Our New Blog is up - please click here to view more recent posts

Our new WordPress blog is up at http://www.noworldborders.com/blog/

All future posts will be from this blog

Weekly Health Care Reform Update at the Federal and State Level

Week of  October 5, 2009

The Senate Finance Committee essentially wrapped up its work on a health care reform bill last week, though additional changes are still possible as the bill is put to a vote of the full Committee later this week. A number of changes made to the bill at the 11th hour last week already are generating concerns about the direction of the legislation.

For example, one amendment approved by the Committee would result in a significant weakening of the individual coverage requirement (see below). This requirement is the cornerstone on which a host of insurance market reforms are supported.

The bill also would levy significant new fees and taxes on different sectors of the health care system, such as health insurance, without adequately tackling the true drivers of health care costs.




As health care reform moves toward floor debate in the House and Senate, the industry will monitor events closely and weigh in on issues of substance. While this summer's town hall meetings were an important part of the process, there will be no more important time for all Americans to stay informed and be involved than in the weeks ahead. 

Federal 

The Senate Finance Committee last week finished moving through dozens of amendments, paving the way for a vote on the finished bill sometime this week after the Congressional Budget Office provides a cost estimate. While many amendments were rejected, the panel did approve at the last minute some significant changes to the bill introduced by Chairman Max Baucus (D-MT) in mid-September. 



One amendment adopted would weaken the individual coverage requirement by delaying and reducing penalties attached to the requirement. The maximum penalty for a family of four would start at $200 in 2014 and rise to $750 in 2017.
Significantly, an estimated 2 million people who would face financial difficulties would be exempt from buying even the cheapest insurance available -- those who would have to pay more than 8 percent (a change from 10 percent) of their adjusted gross income for the cheapest plan would be exempt.

The Committee rejected amendments for a public plan option, but it did include a mini-public plan option for those under 200 percent of the federal poverty level. To help pay for the legislation, new fees and taxes would be levied on insurance companies, drug makers, medical device manufacturers, and some families. Senate leaders already have begun looking at ways to blend together the Senate Finance Committee bill and a competing Senate HELP Committee bill so that floor debate can begin later in October. 


States 

INDIANA:  Hearings resumed last week on the Health Provider Patient Limit Study supported by the Indiana Medical Association. The Health Finance Commission is required to study:

1.    health plan provider contract provisions that would require a contracted provider to mandatorily accept more than a certain number of patients (open access clause); and

2.    whether an insurer should be required to directly reimburse an out-of- network health care provider (assignment of benefits). 

Arguments were presented on both sides of these issues.  In addition, HEA 1300 requires the Indiana Department of Insurance (DOI) to collect information regarding the costs of initiation and operation for recognizing assignment of benefits and report to the Health Finance Commission on its actuarial findings. 

The data has been collected by DOI, which will present its final findings on assignment at the October 19 Health Finance Commission meeting.  A final report from the Health Finance Commission is due to the Legislative Council by November 1. 

TEXAS: The Department of Insurance has prepared a working draft of rules concerning physician ranking requirements and notice requirements that would limit health plans' ability to publish physician rankings. These draft rules would implement the provisions of legislation recently passed establishing standards for the use of physician ranking systems by health plans. The legislation outlines a process to be used by the TDI in determining nationally accepted standards for provider rankings.

The standards used must be disclosed to each affected provider, as well as the details of a process that may be used to dispute the rankings. The measure also prohibits physicians from taking action that would prevent a patient from participating in an evaluation of the physician’s performance. Insurers / payors worked throughout the session with the bill’s authors to ensure that the final version tracked the patient charter and national best practices. Insurers / payors will continue to work with TDI in the crafting of its final rules.

WASHINGTON: Insurers / payors are working with the state and other industry stakeholders to determine the feasibility of maintaining the state's Universal Vaccine Program for children. Due to budget cuts, the state is scaling back the vaccine program next spring to cover only low-income children.  


Currently, the program is available for all vaccinations for any child residing in the state, even those with private insurance. Due to the state's purchasing power and its ability to distribute vaccine effectively, there are multiple benefits to the state continuing the program.

No World Borders provides services to health care payors / insurers and providers as well as in other industries.

Click Here to Schedule a Discussion with One of Our Industry Experts

Click Here to view our cross-industry skills in process improvement

Click here to view our capabilities in HIPAA x12 5010 and ICD-10

Weekly Health Care Reform Update at the Federal and State Level

Week of September 28, 2009

The Senate Finance Committee wasted no time last week in wading through a seemingly endless number of amendments to its proposed health care reform legislation (see below). The committee turned aside a number of amendments, including attempts to avert cuts to the Medicare Advantage program to help pay for expanded coverage for the uninsured. But the sparring that occurred over the issue is a good indication that emotions are running high, and the dispute is bound to reappear when the bill makes it to the Senate floor. Democrats and the Obama administration last week sought to reassure seniors that health care reform would not cost them their current levels of Medicare benefits, but the head of the Congressional Budget Office, Douglas Elmendorf, recently told Senators that seniors in Medicare Advantage could very well see reduced benefits. The bill's momentum continues, but some Democrats are now struggling to figure out how to vigorously support health care reform without alienating many elderly voters.

