For 2019, Employers Adjust Health Benefits as Costs Near $15,000 per Employee

This article was published on August 13, 2018 on SHRM.org, written by Stephen Miller.

Plans are steering employees toward expanded telehealth options and high-value centers of excellence

With the cost of employer-sponsored health care benefits expected to approach $15,000 per employee next year, large U.S. employers continue to make changes, new research reveals.

Many want to hold down cost increases and are steering employees toward cost-effective service providers, such as telehealth options and high-value in-plan provider networks, according to the nonprofit National Business Group on Health (NBGH) survey 2019 Large Employers’ Health Care Strategy and Plan Design. The survey was conducted from May to June with 170 large employers as they finalized their 2019 health plan choices; more than 60 percent of respondents belong to the Fortune 500.

Cost Increases Hold Steady

Big employers project that their total cost of providing medical and pharmacy benefits will rise 5 percent for the sixth consecutive year in 2019. If they weren’t making benefit changes, their costs would rise 6 percent, the survey showed.

The total cost of health care, including premiums and out-of-pocket costs for employees and dependents, is estimated to average $14,800 per employee in 2019, up from $14,099 this year. Large employers will cover roughly 70 percent of those costs, leaving $4,400 on average for employees to pick up in premium contributions and out-of-pocket expenses.

Health benefit costs are still rising at two times the rate of wage increases and three times general inflation, “making this [cost] trend unaffordable and unsustainable over the long term,” Brian Marcotte, NBGH president and CEO, said at an Aug. 7 press conference in Washington, D.C.

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Consumer-Directed Health Plans

“The most unexpected data point in the survey this year is that employers are dialing back their move to consumer-directed health plans”―or CDHPs―especially as a full replacement for other health plan options, Marcotte said. CDHPs typically combine a high-deductible health insurance plan with a tax-advantaged account that employees can use to pay for medical expenses, most commonly a health savings account (HSA) or health reimbursement arrangement.

“We may be at a tipping point in terms of cost-sharing with employees,” Marcotte said.

In 2019, the number of employers offering CDHPs as a sole option will drop by 9 percent, from 39 percent to 30 percent, “reflecting a move by employers to add more choice back into the mix” by also offering traditional health plans such as preferred-provider organizations, he noted.

To lessen the pain of high deductibles while maintaining incentives for cost-conscious spending, large employers are contributing to their employees’ HSAs, on average, $500 for an individual and $2,000 for a family, NBGH found.

The shift to CDHPs as a sole option over the last decade was driven, in part, by the Affordable Care Act and its 40 percent “Cadillac tax” on high-value health plans, originally to take effect in 2018, Marcotte said. “A lot of companies moved to high-deductible health plans to minimize the impact of the Cadillac tax or to delay its impact, but the Cadillac tax has been kicked down the road, first  to 2020 and now to 2022,” Marcotte said. Many believe it may be further delayed or repealed altogether, “so employers are relaxing” about the need to reduce the scope of their plans. Continue reading

Reference Based Pricing Gaining

ebso-rpbWhile plenty of folks talk about reference based pricing as though it’s a fad that has come and gone, we’re finding more interest from employers all the time. This may be because many like to brand it as another form of disruption, but regardless of how you brand it, reference based pricing is becoming a more important part of our value proposition all the time. It’s becoming more widespread because it enables a self-funded plan to limit costs to an extent that few other measures, if any, can match. This is primarily because by negotiating in advance with hospitals to accept a schedule of fixed payments for certain healthcare services, carrier-sponsored provider networks can be bypassed.

The fact is that while reference based pricing may be considered disruptive by many hospitals, it works. It is a transparent approach that can save a lot of money for self-funded health plans and their members. And finding ways to help self-funded employer plans provide high quality, high value healthcare to their members is our most important job.

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Jury deems Centura Health $230K surgical bill ‘unreasonable,’ awards $766

This article was published on June 21, 2018 on BenefitsPro, written by Greg Land. Photo Source: BenefitsPro.

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A Colorado jury declared a hospital’s billing unreasonable, turning aside its lawsuit demanding almost $230,000 from a patient whose insurer already covered the cost of her surgery.

The patient had already paid her deductible and her insurer had paid the hospital about $75,000, which an audit deemed the “reasonable value of the goods and services” she had been provided, her lawyer said.

Lead attorney Ted Lavender of FisherBroyles’ Atlanta branch, who represented the former patient with office partner Kris Alderman and Denver partner Frank Porada, said testimony in the case revealed just how murky hospital billing can be and how some patients are targeted for whopping bills to make up for those who pay substantially less for the same services.

“The hospital experts explained how the rates get set, and it ultimately devolved into this idea that paying patients have to pay more to make up for nonpaying patients, the uninsured, those on Medicare and Medicaid, who don’t pay full price,” Lavender said.

