By: Ron E. Peck, Esq. and David Ostrowsky
Traditional health benefit plans and insurance carriers pay medical bills that generally fall into one of two buckets, based on the “network status” of the applicable healthcare services provider. If the benefit plan or carrier is utilizing a network (such as a PPO) and the applicable provider is a participating provider, then the provider is deemed to be “in-network.” When a provider is in- network, the plan or carrier will pay the provider’s billed charges minus a discount defined by the network agreements. If the provider is not participating in the network, they are deemed to be “out-of-network.” In instances where the provider is out-of-network, the plan or carrier will determine how much of the applicable medical bill is payable by the plan or carrier – utilizing factors that are outlined within the applicable plan document or policy. Usually, this “maximum payable amount” is less than the amount being billed by the out-of-network provider. Whereas network agreements prohibit in-network providers from “balance billing” patients the difference between their billed charges and the network discounted payment, there is no contractual obligation prohibiting out-of-network providers from balance billing patients the difference between their billed charges, and the maximum allowable amount payable by the plan or carrier to out-of-network providers. Many will argue that network discounts have little to no value, due to the fact that the discount is being applied to an extremely inflated price, resulting in a still excessive payable amount. For those who assign little to no value to network discounts, the knee jerk reaction may be to abandon networks altogether, and pay all providers an objectively fair amount, based upon the plan’s definition of maximum payable amounts and utilizing objective metrics to calculate said payable amounts. On the surface, it may seem that this approach, commonly referred to as reference-based pricing (RBP), is a viable solution for plan fiduciaries trying to responsibly manage costs amid a marketplace rife with price variation. However, upon closer review, there are, in fact, multiple problems inherent in the RBP methodology: tremendous unanticipated out-of-pocket costs for patients when providers opt to balance bill for services exceeding the reference based price; a very limited number of providers willing to treat patients who participate in such plans due to many providers feeling disinclined to accept the reference price; price of services taking precedence over quality of services; and the undue administrative complexity of implementing and managing an RBP plan. Indeed, many benefit plans continue to utilize network plans, despite being contractually obligated to pay excessive prices, solely due to the protections networks afford against these issues. Fueled by the belief that the American workforce deserves better, The Phia Group is championing an alternative to RBP: Care Empowered Pricing (CEP). CEP represents a new methodology providing first-class plan support, substantial savings, and advocacy for both members and employers, among other features. Not only does CEP feature an exhaustive review of regulations and balance bill resolution support handled by The Phia Group’s team of experts, a repository of compliant cost containment language, and cutting-edge Ignite Repricing technology software, but it also tailors the program to a group’s specific needs by customizing rates based on plan terms, direct contracts, and provider profiles. In line with The Phia Group’s mission of empowering patients with access to high quality and justifiably priced care, CEP enables the TPA or health plan to assume ownership of the program. In contrast to a traditional RBP plan where the vendor manages the entire program in a black-box, and the TPA or health plan merely administers the claims, CEP is engineered in a collaborative manner that truly reflects a group’s brand, purpose, and market standing. As its name suggests, Care Empowered Pricing sincerely embodies compassionate care for plan participants. Whereas RBP programs, with their shortcuts in compliance reviews, understaffed services, and obsolete provider data for quality metrics, often leave plan participants at risk of receiving poor care riddled with delays, CEP equips TPAs with technology-enabled provider selection and access support so that they can operate with the best interests of plan members in mind. CEP isn’t just a new methodology for claims pricing. It is a complete solution meant to address access, pricing, and dispute resolution. With a quarter century of healthcare cost containment industry experience, The Phia Group has developed a revolutionary program in CEP that not only provides a bulwark against balance billing but also buttresses their entire ecosystem of cost containment services. Ultimately, it is the plan members – and their families – who are the real beneficiaries as they receive healthcare of the highest quality and at the lowest possible price point.
Attorneys Jen McCormick and Nick Bonds ring in the Lunar New Year by breaking down the ERIC v. HHS lawsuit in which an industry advocate challenged the federal regulators’ new Final Rules enforcing the MHPAEA and mental health parity rules. Could this case blaze a new path for challenging agency actions in a post-Chevron Doctrine world? Join us as we discuss the potential implications for group health plans. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
By: Kendall Jackson, Esq.
As we close out the first month of 2025 with a new administration, the vast number of new proposals related to reducing government spending is unsurprising. Only a week ago, two documents were leaked related to House Republicans’ “Spending Reform Options,” which provided insight into their policy objectives.
One proposal that was particularly significant was the goal to pass H.R. 5688, referred to as the Bipartisan HSA Improvement Act of 2023. While this bill has several objectives, the most notable may perhaps be to allow an individual to continue contributing to a health savings account (HSA), as part of a high deductible health plan (HDHP), while participating in a primary care service arrangement, such as direct primary care (DPC). This would be a big shift from the current regulations and would be very beneficial to individuals with HSAs.
Currently, Section 223(c) of the Internal Revenue Code provides that an individual who is covered under an HDHP may not be covered by any other health plan that (1) is not a high deductible health plan, and (2) which provides coverage for any benefit that is covered under the HDHP. Consequently, when a DPC is offered outside the employer’s health plan it is considered by the IRS to be a second health plan and impermissible “other coverage.” This structure often presents issues for employers seeking to offer access to a DPC arrangement in addition to an HSA-qualified HDHP because the threshold for creating a “group health plan” is very low, including essentially any program offered by an employer or association for the purposes of paying medical expenses.
