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Living in the Now: Prepare for 2018
A new year is approaching, and we are in the middle of renewal season; meaning it’s time for some serious preparation. Making sure your clients are cared for is no easy task; are you prepared to protect your plans, save them money, and grow your own business in 2018?

Join The Phia Group’s legal team discuss where the market is heading and what you need to do to keep up with it.

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MA Contraceptive Reform Update
By: Jen McCormick, Esq.

The continually evolving health care rules and regulations may be unsettling for employers, particularly if they are trying to finalize their 2018 benefit offerings. In addition, this unease may create confusion for employees trying to weigh their options for health care for next year.  Massachusetts women, however, shouldn’t have to worry about whether contraceptives will be available at no cost.

Despite the potential changes and uncertainty that may exist at the federal level, the Massachusetts House passed a bill last week to create clarity for these benefits for women. This bill would ensure that women retain access to no cost birth control, apart from what may happen with ACA.  Note that Massachusetts is not alone in trying to codify contraception requirements, as other states have taken measures to match the federal requirements.

The interesting piece of this Massachusetts reform, however, is that the bill would further expand the ACA requirement by permitting women to access a 12 month supply (after a three month trial), instead of limiting the supply to the typical one to three months at a time.  The Massachusetts House bill will go to the Senate next. Many believe that the bill will proceed with support.  


Massachusetts on Track to Pass a Significant Cost Containment Bill
By: Brady Bizarro, Esq.

Massachusetts, like Phia, is a cost-containment leader and on the front lines of the battle to contain health care costs. Last month, Massachusetts State Senators proposed a comprehensive reform bill focused on health care cost containment, specifically focusing on prescription drug prices and hospital costs. They, along with the Millbank Memorial Fund, spent the past year looking at what other states have done to try and curb health care costs. This bill was addressed last at the state’s Massachusetts Association of Health Plans (“MAHP”) conference by Senate President Stanley Rosenberg (which I attended). The report’s recommendations reveal that the Commonwealth is moving toward adopting many of the cost-containment strategies we already recommend to our clients, including: increasing the use of alternative payment methodologies, encouraging value-based choice, increasing consumer awareness, and mitigating provider price variation.

Unsurprisingly to our industry, the state identified pharmaceutical drug costs as a significant driver of rising health care costs. The bill empowers state agencies to conduct additional oversight of drug manufacturers and pharmacy benefit managers (“PBMs”). Notably, pharmacists would be required to inform consumers if a prescription’s retail price is less than they would pay through insurance, and to charge them the lower price. Drug manufacturers and PBMs are required to report drug pricing information to the state’s Health Policy Commission (HPC).

With regard to reigning in hospital spending, the bill aims to reduce unwarranted price variation among hospitals, out-of-network billing, and hospital readmissions. The state’s idea is to set the benchmark for readmissions at 20% for 2017-2020 and to disincentive out-of-network billing by establishing an upper limit for the non-contracted commercial rate for both emergency and non-emergency out-of-network services.

The Senate is expected to vote on this bill before the holiday recess begins on November 15th. If the bill passes the upper chamber, the debate would move to the Massachusetts House of Representatives, which could make significant changes. We will be monitoring the progress of this legislation.


Montana SB44 and State Efforts to…Do What, Exactly?
By: Jon Jablon, Esq.

A few months ago, Montana passed SB44, which created a new part of the Montana Code Annotated (the MCA). The new provisions have been added because, according to the legislature’s statement of purpose, “in many cases the high charges assessed by out-of-network air ambulance services and limited insurer and health plan reimbursements have resulted in Montanans incurring excessive out-of-pocket expenses….” For once, I don’t disagree with a state law’s purpose. Unlike many other states’ laws, which justify themselves as correcting health plan coverage deficiencies, this law exists because of high provider charges, and the legislature acknowledged that, at least to some extent. The “limited insurer and health plan reimbursements” is a byproduct of high provider charges, rather than a separate problem; it’s a problem created by the medical provider who have gouged payers for decades.

To start, note that it is likely that ERISA will preempt this law as it relates to self-funded health plans governed solely by ERISA, since the primary purpose of this law is to determine reimbursement by a health plan to a medical provider. Courts have consistently interpreted ERISA as preempting state laws purporting to change the allocation of risk between the insurer and the insured, and this apparently does exactly that by dictating what the insurer must pay. Seems like a textbook candidate for preemption.

