In part 2 of episode 469, host Stacey Richter discusses the implications of Medicare site neutral payments and Health Savings Account (HSA) reforms with James Gelfand, president and CEO of the ERISA Industry Committee (ERIC).
The episode details how plan sponsors should adapt to Medicare's site neutral payment policies aimed at curbing hospital consolidation and inflated prices through facility fees and markups. Gelfand provides insights into how HSA reforms currently in Congress could expand the scope of preventive care covered before deductibles are met, benefitting both employers and employees.
The conversation also touches on the challenges high deductible health plans pose and the potential benefits of codifying recent IRS guidance to allow greater flexibility in pre-deductible coverage. The discussion underscores the importance of plan sponsors staying ahead of Medicare policies to avoid higher costs.
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05:42 What does Medicare site-neutral payments mean?
08:59 How do markups play into the dynamics here?
09:52 Upcoming episode with Christine Hale, MD, MBA.
10:36 What does the “narrow” start for these changes mean?
11:42 What action steps should plan sponsors be taking?
13:01 What options do plan sponsors have in highly consolidated markets?
14:27 EP371 with Erik Davis and Autumn Yongchu.
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Episode 469 "The Impact on Plan Sponsorsof Medicare Site Neutral Payments and
HSA, Health Savings Account Reforms".
Today I speak with James Gelfand,
(00:21):
American Healthcare Entrepreneurs andExecutives You Want to Know, Talking.
Relentlessly Seeking Value.
Did you just listen to the show withJames Gelfand on the impact of Medicaid
cuts on plan sponsors, what the cutsactually are, and what the intriguingly
named Cornhusker Kickback is all about?
(00:41):
If not, no worries, but dogo back and listen to that
after you listen to this show.
No particular order of listeningis superior for this double
episode, so it's all good nomatter how you have chosen to roll.
Now, in this show that you arecurrently listening to, one part
of the episode 469 double episode,this is what's going to happen.
(01:02):
I ask my guest today, James Gelfand, toget into the what and how and so what of
the goings on with Medicare site neutralpayments and honest billing practices.
And then I ask him the same thingwith the HSA, health savings account
reforms currently in Congress.
And look, bottom line, I wasa picture of overconfidence
(01:23):
walking into this conversation.
Relative to the Medicare site neutralpayments, James has some crisp feedback
for plan sponsors, which is in a nutshell.
Get ahead of this, and TPAs andconsultants and brokers should be all
over this right now, advising clients andwriting stuff into provider contracts.
Then, after we cover Medicare site neutralpayments, we very seamlessly, if I do
(01:46):
say so myself, segue into what's the whatwith HSAs, health savings account reforms.
I did not realize a few things here.
One of them is that HSAs lastwere taken up by Congress in 2003.
Back in those Helicon days ofhigh deductible health plans,
HDHPs or even better consumerhigh deductible health plans.
(02:09):
CHDHPs.
When we all kind of thought, includingme, by the way, wow, did I change my tune?
But the prevailing wisdom was thatgiving patients and members skin in the
game would evoke high value purchasingdecisions by them and yeah, listen to
me going off on why that is not reallytrue and the moral hazard of insurance
(02:30):
for 20 minutes in an Inbetweenisodewe will link to in the show notes
where you will find all the links
So anyway, first up we talk aboutMedicare site neutral payments and
honest billing practices Then thecurrent issues with the current HSA
regs and what the future may hold.
And just saying, lest anyone forget, thecurrent HSA regulations really hinder
(02:51):
plan sponsors ability to offer, like,direct primary care and pay for it or
do stuff to help members with chronicconditions keep those conditions managed.
There are many not super intuitivebut really impactful issues here.
Now, of course, hospitals do in fact comeup on this show, and I am seeing this
in a bunch of intros lately, but let meremind everyone, it so must be said with
(03:14):
five underlines, all hospitals are notthe same, and what a hospital does or
doesn't do may not be the same as whatmany or most who work at the hospital
believe is the right thing to be doing.
Listen to the show with Dr.Komal Bajaj on just the gaping
disconnects and lack of trust betweenclinicians and administrators,
some of them, not all, of course.
(03:35):
Also, a hospital can be doinggreat things and really crappy
things absolutely simultaneously.
These are big, sprawlingplaces with a lot going on.
James Galfand, as aforementioned,my guest today is president
and CEO of the ERISA IndustryCommittee, otherwise known as ERIC.
ERIC represents the nation'slargest self insured employers.
(03:56):
Advocating for comprehensive benefitsand healthcare policies that impact
millions of employees across the country.
James Gelfand brings nearly twodecades of experience in healthcare
advocacy, having worked at the Chamberof Commerce and on Capitol Hill.
When you are done listening to theshow, please do come back and take
a listen to the other part of thisdouble episode if you haven't already.
(04:17):
In that part, we talk Medicaid cuts andthe impact on plan sponsors and et cetera.
I also talk about how JamesGelfand came to find himself
invited on the pod to begin with.
And short version, it allstarted with Cora Opsahl.
And I say this as a thank you toCora because these shows with James
Gelfand are so informative and hewas, in fact, the exact right person
(04:39):
to have these conversations with.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
James Gelfand, welcome toRelentless Health Value.
Thanks for having me today.
There's so much going on.
So I guess just selecting what to talkabout is a thing in and of itself.
But if we're going to be talking aboutmaybe the top goings on that plan sponsors
may need to consider such that nobodygets caught flat footed, let's pick one.
(05:06):
What do you want to talk about?
I think a good one to talk aboutto start with would be this package
of reforms that almost got acrossthe finish line in December.
And very likely could get considerationin Congress in March, and if not
March, then the next available vehicle,because it's already been agreed to
between the House and the Senate andbetween Republicans and Democrats.
(05:27):
There's a lot of very interesting,policy in there that's all going
to be very important to health carepurchasers as well as to providers,
but some of the most important thingsin there are Medicare site neutral
payment policies and honest billingrequirements for hospitals under Medicare.
All right, so Medicare siteneutral payment requirements
and honest billing practices.
(05:47):
I think a lot of our listeners aregoing to at least have a glimmer of
what you're talking about, but justhow would you describe what that means?
Sure.
So if you think about a hospitallike a vacuum and it's looking around
for other sites of care and otherproviders that are nearby and it's
vacuuming them up and it's turningthem into part of the hospital system.
The reason that this happens isbecause hospitals can bill higher
(06:11):
amounts for the exact same servicesand they can charge facility fees for
patients who come on to their premises.
So if they purchase your doctor'soffice and you go to the doctor.
Now they can charge you a facilityfee because technically, you've
just been to the hospital.
So, Congress is looking for ways tofight back against this consolidation
(06:31):
and against the inflation in prices.
And certainly, any changes in this areawould be a shock to the system for some
of these hospitals who, frankly, have beenbilking both Medicare and private payers.
