Boutin essential benefits

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  • FROM: BMS20060104_Quality Presentation_Revised_sm
  • Create a baseline benefit package Use FEHBP BCBS Standard Option as a foundation Exclude dental and vision benefits, even though these are covered under the BCBS Standard Option Price the baseline benefit package Calculate covered charges and estimated premium for selected benefit package Calculate actuarial value (AV) Adjust premiums and cost-sharing for all four levels of benefit packages established by the ACA Platinum (90% of covered charges are paid by the plan) Gold (80% of covered charges are paid by the plan) Silver (70% of covered charges are paid by the plan) Bronze (60% of covered charges are paid by the plan)
  • * The median percentage of a budget assigned to necessities was estimated by Gruber and Perry, April 2011. ** The ACA sets threshold levels for maximum premiums, above which people will receive subsidies. At 250% FPL, the maximum premium is 8.1% of income. *** The ACA sets reduced out-of-pocket maximums for people with limited income. A Rand study estimated total out-of-pocket spending related to kidney disease was nearly $9,000 in 2004.
  • * The median percentage of a budget assigned to necessities was estimated by Gruber and Perry, April 2011. ** The actuarial analysis estimated an annual premium of approximately $5,205 for a platinum plan. At this level of income, there is no premium subsidy. *** The ACA sets the standard OOP Maximum at $11,900. At this level of income, there is no subsidy for the OOP Maximum. A Rand study estimated total out-of-pocket spending related to rheumatoid arthritis was around $4,800 in 2004.
  • Boutin essential benefits

    1. 1. The National Health Council’s Essential Health Benefits Marc Boutin Executive Vice President & COO National Health Council
    2. 2. The mission of the National Health Council is to provide a united voice for people with chronic diseases and disabilities.
    3. 3. ACA: Minimum Essential Benefits <ul><li>The ACA creates 10 categories of essential benefits that plans must cover beginning in 2014: </li></ul><ul><li>The essential benefits requirements also places limits on patient costs </li></ul><ul><ul><li>Limits out-of-pocket costs to Health Savings Account (HSA) levels (in 2011, $5,950 for individuals) </li></ul></ul><ul><ul><li>Limits deductibles for small group plans to $2,000 for individuals and $4,000 for families </li></ul></ul><ul><li>Ambulatory patient services </li></ul><ul><li>Emergency services </li></ul><ul><li>Hospitalization </li></ul><ul><li>Mental health and substance abuse services </li></ul><ul><li>Rehabilitative and habilitative services and devices </li></ul><ul><li>Prescription drugs </li></ul><ul><li>Laboratory services </li></ul><ul><li>Preventive and wellness services and chronic disease management </li></ul><ul><li>Maternity and newborn care </li></ul><ul><li>Pediatric services </li></ul>
    4. 4. Essential Health Benefits – Value Statements Goal : Ensure that people with chronic conditions have access to affordable and high-quality services and treatments necessary for prevention, diagnosis and management of their health condition Domain Value Process Transparency <ul><li>Create processes for meaningful patient input at all stages of defining essential health benefits </li></ul><ul><li>Put safeguards in place to protect patients from discriminatory practices </li></ul><ul><li>Develop periodic evaluation processes to review the adequacy of the essential health benefits package </li></ul><ul><li>Define the interaction of federal essential health benefits with existing state mandates </li></ul>Criteria to Define “Essential” Benefits <ul><li>Ensure that access to essential health benefits by individual patients is not impeded by financial barriers </li></ul><ul><li>Promote flexibility to accommodate technological advances and evolving evidence </li></ul><ul><li>Include benefits from a variety of care settings and providers to meet all patient needs </li></ul>Recourse in Decision-making <ul><li>Permit the public to request reconsiderations of the essential health benefits package by the Secretary of HHS </li></ul><ul><li>Allow enrollees to challenge a health plan’s interpretation of essential health benefits and rationale for the inclusion or exclusion of individual services </li></ul>
