Preparing For PPACA Pt. 3

Last week, we began explaining the details of how the PPACA would be changing the way you do business. Regardless of what industry you are in, human resources compliance requires you to meet these specific healthcare regulations. We are summarizing some of the most complex issues, but you can read ADP’s entire report by clicking here.

Shared Responsibility Requirements

“Health Care Reform does not require you to provide healthcare coverage to full-time employees, but it will impose a potential penalty on those employers with at least 50 employees who fail to do so,” warns ADP. There are very specific requirements in place that employers can use to ensure that they are avoiding this issue.

The author suggests actively managing potential issues by integrating automated time and labor management tools, payroll services, and benefits administration. In this way you can manage assigned hours to reduce exposure to additional healthcare costs and/or federal penalties; help ensure that employees who should be eligible for coverage are actually made eligible in a timely and compliant fashion; and gain ready access to the data needed to track and reconcile with the government for those employees who choose to utilize a Public Exchange.

The PPACA has a broad reach, and could impact many aspects of your company. If you have any questions or concerns about the PPACA, feel free to contact us.

Next week, we’ll be examining some other aspects of healthcare reform, and exploring the plausibility of one of the most controversial Medicare changes.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Preparing For PPACA Pt. 2

If you think the PPACA doesn’t affect your business, because you aren’t in the health industry, it’s time to think again. Nearly every business, in nearly every industry, will fall under the jurisdiction of the PPACA in one way or another. Fortunately, it is not overly difficult to prepare for.

For most businesses, the PPACA will really only come into effect when dealing with human resources.

According to the Centers For Medicare and Medicaid Services, Office of the Actuary, healthcare costs now account for over 18 percent of the entire U.S. economy, and are expected to account for 20 percent by 2015. Therefore, it’s not surprising that Health Care Reform has dominated the employer-sponsored employee benefit plan landscape and will continue to have strategic and administrative impact for years to come — especially in the area of HR compliance.

This report, from ADP Research Institute, explores the complexities of HR Compliance in the PPACA. Below, we have summed up some of the major talking points from the report. For more detail, you can read all of ADP’s findings here.

Employee Benefits will Lose Flexibility

“Health Care Reform will require that you re-think employee benefits plan design due to both coverage mandates and the nondeductible excise tax on high-cost healthcare coverage,” begins ADP. “Although it seems like a long way off, beginning in 2018 healthcare benefit costs that exceed $10,200 for individual coverage or $27,500 for family coverage will be accessed an excise tax of 40 percent on the amount that exceeds this level.”

What does all that mean? Most employers will have no choice but to limit, or cut, healthcare options for their employees. Employer-sponsored plans will need to change from a model of options and flexibility, to one of control and consistency.

Public and Private Exchanges to Take Precedence

Three types of exchanges will become important to you as they come into effect by 2014. Again, ADP explains:

Limited Exchanges, which most employers offer today, are traditional employer-sponsored plans generally limited to three to six healthcare plan choices. Private Exchanges offer a variety of plan choices, aggregated by a provider or an outsourcer with employer input as to which ones are offered, and enable you to rapidly embrace a Defined Contribution strategy utilizing a qualified funding vehicle. Public Exchanges, required under Health Care Reform and offered at the state and federal levels, will vary by jurisdiction in terms of coverage, quality and participant experience.

 We'll continue next week, with a few more insights from ADP.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Hospitals Look to Private Insurers To Make Up Medicare Losses

Most people seem to agree that the Affordable Care Act has benefited the country’s consumers. For many hospitals, though, the ACA means even thinner profit margins. Even without the threat of fines from CMS, many hospitals are looking to unique solutions to the lost profits that the ACA represents.

“Maryland hospitals and regulators are discussing raising hospital prices for private insurers and businesses by hundreds of millions of dollars a year to make up for suggested cuts from Medicare and Medicaid,” begins this Kaiser Health article. “Once phased in, the plan would raise charges for commercial insurers and their customers by about $350 million a year and increase their price for a typical hospital admission by $900 — in addition to underlying health-care inflation.”

But Maryland’s plan isn’t that close to completion; it still requires a sign-off from HHS. The plan also has a fair amount of critics, who believe that such a maneuver would act as a tax on business. What makes Maryland so unique in a sector that is cutting costs in every other state?

The debate focuses on Maryland’s unique, decades-old system of setting all hospital rates for all payers.

The federal government lets the state control Medicare prices only as long as the program’s cost per admission rises no faster in Maryland than in the rest of the nation.

Now that the limit is close to being reached, Maryland policymakers are talking to the HHS and hospital and insurance industry leaders about sharply cutting rates for Medicare as well as those for Medicaid, which has been straining the state’s budget.

But instead of making hospitals absorb the reductions, those officials are talking about forcing commercial insurers, self-insured businesses and privately insured patients to make up the difference.

If approved, the plan will take effect in early 2013, so expect to hear more about this interesting policy before the close of the year.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.

Readmission Penalties Begin This Month

CMS announced an incentive-based initiative earlier this year, which would punish hospitals that fail to meet new quality-of-care guidelines. Hospitals that exceeded these guidelines would receive bonuses, while those that failed to meet guidelines would receive financial penalties.

Under the final rules announced Friday, Medicare will cut payments to hospitals 1 percent and set that money aside for a bonus pool. Hospitals that do better than average on a variety of measurements, or show the greatest improvement from the previous year, would earn bonus payments, totaling $850 million in the first year. The bonus pool would increase to 2 percent of Medicare payments in October 2016.

“In many ways, it’s a watershed moment for the health care system,” said Ashish Jha, a professor at the Harvard School of Public Health who has studied hospital quality. “It’s a modest amount of money and not something that’s going to radically change the way we pay for hospital care in America. But it’s a really important step toward paying for better care and not just for more care.”

Kaiser Health has written an article explaining the penalties in greater detail, and explaining who is most at risk.

The penalties, authorized by the 2010 health care law, are part of a multipronged effort by Medicare to use its financial muscle to force improvements in hospital quality. In a few months, hospitals also will be penalized or rewarded based on how well they adhere to basic standards of care and how patients rated their experiences. Overall, Medicare has decided to penalize 71 percent of the hospitals whose readmission rates it evaluated, the records show.

The penalties will fall heaviest on hospitals in New Jersey, New York, the District of Columbia, Arkansas, Kentucky, Mississippi, Illinois and Massachusetts, a Kaiser Health News analysis of the records shows.  Hospitals that treat the most low-income patients will be hit particularly hard.

A total of 307 hospitals nationally will lose the maximum amount allowed under the health care law: 1 percent of their base Medicare reimbursements. Several of those are top-ranked institutions, including Hackensack University Medical Center in New Jersey, North Shore University Hospital in Manhasset, N.Y. and Beth Israel Deaconess Medical Center in Boston, a teaching hospital of Harvard Medical School.

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Pam Argeris is a thought leader in the Healthcare Industry and possesses extensive, hands-on experience with CMS compliance, and multiple regulatory bodies such as NCQA, JACHO, and DOI. In her role at Merrill Corp., Pam focuses on developing solutions for compliance and quality assurance, delivered in a cost effective manner to improve beneficiary and prospect communications. You can contact Pam at Pamela.Argeris@merrillcorp.com.