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HEALTH CARE SUMMIT RECAP Rhode Island can learn from Mass. reform effort

Providence Business News

Page HC2 April 8-14, 2013 www.pbn.com

By Richard Asinof Contributing Writer

Many of the top supporters of health care reform in Rhode Island joined in a Providence Business News-sponsored panel discussion on “Health Care Reform and the Insurance Exchange,” held March 28 at the Crowne Plaza Providence-Warwick. Christine Ferguson, executive director of what’s now called the R.I. Health Benefits Exchange, began the dialogue with a nuts-and-bolts overview of the exchange, promising that it will be “amazing and fantastic.” She called it a “once in multiple-generation” opportunity to change health care delivery for the better in Rhode Island – and the nation. The exchange will be open for business on Oct. 1, Ferguson said, with a Web presence and comparison-shopping for the different health-insurance plans, as well as an informational contact center to help consumers with questions. Actual enrollment through the exchange will begin on Jan. 1, 2014, Ferguson continued. There will be a six-month open-enrollment period for individuals, beginning in October, and small businesses with less than 50 employees will have a running enrollment period, depending on their renewal dates. On April 2, the U.S. Department of Health and Human Services said that

PBN PHOTO/RUPERT WHITELEY

IDEAS EXCHANGE: Tufts Health Plan President and CEO James Roosevelt Jr., speaking, wearing glasses, says that the insurer is committed to the R.I. Health Benefits Exchange.

it was delaying employees from small businesses the choice to purchase health insurance in federally run exchanges for a year, until Jan. 1, 2015. However in Rhode Island, the plan remains to offer employees that choice beginning in Jan. 1, 2014. “Our extensive outreach in the business community has shown that both small-business employers and

employees clearly value choice in the exchange marketplace, and our intention is to build a program that will offer them full employee choice beginning in 2014,” said Ian Lang, associate direction of marketing and communications for the R.I. Health Benefits Exchange. Testing of the exchange’s new IT system – which will include online Medicaid eligibility and enrollment for

approximately 270,000 Rhode Islanders – will begin in April. By Jan. 1, 2015, the exchange will need to become self-sustaining, without support from federal funds. Ferguson did not share any details of how that will be accomplished; fees consumers and insurers may be charged for the exchange’s services were not explained. The biggest news Ferguson delivered in her opening remarks was that the exchange would have a new name. “The new name and branding of that name will be revealed as part of a marketing and outreach effort scheduled to begin in early summer. When asked about who is eligible to participate in the exchange, Ferguson suggested that those in attendance with questions go to the exchange’s Web site for specific details, adding: “The exchange is available for individuals who don’t have access to affordable health insurance.” Affordable, she continued, is defined as premiums that are less than 9.5 percent of income. The exchange is also open for small businesses with less than 50 employees, she said. It is not aligned with Medicare members. James Roosevelt Jr., the president and CEO of Tufts Health Plan, spoke about what Rhode Island can learn from Massachusetts’ experience with its state health care reform law. Acknowledging that the state and federal laws are different, Roosevelt said that See Effort, page HC6

