California-based employee benefit professionals who want to learn more about private exchanges, the Affordable Care Act, and the importance of developing a competitive health plan strategy can join Lockton at one of three upcoming seminars in April.
Sessions are scheduled April 15, 16, and 17 in San Francisco, Los Angeles, and La Jolla, CA, respectively.
For more information, visit
Seminar on Changes in Benefit Management
Human Capital Media (HCM) Workforce Focus conference will take place at The Ritz-Carlton in Boston on Nov. 9, 2015. Designed by the editors of HCM’s industry leading publication, Workforce magazine, and the Human Capital Media Advisory Group, this event will explore how benefit management is shifting and how employers navigate these changes. For more information, visit http://www.workforcefocus.com. To inquire about becoming a speaker, contact event content manager, Ashley Wynne, at email@example.com. Any questions regarding sponsorship opportunities, contact director of business development, events, Kevin Fields at firstname.lastname@example.org or call 312-676-9900 x206.
Platform to Optimize Benefit Administration and Enrollment
Benefitfocus is offering BENEFITFOCUS Marketplace, an updated a private exchange platform. It now does the following:
- Compiles healthcare data from multiple sources and translates it into information that can help employers identify healthcare cost drivers and design plans.
- Synchronizes enrollment and billing information to streamline the monthly billing process, automate adjustments and increase accuracy of payments.
- Provides a personalized dashboard that makes it easier for consumers to find important information quickly. It also gives benefit administrators the ability to customize content and push HR notifications to users based on demographics, life-event changes and other factors.
- Allows employers to incorporate health assessments and reward programs into the benefit enrollment experience.
- Offers employers, insurance carriers and brokers a curated selection of voluntary insurance products, including: critical illness, hospital indemnity, accident, legal, permanent life, pet, auto, home and more.
- Offers 23 private exchanges for individuals, small employers, large employers, and retirees.
For more information, visit www.benefitfocus.com.
Medical Cards to Reward Clients ICE Medical Cards
Agents can now offer branded Medical cards as a reward to clients. The system includes a key tag and a Medical Card that fits conveniently in front of a driver’s license. Members create and update their information via a secure online portal. In the event of an accident or emergency, first responders can quickly access this portal with the information printed on the back of the card, provided there is Internet or mobile phone access. For more information, visit ICEMedicalCard.com.
Health Net Launches Palliative Care Programs
Health Net has launched palliative care programs in California and Oregon. They follow a successful palliative care program Health Net established in Arizona. Palliative care is specialized medical care for people with serious illness. It focuses on providing patients with relief from the symptoms, pain and stress of a serious illness, no matter the diagnosis. Palliative care providers work closely with a patient’s other providers, delivering treatment with disease-directed therapies. Marvin Gordon M.D., regional medical director for Health Net of California said, “We are encouraged by the outcomes we saw from our work with Arizona Palliative Home Care. Patients in this program experienced improved quality of life, fewer emergency room visits and fewer days in the hospital.”
Health Net’s California palliative care programs are in San Diego County, with Light Bridge Hospice and Rady Children’s Hospital; and in Orange County, with Care Choices Hospice and Palliative Care Services.
Onerous Conditions Force Prime Healthcare to Withdraw Purchase Offer for DCHS Hospitals
Unprecedented conditions imposed on the sale of the Daughters of Charity Health System (DCHS) hospitals by the state Attorney General would make it impossible for the hospitals to remain operational and have forced Prime Healthcare to withdraw its purchase offer. This was the largest hospital transaction ever reviewed by the California Attorney General’s office. Unfortunately, under intense political pressure, the Attorney General ignored national and state precedents and imposed the most extensive and overreaching conditions in history, according to Prime.
Troy Schell, General Counsel for Prime Healthcare said, “The sheer number of conditions – more than 300 – is unheard of in California or anywhere else in the United States. Maintaining all services for 10 years regardless of whether the services are needed or essential for the communities served is unprecedented and untenable. In essence, the Attorney General is telling Prime Healthcare to operate the hospitals exactly as DCHS has and expect different results.”
Prem Reddy, M.D., Founder and Chairman of Prime Healthcare said, “Prime Healthcare has been committed to saving the six struggling DCHS hospitals and securing their mission of care, just as we have done for 34 financially distressed hospitals across the country. Unfortunately, the conditions placed on the sale by the California Attorney General are so burdensome and restrictive that it would be impossible for Prime Healthcare or any buyer to make the changes needed to operate and save these hospitals.”
