In this groundbreaking episode, Pat 'the Man' Santos – our silent producer, is silent no longer! Listen (if you dare) as he grabs the mic and goes toe to toe with our hosts. Learn of his daring escape from mediocrity, journey of self-awareness, and eventual role with The Phia Group. This is the one you’ve been waiting for. Don’t miss it.
Click here to check out the podcast! (Make sure you subscribe to our YouTube and iTunes Channels!)
By: Brady Bizarro, Esq.
On February 26th, and again in early April, top executives from major pharmaceutical companies and PBMs testified before the Senate Finance Committee. The companies represented included Pfizer, Merck, John and Johnson, CVS, Express Scrips, OptumRx, and others. Led by Chairman Grassley (R-IA) and Ranking Member Wyden (D-OR), the Committee sought to address the problems of continued price increases, free loading, and price transparency. They also portrayed PBMs portrayed as the shadowy middlemen who may be making these problems worse through their increased use of rebates.
The hearings proceeded mostly as Q&A sessions. When asked whether the CEOs consider negative public opinion when setting list prices, all said yes, meaning price isn’t just a function of administrative or research and development costs. Their answer Implies that if no one got upset, prices would go up more. One senator pointed out that if Humira (a drug used to treat arthritis and Crohn’s disease) were its own company, the drug would be among the Fortune 500 companies all by itself, larger than General Mills, Halliburton or Xerox.
The drug manufacturers claimed to support the Trump administration’s proposed rebate reform rule. That rule as proposed applies to Medicare Part D rebates only (which are still very large). Senators are also developing bills aimed at reforming the rebate system. Two CEOs told the Committee that they would lower their list prices if the rebate ban was extended to the private market.
Between these two hearings (for the manufacturers and then for the PBMs), the drugmakers and PBMs essentially blamed each other for high prescription drug prices. Popular ideas discussed were potentially tying U.S. drug prices to international prices. There was also serious support for value-based purchasing arrangements (sometimes called risk-sharing agreements) that tie drug payments to patient outcomes. That would mean that if a particular drug fails to produced a particular clinical or financial outcome, a price reduction would be triggered or a refund. Senators noted that these arrangements are complicated because of anti-kickback laws and proposed rebate reform rules, though. Price transparency will help gain more evidence in knowing if you're paying a fair price during claim negotiations. In the end, all parties agreed that the status quo isn’t working for patients, payers, or society.
By: Erin M. Hussey, Esq.
In our previous blog post, The Final AHP Rules Take a Hard Hit, we discussed the court decision that vacated (1) the bona fide provisions (including the provisions about a substantial business purpose, control, and the expanded commonality of interest requirements), and (2) the working owner provisions from the Final Rule on Association Health Plans (“AHPs”). The court remanded their decision to the Department of Labor (“DOL”) to determine how this ruling would affect the rest of the Final Rule given the severability clause. The DOL has provided an initial response via Question and Answers (“Q&As”). Those DOL Q&As detail the following:
“The Department disagrees with the District Court’s ruling and is considering all available options in consultation with the Department of Justice including the possibility of appealing the District Court’s decision and the possibility of requesting that the District Court stay its decision pending an appeal. At this time, we have not reached a decision on how to proceed.”
As such, without any action from the DOL, it appears the above-noted bona-fide and working owner provisions remain inoperative. However, the House and Senate have taken matters into their own hands. On April 11th, Sen. Mike Enzi (R-WY) and Lamar Alexander (R-TN) introduced a bill in order to protect the AHP Final Rule (S. 1170). The text of the bill is not available yet but will be made available here: https://www.govtrack.us/congress/bills/116/s1170. Sen. Enzi noted the following in his statement on the legislation:
“I rise to introduce the Association Health Plans Act of 2019 . . . My bill will simply codify the Labor Department's final rule to provide certainty for current enrollees and to ensure the pathway remains available for new association health plans to form.”
The following day, on April 12th, U.S. Representative Tim Walberg (MI-07), joined by Rep. Michael C. Burgess, M.D. (TX-26) and Rep. Virginia Foxx (NC-05), introduced the Association Health Plans Act of 2019 (H.R. 2294). The text of that bill is not available yet but will be made available here: https://www.congress.gov/bill/116th-congress/house-bill/2294.
While it is unlikely these bills will get bipartisan support, this legislation will be something to keep in mind while we await the ultimate outcome of the AHP Final Rule. If you need help understanding AHP's or self-funded health plans please contact us, today!
By: Jon Jablon, Esq.
We’ve seen it a thousand times: a health plan document provides that the plan will pay the lesser of certain factors, including billed charges, the applicable network rate, and the plan’s U&C rate (however it may be calculated). The old way of thinking in the industry is that this language gave the Plan Administrator a lot of leeway in determining appropriate payments – but it’s “the old way of thinking” for a reason.
Consider this scenario, with the language mentioned above: an out-of-network provider bills $20,000 for services, and the plan’s U&C rate is $13,000. The plan can simply pay the “lesser of” billed charges or U&C – netting payment of $13,000. There’s no contract, and no requirement to pay more than U&C. Easy stuff; very straightforward.
Now, consider this scenario: an in-network provider bills $20,000 for services; the plan’s U&C rate is $13,000; the network rate is $18,000. The plan’s language obligates the Plan Administrator to pay the “lesser of” those figures which is the U&C rate – but the network rate contractually obligates the payor to pay $18,000! Payment of the “lesser of” – that is, strict compliance with the plan document – results in violating the network contract, which can result in a contentious situation at best – but at worst, a lawsuit by the provider and possibly loss of network access (sometimes even on the TPA level, depending on the situation).
That’s what some might call a “double-edged sword,” where the Plan Administrator must make the choice either to violate the network contract and abide by the strict terms of the Plan Document (thus fulfilling its fiduciary duty), or to violate the Plan Document and abide by the terms of the network contract (thus fulfilling its contractual payment obligations). It’s a tough choice – but one that a Plan Administrator can avoid having to make in the first place, with the right plan language!