In his client’s case, records showed that surgical spinal implants cost the hospital about $31,000.

“They turned around and charged $197,640 for those items on the hospital bill,” said Lavender. “That is a 624 percent markup.”

The hospital is represented by Traci Van Pelt, Michael McConnell and David Belsheim of Denver’s McConnell Fleischner Houghtaling.

Van Pelt said they will file posttrial motions and appeal the verdict.

The case involved back surgery performed on Lisa French in 2014 at St. Anthony North Health Campus, north of Denver. Hospital filings said French’s surgery was to relieve back pain and was “considered elective.”

French’s employer had a self-funded ERISA insurance plan, and she was told prior to surgery that she would owe $1,336, of which she immediately paid $1,000.

French’s contract included phrasing that she “understand[s] that I am financially responsible to to the hospital or my physicians for charges not covered or paid pursuant to this authorization.”

St. Anthony’s billed her insurance plan $303,888 after the surgery and for two presurgical consultations based on its “chargemaster” billing schedule, an industrywide practice whereby providers list all the prices they charge.

As Lavender explained, French’s employer’s insurance plan contracts with a health care consulting firm, ELAP Services, which audits claim costs and negotiates with providers for self-funded insurers. On its website, ELAP says it “assists in plan design and jointly establishes limits for payment of medical claims that correlate to the providers’ actual cost of services.”

ELAP audited the fees St. Anthony’s charged French and determined that her actual charges came out to about $70,000, Lavender said. Between her co-pays and the insurance plan, St. Anthony’s was paid $74,597.

St. Anthony’s parent company, Centura Health Corp., sued French in state District Court in Adams County, Colorado, seeking an additional $229,112 in 2017.

ELAP provides legal representation to clients facing suit pursuant to its services, and Lavender, Alderman and FisherBroyles Denver partner Frank Porada were assigned French’s defense.

According to defense filings, Fishers contract with St. Anthony’s contained no stated price and was thus ambiguous.

The hospital was already paid the reasonable value for the services, according to a defense account. The chargemaster rates are “grossly excessive and defendant had no choice but to sign the Hospital Service Agreement, making them unconscionable” and thus unenforceable, the defense said.

During a six-day trial in Brighton, Colorado, before Judge Jaclyn Brown of Colorado’s 17th Judicial District, Lavender said the entire dispute was over the prices and methodologies medical providers use.

“We had one expert, and they had three,” said Lavender. “They spent $100,000 on experts.”

“The reality is that there’s nobody to say how much they’re charging is reasonable,” Lavender said.

The jury made that determination for French on June 11, answering “no” when asked whether her bills were reasonable. The panel agreed she had a contract with St. Anthony’s to pay “all charges of the hospital,” but that those charges were “the reasonable value of the goods and services provided,” not those set by the hospital’s chargemaster.

The jury awarded the hospital $766.74.

The hospital’s attorneys did a good job explaining how hospitals have to shoulder the burden for underpayments and nonpayment by other patients, Lavender said.

“They know they’re not going to collect from everybody,” he added. “But in the end, it just reveals how antiquated and nontransparent the system is, because nobody understands the bill.”

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IRS Penalties Are Being Issued

The Internal Revenue Service is finally issuing penalty letters to employers who failed to provide health coverage, in compliance with the employer shared responsibility provisions of the ACA, for the 2015 tax year. Some letters may describe a no coverage excise tax while others may assess an excise tax for failure to provide “adequate or affordable” coverage. The notices are catching many employers off guard because issuance of these letters was delayed several times.

Those who receive a letter describing the specific violation, could be liable for penalties ranging from $2,080 to $3,480 per affected employee, depending on the violation and the plan year involved. Regulatory experts recommend that employers refer to the data submitted on forms 1094-C and 1095-C and respond to the IRS on time, even if they don’t believe the tax is owed.

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4 Ways Social Media is Changing the Healthcare Industry

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This article was published on May 30, 2018 on Businessmole, written by Sam Allcock.

Social media and healthcare may not seem like two things that should go hand in hand. Social media is all about sharing information whereas the health sector is mostly about privacy. So, how is social media changing the healthcare industry?

Like most industries, healthcare is moving to be more digital. The main reason being that the general population is becoming increasingly more ‘plugged in’, therefore to reach prospective clients, those in healthcare need to move with the times and get online.

Social media isn’t just an outlet to share pictures of food, funny videos or stories of your day, but it in fact is a powerful communication tool that is shaping the success of many businesses.

Here are just a few ways in which social media is changing healthcare:

Improving the physician-patient relationship

Social media has provided the opportunity to develop relationships between patients and physicians. Instead of only being able to communicate with a patient for the 10 minutes given for an appointment, doctors are now able to share valuable health information on their social media platforms. This helps physicians further improve the lifestyle choices of their patients, through reinforcement of health studies, research and messages on this media patients will be exposed to health information on a daily basis.

