Healthcare Options for Small Businesses are Limited until 2015

The Obama administration recently verified that part of the 2010 health-care law geared toward helping small businesses offer insurance to their employees will be pushed off by a year.

The department overseeing Medicaid and Medicare announced that the launch of the federal SHOP Exchange, an online marketplace where businesses with less than 50 workers would be able to buy insurance for their employees and get a tax credit, would be on track for Oct. 1. However, the initial expectation that employees would be able to choose from a variety of plans has been quelled as they will only have one option for a plan. The full selection of healthcare plan options won’t be available until 2015.

The postponement recommended earlier in the year upset some business supporters and provoked questions about whether the administration was lagging on the implementation of the healthcare law.

While large companies will be obligated to provide insurance starting next year under the law, it will be optional for those with less than 50 employees. John Arensmeyer, head of the Small Business Majority, an advocacy group that supports the health law, said the news would probably deter some companies from offering insurance to their employees.

States that already established their own health insurance exchanges won’t be impacted by the delay.

Health Care Reform Will Lead to Stricter Workplace Wellness Programs and Harsher Penalties

The Obama administration recently announced the final rules on employee wellness programs under the Affordable Care Act (ACA). The U.S. Department of Health and Human Services issued the regulations, which were enacted under the ACA on May 29. The program allows employers to increase the incentives they give workers to get them into a wellness program or other means of promoting healthier choices and behavior. It supports workplace health encouragement and deterrence as a way to decrease chronic sickness, better health, and regulate growth of health care costs while making sure workers are safe from unfair underwriting methods that could lessen benefits based on health status.

Employers also get clarity on applying penalties for unhealthy employees. Under the new regulations, employers have greater flexibility to charge higher premiums to workers who do not meet certain health goals.

According to a recent survey by the Midwest Business Group on Health, more than 80% of the country’s biggest employers are looking to implement a penalty and reward system to encourage their workers to get healthy.

The rules support “participatory wellness programs,” which are typically accessible no matter the individual’s health status. Included are programs that compensate employees for the cost of membership to a gym or fitness center, rewards for those who attend a free monthly health education meeting or who undergo a health risk assessment.

The final rules protect users by demanding that health-contingent wellness programs be logically planned, equally available to all similarly situated people, and that they accommodate suggestions made at any time by an individual’s doctor founded on medical appropriateness.

Due partially to the ACA, 82% of almost 100 global and national businesses are lowering premiums and offering gift cards for healthy living or charging higher co-payments and fees for poor health choices like smoking. The final rules will go into effect starting on or after Jan. 1, 2014

Read the official news release from the U.S. Department of Health & Human Services here: http://www.hhs.gov/news/press/2013pres/05/20130529a.html

Employers Cut Back on Generous Health Plans

According to a recent New York Times article, companies that offer high-end health plans are scaling back benefits to employees. This is because of a so-called Cadillac tax, which penalizes companies that offer these sorts of plans. The purpose of the tax is to discourage employers from plans that shield employees from the high costs of healthcare and can lead to excessive and unnecessary medical procedures. The tax is highly controversial, but intended for employers to consider long-term healthcare cost control.

Companies that are scaling back their health plans are going to be looking to control their business costs in other ways as well. One way to do that is through invoice factoring, which is the sale of unpaid invoices for cash advances. Proper cash flow is a step in the right direction for companies struggling to meet healthcare reform requirements, and could be a blessing amidst the current uncertainty.

The Myths about Obamacare and Small Business

The opposition to the Patient Protection and Affordable Care Act (PPACA) often falls back on the argument that says health care reform will hurt small businesses. However, according to a CNN Money article, new research indicates that this argument is overblown and only a tiny fraction of businesses will be affected by the 2014 provisions.

Out of 5.9 million small businesses, defined as businesses below 500 employees, 97% have below fifty full-time employees; therefore, healthcare reform only affects 3% of small business, or 200,000 companies. Out of those 200,000 companies, 97% already offer insurance. Although detractors claim that their insurance policies could still be penalized, new research from the University of Chicago says that more than 99% of the existing insurance policies will be acceptable under the PPACA.

