The top concerns are: eking out growth in an uncertain economy, preparing for and reducing employee flight, acknowledging the customer is boss, surrendering to social media, keeping pace with regulation, protecting against increased risks, going global, watching your reputation, keeping up with technology, and staying ahead of the competition.
Take this list and couple it with any and all other interruptions, distractions, and unexpected issues that cross your desk each day it is wise to heed the advice of John Maxwell who said, “It is lonely at the top so you better know why you are there.”
So how do you take on all of the challenges of being a leader? Perhaps the advice of an old woodsman about catching a porcupine will help. He says, “Watch for the slapping tail as you dash in and drop a large washtub over him. The washtub will give you something to sit on while you ponder your next move.” That you will face prickly situations is a given – how you face them will set you apart. Here are three suggestions to help you face your challenges and make the most of them.
Expect the best. Keeping up with the demands of your business or organization can be daunting. Every business faces its own unique set of challenges. But the expectations and hopes you bring into the mix will create the attitude by which they are addressed. Your team will only move in the direction of your expectations.
South Carolina’s seasonally adjusted unemployment rate increased to 10.5% in June from 10% in May, the S.C. Department of Employment and Workforce reported today.
The survey of households noted an increase in the labor force of 2,830, bringing the overall labor force to 2,158,217. The state agency said more people are looking for jobs, but fewer jobs are available. Since 1976, the seasonally adjusted rate has increased 16 times in the May-to-June time frame.
According to The Conference Board’s Help Wanted Online Index, online job postings decreased by 1,580 positions last month. Though there was a decline, South Carolina fared better than neighboring states — North Carolina had 7,800 fewer postings and Georgia had 7,000 fewer postings, a sign that the Southeast economy is still fragile.
South Carolina’s nonfarm payroll employment increased by about 3,300, but the brightest spot was a continuing increase in manufacturing employment. That sector saw its fifth consecutive monthly gain since January 2011, rising 3.8% from May to June.
The year-over-year increase in nonfarm employment was 13,500 jobs. Gains were reflected in several major industry sectors: leisure and hospitality (5,300); manufacturing (1,600), and construction (1,500). The gains were offset by losses in the government, and education and health services industry sectors.
“Even given the normal summer spike in unemployment, the rate is still reflective of what is going on at the national level. However, we expect this will improve in the future as businesses and jobs continue to come to South Carolina,” said John Finan, executive director of the state employment agency.
Source: S.C. Department of Employment and Workforce
Since 2009, NYS has borrowed over $3 billion from the Federal Unemployment Trust Fund. The ARR provided interest-free loans to varioud staes with insolvent trust funds. Congress has not extended these loans into 2011. Therefore, NY is required to assess a temporary charge on employers, called an Interest Assessment Surcharge (IAS). The surcharge for 2011 is 0.25% which equates to a maximum amount of $21.25 per employee for 10/1/09 – 9/30/2010. Payment of the IAS is due by August 15, 2011.
For questions call the Employer Accounts Adjustment Section of the UI Division at 1-888-899-8810.
July 1, 2011
How well do your employees really understand their health plan? Do you know the readability score of the materials you provide them? How much jargon is included in your summary plan descriptions? How do you educate new grads entering the workforce and individuals working in the U.S. for the first time on the intricacies of health insurance? Is it even an employer’s responsibility to improve health literacy?
ERISA says that SPDs should be written in plain English so that the average participant can understand them. But according to a 2004 report by the Institute of Medicine, most employer- provided information about health insurance is too complex. Many employers tend to rely on the SPDs or certificate of coverage that are provided by their insurance carrier. Have you ever read one from cover to cover? They’re often difficult for a benefits professional to understand! Even worse, I’ve periodically gone back to the insurance carrier to request clarification on a specific clause only to find that they are unsure of the meaning.
Health literacy is defined by the U.S. government’s Healthy People initiative as: “The degree to which individuals have the capacity to obtain, process and understand basic health information and services needed to make appropriate health decisions.” Research conducted by the American Medical Association Foundation found that poor health literacy is a stronger predictor of health than any other factor.