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Social media also helps to expand the reach of information: there will be patients that only visit their local GP or hospital very occasionally, meaning their exposure to important health information is limited. Through the sharing of these messages on social media, members of the public that would otherwise miss these important notices are exposed to them.

Similarly, it helps develop trust between patient and consultant. By allowing the physician to share up to date health research and stories on their accounts, patients can be confident that their physician is ahead in their education and patient care. Not only does this build confidence with existing patients but is excellent for ‘word of mouth’ referrals. People are likely to share what the doctors are putting on their feeds, this will then be seen by a new circle of people and is likely to influence their healthcare decisions.

The example below shows an oncologist sharing news about a new cancer treatment, this then has been retweeted by three separate accounts. This news is relevant to the industry that Dr. Greg Wilson is in, making him appear to be up to date with developments in his field but also, by sharing it on Twitter, he has made that information available to other accounts who then have shared this information to their own following, further spreading the news and his name.

In a 2016 Forbes article, it was mentioned that “Social media will be THE place patients go to for information on doctors and hospitals and will be a major referral source for healthcare providers.”

Patients using social media to make a decision

In a similar way to people using social media reviews to choose a restaurant, more and more people are turning to social media before they make a decision about a healthcare provider. 41% of people say social media would affect their choice of a specific doctor, hospital or medical facility.

The image below shows three negative reviews of a GP surgery and outlines issues people have had with that particular facility. A new patient may look at these reviews and make the decision not to register with that particular doctors’ surgery.

People are able to research a healthcare provider before making a decision. By being able to read real life reviews they can ensure that they are making an informed choice when they choose a medical facility.

These reviews can also help to improve the quality of these services. If enough people are leaving feedback about any poor or unacceptable aspect of a business, changes are likely to be made to improve them.  Even if patients are not using social platforms to leave reviews, healthcare providers are able to distribute surveys or run polls via social media in order to obtain feedback on their services and then use this data to make changes to improve quality.

Raising Awareness

Social media is an effective platform to share information with the population and raise awareness about important subjects. Nothing is more important than health concerns. By creating shareable content healthcare providers are able to have their important subject spread wider, and faster, than if they used traditional media.

Social media can be used for targeted local campaigns. For example, every year the NHS call for vulnerable groups and those working within the healthcare sector to get their ‘flu jabs, you can usually see leaflets in the doctors surgeries and banners in local pharmacies. However, these marketing materials are easy to ignore when you are out and about. Social media targets the public when they are unlikely to be focusing on anything else.

South Tees Hospitals NHS Foundation Trust ran a campaign through October, 2016 called #Flutober. The campaign was aimed at the staff of these hospitals and involved a set of emotive pictures of vulnerable patients who would risk further harm by contracting ‘flu. This risk would be reduced by those working at the hospital getting the flu jab.

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As a result of the campaign 600 more staff, compared to the same period in the previous year, were vaccinated.

Due to a lack of funding and tight marketing budgets, marketers in this industry should ensure that healthcare call tracking software is applied to their campaigns as it will allow marketers to track which campaigns are bringing in the most leads and, as a result, they can determine which have been successful in raising awareness and which platforms have the most engagement. This can help marketers allocate budget effectively to achieve the greatest results with the budget provided.

Engaging with patients in real time

Social media has the benefit of being able to reach more people worldwide than most other media, according to numbers from Statista, the number of social media users worldwide is set to reach 2.62 billion in 2018. This reach is useful when there are global health crises as it provides a platform for sharing important information about epidemics. It also has the advantage of being a fastmoving media, there is no waiting for material to go to print or for footage to be edited, and it works in real-time.

An example of this in action was the Zika outbreak in Brazil in 2016. This virus is spread through mosquito bites and exposure to this virus while pregnant can produce life-altering birth defects. Due to the speed at which the disease was spreading in 2016, and being so close to the Rio Olympics, which were forecast to bring thousands of tourists to the country, it became a global issue. Using social media, healthcare providers, news outlets and charities were able to create content and spread important information about the virus, such as how to prevent it from spreading, how to avoid mosquito bites if you are traveling to the infected area, risks for vulnerable individuals such as pregnant women and symptoms to look out for.

The Centers for Disease Control and Prevention (CDC) won ’Social Media Campaign’ category of Ragan’s 2017 Health Care Marketing & PR Awards for their campaign during this health crisis. The campaign produced more than 6,800 messages to deliver information about prevention, updates on the outbreak and news of the CDC’s response. The videos were published 92 times across the CDC’s social media accounts and were viewed more than 680,000 times.