According to the “Hold Harmless” section of the law (MCA 33-2-2302), a health plan is required to tender payment to an air ambulance provider within 30 days of claim receipt based on either (i) billed charges, (ii) a negotiated rate with the provider, or (iii) the median amount the insurer or health plan would pay to an in-network air ambulance service for the services performed.

The law goes on to provide for dispute resolution, which applies after payment is made, and if a party disputes the other party’s contention of whether any further payment obligation exists. This is potentially troublesome because it does not say that the parties can engage in dispute resolution right off the bat if either party disputes the reimbursement allegedly due; this implies that payment must first be made, and then the parties can engage in dispute resolution. Needless to say, that’s not ideal for a health plan.

The dispute resolution provisions start out on a high note (the procedure outlined in the law “is to be used to determine the fair market price of the services”). Then there’s another very sensible provision (“[p]ayment of the fair market price calculated pursuant to 33-2-2305 constitutes payment in full of the claim”). Those factors include fees usually charged and accepted as payment in full by the provider and other providers, Medicare rates, the context of the flight, and crew qualifications. This is all looking good!

But then it takes a turn.

The very next provision, referring specifically to dispute resolution, says “[a] determination under this section is not binding on the insurer or health plan and the air ambulance service.”

I am dumbfounded. That’s as anticlimactic a statement as any law can contain. The legislature’s inclusion of that last bit undermines the entire provision; once you find out that it’s not binding, you can basically just stop reading and forget what you read. It’s like reading something purporting to be a “true story” and then at the end there’s a disclaimer saying “none of this actually happened.” Not good.

So, then, where do we stand regarding payment amounts due to out-of-network air ambulance providers in Montana based on this law? It’s hard to know. Payment is apparently required to be made within 30 days, and then it can be challenged (with non-binding dispute resolution…?) – but if a health plan is first required to tender payment based on either billed charges, a negotiated rate, or the median network rate accessed by the plan, then it seems that this law is going to do more harm than good.
I wonder if Montana’s penal code is non-binding, too?


Empowering Plans Segment 21 - Planning for Stormy Seas Ahead
In this episode, Adam, Ron, and their guest star – VP of Consulting Jennifer McCormick, Esq. – discuss all of the many issues creating waves as it relates to benefit plan documents, and what steps we can all take to safely navigate those waters – including setting sail on The Phia Group Flagship Template!

Click here to check out the podcast!   (Make sure you subscribe to our YouTube and iTunes Channels!)

Phia Undercover: Two Chargemasters at Addiction Centers
By: Jason Davis

At Phia we sincerely try to be reasonable in all our provider settlements, but every once in a while we have problems achieving our goals.  A few weeks ago, we received claims with four different addiction centers, using the same biller.  This biller was billing $4,500.00 per day for detox, $1,200.00 for labs – the works.  We were asking for reasonable per diem rates which we typically get without too much hassle; they offered 10%, and then 20% and then 50% (which was still ridiculous).

They kept telling us all the other agreements they had with large PPOs or other “big” cost-containment vendors were for 50% discounts – so what was our problem, why were we asking for a greater discount?
Because that is the Phia way and discounts mean nothing!  We tried nearly everything to break through:

•    We sent them the plan document language and had an attorney argue the merits
•    We blitzed them with objective data
•    Eventually we even tendered conditional payments to try and settle the dispute…which they actually sent back!

Nothing was working, and we were stuck – but necessity is the mother of invention, and so we invented a way to push for a better rate.

I had recently read the book “Scar Tissue” by Anthony Kiedis (lead singer for the Red Hot Chili Peppers).  In his book he describes his struggles with addiction and the costs of treatment…and they were way less than what I was seeing billed, and it occurred to me that Kiedis was paying cash for his treatment (he could certainly afford it). That gave me an idea…

Using pseudonyms and personal email accounts, we emailed each addiction center advising that we were inquiring about the costs for treatment.  To be honest, we intimated that we were personally seeking treatment, which we understand could be seen as in poor taste; please note that I am married to a marriage and family therapist and so I am not insensitive to mental health issues – but diligence for our client was the priority.

We advised that we did not want to use “insurance” but wanted to see the private pay rates instead, which they quoted, and shockingly they were 10-20% of what the insurance rates were, representing 80%-90% discounts off the billed charges.  They have (at least) two completely separate charge masters: one for self-paying individuals, and one for insurance.

Taking off our self-pay beanies and putting our Phia cowboy hats back on, we informed the biller that we were aware of their private pay rates and with that in mind, we strongly urged them to reconsider our offer.
Miracle of miracles, they signed off, and we were able to close the accounts for a fair rate with a signed agreement. A little creativity and some elbow grease can go a long way!

