On Shaky Ground - Medicare
Apr 24, 2019


An annual government report on the status of Medicare and Social Security gave a dire outlook to the financial stability of the social safety net programs.  Medicare could be insolvent in 2026 and Social Security by 2035.  If Congress doesn’t act, Medicare eventually will be unable to cover the full cost of promised benefits, which could mean that hospitals, nursing homes, and other medical providers would be paid only part of their agreed-upon fees.



Good question.  Let’s define it first.  Medicare for All = a system where all Americans are automatically enrolled in a government-run health plan that replaces all duplicative private coverage.  It’s complicated but let’s just look at projected numbers.  One study put the cost at more than $32 trillion over 10 years.  On the other hand, by 2026, the combined health care spending by private and public sectors is expected to reach $45 trillion regardless.



There are many different proposals being tossed around, but Sen. Bernie Sanders’ bill would shake up a fifth of the nation’s economy.  As Congress turns its attention to health care, health insurer stocks have tumbled.  Health insurance companies have shed tens of billions in market value over the past two months amid various health care proposals and the threat of uncertainty.



The risk management and insurance sector is doing its part to keep Medicare solvent.  The Provide Accurate Information Directly (PAID) Act would strengthen the Medicare Secondary Payer (MSP) policy by requiring CMS to return beneficiary enrollment information in Part C Medicare Advantage and Part D plans to non-group health plan responsible reporting entities.  The measure would help the claims industry obtain timely and relevant information about claim payments and help resolve claims faster.  I’m sure we’ll be talking Medicare well into 2020 election cycle.


Employee Classification


Wisconsin Governor Tony Evers announced the creation of a Joint Enforcement Task Force on Payroll and Worker Misclassification.  The task force will be staffed by the Department of Workforce Development (DWD).  In 2018, the DWD conducted over 500 worksite investigations and recouped more than $1.5 billion in Unemployment Insurance (UI) Division audits.  The next state over, Michigan Attorney General Dana Nessel announced her office will establish a Payroll Fraud Enforcement Unit to investigate payroll fraud and employee misclassification.  Misclassification costs Michigan workers almost $429 million in lost wages.



We previously reported on California Assembly Bill 5, which seeks to codify and clarify a three-part test to determine if a person is an independent contractor or employee.  In an effort to promote safety, electronic logging devices (ELDs) might actually make it easier for a driver to show truck company control therefore classifying the driver as an employee vs. an independent contractor.  Multiple lawsuits from the trucking industry are fighting the California Supreme Court decision creating the ABC test to determine independent contractor state.  Businesses (think Lyft or Uber) are vying to be exempted from the test in AB 5.  We’ll see where everything lands.


Making Our Way Around the Country


The New York State Workers’ Compensation Board (WCB) released its third revision to the proposed NYS workers’ compensation drug formulary.  This draft includes a requirement that all compound medications must receive prior authorization prior to prescribing and/or dispensing the medication.  Earlier this month, U.S. Food & Drug Administration (FDA) Commissioner Scott Gottlieb announced the 2019 efforts to improve the quality of compounded drugs.  Compound drugs are not FDA-approved so they have not been evaluated for safety or efficacy by the FDA.  New York WCB is accepting comments on the new proposed formulary until May 17, 2019.



The California State Fund announced that it will soon launch a revolutionary utilization review (UR) technology called UR Connected.  The system will speed up the approval process for most UR requests and help physicians treat their patients faster and more effectively by providing physicians with real-time approvals in most cases.  The system is also supposed to reduce administrative burdens felt by physicians during the current UR process.  Beginning this summer through key access points such as direct integration services and a web portal, medical providers will be able to connect with State Fund in real time – a first for workers’ compensation carriers in California.


RIMS 2019

The RIMS 2019 Annual Conference and Exhibition is always a great place to learn, network, and connect with friends old and new.  Some may be getting in early to take in a game at Fenway Park, but you’ll probably find me at the JFK Library – my daughter’s name is Kennedy! And once the convention kicks off, I will be speaking in the Thought Leader Theater in the exhibit hall on the RIMS Federal agenda at 12:55PM on Monday. Or check out Gallagher Bassett's other speakers during the conference. Don’t forget to stop by GB’s booth #877 to say hello to us!


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