Further research showed that an estimated $73 billion is spent each year on medical care due to poor health literacy. And if $73 billion is spent on just care, there is an even high cost associated with lost productivity and absences associated with poor health literacy. In the Institute of Medicine’s report “Health Literacy: A Prescription to End Confusion,” the authors estimate that close to half the population has difficulty understanding and using health information.
This is not that surprising to those of us who answer employee questions on medical coverage. How many times have you explained what a deductible or coinsurance is? How many times have you explained the difference between an HMO and a PPO? Or, even more frequent, how many times have you explained to an unsuspecting employee the difference between the allowed and billed amount for out-of-network care?
The HHS’ National Action Plan to Improve Health Literacy offers some tips for employers to help improve the health literacy of their materials:
1. Involve members of your target audience in the design and testing of communications.
2. Use plain language in the development of all information. The Center for Plain Language (http://centerforplainlanguage.org/) can help provide you with a plain language checklist while you develop your communications.
3. Include specific steps and action words to make it clear what the person needs to do.
4. Provide training, tools and resources for employees to improve their health information-seeking and decision-making skills, particularly to new grads, who may never have had any exposure to making their own health decisions.
5. According to the IOM, health literacy measures more than an individual’s reading skills: It also includes writing, listening, speaking, arithmetic and conceptual knowledge. Make sure to include information that touches on all of these skills.
6. Use sources of information that already exist, such as the CDC Health Literacy website (www.cdc.gov/healthliteracy/) or the Health Education Resource Exchange (http://here.doh.wa.gov/materials-projects), which is a repository of health communications.
The movement toward consumer-directed health plans, which require a high level of health literacy, accompanied by the dual pressures of health care reform and ever-increasing costs, only stress the importance of health literacy.
We are overloaded with information in our daily lives. There are tons of mobile phone applications for health. There are several different personal health record systems. There are tools developed by the insurance carriers.
There is a whole industry of health advocates to help you navigate the health care system. U.S. health care is an incredibly complex system — how much time have your employees lost due to health literacy issues?
Hopefully some of this information can help you develop the business case for why health literacy matters inside your company. There is no place that teaches health literacy, and right now employees simply find out the hard way when they have an issue. We have an obligation as employers to step up and either advocate for health literacy to be taught in schools or else provide our employees with a basic level of health literacy.
Contributing Editor Shana Sweeney — a self-proclaimed geek and political junkie — is a benefits professional at Google. She is an SPHR with degrees in politics and human resources. She has more than a decade of experience working in various industries, including high-tech, utilities, manufacturing and health insurance. She can be reached at firstname.lastname@example.org.
If we slash trillions from the federal budget, what does that do to our GDP?
Presented by Reeve Conover
The summer of discontent stretches on. As July ebbs into August, we have no resolution on the federal debt limit issue. The possibility of default is still in play. Republican leaders want major cuts to entitlement programs as a condition of raising the debt ceiling; Democrats agree on the necessity of cuts but also want tax hikes for the wealthiest Americans to bring in added revenue.
A trillion-dollar divide. On July 14, CNBC.com reported that both parties had tentatively agreed on nearly $1.4 trillion worth of reductions to the federal budget. That’s not too surprising: $1.4 trillion is the projected size of the budget gap for the fiscal year ending in September. Republicans have called for $2.4 trillion in cuts.1,2
This federal belt-tightening is going to lead politicians, economists and consumers into the second part of the debt cap conversation. Two very important questions demand our attention.
