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.
By: David Ostrowsky
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!)
In this episode of the Empowering Plans podcast, attorneys Jon Jablon and Brady Bizarro delve into the details of a recent lawsuit where BCBS of Michigan, in its capacity as a TPA, is alleged to have engaged in anticompetitive practices for charging a fee to a group that chose a stop-loss carrier other than BCBS. This case is in its infancy as of December 2024, but we expect it to have noticeable effects on the stop-loss marketplace regardless of outcome. In this episode, Jon and Brady discuss those potential effects and how a holding either way could impact self-funding as a whole. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
Well before Hurricane Helene, one of the deadliest storms in modern American history, ripped through Western North Carolina earlier this autumn, decimating scores of residences and businesses and washing away entire neighborhoods, the largely impoverished Appalachian region was grappling with a precarious healthcare infrastructure. To this day, Asheville, North Carolina, and its surrounding mountainous communities have never fully recovered from the devastation of the Great Recession of 2008, resulting in a grave health disparity among other societal ills. And, yes, the recent ferocious tempest of which Western North Carolina bore the brunt has only exacerbated the region’s already fragile healthcare system.
In the immediate aftermath of Helene, thousands of residents whose cars were buried under their collapsed homes found themselves bereft of medication refills, IV fluid bags (there’s been a lot of publicity about this in particular), insulin supplies, and dialysis equipment among so many other life-saving resources. In addition to the scarcity of options for reliable transportation to medical appointments – or the inability to walk safely along public roads laced with downed trees and electrical wires – survivors have faced the heightened risk of exposure to sewage, toxic industrial waste, and mosquito-borne illnesses stemming from the raging, out-of-control floodwaters. Meanwhile, the blunt force of the storm’s impact has caused a bevy of short-term injuries that, because they have not received immediate medical attention, could mushroom into chronic, far more severe issues. This is to say nothing of the severe mental health problems many residents are surely experiencing in the wake of losing loved ones and having their lives uprooted. To put it another way, instead of shopping for holiday gifts in the coming weeks, many will be busy filing insurance claims.
As North Carolinians whose lives have been upended continue to endure such apocalyptic circumstances, nearby healthcare facilities (or those that are accessible) have faced their own mounting problems. While the physical infrastructure of nearly all community health centers in Western North Carolina remained unscathed, there has been a universal struggle for facilities to obtain clean potable water for sanitizing equipment, cleaning wounds, washing hands properly, or even making an adequate amount of coffee for providers to stay alert. For over a month now, it has been an endeavor of colossal proportions for Asheville’s Mission Hospital, the only designated trauma center in Western North Carolina, to obtain clean, usable water while other facilities − such as Asheville's Planned Parenthood clinic and local birthing centers – were relegated to slashing critical health services due to the lack of running water. By all accounts, the dearth of potable water has been the chief culprit behind the systemic woes bedeviling the region’s healthcare landscape. (It also bears mentioning that there were some North Carolina nursing homes still without an adequate supply of running water for several weeks after Hurricane Helene made landfall.)
In addition to clean water, another all-important resource in drastically short supply for such healthcare facilities is that of adequate manpower. For an area of the country that was already struggling mightily to recruit and retain medical staff, Helene dealt a devastating blow. Truthfully, many of the healthcare workers in Western North Carolina themselves were personally affected by Helene. Some tragically lost their lives while many others have struggled to help victims as they and their families have been experiencing unimaginable distress. Certainly, volunteer doctors, nurses, and psychologists have descended on the region to help hospital patients – as well as those who are housebound often without internet, reliable phone service, electricity, and running water – but a severe staffing shortage, one that may portend a wave of hospital closures, still looms large in the storm-ravaged region.
“How do we attract someone to come into the area at this moment?” Kim Wagenaar, the chief executive of Western North Carolina Community Health Services, which serves 13 counties in the region, shared with the New York Times in an October 28 piece. “It’s just going to take a long time to really mitigate the effects of this disaster.”
Though hurricane season may be winding down, we can’t lose sight of the legions of victims of Helene who want nothing more than adequate healthcare services this holiday season.
