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Take Two Premiums and Call Me in the Morning...

By: Ron E. Peck, Esq.

A friend and ally in the health benefits industry recently asked me if I had an up to date listing of the most costly health care expenses paid by health plans in 2018.  I didn’t; so on a whim I brought up my handy dandy search engine and typed in: “the most costly health care expenses paid by health plans in 2018.”  You know what the top results were?  “Cost of Employer Health Coverage to Rise in 2019” … “Health Insurance: Premiums and Increases” … “How to Find Affordable Health Insurance in 2018” … and other, similar articles focused on what individuals will pay in premium (and in some instances, even dissecting co-pays, deductibles, and co-insurance).  The common thread?  They are all about participant out-of-pocket expenses.  I didn’t ask how much it costs to obtain insurance.  I asked how much it costs to obtain an appendectomy!

This is just a most recent example of an issue that sticks in my craw like no other, and reminds me of something I wrote years ago.  Check this article out: https://moneyinc.com/affordable-health-insurance-is-not-affordable-health-care/.

“… too many people are confusing the term ‘health care’ with ‘health insurance.’ … Health care – meaning the actual act of caring for someone’s health – is necessary for survival. Health insurance – meaning a method by which we pay for health care – is just that; merely a means to pay for health care. Yet, a few years ago (2009 to be precise), a report posted by the American Journal of Public Health indicated that nearly 45,000 deaths are annually associated with a ‘lack of health insurance’ and that uninsured, working-age Americans have a forty percent higher risk of death than those with private insurance.  The knee-jerk reaction to this news is likely (and likely was) to rush to provide health insurance to as many people as possible. Indeed, according to this report, health insurance saves lives. Furthermore, one could argue, if saving lives is health care, and health insurance saves lives, then health insurance is health care, and your author has proven himself wrong.… As stated before, however, health insurance is a method by which we pay for health care. It stands to reason, therefore, that it is not a lack of health insurance that kills people, but rather, it is a lack of means by which to pay for health care that kills people. This, then, leads us to a logical conclusion; the problem is not that we don’t have insurance … the problem is that we can’t pay for health care without insurance. This, then, leads to the next logical thought: why is health care so expensive?”

Go back and re-read the first paragraph of this blog post.  Sadly, I fear my words published two years ago apply as much today as ever.  Enjoy this blast from the past for Throwback Thursday, and let me know if you think we’ve advanced at all since then.


Responding to a IRS Letter 226J: Considerations and Common Mistakes

By: Krista J. Maschinot, Esq.

If you are an applicable large employer (ALE), the Internal Revenue Service (IRS) could possibly be sending a Letter 226J notice your way. Will you be ready to respond accurately within 30 days of receipt if needed?

We discussed in a recent blog post that IRS enforcement of the Employer Shared Responsibility Provision of the Affordable Care Act (ACA) is very real and ALEs should be prepared as such.

There are two types of ESRP penalties that the IRS will assess based upon the information the ALE provided on Forms 1094-C and 1095-C:

§4980H(A) – Assessed when an employer fails to offer minimum essential coverage to enough of its full time employees

§4980H(B) – Assessed when an employee enrolls in the Marketplace and qualifies for the premium tax credit because the employer failed to offer affordable coverage

We recommend comprehensively reading and reviewing the information provided in the Letter 226J as to the reasoning for ESRP penalties and ensuring that this matches up with your internal documentation. This review is particularly significant because it will help you determine whether you have made an administrative/filing oversight or if there are larger compliance issues to deal with.

There are common mistakes to be aware of based on how Forms 1094-C and 1095-C were filled out that could trigger a Letter 226J. An ALE could, for instance, forget to check the “Section 4980H Transition Relief” box (Box C of line 22) on Form 1094-C. It may also fail to correctly code Line 14 of Form 1095-C regarding offer of coverage based on months offered coverage, as opposed to months of actual coverage. These types of errors are easy enough to make, but it is important to identify that they have been made prior to responding to the IRS. The monetary penalties will be assessed much differently based on filing mistake rather than actual ESRP non-compliance.


Objectives for the CVS Health and Aetna Merger

By: Erin M. Hussey, Esq.

On November 28th, CVS Health closed on its acquisition of Aetna in a $69 billion merger. CVS Health and Aetna announced this deal in December 2017 and received preliminary approval from the Department of Justice in October. This merger will combine CVS’ pharmacies and Aetna’s insurance business, but it remains to be seen whether this merger will only benefit the companies themselves or if it will truly create positive change for patients as consumers of healthcare.