But what Congress is looking at issaying that for certain services, or
perhaps for certain drugs that need tobe infused on site, what they would say
(06:53):
is, this is the amount that Medicare isgoing to pay for this service, period.
And it's not going to make a differenceif it's done at the hospital, or at
an ASC, or at a hospital outpatientdepartment, or in a physician's office.
This is the amount that thatservice is worth to Medicare.
And if Medicare does that, thehospitals suddenly lose that need
(07:15):
to go out there and buy all theprovider offices and buy all these
other sites of care and to consolidatethe way that they're consolidating.
And you're really killing someof the incentives that are
driving that consolidation andsome of that price inflation.
So when we talk about site neutral, we'retalking about policies that could be very,
very narrow or very, very broad, right?
(07:35):
So in this particularpiece of legislation.
Congress is looking at somepretty narrow policies.
They're going to kind of experimentwith it and say, we're going
to try it for these things.
And if all the hospitals don't goout of business, we'll probably
look at expanding it later.
Because doing this could save quite abit of money for the federal government.
There's been a lot of talk aboutsite neutral payments, mainly
(07:56):
because of the facility fee.
I'm trying to figure out a goodnoun to use the, um, overabundance
maybe of, of facility fees.
And you hear some of these patientstories, like I had a telehealth visit
and I got charged a $600 facility fee,or I went to my primary care office
(08:18):
for something very primary carey.
You know, I had gonethere many, many times.
My copay used to be $22 and suddenlythe hospital bought the practice.
I'm going to the exact same office thathas it's nowhere near the hospital campus
and I got charged $600 as a facility fee.
There certainly is, as youjust said, there's an incentive
(08:40):
to buy more practices.
There's incentive to steer patientsto different sites of care.
It does not have anything todo with clinical outcomes.
I mean, maybe someone couldargue that it could, but it
definitely jacks up the price.
Well, and I think you nailed it, Stacey,but there's also two dynamics here.
So the facility fees is one issue, right?
So the other dynamic here is just markups.
(09:02):
I could go to CVS right now.
I could pay $5 and I could probablyget a package of 100 band aids.
I could go to my doctor's office andthey could take one of those band
aids and it'll be $5 for that oneband aid and the, you know, 10 seconds
it took the doctor to put it on me.
The hospital could charge me$50 for that same band aid.
(09:23):
So, this actually takes place withevery type of service that there is.
No matter what it is, it is alwayscheaper to do that service somewhere
that is not affiliated with a hospital.
Hospitals innately mark everything up.
And so, by not treating these othersites of care, which frankly are not
hospitals, by not treating them likehospitals, we can save tons of money
(09:44):
well beyond just those facility fees,which frankly should be outlawed period.
There shouldn't be any facility feesunless you enter a hospital facility.
We will have Dr. ChristineHale on in a couple of weeks.
And one of the things that she says,she's talking about high cost claimants
and just the zeros that are involved inchanging the site of care for a patient.
(10:04):
Taking them out of the hospitaland putting them, I mean, maybe
it's even they get the infusionat their home or whatever.
And it's, it's like hundreds of thousandsof dollars that can be saved, which
pretty much just emphasizes the pointthat you're making that there's a lot
of additional spend that can happendepending on where the patient goes.
And if that patient is on or abouta hospital, everything that we're
talking about is going to apply.
(10:27):
At this moment in time, it's on theplan sponsor to realize what's going
on and to try to navigate and steer.
But, you know, that's difficult.
It can't always be done.
So this policy sounds like it'sgoing to kind of stop it at the root.
As you said, though, this is they're goingto experiment with this and start narrow.
So it's going to be we're going topick DRGs or something or codes.
(10:49):
What does narrow mean?
Right.
So the initial program that they'relooking to launch really is focused on
these physician administered drugs whereyou have to go in and have an I.V. to
take the drugs that you need to take.
And in those cases, the beliefis that it can safely be done
somewhere else besides hospital.
There's no questions about safety.
There's no questions about.
(11:09):
The providers being capable ofdoing it elsewhere, somewhere that
is not a hospital, that doesn'thave an emergency room, et cetera.
So that's where they're going tostart is on that stuff, but you should
know there's other legislation that'snot going to be passed this year.
It's not going to be passed inMarch, but there is other legislation
that would go much, much bigger andsay we're going to go well beyond
that to all manner of services.
(11:31):
So, that's what I mean when I say we'regoing to start narrow, comparatively,
looking at the different proposals thathave been on the table in Congress.
This is on the smaller side,although it still saves billions and
billions of dollars for Medicare.
So, if I am a plan sponsor, and I'mlistening to this right now, is there
any action steps that I should be taking?
I think it's a pretty safe mantrafor a plan sponsor to have, to
(11:54):
say, don't fall behind Medicare.
If Medicare gets in front of you,you'll be left to be picked at by the
vultures of the healthcare system.
So, hospitals, let's say the hospitalshave site neutral policies applied
to them in the Medicare program.
Well, they're going to turn aroundand say, oh, well, let's see, were
these employers smart enough to alsoimplement site neutral policies.
(12:16):
And if the answer is no, they're goingto build those employer plans, right?
They're going to charge them thehospital prices at all the physician
offices and all of the hospitaloutpatient departments, etc.
So really an astute employer and astuteTPA need to be watching this and need to
make sure that they're keeping up and thatthey're doing the same smart purchasing
(12:38):
that Medicare is going to be doing.
And that can be site neutral policies.
It could also be things like Centers ofExcellence or high performing networks,
but either way, you have to be discerningon where these provision of care is
taking place in order to be ahead of it.
And rather, if you're left behind,you know, hospital is going to say,
Well, we're getting some carved outof our hide by Medicare, but we're
(12:59):
going to take it back and we'regoing to take it back from you.
And is there any advice that youmight have for a plan sponsor
who is looking to do that?
Because you know, we all know aboutthe balance of power with some of
these major consolidated hospitals.
Are they just going to say no?
In highly consolidated markets,there's not always a whole lot you
can do other than trying to steeraway from that particular market.
(13:21):
Although, steering away fromthe hospital is always your
best option, no matter what.
So unless the hospital has purchasedall the provider offices and all the
different sites of care and the imagingsites, et cetera, you really should
have provisions in your plan designthat encourage employees and really to
compensate those employees, give themsome of the savings if they're going
to some of these cheaper sites of care.
(13:43):
In markets that are morecompetitive, obviously you
should be creating competition.
You should be playing thehospitals off each other.
You should be steering to theones where they have the best
quality and the lowest cost.
So you're getting thebest of value out of it.
And hopefully your TPA is tellingyou this stuff before you hear
it on this podcast, right?
If you hear it from us and you have to goback to your TPA and say, Hey, TPA, have
(14:04):
you ever thought about doing site neutralpurchasing options for your clients?
You might want to shopfor a different TPA.
Yeah, this definitely sounds likesomething that should be on somebody's
agendas to discuss as points of interest.
