Category Archives: Medical Insurance

ALL THE AGENCIES THAT REGULATE HEALTHCARE ALL IN ONE PLACE!

Oversight of Health Care Industry

COVERED CALIFORNIA: WHAT’S A PROVIDER TO DO?

Several issues arise from the proposed agreements for providers from Qualified Health Plans (“QHP”) under Covered California. Some issues that physicians and other providers should be watching out for:

1. Payment Schemes. Initial contracts from the various QHP’s are offering low payment options, particularly the “80% of Medicare” option. Physicians should be wary of such agreements. Under QHP contacts with Covered California, the plans have agreed to work on value-based payments in the future, making future contracts even less attractive for providers.

2. Hospital Contracts. There still is no clarity on which hospitals will take part in Covered California and under what plans. Covered California has no listing of participating hospitals at this time. The prospect of narrow networks (fewer providers offered to consumers) makes it troublesome to predict the future on hospital participation.

3. Administrative Burdens. QHPs are imposing difficult and legally thorny administrative tasks on providers, particularly providing information about patients and payments.

4. Populations. Get information on the types of patients expected under contracts. The initial rounds of patients are predicted to be populations that are in fair to poor health. Since they are not used to traditional medical care, they are expected to have a large percentage of missed appointments and compliance issues.

5. Collections. What is the providers obligations to collect? Some Covered California plans leave high deductibles and copays for enrollees. Yet, the newest enrollees are not used to paying such amounts. Also, determine risk for patients who fail to pay premiums to Covered California QHPs. Providers may be on the hook.

With all the problems with exchange products, providers may want to sit out this first round

Several issues arise from the proposed agreements for providers from Qualified Health Plans (“QHP”) under Covered California. Some issues that physicians and other providers should be watching out for:

1. Payment Schemes. Initial contracts from the various QHP’s are offering low payment options, particularly the “80% of Medicare” option. Physicians should be wary of such agreements. Under QHP contacts with Covered California, the plans have agreed to work on value-based payments in the future, making future contracts even less attractive for providers.

2. Hospital Contracts. There still is no clarity on what hospitals will take part in Covered California and under what plans. Covered California has no listing of participating hospitals at this time. The prospect of narrow networks (fewer providers offered to consumers) makes it troublesome to predict the future on hospital participation.

3. Administrative Burdens. QHPs are imposing difficult and legally thorny administrative tasks on providers, particularly providing information about patients and payments.

4. Populations. Get information on the types of patients expected under contracts. The initial rounds of patients are predicted to be populations that are in fair to poor health. Since they are not used to traditional medical care, they are expected to have a large percentage of missed appointments and compliance issues.

5. Collections. What is the providers obligations to collect? Some Covered California plans leave high deductibles and copays for enrollees. Yet, the newest enrollees are not used to paying such amounts. Also, determine risk for patients who fail to pay premiums to Covered California QHPs. Providers may be on the hook.

With all the problems with exchange products, providers may want to sit out this first round of patients.

FORNIA: WHAT’S A PROVIDER TO DO?

Several issues arise from the proposed agreements for providers from Qualified Health Plans (“QHP”) under Covered California. Some issues that physicians and other providers should be watching out for:

1. Payment Schemes. Initial contracts from the various QHP’s are offering low payment options, particularly the “80% of Medicare” option. Physicians should be wary of such agreements. Under QHP contacts with Covered California, the plans have agreed to work on value-based payments in the future, making future contracts even less attractive for providers.

2. Hospital Contracts. There still is no clarity on what hospitals will take part in Covered California and under what plans. Covered California has no listing of participating hospitals at this time. The prospect of narrow networks (fewer providers offered to consumers) makes it troublesome to predict the future on hospital participation.

3. Administrative Burdens. QHPs are imposing difficult and legally thorny administrative tasks on providers, particularly providing information about patients and payments.

4. Populations. Get information on the types of patients expected under contracts. The initial rounds of patients are predicted to be populations that are in fair to poor health. Since they are not used to traditional medical care, they are expected to have a large percentage of missed appointments and compliance issues.

