News from the Blues... for Employers
April 22, 2011
Legislative Update
Obama signs bill to repeal voucher program
President Barack Obama has signed into law a bill that repeals a provision of the health care reform law, the Affordable Care Act, which would have required employers to offer low-wage employees company-paid vouchers to buy coverage in state health insurance exchanges.
As we reported last Friday, the repeal was included as part of H.R. 1473, the bipartisan budget agreement that provides funding for the federal government to operate for the rest of fiscal year 2011.
DOL reports on essential health benefits
The U.S. Department of Labor (DOL) released a report to the U.S. Department of Health and Human Services (HHS) last Friday on its analysis of the medical benefits most commonly covered under employer-sponsored benefit plans. The Affordable Care Act requires that essential health benefits be equal in scope to the benefits under a typical employer plan.
The DOL report, along with a report from the Institute of Medicine due in September, will provide information to HHS to assist in setting regulations on essential health benefits.
The report, which pulled existing data from the DOL’s National Compensation Survey, listed 12 additional medical benefits typically offered beyond the general hospital and physician office visits. They include:
- emergency room visits
- ambulance services
- diabetes care management
- kidney dialysis
- physical therapy
- durable medical equipment
- prosthetics
- maternity care
- infertility treatment
- sterilization
- gynecological exams and services
- organ and tissue transplantation
The findings include information on how often employers cover or exclude such benefits and the type of limits imposed on them. The full report can be found at bls.gov/ncs/ebs/sp/selmedbensreport.pdf.
The release of the report does not require any action by employers or make any changes to the current assumptions Blue Cross and Blue Shield of Texas (BCBSTX) has made regarding what we consider to be essential health benefits. HHS Secretary Kathleen Sebelius has said that they will consider this report as they develop their regulations for essential health benefits. Sebelius also announced that this fall HHS will launch an effort to collect public comments on this issue.
CMS database to monitor state exchanges
The Centers for Medicare and Medicaid Services (CMS) announced last Friday that it plans to develop a Health Insurance Assistance Database as part of a program to oversee states' development and operation of health insurance exchanges. The CMS Center for Consumer Information and Insurance Oversight will build the database, which will collect information on consumer inquiries and complaints regarding the exchanges.
Authorized under the Affordable Care Act, exchanges are Web portals enabling consumers and small businesses to compare and purchase coverage starting in 2014.
Quick ruling on ACA’s constitutionality not likely
The Supreme Court justices are scheduled to consider a request today by the Commonwealth of Virginia seeking to bypass the normal appeals process for a quicker ruling on the constitutionality of the Affordable Care Act. Analysts say such requests are rarely granted, and that the Supreme Court would likely allow the law to be considered first by the appeals court under the usual process. With that process, any Supreme Court review of the law would be put off until its 2011-12 term, which begins in October, depending on how fast the appeals courts rule.
Activities such as these continue among the states. In Idaho, Governor C.L. “Butch” Otter issued an executive order Wednesday imposing a state prohibition on receiving federal funding for or otherwise implementing the Affordable Care Act. The executive order directs state agencies not to establish new programs, promulgate rules or accept federal funding to implement the Affordable Care Act. It also bars state agencies from assisting federal agencies in implementing the law.
However, the executive order does allow the Idaho Departments of Insurance and Health and Welfare to continue developing a state health insurance exchange. The governor said that would prevent the federal government from controlling the state’s insurance market by administering an exchange of its own in Idaho.
BCBSTX continues to focus on keeping you informed and to assist you in navigating health care reform and other legislation impacting your benefit plans. We always welcome your feedback on how we can improve this effort. Please contact your BCBSTX account representative with any suggestions, concerns and questions you may have.
April 22, 2011
Texas Legislative Digest
82nd Texas Legislature, Regular Session
Volume 12 – April 14, 2011
Combs Report Examines Spending for Health Care
Budget Update
Full Senate Action
Committee Action
Timetable
COMBS REPORT EXAMINES STATE SPENDING FOR HEALTH CARE
A new report by Texas Comptroller Susan Combs examines where health care dollars go and why costs are growing, and analyzes various cost-saving proposals the legislature is considering to meet the state budget challenge. The report focuses on the largest categories of health care expenditures by state agencies and identifies the major cost drivers for each. Combs noted, “By focusing on these programs, state lawmakers can more effectively control costs without adversely affecting the delivery of vital health care services.” Combs’ report looks at a number of cost-saving proposals, including expanding the use of managed care in the Medicaid program; instituting a statewide smoking ban; requiring state employees who use tobacco to pay more for health insurance than non-users; and requiring state employees and retirees to pay a greater share of the cost of their health insurance benefits.
The Health Care Cost Drivers in Texas report can be found on the Comptroller’s website at http://www.window.state.tx.us/specialrpt/healthcare/.
