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Employers Grapple With Birth Control Mandate

May 09, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News

www.Medtipster.com Source: Employee Benefit News, 5/1/12 – By, Lisa V. Gillespie

Federal contraception coverage mandate raises ire among insurers, may raise premiums for health plan members

The intersection between religion and business is a heated one, with the most recent flare-up sparked by a provision in the Patient Protection and Affordable Care Act that mandates employers cover the cost of contraception in their health plans. Although the Obama administration exempted houses of worship from the rule, it still requires coverage be made available to employees of religiously affiliated organizations such as hospitals and universities.

The administration has said insurers should ultimately make up any initial costs by avoiding expenses associated with unintended pregnancies. But a survey of 15 large health plans shows they are dubious of such savings.

Asked what impact the requirement will have on their costs in the year to two years after it goes into effect, 40% of insurers said they expect the requirement will increase costs through higher pharmacy expenses.

The survey of pharmacy directors at the health plans was conducted by Reimbursement Intelligence, which advises pharmaceutical, medical device and other companies on reimbursement issues. The firm did not name the insurance plans it surveyed.

Of the health plans, 20% said costs would even out because they already budget for contraception in the premium, 6.7% said it would drive up pharmacy costs but decrease medical costs, while 33.3% weren’t sure. None said it would lead to net savings.

“[Insurers] think it will raise pharmacy costs and won’t lower medical costs,” says Rhonda Greenapple, chief executive officer of Reimbursement Intelligence. “The idea that preventive care is going to reduce overall health care costs, they don’t buy it.”

In addition to health insurance companies, lawmakers also have questioned the precedent set by Obama’s plan that would force insurers to pay for coverage with no clear way of recouping the expense. “The idea that insurance companies are going to provide free coverage for items contained in the administration’s order reflects a misunderstanding of the business of insurance,” says Rep. Dan Lungren (R-Calif.). “Under its ‘accommodation,’ the religious employer continues to pay premiums that contribute to the revenues of the insurers. The money paid by religious employers for what will inevitably be higher premiums thereby frees up insurer funds to pay for abortion-inducing drugs, sterilization and contraception in violation of their strongly held beliefs.”

The guidelines require insurers to do away with copayments on coverage of preventive care services for women in all new plans beginning in August. A poll from the Kaiser Family Foundation in February showed nearly two-thirds of Americans favor the policy requiring birth control coverage for female employees, including clear majorities of Roman Catholic, Protestant evangelical and independent voters. Sixty-three percent of Americans overall supported it, according to the data.

But Catholic leaders, Protestant evangelical groups, Republicans and other social conservatives rejected the compromise, saying it still violates religious freedom under the U.S. Constitution and would cause economic hardship for self-insured institutions. The controversy has spawned a rancorous debate in Congress as well as a handful of Catholic lawsuits, including a federal suit in Nebraska joined by seven U.S. states.

Employer response

Some employers have voiced support for the rule, including one reader of EBN’s blog Employee Benefit Views, who said his/her employee population consists mainly of lower-income employees “who make $10 to $15 an hour who may not use birth control – not because of religious reasons, but because they cannot afford the cost of the birth control and keep a roof over their heads. I work for a self-funded employer, and this would create additional costs for us. However, these could possibly be off-set with the savings from births, disability leaves and the like.”

That cost savings may be attractive to employers constantly looking to reduce health care cost burdens. “I understand the issue of ‘religious freedom’ here, but just because this coverage is offered by your insurance company, does not mean that you have to use it,” wrote another EBV commenter. “I would think that each adult can make their own choice on whether or not this is a benefit [they] want to use. But the coverage is there, then, for those individuals who want and need that coverage. Better than the alternative of unwanted pregnancies, abortions and the like.”

Other readers likened the coverage of contraception to coverage to treat chronic conditions. “I do understand the perspective of the employer not wanting to pay for a benefit they do not condone,” a third EBV commenter wrote. “I don’t condone many of the activities that lead to diabetes or heart disease. But I still have to pay for the people that have those habits.”

