Federal Health Care Reform Implementation
The GIC continued to implement important aspects of federal health care reform, including expansion of benefits at the beginning of the fiscal year. The GIC enrolled an additional 6,675 dependents ages 19 to 26 and implemented zero dollar cost sharing (no copays and deductibles) for certain preventive care services, such as mammograms, scheduled immunizations, routine OB/GYN visits and physicals.
The Calendar Year 2012 W-2 tax forms must show the aggregated employer and employee health insurance premium costs for informational purposes. In preparation, the GIC developed processes and procedures for reporting this important information to the over 220 payroll systems with which we interact.
The GIC received a total of $51 million for Fiscal Years 2011 and 2012, with $45.2 million coming in during Fiscal Year 2012 as part of the federal government’s Early Retiree Reinsurance Program. This program encourages employers to continue offering benefits to early retirees ages 55 to 64, who are not yet eligible for Medicare. GIC staff worked extensively with its health, mental health, and prescription drug plans and data warehouse vendor to gather the necessary data so that the application submissions could be made before the total $5 billion available across all employers in the country for this program was depleted. The amount the GIC received placed us near the top of all employer subsidy recipients. The federal government specified that these funds could only be used to reduce an employer’s health benefit premiums or costs, and/or reduce costs for plan participants. A small portion of the funds were used to provide a wellness program to early retirees, with the remaining funds used to help pay for medical claims.
Modernizing Our Eligibility System
The GIC’s critical eligibility system, MAGIC, continues to undergo major transformations as new enhancements were rolled out during the year. The GIC’s standalone life insurance claims system was integrated into the new web-based MAGIC platform. This integration has significantly reduced duplicate data entry work and helped to expedite claim payments. All of the health plan vendors are now on the web-based vendor application, thus eliminating the need for vendors to call the GIC, and allowing vendors to immediately help members with any eligibility-related questions.
Although most of the GIC’s state agencies participate in the HR/CMS and UMass payroll systems that offer online access to MAGIC, our 230 “offline agencies” (such as housing and redevelopment authorities) and over 40 municipalities do not have access to MAGIC and must make all employee benefit elections and changes via paper submission to the GIC. The GIC’s Data Processing Unit then enters this data into MAGIC. The GIC began a pilot roll out of a web-based program that allows these agencies to make online coverage changes for their employees. The feedback has been very positive and the GIC continues to add more agencies to this online program.
Offline agencies have traditionally received their monthly reconciliation and billing reports through the mail. The GIC began rolling out online premium and billing reports through a secure website portal, reducing postage and mailing costs, and improving efficiency. Also under development are a web portal that will enable GIC members to view their GIC coverage online (and in the future make selected changes), an integrated correspondence tracking system, and a new consolidated bill for members who are billed for their GIC premiums when they are off-payroll.
Prescription Drug Benefits
The GIC continued its work on the Medicare Part D federal employer subsidy program, sharing and correcting data with the Centers for Medicare and Medicaid services, three of our Medicare health plans, and the pharmacy benefit carveout for the UniCare State Indemnity Medicare Plan. For Fiscal Year 2006 through Fiscal Year 2012, a total of $156 million has been sent to the General Fund as a result of these efforts.
In Fiscal Year 2012, the GIC implemented a new prescription drug management program for all UniCare members targeting anti-ulcer/heartburn medications. We discontinued covering Nexium® and Aciphex® because of the availability of numerous, less expensive, and equally effective alternatives in the class of drugs called Proton Pump Inhibitors (PPIs). Coverage is provided for over-the-counter PPIs, generic PPIs and a brand name PPI. As a result of members changing to the alternative products, the Commonwealth saved over $5.8 million for the fiscal year.
Four audits were performed in FY12, providing a valuable review into the claims payment operations of four of the GIC’s insurance vendors. The audits spanned financial accuracy, compliance with GIC benefits, and claims turnaround time. CVS Caremark and Tufts Health Plan performed particularly well on the audits, with few minor errors uncovered. The audits’ findings prompted the GIC staff to look closely at Harvard Pilgrim Health Care’s payments for potentially-excluded benefits and out-of-network claims. GIC staff and Harvard are currently working to address the questions raised in the HPHC audit. The audit of the United Behavioral Health claims encountered some data problems and revealed some systemic payment errors relating to out-of-network claims that were paid at a higher rate than the contract terms. That error was corrected and the contractual payment schedule is now being adhered to. The GIC is having UBH’s claims data file re-audited to see whether, with the correct claims data file, the audit yields acceptable results.
This information provided by the Group Insurance Commission.