Medical Malpractice in Spotlight in Study Committee

Posted on October 5, 2015 by Mike Ripley

The Courts and Judiciary Interim Study Committee has been charged with looking at Indiana’s medical malpractice (med-mal) system. The statute was written in 1975 to protect the health of the citizens of Indiana by preventing a reduction of health care services. Prior to the enactment, seven of the 10 insurance companies writing med-mal business at the time either ceased or limited writing the insurance because of unprofitability. Premiums for med-mal skyrocketed at that point. In some cases, physicians were hard pressed or unable to purchase coverage. Likewise, services were discontinued in some locales.

To stabilize the market, the Med-Mal Act created a medical review panel consisting of an attorney and three health care providers. The parties agree to a panel chair, each party chooses one health care provider to be on the panel and the two health care providers choose a third provider to fill out the panel. Parties send submissions to the panel and the providers review the information and determine if there was malpractice. The panel makes an opinion based upon whether or not the provider failed to comply with the standard of care; whether the conduct complained of was a factor of the resultant damages; and whether the health care provider should be reported to the applicable licensing agency. The medical review panel must render its decision before any court action may take place, unless the claim is less than $15,000 or both parties agree to bypass this step.

The system has damages capped to a patient for an act of malpractice at $1.25 million. That cap has been raised twice since 1975. The system is voluntary, but to participate in the protections of the act, physicians purchase a commercial insurance policy to cover the first $250,000 and pay a surcharge to the Patient’s Compensation Fund (PCF) to cover the remaining $1 million in potential liability. Surcharges vary based upon the specialty of the provider. In 2014, nearly $138 million in claims were paid from the PCF.

The Courts and Judiciary Interim Study Committee has entertained testimony on two separate occasions. The debate now concerns whether or not the caps on med-mal need to be raised for the first time since 1999. The balancing act is between trying to maintain the med-mal system in this state, with maintaining access to care and low premium costs for physicians, and the fear of having the Indiana courts determine the system unconstitutional because the caps haven’t been raised in over 15 years. The committee is also entertaining discussion on the consideration of increasing the bypass threshold (currently $15,000) of the medical review panel – regarding those claims exempt from the medical review panel process.

Committee chairman Sen. Brent Steele (R-Bedford) has asked committee members to review the documentation presented and offer proposals to improve the process. The Indiana Chamber expects there will be a proposal for some increase to the cap.

State Rolls Out New Employer Benefit Link Program

Posted on June 29, 2015 by Mike Ripley

Are you a small employer that does not offer health insurance but would like to do so? Are you an employer that offers a health insurance plan to your employees but you may have employees who do not participate because they deem it unaffordable? If so, then you may find the state’s new Healthy Indiana Plan (HIP) Employer Benefit Link to be a program of some interest to you.

HIP was expanded to provide health coverage to eligible Hoosiers that are at income levels up to 138% of the Federal Poverty Level (FPL), which is $16,436 per year for an individual or $33,865 for a family of four. The HIP Link is a new state program that offers premium assistance for eligible (age 21) participants who choose to enroll in their employers’ sponsored health plan.

The Governor and his staff recently unveiled the program. It is their hope to enroll more Indiana residents in employer sponsored health plans.

The basics: HIP Link employers may be able to enroll more of their employees into their employer-sponsored plans. This may help some employers meet health plan participation requirements. Employers must agree to employ Indiana residents and contribute at least 50% to the premium cost of their employer -ponsored plan.

Plans must meet the federal Affordable Care Act minimum benefit and cost requirements. Who qualifies and for what: Large, small and self-insured businesses with a federal employee identification number (FEIN) that have at least one employee who is an Indiana resident may be eligible. The employer becomes a HIP Link employer by filling out an application online. Employers will need to provide a summary of benefits and coverage. Dental and vision benefits must be included if offered.

How it works: The employer deducts from the employee’s pay the cost or premium charged to the employee for the group health insurance according to the employer’s normal procedures. Each month the state will reimburse the employee directly for the amount of the deduction (minus any employee contribution to the POWER account). Each employee participating in the program will be given a HIP Link personal wellness and responsibility account (POWER) funded with $4,000. This account is used to pay premiums and other medical expenses charged to the employee up to $4,000 per year. The plan promotes personal ownership by requiring participants to contribute a portion of their income (about 2%) to their health coverage. Family members may be eligible under the plan.

