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Phia Group Media

Jason Ruhl
Jason Ruhl
Jason Ruhl's Blog

Pin the Tail on the Donkey & Other Blindfolded Games of Placement

On December 27, 2017
By: Ron E. Peck, Esq.

Our industry (that being the self funded health benefits industry) is primarily a web-work of relationships.  Unlike a large, traditional health insurance carrier, where all functions are located under one roof, in our industry key pieces of the greater whole are comprised of various independent entities.

The funding comes from a sponsor – usually an employer.  Sometimes, these employer “groups” gather to form a captive, MEWA, association health plan, or other collective funding mechanism.  Next, they select someone to process claims and perform other administrative tasks.  Usually this is a carrier providing administrative services only (ASO) or a third party administrator (TPA).  Next, these plans – more often than not – require some sort of financial insurance to protect them from catastrophic claims, securing for themselves a specific type of reinsurance customized to fit this role, a.k.a. stop-loss.  Add to this list of entities a broker/advisor, who helps the sponsor “check all the boxes,” as well as ensure a complete and successful implementation (as well as plan management), vendors (who offer any number of cost containment services and other plan necessities), networks with providers (from direct contracts to PPOs), and a pharmacy benefit manager (PBM).  I’m sure I’ve missed a few other players, but – hopefully – you start to see how a so called “plan” is not a single being, but rather, a collection of beings coordinating with each other.  If one player drops the ball, the whole thing unravels.

I recently posted on LinkedIn a hypothetical, wherein a CEO loves the idea of medical tourism, railroads it through and has it added to their self-funded health plan; their broker and TPA pick a medical tourism vendor, and a few weeks later, a plan member is in Costa Rica for a costly procedure.  The total cost of the procedure hits (and exceeds) the benefit plan's stop loss insurance specific deductible.  Despite that, the total cost is still way less than if the procedure had taken place domestically (even after applying the plan's network discount).  Yet, stop loss denies the claim for reimbursement, citing the fact that the plan document excludes coverage for treatment received outside the United States.  Now the plan (through its TPA) has paid the vendor's fees, paid for claims that are technically excluded by the plan document, and is without stop-loss reimbursement.

The responses have been many, various, and generally spot-on (as well as – in some cases – entertaining).  Yet, it exposes a few issues and “gaps” in the web-work I described above.  The employer, TPA, and broker are excited to adopt a program that will save them money.  By extension, the stop loss carrier will save money.  In my example, the stop loss carrier did indeed save money, compared to what it would have cost (and they would have paid) domestically.  Yet, because the plan document wasn’t updated and the carrier wasn’t informed, the stop loss carrier isn’t “required” to reimburse.  Today, few carriers will reimburse when not required to do so.  There are some that, in recognition of the plan’s efforts to contain costs, would cover the loss – but most would not.

This is just one example of the issues we’re seeing today due to the “web-work” nature of our industry.  Like organs in a human body, all the pieces need to communicate and coordinate.  

It has also come to our attention that there is a growing trend whereby brokers and plan sponsors seek to use their own stop-loss rather than a “preferred” carrier selected by the TPA.  TPA’s, in turn, are worried that if the plan utilizes a carrier the TPA has not vetted, and something goes wrong, that TPA may be blamed for a conflict they had no hand in creating.  Rather than push back against this trend, however, and thusly lose business opportunities, we believe – AGAIN – the key to success is communication and preemptive coordination.  Explain the concerns, put them in writing, and have the party placing the insurance agree not to hold the TPA at fault for issues they had no hand in creating.  This will then allow a trend – that frankly can be quite good for the industry (that is, allowing plan sponsors to customize their plan to meet their needs, including who provides the stop-loss) – to thrive without threatening the TPA.

These are only two examples, but hopefully it’s now clearer to you why we must discuss these issues ahead of time, ensure all written documents align, and we coordinate before an issue arises.

Empowering Plans Segment 25 - A Taxing Time

On December 21, 2017
In this special edition of the podcast, The Phia Group's CEO Adam Russo and Attorney Brady Bizarro discuss the new GOP tax bill in depth. Specifically, how does the bill affect employers? What does the repeal of the individual mandate mean for the self insured industry and for the future of Obamacare?

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

With Great (Cost-Containment) Power Comes Great (Fiduciary) Responsibility!

On December 19, 2017

Insurance has entered an era of cost-containment. No matter your role in the industry, you are concerned with saving money, whether for yourselves or your clients. Health plans and other entities have begun to adopt various programs that are designed to reduce exposure – but only some of those programs are supported by the Plan Document. This can cause fiduciary headaches for the Plan, such as in the recent Macy’s case.

 Join The Phia Group’s legal team for an hour as they describe various ways to cut costs, what must be done to ensure that fiduciary duties are being met, and what happens if they are not.