By: Kendall Jackson, Esq.
The deadline to comply with several of the new final rules regarding the Mental Health Parity and Addiction Equity Act (“MHPAEA”) is quickly approaching. On September 9, 2024, the U.S. Departments of Health and Human Services (HHS), Labor, and the Treasury released new final rules that updated existing regulations to provide additional clarity for plans and their vendors on what is required and what will be considered compliant and non-compliant for parity purposes when performing a nonquantitative treatment limitation (NQTL) comparative analysis. The final rules generally apply to group health plans, including self-funded non-Federal governmental health plans that, prior to the issuance of these rules, were able to opt out of MHPAEA compliance. The extension of MHPAEA’s application to self-funded non-Federal governmental health plans is beneficial to ensure that no plan may impose an NQTL with respect to mental health or substance use disorder (“MH/SUD”) benefits in any classification that is more restrictive, as written or in operation, than the predominant NQTL that applies to substantially all medical/surgical (“M/S”) benefits in the same classification. Of the newly outlined rules, most apply to group health plans on the first day of the first plan year beginning on or after January 1, 2025.
The final rules codify that health plans must perform a comparative analysis, which must include an evaluation of NQTLs for network composition, out-of-network reimbursement rates, medical management standards, and prior authorization, as well as six additional elements, such as a description of the NQTL, identification of and definitions for the factors and evidentiary standards used to design or apply the NQTL, and a description of how factors are used in the design or application of the NQTL. The final rules also outline certain responsibilities for plan fiduciaries. The final rules require certification confirming the plan fiduciary’s engagement in a prudent process to select one or more qualified service providers to perform and document a comparative analysis in connection with the imposition of any NQTLs that apply to MH/SUD benefits under the plan in accordance with MHPAEA and its implementing regulations, as well as satisfaction of the duty to monitor those service providers. At a minimum, the Department of Labor expects that the plan fiduciary will review the comparative analysis, ask questions about the results, discuss the results with those who drafted it, if necessary, and ensure that the service provider conducted the comparative analysis in compliance with MHPAEA.
Separate from those requirements listed above, the implementation of several other requirements is delayed until January 1, 2026. This includes the meaningful benefits standard, which requires that if a plan provides any benefits for an MH/SUD condition in any of the six benefit classifications, it must provide “meaningful benefits” for that condition or disorder in every classification in which meaningful M/S benefits are provided. Also delayed are the regulations requiring plans to satisfy the design and application requirements, which include the prohibition on discriminatory factors and evidentiary standards, and the relevant data evaluation requirements, which involve collecting and evaluating relevant data to assess the impact of NQTLs on access to MH/SUD benefits and M/S benefits. Any requirements for the provisions of the comparative analyses related to the delayed requirements are also deferred until January 1, 2026.
While several of these new requirements are not applicable for quite some time, plans that cover both M/S benefits and MH/SUD benefits and impose NQTLs on MH/SUD benefits should be sure to perform and document a comparative analysis of the design and application of each applicable NQTL in a manner consistent with the new final rules. The Departments have yet to provide how often these comparative analyses should be performed, but rather state that they should be kept current. We generally interpret this to mean that they should be performed annually based on the fact that the plan is updated annually.
On Friday, November 1, millions of Americans awoke from their Halloween slumber only to be further spooked by a New York Times report that employers expect the costs of health benefits to surge as much as 9 percent on average in 2025. How much will the outcome of this month’s elections – held during many companies’ open enrollment period -- impact this now decades-long industry trend? What does this all mean for plans interested in covering big-ticket items like weight loss drugs and next-generation gene therapies in the new year? As 2024 soon merges into 2025, join The Phia Group’s webinar as its panel of experts break down how election results will impact the industry and look ahead to what compliance changes are afoot in just over a month ahead. Indeed, this is a crucible moment for the healthcare industry – and Phia’s Independent Consultation & Evaluation (ICE) team looks forward to lending its expertise.