Patient-centered care key to curbing costs cussion stressing the importance of patient-centered care in new insurance products and investments in health care delivery service by Blue Cross. “I’ve been in the health insurance By Richard Asinof business for 30 years,” he said, saying Contributing Writer that the emphasis has supposed to be The CEOs of three commercial about building a relationship with prohealth insurers in Rhode Island joined viders and patients. “It’s been anything the leaders of Lifespan, the state’s largbut that. We’re just beginest hospital network, and ning to change the incenCoastal Medical, one of tives.” the state’s largest phyBlue Cross has investsician-run primary care ed in new shared savings practices, for a March 28 contracts and in patientdiscussion on “Health centered medical homes in Care Reform and the InRhode Island to encourage surance Exchange.” population health manageTogether, they offered ment and root out waste, details of new insurance according to Andruszkieproducts and new health wicz. care delivery models that He pointed to the rapid they are bringing into growth of Blue Cross’ inthe market. At the center vestment in patient-cenStephen Farrell of those efforts is an attered medical homes. In UnitedHealthcare of New tempt to engage with the the last three years, it has England Inc. CEO consumer and make the grown from six practices patient the focus of health with 14,000 patients to 80 care delivery. practices with more than 160,000 paFor the more than 450 people crowd- tients. ed into the Grand Ballroom at the James Roosevelt, Jr., president and Crowne Plaza Providence-Warwick CEO of Tufts Health Plan, offered some for the Providence Business News- insights into his health-insurance’s sponsored event, it was a glimpse into plans for the Rhode Island market, with the future direction of health care in a push to help small businesses become Rhode Island. self-insured. He also suggested that a Peter Andruszkiewicz, president plan similar to one in Massachusetts, a and CEO of Blue Cross & Blue Shield partnership with Steward Health Plan of Rhode Island, began the panel dis- that created a tiered, limited-network

Insurers, care providers invested in outcomes

‘Our goal is to align the interests of the patient, the provider and the insurer.’

PBN PHOTO/RUPERT WHITELEY

TALKING POINTS: More than 450 people attended the PBN-sponsored Health Care Summit at the Crowne Plaza Providence-Warwick last month.

insurance product, is something under consideration to be offered on the new R.I. Health Benefits Exchange. Neither Steward nor Tufts has offered any detailed enrollment numbers to date. Stephen Farrell, CEO of UnitedHealthcare of New England Inc., talked about the ways that UnitedHealthcare was attempting to engage the consumer in its new products, such as “Choice Advanced.” “Better information leads to better decision-making leads to better health outcomes,” he said. Farrell called his firm’s products “groundbreaking” in their attempts to make costs visible and transparent to consumers, so that they

are empowered. Farrell touted UnitedHealthcare’s national, for-profit reach – with more than $20 billion in insurance revenue annually, investments in 10 accountable care organizations nationwide, with two of the innovative entities here in Rhode Island, at Coastal and at Lifespan, and the ability to mine health IT data from some 75 million customers in better managing population health. “We have a very fragmented health care system,” Farrell continued. “Our goal is to align the interests of the patient, the provider and the insurer.” Dr. Timothy J. Babineau, president See Key, page HC4


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Key

tice of medicine is about the exchange of information,” he said. The choice of Epic, he continued, was reinforced by the decision by Partners Healthcare in from page HC2 Boston to choose Epic and invest $800 and CEO of Lifespan, the state’s largest million to rebuild its IT system. Care hospital network as well as its largest New England, the second-largest hosprivate employer, with more than 12,000 pital network in Rhode Island, has also employees, talked about the need to re- partnered with Epic to rebuild its amdesign health care delivery around the bulatory care IT system, as well as creneeds of the patient, not the provider. ate a unified platform for its physician Despite the great advances in science practices. Babineau said that the Lifespan netand technology in health care, Babineau said, “If you think about health work had 280 separate IT interfaces; care as an industry, we’ve evolved very with EPIC, in the future, every department and surgical center little in terms of respondwould now operate across ing to the market.” one platform. In terms of the need William P. Deveraux, for cutting medical costs, a partner at the law firm Babineau continued, it of Pannone Lopes Deneeds to be “much more vereaux and West, LLC, than paying 95 cents incalled the new health IT stead of a $1 for a Bandsystems and the transparAid.” ency they promote “a wonBabineau praised Lifesderful thing for software pan’s efforts to redesign engineers and lawyers, bethe delivery of care to be cause there was a signifipatiented-centered, thinkcant risk of inadvertent Dr. Timothy J. ing about health care not disclosure.” just as what occurs in a Babineau Dr. G. Alan Kurose, hospital, but what hap- Lifespan president and CEO president and CEO of pens before and after, too. Coastal Medical, counBabineau cited the extered Devereaux, saying that the lack perience at The Joint Center at The of clinical information available to proMiriam Hospital, where through the viders at the point of care was a much use of Lean and Six Sigma techniques, more significant problem – “a hundred the hospital has been able to reduce the times, 500 hundred times, 1,000 times number of patients who need to go to a greater” – than inadvertent disclosure nursing home for rehabilitation stays of personal medical information. from 60 percent to 21 percent. “That’s Kurose also offered details of Coastal where the opportunity is,” he said. Medical’s innovative, shared-savings Babineau also talked about the new contracts with Blue Cross and its $100 million investment by Lifespan to accountable-care organizations with rebuild its health IT system using Epic Medicare and with UnitedHealthcare. Before coming to the forum that software and technology. “The prac-

