Oct. 15 Deadline Nears for Medicare Part D Coverage Notices

Are you ready for the Medicare Part D coverage notice deadline? Plan sponsors that offer prescription drug coverage must provide notices to Medicare-eligible individuals before October 15. Continue reading to learn more.


Plan sponsors that offer prescription drug coverage must provide notices of "creditable" or "non-creditable" coverage to Medicare-eligible individuals before each year's Medicare Part D annual enrollment period by Oct. 15.

Prescription drug coverage is creditable when it is at least actuarially equivalent to Medicare's standard Part D coverage and non-creditable when it does not provide, on average, as much coverage as Medicare's standard Part D plan.

The notice obligation is not limited to retirees and their dependents covered by the employers' plan, but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents.

Background

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires group health plan sponsors that provide prescription drug coverage to disclose annually to individuals eligible for Medicare Part D whether the plan's coverage is creditable or non-creditable.

The Centers for Medicare & Medicaid Services (CMS) has provided a Creditable Coverage Simplified Determination method that plan sponsors can use to determine if a plan provides creditable coverage.

Disclosure of whether their prescription drug coverage is creditable allows individuals to make informed decisions about whether to remain in their current prescription drug plan or enroll in Medicare Part D during the Part D annual enrollment period.

Individuals who do not enroll in Medicare Part D during their initial enrollment period, and who subsequently go at least 63 consecutive days without creditable coverage (e.g., because they dropped their creditable coverage or have non-creditable coverage) generally will pay higher premiums if they enroll in a Medicare drug plan at a later date.

Who Must Receive the Notice?

The notice must be provided to all Medicare-eligible individuals who are covered under, or eligible for, the sponsor's prescription drug plan, regardless of whether the plan pays primary or secondary to Medicare. Thus, the notice obligation is not limited to retirees and their dependents but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents.

Notice Requirements

The Medicare Part D annual enrollment period runs from Oct. 15 to Dec. 7. Each year, before the enrollment period begins (i.e., by Oct. 14), plan sponsors must notify Medicare-eligible individuals whether their prescription drug coverage is creditable or non-creditable. The Oct. 15 deadline applies to insured and self-funded plans, regardless of plan size, employer size or grandfathered status.

Part D eligible individuals must be given notices of the creditable or non-creditable status of their prescription drug coverage:

  • Before an individual's initial enrollment period for Part D.
  • Before the effective date of coverage for any Medicare-eligible individual who joins an employer plan.
  • Whenever prescription drug coverage ends or creditable coverage status changes.
  • Upon the individual's request.

According to CMS, the requirement to provide the notice prior to an individual's initial enrollment period will also be satisfied as long as the notice is provided to all plan participants each year before the beginning of the Medicare Part D annual enrollment period.

An EGWP exception

Employers that provide prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP) are not required to provide the creditable coverage notice to individuals eligible for the EGWP.

The required notices may be provided in annual enrollment materials, separate mailings or electronically. Whether plan sponsors use the CMS model notices or other notices that meet prescribed standards, they must provide the required disclosures no later than Oct. 14, 2017.

Model notices that can be used to satisfy creditable/non-creditable coverage disclosure requirements are available in both English and Spanish on the CMS website.

Plan sponsors that choose not to use the model disclosure notices must provide notices that meet prescribed content standards. Notices of creditable/non-creditable coverage may be included in annual enrollment materials, sent in separate mailings or delivered electronically.

What if no prescription drug coverage is offered?

Because the notice informs individuals whether their prescription drug coverage is creditable or non-creditable, no notice is required when prescription drug coverage is not offered.

Plan sponsors may provide electronic notice to plan participants who have regular work-related computer access to the sponsor's electronic information system. However, plan sponsors that use this disclosure method must inform participants that they are responsible for providing notices to any Medicare-eligible dependents covered under the group health plan.

Electronic notice may also be provided to employees who do not have regular work-related computer access to the plan sponsor's electronic information system and to retirees or COBRA qualified beneficiaries, but only with a valid email address and their prior consent. Before individuals can effectively consent, they must be informed of the right to receive a paper copy, how to withdraw consent, how to update address information, and any hardware/software requirements to access and save the disclosure. In addition to emailing the notice to the individual, the sponsor must also post the notice (if not personalized) on its website.

Don't forget the disclosure to CMS

Plan sponsors that provide prescription drug coverage to Medicare-eligible individuals must also disclose to CMS annually whether the coverage is creditable or non-creditable. This disclosure must be made no more than 60 days after the beginning of each plan year—generally, by March 1. The CMS disclosure obligation applies to all plan sponsors that provide prescription drug coverage, even those that do not offer prescription drug coverage to retirees.

