Friday, October 31, 2014

CMS releases final payment rules for the Medicare program



FOR IMMEDIATE RELEASE                                     Contact: CMS Media Relations

October 31, 2014                                                   (202) 690-6145 or



CMS releases final payment rules for the Medicare program

New policies focus on value, improve how care is provided, and increase transparency of information on quality 


WASHINGTON – Over the past several days, the Centers for Medicare & Medicaid Services (CMS) released final rules outlining how Medicare will pay major health care providers and suppliers in 2015. Important provisions of the Affordable Care Act that reward higher quality, patient-centered care at a lower cost are being implemented by these rules. The final rules include Medicare payments to physicians and non-physician practitioners, hospital outpatient departments, ambulatory surgical centers, home health agencies and dialysis facilities that treat patients with end-stage renal disease.


“Health care systems across the country are shifting their focus from volume of services to better health outcomes for patients, coordinating care, and spending dollars more wisely,” said CMS Administrator Marilyn Tavenner. “These rules are a part of the broader strategy driving greater value in health care. By collaborating and building on best practices across the health care system, we can deliver the results of higher quality care and lower costs that consumers, providers, purchasers, and businesses deserve.”


The rules reflect a broader Administration-wide strategy to move our health care system to one that values quality over quantity and spends taxpayer dollars more wisely by finding better ways to deliver care, pay providers, and distribute information:


Empowering providers to deliver coordinated and integrated care, transition to new models of care, and improve the doctor-patient relationship.


  • Better coordination of care for beneficiaries with multiple chronic conditions. Often, seniors with multiple conditions see a number of specialists. In those cases, extra physician effort is required to coordinate a care regimen that prevents over-treatment or duplicative tests. Historically, Medicare has not paid for services that support care management but are not delivered face-to-face, such as telephone check-ins with nurse care managers, in the clinical setting. Under this year’s rulemaking, the Medicare Physician Fee Schedule will include a new chronic care management fee beginning next year. This separate payment for chronic care management will support physician practices in their efforts to coordinate care for Medicare beneficiaries with multiple chronic conditions. This helps improve the way care is provided by supporting clinicians coordinating care for patients, including outside of regular office visits.


Aligning the way providers are paid to reward value rather than volume.

  •  Paying providers for quality, not quantity of care. In 2015 Medicare is continuing to phase in the Value-based Payment Modifier, which adjusts traditional Medicare payments to physicians and other eligible professionals based on the quality and cost of care they furnish to beneficiaries. Those adjustments translate into payment increases for providers who deliver higher quality care at a better value, while providers who underperform may be subject to a payment reduction.
  • Providing incentives to hospital outpatient departments and facilities to deliver efficient, high-quality care. The Hospital Outpatient Prospective Payment System/Ambulatory Surgical Center (OPPS) rule includes provisions that promote greater packaging of payments for items and services rather than making separate payments for each individual service. For example, a new comprehensive Ambulatory Payment Classifications payment policy is being implemented in CY 2015 to make a single payment for all related hospital items and services provided to a patient receiving certain device-dependent procedures, such as insertion of a pacemaker, rather than separate payments for each supportive service, such as routine tests and diagnostic procedures.  


Increasing the availability and accessibility of information on quality, utilization and costs for effective, informed decision-making.