Federal

The Senate Finance Committee began its long-awaited mark-up of a health care reform bill and by the end of last week had slogged its way through about two dozen amendments, both in open session and as part of after-hours talks dealing with Medicare, taxes, insurance and delivery items.

1. Of note are the proposed increase in the insurer tax and the defeat of several Republican amendments to soften the burden on seniors in Medicare Advantage. The individual coverage requirement is still intact, but the dollar penalty for noncompliance has been lowered. And the age rating limit of 5:1 has been reduced to 4:1, which would increase the eventual rate shock for younger insureds.

2. Additionally, the Committee approved an amendment to dramatically increase transparency by forcing PBMs, (aka Pharmacy Benefit Managers - The PBM market is dominated by 3 large players – Medco, Caremark, and Express Scripts) to disclose certain pricing information to government and plan sponsors. It seems likely that some member will offer an amendment to add an employer mandate to the bill as well as an amendment to replace the current co-op provision with a full-fledged government plan. This mark-up process is expected to continue through this week. It is likely that the Committee will finish by the end of the week but probably not in time to meld its product with the HELP Committee bill before the Columbus Day break.
The House Energy & Commerce Committee held a mark-up last week to take up a handful of amendments left over from its mark-up of reform legislation in July.

Two major items include:

1. Passage of a provision to provide grants to large employers (not covered in the original bill) for establishing wellness programs; and
   
2. The defeat of a provision that would have prohibited Insurers / payors from recovering insurance payments through subrogation.

Insurers / payors and employers worked together to help defeat this latter item. On a related House matter, it is becoming increasingly clear that the compromise between the House leadership and the Blue Dogs seems to be more tenuous than ever, which may well give the Speaker the political "room" to beef up the existing public plan provision in the House bill by adding back the government rate-setting provision she favors.
States

CALIFORNIA: Governor Arnold Schwarzenegger signed legislation that subjects Medicaid (Medi-Cal) managed care plans to a tax to fund Medi-Cal and the state's Children's Health Insurance Program (Healthy Families). The tax, which is assessed on the plan's total operating revenue, is effective for Medi-Cal managed care plans through January 1, 2011.

Approval of the measure will prevent more than 600,000 children from losing access to Healthy Families coverage. In addition, this bill has allowed the state to reopen Healthy Families enrollment and begin processing the more than 80,000 applications that were placed on a wait list.

In other news, the California Privacy and Security Advisory Board (CalPSAB) approved a "hybrid approach" to patient consent guidelines for participation in a health insurance exchange. The approach, outlined by CalPSAB, appears to be inconsistent with federal privacy and security standards. CalPSAB is developing new privacy and security standards to enable the adoption and application of health information exchange in California.

CONNECTICUT: Gov. M. Jodi Rell is threatening to veto a bill being debated during a special legislative budget session because it represents a back-door maneuver around her veto of a controversial health care pooling bill. In a detailed letter to top legislators, Rell said flatly that she would veto the bill because it did not meet certain requirements.
One of the troubling provisions, Rell said, is that Section 15 of the general government bill would allow the state comptroller, Democrat Nancy Wyman, to merge various insurance plans into the state's self-insured plan. Rell stated that this effectively would allow the comptroller to implement the pooling concept that she previously vetoed, which would likely result in a significant cost increase to the state at a time when the state is making cuts to virtually every program.

IOWA: The Iowa Health Care Coverage Commission has begun meeting to develop a plan to ensure that all Iowans have access to health care coverage that meets minimum standards of quality and affordability. The Commission, which has representation from a wide spectrum of stakeholders including the health insurance industry, has broken into three work groups addressing (1) coverage of uninsured and underinsured adults; (2) the use and creation of a group insurance plan to provide coverage to non-state public employees, employees of not-for-profit groups, and small employers; and (3) administration of health care reform. The Commission is required to issue its first quarterly progress report to the Iowa Legislative Council by January 1, 2010.

NEW YORK: The State Insurance Department (DOI) is conducting public hearings in Rochester, Newburgh and New York City to gather information about limited benefits health insurance plans. The goal is to ascertain how these policies are marketed by Insurers / payors and producers, assess what disclosures are made regarding the services they cover, evaluate what advantages these policies provide, and determine whether additional oversight and regulation are needed. The DOI investigations have revealed that some policies are sold through telemarketing firms using unlicensed agents, which runs afoul of the New York Insurance Law and that some Insurers / payors issue limited benefits health plan policies as group coverage through invalid associations. Consumers must join the association for an additional fee in order to be eligible to purchase the coverage. The NYS Health Plan Association will be submitting written testimony on behalf of its members who offer limited benefits plans, to distinguish these legitimate products from the fraudulent types of associations being investigated by the DOI.

OKLAHOMA: Senate President Pro Tem Republican Glenn Coffee recently announced the approval of 34 interim studies and the committees that will conduct them. With nearly one-third of the studies having implications for health insurance, the list yields insights into a number of issues, especially autism, that could be the subjects of key legislation in 2010. The following studies are the most relevant to the health insurance industry, and Insurers / payors will be watching them closely: Review of health insurance mandates; health insurance policy rescissions; high-risk pool coverage of autism spectrum disorder diagnosis and treatment; autism insurance mandates and the state’s economy; issues relating to interstate purchasing of health insurance policies; and possible funding for PPO coverage of persons in rural Oklahoma.

