By: Ron E. Peck, Esq.
I really enjoy the quote, attributed to Haruki Murakami, that “Pain is inevitable. Suffering is optional.” This really hits home for me for a few reasons, personal and professional, but for our purposes – let’s consider how it relates to the health benefits industry and healthcare as a whole.
Anyone paying attention to the media and political debates will no doubt make note of the constant rhetoric regarding healthcare, and more to-the-point, the “cost” of healthcare. I’ve (here and elsewhere) discussed ad-nauseam my position that health “care” and health “insurance” are not the same. That insurance is a means by which you pay for care, and is not care itself. That by addressing solely the cost of insurance, and not the cost of care, you build a home on a rotten foundation. So, you can likely imagine some of the “ad-nauseam” I feel in my stomach when I hear the candidates talking on and on about how they’ll “fix” the problem of rising healthcare costs by punishing insurance carriers and making health “insurance” affordable (including Medicare-for-All).
The issue is that, ultimately, whether I pay via cash, check or credit… and whether I pay out of my own bank account, my wife’s account, or my parent’s account… at the end of the day, a beer at Gillette Stadium still costs more than a beer from the hole-in-the-wall pub, and if I keep buying beer from (and thereby encouraging the up-charging by) the stadium, prices will increase and whomever is paying (and in whatever form they are paying) will be drained, and no longer be able to pay for much longer. In other words, making insurance affordable (or free) without addressing the actual cost itself is simply passing the buck.
So, this brings me to the quote: “Pain is inevitable. Suffering is optional.”
Pain – the pain we feel as we are forced to deal with a costly, yet necessary, thing … healthcare. As technologies improve, research expands, and miracles take place every day, I absolutely understand that with the joys of modern medicine, come too the pain of cost. We must identify ways to reward the innovators, the care takers, the providers of life saving care.
Yet, we – as not only an industry, but as a nation – also assume that with this inevitable pain, so too must come the suffering. Suffering in the form of bankruptcy for hard working Americans and their families. Suffering in the form of unaffordable care, patients being turned away by providers, and steadily rising out of pocket expenses.
I do not believe that this suffering needs to be inevitable. If instead we accept the inevitability of the “pain” inherent in healthcare, and the costs of providing healthcare, but instead identify innovative ways to address those costs, then we can avoid the suffering. Our own health plan, for instance, rewards providers that identify and implement ways to provide the best care, for the least cost. Our plan rewards participants who utilize such providers as well. We educate our plan participants regarding how, unlike in many other aspects of life, in healthcare you do NOT “get” what you “pay for.” That fancy labels, advertisements, and price tags do not equate to better care. We teach our participants how to leverage not only “price transparency,” but also quality measurements to identify the “best of the best” when seeking care – providers that perform as well or better than the rest, for the lowest cost. Rather than accept the “inevitability” of suffering, we embrace the pain – we endure the costs, the time, the resources necessary to actually care, and make ourselves educated consumers of healthcare.
The result? Plan participants – employees that have been on the plan for five or more years – will, beginning in 2020, not make any contribution payment to our plan. That’s right; their “premium” is zero dollars. The cost of their enrollment is covered, 100%, by the plan sponsor. The plan sponsor, meanwhile, can afford to do this thanks to efforts it has made, as well as efforts made by its plan participants, to keep the costs down. Indeed, a self-funded employer like us can make a choice – either assume that the suffering is inevitable, and pass the cost onto the plan members (incurring the wrath of your own employees and politicians alike), or, see that the suffering is optional, and nip it in the bud. We have identified ways to better deal with the inevitable pain, thereby minimizing the suffering endured by our plan participants.
It can be done, and we did it. You can too, but the first step is accepting that some things are inevitable, and others are not. Assigning inevitability to something that is not in fact inevitable is a form of laziness and blame shifting; and the time has come to stop that behavior, accept responsibility, do the painful work necessary to change things, and recognize that – no pain, no gain.
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By: Jon Jablon, Esq.
