As New Transparency Rules Go Into Effect, Doubts Persist

CMS grants insurers partial reprieve in price transparency rule |  BenefitsPRO

Source: BenefitsPRO, by Scott Wooldridge

As of July 1, employer-sponsored plans will be required to comply with transparency requirements first passed in 2020. But questions remain over whether these new rules will truly help consumers.

The Transparency in Coverage (TiC) rules have been some time in the making; the original deadline was January 1, but that was pushed to July 1. The new rules are part of a larger overall reform measure that includes provisions on “surprise billing” and other provisions intended to make health insurance more consumer accessible.

Although most of the changes required will be put in place by insurers and third party-administrators (TPAs), employers should be aware of the new requirements and include the necessary information about accessing the data in employee communications.

What the new rules say

The TiC rules requires employers to provide “machine readable files” (MRF) to the public, which will show in-network insurance rates, out-of-network charges, and information relating to prescription drug coverage.

The MRFs apply to group medical plans, whether the company has a fully-insured or self-insured plan. The rules specify how employers are identified and how to provide information on billing codes.

The MRFs must be updated monthly, and while much of the compliance will be handled by insurance carriers, guidance from SHRM notes that employer-sponsored plans may be held responsible for any failure to follow the rules.

“A carrier will be responsible for any MRF failure as long as it is required in writing to ensure a plan’s compliance. Self-funded plans also can contract to have a third party provide and update MRF, but the TiC rules do not shift liability to a third party for self-insured plan failures. Thus, self-funded plans should carefully review indemnification provisions in all relevant vendor service agreements,” said Carlton Pilger, an HR attorney with Fisher Phillips, writing for the SHRM website. “Most carriers and TPAs have already contacted employer plan sponsors offering to assist with preparing, updating, and hosting the MRF. Employers should be carefully reviewing their service agreements and related contracts to make certain they include specific provisions dealing with all aspects of the required disclosures.”

One broker’s view: more of a burden than a useful tool

Derek Winn, a consultant with Business Benefits Group, said he is skeptical about the usefulness of the new system. “What this is designed to do is allow third party applications and developers to scrape data,” he says, noting that new rules are about machine-readable files, rather than clear information that consumers can understand.

“’Transparent’ to me means that someone with a basic reading level can read and interpret and apply the information that’s provided,” he says. “This information is not going to be available in that format. It’s like reading code, it’s not like ordering off a menu.”

Wynn also notes that recent transparency efforts have been handed down on the federal level but implementation has been left up to industry shareholders such as health plans, providers, and group plan sponsors.

“We’ve learned very little in our efforts to breathe transparency into health care,” he says. “A great example is the number of hospitals who still aren’t complying with their own transparency guidelines.”

Wynn says he believes health plans were already providing more useful information for consumers via their websites and price comparison tools. “Most good health plans are already far more accessible and transparent through their own solutions than what this will bring to any consumer.”

Mask Rules Are Suddenly Back In California As Coronavirus Hits Danger Zone

Palisades Charter High School students ride the Metro E line train on April 21.

Source: Los Angeles Times, by Rong-Gong Lin II and Christian Martinez

Suddenly, California officials are moving toward new indoor mask rules as coronavirus cases enter the danger zone in many parts of the state.

The virus has been spreading rapidly across California after a spring of big declines. That is setting up an anxious summer in which officials are now talking about a return to mask wearing to prevent wider spread.

So far, the biggest concerns have been in Northern California. But Los Angeles County officials say mask mandates are possible by the end of the month if conditions continue to deteriorate.

Why are masks back on the agenda?

The U.S. Centers for Disease Control and Prevention recommends universal indoor masking when a county enters the high COVID-19 community level, the worst in a three-tier system.

Entering the high COVID-19 community level means that new weekly rates of hospitalizations, or hospital capacity, are being affected by coronavirus-positive patients to such an extent that the hospital systems may grow strained.

The CDC on Thursday placed 13 California counties in the high COVID-19 community level. It’s the first time since mid-March that any county in the state was in that level.