SOURCE: Chan, K.; Stover, R. (10 September 2018) "Oct. 15 Deadline Nears for Medicare Part D Coverage Notices" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/medicare-d-notice-deadline.aspx/


Safety Focused Newsletter - October 2018

Avoid Getting Sick at Work

It can be difficult to avoid getting sick at work, particularly if you work in close quarters. While you may not be able to avoid germs altogether, the following tips can help reduce your risk of getting sick:

  • Wash your hands. Germs can cling to many surfaces in the workplace, including elevator buttons, doorknobs and refrigerator doors. To protect yourself from illness, it’s important to wash your hands regularly, especially before you eat or after you cough, sneeze or use the restroom.
  • Keep your distance. Illnesses like the cold or flu can spread even if you aren’t in close contact with someone. In fact, experts say that the flu can spread to another person as far away as 6 feet. If you notice a co-worker is sick, it’s best to keep your distance.
  • Get a flu shot. Yearly flu shots are the single best way to prevent getting sick. Contrary to popular belief, flu vaccines cannot cause the flu, though side effects may occur. Often, these side effects are minor and may include congestion, coughs, headaches, abdominal pain and wheezing.

In addition to the above, it may be a good idea to avoid sharing phones, computers and food with your co-workers during flu season. Together, these strategies should help you stay healthy at work.

Parking Lot Safety Tips

Parking lots are common hazards for drivers and vehicles alike. Slips, falls, auto accidents, theft, harassment and assaults are just some of the risks individuals face while using parking lots.

Even the parking lots and garages at your place of employment can be dangerous. Thankfully, there are simple and effective precautions drivers can take to protect themselves and their vehicles:

  • Park in a well-lit area, preferably one with surveillance cameras and security patrol services.
  • Avoid parking near shrubbery or other areas that could conceal attackers.

  • Park as close to an exit as possible when using garages.
  • Lock your doors when leaving your vehicle.
  • Remain vigilant, and notify security or the authorities if you notice any suspicious behavior.
  • Lock all of your valuable items in your trunk and out of sight. Avoid leaving purses or wallets in your vehicle.
  • Walk confidently when leaving or returning to your vehicle. If you notice a potential threat, proceed to a safe place, like a public building or store.
  • Use the buddy system, and walk to your car with a co-worker.
  • Have your car keys ready when you near your vehicle.

Staying safe can be easy as long as you’re cautious and mindful of your surroundings.

Avoid Slips and Falls in Parking Lots:

Watch Out for Uneven Surfaces, Curbs and Potholes.

Beware of Ice During Colder Months.

Stay in Well-Lit Areas.

Walk, Don't Run.

Illnesses like colds or the flu can spread even if you aren’t in close contact with someone.

Download the Newsletter

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Get Moving...To Live!

Are your employees sitting all day at work? Regardless of who you are and how often you exercise, if you're sitting for long periods of time, your chance of an early death increases. Read on to learn more.


The phrase: “If I’m lying, I’m dying” should be changed to: “If I’m sitting, I’m dying” even though it doesn’t rhyme. If you haven’t heard by now, sitting for long periods of time increases the chance that you’ll die early, regardless of your race, gender, age, body mass index (BMI), or even if you exercise. The longer you sit, the higher your risk of dying sooner rather than later.

See also: 7 wellness program ideas you may want to steal

Every morning, people get ready for work and then sit in their cars (or public transportation), then sit when they get to work, then sit again in their cars, then sit in from of the TV when they get home. It’s time everyone breaks that cycle and starts moving around more during the day and not just when they’re at the gym, assuming they even go.

Fortunately, in an article on CNN’s website titled, “Yes, sitting too long can kill you, even if you exercise,” reveals that taking “movement breaks” every 30 minutes basically cancels out this health problem. But it’s not as simple as just standing, there are two factors impacting this—frequency and duration. How often you sit during the day, and how long you sit each time, have an effect. The article references the American Heart Association’s message of “Sit less, move more,” but admonishes them for not telling people how they should move around, or for how long.

See also: Beyond wellness: Workplace health initiatives that work

The Centers for Disease Control and Prevention (CDC) has specific guidelines and recommendations for exercising, but none for sitting. For example, if you sit for 30 minutes, you should probably walk around for at least five minutes before sitting down again. And don’t assume that a “standing desk” is healthier than a traditional desk where you sit down. There isn’t enough evidence to say that a standing desk is better. It’s all about actual movement, which is why simply standing up isn’t enough.

Age is another factor that would seem to make a difference but actually doesn’t. The article discusses age, yet the same principles apply. Older adults who sat more often and for long durations were far more likely to die earlier than those who sat less.