Approval process: The application for HIP Link is available at HIP.IN.gov. Once the employer is approved, an employer ID will be assigned and employees may then enroll in the program. There are no costs associated with enrollment. On a monthly basis, the HIP Link employer will be prompted to confirm through the portal that employees enrolled in HIP Link are still employed and eligible for health insurance coverage. On an annual basis, employers will confirm benefits or premiums for the new benefit period.

More information is available at www.hip.in.gov.

Common Construction Wage Repeal Now in the Mix at the Statehouse

Posted on February 23, 2015 by Mike Ripley

statehouse pic It was a welcome surprise last week when the Indiana Chamber learned that the Common Construction Wage Bill (HB 1019) was going to receive a committee hearing. The Chamber testified it was in strong favor of repealing the CCW statute, noting this has been the organization’s position for many decades.

The Chamber told the committee that CCW prevents open and fair bidding competition for public construction projects. It establishes a government-sanctioned advantage for one set of contractors and workers over all others. It requires taxpayers to pay significantly above market wages, and therefore excessive taxes, on public construction projects. And it requires the setting of a government-mandated price to be paid for construction labor that is excessive and completely unnecessary; we don’t set minimum prices to be paid on other forms of labor, construction materials or equipment.

At the core of the issue for the Chamber: CCW costs taxpayers hundreds of millions of dollars in excess and unnecessary tax burdens. Chamber members – over 80% of which are small businesses – and the rest of the business community pay over half of the excess taxes caused by CCW. The remainder is paid by farmers and residential property owners, including elderly homeowners on fixed incomes.

In testimony, Chamber President Kevin Brinegar relayed the unfortunate situation that occurred nearly a decade ago when three massive public construction projects were going on in Indianapolis at the same time: Lucas Oil Stadium, the new Indianapolis Airport and the expansion of the Indiana Convention Center.

The wage committees on those projects chose union scale. And they further chose union-only project labor agreements which effectively excluded the non-union contractors from participating. At the height of the construction of those projects, there was not enough union labor to work on all three simultaneously. And rather than go to skilled, trained Hoosiers who didn’t happen to hold a union card to fill those needs, they went to union halls in Ohio, Kentucky and Illinois. That meant literally thousands of out-of-state workers – approximately 4,000 – came to work on our projects funded by our tax dollars instead of using qualified Indiana workers. The wages paid to those individuals went back to Ohio, Illinois and Kentucky to be used in their economies, not in ours. The Chamber views this as unfair and inappropriate.

Brinegar also told the group he served on approximately 40 wage-setting committees during his 12 years on the Noblesville School Board. In a property tax-capped environment, cash-strapped local units of government, like schools, cannot afford to pay inflated costs for their construction projects.

The Chamber closed its argument by calling CCW an unnecessary and wasteful interference by government into the free enterprise system and a relic of the 1930s – a costly one that is far past time to be repealed.

Many others testified in favor of the repeal. The Anderson Economic Group said it had conducted a study in Illinois and Michigan on how much CCW added to overall costs. The Fort Wayne City Council president testified to the many projects that will be coming to Fort Wayne that could save millions of dollars if CCW is repealed. He further testified that the CCW committee process is predetermined. The former mayor of Terre Haute added that cities have been beaten up over the property tax caps; repeal of CCW would alleviate some of that problem. The Associated Builders and Contractors stated that government should not be in the business of mandating wages.

House Bill 1019 is expected to receive a final floor debate on Monday. Organized labor is mounting stiff opposition to the measure in an effort, much like in the fight over right-to-work, to protect a special, government-created privilege at the expense of taxpayers and the free market. The Chamber will be diligently working with like-minded organizations to secure passage of HB 1019.

Call to Action: Please send a brief message to your state representative in support of HB 1019 and repealing the common construction wage law. It’s quick and easy via our grassroots program!