I could also certainly see, andjust thinking about, like, for
example, independent oncologistsand other indie practices right now,
(14:25):
this might be good news for them.
We had Erik, Erik Davis and AutumnYongchu on the pod, it was a couple of
years ago now, but they were talkingabout how some of these infusions
are marked up three, four, five,ten times the price of the drug.
You have some very, very wealthy sortsof practices who are, you know, in air
quotes, part of the hospital, which leavesThe Indies scrambling, and then obviously
(14:49):
340B plays in here too because hospitalscan actually buy the drugs much cheaper,
listen to the shows with Shawn Gremminger.
So as we all know, transparencyand competition tends to
keep prices more reasonable.
I could definitely see that levelingthe playing field a little bit
here could improve the competitiveability of some of these indies.
Absolutely.
(15:09):
And this should be an opportunityfor them to say, hey, Medicare
is getting smart about this.
Now's the time to go talk to the insurerswho we work with and pitch them on better
steerage policies within their networks.
Moving on to what else is in thisreform package of which you speak
that might be worth some attention.
Right?
So, you know, we talked a little bit aboutthis tax bill and how Medicaid might be
(15:32):
part of the way that they finance thebill and how the focus of this legislation
is going to be on the tax rates thatindividuals and corporations pay.
Reminding everyone theMedicaid conversation is in
the other part of this episode.
But there's this tiny littlesidebar conversation going on
that could be very meaningful fortens of millions of Americans.
(15:55):
And that is, would this bill includechanges to health savings accounts
and high deductible health plans,the plans that are paired with HSAs?
Because those plans arecreatures of the tax code, right?
The only way to make changes tothem is to change the tax code.
And really, that hasn't reallybeen done for 20 years, right?
(16:17):
These, these accounts and the HighDeductible Health Plan and the definition
of that, they were created back in2003 in a sidecar bill to the Medicare
Modernization Act, which created thePart D prescription drug benefit, right?
So we're talking about such a longtime ago that seniors on Medicare
used to not have their drugs covered.
It seems like an eternity ago
(16:38):
. So that's how long it's been since we've made real true, meaningful
updates and changes to HSAs.
And my goodness, we'velearned a lot in that time.
Back in 2003, all the smartest healthpolicy wonks and gurus were saying,
look, the problem is these patients.
They keep going out andgetting health care.
We got to, we got tochange the dynamics here.
(16:59):
So they stopped wanting toget all this health care.
Let's put all this skin in thegame so that they have to pay
a big percentage of their cost.
Let's put these huge deductibles infront of them where they literally get
no help from the insurance company otherthan supposedly the negotiated rates,
but they get no help until they paidthrough thousands of bucks and then their
insurance kicks in and we'll say, Hey,I know this sucks, but we're going to
(17:22):
offset that by giving you a bank accountand you can put money in that bank account
and it's triple tax advantage, right?
You don't get taxed on the money going in.
You don't get taxed on howthat money accrues and gets
compound interest over time.
And you don't get taxed onthat money when it comes out.
So it can be awesome forretiree health savings.
But there are all kinds of thingsthat we've learned since then.
(17:42):
First of all, patients areactually not, not the problem.
In fact, there's a lot of utilizationthat we want and we want more of it.
We want more use of high value services.
That's going to be services that canprevent much more expensive interventions
that have to take place later.
Things that don't cost a whole lot, butdo provide a lot of health benefits.
(18:02):
So we've really kind of changed howwe think about controlling health
care costs in the past 20 years.
And HSAs have not kept up.
So now might be the time when Congressactually makes some meaningful
changes that starts to change thatdynamic so that HSAs can be a creature
of the 2020s instead of the 2000aughts when, you know, Will Smith
(18:23):
was singing songs for the new year.
So just to kind of recap the issuethat you just raised since 2003, when
the last iteration of HSAs, healthsavings accounts, hit the street, which
was in conjunction with those highdeductible health plans where, and I'm
just reminding everybody I ranted for20 minutes about the moral hazard of
(18:46):
insurance in a show a couple of weeks ago.
So if anybody really wants to takea deep dive into this whole skin
in the game business and the goodnews, bad news with that whole thing.
You're welcome.
But what we're talking about hereis the way that it was conceived of
the health savings accounts did notenable somebody to get care for even
(19:09):
high value things before they hitthe deductible, which is high because
it's a high deductible health plan.
Right?
So like, if you want to make surethat somebody with diabetes is getting
regular diabetes care, from what Iunderstand, like you can't cover that.
So we just talked about high value careand how it might be in a plan sponsor
(19:31):
and the patient, nothing for nothing,their best interest to ensure that they
are going to get this high value careprior to reaching their big deductible.
How does the HSAs and what waspassed in 2003 not facilitate that
or like, what's the problem there?
Okay.
So, so try not to laugh, but in 2003,we at least knew that there were certain
(19:54):
care that was preventive in nature andthat it made sense to allow coverage of
that with first dollar coverage, right?
So the employer or the insurercan pay even if you haven't
hit your deductible yet.
So we said preventive care canbe covered with first dollar
coverage, but but nothing else.
Okay, what is preventive care?
Well, Congress said, uh,I don't know, ask the IRS.
(20:16):
So the IRS,
Because of all their medical credentials.
Yes.
So they literally made a list andit's now part of the tax code.
It's in the IRS code wherethey have a list of what they
consider to be preventive.
And I doubt you've ever had a gueston this show who would say, you know
what, I'm in agreement with that list.
I'm good with it.
That's the list.
(20:37):
That's what's preventive.
Nobody, nobody would say that becausenobody agrees with that because
it's very narrow thinking, right?
They're thinking, okay,what does prevent mean?
Well, you know, I'm a, I'm a tax attorneyand I say that prevent means you are
stopping a disease before it takes place.
But once somebody is infectedwith something or once somebody
has a condition, managing thatcondition is no longer preventive.
(20:58):
This is backwards thinking,but it was the way that they
thought about it 20 years ago.
So if you fast forward to 2017, theTrump administration, the first Trump
administration, they looked at theserules and they said, this is not smart.
This is not a good way to do business.
And they took a couple of years and whatthey ended up doing was releasing new
(21:19):
guidance that actually for the firsttime allowed employers or insurers,
if they wanted to, to expand thedefinition of preventive coverage.
And by expanding that definition,you then expand what the employer
or insurer can pay for before apatient hits their deductible.
And what a lot of employers didwas they massively expanded it in
(21:42):
such a way that employers startedoffering free insulin, right?
They started offering multiplevisits for certain kinds of care.
And what the employers saw was thatthis was preventing hospitalizations.
It was preventing operations, itwas preventing surgery, it was
preventing people from progressingin their disease state and having
(22:02):
to get on high cost specialtymedications, and it was saving money.
It was improving health and saving money.
Everything that we talkabout wanting in healthcare.