  • Better information for providers to understand the total scope, cost, and quality of care that the Medicare beneficiaries they serve receive. To assist physician groups and physicians in improving quality of care for their Medicare beneficiaries, CMS recently made Quality and Resource Use Reports available. The reports include information about the scope, cost and quality of care that is delivered to the Medicare beneficiaries they serve, both inside and outside of their practices. These reports include information on where beneficiaries are hospitalized and whether they were readmitted. Solo practitioners and group practices can use the reports to implement action steps that can improve care coordination and reduce the provision of unnecessary services, improving the quality, effectiveness, and efficiency of care delivered to Medicare beneficiaries.
  • Expand and add new measures to the Physician Compare website. The Physician Compare website allows consumers to search for reliable information about physicians and other health care professionals who provide Medicare services so they can make informed decisions about who delivers their care. CMS has finalized policies to significantly expand the quality measures available on this website by making group practice and individual physician-level measures available for public reporting, including patient experience measures, and measures collected by Qualified Clinical Data Registries. By making all of these measures available for public reporting, CMS can work to include a diversity of quality measures on the website while including only those measures that are most beneficial to consumers and best aid decision making.
  • New quality and performance measures for dialysis facilities. The End-Stage Renal Disease (ESRD) Prospective Payment System rule introduces new quality and performance measures for outpatient dialysis facilities. The rule incorporates in 2017 a Standardized Readmission Ratio, which assesses the rate at which ESRD dialysis patients return to an acute care hospital within 30 days of discharge from an acute care hospital, supporting the Administration’s efforts to reduce unnecessary hospital readmissions in all settings.




Additional CMS fact sheets on final payment rules released by CMS click here:


  • CY 2015 Physician Fee Schedule (CMS-1612-F)“Riders”
  • CY 2015 OPPS (CMS-1613-F) “Riders”
  • CY 2015 ESRD PPS System (CMS-1614-F) “Riders”
  • CY 2015 Home Health PPS System (CMS-1611-F) “Riders”:

Today's Datapoint

51% of consumers are highly satisfied with their exchange experience and 53% are highly confident when making purchases on the exchanges, according to a Strategy& consumer survey, The Birth of the Healthcare Consumer.

Quote of the Day

“What one can deliver in a telemedicine office visit next year will be dramatically better than what could be delivered five years ago,” because of technology advances.

— Jeff Levin-Scherz, M.D., national leader of health management practice for Towers Watson, told AIS’s Health Plan Week

Thursday, October 30, 2014

Open Enrollment: Insights from Medicare for Health Insurance Marketplaces

Oct 23, 2014 | Tricia Neuman

As the November open enrollment period approaches, consumers in the federal and state marketplaces will soon have the opportunity to renew or change health plans for 2015.  Health insurance plans often change from one year to the next, and some of these changes could have a real impact on costs and coverage, including changes in premiums, cost-sharing, benefits, formularies and choice of doctors and hospitals.  Consumers are advised to review their options carefully before deciding whether to renew their current plan or enroll in a new one.  But will they?

This question will sound familiar to those who have been tracking the Medicare Part D and Medicare Advantage markets, and based on this experience, the advice to review plan options makes good sense.  Medicare Advantage plans in a given market vary in terms of benefits, cost-sharing and provider networks, and plans often make adjustments from one year to the next.  Our analysis of the Medicare Part D market since its inception in 2006 has documented wide variability across plans, and not-insignificant changes in plan costs and benefit design features from year to year.

Yet, even with wide variation across plans and the potential to lower costs by switching plans, our research confirms a high degree of “stickiness” among Part D enrollees, with just over ten percent voluntarily switching plans during a recent  open enrollment period.  Our focus groups of Medicare beneficiaries help explain why.  Seniors told us that they are generally aware of the open enrollment period, in part because they are inundated with marketing materials during the fall of each year.  But, they also said that they have little appetite for what they consider the drudgery of comparing plans – even though they recognized it might be a good idea to do so.