TENNESSEE: Preliminary meetings are being scheduled to discuss Silent PPO legislation related to workers' compensation, which was defeated earlier this year. This is expected to be a significant issue for the 2010 legislative session. In addition, Insurers / payors are is participating in a workgroup at the Tennessee Department of Commerce and Insurance regarding implementation of claims data legislation passed earlier this year.

WISCONSIN: The Office of the Commissioner of Insurance (OCI) intends to publish emergency rules to comply with the federal American Recovery and Reinvestment Act (ARRA) and provisions related to continuation of employer-discounted group coverage. The draft rules contain a new COBRA eligibility category for group coverage discontinuation retroactive to May 2009. In addition, the Autism Workgroup, created under the auspices of the OCI, has developed an administrative rule to implement recently enacted legislation requiring health insurance coverage for autism spectrum disorders. The rule will be promulgated on an emergency basis and takes effect for insurance products that are issued or renewed on or after November 1, 2009.

No World Borders provides services to health care payors / insurers and providers as well as in other industries.

Click Here to Schedule a Discussion with One of Our Industry Experts

Click Here to view our cross-industry skills in process improvement

Click here to view our capabilities in HIPAA x12 5010 and ICD-10

Weekly compilation of health care reform developments in Washington, D.C. and state legislatures 9/24/09

While the proposals being considered by Congress to help reform the health care system could make significant strides in addressing health care access problems, many remain concerned that the proposals made to date do not do enough to take on the overarching problem of rapidly rising health care costs.

To help draw more attention to this daunting problem, some large insurance firms recently were sponsors of the September/October edition of the journal Health Affairs, which is devoted to "bending the cost curve." The current issue and the launch event highlighted innovative solutions that could have a significant impact on the future cost of health care. Bending the cost curve is the key -- if we don’t make health care more affordable, other reforms will have little value.

Federal

Medicare Policy Might Discourage Proper Care for Hospital-Acquired Infections

Medicare's recent policy of refusing to pay hospitals' additional costs to treat hospital-acquired infections fails to adequately incentivize prevention and proper treatment of these complications, associated with 99,000 deaths annually. Read more from the healthcare blog

Senate Finance Committee Chairman Max Baucus released his "mark," which is the Senator's offering to the full Committee of the legislative pathway he thinks the Committee should follow to pass health care reform. While those on both the left (Senator Rockefeller) and on the right (Senator Grassley) expressed negative views on the mark, all the headline posturing ceases when the committee officially begins to review and amend the mark this week. The key for Chairman Baucus is to garner sufficient support to pass the bill out of committee in a fashion that bodes well for floor passage. Right now the prospects are far from certain.

States

ARIZONA: The Department of Insurance has issued a bulletin summarizing several insurance-related bills enacted during the 2009 legislative session. The bulletin expressly notes: the revision of the acceptable medical references an insurer may use in its determination of whether a drug has been found to be safe and effective for treatment of a specific type of cancer and the amended definition of "network plan" to include a plan under which the financing and delivery of health care services are provided through a defined set of providers under contract with a hospital, medical, dental or optometric service corporation; the ability of service corporations to issue subscription contracts free of many state-mandated benefits and also reduce the allowable uninsured period for small groups to qualify for state vouchers for free coverage; and the permissibility of issuing coverage to uninsured individuals without being subjected to many of the state's mandated benefits.

CALIFORNIA: Proponents of a new statewide initiative to return the legislature back to a part-time status are attempting to collect the 700,000 signatures necessary to qualify for the ballot in 2010. The measure would cut the current legislative calendar to 90 days. Supporters of the initiative say that the full-time legislature, authorized by voters in 1966, has failed to produce the results promised. After another rocky legislative year marked by a soaring budget deficit and a failure to address education spending and health reform issues, broad support for the measure seems likely. However, a bipartisan group of three former state lawmakers have formed an alliance to fight the effort, arguing that it would not allow the legislature sufficient time to address the state's serious problems.

CONNECTICUT: The General Assembly is holding September 23 and 24 to take up several bills needed to implement the new, two-year budget that took effect September 8. The “implementer bills” are required to put in statute the policy changes necessitated by passage of the budget. The session bears watching because of a trend of late to attempt to include non-budget-related proposals in these implementer bills. In the past, ideas that died in the regular session came back to life during an implementer session, only to expire again once they were publicized.

FLORIDA: The Agency for Healthcare Administration has asked carriers to participate in a workgroup regarding Explanation of Benefits (EOB) sent to members. The goal of the workgroup is to develop best practices for information contained on an EOB and assure the EOB is clear to consumers.

ILLINOIS: The Department of Insurance's (DOI) proposed rules for preferred provider programs and networks were heard last week by a legislative panel. These rules would affect both insurers and network administrators that offer incentives to insureds to utilize the services of contracted providers. At the hearing DOI agreed to remove objectionable language to business and insurance groups that would have limited a consumer's exposure to 50 percent of out-of-network billed costs by a provider. The DOI Director was given discretion on the rest of the proposed rule and agreed to hold it for 30 days and meet with the industry to discuss other objections. The two major issues that remain for business and insurance groups are: a provision stating that a provider's written approval must be obtained whenever an insurer or administrator buys another network, if it represents a material change to the contract; and the effect of language that would require insurers and administrators to hold beneficiaries harmless for out-of-network physician costs. The industry is preparing for meetings with DOI.

