Midweek Update

The regulatory agencies implementing the Affordable Care Act have released promised guidance on the federal external appeal process applicable to non-grandfathered group health plans, typically ERISA governed health plans, effective for plan years beginning on or after September 23, 2010.  For the past 25 years, the FEHB Program has had a successful external appeal process — prescribed by the FEHB Act, 5 USC Section 8902(j) — that culminates in OPM review. The Affordable Care Act gives the Secretary of Health and Human Services the authority to deem existing external review processes compliant with the Act, but this guidance does not even mention the FEHB Program or the status of its external appeal process. That is disappointing to the FEHBlog. Here’s a link to a Business Insurance article on the guidance.

Business Insurance reports today on an Aon Consulting survey of employers with 500 employees or more indicating that “Just over one-third of respondents said their group health care costs rose at least 5% but less than 10% this year, while 18% said costs climbed at least 10% but less than 15%. Twenty-four percent, though, said cost increases were less than 5%, while 5% said cost increases were at least 15% but less than 20%.”  AHIP offers a useful website that brings together various resources explaining why health care costs are increasing (hint — the population is aging and health care providers are raising prices).

A New York Times report earlier this week anticipates that the Health and Human Services Department pulled back the final rule governing notices of breach of unsecured protected health information because the Department plans to remove the common sense harm threshold. The current interim regulation required health care providers, health plans, and their business associates to provide affected individuals of a breach of unsecured protected health information if the breach creates a likelihood of financial or reputational harm to the individual. This threshold is found in the 2007 Office of Management and Budget guidance to federal government agencies on how to handle data breaches. OMB explained then that a harm threshold avoids unnecessarily alarming people. That makes sense to the FEHBlog, but not to the privacy zealots.