Health Costs Projected to Continue Climbing

A new report from the Centers for Medicare and Medicaid Services' (CMS) Office of the Actuary notes that health care costs are expected to increase at a slightly higher rate over the next 10 years because of the new health reform law. The authors estimate that national health spending will reach nearly $4.6 trillion by 2019, increasing by 6.3 percent on average annually. This increase is 0.2 percentage points faster than expected before the health reform law was passed in March. Additionally, the team of economists predict that health spending will be at 19.3 percent GDP in 2019.

The report, published in Health Affairs, can be found by clicking here.
The New York Times story is available here.
And The Wall Street Journal article is here.

HIT Meaningful Use Regulations Released

"The widespread use of electronic health records (EHRs) in the United States is inevitable", asserted Dr. David Blumenthal, the national coordinator for health information technology at the US Department of Health & Human Services (HHS), in a recent New England Journal of Medicine article.   

HHS released on Tuesday the final rules for expanding the use of electronic health records by hospitals and physicians. Eligible physicians and hospital facilities can qualify for Medicare and Medicaid incentive payments if they adopt certified EHR technology and subsequently use it to achieve specified patient health outcomes. Two regulations, in fact, were released by HHS.  The first defines the "meaningful use" goals that providers must meet in order to qualify for the bonus payments. The second rule describes the technical capabilities required for certified EHR technology. This marks the finalization of a highly scrutinized proposed rule that was released on January 13, 2010.

The program, created by the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, is expected to award up to $27 billion in bonus payments over ten years.  Providers may receive up to $44,000 under Medicare and $63,750 under Medicaid.  Hospital facilities, on the other hand, may be eligible to receive millions of dollars for implementation and meaningful use of EHRs under both aforementioned public health care programs.

Click here for the HHS press release, which links to a fact sheet on and the text of the final rules.

Obama to Use Recess Appointment for Berwick

The White House yesterday announced that President Obama, to the chagrin of many Congressional Republicans, will use a recess appointment to make Don Berwick the administrator of the federal Centers for Medicare and Medicaid Services (CMS). Mr. Berwick is touted as an expert in and advocate of quality improvement in health care and is also a renowned Harvard professor and pediatrician. His appointment will remain valid until the end of the 111th Congress in January, at which time he will be subject to another confirmation, and presumably a hearing.

Click here to read more from Politico.
Kaiser Health News has released a resource guide on Mr. Berwick.  Click here to access it.

Three New Health Reform Model Notices Posted

Earlier this week, the US Department of Labor released three new model notices, each related to provisions included in the new health reform law. Each provision is effective for new plan years that begin on or after September 23, 2010.

The first pertains to the extension of dependent coverage to adult children up to age 26. It can be found at: http://www.dol.gov/ebsa/dependentsmodelnotice.doc

Next is model notice language for the prohibition on lifetime limits on "essential health benefits". This notice can be found at: http://www.dol.gov/ebsa/lifetimelimitsmodelnotice.doc

Lastly, a model notice pertaining to certain patient protections. These include an enrollee's right to designate a primary care physician or a pediatrician from within their network as well as to obtain obstetrical or gynecological services without prior authorization from their health plan. This model notice can be found at: http://www.dol.gov/ebsa/patientprotectionmodelnotice.doc

High Risk Pool Programs & New Health Insurance Website

Today the US Department of Health and Human Services (HHS) announced the creation of a new government-run health insurance website - healthcare.gov - as well as the highly-anticipated high-risk pool program. 

The new website, mandated by the new health reform law, is an information clearinghouse meant to help consumers navigate what can sometimes be a complicated health insurance market.  Only in version 1.0, the site lists the insurers selling products in a given user's particular service area.  In the autumn, the site will be enhanced with the addition of insurance products' prices and benefits information. Users can also log-on to learn more about how the new health reform law may impact them.

Also launched today, a few days past its anticipated launch date, is the new state-based temporary high-risk pool program, now called the Pre-Existing Condition Insurance Plan (PCIP).  This temporary insurance program is designed to bridge the coverage gap for those with pre-existing conditions until state-run insurance exchanges are established in 2014.  Slightly more than half of the states (29 of them) decided to run their own high-risk pool program, with the remaining 21 states allowing the federal government to step-in and administer theirs.  Coverage for those who qualify is expected to kick-in August 1st for those who apply by July 15th.

To read more on these developments, visit the HHS press release, a Wall Street Journal story, or coverage from Kaiser Health News.  

Early Retiree Reinsurance Program (ERRP) Applications Now Being Accepted

Today the US Department of Health and Human Services' Office of Consumer Information and Insurance Oversight (OCIIO) announced that they will immediately begin accepting applications for participation in the early retiree reinsurance program (ERRP).  A draft application was released earlier this month, but employers hoping to be part of this new, temporary program now can complete and submit an official application. 

The ERRP was created as part of the recently enacted federal health reform package and became effective June 1, 2010. Participating employers will be reimbursed 80 percent of certain claims between $15,000 and $90,000.  One condition of participation in ERRP is that the employer must have in place procedures and programs that have or will generate cost savings for plan participants with chronic and high cost conditions.

The application can be accessed by visiting http://www.hhs.gov/ociio/regulations/index.html.
Also available on the OCIIO site is an ERRP Fact Sheet and Application Submission Do's and Don'ts.

