Archive for May, 2013

Administration Issues Improved Employer Wellness Regulations; Bigger Role for MDs; Opening for Drugs and Surgery?

May 30th, 2013

The Obama Administration has finally issued final regulations on employer wellness programs. Not only are they a significant improvement over the proposed regulations issued last November, they may provide a window for getting employers to pay for obesity drugs and surgery for appropriate employees.

The regulations are a big setback for big business. The Chamber of Commerce had lobbied for stacking, i.e. a process whereby failing a tobacco biometric, a 50% penalty, could be stacked with obesity, a 30% penalty, to equal an 80% penalty. They didn’t get it.

Instead, the Administration (consisting of three Departments, Labor, Health and Human Services and Treasury) cleaned up their earlier draft and made it much easier for persons with obesity and others with disabilities or medical problems to qualify for the reward in wellness programs.

The final regulations have re-structured employer wellness programs which may make them easier to understand. There are two broad categories. The first is “participatory wellness programs” with which most people are familiar. They involve gym membership, classes and modest ‘everyone-gets-a-tee-shirt-rewards’ for participating. The other type (now “types”) have gotten the lion’s share of attention. They are called “health-contingent wellness programs” and, although they do not always say so, everyone (all employees) or those who fail a certain health biometric (like Body Mass Index) must participate. Previously, this was just one group. Now, the feds have broken them into two groups but both are still mandatory “health-contingent wellness programs.” The first category is now called “activity-only wellness programs.” The second category is called “outcome-based wellness programs.”

Both activity-only wellness programs and outcome-based wellness programs must ensure that their plan: is reasonably designed to promote health or prevent disease; has a reasonable chance of improving the health of, or preventing disease in, participating individuals, is not overtly burdensome; is not a subterfuge for discriminating based on a health factor, and is not overtly suspect in the method chosen to promote health or prevent disease.

Activity-only wellness program is one where the individual is required to perform or complete an activity related to a health factor in order to obtain a reward. They do not require an individual to attain or maintain a specific health outcome. Examples include walking, diet or exercise programs. Since some individuals may have difficulty in participating to achieve the award, these individuals must be given a reasonable opportunity to qualify for the reward.

A health-contingent outcome-based wellness program requires an individual to attain or maintain a specific health outcome (such as not smoking) in order to attain a reward. “Generally, these programs have two tiers: (a) a measurement, test, or screening as part of the initial standard and (b) a larger program that then targets individuals who do not met the initial standard with wellness activities. For individuals who do not attain or maintain the specific health outcome, compliance with an educational program or an activity may be offered as an alternative to achieve the same reward…Examples of outcome-based wellness programs include a program that tests individuals for specified medical conditions or risk factors (such as high cholesterol, high blood pressure, abnormal BMI, or high glucose level) and provides a reward to employees identified as within normal or healthy range (or at low risk for certain medical conditions), while requiring employees who are identified as outside the normal or healthy rand (or at risk) to take additional steps (such as meeting with a health coach, taking a health or fitness course, adhering to a health improvement action plan, or complying with a health care provider’s plan of care) to obtain the same reward.”

To meet these standards, health-contingent outcome-based wellness programs must offer a “reasonable alternative standard (or waiver of the otherwise applicable standard) to a broader group of individuals than is required for activity-only wellness programs. Specifically, for activity-only wellness programs, a reasonable alternative standard for obtaining the reward must be provided for any individual for whom, for that period, it is either unreasonably difficult due to a medical condition to meet the otherwise applicable standard, or for whom it is medically inadvisable to attempt to satisfy the otherwise applicable standard. For outcome-based wellness programs, which generally provide rewards based on whether an individual has attained a certain health outcome (such as a particular body mass index (BMI), cholesterol level, or non-smoking status, determined through a biometric screening or health risk assessment), a reasonable alternative standard must be provided to all individuals who do not meet the initial standard, to ensure that the program is reasonably designed to improve health and is not a subterfuge for underwriting or reducing benefits based on health status.”