The Irony of Equity – It’s Almost Never Fair
By: Chris Aguiar, Esq.

Self-funded benefit Plans are offered an exclusive equitable remedy.  Equity is really just a fancy word for “fair”, but most of the time – the outcomes in equitable claims aren’t really viewed as fair by anyone involved.  This week I handled a $3.5 million case for which the recovery was limited to $250,000.00.  I couldn’t help but think that no matter the outcome on this case, there is no way for anyone to feel like they got a fair share.

From the Plan’s perspective, It paid $3.5 million and even if It’s are able to recover the entire $250,000.00, it’s not fair that the party at fault for the accident is allowed to walk away without any loss except for those policy insurance limits, which to the insured only really means a premium increase for the next few years.  This sense of a lack of fairness is rooted in a very basic concept – that is, health insurance in a health care reform world is effectively unlimited while auto insurance minimums are governed by the states, with maximums decided by those who purchase the policies; they are really just looking to protect themselves from financial ruin, not those they may harm.

Of course, the Plan participant doesn’t feel like the outcome is fair, either.  This injured party was the son of a plan participant whose life was forever changed for the worse the day he found himself in the wrong place at the wrong time.  Certainly, after being resuscitated 4 times in the emergency room, he and his family are thankful he is still alive, but the stark reality that the responsible party doesn’t really have to suffer for the pain they caused that day, and that they may also lose out on any of the small pool of funds available because it may be taken completely by the Plan cannot be easy to swallow.

No matter what, someone leaves the table unhappy – but parties should to be sure they don’t throw good money after bad.  Doubling down on a bad situation only makes it worse.  If that same participant above gets a lawyer, for example, he likely gives away 1/3 of the $250,000.00, but hasn’t really changed his rights at all – so what was the point?  Benefits plans may have legal doctrine that limit their ability to push for more money – after all, ERISA requires plan fiduciaries to be prudent with Plan assets.  

I can’t stress the importance of having advisors who truly understand the rules of the game and, most importantly, that you trust.  Experienced, trusted advisors are in the best position to maximize the Plan’s recoveries as prudently as possible so that plans don’t end up spending valuable plan assets for nothing.  Equity isn’t always fair, but it is the law, and what’s the point of equity if it leaves you worse off than if you had done nothing at all?


Empowering Plans Segment 20 - Trumping Costs and Climbing the Hill
With this episode, Adam and Ron welcome back a fan favorite – guest star Brady Bizarro – and discuss the wild and crazy happenings in DC.  From contraceptives to cost containment; the impact of fully insured subsidies on self funded plans; and everything in between – this is one lively podcast you cannot afford to miss.

Click here to check out the podcast!   (Make sure you subscribe to our YouTube and iTunes Channels!)

More Rule Changes?
By: Kelly Dempsey, Esq.

Just when you thought the 2018 renewal season would be uneventful, the federal agencies and the Trump administration have been busy pumping out rule changes in the last two weeks.  If you tuned into our webinar on Tuesday, October 17, we touched briefly on the changes that have been released, including:

1.    Narrowing of the ACA’s Contraceptive Mandate;
2.    The executive order on Associations and short-term insurance; and
3.    Ending the cost-sharing reductions.

Shortly after the webinar, an apparent deal was reached regarding the funding of the cost-sharing reductions to health insurers which means the cost-sharing reductions will likely continue for another few years.  We’ll be discussing these changes in more detail in an upcoming podcast – so stay tuned.  

As we’ve seen several attempts at repeal and replace fail to come to fruition, it’s possible that we’ll see more rule changes, making the renewal season even more fun.  So for now, don’t fall asleep at the wheel - run to the store and stock up on your favorite form of caffeine to help keep your eyes peeled and tune into our podcasts and webinars for more information.  


Best Practices for Today's Plan Documents
There’s a reason the law governs how plan documents must be formed and distributed – and it’s that the plan document remains the be-all-end-all of the plan’s and member’s rights. For this reason, it is crucial to ensure that the plan document is compliant to a T, is clear and comprehensible, and is able to contain costs.
 
A plan document can, however, also be a tool that employers can use to improve their businesses as a whole, and a way for TPAs and brokers to distinguish themselves in the marketplace. Join The Phia Group’s legal team as they discuss best and worst plan document practices, provide some creative ideas for plan formation, and suggest some concepts to help perfect plan document drafting.

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