Nearly 1 in 6 Californians live in a county with a high COVID-19 community level. The affected counties are Santa Clara, Sonoma, Solano, Marin and Napa in the San Francisco Bay Area; Sacramento, Placer, Yolo, El Dorado in the Sacramento Valley area; and Monterey, Mendocino, San Benito and Del Norte elsewhere in Northern California.

What actions are being taken?

Alameda County issued a new mask mandate for most indoor public settings effective Friday, becoming the first California county to do so.

The county, home to Oakland, is the Bay Area’s second-most populous. Its mandate is the first issued in California since the winter Omicron surge faded

The order does not apply to K-12 school settings through the end of the school year, nor does it apply to Berkeley, which is in Alameda County but has its own public health department. Berkeley’s school system, however, has already implemented an indoor mask mandate.

“Rising COVID cases in Alameda County are now leading to more people being hospitalized, and today’s action reflects the seriousness of the moment,” county health officer Dr. Nicholas Moss said in a statement.

“We cannot ignore the data, and we can’t predict when this wave may end. Putting our masks back on gives us the best opportunity to limit the impact of a prolonged wave on our communities.”

Alameda County has one of California’s highest coronavirus transmission rates, reporting about 354 cases a week for every 100,000 residents for the past week. That figure has climbed 20% from mid-May. A rate of 100 cases a week or more for every 100,000 residents is considered high.

What are the details?

The Alameda County order will require masks to be worn at indoor businesses and workplaces, including offices, stores, theaters and conference centers, as well as restaurants and bars when not eating or drinking; on public transportation, including taxis and app-hailed rides; and at Oakland International Airport. Businesses and venue operators are required to post signage at all entrance points to communicate the mask requirement and “make reasonable efforts to ensure compliance in their setting,” the health order said.

The county won’t require masking in schools through the few remaining days in the school year. Masks need not be worn while working alone in a closed office or room, while swimming or showering at a gym or while obtaining a medical or cosmetic service involving the head or face for which mask removal is needed to perform the service.

Alameda County also is allowing masks to be optional for performers at indoor live events, such as the theater, opera, symphony, religious choirs and professional sports; at religious gatherings when necessary to perform rituals; and at indoor gyms and yoga studios by people who are “actively engaged in periods of heavy exertion,” are swimming or diving, or when engaged in sports where masks create a risk to health, like wrestling and judo.

Masks will be required in other youth settings, including child care, summer school and youth programs. Children younger than 2 must not mask because of the risk of suffocation.

What about other places?

The Berkeley school system has already issued a mask order for indoor K-12 classroom settings, as well as indoor graduations.

Other educational institutions in California have done the same, including UCLA and Cal Poly San Luis Obispo. Sacramento schools also announced new mask measures this week.

Where does Los Angeles County stand?

L.A. County could be poised to see a new universal indoor mask mandate lat`er this month if the upward trends continue.

“Our weekly case rate and the rate of increase in hospital admissions are of concern,” L.A. County Public Health Director Barbara Ferrer said Thursday. “If we continue on the current trajectory … we’re likely to move into the CDC high [COVID-19] community level within a few weeks towards the end of June, indicating increased stress on the healthcare system.”

According to CDC data issued Thursday, L.A. County observed 5.3 new weekly coronavirus-positive hospitalizations for every 100,000 residents, an 18% increase from the previous week’s rate of 4.5. A rate of 10 or more would place L.A. County in a high COVID-19 community level.

Elsewhere in Southern California, Ventura County had a new weekly coronavirus-positive hospitalization rate of 7.6; Santa Barbara County, 6.3; Orange County, 5.3; San Diego County, 4.9; and Riverside and San Bernardino counties, 2.9.

What are experts saying?

There is still not a clear sense of how bad the summer COVID-19 wave will be in California. Hospitalizations and deaths are still relatively modest.

Some observers say there’s no sign that California is nearing a peak, as the latest variant’s exceptional contagiousness is thought to be approaching that of measles. State modeling suggests, however, that the spread of COVID-19 is likely still increasing in Southern California, the San Joaquin Valley and Greater Sacramento.