Even if the DPC is offered under the employer’s health plan, as opposed to outside the health plan, it still presents issues. Under the IRS rules, an HDHP is prohibited from providing any first dollar coverage for benefits until the minimum deductible is satisfied. There is, however, an exception for preventive care, and other limited exceptions where first dollar coverage would be available under an HSA-qualified HDHP. However, since the services provided by DPC are not always considered preventive care, there will inevitably be times when the patient's care must be subject to the deductible. Considering DPC does not typically include a fee for service, there is no fee to apply to the deductible, which is problematic. To offer a DPC or other PEPM-based non-preventive service arrangement under an HDHP, the plan must find a way to hold participants responsible for the full cost of services received until the minimum deductible is met. This structure is often not pursued because this largely defeats the purpose of PEPM-based services.
With the host of issues noted above, the passing of H.R. 5688 would be a significant modification to the current regulations. Not only would the noted concerns be alleviated, but it would benefit individuals with HSA-qualifying HDHPs by allowing contributions to the HSA while simultaneously capitalizing on the availability of a primary care service arrangement.
By: David Ostrowsky
When you’re shopping for a new car, you expect that shelling out more money will correlate with a more high-powered, fancier, and durable vehicle. The same logic – that price and quality run parallel to one another – would seemingly apply to flat screen TVs, smartphones, stereo systems, laptops, vacuum cleaners, snowblowers, and every other item that Americans race to the stores to purchase on Black Friday. It is human nature to assume that a higher price equates to higher quality . . . unless information is provided to the contrary. As savvy shoppers are well aware, there are user reviews online that could potentially reveal that the higher cost vacuum or TV is no better than (and is sometimes worse than) a lower cost alternative. As such, price transparency on its own may be harmful as people gravitate to the higher cost item based on an assumption that it is better; however, when price transparency is combined with quality metrics, consumers can truly make the most enlightened and informed decisions.
When it comes to healthcare, the belief that a higher price of services equates to more optimal outcomes is also widely prevalent. However, because there is such scarce transparency regarding price and quality metrics of healthcare services – in stark contrast to such information being readily available for the aforementioned consumer products – this belief is so often not grounded in reality.
And The Phia Group, as the country’s foremost expert in healthcare cost containment, has the numbers to prove it.
While the United States spends more on healthcare than any other developing country and still ranks last for quality of healthcare, the same dynamic plays out among the individual states. As indicated in the recently released The Phia Group Healthcare Index, a state-by-state healthcare quality and cost analysis grounded in clinician and facility data from publicly available CMS sources, incorporating both quality metrics and cost data derived from Medicare payment files, the states that ranked at the top (Minnesota, Hawaii, and Montana) had high quality healthcare and lower aggressive billing/more affordable services while those states ranking low on the list for healthcare quality (Nevada, South Carolina, and Texas) had more aggressive billing rates/less affordable services.
This tremendous irony may confound readers, but, in a sense, it should not come as a major surprise given that so many Americans are unaware of how to access information pertaining to healthcare quality and cost metrics. Subsequently, the overwhelming majority of people have no real understanding as to what their respective medical treatments cost – or that there is often such a wide range of prices for a given service. For just one example, the price of a knee surgery at one facility could be thousands of dollars higher than it is at another facility; in so many cases, unfortunately, the quality of the surgery at the higher-priced facility may be of vastly inferior quality, resulting in further costly complications and re-admissions. In other words, it’s a vicious cycle that can keep repeating itself. This same dynamic certainly holds true with maternity services, which tend to be some of the costliest medical services people consume.
So why aren’t more people aware of the actual costs of the medical services they receive? While there is such financial data available, it certainly takes a longer Google search to find than that for most consumer products. Also, because participants on health insurance plans are not paying the entire bill – but instead focused on their deductible amount and co-pays – they have little incentive to do some research and learn what the total price is. Indeed, many expecting mothers would be shocked to find out that they could be saving their respective health plans tens of thousands of dollars by delivering at certain hospitals, ones that may just so happen to offer superior services.
Ultimately, the mindset of patients needs to change. They need to view themselves as engaged consumers of healthcare services who shop around by comparing cost and quality metrics – no different than they would for products such as a lawn mower or refrigerator. By law, healthcare facilities are required to provide clear pricing information online for services rendered; patients/engaged healthcare consumers need to feel empowered to search for that information and then make educated decisions that are in their best interest.
That is, quite simply, the only way to prevent healthcare costs from spiraling out of control.
For reference, the list of states, ranked top to bottom, is as follows:
**Maryland was excluded due to its unique all-payer model, which regulates hospital payments differently from other states.
It must be January. Gyms are packed. W-2s are hitting the mail. Christmas trees are coming down. And the healthcare industry is bracing for new regulatory developments in the year ahead. While the new administration may indeed usher in sweeping healthcare changes, other pressing industry matters such as fiduciary liability and lawsuits – particularly cases involving Johnson & Johnson, Wells Fargo, and Blue Cross Blue Shield, warrant particularly close attention. Join The Phia Group’s roundtable of experts as they discuss potential changes that may be afoot in the new year – and ways that you can be best prepared. Just like fiduciary liability issues and lawsuits, this webinar will be impossible to ignore. Click Here to View Our Full Webinar To obtain a copy of our webinar slides, please reach out to [email protected].
