Insurers Rethink Pay and Pursue Strategy

“With about seven percent of all public and private health insurance claims paid incorrectly, insurers have a ways to go, beyond traditional models, if the healthcare spending crisis is to be reined in.

Private insurers historically were apt to raise premiums to cover rising healthcare inflation and, like Medicare, to “pay and chase” incorrect claims. But that may not be sustainable for much longer.

With provider upcoding and demand for healthcare services bound to continue … payment integrity is one area where insurers can start to make a large difference.”  Read more here.

Final Regulations for Basic Health Program Issued

The Centers for Medicare & Medicaid Services (CMS) published final regulations on March 12, 2014 to establish the Basic Health Program (BHP) under the Affordable Care Act.  These regulations include eligibility and enrollment requirements for standard health plan coverage offered through the BHP, minimum benefits covered by such plans and federal funding available to states participating in the BHP.  These regulations are effective on January 1, 2015.  CMS also published a final methodology to determine the federal payments states may receive should they elect to participate in the BHP in 2015.

HHS Releases 2015 Benefit and Payment Parameters

The Department of Health and Human Services (HHS) published on March 11, 2014 the final rule on benefit and payment parameters for 2015.  This rule includes oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs as well as cost-sharing parameters and cost-sharing reductions.

In this rule, HHS finalized its provision that any self-insured group health plan that does not use a third party administrator for claims processing, adjudication, or plan enrollment for the 2015 and 2016 benefit years is excluded from making reinsurance contributions.

Cost-sharing limits for calendar year 2015 will be increased from $6,350 to $6,600 for self-only coverage. The limits for all other coverage will be increased from $12,700 to $13,200 for 2015.

These regulations are effective on May 12, 2014.

90 Day Waiting Period Final Regulations

The U.S. Department of Labor (DOL), Treasury and Health and Human Services (HHS) jointly released final and proposed regulations on February 24, 2014 to implement the 90 day waiting period limit provision of the Affordable Care Act.

The final regulations state that a group health plan or group insurance issuer cannot impose a waiting period of more than 90 days from the date an individual becomes eligible for coverage.  Eligibility requirements which are based on number of hours worked are generally permitted as long as the maximum number of hours required is no more than 1200 hours in a 12 month period.

Enrollment may also be based on meeting other eligibility conditions such as being in an eligible job classification, attaining job-related licenses or completing an orientation period.  The departments issued a proposed rule limiting the maximum length of an orientation period to one month.

The final regulations are effective April 25, 2014.  The regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015.  For plan years that begin prior to that date, plans must comply with either the proposed rule or the final rule.