Health Reform Update


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What are the implications of healthcare reform for the various market players? What should you be thinking about in terms of implementation? What types of solutions and strategies are being implemented to address the requirements of the bill?

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Health Reform Update

  1. 1. What Now? An Update onHealthcare ReformColette Desmarais, Mehlman Vogel Castagnetti, Inc.Zahoor Elahi, FIS Health & Financial Network SolutionsKerry Leonard, FIS Consumer Driven Healthcare Solutions
  2. 2. Agenda• Colette Desmarais, Mehlman Vogel Castagnetti, Inc. – Recent developments – 2010 mid term elections – What now for healthcare reform? – Other issues shaping the political agenda• Kerry Leonard, FIS Consumer Driven Healthcare Solutions – What does all this mean for Consumer Directed Healthcare?• Zahoor Elahi, FIS Health & Financial Network Solutions – What is Administrative Simplification? (Section 1104) – What are the impliciations? – What is required for success? 2
  3. 3. What now? An Update on Health ReformFIS Web SeminarJanuary 25, 2011Colette Desmarais
  4. 4. The 2010 Mid-Term Elections: What Happened and What Issues Drove Voters?4
  5. 5. Republicans Make Large Congressional Gains, Earning House Majority Senate: 51-47-2 Democratic Majority GOP Gains: 6 (60 needed to pass most legislation) House: 242-193 Republican Majority GOP Gains: 63 (218 majority needed to pass legislation)5
  6. 6. Independent Voters Moved To GOP 28% of Overall Voters 62% 57% 51% 51% 49% 49% 43% 38%6Source: Greenberg Quinlan Rosner Research, Nov. 5, 2010
  7. 7. Health Reform Part of Election Narrative that Government Grew Too Big Under Democrats Role of Government •Does Too Much: 56% •Should Do More: 38%7Source: CNN Exit Polling Data
  8. 8. What Now for Health Reform?8
  9. 9. The Most Recent Numbers:Where Americans Stand Now On Health Reform
  10. 10. 32 Million Gain Coverage Under ReformMajor Role for States, Major Changes in Insurance Markets 282 million non-elderly population 25m 30m (9%) (11%) 51m (18%) 35m 162m (12%) (57%) 159m (56%) 23m (8%) 54m (19%) 24m (9%) 2010 2019 Medicaid & CHIP Nongroup & Other Employer Exchanges Uninsured Source: Congressional Budget Office (CBO), March 20, 201010
  11. 11. The Overall GOP Approach To Health Reform • Repeal • Replace • Oversight and Investigations • Congressional Review Act • Block funding through Appropriations • Surgical strikes11
  12. 12. GOP Targets and Policy Proposals • Some Specific ACA Targets – Individual mandate – Medicaid eligibility – Industry taxes and fees – Employer penalties – CLASS Act – 1099 small business tax relief – Medicare payment cuts – IPAB and PCORI – Account-based plan provisions • Some Specific Reforms – Medical liability reform – Insurance reform – Tax credits – HSA expansions – Purchase across state lines12 – Medicare SGR
  13. 13. Also Shaping the Agenda13
  14. 14. On Deficits, Health Spending In the Bulls Eye “Rising health costs will put tremendous “Federal health care spending represents our single pressure on the federal budget during the largest fiscal challenge over the long-run. As the next few decades and beyond. . . Putting baby boomers retire and overall health care costs the federal budget on a sustainable path continue to grow faster than the economy, federal would [… ] require a significant reduction in health spending threatens to balloon. Under its the growth of federal health spending extended-baseline scenario, CBO projects that relative to current law.” federal health care spending for Medicare, Medicaid, the Children’s Health Insurance Program Source: Presentation to the IOM by Douglas W. (CHIP), and the health insurance exchange Elmendorf, May 26, 2010 subsidies will grow from nearly 6 percent of GDP in 2010 to about 10 percent in 2035, and continue to grow thereafter.” Source: The Moment of Truth: Report of the National14 Commission on Fiscal Responsibility and Reform, December 2010
  15. 15. 2012 Elections• Finance Committee -- HALF IN CYCLE: ConradBingaman (Open) Stabenow Cantwell B. Nelson Menendez Carper Hatch Snowe Kyl Ensign
  16. 16. How Will Health Reform (as it currently stands)Impact Consumer Driven Healthcare? 16
  17. 17. PPACA – CDH Impacts2011• Over-the-counter (OTC) expenses for “medicines or drugs” are not eligible for reimbursement under an FSA, (HRA), or HSA without a doctor’s prescription• Excise tax for non-medical distributions from HSA increased from 10% to 20%2013• FSA contributions limited to $2,500 each year 17
