Many of you may have already had visions of turkey and sweet potatoes floating in your mind, so you can certainly be forgiven if you missed a few eagerly awaited rules related to the Affordable Care Act that dropped before the holiday break. But I'm here to shake you out of that post-Thanksgiving food coma and serve up some leftovers following last week's news.
The Department of Health and Human Services on Nov. 20 issued three proposed rules spelling out how the implementation of the Affordable Care Act will unfold. Those included the much-anticipated essential health benefits of ACA-approved insurance plans, a rulerelated to insurance market conduct, and guidance for employer-based wellness plans.
Ellen Pryga, policy director for the American Hospital Association, said the rules aren't that different from what HHS spelled out about a year ago. A lot of leeway is left to states, she told me, to entice them to sign up for insurance exchanges.
"In reality, it's not that much different from all of the earlier guidance that they've issued," she said. "There's still some holes in what people are looking for, but it's consistent with their desire to leave as much flexibility for the states as they can, in the hope that more states will actually do exchanges. They've been worried about making sure that the plan requirements are not so heavy that they'll get enough plans that will offer the essential health benefits."
The ACA spells out that newer plans — not grandfathered into the act, in individual and small group markets, and in or out of insurance exchanges — must offer up an array of "essential health benefits" to consumers, in the form of both products and services. Those fall under 10 different categories, from emergency services to prescription drugs, pediatric services and hospitalization. The proposal keeps in place the previously outlined method of adhering to the essential health benefits by having a state choose from one of four "benchmark" approaches, or using the federal default. HHS also issued two guidance documents related to this, which can be found here and here.
You're probably still out of it from all the tryptophan, so I'll try not to bore you too much with the minutiae and skip to the "so what?" part. One of the most interesting tidbits for providers is that the rule clarifies that any patient costs for an out-of-network provider do not count towards the out-of-pocket cap, said Caroline Pearson, a director of consulting firm Avalere's health reform practice. She expects plans in the exchanges and individual market to be a lot more likely, then, to use tight provider networks than other markets. "This really kind of puts some teeth on those networks by forcing people to adhere to them, even after they've hit the out-of-pocket maximum," she said.
One concern on the part of providers that still doesn't appear to be addressed, Pearson said, is the worry that consumers in the exchanges may still have high co-insurance provisions in their plan, resulting in under-insured patients who have a hard time paying their shares of bills. "That's sort of an underlying issue, but nothing about the reg really changes any of that," Pearson said.
So how should hospitals react? Read up and respond. There's an open comment period on the proposed rules ending on Dec. 26. Beyond that, assess your service mix and whether it lines up with the essential health benefits, monitor your market and try to work with health plans so you're on the same page, said Jim Smith, a senior VP with the Camden Group, who previously worked on both the provider and payer sides. The ACA is going to demand a new level of transparency from insurance companies, and hospitals will likely need to defend their prices to payers.
"As a provider, you need to be prepared more and more to have your pricing and your value positioned well in the market," Smith said. "It's an extremely important time for not only the plans, but also the providers, to be able to have a value proposition that they're able to communicate to the members and patients that they're serving."
Beyond essential health benefits, the second proposed rule would prevent insurers from discriminating against current and future enrollees based on pre-existing or chronic conditions. Premiums, however, can vary related to age, tobacco use, family size and geography within limits. Meanwhile, the third rule implements and expands incentives for employer wellness programs, while also protecting individuals from unfair underwriting practices stemming from those programs.
It's a lot for hospitals to sort through, but the main point, said the AHA's Pryga, is that reimbursements are shrinking, and the old ways of treating patients are becoming relics.
"The bottom line is that money is getting tighter and constraints on utilization are getting tighter, and the need is to try and make sure that we're not providing services at the margin, or we're not providing services in a way that will just yield readmission. All of those things are becoming very strong imperatives," she said.