Phia Group Media


Phia Group Media

Usually and Customarily Denied

On October 4, 2017
By: Jon Jablon, Esq.

An increasingly common problem that self-funded plans face is that plans subject to network agreements pay claims correctly and timely and at the negotiated rate, but when the claim is submitted to stop-loss, stop-loss denies a portion of the paid claim as excessive compared to the carrier’s U&C provision.

The first question a plan should ask is whether the carrier was correct in denying the claim. For instance, if the stop-loss policy defines U&C as the prevailing charge in the area, the carrier has limited its ability to reduce the claim except based on the prevailing charge in the area, so the basis for reducing the claim is severely limited.

To contrast, if the stop-loss policy defines U&C as the lesser of the prevailing charge in the area or, say, 150% of Medicare – then the carrier has the right to perhaps reach a lower determination of payability.

This might seem like a question that shouldn’t need to be asked – and we agree! – but there are so many moving parts in the self-funded industry and so many differing interpretations of contracts that it makes sense to cover all possible bases.

No matter who the carrier is, we urge health plans to not make any assumptions about what will or will not be covered. Since many stop-loss policies contain their own definitions of U&C, a health plan should coordinate with its stop-loss carrier as early in the policy year as possible (or even, ideally, prior to signing) to determine how the carrier will treat network payments in terms of U&C.

We urge health plans to learn from others’ mistakes, and make sure all the relevant contracts align before signing them. The questions of how a stop-loss policy defines U&C and how the carrier will treat network rates are important parts of the shopping-around process!

Another One Bites the Dust

On October 2, 2017
By: Brady Bizarro, Esq.
It turns out that the reports of Obamacare’s death were greatly exaggerated, at least for the 2017 calendar year. Earlier this week, Senate Republicans scrapped their last-ditch effort to repeal and replace the Affordable Care Act (“ACA”). This time around, the repeal bill, named after its sponsors, Senator Lindsey Graham (R-SC) and Senator Bill Cassidy (R-LA), received a sudden burst of momentum in the past few weeks, mostly due to the September 30th deadline, after which procedural protections expire and Republicans will need sixty (60) votes to pass a healthcare bill.

Like the earlier repeal bills, Graham-Cassidy would not have truly repealed the ACA, but it would have made fundamental changes to it. The centerpiece of this bill was the proposed repurposing of nearly all federal money currently allocated to states for premium tax credits, cost-sharing reductions, and the Medicaid expansion, into a giant block grant distributed to the states. Along with this pinch of federalism, the bill’s sponsors proposed repealing the individual and employer mandates and providing some flexibility to insurers with regard to ACA coverage mandates (provided those insurers offered “adequate” alternative coverage options). In the end, however, this bill ran into the same hurdles that plagued the other repeal bills; moderate Republicans were unwilling to make deep cuts to Medicaid and roll back protections for people with pre-existing conditions, at least not without hearings and regular order.

Now, many political supporters of the President are urging him to turn the page to tax reform, a policy area where Republicans are more unified and perhaps the last opportunity for the Trump Administration to secure a major legislative victory before the end of the year. That does not mean that the GOP is about to abandon the top campaign promise of most Republicans in Congress. We fully expect Republican leaders and the Trump Administration to revisit this issue after they deal with tax reform (possibly after Thanksgiving). Just this week, Senator Graham told reporters that he was optimistic and that it is merely a question of “when,” not “if” repeal was going to happen.

So where does this all leave us? What does this mean for the self-funded industry? It means that for the rest of 2017, Obamacare is staying put. Whether or how strictly the Trump Administration will enforce the ACA remains to be seen. The President has already indicated his intention to sign as many executive orders as he can to ease the regulatory burden of the ACA (his first proposal, to permit states to sell policies across state lines, really only affects the fully-insured market). Meanwhile, HHS, the IRS, and other federal agencies will have to prepare for open enrollment on the exchanges and a new coverage year.