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By: Scott Bennett and David Ostrowsky
As rising healthcare costs continue to challenge employers and third-party administrators (TPAs), Reference-Based Pricing (RBP) has emerged as a powerful strategy for cost containment. However, RBP, while promising, is not without its pitfalls. Chief among them is balance billing, in which providers charge patients for the difference between their billed charges and the RBP plan’s payment. Additionally, the No Surprises Act (NSA) has introduced Open Negotiations and Independent Dispute Resolution (IDR) processes, which, while protecting patients, expose employers to post-payment disputes. Addressing these concerns effectively requires comprehensive tools, support, and strategic implementation.
Addressing the Challenges of RBP Programs and NSA Requirements
RBP programs use reference points such as Medicare rates to create more predictable and transparent pricing. While this can reduce healthcare costs and broaden provider options, it also exposes plan participants to potential balance billing when providers reject the RBP payment as full settlement and bill the patient for the remaining balance. This creates financial stress for both patients and employers.
The introduction of the NSA further shifts the focus of payment disputes from patients to employers. Open Negotiations and IDR processes require a deep understanding of regulations, adherence to strict timelines, and awareness of critical benchmarks necessary to successfully argue, negotiate, and defend cases. TPAs and self-funded employers must navigate these processes carefully to mitigate risk and manage potential exposure.
How Comprehensive RBP Solutions and NSA Expertise Mitigate Risks
1. Effective Balance Bill Resolution
Choosing an RBP solution that offers strong balance bill resolution is critical. Programs that include direct intervention and independent legal support can prevent unexpected financial burdens on employees and reduce the administrative load on employers and TPAs. Care Empowered Pricing, for instance, includes this type of support, leveraging years of experience in resolving balance billing issues effectively and adapting to the evolving regulatory landscape under the NSA.
2. Expertise in NSA Open Negotiations and IDR
Handling Open Negotiations and IDR requires more than basic dispute resolution skills. Employers need an informed and experienced team that understands the regulations, adheres to strict timelines, and recognizes the important benchmarks necessary to advocate successfully. Solutions that provide this level of expertise ensure that employers are prepared to navigate these complex processes and defend their positions effectively, minimizing exposure and ensuring compliance.
3. Empowered Provider Selection
The use of advanced provider data and selection tools can greatly enhance the success of an RBP program. By using technology-enabled repricing engines, TPAs can glean insights into provider practices and payment acceptance, thereby steering employees toward providers more likely to accept reference-based payments without triggering balance bills. This also helps reduce the frequency of disputes requiring NSA Open Negotiations or IDR processes.
4. Member Education and Support
Educating employees about how their RBP plan functions and how to identify compliant providers is essential. Solutions that offer real-time support and guidance ensure that members are confident and well-prepared when navigating healthcare services. Additionally, having a well-informed and experienced team capable of reacting swiftly, reaching out, and using technology based on practical experience to track and resolve cases is vital. Care Empowered Pricing emphasizes member education and continuous access to resources in order to bolster awareness of the NSA processes.
Best Practices for Preventing and Resolving Balance Bills and Navigating NSA Processes
Preventing and addressing balance billing and post-payment disputes is essential for the success of any RBP program. Key practices include:
Why Enhanced RBP and NSA Solutions Matter
For TPAs and self-funded employers, selecting an RBP solution that encompasses customizable pricing, experienced advocacy, and continuous member support—while also incorporating expertise in NSA regulations and dispute resolution—is essential. Solutions like Care Empowered Pricing deliver comprehensive approaches, ensuring that participants are informed, supported, and protected from balance billing challenges and that employers are well-equipped to handle post-payment disputes. This creates a more sustainable, efficient, and fair approach to healthcare pricing and compliance that benefits all stakeholders.
By integrating these strategies into their RBP programs, TPAs and employers can enhance participant experiences, reduce financial risks, and build a healthcare framework centered on transparency, fairness, and robust regulatory compliance.
On this episode of the Empowering Plans Podcast, attorneys Ron Peck and Nick Bonds talk through a recent Florida case addressing judicial review of IDR determinations and highlight some of the key insights and takeaways for any entity subject to the No Surprises Act. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)