Insight on New Preventive Services for 2011

We have spent a lot of time educating employers and employees of the important PPACA provisions that go into effect on or after 09/23/10. One of the most consumer friendly but confusing components of the Obama Health Care Reform Bill lies within the new preventive care coverage. Complying with the new provisions is easier said than done. The list of services that are now covered is extensive, insurers grapple with changing claims payments systems to accommodate preventive care codes, employers must now educate their employees on the importance of getting annual checkups performed, the physician community must now verify that the employee is covered under the new provisions and the employee must understand that we are entering uncharted territory with respect to no co-payments and coinsurance.

Employee Issues: The new law states that for covered services, there is no cost-sharing by the member. The employee or dependent is not responsible for any out-of-pocket expense not even a co-payment. Historically, prevention was covered but the member was charged the applicable co-payments. An employee may think a service or procedure is “routine” or “preventive” but the coding of the procedure must comply with the new law. Additionally, if a condition is discovered as part of the preventive exam, there is no requirement that the treatment for that condition be covered with no cost sharing. For example, a female employee gets an annual mammogram. In the course of the mammogram, a cyst or cancer is detected. If the procedure code has changed, the services will not be covered at 100%. Conversely, an employee over age 50 goes in for a regular colonoscopy and a polyp is found, the diagnosis code may very well change from prevention to a covered expense subject to deductibles, coinsurance and co-payments. Any follow up procedures coupled with the diagnosis may very well be covered but not at 100%.

Provider Issues: We have counseled many physician practices regarding the new law and they too will be overwhelmed. They must first check to make sure the employer has renewed their plan after September 23, 2010, the plan is not grandfathered, and the coverage change has been adjusted with the insurance carrier. We anticipate many physician offices will still require employees to pay a co-payment. We encourage your employees to remind their physicians office that they are now covered under the new preventive care benefits. Depending on the sophistication of the physician practice and knowledge, we will not be surprised if an employee will be required to pay a co-payment. If the co-payment is paid, and the claim is covered at 100%, the employee can take the EOB to the physician office and ask for a credit or a refund of the co-payment.

Administrative Issues: Claims payors are frantically building their claims payment systems to accept the new codes. They must recognize grandfathered versus non-grandfathered plans, preventive versus non-preventive services and how it relates to follow up care. Ultimately, the Explanation of Benefits (EOB) will determine whether the procedure code is covered under the new law.

Employer Issues: There is no free lunch with the new law. Any additional benefit given to employees such as 100% coverage for prevention, increasing the dependent age limit to age 26, increasing maximum benefits to unlimited coverage, no pre-existing conditions for children less than age 19 will come at a price – an increased cost due to continued mandates. Employers may find employees frustrated in the beginning with the perception my services were preventive and yet they were coded differently.

Our advise to both employers and employees is twofold. First, relax we are moving into uncharted waters with new benefits and the industry will adapt quickly but maybe not as quickly as your next visit. Second, while a provider in the first six months of the year may require a co-payment, by the fourth quarter, every plan in America will have renewed and every employer, employee and provider will know who is covered under the new law. At the end of the day, we have been huge proponents of prevention and think that the new law over time may help to control costs as long as your employees are maximizing their benefits.

As always, we appreciate your business and your trust. PPACA reform forces each employer to continue the employee benefit education process.

Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.