CVS Health President and Chief Executive Officer Larry J. Merlo, detailed the following regarding the company’s objectives: “our combined company will have a community focus, engaging consumers with the care they need when and where they need it, will simplify a complicated system and will help people achieve better health at a lower cost.” In addition, CVS Health not only stressed the importance of patients as consumers, but the role of pharmacists and primary care physicians given the increased access to data. The combined companies will have the ability to deliver data at the pharmacy level and the pharmacists would know recent medical history of patients. Merlo also detailed the following: “By fully integrating Aetna's medical information and analytics with CVS Health’s pharmacy data, we can develop new ways to engage consumers in their total health and wellness through personal contacts and deeper collaboration with their primary care physicians.” CVS Health further commented that the use of technology will also help to achieve these objectives.

CVS will start to test stores in 2019 with added health services, focusing mainly on the management of chronic diseases. Some examples of services being added include the expansion of services at MinuteClinic, nutritional and behavioral counseling, and digital apps. CVS Health and Aetna will also focus on offering new preventive health screenings in communities that are identified as high-risk for certain health conditions. Additionally, CVS Health is developing medical cost reduction programs to “improve medication adherence and avoid hospital readmissions and unnecessary emergency room visits.”

Establishing localized and accessible healthcare, simplifying the process for consumers, and lowering costs are all positive and meaningful objectives that CVS Health and Aetna are seeking to accomplish. The changes within CVS stores will certainly be on the healthcare industry’s radar in 2019 to determine whether these objectives will be achieved and if this merger will prove positive for patients, pharmacists, and primary care physicians.

Sources:

https://cvshealth.com/newsroom/press-releases/cvs-health-completes-acquisition-of-aetna-marking-the-start-of-transforming-the-consumer-health-experience

https://www.cnbc.com/2018/11/28/cvs-creates-new-health-care-giant-as-69-billion-aetna-merger-closes.html


Faces of Phia: Episode 3 – Flying High with Judy

In this episode, Ron and Adam sit down with Judith McNeil. Judith is the most recent winner of our “Employee of the Quarter” award, as well as our second Face of Phia. Judith’s story goes from inspiring to hilarious, and is one you certainly won’t want to miss. Expect to see things differently by the time you’re done with this episode.

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


You Down with RBP? (You May Already Be!)

By: Jon Jablon, Esq.

Reference-based pricing is one of the most mysterious self-funding structures out there. At its core, it’s a simple enough idea: the plan changes what it pays for non-contracted claims. At its most basic level, it’s a way to redefine the traditional notion of U&C; generally, RBP plans base payment on some percentage of the Medicare rate. Guess what, though? If your plan defines U&C based on a database such as FairHealth (for instance), that’s a form of RBP too!

RBP isn’t a structure with a well-defined set of rules. Different plans, TPAs, and vendors do things very differently. The common denominator is that pricing for claims isn’t based on billed charges or an arbitrary percentage off billed charges, but an objective metric based on the value of services. If the plan considers rates set by a popular database to be indicative of the value of services, then that’s the reference upon which prices are based (there’s the R, the B, and the P!).

While of course there are practical differences between popular databases and Medicare, the easiest example being differences in the actual amounts generated), the major conceptual difference is that providers are generally more likely to accept rates generated by popular databases as payment in full than to accept Medicare rates as payment in full from the same payors. Even though the majority of hospitals do accept Medicare, the prevailing opinion among hospitals is that Medicare rates are essentially thrust onto them in a contract that they sign out of necessity (since many hospitals would lose a large percentage of their business if they didn’t accept Medicare). While payors may consider Medicare rates or a percentage above them to be reasonable, the majority of hospitals tend to disagree – at least at first.

When a health plan accesses the FairHealth database (again, just for example) to obtain pricing, there is often no patient advocacy needed, since many providers access the same database or consider those rates to be generally accepted – but to contrast that to Medicare-based pricing, a plan paying Medicare rates is much more likely to need some sort of advocacy since Medicare rates are not nearly as widely-accepted by providers. Patient advocacy is one of the must-haves in “traditional” RBP, which typically uses Medicare rates.

The morals of this story: (1) you may already be using RBP without realizing it! And (2) make sure your RBP program has patient advocacy, if necessary. If your chosen RBP payment methodology doesn’t need patient advocacy, then your RBP experience will probably be a bit simpler – but if you do need it, don’t skimp on it.


Trump Administration Finalizes ACA Contraceptive Mandate Exemption Rules

By: Patrick Ouellette, Esq.

Amid broader health policy discussions around the Affordable Care Act (ACA), the Trump Administration recently, and somewhat quietly, released new final rules that would expand the scope of the ACA contraceptive mandate exemption to potentially include more types of employers. The two rules are “Exemptions for Religious Beliefs” (CMS-9940-F2), aimed at large, publicly traded companies, and “Exemptions for Moral Convictions” (CMS-9925-F), which is geared toward nonprofit organizations and small businesses.