BUDGET UPDATE
House Appropriations Leaves Revenue Bills Pending
On April 7, the House Appropriations Committee took up several bills that would generate non-tax revenue and other bills that address additional revenue for the state. All bills were left pending, but it is anticipated they will be brought back up on April 14 with substituted language.
Among the bills reviewed:
House Bill 3640 (Jim Pitts, R-Waxahachie), an accelerator bill, would allow Texas to collect taxes a quarter earlier next year. The bill would apply to gasoline and diesel fuel-ax collections, certain franchise taxes, mixed beverages taxes and fees on certain alcoholic beverages. Appropriations Committee Chairman Pitts indicated the bill would bring approximately $1 billion in new revenue.
House Bill 3644 (Pitts), a consolidation bill, would allow for the creation and re-creation of funds and accounts in the State Treasury, the dedication and re-dedication of revenue, and the exemption of un-appropriated money from use for general governmental purposes. Chairman Pitts pointed out that a similar bill is filed every session. He also stated if the bill is not passed, the House will have to look for an additional $3 billion in cuts.
House Bill 1645 (John Zerwas, R-Simonton), a cost savings bill, would deal with efficiencies and cost-savings in health and human services and other related regulatory agencies, including the state medical assistance and child health plan programs (i.e., Medicaid and CHIP). Rep. Zerwas noted the bill is a work in progress, but expands managed care, which would lead to parity across the state. It is expected there will be $360 million in savings with the expansion of managed care; however, this savings is already embedded in HB 1.
House Bill 2720 (Pitts, et al) would authorize state agencies, including institutions of higher education, to implement an involuntary furlough program to balance agency budgets. Chairman Pitts noted the bill would protect employees’ benefits if there was a break in service. After the exemption of essential employees, the total savings estimated would be $22 million a day.
FULL SENATE ACTION
On April 7, the Senate passed Senate Bill 293 (Jane Nelson, R-Flower Mound), which would allow Medicaid to cover tele-health practices that use various telecommunication technologies to transmit medical information from a patient's home to health care providers. The bill has been received in the House but not yet referred to a committee.
COMMITTEE ACTION
House Insurance Committee
On April 12, the House Insurance Committee considered a number of bills BCBSTX is tracking. All of the bills were left pending.
Two witnesses representing health care organizations testified in favor of House Bill 758 (Craig Eiland, D-Galveston). The bill would prohibit excluding coverage for injuries acquired while an enrollee is intoxicated or under the influence of narcotics for policies that cover emergency or other medical, hospital or surgical expenses.
A representative of the Texas Medical Association testified in favor of House Bill 1534 (Eiland), which would regulate certain health care provider network contract arrangements commonly referred to as “silent PPOs.” The bill would allow for the oversight of the secondary market in physician discounts. Contracting entities, such as free-standing PPO networks and third-party administrators, that are not otherwise licensed and do not hold a certificate of authority, would be required to register with the Texas Department of Insurance. A witness representing the Texas Association of Benefit Administrators opposed the bill, testifying that third-party administrators should be exempt from the bill because they are often not aware of the terms of the contracts they are administrating. The Texas Association of Health Plans testified neutrally on the bill.
House Bill 2165 (Charles Perry, R-Lubbock, et al) would repeal the Texas Health Reinsurance System and replace it with the Texas Medical Reinsurance System (TMRS). The TMRS would provide aggregate stop-loss insurance to certain self-funded health benefit plans that would cover claims exceeding a specified dollar amount or percentage of expected claims. Supporters of the bill testified that the legislation would level aspects of insurance that lead to spikes in price during the renewal period, and that during the renewal period, insurers essentially get a “re-do” on the risks associated with a policy, leading to a situation that inhibits competition. The Texas Association of Life and Health Insurers and the Texas Association of Health Plans testified against the bill as it would create a new governmental agency to provide insurance, essentially a single-payer plan for reinsurance.
Two bills that address similar topics, House Bill 2336 (John Smithee, R-Amarillo), and House Bill 2697 (Eiland), examine payment for out-of-network services provided in an ambulatory surgery center. Both bills were opposed by insurance industry representatives.
House Public Health Committee
On April 6, the House Public Health Committee reported favorably House Bill 1013 (Fred Brown, R-Bryan) relating to improving accountability and transparency of the Texas Medical Board, the professional licensing board for physicians practicing in Texas. These measures would include setting statutes of limitations on when complaints against physicians may be filed with the Board, providing doctors with details of complaints against them and giving them more time and legal remedies to respond or appeal.
TIMETABLE
Important dates related to the legislative session:
April 15, 2011 First day a senator may place five bills or resolutions on the Intent Calendar
May 9, 2011 Last day for House committees to report House bills and House Joint Resolutions voted favorably
May 30, 2011 82nd Legislative Session ends
June 19, 2011 Last day the governor can sign or veto bills passed
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