The rule requiring hospitals to post their prices online, which became effective on January 1, 2019, really hasn’t done much to promote cost transparency. The problem is that the price lists, which payers refer to as chargemasters, break common procedures into complex, coded retail-priced components that mean little to the average consumer.
As an example, determining the cost of an ER visit would require knowing the codes and locating costs for all parts involved in the visit. Few people, if any, are familiar with these complex details. While giving consumers price information in an easy-to-understand format would be a big help, it appears that CMS Administrator Seema Verma was accurate when she described this as little more than a “critical first step”.
According to a public-private partnership launched by HHS, the percentage of U.S. healthcare payments tied to value-based care rose to 34% in 2017, a 23% increase since 2015. Fee-for-service Medicare data and data from 61 health plans and 3 fee-for-service Medicaid states with spending tied to shared savings, shared risk, population-based payments and bundled payments were examined in the analysis.
Another recent proposal of the Trump Administration would allow employers to fund tax-exempted Health Reimbursement Arrangements to help pay for an employee’s individual health insurance premiums. In addition, the proposal would also allow employers that offer group health coverage to fund an HRA of up to $1,800 to reimburse employees for “qualified” medical expenses. Easing restrictions in this manner is seen by many as a big boost for small businesses that are unable to provide employer-sponsored healthcare. Comments are being accepted through December 28, 2018 and if approved, the new rules would apply for plan years beginning on or after January 1, 2020.
While the Department of Health and Human Services has asked drug manufacturers to disclose list prices for most drugs they feature in television commercials, the industry’s largest trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), has countered with an offer to include content directing consumers to a new website where pricing information could be found.
The Administration’s request requires that list prices be featured in text on the screen in television ads for drugs covered by Medicare and Medicaid costing more than $35 per month. A great deal of debate has developed, with PhRMA arguing that featuring list prices would confuse consumers by making them think they have to pay more than they actually would. HHS is still accepting comments on the proposal.
Each year, the IRS announces inflation-adjusted limits for HSA and FSA contributions as well as minimum deductibles and out-of-pocket levels for High Deductible Health Plans (HDHP). Based on their recent announcement, maximum contribution levels going into effect on January 1, 2019 are as follows:
In late Fall, the President signed two bills that should make it easier for pharmacists to help customers find the lowest cost, appropriate medications. The “Know the Lowest Price Act of 2018” and “Patient Right to Know Drug Prices Act” bills are designed to crack down on “gag clauses” that prevent pharmacists from telling patients about more affordable options for prescription drugs. Having developed a “drug pricing blueprint” to promote greater price transparency, the President praised these bills as representing significant steps in that direction.
You might be surprised to hear that millennials represent one third of the American workforce, but Pew Research Center confirms it. If your health benefit plan hasn’t adapted to the needs and lifestyles of these young people, you’re missing an opportunity to boost retention, build loyalty and enhance wellness.
For starters, it’s important to realize that 45% of young adults age 18 to 29 do not have a primary care doctor. They do, however, have a smartphone and you can bet they use it to access the internet constantly. With online sources like WebMD offering so much healthcare information, it’s no wonder that millennials are likely to self-diagnose and even treat one another at home before seeing a doctor. If young people can find much of the healthcare information they need in the palm of their hand, you can bet they expect to find benefits and enrollment information easily accessible as well.
They Want Information Now
Just like so many of us who have come to expect an immediate response to everything, millennials who do need a doctor expect the visit to happen quickly and easily. According to PNC Healthcare, this explains why 34% of millennials prefer to use a retail clinic rather than waiting several days to see a primary care physician in their office – a rate twice as high as baby boomers. It would also seem to point to an increased use of telemedicine.
Cost Matters to Millennials
Millennials face more than their fair share of financial pressures and take their finances seriously. Surveys show they are more willing to request a cost estimate prior to choosing a treatment option than baby boomers or seniors ever were. This not only makes cost transparency tools important, but it’s a very positive trend that should contribute to lower claim costs going forward.