Significantly, the final regulations declare, “The intention of the Departments in these final regulations is that, regardless of the type of wellness program, every individual participating in the program should be able to receive the full amount of any reward or incentive, regardless of any health factor.”

For health-contingent outcome-based wellness programs, the individual must have the opportunity to qualify at least once a year and the size of the reward/penalty cannot exceed 30% of the cost of the health insurance premium (50% in the case of smoking cessation programs). In addition, the program must be “reasonably designed to promote health or prevent disease” whether activity-only or outcome-based. The 2006 regulations and the 2012 proposed regulations described these programs as “experiments” which need not have a scientific record. I protested in my comments to the November 2012 proposed regulations that this made them human experiments subject to federal regulation which required at its core informed consent. So, they took out the language that they need not have a scientific record and about experiments. Instead, the preamble states, “a wellness program is reasonably designed if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and is not overly burdensome, is not a subterfuge for discrimination based on a health factor and is not highly suspect in the method chosen to promote health or prevent disease. The determination of whether a health-contingent wellness program is reasonably designed is based on all the relevant facts and circumstances.”

(Query: If, as it appears, an employer weight wellness program can achieve a one pound loss a year for three years, does anyone know of a study showing that is enough to prevent disease or promote health? In any event, I am not convinced these not still human experiments without the federal regulatory protections.)

Significantly, the final regulations require that the outcome-based wellness programs must require a full-scale, larger wellness program as a reasonable alternative. It states, “This approach is intended to ensure that outcome-based programs are more than mere rewards in return for results in biometric screenings or responses to a health risk assessment, and are instead part of a larger wellness program designed to promote health and prevent disease, ensuring the program is not a subterfuge for discrimination or underwriting based on a health factor.”

A lot of the comments dealt with what would be considered a “reasonable alternative” and who would decide. The final regulations make it very clear and the employee and his or her doctor won.

First, the regulations state that:

  1. If the reasonable alternative is completion of an educational program, the plan must find such a program and make it available and pay for it;

  2. The time commitment required must be reasonable;

  3. If the reasonable alternative is a diet program, the plan is not required to pay for food but must pay for the cost of membership or participation fee; and,

  4. If the individual’s personal physician states that a plan is not medically appropriate for that individual, the plan or issuer must provide a reasonable alternative that accommodates the recommendations of the individual’s personal physician with regard to medical appropriatness.

Expounding on time commitment, the regulations go on to say that “requiring attendance nightly at a one-hour class would be unreasonable.”

Perhaps more importantly for the future of coverage of drugs for the treatment of obesity and bariatric surgery, the regulations go on to say, “The final rules retain the clarification of the proposed regulations and add an additional clarification that an individual’s personal physician can make recommendations regarding medical appropriateness that must be accommodated with respect to any plan standard (and is not limited to a situation in which a personal physician disagrees with the specific recommendations of an agent of the plan with respect to an individual).”  The regulations go on to note that these decisions are subject to external Federal review under 76 FR 37216 an plans may impose standard cost-sharing for medical items and services furnished in accordance with the physicians recommendations.

Thus, to my reading, an employee’s physician could recommend that the employee receive an anti-obesity pharmaceutical agent or bariatric surgery, if eligible. Review would take place by reviewers external to the employer and plan and normal deductible and co-payments for drugs or surgery could be required. We’ll have to wait and see how this works out.

Finally, the regulations address the issue of “What happens in year 2?” They note that smoking cessation may take may attempts and maintenance may be a perfectly good outcome. A physician’s recommendation of nicotine replacement therapy would constitute a reasonable alternative standard.