All told, that leaves a tiny fraction of small businesses that will have to change their policies under health care reform. So while it may be tricky for these few companies, to say that Obamacare will harm small business is a stretch.

Nursing Aide Staffing Shortages- Are Occupational Injuries to Blame?

As we pointed out in our last post, skilled care facilities are facing a growing shortage of nursing aides. A number of factors contribute to the high turnover rates, but chief among them may be the high rates of injury among the aides.

Nursing aides have a very physical job, and must work long shifts on their feet and lift willing and unwilling patients regularly. Nursing aides say that they are often required to look after more patients than they can safely handle—on average, one aide for every ten patients. A telling statistic is that nursing aides suffer more occupational injuries than construction or factory workers.

The high number of injuries leads to a high turnover rate—between 34-75% of nursing aides turn over every year. This is costing the industry much, about $6.3 billion a year, in terms of hiring and training new workers, and experts say the costs could be reduced if better working conditions were implemented.

Nursing Home Staffing Faces Shortages as Population Ages

According to a recent article appearing in the Wall Street Journal, a worsening labor shortage in the care of the elderly is hitting the country just as older generations need help most. Looming retirements in the current labor force, of which one-fifth is over 55, is also a big concern of skilled care facilities and home-care agencies. The three major reasons for the staffing shortage are:

1. Low pay: The median pay for nursing aides is $11.74, almost $5 less than the national average of all occupations at $16.71. Some nursing aides start hourly at barely above minimum wage. Nursing home operators say that while they would like to increase pay, recent cuts in Medicare and Medicaid reimbursements make it impossible to do so.

2. High injury rates: Occupational injury rates for nursing home aides are higher than that for factory and construction workers—almost double the yearly rate. Back injuries are prevalent as their duties include lifting patients out of bed, and they are often are bitten, kicked, and spat upon by residents with dementia.

3. Draining work: According to nursing aides, as the shortage continues they are asked to work more hours and care for more patients than they can handle. Industry turnover is high at 43%-75%, compared to other health occupation turnover at 28%.

This story is important for factors and brokers to know about because skilled care facilities and home care facilities, prime factoring clients, are going to face cash flow shortages. Government agencies are giving less money back and facilities need more employees to cover the shortage, a combination which means a shortage of cash. Factoring companies are in a position to help these institutions through this tough time and ensure that the elderly are always cared for.

The Future of Medical Transcription Under Obamacare

In 2010, the U.S. Department of Health and Human Services (HHS) introduced measures that lay a groundwork for the widespread adoption of electronic medical records (EMR) within medical institutions. Electronic medical records are a digital files containing health information about patients that are typically filled out by doctors.

With these electronic medical records now mandated by Obamacare, does that leave any room for flesh and blood medical transcriptionists? Medical transcription is the process of converting voice-recorded reports dictated by healthcare professionals into text format. The transcription industry has faced threats before, such as outsourcing and voice recognition software, but the mandated EMRs are likely to reshape the whole transcription industry.

Almost everyone agrees that completely electronic records will never eradicate the need for medical transcription. Instead, experts say that future transcriptionists will simply need to augment their existing skill set with new EMR structure knowledge. The job will evolve with technology, just like every other industry must.  Accurate health documentation is a must, and the human touch is still needed when it comes to doing so.

For more information, see How EMR is Going to Affect Medical Transcription Industry

Some Call for Medical Billing Act

Medical billing is a complex process, and like anything that involves money and credit it is sometimes controversial. While no one likes getting a medical bill, but sometimes it is even worse than that and customers are left with ruined credit over procedures and charges they don’t even remember incurring. Credit advocate Call 12 for Action is currently investigating medical billing issues, and are pursuing legislation that would treat medical billing the same as credit card billing. Credit card billing has the The Fair Credit and Billing Act, a strong consumer protection law that gives customers rights when disputing bills.

A big problem with current medical billing is that unpaid bills are sometimes reported to credit agencies before they have a chance to be paid or while being processed by insurance. Therefore, a current bill that Call 12 for Action is backing is the Debt Responsibility Act, introduced by Senator Jeff Merkley, D-Ore, which would prohibit credit-reporting agencies from using paid or settled debts to determine credit ratings.

