In July, the State Health Plan Design Committee (PDC) adopted resolutions establishing a new primary care initiative, a new limited network option, changes concerning Hepatitis C medications, compound drugs, chiropractic and acupuncture out of network payments, ER copays and a Rutgers University wellness pilot.
It was the first time that state has engaged in serious negotiation with public sector unions concerning the design, implementation and monitoring of State Health Benefit Plan programs. The PDC adopted a detailed resolution establishing a new primary care initiative which was explained in the July issue of NJ COPS. This proposal was a union initiative that was not proposed or originally supported by either management or Horizon.
While the NJ State PBA, FMBA and STFA did not vote to approve the Direct Primary Care model, it was not for the reason that we do not support the concept. There were some concerns about allowing the program to have sufficient completion to help keep premiums lower.
Our philosophy on the committee has always been to drive down premiums as our members are carrying a much higher burden than other public sector unions. Here is information about the specific elements of this proposal:
Pilot Project on voluntary use of Direct Primary Care Medical Homes
Union members in any non-HMO plan can join this new pilot program at any time during the year. It features no copays for members and the promise of 24-7 access to a physician.
The patient load for doctors will be reduced from the typical level of 2,500 patients per doctor to less than a 1,000 per doctor, allowing for much more regular and intensive interaction between patient and doctor, especially for those with chronic conditions.
We anticipate that these intensive primary care efforts will produce very significant savings from reduced need for specialists and fewer ER and hospital admissions and generally keeping member healthy.
The pilot will operate for three years with a goal of 60,000 members among south, central and northern pilots. The quality and cost savings of the pilot will be evaluated by an independent group with the option to expand the effort if it is successful.
Participation by members in the pilot is entirely voluntary and the member retains the ability to visit any other specialist or facility while participating in the pilot.
A launch date of April 1, 2016 is planned. It will take some time to secure providers and ramp up the pilot to capacity.
New Horizon Tiered (limited) network plan
This new plan is another option available to members who are seeking a lower premium plan. It should have premiums that are 20-25-percent less than direct plans and will replace Horizon’s HMO products. Horizon will be submitting a detailed description of the plan for the September issue of NJ COPS.
This Narrow (a.k.a. Tiered or Limited) Network plan will have two tiers of coverage: a Tier 1 network for full coverage and a Tier 2 network that includes all current NJ Direct providers, but with significantly higher copays, co-insurance (20 percent by member) , deductibles ($1,500) and maximum out of pocket ($4,500) than Tier 1.
This plan will not have out-of-network coverage, and is a much better alternative to a high deductible plan, however, participants must be careful to be sure that their physician is in the network.
Quality and network adequacy standards will be established and enforced. Tier 1 will include 12 hospital systems with more than 30 locations; all Tier 1 facilities will be located in New Jersey.
This plan will not be for everyone, but will feature reduced member premiums without cost shifting if you’re careful and use Tier 1 providers. This plan option will go into effect on Jan. 1, 2016.
Hepatitis C Drugs
Effective Oct. 1, we have agreed to use a Step Therapy approach for the newest, very effective and very expensive Hepatitis C drugs. The drug for which Express Scripts negotiated significant cost reductions, Viekira Pak, will be the first choice for treatment. If it doesn’t work, has side effects that are not tolerated or there is a medical reason to use another drug, members can go on to another one of the new medications.
Members in a course of treatment with one of the other drugs prior to implementation of the new Step Therapy program will continue with that course of treatment.
Since a course of treatment costs approximately $80,000 to $90,000, and Express Scripts appears to be able to reduce costs by nearly a third with this program, this was a smart move.
Limiting Compound Drugs
Compound drug costs have exploded, rising more than 1,000 percent the past three years primarily from boiler-room-type huckstering for creams that are supposed to stop pain. Very few of these compound drug treatments have been tested for effectiveness or safety. We significantly restricted the use of these topical compound drugs. Compound drugs will still be available for those who cannot take an FDA approved drug by the normal means of delivery, are allergic to an ingredient or whose medical conditions prohibits the use of the prescribed drug and requires a compound drug. The new rules will be implemented some time in fall 2015.
Emergency Room Copays
Emergency Room copays will go up $25 effect Jan. 1, 2016 for all plans currently with less than a $100 copay, however, the increased copay is waived for all patients under the age of 19, for any patient referred to the ER by a physician and for any patient admitted to the hospital within 24 hours.
Excessive emergency room usage was the reason for the copay increase. If ER usage does not fall in 2016, an additional copay increase of $25 for 2017 will be triggered for plans with copays of less than $100.
Chiropractic and Acupuncture out-of-network payments
In-network reimbursement for these two services will be increased in order to get more in-network providers. Out of network reimbursement for these providers will be limited to 75 percent of the in-network reimbursement effective Jan. 1, 2016.
Horizon and Aetna will report back to the PDC concerning the success or lack of success in recruiting additional in-network providers.
Rutgers Wellness Pilot
A three-year pilot of this incentive-based wellness program will be implemented by Jan. 1, 2016. The pilot will use Patient Centered Medical Homes and include increased monetary incentives for those with chronic conditions who participate in wellness and disease management efforts.
We truly hope that the changes in the State Health Benefit plan will affect premiums going forward.
2016 rate increases
Overall, 2016 rates for the state plan will go up 5.9 percent, including 4.5 percent for active employees. This compares to a 7.8 percent increase in 2015. The increase for local overall rates increase is 5.8 percent for 2016 compared to 7.4 percent in 2015, with a 6-percent increase for actives in 2016.
Continuing the multi-year effort to “adjust” rates to reflect actual payments, the Commission voted for rates that will increase rates approximately 2.1 percent for employee-only and employee-spouse in the state plan and 3.6 percent in the local plan compared to 5.9 percent for family and 8.2 percent for employee-child in the state plan and 7.4 percent for family and 9.7-percent for employee-child in the local plan.
I stated that as a matter of public policy we should not be increasing the burden on families, especially single-parent families and voted against this. Unfortunately, it appears that they are planning another increase next year.
Aon stated that in 2016 there will be $108 million state and $54 million local savings from the reforms implemented by the PDC on July 6. Approximately 85 percent of savings is from the Compound Drug change.
I would like to thank our brother and sister public sector union members for their hard work and dedication in developing the innovations that will provide our members with better health care and lower premiums.