MASSACHUSETTS: The Division of Health Care Finance and Policy (DHFP) has introduced amendments to the Employer Fair Share Contribution regulation. The proposed amendments clarify that to be considered a contributing employer, an employer must maintain a written plan document for its group health plan. In addition, the employer must be able to document in writing its offer to employees to make a percentage premium contribution and the minimum number of hours that the employees are required to work to be eligible for full-time benefits. The amendments also clarify that a Premium Reimbursement Arrangement (in which an employee enrolls in an individual plan and is reimbursed by the employer for a portion of the premium expense) may qualify as a group health plan, provided there is written plan documentation that designates a particular plan for use by employees.

NEW JERSEY: Legislation requiring disclosure of certain serious reportable events was recently enacted by Governor Jon Corzine. Under the new law, the Department of Health and Senior Services will annually issue a report of specific hospital Patient Safety Indicators (PSI) as enumerated under federal guidelines by CMS. Additionally the law prohibits hospitals from charging for certain "never events." These events, for which reimbursement cannot be sought, include: transfusion reaction; air embolism; foreign body left in during a procedure; surgery on wrong side, body part, or person; and performing the wrong procedure on a patient. Also, the Department of Banking & Insurance adopted regulations establishing minimum benefits standards for health benefits plans, dental plans, and prescription drug plans. The regulations, among other things, set maximum cost-sharing and network copayment limits.

SOUTH DAKOTA: The Division of Insurance has issued a three-sentence, proposed regulation addressing the relationship between Centers of Excellence and access plans. The proposed regulation currently states that each contracted Center of Excellence and each contracted network of a Center of Excellence must be included in a health carrier’s access plan. For purposes of network adequacy, the health carrier’s entire Center of Excellence network, including both direct–contracted Centers of Excellence and contracted networks, shall be considered. A health carrier may not contract with a Center of Excellence network or any other network that is not registered pursuant to South Dakota law. When originally circulated, this regulation also contained a definition of Centers of Excellence, placed restrictions on carriers with Centers of Excellence for transplant services, and required “closed plans” to have certificates of authority to operate as HMOs. The new language is strongly preferable. A hearing regarding these proposed regulations is scheduled for October 21, 2009.

UTAH: The Utah Insurance Department (UID) has issued amendments to the state's requirements for the Basic Health Care Plan to bring the rules into compliance with new statutory requirements that were enacted in 2008 and 2009. Individual and small group health insurers are required to offer the Plan until January 1, 2010. The Plan includes the following maximum benefit limitations: 1) a lifetime maximum of no less than $1 million per person, 2) a minimum $250,000 annual maximum per person, and 3) out-of-pocket maximums on various cost-sharing obligations. After January 1, 2010, the Plan will be replaced with a new basic health care plan that is defined as: 1) a federally qualified, high-deductible health plan (HDHP), 2) has the lowest deductible that qualifies as an HDHP, and 3) has an out-of-pocket maximum no greater than three times the annual deductible.

If your company is a medical provider, health care insurance payor, or you need to gather insights on the coming changes in electronic health care, HIPAA, and ARRA related health care developments,

Click Here to Schedule a Discussion with One of Our Industry Experts

Click Here to view our cross-industry skills in process improvement

Click here to view our capabilities in HIPAA x12 5010 and ICD-10

Weekly compilation of health care reform developments in Washington, D.C. and state legislatures 9/4/09

Federal

The Senate Finance Committee pledged bipartisan compromise on health care reform, but it appears no new agreements have been reached. Senator Edward Kennedy’s passing last week caused some on Capitol Hill to be more concerned about lack of compromise in the legislative process to achieve health care reform.

In the House, work remains to be done as the three committees that passed health care reform bills in July need to merge these bills into one. The Energy and Commerce Committee first is planning to consider several dozen amendments not addressed during the committee's mark-up. As a result, the timing of real progress on health care reform legislation this fall is very hard to predict.

State

At the state level in Pennsylvania, the Highmark/IBC merger has opposition from non-Blue health plans including Aetna who are asking for a review of geographic restrictions and anti-competitive practices.

PENNSYLVANIA: The Department of Insurance has been relatively silent since its July 17 press release announcing separate examinations of the Blues plans on possible anti-competitive and unfair trade practices. The Department has retained the same law firm and economist that coordinated the review of the Highmark/IBC merger. It is set on concluding the examination in early 2010, if only to give it time to implement any recommendations in the last months of this administration. Other non-Blue insurance firms have raised recommendations for improving competition: Review the geographic restrictions in the Blues’ licensing agreements as well as any agreements among the Blues that impede competition; the Blues’ use of market power in provider contracting and product tying; and any practices that impede transparency.

CALIFORNIA: Two health care taxes are under consideration in the legislature. The first would impose a tax on all acute care hospitals, but the hospitals would receive new funds to supplement reimbursement under the state's Medi-Cal program. The amount of the tax has not been determined.

The second tax would impose the state's gross premium tax on all Medi-Cal managed care plans. The legislature expects the tax to raise $150 million annually. Medi-Cal managed care plans have been assessed a Quality Assurance Fee by the state. Federal law prohibits this fee from being collected after Oct. 1, 2009, though there is a bill in Congress to extend the fee for another year. Both tax proposals have broad support and neither is expected to impact most major insurer's current lines of business.

