Opioid Bill Taps Employers for Funding
(c) Dwight Nadig
The House completed its work on opioid bills last week, sending a bipartisan package with offset provisions to the Senate. One of the budget offsets is a revision to the Medicare secondary payer rules to require private insurers (including employer plans) to pay for an additional three months of care for end-stage renal disease (ESRD) patients before Medicare assumes responsibility for the payments. This change is projected to generate $340 million in savings as an offset to the cost of the federal program.
From an employer perspective, our best estimate of the cost of the additional three months is approximately $48k/patient. Although the dollar amount is relatively small in terms of total cost impact to an employer, the "secondary payer" requirement for ESRD patients is seen as a dial that Congress could repeatedly turn. Initially when this provision became law in 1981, the payment period was 12 months. It went from 12 to 18 months in 1990 and the most recent change, to 30 months, occurred in 1997.
The provision would be a win for dialysis clinics since it would increase the amount of time they receive reimbursement from a patient’s private coverage, which is roughly double the Medicare reimbursement under the ESRD bundle.
Timing for consideration by the Senate has been suggested for mid-July. It remains unclear how these bills will be amended and how they might be reconciled. Employer advocacy groups are working with lawmakers and their staff to encourage them to remove this revenue provision.
Just more proof that it’s important for employers to stay on top of activities in Washington and be sure our voice is heard.