5. Collections. What is the providers obligations to collect? Some Covered California plans leave high deductibles and copays for enrollees. Yet, the newest enrollees are not used to paying such amounts. Also, determine risk for patients who fail to pay premiums to Covered California QHPs. Providers may be on the hook.

With all the problems with exchange products, providers may want to sit out this first round of patients.

NEW CALIFORNIA HEALTHCARE LAWS: GAY AND LESBIAN DISCRIMINATION FOR FERTILITY TREATMENT

This is the first in a series of posts about new laws for 2014 affecting healthcare.

AB 460: Non-Discrimination for Homosexuals and Lesbians

Summary

This law requires coverage under the Knox-Keene Health Care Service Plan Act and a under a policy of health insurance that provides for coverage for the treatment of infertility.   If such coverage is offered and purchased, it must be provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex or sexual orientation.

AB 460 extended the idea of “non-discrimination” in this context to homosexuals and lesbians regarding fertility. If a health insurance plan is purchased that contains coverage for infertility, then the plan must not discriminate.  This statute is meant to help all people access to treatment of infertility.

Insurance plans are not required to carry such coverage.  There will be a violation of the statute only if the plan does offer such coverage and they attempt discrimination in the utilization of the coverage.

The law makes homosexuals and lesbians eligible for insurance coverage for “treatment of infertility, except in vitro fertilization, under those terms and conditions as may be agreed upon between the group subscriber or the group policyholder and the plan or the insurer.”

An interesting issue arises when the definition of infertility is considered. Under the new law, homosexuals and lesbians will be classified as “infertile” if they are unable “to conceive a pregnancy or to carry a pregnancy to a live birth after a year or more of regular sexual relations without contraception.” Since most sexual relations in a homosexual and lesbian relationship do not result in pregnancy, the law effectively defines all homosexuals and lesbians as “infertile.” Surely this is an unintended result and new legislation will need to be considered in the near future.

DOMA: HOW IT CHANGES BENEFITS FOR SAME SEX COUPLES

THE SUPREME COURT STRIKES DOWN DEFENSE OF MARRIAGE ACT

The decision of the United States Supreme Court in U.S. v.
Windsor, where the court struck Section 3 of the Defense of Marriage Act
(DOMA), will change many aspects of healthcare as it relates to same-sex
marriage.  The decision requires that the
federal government recognize same-sex marriages that are recognized under state
law.

SOME OF THE THINGS THE
COURT DID NOT RULE

The Feds Follow the
State
.
The Court didn’t rule that the federal government must recognize all
same-sex marriage.  Instead they
determined that marriage is traditionally an issue for the states to
decide. 

 States Follow Their Own
Path
.  The Court did not
strike down Section 2 of DOMA, which provides that no state shall be required
to recognize a same-sex marriage that is recognized by another state. This
raises a number of issues for couples who move from state to state or who live
in a state that does not recognize same-sex marriage but travel to a state that
does and marry there.

 Retroactive?.  Another open issue is retroactivity. Windsor
did not specifically address whether same-sex couples have any retroactive
rights to any benefits. For example, suppose a 401(k) plan participant entered
into a same-sex marriage, designated someone other than the same-sex spouse as
beneficiary (without obtaining the spouse’s consent), and died before the
decision. Does the surviving spouse have a claim against the plan for survivor
benefits? Do same-sex couples have a right to claim refunds for health plan
benefits that were previously treated as taxable? The Courts and the IRS will
provide guidance on retroactivity at some point. 

CALIFORNIA RECOGNIZES
SAME SEX UNIONS

In California, the Supreme Court, in a 5-4 decision issued on
the same day as U.S. v. Windsor, ruled against the backers of California’s
Proposition 8
gay marriage ban. With the court’s ruling, gay marriage is once
again officially legal in California. While many questions remain about the broader
constitutional issue concerning the right of gay and lesbian couples to get
married, June 26 will be remembered as the day California’s gay marriage ban
died. 

 DOMA:  KNOWN EFFECTS

       1. Imputation of Income.
Same-sex partners will no longer pay federal taxes on income imputed for an
employer
s
contribution to a same-sex spouse
s
medical, dental or vision coverage and employers will no longer be required to
pay federal payroll taxes on such amounts.