The low rate of plan switching among Medicare Part D enrollees should not come as a total surprise.  Similar results have been reported in studies of younger adults in health insurance marketplaces, including federal workers in the Federal Employees Health Benefits Program (FEHB) and among enrollees in Commonwealth Care in Massachusetts that was established prior to the ACA – suggesting a very high degree of satisfaction or a strong preference for the status quo, or both, in all three health insurance marketplaces (Exhibit 1).1
This brings us back to the upcoming November enrollment period for consumers in the federal and state marketplaces.  While the health insurance marketplaces are clearly still in start-up mode, with enrollees still very much on a learning curve, the hope is that marketplace enrollees will carefully review the health plan options available in 2015, and switch plans when it is in their interest to do so.  As my Kaiser Family Foundation colleagues explained in a recent analysis of 2015 marketplace premiums, consumers who chose low premium plans in 2014 may find their plan is no longer a low-cost option in 2015, and could wind up paying substantially more for their coverage unless they switch plans.  And, maybe they will.
On the one hand, adults in the Marketplace may be more motivated than Medicare Part D enrollees to switch plans if the premium changes they face are appreciably larger than those for Part D plans; and it would not be a surprise if Marketplace premium increases and decreases are larger in dollar terms because they apply to a full range of medical services, not just prescription drugs, and could be subject to changes that result from a system that ties government premium contributions to the second least cost silver plan.  Our Part D analysis found that enrollees with bigger premium increases were more likely than others to switch drug plans.   Younger adults are also more likely than seniors to shop online and less likely to have health and cognitive impairments that make these tasks somewhat challenging.  And, this year, they can change plans anytime between November 15 and February 15 — more than the six weeks allotted for Medicare beneficiaries.
On the other hand, online plan comparison tools for marketplace enrollees are still evolving, and consumers may have trouble getting all the information they need to compare plans.  And, Marketplace enrollees may be less likely than older Part D enrollees to switch plans because they are less likely than seniors to have health problems, and therefore less likely to experience problems with their plan.
This year, the focus during the 2015 open enrollment period may be more on helping people maintain or gain access to coverage, much as it was when the Part D program began.  But over time, there is likely to be interest in understanding whether marketplace consumers are “sticky” like their parents and grandparents on Medicare, or if the apple actually does fall far from the tree.  The lack of consumer engagement during the open enrollment period is a concern if it means consumers get the short end of the “stick.”

Commonwealth Care was established in Massachusetts prior to the implementation of the Affordable Care Act to provide coverage to the uninsured.   As the ACA is implemented, Commonwealth Care will be replaced with ConnectorCare.

According to a recent survey:

  • 89% of the uninsured are unaware of when the next open enrollment period begins under the Affordable Care Act
  • 59% of uninsured adults ages 18-64 plan to get health insurance in the next few months
  • 18% don't think they will be able to find an affordable plan
  • 6% don't want to be forced to buy anything
  • 1% don't think they need health insurance coverage

Source: "Kaiser Health Tracking Poll: October 2014," The Henry J. Kaiser Family Foundation, October 21, 2014,

CMS announces payment changes for Medicare home health agencies for 2015



FOR IMMEDIATE RELEASE                                  Contact: CMS Media Relations

October 30, 2014                                                       (202) 690-6145 or


CMS announces payment changes for Medicare home health agencies for 2015


The Centers for Medicare & Medicaid Services (CMS) today announced changes to the Medicare home health prospective payment system (HH PPS) for calendar year (CY) 2015 that will foster greater efficiency, flexibility, payment accuracy, and improved quality. Approximately 3.5 million beneficiaries received home health services from nearly 12,000 home health agencies, costing Medicare approximately $18 billion in 2013.


In the rule, CMS projects that Medicare payments to home health agencies in CY 2015 will be reduced by 0.30 percent, or $60 million. This decrease reflects the effects of the 2.1 percent home health payment update percentage ($390 million increase) and the second year of the four-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and the non-routine medical supplies (NRS) conversion factor (2.4 percent or $450 million decrease).


The rule implements increases to the national per-visit payment rates, a 2.82 percent reduction to the NRS conversion factor, and a reduction to the national, standardized 60-day episode rate of $80.95 for CY 2015. The national, standardized 60-day episode payment for CY 2015 is $2,961.38.


The HH PPS final rule is one of several rules for calendar year 2015 that reflect a broader Administration-wide strategy to deliver better care at lower cost by finding better ways to deliver care, pay providers, and use information. Provisions in these rules are helping to move our health-care system to one that values quality over quantity and focuses on reforms such as measuring for better health outcomes, focusing on disease prevention, helping patients return home, helping manage and improve chronic diseases, and fostering a more-efficient and coordinated health care system. For example, the Home Health Agency (HHA) Value-based Purchasing (VBP) model that is introduced in this rule would be an opportunity to test whether carefully designed payment incentives would lead to higher quality of care for beneficiaries.



