News From Southern Health: Regional PPO Expansion, Benefit Changes

August 28, 2009

Mental Health Parity Act - The mental health parity act is a federal law that affects large employers throughout the country. For consistency, and to avoid confusion among our brokers and clients, Southern Health has decided to make the required changes for all size employers. As a result of the change, Southern Health will remove benefit limits from the behavioral health benefits. Additionally, the copayment and coinsurance responsibility required for those services will be the same as the member responsibility for any other physical illness. Effective November 1, 2009, you will notice on the Schedules of Benefits, the Behavioral Health section has been removed.

Prosthetic Limb mandate - During the 2009 Session of the Virginia General Assembly a bill was passed mandating that coverage for prosthetic limbs and their components be offered to all groups beginning January 1, 2010. Prosthetic limbs are defined as an arm, hand, leg, or foot or any part of an arm, hand, leg or foot. Southern Health currently covers prosthetic limbs as part of the base plan under the coverage category, Nonimplanted Prosthetic Devices. Effective November 1, members have two coverage categories: Prosthetic Limbs which will be covered with 30% coinsurance, and Nonimplanted Prosthetic Devices which will continue to be covered in network with 50% coinsurance.

Emergency Room Treatment - An analysis of utilization has revealed an increase in expenses related to the Emergency Room. The average claims cost for Emergency Room services has increased in excess of trend by 7%. Southern Health has maintained a copayment for Emergency Room facility services on our benefit plans other than Consumer Driven Health Plans and High Deductible Health Plans, which we will continue to do. Facility charges for Emergency Room treatment make up 79% of the cost of care. Effective November 1, 2009, Southern Health will begin requiring a $50 copayment on Emergency Room physician services on Care plans and coinsurance on the Value plans.

Four-Tier Prescription Coverage - Southern Health offers prescription drug coverage on a preferred/non-preferred basis based on safety, efficacy, and cost-based formulary. In recent years there has been a dramatic increase in the development of high cost specialty drugs, specifically self-administered injectable drugs. Southern Health has continued to cover these medications under the prescription drug program for a copayment. A recent cost/benefit analysis shows that only .2% of members are taking a specialty drug, the respective costs incurred make up over 10% of the total claims cost for prescriptions. As a result, Southern Health is changing the way we provide coverage for self-administered injectable drugs. Effective November 1, 2009, Southern Health will offer the following tiers:

Tier One: Preferred Generic drugs
Tier Two: Preferred Brand Name drugs
Tier Three: Non-Preferred drugs
Tier Four: Self-Administered Injectable Drugs (does not include insulin or epi-pens)

To reiterate, these changes are not being made across-the-board on November 1, 2009, but will be effective for new clients and as groups renew.