PEIA Task Force to continue work beyond Tuesday deadline

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By: Phil Kabler, Charleston Gazette-Mail

With a marathon of meetings Monday afternoon, the PEIA Task Force approved a series of recommendations to present to the West Virginia Legislature on Tuesday, but left many key issues unresolved.

Despite a Tuesday deadline to submit its recommendations, Task Force Chairman Mike Hall, who is chief of staff to Gov. Jim Justice, announced Monday that Justice has decided to extend the Task Force so it can continue work on the unresolved issues.

“This is not the end. We’ll have future meetings. This Task Force will continue on,” Hall told the 29-member panel Monday.


Left unresolved is the prime issue of finding sources of funding to address medical and pharmaceutical costs for the health insurance plan that grow by about $50 million a year.

Meeting for the first time since August, the panel’s cost and revenue subcommittee eschewed identifying a dedicated revenue source for PEIA, and failed to act on a proposal to build $50 million a year in new funding into the base budget.

PEIA Executive Director Ted Cheatham stressed that, at current 5 percent medical cost inflation rates, PEIA needs not just $50 million a year in additional revenue, but $50 million compounded annually, so that, by the fifth year out, PEIA will need an additional $250 million.

“If you just paid me five years’ money to cover my expenses without any changes, it’s going to be in the $700 million to $800 million range,” he told the panel.

The panel did endorse Justice’s pledge to contribute $100 million in state budget surplus funds to PEIA during the 2019 legislative session — money that should stabilize the plan through June 2021.

Also left unresolved are revisions to the plan’s current income-based premium tiers, development of a wellness program geared to incentives, rather than penalties, and other issues.

“On Monday, the panel made one significant change to its recommendations, extending a recommendation to eliminate cost penalties for insurees for obtaining care from out-of-state providers in border counties to include any in-network out-of-state providers.

“Just because I’m two counties over, instead of one county, I shouldn’t be penalized,” Task Force member Dale Lee, West Virginia Education Association president, said in making the motion to expand the proposal to all out-of-state providers for one year.

Cheatham said the expansion would increase costs to the plan from $7 million to $13.2 million next year.

Under the proposal, insurees who go to out-of-state providers would have the same co-insurance rates as in-state, eliminating a 10 percent penalty charge, as well as eliminating a $25 out-of-state copay and facility fees for 143 commonly provided medical services and tests.

Lee’s proposal was adopted over objections from some Task Force members who raised concern about the effect on in-state providers, with whom PEIA has negotiated much lower reimbursement rates than their out-of-state counterparts.

“What are we doing to the health care system in West Virginia from subsidizing, or paying more for the same procedures out of state?” asked Senate President Mitch Carmichael, R-Jackson.

However, proponents such as Perry Bryant, founder of West Virginians for Affordable Health Care, noted that the No. 1 complaint from insurees at public hearings around the state was the inability for border county residents to go to their closest health care providers without paying the out-of-state penalties.

“To be able to remedy that for $6 million?” Perry said. “It’s the best $6 million we’ll ever spend.”

Panelists also approved a recommendation to create an appeals process for prescriptions on PEIA’s Tier 3 nonpreferred brand-name drugs, which have a 75 percent copayment rate, up to an annual $1,750 prescription drug out-of-pocket maximum.

That will cost the plan about $1.6 million a year.

The recommendations will be presented to the Joint Committee on Government and Finance Tuesday afternoon.

Earlier Monday, the co-chairs of the Task Force briefed members of a legislative interim committee on PEIA on the panel’s work to date.

West Virginia Hospital Association President and CEO Joe Letnaunchyn said the Cost and Revenue subcommittee had planned to meet monthly, but its members realized they had to wait for recommendations from the Coverage and Plan subcommittee before they could fully address PEIA finances.

“The committee paused for a few months pending recommendations from the Coverage and Plan committee,” he said, explaining the subcommittee’s 15½-week hiatus from its last meeting on Aug. 23 to its meeting Monday afternoon.

Letnaunchyn said the subcommittee concluded early on that it did not have sufficient information to make recommendations on possible new sources of revenue for the $50 million a year in funding PEIA needs annually to cover increasing medical and pharmaceutical costs.

“Any of these issues or recommendations would have to be approved by the Legislature,” he said.

During public hearings around the state, PEIA insurees recommended a variety of dedicated funding sources for PEIA, with an increase in the severance tax on natural gas topping the list. Other proposals included raising tax rates on soft drinks and/or tobacco, raising corporate taxes and restoring the sales tax on food.

Senate Finance Chairman Craig Blair, R-Berkeley, a Task Force member, was critical Monday of the subcommittee’s long hiatus.

“We’ve been in a holding pattern for three months, when we would have liked to be working,” he said.