On a smaller, local level, GP surgeries and other medical facilities can update patients on waiting times, staff absences and closures in real-time through their social media pages, see the example below:

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Advice of this sort stops patients from making unnecessary trips only to discover they can’t see their preferred doctor or that the waiting time is over an hour; it also allows healthcare providers to keep patients informed even when they are out and about.

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How many times has your company changed its health plan in the last 5 years?

EBSO Benefits, an independently owned Third Party Administrator, helps employer groups self-fund their health benefits, thereby giving their clients an opportunity to reduce administrative costs, increase plan flexibility and expand the services they offer to their employees.

More importantly, EBSO is leading the way in a new phase of employee healthcare by helping employer groups take control of their healthcare plan. And taking control means more than self-funding. It means really managing the plan, doing some heavy lifting and shaking things up when what was commonplace is no longer working.

One example EBSO is proud to reference is that of a Midwest-based food processor that has not only stabilized costs for its 700+ employee group but seen the cost of its self-funded health plan drop by approximately 8 percent over the past 4 years. There’s no magic involved – taking ownership of the plan and managing it each and every day has made the difference. New steps have also been taken over time, like adding on-site clinics and contracting directly with high value providers for certain procedures.

While change came slowly at first, the pace quickened once everyone bought into the reality that the status quo was no longer acceptable.

As their TPA, we partnered with the employer to lead the way. Actively managing the plan and navigating care demonstrated to members that the days of simply pulling out an ID card and paying a co-pay were over.

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As shown, navigating care in a self-funded environment can achieve high quality, affordable healthcare over time. Employees value the many resources available to them, such as an online benefits portal, mobile apps and day-to-day support. They also learn to share in the responsibility.

If moving from carrier to carrier isn’t working out well for your company, it’s time you discovered the freedom, flexibility and control that self-funding with an independent TPA can offer. Contact EBSO and learn more today.

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Self-Funding Keeps Growing

With time running out on an opportunity for Congress to repeal and replace the Affordable Care Act and open enrollment season approaching, thousands of small and mid-sized businesses are likely bracing for another round of premium increases. A growing number of employers, however, will choose to avoid the uncertainty plaguing traditional group insurance markets by moving to a self-funded health plan – an option that provides an opportunity for savings and far more plan design flexibility.

Healthcare benefits continue to be perhaps the biggest obstacle facing small and mid-sized businesses. The Self Insurance Institute of America reports that between 2011 and 2016, the average annual deductible for employer-sponsored plans increased by 49% and the percentage of firms with fewer than 200 employees still providing health benefits fell from 68% in 2010 to 55% in 2016.

Self-funding on the other hand, has proven to be a far more responsible alternative for employers, enabling thousands to not only use their health benefit plan to attract and retain high quality employees, but to do so at an affordable cost. While self-funding has long been a staple for the nation’s largest employers, nearly a third of companies with 200 or more employees now offer at least one self-funded option.

Everyone Benefits from Flexibility

There are many reasons for the growth of self-funding, with flexibility and access to valuable claims data high on the list. Since self-funded plans are governed by ERISA, they avoid many of the costly mandates governing fully insured plans. To manage risk, stop loss coverage is obtained to cover claims that exceed anticipated levels. If claims are below anticipated levels, the plan retains the savings that would have been paid to an insurance carrier in the form of non-refundable premiums. Benefits can be customized to meet the unique needs of the group. When an independent TPA is engaged to administer the plan, claims data can be analyzed to identify chronic conditions and other key cost drivers. Services such as telemedicine and mobile transparency tools can be added to make physician access more convenient and more affordable. From plan design to data analysis, everyone benefits from the flexibility that a self-funded plan can provide. It’s the biggest reason why more small and mid-sized companies continue to move to self-funding with help from an independent TPA.

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Small Businesses Doing More

ebso-smallbusinessAccording to Deloitte Consulting LLP, small and medium sized employers with 100 or more workers are contributing considerably more towards the cost of employee and dependent healthcare benefits than legally required – about 73% of the total cost, on average. Regional differences also exist, with companies in the Northeast contributing more toward the cost of family coverage and companies on the West coast contributing more to individual coverage.

Even as healthcare costs continue to increase, consultants agree that employers of all sizes will continue to contribute significantly to healthcare benefits as the job market continues to tighten and retaining top talent remains a top priority.

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Healthcare Tech Sector Hot

ebso-mobile-marketing-blogMention healthcare startup and you probably think of Silicon Valley. Surprisingly, there’s plenty of healthcare technology happening in the Midwest, with Minnesota leading the way. According to Twin Cities magazine, 98 health technology startups raised more than $420 million in capital in 2016 alone, bringing the total to $2.75 billion since 2009. From mobile app developers to medical device manufacturers, more than 430,000 Minnesotans are employed by healthcare-related companies.

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