To qualify for the Medicare home health benefit, a Medicare beneficiary must be under the care of a physician, have an intermittent need for skilled nursing care, require physical therapy or speech-language pathology, or continue to need occupational therapy. The beneficiary must be homebound and receive home health services from a Medicare-approved home health agency (HHA).


Medicare pays home health agencies through a prospective payment system that pays higher rates for services furnished to beneficiaries with greater needs. Payment rates are based on relevant data from patient assessments conducted by clinicians as currently required for all home health agencies participating in Medicare. Home health payment rates are updated annually by the home health payment update percentage. The payment update percentage is based, in part, on the home health market basket, which measures inflation in the prices of an appropriate mix of goods and services included in home health services.


Face-to-face encounter requirements

The Affordable Care Act requires that the certifying physician or allowed non-physician provider (NPP) must have a face-to-face encounter with the beneficiary before they certify the beneficiary’s eligibility for the home health benefit. Current regulations require the encounter occur within 90 days before care begins or up to 30 days after care began. Documentation of the encounter must include a narrative to explain why the clinical findings of the encounter support that the patient is homebound and in need of skilled services.

In this rule, CMS is finalizing three changes to the face-to-face encounter requirements for episodes beginning on or after January 1, 2015. These changes will reduce administrative burden and provide home health agencies with additional flexibilities in developing individual agency procedures for obtaining documentation supporting patient eligibility for Medicare home health care.


First, CMS is eliminating the narrative requirement currently in regulation. The certifying physician would still be required to certify that a face-to-face patient encounter occurred and document the date of the encounter as part of the certification of eligibility. For medical review purposes, we will require documentation in the certifying physician’s medical records and/or the acute/post-acute care facility’s medical records (if the patient was directly admitted to home health) to be used as the basis for certification of patient eligibility.


Second, CMS is finalizing that if a HHA claim is denied, the corresponding physician claim for certifying/re-certifying patient eligibility for Medicare-covered home health services is considered non-covered as well because there is no longer a corresponding claim for Medicare-covered home health services.


Lastly, CMS is clarifying that a face-to-face encounter is required for certifications, rather than initial episodes; and that a certification (versus a re-certification) is generally considered to be any time a new start of care assessment is completed to initiate care.


Therapy reassessments

CMS is finalizing the elimination of the 13th and 19th visit reassessment requirements. For episodes beginning on or after January 1, 2015; at least every 30 calendar days a qualified therapist (instead of an assistant) must provide the needed therapy service and functionally reassess the patient. This policy change will lessen the burden on HHAs of counting visits and reduce the risk of non-covered visits so that therapists can focus more on providing quality care for their patients, while still promoting therapist involvement and quality treatment for all beneficiaries regardless of the level of therapy provided.

Rate-setting changes

Recalibration of the HH PPS case-mix weights                

CMS is recalibrating the HH PPS case-mix weights using CY 2013 home health claims data to ensure that the case-mix weights reflect the most current utilization and resource data available.


Core Based Statistical Area (CBSA) changes for the HH wage index

In Feb. 2013, the Office of Management and Budget (OMB) issued a bulletin that contained a number of significant changes related to the delineation of Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, and guidance on uses of the delineation of these areas. CMS is finalizing changes to the wage index based on the revised CBSA delineations for the CY 2015 HH PPS wage index. These changes will be made to the wage index using a blended wage index for a one-year transition. For each county, a blended wage index is calculated as 50 percent of the CY 2015 wage index using the current OMB delineations and 50 percent of the CY 2015 wage index using the revised OMB delineations.


Home health payment update percentage

The Affordable Care Act requires that the market basket update for HHAs be adjusted by changes in economy-wide productivity for CY 2015 (and each subsequent calendar year). The CY 2015 home health market basket (2.6 percent) adjusted for multifactor productivity (0.5 percentage points) results in a 2.1 percent payment update.