Even if hospitals don’t become burdened, there’s concern that climbing rates of transmission could keep people at home for a week or more, ruining plans for graduations, weddings and vacations and making it difficult for businesses to maintain adequate staffing.

Of all the COVID-19 restrictions that have been issued over the years, a mask order is among the least onerous to the public, said UC San Francisco epidemiologist and infectious-diseases expert Dr. George Rutherford.

“If you’re going to try and stay in front of this and try and restrict the damage that’s going on, this strikes me as a fairly low-level ask, to have people wear a mask,” Rutherford said.

“We’re not talking about lockdowns, we’re not talking about mandatory vaccination, we’re not talking about mandatory testing programs. We’re just talking about wearing masks, which are highly effective, especially if both people are wearing masks. And it’s something we’re used to doing,” Rutherford said.

After the Pandemic Hit Nursing Homes Hard, California Lawmakers Push to Tighten Licensing Rules

Nursing home COVID copy 2_i.png

Source: Kaiser Health News, by Samantha Young

When Johanna Trenerry found a nursing home for her husband after his stroke, she expected his stay would be temporary.

He never came home.

Arthur Trenerry died at Windsor Redding Care Center in Northern California in October 2020. The 82-year-old great-grandfather is among more than 9,900 California nursing home residents who have died of covid-19.

The nursing home where Trenerry died is licensed by the state, but not under its current owner, Shlomo Rechnitz. The state denied Rechnitz a license, citing at least one death and multiple cases of “serious harm” at other nursing homes he owns or operates. To get around that, Rechnitz formed a business partnership with one of the home’s former owners, who continues to hold the facility’s license.

Some California lawmakers want to put an end to those types of business arrangements and ban people or entities from buying or operating nursing homes unless they have a license — which is the situation in most states. They’re also proposing an overhaul of the licensing process to reject applicants with poor performance and those without adequate experience or financial resources.

The ambitious effort, which the industry considers an overreach, could make California’s oversight the gold standard and a model for other states trying to improve nursing home care. Nationwide, more than 152,000 residents of nursing homes have died of covid during the pandemic, according to federal data.

“The public health emergency that we’ve experienced could be something that becomes a catalyst for making real change,” said Dr. Debra Saliba, a UCLA professor of medicine who served on a National Academies of Sciences, Engineering, and Medicine committee that released a comprehensive report on nursing homes in April. “One of the things that we have right now is the determination, the resources to make things happen.”

In his State of the Union address in March, President Joe Biden said the quality of care had declined in nursing homes taken over by investors — and vowed to set higher federal standards. In anticipation of the speech, the White House released a proposal calling on Congress to boost funding for nursing home inspections and to give federal regulators the authority to deny Medicare funds to underperforming facilities. The administration also directed the Centers for Medicare & Medicaid Services to propose minimum staffing standards within a year.

States are also taking steps to improve quality. New Jersey, for example, this year adopted a law that toughens penalties for health violations and requires nursing homes to disclose financial records.

In California, lawmakers are considering several proposals, including the changes to nursing home licensing rules.

Companies and individuals can buy or run nursing homes in California before they get a license, a process that even an industry lobbyist described at a legislative hearing this year as “backward” and unique to the state.

“In California, nursing home owners and operators can operate without a license even after they’ve been denied a license,” said state Assembly member Al Muratsuchi (D-Torrance), author of AB 1502. “Many of these owners and operators have, unfortunately, an extensive history of neglect and abuse.”

Muratsuchi’s bill would require an owner or company to apply for a license 120 days before buying or operating a nursing home and include financial records that contain the names of all owners and investors. The state would reject applicants who fail to meet standards for character, performance in other homes, and the financial ability to run the home. Homes operating without a license would lose Medicaid funding and couldn’t admit new residents.

The powerful California Association of Health Facilities, which represents more than 800 nursing homes, has blocked previous licensing legislation and has set its sights on Muratsuchi’s bill. The group is led by Craig Cornett, a veteran of the state Capitol who has worked for four Assembly speakers and two Senate leaders.

The organization has made just over $2 million in political contributions and spent $5.9 million lobbying lawmakers from Jan. 1, 2011, through March 31, 2022, according to records filed with the California secretary of state’s office.

