discussion of several significant short-term changes.

When the Affordable Care Act becomes fully effective in 2014, a number of related provisions are designed to reduce the number of Americans without health coverage. These include an “individual mandate” (requiring that all legal residents have some type of health coverage — or pay a tax penalty for failing to do so), the establishment of statewide clearinghouses (known as “exchanges”) as a way of connecting individuals and employers with health insurance policies, tax subsidies designed to assist individuals in obtaining health coverage through the exchanges, and penalties on larger employers (those with more than 50 full-time employees) that fail to offer their employees “affordable” health coverage.

But much will be happening in the next 3½ years. President Obama has directed the agencies responsible for administering the Act’s provisions (the Department of Health and Human Services [“HHS”], the Department of Labor [“DOL”], and the Internal Revenue Services [“IRS”]) to give top priority to issuing necessary guidance. Those agencies have taken that directive to heart, having already started to issue substantive guidance. We expect to see more such guidance throughout the remainder of 2010.

Below are links to additional articles about the Affordable Care Act's effects on employee benefits. You can find all of these articles in the Employee Benefits Practice Group's newsletter.   
 

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

If you have relied on the media to explain the need for health care reform and the provisions of the legislation that was so laboriously crafted over the last several months, we can almost guarantee that you are concerned about the effects of the legislation on your business, that you are confused about what the legislation means to you and your business, and that you are tired of the entire debate. We hope that we can cut through the static and at least help you identify the issues that will affect you and enable you to start preparing your business for the future.

The need for health care reform has been recognized for years. Presidents from Truman through Obama have tried to reform the unique American health care system. They recognized that America was spending an ever-increasing percentage of its GDP on health care and was not getting a good return on its investment. As health care costs have continued to increase more rapidly than any other sector of our economy, the health care indicators for Americans have continued to languish at the bottom of those for all industrialized nations even though it is well recognized that some of the most sophisticated care has been developed and is available in the United States. Americans are less healthy even as we have spent more on health care.

Clearly, a significant portion of our population has not had ready access to health care services because they could not afford health insurance, were not provided health insurance as a benefit of employment, or simply chose not to secure insurance. But even with that crying social need, the bottom-line truth is that this nation was rapidly approaching a point where health care costs were breaking our economy. Companies which had made a contract with their employees and retirees to provide health care benefits were finding they could not fulfill the promise. Our country's promise to care for the poor and aged was breaking the Medicare and Medicaid banks. Our promise to our veterans to provide care in return for their service to our country was overwhelming our defense and veterans affairs budgets. Health care costs were hamstringing our economy and tearing at the social fabric of our nation.

As a country, we tried market reforms after the last great debate on health care during the Clinton Administration. Managed care was the approach. Health insurers paid providers a set amount for each insured each month. It was then up to the providers, with an insurance person looking over their shoulders as they made professional care decisions, to determine what care would be provided for the dollars allocated. The result was care that was rationed on the basis of the dollars available, not the health status that was achieved for the patient. The insured public and the providers themselves rebelled; the insured public received less personal attention to their health care needs and the providers didn't like the payers looking over their shoulders.

Currently, providers are compensated on a fee-for-service basis; the more services that are provided, the more compensation they receive. There is nothing that equates the payment for services to the resulting health status of the patient. There is no incentive for maintaining or improving the patient's health. And there is no governor on the amount of health care services that are provided, even if they prove to be redundant and unnecessary. Often the fear of litigation causes providers to over-test and practice defensively. All these pressures have contributed to the escalating cost of health care.

The new health reform act attempts to make health insurance coverage more available with the thought that more coverage makes services more available to all Americans. That's the part of the act we have heard the most about from the media. But the more profound part of the legislation is its attempt to "bend the cost curve"; i.e. achieve better health status for Americans at lower cost. The health reform act attempts to control health care costs by providing incentives to achieve efficiencies and improve the health status of our citizens in the process.