Our consulting team (via PGCReferral@phiagroup.com) is often presented with the following scenario: Patient A visits Hospital, and the Plan pays certain benefits to Hospital which are later discovered to have actually been excluded by the terms of the plan document. This is a classic overpayment scenario, except that Hospital refuses to refund the overpayment to the plan (which it is well within its rights to do). In response, to try to avoid the loss, the Plan decides to activate the right it has given itself to offset future benefits payable against amounts due to the Plan. The right to offset future benefits is a common one, and there is nothing inherently unenforceable about offsetting benefits due to a patient, when that particular patient owes the plan money.
This health plan interprets its offset provision to apply across different patients. Since it is unknown whether or when Patient A will incur more covered claims, the plan instead decides to recoup its overpaid funds by withholding benefits due to Patient B (who had the misfortune of being the next patient to visit Hospital).
The question posed to our consulting team is whether this is an acceptable practice.
Our answer is no.
First, regarding overpayments in general: with some exceptions – such as payments by the Plan in excess of a contracted amount, or in excess of billed charges (for non-contracted claims) – providers do not have a legal obligation to refund money to a health plan. Instead, courts have indicated that the overpayment was technically made to the patient, since the plan paid money that would have been patient responsibility, had the plan correctly denied that amount.
Plan Administrators have certain fiduciary duties pursuant to ERISA and common law, including to act solely in the interest of plan participants, to act with the exclusive purpose of providing benefits and paying reasonable plan expenses, and to strictly abide by the terms of the Plan Document. The most apt interpretation of the practice of cross-patient offsetting is that the Plan has withheld benefits to Patient B in order to benefit the plan, such that Patient B is denied benefits to account for a prior error on the part of the plan. The plan’s attempt to make itself whole at Patient B’s expense – even though Patient B played no role in, nor benefitted in any way from, nor was even aware of, the overpayment – could be interpreted as a violation of an important fiduciary duty.
Cross-patient offsetting negates benefits due to patient B because of the Hospital’s refusal to refund money to the Plan. When we consider that it is not the provider that has technically been overpaid, but Patient A, it becomes more clear that Patient B cannot have benefits withheld to compensate for the overpayment made to Patient A. It’s an attempt to punish Hospital for not refunding money that is legally due from Patient A. Meanwhile, Patient B has paid her contributions in exchange for benefits from the plan; to withhold benefits due to Patient B because another, unrelated patient has not repaid the plan money allegedly owed is a practice we strongly recommend against.
Overpayments happen, and The Phia Group can assist in recouping them – but please, please do not offset a perceived overpayment against future claims incurred by other patients!
For Immediate Release
December 19, 2019
Braintree, MA – The Phia Group, LLC is pleased to announce that with the ringing in of the new year, it will be offering FREE HEALTH BENEFITS to employees and their families. Specifically, plan participants that have been enrolled in the plan for five or more years will be enrolled in 2020 and have zero contribution or premium; 100% of the cost of their and their families’ membership is paid for by The Phia Group.
This remarkable achievement is made possible thanks to the application and utilization of cost containment measures developed and provided by The Phia Group to the self-funded health benefits community, and proactive efforts on the part of its own plan membership to be educated, and cost-conscious “consumers” of healthcare.
The Phia Group’s CEO, Adam V. Russo, Esq., remarked – in response to those that believe cost-shifting the burden of rising healthcare costs onto employees is inevitable – that, with the right tactics in place, health benefits can be affordable and employees do not need to bear the burden of an inefficient health plan. “If our approach to health benefits didn’t work,” Adam continued, “… could we afford to maintain our contribution levels, year after year? Could we continue to offer benefits with no co-pays or deductible? The answer is no.”
Ron E. Peck, Esq., Executive Vice President and General Counsel of The Phia Group explained, “Our mission is to ensure health benefits are robust and affordable for hard working Americans. Very few people work as hard as our own employees, so providing them with the best, most affordable benefits is us living our mission.”
“We are very proud to be able to offer our employees and their families the types of benefits they’d only see at a very small number of businesses, nationwide;” Adam concluded.