    5. 5. Potential Approaches to Developing the Essential Health Benefits Package 1 2 3 <ul><li>Define benefits narrowly </li></ul><ul><li>Medicare Part B program </li></ul><ul><li>Define categories of benefits broadly and establish process-oriented requirements as a ‘check’ on plans </li></ul><ul><li>Medicare Part D program </li></ul><ul><li>Define categories of benefits broadly, granting plans the flexibility to develop coverage policies within each category </li></ul><ul><li>FEHBP plan </li></ul>
    6. 6. Essential Health Benefits Landscape <ul><li>Continue to endorse NHC’s values on EHB </li></ul><ul><li>Ensure that any limitations to DOL’s database are addressed </li></ul>IOM DOL HHS + State Exchanges Health Plans Informing Regulations Developing Regulations Implementing Regulations
    7. 7. Timeline for Engagements: Essential Health Benefits Proposed Rule Anticipated from HHS IOM Committee Meeting IOM Recommendations Expected DOL data expected in “Spring” Third and fourth IOM Committee meetings Develop essential health benefits package using FEHB plan as foundation in consultation with NHC members Develop ideal approach for HHS/State regulatory oversight Vet regulatory approaches with NHC members Share regulatory approach with HHS Commission actuarial analysis of the affordability of NHC’s essential health benefits package and discuss implications among membership Craft regulatory language that HHS could adopt and review with NHC membership Craft regulatory language March 2011 May July September November January 2012
    8. 8. Development of Policy Recommendations EHB White Paper <ul><ul><li>This report established baseline knowledge and considered the approaches HHS may take in defining the EHB package </li></ul></ul>EHB Cost Analysis <ul><ul><li>This analysis examined the cost of a comprehensive health benefits package, using the Federal Employees Health Benefits Package as a model </li></ul></ul>EHB Policy Recommendations <ul><ul><li>This report will articulate NHC’s recommendations and proposed solutions and will be shared with key policymakers and stakeholders </li></ul></ul>
    9. 9. Commissioned Actuarial Analysis <ul><li>Create a baseline benefit package </li></ul><ul><li>Use FEHBP BCBS Standard Option as a foundation (minus dental/vision benefits) </li></ul><ul><li>Price the baseline benefit package </li></ul><ul><li>Calculate actuarial value (AV) </li></ul><ul><ul><li>Platinum (90% of covered charges are paid by the plan) </li></ul></ul><ul><ul><li>Gold (80% of covered charges are paid by the plan) </li></ul></ul><ul><ul><li>Silver (70% of covered charges are paid by the plan) </li></ul></ul><ul><ul><li>Bronze (60% of covered charges are paid by the plan) </li></ul></ul>© National Health Council
    10. 10. Plan Premium Costs *The estimated premiums and the reduced OOP max for the platinum plan are actuarial estimates from ARC. Plan Estimated Annual Premium—Individual* OOP Maximums Total Cost BCBS Model $5,032 Platinum $5,205 $1,500 $6,705 Gold $4,627 $5,950 $10,577 Silver $4,048 $5,950 $9,998 Bronze $3,470 $5,950 $9,420
    11. 11. Room in Household Budget for Health Care? (c) Jonathan Gruber and Ian Perry, The Commonwealth Fund Reported Income (% poverty level) Necessities Necessities + Premium Necessities + Premium + Median OOP Cost Necessities + Premium + 90th Percentile OOP Cost <Poverty 17.30% 17.30% 17.30% 17.30% 101–150 7.50% 8.40% 8.50% 10.80% 151–200 3.70% 7.60% 9.00% 17.50% 201–250 3.00% 5.70% 8.80% 26.20% 251–300 1.10% 5.30% 6.90% 24.20% 301–350 0.70% 4.20% 5.30% 17.50% 351–400 1.20% 3.50% 3.90% 12.50% 401–450 0.50% 2.70% 3.70% 15.30% 451–500 0.40% 3.60% 4.70% 12.00% >500 0.20% 0.60% 0.60% 2.50%
    12. 12. At 250% FPL: Family of Four, One Person with Kidney Disease Actuarial analysis performed for NHC by Actuarial Research Corporation and Avalere Health Annual Income (Gross) $55,875 Median Necessities* (at 71%) – $39,671 $16,204 Maximum Premiums** – $4,500 $11,704 OOP Maximum*** – $5,950 $5,754 Per Month ÷ 12 ~ $480 Subtract the cost of taxes, child care, food, housing, transportation, and miscellaneous expenses of 10% Subtract ACA-defined maximum premium for family at 250% FPL (compared to ~$8,000 for a silver plan with no subsidy) Subtract reduced out-of-pocket maximum due to 250% FPL (compared to $11,900 with no subsidy) Divide by 12 for estimate of remaining funds in monthly budget
    13. 13. At 450% FPL: Individual with Rheumatoid Arthritis Actuarial analysis performed for NHC by Actuarial Research Corporation and Avalere Health Annual Income (Gross) $49,005 Median Necessities* (at 63%) – $30,873 $18,132 Platinum Premiums** – $5,205 $12,927 OOP Maximum*** – $5,950 $6,977 Per Month ÷ 12 ~ $580 Subtract cost of taxes, child care, food, housing, transportation, and miscellaneous expenses Subtract cost of premium for a platinum plan Subtract out-of-pocket maximum set by the ACA Divide by 12 for estimate of remaining funds in monthly budget