So this happened because of guidance.
It is sub regulatory in nature.
It is not statute.
The next administration thatcomes along could say, you know
what, we ain't getting it back.
We're going back to the 2003 rules.
(22:24):
So actually just this week, theHouse passed legislation that
said we are going to codify thatparticular guidance, which is great.
I doubt the Senate is going to then takeup that legislation, although they should.
But if we're going to truly revisitthose 2003 rules, we need to broaden
even more and say, listen, we needto give some discretion to employers
(22:48):
and insurers to figure out what isit that we should be covering with
first dollar coverage that enablesus to save money and improve health?
I think a no brainer forthis would be onsite clinics.
That's a big one for many ofthe companies that I work with.
They have an onsite clinic who theyknow provides very high quality
care at very reasonable costs.
(23:08):
They want employees to useit as much as possible.
Right now, a lot of employees say,well, I got to pay through my deductible
first anyway, so I might as wellgo somewhere else to get my care.
So there's all kinds of exampleslike that where we could change the
rules and lower health care costs.
Okay, so I just want to connect orclarify what you're talking about with
(23:31):
preventative care and HSAs only beingable to be used in high deductible
health plans for preventative care andthe concept of first dollar coverage.
Could you just explicitlyconnect these concepts and in
case anybody is a little lost?
Sure.
So when Congress created health savingsaccounts, which are bank accounts,
(23:52):
they said, in order to put money intothis bank account, you must have what
we call a high deductible health plan.
And this is defined in statute.
What is a high deductible health plan?
And the definition is, you know, ithas a certain number of dollars that
you have to pay before the insurancebenefit starts paying, and only very
(24:14):
limited things that can be coveredbefore you hit that deductible.
So, when we are talking about, oh,well, what about an on site clinic?
We want an on site clinicto be able to be covered.
Well, once you have access to thatonsite clinic and you don't have to
pay for it, your high deductible healthplan is no longer qualified, right?
It's violating those IRS rules, whichmeans you're now banned from putting that
(24:37):
money into your health savings account.
Just like the code says, if you wantto put money into your HSA, you can
have that high deductible health planand you can't have any other coverage.
So you have to have thatHDHP and only that HDHP.
So if you also have a direct primary careplan, or if you also have access to the
(24:57):
TRICARE benefit or access to the IndianHealth Service or access to Medicare,
you're banned from putting money intothe health savings account, bank account.
So if I'm just summing this up, it's kindof a downstream consequence of the way
that that 2003 bill got set up, which isthat the HSAs are a, you know, come as
a set with these high deductible healthplans and there's a very strict definition
(25:20):
of what is a high deductible health plan.
And what that means is nobody can pay foranything until the patient member reaches
high deductible, except maybe this verynarrow definition of preventative care.
And the second that anybody paysfor anything for this particular
individual that isn't on that IRSlist, whoops, you are now do not have
(25:41):
a high deductible health plan andtherefore you cannot have an HSA.
So is that the, wouldthat be a good summary?
You nailed it.
And it's probably worth mentioningthat there are some people who say,
The real solution here is to justcompletely get rid of this definition
of high deductible health plans.
And maybe what we need to do is just say,Hey, you want a health savings account,
have a health savings account, right?
(26:03):
The problem with that, which I don't,I don't disagree with it from a policy
perspective necessarily, but the problemis if you were to ask Congress about
what would be the cost, how would thisaffect the deficit if we did that?
The Congressional Budget Office andthe Joint Committee on Taxation, who
are the ones who do these kinds ofestimates, they would say, that will
(26:25):
increase the deficit by tens or even,or even a hundred billion dollars.
Depending on how many people thensay, oh, well, you know what?
I like putting money into a bankaccount that doesn't get taxed.
We may have, you know, 100 millionpeople who decide that they are
now going to put 20 grand a year orwhatever the limit is to this year.
(26:45):
We're going to put all that moneyinto a health savings account.
So, from a legislative cost estimateperspective, it would be very, very
difficult to just completely jettison thisdefinition of high deductible health plan.
And that's why groups like ERIC,like my group, that's why we're
trying to improve that definition.
And maybe later, it'll be thetime to say, you know what?
(27:07):
We've moved on.
You know, we're ready to just get ridof these high deductible health plans
and say, you want an HSA, have an HSA.
But for now, we're kind of stuck in thisframe that was put together back in 2003.
Thank you for that explanatory interlude.
All right.
So back to our main theme here.
You were saying that on or about 2017.
(27:27):
There was some sub regulatory guidancethat allowed plan sponsors to offer
certain things to members on highdeductible health plans that didn't
technically qualify as preventativecare and didn't disqualify the plans.
But now, right now, there is anopportunity to get all this codified
into law, or did I misunderstand that?
(27:48):
Well, I think that thatguidance was finalized in 2019.
It took some time to get it out.
It's again, it's the IRS.
They don't do anything quickly.
So that is one piece of the puzzle.
But if you look at what Congressis actually considering.
That they might want toinclude in this tax bill.
It goes far beyond that.
So not only would they potentially codifythat guidance and potentially expand it to
(28:10):
include even more preventive services andmore high value care to be first dollar
coverage, but they're also potentiallygoing to say, We're going to allow care
at an on site clinic or a near siteclinic to be pre-deductible coverage.
So that you couldn'tdo that in 2017, 2019.
Right.
You still today, you cannot dothat, but Congress might, they
want to go further, I think.
(28:32):
So they're also going to look at and say,you know, maybe we should allow people
to pay for physical activity as a one wayto stay healthy is to like do Peloton or
do Weight Watchers and you can take themoney in your HSA and use it for that.
Maybe they'll go even further and saywe're going to look at direct primary
care and we're going to say that youcan have a membership with one of these
(28:53):
primary care providers that essentiallytakes a capitated payment every month
and it's their job to keep you healthy.
And we're going to say you cando that along with your HSA.
Maybe they'll expandthe eligible population.
Right now, there's a lot ofpeople who are discriminated
against and can't have an HSA.
For example, veterans.
Veterans have access to some,some TRICARE benefit that actually
(29:15):
prevents them from being able to putmoney into a health savings account.
So if you're a veteran and you workfor an employer that offers a high
deductible health plan, you mightbe stuck on that HDHP and you can't
even get the bank account whereyou get the real benefit from.
Native Americans, it's anotherexample because they have coverage
that they can potentially get tothe Indian Health Service and that
(29:36):
blocks them from being able to makeuse of a health savings account.
And of course, another populationis working seniors who are
eligible for parts of the Medicareprogram, even though they're still
working and they still have a job.
Well, again, they could have a highdeductible plan, but they couldn't
benefit from the health savings account.
So there's a lot of thesetweaks that could be made where
(29:56):
millions of people would benefit.
And Congress, for the firsttime, they actually take this
up as part of the tax bill.
That is interesting.
