Archive for May 4th, 2010

Tuesday, May 4th, 2010

   MAY 2010      
      ISSUE 2   
    CLARIFYING REFORM’S IMPACT TO DENTAL BENEFITSSince the Patient Protection and Affordable Care Act was signed into law, those throughout the health care system, as well as the media, have been primarily focused on the near-term impact that reform will have on individual and group medical benefits. What hasn’t received as much coverage is how dental benefits will ultimately be impacted by the new reform law.

Although the impact of reform is not as great to dental as it is for medical, and there does not appear to be an immediate impact to dental coverage, it is important to note that the new reform law will indeed affect dental benefits.

There may be some confusion right now as to what provisions may or may not apply to dental benefits, so we’ve included a quick synopsis to help provide some clarity.

Which provisions do not impact dental?
Which provisions will impact dental?


For the most up-to-date information on reform, we encourage you to visit America’s Health Insurance Plans at or the National Association of Health Underwriters (NAHU) at


Justice Department Oks Study of California Hospital Costs

Tuesday, May 4th, 2010

The U.S. Department of Justice won’t stand in the way of a long-delayed project aimed at shining more light on California’s rising hospital costs.

That means CalPERS and some of the state’s largest health care purchasers can proceed with plans to launch an extensive study scrutinizing the cost of providing care at more than 300 hospitals statewide.

The California Hospital Association had attempted to block the project, saying it violated federal antitrust laws by potentially releasing proprietary data that could hinder competition within the health care industry.

On Monday, the Justice Department sided with CalPERS, the Pacific Business Group on Health and the California Health Care Coalition, the entities planning to underwrite the Hospital Value Initiative.

Brad Pacheco, a spokesman for the California Public Employees’ Retirement System, welcomed the Justice Department’s decision, saying it “reinforced the importance of transparency.”

CalPERS is the country’s second-largest buyer of health care services, spending more than $5.7 billion last year on health benefits for 1.3 million state and local government employees, retirees and their families.

Jan Emerson, a spokeswoman for the California Hospital Association, declined to be interviewed but said in an e-mail that the announcement by the Department of Justice “does not resolve the anti-competitive concerns California hospitals have about this initiative.”

Emerson said the project’s focus on cost was too narrow and said the quality of care should also be taken into account.

Because of the antitrust concerns, the initiative had been in limbo since 2007, pending government review.

In recent years, soaring hospital costs have been under scrutiny by CalPERS and the state’s largest companies.

In 2006, CalPERS joined the Pacific Business Group in commissioning a study that showed the wide variations in hospital costs across the state.

“The overall goal was to help consumers and purchasers understand which hospitals in California are affordable,” said David Lansky, the president and CEO of the Pacific Business Group.

The group includes some of the state’s largest employers, including Chevron, Safeway, Wells Fargo and Walt Disney Co.

Earlier this month, The Bee used the same methodology to produce a special report that showed private insurers paying substantial negotiated “markups” for hospital care – sometimes more than double what it costs hospitals to provide those services.

CalPERS and its partners plan to look at insurance claims data to figure what out it costs each hospital to provide a specific service. The resulting comparisons could be instructive for companies and consumers looking to rein in medical expenses, Lansky said.

“Purchasers need more transparency,” Lansky said. “They really have a right to know.”

In announcing its decision, the Department of Justice said the project “was not likely to produce anticompetitive effects,” as argued by the California Hospital Association.

In fact, improving public access to hospital pricing information could improve competition, the Justice Department said, by “facilitating more informed purchasing decisions by group purchasers of health care services.”

But the government said it reserved the right to challenge the proposal at a later time if it hinders competition.

In its decision, the Justice Department noted that the data included in the information exchange would be at least 10 months old and would not disclose specific pricing data.

© Copyright The Sacramento Bee. All rights reserved.

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Tuesday, May 4th, 2010
Mon, May 3, 2010 2:07:38 PM Say ‘No’ to Premium Limits

It’s time to act!
Changes to our industry are underway. The IHC Group has always been active on your behalf in Washington, D.C. Now we are asking for your help to ensure all of our voices are heard.
Please read Janet Trautwein’s letter below, and contact your congressmen today. Encourage them to say “no” to the Health Insurance Rate Authority Act of 2010, which will allow the federal government to establish limits on premium increases. This legislation coupled with the Patient Protection and Affordable Care Act’s minimum medical loss ratio discussed in The Flame last week, could impact the way you do business.

This is your opportunity to help shape the future of your industry, ensure your customers have access to professional agents that can help them navigate the health insurance system, and cement your role as a someone who provides a valuable service.
I strongly encourage you to take action today. If you have any questions or comments about this act or the minimum medical loss ratio, please call me. I look forward to seeing our fellow NAHU members at the 2010 Annual Convention and Exhibition in Chicago June 27–30.

Dave Keller
Senior Vice President of Sales and Marketing


Half Guilty Half Pregnant Olivarez Sentencing Postponed – Again

Tuesday, May 4th, 2010

Admitted felon and still active insurance agent Arnulfo C. Olivarez has had his sentencing postponed again.  Sentencing is now set for August 27 at 9:30 am in federal court, McAllen, Texas.