It’s a new year, and a new type of Empowering Plans podcast! In a world full of talking heads and 2-minute news cycles, hot takes have become the norm. This is true from mainstream news media to sports talk radio. Ron Peck and Corey Crigger throw their hat in the hot take ring by speculating on what some of the biggest news stories could be in 2025. From AI to RFK Jr, join Ron and Corey as they gaze into the crystal ball and make their bold predictions of what we will be talking about all year. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
By: David Ostrowsky Unfortunately, there has long been a widely held perception that the healthcare industry is largely antiquated and riddled with inefficient processes. Perhaps that can explain why last week’s announcement – that Machinify, a provider of artificial intelligence (AI)-powered software for streamlining the healthcare claims lifecycle, will become an integral part of the company recently formed through the merger of The Rawlings Group (“Rawlings”), Apixio’s Payment Integrity business (“Apixio PI”), and VARIS – was deemed particularly newsworthy. That this new conglomerate, to be named Machinify, will be leveraging next generation technology and a wealth of data to further automate and enhance healthcare administration processes has apparently captured the imagination of healthcare stakeholders worldwide, and struck a chord with those that believe the healthcare industry must do more to leverage new technologies and catch up to other innovative industries. While the industry embracing novel technologies is an encouraging sign of change, the reality is that, upon closer inspection, it is not a new development. Not even close. In fact, The Phia Group, as one of the country’s premier healthcare cost containment companies, has for years been a pioneer in channeling A/I-powered applications to optimize the healthcare claims lifecycle by enhancing automation and efficiency. This next generation technology is integrated into multiple aspects of the company's core products and services, from The Phia Ignite Repricing Engine, to SoPhia (™) - its proprietary A/I consulting tool. So, what exactly are The Phia Ignite Repricing Engine and SoPhia (™)? Let’s take a look at how Phia has been championing cutting-edge means for automating processes over the past couple of years . . . Encompassing focused A/I, detailed quality metrics, multiple and defensible repricing datapoints, the Phia Ignite Repricing Engine is engineered to consistently calculate equitable and defensible claims payments. Indeed, Phia Ignite represents a means for revolutionizing the way self-funded plans approach cost containment as it empowers plans to take control of their healthcare spending by unwrapping the complex layers of medical billing and reimbursement. Not only does Phia Ignite have the unique ability to price claims for which benchmarks and rates would be otherwise unavailable but it also can be utilized for navigating patients towards the highest quality physicians who can provide services at the most equitable prices. In short, with the Phia Ignite Repricing Engine, the market’s most innovative technology has been harnessed to help healthcare consumers become more enlightened about their options for receiving care. Meanwhile, for their respective health plans, the benefits – whether they be realizing maximum savings, reducing risks, ensuring proper compliance – are immeasurable. Speaking of compliance, The Phia Group has invested considerable time and effort in developing the aforementioned SoPhia (™) for our consulting department. Gone are the days when Phia’s unrivaled consultants would spend hundreds (thousands?) of hours combing through a bevy of internal and industry communication materials and deliverables. Now, with SoPhia (™), they are able to tap into the powers of A/I to acquire, organize, update, and deliver information at an exponentially faster rate, leveraging years of output produced by The Phia Group’s thought leaders. Clients are constantly presenting The Phia Group with compliance-related questions and they need answers as quickly as humanly possible. Seeking to do better than “humanly possible,” Phia’s consultants and developers collaborated to achieve an incorporation of artificial intelligence into the processes of gaining and disseminating internal, and sometimes proprietary, Phia knowledge. While A/I, like any new technology, needs to be closely monitored in its nascent stages, its immense potential for enhancing the timing and quality of deliverables is awe-inspiring – and something the industry wholeheartedly embraces. Hopefully, the narrative surrounding the glacial pace of change in healthcare will start to change as stories such as New Mountain Capital’s acquisition of Machinify to form a multibillion-dollar medical payments powerhouse become more commonplace. But, as Phia’s track record suggests, the latest and greatest technology (i.e., artificial intelligence) is already well embedded in certain aspects of the healthcare administration industry. Just ask us about it.
By: Nick Bonds, Esq.
Feeling under the weather? There’s an app for that. Sort of. This is the future presaged by “PDURS” (Prescription Drug Use-Related Software). One of the sillier acronyms to grace the healthcare industry in recent memory, PDURS are defined by the FSDA as “software disseminated by or on behalf of a drug sponsor that accompanies one or more of the sponsor’s prescription drugs, including biological drug products.” Essentially, most patients will encounter this software as an app, paired with marquee prescription drugs, that is designed to “assist” patients and healthcare providers in the prescription and use of the medication. The FDA is working to assume regulatory authority over PDURS and released draft regulations on PDURS in 2018. It also updated draft regulations in 2023 along with Draft Guidance outlining regulatory considerations for PDURS. Broadly speaking, the FDA’s guidance creates two primary categories of prescription drug labeling 1) FDA-required labeling and 2) promotional labeling. The FDA-required labeling is defined broadly to include any prescribing information, as well as any software output that “supplements, explains, or is otherwise textually related to one or more of the [manufacturer’s] drug products” constitutes labeling. In other words, virtually any type of PDURS app or software would be considered “labeling” and subject to the FDA’s authority. Alternatively, the FDA’s Draft Guidance reasons that PDURS may also be regulated as a medical device, or as a combination of labeling and device functions. Ultimately, FDA regulations should be aimed at ensuring that PDURS are safe and reliable. The methodical pace of these regulations’ development and implementation may be slowing the rollout of PDURS apps for the moment, but they certainly aren’t stopping them. The FDA has already approved the launch of “Software-Enhanced Drug therapies” from Click Therapeutics and Otska Pharmaceutical that pairs with a six-week drug regimen to treat major depressive disorder. Theoretically, PDURS will improve the effectiveness of medications by helping patients stay on track with taking their doses as directed, tracking and managing the patient’s condition and side effects, educating them more thoroughly about their prescription drugs, assisting in clinical decision-making, and helping tailor doses to the individual patient. That said, coupling an app with a prescription drug provides a new way for name-brand drug manufacturers to defend against generic equivalents. This could also “software-lock” patients into using a more expensive name brand drug, not unlike car manufacturers using software to require owners of their vehicles (the end users) to only have their maintenance done at authorized dealers and repair shops. Effectively, drug manufacturers could use the licensing arrangements of PDURS software to stifle competition from generic versions of their drugs, keeping the name-brand prices higher and keeping employees and their group health plans locked into paying them.