See also: Top 10 Corporate Wellness Habits to Adopt During 2018

The message is clear. Regardless of who you are, what you do for a living, or how “fit” you may be, if you’re not moving around during the day and sitting for fewer than 30 minutes, you’d better get used to the fact that you may not be around as long as you expect, so get moving!

SOURCE: Olson, B. (18 September 2018) "Get Moving...To Live!" (Web Blog Post). Retrieved from http://blog.ubabenefits.com/get-moving...to-live


Senate passes bill to combat opioid epidemic

On September 17, the Senate passed a bill to help fight prescription drug and opioid misuse in the United States. Read this blog post to learn more.


Both parties got behind a bill designed to fight the misuse of opioids and other addictive medications, with a sole Republican voting against it as it passed in the Senate.

See also: The days of employers ignoring the opioid crisis are over

As reported by the Associated Press, Utah Republican Mike Lee was the sole dissenting voice as the bill was passed 99-1.

According to the reports, the legislation’s reach is broad, with provisions for deeper scrutiny of arriving international mail that could contain illegal drugs; money for the National Institutes of Health research on nonaddictive painkillers; paving the way for pharmaceutical companies to conduct research on alternatives; approval for the Food and Drug Administration to require drug manufacturers to provide opioids and similar drugs in smaller quantities and packages; and provides federal grants for treatment centers, emergency worker training and prevention research.

See also: A look at how the opioid crisis has affected people with employer coverage

It also would push physicians to discuss pain management alternatives with Medicare patients, something that could have an effect on Department of Health and Human Services data indicating that a third of Medicare Part D prescription plan users in 2017 were prescribed opioids.

“I recognize these provisions are just a start, but we are losing 116 lives every day. And we need to save as many as we can—as soon as we can,” Sen. Gary Peters (D., Mich.) told the Senate.

See also: Employers take steps to address opioid crisis

Funding for the provisions of the measure will have to come from separate spending bills, and for the bill to become law, it will have to be reconciled with legislation that passed the House back in June. Despite the high level of tension between Democrats and Republicans at present, according to the Wall Street Journal, “Senate aides are optimistic the measures can be reconciled and passed by the end of the year.” Still, opioid use is definitely a bipartisan issue, hitting red and blue states alike, with preliminary data from the Centers for Disease Control and Prevention indicating that in 2017 U.S. overdose deaths from all drugs set a record and ballooned to more than 72,000.

SOURCE: Satter, M. (18 September 2018) "Senate passes bill to combat opioid epidemic" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/09/18/senate-passes-bill-to-combat-opioid-epidemic/


Here’s how HR pros can breeze through open enrollment

Open enrollment is quickly approaching and can often make the most experienced HR professionals shudder. Read this blog post to learn how you can breeze through open enrollment this year.


Three words have the power to make the most experienced HR professional shudder: open enrollment season.

Open enrollment season is a challenge, no matter how well the HR department prepares. Costs for medical and pharmacy benefits continue to rise, which means there are adjusted employee contributions to present to an audience who’s unlikely to understand the reasoning behind cost increases. There may be new benefits offerings that require employees to pay close attention during the decision-making process. There are open enrollment education campaigns and communications meetings to plan and launch.

Employers with multiple generations of workers must accommodate a wide range of health and welfare benefit needs. New laws (like the federal tax law) plus evolving regulations around benefits add more to HR’s already full plate. (No wonder you don’t have time for lunch.)

But, there’s good news. First, open enrollment is made easier if you plan throughout the year for it. Second, these four tips can help HR professionals make open enrollment much easier.

Review trends and projections ASAP. Focus on the renewal rate long before the renewal date. If your employee benefits renew at the beginning of the year, you may not have received your rate yet. But frankly, by now you should have a very good idea where the rate is projected to land. Reviewing claims and trend data alongside benchmarking and industry analyses throughout the year can help you and your broker project, within a few percentage points, how your renewal rate will increase or decrease.

Your benefits broker should be analyzing your program data on an ongoing basis to estimate the renewal rate and avoid a nasty surprise. The broker should also challenge the first carrier rate offered — there’s almost always room for negotiation. Doing pre-renewal work throughout the year can help you prepare for plan changes and position you to make the best decisions for the organization and employees. It will also help facilitate a smoother open enrollment season.

Keep new benefit options simple. After reviewing benefits and trends, you may find that adding a pre-tax benefit, such as a health savings account, flexible spending account or a health reimbursement account, can help the organization save money while giving employees a way to better plan their healthcare and finances. However, with their alphabet soup acronyms, HSAs, FSAs and HRAs are confusing. Even if you did a whole campaign on the topic for the last open enrollment season, it makes sense to repeat it.