IRS adjusts rules on health insurance debit cards

December 27, 2010 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Accounting Today, a SourceMedia publication – 12.27.2010

The Internal Revenue Service issued new guidance allowing the continued use of flexible spending arrangement and health reimbursement arrangement debit cards for the purchase of prescribed over-the-counter medicines and drugs.

The new guidance modifies previous guidance to permit taxpayers to continue using FSA and HRA debit cards to purchase over-the-counter medications for which the taxpayer has a prescription.

Effective after Jan. 15, 2011, in accordance with the new guidance, this use of debit cards must comply with procedures reflecting those that pharmacies currently follow when selling prescribed medicines or drugs.

The procedures include requirements that a prescription for the medication be presented to the pharmacy or the mail-order or web-based vendor that dispenses the medication and that proper records be retained.

In accordance with the Affordable Care Act, the cost of over-the-counter medicines or drugs can be reimbursed from a health FSA or HRA if a prescription has been obtained. The requirement to obtain a prescription does not apply to insulin.

The prescription requirement applies to purchases made on or after Jan. 1, 2011, and not to purchases made in 2010 even if reimbursed after Dec. 31, 2010. Because the requirement applies only to over-the-counter medications, it does not apply to other health care expenses such as medical devices, eye glasses or contact lenses.

The new guidance, IRS Notice 2011-5, as well as answers to frequently asked questions on IRS.gov, also contain further details on health FSA and HRA debit card purchases, including purchases from health care providers other than pharmacies and mail order and web-based vendors.

For guidance on health FSA and HRA debit card purchases at “90 percent pharmacies,” see IRS Notice 2010-59. More information on health care reform provisions can be found on the Affordable Care Act page on IRS.gov.

Flexible spending gets more rigid

October 04, 2010 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Chicago Tribune | 10.1.2010 | By Gregory Karp

Beginning Jan. 1, you'll need a prescription to purchase over-the-counter drugs tax-free

If you have a health care flexible spending arrangement (FSA), commonly known as a flexible spending account, through your employer, it’s about to become less flexible.

The coming change means you might want to alter your FSA contribution during this year’s open-enrollment period for health benefits. New federal regulations that take effect Jan. 1 require a prescription for drugs and medications purchased with FSA money, limiting purchases you can make tax-free.

The same rules apply to health reimbursement arrangements (HRA), health savings accounts (HSA) and the less-common Archer medical savings accounts (MSA).

That means no more tax-free purchases of over-the-counter cold and flu medications, pain relievers and allergy meds without a prescription. The prohibition is part of the Affordable Care Act enacted in March.

The good news is the new rule pertains only to drugs and medicines. You can still buy over-the-counter medical supplies. So, besides such purchases as crutches, medical-testing kits and joint supports, you can still use FSA money for standard medicine cabinet stock, such as Band-Aids, contact lens solution and hearing-aid batteries. Some plans allow the purchase of suntan lotion with a sun protection factor (SPF) of more than 30 and even hand sanitizer. Big-ticket expenses such as eyeglasses and teeth braces are still allowed. And the new rule specifically exempts reimbursements for the cost of insulin, which you can still buy without a prescription.

If you have an FSA available through your employer, here’s what you need to know.

* FSAs are still a good deal. An FSA is a benefit typically offered by large employers to help workers defray medical costs not covered by insurance. You designate a yearly amount to contribute to the FSA. Your employer deducts a prorated amount from each paycheck before taxes. Whenever you pay for an approved medical item, you draw down on your fund of pledged contributions, often with a dedicated debit card.

The account allows you to save money by purchasing health care-related items with pretax money, essentially giving you a big discount. The problem with FSAs is they are “use it or lose it.” You must use the FSA money by the end of the calendar year, though many employers extend the deadline into the following year. Otherwise, you forfeit the balance. FSA money was typically used to pay for medical co-pays, deductibles and prescriptions. In 2003, the IRS loosened rules on what you could buy with FSA money, allowing over-the-counter medications and medical supplies. The new rule essentially reverses part of the 2003 change.