Olivarez plead guilty to paying bribes in exchange for lucrative insurance contracts at the Pharr San Juan Alamo Independent School District. Similar charges involving other polical subdivisions were dropped in lieu of Olivarez’s guilty plea.

Aaron Gonzalez, former member of the Edcouch Elsa Independent School District Board of Trustees, and former insurance agent, has had his sentencing re-set for July 23.

For more information on the Olivarez case, type in “Olivarez” in the search box on this blog.

Tuesday, May 4th, 2010
Tue, May 4, 2010 10:18:55 AM Goodbye Insurance

Actuary: Act Fast, Or Individual Health Insurers Will Flee 

Published 5/3/2010 

From: Jim
Subject: See this yet?

Health Reform Dates to Remember

Tuesday, May 4th, 2010


From: Manley, Madelyn []
Sent: Tuesday, May 04, 2010 10:14 AM
To: undisclosed-recipients:
Subject: Health Reform Dates to Remember

 As you know, the federal health care reform law is both lengthy and complicated. Our staff is working closely with industry leaders and officials to ensure that we have the very best information so that we can implement appropriate changes to our business practices and/or plans as required by the new laws.

 Complicating issues is the reality that the regulations, which provide the official definitional and legal guidance for compliance, are not yet completed. Over the next few months as the regulations are drafted, obligations for insurance companies, third party administrators, and employers will become clearer. Therefore, information provided by any source about health care reform obligations is provided with the caveat that health care reform remains a work in progress and will for many months. Internally, we have a task force working to ensure a smooth transition once the requirements are defined.

 We encourage you to stay informed through your industry associations and other appropriate sources.  Three websites with reliable information are:

Federal Government:


Kaiser Family Foundation:

 The following is a brief overview of known health care reform obligations compiled by Willis Legal & Research Group. Where applicable we will be providing compliance information on these requirements as their effective dates approach.  Not all requirements apply to all plans or all employers.

 MARCH 23, 2010

  • Date of enactment.  Plans in effect on this date are “grandfathered plans,” which get some exemptions from compliance.


  • Availability of reimbursement for large claims under early retiree coverage.

 SEPTEMBER 23, 2010

  • Group health plans – including, for most items, self-funded plans – start becoming subject to “insurance” reforms (see items listed for January 1, 2011) as of the dates their plan years begin.  THIS MAY BE EARLIER THAN JANUARY 1, 2011.

 JANUARY 1, 2011

  • Group health plans – including, for most items, self-funded plans – that are calendar year plans become subject to “insurance” reforms:
  • Lifetime dollar limits on essential benefits prohibited
  • Annual dollar limits on essential benefits prohibited (subject to exceptions defined by HHS).
  • Rescissions prohibited except in cases of fraud or intentional misrepresentation.
  • Preexisting condition exclusions prohibited for children under age 19.
  • Coverage for dependent children, “adult children,” must remain available until age 26 (i.e. through age 25) (until 2014, grandfathered plans may exclude children who are eligible for other employment-based coverage).
  • Benefits provided to children under age 27 (i.e. through age 26) are nontaxable regardless of dependent status.
  • Cost sharing on preventive care expenses prohibited (grandfathered plans exempt)
  • Insured plans become subject to nondiscrimination rules that currently apply only to self-funded plans (grandfathered plans exempt).
  • Access to emergency services must be provided without preauthorization and out-of-network services treated as in-network (grandfathered plans exempt)
  • Access to obstetrical and gynecological care must be provided (grandfathered plans exempt)
  • Internal and external appeals procedures must be implemented (grandfathered plans exempt).
  • Health insurers must report medical loss ratios to HHS and provide rebates to enrollees if medical loss ratio is less than 85% (80% for small groups).
  • Unless prescribed by a provider, over-the-counter medications are not qualifying medical expenses for purposes of health flexible spending accounts (FSAs), health reimbursement arrangements and health savings accounts (HSAs).
  • Employers with fewer than 25 employees may qualify for a tax credit if they provide health insurance.
  • Qualifying small employers may establish “simple cafeteria plans”.

MARCH 23, 2011

  • Deadline for HHS to establish standards for uniform explanations of coverage, a 4 page document.

 JANUARY 31, 2012

  • W-2s issued for 2011 earnings must report value of health coverage.

 MARCH 23, 2012

  • Deadline for group health plans to provide uniform explanations of coverage.
  • Group health plans must notify enrollees of material changes no less than 60 days before effective date.
  • Deadline for HHS to develop standards for annual reports to enrollees and HHS on plan benefits that improve health.

 SEPTEMBER 30, 2012

  • For policy years ending after this date, a fee of $1 times the average number of covered lives is required for both insured and self-funded coverage.

 SEPTEMBER 30, 2013

  • For policy years ending after this date, the fee noted at September 30, 2012 increases to $2 times the average number of covered lives.