That’s all before even considering that PDURS apps and software will open yet another avenue for data mining and gathering other sensitive information about individuals and their health. As more of these PDURS proliferate, The Phia Group and all stakeholders in the self-funded industry will be keeping an eye on how they, and the guardrails around them, evolve.
Phone: 781-535-5600 | www.phiagroup.com
The Book of Russo:
Happy New Year to everyone and I hope that your resolutions are still alive and in effect. My New Year’s resolution for 2025 was pretty simple. This year, I will enjoy every minute that I get to do this job… and what a year it will be. Indeed, this year we are celebrating The Phia Group’s 25th anniversary! I often reflect on how we got here, and to be honest, sometimes I have no idea. As I look back on a quarter century of hard work, innovation, passionate advocacy, and meaningful partnerships – this was never expected. Not in my wildest dreams did I imagine I’d be here 25 years later, still loving what I am doing, and loving the people with whom I’m doing it. All I know is that I approach each day with the same optimism and passion as I have for the last 25 years …
and I’m not going to change that any time soon. Being in an industry where there is so much innovation and new technologies is amazing. Attempting to balance legislative and regulatory requirements – amongst other obstacles, with new and existing processes presents a thrilling challenge. It’s exhausting yet exhilarating at the same time. Each day is different; there is no “Groundhog’s Day” experience in my role – always a new threat and opportunity on the horizon. Just as the challenges and ideas are always evolving, so too are the faces and personalities in our industry. I recall years ago how worried some of us were about how our industry’s leadership was aging, and how we needed an influx of new talent. Industry associations (as well as The Phia Group) invested heavily in future leader programs and young professional campaigns. Only a few years later, you only need to look at the conference attendees to appreciate that our industry is in good hands. I am so fortunate to meet and collaborate with you all; new friends and old. Regardless of whether you are an industry veteran, or new to the trade, we all need to tackle the same issues and leverage the same opportunities (albeit in different ways) – performing a balancing act between efficiencies and accuracy, services and savings. That is why – at The Phia Group – we offer the best in industry services to ensure the greatest outcomes, always balancing the sometimes-contradictory attributes and needs of our clients and their customers. In this market, no two clients are the same and that is reflected in the custom work that we do. Well, that’s enough from me. Let’s get to the good stuff! I hope your year is off to a great start and just remember that we are always here for you. - happy reading.
Service Focuses of the Quarter Phia Fit to Print From the Blogosphere Webinars Podcasts The Phia Group’s 2025 Charity Employee of the Quarter & Year Phia News
Service Focus of the Quarter: Phia Unwrapped (featuring Phia Ignite)
Phia Unwrapped, featuring our groundbreaking Phia Ignite repricing engine, is revolutionizing the way self-funded plans approach cost-containment. This comprehensive solution empowers plans to take control of their healthcare spending by unwrapping the complex layers of medical billing and reimbursement. With Phia Ignite at its core, Phia Unwrapped offers a powerful combination of technology-driven analysis, expert negotiation, and strategic plan design to optimize healthcare costs without compromising provider access.
What sets Phia Unwrapped apart is its ability to seamlessly integrate with your existing plan structure while providing unparalleled flexibility and customization. Our team of industry experts works closely with you to tailor the solution to your specific needs, whether you're looking to implement reference-based pricing, narrow your network, or explore hybrid models.
By leveraging advanced data analytics and our extensive industry knowledge, Phia Unwrapped not only helps you achieve immediate savings but also provides long-term strategies for sustainable healthcare management. Experience the transformative power of Phia Unwrapped, and let Phia Ignite ignite your potential for success in today's challenging healthcare landscape. If you haven’t used, seen a demo of, or heard great things about Phia Ignite we urge you to email [email protected] today.
Enhancement of the Quarter: Care Empowered Pricing
This quarter, we are excited to highlight Care Empowered Pricing. This innovative addition to The Phia Group's suite of services represents a significant advancement in our cost containment offerings, creating a new breed of reference-based pricing.
One of the key features of Care Empowered Pricing is its technology-enabled provider selection and access support, which ensures that clients can provide access to optimal high-quality care at the lowest possible price point. Additionally, this enhancement includes balance bill resolution services supported by our legal team at no extra cost, further protecting you, your clients, and their employees from unexpected expenses associated with healthcare services.
By integrating Care Empowered Pricing into our existing services, we empower stakeholders to make informed decisions that improve outcomes for both plans and individuals seeking healthcare. This enhancement not only strengthens our commitment to delivering high-quality care but also reinforces our mission to provide effective cost-containment solutions in an ever-evolving healthcare landscape.
Phia Case Study: Hidden Parity Issues
Our consulting team recently uncovered a subtle but significant mental health parity violation in a large health plan's provider credentialing process. While the plan claimed to apply the same standards to both medical/surgical and mental health providers, we noticed a crucial discrepancy. Medical/surgical specialists were allowed a 60-day grace period to complete certain credentialing requirements after being provisionally approved to see patients, while mental health providers were only allowed a 30-day grace period.
This seemingly minor difference had a substantial impact on network adequacy and patient access to mental health services. The stricter credentialing timeline for mental health providers led to longer wait times for patients seeking mental health care, a smaller network of available mental health providers, and an increased likelihood of out-of-network care for mental health services. We recognized that this disparity in credentialing processes violated the Mental Health Parity and Addiction Equity Act (MHPAEA), which requires that non-quantitative treatment limitations (NQTLs) for mental health services be no more restrictive than those for medical/surgical benefits.
By identifying this hidden parity violation, we helped the plan (through its network) align its credentialing processes across all provider types, improve patient access to in-network mental health services, and avoid potential regulatory penalties and litigation risks. This case demonstrates the importance of thorough, nuanced analysis in uncovering less obvious parity violations, ultimately leading to better mental health coverage and improved patient care.