The health reform act attempts to accomplish this seemingly impossible task by paying providers on health outcomes -- in part -- and pouring significant resources into wellness and prevention programs. The government will lead by example. The new law includes numerous reforms of the Medicare program with the promise of not reducing eligibility or benefits to its beneficiaries. A new Center for Medicare Innovation is charged with evaluating and implementing new payment models, with particular emphasis on bundled payments (a single payment for an episode of care to be divided among providers). Other federal agencies are charged with developing quality measures and promoting quality improvement initiatives.

New carrots and sticks are intended to focus providers on delivery of quality of care, not simply more care. A new shared savings program will give providers incentives to form strategic alliances to improve patient care over a continuum of services. Hospitals will face reduced payments if they fail to reduce readmissions or experience high levels of hospital-acquired conditions. Physicians will face similar consequences if they fail to meet established quality standards. Well-funded wellness and prevention programs will go on line in the near future.

Where the government goes with Medicare incentives to providers, the private health insurance industry will undoubtedly soon follow. So even as Americans start to have better access to health insurance through the reform of the health insurance system, the entire health care system will begin a migration to managed outcomes rather than managed care. What's at stake cannot be overestimated: we must bring down the cost of health care and improve the health status of Americans or risk crippling our country economically and physically.

 

Photo Credit: Diesel Demon, Flickr Creative Commons

• Email This
• Print
• Comments
• Trackbacks

We apologize for our brief blogging hiatus. Although we've been busy working on our Webinar series, we're currently conjuring up some great content that we'll post later this week. Check back soon for updates.

-the HealthLawNavigator team

 

Photo Credit: lapideo, Flickr Creative Commons

• Email This
• Print
• Comments
• Trackbacks

If you plan to read the new health care reform law, you better start with a big table – or several computer monitors.  The Patient Protection and Affordable Care Act amends existing provisions of the Public Health Service Act, the Social Security Act, the Employee Retirement Income Security Act, the Internal Revenue Code, the False Claims Act, the Indian Health Services Act, and several provisions in the U.S. Criminal Code.  Several PPACA provisions make absolutely no sense unless one reads them side-by-side with these statutes. 

Luckily, several organizations that have studied the text carefully have produced excellent timelines and summaries.  We’ve compiled the following list of our favorite reference materials.  We can’t guarantee each one is 100 percent accurate, but each of these has passed our initial sniff test. 

Summaries:

U.S. Senate Democratic Policy Committee: “Section-by-Section Analysis with Changes Made by Title X included within Titles I – IX, where Appropriate”
Provides a detailed summary of specific sections of the bill and how and when their planned requirements should be enacted.

HealthReform.gov: “Key Provisions That Take Effect Immediately”
A simple list of reform-related changes active as of now.

Kaiser Family Foundation: “Summary of New Health Reform Law”
Easy-to-follow and simply written, this visually appealing series of charts explains how PPACA will impact individuals, businesses, and government sponsored programs.

The White House: “Putting Americans in Control of Their Health Care”
The straight-from-the-president guide to understanding health reform, plus links to the original senate documents and briefings about key health reform elements.

The Huffington Post: “Health Reform Bill Summary: The Top 18 Immediate Effects”
A slideshow of short blurbs explaining health reform implementations that will take effect immediately.

The American Medical Association:  “How the Passage of Federal Health System Reform Legislation Impacts Your Practice”
Two-page summary of PPACA’s impact on physicians. 

National Conference of State Legislators:  “Summary of Health Workforce Provisions”
Identifies fourteen categories of health care providers, and lists the PPACA provisions which impact each one. 


Timelines:

U.S. Chamber of Commerce: “Health Care Implementation Timeline”
A bulleted list of calendar years and the bill provisions that will be implemented during each.

Kaiser Family Foundation: "Health Reform Implementation Timeline”
Breaks PPACA down into a series of dates each provision will be enacted and how individuals and independent organizations will be responsible for enacting it.

Missouri Hospital Association:  “Issue Brief: Congress Passes Massive Health Care Reform Using Two Bills”
A combination summary/timeline focusing on provisions which impact hospitals. 

