Client
B is a large retail chain with mostly
white collar employees in a low-income tax bracket. Its plan renewal was 2/1/11, and under its
Ongoing Verification procedures, the company began verifying for the new health
care reform categories in mid-January. Client B implemented a grandfathered
policy with an Adult Child Exclusion policy:
if an adult child was eligible for coverage under his or her own
employer’s policy, that dependent was not eligible for the policy of Client B. Open Enrollment numbers showed a 20% increase
of enrollees to the policy, which fit with its expectations for the 2011
year.
The big surprise, though, was the
upswing of ineligibles: during the
original verification, between October 2009 and January 2010, the
ContinuousHealth Dependent Eligibility Verification Audit found that 1,851, or
16.56%, of Client B’s 11,175
dependents enrolled were ineligible; during the first four months following the
implementation of PPACA regulations, the ContinuousHealth ongoing dependent
eligibility verification audit found 549, or 30.57%, of the 1,796 newly
enrolled dependents to be ineligible for the new policy. This number was nearly
double the findings of the original project, when the eligibility criteria were
more stringent. Throughout the whole 2011 year, ineligible numbers came down,
but were still considerably higher than the findings of the initial project, as
between January and December 2011, ContinuousHealth identified that 26.84% of
dependents did not meet the requirements to verify their eligibility for the
plan. With the change in plan requirements under PPACA, Client B regularly found an increased rate of ineligibility by
between ten and fourteen percent.
Client
C is a major automotive manufacturing
company with a non-grandfathered plan and a February plan renewal. The company began verifying for new
categories in mid-February. Prior to
health care reform provisions, the Dependent Eligibility Verification Audit identified
10.55% of enrolled dependents as ineligible.
After enacting the Age 26 requirement
and removing a residential requirement for stepchildren, the Ongoing Dependent
Eligibility Verification found that 27.91% of new enrollees were ineligible
during the first four months of PPACA.
For the 2011 year, Continuoushealth identified 24.1% of dependents on
the plan were ineligible for coverage, a slight drop from the first few
months. Overall, Client C has found an increase of more than double the rate of
ineligibles since PPACA.
Client
D is a large hospital management system
with 15 localized hospitals. The
management system did a Dependent Eligibility Verification Audit in 2010, prior
to implementing health care reform at their July 1, 2011 plan renewal, with 13
of its 15 hospitals. The two hospitals who did not participate initially were
both located in Massachusetts and were excluded because they were covered under
“RomneyCare,” a set of provisions that representatives of President Obama have
cited as a model for PPACA[1]
and which have been called an “ObamaCare preview.”[2]
After the leadership team reviewed the
results from the initial verification, the two hospitals in Massachusetts
decided to undergo a ContinuousHealth Dependent Eligibility Verification Audit
as well. The results were comparable with their non-Massachusetts counterparts: the original verification found 10.1%
ineligibles for hospitals that were not yet subject to PPACA; one Massachusetts
hospital discovered that 6.34% of dependents were ineligible and the other
found 9.64% of dependents were ineligible under the current plan guidelines.[3]
After the first plan renewal for the
entire system under PPACA (7/1/2011), leadership requested that all hospitals
undergo another dependent eligibility review.
The hospitals all had similar plan eligibility, all non-grandfathered
with no spousal exclusions or surcharges. During that post-PPACA review in fall
of 2011, ContinuousHealth identified 21.01% of the active dependents on the
plan were unable to satisfy eligibility requirements. Specifically, the two
hospitals in Massachusetts each found 10.29% and 16.19% ineligible during the
second review. All hospitals saw an increase in ineligible dependents. The
post-PPACA verification savings for Client
D totaled more than $5 million in claims cost reduction.
Client
E is a national restaurant chain with
hourly and salaried employees throughout the US. At the time of review, Client E had been following PPACA
guidelines for 12 months. The Human Resources team systematically requested
documentation for any new enrollees, but the client had not done full
documentation verification. ContinuousHealth identified 6.08% of the plan
participants were ineligible for coverage under the non-grandfathered plan
guidelines. Ineligible dependents were primarily over the age of 18 years old
and may have been added on the plan as “spouses” or “adult children,” though
they were, in fact, unable to verify their eligibility as such.
Client
A
|
Client B
|
Client
C
|
Client
D
|
Client
E
|
|
Industry
|
Transportation / Manufacturing
|
National Retail Chain
|
Automotive Manufacturing
|
Hospital Management System - 15
hospitals
|
National Restaurant Chain
|
# Dependents
|
350
|
11,000+
|
3,500
|
17,000+
|
1,300
|
Grandfathered or
Non-Grandfathered
|
Non-grandfathered
|
Grandfathered:
Adult Children eligible for own employers’ plans were ineligible
|
Non-grandfathered
|
Non-Grandfathered;
2 Hospitals under “RomneyCare”
|
Non-Grandfathered
|
First Plan Renewal
|
9/1/2011, but implemented on 9/1/2010;
Age 26 compliant for 4 months at
verification start
|
2/1/2011;
started verifying for HCR in mid-January
|
2/2011;
started verifying for HCR in
mid-February
|
7/1/2011
|
1/1/2011
|
Results
|
14.5% of dependents were ineligible,
far higher than leadership expected
|
· 20% increase in Open
Enrollment numbers
· Original project in
2009-2010 found 16.56% of 11,175 dependents were ineligible
· First 4 months of
PPACA showed that 30.57% of the 1,796 newly enrolled were ineligible
· 2011 showed that
26.84% of the 2,724 newly enrolled were ineligible
|
· Original DEVA found
10.55% of enrolled were ineligible
· Post-HCR DEVA found
27.91% of new enrollees were ineligible
· 2011 showed 24.1% of
the 1,229 newly enrolled were ineligible
|
· Initial
project: 10.1% ineligibles
· 2 “Romneycare” hospitals
excluded from initial verification did a DEVA after seeing other 13
hospitals’ results
· Results were
comparable: RomneyCare project: 6.34%
ineligibles in one and 9.64% in the other
· Post-PPACA found
21.01% ineligible overall
|
· Identified 6.08% of
active dependents were ineligible
|
Financial Exposure
Reduction
|
Over $184,960
|
· Original
project: $4,995,000
· First 4 months of
PPACA: $1,482,300
· 2011 verification: $1,462,000 (with a decrease in claims
cost)
|
· Original
project: $1,114,345
· First 4 months of
PPACA: $1,500,442
· 2011: $929,144
|
Total savings: $4,165,246
|
Total savings: $262,833
|
[1]
Carol E. Lee, “White House Again Jabs Romney on Health Law,” Washington Wire,
Wall Street Journal, http://blogs.wsj.com/washwire/2011/05/13/white-house-again-jabs-romney-on-health-law,
(May 17, 2011).
[2]
“National Health Preview: RomneyCare’s
bad outcomes keep coming,” Wall Street Journal, http://online.wsj.com/article/SB10001424052748703864204576313370527615288.html?KEYWORDS=national+health+preview+romneycare,
(May 10, 2011).
[3]
The hospitals from the original verification were also not doing document
checks, while the two Massachusetts hospitals believed their employee document
records were up to date, checking student status as well as IRS dependency, per
their SPD.
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