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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
From Spencer's Benefits Reports: The effect of price transparency on spending for health care services and pharmaceuticals is, at best, ambiguous, and, depending on the local market conditions, could raise costs instead of reduce costs, the Congressional Budget Office (CBO) concluded in its June 5 CBO Economic and Budget Issue Brief. In this growing environment of health care consumerism, many experts believe that making prices of certain health care services available to patients would encourage more cost-effective purchasing. However, the CBO points out, prices for medical services vary widely across providers in a local health care market depending on varied negotiated contracts and who is paying the bills—individuals, governments, or insurers.
Consequently, it is difficult to determine the actual price for a service, although a government agency could report average prices, the CBO brief suggested. The CBO brief focused on charges for hospital care, physician services, and prescription drugs, which represented some two-thirds of national health care spending in 2006.
While payment rates for Medicare and Medicaid are preset and publicly available, rates negotiated by private insurers and pharmacy benefits managers (PBMs) are confidential and not shared. Uninsured individuals or those with insurance that does not provide negotiated discounted rates usually must pay the provider’s “list” price. Consequently, reliable true-price transparency seldom is publicly available. In addition, while some insurers might reveal to their members their negotiated discounted prices, persons shopping for health insurance might not compare different insurers’ negotiated prices.
Although some state governments and private organizations have started providing some price information, primarily for hospitals, charges for physician services provided during a hospital stay still are not available, nor do those prices reflect insurers’ discounts. New Hampshire’s state insurance department collects all of the detailed information from insurance claims and reports estimates of total prices and out-of-pocket expenses for an episode of care.
Improved price transparency could help patients use health care more efficiently, compare various providers’ prices, select alternative treatments, or opt to skip treatment that the patient deems not to be cost-effective. Price transparency would be most valuable to uninsured patients or patients with account-based high-deductible health plans (HDHPs), who bear a larger portion of costs, the CBO brief observed. However, currently, the proportion of insureds with an HDHP is small, compared with those enrolled in more traditional health insurance, which shields them from the true costs. The RAND Health Insurance Experiment, conducted in the 1970s and 1980s, revealed that while the primary effect of higher cost sharing on insureds was on whether or not to seek care, once the insured sought medical advice, per-person spending was similar to insureds with other, lower cost-sharing.
Also affecting use of health care is the availability of only one treatment for a specific medical condition; the fact that many necessary health care “purchases” cannot be planned in advance to allow for price “shopping;” and the fact that in emergencies, patients seek the nearest available providers. Furthermore, price transparency might reduce competition and result in increased prices in medical markets with limited resources, particularly as hospitals consolidate and gain negotiating power, the CBO brief observed. In contrast to strong hospital market power, individual physicians have relatively low negotiating leverage and might not be able to use transparent pricing to increase prices, although lack of transparency might leave physicians without adequate knowledge of payments to expect for services, the CBO explained.
With respect to actual prescription drug prices, the CBO found that disclosing discounts provided to Medicare Part D prescription drug plans “could set in place conditions for tacit collusion, as manufacturers would find it more difficult to set prices below their competitors’ without detection,” the CBO brief indicated. The Centers for Medicare and Medicaid Services was planning to collect and publish prescriptions’ average wholesale price beginning in 2007, but a lawsuit brought that project to a halt.
Consequences of increased price transparency might include patients pressing their medical providers for lower rates, price increases for payers with the lowest prices, or reduced price variation as providers seek a “middle price range.” According to the CBO, “If, for example, insurers have a stronger bargaining position than providers and if enough individuals pay for a substantial portion of their care out of pocket, price transparency that reveals insurers’ negotiated rates could bring lower average prices and less spending. Conversely, when providers have a stronger position and individuals have few incentives or little ability to conserve health care spending, that same transparency could produce higher average prices and spending.”
For more information, visit http://www.cbo.gov.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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