The bill fails to consider the state’s “complex regulatory environments” and would create “extensive” disclosure requirements on ownership applications that “in many cases would fill an entire room with boxes and boxes of paper,” Jennifer Snyder, a lobbyist for the association, told lawmakers in January.

The measure would “eliminate the ability for most current owners in California to actually apply or even apply for a change of ownership,” she added.

But this year, the industry faces an altered political landscape.

Covid has pushed lawmakers to act — and Muratsuchi has gained a valuable co-sponsor for his bill, Democratic state Assembly member Jim Wood, head of the Assembly Health Committee. Wood has condemned nursing homes for not doing enough during the pandemic and has directed state regulators to conduct stricter oversight.

Muratsuchi’s measure has cleared the state Assembly and awaits a hearing in the Senate.

Investigations by news organizations CalMatters and LAist last year found that at least two California nursing home operators without licenses were running dozens of facilities even though officials at the state Department of Public Health had declared them unfit to do so.

The homes remain open, in large part because finding another nursing home for residents is incredibly difficult.

In July 2016, state regulators denied a license to Rechnitz — who had purchased the Windsor Redding Care Center, where Arthur Trenerry died — citing 265 health and safety code violations at his other facilities in the previous three years. Nevertheless, Rechnitz continues to operate the home in partnership with a former owner, Lee Samson, who is listed as a license holder in state records.

Mark Johnson, a lawyer who represents Rechnitz and his company, Brius Healthcare, said that Windsor Redding Care Center’s “license is in good standing” and that Rechnitz is managing the facility under an agreement “that is customary in the skilled nursing facility industry.” Rechnitz has filed a new and updated license application with the state, Johnson said.

Johanna Trenerry said she had no idea Rechnitz had been denied a license. Had she known, she said, she would never have placed her husband of 60 years at Windsor Redding.

Even before her husband caught covid, Trenerry and her children were trying to transfer him to another home because he seemed overly medicated, could no longer hold up his head, and fell numerous times trying to get out of bed, she said. Once, she recalled, the nursing home brought out the wrong person when the family visited.

They kept him “so drugged up,” said Nancy Hearden, one of the Trenerrys’ eight children. “And I think it was just because it was easier for them. He wasn’t getting to go to his rehab. I felt, ‘We’ve got to get him out of this place.’”

Then he got covid.

Sixty of the 84 residents at the facility came down with the disease in September 2020 — and at least two dozen of them died. According to a lawsuit filed by family members of 15 residents who died, including the Trenerrys, employees of the home were forced to work despite having covid symptoms. The lawsuit refers to state citations that found the home didn’t supply enough personal protective equipment to staffers, didn’t test staff, and placed covid patients and untested patients in the same rooms with residents who weren’t infected.

Johnson denied the allegations.

Small Businesses Owe Billions In Unforgiven PPP Loans

Small Businesses Owe Billions in Unforgiven PPP Loans | Word & Brown

Source: Word & Brown, by Alex Strautman

The Paycheck Protection Program (PPP), launched as part of the federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act to aid to small businesses coping with the impact of COVID-19, ended on May 31, 2021. However, nearly 350,000 small businesses that received a PPP loan have not had their loans forgiven. Another 380,000 loans have been only partially forgiven.

A recent analysis by Bloomberg News says total PPP debt amounts to $28 billion, with most loans for less than $25,000. During 2021, the Small Business Administration (SBA) reported distributing more than $400 billion to more than six million businesses through the PPP, Restaurant Revitalization Fund, Shuttered Venue Operators Grant, COVID Economic Injury Disaster Loan (EIDL), and targeted and supplemental advance programs.

Employers receiving a PPP loan during the first funding round had until August 30, 2021, to apply for loan forgiveness. However, advocacy groups, community leaders, and business owners say the process for seeking forgiveness is burdensome for businesses. Indeed, the loan forgiveness application, SBA Form 3508S (07/21), is seven pages and requires considerable documentation regarding how PPP funds were used.