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Empowering Plans Segment 24 - Protect Your ASA

On December 18, 2017
In this episode, our hosts (including repeat guest host Vice President of Consulting, Attorney Jennifer McCormick) discuss the rising trend in stop-loss insurance being placed by entities other than the TPA, yet the TPA is held responsible if things go sour.  Listen in to see how everyone can proactively avoid issues from emerging.

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

House Bill Assumes Air Ambulance Providers are Underpaid

On December 13, 2017

By: Jon Jablon, Esq.

When working with air ambulance providers to discuss appropriate pricing, it is common for providers to suggest that Medicare rates are inappropriate due to Medicare’s habitual underpayment air ambulance providers. In this manner, when a payor suggests payment at a percentage of Medicare, many providers demand more, suggesting that the Medicare-based payment is unreasonably low, and therefore payment derived from that is low as well.

In apparent agreement with that thought, The 115th Congress has introduced HR3378. Short-titled the “Ensuring Access to Air Ambulance Services Act of 2017,” this bill is designed primarily to alter the Medicare reimbursement to air ambulance providers. The bill apparently contemplates that air ambulance providers are being underpaid by Medicare, because starting in 2018 the Medicare base rate will increase by 12%, prior to any cost data being reported by those providers. For 2019 and 2020, that increase will jump to 20%.  Beginning in 2019, air ambulance providers are required to report a comprehensive set of cost data elements, and beginning in 2020, that reporting includes quality data as well. As of 2024, the bill also creates a “value-based purchasing program,” which entails giving each air ambulance provider a performance score and increasing or decreasing payments based on that. Reported cost data will eventually (2021) be used to recalculate the base rate of air ambulance services.

The bill in its current form specifies that the data disclosures will eventually be made public, which can be useful for self-funded plans to be able to benchmark claims. Often health plans have only the provider’s billed charge and a Medicare rate to work with when determining payment, but if cost data is publicized, that creates new benchmarking possibilities.

So, if this bill passes, what will it mean for you? If Medicare rates are irrelevant to you or your health plans, then this likely means very little for you – but if you or a client are one of the thousands of health plans that consider Medicare rates when determining payment for air ambulance services, then it means your Medicare calculations (and therefore payments to air ambulance providers) will increase a bit for 2018, and a bit more for 2019 and 2020. Come 2021, they may increase or decrease again based on cost data, and come 2024, they may increase or decrease yet again based on performance indicators. In other words: expect higher payments in 2018, another increase for the following two years, and then unpredictable increases or decreases from there.

Although it may seem intuitive to assume that the government’s admission that these providers are underpaid by Medicare will lead to an increase in charges across the board, my assumption is that charges billed to self-funded payors will not increase as a result of this bill, even if it becomes law. Many air ambulance providers already justify their billing by citing operating costs, and this new bill does nothing to change those costs. An air ambulance provider would be hard-pressed to use either the assumptions or effects of this bill to justify increasing charges across the board.

The bill is still in its infancy, so it is likely that if it ultimately becomes law, it will have been changed quite a bit in the process; we’ll just have to wait and see what happens with this one.

Sacrificing the Individual Mandate on the Alter of Tax Reform

On December 11, 2017

By: Brady Bizarro, Esq.

Perhaps the single most important piece of the Affordable Care Act (“ACA”) is its “individual mandate.” It is literally the glue holding all of Obamacare together. Since 2014, every American (with minor exceptions) has been required to obtain health insurance coverage that meets the government’s definition of “minimum essential coverage” or pay a penalty. The latest version of the Senate tax plan, which narrowly passed on December 2nd, eliminates the individual mandate. According to the non-partisan Congressional Budget Office (“CBO”), this will result in thirteen (13) million fewer individuals having health insurance coverage by 2027. Yet, that is only one fraction of the impact eliminating the individual mandate would have on the health insurance market overall. The primary impact would be the unraveling of the health insurance market because of what is known as the “death spiral.”

Recall that the ACA addressed the problem of unaffordability for individuals with preexisting conditions through its “guaranteed-issue” and “community-rating” provisions. Together, they prohibit insurance companies from denying coverage to these individuals or charging them higher premiums based on their health status. These provisions do not address the problem of healthy individuals choosing to forgo coverage until they become sick or in some cases entirely. This is a phenomenon known by health policy experts as “adverse selection,” and, if left unsolved, it inevitably leads to a “death spiral” in which only the sickest people remain in the health insurance market. In fact, the “guaranteed-issue” and “community-rating” provisions make this problem worse, since insurers would be forced to cover these individuals and be barred from charging them higher rates.

The individual mandate solves the problem of the death spiral because it forces healthy people into the insurance risk pool and allows insurers to subsidize the costs of covering sick individuals. Without the mandate, insurance companies may find it exceedingly difficult to make a profit and are very likely to leave the marketplace (especially the individual exchanges which tend to insure the sickest people). The CBO has already estimated that premiums on the marketplaces will increase by at least ten percent (10%) in 2019 if the individual mandate is repealed.

