Projected Tax Revenues from "Cadillac Tax" Drop in New CBO Estimate

According to a new Congressional Budget Office report, revenues expected to be generated by the ACA's excise tax on high-cost employer-sponsored plans (the "Cadillac Tax") have dropped from $137 billion to $80 billion. Largely because of this drop-off in projected tax revenues, the estimated cost of implementing the law through 2023 rose by $40 billion to $1.36 trillion, the budget office said.

The law imposes the “Cadillac Tax" starting in 2018. Sixty-one percent of employers with 500 workers or more said in a 2011 survey that they expected to trigger the tax unless they took steps, according to Mercer Inc.

CBO analysts said in a May 14 blog post that the projection changed because of “new data on the health insurance premiums paid by employers. As a result, we now expect fewer employment-based plans to be subject to the excise tax.” Other potential reasons for the decrease include employers pressing hospitals and health systems for better rates, adding wellness programs, and raising deductibles and other cost-sharing on workers. A slowdown in U.S. medical costs overall since the recession that began in 2008 probably also contributed to the CBO’s forecast.

CMS Announces $1 Billion Health Care Innovation Awards Initiative

The Centers for Medicare & Medicaid Services (CMS) has released a Funding Opportunity Announcement for round two of the Health Care Innovation Awards. Under this announcement, CMS will spend up to $1 billion for awards and evaluation of projects from across the country that test new payment and service delivery models that will deliver better care and lower costs for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) enrollees.

The second round of the Health Care Innovation Awards will support public and private organizations in four defined areas that have a high likelihood of driving health care system transformation and delivering better outcomes. Specifically, in this second round, CMS is seeking proposals in the following categories:

• Models that are designed to rapidly reduce Medicare, Medicaid, and/or CHIP costs in outpatient and/or post-acute settings.
• Models that improve care for populations with specialized needs.
• Models that test approaches for specific types of providers to transform their financial and clinical models.
• Models that improve the health of populations – defined geographically (health of a community), clinically (health of those with specific diseases), or by socioeconomic class – through activities focused on engaging beneficiaries, prevention (for example, a diabetes prevention program or a hypertension prevention program), wellness, and comprehensive care that extend beyond the clinical service delivery setting.

In this round, CMS specifically seeks new payment models to support the service delivery models funded by this initiative. All applicants must submit, as part of their application, the design of a payment model that is consistent with the new service delivery model that they propose.

Interested parties of all types who have developed innovations that will drive significant improvement in population health, quality of care and total cost of care are welcome to apply. Eligible applicants include, but not limited to: provider groups, health systems, payers and other private sector organizations, faith-based organizations, states, local governments, public-private partnerships and for-profit organizations.

Key Dates and Deadlines
Letters of Intent to Apply: CMS will accept letters of intent beginning June 1 until June 28, 2013 3pm EDT.
Application: CMS will accept applications beginning June 14 until August 15, 2013 3pm EDT.

Visit the Innovation Center website for more details on how to apply for these awards! 

Oregon Insurers Rethink 2014 Exchange Premiums as State Posts First-Ever Rate Comparison

The new health insurance marketplace envisioned by federal health reforms doesn't formally kick in until fall. But it already is taking shape – and consumers for the first time can compare, premium by premium, identical plans by different insurers. According to The Oregonian, a comparison of proposed 2014 health premiums became public online this week, causing two insurers to request do-overs to lower their rates even before the state determines whether they're justified. The unusual development was sparked by a comparison that used to be impossible because plan benefits varied so widely. But under the federal reforms in the Affordable Care Act that take effect Jan. 1, health insurance is mandated and every insurer must offer certain standard plans, known as Essential Health Benefits. Oregon's state-based health insurance exchange - Cover Oregon - allows for much easier apples-to-apples comparisons among health insurance plans than exists currently in the individual insurance market.

Urban Institute Study on Impacts of Limiting Tax Exclusion for Employer-Sponsored Health Care

Capping the tax exemption for employer-sponsored health coverage would raise hundreds of billions of dollars over the next decade, according to new analysis by the Urban Institute. As the single largest tax expenditure, the employer-sponsored insurance exclusion massively reduces the tax revenues the government collects each year — by a total of $268 billion in 2011. Placing a cap on the exemption that allows the top 25 percent of the most expensive health benefits to be taxed would raise $264 billion for the federal government by 2023.

