EEOC finalizes rules on financial incentives for wellness programs

In "Final EEOC Rule Sets Limits For Financial Incentives On Wellness Programs," Kaiser Health News reports: "Employer wellness programs can gather medical information from employees and spouses — so long as financial incentives or penalties don’t exceed 30 percent of the annual cost for an individual in the company’s group health plan, according to final rules issued by the Equal Employment Opportunity Commission Monday. Although such penalties or incentives could run into the hundreds or even thousands of dollars, the programs are considered voluntary — and therefore legal, the commission said."

You may find these articles of interest as well: In "EEOC Issues New Rules for Wellness Programs," the Wall Street Journal reports that wellness programs would be considered voluntary as long as employers’ discounts don’t exceed more than 30% of the employee’s health plan cost.

The rub involves what is considered voluntary relative to employee providing healthcare information as a quid pro quo to participation.  As explained by the Wall Street Journal article -

The EEOC issued final rules regarding how corporate wellness programs work with existing antidiscrimination laws, including the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. Those laws generally prohibit employers from using information about workers’ own health conditions and that of other family members, including spouses, unless the information is collected under a voluntary wellness program.

In "Obama Administration Releases Rules on Wellness Programs,"the New York Times reports that congressional action may be afoot to challenge what some consider the restrictive nature of the rule.

The new rules are more restrictive than those passed under the ACA, which allowed incentives of up to 30 percent of the actual cost of an employee's insurance plan and 50 percent for programs approved by the Internal Revenue Service, the Department of Labor and the Department of Health and Human Services. Only smoking-cessation programs received that approval.

 

The rules will go into effect 2017.  See this earlier WSJ article on employer-sponsored wellness plan: "Your Company Wants to Make You Healthy."

New Overtime Rule, effective December 1, 2016, likely to impact healthcare workforce

On May 18, 2016, the U.S. Department of Labor issued a new rule affecting the regulations on overtime pay: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.

The standard salary threshold for full-time salaried “white collar” workers will be increased from $455 per week to $913 per week (or from the current annualized $23,660 to $47,476).  This number is based on the 40^th percentile of full-time salaried workers in the lowest-wage Census region (currently the South) and will be adjusted accordingly every three years.  The highly compensated employees (HCE) salary threshold for full-time salaried workers is increased from $100,000 to $134,004 per year.  This number is based on the 90^th percentile of full-time salaried workers nationally, and will be adjusted accordingly every three years.

The effective date for the new thresholds is December 1, 2016.  These threshold levels will automatically update every three years, beginning January 1, 2020.  The Department of Labor will post the new salary levels 150 days in advance of their effective date, beginning August 1, 2019.  More information may be found on the Department of Labor's webpage.

Kaiser Health News reports: "Starting in December, anyone making up to $47,476 a year will qualify for overtime. But in the health care industry that wouldn't necessarily mean the workers are going to get paid more."

In Overtime pay rules will affect millions of healthcare workers, Modern Healthcare reports:

The new Obama administration rule is expected to affect a total of 4.2 million workers. The increase to $47,476 will start this December and will affect employees who clock in more than 40 hours a week. The policy updates rules that date back to the 1930s and require employers to pay 1.5 times a worker's regular salary for any work past 40 hours a week.

Healthcare professions that will likely be affected by the overtime threshold increase are nurses, medical and physical therapist assistants, medical and pharmacy technicians, and paramedics. Average mean salaries in these professions range from $25,710 to $47,010. That includes approximately 4.1 million workers, according to 2015 data from the U.S. Bureau of Labor Statistics.

Medicaid-funded home-care providers for individuals with disabilities or facilities with 15 beds or fewer are exempt from implementing the new rule until March 17, 2019.

 

What changes for Medicare's Hospital Star Rating?

In "Critics of Medicare's Overall Hospital Star Rating Push for Changes, "Kaiser Health News staff writer Jordan Rau reports: "Over the past decade, the federal government has publicized 115 different ways to measure medical quality in hospitals, from assessing wait times in emergency rooms and noise levels outside hospital rooms to tracking blood clots in surgical patients. But the latest effort, to combine dozens of metrics into one patient-friendly quality indicator, has proven the most contentious. The Centers for Medicare & Medicaid Services recently postponed its plan to release the new rating system, which would award one star to the worst-quality facilities and five stars to those with the best marks. ... Hospital leaders who previewed the preliminary rating system say the formula seems skewed against institutions that treat the poorest or toughest patients, meaning those with complex illnesses."

That is the headline leader in today's Kaiser Health News (Wednesday, May 18, 2016).

Over the past decade, the federal government has publicized 115 different ways to measure medical quality in hospitals, from assessing wait times in emergency rooms and noise levels outside hospital rooms to tracking blood clots in surgical patients. But the latest effort, to combine dozens of metrics into one patient-friendly quality indicator, has proven the most contentious.

The proposal was delayed under criticism from hospital groups as well as Members of Congress.

