Wednesday, July 26, 2017

Senate Votes to Take up Obamacare Repeal House Bill for Debate

On July 25, 2017, members of the U.S. Senate voted 51-50 to open up the American Health Care Act (AHCA) for debate. Vice President Pence cast the deciding vote on this "Motion to Proceed". The AHCA is the bill to repeal and replace the Affordable Care Act (ACA) that passed in the House of Representatives on May 4, 2017. 

As a result of the vote, the Senate will now begin debate on the AHCA - a series of proposed amendments will undoubtedly be part of this process. One such amendment already failed yesterday evening with nine Republicans joining all Democrats in opposing the amendment.

See our legislative alert for an overview.

The Motion to Proceed is, in essence, just a vote to have a vote. There appear to be four possible outcomes:

1. The Senate passes the AHCA in the same form as passed by the House. In that case, the bill would go to the President for signature. This outcome seems unlikely at this point.

2. The Senate passes its own bill, either some form of the Better Care Reconciliation Act of 2017 (BCRA) or something entirely different. There have been recent talks of the Senate possibly passing a "skinny bill" which would only repeal the ACA employer mandate, the individual mandate and the medical device tax. If the Senate passes the BCRA or another bill, then that bill could go to the House. If the House passes the Senate bill in the same form as passed by the Senate then the bill would go to the President for signature.

3. The Senate passes a form of the BCRA or something entirely different. The House and Senate decide to send the AHCA and the Senate bill to a joint House/Senate conference committee where they would attempt to resolve any differences between the two bills. If they are successful, then the revised conference committee bill would need to go back to both the House and Senate for a vote before it could be signed by President Trump.

4. The Senate is unsuccessful in passing any type of bill. In that case, it would appear that any repeal of the ACA would, at the very least, be delayed. Remember, however, that "repeal and replace" has been pronounced dead on several prior occasions.

Before Your Hospital Hired This Staffing Firm, 6% of Patient Visits in the Emergency Room Were Billed at the Most Expensive Level of Care - Afterwards it's 28%

From the New York Times:
Early last year, executives at a small hospital an hour north of Spokane, Wash., started using a company called EmCare to staff and run their emergency room. The hospital had been struggling to find doctors to work in its E.R., and turning to EmCare was something hundreds of other hospitals across the country had done. 
That’s when the trouble began. 
Before EmCare, about 6 percent of patient visits in the hospital’s emergency room were billed for the most complex, expensive level of care. After EmCare arrived, nearly 28 percent got the highest-level billing code. ... 
Sometimes, insurers simply pay higher out-of-network bills, but the cost is often passed on directly to patients. ... 
Nationwide, more than one in five visits to an in-network emergency room results in an out-of-network doctor’s bill, previous studies found. But the new Yale research, released by the National Bureau of Economic Research, found those bills aren’t randomly sprinkled throughout the nation’s hospitals. They come mostly from a select group of E.R. doctors at particular hospitals. At about 15 percent of the hospitals, out-of-network rates were over 80 percent, the study found. Many of the emergency rooms in that fraction of hospitals were run by EmCare.
The researchers focused on 16 hospitals that EmCare entered between 2011 and 2015. In eight of those hospitals, out-of-network billing rose quickly and precipitously. (In the others, the out-of-network rate was already above 97 percent, and it did not go down.) They also looked at a larger sample of 194 hospitals where EmCare worked and found an average out-of-network billing rate of 62 percent, far higher than the national average. ...
Hospital emergency departments, which must take all comers regardless of their health insurance, were once viewed as financial drains. Then hospital leaders started to see the E.R. as the front door, critical to attracting paying patients. In the early 1990s, emergency departments accounted for a third of admissions to hospitals; today, they account for half, according to a RAND study. ...
In addition to its work in emergency rooms, EmCare has been buying up groups of anesthesiologists and radiologists. In these hospital specialties, it is hard for patients to shop, and out-of-network billing is common.
The good news in California and in a few other states is that this issue has been addressed, as the NYT article states, "California recently passed a law setting a maximum amount that out-of-network doctors can charge patients. Other states, including Florida and New York, have also passed laws to limit surprise bills."