When the plan document obligates the Plan Administrator to pay less than the amount required by a separate contract, the Plan Administrator’s contractual and fiduciary obligations are at odds with one another. But it’s avoidable!
My advice? Make sure the Plan Document provides that the amount the Plan Administrator will pay is the contracted rate, if there is one. (And, hey – if that network rate doesn’t seem like it’s adding enough value, ditch the network. There are viable alternatives!)
As with so many stories in the self-funding universe, the moral of this one is to make sure your plan language lines up with your contracts. If you want to make the plan language tighter, or you think it can be better, or even if you just want to test its tensile strength to see what’s what, contact The Phia Group’s consulting division, at PGCReferral@phiagroup.com.
The healthcare space is rapidly evolving – and self-funding is no exception. Legislators, regulators, and courts are constantly providing new guidance – some good, some not. For this month’s webinar, we’re going to present some current events; we’ll discuss how they can help or hurt self-funded players, and what you can do to take advantage of them (or avoid the pitfalls created).
Join The Phia Group’s legal team for an hour as they tackle some of the most relevant topics currently affecting our industry, and explain what they mean to you and your business.
Click Here to View Our Full Webinar on YouTube
Click Here to Download Webinar Slides Only
Phone: 781-535-5600 | www.phiagroup.com
The Book of Russo: From the Desk of the CEO
We are in full spring mode here at The Phia Group, enjoying warmer weather and record breaking growth. My pool is open, the Indians are playing (more like winning) baseball, and we are already seeing an uptick in renewals on behalf of our clients. While the self-funded space has more energy than ever, we are also seeing some situations where employers and brokers aren’t fully aware of what they are getting themselves into. Yes, you can be innovative and save money, but you must also understand that you are now a fiduciary, you must take on added exposure and risk. There are many moving pieces in the self-funded space, so the plug and play approach won’t always work. In fact, you will get the best results by not plugging and playing anything. This is where we come in, from setting up your plan design to handling your appeal issues, Phia is here to ensure you have a positive self-funding experience. I hope you enjoy the great newsletter we have put together for you. Happy reading!
Service Focus of the Quarter: Unwrapped and CNS Phia Group Case Study - Frightening ASA Provisions Phia Fit to Print From the Blogosphere Webinars Podcasts The Phia Group’s 2019 Charity The Stacks Phia’s Speaking Events Employee of the Quarter Phia News
Service Focus of the Quarter: Unwrapped and CNS
We have all witnessed instances of abusive provider billing. When imposed upon a self-funded health plan, the effects seem most disastrous. To combat this, some groups have migrated to a no-network, full reference-based pricing model. While that is ideal for some groups, it is still a small minority of plan sponsors who are willing or able to bear the risks associated with a full reference-based pricing program.
A more traditional way of combating high claims is one-off claim negotiations. The Phia Group calls this our Claim Negotiation & Signoff service (or CNS). Through this service, The Phia Group puts its legal team and expert negotiators to work, to combine legal expertise with objective cost data to obtain case-by-case negotiations with medical billers. A comprehensive set of data helps determine market-based prices, to put payors on a level playing field with their members’ medical providers, and secure written payment agreements that avoid balance-billing.
The Phia Group proudly boasts a 51% average discount off billed charges on claims within the CNS service. Unlike CNS, however, Phia Unwrapped is anything but traditional. Wrap, extender, and other leased networks offer small discounts and audit restrictions, affording providers nearly unlimited rights. With Phia Unwrapped, The Phia Group replaces wrap network access and modifies non-network payment methodologies, securing payable amounts that are unbeatably low. Phia Unwrapped places no minimum threshold on claims to be repriced or potential balance billing to be negotiated, and The Phia Group attempts to secure sign-off, ensuring providers will accept the plan’s payment as payment in full.
Out-of-network claims run through The Phia Group's Unwrapped program yielded a whopping average savings of 74% off billed charges (three times the average wrap discount in 2018). On average, The Phia Group sees roughly 2% of claims result in some form of balance-billing; these results are similar throughout many different plan types and geographies, proving that this program and these results can be applied nationwide.
Contact our Vice President of Sales and Marketing, attorney Tim Callender, to learn more about CNS or Phia Unwrapped. Tim can be reached by phone at 781-535-5631 or by email at TCallender@phiagroup.com.
Phia Case Study: Frightening ASA Provisions
The broker of a self-funded benefit plan was presented with an Administrative Services Agreement (or ASA), by which the prospective TPA would administer claims for the health plan. The broker presented our consulting division with the Administrative Services Agreement to review, as a matter of ordinary diligence. This review was focused on a holistic approach, rather than any particular provisions that were previously identified as troublesome.
Upon reading the ASA, The Phia Group’s reviewer noticed a provision relating to the network, which provided that the plan would be required to pay certain types of claims despite issues with medical necessity or experimental status. This ASA essentially rendered those important Plan exclusions unusable, which, needless to say, is a problem.
Among other issues to address within the ASA, The Phia Group placed a great deal of emphasis on that provision when providing the client with the review, and the broker was grateful that this matter was brought to light. This is especially important from a stop-loss perspective; it’s tough to know how exactly a given carrier will treat a particular situation without a discussion, and this language within the ASA couldn’t be discussed until it was identified.
With the information provided by The Phia Group, the broker and group were able to discuss the matter with the TPA and reach a resolution favorable to all parties involved – and the plan no longer had to worry that its ASA required it to pay claims that stop-loss would almost certainly deny!
Fiduciary Burden of the Quarter: Ensuring Proper Application of OOP Limits!
The Department of Labor has explained that amounts that must be applied to an individual’s out-of-pocket maximum do not (but may, at the plan’s option) include “premiums, balance billing amounts for non-network providers, or spending for non-covered services.” A claim subject to reference-based pricing, as opposed to one subject to a contract with a provider, necessarily entails an out-of-network claim. Thus, according to the DOL’s original interpretation, balance-billed amounts resulting from non-network reference-based pricing are not included in the individual’s out-of-pocket cost limitations.