KENTUCKY: The legislature held hearings last week on an autism mandate that broadly defines the condition without coverage limits, except co-payments and deductibles. In addition, the bill would allow an "autism services provider", meaning any person or entity that provides treatment of autism spectrum disorders, to treat. Insurance companies and the Kentucky Association of Health Plans are working with the bill sponsor to include age limits and licensure of providers provisions, particularly for applied behavioral analysis.

GEORGIA: A hearing has been set for September 9th to finalize regulations allowing health plans to include health status as a factor in the rating of small groups on renewal dates. Previously, this was permitted for new business. The Georgia Association of Health Plans and America's Health Insurance Plans (AHIP) have been working on this issue for some time with the Georgia Department of Insurance.

ILLINOIS: Senate President Cullerton expects an external review bill to pass during the fall veto session. Agreed to by the insurance industry, provider, and consumer groups, the bill creates external review requirements for all commercial insurance products, rather than just HMOs, effective July 1, 2010. The bill also establishes committees to create a uniform small employer group health status questionnaire and an individual health statement for use on January 1, 2011. Lastly, the bill would require insurers to semi-annually prepare and provide the Department of Insurance a statement on aggregate administrative expense and other information. This last point was agreed to as an alternative to a medical loss ratio requirement.


MARYLAND: The Maryland Health Care Commission (MHCC) has invited insurance companies to participate in a workgroup consisting of payer representatives and other health care stakeholders, which will draft proposed regulations for the monetary incentives/disincentives in response to Electronic Health Records – Regulation and Reimbursement. This legislation lists many essential activities; one of the requirements calls for state-regulated private payers to provide monetary incentives to health care providers to promote the adoption and meaningful use of electronic health records (EHRs). Included in the statute is a requirement for establishing disincentives after 2015 for providers seeking payment from a state-regulated payer who uses an EHR that is neither certified nor capable of connecting to a health information exchange.

MICHIGAN: House leadership and an appointed committee continue to move forward with fleshing out Speaker Andy Dillon's health insurance pooling proposal. The Dillon proposal would consolidate public sector active and retiree health care benefits for up to 400,000 individuals in order to help the state address its budget deficit. Several large unions have come out in opposition to the pooling option, saying it strips collective bargaining rights. On Friday, the Speaker released draft legislation on the proposal.

OHIO: The legislature is considering a joint resolution calling for a constitutional amendment to exempt Ohio from a potential mandate requiring individuals to have insurance. It is similar to an issue that was taken up in Arizona in 2008. Arizona's legislature passed a resolution this year that will put the question on the ballot for 2010. If federal reform passes with an individual mandate, such a constitutional amendment would likely be challenged in court. In other business, Representative Boyd indicated that her legislation regarding regulation of "physician designation programs" will be moving forward in the House. Physician designation programs are those programs that provide a grade or any other rating to characterize an insurer's assessment or measurement of a physician's cost efficiency, quality of care or clinical performance. The medical society wants state standards for physician designation programs operating in the state. Several insurance companies have actively been reviewing this bill and how it would affect them, and are providing comment.

OKLAHOMA: The "Insure Oklahoma" program has grown at such a significant rate it is expected to reach funding capacity before year's end, potentially leading to a freeze in enrollment and a loss of momentum in providing health insurance coverage for all Oklahomans. The program subsidizes health insurance premiums for small businesses and individuals who qualify. Under the program, employers contribute 25 percent of premiums, employees 15 percent, and the state pays the remainder. Its current funding stream has capacity for up to 35,000 people. With a projected growth rate of 9.8 percent, enrollment could top 40,000 by January 2010. To avoid freezing enrollment in the program, the authority is looking for additional funding streams. It has embraced a recommendation by the State Coverage Initiative that would assess a fee on all insurance companies that are part of the program. Those fees would be placed in a dedicated account and would generate federal matching dollars to fund Insure Oklahoma. The problem is the fee assessment would need to be approved by the state legislature, which will not reconvene until February, 2010. A special session would be needed to consider the fee assessment. A half-percent fee would double Insure Oklahoma's capacity to 80,000 lives and reduce cost shifting by $39 million.


VIRGINIA: An escalating conflict of interest issues involving delegate Phillip Hamilton (R), vice chairman of the House Appropriations Committee, could have significant impact on the governance of the state over the next four years, particularly if front runner Republican Robert McDonnell wins in November. Currently, the House has a Republican majority and the Senate a Democratic majority; resulting in divided control of the General Assembly for the first time in modern history. This split has hampered Democratic Governor Timothy Kaine's ability to move much of his agenda since coming to office. Delegate Hamilton's situation and his refusal to step down have invigorated Democrats who only need to win six seats in the House to gain control of the legislature. Such a result would present increased challenges for the business community, including health plans.

Process Owners & Social Productivity – Changing Corporate DNA

While these concepts can be applied to all industries (see Harvard Business Review Blog "Lessons from GE's Approach to Personal Productivity"), the daunting complexity of moving to new health care data interchange standards such as HIPAA 5010 and medical coding standard ICD-10 suggest the traditional process owner and new social productivity concepts could converge for significant gain to enable cost savings, productivity improvement, and ultimately faster adoption and implementation of electronic health care record technologies.