A cap on the exemption for employer-sponsored health care has started to come up for discussion frequently as Congress looks toward a broad tax reform in 2014. The cap analyzed by the Urban Institute would lead to a tax increase for 16 percent of people who file taxes in 2014 and 20 percent of people who file taxes in 2023.

New Gallup Poll: The Cost of Absenteeism Adds Up

Absenteeism costs employers $24.2 billion in lost productivity, according to a Gallup poll released on May 7. The polling organization counted unhealthy days by asking survey takers about how often poor health kept them from doing usual activities and going to work. Of the 14 types of occupations Gallup surveyed, 77 percent of workers were either above normal weight or had been diagnosed with at least one chronic condition. Transportation workers were the most likely to be overweight or have a chronic condition, while physicians were the least likely.

Gallup calculated unhealthy days using respondents' answers to the question, "During the past 30 days, for about how many days did poor health keep you from doing your usual activities?" and "How many actual work days in the last month did you not work due to poor health?" As employers increasingly engage in improving the health of their workers, substantial potential savings remain on the table from getting more employees to work each day as their health improves over time.

CMS Publishes Hospital-Specific Medicare Charge Data for 100 Common Procedures

CMS has released data showing that U.S. hospitals charge widely varying amounts for the same services, and also illustrating the significant variation in how much Medicare pays for those services. The database includes hospital charges for 100 most frequently billed discharges by the more than 3,000 hospitals reimbursed under the inpatient prospective payment system. The numbers reflect $66.7 billion in Medicare spending during fiscal 2011 and represent 7 million discharges.

Hospitals determine what they will charge for items and services provided to patients and these charges are the amount the hospital bills for an item or service. The Total Payment amount includes the MS-DRG amount, bill total per diem, beneficiary primary payer claim payment amount, beneficiary Part A coinsurance amount, beneficiary deductible amount, beneficiary blood deducible amount and DRG outlier amount.

One of the most concerning aspects of the data is the wide variation in what Medicare pays hospitals for treating the same conditions, which does not seem to be driven by the provider's status as a teaching hospital or higher capital costs of some facilities. CMS speculates that the reason for such disparity is the wide variations in the average morbidity of patients and local costs at different hospitals. Specifically, hospitals with sicker patients receive health status outlier payments and add-on payments based on the geographic location.

Labor Department Publishes Model Employer Exchange Notification Documents

On May 8, the U.S. Department of Labor published Technical Release 2013-02, which provides guidance for employers regarding the Affordable Care Act (ACA)-required notice to employees of their options under state and federally-facilitated health insurance exchanges.

ACA section 1513 amends the Fair Labor Standards Act (FLSA) to require that employers provide each employee with a written notice providing the employee with information about the exchange in their state and how to request assistance, describing the availability of a premium tax credit (if applicable) and outlining the implications for the employee if they choose to purchase a qualified health plan through an exchange. This requirement applies to ALL employers, regardless of size, and regardless of whether the shared responsibility requirements ("pay or play") apply. Any employer with one or more common law employees must provide this notice.

As employer advocates had hoped, model notices have been issued by DOL for use by employers:

• Model notice for employers that currently offer a health plan to some or all employees
• Model notice for employers that do not offer a health plan

The ACA effective date for distribution of these notices was March 1, 2013. The Technical Release states that employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge. The notice can be provided electronically or by first class mail. The Technical Release also describes how to comply with the requirement for individuals in COBRA continuation coverage.

Robert Wood Johnson Foundation and United Health Foundation Award $700,000 in Community Health Grants to National Business Coalition on Health Members

To reduce debilitating and expensive chronic diseases and unnecessary procedures, the Robert Wood Johnson Foundation (RWJF) and United Health Foundation (UHF) are awarding a total of $700,000 in community health grants to nine National Business Coalition on Health(NBCH) member coalitions. The awards will provide the coalition communities with resources to assess their key health challenges and plan or implement efforts to solve them.

Activities from the various coalitions across the United States include efforts to decrease obesity and tobacco-use rates, jumpstart healthy eating and living efforts, lower the prevalence of childhood obesity, and reduce elective pre-term births.

Five coalitions that recently completed a community health improvement planning process will receive $100,000 each to carry out their action plans. In addition, four coalitions will receive $50,000 each for their health planning efforts, capitalizing on the lessons learned through participation in previous NBCH-United Health Foundation programs.