What the Departments are looking for are reasonable alternative standards “in light of the individual’s actual circumstances, as determined to be medically appropriate in the judgment of the individual’s personal physician…For example, if the initial standard is to achieve a BMI less than 30, the reasonable alternative for the individual cannot be to achieve a BMI of less than 31 on that same date. However,if the if initial standard is to achieve a BMI of less than 30,  a reasonable alternative standard for the individual could be to reduce the individual’s BMI by a small amount or a small percentage over a realistic period of time, such as within a year. Second, an individual must be given the opportunity to comply with the recommendations of the individual’s personal physician as a second reasonable alternative standard to meeting the reasonable alternative standard defined by the plan or issurer, but only if the physician joins in the request.

There is more to these regulations which we will be covering in future posts.

Secret RAND Report Trashes Employer ‘Wellness’ Programs

May 25th, 2013

A Reuters story by Sharon Begley discloses a report from RAND Corp. provided to the US Departments of Labor and Health and Human Services . The study finds only a modest benefit in wellness programs.

It states, “According to a report by researchers at the RAND Corp, programs that try to get employees to become healthier and reduce medical costs have only a modest effect. Those findings run contrary to claims by the mostly small firms that sell workplace wellness to companies ranging from corporate titans to mom-and-pop operations.

RAND delivered the congressionally mandated analysis to the U.S. Department of Labor and the Department of Health and Human Services last fall.

The report found, for instance, that people who participate in such programs lose an average of only one pound a year for three years.

In addition, participation “was not associated with significant reductions in total cholesterol level.” And while there is some evidence that smoking-cessation programs work, they do so only “in the short term.”

Most large U.S. employers believe the programs improve workers’ health and reduce or at least keep the lid on medical spending. “Companies from the CEO on down feel that these programs are bringing value,” said Maria Ghazal, a vice president at the Business Roundtable, the association of chief executives of big companies. “The criticism is surprising, because companies are not hearing that internally.”

Some experts not involved with the new report say even the modest benefits RAND found need qualification.

“The strongest predictor of whether someone will lose weight or stop smoking is how motivated they are,” said Al Lewis, founder and president of the Disease Management Purchasing Consortium International, which helps self-insured employers and state programs reduce healthcare costs. “Since the programs are usually voluntary, the most motivated employees sign up. That makes it impossible to credit the programs with success in smoking cessation or weight loss rather than the employees’ motivation.”

For its report, RAND collected information about wellness programs from about 600 businesses with at least 50 employees and analyzed medical claims collected by the Care Continuum Alliance, a trade association for the health and wellness industry.

Industry experts noted that whenever researchers analyze hundreds of programs, there are inevitably more effective and less effective ones.

“Traditional workplace wellness barely scratches the surface,” said Keith Lemer, president of WellNet, which provides programs to Cumulus Media, Viking Range Corp and the Charlie Palmer Group of restaurants, among others. “Done right, (the program) requires the integration of clinical data, wellness, health coaching, and work flow.” The initiatives succeed if they have “senior level support and a high-degree of employee engagement in healthy behaviors,” he said.

The report’s conclusions about the financial benefits of workplace wellness programs are also grim. In theory, the programs should reduce medical spending as employees become healthier and thereby avoid expensive conditions such as heart disease, cancer and stroke.

In fact, workers who participated in a wellness program had healthcare costs averaging $2.38 less per month than non-participants in the first year of the program and $3.46 less in the fifth year. Those modest savings were not statistically significant, meaning they could have been due to chance and not to the program.

More surprisingly, workplace wellness did not catch warning signs of disease or improve health enough to prevent emergencies. “We do not detect statistically significant decreases in cost and use of emergency department and hospital care” as a result of the programs, RAND found.

The RAND report was mandated by the Affordable Care Act, the healthcare reform law known as Obamacare. Two sources close to the report expected it to be released publicly this past winter. Reuters read the report when it was briefly posted online by RAND on Friday before being taken down because the federal agencies were not ready to release it, said a third source with knowledge of the analysis.”

This report comes amid a lobbying blitz by major Americans corporations to get tougher regulations from the Obama Administration, according to recent reports.