        2.     Employer Refunds.  Employers may be entitled to a refund for
payroll taxes previously paid.
Employers may be required to continue to impute income for state law
purposes in states that do not recognize same-sex marriage.

3.  Coverage.
Windsor does not address whether plans that provide spousal coverage must cover
same-sex spouses. Employers with self-insured plans subject to ERISA are not
required to cover spouses and if they do cover some spouses, they are not
necessarily required to cover all spouses. Employers with plans not subject to
ERISA would be subject to any applicable state laws regulating coverage.  The ACA requires coverage of offspring but
not spouses, same sex or not.

 4. Pre-tax premiums.
Employees with same-sex spouses may pay the cost of spousal health coverage by reducing
pay on a pre-tax basis.

 5. COBRA. Same-sex spouses have the same independent COBRA rights as
opposite-sex spouses.

 6.  Special
Enrollment Rights.
Marriage to or divorce from a same-sex spouse is now a
HIPAA special enrollment event under plans offering spousal coverage. Employees
may add a same-sex spouse to their health coverage outside of the open
enrollment period, if they marry or if the spouse loses coverage due to a job
loss or change.

 7.  Personal Representatives.  HIPAA provisions relating to providing
patient information will now clearly include same sex spouses. 

8.  Medical
Expenses Tax Treatment.
Eligible medical expenses incurred by a same-sex
spouse at least since the date of the Windsor decision are eligible for
tax-free reimbursement under health care flexible spending accounts, health
reimbursement arrangements, and health savings accounts. There may also be a
medical expense deduction.  An employee
and a same-sex spouse will share the deduction limit for HSA contributions and
the typical health care cost deduction.

 9.  Qualified Retirement Plans. Spouses have a
number of rights under qualified retirement plans (such as defined benefit and
401(k) plans) subject to ERISA. Some examples of these rights, which must now
be provided to same-sex spouses, include Qualified Joint and Survivor rights,
same-sex spouses who are divorced can obtain a qualified domestic relations
order dividing retirement benefits (QDRO’s), and other rights for spouses.

HEALTHCARE SPECIFIC
ISSUES

Impact on Medicaid/CHIP
Eligibility. 
With
the invalidation of DOMA, states that recognize gay marriage must treat
married, same-sex couples as part of the same household. To determine whether
an individual is eligible for Medicaid/CHIP, states assess a household’s
composition and countable income as a percentage of the federal poverty level.

Treating same-sex couples as spouses can make it more likely that they are eligible
for Medicaid/CHIP by increasing the size of their households or it can make a
household less likely to be eligible by increasing the total family income.
Ultimately, in terms of Medicaid/CHIP eligibility, whether a same-sex couple
benefits or loses from being treated as one household depends on the amount of
income each spouse contributes.

The DOMA decision will affect the access married, same-sex
couples have to many government programs, as well as to employer-sponsored
health insurance. With DOMA no longer in place:

           Same-sex
spouses of federal employees will be entitled to federal healthcare           coverage.

           Same-sex
spouses of military personal will be eligible to receive TRICARE           coverage.

           Individuals in
same-sex marriages
like
those in heterosexual marriages
will
be able to qualify for Medicare based
on a spouse
s
work history.

 OTHER ISSUES

FMLA

The FMLA now will provide entitlement to take leave to care
for a same-sex spouse to the same extent as an opposite-sex spouse.

Medicare Secondary Payer Rules

Same-sex spouses will now be treated as spouses, such that
plans covering spouses of active employees will be considered primary for
Medicare purposes.

Prohibited Transaction Rules

Spouses are treated as “family members” in
determining whether a person is a disqualified person for purposes of
prohibited transaction rules. Same-sex spouses are now disqualified persons to
the same extent that opposite-sex spouses are.

 Ownership Attribution Rules

 The same-sex spouse of a 5% owner of employer stock is now
considered to be a 5% owner by attribution, including for purposes of
identifying highly compensated employees and for top hat purposes.

ACTION
ITEMS

 1.  Begin reimbursing
medical care expenses for same-sex spouses of participants.
Notify employees of the window (typically 30-days) under the
cafeteria plan for family status changes and special enrollment rights for
same-sex spouses and their dependents.