The truth is, no one knows for sure how many young, healthy individuals will drop their health insurance coverage if the mandate is repealed. For employer-sponsored plans, especially self-funded plans which tend to be less expensive than their fully-insured counterparts, it may be that healthy workers keep their coverage as part of their overall benefit packages. Arguably, the bigger risk is to those who purchase individual coverage. As for hospitals and providers, they can expect to provide increased uncompensated emergency room care as at least some of those individuals who voluntarily (or involuntarily) drop their health insurance coverage will inevitably end up in the emergency room to receive medical treatment.

Empowering Plans Segment 23 - Plans and Conspiracy

On December 6, 2017
Bring your tin foil hats, folks!  With today's episode, our hosts (including guest host, VP of Consulting, Attorney Jennifer McCormick) discuss the recent news regarding CVS purchasing Aetna as well as a new opportunity to customize plan document reviews to address different levels of need.

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

Year Up at Phia!

On December 1, 2017
The Phia Group has been beyond thrilled with our talented, dedicated members who have come to us through Year Up. Sheyla and Josh have become such essential members of our team – we feel truly blessed to call them a part of the Phia Family. We sat down with them to hear their thoughts and experiences:

Q: How did you hear about Year Up?

Sheyla: I was discussing my job situation with friends and family. I was working long hours with little pay in a pizza shop; I felt stuck. They suggested I apply for Year Up.

Josh: I was working at a full service gas station. The pay was bad, the environment was rough, and I was over it. My dad actually told me about Year Up – He said they put you on a good path and you could make money while in the program.

Q: How was getting your foot in the door?

Sheyla: It’s kind of tough to get in the program; they don’t take everyone – it was competitive. The seats fill up fast. I was 21 when I joined the program.

Josh: I had friends already go through the program. The application process is time sensitive, someone could finish their paperwork before you and they would get in and you wouldn’t. I was 24 when I started.

Q: Did you choose Phia or was Phia chosen for you?

Sheyla: Phia was chosen for me; we didn’t really interview, after we knew we’d be going to Phia we met with our director and a couple people from Phia just to have a conversation.

Josh: I looked up Phia and I didn’t have a real grasp on what they did, I was asking a lot of people things like ‘what’s subrogation?’ - There were a lot of things I’d never heard of before.

Q: What was it like when you first started at The Phia Group?

Sheyla: I kept thinking to myself ‘am I doing this right? Do I shake everyone’s hands?’ – Year Up did a good job of preparing me with a general skill set but getting comfortable with Claim Analysis was tough coming from only having experiences in finance.

Josh: Everyone speaks so highly of Sheyla, she does a great job. I actually started working in a bunch of different departments, moving around from task to task to get a hold of what I fit best in. I did a lot in IT and Claim Analysis and eventually found my place in coding.

Q: What skills have you gained through Year Up and The Phia Group?

Sheyla: Actually working on a computer is something I’ve grown a lot in. I wasn’t familiar with Claim Analysis when I got here and I was able to learn new skills and grow within the department. I was also able to change my perspective on team work. In the past I would take the bulk of the work when working in groups, I would be the one to carry the team through the project. I got a stronger sense of the idea of team work when I came here. It is balanced, people pull their own weight, and it’s nice to see that. People are nice here, it feels good not to have to carry people, it’s nice to have a great team.

Josh: I feel I’ve gained a lot of computer skills. I know Excel really well now, I’m proud of that. Learning how to code is also something I’m proud of, I would like to grow more with my coding skills. When I first came in they didn’t really know where to place me, I got my feet wet in all different departments, and I’m happy I ended up where I am. I learned slowly about what every department does here, I’m grateful for the growth process.

Q: Where did you see yourself in 5 years before Year Up?

Sheyla: I got into The AI in Brookline but I had payments due and I couldn’t find a job to pay for school. I had to drop out. From there I worked small jobs and I wanted to save up money to go to school.

Josh: I wanted to be a chef and I had dreams of owning a food truck. I dropped out of art school with no way to pay for it.

Q: Where do you see yourself in 5 years now?

Sheyla: I’d like to still be working at The Phia Group – I like what I do here and I feel like I have a leg up in this field with all that I’ve learned and the experience I’ve gained.

Josh: With my background in coding, I want to take it further. I see how great a coding career is and I want to get better at it; I’d like to follow in the steps of some of the execs here.

Q: What advice would you give to others in Year Up?

Sheyla: Year Up gives people an opportunity to have a meaningful career. If you’re going to do it, make sure you’re fully invested in it. I do wish Year Up was offered in more places, it’s a great program.