For more information regarding The Phia Group, it’s benefit plan, and the services that make these incredible results possible, please contact Vice President Tim Callender by email at firstname.lastname@example.org or by phone at 781-535-5631.
About The Phia Group:
The Phia Group, LLC, headquartered in Braintree, Massachusetts, is an experienced provider of health care cost containment techniques offering comprehensive claims recovery, plan document and consulting services designed to control health care costs and protect plan assets. By providing industry leading consultation, plan drafting, subrogation and other cost containment solutions, The Phia Group is truly Empowering Plans.
This is it! This is it! Ron and Brady pick apart Elizabeth Warren’s Medicare-for-All proposal, and the concept as a whole; the good, the bad, and the really bad. You can’t afford to ignore this one.
By: Nick Bonds, Esq.
With Presidential impeachment eating up the above-the-fold coverage pretty much universally, it is important to remember that Congress has other pressing issues to attend to. While a number of Democratic candidates are worried their mandatory attendance at the Senate trial will eat up valuable campaign time on the ground in the early primary states, the rest of Congress is still trying to keep the country running.
For instance, while Democrats and Republicans have an “agreement in principle” on a stopgap appropriations deal to fund the government through the end of the fiscal year, the spending package still needs to be finalized an passed before December 20 to avoid another looming shutdown. Meanwhile, the House Ways and Means Committee is working to ratify the United States-Mexico-Canada Agreement (USMCA), the Trump Administration’s replacement for NAFTA. Both of these urgent matters of business appear to have bipartisan support, but Congress is certainly feeling the pressure as this week gets underway.
The major sticking point in the USMCA negotiations appears to be the debate around the trade deal’s prescription drug provisions. The pharmaceutical lobby has long been pushing for prescription drug protections in trade deals – remember the TPP – but this time around the White House’s primary objective appears to be lowering drug prices. A concession to strike protections for biologics from the trade agreement appears to have clinched Democratic support, who opposed the deal’s 10 years of regulatory data protection for biologics innovations. Democrats argued that the biologics protections would increase drug prices in the U.S. and delay development of cheaper biosimilar drugs.
While the USMCA appears on track for ratification, Speaker Pelosi’s prize fight of the moment is her drug pricing bill – which passed the House along party lines last Thursday. The bill, named for late Representative Elijah Cummings, aims to expand Medicare, reign in drug prices, and allow the HHS Secretary to negotiate prices of between 50 and 250 prescription drugs (including insulin). President Trump appears poised to veto the Elijah Cummings Lower Drug Costs Now Act, while the Senate is debating a more moderate proposal – the Prescription Drug Pricing Reduction Act (PDPRA). The PDPRA would add consumer protections to cap out-of-pocket (OOP) prescription drug spending, and take measures to redesign Medicare Part D and reign in drug prices.
Congress has a lot of irons in the fire this week. We shall see what they can hammer out.
Looking back at the year that was, 2019 gives us perspective and allows us to view 2020 with both optimism and concern. Open your eyes (and ears) and join the team as they review the issues, topics, and innovations of 2019 that they believe will impact 2020, as well as the strategies you need to implement now to conquer the coming year.
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The Phia Group’s Executive Vice President and General Counsel, Ron E. Peck, and Senior Vice President of Consulting, Jen McCormick, sit down to discuss the top-rated topic chosen by Phia’s webinar listeners. Our webinar listeners spoke (hypothetically) and we listened! Make sure you tune in to find out what Ron and Jen have to say about plan documents and learn the do’s and don’ts when it comes to reviewing and updating your plan document in 2020!
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By: Philip Qualo, J.D.
December 1st marked the 31st observance of World AIDS Day, an opportunity for the world to unite in efforts to stop HIV, support those affected by HIV, and remember those who have lost their lives to HIV-related diseases. The Centers for Disease Control and Prevention (CDC) first called attention to what is now known as AIDS in 1981.