Employer Wellness, EEOC, Data Warehousing, Predictive Analytics

May 23rd, 2013

Download my comments to the EEOC filed today looking at employer wellness programs and the development of data warehousing and predictive analytics. How new technology can be used to discriminated against persons with obesity. Morgan Downey_EEOC_Employer Wellness Comments

Employer Wellness Issue Heats Up

May 20th, 2013

The Equal Employment Opportunity Commission (EEOC) held a long hearing on May 8, 2013 on employer wellness programs. Opponents made a strong case that there was virtually no way that a mandatory health-contingent wellness plan could not discriminate against protected classes of workers. (See statement of Judith Lichtman) On the other hand, the more pro-business representatives argued that Congress and the Administration supported the changes in the Affordable Care Act and the programs where here to stay. It seems that all parties are urging the EEOC to provide guidances to employers.

The testimony came amid a backdrop of waiting for the final regulations from the Obama Administration. The comment period closed in January and many were expecting we would have final regulations by now. Politico reported that a group of corporate CEOs with the Business Roundtable were in Washington recently to lobby the Administration to avoid further weakening of the regulations.

Forbes magazine was reporting the CVS-Caremark was penalizing workers $600 annually if they failed to complete a health risk assessment. The article noted that most companies did not provide such stiff penalties but many were moving in that direction.

Meanwhile, several research articles provide only lukewarm support for weigh loss employer wellness programs.

A Health Affairs article by Ron Goetzel and colleagues, found only 22 % of employer health care costs could be attributed to 10 modifiable health factors (including obesity). This is actually a drop from 24.9% in 1998, even though rates of obesity have increased and costs related to obesity have gone up. Obesity contributed the most excess costs at $347 per capita. Goetzel, Pei, et al,

Another recent paper was a longitudinal study at the worker productivity in terms of absenteeism, presenteeism and job performance associated with changes in 19 modifiable well-being risks. These included physical health risks, health behavior risks, social and emotional health risks work-related risks and financial health risks.  The researchers found that, “Obesity, high cholesterol, tobacco use and excessive alcohol generally contributed to productivity changes insignificantly or unfavorable, possibly because of its multicolinearity with other risks that are closely correlated.” However, they noted that, “Health-related risk explained only a portion of the total productivity variances. For example, Riedel et al found that health risks accounted for 7.8% of the total variance in productivity impairment and acknowledged that the majority of the variation was left unexplained. Lenneman et al also found only 8.5% of the variance in productivity was contributed by health risks…We found that reductions in work-related well-being risks and financial health risks significantly contributed to improvement in productivity measures especially for measures of presenteeism and job performance that were not attributable solely to the more narrow definition of physical health.” They found modest numbers of workers were able to make improvements: 25% reduced their physical health risks 26% improved their health behaviors 16% improved their social and emotional health, 31% improved their work-related risks and 13% their financial health risks. Improvements in absenteeism, decrease in presenteeism and a modest improvement in job performance accompanied such changes. They calculated these improvements were equivalent to a savings of $468 per person per year. Shi, et al.

Ted Kyle reports in his blog that one program, Healthy Blue Living, requires obese participants to wear a pedometer which uploads their physical activity to the employer wellness program. The employees must meet daily step goals if they want to keep full health benefits. Not doing so could cost them each $2000 a year. Kyle notes (and I strongly agree) that this constitutes human experimentation without the protection of the federal regulation protecting human subjects, 45 Code of Federal Regulations Part 46. In fact, the program is not that successful. Promotional material notes that only 16% who agreed got their weight under a BMI of 30.