If we cut trillions from the federal budget, how will that affect GDP? In fiscal year 2009, federal spending represented 24.7% of U.S. gross domestic product. The Office of Management and Budget projected this figure to grow to 25.4% in FY 2010 and stay at 25.1% in FY 2011. The percentages haven’t been this high since 1946.3
The OMB thinks that federal spending will average about 23% of GDP between here and 2020; the Congressional Budget Office thinks the percentage will be slightly greater. It is worth noting that the federal government has only gathered (on average) 18.5% of GDP in tax revenues annually across the past 30 years. A decline in GDP means less tax revenue coming in, and less tax revenue may increase pressure to trim Medicare and Social Security. That’s a scenario that implies a quick sunset for the EGTRRA/JGTRRA tax breaks that Congress has extended.3,4
Will consumer spending continue to grow with less federal spending? The 2008 stimulus either propped up consumer spending or at least encouraged consumers to think more positively about it. There has been talk of a $196 billion haircut to federal nondefense discretionary spending across the next two fiscal years; one liberal think tank, the Economic Policy Institute, thinks this could remove 900,000 jobs from the economy next year and 1.3 million jobs in 2013, which would not bode well for housing, discretionary spending, retail sales, durable goods orders, consumer credit –the list is long. Conservatives counter with the belief that the economy has recovered to the degree that it doesn’t need such massive federal spending, and that the economy will strengthen further over the next couple of years.5
If the economy wanes, what happens to stocks? The mood on Wall Street doesn’t always correspond to the mood on Main Street, but this much is certain: pre-retirees can’t stomach another stock market downturn. Investors who are a decade or less from their envisioned retirement dates cannot imagine pushing back retirements even further. Recently, the mood on Wall Street has been cautiously bullish – but if the bulls bolt thinking that the economy is stagnating or sliding back into recession, the near future may call for some active or tactical portfolio management.
Let’s hope the “what if” stays hypothetical. The brinkmanship will probably give way to an accord at the tenth or eleventh hour, and we may see small short-term cuts as a prelude to bigger long-term cuts and reforms to entitlement programs.
What if no deal is reached by the August 2 deadline set by the Treasury Department? The Bipartisan Policy Center forecasts that the federal government would have to spend $134 billion less than planned during the rest of the month. So $134 billion would be removed from the U.S. economy in 29 days. This is more than 10% of America’s monthly GDP. Imagine that happening for a start, and then factor in a 9% jobless rate and the possibility of a stock market swoon and higher interest rates.6
It is not a pretty scenario, and it is one the U.S. will hopefully avoid. If a new Reuters poll is any indication, most economists think disaster will be averted – 38 of 40 economists recently surveyed by the news agency believe legislators will reach a deal before August 2 rolls around.1
Reeve Conover may be reached at Reeve@ReeveWillKnow.com or 877-423-9990
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.
1 – cnbc.com/id/43755316 [7/14/11]
2 – reuters.com/article/2011/07/08/us-usa-economy-fiscal-idUSTRE7676KI20110708 [7/8/11]
3 – mercatus.org/publication/controlling-federal-spending [6/22/10]
4 – cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables%5B1%5D.pdf [1/11]
5 – csmonitor.com/Business/2011/0428/Economy-cools-as-government-spending-drops.-Wrong-time-for-budget-cuts [4/28/11]
6 – blogs.forbes.com/beltway/2011/07/14/tea-party-zealots-scare-mcconnell-straight-on-debt-limit/ [7/14/11]
7 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [7/15/11]
|Reeve Conover Presents:
QUOTE OF THE QUARTER
“Failure is not fatal, but failure to change might be.”
Do you regularly log into your bank account or credit card to verify charges? If you don’t bank online – do you carefully check your monthly statements? If not, you should. Fraudulent charges are all too common these days, and some “clever” thieves make small, seemingly insignificant charges ($9.99, $19.99) – most likely in hopes that you won’t notice, or that you’ll decide the amount is too minimal to bother with. If you don’t recognize a charge, call your bank or card provider immediately. Aside from the importance of getting your money back, it’s vital that they know of the fraud. It means your account info may be compromised, and most banks will help you by looking into the fraud and by issuing you a new card or account number to protect you from future erroneous charges.