The six DCHS hospitals include Seton Medical Center in Daly City; Seton Coastside in Moss Beach; O’Connor Hospital in San Jose; Saint Louise Regional Hospital in Gilroy; St. Francis Medical Center in Lynwood; and St. Vincent Medical Center in Los Angeles. The hospitals have been losing over $150 million a year due to mounting labor costs and low medical reimbursement rates.
Prime Healthcare’s purchase agreement with DCHS was far and away the best offer for the hospitals, meeting every requirement set by the DCHS board of directors. It included a commitment to keep all the hospitals open a minimum of five years, fully fund the pensions of 17,000 current and former employees, maintain or increase charity care and invest over $150 million in capital improvements.
Prime Healthcare has a history of acquiring distressed hospitals nationwide – including five successfully completed acquisitions in the past three months — and restoring them to financial health while providing award-winning quality care. Prime Healthcare has been recognized as having the Top 100 Hospitals in the nation 33 times, and was ranked Top 15 Health System in the nation three times by Thomson Reuters/Truven Health Analytics.
Support for the sale of DCHS to Prime Healthcare was overwhelming across the state and included the DCHS board, hospital boards, physicians, patients, nurses, dozens of civic and health-care organizations and the Vatican. More than 50,000 signatures on petitions and letters were submitted to the Attorney General in favor of the sale to Prime Healthcare. For more information, visit www.primehealthcare.com.
Abacus Wealth Partners and Aspiriant Join Forces
Abacus Wealth Partners and Aspiriant have entered into a new joint venture, Align, which will offer philanthropic strategy and impact investment portfolios to clients and their financial advisors. Jennifer Kenning, former Director of Wealth Management and spearhead of impact investing at Aspiriant, has been tapped to lead the new venture.
Align will serve as an independent specialized impact advisor to families, individuals, and foundations to help them define their most important values and desired social outcomes, and increase the effectiveness and alignment of their philanthropic grants, impact investments, and mission related investments. For more information, visit www.abacuswealth.com.
Disability Fraud Cases
California Department of Insurance investigators arrested Mitchell Lee King, 53, for alleged healthcare disability fraud and charged him with 19 felony counts including grand theft, forgery, filing a false claim and providing a material misstatement. Investigators allege King received more than $20,000 not owed to him.
Over the course of four years, King filed disability claims with his insurer stating he was not working. King’s assertion was supported by forged physician’s statements and falsified statements from his employer authorizing his total disability. The investigation revealed King’s forgery and fraudulent claims. Based on the false documents provided, King received more than $20,000 from his insurer, which he allegedly used to pay off his vehicle loan.
King was booked into the Los Angeles County Inmate Reception Center with bail set at $290,000. If convicted on all counts, King faces a maximum of 16 years in state prison. This case is being prosecuted by the Los Angeles District Attorney’s office.
In a separate case, Yolanda Gladney, 56, was arrested and charged with 18 felony counts for disability fraud including presenting fraudulent claims for the payment of an injury, grand theft and falsifying records. An investigation by the California Department of Insurance alleges that Gladney filed multiple disability claims in 2013, totaling more than $5,000, by forging the signature of a former physician on various disability claim forms. She had not been seen by the provider since 2012.Gladney was an AFLAC Insurance policyholder and filed four disability claims in 2013. She received $3,080 in benefits from two of the claims before the claims specialist noticed several red flags on the physician’s form. Had all of the claims been processed, Gladney would have received over $5,000 in benefits she was not entitled. Gladney was booked into Century Sheriff’s Station on February 12 and is facing a lengthy prison sentence if convicted on all felony counts. Her bail is set at $300,000.
Sutter Health Plus Expands to Sonoma County Community
Sutter Health Plus, an HMO health plan that serves the greater Sacramento and Central Valley areas, will now offer its competitively priced products in the Sonoma County community. The announcement comes after receiving final approval from the Department of Managed Health Care. In January 2014, the not-for-profit Sutter Health network launched its own health plan as a way to partner directly with patients to manage their total health needs, including quality and cost of care.
Steve Nolte, CEO of Sutter Health Plus said, “Brokers and employer groups in our current service area tell us that we’re an attractive option based on price and access to Sutter Health doctors and care centers.” The plan’s current client list includes large employers such as the City of Sacramento and County of Sacramento as well as small employer groups that diligently manage every penny paid toward employee benefits.
In Sonoma County, Sutter Health Plus’ network includes the new $284 million state-of-the-art Sutter Santa Rosa Regional Hospital; Sutter Pacific Medical Foundation with care centers in Santa Rosa, Rohnert Park, Sebastopol and Healdsburg; Sutter Medical Group of the Redwoods; and Novato Community Hospital in Marin County.