Subsequently, however, the DOL got wind of this whole reference-based pricing phenomenon, and altered its stance a bit. According to the regulators:
“…a plan that utilizes a reference-based pricing design (or similar network design) may treat those providers that accept the reference-based price as the only in-network providers and not count an individual’s out-of-pocket expenses for services rendered by other providers towards the MOOP limit only if the plan is using a reasonable method to ensure adequate access to quality providers at the reference price.”
In other words, it’s still the case that a patient’s OOP does not include balance-billed amounts – but that’s only if the plan “is using a reasonable method to ensure adequate access to quality providers at the reference price.” Our interpretation of that has been that reference-based pricing is still alive and well according to the DOL – but a given RBP plan must count balance-billed amounts toward patient OOP unless the plan provides patients options to avoid balance-billing. The DOL has not elaborated on what those options may be, but a reasonable interpretation is that contracts of any kind would work. Some plans choose to use a full PPO and only use RBP for out-of-network claims; other plans use a narrow network; others choose to sign contracts with certain choice facilities to provide their members with safe options; others still opt to sign no contracts whatsoever, but are sure to settle claims on the back-end to avoid balance-billing.
Whatever option you choose for your RBP plan, make sure you’re following the regulations! One important fiduciary duty of a Plan Administrator is to accurately calculate member OOP – and when it comes to reference-based pricing, that can get tricky.
Success Story of the Quarter: Overpayment Recovery
The Phia Group’s overpayment department was presented with a file whereby the TPA identified a claim that was overpaid to a medical provider; the overpayment reason was that Medicare was primary on the claims, but the TPA placed the self-funded health plan as primary in error. The plan had paid $76,000. The TPA knew that the plan would need to pay something as secondary, but certainly not its entire allowable. Further, the TPA had concerns that the group and its broker would hold the TPA responsible if the money couldn’t be recovered.
The Phia Group’s overpayment experts reached out to the provider, and initially were given the cold shoulder. After continuous communication with the provider and making sure to stay on the hospital’s radar, eventually the claim was escalated to the hospital’s CFO. After a series of lengthy discussions, the hospital’s CFO finally agreed to resubmit the claims to Medicare, but only agreed to refund the Plan the portion of the claim that was not in fact payable by Medicare, effectively treating the plan as secondary up to the full, billed charges.
At that point, one of The Phia Group’s attorneys contacted the hospital’s CFO, in an attempt to explain that even though the self-funded health plan pays secondary to Medicare, the health plan’s allowable amount is defined within the Plan Document, and is not the full billed charges. After The Phia Group’s overpayment team went back and forth for many weeks and explained the plan’s language numerous times the CFO seemed to understand.
Ultimately, it was revealed that Medicare paid the claims in question at the rate of $58,000. Because the plan’s allowable was the original $76,000, the plan paid the difference of $18,000 as secondary, but was refunded the $58,000 that Medicare paid as primary.
The moral of this story? If you find that money has been overpaid, The Phia Group can help you recover it! Contact our Vice President of Sales and Marketing, attorney Tim Callender, to learn more about The Phia Group’s overpayment recovery services. Tim can be reached by phone at 781-535-5631 or by email at TCallender@phiagroup.com.
Phia Fit to Print:
• Free Market Healthcare Solutions – You Have the Right to Know the Price – March 10, 2019
• Self-Insurers Publishing Corp. – The Self-Funded Case-Back To Basics – March 8, 2019
• BenefitsPro – How close are we to a federal paid family leave law? – March 6, 2019
• Self-Insurers Publishing Corp. – The Profit Motive-A Necessary Evil? – February 5, 2019
• Self-Insurers Publishing Corp. – A Texas Federal Judge Declares The Affordable Care Act Unconstitutional: What Next? – January 16, 2019
• Money Inc. – Texas v. United States: The Events that Followed and the Impact of the Government Shutdown – January 14, 2019
• Managed Healthcare Executive – Top 4 Challenges Healthcare Faces in 2019 – January 11, 2019
Back to top ^
From the Blogosphere:
• Foreign Drugs: Savings Worth Traveling For. A roadtrip that might be worth taking.
• To RBP, or Not to RBP: That is (one) of the Question(s). Reference-based pricing is one of the most mysterious self-funding structures out there.
• Hey, Watch Your Language! Clear language describes what the plan will pay in a comprehensible manner.
• New Action on Drug Pricing: Medicare-Like Rates? From ending pharmacy gag rules to outlawing the use of co-pay coupons.
• Blocking the Birth Control Rule. Coverage of contraceptives for women and the availability of a religious or moral exemption (or an accommodation) has been hotly debated recently.
To stay up to date on other industry news, please visit our blog.
Webinars
Click HERE to Register!
• On March 14, 2019, The Phia Group presented, “Transparency: A Building Block of Self-funding,” where we discussed some emerging and ongoing transparency issues, measures being taken to try to resolve them, and methods you can use to get the data you need in order to lower costs.
• On February 14, 2019, The Phia Group presented, “What We Love About Self-Funding in 2019,” where we discussed what makes self-funding such a great option for so many employers and employees, as well as the incredibly cool new innovations rolling out in 2019.
• On January 16, 2019, The Phia Group presented, “The Affordable Care Act in 2019: A Look Ahead,” where we discussed many legal and political battles that threaten the ACA's existence.
Be sure to check out all of our past webinars!
Podcasts:Featuring Video Podcasts!
• On March 29, 2019, The Phia Group presented, “Breaking News - Federal Judge Blocks Expansion of AHPs,” where Adam and Brady discuss the Department of Labor’s new rules that expanded the sale of association health plans (“AHPs”) violate existing law.
• On March 26, 2019, The Phia Group presented, “Employee Takeover: Self-Funded Health Plans from the Member's POV,” where Phia’s Marketing & Accounts Manager, Matthew Painten, and Compliance & Regulatory Affairs Consultant, Philip Qualo, dissect Phia’s very own Self-funded health plan.
• On February 28, 2019, The Phia Group presented, “Bigger in Texas,” where Ron and Brady discuss Brady’s recent trip to Austin and presentation at the Texas Association of Benefit Administrators.