Fiduciary Burden of the Quarter: ASA Termination Penalties
As a TPA, it's crucial to understand the implications of federal regulations on your contracts with ERISA plans. One particular regulation (found at 29 CFR § 2550.408b-2[c]) stipulates that a contract isn't considered “reasonable” if it doesn't allow the plan to terminate without penalty on reasonably short notice. While you can include provisions for recouping actual losses upon early termination, substantial penalties that effectively lock plans into long-term arrangements (or even the lack of ability to terminate without cause) are prohibited.
This requirement impacts your contract structures and fee models significantly. You'll need to carefully balance your business interests with regulatory compliance. Consider transparent fee structures that clearly demonstrate the ongoing value of your services, rather than relying on long-term commitments or hefty early termination fees. After all, if challenged by a plan, federal law places the burden on the TPA to justify any early termination costs as actual losses rather than penalties.
While you may not always be considered a fiduciary under ERISA, your actions and contract terms can sometimes lead to functional fiduciary status. In such cases, imposing substantial early termination penalties could be seen as a breach of fiduciary duty. Even as a non-fiduciary, including such penalties could invite legal challenges or regulatory scrutiny. Focus on creating flexible, value-driven relationships with your clients that comply with ERISA's protective intent while still safeguarding your business interests.
Webinars:
• On November 19, 2024, The Phia Group presented “A New Year, a New Administration, but the Same Old Problem?,” in which we broke down how election results would impact the industry and looked ahead to what compliance changes are afoot.
• On October 17, 2024, The Phia Group presented “Industry Crossroads – How the 2024 Election Impacts You & Major Implications For Our Industry,” in which we discussed how the results of the historic election would have a major impact on healthcare and health benefit plans alike.
Be sure to check out all of our past webinars!
Podcasts:
Empowering Plans
• On December 19, 2024, The Phia Group presented “Denied Claims Beyond the Headlines,” in which our hosts, Corey Crigger and Cindy Merrell, discussed the murder of UnitedHealthcare’s CEO, which fueled public outcry over denied claims.
• On December 5, 2024, The Phia Group presented “Non-Preferred Carrier Fees: Incentives or Control?,” in which our hosts, Jon Jablon and Brady Bizarro, dove into the details of a recent lawsuit involving BCBS of Michigan.
• On November 5, 2024, The Phia Group presented “Lessons From a Florida IDR Case,” in which our hosts, Ron Peck and Nick Bonds, discussed a recent Florida case addressing judicial review of IDR determinations and highlighted some of the key insights and takeaways for any entity subject to the No Surprises Act.
• On October 24, 2024, The Phia Group presented “Nightmares on Self-Funded Street,” in which our hosts, Corey Crigger and Kendall Jackson, delved into ways to protect your plan from the scary cost of gene therapies.
• On October 15, 2024, The Phia Group presented “Gender-Affirming Care, Is it Covered?,” in which our hosts, Jon Jablon and Cindy Merrell, discussed the changing landscape of several state and federal laws that affect coverage of gender-affirming care.
Be sure to check out all of our latest podcasts!
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Phia Fit to Print:
• BenefitsPro – Trump's health appointments spark controversy and change – December 2024
• The Self-Insurer – Navigating The New Frontier In Reference-Based Pricing: NSA Impacts, Data Overload, and The AI Revolution – December 2024
• BenefitsPro – The end of the year is near: Health plan preparation for 2025 – October 2024
• The Self-Insurer – Summer Olympics Showcased Advances In Mental Health Services Lessons For Self-Insured Health Plan Sponsors – October 2024
From the Blogoshpere:
• Anthem Blue Cross Blue Shield’s Major Reversal. On November 1, Elevance Health issued a news release detailing its proposed billing guideline changes for Connecticut, New York, and Missouri.
• New Requirements Under the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The deadline to comply with several of the new final rules regarding the Mental Health Parity and Addiction Equity Act (“MHPAEA”) is quickly approaching.
• Navigating Balance Billing and Post-Payment Disputes: Solutions for TPAs and Self-Funded Employers. Preventing and addressing balance billing and post-payment disputes is essential for the success of any RBP program.
• The Future of Birth Control in America. For the first time in the history of the United States there is strong potential for universal coverage for no-cost, over-the-counter, no-prescription-necessary contraception.
• Cobenfy: A Potential Game-Changer for Schizophrenia Patients – But at What Price? Will drug prices be coming down in the near future?
To stay up to date on other industry news, please visit our blog.
The Phia Group's 2025 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 2025 charity is the Boys & Girls Club of Metro South.
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 Metro South (BGCMS) 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 to 18, signed up as club members. In the 30-plus years since then, 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 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 programs.
Thanksgiving Delivery!
The tradition continues! Right before Thanksgiving, The Phia Group once again had a large contingent of volunteers helping to hand out Thanksgiving meals at the Boys & Girls Clubs of Metro South. Over twenty-five families received dinner and dessert! We hope everyone had a great Thanksgiving!
Phia's Angel Tree
Our Angel Tree was on display in our Canton office! We are thrilled to share that this marks our 10th consecutive year participating in the Salvation Army Angel Tree program. We had 150 tags on our tree this year, which means that we got to bring joy to 150 children this holiday season. Discover more about this heartwarming initiative that brings us so much joy in the link below: Angel Tree's Site.
Senior Care Package Corner
Through the Angel Tree Program, The Phia Group spreads holiday cheer to dozens of seniors in the Greater Boston area, many of whom do not have families who are local. Thanks to the generosity and dedication of our employees, a Senior Care Package Corner was set up for the collection of basic necessities such as hats and gloves as well as some tasty treats. The Phia Group continues to look forward to making a difference in our local community in the upcoming year.