As hospitals, and other health care organizations review their practices and begin to make changes to meet the needs of regulatory legislation, patients and payors, the roles and responsibilities of employees at all levels are affected. To support process-centered environment, management roles must be re-aligned to support the key processes. The need for strong leadership and regular communication are important, as is the role of the process owner. Social media can be used to help, and in fact the most serious social media minded companies are working to rewire their corporate DNA to function very effectively as a social computer, although we have seen nothing like this yet inside of health care companies.

Here is a look at the two concepts.

Social Productivity

Social productivity has been defined as the “…efficient conduct of social interactions, management of social relations, and collaborative social activity.” It has also been argued that social productivity is a form of inter-personal exchange founded on the idea of reciprocity using wikis, workflow, and other media inside a corporation to encourage greater sharing and contributions to collective work. As the activities are socially valued, efforts are expended in return for monetary or non-monetary rewards. Strong internal motivations for engaging in activities, including the need for self-agency and for self-esteem may help explain why people stay involved in activities, which may not offer monetary rewards commensurate with effort.

Process Owner

The Process Owner is the person “…who is responsible to design the processes necessary to achieve the objectives of the business plans that are created by the Business Leaders.” The Process Owner is responsible for the creation, update and approval of documents (procedures, work instructions/protocols) to support the process. Many Process Owners are supported by a process improvement team. The Process Owner uses this team as a mechanism to help create a high performance process. The Process Owner is the only person who has authority to make changes in the process and manages the entire process improvement cycle to ensure performance effectiveness. This person is the contact person for all information related to the process.

The responsibilities of the Process Owner follow the Plan, Do, Check, and Act Cycle.

Plan: The Process Owners create and own the process performance objectives of the organization. The Process Owner first needs to understand the external and internal customer requirements for the process. This person uses the business plans as a source to help understand the long term and short term customer and business requirements. This person translates these requirements into process performance objectives and establishes product (includes service) specifications. This person establishes process performance metrics to measure the process’s capability to meet the product specifications and overall process objectives. The set of metrics that are to be reviewed by Operational Managers and Process Operators are called Key Performance Indicators (KPIs). The Process Owner then designs process steps to describe work that when performed will have the capability to produce product that meets the customer and business requirements.

Do: The Process Owner is responsible to communicate to the Operational Managers the details of the processes that the Operational Managers are responsible to execute. As the Operational Managers and Process Operators perform the processes, the Process Owner is responsible to build bridges and remove barriers that will allow the process performance objectives to be met. The process performance metric data is produced and collected as the process is performed by Process Operators. The Process Owner is continually involved with the Operational Managers and Process Operators as they use Kaizen to continually improve the process as they are performing the work.

Check: The Process Owner periodically analyzes the process performance data and use it to visualize the process’s capability to operate within control limits over time (performance trends), compare actual performance against performance targets, and identify performance issues.

Act: The Process Owner is responsible to create improvement actions to address the performance issues that are identified during their analysis of the process performance data. Improvement actions may include the initiation of Lean projects to reduce waste from the process or projects to reduce variation in the process. Improvement actions may include the use of problem solving tools that would include risk assessment and root-cause analysis. Risk assessment is used to identify and reduce, eliminate, or mitigate risk within the process. This is the proactive approach to avoid problems being created from the process. Root-cause analysis is the reactive way to respond to problems that occur from the process. Root-cause analysis is used to identify the causes of problems within the process and identify and implement improvement actions that will ensure these problems do not occur again.

Key Lessons

Compare your calendar with the priorities. Label the purpose of every regular or recurring activity on your quarterly calendar and highlight those activities that are connected with your top five priorities. This simple exercise will reveal where you're squandering your time.

Be ruthless. Instead of persuading yourself why you can't give up the time you've been devoting to underperforming operations or overly demanding customers that seem important even if they aren't connected to a strategic priority, start with the attitude that you simply cannot deal with them anymore. In some cases, you'll realize that you've been treating the symptoms of the disease and should finally cure the disease. In others, you'll discover that the task will provide a growth opportunity for someone else.

Ask your team to do the same. Then discuss together how jobs could be recast and how the group as a whole could better spend its time. Make it clear that everything can be challenged — down to the PowerPoint slides presented regularly at meetings. Do you really need 20? If you could only have, say, two, which ones would they be?

Make time for your people and yourself. When you're rebuilding your calendar, be sure to include quality time for your team to get together to brainstorm about the strategy, the organization, and new opportunities. Last but not least, absolutely include time to pursue personal priorities that will help you grow and make you more valuable to your organization.

Weekly recap of Federal and State Developments in Health Care Reform

Week of August 24 , 2009

With opposition to a government-plan option evident at many health care reform town hall meetings this summer, an alternative option based on private regional cooperatives is now getting a lot more serious attention.

If your company is a medical provider, health care insurance payor, or you need to gather insights on the coming changes in electronic health care, HIPAA, and ARRA related health care developments,

Click Here to Schedule a Discussion with One of Our Industry Experts

Click Here to view our cross-industry skills in process improvement

Click here to view our capabilities in HIPAA x12 5010 and ICD-10

Senate Finance Committee member Senator Mike Enzi (R-WY), part of a six-member team that continues to try to achieve a bipartisan agreement throughout the Congressional recess, said last week that he could support a co-op provision. However, the co-op idea has its detractors and is still not well defined.