Chamber Analysis of Governor’s Request to Expand Healthy Indiana Plan

Posted on May 28, 2014 by Mike Ripley

The Pence administration last week unveiled plans to request a waiver from the Centers for Medicare & Medicaid Services (CMS) to expand the Healthy Indiana Plan (HIP). This expansion of HIP would be in lieu of a traditional Medicaid expansion. The announcement had been anticipated for several weeks.

The Healthy Indiana Plan, or HIP 2.0 as it is now being referred to, will have three “pathways” to coverage: HIP Basic, HIP Plus and HIP Employer Benefit Link. It is funded through the existing cigarette tax, the hospital assessment fee and federal Medicaid funds.

The Basic HIP plan is for Hoosiers below 100% of the federal poverty level (FPL). Basic members use an entirely state funded power account (similar to a health savings account) to cover a $2,500 annual deductible. The HIP Plus plan is for Hoosiers under 138% of FPL. They will be required to make contributions that range from $3-$25 per month. Members of HIP Plus and the state will jointly fund the power account based on a sliding income scale. This plan also includes dental and vision coverage.The HIP Employer Benefit Link allows HIP eligible individuals to enroll in either HIP Plus or receive a defined contribution power account funded by the state to access an employer-sponsored program. The defined contribution must be used to pay for premiums, co-pays or deductibles.

The Indiana Chamber has supported the expansion of HIP as an alternative to a traditional Medicaid expansion. The HIP plan has encouraged individual responsibility by attempting to mirror consumer driven health plans. HIP also reimburses at 100% of Medicare (higher than Medicaid), which ensures more provider participation and reduces cost shifting to the private sector, a point that is important to employers. The Indiana Chamber believes that the HIP Employer Benefit Link option will be an interesting program to potentially provide coverage to Indiana’s working poor. The Indiana Chamber will be securing more details on how the program will be implemented and will provide our members that information as it is received.

On a related note, this $25 million budget savings to the state – if the HIP expansion is approved by CMS – could cause some problems for insurance carriers providing health insurance coverage to the individual market in the insurance exchange/marketplace. The state is transitioning from a (209b) state, with its own disability definition, to what is called a “1634” state. Under a 1634 state, the administration will accept disability definitions of the Social Security Administration. As a result of the switch, the state will no longer be required to maintain a spend-down program. This program allowed those with high medical expenses to become eligible for Medicaid after they spent a designated portion of their monthly income on medical expenses. As of December 2013, there were over 134,000 people in this spend-down program.

Of that spend-down population, nearly 7,500 have incomes over 100% of FPL. It is this population that will be transferred to the insurance exchange/marketplace to purchase qualified plans in the commercial market. Medicaid claims for those individuals have been over $1,800 per member per month. Total claims for March 2013 through March of 2014 were $134 million. That amount is significantly higher than under normal individual insurance plans.

Insurance carriers participating in the insurance exchange filed their rates in May of last year. Those rates included calculations for the high risk pool being transitioned into the exchange, but the 7,500 “1634” transition eligibles are not included in those rates. This has serious impacts on those carriers: Significant losses to those participating which will result in considerable increases in current rates to cover the cost; those carriers that waited and will be coming into the exchange in 2015 have an advantage over those current participants in that they are taking on none of this additional risk; and for the smaller carriers there is a concern whether they will be able to participate in the exchange in the future, thus potentially jeopardizing Hoosier choices.

The Indiana Chamber will continue to evaluate and comment on this issue as more information is available.

Judge: Supreme Court Voice Needed on Health Care Reform

Posted on March 4, 2011 by Mike Ripley

The Florida judge who declared the federal health care reform law unconstitutional "updated" his own ruling yesterday and urged that "the sooner this issue is decided by the Supreme Court, the better off the entire nation will be."

On January 31, 2011, U.S. District Judge Roger Vinson (Pensacola, Florida) determined that the “individual mandate” provision of the Patient Protection and Affordable Care Act (PPACA) is unconstitutional and declared the remainder of the Act void because it was not severable. The defendants (the Obama administration) filed a motion to clarify with the court, suggesting that there would be adverse consequences from an immediate halt of implementing the Act given that many provisions are now in effect and that several other district court judges have upheld the law.