 JANUARY 1, 2013

  • Annual salary reduction contributions to a health FSA may not exceed $2,500.
  • Subsidy for employers that provide certain retirees with coverage equivalent to Medicare Part D is no longer deductible 1.45% Medicare payroll tax increases to 2.35% on wages over $200,000 ($250,000 for joint return filers).

 JANUARY 1, 2014

  • Employers with 50 or more full-time employees may incur “free rider” penalties if they offer no coverage or coverage that is unaffordable or insufficient.
  • Employers must offer free choice vouchers to certain employees.
  • Individuals who do not have qualifying coverage must pay an excise tax (coverage under any grandfathered plan satisfies requirement).
  • Plans must report coverage information to enrollees and the IRS.
  • Group health plans – including, for most items, self-funded plans – become subject to additional “insurance” reforms when their 2014 plan year begins.
  • Preexisting condition exclusions prohibited for all enrollees.
  • All annual dollar limits on essential benefits prohibited.
  • Grandfathered plans lose the ability to deny coverage to employees’ children who are under age 26 based on eligibility for other employment based coverage.
  • Plans must cover routine patient costs for care in connection with clinical trials (grandfathered plans exempt).
  • Discrimination against providers prohibited as long as they act within the scope of their licenses (grandfathered plans exempt).
  • Out-of-pocket maximum can be no greater than that allowed for a high deductible health plan offered in connection with a health savings account (grandfathered Deductibles can be no greater than $2,000 for single coverage and $4,000 for family coverage (grandfathered plans exempt).
  • Wellness incentives up to 30% of individual COBRA rate permitted (federal agencies may allow additional increases up to 50%).
  • Employers with 200 or more full-time employees become subject to automatic enrollment requirements.
  • Employers become subject to notification requirements regarding insurance exchanges and subsidies.
  • State health insurance exchanges begin operation for individuals and small employers.
  • Employers that offer coverage through an exchange may permit pre-tax contributions through their cafeteria plans.

 JANUARY 1, 2016

  • State health insurance exchanges must be available for employers with up to 100 employees.

 JANUARY 1, 2017

  • States may allow employers of any size to access coverage through health insurance exchange.

 JANUARY 1, 2018

  • Excise tax applies to high-cost coverage.

 JANUARY 1, 2020

  • Fee noted at September 30, 2012 and September 30, 2013 sunsets. 

 Not every employer-related provision with an early effective date is listed here, nor does the list include any provisions that may indirectly affect employers through their effect on health care providers and the health care delivery system.

Tuesday, May 4th, 2010

The Top 5 Most Requested Modern Healthcare Articles


Researchers suggest EHR systems linked to higher costs

Final agreement ending Cincinnati alliance is signed

St. Vincent’s Hospital closes after 160 years

Lawmakers vow to monitor insurers

Policy committee member scrutinizes design of NHIN

A nationally regarded health information technology privacy and security expert had some self-described harsh words to say about the performance thus far of the federal government in designing a proposed national health information network that would protect patient privacy while permitting …

Two Democrats said they would use their posts on congressional oversight committees to ensure that insurance companies do not take shortcuts when they begin to comply with tighter industry restrictions and chided several insurers that they say already have. …

Despite surviving the Great Depression and severe outbreaks of cholera and AIDS, St. Vincent’s Hospital in Greenwich Village permanently closed its doors today after 160 years, shutting down the last Catholic hospital in New York City. …

The parties to the Health Alliance of Greater Cincinnati signed a final agreement that effectively puts an end to what once was a regionally dominant league of five healthcare organizations. The resolution follows a memorandum of understanding reached in March. …

Researchers from the business school at Arizona State University, Tempe, say their work suggests electronic health-record systems in hospitals increase hospital costs, nurse staffing levels and the incidence of complications, but lower mortality rates for some conditions, according to a published …

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Humana Exposes PBM Tactics

Tuesday, May 4th, 2010

Attend this Webinar to help your customers make informed decisions when choosing a PBM.
Humana - Complimentary Webinar
An Update on PBM Pricing Tactics from Humana Pharmacy Solutions
Last year, we took a close look at common pricing strategies PBMs use when they respond to your RFPs. Some of these strategies merely enhance the perceived value of the financial quote, while others siphon value from both members and plans.

Register Now

The goal of this update is to bring you important new information so you’ll understand our approach to business and our financial offer for you and your clients.

In this May 12 Webinar, Mark Morse, director of Pharmacy and Clinical Sales & Segment Support at Humana Pharmacy Solutions, will again guide you through:

  • Additional PBM pricing strategies.
  • Changes in Humana Pharmacy Solutions’ pricing approach.
  • Q&A and discussion on PBM strategies.
  • The latest updates for you and your clients.

Register Now

Can’t Make the Live Event?

Use this link to register now and after the event you will receive an e-mail with the complimentary presentation content.

View video



Wednesday, May 12, 2010


2 p.m. Eastern
11 a.m. Pacific


1 Hour

Featured Speaker:

Mark Morse
Pharmacy and Clinical Sales
& Segment Support
Humana Pharmacy Solutions


Derek Petrie
Commercial Marketing Manager

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