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National Healthcare Reform

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Presentation on theme: "National Healthcare Reform"— Presentation transcript:

1 National Healthcare Reform
Impact on Vision Providers November 2010

2 Reform in Review President signed H.R into law on March 23rd. (Patient Protection and Affordable Care Act - PPACA) President signed H.R into law on March 30th. (Healthcare and Education Reconciliation Act) Parts of legislation scheduled to roll out yearly between 2010 and 2019.

3 Reform in Review What is included What is not included
Coverage Expansion Coverage expansion to 32M additional $940B est. Individual Mandate Requires all citizens have health insurance beginning 2014 Employer Responsibilities No employer mandate for employer w/under 200 employees but… Employers w/+50 employees assessed a penalty if any employees receive premium credit through an exchange Must auto enroll employees who do not select or opt out Delivery System Reforms Revenue Provisions What is not included Cost containment Employer Mandates Tort Reform/Liability Protection Individual Mandate Financial penalty starts at $95 per person in 2014 and rises to $750 per person by 2016 Penalties will be indexed for inflation after 2016. Employer Responsibilities Survey by Crain Communications shows that about 8% of employers currently offering coverage will discontinue and send employees to the exchanges. Cost Containment CMS’ chief actuary believes that national health expenditures will increase from 17% of GDP to 21 % under the new law. Tort Reform Congressional Budget Office estimates that if reform similar to Texas was passed would save more than $54 Billion over 10 years Mostly due to reduction of defensive medicine

4 Coverage Expansions Public Program Expansions
Medicaid eligibility up to 133% of FPL States prohibited from reducing current benefit levels to offset cost of additional members High risk pools Medicare “Improvements” Plug donut hole in Part D State Exchanges

5 State Exchanges Stand alone vision not a mandated inclusion
Probable that they may be included at state’s option Separate exchanges for individuals and employer groups Administration must be self sustaining thru state “assessments” Standard sets of benefits States taking the position that they can include other coverage unless Fed specifically disallows.

6 Delivery System Reforms
Requirements for Transparency Healthcare costs Medical loss ratio 85% for large group/80% for small group and individual Reporting begins 2010/Rebates begin 2011 Premium review Administrative simplification Development and use of uniform explanation of coverage documents Development of standardized definitions

7 Delivery System Reforms
Consumer protections Choice of primary care provider Mandatory coverage of ER visits w/out prior authorization Federally defined “minimum qualified” coverage (Sept provisions) No cost sharing for preventive services No denial of coverage based on pre-existing conditions No life time or annual limits Extend dependent coverage to age 26

8 Revenue Provisions Reduce pharma payments & increase access to generics Reduce Medicare/Medicaid fraud Reduce hospital readmissions through bundled payments under Medicare Assessments on RX drug manufacturers, medical device manufactures, health insurance companies, and diagnostic labs Expand P4P programs Excise tax on “Cadillac” health plans (2018) Medicare surtax on “upper income” citizens (2013) Additional penalties on non-medical HSA/HRA withdrawals (2011) Increase threshold for itemized medical deductions from 7.5% to 10% of income (2013) Sin taxes (indoor tanning 2010) Reduce Medicare Advantage funding

9 Revenue Provisions

10 Impact on Vision Provider non-discrimination provision (Section 2706) Enhanced vision coverage through “pediatric vision exam requirement” (2014) Vision exam but not eyewear will be a mandate coverage for children under 18 2.3% medical device tax beginning 2013 Specifically excludes eyeglass and contact lenses Value of stand alone vision plans not included in calculation of “Cadillac” coverage (2018) Dilate optometric scope of practice Scope of Practice Predicted shortage of GPs and Internests If 30 Mill new members are added to the health system, it will require 15,000 more GPs. Currently only about 1,000 GPs graduate annually. Optometrists one of groups target to help fill gaps