The same goes for voluntary benefits: keep them simple. There is a dearth of voluntary benefits available for a multi-generational workforce. While adding voluntary benefit sounds appealing —especially if your core benefits are changing — which products are right for your organization? Survey your employees to get their feedback; they’ll appreciate that you’re asking for their opinion. Once you tally the feedback, resist the urge to offer a slew of voluntary products. Keeping it simple means adding the one (or a few) that are most desired by your workforce.

Voluntary benefits require significant education and engagement — especially products that are newer to the market. (Student loan debt assistance is a good example.) When it comes to a successful voluntary benefits program, timing is everything. If you plan to add student loan debt repayment, pet insurance, long-term care, or any other new voluntary product, the open enrollment season is not the recommended time to do it. Running a voluntary education and communications campaign and open enrollment off cycle will allow employees to focus on their main menu of options during the open enrollment season, then decide later what they want to add for “dessert.”

Educate. Rinse and repeat. You offer employee benefits to help recruit and retain the best talent. But if your employees don’t understand the core and voluntary benefits you offer, you’re unlikely to increase engagement or retention — and you might even see costs rise.

The health and welfare benefits landscape is changing drastically, which means the onus is on the employer and the HR department to educate the workforce on how the plan is changing (if at all). This means putting decision-support tools, such as calculators, in employees’ hands to help them estimate how much insurance they will need to make the best decision. You could run a whole campaign around that topic.

In addition, try using new methods of communication such as social media messages, text messaging, small-group meetings, your company’s intranet, and one-on-one sessions to help employees avoid mistakes at decision time.

Create a 21st-century experience. Manual benefits enrollment and tracking is so 1999. Moving away from paper-based enrollment will save trees — and possibly your sanity — during the open enrollment season and throughout the year. Benefits administration technology allows employees to ponder their options and enroll at their leisure. A decision-support platform enables better enrollment tracking and eliminates typos and mistakes that can pose major issues for the plan participant and the HR team.

Benefits administration technology provides checks and balances that streamline important tactical functions. Mistakes can put you in a world of hurt when it comes to benefit laws and regulations, such as missing those all-important annual HIPAA and COBRA notifications. You can avoid potential government penalties, fines and employee lawsuits with automatic notifications by the benefits administration platform. Technology can also help you identify ineligible dependents, provide employee data to a COBRA provider if employment ends, interface with your payroll platform — the list is almost endless.

The bottom line: Employees won’t enroll in what they don’t understand — which could lead them to choose a benefits plan that is more expensive, or with fewer options, than what they need. Being prepared for open enrollment season, keeping plans simple, focusing on employee education and communications (and the employee experience) can help mitigate issues for plan participants and HR.

Putting all of your ducks in a row throughout the year will ease headaches during the open enrollment season. You might even be able to take a lunch break.

SOURCE: Newman, H (30 August 2018) "Here’s how HR pros can breeze through open enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-human-resources-can-breeze-through-open-enrollment?feed=00000152-a2fb-d118-ab57-b3ff6e310000


ACA: 4 things employers should focus on this fall

Employers who fail to comply with certain Affordable Care Act (ACA) rules are still subject to penalties. Read this blog post to learn about the four things employers should focus on to avoid financial liabilities.


During the coming months, employers may have questions about whether they still need to worry about the Affordable Care Act (ACA). The answer is yes; the ACA is alive and well, despite renewed legal challenges and the elimination of the individual mandate beginning next year.

While the Tax Cuts and Jobs Act reduced the tax penalty for individuals who don’t have health coverage to $0, effective for 2019, employers are still subject to penalties for failing to comply with certain ACA rules. For example, the IRS is currently enforcing “employer shared responsibility payments” (ESRP) penalties against large employers who fail to meet the ACA requirements to offer qualifying health coverage to their full-time employees. For this purpose, large employers are those with 50 or more full-time or full-time equivalent employees. Here are four things about the ACA that employers should focus on to avoid significant financial liabilities.

1. The IRS is currently assessing penalties using 226-J letters

In 2017, the IRS began assessing ESRP penalties against large employers that failed to offer qualifying health coverage to at least 95 percent of their full-time employees. An ESRP penalty assessment comes in the form of a 226-J letter, which explains that the employer may be liable for the penalty, based on information obtained by the IRS from Forms 1095-C filed by the employer for that coverage year, and tax returns filed by the employer’s employees. The employer has only 30 days to respond to the 226-J letter, using IRS Form 14764, which is enclosed with the 226-J letter. The employer must complete and return IRS Form 14765 to challenge any part of the assessment.