Yet another study published in Health Affairs looked at one hospital system’s wellness program. The program provide a substantial incentive/penalty for participation in a health risk assessment (which included automated feedback) signing a health pledge, health fairs and physician referrals. The study found a significant reduction in hospitalizations for conditions related to the conditions covered by the wellness program. However, there was an increase in medication costs. Combined with the costs of the wellness program and incentives, the authors concluded, “It is unlikely that the program saved money.” Gowrisankaran G, et al. A Hospital System’s Wellness Program Linked to Health Plan Enrollment Cut Hospitalizations But Not Overall Costs, Health Affairs 32 (3) 2013; 477-485. Gowrisankaran

A second paper also published in Health Affairs reviewed randomized controlled trials of workplace wellness programs. Their review raises doubts the employees with health risk factors such as obesity and tobacco use spend more money on medical care than others. They concluded that workplace wellness programs show little evidence of saving costs through health improvements without being discriminatory.  To test the assumptions of workplace wellness programs the authors, “reviewed research on the relationships among financial incentives, behavior, health status, and medical spending. We focused on randomized controlled trials involving four conditions- smoking, hypertension, high cholesterol and obesity- that are typically included in health-contingent programs. In our review, we found mixed evidence that employees with these conditions have higher health costs than other employees, which undermines the argument that employees with the conditions are particularly effective targets for incentives. We also found little evidence that working-age people change their behavior as a result of financial incentives, particularly over the long term. These findings suggest that program savings many not, in fact, derive from health improvements. Instead, they may come from making workers with health risks pay more for their health care than workers without health risks do. If true, this conclusion would jeopardize long-standing regulatory efforts, maintained in recently proposed Affordable Care Act regulations to prevent workplace wellness from being “a subterfuge for underwriting or reducing benefits based on health status. (citations omitted) Since low-income workers disproportionately suffer from conditions typically targeted by health-contingent programs, savings arising outside of health improvement may entail hidden, regressive redistributions increasing the burden imposed on low-income workers. “

In effect, they point out, wellness plans shift costs with the most vulnerable employees, those from low income groups with the most health risks probably subsidizing the healthier workers. Horwitz, JR, Kelly, BD, DiNardo, JE, Wellness Incentives in the Workplace: Cost Savings Through Cost Shifting to Unhealthy Workers, Health Affairs, 32 (3), 2013:468-476. Horwitz

The Agency for Healthcare Research and Quality (AHRQ) has issued another independent review. This time they reviewed studies of strategies to prevent weight gain in adults. The reviewers looked at 51 trials involving 555,783 subjects with at least one year of follow-up and a weight outcome. A meaningful difference between groups was considered to be 0.5 kg of weight (1.1 pound) or 1 cm of waist circumference. They found moderate evidence that workplace programs for the prevention of weight gain in adults. One study combining diet, physical activity and environmental components resulted in meaningful and statistically significant prevention of BMI change at 12 months and another that combined internet based diet and physical activity counseling resulted in significant prevention at 24 months. However, a third study found no difference. AHRQ Strategies to Prevent Weight Gain Among Adults, Comparative Effectiveness Review No. 97, AHRQ

Also cited as, Gudzune K et al Strategies to prevent weight gain in workplace and college settings: A systematic review, Prev Med. 2013 Mar 22. Gudzune


Christie’s Surgery Covered by Insurance

May 7th, 2013

Governor Christie’s surgery was covered by state insurance, kind of. Here is what he said at a press conference this afternoon:

Question: [inaudible]

Governor Christie: My insurance. Yeah. The insurance that I pay for, yeah.

Question: [inaudible follow-up]

Governor Christie: No, I’m not going to price it out for you. No. No. No. Anymore than you have any right to know what Sheila pays for when she goes to the doctor, what Armando pays for when he goes to the doctor or anybody else. No, you don’t have a right to know that, that’s my personal business. That’s called HIPAA. That’s a federal statute. Familiarize yourself with it.

Question: [inaudible follow-up]

Governor Christie: Yeah. It is a procedure that is covered when you go through the steps that you need to go through by the State Health Insurance Plan that myself and my family are covered by. Yes.


NJ Gov Christie Has Lap-Band Surgery

May 7th, 2013

New Jersey Governor Chris Christie has had lap-band surgery, according to a report in today’s Politico. Christie’s weight has long been an opportunity for fat-bashing humor and has been considered an obstacle to a potential Presidential run. However, Christie, who had the operation on his 50th birthday, said that he had the operation to be healthier for his wife and children.