    14. 14. Regulatory Opportunities
    15. 15. Non-Discriminatory Utilization Management MODEL PROGRAM: The Medicare Part D Formulary Review process analyzes the use of practices such as prior authorization, step therapy, and quantity limits and compares practices to industry standards, guidelines, and other Part D plans. Recommendation HHS Regulatory Opportunity EHB regulation should provide for oversight of plan benefit design to avoid discrimination caused by unfair utilization management techniques <ul><li>Outline oversight mechanisms for states to use in reviewing plan utilization management policies </li></ul><ul><li>States should establish oversight mechanisms to review plan processes </li></ul><ul><li>HHS should continue to monitor state oversight programs to guarantee that plans are meeting federal requirements </li></ul>
    16. 16. Continuity of Care Protections MODEL PROGRAM: Medicare Part D Auto and Facilitated Enrollment processes ensure beneficiaries with limited income remain enrolled in Part D plans that have reduced costs. Recommendation HHS Regulatory Opportunity EHB regulation should include patient protections to ensure plan cooperation and coordination when people switch enrollment between plans <ul><li>Include protections for patients switching enrollment (among qualified health plans and to and from Medicaid) so patients do not have to re-establish the necessity of treatment protocols already in place </li></ul><ul><li>Require plans to provide written notice of the right to transfer treatment protocols </li></ul><ul><li>Require Navigator education programs to provide information about the potential implications of switching between plans </li></ul>
    17. 17. Cost-Sharing Protections MODEL PROGRAM: The Maryland Comprehensive Standard Health Benefit Plan* specifies cost-sharing requirements for certain services and includes some service limits to offer an extra level of patient protection for enrollees in these plans. Recommendation HHS Regulatory Opportunity EHB regulation should require plans to have non-discriminatory cost-sharing policies across benefit categories. Exchanges should allow creative benefit design to encourage plans to develop novel approaches to cost- sharing <ul><li>Require plans to disclose the deductible, co-payment, and co-insurance amounts applicable to covered services prior to enrollment </li></ul><ul><li>Prohibit specialty tiers </li></ul><ul><li>Offer protection from high out-of-pocket costs on prescription drugs and allow tiering exceptions </li></ul><ul><li>Create oversight mechanisms to ensure that states are reviewing plan benefit design to ensure cost-sharing is neither unfair nor discriminatory </li></ul>
    18. 18. State Navigator Programs MODEL PROGRAM: The State Health Insurance Assistance Programs (SHIPs) are an often cited example of what a Navigator program could resemble. SHIPs provide assistance to Medicare beneficiaries and help them with their Medicare benefits. Recommendation HHS Regulatory Opportunity EHB regulation should contain specific mechanisms to assist patients in identifying an appropriate plan and navigating enrollment and other key plan processes <ul><li>Include resources to educate enrollees about their plan rights and responsibilities </li></ul><ul><li>Prohibit educational materials and programs from steering or attempting to steer people into a plan or type of plan </li></ul><ul><li>Navigator programs should coordinate with other consumer assistance programs in the state </li></ul>
    19. 19. Care Coordination & Management Activities MODEL PROGRAM: Medicare Advantage coordinated care plans are required to have quality improvement and chronic care improvement programs as well as monitor and evaluate these activities and outcomes. Recommendation HHS Regulatory Opportunity EHB regulation should require proven effective care coordination and management activities to improve outcomes and reduce total healthcare costs <ul><li>Require care coordination activities as an essential health benefit </li></ul><ul><li>Create pathways for plans to develop innovative strategies to compensate providers for effective care coordination </li></ul><ul><li>Encourage state IT programs to include information about the care coordination policies of plans on state Exchange websites </li></ul>
