By Lynn Cavanaugh - The SECURE 2.0 Act is lawmakers’ response to increasing concern about Americans making ends meet during their retirement years. A key component of this law passed in December 2022 — and included in the Consolidated Appropriations Act, 2023 — includes changes that make it easier for retirement plan sponsors to correct errors or failures in order to protect participant benefits. Read Full Article…

VBA Article Summary

1. Expansion of Self-Correction Options under SECURE 2.0: The SECURE 2.0 Act greatly expands the types of errors that can be self-corrected, removing the previous constraints linked with the EPCRS. Specifically, this includes the term "Eligible Inadvertent Failures" that denotes mistakes made even when procedures to prevent them were in place. Instead of the previous three-year timeframe for correcting these errors, there is now generally no set deadline, unless under specific conditions such as the plan coming under IRS examination before beginning corrections. Additionally, self-correction can be deemed reasonable if done within 18 months of identifying the failure.

2. New Clarity on Eligible and Ineligible Self-Corrections: An "Eligible Inadvertent Failure" is a mistake that happened despite having preventive procedures. The mistake could be from an oversight or misapplication of procedures, not from the lack of them. Some errors cannot be self-corrected. This includes egregious failures related to asset misuse or tax evasion and other identified failures like unsigned plan documents. Importantly, failures related to participant loans, which were previously uncorrectable without VCP or Audit CAP, can now be self-corrected.

3. Guidance and Recommendations for Plan Sponsors: Plan sponsors should leverage the flexibility of the SECURE 2.0 Act to conduct internal audits, ensuring alignment between plan documents and procedures. The IRS actively promotes this proactive approach, recently piloting a program to facilitate timely self-audits. While SECURE 2.0 continues to evolve and may have some areas needing refinement, the central message remains clear: Self-identifying and timely correction of plan errors, before IRS or DOL intervention, is the best course of action.

Scale of healthcare cyber attacks increase as criminals change tactics, report finds

By Susanna Vogel - Cyber criminals are increasingly targeting healthcare providers’ third-party business associates, according to a new report from cybersecurity firm Critical Insights. Read Full Article… 

VBA Article Summary

1. Reduced Frequency, Increased Magnitude: While the first half of 2023 saw a 15% reduction in reported healthcare data breaches compared to the latter half of 2022, the scale of individual breaches has surged. Cybercriminals are shifting their focus, with nearly half of the 40 million records exposed this year being a result of attacks on third-party business associates of healthcare providers. These breaches impact an average of over 304,000 records, significantly higher than breaches on providers or health plans which affect less than 86,000 records on average.

2. Changing Threat Landscape: Cybercriminals are continuously adapting their strategies, focusing on the weakest links in the healthcare sector's supply chain. John Delano from Critical Insight emphasizes the importance of healthcare organizations remaining vigilant, especially concerning their third-party business associates. Furthermore, the report indicated that a significant majority of the attacks this year targeted network servers, with emails being another notable vulnerability.

3. Economic and Legal Implications: The financial fallout from data breaches in healthcare is growing, with the average cost of a breach now nearing $11 million, a 53% increase since 2020. Large organizations like HCA Healthcare have already been victims of massive breaches this year. Furthermore, these breaches can have legal repercussions, as evidenced by the class action lawsuit served to Johns Hopkins Health System in July, alleging negligence following a significant data breach.

Prediction is Power: The Truth About What is AI, Really

By Rick Stevens - Do some people simply think the A in AI stands for Automation? Most likely the confusion is due to a lack of understanding of what AI truly is, combined with a strong desire to use the term for marketing purposes. Read Full Article…

VBA Article Summary

1. Definitions Matter: The buzz around AI has led to misconceptions about its definition and function, particularly in the healthcare revenue cycle domain. Many technologies, like robotic process automation (RPA) or basic data analysis tools, are being labeled as AI when they don't fit the bill. To clarify, AI, at its core, is about prediction. For instance, a program suggesting content on Netflix uses AI to predict what users might want to watch next. On the other hand, a bot used to automate a repetitive task, such as logging into a portal to check patient eligibility, is not AI but RPA.

2. Avoiding Misuse for Marketing: The hype surrounding AI can be compared to the early days of cloud computing. Back then, many tech companies marketed their products as "cloud solutions" without fully understanding or accurately representing the technology. Similarly, the term AI is sometimes used inaccurately to market solutions, leading to confusion. Some technology vendors might be using the term AI to describe simple automation or basic analytics tools, which only muddies the waters further for those trying to differentiate between genuine AI applications and other technologies.

3. Identifying Genuine AI Applications: Truly predictive technologies utilize past data to forecast future outcomes, and this is the hallmark of AI. For instance, a tool that uses past denial data to anticipate if a future claim will be rejected is employing AI. While AI's predictive capabilities can indeed be combined with other technologies, such as analytics or RPA bots, it's essential to recognize and differentiate AI's primary function: prediction.