National Federation of Independent Business: “Healthcare Reform Law: Timeline for Small Business”
A timeline of simple small business-specific provisions and how small business owners can implement them in the coming years.

Wikipedia: “Patient Protection and Affordable Care Act”
This Wikipedia page offers a (surprisingly) accurate overview of health reform’s timeline through 2018.

CNN: “Timeline: When health care reform will affect you”
A straightforward CNN timeline that includes a brief video clip of Obama describing how and when health care reform will occur.
 

Photo Credit: @boetter, Flickr Creative Commons

• Email This
• Print
• Comments
• Trackbacks

We have encouraged hospitals to begin a dialogue with their physicians moving toward development of vendor relations polices, and we have offered several examples for consideration. The new health reform law, the Patient Protection and Affordable Care Act (which forever more will be known as PPACA), gives hospitals and physicians even more to talk about on this subject.
 
Section 6002 of PPACA incorporates provisions from the proposed Physician Payment Sunshine Act. That legislation was introduced in Congress last year by U.S. Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI) to require drug and medical device manufacturers and group purchasing organizations to report on a wide range of payments to physicians and physician-owned entities.

Thomas Sullivan, president the of Rockpointe Corporation, has posted an excellent summary of this new reporting law at his blog, Policy and Medicine.   Beginning in March 2013, drug and device companies and GPOs will have to report to HHS any cash payment or provision of any in-kind item or service to a physician.  There are a handful of exceptions, including items and services valued at less than $10.00 (provided the annual aggregate is less than $100).  HHS will maintain this information in searchable databases made available to the public on its website. 
 
Now, in addition to worrying about the Anti-Kickback Statute when accepting vendor freebies, doctors must answer conflicts of interest charges from their patients and the public.  Such pressure is more likely to change some physicians' behavior than what they perceive as the remote threat of criminal prosecution.  Although reporting does not start for another three years, hospitals and physicians need to keep "draft vendor policy" on their health care reform to-do lists.
 

Photo Credit: Wade Morgan, Flickr Creative Commons

• Email This
• Print
• Comments
• Trackbacks

Change starts today, and the new health care reform law will affect everyone eventually.

The Patient Protection and Affordable Care Act, or PPACA, will be implemented in three phases: (1) short-term solutions to shore up the current system; (2) expanded access to care; and (3) long-term payment and delivery system reforms.

Attorneys from our health care, labor and employment, employee benefits, and tax teams are collaborating to present a three-part webinar series delving into key PPACA provisions. We will focus on what providers, payers and employers need to do now to prepare for these far-reaching changes.

The charge for each webinar in the series is $75.00 per site. An unlimited number of participants may attend at each site. Each registered site will receive concise reference materials and access to an MP3 playback file.
 

REGISTER HERE

 

Phase I: Today
Wednesday, April 21, 2010
Noon — 1:30 p.m. CDT

Effective now (or in the near future): new Medicare/Medicaid rules targeting fraud, waste, and abuse; disclosure requirements for doctors, hospitals, and drug and device companies; prohibitions on certain insurance company practices; and business tax credits and individual subsidies to purchase health insurance.

Phase II: Tomorrow
Wednesday, May 5, 2010
Noon — 1:30 p.m. CDT

January 1, 2014, is the target date for expanded health insurance coverage, including enforcement of individual and employer mandates, start-up of health insurance exchanges, and new Medicaid eligibility rules. Tax changes to fund increased access and new administrative simplification requirements go into effect a year earlier.

Phase III: Next Day
Wednesday, May 19, 2010
Noon — 1:30 p.m. CDT

The ultimate goal of health care reform is a more efficient and less-costly health care delivery system, or "bending the cost curve." PPACA incorporates numerous strategies for achieving this goal: value-based purchasing; accountable care organizations; comparative effectiveness research; Medicare Independent Payment Advisory Board; expanded community health and prevention/wellness programs; and tort reform demonstration grants.

 

Photo Credit: walknboston, Flickr Creative Commons

• Email This
• Print
• Comments
• Trackbacks

Here is the final update in our vendor policy guide series.

