Day: July 17, 2013

60%/9.5%/100%

emptyBy William Rusteberg

Under ObamaCare as it is now written and understood, if an employer with more than 50 employees wants to avoid all punishment, the 60%/9.5% Rule controls. The former addresses “minimum actuarial value” while the later addresses  the “affordability” mandate.

Minimum value simply means the health plan offered by the employer should actuarially cover 60% of health care costs. Experts say a plan with a $2,000 deductible, 80/20 and no co-pays qualifies. Other experts say a $3,000 deductible, 60/40 qualifies.  Take your pick.

Affordability, as defined by Congress, stipulates that an employer sponsored health plan is affordable if participants pay no more than 9.5% of their gross income towards the cost of coverage.

Some employers may adopt a “100% plan reimbursement strategy” in conjunction with  these two mandates by utilizing existing government reimbursement rates, i.e. Medicare. Medicare reimbursement rates  are significantly lower than rates through PPO contracts, which typically reimburse hospitals 300% of Medicare and more.

A Plan Sponsor may decide that paying 100% of Medicare is a lot less expensive than paying 300% of Medicare.

Despite punishing ACA mandates employers still retain some degree of control over their profit and losses. The glass is half full.

 

 

 

Blue Cross Cuts Ties With Mississippi Hospitals

JACKSON, Mississippi — Blue Cross and Blue Shield of Mississippi has told the state’s second-largest hospital owner that it will end its contract with the company’s 10 Mississippi hospitals at the end of August.

The insurer sent the notice of termination to the Health Management Associates hospitals statewide on June 25. That was a week after Florida-based HMA sued Blue Cross for $13 million, claiming the Flowood, Miss., insurer is breaking contract terms.

At the same time, Jackson’s University of Mississippi Medical Center and Blue Cross continue talks over payment rates, with the chance that the insurer will no longer contract for treatment at the state’s largest hospital.

If Blue Cross no longer has contracts, hospitals would be reimbursed at lower out-of-network rates, meaning individual patients could face much higher out-of-pocket costs.

— The Associated Press

Hospitals Sue Blue Cross Over Payments

Ten Mississippi hospitals, including several in metro Jackson, claim in a breach-of-contract lawsuit that Blue Cross Blue Shield of Mississippi shortchanged them by more than $13 million in improperly reduced inpatient payments for a range of medical services.

The suit, filed Tuesday in Hinds County Chancery Court, contends Blue Cross Blue Shield reduced its inpatient payments to the hospitals, each owned by Health Management Associates, by rewording certain sections of its policy manual to reflect those changes instead of negotiating any payment adjustments with the hospitals, which HMA said the insurer is obligated to do.

Local hospitals that are plaintiffs include Jackson’s Central Mississippi Medical Center, Crossgates River Oaks Hospital in Brandon, Madison River Oaks Medical Center in Canton, and River Oaks Hospital and Woman’s Hospital, both in Flowood. The lawsuit seeks to recover the amount it says the hospitals have been underpaid.

“It’s a contractual issue between the parties. They just made changes without notifying the hospitals. They made it unilaterally,” said Tom Kirkland, an attorney for the plaintiffs.

Blue Cross Blue Shield would not comment on the allegations.

The lawsuit says Blue Cross Blue Shield and the hospitals typically enter into contracts, which are regularly renewed, that govern the services the insurers provide, including the amount of money it pays each hospital for inpatient care.

Any changes to what is paid, the suit contends, is to be agreed to “by mutual written consent” of each party, and that any changes Blue Cross Blue Shield wants to make need to be addressed with each hospital “in writing at least 30 days before the proposed changes are to become effective.”

But after an impasse in 2011 between the hospitals and Blue Cross Blue Shield over payment rate increases, the insurer inserted new language into its policy manual reflecting the payment reductions, the suit claims. The underpayments, Kirkland says, apply to the treatment of “a large number of patients,” although he couldn’t provide a specific number.

“It is unfair for insurers like Blue Cross Blue Shield to not honor the amount they agreed to pay,” said Bill Williams, HMA’s division CEO for the hospitals, said in a news release announcing the lawsuit. “That may benefit the insurance company and its executives, but it harms our hospitals and the communities we serve.”

The other hospitals involved in the lawsuit are Biloxi Regional Medical Center, Gilmore Regional Medical Center in Amory, Natchez Community Hospital, Northwest Mississippi Regional Medical Center in Clarksdale and Tri-Lakes Medical Center in Batesville.


To contact Jeff Ayres, call (601) 961-7050. He is @jeffayres71 on Twitter.

Empire Blue Cross & Castlight Health Introduce Reference Based Benefits

NEW YORK--(BUSINESS WIRE)--July 10, 2013--

Empire BlueCross BlueShield and Castlight Health, a leader in health care transparency, is announcing a joint offering for employers called Reference Based Benefits. Innovative health care benefit designs are an important component of controlling costs while increasing access to quality care. The new offering combines Castlight’s consumer-focused health care transparency solution with Empire’s focus on customer service, broad provider networks and efficient administrative processes.

Continue reading Empire Blue Cross & Castlight Health Introduce Reference Based Benefits