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.

Read more: http://www.sacbee.com/2010/04/28/2710563/justice-department-oks-study-of.html#ixzz0mzGAechj

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.

 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:       http://www.healthreform.gov/

Michigan:       http://www.michigan.gov/healthcarereform

Kaiser Family Foundation:   http://www.healthreform.kff.org

 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.

 WITHIN 90 DAYS

• 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.