• On February 15, 2019, The Phia Group presented, “Hail to the Chief!,” where our hosts, Brady and Ron, dissect the President’s State of the Union Address.
• On February 5, 2019, The Phia Group presented, “Hospital Transparency!,” where out hosts, Ron and Brady discuss the new legal compliance and regulatory affairs team (“LCARA”) with team member Philip Qualo, and specifically address recent efforts to promote hospital transparency.
• On January 25, 2019, The Phia Group presented “Touchdown!,” how providers – like plan sponsors – are concerned with the state of things and want to identify what’s wrong, what’s right, and how we can collaborate on a new approach that works for us all, as members of a single industry – healthcare.
• On January 10, 2019, The Phia Group presented “Obamacare is Still the Law, Right?,” where Ron and Brady dissect the Texas decision that challenges the legality of the ACA.
• On January 2, 2019, The Phia Group presented “Leather Patches & Pipes,” where our host, Ron Peck sits down with Andrew Silverio and Jon Jablon to discuss the forthcoming master’s degree program in plan development they will be teaching.
Be sure to check out all of our latest podcasts!
Face of Phia
• On February 19, 2019, The Phia Group presented, “Taking Account with Lisa T!,” where our hosts sit down with The Phia Group’s Senior Controller, Lisa Tangney.
• On February 8, 2019, The Phia Group presented, “It’s Tomasz Time!,” where our hosts sit down with The Phia Group’s Senior Claim & Case Support Analyst, Tomasz Olszewski.
• On January 30, 2019, The Phia Group presented, “Ashley Turco… International Agent of Security!,” where our hosts sit down with The Phia Group’s Director of Compliance, Ashley Turco.
• On January 17, 2019, The Phia Group presented, “Tech Talk with Hemant,” where our hosts sit down with The Phia Group’s Vice President of Technology, Hemant Dua.
• On January 14, 2019, The Phia Group presented, “Setting the Pace with Tori: Help me Tori!,” where our hosts sit down with a member of The Phia Group’s Client Implementation Coordinator, Tori Pace.
• On January 7, 2019, The Phia Group presented, “Dishing with Delaney,” where our hosts sit down with The Phia Group’s Senior Training & Development Specialist, Katie Delaney.
The Phia Group’s 2019 Charity
At The Phia Group, we value our community and everyone in it. As we grow and shape our company, we hope to do the same for the people around us. The Phia Group's 2019 charity is the Boys & Girls Club of Brockton.
The mission of The Boys & Girls Club is to nurture strong minds, healthy bodies, and community spirit through youth-driven quality programming in a safe and fun environment.
The Boys & Girls Club of Brockton (BGCB) was founded in 1990 to create a positive place for the youth of Brockton, Massachusetts. It immediately met a need in the community; in the first year alone, 500 youths, ages 8-18, signed up as club members. In the 25 years since, the club has expanded its scope exponentially by offering a mix of Boys & Girls Clubs of America (BGCA) nationally developed programs and activities unique to this club.
Since their founding, more than 20,000 Brockton youths have been welcomed through their doors. Currently, they serve more than 1,000 boys and girls ages 5-18 annually through the academic year and summertime programming.
A Special Delivery from the Phia Family
The Phia Family loves to show their Patriots Pride! In anticipation of the Super Bowl, we channeled our excitement to raise over 2,000 hygiene items and $1,400 for the Boys & Girls Club of Brockton! As a thank you to the kind, thoughtful, giving members of the Phia Family, we decided to reward everyone at the office with a late opening the day after the Super Bowl.
Youth of the Year
Our favorite time of the year has arrived and we get the opportunity to choose our Youth of the Year. A member of the Boys & Girls Club of Brockton has been chosen by The Phia Group’s CEO, Adam Russo, to receive the prestigious award of Youth of the Year. This member will receive a $5,000 college scholarship and a brand new laptop that will help them through the four years of college. We are proud to announce that Julieth Nwosu was chosen to receive this prestigious award! Congratulations, Julieth, and best of luck in college!
The Stacks
The Self-Funded Case – Back To Basics
By: Tim Callender, Esq. – March 2019 – Self-Insurers Publishing Corp.
Without a plan document, what is a self-funded plan, truly? It is a nebulous financial instrument, or bizarre oral contract slightly memorialized by HR emails and broker notes that exists without clear guidance or application. Yet this plan is still subject to incredible responsibility and liability. Needless to say, not only is having a plan document a good idea (if not required, depending on how you read the law) but it is an even better idea to have a well-written and understandable plan document. As discussed above, many plan sponsors become enamored with new and innovative solutions, ranging from specialty Rx cost control to a medical tourism program filled with plan member incentives. These are wonderful solutions that may yield outstanding results – but what if the plan document does not properly support and outline the specialty Rx program? What if the plan document fails to provide clear instruction to the plan member on how he/she can take advantage of the beneficial medical tourism program? Not only does the plan sponsor run the risk of implementing benefit structures that may cause legal problems, since they are not outlined in the plan document, but the plan sponsor will most surely lose out on gaining the benefit of these innovative solutions. Not to mention paying claims outside the terms of the plan’s stop-loss policy. Without a well-written and understandable plan document, the it is pointless to pursue more complex solutions and the goals of cost containment and rich benefits will surely never be met.
Click here to read the rest of this article
The Profit Motive – A Necessary Evil?
By: Andrew Silverio, Esq. – February 2019 – Self-Insurers Publishing Corp.
Working in the self-funded healthcare industry, it can be easy for us to develop tunnel vision and focus on cost containment and affordability at all costs, losing sight of other valid interests within and relating to the healthcare market. Quality of care is an obvious one – if not done properly, reductions in cost can come at the expense of quality (of course, this isn’t always the case in healthcare, a product which so often has a great deal of inefficiency built in). But there are other, less directly related interests which we should keep in mind when we zoom out and look at the broader system, for example in forming policy decisions. The healthcare market is an ecosystem, and like in any ecosystem, one organism becoming too powerful can ultimately be a bad thing for everyone. A super-predator in an isolated system can quickly hunt its own prey out of existence and starve.
