The U.S. government wants to make a name for itself in the wellness space through its Medicare program, a move that might actually help employers reduce retiree health costs.

Under the Patient Protection and Affordable Care Act, the Centers for Medicare and Medicaid Services is required to provide, with no copayments or deductibles, Medicare beneficiaries with an annual wellness visit and a personalized prevention plan.

The initiatives, which go into effective in 2011, are intended to create a robust clinical environment where Medicare beneficiaries will have access to wellness and preventive care programs focusing on smoking cessation, weight loss, nutrition, diet, stress reduction, and exercise and fitness.

Participants also will undergo an annual wellness visit that includes a health risk appraisal and regular disease screenings.

For employers, the Medicare wellness initiatives have the potential to ensure that their retirees will have access to health promotion programs similar to the workplace. But some are wondering whether the government can successfully mimic corporate wellness, especially with health risk assessments and other programs.

Wellness for retirees

Employers realize keeping retirees on the wellness track can be complicated. For instance, retiree health benefits may not include access to workplace wellness and health promotion programs. Also, some wellness benefits are only delivered at the worksite, where retirees may have limited access. And of course, retirees may have simply moved away from where they used to work.

Still, the success of the Medicare wellness initiatives under PPACA is clearly linked to employer-sponsored wellness programs, explains Paul Bonta, associate director of policy and government affairs with the American College of Preventive Medicine.

New Medicare beneficiaries with experience in corporate wellness are less likely to view the whole process as something foreign. This will increase the utilization of the services and the effectiveness of the annual wellness visit, Bonta says.

"You want employees who enter the Medicare population to have a common understanding of what a wellness program entails, which means openly discussing their risky health behaviors with providers," he explains.

When Medicare first introduced managed-care plans, there wasn't a big rush of Medicare beneficiaries to enroll in those plans, recalls Jake Flaitz, Paychex's director of benefits and human capital, a New York-based company that provides payroll, human resource and benefits outsourcing services.

By and large, new Medicare enrollees back then were unfamiliar with managed care plans and were more comfortable with the old traditional indemnity programs offered in the workplace.

"But as more employers started to enroll workers into managed care plans, workers quickly adopted to the plans. That is a good example of why the success of the Medicare wellness initiatives will be linked to a beneficiary's previous experience with workplace wellness program," Flaitz says.

Standardized HRA

Meanwhile, the PPACA rules issued by CMS also require that the annual wellness visits include a health risk appraisal/assessment standardized by the Department of Health and Human Services. CMS, which administers Medicare, is part of HHS.

"With respect to the HRA, it is important that we monitor this because the June 26 rule by CMS states that PPACA requires that an HRA be included in the annual wellness visits beginning on Jan. 1, 2011," explains Bonta.

So far, HHS hasn't created the standardized HRA, but the rules state that the Secretary of HHS has a year to create one. However, CMS is working closely with the Centers of Disease Control and Prevention, which will probably take the lead role in creating the standardized HRA required by health reform law.

Still, from Bonta's perspective, "the use of an HRA in a wellness program is critical, so to move forward with an annual wellness visit that does not require the use of an HRA is something we would not support," he adds. The HRA markets carry a variety of appraisals and assessments that employers and health plans providers can use.

Bonta believes a standardized HRA created by the government will ensure that the appropriate information is being collected and the medical community has access to comparative health data.

Coincidentally, as HHS oversees the creation of an HRA, it also has to enforce regulations under Genetic Information Nondiscrimination Act. GINA restricts HRAs because it prohibits health plans and employers from asking questions about a person's family medical history.

"The GINA regulations are well-founded in that we don't want to discriminate against individuals based on genetic characteristics. It's unfortunate the legislation requires family history medical questions to be dropped from the HRA, especially when we know family history has a bearing on health risks," says Flaitz.

He urges CMS to tie the wellness efforts to the medical benefits as the corporate sector has done. "CMS officials should not view the PPACA wellness initiatives in a siloed fashion."

Mike Campbell, managing partner, corporate health and wellness at Neace Lukens, a private insurance broker, hopes federal officials who are responsible for creating the HRA will reach out to the corporate wellness space for advice and feedback. So far, the health advisers on reform to policymakers and legislators have been from the provider community and not from the corporate wellness sector, Campbell observes.

Linking technology and tangible action

"It will take awhile before the Medicare sector establishes a robust wellness infrastructure. But for starters, CMS should focus on building its wellness and preventive care programs around online technology as a way to get beneficiaries to participate in the programs," says Rich Gallun, CEO of bswift, a Chicago-based HR and benefits administration software provider.

Hopefully, no one believes that by simply offering an HRA "we are going to miraculously turn around the nation's skyrocketing health care costs. Such a notion reflects a complete suspension of disbelief," Gallun says.

A standardized HRA by the government will have to be integrated with health coaching programs. For example, some employers use the HRA to drive participants into health coaching programs, either ones in which a nurse or physician assistant picks up the phone and educates the participants about their chronic conditions or a digital health- coaching program.

"In other words, HRA has to be translated into something actionable," Gallun explains.

CMS might also want to offer Medicare beneficiaries incentives to complete the HRAs. In May, his company found that 35% of employers with 500 to 15,000 workers offer an incentive for a worker to complete an HRA. The incentives ranged from health insurance premium discount or surcharge, one-time gift or gift card or eligiblility for gift drawing, reduced deductible or copay, a contribution into a health savings account, or health reimbursement account and additional paid-time off.

Plan wisely

Most developed nations recognize that "if you help people to think about their health, they are more likely to take charge of their health by becoming better educated and informed about health care costs and services," says Colin Evans, chief executive officer of Dossia, a Massachusetts-based nonprofit consortium of large employers promoting personal health records.

Therefore, it's no surprise the government is using Medicare as a springboard to its wellness and preventive care agenda.

"Yet from a wellness perspective, CMS can learn from the corporate sector about segmentation and targeting a population based on specific health needs," Evans explains.

"Offering the same wellness and preventive care benefits to everyone will probably increase the spending on those programs and services. It's critical that the government figures out how to map out beneficiaries for the appropriate services and programs," he says.

Medicare spending

Researchers at the Kaiser Family Foundation report that spending for Medicare will increase from $523 billion in 2010 to $845 billion in 2019. The figures take into account changes to Medicare required by the PPACA.

However, lawmakers hope PPACA will reduce annual growth in Medicare spending by reducing the growth in Medicare payments to health care providers and Medicare Advantage plans. They also believe several new policies and programs, including the annual wellness visit and personalized prevention plan, will reduce costs and improve quality of patient care.

According to the Congressional Budget Office, the Medicare provisions under PPACA are projected to result in a net Medicare spending reduction of $428 billion between 2010 and 2019, including $533 billion in savings and $105 billion in new Medicare spending.

As a result of health reform, the government projects the average annual growth rate in Medicare spending between 2010 and 2019 will drop from 6.8% to 5.5%.

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