The short timeframe for responding to a 226-J letter means that staff who are likely to be the first to receive communications from the IRS should have a plan in place to react quickly. Training for staff should include information about who to notify and what documentation to keep readily available to support an appeal. Not responding to the IRS 226-J letter will result in a final assessment of the proposed penalty. These penalties can be significant. In the worst case, an employer with inadequate health coverage could pay for the cost of the coverage, as well as penalties of $2,000/year (as indexed) for every full time employee (less 30), even those who received health coverage from the employer.

Depending on the employer’s response to the initial assessment, the IRS will then send the employer one of four types of 227 acknowledgment letters. If the employer disputes the penalty, the IRS could accept the employer’s explanation and reduce the penalty to $0 (a 227-K letter). But if the IRS rejects any part of the employer’s response, the employer will receive either a 227-L letter, with a lower penalty amount, or a 227-M letter, a notice that the amount of the initial assessment hasn’t changed. These letters will explain steps the employer has to take to continue disputing the assessment, including applicable deadlines. The next phase of the appeal might include requesting a telephone conference or meeting with an IRS supervisor, or requesting a hearing with the IRS Office of Appeals.

2. ACA reporting requirements and penalties still apply

Along with the ESRP penalties, the Form 1094-C and 1095-C reporting requirements still apply to large employers. The IRS uses information on Forms 1095-C in applying the ESRP rules and deciding whether to assess penalties against the reporting employer. Large employers must file Forms 1095-C every year with the IRS and send them to full-time employees in order to document compliance with the ACA requirement to offer qualified, affordable coverage to at least 95 percent of full-time employees. Technically, the forms are due to employees by January 31, and to the IRS by March 31, each year, to report compliance for the prior year. In the past, the IRS has extended the deadline for providing the forms to employees, but not the deadline for filing with the IRS. 

Penalties can apply if an employer fails to file with the IRS or provide the forms to employees, and the penalty amount can be doubled if the IRS determines that the employer intentionally disregarded the filing requirement. These penalties can apply if an employer fails to file or provide the forms at all, files and provides the forms late, or if the forms are timely filed and provided, but are incorrect or incomplete.

In some instances, the IRS has assessed ESRP penalties based on Form 1095-C reporting errors. So, in addition to the reporting-related penalties, inaccurate information on Forms 1095-C can lead to erroneous ESRP assessments that the employer will then need to refute, using the IRS forms and procedures described above.

Employers should carefully monitor their ACA filings and reports, and consider correcting prior forms if errors are discovered. Employers should also continue tracking offers of coverage made for each month of 2018, to prepare for compliance with the Form 1095-C reporting requirement early in 2019.

3. “Summary of Benefits and Coverage” disclosure forms are still required

The ACA added a new disclosure requirement for group health plans, called a “Summary of Benefits and Coverage” or “SBC,” that’s intended to help employees make an “apples to apples” comparison of different benefit plan features, such as deductibles, out-of-pocket maximums, and copayments for various benefits and services. This requirement still applies, and SBCs must be provided during open enrollment, upon an employee’s initial eligibility for coverage under the plan, and in response to a request from an employee. The template SBC form and instructions for completing it were updated for coverage periods starting after April 1, 2017. For 2018, a penalty of $1,128 per participant can apply to the failure to provide an SBC as required. 

4. The “Cadillac Tax” has not been repealed

The ACA’s so-called Cadillac tax — an annual excise tax on high-cost health coverage — was initially scheduled to take effect in 2018. The Cadillac tax has been repeatedly delayed, and the federal budget bill passed in January delayed it again through December 31, 2021. Despite the repeated delays, the Cadillac tax has not been repealed and is currently scheduled to apply to health coverage offered on or after January 1, 2022. This might be an issue to consider for employers who are negotiating collective bargaining agreements in 2018 that include terms for health benefits extending beyond 2021. 

While uncertainty continues to surround the ACA, employers should remain aware of continuing compliance requirements to avoid the potentially significant penalties that remain in effect under the ACA. 

Boyette, J; Masson, L (21 August 2018) "ACA: 4 things employers should focus on this fall" (Web Blog Post). Retrieved from https://www.benefitspro.com/2018/08/21/aca-4-things-employers-should-focus-on-this-fall/


Top 10 health conditions costing employers the most

What health conditions are costing employers the most? As healthcare costs continue to rise, employers are constantly looking for ways to lower their costs. Continue reading to learn more.


As healthcare costs continue to rise, more employers are looking at ways to target those costs. One step they are taking is looking at what health conditions are hitting their pocketbooks the hardest.