A review of 2Q 2011
THE QUARTER IN BRIEF
DOMESTIC ECONOMIC HEALTH
Unemployment actually increased in the quarter. In March, the jobless rate was at 8.8%; in May, it had climbed back up to 9.1%. By May, annualized inflation had cranked up to 3.6%, and gasoline prices had risen 36.9% in a year. On the bright side, monthly consumer price increases had moderated: after 0.5% gains in the federal government’s Consumer Price Index in February and March, prices respectively advanced by just 0.4% and 0.2% in April and May. Wholesale inflation was more pronounced, what with energy costs and supply disruptions in the wake of the March earthquake and tsunami in Japan: producer prices increased by 0.8% in April and 0.2% for May, bringing 12-month wholesale inflation to 7.3% in May compared to 5.8% for March.5,6,7
As for the key American snapshot of the manufacturing and service sectors, the Institute for Supply Management’s non-manufacturing index went from 54.6 in May to 53.3 in June; its manufacturing gauge defied expectations, moving north to 55.3 in June from May’s 53.5 reading.8
In April, citing concern over the ballooning U.S. deficit, Standard & Poor’s cut the credit outlook for America from “stable” to “negative”. Moody’s Investors Service made no such move. The federal debt ceiling was reached on May 16, and Treasury Secretary Timothy Geithner noted a hard deadline of August 2 to raise the debt cap. Congress mostly dithered on the issue during May and June, playing politics first and striving for compromise second. The Federal Reserve’s second round of quantitative easing ended June 30 and the impact wasn’t as harsh as feared: though the end of QE2 meant the end of $600 billion thrown at the bond market, bond yields and stock prices actually increased slightly on July 1.9,10,11
GLOBAL ECONOMIC HEALTH
That wasn’t the only notable economic development in Europe in the quarter. The European Central Bank raised its key interest rate to 1.25% (and seemed poised to raise it again in early July), making a move before the Bank of England and the Fed. Annualized inflation in the Eurozone was at 2.8% in April; it ticked down to 2.7% by June. Retail sales in the EU slumped by 1.1% in May, and by 2.8% in Germany. On the upside, Germany’s manufacturing orders rose by 2.9% in April and 1.8% in May, and German business confidence improved in June.13,14,15
China’s official manufacturing index declined in each month of the second quarter, falling to 50.9 by June. Its annualized inflation rate hit 5.5% in June, the highest in 34 months. Elsewhere, there were other signs of a slowdown: India’s PMI slipped in both May and June, reaching a low unseen since September. The key PMIs in South Korea and Taiwan also fell, with Taiwan’s showing sector contraction. Business sentiment in Japan fell to its lowest level in five quarters in 2Q 2011, an effect of the triple tragedy the nation suffered in March.16,17
Moving to energy and crops, oil lost 10.6% in 2Q 2011 for its worst quarter since 4Q 2008 as the International Energy Agency elected to free up global reserves. While several key crops have had a great run over the past 12 months, the quarter was not kind to them: corn lost 10.0%, soybeans slipped 8.2% and wheat lost 20.0%. Rice pulled off a 6.1% quarterly advance.24,25
Mortgage rates fell in the quarter. Here were Freddie Mac’s Primary Mortgage Market Survey interest rate averages from March 31: 30-year FRMs, 4.86%; 1-year ARMs, 3.26%; 15-year FRMs, 4.09%; 5-year ARMs, 3.70%. The numbers from the June 30 survey: 30-year FRMs, 4.51%; 1-year ARMs, 2.97%; 15-year FRMs, 3.69%; 5-year ARMs, 2.97%.30
LOOKING BACK…LOOKING FORWARD
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
The new quarter begins with a few questions. Will a QE3 be needed? Will inflation become more of a factor? Will cheaper commodities help U.S. companies? Will Greece require further bailouts or loans before 2011 ends? Are Spain, Italy and Portugal next on the EU/IMF rescue list? How long can world financial markets put up with inaction on the U.S. debt ceiling? And finally, will Wall Street earnings be as impressive as some analysts think? It promises to be an eventful quarter.