Yesterday, the judge stated that while his original order “was as clear and unambiguous as it could be, it is possible that the defendants may have perhaps been confused or misunderstood its import.” He did however, treat the clarification as a stay from his original order and as such granted it. He conditioned the stay upon the defendants filing their anticipated appeal within seven days of his order, either in the Court of Appeals or with the Supreme Court. He chastised the administration that it had been more than a month since his order and the defendants had not filed their notice of appeal.

Twenty six states, including Indiana, are party to the lawsuit. On Wednesday at the Indiana Statehouse, a joint meeting took place with the House and Senate Insurance and Health Committees. Attorney General Greg Zoeller commented on PPACA and offered his view that in those states that were party to the suit the Act was unenforceable. Those comments do not apply a day later as Judge Vinson’s stay to his original order was granted.

Three Health Care Forums Held

Posted on November 8, 2010 by Mike Ripley

Recently, the governor’s Interagency Task Force on Health Care Reform conducted three separate forums: one each for employers, health providers and health insurers. Each industry was given the opportunity to provide comments about the Patient Protection and Affordable Care Act (PPACA) and the insurance exchange (the mandated entity at the state level that will market health care products and determine eligibility). While the administration was looking specifically for information to assist it in its decision-making process regarding the exchange, the forums also allowed each industry to vent about its frustrations with PPACA.

The Indiana Chamber commented on the impact on health insurance premiums due to no lifetime limits and coverage of children up to age 26. Further concerns were made known about the ability (or lack thereof) to maintain grandfathered status on existing health plans, the possibility of employers “dumping” employees into the exchange and the significant cost concerns related to the new enrollees in the Medicaid program under PPACA. David Wulf, chairman of the Chamber’s Health Care Policy Committee, provided his perspective as vice president of administration at Templeton Coal Company, specifically sharing his concerns about PPACA.

Since then, the Chamber has had ongoing discussions about the exchange and has been asked by the Department of Insurance to look into the idea of a defined contribution plan within the exchange. Utah created the first defined contribution plan that allows employers to contribute a dollar amount to an employee that purchases insurance through the exchange. Eventually, the employee would be able to combine federal subsidies, employer contributions and spousal employer contributions to purchase an individual policy based upon a group rate through the exchange. Several states are looking into the idea and the U.S. Chamber of Commerce is in support of the program.

Stop the Insurance Industry Attacks

Posted on August 19, 2009 by Mike Ripley

While many agree that health care reform is necessary, the level of disagreement on the current proposals in Washington is extremely high. Let’s hope that reasonable debate and compromise will lead to a sensible solution.

No matter how that plays out, one aspect that needs to stop is the all-out attack on the insurance industry. House Speaker Nancy Pelosi (D-California) has made insurance companies the primary culprit. "It’s almost immoral what they are doing," Pelosi told reporters, adding, "Of course they’ve been immoral all along in how they have treated the people that they insure. They are the villians. They have been part of the problem in a major way."

President Obama, in discussing the public option for health insurance, said, "We want to keep the insurance industry honest" and that can be done by having a public option that will compete with private insurers.

I understand that many folks don’t like the fact that insurance companies make a profit. Profit in this country, for some unknown reason, has become an evil pursuit. In a recent Fortune magazine ranking of industries, health insurers ranked 35th with a 2.2% profit margin. (The larger numbers cited for earlier in the decade were primarily a result of significant consolidation in the industry).

Let’s face it: Either the employee-based system of using private insurance to provide for our health care needs is a good thing or it’s not. If it’s not, then go to the public plan and be honest with the American people. If it is good, let’s promote an environment that allows insurers the ability to compete and make a profit while holding them accountable to improve administrative efficiencies.

Without the ability to underwrite business, an insurance company can’t make a profit. That ability is what has afforded us the best policy benefits and coverages in the world. It also has resulted in private initiatives between insurers and employers to address some of the system’s runaway costs. Let’s work together to continue to do a better job in that area instead of simply casting blame on insurers.

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