It would be understandable if you are not aware of the Consolidated Appropriations Act. Your human resource department has other pressing priorities like hiring new employees and retaining old ones in a tight labor market, the pandemic, supply chain issues etc. That said, understanding the CAA is critical, because you have a new fiduciary responsibility equivalent to that of your company-sponsored retirement plan. It was not until corporate leaders faced lawsuits and fines related to their retirement plans that they fully realized the implications of related laws.
The risk is the same here, because organizations must comply. You can mitigate that risk by beginning your compliance efforts now. Under the new law, self-insured employers must understand the costs of health care, how consultants and brokers are paid, and disclose evidence of compliance to the appropriate federal agencies. Those who don’t comply could face fines and they could be sued by employees who are only too aware that healthcare costs are consuming their pay raises. Convert this risk into a benefit for your organization by using this act to empower transforming your health plan improve health and reduce healthcare costs.
Low-value healthcare has been a barrier to your success for too long. If your plan provides better health at lower cost, that will help you retain and hire the best people. The CAA can empower positive change because it requires transparency. You can see all plan financial date and deidentified patient information so that you can understand where your greatest financial and clinical problems exist in your health plan. A desire to avoid disruption has prevented exploring new options, but the CAA requirements support you in providing better health at lower cost. Finally, transparency requirements permit you to know your data in detail and to engage comprehensive solutions that can help you make progress.
The act requires knowledge of vendor compensation and commission arrangements. You can’t just depend on a trusted broker anymore—you must know. All vendor and broker arrangements must meet a test of value and reasonableness. Compliance will require changes in administrative and cultural practices. New processes are required to document decisions related to due diligence around selecting vendors and health plan providers. Duplicating the process for managing retirement plans is one way to begin.
Compliance with the CAA will involve some disruption. It will not be easy. There will be hard conversations, hurt feelings, and tough decisions. Changes are coming for executives and employees. Just remember the prize at the end of the process will be well worth it. Bring this new law to the attention your human resources leader and have the CFO partner with them to support and monitor progress
Health care costs will continue to increase under the current arrangements. The CAA is an opportunity for companies and leaders to improve health care benefits so that employees and the company finally realizes greater healthcare value. Change is hard and changing your approach to healthcare is challenging. At best, the CAA provides a stimulus to finally do the things that improve health and reduce costs. If that motivation is not sufficient, fines and legal consequences will likely follow.
Addressing the requirements of the CAA requires a comprehensive solution. We have been working with other stakeholders to make the right way the easy way. We can identify the twenty percent of patients who are generating 85% of healthcare costs. They have chronic conditions. We have brought together the new systems, new science, and new payment models to dramatically improve clinical and financial outcomes for these patients. We interact with third party administrators to digest clinical and financial data with total transparency. We can tell you which categories of disease represent the greatest opportunities to improve health and reduce costs. We have developed an IT platform to identify care gaps, provide a list to nurse coaches and case managers, and then close the gaps with provider partners. If you would like to know more, contact me. wbestermann@congruityhealth.com
Great post. The most important second order effect of CAA will be the required change in the way that employers/purchasers procure their healthcare services. Under the existing arrangement, employers rely upon agents and brokers to ‘procure’ health services from the existing BUCA offerings. This procurement strategy is inherently conflicted because of the way that brokers are paid for their services........commissions and contingent compensation received for the placement and retention of coverage with specific carriers. Plan fiduciaries now need to consider the fiduciary standard under CAA as the basis for considering procurement and terms. Employers and especially named fiduciaries will need to consult new informed ‘truth sources’ to help them with procurement. Further, employers will need to review their data, reporting and analytics to make appropriate buying decisions on behalf of their plan beneficiaries.