Under that new California's new law which became effective on July 1, 2017, if you visit an in-network facility - such as a hospital, lab or imaging center - you will be responsible solely for your in-network share of the cost, even if you're seen by an out-of-network provider. You can read more about that law here.

Also note that the new California law only addressed non-emergency situations. That is because, by case law, California outlawed balance billing in emergency departments back in 2009, see the 2009, unanimous decision of Prospect Medical Group, Inc. v. Northridge Emergency Medical Group.

There the California Supreme Court declared "balance billing unlawful in the context of emergency medical care. Where a health plan ... does not pay, in whole or in part, the amount charged by emergency room doctors, the doctors now must resolve billing disputes solely with the health plans. The providers may seek dispute resolution, or even sue the health plans if they wish, but they may no longer bill patients with a health plan for the disputed amount." 

Tuesday, July 25, 2017

Government Efficiency: The U.S. spends $100 billion on this program, so Medicaid recipients can save $5.5 billion

From Megan McArdle writing at Bloomberg:
... When Obamacare was passing, its supporters were pretty clear about what the program was supposed to do: save thousands of lives every year, reduce health-care costs, lower premiums, and save thousands of families from the trauma, and stigma, of bankruptcy. 
Have mortality rates dropped? No, they rose. Are premiums lower? No. Have bankruptcies dropped? Yes, but only dubiously related to Obamacare. The only outcome for which we have really strong evidence is a modest reduction in the financial stress of illness. According to the CFPB [Consumer Financial Protection Bureau], we have reduced medical debt by about $5.5 billion, or roughly $10 per consumer. 
Now, that debt is not equally distributed, so some people got a substantial benefit and are breathing easier without having to worry about their medical bills. That’s a definite good, and we should all be glad to know that fewer people are waking up in the middle of the night, wondering where they’re going to be able to pay for their medical care. 
But we’re spending more than $100 billion a year on Obamacare. That is a lousy way to save people $5.5 billion in medical debt. It will be troubling if we continue to find good evidence of small effects like these, and less compelling evidence of the substantial benefits we were promised in return for all that money. 

Monday, July 24, 2017

ADA Guidance For Employers - 12 Month Leave Request Unreasonable, Even 2 Months May Be Unreasonable

... For example, the 1st Circuit cited a case in which a court ruled that an employee’s request for an extension of medical leave of 4 to 6 months was unreasonable. In another decision, the 7th Circuit suggested that even a 2-month medical leave may not be required by the ADA because the “inability to work for a multimonth period removes a person from the class protected by the ADA.” 
The 1st Circuit cited its “newest judicial superior,” U.S. Supreme Court Justice Neil Gorsuch, in a 10th Circuit opinion. In the case, Gorsuch captured the dilemma lengthy leave requests pose for employers:
By her own admission, [the employee] couldn’t work at any point or in any manner for a period spanning more than six months. It perhaps goes without saying that an employee who isn’t capable of working for so long isn’t an employee capable of performing a job’s essential functions—and that requiring an employer to keep a job open for so long doesn’t qualify as a reasonable accommodation. After all, reasonable accommodations—typically things like adding ramps and allowing more flexible working hours—are all about enabling employees to work, not to not work. 
. . . It’s difficult to conceive how an employee’s absence for six months—an absence in which she could not work from home, part-time, or in any way in any place—could be consistent with discharging the essential functions of most any job in the national economy today. Even if it were, it is difficult to conceive when requiring so much latitude from an employer might qualify as a reasonable accommodation.
The 1st Circuit agreed that complying with a request for a lengthy period of leave imposes obvious burdens on an employer, not the least of which is somehow covering the employee’s job responsibilities during her extended leave. In this case, Pam did not show that her requested accommodation was facially practicable, and therefore, dismissal of her failure-to-accommodate claim was appropriate. 
Significantly, the 1st Circuit decided that because Pam failed to shoulder her burden of identifying a reasonable accommodation, there was no need to consider whether a 12-month extension would have imposed an undue hardship on AstraZeneca. 
Some Relief for Employers 
The takeaway from this case is that an employer may not be required to grant an employee’s request for an extended, multimonth medical leave of absence under the ADA, particularly if there is evidence that the employee will not be medically able to return to work in the near future. 
Although there is not a black-and-white line, employees’ requests for extensions of leave of more than 4 months have been found to be unreasonable and may be denied based on case law. Each request for leave under the ADA must be analyzed based on the individual facts. In complex cases, the analysis ideally will include employment counsel. 
Also, it is important to remember that employees may be entitled to medical leave under other federal and state laws, including the federal Family and Medical Leave Act (FMLA).