The five coalitions awarded the $100,000 implementation grants are: Lancaster County Business Group on Health in Pennsylvania; Memphis Business Group on Health; Chicago-based Midwest Business Group on Health; St. Louis Area Business Health Coalition; and Savannah Business Group in Savannah, Ga. The four coalitions awarded the $50,000 planning grants are: Arizona Business Coalition on Health; Florida Health Care Coalition; Oregon Coalition of Health Care Purchasers; and Greater Philadelphia Business Coalition on Health.

Click here to read the full press release.

New Brookings Report on Person-Centered Care

A working group including former Senator Tom Daschle and former HHS Secretary Michael Leavitt was convened by the Brookings Institute and has published a new white paper on person-centeredness in health care reform. The report argues that person-centered health care is the best way to improve care and health while also bending the curve of health care cost growth. The report is focused on truly system-wide reform, including specific discussions on improvements to Medicare and Medicaid, and recommendations for the private sector to achieve more person-centered care. The report also recommends changes to the health care delivery system, including improved cost and quality transparency, and increased anti-trust enforcement.  The authors suggest that private employers can do more to support multi-payer financing reforms, including contributing consistent data to more comprehensive and effective ways to measure quality and continuing to innovate in reforms in benefit design to promote higher-value care.

CMS Releases Guidance on Role of Brokers and Agents in Exchanges

The Center for Consumer Information and Insurance Oversight (CCIIO) within CMS has released a new guidance document describing the roles agents and brokers can play in the new ACA-created health insurance exchanges. The guidance acknowledges that agents and brokers have an important role to play in helping consumers - both individuals and small businesses - understand the new exchanges.

Section I of this document provides a high-level overview of the role of agents and brokers, including web-brokers, in federally-facilitated exchanges and state partnership model exchanges. In section II, CMS addresses common questions raised by states and other stakeholders on the role of agents and brokers in all exchanges, including state-based exchanges. In section III, CMS addresses questions specific to web-brokers. The guidance document also contains a process flowchart to illustrate how agents and brokers will assist consumers through both the issuer-based and exchange pathways.

Agents and brokers intending to work with consumers in federally-facilitated and state partnership exchanges will be able to assist consumers in two ways: (a) an issuer-based pathway, through which an agent or broker uses an issuer’s website to assist the consumer; or (b) an exchange pathway, through which an agent or broker assists the consumer using the exchange website. In states where a federally-facilitated or partnership is operating, all agents and brokers must register with CMS and complete a training course. This online registration process administered by CMS will begin in the summer of 2013, prior to open enrollment. Agents and brokers working in states with state-based exchanges will still need to register with the state exchange and follow any processes and requirements of that state exchange.

CPR Urges Plans, Providers to Add Their Payment Reform Programs to Their National Compendium

A close collaborator of NBCH, Catalyst for Payment Reform (CPR) has launched a National Compendium on Payment Reform This is a brand new searchable and sortable website designed to catalogue payment reform efforts underway across the country. Those implementing payment reforms are encouraged to share a description of their efforts in the compendium, a resource for health care purchasers, payers, providers, policymakers, researchers, and journalists. Visit the website and register to upload information about your payment reform pilot or program.

CPR is offering one hour of free consulting to the first ten organizations that add their program! Add your entry today!

Treasury Publishes Proposed Rule on Minimum Value of Employer-Sponsored Plans

On April 30, Treasury published a Notice of Proposed Rulemaking on the requirements for minimum value of eligible employer-sponsored health plans. Under the ACA's Shared Responsibility provisions ("pay or play"), an employer-sponsored plan fails to offer minimum value if the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs. The ACA also provides that employees may be eligible for premium tax credits even if offered employment-based coverage (which could result in an employer’s liability for an assessable payment) if that coverage is “unaffordable.” Unaffordability is generally defined as costing an employee more than 9.5 percent of income.

The proposed regulations provide that plan sponsors may determine minimum value by using the Department of Health and Human Services’ “MV Calculator,” which can be found online at CCIIO's website (www.cciio.cms.gov). The use of this MV Calculator is essentially a safe harbor upon which plan sponsors can rely.