A Texas Federal Judge Declares The Affordable Care Act Unconstitutional: What Next?
By: Brady Bizarro, Esq. – January 2019 – Self-Insurers Publishing Corp.
On February 26, 2018, eighteen state attorneys general and two Republican governors filed suit in a Texas district court against the federal government over the constitutionality of the Affordable Care Act (“ACA”). While Texas v. United States is not the first serious legal challenge brought against the Obama administration’s signature healthcare law (see, e.g., King v. Burwell, 135 S. Ct. 2480 (2015); see also National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012)), it is the first in which the executive branch broke with tradition and declared that it would not defend the ACA in court. The case has certainly represented the most serious threat to the ACA since the GOP’s legislative efforts to repeal the healthcare law failed last summer. As it turns out, this threat should have been taken more seriously by industry analysts. On December 14, 2018, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas found that the ACA was unconstitutional.
To stay up to date on other industry news, please visit our blog. Back to top ^
Phia’s 2019 Speaking Events:
Phia’s Speaking Engagements: • 1/9/2019 – FMMA Conference – Austin, TX
• 2/27/2019 – Sunlife 2019 MVP Academy – Denver, CO
• 3/8/2019 – UnitedAg Conference – Anaheim, CA
• 3/19/2019 – SIIA Self-Insured Health Plan Executive Forum – Charlotte, NC
• 3/21/2019 – CGI Business Solutions Seminar – Woburn, MA
• 3/26/2019 – HFTA Broker Meeting – Tyler, TX
• 4/3/2019 – BenefitsPRO Broker Expo – Miami, FL
• 4/5/2019 – Pareto Conference – Nashville, TN
• 4/7/2019 – Captive Symposium – Cayman Islands
• 4/8/2019 – National Beer Wholesalers Association Legislative Conference – Washington DC
• 4/12/2019 – FMMA 2019 Annual Conference – Dallas, TX
• 4/23/2019 – Johns Hopkins Industry Education Series – Baltimore, MD
• 4/24/2019 – Sunlife 2019 MVP Academy – Kansas City, MO
• 4/25/2019 – BevCap’s Best Practices Workshop – Orlando, FL
• 4/26/2019 – Society of Professional Benefit Administrators Annual Conference – Washington, D.C.
• 5/2/2019 – MassAHU Benefest 2019 Conference – Westborough, MA
• 5/14/2019 – Cypress Unversity – Las Vegas, NV
• 5/30/2019 – Contrarian Captive – Austin, TX
• 6/11/2019 – Leavitt Conference – Big Sky, MT
• 7/15/2019 – HCAA TPA Summit – Dallas, TX
• 7/31/2019 – 2019 MVP Academy – Wellesley, MA
• 8/24/2019 – Well Health Workshop – Chicago, IL
• 10/27/2019 – 2019 Annual NASP Conference – Washington DC
Get to Know Our Employee of the Quarter: Andrew Fine
Congratulations to Andrew Fine, The Phia Group’s Q2 2019 Employee of the Quarter!
When Andrew first started at The Phia Group in 2017 as an intake specialist, it was clear that he was a perfect fit for not only his role, but for The Phia Group. Andrew is currently the Lead Intake Specialist for Phia’s Consulting department. Andrew has a great work ethic and maintains a positive attitude. The Consulting department can always rely on him to stay on top of client requests, as he is very efficient and organized.
Congratulations Andrew, and thank you for your many current and future contributions.
Phia News
Exceptional Business Award
The Phia Group is proud to announce that we have been presented with an Exceptional Business Award at the 11th Annual Mentor Recruitment Rally & Celebration! We take tremendous pride in our community and the youths of the Boys & Girls Club of Brockton - Allowing the young people of our community opportunities and platforms in which they can succeed has been rooted in our everyday business functions, leading to a promising future and a caring environment for all those involved.
Valentine’s Day at Phia
The Phia family celebrated Valentines Day with a guessing game! Everyone in the office was tasked with guessing how many candy hearts were in the glass jar… But we didn’t stop there… We challenged our followers on LinkedIn to join in on the fun. After an entire day of guesses being collected, we finally counted out the candy hearts. There were a total of 2,329 candy hearts in the glass jar! Congratulations to Jeff Hanna, of The Phia Group, who guessed 2,303. We would also like to congradulate Diana Denzin, who had the closest guess on our LinkedIn page, with a guess of 2,621.
Job Opportunities:
• Intake Specialist
• Attorney I
• Overpayments Recovery Assistant
• Health Benefit Plan Drafter
• Case Investigator I
• Provider Relations Client Concierge
See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers
Promotions • Ron Peck has been promoted from Sr. VP and General Counsel to Executive Vice President and General Counsel
• Julie Martin has been promoted from VP, Recovery Services to Sr. Vice President, Recovery Services
• Jen McCormick has been promoted from VP, Consulting to Sr. Vice President, Phia Group Consulting
• Chris Aquiar has been promoted from Director, Recovery Services to Vice President, Legal Recovery Services
• Hemant Dua has been promoted from Sr. Director of IT to Vice President of Technology
• Brady Bizarro has been promoted from Director, Healthcare Attorney to Director of Legal Compliance & Regulatory Affairs (LCARA)
• Andrew Silverio has been promoted from Health Benefit Plan Admin - Attorney III to Compliance & Oversight Counsel
• Philip Qualo has been promoted from HR Compliance Specialist to Compliance & Regulatory Affairs Consultant
• Sean Donnelly has been promoted from Corporate Counsel to Associate General Counsel
• Cara Carll has been promoted from Senior Team Lead to Manager of Case Evaluation, Customer Service & Claim Analysis
• Amanda Lima has been promoted from Provider Relations Team Lead to CEO Executive Assistant and Manager of Provider Relations
• Cindy Monfils has been promoted from Account Coordinator/Paralegal to COO Executive Assistant/Paralegal
• Jamie Johnson has been promoted from Team Lead, Sr. Recovery Team to Team Lead, Bodily Injury
• Rose Jardim has been promoted from Team Lead of Accounting to Supervisor of Accounting
• Ekta Gupta was promoted from Coordinator, Data Services Group to Manager, Data Services Group
• Erin Hussey has been promoted from Attorney I to Attorney II
• Andrew Fine has been promoted from Intake Specialist to Lead Intake Specialist.