    20. 20. Medical Necessity Decision Making & Appeals Processes MODEL PROGRAM: Medicare Part D offers an example of a federally regulated, nationwide program that has set requirements of participating plans for exceptions and appeals processes. Recommendation HHS Regulatory Opportunity EHB regulation should outline clear, understandable standards for plan medical necessity determinations and should include a process for appealing adverse plan determinations <ul><li>Require plans to use medical necessity criteria that are objective, clinically valid, and compatible with generally accepted principles of care </li></ul><ul><li>Plan denials based on lack of medical necessity should explain, in clear language, the criteria used to make the determination </li></ul><ul><li>Create uniform exceptions and appeals process for items and services that do not meet definition of medical necessity </li></ul><ul><li>Navigator programs should be available to guide patients through the complexities of plan appeal processes </li></ul>
    21. 21. State Exchange Requirements MODEL PROGRAM: The Massachusetts Health Connector’s Commonwealth Choice program offers a variety of plans with different benefit packages. The Health Connector reviews and approves each plan offered in Commonwealth Choice. Of the two operational health insurance exchanges (MA and UT), the program in Massachusetts provides more oversight and patient protections than the exchange in Utah. Recommendation HHS Regulatory Opportunity HHS Exchange regulation should include federal and state oversight to ensure that plans offered on state exchanges meet all appropriate and necessary criteria (including network adequacy standards) <ul><li>Require Exchanges to monitor and seek to improve quality of care </li></ul><ul><li>Plans may not exclude eligible individuals from coverage </li></ul><ul><li>Plans utilizing a provider network shall be required to demonstrate an adequate number of in-network providers in various specialties corresponding to the EHB categories of services </li></ul>
    22. 22. Alignment of IOM & NHC on Essential Health Benefits NHC Value IOM Report Alignment <ul><li>Bar Discrimination in Utilization Management </li></ul>Minimal alignment <ul><li>Ensure Continuity of Care </li></ul>Not Addressed <ul><li>Require Cost-Sharing Protections </li></ul>Not Addressed <ul><li>Provide Education and Coordination through Navigators </li></ul>Not Addressed <ul><li>Cover Care Coordination and Management Activities </li></ul>Not Addressed <ul><li>Include “Medical Necessity” Decision Making and Appeals Processes </li></ul>Moderate alignment <ul><li>Ensure Access to Essential Health Benefits through Exchanges </li></ul>Minimal alignment
    23. 23. Limitations of IOM’s Recommendations: Inclusion Criteria IOM Recommendation Limitation <ul><li>Of the four inclusion criteria for EHB, items and services must have demonstrated evidence that the item or service is: </li></ul><ul><ul><li>Likely to enhance patient outcomes when compared to available alternatives </li></ul></ul><ul><ul><li>Cost-effective to justify the health gain </li></ul></ul><ul><li>The data and research both on patient outcomes and cost-effectiveness are limited and conflicting </li></ul><ul><li>Much existing research is based on the population at-large and not on subpopulations </li></ul><ul><li>There is no consensus on application of these research methods to coverage criteria </li></ul>
    24. 24. Limitations of IOM’s Recommendations: Balancing Affordability and Coverage IOM Recommendation Limitation <ul><li>On the issue of balancing affordability with effective coverage, the IOM falls squarely on the side of affordability </li></ul><ul><li>With the balance shifting towards cost, more people, including those with complex chronic conditions, may have access to coverage </li></ul><ul><li>However, the coverage available may not be comprehensive or effective, in light of specific health care needs </li></ul>
    25. 25. National Health Council Resources EHB Policy Recommendations (2011): http://www.nationalhealthcouncil.org/NHC_Files/files/EHB_UnitedPatientVoice.pdf EHB Actuarial Analysis (2011): http://www.nationalhealthcouncil.org/NHC_Files/files/EHB_ActuarialAnalysis.pdf EHB White Paper (2010): http://www.nationalhealthcouncil.org/NHC_Files/files/EHB_WhitePaper.pdf
    26. 26. Marc Boutin Executive Vice President & COO National Health Council [email_address]

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