Federal 


With Congress in recess, there is no federal report this week. 



States 


CALIFORNIA: Legislation to initiate a health insurance tax to fund the state’s high-risk pool has been shelved for the year. The tax would have required all health insurers to be assessed up to $1 per member per month across each company’s entire book of business, including self-funded clients.

Insurance companies led the opposition to this tax, which has been proposed in the past by California-domiciled health insurers and HMOs. Insurance companies argued that funding a high-risk pool should be broad-based and not single out one industry, nor should it tax employers that do not purchase insurance but instead choose to fund health benefit arrangements in-house. The concept of funding high-risk pools by tapping employer’s self-funded arrangements was proposed but ultimately withdrawn or defeated in Oregon, Maine and Colorado this year as well. It is anticipated that these states will revisit the legislation in 2010.

NEW YORK: Governor Paterson's office is again outlining its priorities for federal health care reform for New York's congressional delegation and is signaling its intent to maintain or strengthen the state's role in regulating health care benefits. The Governor's office is emphasizing a need for any insurance exchange program to ensure a level playing field between the exchange and non-exchange insurers; the view that the federal law should be a floor and not a ceiling; and that there should be concurrent jurisdiction of the federal and state governments to regulate the insurance industry. In addition, Governor Paterson appointed James Wrynn as the new superintendent of insurance. The Senate is expected to act on this and other appointments in a one-house special session on Sept. 10. 
 


TEXAS: In a press conference held last week, Governor Rick Perry emphasized the importance of state-developed health care reform rather than the costly, expansive, one-size-fits-all mandates being considered by the federal government. The Governor expressed concern over the potential loss of a state’s ability to develop solutions tailored to the unique needs of its citizens. He further argued that current federal health care reform legislation would pose a serious threat to patients and providers, and would cost Texas taxpayers tens of billions of dollars over the next 10 years, without significantly improving care for Texans.

Other

August 14, 2009 – Study urges action to get patients to follow prescriptions - It is based on seven systematic reviews of medical literature, as well as interviews with 16 health care organizations, insurers, drug makers, and technology companies. The health care institute recommends some system wide changes, such as revamping how health care providers are paid. Other recommendations include using health information technology to monitor what happens after an electronic prescription is transmitted to a pharmacy and to help patients manage multiple medication regimens.

Weekly Recap of Health Care Reform - Red Flag Rules in New Jersey

Week of August 17

The highly charged health care reform debate continues to get extensive news coverage, and Members of Congress are clearly feeling the heat. Senate Finance Committee Ranking Member Senator Charles Grassley (R-IA) took the unusual step of issuing a statement last week to reassure voters that a Finance Committee bill will not have end-of-life provisions -- one of the more controversial topics at town hall meetings this summer.

A Finance Committee bill has yet to emerge, as Committee members search for an approach that can net bipartisan support. But Grassley provided a small glimpse of the Committee's thinking when he disclosed that the panel "dropped end-of-life provisions from consideration entirely because of the way they could be misinterpreted and implemented incorrectly." Distancing himself and the Finance Committee from the House bill, Grassley went on to say House legislation is "poorly cobbled together" and could invite unintended consequences.

If your company is a medical provider, health care insurance payor, or you need to gather insights on the coming changes in electronic health care, HIPAA, and ARRA related health care developments,

Click Here to Schedule a Discussion with One of Our Industry Experts

Federal

Congress is in recess, so there were no federal reports for the week of August 17th.

States

NEW JERSEY: New law means that New Jersey providers will be subject to Red Flag Rules.

• Newly enacted legislation requires installment payment for maternity services, and it mandates the Department of Banking & Insurance to promulgate a payment schedule for provider services rendered in advance of child delivery. Through the New Jersey Association of Health Plans, several carriers will meet with stakeholders to assist the department in implementing this statute.

• Effective August 1, 2009, every health care organization and practice must review its billing and payment procedures to determine if it’s covered by the Red Flags Rule. Whether the law applies to you isn’t based on your status as a health care provider, but rather on whether your activities fall within the law’s definition of two key terms: “creditor” and “covered account.”

• As many as nine million Americans have their identities stolen each year. The crime takes many forms. But when identity theft involves health care, the consequences can be particularly severe.

• Medical identity theft happens when a person seeks health care using someone else’s name or insurance information. A survey conducted by the Federal Trade Commission (FTC) found that close to 5% of identity theft victims have experienced some form of medical identity theft.

• Victims may find their benefits exhausted or face potentially life-threatening consequences due to inaccuracies in their medical records. The cost to health care providers — left with unpaid bills racked up by scam artists — can be staggering, too.

• The Red Flags Rule, a law the FTC began enforcement on August 1, 2009, requires certain businesses and organizations — including many doctors’ offices, hospitals, and other health care providers — to develop a written program to spot the warning signs — or “red flags”

• Also enacted into law was an autism coverage mandate. Under the new statute, insurance carriers must extend coverage for medically necessary treatment including speech, occupational, and behavioral therapy. The coverage benefit is capped at $36,000 annually. Also, the state Supreme Court has denied an appeal for stay of approved rider filings by the Small Employer Health Benefits board.

