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Blue Shield of CA and Sutter Health: Negotiating a new contract

From Blue Shield today:

Blue Shield and Sutter Health are engaged in contract negotiations
Blue Shield of California and Sutter Health are engaged in discussions on rates and terms for a new network contract (HMO/PPO and in some cases, Group Medicare Advantage). The current contract is set to expire at the end of this year and without a new deal, Sutter Health would no longer be a Blue Shield in-network provider starting January 1, 2017.

We are working diligently in good faith to complete a new contract that is fair and sustainably affordable for our customers. If the network relationship terminates, Blue Shield will ensure that members have continued access to care in their area, including continuity of care for those who qualify to continue in their current course of treatment with a Sutter Health provider.

What are the lines of business affected by the negotiations?
The contracts being negotiated apply to all Blue Shield plan types, including HMO, PPO, EPO, POS-HMO Tier, POS-PPO Tier and Group Medicare Advantage.

  • Individual and Family Plans: Grandfathered and Non-Grandfathered Plans (on and off exchange)
  • Medicare: Group Medicare Advantage Prescription Drug (GMAPD) plans
  • Small Business (1-100 employees)
  • Fully Funded Large Employers (101+ employees)
  • Self-Funded/ASO Large Employers (101+ employees)
  • Self-Funded/Shared Advantage (101+ employees)
  • CalPERS
  • FEP
  • FEHBP

Sutter Health providers are located in Northern and Central California (see listing of counties below). In addition, Sutter Health has surgery centers in San Diego County.

Sutter Health Counties
Alameda Marin San Joaquin Santa Cruz Sutter
Amador Merced San Luis Obispo Shasta Yolo
Contra Costa Placer San Mateo Solano
Del Norte Sacramento Santa Barbara Sonoma
Lake San Francisco Santa Clara Stanislaus

The contracts currently being negotiated include the following Sutter Health hospitals:

  • Alta Bates Medical Center Herrick Campus
  • Alta Bates Summit Medical Center Alta Bates Campus
  • California Pacific Medical Center – California Campus*
  • California Pacific Medical Center – Pacific Campus*
  • California Pacific Medical Center – St Luke’s Campus*
  • California Pacific Medical Center Davies Campus*
  • Eden Medical Center
  • Memorial Hospital Medical Center
  • Memorial Hospital of Los Banos
  • Menlo Park Surgical Hospital
  • Mills Peninsula Health Center
  • Mills Peninsula Medical Center
  • Novato Community Hospital
  • Sutter Amador Hospital
  • Sutter Auburn Faith Hospital
  • Sutter Center for Psychiatry
  • Sutter Coast Hospital
  • Sutter Davis Hospital
  • Sutter Delta Medical Center
  • Sutter Lakeside Hospital
  • Sutter Maternity and Surgery Center of Santa Cruz
  • Sutter Medical Center of Santa Rosa
  • Sutter Medical Center, Sacramento
  • Sutter Roseville Medical Center
  • Sutter Solano Medical Center
  • Sutter Surgical Hospital North Valley
  • Sutter Tracy Community Hospital

    *Includes Medicare Advantage

In the event of a termination with Sutter and in accordance with DMHC regulations, Blue Shield of California would notify HMO members assigned to a Sutter Health Primary Care Provider (PCP) 60-days in advance of a potential termination with Sutter Health. PPO members with an out-of-network benefit could receive services from a Sutter-affiliated provider, but the out-of-pocket costs will be at the non-preferred benefit level.

Our commitment to affordably priced health coverage
Blue Shield continues its provider contract discussions with Sutter Health in hopes that new agreements will soon be reached. We appreciate your patience while we work to secure the best possible outcome for our customers and members. Our goal is to provide our members with access to quality health care at an affordable price.

Emergency services
Blue Shield of California members who need emergency services should call 911 or seek care at the nearest emergency room. Blue Shield will provide the full emergency care level of benefits for these services.

San Francisco HCSO 2015 reporting deadline: Extended to May 2nd

The City of San Francisco’s Office of Small Business just sent a reminder: you must file your Health Care Security Ordinance (HCSO) report for 2015, by April 30, 2016 or face a $500/quarter late filing fee.

Note: Private employers who employed fewer than 20 employees for all of 2015 (or non-profit employers that employed fewer than 50), do not need to file. Stop here.

Reporting instructions

Online reporting form

.Pdf preview of data required to file

If you are filing for the first time, or need assistance collecting data or running reports, please contact Allpointe as soon as possible so that we can help you in advance of the deadline.

CONTACT

 

Covered California Announces SHOP Plans and Rates – without Anthem Blue Cross

Covered California, the new health insurance marketplace, or “exchange” announced today that six carriers would participate in the 2014 SHOP for small businesses of 2 to 50 employees:

  • Blue Shield of CA
  • Kaiser Permanente
  • Health Net
  • Chinese Community Health Plan
  • Western Health Advantage
  • Sharp Health Plan

The last three are regional carriers.  As expected, Anthem Blue Cross is absent from this list, having withdrawn from the small business exchange last week, as reported by the L.A.Times and The Hill.

Rates are pending approval by state regulatory agencies, and Covered California’s release only gives examples for a single, 40-year old employee.  You can download the booklet and accompanying press release here.

Yet unanswered is the question of whether these plan options will offer limited provider networks, as we have seen with the individual marketplace.

Small employers will be able to choose to purchase health coverage for employees inside the Covered CA marketplace, or they may go directly to carriers as they do today.  Depending on the business demographics and needs, either may be a viable financial strategy to provide competitive benefits to employees.  We look forward to helping small business owners determine the right choice for their business.

What To Do With This Blue Shield Rebate Check?

