Monday update

Following up on yesterday’s update, the Insurance Journal reports on today’s IRS hearings about the proposed employer reporting requirements under IRC § 6056  which the IRS will use to help enforce the employer shared responsibility mandate under the ACA. This quote caught the FEHBlog’s eye:

One lawyer, speaking anonymously to protect his relationship with IRS officials, said the business requests for data cutbacks were “dead on arrival.” IRS officials will likely show limited flexibility in the final rules, he said.

The IRS hearings on the health plan reporting requirements under IRC § 6055 will be held tomorrow.

The FEHBlog has noted that HHS Secretary Sebelius recently informed Congress that the qualified health plans in the ACA’s health insurance exchanges are not federal health plans subject to the federal health plans anti-kickback act. (The FEHBA is expressly excluded from the scope of that complex law.)  The hospitals celebrated the fact that it appeared they could pay the QHP premiums for their patients when necessary. The celebration appeared to be cut short by a CMS FAQ warning QHPs not to accept third party premium payments. Health Leaders Media reports that the American Hospital Association is aggressively pushing back against this FAQ guidance. Litigation appears likely.

The FEHBlog also recently complained about the revamped DOL ACA website. The FEHBlog noticed today that DOL appears to have cleaned up the glitches by, for example, including a link to the all important ACA FAQs.

The big legislative news today is that the Senate approved a House endorsed bill strengthening the Food and  Drug Administration’s authority over drug compounders in the wake of last year’s New England Compounding Center tragedy. The bill now goes to the President so that he may sign the bill into law.

Health plans have been attempting to lower emergency room costs by diverting patients to urgent care centers. In a man bites dog story, Fierce Healthcare Payer reports that according to a Blue Cross executive in Buffalo NY those urgency care centers can siphon off primary care provider patients thereby raising costs. However, that may be unavoidable because urgent care centers are open long than doctors’ offices. But it’s useful information to consider when trying to find the Goldilocks point.

Finally, as you may know there large insurers and relatively small health plans participating in the FEHBP (frame of reference — a small plan covers about 70,000 to 100,000 lives).  The Health Affairs Blog reports on a study finding that economies of scale for health insurers/plans converge around 100,000 lives. The blog post explains that

Interestingly, it appears that, as scale increases, the incremental costs driven by greater complexity begin to counteract the economies of scale. [P]ayors with greater than one million covered lives tend to have more lines of business and to operate in many more states than smaller payors do, and they seem to have higher administrative costs. In our experience, smaller payors often have much greater standardization of products and processes, and are more likely to outsource IT platforms and core functions. Because their business is less complex, they often appear to be better able to make the most of the efficiencies derived from economies of scale.