However, over-the-counter medicines aren’t a big part of FSA spending, on average. Only 9 percent of FSA reimbursement claims, and only 3 percent of FSA dollars, are for purchases of over-the-counter drugs and medicines, according to CBIZ, a professional-services company that processes 46,000 FSA claims per month. So, there are still plenty of tax-free purchases to make with an FSA, and literally hundreds of dollars to be saved for many households.

“I hope people continue to use their FSAs. They just have to be a little bit careful about the amount of their contribution,” said Melissa Labant, a tax manager at the American Institute of CPAs.

* Re-evaluate. During open enrollment this year for your company benefits covering 2011, take a critical look at how much money you should commit to your FSA, said Philip Noftsinger, president of the payroll-business unit of CBIZ. Many plans have online sites that allow you to see previous FSA purchases, he said. How much did you spend in 2010 and 2009 on over-the-counter drugs and medicines? If it’s a big dollar amount, you might want to reduce your 2011 pledge to your FSA, but most people should be fine leaving the contribution the same, Noftsinger said.

* Stock up. Smart FSA users know to stock up on medicines and supplies to exhaust their FSA fund every year. This year, use FSA money to stock up on over-the-counter drugs and medicines before Jan. 1. For example, if it’s a choice between stocking up on over-the-counter medications or paying a bill for kids’ braces that could be paid after Jan. 1, choose the meds, said Rob Wilson, president of outsourcing firm Employco USA, in Westmont, Ill., which helps small businesses set up employee-benefit plans like FSAs.

Even if your employer’s plan includes a grace period for FSA spending that spills into 2011, Jan. 1 is still the deadline for using FSA money to buy over-the-counter meds, the IRS says. Don’t worry if you aren’t reimbursed before New Year’s Day. You just have to make the purchase in calendar year 2010.

* Get a script. A minor loophole or workaround in the new rule is that you can still buy over-the-counter medications if they’re prescribed by your doctor. So, the advice is to become less shy about asking doc to whip out his prescription pad. If during an exam he says, “give the toddler Children’s Tylenol,” make him write a script so you can buy it with FSA money.

“It doesn’t cost anything extra to ask for a prescription, and then you can use your FSA,” Labant said.

However, buying over-the-counter medicines with FSA money will be more of a hassle. You’ll have to submit for reimbursement not only the receipt but the prescription, too, according to IRS rules. That’s more complicated than simply buying aspirin with your FSA debit card, often called a flex card.

“You’re probably not going through that effort for medications you keep in your house for the occasional headache or sunburn,” Noftsinger said.

Another change with health FSAs is coming in 2013. That’s when the government puts a $2,500 cap on money you can squirrel away in a health FSA, or half of what many companies allow you to put in today. Nearly 20 percent of FSA participants pledge more than that, CBIZ said.

Most large employers changing health benefit for 2011

August 23, 2010 By: Nadia Category: HealthCare, Medtipster, Prescription News

www.Medtipster.com Source: Employee Benefit News – By Kathleen Koster – 8.18.2010

According to a new survey by National Business Group on Health, more than half (53%) of large U.S. employers plan to revise their 2011 health care benefit programs in the wake of health care reform legislation and anticipated large benefit cost increases next year.

Also considering the provisions of the Patient Protection and Affordable Care Act, 19% of respondents are scaling back changes they planned to make while an equal number are making no changes.

The remaining respondents were still undecided pending further review of the final regulations.

Among employers who will be making specific changes to their health benefit plans to comply with the new law, 70% said they will remove lifetime dollar limits on overall benefits while 37% said they will make changes to annual or lifetime limits on specific benefits.

Approximately one-fourth will remove annual dollar limits on overall benefits while 13% reported they will remove pre-existing condition exclusions for children.

The survey, based on responses from 72 of the nation’s largest corporations representing more than 3.7 million employees, was conducted in May and June 2010.