New Hires • Robyn Sullivan was hired as an Executive Assistant
• Robert Martinez was hired as an Attorney in the Provider Relations Department
• Robyn Cleaves was hired at a Team Lead in Accounting
• Shawndell Dias was hired as a Case Investigator
• Scott Byerely was hired as the Vice President, Operations and Total Quality Management
His decision has rattled the markets, Democratic political leaders, advocacy groups, and the broader healthcare industry. One prominent Democratic senator remarked, “This is a five alarm fire – Republicans just blew up our healthcare system.” Senate Minority Leader Chuck Schumer (D-NY) called it an “awful ruling . . . [which, if not reversed] will be a disaster for tens of millions of American families, especially for people with pre-existing conditions.” After taking a closer look at this ruling, however, many legal experts have concluded that it is not nearly as earth shattering as the headlines have made it appear.
First, Judge O’Connor’s ruling did not block enforcement of the ACA despite the fact that the plaintiffs had asked the court to issue a nationwide injunction on the federal government from implementing, regulating, or enforcing the ACA. Since the judge declined, all of the existing provisions of the ACA with which employers, fully insured plans, and self-funded plans must comply are still in effect. This decision has no effect whatsoever on plan design, on cost containment, on employee incentives, or on regulatory compliance. A quick check of Healthcare.gov post-ruling revealed that federal officials have even added this reassuring message: “Court’s decision does not affect 2019 enrollment coverage.”
Second, a spokeswoman for the California attorney general has already confirmed that the sixteen states (and D.C.) that stepped in to defend the ACA will appeal this district court ruling to the United States Court of Appeals for the Fifth Circuit in New Orleans, Louisiana. That means there is a chance that this decision could be overturned before the case reaches the Supreme Court. That possibility brings me to my third point; that legal scholars across the ideological spectrum have found the legal arguments made by the plaintiffs in this case to be remarkably unpersuasive. To understand why, let us break down the court’s opinion (which sided with those arguments).
Judge O’Connor’s opinion has two major elements. First, he contends that since Congress reduced the ACA’s individual mandate penalty to $0, the mandate to purchase insurance must be invalidated. Then, he argues that since the individual mandate is essential to and inseverable from the remainder of the ACA, the entire 2,000 page healthcare law must be struck down. This issue of “severability,” or whether one provision of a law can be severed without invalidating the entire law, is key. Prior to addressing severability, however, Judge O’Connor explains his constitutional analysis for finding that the individual mandate is no longer fairly readable as an exercise of Congress’s tax power.
Regarding his first contention, that the individual mandate could not be saved from the ACA, Judge O’Connor has made a rather compelling case. When the ACA was passed in 2010, the bill contained a requirement that all Americans purchase health insurance or pay a penalty. In 2012, the Supreme Court ruled that this requirement, known as the individual mandate, was a legitimate exercise of Congress’s constitutional authority to tax. See NFIB v. Sebelius (2012). In late 2017, in the Tax Cuts and Jobs Act (“TCJA”), Congress zeroed out the penalty associated with the tax, meaning the individual mandate can no longer reasonably be considered a tax. As such, the constitutional foundation identified by the majority of the Supreme Court, on which the individual mandate was based, was invalidated (recall that the majority in NFIB v. Sebelius also declined to sustain the individual mandate’s constitutionality under the Commerce Clause).
With respect to Judge O’Connor’s second contention, that the entire ACA must fall, many legal experts strongly disagree. Nothing in the original 2010 bill spoke to the severability of the individual mandate. Typically, when lawmakers neglect to include a severability clause in a bill, courts look to discern the intent of Congress when considering whether finding a particular provision of a law unconstitutional would require the elimination of the entire law. In NFIB v. Sebelius, the majority never addressed severability with respect to the individual mandate since the Court upheld the requirement. Four dissenting justices concluded that the individual mandate was unconstitutional and that Congress intended the entire ACA to be invalidated without the individual mandate.
Judge O’Connor assumes that the intent of the 2010 Congress controls the severability analysis in the case before his court; an intent only discerned by a minority of the Supreme Court. Indeed, he spends most of his 55-page opinion attempting to discern the intent of the 2010 Congress on his own. In doing so, however, he ignores the intent of a later Congress that did speak to the issue of severability in the form a later legislative act. The 2017 Congress, in passing the TCJA, eliminated the individual mandate and preserved the rest of the ACA. This act presents strong evidence that Congress intended the ACA to function without the individual mandate. Judge O’Connor’s explanation for this fact is that the 2017 Congress was unable to repeal the individual mandate because of budget rules and it therefore had no intent with respect to the individual mandate’s severability.
By assuming Congress had no intent because it was shackled by complicated legislative rules, Judge O’Connor has drawn the ire of most of the legal community. If he had been so sure of his position, why would he neglect to issue a nationwide injunction on the ACA, as he could have done? True, throwing a wrench into the middle of the healthcare system, where $600 billion in federal funding and health insurance coverage for millions of Americans is on the line, would have been a drastic action; however, if Judge O’Connor truly believed Congress intended this, he could have blocked enforcement of the ACA across the country.
I could go on at length about the consequences if this ruling were to stand; the impact on employer-sponsored plans, the effect on those with pre-existing conditions, the potential loss of health insurance coverage for millions of individuals, and the end of the Medicaid expansion. Yet, based on the response from the legal community of which I am a part, my position is that this decision rests on very shaky ground. This decision also goes much further than even the Trump administration had wanted (it wanted to preserve protections in the law for people with pre-existing medical conditions). I fully expect this case to be reversed by the United States Court of Appeals for the Fifth Circuit and to eventually be declined by the Supreme Court.
