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WASHINGTON -- Unbeknownst to them, most employers now have just two months to notify employees in writing of the latest benefit mandate imposed by Congress.
One of hundreds of amendments tucked into a 3,000-page appropriations bill passed by Congress last week and signed by President Clinton requires all health care plans offering coverage for mastectomies to cover reconstructive surgery on the same basis as they cover other surgical procedures.
The mastectomy mandate, championed by Sen. Alfonse D'Amato, R-N.Y., will require health care plans to provide coverage for breast reconstruction following a mastectomy and additional surgery to produce a symmetrical appearance.
Another 11th-hour amendment imposes a new prescription drug benefit mandate on the health care program covering federal employees.
However, congressional negotiators rejected an amendment by Sen. Edward Kennedy, D-Mass., that would prevent Massachusetts HMOs that provide coverage to Medicare beneficiaries from cutting prescription drug benefits. A federal court now will decide that issue.
The basic mastectomy mandate will have little impact on employers' benefit costs because exclusions for reconstructive surgery after a mastectomy are rare, especially in large-employer plans.
What will have an impact, though, is a notice requirement that is part of the mastectomy mandate. Employers -- including those already offering coverage -- will have to notify employees that their health care plans offer coverage for reconstructive surgery.
Given that employers already typically offer the coverage, this informational mandate is a waste of employer resources, consultants say.
"This is wasting time and money without adding new benefits," said Howard Tarre, a director at PwC Kwasha in Fort Lee, N.J.
And employers don't have much time to communicate to employees a benefit they already are providing. Employers with calendar plans, for example, have only until Jan. 1 to get the notice out.
After that, employers face an annual notification mandate, though the legislative language is so confusing that benefit experts are divided on who must receive the notice.
A literal reading of the language suggests that the annual notice should go only to employees who have undergone mastectomies.
While that is what the language says, the practical effect would be illogical, some say. "Does this mean, for example, that 25 years after a woman has a mastectomy, the employer still has to notify her each year of the coverage? That doesn't make sense," said Henry Saveth, an attorney with William M. Mercer Inc. in Washington.
Others, though, believe the intent of the amendment is to require employers to notify all employees each year of the availability of coverage for reconstructive surgery after a mastectomy.
In any case, there could be later regulatory relief or a technical correction to clarify the employer's notice obligation, Mr. Saveth said.
Sen. D'Amato's amendment is a pared-back version of a bill he earlier introduced that would have required health plans to provide coverage for hospitalization after mastectomies for as long as medically necessary. The earlier bill was a response to reports that a small percentage of managed care plans were denying women coverage for overnight hospitalization following mastectomies.
Few plans now exclude reconstructive surgery. "When there is an underlying medical reason -- in this case a mastectomy -- for reconstructive surgery, it is covered. This shouldn't have an impact, at least not in the large-employer community," said Barry Barnett, a principal with PwC Kwasha.
"The overwhelming majority -- at least 90% -- of large-employer plans" cover reconstructive surgery after a mastectomy, added Linda Anderson, a consultant with Hewitt Associates L.L.C. in Lincolnshire, Ill.
Sen. D'Amato, though, earlier said in a statement that "scores" of women have been denied coverage for reconstructive surgery following mastectomies after their insurers ruled that the procedure was cosmetic and not medically necessary.
The other benefit mandate in the legislation would apply strictly to the health care benefits program that covers federal employees and dependents.
That mandate will require health care plans participating in the program, which covers about 1.2 million women of child-bearing age, to cover prescription contraceptives to the same extent that the plans cover other prescriptions. Religious plans participating in the federal program, as well as physicians with moral objections, would be exempt from the mandate, which was proposed by Rep. Nita Lowey, D-N.Y.
Currently, 90% of the 374 health plans participating in the federal program provide coverage for at least one type of prescription contraceptive, though only 19% cover all five methods of prescription contraceptives: the pill, the diaphragm, IUDs, Norplant and Depo-Provera.
The largest plan in the federal program, a Blue Cross & Blue Shield PPO, has for some time been covering all of the major methods except the diaphragm, which it planned to cover next year even before the legislation was passed.
"We are market-sensitive," and prescription contraceptive coverage "is a benefit valuable for many people," said Jean Barber, managing director for business analysis and strategy for BC/BS's federal employee program in Washington.
The cost impact of the new mandate should be minimal, said a spokesman for the federal Office of Personnel Management, which administers the program. That is because female federal employees or dependents who want prescription contraceptives likely already are in plans that offer such coverage, he said.
"We think this will have a small fiscal impact but provide a significant expansion of choice," the OPM spokesman said.
Indeed, a Buck Consultants Inc. study recently conducted for The Alan Guttmacher Institute found that a prescription contraceptive mandate would increase group health care plan costs -- for plans not offering any coverage -- an average of $21 per year per employee. Other consultants say the cost would be even lower. That cost does not take into account potential savings through a reduction in unwanted pregnancies.
"This is a marginal cost item," said Andrea O'Boyle, a benefit consultant in Buck's New York office.
Benefit lobbyists say mandating prescription contraceptive coverage for health care plans in the federal program is an appropriate role for Congress.
"The focus of Congress should be on its own plans, not as a micromanager for private-sector plans," said James Klein, president of the Assn. of Private Pension & Welfare Plans in Washington.
Still, the new mandate for plans in the federal program could be the first step toward a mandate covering employer plans. Consultants estimate that roughly 80% to 85% of HMOs provide prescription contraceptive coverage and 50% to 70% of employers with self-funded prescription drug plans cover contraceptives. The prevalence, though, of employers offering such coverage has been rising in recent years, said Bridget Eber, a Hewitt consultant in Lincolnshire.
Employers excluding contraceptives from their prescription drug plans include those that have philosophical objections to paying for contraceptives as well as those that limit their plans to providing coverage for prescriptions that only are absolutely medically necessary, said Tamra Lair, a consultant in the Minneapolis office of Watson Wyatt Worldwide.
While approving the contraceptive drug mandate, legislators declined to interfere with a 1994 Massachusetts mandate requiring HMOs in the state to provide either unlimited or no prescription drugs to retirees eligible for Medicare.
Several HMOs in the state have proposed cutting back prescription drug benefits to $800 a year, an action that is permitted by a provision in a 1997 budget law that pre-empts state laws or rules dictating the kind of benefits Medicare HMOs must offer, they say.
The Massachusetts Division of Insurance, though, disagrees with that interpretation and is suing one of the HMOs -- Harvard Pilgrim Health Care -- that wants to scale back its prescription drug benefit. In turn, a Massachusetts HMO trade group is seeking a court ruling that the federal budget law pre-empts the Massachusetts mandate.
Sen. Kennedy, responding to pleas for intervention from Massachusetts politicians, drafted an amendment for insertion in the appropriations bill to make clear that the Bay State's prescription drug mandate was not pre-empted by the federal law.
But congressional negotiators would not accept Sen. Kennedy's amendment, which Sen. Kennedy said was a case in which "the Republican leadership in Congress sided with HMOs instead of patients."
Others, though, say the Kennedy amendment was pushed aside because of legislators' reluctance to weaken federal pre-emption.
If states were allowed to carve out their own Medicare exceptions, "pretty soon you don't have a federal program with federal uniform rules," Mr. Saveth said.