“While the health reform law has forced employers to evaluate their health care benefit strategies and decide whether to comply with the law or lose grandfathered status, they haven’t lost sight of the fact that controlling rising costs remains one of, if not, their highest priority. They have to foot the bill, not the government,” says Helen Darling, president of the National Business Group on Health. 

“In fact, with cost increases expected to accelerate next year, many of the plan design changes employers are making are being done to help curb those increases, as they have to do every year,” she adds.

Employers estimate their health care benefit costs will jump to an average of 8.9% next year, compared with an average increase of 7% this year. To help curb those increases employers plan to use a wider variety of cost-sharing strategies.

According to the survey, 63% of employers plan to increase the percentage employees contribute to the premium, up from 57% who did so this year, while 46% plan to raise out-of-pocket maximums next year compared with 36% this year.

In order to further mitigate costs, employers are shifting to consumer-directed health plans. In fact, 61% of plan sponsors will offer a CDHP in 2011.

While the most common type of plan employers will offer is a high-deductible plan combined with a health savings account (64%), the survey found a large spike in employers moving to a full replacement plan.

Among employers offering a CDHP, the number moving to a full replacement plan doubled from 10% this year to 20% in 2011.

“Consumer directed health plans are living up to their expectations as a way to help save employers money and put employees in greater control of their health care.  In fact, offering these plans was the most often-cited tactic by employers to control costs.  We fully expect that employer interest in CDHPs, and especially full-replacement plans, will continue to increase in the future,” says Darling.

As the health reform law makes Medicare Part D benefits richer as the “doughnut hole” closes between now and 2020, 5% of employers plan to drop retiree health coverage in 2011 while 60% are considering doing so in the future.

In attempt to cut costs with wellness initiatives, 41% of employers offered premium discounts for completing health assessments while 22% offered premium discounts for participating in tobacco cessation programs.

In addition, one in four (25%) of plan sponsors plan to raise the co-pay or co-insurance for retail pharmacy prescription drug benefits while 21% plan to do the same for mail-order pharmacy benefits.

Copies of the survey report can be found at www.businessgrouphealth.org.

Lack of medication adherence remains widespread problem; Get into your members’ minds and resolve issues

July 23, 2010 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Managed Healthcare Executive, by Mari Edlin – 7.22.10

Patients who do not follow their medication regimens cost the U.S. healthcare system an estimated $290 billion a year, or 13% of total healthcare expenditures, according to the New England Healthcare Institute. In addition, those with low levels of medication adherence spend nearly twice as much as those who have better adherence.

Non-adherence is widespread; only about half of all U.S. patients take their medications as prescribed by their physicians, according to the Congressional Budget Office.

The Patient Protection and Affordable Care Act promotes medication adherence indirectly through several provisions including incentives to establish patient-centered medical homes and accountable care organizations as well as innovative payment models, as highlighted in a recent study in the April 28 issue of The New England Journal of Medicine.

Ann Arbor, Mich.-based HealthMedia, a health coaching organization, provides behavioral support intervention digitally. The company’s recent survey found that consumers receiving a tailored cholesterol management guide resulting from personalized responses to questions related to hyperlipidemia—their understanding of the condition, perceived barriers to medication adherence and their attitudes and beliefs—fared better than a control group.

The control group received behavioral advice from one interactive-voice-response telephone call without personalization in addition to a general cholesterol management guide delivered through the mail.

The experimental group also received reminders to refill prescriptions, tips for overcoming adherence barriers and encouragement to follow up with their doctors. Adherence was based on the use of a statin.

The findings indicate that 74.4% of the experimental patients vs. 60.7% of the control group showed six-month prevalence rates. In addition, the experimental group had medication possession rates (MPRs) over 80%, which is considered optimal from a population standpoint, while the MPR for the control group is 38.9%.

CIGNA is trying to ward off non-adherence before it gets out of control. Last year, the insurer developed CoachRx, an interactive Web site that helps members using CIGNA Home Delivery Pharmacy identify their barriers to medication adherence and then provides solutions to stay on track. It is one more program in the health plan’s tool kit for finding gaps in care. Approximately 5,000 customers have used CoachRx services—either through the Web-based portal or the pharmacist consultation hotline—indicating an increase in engagement of 20% month over month.