‘Health care … [has] evolved very little in terms of responding to the market.’

PBN PHOTO/RUPERT WHITELEY

BREAKING DOWN BARRIERS: Coastal Medical President and CEO Dr. G. Alan Kurose, second from left, says that health-IT reform is removing the issue of the lack of clinical information being available to providers.

morning, Kurose said he reviewed Excel spreadsheets at the breakfast table, with some 67 databases looking at the total cost of Coastal’s operations. The inpatient hospital costs were about 21 percent for Blue Cross; for Medicare, the inpatient hospital costs run about 39 percent. What that points to, he continued, is the need for system redesign, because about 80 percent of the costs incurred with Blue Cross happen outside the hospital, and with Medicare, 60 percent of the costs happen outside the hospital. Kurose also touted Coastal’s inno-

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vative approach to providing primary care 365 days a year, as a way to deliver “the right care at the right place at the right time.” Sen. Joshua Miller, D-Cranston, chairman of the Senate Committee on Health and Human Services, called the panel discusion “a great opportunity” for someone like himself who is trying to keep up with all that is happening. Edward Quinlan, president of the Hospital Association of Rhode Island, said it was “a great service to the community.” n


Providence Business News

HEALTH CARE SUMMIT RECAP B:10”

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Providence Business News

Effort

that the rules were being configured to avoid this pitfall. “We have the opportunity to do this right from day one here,” he said. from page HC6 Roosevelt said that there would be a price to pay for the effort to deliver some general principles apply. As a health insurer, he continued, health care in a more affordable and Tufts is “very committed” to Rhode Is- more transparent manner. “There will land and its exchange. “The goal is to be increases in premiums,” he said. provide high-quality, affordable health “You don’t get anything … for nothing.” Jumping into the conversation, R.I. care. This is going to require developing new products with different fund- Health Insurance Commissioner Chrising methods,” Roosevelt said. It will topher F. Koller warned the audience to also require providers, payers and be careful when they read stories prestakeholders working together, he con- dicting what increasing costs will be as a result of health care retinued, “something I think form. “Nobody knows for we are all doing now.” sure about costs,” he said. Roosevelt also urged Stories that attempt to prethat the emphasis be on dict the costs, Koller conwhat works, rather than tinued, “will be attempting what may be held up as an to make a political point.” ideal. Lt. Gov. Elizabeth H. “One thing that MasRoberts attempted to resachusetts did that was frame the discussion really important was the around costs, saying: “If outreach effort and marwe were to keep doing the keting campaign of its same thing that we are exchange, known as ‘The now, the costs are going Connector,’ ” Roosevelt James Roosevelt Jr. to go up,” she said. “We’re said, describing how the Tufts Health Plan not really changing how state partnered with the president and CEO we get health insurance, Boston Red Sox to get the but how we get health message out to people. “This is a new concept for people, and care.” Ferguson touted the accessibility you have to explain how it works and and transparency of information on the why it matters,” he said. Like everything else in life, Roo- new exchange, saying that consumers sevelt continued, “there are people will be able to make apples to apples who will try and game the system,” de- comparisons 365 days a year. The total scribing what he termed “jumpers and costs of health insurance will be transdumpers,” people who signed up for parent, she promised. Further, she prehealth insurance to deal with particu- dicted that most employers in the state lar medical needs, and once they were will not try to game the system, citing statistics that 98 percent of employers met, dropped their insurance. In Rhode Island, Roosevelt said with more than 50 employees in Rhode

‘This is going to require developing new products with different funding methods.’