 2. Review definitional and choice-of-law provisions of benefit
plans concerning the definition of “spouse.”  Start obtaining spousal consent from same-sex
spouses for any defined benefit plan retirement distributions.

3. Advise employees married to same-sex spouses to review
their death beneficiary designations; if proper spousal consent has not been
obtained, their designations will be void.

4. Employers will want to ensure that same-sex spouses are
identified for its records in the same manner opposite-sex spouses are
identified. If the employer does not currently distinguish between same-sex
spouses and domestic partners in company records, for example, or identifies
opposite-sex spouses, but not same-sex spouses in its record keeping, the
employer should consider modifying its practices.

5.  Review all plan
documents, in particular the eligibility provisions, to determine if provisions
that were designed to provide coverage to domestic partners or same sex spouses
or designed to restrict coverage to opposite sex spouses should be changed or modified.

6.  Be sure that, at
least after the date of the Windsor decision, retirement plans in operation
provide lawfully married same-sex spouses residing in states where same-sex
marriages are recognized the benefit rights to which opposite sex spouses are
entitled. (See the lists above.)

7.  Cease imputing
income on health coverage and other benefits provided to same-sex spouses
residing in states that recognize same-sex marriage if income imputation is not
required for opposite-sex coverage.

 8. Permit employees to pay the 2013 cost of health care
coverage for lawfully married same-sex spouses residing in states where
same-sex marriages are recognized with pre-tax reductions in pay.

9.Consider whether to seek a refund for employment taxes paid
on imputed income for same-sex spouse benefits for open tax years.

10.  Begin a review of all
employee benefit plans, policies, procedures and handbooks to consider whether
changes are needed or desirable.

Matthew L. Kinley, Esq.

Matt Kinley On HIPAA Final Rule: Talk before Orange County Medical Group Management Association

OCMGMA: HIPAA Update

Tuesday, June 11, 2013 (12:00 PM – 1:30 PM)

Presented by: Kathleen Stillwell, MPA/HSA, RN, CPHRM Patient Safety
Risk Management Account Executive, The Doctors Company, and Matthew
Kinley, Esq.,  Partner, Tredway Lumsdaine & Doyle, LLP

Program Information:

The new HIPAA Omnibus Rule
includes new breach notification requirements; limits for use and
disclosure of Protected Health Information (PHI), defined Business
Associates and Subcontractors, increased Patient Rights, change in the
Notice of Privacy Practice, increased fines and penalties, and other
important changes. There is a new focus on investigating and penalizing
noncompliance due to “willful neglect.”

The Office of Civil Rights will begin enforcement of the Omnibus Rule September 23, 2013.

Attend this session to learn what actions your practice must take to meet the new federal compliance regulations.

Objectives:

  • Describe new limits on uses and disclosures of PHI
  • Recognize Business Associates and Subcontractors
  • Explain increased Patient Rights
  • Outline action steps for compliance with Omnibus Rule

Kathleen Stillwell Bio       Matt Kinley Bio

RSVP to Maria Taylor at 714-937-2182 or mtaylor@osiortho.com.
Cost: Members – $25, Non-Member managers – $35, Members Vendors and
Vendors who attend the first time – $50. Other Non-Member vendors – $95.

1.0 CEU Available from ACMPE

EMPLOYERS QUESTIONS ANSWERED: PENALTIES FOR FAILURE TO PROVIDE INSURANCE

The United States Congressional Research Service has issued this helpful white paper answering employers questions about the new penalities for failure to provide appropriate insurance.  The paper, called POTENTIAL EMPLOYER PENALITIES UNDER THE PATIENT PROTECTION AND AFFORDABLE CARE ACT, does not provide any new information, but it is a good source for those people who want to familiarize themselves with the requirements. 

Interesting Case Summary Concerning Blue Cross Coverage

Click here to read an interesting summary of a federal case where employer failed to follow Blue Cross insurance policy because some of the employer’s employees lived outside the geographic limitiations of the policy.

The result: the employees were disallowed payment for medical care.

Submitted by Matthew L. Kinley