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ER docs sue HHS over out-of-network payments

On May 18, 2016
By Maria Castellucci

The American College of Emergency Physicians is suing HHS, claiming a provision of the Affordable Care Act allows insurers to underpay for out-of-network emergency medical services.

The federal lawsuit asks that insurers be transparent on the data they’re using to pay for services rendered by an out-of-network hospital.

Read more…

Sky-Rage: Bills, Debt, Lawsuits Follow Helicopter Medevac Trips

On March 18, 2016
By Cindy Galli, Stephanie Zimmermann & Brian Ross

The helicopter ambulance that rushed Shauna Laswell to a Las Vegas hospital after a heart attack may have saved her life.

But when she got the air ambulance bill, she says she “almost had another heart attack.”

Read more…

FEHBA Preempts Kansas Anti-Subrogation Regulation

On November 3, 2015
By Carmen Castro-Pagan
The Federal Employees Health Benefits Act preempts a Kansas administrative regulation prohibiting subrogation and reimbursement clauses in health insurance contracts of federal government employees, the U.S. Court of Appeals for the Tenth Circuit ruled .
The appeals court, in the Oct. 29 opinion, joining other federal courts in ruling that FEHBA preempts state laws limiting subrogation and reimbursement clauses. The decision confirmed the lower court’s ruling that a federal employee must reimburse her insurer because federal common law also displaced Kansas regulation.
The case is Helfrich v. Blue Cross & Blue Shield Ass’n, 2015 BL 356222, 10th Cir., No. 14-3179, 10/29/15 

Supreme Court of California Case Notification for Children’s Hospital Central California v. Blue Cross of California

On October 17, 2014
In an important legal development in the healthcare cost debate, the California Supreme Court has denied a petition for review of the recent decision in Children’s Hospital of Central California v. Blue Cross of California, 226 Cal. App.4th 1260 (2014). You’ll recall that a few months ago, a California appellate court reversed a decision by the trial court holding Blue Cross responsible for the full billed charges because the jury found that an implied-in-fact contract existed between the Hospital and Blue Cross. In so doing, the jury awarded the hospital $6.6 million in addition to the $4.2 million Blue Cross had already paid, totaling a payment of $10.8 million. This decision set up a potential showdown in the California Supreme Court; but the showdown is not to be. As a result benefit plans get important legal support for the proposition that a hospital cannot be paid an amount simply because they charge for it.

See the full appellate decision here.

Stay tuned as the the California courts try to determine on remand what should be considered when determining the “reasonable and customary” value of services rendered.

Hospitals facing big divide in pro- and anti-ACA states

On December 2, 2013
By Beth Kutscher

Bradford Regional Medical Center and Olean General Hospital sit just 20 miles apart on opposite sides of the Pennsylvania/New York border. They serve a similar patient population in the rural, forested region. They are both owned by the not-for-profit Upper Allegheny Health System.

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Letter from The Phia Group’s editior, Andrew Milesky

On October 14, 2013
The winds of change are coming, and they blow closer than ever. It seems so recent that we were all looking forward to 2014, and feeling confident that we had plenty of time to get things in order and prepare – both financially and in terms of compliance – to address President Obama’s sweeping healthcare[insurance] reform law. Yet here we are, clueless as ever and full implementation looming.

Since the passing of the law, various waves of reform have impacted our industry, sending many of our clients into panic mode as they hustle and bustle to update their plans and implement measures to ensure compliance. At this point, SBCs seem like a thing of the past; as new “bigger and badder” issues arise!

As we sit here, with the air getting a little chillier and January 1st getting a little closer, we once again await our inevitable lives without pre-existing exclusions, no more than 90 day waiting periods, no annual limits on essential health benefits, and for some of us a change in clinical trial coverage.

But let’s not rush to winter; the fall is upon us and that means conference season is too. As we do each year, we road warriors head out to the major industry events to talk and listen; to address your greatest concerns. This interaction is invaluable to us; so when you see us, please let us know how we can help. It is your concerns, your requests, and your pleas that inspire us to research and develop new services and cost containment strategies focused on growing your businesses.