Santa’s Special Delivery
On the evenings of December 17th and 18th, The Phia Group – with CEO Adam Russo serving as Santa, accompanied by a dozen elves – delivered gifts to 150 kids at the Brockton & Taunton Clubhouses of the Boys & Girls Clubs of Metro South. We hope they enjoyed all of the gifts they received!
Phia News:
Stein Holding Contest
Oktoberfest wouldn’t be complete without a good old-fashioned Stein holding contest! This year we had fifteen participants willing to put their strength to the test. As always, there could only be one winner, which was David Ostrowsky! Congratulations, David, and we look forward to another great Oktoberfest next year!
Halloween at Phia
In late October, many of our employees brought in their children for the annual Halloween extravaganza at our Canton headquarters, as well as at our Louisville office. Everyone – kids and adults alike – had a blast trick-or-treating around the office and then enjoying a delicious pizza party afterwards! On behalf of everyone here at The Phia Group, we would like to thank all those who made that day so special for the Phia Phamily kids!
Best Costume
As is tradition, Phia held its annual Halloween costume contest. The Phia staff did not disappoint! And the winner was clear. Congratulations to the HR Team, who dressed up as the Wizard of Oz cast! Check out their amazing costumes below.
Candy Corn Contest
As is tradition, Phia held its annual candy corn contest. The Phia Family made some great guesses, but there was one person who came particularly close to guessing the exact number. Congratulations to Matt Painten on guessing 897 pieces of candy corn. This was a good guess, as we had 998 pieces of candy corn in the jar!
Get to Know Our Employee of the Year: Harman Singh
To be designated as Employee of the Year is an achievement that is reserved for Phia employees who truly go above and beyond their day-to-day responsibilities. This person must not only transcend their established job description but also demonstrate dedication and passion to The Phia Group and its employees that is so unparalleled that it cannot go without recognition.
The Phia Explore team has made the unanimous decision, without hesitation, that there is no one more deserving than our very own Harman Singh as The Phia Group’s 2024 Employee of the Year!
Congratulations, Harman, and thank you for your ongoing and future contributions.
Get to Know Our Employee of the Quarter: Rand Lennox
Being named Employee of the Quarter is an achievement that is for Phia employees who truly go above and beyond their responsibilities. This person must not only transcend their established job description but also demonstrate such unparalleled dedication and passion to The Phia Group and its employees that it cannot go without recognition. The Phia Explore team unanimously agrees that there is no one more deserving than Rand Lennox to be recognized as The Phia Group’s Employee of the Quarter for Q4 of 2024.
Congratulations, Rand, and thank you for your ongoing and future contributions.
Phia Attending the SIIA National Conference
Several of Phia’s industry experts will attend SIIA’s 2025 National Conference in Phoenix, Arizona, from October 12th – 14th. If you are interested in attending or learning more about SIIA’s National Conference, visit their website: https://www.siia.org/i4a/calendar/?pageid=7767&showTitle=1
Job Opportunities:
• Accounting Administrator I
• Healthcare Consulting Attorney
• Health Plan Documentation Specialist
• Senior Claim Recovery Specialist
• Health Claim Investigation Specialist
See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers
Promotions
• Vanessa Leurini has been promoted from Case Investigator to Claims Recovery Specialist III.
• Ethan Forrest has been promoted from Sr. Claims Recovery Specialist to Team Lead, Recovery.
• Kendall Felici has been promoted from Project Coordinator I to Project Coordinator II.
• Tara Otoka has been promoted from Health Benefit Plan Consultant to Quality Assurance Specialist.
• Michelle Moyal has been promoted from Health Benefit Plan Consultant to Quality Assurance Specialist.
New Hires
• Tracey Tostanoski was hired as a Claim Recovery Specialist
• Mutyam Bejjanki was hired as a BI Assistant
• Christine McFadyen was hired as an Accounting Assistant
• Liam Tangney was hired as an Accounting Intern
• Emillya Vieira was hired as a Case Investigator
• Amy Holladay was hired as a Sr. Claim Recovery Specialist
• Allie Hanserd was hired as a Subrogation Attorney
• Gina Vaught was hired as a Claim Specialist
• Jesse Wilkins was hired as a Case Investigator
• Iliet Alvarez was hired as a Claim Recovery Specialist
• Taisha Brooks was hired as a Customer Service Rep
• Erica Risch was hired as a Customer Service Rep
• Kristina Bernal was hired as a Customer Service Rep
• Averee Leonard was hired as a Case Investigator
• Nathan Cook was hired as a Sr. Systems Administrator
The Phia Group Reaffirms Commitment to Diversity & Inclusion At The Phia Group, our commitment to fostering, cultivating, and preserving a culture of diversity and inclusion has not wavered from the moment we opened our doors 20 years ago. We realized early on that our human capital is our most valuable asset, and fundamental to our success. The collective sum of individual differences, life experiences, knowledge, inventiveness, innovation, self-expression, unique capabilities, and talent that our employees invest in their work, represents a significant part of not only our culture, but also our company’s reputation and achievements.
We embrace and encourage our employees’ differences, including but not limited to age, color, ethnicity, family or marital status, gender identity or expression, national origin, physical and mental ability or challenges, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique.
The Phia Group’s diversity initiatives are applicable to all of our practices and policies, including recruitment and selection, compensation and benefits, professional development and training, promotions, social and recreational programs, and the ongoing development of a work environment built on the premise of diversity equality.
We recognize that the success of our company is a direct reflection of each team member’s drive, creativity, diversity, and willingness to exercise initiative. With this in mind, we always seek to attract and develop candidates who share our passion for the healthcare industry and our commitment to diversity and inclusion.