In addition to having access to a clinical pharmacist, members can schedule automated medication reminders and record their own messages to be relayed by text, phone or email. The program also offers educational materials, discount coupons to offset drug costs and free pill boxes to organize medication, all based on a member self-assessment.

“Many programs are one-size-fits-all, but we realize that it is critical to study how different people react and what drives them,” says Yi Zheng, assistant vice president, pharmacy clinical programs for CIGNA. “If we understand barriers, then we can personalize solutions. The result is an individualized approach around their issues connected to adherence.”

CIGNA utilizes what Zheng calls “onboarding packets” to encourage proper use of a medication when it is first prescribed. They address the drug’s use, treatment goals and possible side effects to help avoid repercussions in the future.

STOP PROCRASTINATING

Express Scripts, a pharmacy benefits manager (PBM) headquartered in St. Louis attributes $106 billion in wasteful spending to non-adherence to therapy. The PBM is segmenting members into personality categories to address specific non-adherence patterns, including “sporadic forgetter,” “active decliner,” and “refill procrastinator.”

Those classified into the sporadic forgetter group, for example, perceive therapy positively but periodically forget to take medications. The active decliner group does not consider therapy effective. The refill procrastinators view therapy positively and will take their medications if they are readily available.

“People often do not respond to things rationally,” says Bob Nease, chief scientist for Express Scripts, “which is why it is important to figure out why people do what they do regarding adherence. However, we need keener instruments to understand behavior and determine how to intervene.”

Nease says that the PBM has developed strategies to address certain kinds of behavior. For refill procrastinators, mail delivery and automatic refills can potentially increase adherence. For active decliners, physician or pharmacist intervention can provide supporting education to encourage them to continue taking medication as prescribed. Adherence reminders, text messages, email and phone calls can help sporadic forgetters.

Express Scripts conducted a randomized trial of 35,000 patients to determine what kinds of messages rang true. The rate of medication possession rose from 7% for patients who received no messages to 8.8% for those who received messages containing references to negative effects of missing doses of prescribed medication, as well as information from someone who could be regarded as a respected source or authority (a chief medical officer, for example).

“The effectiveness of messages is in the wording and in gaining permission to offer advice, which is as important as incentives,” Nease says.

The PBM found that messaging is most effective for high-risk patients.

CVS Caremark, a PBM and retail pharmacy chain based in Woonsocket, R.I., also is studying the motivators behind adherence.

“We want to pinpoint barriers,” says Bari Harlam, senior vice president, member experience.

Research focuses on why prescriptions are often filled but not picked up at the pharmacy (typically forgetfulness and financial barriers), why patients prematurely stop taking medications, which medications show the highest level of non-adherence, and the relationship between behavioral science and adherence.

“We have found that the most successful communications are those that are sensitive, prevention-oriented, appeal not just to members but also to their sense of control, and utilize the most effective channel,” Harlam says. “No one communication delivery system is right for everyone.”

FINDING GAPS IN CARE

Exploring medication adherence, Prime Therapeutics, a PBM located in St. Paul, Minn., studied the adherence rate between 30-day prescriptions acquired at a local pharmacy with 90-day supply either through retail or mail and found that those receiving the three-month supply were 40% less likely to have adherence problems. Patients were on medications for hypertension, diabetes and high cholesterol and were followed for a year and a half.

“The extended supply was definitely the determining factor rather than the channel of delivery,” says Pat Gleason, director of clinical outcomes assessment for the PBM. He calls the 90-day supply an “easy, low-cost way” to help keep patients with chronic conditions on their medications. The study shows that extended-supply patients have an adherence rate from seven to 10 percentage points higher, depending on the type of medication and the follow-up period.

On the other hand, Express Scripts promotes its mail service, which increases adherence up to eight percentage points, as the most effective intervention program to reduce non-adherence.

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