Small businesses and individuals will be receiving a rebate from Blue Shield by August 1st.  Employers, please review the details here, about valid ways to return these refunded premiums to your employees.  Reducing the cost of future insurance coverage is a legitimate use of the rebate.

From Blue Shield:

Medical Loss Ratio Rebates and Notifications

Last month, we informed you that Blue Shield reported its 2012 Medical Loss Ratio (MLR) by market segment to the Department of Health and Human Services (HHS). We are now sharing our rebate information with you.

Blue Shield did not meet the MLR thresholds for the following market segments:

  • Individual and Family plans regulated by the Department of Insurance (DOI)
    The MLR threshold for this market segment is 80%. Blue Shield reported an MLR of 78.0%. The Individual and Family plan MLR was 2% below the 80% threshold. As a result certain subscribers will receive premium rebates by August 1, 2013. The 2% of premium revenue equals $13.3 million that will be returned to 226,034 Individual and Family plan subscribers who were enrolled in the Blue Shield Life plans that did not meet the MLR threshold. The average rebate amount per subscriber is about $59.
  • Small Business plans (50 or fewer employees) regulated by the Department of Managed Health Care (DMHC)
    The MLR threshold for this market segment is 80%. Blue Shield reported an MLR of 76.6%. The Small Business MLR was 3.4% below the 80% threshold. As a result, certain subscribers will receive dues rebates by August 1, 2013. The 3.4% of dues revenue equals $24.5 million that will be returned to 29,232 Small Business policyholders who were enrolled in the Blue Shield plans that did not meet the MLR threshold. The average rebate amount per Small Business policyholder is about $827.

Will Obamacare Kill Healthy San Francisco?

Chris Rauber is asking those questions at the San Francisco Business Times, and apparently, so is much of the San Francisco business community.  Well summed up by Jim Lazarus of the San Francisco Chamber of Commerce:

Among the problem area, according to Lazarus:

  • The federal individual mandate is not met by Healthy San Francisco.
  • The health reimbursement accounts now used by some San Francisco businesses to comply with the local mandate won’t be available next year.
  • Healthy San Francisco, after Jan. 1, will be primarily an “avenue of last resort” for individuals, including undocumented residents, who don’t qualify for other programs. “Some may be willing to stay in the program and pay the penalty” for not having individual insurance, Lazarus speculated.
I agree that these are the major sticking points, but it is the Employer Spending Requirement that the business community (especially the Golden Gate Restaurant Association) would really like to get out from under.  Businesses of 20-49 employees are particularly hard-hit here, as the Federal law exempts them, but San Francisco’s Health Care Security Ordinance does not.

Not to worry, says Mayor Lee.

Like many other parts of the Affordable Care Act and upcoming health care reform changes, we will put this in the “Likely to change between now and 2014” file.
UPDATE 8/1/14 – The Usual Suspects has a good collection of related articles on Healthy San Francisco going.

Rebates coming to small business from Anthem and Blue Shield of California

Chad Terhune of the LA Times reports that Anthem Blue Cross and Blue Shield of California will be required to issue rebates to small businesses this August, for failing to meet the minimum 80% medical loss ratio threshold in 2012, as required under the Affordable Care Act.

Blue Shield of California insures 29,000 small businesses in California, while Anthem Blue Cross is the largest small business insurer in the state, covering 45,000 small businesses.  Your Allpointe broker will be contacting you once specific dollar amounts are released.

Say Goodbye to the 90-day Waiting Period

Beginning in 2014, the Affordable Care Act will require a maximum 90-day waiting period for new hires to join a group medical plan.  California has taken this a step further: Governor Brown signed AB 1083 into law near the end of 2012, reducing that maximum waiting period further — to 60 days.  Let’s take that a step further, as the practical application for small business effectively makes the maximum waiting period one month or 30 days.  Why is this?  Well, currently every carrier for small groups uses a “first of the month following completion of the waiting period” as the eligibility date for a new hire.

If new employee Jane Smith begins work on March 15, 2014 and her employer has a 60-day waiting period, her effective date in the current system would be … June 1, 2014.  Seventy-seven days after her date of hire, or 17 days beyond the maximum waiting period.

We expect the carriers to adapt their plan contracts upon plan renewals in 2014, to help small employers adapt to the new requirements.  Kaiser Permanente officials have stated they will offer three waiting period options for plans that renew on or after January 1, 2014:

  • First of the month following date of hire
  • First of the month following 30-day waiting period
  • NEW: Sixty days following date of hire (partial months to be prorated)

We expect other carriers to offer the same or similar options.

Many of our small group clients in competitive industries already have a first of the month following date of hire policy, but others will need to prepare and adapt.

Small business heath care tax credit: a mirage?

One of the provisions of the Patient Protection and Affordable Care Act (PPACA) initially looked like it could be a huge boon to small businesses: a tax credit for dollars spent on employee health care.  Kaiser Health News has a very good summary of the tax credit, here.

We wrote about this back in April; six months later, as we talk to clients throughout the Bay Area and California, most small businesses do not qualify.  We attribute this primarily to the high cost of living in California’s urban areas, and because the tax credit phases out based on two criteria: number of employees over 10, and average salary over $25,000 annually.  Combine those two and we are finding that our clients either do not qualify at all, or the credit is so small so as not to be worth the effort of applying for it.

A factor that often gets missed is that the average salary criterion is measured by FTE – Full Time Equivalent, not just average annual salary.  So, your 30-hour/week, $40,000/year employee in fact does not fall within the threshold.

Still, there are a few small businesses that may qualify, so we encourage you to use the easy online calculator from the Small Business Majority.  Please contact us if you aren’t sure if you qualify.