Thursday, July 13, 2017

Senate Healthcare Revision: More Taxes & Government with a Couple of 'Get Out of Jail Free' Cards

Each of these revisions to revamp and revitalize most of Obamacare grow government more than the last while further curtailing individual freedom.

The Senate released its latest attempt to tweak Obamacare this morning.  It is 172 pages. Compared to the last Senate version, it is a mishmash of poor and decent policy mixed in with a few 'Cornhusker Kickback' styled giveaways designed to lure in some straggler Republicans.  You can view a side-by-side comparison of the two bills here.

It could forestall America's slide to single-payer healthcare for a couple of more years and prolong our partially-socialized hybrid provided politicians could stick to the reduced growth in Medicaid.  But, like the supposed 'Doc Fix' legislation that limped along for more than a decade, I strongly suspect politicians will fold years into the future when the politics of shrinking a government handout becomes difficult to sell to clamoring constituents.  Few politicians are actually known for their robust spinefullness.

As Senator Rand Paul has accurately put it, "too many Republicans are falling all over themselves to stuff hundreds of billions of taxpayers’ dollars into a bill that doesn’t repeal Obamacare and feeds Big Insurance a huge bailout."

Here are the changes to the Senate bill to appease the GOP's more liberal majority:
  • $45 billion more in federal giveaways to help treat the opioid addiction problem in America; 
  • An extension and reaffirmation of three more Obamacare taxes.  Recall that all earlier versions of this legislation kept the 'Cadillac Tax.'  Now under pressure from the left, the GOP has fully reneged on its pledge to repeal every ACA tax by adding three more politically sellable ones back in - 
    • a .9% surtax on Medicaid for individuals making more than $200,000 per year ($250K for couples); 
    • and an additional tax on insurance executive's compensation.
  • $70 billion more to states to temporarily Band-Aid the excessive cost of healthcare and try and blunt some of the adverse selection created by allowing the unhealthy to wait until they are sick before buying healthcare. This now brings this fund total up to $182 billion. This is the additional "bailout" feeding "Big Insurance" against which Senator Paul rails.  
These taxes, like any tax increases, suppress economic growth and opportunity throughout the economy.  Right now, Obamacare costs our economy about 250,000 jobs.

Here are the changes to the Senate bill designed to buy the vote of more conservative members:
  • Health Savings Accounts can be used to pay for health insurance premiums allowing more people to pay for healthcare with pre-tax dollars the same way businesses do.
  • Lower cost, slimmed down health insurance options could be offered and people could be eligible for tax credits to help pay for them so long as the carrier also offers a full, high-dollar, Obamacare plan as well. 
  • While the cuts to Medicaid will remain in place from the Senate's last version of this bill, new exceptions were created to funnel more taxpayer money from the federal government to the states in cases of a "public health crisis" whereby the declaration of a state of emergency would garner more funds. 
Would this bet better than Obamacare?  Yes in that it does eliminate the individual mandate, employer mandate and most of the taxes passed into law with the ACA.  However, it further cements Big Government's marriage to Big Insurance in America and will ultimately lead to increased premiums and fewer choices for the American people. This is not a solution but a temporary Band-Aid on a terminally ill system.  

