Friday, July 30, 2010

Agencies issue interim final regulations for internal appeal & external review of denied claims

On July 23rd, the Internal Revenue Service (IRS) and the Departments of Labor (DOL) and Health and Human Services (HHS) published interim final regulations regarding processes for internal claims and appeals, as well as external review processes, for insured and self-insured, non-grandfathered group health plans as required by the Patient Protection and Affordable Care Act (PPACA).

The regulations establish minimum standards for a new federal external review process that will be applicable to all ERISA-covered, self-insured group health plans. The rules also establish standards for a group health plan’s internal claim and appeal process, expand the types of decisions to which the appeal procedures apply and modify existing DOL claims procedure regulations.

For example, a response to an urgent care claim must now be made within 24 hours of receipt of the claim, instead of within 72 hours as permitted under the current DOL regulations on ERISA plan appeals.

We will provide further guidance and information on this provision once the proposed regulations are passed and as more comprehensive updates are available. For more information, click to access the Interim Final Regulations.

Tuesday, July 20, 2010

Interim final regulation released on preventive care coverage requirement

The Departments of Health and Human Services, Labor and Treasury released an interim final regulation on July 14th, which expands on the requirement for health plans to cover preventive care with no cost-sharing as set forth in the Patient Protection and Affordable Care Act (PPACA).

PPACA requires that all plans provide first-dollar coverage of specific preventive services beginning on the first day of the first plan year following September 23, 2010. This requirement applies to all individual and group health plans, including self-funded plans, with the exception of grandfathered plans as long as they retain their grandfathered status.

Preventive services that must be covered at 100% include:
• Recommendations of the United States Preventive Services Task Force (USPSTF) with a grade A or B (click to access the Complete List of USPSTF Grade A/B Recommendations)
• Recommendations of the Advisory Committee on Immunization Practices (ACIP) as adopted by the Director of the Centers for Disease Control and Preventive (CDC)
• Guidelines supported by the Health Resources and Services Administration (HRSA)

For links to the above recommendations, click to access Recommended Preventive Services Summary on

Not only do the rules outline which preventive services must be covered without cost-sharing, they also specify how cost-sharing will work under specific scenarios. For example:
• If a recommended preventive service is billed separately from an office visit, then cost-sharing may be applied to the office visit.
• If a recommended preventive service is not billed separately from an office visit and the primary purpose of the office visit is the delivery of such service, then cost-sharing requirements may not be imposed with respect to the office visit.
• If a preventive care screening or service results in a need for additional care or medication, cost-sharing can apply to the patient’s treatment.
• Out-of-network cost-sharing rules will apply to any recommended preventive services received from an out-of-network provider.
• If the federal recommendations do not specify the frequency, method, treatment or setting for the provision of a particular preventive service, the plan can determine reasonable coverage limitations.
• If a plan covers preventive services above and beyond the new federal requirements, the plan can impose cost-sharing requirements on those services.

Additionally, if a federal preventive care service recommendation changes, the plan is no longer required to provide first-dollar coverage on that service. For more information, click to access the Interim Final Preventive Regulations.

Thursday, July 15, 2010

Form 1099 tax change in health reform law exposed

An overlooked provision in the recently passed Patient Protection and Affordable Care Act (PPACA) is drawing attention due to its major financial and administrative implications for American businesses.

Scheduled to take effect January 1, 2012, Section 9006 of the law mandates that all companies issue 1099 tax forms to any individual or corporation from whom they buy more than $600 in goods and services in a tax year. Currently, the IRS Form 1099 is only used to document income for contract workers.

While the provision is seemingly unrelated to health care reform, it is intended to capture unreported income, which will generate more government revenue to help offset the cost of the health bill. The new requirement imposes a heavy administrative burden on businesses, expected to result in millions of additional forms being sent out each year.

The IRS has not commented on when it will release regulations on the new law or schedule public hearings. For more information, please view Health care law’s massive, hidden tax change from

Wednesday, July 14, 2010

BCBSNC implements changes to Member Health Partnerships program

Effective July 1, Blue Cross Blue Shield of North Carolina (BCBSNC) has made several changes to their Member Health Partnerships (MHP) program to better engage members with chronic conditions.

Changes will be made in the following areas:
Enrollment. BCBSNC is discontinuing paper survey enrollment. Members may now join by phone at 1-800-218-5295, then press 1, and will be able to also enroll online beginning in September.
Materials. All members invited to join the program will receive a Chronic Care Guide. While many of the educational books are no longer available, members can sign up to receive tips about weight management or tobacco cessation by e-mail or phone. There is also a text messaging feature for the pregnancy program.
Identification. BCBSNC’s outreach efforts will be focused on members at the higher risk level. Nurses will be calling members who are considered “most impactable” and inviting them to engage in health coaching and join the MHP program. Additionally, the pregnancy program will now be self-refer only.
Re-engagement. BCBSNC will continue to monitor all members’ claims and will outreach accordingly. Members who are considered “most impactable” will receive a phone call from a health coach, who will work with them regardless of whether or not they enroll in the MHP program. Members who are identified for the program but are not considered “most impactable” will receive a mailed invitation. Members who do enroll in the Member Health Partnerships program will receive an annual mailing.

Members who join MHP will continue to receive targeted information and services, which can help them manage their specific health care needs. Customized benefits, such as nutritional counseling visits and numerous discounts are also available to members. Current MHP program participants will be automatically enrolled in the updated program.