Hospital leaders who previewed the preliminary rating system say the formula seems skewed against institutions that treat the poorest or toughest patients, meaning those with complex illnesses. The number of stars would be based on 64 different measures, which are posted on Medicare’s Hospital Compare website. The metrics on mortality, readmission, patient experience and patient safety are the most influential, each representing 22 percent of a facility’s rating.

While the goal of getting quality ratings into the mix for patients as consumers of healthcare, the formula to be used for star rating isn't perfect, and risks sending the wrong general message about specific facilities or healthcare systems.

The broader debate about the government judging hospitals has been going on since Medicare began publishing quality ratings in 2005. But it has intensified since passage of the Affordable Care Act, which instructed Medicare to use quality metrics in setting payments.

Teaching hospitals as a group have tended to fare poorly from some of these financial incentives. This year, for instance, nearly half of major teaching hospitals are losing 1 percent of their Medicare payments because of high rates of infections and surgical complications. Facilities with more low-income patients, who often face difficulties affording medication, following complicated recovery instructions and getting to doctors regularly, typically have higher readmission rates.

Ransomware: Why Hospitals? Why Now?

RealClear Politics has run a series of articles on 2016 security issues.  The fourth and final part, Ransomware: Crime for a New Century, takes a look at this new form of cybecrime and how hospitals have proven particularly vulnerable to the attacks.

This particular question and its two answers caught our attention: 

Why Hospitals? Why Now?

There are two major factors that make the health care industry especially vulnerable to cybercrime in 2016.

First, health care has historically lagged behind other industries in adopting computerized records systems. It has been decades since banks kept account records on paper, but as recently as 2008, less than 10 percent of U.S. hospitals had even a basic electronic health records system.

The second factor is a strong push by the federal government in recent years to hasten the adoption of EHRs. The 2009 stimulus bill deployed a carrot-and-stick approach to speed the conversion to digital records. Funds were set aside to help finance the purchase of EHR systems, and in return, providers were required to meet minimum standards and to demonstrate “meaningful use” of these systems to improve the efficiency and quality of care.

The rush to adopt this technology caused serious growing pains, and the rollout of these systems is often an ordeal. For example, a New York City official last month compared the new system for the city’s hospitals to the 1986 Challenger disaster. A 2013 RAND Corp. study of U.S. physicians found that “the current state of EHR technology appeared to significantly worsen professional satisfaction in multiple ways,” and in many hospitals, the focus has been on just getting the systems functioning at the most basic level.

One conclusion offered - Perhaps these attacks are the inevitable growing pains of an industry rushing to catch up to the digital age...However, as health care providers inevitably become more dependent on digital technology, it will only be more important for hospitals to get cybersecurity right.

Healthcare costs vary from town to town, state to state

"The National Chartbook of Health Care Prices 2015" using data from the Health Care Cost Institute (HCCI), and the report, "Prices For Common Medical Services Vary Substantially Among The Commercially Insured," released by HealthAffairs, show price differences for common medical procedures across the same areas and across the states.

The study used data from the Health Care Cost Institute to assess national commercial claims and compare 242 medical services prices across 41 states and the District of Columbia between Jan. 1, 2012, and Dec. 31, 2013. Prices were standardized to reflect costs in September 2015. The study also looked at city data. No state data was available for Alabama, Arkansas, Hawaii, Idaho, Montana, Michigan, South Dakota, Vermont and Wyoming.

National Public Radio, in "That Surgery Might Costs You A Lot Less In Another Town," offers a way to select your state for comparing to the national average for three common procedures.

Congressional Quarterly reported that Alaska, along with Wisconsin, North Dakota, New Hampshire, and Minnesota in their respective order, had the highest average health care prices.  Residents in Alaska paid twice the costs of the national average.  See "Health Costs Differ in States and Cities, Report Finds". Only 15 states had health care costs below the national average. Florida, Arizona, Tennessee, Maryland and Nevada had the lowest in the country.

USA Today reports in "Huge health care price differences even within same area, by state" (April 25) that prices can differ within an single urban area, showing disparities in MRI costs within a 100-mile radius of San Francisco.  While some residents in different cities in the same state could see significant price differences, in other states, differences between cities were minimal.

The USA Today article also indicates the amount of out-of-pocket for the patient also shows wide disparities, pointing to several explanations, including the fact that some insurance policies require consumers to pay the insurer's negotiated rate, while others require the insured person or the insurers and the consumer to pay the entire sticker price.

In San Francisco, that left one person facing out-of-pocket costs of more than $1,900 for that same lower back MRI that cost less than $500 in the same area. Insurers also often need to include certain expensive hospitals in their networks to get contracts with some employers. Then they will  sometimes put those hospitals in a pricing tier that requires higher out of pocket costs.

Explanations for the variation in healthcare costs vary.  The HCCI report points to wages, rent, market power and the lack of transparency as reasons for wide disparity in prices in its new report. USA Today notes a 2013 report on health care spending by the Institute of Medicine (IOM), which reported about 70% of the variation in spending in the commercial insurance market is due to differences in price markups by doctors and hospitals, which it said most likely reflects these providers' regional market power.