In just 18 months, the final provisions of the Patient Protection and Affordable Care Act (PPACA) go into effect, chief among them a mandate that every American without health insurance obtain it, a tax on employers who do not provide it, and a requirement that insurance companies provide health coverage to anyone, regardless of pre-existing conditions, at the same cost.
If that law ended there and was set in stone, it would be a tight deadline for insurers to prepare for a sea change in the way they do business. But the law goes far beyond this, changing everything from Medicare funding to what private insurance plans cover to the profit insurance companies can make.
And planning for this has only just begun.
A Trip Without a Destination
“This is a 2,000-page law and virtually every single page changes how our industry does business,” says Robert Zirkelbach, vice president of strategic communications at America’s Health Insurance Plans (AHIP), the insurers’ trade association. “So there’s a tremendous amount of work that needs to be done. On one hand there is the effort it takes to implement the regulations [that are already in effect]. On the other hand, there is a lot of work to be done to plan for the larger regulations coming online in the next couple of years.”
These changes require new regulations to be issued by the Department of Health and Human Services (HHS). “There’s a lot of uncertainty because the rules and regulations governing plans haven’t been finalized yet,” says Zirkelbach.
The biggest uncertainty hanging over insurance companies’ heads is the Supreme Court, which is expected to rule sometime this month on whether key elements of the PPACA — notably the individual mandate requiring the uninsured to buy coverage — are unconstitutional. Based on the Justices’ comments when the case was heard in March, many experts expect that to be struck down.
That said, most companies are going ahead as if the law will be upheld, says David Nickelson, vice president of client services, business loyalty, for Minneapolis-based Aimia (formerly Carlson Marketing), a leading meeting planning firm. “There is not a lot of clarity around what the Supreme Court will allow to stand,” he adds. “For me, the better part of valor is preparing as if the law will be upheld.”
For insurance companies, that means a lot of meetings.
“The smart companies have put their strategy meetings together internally and are starting to think about … how this is going to affect their financials and their insurance products,” Nickelson says. “If they are really good at their strategic implementation then they are likely having the next level of meetings with the folks who run their IT systems and help with other support and compliance activities. They’re going to need to talk to their sales forces about the new products they’re going to provide and how to do that. I don’t see them committing to a series of resource investments like meetings until they’ve got a little more clarity.”
As soon as the court provides that clarity, he predicts, “there’s going to be a series of big, industry-wide conferences comprised of insurance executives, health care providers, lawyers, and health systems executives offering guidance about what this means.”
Sunshine Act Tracking
Pharmaceutical companies have been generally supportive of the PPACA, as millions more Americans with insurance would mean enough new sales to offset reforms like
reduced Medicare reimbursement rates.
Where pharmaceutical and medical device manufacturers are seeing the biggest impact of health care reform are the Sunshine Act provisions included in the legislation. This will have a huge impact on meeting and conference organizers and planners, as it dramatically increases the amount of information they will have to track at any event at which a doctor attends or speaks, Nickelson says.
“It’s a very different kind of data collection [and] there’s very little guidance from the government on how to collect it,” he says. “There are a lot of requirements around the ways that we structure meetings, the kinds of incentives we use to bring physicians in, and the kinds of rewards and honoraria we provide.”
The information includes the name, business address, specialty, and national provider identifier of any attendees; the true market value of any payment or item of value provided; and the date, name of the product it is for, and payment type (e.g. cash, in-kind, stock).
The types of compensation of interest to the meetings industry are speaker fees, honoraria, gifts, entertainment, food, travel, and even direct compensation for serving as faculty or a speaker for a medical education program.
“No longer can you have a master bill that just says ‘Cocktails for 75, at the Ambassador room on May 5,’ ” Nickelson says. “You’re going to have to say which health care providers were there, the aggregate spend on each one of them, if they participated, [even] track time in and time out. That’s going to have to be provided to the pharma companies in a way that they can effectively put it into their database and transmit it back to the federal database.”
One result, he predicts, is that “we’re going to see pharma companies spend a little less, host fewer meetings, and perhaps less extravagant ones than in the past.”