Connecticut First State to Expand Medicaid

Connecticut is the first state in the Union to permanently expand its Medicaid program to low-income, single adults as a result of the recently enacted federal health reform. State officials predict that over 45,000 adults will be eligible for the program under this new expansion. Childless adults, prior to health reform's passage, could enroll in Medicaid only if their state was granted a waiver. These waivers were temporary and strict criteria had to be met in order to qualify for approval and renewal. The Patient Protection & Affordable Care Act changed this and now requires state Medicaid programs to cover all low-income individuals beginning in 2014. States that take early action are able to access federal funding to enroll individuals immediately.

Click here to read the press release from the US Department of Health & Human Services.

Cost is Key Reason Workers Are Uninsured

A recent study published by the Employee Benefit Research Institute (EBRI), a non-profit, non-partisan research organization, demonstrates that the majority (85 percent) of uninsured workers cite cost as the number one barrier to coverage. Lack of availability of coverage was reported by 29 percent of respondents as another barrier to coverage. These individuals reported that they did not have access through their own employer, their spouse's employer, or a parent's employer. A provision in the new health reform law will allow adult dependent children up to age 26 to access coverage through a parent's employer-sponsored health plan. This new benefit becomes effective with new plan years that begin on or after September 23, 2010. The US Department of Health & Human Services (HHS) predicts that potentially over 1.20 million individuals will become newly enrolled in coverage as a result.

Click here to access the EBRI brief explaining the findings of the below referenced study.
Click here to view the complete EBRI study.

Guidance on Adult Dependent Coverage Released

Today the Department of Labor (DOL), the Treasury, and the Department of Health and Human Services (HHS) released clarifying guidance on the provisions in the new health reform law that require group health plans to cover adult dependent children up to age 26.

Highlights of the new regulation include:

• Except for children age 26 or older, the terms of the policy cannot vary for dependent coverage based on age of a child
• Additional charges (e.g. surcharges, fees, etc.) are not allowed unless the surcharge applies regardless of the age of the child
• Married adult dependents are eligible for this new benefit. However, coverage does not have to be offered to the adult child's spouse or children.
• Plans must provide a special enrollment period - that includes written notice - for at least 30 days to adult children whose coverage may have ended under a plan or who may have been previously denied coverage. This is effective no later than the first day of the first plan year beginning on or after September 23, 2010 (i.e., January 1, 2010 for most employer-sponsored plans).
• Because of the special enrollment period, the adult child is treated as a special enrollee per HIPAA laws. Therefore, employers must:
• Make available to adult children all benefit packages that are offered to other similar individuals who did not lose coverage because they lost dependent status; and
• Charge the same premium price that they charge other similar individuals who did not lose coverage because they lost dependent status
• Financial contributions set aside for this new benefit may be excluded from the employee's income for the entire taxable year the child turns 26 so long as the coverage continues until the end of that given taxable year.

On a related note, HHS released cost estimates of this new benefit, concluding that it will cost $3,380 for each dependent and thus will raise premiums by 0.7 percent in 2011 for employer plans. A little over one million young adult dependents are expected to sign up, with HHS estimating that more than half of them would have been uninsured if not for this program. While this aspect of the health reform law is effective September 23, 2010, many insurers across the country have already pledged to cover this population far in advance of September. A list of these insurers can be seen in the below referenced DOL Fact Sheet.

Click here to access the regulation.
Click here to view the DOL fact sheet.
Click here to read the FAQs, courtesy of DOL.

Early Retiree Reinsurance Program Regulations

Today the US Department of Health & Human Services (HHS) released regulations on the new early retiree reinsurance program for employers.  Expected to be included in the federal register within the next few days, the regulations provide greater clarification regarding how employers will be reimbursed for early retiree claims costs between $15,000 and $90,000.  Of special note is that the program will go into effect June 1, 2010 in advance of the June 23, 2010 mandated effective date.  The Patient Protection and Affordable Care Act (PPACA) has allocated $5 billion dollars for this program that expires in 2014 when state-based health insurance exchanges are established.  Both self-insured and fully-insured employers are eligible to apply to participate in this program.  In the regulations, HHS states that they predict that many of the program participants will be those that receive the retiree drug subsidy (RDS) because of the similarities between the two programs.

The HHS press release can be accessed by clicking here.  A recently revised White House fact sheet on this program can be found by clicking here.

HHS Implementation Office Established

The US Department of Health and Human Services (HHS) has announced the creation of a new division to oversee and manage health reform implementation efforts.  Speculated by some to be eventually headed by Jon Kingsdale, former executive director of the Massachusetts Connector, the Office of Consumer Information and Insurance Oversight will provide leadership in implementing the new health reform law.  Within this divisions will be five different offices:

1. Office of the Director
2. Office of Oversight
3. Office of Insurance Programs
4. Office of Consumer Support
5. Office of Health Insurance Exchanges

The notice published in the Federal Register outlines the responsibilities of each office and can be found by clicking here.

Mental Health Parity Regulations Released

The Employee Benefits Security Administration (EBSA) has posted the public inspection version of the interim final rules for the Mental Health Parity and Addiction Equity Act ("MHPAEA"). Expanding upon laws enacted by the Mental Health Parity Act of 1996, these news laws require group health plans and health insurance issuers to ensure that financial requirements (such as co-pays, deductibles) and treatment limitations (such as visit limits) applicable to mental health or substance use disorder (MH/SUD) benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits.

Generally, the law became effective for plan years beginning on or after October 3, 2009, and thus January 1, 2010 for calendar year plans. The Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury will publish in the Federal Register final regulation that is effective April 5, 2010, and applicable to plan years beginning on or after July 1, 2010.

EBSA has published a fact sheet that can be found by clicking here.
Click here for the related press release.