Tuesday, July 13, 2010

Implications of the CLASS Act, a national long term care program

The health reform legislation included provisions known as the Community Living Assistance Services and Supports (CLASS) Act, which establishes a government-sponsored long term care plan. This program is aimed at establishing a basic level of long term care coverage for working Americans.

Key points
• Employers can elect whether or not they offer this program to employees
• Premiums will be paid through payroll deductions except for self-employed individuals and employees who want coverage but their employers do not offer the plan
• Mandatory five-year vesting period before any benefits are paid
• Requires that participants are working for at least 36 of the 60-month vesting period
• Premiums expected to range from $100-$240/month, but may be lower for full-time students and low-income individuals
• Pays a modest benefit of roughly $50-75/day based on the level of Activities of Daily Living (ADL) loss or cognitive impairment
• Only available for working individuals; family coverage is not available

While the CLASS Act is effective on January 1, 2011, the Secretary of Health and Human Services (HHS) is not required to define the CLASS benefits until October 2012, with enrollment to follow. For more information, click to access the Kaiser Family Foundation CLASS Act Summary.

Monday, July 12, 2010

Clarification on new W-2 reporting required by health reform legislation

According to the Patient Protection and Affordable Care Act (PPACA), employers will be required to calculate and report the aggregate cost of employer-sponsored health benefits on employees’ Form W-2s for taxable years beginning after December 31, 2010.

Most W-2s for tax year 2011 will be issued in January 2012; however, the new Form W-2s must be available no later than February 1, 2011, in the event that a terminating employee requests one at an earlier date.

It is important to note that the aggregate cost of an employee’s health benefits will not be included in the employee’s taxable income. The W-2 reporting will be a way to track coverage values for the 40% excise tax on high-cost employer-based health plans (the so-called “Cadillac plan tax”), effective in 2018.

Employers only need to report the aggregate cost of benefits. They will not be required to provide a breakdown of the various types of coverage.

Benefits that must be reported include:
• Medical plans
• Prescription drug plans
• Dental and vision plans, unless they are “stand alone” plans (i.e., an employee may elect only dental or vision and is not required to also enroll in medical coverage)
• Executive physicals
• On-site clinics if they provide more than minimal care
• Medicare supplemental policies
• Employee assistance programs

Benefits exempt from reporting requirements:
• Long-term care, accident or disability income benefits
• Specific disease or illness policies
• Hospital indemnity policies in which the full premium is paid after-tax by the employee
• Archer MSA or HSA contributions of the employee or employee’s spouse
• Salary reduction contributions to a health FSA

For more information, click to access the W-2 Reporting Requirements Issue Brief from the National Association of Health Underwriters (NAHU).

Thursday, July 8, 2010

UHC expands Select Designated Pharmacy program to additional fully insured groups effective August 1

In an effort to better manage prescription drug costs and help members save money while providing affordable access to medications, UnitedHealthcare (UHC) is expanding their Select Designated Pharmacy program. As of August 1, 2010, the program will be implemented in CO, GA, ID, KS, MA*, MO, MS, NC*, SD, TN, TX* and VT (*2007 rider business only).

The program has not been expanded to fully insured customers in AR, CT, LA, MD, NY and NY. Additionally, customers with in-network only pharmacy coverage in AR, DE, GA, IA, ID, IN, MO, MS, MT, NC, ME, OK, RI, TN, TX, UT, VT, WV and WY will not be participating at this time.

About the program
The Select Designated Pharmacy program encourages members on select high cost Tier 3 medications to make lower cost medication and pharmacy decisions. It also requires members to use mail order pharmacy or switch to a lower cost medication for continuation of in-network benefits.

By switching to mail-order pharmacy, lower-tier medications, or both, members can save a significant amount of money. Since the program began, the average member savings is $25 per month, or $300 annually.

Select medications
The program targets 18 Tier 3 medications, representing just 1% of all retail prescriptions. Most medications in the program have multiple, lower-cost alternatives. Medications in the program may change as part of the semi-annual Prescription Drug List (PDL) schedule on January 1 and July 1. To view the current medication list as of May 1, 2010, click to access the UHC Select Designated Pharmacy Program Summary.

Member Outreach and Impact
Members taking affected drugs are allowed two prescription refills ('grace fills') at their retail pharmacy before they must select a new option to receive network coverage. After the first grace fill, members will receive a letter and a phone call explaining their options. During both grace fills, point-of-sale messaging at retail pharmacies will encourage pharmacists to engage with members about their coverage options. At any time, members can call member services to help facilitate this change.

Members on affected drugs who have non-network benefit coverage and choose to make no change will pay the full cost of the drug, and can file a paper claim for reimbursement as a non-network benefit. Effective August 1, 2010, in states where allowed, members who have in-network only pharmacy coverage and make no change will pay the full cost of the drug and cannot file a paper claim for reimbursement.

The Select Designated Pharmacy program is not available in all states or for all in-network only customers. For more information, please view the UHC Select Designated Pharmacy Program Summary.

Thursday, July 1, 2010

BCBSNC implements health reform provision ahead of schedule

As of July 1st, BCBSNC will remove the pre-existing condition waiting period for all group members under the age of 19 regardless of when they enrolled. This change applies to eligible services received on or after July 1, 2010. There is no rate impact due to this change.

BCBSNC will be mailing letters this week to approximately 2,200 impacted groups (those with members who will have their pre-existing waiting period removed) to inform them of the change. Groups are encouraged to share this information with their employees.