Whether it be treatment options, provider access or cost of care, the demand for health and benefit plan information will only increase as more and more millennials enter the workforce. In order to respond to change, self-funded employer groups will need the resources of an independent TPA that can combine the right plan design with more personalized, interactive communications and more innovative ways for younger employees to access the more personalized care they will need going forward.
Currently, only 21 states offer some protection against balance billing and most existing laws apply to emergency services required from out-of-network providers. Few, if any, address balance bills received for treatment by an out-of-network provider in an in-network hospital. In Pennsylvania, the Governor and General Assembly have introduced two bills aimed at taking consumers out of the middle of the reimbursement process. These bills have come after several other states have adopted more comprehensive laws that prohibit balance billing entirely.
Some measures addressed in Connecticut, New York, Maryland, Florida and New Jersey include:
- Protections in emergency department and in-network hospital settings
- Prohibiting providers from balance billing and requiring carriers to hold their members harmless
- Adopting reimbursement rate standards and a payment dispute resolution process
- Applying these laws to all types of managed care products, including HMOs and PPOs
The goal of the proposals is to keep covered persons out of the middle of carrier-provider payment disputes. In non-emergency procedures, healthcare facilities in New Jersey are required to disclose whether they are in-network and advise the covered person to ask if their physician is in or out-of-network. Individual healthcare professionals must inform the patient if they do not participate in the person’s plan network and provide a billing estimate and applicable CPT codes. With healthcare costs continuing to rise and a lack of federal regulations, we can expect more states to take measures to protect healthcare consumers. We will strive to keep our clients informed as changes develop.
The International Foundation of Employee Benefit Plans reports that individuals enrolled in employer-sponsored healthcare plans are now paying an average deductible of $1,491 for individual coverage and nearly $2,800 for family coverage. These numbers are up from $1,300 and $2,500, respectively, in 2016.
Individuals covered by HDHPs have average deductibles of $2,296, with families averaging $4,104 – more than twice the averages for traditional, non-high deductible plans. The online survey included nearly 700 U.S. members of IFEBP and was conducted in February.
From Amazon, Berkshire Hathaway and JP Morgan to Walmart and Humana – disruption is all around us. The future of our healthcare system is unfolding right before our eyes and regardless of how this giant chess match turns out, health plan participants just may be the biggest winners.
The Retail Effect
While many healthcare plans have done well under Obamacare, they need to review what many retailers have experienced since Amazon began building its Prime subscriber base of 100 million plus. When you consider the scope of Walmart, their potential for retail clinics is virtually unlimited. Whether by Amazon, Walmart or others, home delivery of prescriptions could make things very difficult for brick and mortar pharmacies. No matter what area you examine, these mega-partnerships have the potential to impact access to care in ways that most traditional healthcare providers have never imagined. And, if recent retail history means anything, healthcare consumers are sure to benefit.
Self-Funding Will Rule
Most working Americans are already covered by self-funded health plans, and we would expect the new Amazon, Berkshire Hathaway, JP Morgan family to offer at least one self-funded option. Studies show that self-funded plans offer employers far more flexibility than fully insured counterparts and Berkshire Hathaway’s Specialty Services unit certainly has the resources to provide the required stop loss insurance.
A Transparency Opportunity
With a little creativity, the transaction processing infrastructure of JP Morgan could make real-time claims processing a reality for fellow plan members. Real-time payments may encourage providers to discount more. Add telehealth and enable physicians to view electronic medical records and patients may know what to expect from their visit and what they will pay before they make the appointment. The bottom line is that as the level of information sharing increases, cost transparency and the potential for savings will grow.
As a TPA dedicated to controlling costs for self-funded health plans and members, we know these deals will keep more people out of the hospital and increase competition for outpatient care. Technology will move forward, actionable data will be more accessible and consumers will have their day as costs become more transparent and delivery more user-friendly.