SERIOUSLY? ANY WILLING INSURER?

For years insurers and other payors have generally opposed “any willing provider” laws.  Any willing provider laws require hospitals, insurers and other payors to allow any provider willing to, in essence, match price and quality goals to participate in any health insurance plan.

In one of the more compelling, ironic events of recent history, insurers in Pennsylvania wish to require hospitals and hospital owned doctor practices to contract with any willing insurer.

Whatever the irony of the situation, this issue should be examined as insurers are creating narrow networks that exclude many hospitals and providers from ACA exchange based plans.  In other words, insurers want to be able to exclude providers, but want to require providers to accept all insurers.

What would make the most sense for patients who need medical care would be to have uniform two-way any willing provider/any willing insurer requirements.

ENCRYPT OR SUFFER

Predictions for the consequences of the recently effective new HIPAA/HITECH rules are for random audits, fines based upon the number of records compromised and patient complaints and litigation regarding either late production of patient requested data or, depending on the state, litigation for improper disclosure.

Obviously, training your staff, both administrative and doctors, is necessary and helpful.  However, given human nature, there will be breaches, whether accidental or intentional.  If you encrypt your PHI data, I believe that hospitals and doctors can justify lesser amounts of training, and will face substantially lower penalties for the breach or disclosure of adequately encrypted data.  It is simply a cost calculation that I believe overwhelming favors encryption.

PAY LESS OR PAY MORE?

Recent studies and news reports indicate that there are wide variations in the reimbursement spectrum, in many cases, as much as a 2-1 variance between the reimbursement rate for physicians at the low and high ends for similar services in similar locations.  Anecdotal data indicates that in areas where large health payors dominate a market, there is less variance, but there is inadequate data to explain whether it is merely insurer/payor manipulation, or whether the variances reflect actual quality and service differences.  Going forward is greater information and transparency more likely to cause an efficient market for the services, or market dominate insurer who enforce price points in particular markets?

HRA, FSA AND EPP GUIDANCE

The Department of Labor (DOL) and IRS have released guidance effective for 2014, providing some clarification for how ACA’s annual dollar limits and preventative care requirements interact with account-based plans such as HRAs and FSAs, and also employment payment plans that reimburse premiums.

IRS DOL generally views HRAs, FSAs and EPPs as group health plans.  The guidance indicates these arrangements qualify as “minimum essential coverage”.  These arrangements must comply with ACA’s annual dollar limit, prohibition and preventative care requirements unless they are integrated into an overall compliant group health plan.

Some other highs ‘from the guidance’:

• Retiree only HRAs are excepted benefits.
• FSAs must be offered through a Section 125 cafeteria plan in order to be exempt from annual dollar limit prohibitions.
• Integrated HRAs must allow participates to have the ability to opt out of the HRA on an annual basis.
• Generally, employers will not be permitted to reimburse employees for individual insurance premium cost on a nontaxable basis.  This had been one of the closely watched issues for employers since the use of the “defined contribution” model would have allowed, in the absence of this guidance, employers to provide employees a tax free pool of funds for the purchase of individual insurance policies.  This will be a disappointment to many medium sized companies.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions about this newsletter or any other matter at (812) 402-1600 or pwallace@joneswallace.com.