We're working on more great content for the coming weeks, so check back often for health policy news and information.

 

HCA Healthcare. An employee may attend a social event the value of which does not exceed $150.00 per person up to three times per year. An employee may accept gifts with a total value of $75 or less in any one year from any individual or organization that has a business relationship with HCA.

Via Christi Health System Standards of Conduct. “All gifts and gratuities, whether offered or accepted, must be reasonable and occasional so as not to influence or appear to inappropriately influence relationships with those we serve. You are prohibited from soliciting gifts, gratuities, or any other personal benefit or favor of any kind from those we serve. You may not accept monetary gifts or cash equivalents. Unless prohibited by entity policy, you may accept unsolicited non-monetary gifts provided that such gifts are of nominal material value. Nominal value is understood to mean modest and reasonable, generally a value of $50.00 or less.”

Salina Regional Health Center Compliance Plan. “At a vendor’s invitation, an individual may accept meals or refreshments at the vendor’s expense. Occasional attendance at a local theater or sporting event, or similar entertainment at vendor expense may also be accepted. In most circumstances, a regular business representative of the vendor should be in attendance with the covered person.”
 

Stormont Vail HealthCare Code of Conduct. “Personnel may not accept gifts of money under any circumstances nor may they solicit non-monetary gifts, gratuities or any other personal benefit or favor of any kind from suppliers or patients. Personnel and members of their immediate families may accept unsolicited, non-monetary gifts from a business firm or individual doing or seeking to do business with Stormont-Vail only if the gift is of nominal value or the gift is primarily of an advertising or promotional nature.” “Personnel may not encourage or solicit entertainment from any individual or company with whom Stormont-Vail does business. From time to time, personnel may offer or accept entertainment, but only if the entertainment is reasonable, occurs infrequently and does not involve lavish expenditures. Offering or accepting entertainment that is not a reasonable adjunct to a business relationship, but is primarily intended to gain favor or influence, should be avoided.”

 

Saint Luke’s Health System

Code of Conduct. “You shall not accept gifts, favors, services, and entertainment or other things of value to the extent that decision-making or actions affecting the System or the services provided might be influenced or may appear to be influenced. Similarly, the offer or giving of money, services or other things of value with the expectation of influencing the judgment or decision making process of any purchaser, supplier, customer, government official or other person by the System is absolutely prohibited. Any such conduct must be reported to the entity ECO and may be grounds for termination of your relationship with the System.”

 

Photo Credit: Neubie, Flickr Creative Commons

• Email This
• Print
• Comments
• Trackbacks

Even if federal health insurance reform legislation lives up to its promise of coverage for an additional 32 million Americans, more than 12 million individuals will remain uninsured.  Most of those individuals will be small-business employees.
 
How will we provide basic health care services for these individuals?  One option is a community-based solution known as "three-share" programs.  Beginning with Muskegon County, Michigan, several communities over the last decade have pursued this novel approach to ensure care for uninsured workers.  Under these programs, the cost of a basic package of health care services is shared by the employee, the employer, and the community.
 
Three-share programs, which were the subject of a recent feature article in USA Today,  focus on employers who cannot afford to provide insurance coverage for low-income employees, such as restaurants and landscape companies.  They offer offer enrollees a limited range of medical services - primarily preventive care -  at a significantly reduced rate.  Given these restrictions, three-share programs don't work for  individuals with costly chronic diseases or catastrophic illnesses.
 
The community contribution ususally comes from government agencies, private foundations, and local hospitals.  Also, physicians are enlisted as participating providers to furnish certain services at reduced costs, and serve as medical homes for enrollees.
      
Three-share programs have not proven wildly successful, but they have provided access to care where it has not been otherwise available. These programs also have allowed communities to come together to address these critical issues.  As providers look to build integrated system, development of community three-share programs offers a good starting point for building such relationships.

 

Photo Credit: Tuppus, Flickr Creative Commons
 

• Email This
• Print
• Comments
• Trackbacks