“About half of employers use disease management programs to help manage the costs of these very expensive chronic conditions,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefits Plans. “In addition, about three in five employers use health screenings and health risk assessments to help employees identify and monitor these conditions so that they can be managed more effectively. Early identification helps the employer and the employee.”

What conditions are costly for employers to cover? In IFEPB’s Workplace Wellness Trends 2017 Survey, more than 500 employers were asked to select the top three conditions impacting plan costs. The following 10 topped the list.

10. High-risk pregnancy

Although high-risk pregnancies have seen a dip of 1% since 2015, they still bottom out the list in 2017; 5.6% of employers report these costs are a leading cost concern for health plans.

9. Smoking

Smoking has remained a consistent concern of employers over the last several years; 8.6% of employers report smoking has a significant impact on health plans.

8. High cholesterol

While high cholesterol still has a major impact on health costs — 11.6% say it’s a top cause of rising healthcare costs — that number is significantly lower from where it was in 2015 (19.3%).

7. Depression/mental illness

For 13.9% of employers, mental health has a big influence on healthcare costs. This is down from 22.8% in 2015.

Five frequently overlooked mistakes in HIPAA compliance

Healthcare entities are often confused by HIPAA regulations. Continue reading to learn about the 5 most frequently overlooked mistakes in HIPAA compliance.


HIPAA was enacted in 1996. In the years since, most healthcare entities have adapted to the major requirements imposed by HIPAA, HITECH and the Privacy and Security Rules. Nevertheless, the thicket of regulations still leaves some traps for the unwary. Here are the most frequent tripwires.

First, the goal of HIPAA is integrity and availability of records along with confidentiality. For workflow or other reasons, hospitals or other covered entities are often reluctant to share patient records.

With the exception of certain specific carve outs, such as psychotherapy notes, this violates HIPAA. Patients are entitled to their records. Compliance programs must accommodate this legal reality

Second, HIPAA requires that disclosure of healthcare records be minimized to the extent necessary to accomplish the objective. In other words, a contractor or other entity with access to personal health information is only entitled to those data points necessary to perform their function e.g. names and addresses.

For practical purposes, a technical solution is not always available — a covered entity may have a single computer system, and cannot realistically reconfigure it for every purpose.

Also see: 

In such instances however, compliance may not be left by the wayside. It must be accomplished by alternative means such as administrative safeguards. For example, a covered entity and business associate may contractually agree to limit access, and combine this restriction with random audits to ensure compliance.

Third, the requirement of minimal disclosure also extends to individual employees and contractors. They are entitled only to those records they need to perform their job functions.
Of course, in the real world those functions continually evolve. Employees often switch roles, go on leave, rotate to different units or complete the tasks that entitled them to access in the first place.

Yet access is rarely calibrated to fluctuating business needs. Excessive access is a regulatory risk. Any compliance program needs to regularly reassess employee access. It must adjust PHI access rights to conform to current responsibilities.

Fourth, HITECH and the Security Rule require a security assessment and the institution of safeguards to protect against reasonably anticipated disclosure. They also require that all business associates be bound to adhere to the safeguards program.

The Business Associate Agreement needs to specifically incorporate this requirement. Technically, the failure to do so, even in the absence of a breach, is a violation. Yet many covered entities overlook this requirement.

If the business associate is unwilling to accommodate the requirement, the covered entity needs to evaluate the contractual arrangement, ensure that it meets the identified security criteria, and document the basis for this determination.

Finally, the healthcare sector is consolidating. The acquisition and consolidation of practices results in transition periods where the successor entity has multiple sets of PHI records under multiple compliance regimes.

The result is a program that is either incomplete, incompatible, or is otherwise deficient. This is a serious regulatory risk. While a seamless transition may not be possible, incorporating compliance into the succession plan at the earliest possible stage is the prudent approach.

None of these five steps require mastery of particularly arcane aspects of the HIPAA regulatory scheme. Yet covered entities and business associates regularly stumble on them. Each of these pitfalls is easily remedied. In compliance, as in medicine, an ounce of prevention is worth a pound of cure.

SOURCE: Gul, S (2 August 2018) "Five frequently overlooked mistakes in HIPAA compliance" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/five-frequently-overlooked-mistakes-in-hipaa-compliance


Amazon has just entered the drug-distribution business

Amazon is the king, knocking big competitors out one by one. Today, they take down pharmacies by offering online health-care services. See what Amazon has in store here.


Amazon.com Inc. agreed to buy the online pharmacy startup PillPack, jumping into the health-care business with a deal that will give the retail giant an immediate nationwide drug network.