CANTON, MA – January 9, 2025 – In its ongoing efforts to be a trailblazer in the healthcare cost containment field, The Phia Group has promoted John Blaney to Executive Vice President of Transformation and Recovery Services. In his new role, Mr. Blaney will spearhead all recovery functions, including subrogation, overpayment, and other cost containment opportunities. Mr. Blaney will leverage his decades of experience serving as an executive in the healthcare field toward streamlining operations as well as automating department-wide processes, all of which will help optimize services offered to Phia’s clients. The Phia Group’s successful growth initiatives and major investments in technology have enabled us to identify more recovery opportunities and deliver higher recoveries to our clients than any other recovery vendor in the market.
“In the short time that John has been at Phia, he has automated more processes and identified more opportunities for driving forward innovation than we previously had,” remarked Phia CEO Adam V. Russo. “He is a true partner in Phia’s mission to lower the overall cost of healthcare.”
“Whereas many companies claim to be making meaningful improvements to the healthcare system, Phia has been invested in this pursuit for 25 years and continues to do so with its innovative products and services,” said Blaney. “It is an honor to be a part of this great organization and to contribute to its continued growth and success.”
Before joining Phia in March 2024, John served as HealthComp’s Vice President Transformation and Automation. In reporting to the CEO of HealthComp, John was instrumental in driving forward process and automation enhancements. Prior to HealthComp, John served as the President of Strategy & Transformation for Equian, a post that eventually segued into Director of Payment Integrity when the company was rebranded as Optum.
A true visionary who found his niche developing claims processing software for healthcare, John was previously the president and founder of Advanced System Applications, Inc., a healthcare application software company, and Primax Recoveries, Inc., a healthcare subrogation and payment integrity company. In serving as the president of the latter company, John implemented transformative strategies that are still being utilized by some of the country’s most renowned recovery firms.
To learn more about The Phia Group and how it empowers plans, please contact Garrick Hunt by email at [email protected] or by phone at 781-535-5644.
About The Phia Group: The Phia Group, LLC, headquartered in Canton, 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.
Was it a standard administrative cost or a true “phantom tax” allegedly stifling competition?
Back in November, Wesco, a 55-year-old privately-held gas station chain, and the benefits fund for the Utility Workers Union of America filed a class action lawsuit, alleging that Blue Cross Blue Shield of Michigan (BCBSM), an insurance carrier serving over six million Midwesterners, engaged in an anticompetitive practice by charging an additional PEPM (“per-employee, per-month”) fee to any group that opted to use a stop-loss carrier other than BCBS. For BCBS of Michigan, the fee represents a fairly standard industry practice for charging a plan extra if it opts to use a non-preferred stop-loss carrier; conversely, for the aforementioned plaintiffs, the constantly escalating PEPM fee represents a means for inflating costs for the already cash-strapped covered groups as well as driving smaller stop-loss carriers out of the market. Looking ahead, how this case plays out in federal court in Michigan will have a monumental impact on not just the stop-loss marketplace but also the self-funding industry in its entirety.
Though it is fairly common for Third Party Administrators (TPAs) to have contractual arrangements with preferred stop-loss carriers, the argument here, according to Wesco, is that the extra fee proved to be so prohibitively expensive that the company had no choice but to use BCBS of Michigan, already its TPA, as its stop-loss carrier. Subsequently, if smaller stop-loss carriers cannot compete – which would amount to a violation of the Sherman Antitrust Act as well as state antitrust laws – there is no limit to which BCBS could charge self-funded employers.
According to court filings, Michigan’s largest health insurer implemented the fee years ago “to serve as a deterrent and discourage BCBSM’s self-funded customers from buying stop-loss coverage from other carriers while simultaneously weakening its rivals competitively by effectively raising the prices of their stop-loss products.”
Consequently, the “effective prices of stop-loss insurance for self-funded accounts are significantly higher than they otherwise would be in Michigan,” according to the lawsuit that opines the fee is “substantively no different than a price-fixing scheme explicitly designed and employed to raise its rivals’ costs in violation of federal and state antitrust laws.”
In other words, the allegation here is that other stop-loss carriers that want to provide more reasonably priced coverage are going to be compelled to offer substantially better deals that hurt their bottom line in order to compensate for the added burden of BCBS’ fees.
But BCBS of Michigan may have a compelling counterargument – aside from buffing up their coffers amidst the ambiguous landscape of anti-trust laws. For self-funded groups, it is naturally easier to work with an entity with which they are familiar as there is less likelihood for administrative snafus to surface; after all, the TPA is the same entity as the stop-loss carrier. In more layperson terms, everyone is already on the same page.
On a grander scale, however, it is important to remember that the relationship involving a benefit plan, TPA, and stop-loss carrier transcends premiums and coffers from which claims can be paid. TPAs charge a fee when a non-preferred carrier is selected for multiple reasons. Indeed, there are more inherent inefficiencies and resources needed for engaging with a carrier with whom an existing process is not yet ironed out. TPAs and their preferred carriers have established processes and system-based tools that facilitate a more streamlined transmission of needed materials; their systems are literally built to integrate with each other. Meanwhile, other carriers would require the TPA to implement and utilize completely new processes outside their usual system.
Furthermore, it bears mentioning that stop-loss carriers that charge less are sometimes able to do so because the scope of their coverage is more limited, their policies contain more exclusions, and they may tend to delay or deny payments. Though the TPA’s only responsibility is to administer the plan in accordance with its terms and applicable law – irrespective of what stop-loss will or will not pay – TPAs, such as BCBS, are often blamed for a stop-loss carrier's failure to reimburse, and are accused of having made some administrative error by allowing the plan to pay claims that would not be reimbursed. Accordingly, TPAs may argue that they institute these fees to safeguard themselves – and their respective plans –from getting in a relationship with cut-rate carriers that will cost them more in the long run. At the very least, the fees arguably buffer the TPA against costs incurred when defending themselves against claims of negligence when a carrier may eventually refuse to reimburse the plan.