In short, we should all hold our collective horses and conduct business as usual for the time being.
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CNBC published an article recently about a disease called nonalcoholic steatohepatitis, or “NASH.” It develops from nonalcoholic fatty liver disease, which has been estimated by the Center for Disease Analysis to impact 89 million Americans, and can lead to cirrhosis, cardiac and lung complications, liver cancer, and death. As a result of the obesity epidemic, particularly around the western world, the disease is becoming increasingly common, and the National Institute of Health now states that as many as 30 million Americans, or 12 percent of adults, have NASH. It’s estimated that by 2020 NASH will surpass hepatitis C as the leading cause of liver transplants in the United States, as increasingly younger Americans, now often in their 20s and 30s, are developing the disease.
As alarming as these numbers are, there is still no FDA approved treatment for NASH. Yet.
With a global market for a cure estimated at $35 billion (with a b) dollars, pharmaceutical companies are quite literally racing to get new drugs approved and onto the market. There are currently 55 NASH drugs in various stages of clinical trials according to BioMedtracker, so new treatments are clearly on the horizon.
That $35 billion pot of gold is the sole reason so many companies are sinking so much money into just having a shot at being first to market. The market may be months away from a cure, it may be a few years away – we’re not doctors or medical researchers – but what we can say with confidence is that whatever the timeline is, it would be much longer without that mammoth payoff as motivation. Manufacturers of new specialty drugs are allowed to charge, and regularly receive payment of, absolutely absurd prices. But in some cases, as appears to be the case with NASH, it is precisely because of this that we will soon have treatment for a disease which would otherwise continue taking lives unchecked.
This ability of manufacturers to charge and receive such high rates for new drugs has also given rise to an entire new sub-industry based around medical tourism and drug importation. In attempting to get patients access to new specialty drugs at a reduced cost to employers, numerous programs aimed at securing generic versions not yet available in the United States are enjoying success under several different models. These programs run the whole spectrum, from acting to facilitate shipment by a foreign pharmacy in Canada or Mexico to the American patient, or sending that patient to a border to cross over and pick up a drug themselves, all the way to a concierge service where a patient flies first class to the Caribbean, is put up in a hotel, and receives their treatment in a tropical paradise. The fact that this third option can actually still be significantly less expensive than the patient simply picking up the American version of a drug at the pharmacy down the street from his or her home is quite telling.
Other types of cost-containment efforts take aim at getting the amounts a plan has to actually pay for these drugs under control. Again, these programs vary greatly and can take the form of exclusions for certain specialty drugs, exclusions for all specialty drugs, or unique cost-sharing structures where copayment amounts change based on whether payment might be available from another source or based on the particular drug. Seemingly recognizing the impossibility of an individual without insurance paying for these drugs out of pocket, manufacturers implement assistance programs to help cover patient copayments, or offer discounts or rebates for those who pay completely out of pocket. Other programs aim to identify when these programs might be available and steer that monetary benefit back toward the health plan.
The fact that all these different approaches are necessary illustrates an important principle which is often overlooked – the profit incentive to develop new drugs and therapies. America is a global leader in developing new therapies, and is by far the biggest healthcare spender per capita and arguably guilty of the greatest waste. Can the former continue to be true without the latter? If not, to what extent are we willing to sacrifice innovation and the development of new therapies for those few with no remedies available for their illnesses, in order to ensure that the masses can receive vital routine care in an affordable way?
Food for thought.
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Self-Funding – So Many Toys in the Sandbox
Not to criticize our industry, in the least, but if we are being honest, we should all agree that it takes thousands of “parts” to make this “car” run, so to speak. This fact has its positives. An industry chock full of numerous stakeholders does lead to incredible innovation, teamwork, healthy competition, creative solutions, and the general strength that comes with an industry steeped in camaraderie. Likewise, this reality of many stakeholders can also create confusion and distraction unless we are paying close attention and working to block out the noise. The typical self-funded case will likely have a list of stakeholders that include (in no particular order & I am sure to leave something / someone out):
In short – there are many, many toys in this sandbox of self-funding.
So…. How About, Back to Basics?
As discussed, there are an incredible number of stakeholders in the self-funding sandbox. To reiterate, this is not necessarily a bad thing, but it can steer us away from the fundamental basics and core needs of our industry, which can lead us astray from the root goal. What is that goal? In short, most self-funded plan sponsors are going to tell you that they entered into the self-funded space for two reasons: (1) to bring the costs associated with their health plan down; and (2) to have the creative control needed to deliver top-notch health benefits to their employees and their families.
Not to take away from the importance of the newest healthcare-related iPhone app, or the newest, innovative methodology behind case management, but sometimes it is important to step back and focus on the basics of this complex, self-funded system. Whether from the outside looking in, or deeply involved in the self-funded industry, all viewers should agree that this industry – this system – is definitely a complex one, as noted by the copious bullet points listed above. To wade through the complex and try to identify the key roots of a successful self-funded case is not only a noble pursuit but should be a point of pride for all in this space. With the roots in place, all of the other, more complex solutions can fall into place and will do so with a much higher likelihood of success.
While like minds might rightly differ on the key elements that lead us toward the goals discussed above, I would list out the five most important roots that push the goals of driving down costs while delivering great benefits as follows:
The All Powerful and Governing Document
The Heart & The Brain
Every employer plan sponsor should have a benefits committee in place, whether the committee is made up of 3 people or 15 people. Too many employers rely solely on the expertise of their consultant and “pass the buck,” so to speak, when it comes to truly understanding the ins and outs of their self-funded plan. Not to say that relying on a consultant is a bad thing – that’s why they exist! However, as any expert will tell you, the expert’s job is always easier when he/she is advising an educated consumer. An educated plan sponsor, backed by a benefits committee full of diverse knowledge and expertise, and advised by an industry expert consultant, is already leaps and bounds ahead of the rest when it comes to the ability to choose and implement solutions that will lead to cost savings and rich benefits. Not to mention, the committee can share the labor burdens associated with running a self-funded health plan. Like, working together to finalize that plan document!
