PA-NABIP Pulse – December 2023

Here is something to mention when discussing cost and benefit trends with clients in the month ahead.

The United States spends more, both per capita and as a percent of GDP, on health care than any other country, yet fails to achieve commensurate health outcomes. One reason for this discrepancy between health spending and outcomes is the significant amount – upwards of $340 billion per year – that the U.S. spends on low-value care. Driven by human bias, information disparities, provider’s litigation concerns, and fee-for-service payment systems, low-value services provide no additional health benefit and, in some instances, may even be harmful to patients.
University of Michigan Center for Value-Based Insurance Design,
https://vbidcenter.org/initiatives/low-value-care/

The Big Three

Each month GPAHU identifies three top public policy or
legal developments that could impact our members and clients.  Here are this month’s big three!

Philadelphia’s COVID-19 Paid Sick Leave Law Expires on December 31st

At the start of the COVID-19 pandemic, the City of Philadelphia’s businesses with 25 or more employees were mandated to provide up to 40 hours of additional paid sick leave to eligible employees who need to miss work due to certain reasons related to the pandemic.  However, those pandemic related protections are about to end, as the COVID-19 Paid Sick Leave law is set to expire on December 31, 2023.  While most city employers will no longer have to provide mandatory paid leave for COVID-19 specifically, the city’s typical paid leave protections for employees still apply.  Furthermore, affected employers will still be required to keep all compliance records for this law for two years — through December 31, 2025.

In addition to the general COVID-19 Paid Sick Leave law, Philadelphia officials also adopted a separate measure specific to healthcare workers affected by an epidemic. The Health Care Epidemic measure applies to city healthcare organizations with 10 or more employees, requiring them to give certain employees additional paid sick leave if the healthcare employee tests positive for COVID-19. This law does not expire on December 31, 2023.  Instead, the effective period of this law is “during a pandemic or epidemic affecting the City of Philadelphia declared to exist by the World Health Organization, the Centers for Disease Control and Prevention, or other recognized public interest health organization.”  According to city officials, worldwide health officials still remain concerned we are in a pandemic, so the Health Care Epidemic Leave requirements will remain in effect until the end of a declared pandemic.

Pennsylvania Experiences Significant Growth in the Number of Uninsured Children in the Commonwealth

A new State of Children’s Health report issued by the Pennsylvania Partnerships for Children demonstrates that, unfortunately, the number of uninsured children in the Commonwealth is on the rise.  The report analyzes 2022 Census data, and it shows that Pennsylvania is one of only three states, alongside Connecticut and Wisconsin, that saw the number of children without health insurance grow between 2021 and 2022. The researchers found that the rate of uninsured Pennsylvania kids increased from 4.4% to 5.2% during this time period.  

According to the most recent Census data, Pennsylvania has the 5th highest number of uninsured children in the nation. That equates to 145,000 children without health insurance or regular access to preventive and primary health care.  In the Philadelphia five county area, only Montgomery County saw its number of uninsured kids decrease last year, and only by .5%.  Philadelphia and Chester counties have the second and third largest number of uninsured children in the state.  Only Lancaster County has more, and that number is affected by the county’s large Amish and Anabaptist population, as members of those two religious groups do not participate in traditional health insurance, relying instead on church and community support to finance healthcare expenses.

It’s also important to keep in mind that the data is this report does not even include the unwinding of the COVID-19 continuous Medicaid enrollment policy, which didn’t begin until April 2023. Notably, private coverage rates significantly decreased for children in Pennsylvania in 2022, even though the rate of privately insured adults went up during the same period.  That surprising bit of data may provide a partial explanation for the overall worse uninsured rate.  Brokers may want to check their group enrollments and highlight the importance of enrolling children.

From a public policy perspective, the Pennsylvania Department of Human Services has proposed allowing eligible children to maintain continuous Medicaid coverage from birth through the last day of the month in which they turn 6 years of age.  Comments may be submitted on this proposal through January 2, 2024.

New Federal Limits, Rates, and Fine Levels Released for 2024

As we wrap up 2023, keep these compliance changes and deadlines in mind:

    • Gag Clause Attestations—Health insurance issuers and group plans must submit an attestation to the federal Departments of Health and Human Services, Labor, and Treasury by December 31, 2023 about the existence of “gag clauses” in any provider, TPA, or PBM contracts.  The submission must specify if, between December 27, 2020 and the date of the attestation, the plan or issuer have entered into any contracts that would directly or indirectly prevent providers from disclosing cost or quality of care information or data, and certain other information to active or eligible participants, beneficiaries, and enrollees of the plan or coverage, plan sponsors, or referring providers, or restrict the plan or issuer from sharing such information with a business associate, consistent with applicable privacy regulations.  Health insurance issuers will complete the attestations for their fully-insured clients, but level-funded and self-funded groups will need to determine if their TPA, PBM, and/or another service provider will submit the attestation(s) on their behalf, or if the group will need to complete their submission themselves.

    • Preventive Care Coverage Changes—Over the past year, federal recommendations as to which preventive care services must be covered on a first dollar basis has changed.  Since group health plans and issuers are expected to cover any new or adjusted recommendations within one year of issue., it is a best practice for plans to begin to covering all of the past year’s recommendations upon renewal.  So, for groups with January 1 renewals, brokers should verify that plans (particularly self-funded plans) will be covering the newly recommended covered services on a first dollar basis in 2024. 

    • Transparency in Coverage Online Tool Requirement—Plans and issuers were required to develop an online cost-sharing information tool and direct request mechanism to give participants price estimates before they access 500 common covered services as of January 1, 2023.This online tool will need to be updated by January 1, 2024 to include price estimates for ALL covered services on a standalone basis. This includes covered services that might be part of a bundled payment agreement or other alternative provider reimbursement arrangement.

    • Availability of ACA Electronic Reporting Hardship Relief Application—Last February, the Internal Revenue Service lowered the 250-return threshold for mandatory electronic reporting to 10 returns.  This change will impact many smaller employers that completed their own ACA employer reporting forms and submitted Forms 1094 B or C to the IRS in paper format.  For 2023 reporting due in early 2024, these employers will either need to engage with ACA reporting vendors to conduct electronic filing, or submit a hardship waiver to the IRS and obtain permission to report on paper this year.  The IRS will make the waiver applications for 2023 reporting available on January 1, 2024, and affected employers are urged to apply at least 45 days before the reporting is due to the IRS on March 31, 2024.

    • Machine Readable File Changes—Plans and issuers will need to add a third machine-readable-file to their online health cost transparency data arsenal, this one containing prescription drug negotiated rates and historical cost data.  Like the other machine-readable files, the data will need to be updated regularly. The Biden Administration has informed group health plan sponsors and health insurance issuers to be prepared to post this file in early 2024, but the exact due date is still TBD.

Check This Out!

If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!

Now updated with 2022 data, the National Health Spending Explorer provides up-to-date information on U.S. health spending by federal and local governments, private companies, and individuals.

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