Employers Expect Changes to Employee Health Benefits
Eighty-four percent of employers expect to make changes to their full-time employee health benefit programs over the next three years, despite cost increases remaining at historically low levels, according to new research from Towers Watson. In addition to aggressive cost management, employers are evaluating the implications of the changing provider landscape, embracing new ways to deliver care through innovative network arrangements, focusing on increasing employee engagement and exploring new options for delivering benefits. This includes assessment of active employee private exchanges and a rapid migration of Medicare retirees to private exchanges.
Employers are using and actively considering various options to manage cost, change employee behaviors and optimize program performance.
Employers project health care costs to increase 4% in 2015 after plan changes, compared to the 4.5% employers predicted for 2014. Without plan changes, projections are for an increase of 5.2%. These modest increases are still more than double the rate of inflation and are a primary factor driving employers’ affordability concerns as the 2018 excise tax in the Affordable Care Act approaches. Two in five employers that have done extensive modeling of their plans say they will trigger the excise tax in 2018. Two-thirds say the tax will have an impact on their health program strategies.
Randall Abbott, a senior consulting leader at Towers Watson said, “Employers have strived to keep their cost increases at the market average, but increasingly, this just isn’t enough. The new focus is on reducing cost trends to the CPI or below. This means driving cost growth to roughly 2% or less, which requires an acute focus on all aspects of health plan performance. In addition to solving the rate of cost trend, employers must pay attention to the base cost. We are seeing a wide variation across and within industries even after adjusting for unique group characteristics. High-performance health care has become the new mantra emphasizing not just reducing costs but improving workforce health, better engaging employees and leveraging new health technologies.”
Among the actions gaining traction are changes to benefits for spouses and dependents. For example, the percentage of employers using spousal surcharges (when coverage is available elsewhere) is expected to nearly double, from 32% now to 61% in three years. Fifty-three percent of respondents plan to significantly reduce subsidies for spouses and dependents by 2018. In addition, 41% say they may adopt a defined contribution arrangement (capping employer contributions at a flat dollar amount) by 2018.
Employers reported greater resolve to improve health outcomes per dollar spent, with two-thirds planning to use data extensively to evaluate plan performance and employee behavior changes in lifestyle and health management. In addition, the use of centers of excellence (within health plans or via a separate network) and narrow networks are expected to triple over the next three years. The use of telemedicine services in place of in-person physician visits, when appropriate, will continue to be rapidly adopted, already expanding by 35% in 2015 over 2014. Over 80% of employers say they could be offering telemedicine services by 2018.
Over the next few years, more than 80% of employers will carefully evaluate specialty pharmacy programs and benefits embedded in their medical plans. Sixty-one percent of employers report including coverage and utilization restrictions in their specialty pharmacy strategy.
Employers recognize the business value of a healthy workforce and are encouraging employees to take control of their health. Two of the top five areas employers say will be the focus of their health care activities in 2016 link to employee engagement and accountability: developing or enhancing a workplace culture where employees are responsible for their health (66%), and adopting or expanding the use of financial incentives to encourage healthy behaviors (51%).
The following are the most popular tactics for boosting employee engagement in health care:
- 48% will place more emphasis on educating employees about how to select providers based on quality and cost information over the next two years. In 2016, 43% of employers will provide price and quality transparency tools to help employees make better consumer choices.
- 60% of employers deliver health and wellness messages through mobile apps and portals. That percentage will increase to 95% by 2018.
- 17% of employers offer full-replacement high-deductible plans tied to tax-advantaged health savings accounts. The percentage may increase to nearly 50% by 2018.
Employer confidence in private exchanges is increasing: 17% view private exchanges as a viable alternative for active full-time workers in 2016. Confidence more than doubles to 37% by 2018.
Twenty-six percent of employers have analyzed private exchanges extensively, and 20% say they are more interested in adopting a private exchange than they were a year ago. Companies that have completed extensive analysis of private exchanges twice as likely to find private exchanges a viable alternative in 2016.
Employers report that cost savings and administrative simplicity are key factors in prompting use of private exchanges. Finance will play a role in shifting to a private exchange model. Fifty-three percent report that finance will influence the decision to move to a private exchange or continue to maintain traditional employer-managed health plans. For more information, visit www.towerswatson.com.
Member Satisfaction Significantly Increases as Health Plans Take Customer-Centric Approach
Following a year filled with negative news coverage about health insurance, a bumpy start to the launch of the Affordable Care Act, and an atmosphere of fear, member satisfaction with health plans has increased significantly as plan administrators take a customer-centric approach, helping to build member trust and loyalty, according to a J.D. Power study.