Josh: It’s not easy so don’t slack off, follow the rules and commit to it. At first I was scared I wouldn’t be able to work in an office environment; Year Up gives you the skills and professionalism to succeed.

We would like to thank Sheyla and Josh for taking the time to tell us about their experiences.

A Little 2017 Holiday Cheer… Subrogation Style!

On November 29, 2017

By: Chris Aguiar, Esq.

On the heels of the NASP conference in Austin, Texas I felt it appropriate to bring along some Holiday Cheer after a questionable 2016.  Everything in the subrogation world in 2016 was viewed through the prism of the Montanile decision where the Supreme Court ruled the a plan who allowed its participant to obtain a settlement fund and not do enough to enforce its reimbursement right could be held without a remedy if the participant spent the settlement funds on non-traceable assets.  After 15 years of decisions favoring benefit plans, Montanile seemed like a little bit of coal under the tree, and some worried that it signaled a shift that might lead to more scrutiny on benefit plans and burdens being shifted onto benefit plans in order to enforce their rights.  I’m happy to report this Holiday season that those fears may have been premature.

I just returned from Austin, Texas where the Country’s best and brightest subrogation attorneys converged at the NASP Conference to chat about the year in subrogation and I can tell you that 2017 has given us a fair amount to be thankful for and hope that the tide has not turned as courts continue to render decisions that are favorable to benefit plans.  For example, in Mull v. Motion Picture Indus. Health Plan, 2017 U.S. App. LEXIS 13949, the 9th Circuit joined the 5th, 6th, & 11th Circuits in deciding that a recovery provision referenced only in an SPD can be enforceable when the SPD is adopted as all or part of the plan.

There also appears to be some positivity surfacing in the courts for MAO’s and their ability to enforce the same rights and obligations upon Medicare recipients as traditional Medicare.  Courts historically held that MAOs did not have an implied federal right of action to sue primary payers in Federal Court.  Over the past year, however, courts have ruled that there is indeed a right of action and that, much like with traditional Medicare, there can be severe penalties levied against parties who do not comply with the requirements of reimbursement under the Medicare Secondary Payer Act, such as treble damages as well as fines of $1,000.00 a day for a carrier’s failure to report.

So, don’t let Montanile and 2016 get you down.  There are several strategies that can be utilized to both ensure that a plan participant  and/or their attorney will cooperate with a plan’s right of reimbursement, and in the event that funds do get disbursed – that isn’t the end of the analysis.  And as is often the case with the law, if you wait long enough the law changes.  The important thing is to make sure you have the resources to stay abreast of all the changes and strategies to maximize recoveries.

Now enough about subrogation … let’s go get ready to spread some actual Holiday Cheer ….. a Merry Christmas and  Happy Holidays to all!

Not all Illegal Act Exclusions are Created Equal

On November 22, 2017

By: Kelly Dempsey, Esq.

The drug addiction crisis in many parts of the United States is a reoccurring news headline, so it’s no secret that the prevalence of medical claims related to driving while under the influence of drugs and/or alcohol also appears to be on the rise. Illegal acts and illegal drugs exclusions are prevalent in self-funded plan documents, but the million dollar question is does the wording in the plan document align with the plan’s intent?

There are many different versions of illegal acts exclusions – some include references to misdemeanors or felonies, while others refer to acts that are punishable by any period of incarceration. The first step to ensuring the plan language meets the needs of the employer is to determine what types of acts the employer intends to include in the illegal acts exclusion. This doesn’t mean the plan needs to specifically list examples of illegal acts but instead use broader descriptions. For example, a plan could exclude felonies and misdemeanors, but not civil infractions or minor traffic violations. Unfortunately illegal acts exclusions can be a bit more complex because of variations in state law so it’s important that employers keep this in mind. It’s of the utmost importance that the plan creates an exclusion that outlines the employer’s intentions and motivations for what should be considered excluded under their illegal acts exclusion.

The plan administrator of a self-funded plan will always retain discretionary authority to interpret the terms of the plan document. While self-funded plans have broad discretionary authority as a fiduciary, the plans must ensure this discretion is utilized in a uniform and consistent manner.  For example, a self-funded plan cannot be discriminatory with claim payment (i.e. deny claims for Sally who is in a DUI, but pay claims for Joe who was in a DUI). However, in order to avoid a breach of that fiduciary duty in use of their discretion, the plan administrator must not act in an arbitrary or capricious fashion.  As we’ve seen in the recent Macy’s court case, it’s important to align plan language with how the claims are administered – so the plan will also need to ensure that the third party claims administrator can process claims in a manner that aligns with the plan’s intent.

As with all exclusions, illegal acts exclusions must be reviewed on a case by case basis to determine their applicability. The key factors are generally a combination of the facts of the specific situation, how the exclusion is worded, and applicable state law and/or guidance. Ultimately, the plan will be using its discretionary authority when determining whether or not to exclude coverage.