11 Impact on Vision Limit on FSA contribution (2013)
OTC products no longer an allowable expense for HSA or FSA spending (2011) Contact lenses, solutions, readers, and refractive surgery still allowed Limit on FSA contribution (2013) SCHIP programs maintained thru 2019 Exchanges and “Cadillac” tax likely to accelerate adoption of HDHPs HDHP members w/ HSA, HRA or limited FSA show higher than average rate of vision care use Accelerated health plan consolidation Reduced vision coverage under Medicare Advantage plans HSA/HRA/FSA HSA – money belongs to employee. IRS defines what qualifies. HRA – money belongs to employer. Employer can define what qualifies Limited FSA – Coupled with HSA or HRA; can be used on dental and vision only FSA Changes/Limits 33 Million workers had FSAs in 2010 60% of FSA accounts were exhausted by end of April Promote use of FSA $s earlier in year – don’t wait until end of year!!! In 2013 limit will be $2,500. Currently no legal limit. Limits set by employers. Accelerated Consolidation Larger organizations better able to drive efficiency 2011 changes in capital gains tax Examples: United’s purchase of Health Net and Principal Financial’s heath business Could result in downward pressure on reimbursement $s. Medicare Advantage Plans Advantage HMO plans likely to survive Most PPO and PFFS plans will suffer

12 Medicare Advantage Enhancements
Share of Medicare Advantage Plans with Selected Extra Benefits 2010 Vision exams - 86% Hearing tests - 65% Worldwide coverage - 62% Preventive dental - 55% Extra podiatry benefits - 47% Extra chiropractic benefits - 34% Some transportation - 14% Part B premium rebate - 6% Source: Medicare Advantage 2010 Data Spotlight, Kaiser Family Foundation

13 Accountable Care Organizations
Medicare demo project In 2012 providers will be allowed to organized as ACOs Must be led by physicians or hospitals Must manage full spectrum of care “Accountable” for the overall cost and quality of care for a defined patient population Must follow clinical guidelines and have quality measured continuously Must provide care across all care settings

14 Accountable Care Organizations
Four organization models Network Organized Medical Group Hospital Collaborative Two reimbursement models Total risk model Shared savings model

15 Accountable Care Organizations
Key strategies Integrate care management and engage patient Identify preventable events Reconfigure care to reduce, waste, and harm to patient Anticipate impacts include Accelerate hospitals’ employment of physicians Accelerate clinical integration Reduce private practice delivery options

16 Impact on ECP as Small Employer
Small Business Tax Credit 35% tax credit of health care premiums Fewer than 25 employees Average wages of less than $50K Employer must pay 50% or greater of employee only premium cost Can include cost of dental and vision premiums Available 2010 thru 2013 Advise to talk with a benefits consultant Wellness Program Grants Fewer than 100 employees Program must not have existed prior to 3/23/10 Small Business Tax Credit Generating increase of small businesses offering insurance – 59% in 2011 vs. 46% in 2010 Wellness Grants HHS to award up to $200 million for a five year period beginning 2011.

17 Impact on ECP as Small Employer
Exchanges (2014) Small Business Health Options Program (SHOP) Run by state Available to employers with up to 100 FT employees After 2017 may also be opened to larger employers

18 Impact on ECP as Small Employer
1099 Filing Requirement (2012) Must file a 1099 form with IRS for any vendor from whom you purchase property or services worth $600 or more during the calendar year Projected to raise $17.1 Bill over 10 years

19 What Next? – Implementation!
Varying interpretations Promulgation of rules through multiple agencies Stakeholder advocacy will continue at federal and state agency level Public comment periods Question of agency authority to address Items beyond agency authority will require additional legislation to fix Compliance enforcement Enforcement HHS currently envisions enforcement being handled at the state level. However, states do not normally have authority to enforce federal legislation. 2010 Election Results Unlikely to repeal law – Obama veto power Most difficult to roll back portions already enacted Can Federal Level - Require hearings Stall funding to HHS State Level – Limit scope of exchanges Impede expansion of Medicaid Join legal challenges

20 2010 Elections Impact? Total repeal unlikely Federal Level Action
Obama veto power Portions already enacted Federal Level Action Require multiple hearings Stall funding Adjustments 1099 requirement Definition of grandfathered plans Delay Medicare Advantage cuts State Level Action Limit scope of exchanges Impede expansion of Medicaid Drop out of Federal Medicaid/SCHIP program Join legal challenges

21 Prepare Now! Stay alert to developments nationally and locally
Contact local ASOs and other integrated care organizations for inclusion Express opinions and concerns to your elected representatives Work with industry advocacy groups Advocacy is Key to Promote Quality Vision Care If you don’t tell your story, someone else will tell it for you!