The SBA boasted in 2021 that it had streamlined its forgiveness application processes. In a press release, the SBA said, “a borrower of a participating lender can now complete most or all of a forgiveness application using a computer or, for the first time, their smartphone. On average, users are able to complete and submit directly to the SBA their applications in just six minutes, and most receive their forgiveness decisions within a week from the date of submission.“

More than six months after the forgiveness application deadline, 50+ business and advocacy groups are still pushing the SBA, Treasury Department, and Congress to forgive automatically PPP loans of $25,000 and less. They argue that many sole proprietors face challenges with income, payroll, and expense documentation. They are also seeking rescission of a rule that denied forgiveness to businesses making a good-faith effort to comply with forgives rules.

In other PPP-related news, the Justice Department continues to go after individuals and businesses that have misused funds related to CARES assistance. In March, charges were filed in Louisiana against an Amtrak employee who sought approximately $89,000 in PPP funds, even while working full-time.

Sentencing also took place last month for two Michigan residents who obtained nearly $1.5 million in PPP funds. Authorities have recovered more than $1.123 million traced to the fraudulently obtained funds through a parallel civil asset forfeiture action. California convictions include seven individuals in Los Angeles sentenced in November for PPP and EIDL fraud in excess of $20 million, as well as a separate action last year against a Temecula business owner who sought and obtained $7.25 million in federal assistance.

State Finalizes Medical Provider Network Rules

The California Dept. of  Insurance has issued final regulations that include requirements for health insurers to create and maintain adequate medical provider networks. “These regulations go into effect immediately because they address a number of critical problems consumers have faced with insurers when seeking timely access to care,” says Insurance Commissioner Dave Jones. He had issued temporary emergency regulations, which have been in effect since late January 2015. The regulations require health insurers to do the following:

  • Include enough numbers and types of providers in the network to deliver covered services.
  • Adequately provide for the treatment of mental health and substance use disorders.
  • Include an adequate number of primary care providers and specialists with admitting and practice privileges at network hospitals.
  • Monitor and adhere to new appointment wait time standards.
  • Regularly report information about the networks and changes to the networks to the Dept. of Insurance for review.
  • Maintain accurate provider network directories available to the public and update them weekly.
  • Arrange out-of-network care at in-network prices when there are insufficient in-network care providers.

Calif. exchange officials seek tighter enrollment rules

The Covered California health insurance exchange board of directors is expected to vote in April on proposed rules that would require consumers to provide documentation of eligibility for enrolling in a health plan outside the open enrollment period. California Healthline (2/19)

Calif. employers brace for Fair Pay Act rules

California’s new Fair Pay Act goes into effect Friday, and employers are assessing their wage scales, Lauren Weber writes. The law will force employers to justify discrepancies between how they pay men and women for “substantially similar” work, and will give employees more rights to challenge lost wages. The Wall Street Journal (tiered subscription model) (12/29)

Administration Releases New Rules To Implement Health Law’s Individual Mandate

by Mary Agnes Carey

Reprinted with permission from Kaiser Health News (kaiserhealthnews.org.)

As congressional Republicans push for a delay in the 2010 health law’s individual mandate, the Obama administration announced final regulations implementing the requirement that most Americans have health insurance coverage by Jan. 1 or pay a fine.

The document from the Treasury Department and the Internal Revenue Service is in addition to regulations the Department of Health and Human Services published in late June.

The regulations specify nine categories of individuals who are exempt from the mandate, including people who can’t afford coverage or taxpayers whose income is so low they don’t have to file a tax return, according to a fact sheet from the agencies. People in jail or who are not in the country lawfully are also exempt, as are individuals who experience a coverage gap of three months or less.

When filing 2014 taxes in 2015, individuals must say on their returns if they have health insurance coverage and, if not, pay a fine. The individual penalty is the greater of $95 or 1% of income, rising to the greater of $695 or 2.5% of income, in 2016. The Congressional Budget Office estimates that less than 2% of Americans who don’t have health insurance will pay the fine.

In July, the Obama Administration delayed for one year a provision in the health law that employers with 50 or more workers offer coverage to employees or pay a fine. Republicans said that if the administration delayed the employer mandate for a year, individuals should also get a reprieve from the health law’s individual mandate set to begin next January. In July, the House of Representatives passed legislation to delay the individual mandate requirement for a year, but the measure is not expected to come to a vote in the Senate.