Later in the day I visited The Michael Berry Show to discuss this proposal:

Monday, July 3, 2017

ERISA Compliance FAQs: Reporting and Disclosure Rules


When Dieting or Learning New Skills, 3-Weeks Does Not 'Cement' a Habit

From Forbes
...[S]everal weeks or even several months isn't long enough to really learn new behaviors, the piano, French, tennis, or how to communicate with your significant other. There just isn't enough time to test your skills. The question is can you maintain new behaviors over longer stretches that include bumps on the road such as holidays, changes in your job, relationship difficulties, illness, different seasons, or the death of Glenn in The Walking Dead television series. The question is when you stumble off the path...which will happen...will you and how quickly can you get back on to the path? 

Sunday, July 2, 2017

July 1 Law Change: California Now Offers Consumer Protections Against 'Balance Billing' Surprises on Fully-Insured Plans

From Kaiser Health News via Healthcare Finance:
California is among 21 states with consumer protections against balance billing, says Betsy Imholz, director of special projects for Consumers Union. But many states' protections are "quite limited," she says. 
"In some states, they only apply in emergency situations or for certain types of plans" such as HMOs, says Claire McAndrew, director of campaign strategy for Families USA, a national consumer advocacy group.
However, in a handful of states, including New York, Florida and now California, the laws are strong and comprehensive, McAndrew says. 
Under California's new law, if you visit an in-network facility -- such as a hospital, lab or imaging center -- you will be responsible only for your in-network share of the cost, even if you're seen by an out-of-network provider. 
The law applies to non-emergency services received on or after July 1. 
"This is a very big deal," says Tam Ma, legal and policy director for the advocacy group Health Access California. "We've heard from hundreds of consumers who were getting these surprise bills." 
A 2015 Consumers Union survey found that nearly 1 in 4 Californians who visited a hospital or had surgery in the previous two years were charged an out‐of‐network rate when they thought a provider was in‐network. 

Saturday, July 1, 2017

The Spurious “People Will Die” Claim Rests on Fallacious Reasoning

From Charles Blahous at Economics 21, the entire post is absolutely worth a read:
The claims are based on extolling a single effect of the ACA: increasing health insurance coverage, which is said to reduce mortality. Of course, the ACA didn’t magically produce its coverage increase out of thin air. To finance it, the law included several features that likely have countervailing effects on mortality. Below is a partial list of such effects, provided with the caveat that it would be just as silly to charge the ACA with killing people as it is to attribute deaths to its possible repeal:
  • The ACA imposed substantial taxes on medical devices and drugs, inhibiting their development and use. We do not know how many lives these products would otherwise have saved.
  • Most of the ACA’s coverage expansion occurred through Medicaid, which has a limited supply of providers and services. Those who gained Medicaid coverage via the ACA gained access to subsidized health services. But unless the number of providers, facilities and services accessible through Medicaid grew at least as fast as enrollment did, there has been a corresponding reduction in health service availability to people previously on Medicaid.
Full story.

And for a Saturday morning chuckle from Remy, enjoy, "PEOPLE WILL DIE!"


On Armstrong & Getty 6/28/17 as We "Sail the Churning Seas of Benefits" & U.S. Healthcare

We start at about the 11 minute mark below.

7 AM - 1 - Joe's trying to de-clutter. 2 - Craig Gottwals talks Trumpcare latest with us. 3 - The News with Marshall Phillips. 4 - John McEnroe said Serena would be #700 among men players.

