Tuesday, August 16, 2011

Tuesday Tidbits

The Wall Street Journal reports that the Affordable Care Act regulators will release a rule describing the new  summary of benefits form that health plans must distribute to consumers beginning next year. The article  explains that
The summary form has often been compared to the food-nutrition label, though it is substantially longer, and at six pages the draft offers considerable detail. For instance, it would not only tell consumers their overall deductibles, or the amount they must pay before coverage kicks in, but would also explain deductibles for specific categories, such as drug coverage. In addition to flagging the limit on a consumer's out-of-pocket expenses, the form would lay out which expenses don't count toward that limit.
A list of medical events and associated services, such as home health care and emergency transportation, would likely be shown along with the consumer's costs for each. The summary would also explain the consumer's possible expenses for three common situations: having a baby, treating breast cancer and managing diabetes.
The FEHBlog is a bit confused because Affordable Care Act states that the form must use a specific font size and not exceed four pages. It will be interesting to figure out how this new rule will or won't mesh with OPM's new Going Green initiative on FEHB plan brochure distribution.

The FEHBlog notes that FAIR Health has gone live with its website that estimates the cost of medical and dental care for consumers who use out of network health care providers.

Yesterday, the IRS released temporary regulations and a proposed rule governing the imposition of an annual fee ($2.5 billion in 2011) on branded prescription drug manufacturers. No doubt this fee will be passed along to health plans.

The New York Times reports that "Medicaid gets much deeper discounts on many prescription drugs than Medicare, in part because Medicaid discounts are set by law whereas Medicare prices are negotiated by private insurers and drug companies, federal investigators said Monday in a new report." The law requires branded prescription drug manufacturers to give their best price to Medicaid. Prescription benefit managers negotiating for FEHB plans and other employer sponsored plans cannot negotiate a price below that floor because if they could, the floor would drop. Medicare Part D plans are permitted by law to negotiate a price below the Medicaid floor without causing the floor to drop. But what would happen to the drug manufacturers if they gave the same enormous discounts to Medicare and Medicaid. Oh wait, the FEHBlog forgets. The manufacturers can price shift to the FEHB and other employer sponsored plans.

The AMA News reports that "When it comes to hospitals and their financial health, they are either thriving or wheezing -- with no in-between." and that the Affordable Care Act is encouraging the haves to gobble up the have nots.

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