Rebasing the 60-day episode rate

The Affordable Care Act directs that beginning in CY 2014, CMS apply an adjustment to the national, standardized 60-day episode rate and other applicable amounts to reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. Additionally, CMS must phase-in any adjustment over a four year period, in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of the enactment of the Affordable Care Act (CY 2010), and be fully implemented by CY 2017. CY 2015 will be the second year of the four year phase-in for rebasing adjustments to the HH PPS payment rates.


Home Health Quality Reporting Program (HH QRP) update

The Home Health Conditions of Participations (CoPs) require HHAs to submit OASIS assessments as a condition of payment and also for quality measurement purposes. HHAs that do not submit quality measure data to CMS will see a two percent reduction in their annual payment update (APU). In this rule, CMS has established a minimum submission threshold for the number of OASIS assessments that each HHA must submit. Beginning in CY 2015, the initial compliance threshold will be 70 percent. This means that HHAs will be required to submit both admission and discharge OASIS assessments for a minimum of 70 percent of all patients with episodes of care occurring during the reporting period. CMS will increase the compliance threshold over the next two years to reach a maximum threshold of 90 percent.


Conditions of Participation for speech-language pathologists

CMS has revised the Home Health Conditions of Participation (CoPs) for speech language pathologist (SLP) personnel. Now, a qualified SLP is an individual who meets one of the following requirements: a) has a masters’ or doctoral degree in speech-language pathology, and is licensed as a speech-language pathologist by the state where they furnish services (CMS believes that all states license SLPs; therefore all SLPs would be covered by this option); or b) has successfully completed 350 clock hours of supervised clinical practicum (or be in the process of completing these hours), has at least nine months of supervised full-time speech-language pathology experience, and has successfully completed a national examination approved by the Secretary. These requirements, which align with the requirements in the Social Security Act, will replace the current stringent requirements with a more flexible option that defers to State licensure requirements.


Home Health Value-based Purchasing Model

CMS received comments on a potential HHA VBP model that it may begin testing in CY 2016. CMS will review these comments as it considers testing a HHA VBP model. CMS has already successfully implemented the Hospital VBP program where 1.5 percent of hospital payments in FY 2015 are tied to the quality of care that the hospitals provide. This percentage amount will gradually increase to two percent in FY 2017 and subsequent years. The HHA VBP model being considered would include a five to eight percent adjustment in payment made after each planned performance period in the projected five to eight states selected to participate in the model. A HHA VBP model presents an opportunity to test whether larger incentives would lead to higher quality of care for beneficiaries. If CMS decides to move forward with the implementation of an HHA VBP model in CY 2016, it intends to invite additional comments on a more detailed model proposal to be included in future rulemaking.


For additional information about the Home Health Prospective Payment System, visit


The final rule can be viewed at Please be mindful this link will change once the rule is published on Nov. 6, 2014 in the Federal Register.

Beware of Shifting Options Within Medicare Plans

OCT. 3, 2014

For millions of older Americans, it is time to sift through the mind-boggling array of Medicare plans.

There is an average of 29 drug plans to digest, and about 18 options for Medicare Advantage, the plans delivered through private insurers. Then there are the 10 supplemental plans that cover what traditional Medicare does not.

The choices can be paralyzing for anyone, and they can be even more challenging as you age. The Medicare open enrollment season, which runs from Oct. 15 through Dec. 7, gives individuals a chance to rethink it all and reassess whether their plan still fits their needs.

While no broad-based changes are expected, there could be meaningful shifts within individual plans. Maybe your Part D prescription plan will no longer pay for one of your drugs, or you started a new one. Perhaps your Medicare Advantage plan dropped your favorite doctor (or worse, a cancer treatment center) from network.

“People treat this as a momentous decision but they get scared of it, and the thing that worries me is that they don’t make the changes that they should,” said Joe Baker, president of the Medicare Rights Center in New York. “Don’t stay in a plan because you’re overwhelmed with the choices.”