22 Prepare Now! Consult with your business professionals
Accountant Benefits consultant Update your practice Delegate to staff so you can practice to the full scope of licensure Adopt an EHR Develop an effective, professional web site Align with strong business partners such as Essilor EHR Needed for efficient co-management Need for ACO or other integrated model participation Prices have come down

23 The Essilor Partnership
Essilor and IHMS Commitment - Supporting the Eye Care Professional Grow Your Business Employer strategy Other strategies Run Your Business Provide Managed Care expertise

24 Essilor’s Traditional Focus
LAB ECPs /Retailers CONSUMERS Like most lens manufacturers, our traditional focus was on the lab and ECPs LENS FRAMES

25 Dental/Vision Plan Combo
Expanded View Large Self-Funded Medium/Small (Broker) EMPLOYER/PURCHASER Business Coalition/ Affiliations Government Health Insurers ( HMO / PPO ) Consumers: Members & Workers Vision Plan Dental/Vision Plan Combo We recognized we needed to dilate our scope of influence because decisions regarding vision were being made “upstream” where we had no “voice”. So Essilor made a commitment to invest in a new division that had the expertise to go “upstream” and influence decision makers at a whole new level. But we had to create a value proposition with these new players…we had to create a mutual purpose between employers and the eye care professional. That mutual purpose is reducing overall health care utilization by positioning the eye exam as an innovative wellness tactic. LAB ECPs LENS FRAMES

26 Director - Cross-Channel
The IHMS Team Steve Nussbaumer VP IHMS Barbara Heffez-Piper Director - Cross-Channel Operations Terri Nesrsta Regional Director- Central Gail Tarantino Director- West Jessica Sumner Assistant Colleen Gelb Plan Specialist Optum Health Superior Vision Opticare Mike Monaco Director- East Maria Barnwell Director-Business Development Raphael Varisella VSP CompBenefits Christelle Broize Project Manager Alyssa Baker EyeMed Avesis VBA Red Solosko Director-Marketing EyeMed Humana (CompBenefits) VBA Advantica Medicare / Medicaid VSP Superior Vision Anthem BCBS (WellPoint) Optum Health (Spectera) Davis Vision Avesis Vision NVA Opticare Medicare / Medicaid Military Kaiser Employer initiatives Strategic Accounts Kristie Miller Marketing Manager Matt Wood Marketing Associate So IHMS was created….describe members etc… Steven Fales Marketing ssociate

27 Employer Program What They Want? Reduced healthcare costs
99.4% of top decision makers are concerned with the impact of health care costs (2010 UBA Employer Opinion Survey) Tactics employed Minimize employee health risk Shift costs to employee 80% will spend money on health promotion and wellness in 2011 Majority express frustration with the ROI Desire to increase employee engagement rates So What? Opportunity to leverage Vision Care as a program that: Increases employee engagement, Improves health outcomes Reduces healthcare utilization We’ve spent the past 2.5 years in the “customer development” process surveying and researching what employers want and need. Every employer is now in the “healthcare” business because it impacts their bottom line and top line so significantly. We were tasked with creating a mutual purpose that would engage and energize the employer to work with ECPs and to rethink their current process as it relates to health and wellness. So here is what we found… Employers want reduced healthcare utilization, they want early intervention so their employees are less sick, they want support from suppliers---they don’t just want to purchase a vision care plan service, they want administrative support to frequently engage employees and to implement programs that will increase utilization of preventive care services. 80% of employers surveyed will be purchasing a wellness program in 2011…even though they find it hard to develop a solid ROI. Employers also want help increasing employee engagement in prevention and wellness programs… We have found that positioning the the eye exam as an innovative wellness tactic can do just that… Government data indicates that 3.6 times more people get an eye exam each year than a general medical exam…99 million people visited the eye doctor in 2006… So what does that mean? M.Barnwell2008 27

28 What is the Employer Program?
A strategy that ties the eye exam to reduced health care costs and risks Provides frequent and direct messaging to large pools of people Grows utilization of eye exam and hardware DISCUSS “HOW” IF NECESSARY HOW: We use the same metrics mainstream health care uses. We collect administrative, clinical and financial metrics. As an example: document ECP referrals to primary care; Employer arena is important…46% of US Adults obtain health insurance through Employers The market is changing at an exponential rate…we need to evolve and leverage… What does it provide? Frequent and directed eye health messaging with incentives, but it also repositions the eye exam under wellness and prevention. So what are some of the tactics Essilor is employing now to grow the vision care market and promote the independent optometric community? M.Barnwell2008 28