Blue Shield of California ditches CVS Caremark as PBM, unveils new pharmacy care model

By Frank Diamond - Blue Shield of California today unveiled a new model for pharmacy care that it hopes will overhaul the “broken prescription drug system.” Under the Pharmacy Care Reimagined program, the health plan will sever most of its ties with CVS Health’s Caremark, its current pharmacy benefit manager. But not all of them, Sandra Clarke, Blue Shield of California’s chief operating officer, told Fierce Healthcare.. Read Full Article…

VBA Article Summary

1. New Partnership for Pharmacy Care: Blue Shield of California has expanded its pharmacy care initiative by partnering with five companies: Caremark, Amazon Pharmacy, Abarca, Mark Cuban Cost Plus Drug Company, and Prime Therapeutics. Each company has a unique role, such as Amazon providing upfront pricing and fast home delivery, while Prime Therapeutics negotiates directly with pharmaceutical companies. The intent is to diversify and optimize the roles typically held by a single pharmacy benefit manager (PBM). The overall objective is to reduce prescription drug costs between 10% to 15%, which could translate to around $500 million savings annually.

2. Focus on Transparency and Reducing Costs: The healthcare supply chain for drugs is notably complex, with many intermediary stages that introduce costs based on the drug's list price or by driving higher volumes. Blue Shield of California aims to simplify the process by introducing a net price system to eliminate hidden fees and rebates. Despite these efforts, some, like Adam Fein, Ph.D., CEO of the Drug Channels Institute, express skepticism, believing that Blue Shield might be overcomplicating the process with multiple stakeholders.

3. Implications and Future Outlook: The move to diversify partnerships means that Blue Shield of California, serving 4.8 million members, is distancing from exclusive ties with Caremark, following in the footsteps of other big insurers like Centene. This shift impacted CVS Health's stock prices, with shares dropping by 9%. However, CVS Caremark defends its value in the industry, pointing out the increasing importance of specialty pharmacy spend and asserting confidence in their long-term prospects. Blue Shield of California plans to phase in the components of this initiative, starting with Prime Therapeutics in 2024, followed by the remaining partners in 2025.

Elevance and other for-profit insurers find new scrutiny from lawmakers over their denials of care for Medicaid patients

By Wendell Potter - You may recall that we published a piece earlier this month about how Elevance and other big for-profit health insurers are refusing to authorize coverage for much of the care ordered by doctors and hospitals that treat Medicaid patients. Read Full Article…

VBA Article Summary

1. Elevance Denial Rates: Elevance, previously Anthem, which operates Medicaid programs in 20 states, was found to have denied over one-third of the requests for doctor-ordered treatments or medications in at least one of its Medicaid plans. This 34% denial rate was only surpassed by a Molina plan, another for-profit venture, which denied 41% of such requests.

2. Congressional Inquiry into Prior Authorization: Rep. Frank Pallone of New Jersey, a senior Democrat in the House Energy & Commerce Committee, is initiating an investigation into the insurers' practice of using "prior authorization" to decline coverage for treatments Medicaid patients require. This decision was prompted by a report from the Department of Health and Human Services Office of Inspector General (OIG) which found that insurers, on average, rejected one in every eight treatment requests for Medicaid patients, a rate that Elevance and similar for-profit companies considerably surpassed.

3. Elevance's Contract Disputes with Hospitals: Elevance, now ranking as the 22nd largest corporation in the US, is currently entangled in the third of a series of ongoing contract disagreements with three hospital systems in Ohio that cater to a large proportion of the state’s Medicaid patients. The situation escalated when, on July 1, Elevance removed Bon Secours Mercy Health from its provider network, consequently leaving Medicaid patients previously cared for at its hospitals with the challenging task of finding alternative care facilities or bearing potentially significant out-of-pocket expenses.

How Payers Are Reducing Prior Authorizations, Limiting Care Disruptions

By Victoria Bailey - Although prior authorization aims to control costs and limit unnecessary medical procedures, healthcare stakeholders have continued to raise concerns that the process creates substantial administrative burden for providers and disrupts patient care. As prior authorization scrutiny persists, payers have started to reduce requirements and limit these care disruptions. Read Full Article… 

VBA Article Summary

1. UnitedHealthcare's Reduction in Prior Authorization Requirements: UnitedHealthcare announced plans to eliminate almost 20% of prior authorization requirements in the summer of 2023 to ease the healthcare process for consumers and providers. A two-phased approach will be implemented to remove specific requirements across different health plans, starting September 1, with reductions in areas such as durable medical equipment, hysterectomy, and radiology. The introduction of a national Gold Card program is planned for 2024, enabling eligible provider groups to follow an administrative notification process instead of prior authorization, along with a new resource for members to track requests online.