So, James Gelfand, is thereanything I neglected to ask you
that you want to mention here?
No, I think we've covered a lot.
We have covered a lot.
That we have.
James Gelfand, if anyone is interestedin learning more about your work or
about Eric, where would you direct them?
(30:17):
Check out our website on eric.org.
James Gelfand, thank you so much forbeing on Relentless Health Value today.
Thank you for having me.
This is Shawn Gremminger, Presidentand CEO of the National Alliance
of Healthcare Purchaser Coalitions.
If you like this podcast, Istrongly recommend subscribing
and leaving a review.
Episode 469 "The Impact on Plan Sponsorsof Medicare Site Neutral Payments and
HSA, Health Savings Account Reforms".
Today I speak with James Gelfand,
(00:21):
American Healthcare Entrepreneurs andExecutives You Want to Know, Talking.
Relentlessly Seeking Value.
Did you just listen to the show withJames Gelfand on the impact of Medicaid
cuts on plan sponsors, what the cutsactually are, and what the intriguingly
named Cornhusker Kickback is all about?
(00:41):
If not, no worries, but dogo back and listen to that
after you listen to this show.
No particular order of listeningis superior for this double
episode, so it's all good nomatter how you have chosen to roll.
Now, in this show that you arecurrently listening to, one part
of the episode 469 double episode,this is what's going to happen.
(01:02):
I ask my guest today, James Gelfand, toget into the what and how and so what of
the goings on with Medicare site neutralpayments and honest billing practices.
And then I ask him the same thingwith the HSA, health savings account
reforms currently in Congress.
And look, bottom line, I wasa picture of overconfidence
(01:23):
walking into this conversation.
Relative to the Medicare site neutralpayments, James has some crisp feedback
for plan sponsors, which is in a nutshell.
Get ahead of this, and TPAs andconsultants and brokers should be all
over this right now, advising clients andwriting stuff into provider contracts.
Then, after we cover Medicare site neutralpayments, we very seamlessly, if I do
(01:46):
say so myself, segue into what's the whatwith HSAs, health savings account reforms.
I did not realize a few things here.
One of them is that HSAs lastwere taken up by Congress in 2003.
Back in those Helicon days ofhigh deductible health plans,
HDHPs or even better consumerhigh deductible health plans.
(02:09):
CHDHPs.
When we all kind of thought, includingme, by the way, wow, did I change my tune?
But the prevailing wisdom was thatgiving patients and members skin in the
game would evoke high value purchasingdecisions by them and yeah, listen to
me going off on why that is not reallytrue and the moral hazard of insurance
(02:30):
for 20 minutes in an Inbetweenisodewe will link to in the show notes
where you will find all the links
So anyway, first up we talk aboutMedicare site neutral payments and
honest billing practices Then thecurrent issues with the current HSA
regs and what the future may hold.
And just saying, lest anyone forget, thecurrent HSA regulations really hinder
(02:51):
plan sponsors ability to offer, like,direct primary care and pay for it or
do stuff to help members with chronicconditions keep those conditions managed.
There are many not super intuitivebut really impactful issues here.
Now, of course, hospitals do in fact comeup on this show, and I am seeing this
in a bunch of intros lately, but let meremind everyone, it so must be said with
(03:14):
five underlines, all hospitals are notthe same, and what a hospital does or
doesn't do may not be the same as whatmany or most who work at the hospital
believe is the right thing to be doing.
Listen to the show with Dr.Komal Bajaj on just the gaping
disconnects and lack of trust betweenclinicians and administrators,
some of them, not all, of course.
(03:35):
Also, a hospital can be doinggreat things and really crappy
things absolutely simultaneously.
These are big, sprawlingplaces with a lot going on.
James Galfand, as aforementioned,my guest today is president
and CEO of the ERISA IndustryCommittee, otherwise known as ERIC.
ERIC represents the nation'slargest self insured employers.
(03:56):
Advocating for comprehensive benefitsand healthcare policies that impact
millions of employees across the country.
James Gelfand brings nearly twodecades of experience in healthcare
advocacy, having worked at the Chamberof Commerce and on Capitol Hill.
When you are done listening to theshow, please do come back and take
a listen to the other part of thisdouble episode if you haven't already.
(04:17):
In that part, we talk Medicaid cuts andthe impact on plan sponsors and et cetera.
I also talk about how JamesGelfand came to find himself
invited on the pod to begin with.
And short version, it allstarted with Cora Opsahl.
And I say this as a thank you toCora because these shows with James
Gelfand are so informative and hewas, in fact, the exact right person
(04:39):
to have these conversations with.
My name is Stacey Richter.
This podcast is sponsoredby Aventria Health Group.
James Gelfand, welcome toRelentless Health Value.
Thanks for having me today.
There's so much going on.
So I guess just selecting what to talkabout is a thing in and of itself.
But if we're going to be talking aboutmaybe the top goings on that plan sponsors
may need to consider such that nobodygets caught flat footed, let's pick one.
(05:06):
What do you want to talk about?
I think a good one to talk aboutto start with would be this package
of reforms that almost got acrossthe finish line in December.
And very likely could get considerationin Congress in March, and if not
March, then the next available vehicle,because it's already been agreed to
between the House and the Senate andbetween Republicans and Democrats.
(05:27):
There's a lot of very interesting,policy in there that's all going
to be very important to health carepurchasers as well as to providers,
but some of the most important thingsin there are Medicare site neutral
payment policies and honest billingrequirements for hospitals under Medicare.
All right, so Medicare siteneutral payment requirements
and honest billing practices.
(05:47):
I think a lot of our listeners aregoing to at least have a glimmer of
what you're talking about, but justhow would you describe what that means?
Sure.
So if you think about a hospitallike a vacuum and it's looking around
for other sites of care and otherproviders that are nearby and it's
vacuuming them up and it's turningthem into part of the hospital system.
The reason that this happens isbecause hospitals can bill higher
(06:11):
amounts for the exact same servicesand they can charge facility fees for
patients who come on to their premises.
So if they purchase your doctor'soffice and you go to the doctor.
Now they can charge you a facilityfee because technically, you've
just been to the hospital.
So, Congress is looking for ways tofight back against this consolidation
(06:31):
and against the inflation in prices.
And certainly, any changes in this areawould be a shock to the system for some
of these hospitals who, frankly, have beenbilking both Medicare and private payers.
But what Congress is looking at issaying that for certain services, or
perhaps for certain drugs that need tobe infused on site, what they would say
(06:53):
is, this is the amount that Medicare isgoing to pay for this service, period.
And it's not going to make a differenceif it's done at the hospital, or at
an ASC, or at a hospital outpatientdepartment, or in a physician's office.
This is the amount that thatservice is worth to Medicare.
And if Medicare does that, thehospitals suddenly lose that need
(07:15):
to go out there and buy all theprovider offices and buy all these
other sites of care and to consolidatethe way that they're consolidating.