A reformed billing process might cause cash flow issues for medical providers, and that’s where factoring comes in. Medical factors solve cash flow issues for facilities that need it, and if the bill passes then medical providers might just need it.

For the full article, see Credit Advocates Calls for Medical-Billing Act

The Effects of Sequestration

With just days until March 1st, sequestration is on the forefront of most working people’s minds. Due to the failure of the government to come to a workable agreement on spending cuts, automatic across-the-board cuts are scheduled to come into effect two days from now. Many government programs and jobs will be impacted, as well as the businesses that work directly and indirectly with them. While exemptions from the cuts do exist, sequestration will have far reaching implications for industries like healthcare as well as business in general.

Sequestration and Healthcare

The healthcare industry has a lot to potentially lose from the $85 billion spending reduction due on March 1st. While Medicare cuts have been restricted to no more than 2% of the budget (unlike most programs at 4% or more), healthcare experts say that the cuts will cost the industry over 200,000 jobs. Government officials say that coverage for those under Medicare will not change, but providers like hospitals are facing a potential 27.4% reduction in Medicare reimbursement. This puts them in a tough financial position– hence the job losses. The largest share of provider cuts goes to hospital inpatient care, at 32%, while group plans, outpatient care, home health agencies and skilled nursing facilities make up the brunt of the rest.

Certain portions of Medicare are exempt from cuts, such as the Part D low income subsidies, catastrophic subsidies, and Qualified Individual premiums. Medicaid and Social Security are exempt completely.

Sequestration and Business

While healthcare looks to be impacted greatly, business in general will be hurting even more so. George Mason University economist Dr. Stephen Fuller estimates that in 2013 alone, sequestration will put 2.14 million jobs at risk. This includes over 950,000 small business jobs from government supplier companies as well as mom-and-pop stores that deal indirectly with government contracts. Companies with 500 employees or less are facing up to 45% of job losses in the coming year. He also predicts a decrease in personal earnings of $109.4 billion as well as a GDP reduction of $215 billion. In an already struggling economy, this bodes ill for the coming months and years.

Specific Effects

Here are some examples of how sequestration will affect specific industries:

Defense: The active military remains untouched, however, civilian Defense Department pay is expected to decrease by around 20%. 46,000 temporary and term workers will be laid off, and furloughs will affect the rest. Defense Secretary Leon Panetta has said that national security could be harmed as a result.

Education: Special Education grants and Head Start funding will be reduced, as well as federal child care assistance. Thousands of teachers, aides, and speech therapists will be affected, and low income children are expected to suffer the most damage. For higher education, federal financial aid programs such as work-study will be cut by about 8.2%.

Air Travel: Federal Aviation Administration employees would be furloughed by 11 days, hampering air travel around the country as less air traffic controllers and technicians will be on duty. Security will also be affected, and wait times could increase dramatically.

Housing: Low-income families could potentially lose 125,000 housing choice vouchers, and about 100,000 formerly homeless people will lose their current housing and go to the streets once again. Foreclosure prevention advice will also decrease as HUD counseling grants will be reduced by 75,000 families.

Conclusion

Without some sort of bipartisan miracle in the next couple of days, sequestration will soon become a reality. The meat cleaver approach seems like an inefficient way to reduce spending, but hopefully it will serve as a wakeup call for the government to put aside differences in order to do what’s best for the country. Businesses should do what they always do in tough times- prepare for the worst while hoping for the best. After all, one thing that can never be “cut” is the indomitable American spirit of enterprise.

Health Data Going Digital, Industry Capitalizing

As hospitals slowly figure out how to make new digital health records work, companies that sell the systems are raking in the profits. Since the passage of the economic stimulus bill in 2009 that included health records legislation, large companies that lobbied for the provision have been hugely successful.

Opinion on the records systems themselves is split. Fans of the digitization argue that the system makes it easier to prescribe medications electronically and will end up saving hospitals money and improving care. Detractors, however, say that the systems are difficult to use, do not share information with other systems, and can increase the time doctors spend doing documentation that could otherwise be used with patients.

Factoring companies or brokers who deal with the medical industry should take notice of this new trend, as change in any industry has cash flow implications across the board.

For the full article, see  A Digital Shift on Health Data Swells Profits in an Industry

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