Legislature offers another bill based on Byrne-Healey report in effort to increase savings on public-sector benefits

By Anjalee Khemlani
Trenton | Jun 20, 2018 at 10:28 am

A bill introduced by the Legislature this week is the latest to follow a recommendation from a report commissioned by the state three years ago to study employee health and benefit plans and identify possible savings and reform.

The bill, which was introduced Tuesday and passed out of Budget committees of both houses, asks the state to audit its health benefits program to ensure all Medicare-eligible members and their dependents are moved to Medicare.

“The State Health Benefits Commission shall establish an audit program through which it shall conduct a continuous review of the State Health Benefits Program for the purposes of ensuring that all persons who are participants and their dependents of the State Health Benefits Program and who are eligible for Medicare under federal law, are properly enrolled in Medicare at the time of initial eligibility with Medicare as the primary provider of their health care benefits coverage and with the State Health Benefits Program as their secondary provider of their health care benefits coverage,” according to the bill.

If it becomes law, it would represent the fifth of six recommendations that the reports suggested.

The reports, known as Byrne-Healey, were released in 2015, with a final report in 2017.

And, while the bill potentially would help save the state $309 million, plus an additional $244 million for eliminating Medicare Part B supplemental coverage, perhaps the biggest potential suggested savings was not addressed.

Assemblyman John DiMaio (D-Bridgewater) wondered why the Legislature has failed to look at curbing the benefits stats employees receive — benefits he calls “far greater” than what is generally received in the private sector.

“Again, we leave millions on the table because we have a pension system and health benefits system that is far greater than what the average private sector person has,” he said.

“(Private-sector employees have) already gone through those changes, where their health benefits have gone from platinum down to the gold plans and their pensions have been changed — for the large part, new employees go to a 401(k)-type plan,” he said. “So, we leave money on the table every year we don’t have that honest discussion.”

In its original report of ideas in 2015, the commission suggested the following health fixes:

  • Fix the out-of-network reimbursement problem;
  • Encourage use of tiered networks of high-quality, cost-effective providers;
  • Discourage use of emergency rooms for non-emergent care;
  • Provide incentives for beneficiaries to be educated consumers;
  • Increase use of generic and mail-order drugs; and
  • Empower primary-care physicians to focus on patient outcomes.

Four of the six suggestions already have been addressed by the state.

The out-of-network problem has been addressed, as it relates to the state health benefits plans, since the legislation was signed by Gov. Phil Murphy earlier this month.

Critics have said similar laws already are on the books, making the new law redundant, and it only applies to a small portion of the state — including all state employees and their dependents.

The use of tiered networks, paired with discouraging the use of emergency rooms and empowering primary-care physicians to focus on patient outcomes, all have been addressed by the state’s plan design committee’s request for tiered network plans in 2015.

That was the year when a joint Senate committee grilled Horizon Blue Cross Blue Shield of New Jersey executives over a new tiered network plan it rolled out in the state. The state health benefits plan also had a similar offering from Aetna, the other contracted third-party administrator.

The goal of the tiered-network plans was to encourage more primary care use, by offering no or low copays for primary care visits, simultaneously discouraging the use of emergency rooms. Wrapped into the mix was the value-based reimbursement for the plans, rather than the usual fee-for-service, which encouraged physicians to focus on patient outcomes.

The state has provided options for generic and mail-order drugs, but it is unclear if members have specifically increased use of either.

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Anjalee Khemlani | akhemlani@roi-nj.com | AnjKhem