The time to chat is now! There has never been a more appropriate time to tell us how we can help and for us to be your strategic partner. The potential for financial burdens on plans means we must seek new and innovative ways to save our clients money, and ensure the preservation of our industry.

The use of strong, effective plan language can be the first step to maximizing plan benefits and savings. A successful claims recovery process to ensure every recoupable dollar spent is placed back in the mix for future health claims, is another step you must take – and something we are happy to assist with.

If you have yet to work with The Phia Group, now might be a great time to start. We are here for the long run and are dedicated to the growth and stability of the employer based health benefits industry.

Attack of the Killer P’s – Providers Paying Patients’ Premiums

On October 10, 2013
By: Sean Donnelly (The Phia Group, LLC)

A recent and unsettling trend in the healthcare industry involves medical providers paying insurance premiums or contributions on behalf of their patients in order to ensure that the patient’s coverage remains active. Providers engage in this practice because it is largely cheaper and easier to prolong a patient’s coverage and continue charging exorbitant amounts to the patient’s health plan or policy than to try and collect directly from a patient who would otherwise no longer qualify for coverage – a struggle that providers view as being akin to squeezing blood from a stone.

Surprisingly, the Internal Revenue Service (IRS) actually condones this practice as reflected in its Final Rule issued in 64 Fed. Reg. 5160-01 (Feb. 3, 1999). The IRS’ Final Rule, which clarifies the accepted methods for paying for COBRA continuation coverage, makes it clear that employer-sponsored health plans must accept premium payments made by a provider on a qualified beneficiary’s behalf. The Final Rule states:

“Many plans and employers have asked whether they must accept payment on behalf of a qualified beneficiary from third parties, such as a hospital or a new employer. Nothing in the statute requires the qualified beneficiary to pay the amount required by the plan; the statute merely permits the plan to require that payment be made. In order to make clear that any person may make the required payment on behalf of a qualified beneficiary, the final regulations modify the rule in the 1987 proposed regulations to refer to the payment requirement without identifying the person who makes the payment.” (emphasis added).

Accordingly, it does not appear that providers are engaging in any unlawful practice by paying premiums or contributions on behalf of their patients, at least from the perspective of the I.R.S. However, group health plans may be able to discourage this practice by arguing that such payments by medical providers constitute taxable income to the patient.

The starting point for the determination of “taxable income” is the computation of “gross income.” Internal Revenue Code § 61(a) defines gross income as “all income from whatever source derived.” Gross income includes “income realized in any form, whether in money, property, or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, or other property, as well as cash.” 26 C.F.R. § 1.61-1. There is no provision in the law that excludes insurance premiums from the category of “income realized in any form,” and insurance premiums fit in very well with the examples of income provided in the regulation.

Furthermore, the doctrine of “assignment of income” posits that money paid to and received by a designated agent, but which is really intended for and paid for the benefit of a third person, is considered taxable income for that third person. Thus, when a hospital pays an insurance premium or contribution on behalf of a patient, the patient is considered to have “constructively received” that income, and it ought to be reported on the patient’s income taxes. Consequently, insurers and group health plans should argue that a provider paying an insurance premium or contribution on behalf of a patient amounts to nothing more than a provider giving money indirectly to that patient.

Finally, insurers and group health plans can also argue that when a provider pays a premium on behalf of the patient, the patient is thereby relieved of his or her obligation to continue making payments in order to maintain coverage. As such, a patient who is relieved of his obligation to make premium payments realizes an economic benefit – namely, the provider’s assumption of the patient’s obligation to pay the premium amount.

Next time a provider tries to pay the premium or contribution for one of your policyholders or plan members to further their own commercial interests, make sure they know that the patient may not be off the hook financially – money indirectly received is nothing more than income for tax purposes.