Elizabeth Cooper, a 68-year-old former elementary schoolteacher, weighs her options each year. She has already tried a couple of plans, including one through Medicare Advantage, which lured her in because it had no monthly premium. But the plan required her to shoulder a significant share of her medical costs.

She is healthy now, but she has a history of skin cancer. “I didn’t feel that would give me a sense of ease because of the co-pays and the possible unexpected expenses that can crop up,” said Ms. Cooper, of Birmingham, Ala.

So she backed out of that plan during the trial period, and opted for peace of mind. She enrolled in original Medicare, and bought a supplemental policy for about $135 a month that covers items like deductibles and her share of each bill. After having a few diagnostic tests this year, her decision already paid off.

“Had I been on the Advantage plan, I would have had to come up with the money for each test,” she said. “It turned out to be a reasonable plan for me. And for that reason, I plan to stick with it.”

Here are some ideas on how to approach the decision-making process.

A REFRESHER COURSE Before delving into the details, here is a quick primer on original Medicare: Part A covers hospital and skilled nursing facility stays, as well as some home health visits and hospice care. Part B covers preventive care, doctor visits and outpatient services. Premiums, for most retirees, were $104.90 a month last year and are projected to be the same in 2015.

Deductibles, co-payments and coinsurance (that is when you pay for a percentage of medical services) can be burdensome since there is no out-of-pocket ceiling, experts said. That is one of the reasons most people buy supplemental coverage, known as Medigap, to cover out-of-pocket costs on Parts A and B. People lucky enough to have retiree employer coverage rely on that instead.

Medicare Part D, which is offered only through private insurers, covers drugs. The average monthly premium for such plans is estimated at $32 in 2015, according to the Centers for Medicare and Medicaid Services.

Alternatively, you can just buy a Medicare Advantage plan from a private insurer, also referred to as Part C. It can serve as a one-stop shop because it covers Parts A, B and often a drug plan — and sometimes throws in extras like dental and vision coverage. Average monthly premiums for Advantage plans are estimated to rise to $33.90, a $2.94 increase, in 2015, according to the Centers for Medicare and Medicaid Services. (aYou pay that in addition to the Part B premium).

ORIGINAL OR ADVANTAGE? Some consumer advocates favor using traditional Medicare with a supplemental plan, largely because it is more predictable and you are free to see any doctor who accepts Medicare.

That is what Mr. Baker said he would recommend for his own grandmother. “I would say enroll in original Medicare and let’s get you the Medigap plan you might need when you are older or sicker,” he said. “If you are in original Medicare and you have a Medigap plan, you are pretty much set for life if you are happy with those things.”

Medigap, with 10 plan levels that are labeled with letters from A to N, is federally standardized coverage, which means coverage must be exactly the same across insurers. For instance, the option known as Plan F will pay for your Part A and Part B deductibles. “This is one area, once you decide on the level of coverage you want, where you can go for the lowest price because you know Plan F will be exactly like any other Plan F,” said Jocelyne Watrous, advocate at the for the Center for Medicare Advocacy.

Depending on the plan, the total cost of your premiums could come close to your final out-of-pocket cost for the year. In Connecticut, for instance, one of the most comprehensive Medigap policies is called Plan F. It costs an individual about $218 a month, or $2,622 annually. “But that’s it,” Ms. Watrous said. “You will pay that premium and it will cover all of your co-payments and deductibles.”

If you are contemplating switching from Medicare Advantage back to original Medicare — and you want to buy a supplemental policy — that is something you may want to do while you are younger and healthier. Later on, coverage may become more expensive or you can be denied altogether. With some exceptions, individuals are guaranteed coverage only if they buy it during a special period six months after their 65th birthday. During that time, insurers cannot refuse to sell you a policy because of a pre-existing condition or other medical issue, nor can they charge you more.