Tuesday’s announcement from Treasury and the IRS — along with the final individual mandate regulations that HHS issued in June — make it clear that the administration is moving ahead with implementing the individual mandate, which has become one of the law’s most politically explosive elements. House Republicans have tried to repeal or defund the law 40 times on the House floor and more votes are likely this fall.

Supporters of the law and many health care economists say that the requirement that most Americans have coverage or pay a fine is critical to making the law work as intended.

The individual mandate is one of two lynchpins that make the Affordable Care Act work, Washington state Insurance Commissioner Mike Kreidler said in a statement. You simply cannot guarantee everyone coverage — regardless of their health status — without also requiring that everyone participate. The individual mandate guarantees personal responsibility. Without it, there’s nothing to prevent people from only buying health insurance when they need it — which is similar to allowing people to buy homeowners insurance when their house is on fire.

America’s Health Insurance Plans, a trade group representing health insurers, wants the health law’s tax on health insurance plans repealed but supports the individual mandate.

There is broad agreement that requiring health plans to cover everyone, including those with pre-existing conditions, cannot work without an individual mandate, the group said in a statement. By requiring all Americans to get health coverage, the risk pool becomes large enough to account for the sickest Americans, without the adverse effect of skyrocketing premiums.

Tax pro explains how the ACA’s credits and subsidies will work

Tax credits for the purchase of health insurance are available to people whose employers do not offer comprehensive policies deemed affordable under the law and whose household income amounts to less than 400% of the federal poverty level. Tax expert and former IRS official Cathy Livingston explains how eligibility and maximum premium subsidies will be determined, options for taking the credits, information that must be reported to the IRS, and rules regarding overpayments. Livingston says it’s especially important for consumers to retain records as they learn the ropes. Kaiser Health News (7/24)

Why Brokers Must Get Up to Speed on HIPPA Rules Now

HIPAALogoIf you are not protecting your clients’ health information according to HIPPA privacy rules, you could be in deep trouble. The Dept. of Health and Human Services (HHS) issued a rule to expand many HIPPA requirements to business associates that receive protected health information, such as contractors and subcontractors. Some of the largest breaches reported to HHS have involved business associates. HIPPA penalties for non-compliance are no laughing matter. Under this rule, they have been increased based on the level of negligence with a maximum penalty of $1.5 million per violation.

Another interesting provision is that, a patient who pays by cash can instruct their provider not to share information about their treatment with their health plan.

The changes also strengthen the Health Information Technology for Economic and Clinical Health (HITECH) Breach Notification requirements by clarifying when breaches of unsecured health information must be reported to HHS.

“This final omnibus rule marks the most sweeping changes to the HIPAA Privacy and Security Rules since they were first implemented. These changes not only greatly enhance a patient’s privacy rights and protections, but also strengthen the ability of my office to vigorously enforce the HIPAA privacy and security protections, regardless of whether the information is being held by a health plan, a health care provider, or one of their business associates,” said HHS Office for Civil Rights Director Leon Rodriguez.

In addition, patients can ask for a copy of their electronic medical record in an electronic form. The final omnibus rule sets new limits on how information is used and disclosed for marketing and fundraising purposes and prohibits the sale of an individual’s health information without their permission.

The final rule also streamlines individuals’ ability to authorize the use of their health information for research purposes. The rule makes it easier for parents and others to give permission to share proof of a child’s immunization with a school and gives covered entities and business associates up to one year after the 180-day compliance date to modify contracts to comply with the rule.

The final omnibus rule is based on statutory changes under the HITECH Act, enacted as part of the American Recovery and Reinvestment Act of 2009, and the Genetic Information Nondiscrimination Act of 2008 (GINA) which clarifies that genetic information is protected under the HIPAA Privacy Rule and prohibits most health plans from using or disclosing genetic information for underwriting purposes.

The Rulemaking is in the Federal Register at https://www.federalregister.gov/public-inspection.

Last Updated 08/10/2022

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