The move represents a formidable threat to pharmacy chains including Walgreens Boots Alliance Inc., which earlier Thursday reported tepid U.S. same-store sales, and rival CVS Health Corp. Walgreens was down 10 percent at 10:18 a.m. in New York, while CVS shares shed 8.9 percent.

Terms of the deal weren’t disclosed. The transaction is expected to close in the second half of 2018, according to a statement from the companies.

The U.S. market for prescription medicine is huge. In 2016, U.S. consumers spent $328.6 billion on retail prescription drugs, according to the U.S. government. CVS reported prescription sales of $59.5 billion last year, and Walgreens sold $57.8 billion worth of drugs in its fiscal 2017.

PillPack has mail-order pharmacy licenses in all 50 U.S. states, which could allow Amazon to expand quickly. PillPack also has relationships with most major drug-benefit managers, including Express Scripts and CVS, and says it works with most Medicare Part D drug plans. Those ties will give Amazon access to much of the prescription drug market in the U.S.

PillPack sells pre-sorted packets of prescriptions drugs, delivering them to customers in their homes. The closely held firm has software that automates many routine pharmacy tasks, such as verifying when a refill is due, determining co-pays, and confirming insurance. That eliminates much of the manual work that pharmacists often are saddled with now.

The pact follows months of speculation about Amazon’s plans to get into the pharmacy or drug-distribution business. Despite the retailer’s vast reach, entering the market presented a daunting logistical challenge in terms of licensing and dealing with a range of private and government payers. Acquiring PillPack’s networks helps Amazon surmount those hurdles.

Michael Rea, chief executive officer of Rx Savings Solutions, said PillPack could transform the industry and that employers and health plans would benefit from the deal, which he called a “sign of the times.”

“This move signals just how big of a market opportunity there is to change the pharmacy landscape,” Rea said in an email.

Amazon has been disrupting businesses from electronics to household staples and even package delivery. Pharmacy and health-benefits companies have long fretted that they’d be next. Chief Executive Officer Jeff Bezos signaled his interest in health-care earlier this year when he teamed up with Berkshire Hathaway Inc.’s Warren Buffett and JPMorgan Chase & Co.’s Jamie Dimon to form a health-care company to manage the health plans of their more than 1 million employees.

The selloff in drugstore stocks was reminiscent of the food-industry swoon that resulted in June 2017 when Amazon said it was buying Whole Foods Market Inc. Kroger Co., the biggest U.S. supermarket chain, saw $2 billion in market value wiped out in one day. Big packaged food stocks also took a hit.

“When Amazon sneezes, everybody else catches a cold,” said Joseph Feldman, an analyst with Telsey Advisory. “And I think that that’s more likely than not what you’re going to see today.”’

Long time coming

Prescription drugs sales are largely intertwined with groceries and personal items like makeup and shampoo and Amazon already sells bulk packs of latex gloves, bed pads and syringes. It recently began selling medical devices and instruments, as well.

Bezos has been thinking about the drug business for nearly two decades; in 1999, Amazon purchased a stake in Drugstore.com. That effort ultimately failed and Walgreens purchased the money-losing startup in 2011 and ultimately shut it down.

Pharmacist TJ Parker and computer scientist Elliot Cohen founded PillPack in 2013 after meeting at a medical-technology program at the Massachusetts Institute of Technology. The company raised more than $118 million from brand-name investors including Accel, Sherpa Capital and New York rapper Nas’s Queensbridge Venture Partners.

A September 2016 funding round valued the Boston-based startup at around $360 million, according to venture-capital database PitchBook. In April, CNBC reported Walmart Inc. was in talks to buy the company for “under $1 billion,” citing unnamed sources.

Standing firm

For now, Walgreens indicated that it was in no hurry to find a deal to respond to Amazon, despite the damage to its stock. On an earnings conference call, Walgreens CEO Stefano Pessina faced multiple questions from analysts about the PillPack deal.

“It is a declaration of intent from Amazon,” said Pessina.

He said Walgreens knew that PillPack was for sale as “it had been for sale for a while,” but that the retailer wouldn’t do deals based on emotions or make moves that could destroy value. Pessina insisted that physical pharmacies would continue to be “very important.”

The slump in Walgreens shares weighed on the Dow Jones Industrial Average, which added the stock to its index of 30 companies this month, replacing General Electric Co.

SOURCE:
Langreth R and Tracer Z (29 June 2018) "Amazon has just entered the drug-distribution business" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2018/06/28/amazon-has-just-entered-the-drug-distribution-busi/


Are Virtual Doctor Visits Really Cost-Effective? Not So Much, Study Says

As the virtual world expands, it raises a question: at what point does it take away from the user experience? In this article from Kaiser Health News, we take a look at a study presenting facts on how virtual healthcare may be an issue rather than a convenience. Read further for more information.