29 Health Fair Program 2008-2009 100 Events Attended
200k+ Employees Impacted 10 Trade Shows Attended 100K One of the tactics in the employer program is direct to employee messaging… Over the past 2 years participated in over 150 health fairs within major employers across the US. Impacted over 200K people. Goal to drive employees to the ECP and fill the exam lane with educated consumers. We welcome partnering with area ECPs in these events…

30 Vision Wellness Brochures
What: A set of 6 topical (vision-related) information sheets you can use to build interest and initiate a dialogue on vision coverage with a target employer Topics: Vision & the Aging Workforce Vision for a Healthy Workplace Eye Safety at Work and Play The Road to Better Health Vision Disorders in Children Computer Vision Syndrome Another tactic is Broker education We have created a Vision Wellness Brochure that speak to 6 general topics and the solutions that Vision Care Plans can offer through Essilor. Each piece has 2-side to it. On the front side it talks about the issue. On the back side, it talks about case study that substantiate the benefit of the solution.

31 CUSTOM Logo
educating the employer benefit manager: providing tools for Brokers to use as they work with employers. This micro site provides a tutorial with an incentive for brokers to use with benefit managers. The tutorial provides a question answer format that ties the value of vision to over all healthcare. Example: Where do employers spend more money? Eye and vision disorders, Breast cancer, Lung cancer or HIV? The answer is Eye and vision disorders.

32 Think About Your Eyes Direct to consumer messaging – importance of comprehensive eye exams TV, radio, online and social media communications 2 year campaign Focused on nine cities – New York, Los Angeles, Chicago, Denver, Atlanta, Houston, Sacramento, Cincinnati, and Portland To date has generated more than million impressions. Educating the general consumer: In partnership with the Foundation for Eye Health Awareness, VSP Global and Luxottica Group Adds encourage consumers to visit to learn more about healthy vision and to schedule an eye exam using the eyecare professional locator tool.

33 Think About Your Eyes Events
New York – May 24-30, 2010 Chicago – July 19-25, 2010

34 Essilor Vision Foundation
A public charity whose mission is to eliminate poor vision and its lifelong consequences starting with children Provides free eye exams and new prescription eyewear through in-school and partnership programs to children who cannot get them otherwise Educates parents, teachers, caregivers, and community leaders to be aware of the implications of poor vision and watch for signs of vision problems in children Educates children on importance of vision care and proper care for eyewear

35 Hot Off the Presses 62% higher
“A Path to Wellness” – A white paper by KDD Health Solutions Analyzed 3 years of medical claims for a company of 10,000 employees & dependents But of all the messaging tactics we developed, we recognized that nothing would be more important in getting the attention of the CFO or the benefit manager than creating a correlation between the eye exam, the eye doctor and reduced healthcare costs… So in 2008, we began analyzing claims data from a large employer with 10,000 covered lives…we focused on the high risk population of individuals with diabetes and hypertension. Historically, these folks have extremely high utilization of healthcare resources… What we found was very interesting…those high risk individuals not having an eye exam cost 62% more than those high risk individuals who did have an eye exam…Now granted, this is correlation not causation. But the fact is that people getting an eye exam were less sick and spent less time in the hospital. This could be for several reasons: It could just be that those getting an eye exam take better care of themselves—or very likely, those getting an eye exam were referred for additional care—by their ECP—and got early interventional preventive care. We know one thing for sure. The eye exam is a marker for better health status. Our next steps include trying to prove “causation” but that will require at least 100K lives…. 62% higher

36 Strategies For Sustainable Environment
Assistance to Run Your Business thru: Managed Care Plan Expertise Webinar Training So, We have been discussing one strategy to grow your business—the employer program… We also have a strategy to help you Run your business… This strategy includes extensive understanding of the various vision care plans and how to enhance profitability through our webinar training programs

37 Run Your Business Practice Assessment Development to:
Increase Capture Rate and Traffic Reaching out to new customers Internet presence Retaining current customers Increase Practice Profitability Dispensing techniques Staff training on plans Pricing strategy Frame board optimization Report Trend Analysis Specifically, we provide a practice assessment that will do the following…

38 Conclusion Managed care will continue to be highly important to independent optometry Healthcare reform will keep things “exciting” for the foreseeable future Recommendation: Find the right advisors to partner with during this turbulent time, and STICK WITH THEM.

39 For more information please contact your Essilor Sales Rep or:
Matt Swartz District Sales Manager (480) For more information please contact your Essilor Sales Rep or: Ken Allmer (801) Terri Nesrsta (214)

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