Outside of that safe period, you aren’t guaranteed coverage under federal law, though many states, including New York, extend greater protections. It is important to ask your local State Health Insurance Assistance Program, or SHIP agency, for more details. After you buy a Medigap policy, it generally cannot be canceled because you are old or sick.

ADVANTAGE Nearly 16 million people, or 30 percent of all Medicare beneficiaries, enroll in a Medicare Advantage plan. Most people are attracted by the plans’ enticingly low and sometimes zero premiums and, for certain services, low co-payments. Some even offer limited dental or vision coverage, advocates said.

The drawback of Advantage plans are their limited networks of providers. Doctors can drop out midyear. And consumers are responsible for all cost-sharing, which can be unpredictable. Those are capped at an out-of-pocket limit for in-network services of $6,700 in 2015, although the Center for Medicare and Medicaid Services recommends a limit of $3,400, according to Kaiser.

But it is difficult to calculate how fast you might reach those ceilings. “The cost-sharing requirements are often harder to compare because it requires consumers to anticipate what their health care needs might be,” said Tricia Neuman, director of the Medicare policy program at Kaiser. “Some advisers suggest considering what services you would need if you were sick and take a careful look at potential costs under various plans.”

People who travel frequently or who spend a significant chunk of time in another state also need to ensure that they will be covered. “Snowbirds need to consider whether the networks and coverage extends to two places,” said Nicole Duritz, vice president for health, education and outreach at AARP.

If you are already enrolled, the “annual notice of change” sent to plan enrollees will detail changes in coverage, costs and networks. But if you are dissatisfied with your Advantage plan for any reason, you can unenroll from Jan. 1 to Feb. 14 and switch to original Medicare.

DRUGS Even if you are happy with your Part D coverage, don’t assume it will remain exactly the same. Lists of covered drugs often change or the company may insert new restrictions, limiting quantities or requiring you to try another drug first.

Go to the Medicare website’s Plan Finder, where you can enter your drugs, the dosage and frequency, as well as where you like to buy them. It will then show you what the plans cover and your total estimated costs for the year. “The plans are so complicated and there is so much variation and the only way to really compare is to use the Plan Finder,” Ms. Watrous said.

Don’t shop on price alone. “The best and cheapest plan for you is the one that covers your drugs the best,” said Mr. Baker, who advised calling the plan, or even your doctor or pharmacist, who has a lot of interaction with the different plans.

RESOURCES Besides local SHIP agencies, advocates suggest that people check out the latest Medicare & You booklet, which all 54 million enrollees should have received in the mail by now. It’s remarkably clear. To talk to someone live, call 1-800-Medicare. Whatever you do, Mr. Baker advised, “Don’t renew blindly.”

20% of women and 16% of men postpone preventive services due to cost

According to a recent fact sheet posted by the Kaiser Family Foundation, due to cost during the past year:

  • 13% of insured women report postponing preventive services.
  • 52% of uninsured women report postponing preventive services.
  • 9% of insured men report postponing preventive services.
  • 42% of uninsured men report postponing preventive services.
  • Overall, 20% of women and 16% of men postpone preventive services.

Note: Data collected from women and men ages 18-64 via survey.

Source: Kaiser Family Foundation

Today's Datapoint

15% per worker was saved on medical benefit costs in 2014 by employers that used Mercer Marketplace, the company announced recently.

Quote of the Day

“The use of risk-corridor payments by the GOP leadership as a rationale for a budget shutdown makes me think there’s still lead in the Capitol water pipes.”

— William Pewen, Ph.D., who served as senior health policy advisor to former Sen. Olympia Snowe (R-Maine) and is now an assistant professor at Marshall University, told AIS’s Inside Health Insurance Exchanges.