In this segment, Jack and Joe really wanted to focus on what this means for the average patient.  The following story came out just after our our interview and I think is  a great addition to the discussion - this is the direction we would be headed under a more socialized system.
  • A new study released Thursday by the Fraser Institute estimates that 63,459 Canadians left the country for medical care last year. That's up about 40% from 2015.
  • According to Fraser Institute's yearly measurement of wait times, people waited an average of 10.6 weeks to see a specialist for treatment, which is four weeks longer than what physicians deemed reasonable.
Full story from the Ottawa Sun here.  

Friday, June 23, 2017

Comparing the Major Provisions of PPACA to the House and Senate Replacement Proposals with Audio from Armstrong & Getty

Overarching Thoughts

1) The Senate absolutely did not “start over” but simply made a few tweaks to the Obamacare Lite bill passed by the House. I’d call this Senate version Obamacare Lite Plus.

2) If you didn’t think the House bill went far enough to repeal Obamacare, you will really hate the Senate bill because, on the whole, it backtracks a few steps toward Obamacare.

3) If I were evaluating these bills based upon how they addressed the problems we faced in healthcare in 2010, I’d grade Obamacare an F, House Bill a D- and Senate Bill an F+.

4) If evaluating these bills today, knowing Obamacare is the law of the land I’d grade the House bill as a C+ and the Senate bill as a C.

  • Both the House and Senate bill repeal all but one Obamacare tax. 
  • Both the House and Senate bill eliminate the Individual and Employer mandates. 
  • Both bills allow for larger use of HSAs and FSAs. 
  • Both bills permit the states a bit more freedom in dealing with many of Obamacare’s coverage mandates. 
  • Both bills phase out the Medicaid expansion ushered in by Obamacare. The House bill does it sooner but the Senate bill does it in greater degree in the long run assuming politicians could stick to benefit reductions – but we know they cannot. 
  • All three plans cement a redistribution of wealth and new federal entitlement of $1.5 to $1.75 trillion dollars. 
  • None of the three laws significantly work to reduce the cost of healthcare in America in a meaningful enough way to avert future economic turmoil. 
  • The House or Senate bill probably prolong our slide into socialized medicine but only by a couple of years. At this pace the U.S. will end up in some form of rationed and socialized healthcare in 7 to 10 years.
I spent a few minutes on the Armstrong & Getty Show this morning discussing this:

House Bill
Senate Bill
10 Year Cost
$1.75 T
$1.63 T
$1.43 T

Uninsured After 10 Years
28 million people
51 million people (note that CMS scored it at 41 million)

50 million people
26 Year olds
Can stay on parents’ insurance irrespective of college enrollment or dependent status.

Taxpayer dollars to buy insurance
Individuals making less than 400% of FPL get money. This is about $100K of income for a family of 4. Not required to pay more than 9.5% of income for health ins.
Abandoned income based subsidies and allowed refundable tax credits based on age bands. Credits did phase out for higher income levels.

Hybrid approach for incomes up to 350% of FPL (about $86K for family of 4). Adults 59-64 could pay up to 16.2% of income. See Marginal Revolution for a good discussion on the issues around income-based subsidies.

Amount of taxpayer dollars to buy insurance

Subsidy amounts based on an ins. plan designed to cover 70% of medical expenses. 

Bases subsidy amounts on age as opposed to income or plan cost. Would be least dollars redistributed of the three plans. 

Subsidy amounts based on a plan that is designed to cover 58% of medical expenses.
Preexisting Conditions
Coverage cannot be denied or cost more.
States can get permission to let insurers charge more for some preexisting conditions. States would have access to federal money to help those with expensive policies or conditions.
Insurance companies would be required to accept all applicants regardless of health status and charge them the same premium just like in O’care. But the draft bill would let states ask permission to reduce some required coverages.