2. Adjustments in Cataract Surgery Prior Authorization by Humana and Aetna: Humana removed its prior authorization requirement for cataract surgery in Georgia, reversing a decision that had led to treatment delays, following advocacy from opthalmology organizations. Aetna made similar changes, eliminating pre-certification requirements for cataract surgeries for most health plan members except Medicare Advantage beneficiaries in Florida and Georgia, and ending prior authorization for physical therapy in several states.

3. Incorporation of Technology to Streamline Processes by Health Care Service Corporation (HCSC): HCSC integrated artificial and augmented intelligence into its prior authorization process, accelerating approvals up to 1,400 times faster. The implementation of algorithms that approve care instantly and tools that provide auto-approvals when certain criteria are met has allowed for more efficient processing, reducing turnaround time by nearly 70%.

How employers can ease back-to-school strain on parents

By Dawn Kawamoto - Life is likely becoming more hectic for working parents as their children prepare to start a new academic year. Employers can ease this stress and back back-to-school easier by penciling in some supportive parenting-related benefits. And the return on this investment can mean better retention, productivity and recruitment, experts say. Read Full Article…

VBA Article Summary

1. Challenges Faced by Parent Employees: The back-to-school phase consists of two parts: the preparation period and the actual beginning of the academic year. Both stages can affect a working parent's professional commitment. The preparation phase involves purchasing school supplies and possibly new clothes. Financial strains are emphasized this year as school supply costs have risen by 28%. The National Retail Federation projects parents will spend an average of $890.07 on supplies, leading to a total back-to-school expenditure of around $41.5 billion nationally. As the school year starts, parents have to adjust to new timetables, communicate with teachers and school officials, manage parent-teacher conferences, and collaborate on their child's learning plans. Furthermore, the period from school's end to the conclusion of the workday is stressful for many parents, leading to scheduling issues. There's also an increased likelihood of children falling ill due to exposure to germs at school, leading to potential absenteeism for parents.

2. The Economic Concerns of Back-to-School: Considering that 58% of Americans are living paycheck to paycheck, employers are worried about the financial well-being of their staff even before accounting for back-to-school expenses. Suggestions to alleviate these financial burdens include offering back-to-school shopping stipends, considering these allowances as a total rewards benefit, and supporting the expansion of the current child tax credit. An extended child tax credit could offer up to $5,300 per child, a significant boost for many families.

3. How Employers Can Support Parent Employees: Employers can offer free online mental health tools for both parents and their kids. A recent example is the collaboration between Mental Health America and Walgreens to offer a mental health toolkit for teens. Providing access to online caregiving platforms for backup care can be invaluable, ensuring kids are taken care of when parents have work commitments. Embracing flexible work schedules is perhaps the most crucial aspect. Modifying hours to suit school transportation needs or offering hybrid work models can be beneficial. Without such flexibility, employers risk reduced productivity and increased absenteeism, particularly during the back-to-school season.

Generational differences should be addressed in benefit offerings, research finds

By Alan Goforth - As the workplace continues to evolve, employers will need to offer a wider variety of benefit options to meet the expectations of different generations within their workforce. “Since the pandemic, employers have faced a dramatically different workforce dynamic with a sustained increase in hybrid and remote workers, which is reshaping expectations,” said Patrick Leary, corporate vice president and head of LIMRA Workplace Benefits Research. Read Full Article…

VBA Article Summary

1. Changing Employee Expectations Post-COVID-19: In the evolving job market, employees now expect a wider variety of benefits from their employers. Beyond traditional medical insurance, there is a growing demand for nonmedical benefits like paid family medical leave, financial wellness programs, and emergency savings. As shown by research from LIMRA and Ernst & Young, employees, especially younger ones, are placing higher value on benefits that promote mental, physical, and financial well-being, including offerings like mental health treatment, physical wellness benefits, tuition assistance, and caregiving benefits.

2. Employers' Challenge in Meeting the Demand: While there's a clear recognition of the need to expand benefit offerings, particularly among smaller organizations, there are also concerns about budgetary constraints. As a result, many employers are considering shifting towards more employee-paid benefits to meet these rising demands. Despite the willingness to enhance benefits, another significant challenge is ensuring employees are fully aware and understand the benefits provided. Customized communication is essential, and with over 90% of workers believing in the effectiveness of digital channels, there's a need to leverage technology to educate and engage employees.

3. The Growing Importance of Digital Capabilities: Digital integration has become a key factor in the employer's decision-making process when selecting insurance carriers. 59% of employers would opt for an insurance carrier that aligns well with their benefits technology platform even if it's pricier. Furthermore, a significant number of employers would switch carriers if their current one isn't integrated into their tech platform, underscoring the importance of digital capabilities in the realm of employee benefits.

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