Transcript National Health Reform - Academy of Managed Care Pharmacy

An Overview of National
Health Reform
Presentation Developed for the
Academy of Managed Care Pharmacy
Updated: February 2015
Health Care Reform
• Comprehensive health reform, the Patient
Protection and Affordable Care Act (PPACA) ,
signed into law on March 23, 2010
• Significant industry-wide changes
– expanded health insurance coverage
– control rising costs
– improve health care delivery system
Marketplace Impacts
Reform Provisions
•Medicaid expansion
•Subsidies for individuals
•Insurance reforms
•Penalties for not having or not offering coverage
•Medicare fee-for-service payment changes
•Health insurance exchanges
•Funding (fees and taxes)
Potential Market Impacts
•Pressure on employer-group coverage
•Increased individual market
•Coverage and payer shifts: private and group
to government and consumer
•Downward pressure on payments to hospital
and physicians
•Price competition and benefit standardization
•Administrative complexity and compliance
risks
•Insurance price pressure and affordability
problems
Implementation Timeline (abbreviated)
•dependent coverage
to age 26
•no recissions
•no pre-existing
exclusion period < age
19
•no cost-sharing for
preventive services
•no lifetime limits;
restricted annual limits
•minimum loss ratio
reporting
•patient protections
Sept. 2010
•MLR rebates
•Medicare Advantage
•2011 payments
frozen
•limits on out of
pocket costs
•Part D: protected
classes
Jan. 2011
•eliminate deduction for
employer Part D retiree
drug subsidy
•Medicare payroll tax
increased for highwage employees and
new tax on unearned
income
•cap on salaryreduction contributions
to health FSAs
2013
Implementation Timeline (abbreviated)
•employer mandates
•individual health
coverage mandate
•health benefit
exchanges
•premium and costsharing subsidies
(low/middle income
individuals)
•required Medicaid
eligibility expansion
•additional consumer
protections and market
reforms
•a new provision will tie
physician payments to
the quality of care they
provide
•permits states to form
health care choice
compacts and allows
insurers to sell policies
in any state
participating in the
compact
2014
2015
2016
ACA Implementation Delays
In July of 2013, the Obama administration announced
the following delays in the implementation of ACA
1) The requirement that some employer health insurance
plans cap employee out of pocket cost
2) The requirement that small businesses offer either a
single plan or allow employees to choose among
different plans
3) The mandate that larger employers offer health
insurance was postponed until 2015
4) The limit on out of pocket costs, including deductibles
and co-payments, not to exceed $6,350 for an individual
and $12,700 for a family was postponed until 2015
ACA Market Place Opens
• On Oct 1, 2013, the ACA marketplace exchanges
officially opened in 14 state-operated and 36
federally operated sites.
• Significant computer glitches during exchanges
rollout resulted in poor enrollment overall despite
extended the enrollment deadline by 1 week.
• In response to consumer outrage over cancelled
existing individual policies which did not meet ACA
requirements, the administration announced that
insurers could continue to offer these existing plans
into 2014.
• The current infrastructure for exchange is effective
from 2014-2015, but in 2016 the system is open for
changes.
State and Federal Exchanges
Grandfathered Status
• Plans that existed prior to March 23, 2010
• Must meet criteria set forth by the Department of
Health and Human Services
• Under PPACA, grandfathered plans are exempt from
the following:
–
–
–
–
–
Emergency services
No cost-sharing for immunization and preventive care
OB/GYN for women’s access
Pediatrician as primary care physician
Coverage of newly eligible dependents with current
coverage under own employer-sponsored plan
– New appeal requirements
Key Near-Term Benefit Changes
Several changes are required to ensure plans are compliant with PPACA
regulations for new plan years beginning on or after September 23, 2010:
Lifetime limits
Prohibits lifetime dollar limits on essential benefits.
Annual limits
Restricts annual dollar limits on essential health benefits to
HHS-defined amount until 2014; prohibited in 2014.
Child pre – ex
Prohibits pre-existing condition waiting periods and exclusions
for members under age 19.
Dependent age
Requires allowing dependents to remain on coverage until age
26 if dependent coverage is offered under the plan.