Member satisfaction averages 679, which is a 10-point improvement from 2014. The increase in satisfaction is driven by improved performance across all factors, most notably in information and communication (+17 points), which is primarily a result of carrier’s efforts to refine messaging, adjust message frequency, and upgrade their websites. Satisfaction in the customer service factor has increased by 11 points, driven partially by matching communication methods to member preferences, such as mobile and text. Cost satisfaction increases by 13 points. Fewer members report a premium increase. They have also seen a decline in out-of-pocket expenses.
Rick Johnson, senior director of the healthcare practice at J.D. Power, said “Health plans have come a long way since last year as the focus has shifted toward better serving member needs and building trust. However, there is still a lot of work to do. Health plans need to take a more customer-centric approach and keep their members engaged through regular communications about programs and services available through their plan. When members perceive their plan as a trusted health partner, there is a positive impact on loyalty and advocacy.”
Satisfaction is significantly higher among the 19% of members who strongly agree their health plan is a trusted partner in managing their health. Among members who say they strongly agree that their health plan is a trusted partner, satisfaction increases by 201 points.
Within information and communication, satisfaction ratings have improved from 2014 in the factor’s four attributes: ease of understanding your plan’s benefits and services, frequency of communications, usefulness of information, and variety of communications.
Similarly, satisfaction ratings have also improved related to premiums, deductibles, co-pays for prescription medication, and co-pays for doctor visits.
Member satisfaction is 108 points higher among members who have contacted their plan via mobile app at least once in the past 12 months than among those who haven’t. While members under 40 years old contact their plan via text and mobile app at a significantly higher rate than older members, the telephone is still the most frequently used contact method across all age cohorts.
Satisfaction is highest among health plan members in the California, Northwest Illinois–Indiana, Michigan, and Mountain regions.
Kaiser Foundation Health Plan ranks highest among health plans in the California for the eighth consecutive year. For more information, visit www.jdpower.com/about-us/press-release-info.
Copayment Assistance To Pulmonary Fibrosis Patients
The HealthWell Foundation launched a fund to help people living with pulmonary fibrosis. Through the fund, the HealthWell Foundation will provide copayment assistance to eligible pulmonary fibrosis patients to help ease the burden of medical costs associated with treatment for their disease. For more information, visit www.HealthWellFoundation.org.
Bringing Down Costs By Targeting High Utilizers
The key to containing rising health care costs lies in the delivery of more efficient episodes of care to the small subset of the population that suffers from advanced chronic and complex illnesses, according to a UHC study. In 2010, the sickest 10% of Americans spent an average of $26,851 in health care costs per person while the healthiest 50% spent less than $250 per person.
Forty-two percent of all health care spending among the commercially insured population arose from unpredictable and largely unavoidable single events, such as appendectomies or injuries. Another 31% of total spending was incurred by the small subset of the population that suffers from advanced chronic and complex illnesses such as congestive heart failure or cancer.
Using commercial insurance claims data and standardized unit prices, UHC found a 50% variation in costs for newly diagnosed lung cancer episodes. Using Medicare claims data, the UHC study found that median total episode costs for patients who received over 80% of their lung cancer treatment from an academic medical center were 25% lower than the episode costs for a similar cohort of patients treated predominantly in community hospitals. This suggests that the lower costs may be a result of the multi-disciplinary nature of academic medical centers and increased adherence to evidence-based standards of care. Further study is needed to test that hypothesis.
The study concluded that lung cancer costs would be reduced by as much as 40% -or over $50,000 per patient if high-cost markets adopted the utilization patterns observed in low-cost markets.
Although wellness programs have great value, they will not reduce health care spending by enough to make the system affordable. Any programs or policies designed to curb health care spend must focus on improving the efficiency of complex episodes of care delivered to the sickest subset of the population, according to the report.
For more information, visit www.UHC.edu/Research-Institute.
The Benefits of Limiting Out-of-Pocket Drug Costs
Capping the cost-sharing for prescription drugs on individual policies would reduce patients’ annual out-of-pocket healthcare spending, and have a small effect on insurance premiums while allowing insurers to remain compliant with the law, according to a study that the Leukemia & Lymphoma Society commissioned from Milliman.
The study examines the effect of imposing dollar limits on out-of-pocket costs for patients who purchase their insurance through health exchanges established under the Affordable Care Act (ACA). The majority of benefit plan options examined can be accommodated with no adjustments to other benefit features or with minor adjustments. For more information, visit LLS.org.