HCR Update: PCIP; Quality of Care

Here is the latest Health Care Reform Update, brought to you with the help of our partners at UBA:

HHS Announces Lower PCIP Premiums

The federal government announced on May 31 that they will increase subsidies to premiums in the Pre-Existing Condition Insurance Program (PCIP) in another effort to spur enrollment. The added subsidies, which will begin July 1, will result in premiums being reduced by up to 40 percent in 17 of the 23 states and D.C. which have the program administered by the federal government. (For example, the monthly premium for a person older than 55 in Florida will be $234.) The remaining 27 states, which each run their own plans, will be able to reduce premiums as well.

In addition, people who would like to enroll in the program no longer need to provide a letter from an insurance company denying them coverage. Starting July 1, 2011, program applicants can simply provide a letter from a doctor, physician assistant, or nurse practitioner dated within the past 12 months stating that they have or, at any time in the past, had a medical condition, disability, or illness. HHS officials cannot waive other eligibility requirements that are spelled out in the statute, such as a rule that people must be without insurance for six months before qualifying for the risk pool.

This announcement comes as enrollment in the Pre-Existing Condition Insurance Plan continues to lag far behind expectations. To date, only 18,000 Americans have signed up for the PCIP. Officials initially said it would reach over one million enrollees by the time the program is phased out in 2014, when it will become illegal for insurance companies to discriminate against the sick. $5 billion in funding for the program was included in PPACA legislation passed in March 2010.

Major New Effort to Give Consumers and Employers Better Information About Quality of Care
The Centers for Medicare & Medicaid Services (CMS) proposed rules that will allow organizations that meet certain qualifications access to patient-protected Medicare data to produce public reports on physicians, hospitals and other health care providers. These reports will combine private sector claims data with Medicare claims data to identify which hospitals and doctors provide the highest quality, cost-effective care.

This new program would provide for the following activities:

• CMS would provide standardized extracts of Medicare claims data from Parts A, B, and D to qualified entities.
• The data can only be used to evaluate provider and supplier performance and to generate public reports detailing the results.
• The data provided to the qualified entity will cover one or more specified geographic area(s).
• The qualified entity would pay a fee that covers CMS' cost of making the data available.
• To receive the Medicare claims data, qualified entities would need to have claims data from other sources.
• To prevent mistakes, qualified entities must share the reports confidentially with providers and suppliers prior to their public release, which gives providers and suppliers an opportunity to review the reports and provide necessary corrections.
• Publicly released reports would contain aggregated information only, meaning that no individual patient/beneficiary data would be shared or be available.
• During the application process, qualified entities would need to demonstrate their capabilities to govern the access, use, and security of Medicare claims data.
• Qualified entities would be subject to strict security and privacy processes.
• CMS would continually monitor qualified entities, and entities that do not follow these procedures risk sanctions, including termination from the program.

This initiative will be based on quality measures that hospitals have been reporting to the Hospital Inpatient Quality Reporting Program since 2004, and that information is posted on the Hospital Compare website. CMS will invest up to $1 billion to help drive these changes.

The proposed rule is on display at the Office of the Federal Register HERE. Comments are welcome on this set of proposed rules.

New Rules for Child Only Policies in Iowa

Federal Healthcare Reform legislation passed in 2010 requires insurance companies to allow children under age 19 to enroll in a plan regardless of health status, claims history, or geographic status. A child only policy can be a good option for some families when traditional family coverage is not practical. But today you cannot buy a child only health insurance policy anywhere in the state of Iowa.


The Iowa Insurance Division (IID) issued a new Administrative Rule that requires all individual health insurance carriers doing business in Iowa to offer coverage to individuals under age 19 during an annual open enrollment period of July 1 through August 14 each year. Applications received during the open enrollment period will be offered coverage on a guaranteed-issue basis, regardless of past or present medical conditions. It’s important to note that insurance companies can charge a higher premium based on health status.

TrueNorth recommends that parents consider applying for a child only policy if:

• A child has past or ongoing medical conditions that made it difficult (or even impossible) to obtain insurance coverage, or
• Providing coverage for a healthy child through an employer plan is a financial burden for the family.

**Note that if an employee is contributing premium dollars for their dependents’ coverage on a pre-tax basis (through a Section 125 plan), there may be limitations regarding if/when a dependent may be dropped from the plan.

TrueNorth has specialists that are experts in the individual health markets, including child only health plans. If you think you might benefit from placing your child under such a policy, please feel free to contact:

Tana Studt, RHU at (319) 739-1414 or
Ted Messer, CLU, ChFC, LUTCF at (319) 739-1421.

HCR Update: Medicare Notices; HIPAA Rules

CMS Makes Changes to Medicare Part D Creditable Coverage Notice Requirement
Organizations and "entities" that provide prescription drug coverage to Medicare Part D eligible individuals must annually notify these individuals whether the drug coverage they have is creditable or noncreditable.

The Centers for Medicare & Medicaid Services (CMS) has made two changes to this requirement:

• CMS has issued new model disclosure notices that are to be used after April 1, 2011. The model notices, in both English and Spanish, can be found on the CMS website.
• Because the Patient Protection and Affordable Care Act (PPACA) changed the Medicare enrollment period, beginning in 2011, the disclosure notice must now be sent to participants a month earlier. In the past, the Medicare enrollment period was Nov. 15 through Dec. 31, and the notice had to be given out by Nov. 15. PPACA changes the enrollment period to Oct. 15 through Dec. 7. Accordingly, creditable coverage notices must be sent by Oct. 15.

HHS Releases Proposed Rule on HIPAA Privacy Rule Accounting of Disclosures Under HITECH Act
The Department of Health and Human Services (HHS) released a proposed rule to modify the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule's standard for accounting of disclosures of protected health information.

The proposed rule, in part, implements statutory requirements under the Health Information Technology for Economic and Clinical Health Act (HITECH Act) to require covered entities and business associates to account for electronic disclosures of protected health information to carry out treatment, payment and health care operations.

HHS proposes to expand the accounting provisions to provide individuals with the right to receive an access report indicating who has accessed electronic protected health information. Also proposed are changes to accounting requirements to improve workability and effectiveness. Comments are due on or before Aug. 1, 2011.