Preventive care
Requires specified preventive care services and immunizations
set by USPSTF and others with no cost share.
Rescissions
Prohibited unless fraud or intentional misrepresentation.
Appeals
Requires plans to meet standards as stipulated by HHS
and National Association of Insurance Commissioners.
Benefit Limits
• Lifetime limits: no longer allowed for “essential
health benefits”
• Annual limits: restricted limits on “essential health
benefits” until 2014; prohibited in 2014
– three-year phase out
• $750,000 for plan years beginning (9/23/2010 –
9/22/2011)
• $1.25 million for plan years beginning (9/23/2010 –
9/22/2012)
• $2 million for plan years beginning (9/23/2012 –
12/31/2013)
Preventative Care
• Requires coverage of certain preventive care items or
services at $0 cost share
– vaccines currently recommended by the Advisory
Committee on Immunization Practices (ACIP)
– evidence-based preventive services
• Inclusion of preventive drugs in this mandate (e.g.
smoking cessation, aspirin, folic acid, iron, fluoride)
subject to interpretation. Further guidance may be
needed
• Grandfathered plans exempt
Medicaid
• Starting January 1, 2014, Medicaid eligibility
expanded to under age 65 with incomes up to
133% of the federal poverty level
• States will receive 100% federal funding for
the first three years to support this expanded
coverage, phasing to 90% federal funding in
subsequent years
Additional Changes
Exchanges
Part D Protected Classes
Part DFree Generic Fill
Part D –
Each state must establish an exchange by 1/1/14 to offer
qualified health plans to individuals and small employers.
Codifies current 6 classes and gives Secretary of HHS
flexibility to establish regulatory process for identifying classes
of clinical concern.
Beginning 2011 allows MA-PD and PDP plans to waive cost
sharing for first fill of generic medication.
Medicare subsidies reduced for higher income beneficiaries.
Premiums
Part D –
Eliminates business tax exclusion for subsidy payments. Assuming
Retiree Subsidy
a 35% tax rate it is estimated to be valued at $14-$21 PMPM.
Additional Changes (continued)
Part D
$250 rebate checks in 2010.
Coverage Gap
Fill in coverage gap through 2020.
Part D -
Codifies MTM portions of 2010 CMS Call Letter. Requires auto
enrollment, face-face/telehealth reviews, follow-up
interventions and quarterly assessments.
MTM
MA & PDP
Complaint System
Medicaid
Drug Rebates
Requires implementation of new complaint system and annual
reporting to Congress on complaints.
Medicaid drug rebate levels increased for brands to 23.1%
of AMP and generics to 13% of AMP.
Medicaid
Drug Rebates
Rebates extended to Medicaid Managed Care Plans.
Additional Changes (continued)
Medicaid
Removes coverage exclusion of smoking cessation drugs,
benzodiazepines and barbiturates in 2014.
Coverage
Health Insurance
Tax
PBM
Transparency
Imposes aggregate annual tax on insurers based on market
share beginning in 2014 (e.g.. $8 billion). Tax exempt insurers
consider only 50% of premium in calculating market share.
Requires PBMs providing services within exchanges or
Medicare Part D plans to report certain information to HHS and
health plans. Includes GDR, amount of drug rebates and
discounts passed to plan, aggregate amount plan pays to PBM
and the amount PBM pays to pharmacies.
…..and there is much more!!!
Flexible Spending Accounts
• Age for dependent coverage can be extended to any child
who has not reached age 27 by end of tax year
• Effective for tax years beginning after Dec. 31, 2012,
contributions for Health FSA capped at $2500
• Effective Jan. 1, 2011, prescription required for over-thecounter medicines or drugs
– exception: insulin
– prescription will need to be submitted, along with required receipts,
for reimbursement
– prescription not required for products that are not medicines or drugs
(e.g. bandages, contact lens solution, etc)
Enhanced Appeals Process
• Members entitled to an external review (when internal
appeals have been exhausted)
– plans must contract with at least three Independent Review
Organizations (IRO)
– claim assignments must be rotated
• Denial notices provided in culturally and linguistically
appropriate manner
• Requirements for denial language
– claim details
– diagnostic codes
• Coverage must continue pending outcome of appeal
• Shortened time limits (not later than 24 hours)
Employer Requirements
• Annual penalties assessed on those employers
that do not offer “minimum essential
benefits” coverage (up to $2000 per full-time
worker beginning in 2014)*
• Employers with 50 or fewer full-time
employees exempt from penalties
*if at least one full-time employee receives government-subsidized coverage through an
insurance exchange.