In 1985, the first HIV test became commercially available. But the number of people who died from AIDS kept growing. The first licensed drug, AZT, had to be given intravenously. At the doses initially used, the drug was toxic. Eventually, an oral formulation was made but it had to be taken in high doses every four hours and usually, only people in clinical trials could gain access to it. Activists had to pressure regulatory agencies to test combinations of new drugs because if each drug were tested on its own, any remission would be temporary, as HIV could easily overcome a single drug.
Since the mid-1990s, scientists have developed an array of antiretroviral drug regimens that durably suppress the replication of HIV. Antiretroviral drugs are used to treat HIV, to maintain the health of an individual, and to prevent transmission of the virus. Numerous studies have demonstrated that when people living with HIV use antiretroviral therapy to achieve and maintain a durably undetectable level of virus, they do not sexually transmit HIV. Over the years, these regimens have been updated and refined to be even more effective, with significantly fewer side effects.
Today, antiretroviral drugs combined into a single pill taken once a day can enable a person living with HIV to achieve a nearly normal lifespan. HIV-negative populations at risk for HIV can reduce the risk of acquiring HIV by 99% by taking a single pill daily as pre-exposure prophylaxis, or PreP. Emergency post-exposure prophylaxis, or PEP, also can prevent HIV from becoming established in the body if begun within three days of exposure and taken for an additional 28 days.
The passage of the Affordable Care Act’s (ACA) in 2010 was another major milestone in improving access to care and, ultimately, health outcomes, for people with HIV in the United States. The ACA’s prohibition against denying or canceling coverage based on pre-existing conditions had a significant impact on individuals living with HIV. Prior to the ACA, many people living with HIV or other chronic health conditions experienced obstacles in getting health coverage, were dropped from coverage, or avoided seeking coverage for fear of being denied. Additionally, the ACA requires most group health plans to cover certain recommended preventive services, including HIV testing, without additional cost-sharing, such as copays or deductibles. Since one in eight people living with HIV in the U.S. are unaware of their infection, improving access to HIV testing has helped more Americans learn their status so they can be connected to appropriate care and treatment.
Despite the past 30 years of milestones in treatment, healthcare, and prevention of HIV-related illnesses, there is still no cure for AIDS at this time. However, the remarkable progress that has been made in the past three decades leads one to believe that the goal of discovering a cure may soon be a reality.
By: Andrew Silverio, Esq.
Starting in 2020, Washington’s new law aimed at putting an end to a particular form of balance billing, known as surprise billing , will go into effect. This includes situations where a patient has no reasonable opportunity to make an informed choice regarding their utilization of in-network versus out-of-network providers, for example in the case of emergency services or non-emergency surgical or ancillary services which are provided by an out-of-network provider within an in-network facility. In these cases, the patient has no way of choosing what providers to utilize, or may not know (and would have no reason to think to ask) that they could be treated by an out-of-network provider while visiting an in-network hospital.
Washington’s law mirrors the approach we have seen in several other states – it takes the patient out of the equation entirely by prohibiting the provider from pursuing any balances from them, and leaves the provider and payer to sort out the issue of any remaining balances.
In resolving outstanding balances, the provider and payer must come to a “commercially reasonable” amount based on payments for similar services in the same geographic area, and in this regard the state actually provides a data set for the parties to reference. If the parties can’t come to an agreement, either can request arbitration, and the arbitrator will choose one of the parties’ last proposed payment, encouraging the parties to submit reasonable amounts (for fear of having to defer to the other party’s offer).
Importantly, the law does not (and cannot, because of federal preemption) apply to private, self-funded plans which are governed by ERISA. However, such plans can opt-in to the law via annual notification to the state. These plans should not expect to enjoy the benefits of the law’s balance billing prohibitions if they choose not to opt-in, and reference to the state’s claims database, available on the Washington Department of insurance website, should help them in determining whether it makes sense to do so.
The full law can be found at http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Session%20Laws/House/1065-S2.SL.pdf, and a useful summary is available at https://www.insurance.wa.gov/sites/default/files/documents/summary-of-2019-surprise-billing-law.pdf.