Please feel free to forward this article to family, friends or colleagues.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Irish Stock Exchange (ISE) is Ireland’s only stock exchange and has been in existence since 1793. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The Korea Composite Stock Price Index or KOSPI is the index of all common stocks traded on the Stock Market Division. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The Hang Seng Index is a free-float capitalization-weighted index of selection of companies from the Stock Exchange of Hong Kong. The S&P/ASX All Ordinaries Index represents the 500 largest companies in the Australian equities market. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Bovespa, the benchmark stock index of Brazil, is the second largest in the Americas, and the leading exchange in Latin America. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
1 – blogs.wsj.com/marketbeat/2011/06/30/data-points-u-s-markets-27/ [6/30/11]
2 – bea.gov/newsreleases/national/pi/pinewsrelease.htm [6/27/11]
3 – census.gov/retail/marts/www/marts_current.pdf [6/14/11]
4 – bloomberg.com/news/2011-06-24/u-s-advance-report-on-durable-goods-for-may-text-.html [6/24/11]
5 – data.bls.gov/timeseries/LNS14000000 [6/29/11]
6 – bls.gov/news.release/cpi.nr0.htm [6/15/11]
7 – bls.gov/news.release/ppi.nr0.htm [6/14/11]
8 – ism.ws/ISMReport/MfgROB.cfm [7/6/11]
9 – money.usnews.com/money/business-economy/articles/2011/04/18/what-sps-us-outlook-downgrade-means [4/18/11]
10 – money.cnn.com/2011/05/16/news/economy/debt_ceiling_deadline/index.htm [5/16/11]
11 – fool.com/how-to-invest/personal-finance/savings/2011/07/05/what-does-qe2s-ending-mean-to-you.aspx [7/5/11]
12 – huffingtonpost.com/2011/06/29/greece-austerity-bill-greek_n_886760.html [6/29/11]
13 – online.wsj.com/article/SB10001424052702303544604576429731982195632.html [7/6/11]
14 – smh.com.au/business/world-business/euro-zone-retail-sales-slump-in-may-20110706-1h19l.html [7/6/11]
15 – bloomberg.com/news/2011-07-06/german-factory-orders-rise-on-domestic-demand.html [7/6/11]
16 – news.xinhuanet.com/english2010/china/2011-07/01/c_13960799.htm [7/1/11]
17 – finfacts.ie/irishfinancenews/article_1022654.shtml [7/1/11]
18- online.wsj.com/article/SB10001424052702303627104576413833704779332.html [7/1/11]
19 – online.barrons.com/article/SB10001424052702303627104576413800819281550.html [6/30/11]
20 – online.wsj.com/article/SB10001424052702303763404576416263003588324.html [7/1/11]
21 – mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [6/30/11]
22 – bullionpricestoday.com/bullion-prices-mixed-in-second-quarter-2011/ [6/30/11]
23 – online.wsj.com/mdc/public/npage/2_3051.html?mod=mdc_curr_dtabnk&symb=DXY [7/6/11]
24 – blogs.wsj.com/marketbeat/2011/06/30/data-points-energy-metals-494/ [6/30/11]
25 – businessweek.com/news/2011-07-01/corn-extends-worst-monthly-loss-since-2008-on-acreage-increase.html [7/1/11]
26 – blogs.forbes.com/morganbrennan/2011/06/29/what-can-homeowners-learn-from-case-shillers-home-price-index/ [6/29/11]
27 – realtor.org/wps/wcm/connect/04f71400474c15ff808c8e0e6e9f088e/REL1105EHS.pdf [6/21/11]
28 – census.gov/const/newressales.pdf [6/23/11]
29 – freddiemac.com/pmms/ [7/5/11]
30 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F30%2F10&x=0&y=0 [7/6/11]
30 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F30%2F10&x=0&y=0 [7/6/11]
30 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F30%2F10&x=0&y=0 [7/6/11]
30 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F29%2F01&x=0&y=0 [7/6/11]
30 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F29%2F01&x=0&y=0 [7/6/11]
30 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F29%2F01&x=0&y=0 [7/6/11]
31 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/6/11]
32 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
33 – montoyaregistry.com/Financial-Market.aspx?financial-market=roth-ira-rules-and-regulations&category=1 [7/7/11]
The original 4% increase was part of a quarterly rate filing that took effect July 1.
Now that Aetna has reduced the size of the latest quarterly increase, the annualized rate of increase for the affected plans is 13.7%, officials say.
In June, a California unit of WellPoint Inc., Indianapolis (NYSE:WLP), agreed to cut the quarterly premium increase for some group health products sold in California to 3%, from 6%, officials say. That change affected small group plans with a total of about 18,000 enrollees.
The California Legislature has been considering Assembly Bill 52, a bill that would limit California health insurers to one rate increase per year and give the state’s insurance commissioner the authority to reject rate increases.