And you're really killing someof the incentives that are
driving that consolidation andsome of that price inflation.
So when we talk about site neutral, we'retalking about policies that could be very,
very narrow or very, very broad, right?
(07:35):
So in this particularpiece of legislation.
Congress is looking at somepretty narrow policies.
They're going to kind of experimentwith it and say, we're going
to try it for these things.
And if all the hospitals don't goout of business, we'll probably
look at expanding it later.
Because doing this could save quite abit of money for the federal government.
There's been a lot of talk aboutsite neutral payments, mainly
(07:56):
because of the facility fee.
I'm trying to figure out a goodnoun to use the, um, overabundance
maybe of, of facility fees.
And you hear some of these patientstories, like I had a telehealth visit
and I got charged a $600 facility fee,or I went to my primary care office
(08:18):
for something very primary carey.
You know, I had gonethere many, many times.
My copay used to be $22 and suddenlythe hospital bought the practice.
I'm going to the exact same office thathas it's nowhere near the hospital campus
and I got charged $600 as a facility fee.
There certainly is, as youjust said, there's an incentive
(08:40):
to buy more practices.
There's incentive to steer patientsto different sites of care.
It does not have anything todo with clinical outcomes.
I mean, maybe someone couldargue that it could, but it
definitely jacks up the price.
Well, and I think you nailed it, Stacey,but there's also two dynamics here.
So the facility fees is one issue, right?
So the other dynamic here is just markups.
(09:02):
I could go to CVS right now.
I could pay $5 and I could probablyget a package of 100 band aids.
I could go to my doctor's office andthey could take one of those band
aids and it'll be $5 for that oneband aid and the, you know, 10 seconds
it took the doctor to put it on me.
The hospital could charge me$50 for that same band aid.
(09:23):
So, this actually takes place withevery type of service that there is.
No matter what it is, it is alwayscheaper to do that service somewhere
that is not affiliated with a hospital.
Hospitals innately mark everything up.
And so, by not treating these othersites of care, which frankly are not
hospitals, by not treating them likehospitals, we can save tons of money
(09:44):
well beyond just those facility fees,which frankly should be outlawed period.
There shouldn't be any facility feesunless you enter a hospital facility.
We will have Dr. ChristineHale on in a couple of weeks.
And one of the things that she says,she's talking about high cost claimants
and just the zeros that are involved inchanging the site of care for a patient.
(10:04):
Taking them out of the hospitaland putting them, I mean, maybe
it's even they get the infusionat their home or whatever.
And it's, it's like hundreds of thousandsof dollars that can be saved, which
pretty much just emphasizes the pointthat you're making that there's a lot
of additional spend that can happendepending on where the patient goes.
And if that patient is on or abouta hospital, everything that we're
talking about is going to apply.
(10:27):
At this moment in time, it's on theplan sponsor to realize what's going
on and to try to navigate and steer.
But, you know, that's difficult.
It can't always be done.
So this policy sounds like it'sgoing to kind of stop it at the root.
As you said, though, this is they're goingto experiment with this and start narrow.
So it's going to be we're going topick DRGs or something or codes.
(10:49):
What does narrow mean?
Right.
So the initial program that they'relooking to launch really is focused on
these physician administered drugs whereyou have to go in and have an I.V. to
take the drugs that you need to take.
And in those cases, the beliefis that it can safely be done
somewhere else besides hospital.
There's no questions about safety.
There's no questions about.
(11:09):
The providers being capable ofdoing it elsewhere, somewhere that
is not a hospital, that doesn'thave an emergency room, et cetera.
So that's where they're going tostart is on that stuff, but you should
know there's other legislation that'snot going to be passed this year.
It's not going to be passed inMarch, but there is other legislation
that would go much, much bigger andsay we're going to go well beyond
that to all manner of services.
(11:31):
So, that's what I mean when I say we'regoing to start narrow, comparatively,
looking at the different proposals thathave been on the table in Congress.
This is on the smaller side,although it still saves billions and
billions of dollars for Medicare.
So, if I am a plan sponsor, and I'mlistening to this right now, is there
any action steps that I should be taking?
I think it's a pretty safe mantrafor a plan sponsor to have, to
(11:54):
say, don't fall behind Medicare.
If Medicare gets in front of you,you'll be left to be picked at by the
vultures of the healthcare system.
So, hospitals, let's say the hospitalshave site neutral policies applied
to them in the Medicare program.
Well, they're going to turn aroundand say, oh, well, let's see, were
these employers smart enough to alsoimplement site neutral policies.
(12:16):
And if the answer is no, they're goingto build those employer plans, right?
They're going to charge them thehospital prices at all the physician
offices and all of the hospitaloutpatient departments, etc.
So really an astute employer and astuteTPA need to be watching this and need to
make sure that they're keeping up and thatthey're doing the same smart purchasing
(12:38):
that Medicare is going to be doing.
And that can be site neutral policies.
It could also be things like Centers ofExcellence or high performing networks,
but either way, you have to be discerningon where these provision of care is
taking place in order to be ahead of it.
And rather, if you're left behind,you know, hospital is going to say,
Well, we're getting some carved outof our hide by Medicare, but we're
(12:59):
going to take it back and we'regoing to take it back from you.
And is there any advice that youmight have for a plan sponsor
who is looking to do that?
Because you know, we all know aboutthe balance of power with some of
these major consolidated hospitals.
Are they just going to say no?
In highly consolidated markets,there's not always a whole lot you
can do other than trying to steeraway from that particular market.
(13:21):
Although, steering away fromthe hospital is always your
best option, no matter what.
So unless the hospital has purchasedall the provider offices and all the
different sites of care and the imagingsites, et cetera, you really should
have provisions in your plan designthat encourage employees and really to
compensate those employees, give themsome of the savings if they're going
to some of these cheaper sites of care.
(13:43):
In markets that are morecompetitive, obviously you
should be creating competition.
You should be playing thehospitals off each other.
You should be steering to theones where they have the best
quality and the lowest cost.
So you're getting thebest of value out of it.
And hopefully your TPA is tellingyou this stuff before you hear
it on this podcast, right?
If you hear it from us and you have to goback to your TPA and say, Hey, TPA, have
(14:04):
you ever thought about doing site neutralpurchasing options for your clients?
You might want to shopfor a different TPA.
Yeah, this definitely sounds likesomething that should be on somebody's
agendas to discuss as points of interest.
I could also certainly see, andjust thinking about, like, for
example, independent oncologistsand other indie practices right now,
(14:25):
this might be good news for them.
We had Erik, Erik Davis and AutumnYongchu on the pod, it was a couple of
years ago now, but they were talkingabout how some of these infusions
are marked up three, four, five,ten times the price of the drug.
You have some very, very wealthy sortsof practices who are, you know, in air
quotes, part of the hospital, which leavesThe Indies scrambling, and then obviously
(14:49):
340B plays in here too because hospitalscan actually buy the drugs much cheaper,
listen to the shows with Shawn Gremminger.