• A coalition of health care providers, primarily ambulatory surgery centers, sought to delay implementation of an approved rider filed by Horizon Blue Cross Blue Shield of NJ, which limits out-of-network ASC benefits at $2,000. The newly appointed Commissioner of Banking & Insurance denied the providers’ appeal for stay. The coalition's emergency request for delay was denied by the Appellate Division and finally the Supreme Court upheld the denial.NORTH

CAROLINA: The Governor has signed the proposed budget with no premium tax increase to insurers, thanks to the input industry leaders, business leaders and trade groups. Previous budget proposals included increases from 1.9 to 2.25 percent, effective January 2011.

PENNSYLVANIA: Governor Ed Rendell signed a budget bill after exercising his line item veto to strike most appropriations other than those necessary to pay state employees. The bill, introduced by Senate Appropriations Committee Chairman Jake Corman (R-Centre), was passed without amendment so that it could go to the Governor. The 2 percent managed care organization tax remains the big open issue for the budget. Moving the current MA MCO assessment under the sales and use tax is supported by some, but the administration is pushing the added 2 percent tax on all managed care premiums.

Weekly Health care Reform Developments at the Federal and State level

With Congress now recessed for the summer, much attention has shifted to the home front where many Senators and Representatives are conducting town hall meetings to gauge public opinion toward health care reform. It has been widely reported that tempers have sometimes flared at these events.

Federal

• Senate Finance Committee continued its health reform negotiations last week in what is the last hope for a bipartisan bill from Congress. Senators left Washington late last week to start their August recess, but Finance Committee members have vowed to continue negotiations throughout the month.
  

• A bipartisan group of six Senators on the Committee, led by Chairman Max Baucus, briefed President Obama on their work Thursday, and they also conducted a conference call with a dozen governors. The emerging legislation would expand Medicaid coverage to millions of additional people, and the governors are concerned about the impact on state budgets. No details of the still-developing proposal have been officially released, but participants have indicated the package could shave $100 billion off the cost of the legislation over the next decade, providing coverage to 94 percent of the nation, expanding Medicaid, abandoning the government-insurance option and possibly replacing it with a state-based co-op plan, and taxing insurance companies that offer health care benefits under the richest plans. Baucus has set a Sept. 15 deadline for a bipartisan deal.

States

ARIZONA: The State Senate last week postponed a vote on a plan to close the state's estimated a $3.2 billion budget deficit using spending cuts, funding delays, borrowing, and federal stimulus funds. Approved by the House on July 31, the plan's health-related provisions include: eliminating the KidsCare Parents Program; reducing AHCCCS (Medicaid) reimbursement rates to non-institutional providers by 5 percent but not reducing AHCCCS reimbursement rates to institutional providers; delaying one month's capitation payment to AHCCCS contracted health plans; and requiring AHCCCS to comply with the federal False Claims Act.

NORTH CAROLINA: In a very positive development, a new budget was issued by the legislature last week that includes no premium tax increases. Previous budget proposals included increases from 1.9 to 2.25 percent, effective January 2011. Several carriers and trade associations, worked to educate legislators and oppose a premium tax increase. A final vote on the budget is expected soon.

OREGON: Governor Ted Kulongoski has signed legislation enacting a 1 percent premium tax that will be used to expand access to affordable health care for children. The premium tax will be assessed beginning October 1, 2009 through September 30, 2013. Rate filings submitted for approval may include the premium assessment as a valid administrative expense or retention element. The law also establishes the Health Care for Oregon Children program, which includes an expansion of SCHIP and a premium assistance program administered by the Office of Private Health Partnerships (OPHP). Under the premium assistance program: Children in families with incomes at or below 200 percent of the federal poverty level (FPL) and who have access to employer-sponsored coverage will receive a subsidy equal to the full cost of the premium; children in families with incomes above 200 percent but at or below 300 percent of FPL will receive assistance on a sliding-scale basis as determined by the OPHP; and children in families with incomes exceeding 300 percent of the FPL will not receive premium assistance but will have the opportunity to purchase coverage through the new OPHP private health option.

TEXAS: With Dallas saddled by the most expensive health care in the state, Mayor Tom Leppert and a local health insurer last week took a step toward changing the city's direction. They are working on scheduling a North Texas health care summit on Sept. 30 at which company and government executives hope to agree on payment, practice and transparency fixes leading to greater competition based on quality and cost efficiency. In its national quality-to-cost ranking, Texas is rated third worst, behind Mississippi and Louisiana. Dartmouth Institute for Health Policy data indicates that on average Dallas health care providers submit $10,100 in Medicare claims for every enrollee, the highest among Texas cities with more than 50,000 residents. Dartmouth's data shows that higher health care spending is not associated with better quality outcomes.

No World Borders observation:

• Health care providers and payors (insurance) firms: The requirements to move to new electronic health care records including the electronic transfer of claims data (HIPAA EDI 5010) and the new medical coding standard (ICD-10) will require all the time health care companies can get. Don't wait while the legislators debate the issues. Process impacts as well as data and electronic transfer issues have been under-estimated by may companies. Move ahead now. We can help. See our capabiliites brief and brochure. Business process models of the "as is" and "to be" will be important items to share among business stakeholders.
  

• Individual consumers & employers: Respectful participation in the Democratic process is important, and no one should be discouraged from an important opportunity to be heard on health care reform. If you would like to attend a future town hall meeting or express your views, your Senator can be found online as well as your Representative.