In a press release, California Insurance Commissioner Dave Jones says the only thing he can do now about rate increases he believes to be excessive is to post information about the increases on the Web.
– Allison Bell
Joel Willemssen, managing director of the U.S. Government Accountability Office (GAO), gave that assessment today in testimony presented at a hearing organized by the Senate Homeland Security and Government Affairs Committee’s federal financial management subcommittee.
The subcommittee held the hearing to look at efforts to protect the integrity of the Medicare and Medicaid programs.
The federal Centers for Medicare and Medicaid Services (CMS), the arm of the U.S. Department of Health and Human Services that runs Medicare, started an Integrated Data Repository (IDR) program and a One PI program in 2006.
The IDR program was supposed to create a single source of Medicare and Medicaid claim data, and the One PI program was supposed to create a centralized portal for analyzing the data and looking for signs of fraudulent billing. CMS officials wanted analysts to be able to look to see, for example, when Medicare enrollees had apparently used ambulance services without using any other type of medical care.
CMS hired contractors to develop the tools and was supposed to have tools in place by 2009.
Parts of the IDR system have been in place since 2006, but the repository is still incomplete, Willemssen said, according to a written version of his remarks provided by the GAO.
“Program officials have not defined plans and reliable schedules for incorporating the additional data into IDR that are needed to support the agency’s program integrity goals,” Willemssen said.
Because of the project management problems, CMS officials stopped efforts to add more data to the repository after spending more than $80 million and more than 3 years on the effort, Willemssen said.
CMS deployed the One PI analysis system in 2009, but it is not widely used, in part because of problems with analyst training, Willemssen said.
There were supposed to be 639 analysts trained to use the system by October 2010, but only 42 were actually trained, Willemssaid said.
“Because IDR and One PI are not being used as planned, CMS officials are not yet in a position to determine the extent to which the systems are providing financial benefits or supporting the agency’s initiatives to meet program integrity goals and objectives,” Willemssen said.
CMS officials have suggested that the IDR project should cost about $90 million through 2018, provide a total of $187 million in financial benefits, and lead to $97 million in net benefits.
“As of March 2011, program officials had not identified actual financial benefits of implementing IDR,” Willemssen said.
Similarly, because of the relatively low level of use of the One PI system, there are “not enough data available to quantify financial benefits attributable to the use of the system,” Willemssen said.
“Until CMS is better positioned to identify and measure financial benefits and establishes outcome-based performance measures to help gauge progress toward meeting program integrity goals, it cannot be assured that the systems will contribute to improvements in CMS’s ability to detect fraud, waste, and abuse in the Medicare and Medicaid programs, and prevent or recover billions of dollars lost to improper payments of claims,” Willemssen said.
EBSA also has extended the effective date of the transitional rule for the final participant-level fee disclosure regulation, so that initial disclosures must be furnished to the agency no later than 60 days “after a first day of the first plan year beginning on or after November 1, 2011, or 60 days after the effective date of the fiduciary-level fee disclosure rule.”
The transitional rule also provides that certain quarterly disclosures must be furnished no later than 45 days after the end of the quarter in which the initial disclosures are required to be furnished to participants and beneficiaries under the transitional rule.
The rule is effective July 15.
EBSA says the final rule keeps a modified version of the 60-day transition rule that works in conjunction with the new effective date of the 408(b)(2) regulation that is now under development. The 408(b)(2) disclosure regulation will require retirement plan service providers to disclose comprehensive information about their fees and potential conflicts of interest to plan fiduciaries.
“This linkage will ensure that the 408(b)(2) regulation becomes effective first and that all plans will be able to take advantage of the transition period following the effective date of the 408(b)(2) regulation,” EBSA officials say.
EBSA Administrator Phyllis Borzi says employers and workers will benefit from the new fee disclosure rules.
But “extending and aligning the applicability dates of these related rules gives plan fiduciaries an appropriate amount of time to get all required fee and investment information from their covered service providers so they can then disclose, by the date required, complete and accurate information about retirement plan and investment costs to their workers,” Borzi says.
Retirement services groups have been asking EBSA to give employers and service providers more time to implement the new rules.