Tuesday's Tidbits

Today the Health and Human Services Department announced start up funding totaling $639 million for seven new CO-OP health plans authorized by the Affordable Care Act.  The CO-OP plans which hopefully will not be the Solyndras of the ACA will be able to offer health plans inside and outside the health insurance exchanges beginning in 2014. Kaiser Health News reports that

Some experts are skeptical that these fledgling health plans can compete effectively against large, established insurers. They warn of the difficulties of recruiting experienced insurance executives and of quickly signing up a large enough and healthy enough membership to make the plans financially viable. Many nonprofit insurance plans launched under federal initiatives in the past 40 years went bust or were sold or converted to for-profit status.

“It’s comforting to say that existing plans are wasteful and are driving costs up for selfish reasons,” said Peter Kongstvedt, a Virginia-based health care consultant. “The truth is it’s not easy to get costs down. It’s hard for me to believe [co-op plans] can be more efficient and effective.”

Speaking of health care costs, the Standard & Poors healthcare index rose for the most recently reported month December 2011.

Across the board, healthcare costs as measured by annual rates of change went up in the last month of the year. The S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.28% over the 12-months ending December 2011. This was an increase from the +4.85% annual growth rate posted for November 2011.

As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 7.11% over the year ending December 2011, moving up from the +6.63% reported for November. Growth rates in Medicare claim costs rose by 2.51%, as measured by the S&P Healthcare Economic Medicare Index, up from the 2.15% reported for November. The broad Hospital and Professional Services Indices annual growth rates also posted increases from their November 2011 rates; they increased 4.99% and 5.34%, respectively, from their December 2010 levels. These are above the +4.69% and +4.76% respective annual rates posted in November 2011.

HHS announced last week that the government has expended over $3.1 billion to fund electronic healthcare record systems for hospitals and doctors. Why don't the providers have any extra cash to handle the ICD-10 upgrade? In this regard, the AMA News reports that doctors are very concerned about the impending April 1, 2010, deadline for use of the ANSI 5010 electronic transaction standards to submit Medicare claims. The 5010 standards are the prerequisite for ICD-10 implementation.

The FEHBlog wraps up this Tuesday with two more ACA tidbits

• Business Insurance reports that the ACA's early retiree reinsurance fund (initially funded with $5 billion in 2010) has been exhausted.
• CCIIO (great acronym) issued FAQs on the essential health benefits bulletin last week, evidently in response to some of the comments submitted at the end of January.