Additionally, a benefits committee increases the chances of a plan successfully implementing a complex solution. Let’s use an out-of-network, reference-based pricing solution as a singular example. Such an innovative and disruptive program does not stand a chance if there is not employee / member buy in and understanding. There will likely be balance billing and “scary” situations which will lead plan members to bring the noise, so to speak, directly to HR. This noise can quickly cause enough pain that the plan sponsor will choose to abandon an otherwise legitimate and beneficial program. But. What if a savvy, vested, and educated benefits committee existed, at the employer, plan sponsor level? Imagine the education and communication opportunities that could exist – imagine the opportunities to work with the plan members, ask critical questions of the vendor, and course correct when needed.
A benefits committee, whether small or large, will move a plan closer to its goals of containing costs and delivering rich benefits, every time.
Likewise, it takes the industry expert consultant to advise this bought in committee and bring them the solutions and ideas that they may not be aware of, that they can then interpret and execute, on their own terms.
To repeat: the vested benefits committee plus the expert consultant = reduced plan costs and the implementation of solutions to drive rich benefit delivery.
The Partner
A sophisticated plan sponsor, governed by a benefits committee and advised by an expert consultant, should next seek a true partner in its third-party administrator. Plan sponsors can sometimes fall victim to regionalism or sticker attraction (seeking out the lowest administrative fee), which may not always lead to the best payor partner for that particular plan. Instead, plan sponsors and their consultants should begin by clearly understanding and defining their own needs and their own goals. They must do this first before trying to find the right payor partner.
Is the plan focused on a strong network? An in-house dialysis solution? Is a domestic call center presence important? What about reporting capabilities? What does the account management model look like and how involved will they be with enrollment meetings and finalizing the plan document? Will the payor listen to the plan’s recommendations and needs regarding stop-loss? The list goes on.
Needless to say, combining a thoughtful benefits committee, with an expert consultant, and a true partner-oriented payor, will allow for a plan to truly innovate and successfully put solutions in place that will meet the plan’s goals.
The Money at The End of The Chain
In thinking on the goals of driving costs down while delivering great benefits, there is one area that provides a clear “win.” Subrogation and recovery efforts.
Why is this the case? In efforts to contain costs, many plans go straight to the overly advertised, upfront, disruptive solutions that may drive costs down before costs are incurred. Many of these solutions have merit and bear fruit! But plan sponsors should not lose sight of the big recovery win that is available through a robust subrogation and recovery platform. Especially now, where copious opportunities exist to seek the recovery of plan dollars on so many fronts. Traditionally, most plans would focus their recovery efforts on the routine motor vehicle accident – the benchmark example of third-party liability. Anymore though, alongside these benchmark MVAs, plans should be considering other sources of third-party liability, such as torts, product recalls, and class actions. The list, and opportunities, go on.
Additionally, whether governed by ERISA or state law, or a combination of both, all self-funded plans are bound by some level of fiduciary duty. Instead of quoting federal or state law, the gist is this: plan fiduciaries must behave prudently with plan assets, which includes how the fiduciaries spend plan assets, don’t spend plan assets, or get plan assets back!
To this end, it is easy for a plan sponsor to focus on asset expenditure and upfront plan savings, while forgetting about recovering dollars from a third party. This is understandable! Upfront expenses and upfront plan savings are exactly that, “upfront!” But, the concept of chasing around a third party, sometimes for years, in an effort to return plan funds back to the plan – well, it is easy to see how this concept can fall by the wayside and become easily forgotten. Yet, maximizing recovery efforts should be just as important to a plan fiduciary as the more routine, upfront savings and expenses that usually take priority. Seeking to assure that subrogation and recovery efforts are maximized is an important obligation of every plan fiduciary. Not to mention, returning plan assets into the plan’s coffers means costs can be kept down and the plan can reinvest those dollars in other areas that might lead to that richer, more robust health plan.
Goals met.
In the latest episode of Faces of Phia, Adam and Ron reminisce on Andrew Silverio's Undergraduate adventure. Tune in for an episode filled with trips down memory lane, international drug importation, and predictions about the future of prescription drugs!
Join Adam, Ron, and Brady for a healthcare free for all where they tackle the most pressing issues facing our industry, including surprise emergency room bills, drug pricing, medical necessity, and employee incentive programs.
By: Andrew Silverio, Esq.
Last month, the Missouri Hospital Association released a study which highlighted some alarming numbers relating to the rates of suicidal thoughts and actions among children covered by Missouri’s Medicaid program (available at https://www.mhanet.com/mhaimages/policy_briefs/PolicyBrief_SuicidalityChildren_0319.pdf). Among the studies key findings was a notable increase it suicidality amongst Medicare-covered children, along with a decrease in average length of inpatient admissions after the state made a switch from traditional fee-for-service Medicaid to a managed care structure in May 2017. The study looked at 18 months of data prior to the change, and 19 after.
Specifically, the study notes that after the transition from a fee-for-service model to managed care, the average length of stay at psychiatric hospitals for children and adolescents fell from 12.5 days to 7.3, and the 60 day suicidality rate among that same population nearly doubled (30, 60, and 90 day suicidality rates all saw jumps of between 81.7% and 93.2%). The disparities in services authorized are troubling as well – the percentage of admissions which were denied jumped 7.9 times from 3.3% to 26.4%.
Of course, there’s disagreement on the extent to which these numbers can be attributed to the switch in payment model – the Missouri Health Plan Association, which represents the three managed care Medicaid plans in Missouri, has slammed the report according to Kaiser Health News. The disparities make sense to Joan Alker, director of the Georgetown University Center for Children and Families, however, who says “Managed care is an effort to save money and that is done by getting rid of unnecessary care or coordinating care better, but a lot of managed care organizations cut corners.”
Whether the managed care structure is being administered poorly, unsuited for this patient population as a whole, or completely irrelevant to these alarming findings, the impact on an incredibly vulnerable patient population is too significant to ignore, and the state should consider getting to the bottom of it to be a top priority. If you think you need an independent health plan consultant, contact Phia Group, today!