PBN PHOTO/RUPERT WHITELEY

GAME CHANGER: Lt. Gov. Elizabeth H. Roberts said at last month’s Health Care Summit that “we’re not really changing how we get health insurance, but how we get health care.”

Island offer employees health insurance. And about 50 percent of employers with under 50 employees also offer health insurance to employees. “Employers will want to be engaged,” she said. William E. O’Gara, a partner in the law firm of Pannone Lopes Devereaux and West, LLC who heads the firm’s litigation and employment teams, voiced optimism that the new exchange may provide some relief to businesses. “We’re in a state where the economy is so difficult,” he said. “Health costs suck all the oxygen out of the economy. The

entire system stopped working several years ago.” Ferguson said the new exchange system may provide employees with new freedom to choose jobs, because until now they have been shackled with what she termed the “golden handcuffs” of health-insurance benefits, unable to leave a position that they don’t like. “I would be really careful about how you think about health insurance,” she warned employers. “A happy employee is a more productive employee,” Roosevelt chimed in. n

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HEALTH CARE SUMMIT RECAP ACA checkup can help keep firm healthy Providence Business News

Page HC8 April 8-14, 2013 www.pbn.com

There’s another wave of health care reform mandates under the Affordable Care Act (ACA), commonly called “Obamacare,” that employers need to know about. These “play-orpay” mandates will Kate Saracene require many compaand Stephen nies to make changes Zubiago in whether and how they provide health care benefits to their employees, and employers who fail to comply face significant penalties. Though not effective until January 1, 2014, employers are wise to start thinking about these issues now. Below is a list of the top items to consider. n Determine whether you are a “large employer” subject to the coverage mandate. All employers with an average of 50 full-time equivalent employees during 2013 will be required to offer health coverage. Full-time equivalence is determined by aggregating the number of “full-time employees” (those who average 30 hours, including paid time off, per week), and the full-time equivalent number of part-time employees. If businesses share at least 80 percent common ownership, or where certain service organizations have joint activity or control, those businesses are considered a single employer. n If you are a large employer, you may need to redefine your policies governing eligibility for health insurance.

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The ACA requires that large employers offer coverage to at least 95 percent of their “full-time employees.” However, many employers currently consider “full-time employment” to be 32, 35 or 40 hours per week (instead of the 30 hours required by the ACA). Some employers’ policies even exclude entire categories of W-2 employees, such as temporary or seasonal employees, or per diems, all of whom may now need to be offered coverage. Large employers who fail to comply with these rules face an annual “sledgehammer” penalty equal to $2,000 times the number of all full-time employees. n Employers with fewer than 50 full-time equivalent employees are not required to provide coverage to their employees, but the ACA offers incentives and opportunities to do so. For example, employers with 50 or fewer employees will be eligible to purchase insurance through the new Rhode Island Health Benefits Exchange, and those with 25 or fewer employees may even be eligible for a federal tax credit to help pay the employer’s share of premiums. n Determine whether you have any variable-hour or seasonal employees subject to special rules. If you have employees whose hours fluctuate, or if you employ seasonal workers, then you may have the option to average their

hours over a period of six to 12 months. If an individual averages 30 hours per week during this “measurement period,” then they must be offered health coverage during a “stability period” that follows, which generally must be the same length as the measurement period. n If you do offer health coverage, determine whether it satisfies the ACA standards for “minimum value” and “affordability.” The “minimum value” standard requires that the plan must pay on average at least 60 percent of the costs for covered benefits. The regulators are developing a minimum-value calculator, where employers will be able to input certain information about the plan, and get a determination as to whether the plan complies. The “affordability” standard requires that an employee’s share of the premium for single coverage cannot exceed 9.5 percent of the employee’s wages. If you discover that your current cost-sharing method makes coverage “unaffordable,” you will need to decide whether to adjust your employer subsidy to make it affordable for all employees, or whether to pay the penalty, equal to $3,000 times the number of your full-time employees who receive a federal government subsidy through an Affordable Health Insurance Ex-