Though this case is still in its infancy at this time, new developments can quickly surface as the federal court is being asked to issue an injunction to hinder Blue Cross from assessing this fee.
By: Kelly Dempsey, Esq.
It’s not the news any of us wanted to hear, but 2025 has arrived with no extension to the telehealth services safe harbor for high deductible health plans that are HSA-qualified. As such, the safe harbor officially expires for plan years starting on or after January 1, 2025. There were numerous reports that an extension was included in early drafts of the bill to keep the government funded in December, but the bill passed and signed by President Biden on December 21, 2024, did not include this extension.
This safe harbor was originally created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed way back in 2020 and additional legislation enacted throughout 2022 extended the safe harbor for plan years starting before January 1, 2025.
Plan sponsors who have offered HDHPs in conjunction with HSAs will no longer be allowed to cover telehealth services before the deductible is met. Should a plan allow reimbursement for telehealth services prior to the deductible being met, the HDHP would not be HSA-qualified; consequently, participants could not contribute to an HSA for that plan year. Plans that violate IRS HSA-qualified HDHP rules can expose both the plan and plan participants to tax consequences.
What’s a plan to do now? Unfortunately, the answer is to update (via amendment or restatement) plan provisions. Plans will need to update their SPD/PDs accordingly at the first plan renewal beginning on or after January 1, 2025. HSA-qualified HDHPs will need to ensure that telehealth services under an HDHP apply to the deductible at the first plan year beginning after January 1, 2025, unless the service is for an ACA-mandated preventive benefit (i.e., a telehealth visit to obtain a prescription for a preventive service).
We know there is a lot of bipartisan support for making this a permanent rule, thus this issue may be taken up in the next Congress, but only time will tell.
On today’s episode of the Empowering Plans podcast series, attorneys Kendall Jackson and Brian O’Hara discuss the Biden administration’s decision to withdraw proposed rules that would have expanded the birth control benefits mandate. Join us in our discussion of the mandate and how it has evolved throughout the Obama, Trump, and Biden administrations. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
Earlier this month, as the healthcare industry was receiving an inordinate amount of unwanted public attention and scrutiny, there was actually a positive development stemming from one of the country’s largest health insurers. Indeed, lost in the shuffle amidst the chaotic aftermath of the murder of UnitedHealthcare CEO Brian Thompson was Anthem Blue Cross Blue Shield’s reversal of its initial decision to stop paying for anesthesia care in certain states if the surgery or procedure extends beyond a particular time limit. Had such a titan of the health insurance industry proceeded in not paying for medically necessary anesthesia services, tens of thousands of Americans – many of whom are of limited financial means -- would have been at risk of getting cut off from a life-saving service.
On November 1, Elevance Health, which recently rebranded from Anthem Blue Cross Blue Shield, issued a news release detailing its proposed billing guidelines changes for Connecticut, New York, and Missouri whereby starting this February, time limits pre-set by the insurer would have dictated the amount of anesthesia care to be covered. It also appears that a similar note had been issued to providers in Colorado, with a March start date.
More specifically, Anthem had said that beginning in February it would use metrics — known as Physician Work Time values — from the Centers for Medicare and Medicaid Services (CMS) to “target the number of minutes reported for anesthesia services.” Claims for anesthesia care stretching beyond that set number of minutes would be denied. In more layperson terms, if a patient’s procedure ran longer than anticipated, well, there would be a no-pun-intended rude awakening as they’d be left to foot the unexpected bill.
In fairness, Anthem declared it would exempt maternity-related care and patients under the age of 22 from this new rule and that providers could have recourse to dispute claims if they disagreed with a reimbursement decision. Meanwhile, there was a belief among some that Anthem’s intention was not to create an undue financial burden for patients but rather to hold providers accountable by standardizing anesthesiologists’ pay at a set rate.
“Anthem’s policy would not have increased costs for their enrollees,” opined Eric Levitz, a senior correspondent at Vox in a December 6 article. “Rather, it would have reduced payments for some of the most overpaid physicians in America. And when millionaire doctors beat back cost controls — as they have here — patients pay the price through higher premiums.
“Anesthesia services are billed partially on the basis of how long a procedure takes. This creates an incentive for anesthesiologists to err on the side of exaggerating how long their services were required during an operation. And a few studies have found that a small portion of anesthesiologists may engage in overbilling by overstating the length of a procedure, or the degree of risk a patient faces in undergoing anesthesia.”
But regardless of the actual motive, the optics were not favorable and the public backlash to Anthem’s announcement was, as expected, intense. In addition to the American Society of Anesthesiologists (ASA), many politicians articulated strong frustration over some commercial health insurers seeking to boost their profits at the expense of patients’ welfare – a sentiment that many Americans surely feel at this hour. New York governor Kathy Hochul was not shy about expressing her outrage at the proposal. Meanwhile, in Connecticut (where Anthem is the provider of the state employee health plan) multiple public officials lobbied the insurance carrier to alter its decision. While US Senator Chris Murphy called on Anthem to take swift action and reverse course, State Senator Jeff Gordon, a practicing oncologist and hematologist who knows full well that a surgery or procedure can face unforeseen challenges and take longer than originally planned for, sent a letter to Connecticut Anthem Blue Cross and Blue Shield urging them to follow suit, claiming “people's healthcare and lives depend on it.” Though it’s hard to fathom that a surgeon and anesthesiologist would ever contemplate truncating a surgery prematurely, the prospect of an unsuspecting patient being saddled with a mountain of medical debt – which is after all, the leading driver of homelessness in America -- is unnerving.
But now, thanks to Anthem doing an about-face, that situation is no longer an impending reality.
On this episode of the Empowering Plans podcast series, attorneys Corey Crigger and Cindy Merrell discuss the murder of UnitedHealthcare’s CEO, which fueled public outcry over denied claims. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)