Wednesday, October 29, 2014

2015 HSA and FSA Cheat Sheet

October 27, 2014

Health savings accounts
What they are
A health savings account is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in an HSA-qualified high-deductible health plan.
HSAs can grow tax-deferred in your account for later use. There’s no deadline for making a withdrawal: Consumers can reimburse themselves in future years for medical costs incurred now.
Individuals (self-only coverage) - $3,350 (up $50 from 2014)
Family coverage - $6,650 (up $100 from 2014)
The annual limitation on deductions for an individual with family coverage under a high-deductible health plan will be $6,650 for 2015.
The maximum out-of-pocket employee expense will increase next year to $6,450 for single coverage from $6,350, and to $12,900, from $12,700, for family coverage.
What’s new
The out-of-pocket limits include deductibles, coinsurance and copays, but not premiums. But starting in 2015, prescription-drug costs must count toward the out-of-pocket maximum.
Account numbers — and exploding growth
Health savings accounts have grown to an estimated $22.8 billion in assets and roughly 11.8 million accounts as of the end of June, according to the latest figures from Devenir. The investment consulting firm said that’s a year-over-year increase of 26 percent for HSA assets and 29 percent for accounts.
Devenir projected that the HSA market will exceed $24 billion in HSA assets covering more than 13 million accounts by the end of 2014. Longer-term predictions are far greater: The Institute for HealthCare Consumerism, for one, estimates that 50 million Americans will be covered by HSA-qualified health plans by Jan. 1, 2019, and that HSA adoption will grow to 37 million.
Who’s using them
Both men than women. The gender distribution of people covered by an HSA/HDHP as of January 2014 was evenly split — 50 percent male and 50 percent female. But males have more money in their accounts. At the end of 2013, men had an average of $2,326 in their account, while women had $1,526, according to the Employee Benefit Research Institute. EBRI reported that older individuals have considerably more money in their accounts than do younger HSA users: Those under 25 had an average of $697, while those ages 55-64 had an average of $3,780, and those 65 or older had an average account balance of $4,460.
Other things of note
People are becoming more active and better managers of their HSA dollars. In 2012, 52 percent of HSA account holders spent in excess of 80 percent of their dollars on health care expenses, according to research by the HSA Council of the American Bankers' Association and America’s Health Insurance Plans.

Flexible spending accounts

What they are

FSAs allow employees to contribute pre-tax dollars to pay for out-of-pocket health care expenses — including deductibles, copayments and other qualified medical, dental or vision expenses not covered by the individual’s health insurance plan.

They’re also known as flexible spending arrangements, and they’re more commonly offered with traditional medical plans.


Under the Patient Protection and Affordable Care Act, FSAs have a $2,500 annual limit. Some predict it may rise by $50 next year, the IRS hasn’t announced the FSA contribution limit for 2015 yet.

What’s new

Last fall the U.S. Treasury Department issued new rules that let employers offer employees the $500 carryover. Previously, unused employee FSA contributions were forfeited to the employer at the end of the plan year or grace period, which industry insiders say were a barrier to adoption. The rule went into effect in 2014.

Double-digit growth

Alegeus Technologies said that clients who have actively promoted the FSA rollover allowance to their employer groups and eligible employees are seeing 11 percent incremental growth in FSA enrollment and 9 percent growth in FSA elections — compared to a flat overall FSA market growth.


The change to the FSA use-it-or-lose-it rule was greeted enthusiastically by employers, consumers and industry insiders. Many believe adoption will grow with that amendment.


Who’s using them

An estimated 35 million Americans use FSAs.

Other things of note

A survey from Alegeus Technologies says most consumers, and even account holders specifically, do not fully understand account-based health plans, including HSAs, FSAs and health reimbursement accounts. Only 50 percent of FSA holders passed a FSA proficiency quiz.

Today's Datapoint

People who purchased coverage through an insurance exchange were nearly 60% more likely to fill prescriptions for specialty medications than were other insured individuals, according to data released recently by Express Scripts Holding Co.

Quote of the Day

“We saw a [Medicare Advantage] plan last year lose 40% of its membership when [the star ratings came out and] the low-quality rating letter got sent from CMS to the members. Forty percent walked when they saw the hate mail from CMS saying you are enrolled in a crappy plan.”

— John Gorman, executive chairman of Gorman Health Group, LLC, told AIS’s Health Plan Week.