Individual Mandate
• Beginning in 2014, individuals will be required to
have health insurance
• Mandate spreads costs among whole population
• Starting 2016, annual penalty for those without
coverage: greater of $695 (up to $2085 per family)
or 2.5% of household income
– lower penalties apply during phase-in period in 2014 and
2015
• Exemptions for certain groups
Health Insurance Exchange or Marketplace
• State run clearinghouse to facilitate buying,
selling and administration of health coverage
• Beginning in 2014, individuals and small
employer (average of 100 or fewer
employees) may participate
• Beginning in 2017, large employers (> 101
employees) may participate
ACA Adoption in the Market Place
• ACCESS
– Historic decrease in uninsured (down 10 million in 2014)
– Medicaid expansion has resulted in 17% ↑ in membership
– Previously insured have more generous, preventive coverage
• CONSUMER AFFORDABILITY
– Premiums are holding stable for 8 in 10 consumers who got insured for
$100 or less after tax credits
– 87% of 2015 Open Enrollees got financial assistance to help lower
their premiums
• QUALITY –
– A Gallup study found that 7 or 10 who signed up in 2014 say quality is
excellent/good.
– Morbidity/Mortality due to hospital-aquired conditions are down 17%
since 2010 with an estimated $12Billion in savings.
– Hospital Readmission rates for Medicare patients were down between
2012 and 2013.
2015 Health Coverage Reported to IRS
As part of the health coverage mandate, 2015 marks the first year that tax filers are required to
report their 2014 Health Coverage by indicating one of three categories of coverage:
– Minimum Essential Coverage via Non-marketplace insurance for all of 2014 (nearly 75%
of Americans)
• Traditional Employer Sponsored coverage
• Medicare Part A or Part C
• Medicaid
• Children’s Health Insurance Program (CHIP)
• Under 26 years of age and covered on Parent Plan
– Marketplace covered individuals and families will fill out FORM 1095-A
• This form requires that the beneficiary consider whether your estimated income
was different from actual income as this can impact the tax credit received.
• If your income or household size changed over the year, tax credits may be
adjusted.
– Individuals NOT covered by any health insurance in 2014
• While those who can afford health coverage but chose not to buy it may have to
pay a fee, individuals who could not afford coverage or met other conditions can
receive an exemption.
• If you qualify, receiving an exemption is simple and easy, and means you won’t have
to pay a fee. Reasons for exemptions include coverage was too expensive (>8% of
your income), uninsured for a brief period of time, or financial hardship due to
extenuating circumstances as outlined by the IRS.
Future of Health Reform
• Impact of changes
– implementation challenges
– guidance and federal oversight needed
– policy and political changes
• Opportunities
– more coverage of the uninsured
– transform delivery and payment systems
– shift health care focus to prevention and primary
care
Resources
•
Kaiser Family Foundation: http://healthreform.kff.org/
•
DHHS consumer website: http://healthcare.gov/
•
Alliance for Health Reform: http://www.allhealth.org/
•
National Association of Insurance Commissioners: http://www.naic.org
•
National Governors Association: http://www.nga.org
adapted from KaiserEDU: Tutorial An Overview of Health Reform
Disclaimer
The information in this document is based on preliminary review
of the national health care reform legislation and is not intended
to be all-inclusive or impart legal advice. Interpretations of the
reform legislation vary and an effort has been made to present
accurate information. This overview is intended as an
educational tool only and does not replace a more rigorous
review of the law’s applicability to individual circumstances and
should not be relied upon as legal or compliance advice. Analysis
is ongoing and additional guidance is also anticipated from the
Department of Health and Human Services
Thank you to AMCP member
Anna Purdum for updating
this presentation for 2015