  18. 18. PPACA – CDH Impacts2014• The FSA cap is indexed to the CPI going forward• Funds for states to establish a health insurance exchange through which individuals may purchase health• Individual Mandate• Employer Play or Pay Mandate 18
  19. 19. PPACA – CDH Impacts2018• 40% Cadillac Plan Tax for Months in which the aggregate value of employer sponsored health coverage for the employee exceeds 1/12 of $10,200 for single coverage and 1/12 of $27,500 for family coverage • Subject to the Excise Tax include: • The applicable premium for accident and health coverage provided by the employer • Contributions to a FSA • Employer contributions to an HSA • Certain coverage such as dental only are exempt Note: Some information provided by Alston+Bird 19
  20. 20. What is Administrative Simplification?(PPACA Section 1104)
  21. 21. What is Administrative Simplification? Administrative Simplification is the name tagged to Section 1104 of H.R. 3590, also referred to as the Patient Protection and Affordable Care Act. Some of the many goals of Administrative Simplification… • Reduce clerical burden • Increase electronic transaction adoption • Standardize operating rules for: − Eligibility (270/271) − Claims status (276/277) − Claims payment and remittance (835) − Enrollment and referral authorization • Ensure compliancy of standards 21
  22. 22. Is Simplification Necessary?
  23. 23. Inefficiency in Grand Proportion 23
  24. 24. What Are the Implications ofAdministrative Simplification?
  25. 25. Make Sure the Math Works Jan 2014 • ERA/EFT rules July 2012 effective; • ERA/EFT rules certification adopted required 6 months • Go live – full or pilot launch 6 months • Ongoing EFT provider adoption • Solution campaigns implementation • Launch EFT provider 3 months adoption • Vendor/solu campaigns tion decisioning • Contracting 25
  26. 26. Wide Spread Adoption Each of the transaction sets within Section 1104 have two basic deployment components: technical and provider adoption Using the EFT/ERA requirement as our example: Provider profile: What’s needed to obtain mass • 5 − 10 physician office provider EFT adoption? • PMS can’t auto post an 835 • Standard 835 usage across all • 4 − 6 payer relationships payers • 95 percent of claims submitted • An integrated EFT and ERA; electronically Communication reconcile to each other • 80 percent of payer payments + Trust • Multi payer EFT enrollment are paper + Realized Benefits • Secure hosting of banking • Not using a billing = Adoption information company/lockbox • Clear ACH debit and credit • Using a clearinghouse for authorization rules HIPAA transactions • “Straight through processing” of data into PMS 26
  27. 27. What is Required for Success?
  28. 28. A Roadmap Full of Mountains Provider Obstacles Payer Obstacles Rely heavily on third parties for patient The post adjudication workflow is built around collections, lockbox, administrative / financial paper. In house, EFT provider adoption efforts record keeping and clearinghouse(s) have largely failed Patients are confused – not sure when and Claims are processed on 1 to 4 legacy, what to pay adjudication platform(s). • Patient payments − average days outstanding Implementing HIPAA v 5010 ~ 90 days • Patient payments − bad debt $60B annually and growing Payer paper checks and remittances are “For profit” organizations are facing margin expensive to handle and process. ~ $10 per compression. MCR requirements payment package to post and reconcile Payer and patient payments are disjointed Not known for great provider relations ICD – 10 Commercial, fully insured membership is Meaningful Use requirements declining as more employers/members move PMS unable to auto post HIPAA ANSI X-12 835 to High Deductible Health Plans 28
  29. 29. A Path To Success – Get Involved• Administrative simplification makes good business sense – regardless of your political affiliation or position on PPACA – Appoint someone from your organization to get involved – Adopt and implement the new standards – Refuse to transact with paper – GO GREEN – Look for third-party solution vendors who are involved and guaranteeing their product(s) compliancy – Payers – work together with your providers – Providers – work together with your payers – Third Party Solution Vendors – bridge the gap between payers and providers RIS recently launched ProviderNet, an integrated print and electronic, post adjudication payment solution in anticipation of the growing market need and Healthcare Reform 29
  30. 30. Thank YouColette; 202-585-0258Zahoor; 972-323-3151Kerry; 781-250-6238