So as we all know, transparencyand competition tends to
keep prices more reasonable.
I could definitely see that levelingthe playing field a little bit
here could improve the competitiveability of some of these indies.
Absolutely.
(15:09):
And this should be an opportunityfor them to say, hey, Medicare
is getting smart about this.
Now's the time to go talk to the insurerswho we work with and pitch them on better
steerage policies within their networks.
Moving on to what else is in thisreform package of which you speak
that might be worth some attention.
Right?
So, you know, we talked a little bit aboutthis tax bill and how Medicaid might be
(15:32):
part of the way that they finance thebill and how the focus of this legislation
is going to be on the tax rates thatindividuals and corporations pay.
Reminding everyone theMedicaid conversation is in
the other part of this episode.
But there's this tiny littlesidebar conversation going on
that could be very meaningful fortens of millions of Americans.
(15:55):
And that is, would this bill includechanges to health savings accounts
and high deductible health plans,the plans that are paired with HSAs?
Because those plans arecreatures of the tax code, right?
The only way to make changes tothem is to change the tax code.
And really, that hasn't reallybeen done for 20 years, right?
(16:17):
These, these accounts and the HighDeductible Health Plan and the definition
of that, they were created back in2003 in a sidecar bill to the Medicare
Modernization Act, which created thePart D prescription drug benefit, right?
So we're talking about such a longtime ago that seniors on Medicare
used to not have their drugs covered.
It seems like an eternity ago
(16:38):
. So that's how long it's been since we've made real true, meaningful
updates and changes to HSAs.
And my goodness, we'velearned a lot in that time.
Back in 2003, all the smartest healthpolicy wonks and gurus were saying,
look, the problem is these patients.
They keep going out andgetting health care.
We got to, we got tochange the dynamics here.
(16:59):
So they stopped wanting toget all this health care.
Let's put all this skin in thegame so that they have to pay
a big percentage of their cost.
Let's put these huge deductibles infront of them where they literally get
no help from the insurance company otherthan supposedly the negotiated rates,
but they get no help until they paidthrough thousands of bucks and then their
insurance kicks in and we'll say, Hey,I know this sucks, but we're going to
(17:22):
offset that by giving you a bank accountand you can put money in that bank account
and it's triple tax advantage, right?
You don't get taxed on the money going in.
You don't get taxed on howthat money accrues and gets
compound interest over time.
And you don't get taxed onthat money when it comes out.
So it can be awesome forretiree health savings.
But there are all kinds of thingsthat we've learned since then.
(17:42):
First of all, patients areactually not, not the problem.
In fact, there's a lot of utilizationthat we want and we want more of it.
We want more use of high value services.
That's going to be services that canprevent much more expensive interventions
that have to take place later.
Things that don't cost a whole lot, butdo provide a lot of health benefits.
(18:02):
So we've really kind of changed howwe think about controlling health
care costs in the past 20 years.
And HSAs have not kept up.
So now might be the time when Congressactually makes some meaningful
changes that starts to change thatdynamic so that HSAs can be a creature
of the 2020s instead of the 2000aughts when, you know, Will Smith
(18:23):
was singing songs for the new year.
So just to kind of recap the issuethat you just raised since 2003, when
the last iteration of HSAs, healthsavings accounts, hit the street, which
was in conjunction with those highdeductible health plans where, and I'm
just reminding everybody I ranted for20 minutes about the moral hazard of
(18:46):
insurance in a show a couple of weeks ago.
So if anybody really wants to takea deep dive into this whole skin
in the game business and the goodnews, bad news with that whole thing.
You're welcome.
But what we're talking about hereis the way that it was conceived of
the health savings accounts did notenable somebody to get care for even
(19:09):
high value things before they hitthe deductible, which is high because
it's a high deductible health plan.
Right?
So like, if you want to make surethat somebody with diabetes is getting
regular diabetes care, from what Iunderstand, like you can't cover that.
So we just talked about high value careand how it might be in a plan sponsor
(19:31):
and the patient, nothing for nothing,their best interest to ensure that they
are going to get this high value careprior to reaching their big deductible.
How does the HSAs and what waspassed in 2003 not facilitate that
or like, what's the problem there?
Okay.
So, so try not to laugh, but in 2003,we at least knew that there were certain
(19:54):
care that was preventive in nature andthat it made sense to allow coverage of
that with first dollar coverage, right?
So the employer or the insurercan pay even if you haven't
hit your deductible yet.
So we said preventive care canbe covered with first dollar
coverage, but but nothing else.
Okay, what is preventive care?
Well, Congress said, uh,I don't know, ask the IRS.
(20:16):
So the IRS,
Because of all their medical credentials.
Yes.
So they literally made a list andit's now part of the tax code.
It's in the IRS code wherethey have a list of what they
consider to be preventive.
And I doubt you've ever had a gueston this show who would say, you know
what, I'm in agreement with that list.
I'm good with it.
That's the list.
(20:37):
That's what's preventive.
Nobody, nobody would say that becausenobody agrees with that because
it's very narrow thinking, right?
They're thinking, okay,what does prevent mean?
Well, you know, I'm a, I'm a tax attorneyand I say that prevent means you are
stopping a disease before it takes place.
But once somebody is infectedwith something or once somebody
has a condition, managing thatcondition is no longer preventive.
(20:58):
This is backwards thinking,but it was the way that they
thought about it 20 years ago.
So if you fast forward to 2017, theTrump administration, the first Trump
administration, they looked at theserules and they said, this is not smart.
This is not a good way to do business.
And they took a couple of years and whatthey ended up doing was releasing new
(21:19):
guidance that actually for the firsttime allowed employers or insurers,
if they wanted to, to expand thedefinition of preventive coverage.
And by expanding that definition,you then expand what the employer
or insurer can pay for before apatient hits their deductible.
And what a lot of employers didwas they massively expanded it in
(21:42):
such a way that employers startedoffering free insulin, right?
They started offering multiplevisits for certain kinds of care.
And what the employers saw was thatthis was preventing hospitalizations.
It was preventing operations, itwas preventing surgery, it was
preventing people from progressingin their disease state and having
(22:02):
to get on high cost specialtymedications, and it was saving money.
It was improving health and saving money.
Everything that we talkabout wanting in healthcare.
So this happened because of guidance.
It is sub regulatory in nature.
It is not statute.
The next administration thatcomes along could say, you know
what, we ain't getting it back.
We're going back to the 2003 rules.
(22:24):
So actually just this week, theHouse passed legislation that
said we are going to codify thatparticular guidance, which is great.
I doubt the Senate is going to then takeup that legislation, although they should.
But if we're going to truly revisitthose 2003 rules, we need to broaden
even more and say, listen, we needto give some discretion to employers
(22:48):
and insurers to figure out what isit that we should be covering with
first dollar coverage that enablesus to save money and improve health?