The intent of these rules was to extend the availability of the exemption to employers that, if they do not necessarily have sincerely held religious beliefs, can use “moral convictions” to oppose services covered by the ACA’s contraceptive mandate protections. If these rules sounds familiar, they should because the Department of Health and Human Services (HHS) released interim versions in October 2017 that were meant to accomplish the same goals. The most recent iteration of the rules were meant to be final, as they will take effect 60 days after their publication in The Federal Register, or in January 2019. Interestingly HHS estimated that the exemptions “should affect no more than approximately 200 employers with religious or moral objections, with many entities not being affected because they were already permitted not to cover contraceptives under the previous rules, or are protected by permanent court injunctions.”

Employers that have been closely monitoring HHS contraceptive mandate enforcement since 2017 and waiting to determine whether they qualified for religious exemptions would now have more a more concrete legal basis after the rules are published to make a contraceptive coverage decision either way. However, as my colleague Kelly Dempsey cautioned in January 2018, employers and TPAs should be wary of the litany of states that have already sued the Trump administration over the 2017 rules and the potential for more lawsuits against the administration.

As it stands now, the states that have sued include Pennsylvania, California, Washington, and Massachusetts. Delaware, Maryland, New York and Virginia joined California in its suit. The California and Pennsylvania attorneys general suits resulted in federal judges granting nationwide injunctions against the 2017 proposed rules, but both are currently under appeal. There will likely be more litigation in response to CMS-9940-F2 and CMS-9925-F; the new rules have also drawn scrutiny from groups such as the American Civil Liberties Union.


The Phia Group, LLC Announces Expansion of Exclusive U.S. Relationship with Jason C. Davis Consulting (“JCDC”)

November 20, 2018 – For Immediate Release

The Phia Group, LLC Announces Expansion of Exclusive U.S. Relationship with Jason C. Davis Consulting (“JCDC”) and the Onboarding of Nick Fitzsimmons.

Braintree, MA.  The Phia Group LLC, one of the health benefit industry’s leading cost-containment service providers, announced today that it has agreed to expand upon its existing exclusive consulting agreement with JCDC through the addition of Nick Fitzsimmons.  Mr. Davis and Mr. Fitzsimmons will assist The Phia Group with sales and product development as it relates to its suite of Provider Relations services, including but not limited to Claim Negotiation & Signoff and “Phia Unwrapped.”

“How plans process claims, apply new pricing methodologies, and interact with healthcare providers will determine who thrives in the years to come,” remarked Adam Russo, CEO of The Phia Group, “Jason and Nick are here to help us and our partners reach the next level as it relates to this increasingly important topic.”

Prior to becoming independent consultants, Jason Davis and Nick Fitzsimmons helped manage the U.S. Markets for Global Excel Management and have a combined provider relations experience of over 35 years.

“Though we consult in other markets, we wanted one exclusive, long-term strategic partnership in the United States; and The Phia Group’s innovative, forward thinking attorneys and industry specialists – with their energy, market presence, and industry know-how – just seemed like a good fit for us,” stated Jason Davis.  Nick Fitzsimmons explained, “I look forward to further enhancing the already incredible collaboration between JCDC and The Phia Group.  Together we will continue to positively impact the viability of the benefit plans they service, and improve the lives of their plan members, by building products and services that are uniquely valuable, and distinctly Phia.”

To learn more about The Phia Group, its Provider Relations services, or any of its offerings, please contact The Phia Group’s Sales Executive, Garrick Hunt, at 781-535-5644 or Info@PhiaGroup.com.


Empowering Plans: P60 - Politics With Brady

This Podcast is HUUUUGE – Brady and Ron will dig deep, analyze the recent election results, and determine how they will impact the health benefits and health care industries.  Bottom line?  If you listen to this episode, you will definitely impress everyone at the Thanksgiving dinner table. You’re Welcome.

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


Empowering Plans: P59 - Talkin’ with TPAC

In this “Partners in Empowerment” episode, Ron and Brady enjoy chatting with Michael Meloch, President of TPAC Underwriters and valued member of The Phia Group’s own advisory board.  Michael isn’t shy when it comes to diagnosing the issues, boiling healthcare cost containment down to simple basics we can all appreciate, and telling it like it is.  His employer based perspective and focus on the bottom line (a/k/a “risk”) is as refreshing as it is informative.  Don’t miss this one!

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


Faces of Phia: Episode 2 – Not Your “Norma-l” Employee

In today’s episode, our hosts chat with Norma Phillips… our first official “Face of Phia;” (sorry Matt). Norma explains what makes her different (and special) as well as what makes The Phia Group so unique. From Friday night films, to saving the American workers’ job… Norma and the team touch all the bases.

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