Consultations with doctors by phone or video conference appear to be catching on, with well over a million virtual visits reported in 2015. The convenience of “telehealth” appeals to patients, and the notion that it costs less than an in-office visit would make it attractive to employers and health plans. But a new study suggests that while telehealth services may boost access to a physician, they don’t necessarily reduce health care spending, contrary to assertions by telehealth companies. The study, published Monday in the journal Health Affairs, shows that telehealth prompts patients to seek care for minor illnesses that otherwise would not have induced them to visit a doctor’s office. Telehealth has been around for more than a decade, but its growth has been fueled more recently by the ubiquity of smartphones and laptops, said Lori Uscher-Pines, one of the study’s authors who is a policy researcher at the Rand Corp., a nonprofit think tank based in Santa Monica, Calif.

These virtual consultations are designed to replace more expensive visits to a doctor’s office or emergency room. On average, a telehealth visit costs about $79, compared with about $146 for an office visit, according to the study. But it found that virtual visits generate additional medical use. “What we found is contrary to what [telehealth] companies often say,” Uscher-Pines told California Healthline. “We found an increase in spending for the payer.” The researchers found that only 12 percent of telemedicine visits replaced an in-person provider visit, while 88 percent represented new demand. The researchers examined 2011-13 utilization data of 300,000 people enrolled in the Blue Shield of California Health Maintenance Organization plan offered by the California Public Employees Retirement System, which covers current and former state employees and their families. CalPERS’ Blue Shield HMO started offering telehealth services, available 24/7 to its beneficiaries, in April 2012.

The researchers focused on virtual visits for respiratory illnesses, which include sinusitis, bronchitis, pneumonia and tonsillitis, among others. While a single telehealth visit for a respiratory illness costs less than an in-person visit, it often results in more follow-up appointments, lab tests and prescriptions, which increases spending in the long run. Liability concerns may prompt telehealth physicians to recommend that a patient go in for a face-to-face appointment with a doctor, the study notes. Researchers estimated that annual spending for respiratory illnesses increased about $45 per telehealth user, compared with patients who did not take advantage of such virtual consultations. Jason Gorevic, the CEO at Teladoc, the operator that provides telehealth services for CalPERS Blue Shield members, said the new study doesn’t square with Teladoc data showing the cost savings of telemedicine.

According to 2016 data, Gorevic said, only 13 percent of Teladoc visits represent new medical use. He noted that the Rand study uses older data, and that many things have changed since then — including the technology, the rate at which these services are being adopted and patient engagement. “In fact, other more comprehensive studies — using six times the amount of claims data including the same population as the [Rand] study — have found tremendous value of telehealth, with consistently repeatable results,” Gorevic said. These other studies have shown that telehealth decreases overall health care spending, he said. But Uscher-Pines said the Rand findings were not surprising.

When Rand researchers studied retail clinics last year, they found that making access to health care more convenient triggers new use and additional costs. That study found 58 percent of visits to in-store clinics represented new use of medical services rather than a substitute for doctor office visits. Yet the fact that telehealth services are more affordable per visit than a trip to a physician’s office shows that there is still a pathway to cost savings, Uscher-Pines said. To achieve cost savings, telehealth services would have to replace costlier visits, the researcher said. Insurers could increase telehealth visit costs for patients to deter unnecessary use.

Another way to increase the health system value of virtual doctor visits is to target specific groups of patients — such as those who often use emergency rooms for less severe illnesses. An emergency room visit costs an estimated $1,734. “You could take these people in the emergency department and offer them this cheaper option. That would be a direct replacement,” Uscher-Pines said. Gorevic said that a challenge for telehealth is engaging consumers, so the comparatively low fees provide a financial incentive. “Because a telehealth visit is much cheaper than an in-person visit, the cost sharing should be reflective of that,” he said.

Marcus Thygeson, senior vice president and chief health officer at Blue Shield, which also provides virtual doctor visits through Teladoc, in a statement said that “increased convenience can increase utilization, so overall healthcare costs may increase or stay the same. Blue Shield supports the use of telemedicine to improve access for both primary and specialty healthcare, especially in rural communities.” The researchers noted several limitations to the Rand study.

For example, researchers examined only one telehealth company and studied only visits for respiratory illnesses. In addition, the patients whose data were scrutinized had commercial insurance, and it is possible the use of telehealth would differ among people with government insurance, high-deductible plans or no insurance at all, the study said.

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. Written by: Ana B. Ibarra