I think a no brainer forthis would be onsite clinics.
That's a big one for many ofthe companies that I work with.
They have an onsite clinic who theyknow provides very high quality
care at very reasonable costs.
(23:08):
They want employees to useit as much as possible.
Right now, a lot of employees say,well, I got to pay through my deductible
first anyway, so I might as wellgo somewhere else to get my care.
So there's all kinds of exampleslike that where we could change the
rules and lower health care costs.
Okay, so I just want to connect orclarify what you're talking about with
(23:31):
preventative care and HSAs only beingable to be used in high deductible
health plans for preventative care andthe concept of first dollar coverage.
Could you just explicitlyconnect these concepts and in
case anybody is a little lost?
Sure.
So when Congress created health savingsaccounts, which are bank accounts,
(23:52):
they said, in order to put money intothis bank account, you must have what
we call a high deductible health plan.
And this is defined in statute.
What is a high deductible health plan?
And the definition is, you know, ithas a certain number of dollars that
you have to pay before the insurancebenefit starts paying, and only very
(24:14):
limited things that can be coveredbefore you hit that deductible.
So, when we are talking about, oh,well, what about an on site clinic?
We want an on site clinicto be able to be covered.
Well, once you have access to thatonsite clinic and you don't have to
pay for it, your high deductible healthplan is no longer qualified, right?
It's violating those IRS rules, whichmeans you're now banned from putting that
(24:37):
money into your health savings account.
Just like the code says, if you wantto put money into your HSA, you can
have that high deductible health planand you can't have any other coverage.
So you have to have thatHDHP and only that HDHP.
So if you also have a direct primary careplan, or if you also have access to the
(24:57):
TRICARE benefit or access to the IndianHealth Service or access to Medicare,
you're banned from putting money intothe health savings account, bank account.
So if I'm just summing this up, it's kindof a downstream consequence of the way
that that 2003 bill got set up, which isthat the HSAs are a, you know, come as
a set with these high deductible healthplans and there's a very strict definition
(25:20):
of what is a high deductible health plan.
And what that means is nobody can pay foranything until the patient member reaches
high deductible, except maybe this verynarrow definition of preventative care.
And the second that anybody paysfor anything for this particular
individual that isn't on that IRSlist, whoops, you are now do not have
(25:41):
a high deductible health plan andtherefore you cannot have an HSA.
So is that the, wouldthat be a good summary?
You nailed it.
And it's probably worth mentioningthat there are some people who say,
The real solution here is to justcompletely get rid of this definition
of high deductible health plans.
And maybe what we need to do is just say,Hey, you want a health savings account,
have a health savings account, right?
(26:03):
The problem with that, which I don't,I don't disagree with it from a policy
perspective necessarily, but the problemis if you were to ask Congress about
what would be the cost, how would thisaffect the deficit if we did that?
The Congressional Budget Office andthe Joint Committee on Taxation, who
are the ones who do these kinds ofestimates, they would say, that will
(26:25):
increase the deficit by tens or even,or even a hundred billion dollars.
Depending on how many people thensay, oh, well, you know what?
I like putting money into a bankaccount that doesn't get taxed.
We may have, you know, 100 millionpeople who decide that they are
now going to put 20 grand a year orwhatever the limit is to this year.
(26:45):
We're going to put all that moneyinto a health savings account.
So, from a legislative cost estimateperspective, it would be very, very
difficult to just completely jettison thisdefinition of high deductible health plan.
And that's why groups like ERIC,like my group, that's why we're
trying to improve that definition.
And maybe later, it'll be thetime to say, you know what?
(27:07):
We've moved on.
You know, we're ready to just get ridof these high deductible health plans
and say, you want an HSA, have an HSA.
But for now, we're kind of stuck in thisframe that was put together back in 2003.
Thank you for that explanatory interlude.
All right.
So back to our main theme here.
You were saying that on or about 2017.
(27:27):
There was some sub regulatory guidancethat allowed plan sponsors to offer
certain things to members on highdeductible health plans that didn't
technically qualify as preventativecare and didn't disqualify the plans.
But now, right now, there is anopportunity to get all this codified
into law, or did I misunderstand that?
(27:48):
Well, I think that thatguidance was finalized in 2019.
It took some time to get it out.
It's again, it's the IRS.
They don't do anything quickly.
So that is one piece of the puzzle.
But if you look at what Congressis actually considering.
That they might want toinclude in this tax bill.
It goes far beyond that.
So not only would they potentially codifythat guidance and potentially expand it to
(28:10):
include even more preventive services andmore high value care to be first dollar
coverage, but they're also potentiallygoing to say, We're going to allow care
at an on site clinic or a near siteclinic to be pre-deductible coverage.
So that you couldn'tdo that in 2017, 2019.
Right.
You still today, you cannot dothat, but Congress might, they
want to go further, I think.
(28:32):
So they're also going to look at and say,you know, maybe we should allow people
to pay for physical activity as a one wayto stay healthy is to like do Peloton or
do Weight Watchers and you can take themoney in your HSA and use it for that.
Maybe they'll go even further and saywe're going to look at direct primary
care and we're going to say that youcan have a membership with one of these
(28:53):
primary care providers that essentiallytakes a capitated payment every month
and it's their job to keep you healthy.
And we're going to say you cando that along with your HSA.
Maybe they'll expandthe eligible population.
Right now, there's a lot ofpeople who are discriminated
against and can't have an HSA.
For example, veterans.
Veterans have access to some,some TRICARE benefit that actually
(29:15):
prevents them from being able to putmoney into a health savings account.
So if you're a veteran and you workfor an employer that offers a high
deductible health plan, you mightbe stuck on that HDHP and you can't
even get the bank account whereyou get the real benefit from.
Native Americans, it's anotherexample because they have coverage
that they can potentially get tothe Indian Health Service and that
(29:36):
blocks them from being able to makeuse of a health savings account.
And of course, another populationis working seniors who are
eligible for parts of the Medicareprogram, even though they're still
working and they still have a job.
Well, again, they could have a highdeductible plan, but they couldn't
benefit from the health savings account.
So there's a lot of thesetweaks that could be made where
(29:56):
millions of people would benefit.
And Congress, for the firsttime, they actually take this
up as part of the tax bill.
That is interesting.
So, James Gelfand, is thereanything I neglected to ask you
that you want to mention here?
No, I think we've covered a lot.
We have covered a lot.
That we have.
James Gelfand, if anyone is interestedin learning more about your work or
about Eric, where would you direct them?
(30:17):
Check out our website on eric.org.
James Gelfand, thank you so much forbeing on Relentless Health Value today.
Thank you for having me.
This is Shawn Gremminger, Presidentand CEO of the National Alliance
of Healthcare Purchaser Coalitions.
If you like this podcast, Istrongly recommend subscribing
and leaving a review.
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