The proposed regulations provides guidance that addresses how wellness programs factor into an employer’s determination of whether its plan provides minimum value, and if it is affordable. Under the proposed rule, when determining a plan’s share of costs for minimum value purposes, any reduced cost-sharing that is available under a nondiscriminatory wellness program is generally disregarded, with one exception. For wellness programs designed to prevent tobacco use, a plan’s minimum value may be calculated assuming every eligible individual satisfies the terms of the program relating to prevention or reduction of tobacco use. Similarly, the proposed regulations provide that for purposes of determining affordability of employer coverage, employers must assume that each employee fails to satisfy the requirements of a wellness program, except that an employer may assume that employees satisfy the requirements of a qualifying tobacco cessation program.

The proposed regulation separately addresses how employer contributions to HRAs and HSAs are treated in determining minimum value and affordability. Specifically, all amounts contributed by an employer to an HSA are taken into account in determining the plan’s share of costs for purposes of minimum value and are treated as amounts available for first dollar coverage. The proposed rule states that former employees who may enroll in continuation coverage required under federal or state law, and individuals who may enroll in retiree coverage under an employer-sponsored plan, are eligible for minimum essential coverage under this coverage only for months that the individual is actually enrolled in the coverage. 

HHS Publishes Exchange Enrollment Applications

The Department of Health and Human Services has published the final enrollment forms that individuals and families will use when applying for coverage through the ACA health insurance exchanges.  Both applications are considerably shorter than the proposed versions.  The individual application is now only three pages long, and the family application is now seven pages long.  The applications are based on a "no wrong door" approach to enrollment, meaning that an applicant fills out one form, and the exchange assists that applicant in enrolling in the coverage most appropriate for his or her situation, including government programs such as Medicaid, CHIP, or veterans' and military benefits.

An appendix to the family application includes an Employer Coverage Tool, which is a one-page form that employees can take to their employers, and request that the employer fill out information regarding the coverage offered to employees.  Employers have assumed that they would need to interact with exchanges in some fashion, and the form confirms that employees themselves will be the link between employers and the exchanges in making eligibility determinations.  The Employer Coverage Tool also asks whether the employer plans to make any changes to its health insurance benefit offerings within the next year.

Survey: Employees Do Not Want More Control over Health Insurance Decisions

Fifty-four percent of U.S. workers prefer not to have more control over health insurance options because making such decisions is daunting, a survey says.  The third annual Aflac WorkForces Report -- an online survey of nearly 1,900 benefits decision-makers and more than 5,200 U.S. workers -- was conducted in January by Research Now and released by Aflac, a provider of supplemental and guaranteed-renewable insurance in the United States.

The survey found 62 percent of workers said medical costs they would be responsible for would increase, but only 23 percent were saving money for potential increases.  Seventy-five percent of workers said they think their employer would educate them about changes to their healthcare coverage as a result of the Affordable Care Act, but only 13 percent of employers said educating employees about healthcare reform was important to their organization.

Fifty-three percent said they feared their employers might not adequately manage their coverage, leaving their families less protected. Eighty-nine percent admitted they chose the same benefits year over year -- and many don't understand the options provided.

Even though educating employees is a low priority, helping workers learn how to manage their health care choices effectively presents an opportunity for employers to demonstrate they care about their employees, and to curb potential absenteeism, low morale, and low productivity.

Nominations for AHRQ Quality Indicators Workgroup

The Agency for Healthcare Research and Quality (AHRQ) is seeking nominations for both a time-limited workgroup and a standing workgroup to be convened by an AHRQ contractor. The workgroups shall be comprised of individuals with knowledge of the AHRQ Quality IndicatorsTM (QIs), their technical specifications, and associated methodological issues. The overarching goals of each group are to provide feedback to AHRQ regarding refinements to the QIs. The time-limited workgroup is more restricted to specific clinical or methodological issues, while the standing workgroup addresses broader issues related to the measurement cycle.

Because AHRQ did not get a set of candidates with anticipated breadth of diversity of experience as required in response to our notice published on January 28, 2013, AHRQ resubmits the same notice to give opportunity to those interested in this objective.

DATES: Please submit nominations on or before May 3, 2013. Self-nominations are welcome. Third-party nominations must indicate that the individual has been contacted and is willing to serve on the workgroup. Selected candidates will be contacted by AHRQ no later than May 17, 2013. Please include the workgroup of interest. Candidates may apply for both workgroups.