Tax Burden
Implemented 21 new taxes on business, individuals, and various industries. 
Eliminates 20 of the 21 new taxes, delays Cadillac Tax from 2020 to 2026
Eliminates 20 of the 21 new taxes, delays Cadillac Tax from 2020 to 2026

Obamacare expanded Medicaid from persons at 100% FPL to 138% FPL and promised the federal government will pay 90% of that expansion. 31 states took that deal. 
Would limit Medicaid reimbursement by a per-enrollee cost, based on 2016 average costs. And phase out the expansion in 2020. 
Allows the 31 states that expanded Medicaid to continue getting federal funding through 2023, with reduced funding starting in 2021. The bill sharply curtails federal support for Medicaid expansion in 2024, likely causing many states to end the expansion. Deeper proposed cuts could begin in 2025. 

Subsidies for Out of Pocket Costs
Provides subsidies to help people with lower incomes pay for out-of-pocket costs like deductibles and co-payments. Note, these subsidies are in legal doubt now under PPACA.

Eliminates these subsidies immediately. 
Preserves the subsidies through 2019, then eliminates them altogether. 
Prohibitions on annual
and lifetime limits
Bars insurers from setting a limit on how much they have to pay to cover someone.
Preserves this rule, but gives states the option to eliminate it as part of a waiver of insurance market rules.

Preserves this rule, but gives states the option to eliminate it as part of a waiver of insurance market rules.
Underwriting Premiums for Older vs. Younger Americans
Bans insurers selling policies directly to individuals from charging their oldest customers more than three times what they charge their youngest ones thereby unfairly burdening the young with higher premiums. 

Allows insurers to charge older customers the actuarially sound amount of five times as much as younger ones.
Allows insurers to charge older customers the actuarially sound amount of five times as much as younger ones.
Individual Mandate
Requires all Americans to buy health insurance or pay a tax penalty, with exceptions for 30+ categories of ‘hardship’

Eliminates the penalties. Instead, when people who've gone uninsured decide to buy health insurance, they'll have to pay a 30% surcharge on their premiums for one year.

Eliminates the penalties. Currently no provision to dissuade people from gaming the system. This must be corrected
Employer Mandate
Requires companies with 50 or more employees to offer government approved, affordable health insurance to persons working 30 or more hours per week. 

Eliminates all employer mandate penalties.
Eliminates all employer mandate penalties.
Health Savings Accounts
In 2017, allows an individual to put $3,400 and a family to put $6,750 into a tax-free health savings account.

Nearly doubles these limits to $6,650 for individuals and $13,300 for families.
Nearly doubles these limits to $6,650 for individuals and $13,300 for families.
Flexible Spending Accounts
Prevents Americans from using these pre-tax accounts for over-the-counter medications without also obtaining a prescription.  Caps overall use of an FSA to $2,500 per person per year. 

Allows over-the-counter use of FSAs without first obtaining a prescription. Removes annual cap on the amount of money a person may put in an FSA. 
Allow States to Impose Work Requirements for Able Bodied Persons Seeking Medicaid
PPACA did not allow for this. 
Gives states the option of requiring some Medicaid recipients to work or pursue job training.

Gives states the option of requiring some Medicaid recipients to work or pursue job training.

Thursday, June 22, 2017

CalPERS Premiums Only Set to Increase 2.33% in 2018

From CalPERS
The California Public Employees' Retirement System Board of Administration today approved health care rate and plan changes for 2018 that include an average 2.33 percent overall premium increase. Individual plan increases may vary, but the overall Medicare and Basic (non-Medicare) increase is the lowest in 20 years. ... 
Lower overall premiums were driven largely by an average decrease of 2.5 percent for Preferred Provider Organization (PPO) plans. Premiums for members enrolled in Health Maintenance Organization (HMO) plans increased an average of 3.71 percent, including an 8.2 percent increase for Kaiser. 
CalPERS Medicare plan enrollees will see premiums increase by 1 percent overall, with HMOs rising an average of 4.27 percent and PPOs averaging a decrease of 2.04 percent. 
The rates will take effect on January 1, 2018. ...