Obamacare allows employers to pay a penalty and opt out of the coverage mandates.

change. n Revise your health-plan terms to comply with new mandates. The ACA requires that you must offer coverage to your employees’ biological, step, adopted and foster children. It also imposes a 90-day maximum on eligibility waiting periods, and caps the permitted out-of-pocket maximums. n Use modeling tools to determine whether it is more affordable to “play” or to “pay.” Obamacare allows employers to pay a penalty and opt out of the coverage mandates. You should think about which option is better for your business. n Consider changes to your business model. For example, some owners of multiple businesses are selling off shares in order to become “small employers” exempt from the coverage mandate. n If you have a unionized workforce, negotiate with the unions representing your employees regarding changes that need to be made to your collective-bargaining agreements to ensure compliance. If your unionized employees participate in the union’s own health plan, you are not off the hook either, and you need to make sure that the union’s plan complies, or you as the employer will face the penalty. n Kate Saracene is a labor and employment and employee-benefits lawyer with Nixon Peabody LLC. Stephen Zubiago is a health-services partner with the firm.


Providence Business News

HEALTH CARE SUMMIT RECAP

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The New Health Insurance Marketplace: It’s time to plan for 2014! Each state has filed a blueprint for creating a Health Insurance Marketplace (formerly known as the American Health Benefit Exchanges). These Exchanges are projected to be operational on January 1, 2014, and we expect to inundated with new guidance and regulations in the coming months. Join USI Insurance Services for an interactive breakfast seminar where our compliance experts will discuss the current status of the legislation. If you are a CFO, CEO, COO, President, Business Owner or HR Director, you can’t afford to miss this timely session. This session has been approved for 2.5 HR Credits.

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HEALTH CARE SUMMIT RECAP

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2 1. Panelists Blue Cross Blue Shield CEO, Peter Andruszkiewicz and William Devereaux, Pannone Lopes Devereaux & West 2. UnitedHealthcare New England CEO, Stephen Farrell (center), listens to first panel. 3. Robert Anderson of RIMS Brokerage asks the panelists a question 4. Joan Greenwell, Starkweather & Shepley, talks with David Glade and Jeff Minuto of USI Insurance 5. Janet Farrell, Brown University Continuing Education 6. Carlos Fuentes, VP of Delta Dental 7. Paula Rossi, VP of Coastal Medical 8. Dr. John Murphy, Lifespan 9. Deanna Casey, AARP

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Caitlin McBride and Laurie Ufland, Tufts Health Plan Christine Ferguson, director of the RI Benefits Exchange Sam Slade, USI Insurance William O’Gara, Pannone Lopes Devereaux & West, and Lt. Governor Elizabeth Roberts Tufts Health Plan CEO, James Roosevelt, Jr., talks about the “Mass Connector” Stephen Farrell, CEO of UnitedHealthcare NE, Lifespan CEO Dr. Timothy Babineau, and Dr. Alan Kurose, CEO of Coastal Medical Jim Ryan, Pannone Lopes Devereaux & West, listens to Panel 1 discuss the Benefits Exchange Doris Haskins and Alan Neville, AARP Christine Ferguson talks with Peter Andruszkiewicz, BCBSRI CEO James Roosevelt, Jr. talks with fellow panelist, William Devereaux Dr. Timothy Babineau and Dr. Alan Kurose Kim Hadsell (center) of USI Insurance John O’Hara, AARP, asks the Panelists a question concerning Medicare

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