Phia Group Media


Phia Group Media

Stop Loss and My Infinite Sadness

On September 11, 2017
By: Ron Peck, Esq.

I am a firm believer in self funding.  I believe that, when done well and properly, no other type of health plan can compare to a self funded plan.  I also believe that most well formed self funded plans need stop loss insurance.  That’s why it makes me so sad to see infighting between self funded plans and their stop loss carriers.  They are on the same side; they should be allies!  Yet, too often I see a plan pay claims in accordance with one set of rules, and then stop loss re-prices the plan’s submission for reimbursement using a different set of rules.  Sometimes this is based on differing verbiage in the plan document versus the stop loss policy.  Sometimes this is based on differing interpretations of the same verbiage.  Sometimes there is no real basis for the conflict at all.  Too often it feels like the carrier is trying to deliver a heavy handed form of tough love: “If you won’t take action to contain costs, I’m going to do it for you.  It hurts me worse than it hurts you; you’ll thank me later.”  Other times it feels like a short term maneuver to cut costs, even if it means losing business long term.  Indeed, when I describe some of the positions some stop loss carriers take when dealing harshly with their plan clients, the reaction is that those carriers are being foolish – and they will certainly lose their clients… and yet… they do continue to write new business and are maintaining a client base.  This tells us that, by offering a very low rate, they attract clients.  This also tells me that those clients (and their broker/advisors) aren’t investigating the carrier’s track record.  This, in turn, makes me just as sad as the fighting.  Why?  It breaks my heart that those stop loss carriers who go above and beyond to work with their plan clients, find ways to reimburse, and collaborate with us all are not receiving the due credit they deserve.  In fact, sometimes the “premium” they charge for their white glove service ends up knocking them out of the running when they are up against a bargain basement carrier.  Trust me – the savings on premium will never equal the loss you suffer the first time a carrier denies your claim for reimbursement because they “say” you overpaid.

The moral of the story is this – First, don’t pick a carrier based solely on the premium.  You get what you pay for.  Second, review the stop loss policy, network contract, administrative service agreement, employer handbook, and plan document side-by-side-by-side.  Identify areas where they require the same entity or entities to do different things; things that can’t coexist.  Third, talk through conflicts and potential conflicts BEFORE there is a claim, and agree how they will be handled if they occur.  Fourth, carriers should incentivize plans to engage in cost saving procedures before claims are incurred – not punish them for failing to do so after the fact.  Both plans and carriers need to recognize that while it may be easier to beg forgiveness rather than ask permission, it rarely works out well for anyone.

Empowering Plans Segment 17 - Cutting Out Conflict

On September 11, 2017

When it comes to securing stop-loss, too many benefit plans think the ball is only in the stop loss carrier’s court.  Today, our hosts explain what plan administrators can do to cut out conflict and tie up loose ends before they suffer a costly loss.  Ensuring an ongoing and fruitful relationship between plans and stop loss tomorrow requires intensive work today.  Addressing these potential costly issues now will guarantee reimbursements are in the bag later.

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Change is Good

On September 5, 2017
By: Jen McCormick, Esq.

As we are closing in on the calendar year, Plan Administrators are starting to reflect on the past year.  In relation to self-funded health and benefit plans, they consider the laws and regulations that changed (or didn’t change) over the past year and how they might impact the plan.  Also, they consider claim occurrences – good and bad – that may impact benefit changes for the following plan year.  The most important question, however, when considering renewal changes is how to offer a valuable benefit plan to employees which takes advantage of as many cost containing opportunities as possible.
ERISA plans do have minimum standards as far as basic information which must be included within the documentation (i.e. benefits and eligibility, claims procedures, COBRA information, fiduciary information, etc).  As Plan Administrators, however, there is great flexibility to design a benefit program that captures the compliance information but also is tailored to the specific needs of an Employer.  Remember that ERISA does not mandate a specific format for how a benefit plan must be presented.
In light of the requirements, and notable flexibility, consider that change is good. Many entities specialize in the creation and administration of plan design documents, and happily wish to share the value of why certain provisions should be outlined or presented in particular fashion.  As a result, may it’s time to consider reviewing the benefit structure and organization to ensure that it’s organized in a fashion that truly meets the needs of participants. Consider reviewing the text to ensure it offers the best possible cost containing opportunities for participants.  A refresh of a document can be advantageous for the plan, and so remember to keep an open mind at renewal!

Uncertainty Prevails in the Health Care Debate

On August 30, 2017
By: Brady Bizarro, Esq.

The dog days of summer have come and gone and there are still many questions left unanswered regarding the future of the Affordable Care Act (“ACA”). Congress is in its summer slow and President Trump’s plans for the ACA’s upcoming 2017-2018 enrollment period remain a mystery. There are millions of Americans in the individual insurance market who are not certain whether or not they will be able to get minimum health coverage from the precarious ACA insurance market. For employers, it still remains unclear which ACA regulations the Trump Administration will enforce and which it will not. A lot has happened thus far in the repeal and replace saga, and it is worth a recap of how we got here; once again, to a place of uncertainty.

Throughout July, the Senate voted on five repeal and replace bills, all of which failed (one by a margin of only one vote). The first bill, and perhaps the most promising for many House Republicans, was the American Health Care Act (“AHCA”). Next was the original Better Care Reconciliation Act (“BCRA”). This bill caused so much division that it was pulled from the Senate floor and underwent a series of revisions, including one from Senator Ted Cruz (R-TX). Then the Senate considered the Obamacare Repeal and Reconciliation Act (“ORRA”), which did not really provide a replacement strategy. Finally, the Senate considered “skinny repeal,” officially titled the Health Care Freedom Act (“HCFA”). This was the bill that went up in flames in a dramatic showdown involving Senator John McCain (R-AZ) on the Senate floor. In the end, we added a number of acronyms to the health care debate, but no actual progress was made.

With the administration and congressional Republicans poised to reboot repeal and replace efforts, the focus for now shifts to the White House as the individual insurance market teeters on the brink. While he did approve August subsidy payments, President Trump has threatened to end billions of dollars in cost-sharing reduction payments to insurance companies to subsidize the cost of care for low-income Americans on the individual exchanges. In addition, his administration has cut the ACA enrollment period in half, from ninety days to forty-five. This year, Americans will only be able to register for 2018 between November 1st and December 15th.  

These next few months will be critical, especially for the individual insurance market. The Senate is holding hearings in a few weeks to discuss strategies for stabilizing the exchanges. We will be watching to see how the administration reacts and what actions it takes that affect regulatory compliance. For now, however, as Speaker Ryan (R-WI) recently said, “Obamacare is the law of the land.”

Reference Based Pricing Bloopers & Blunders

On August 28, 2017

By: Jon Jablon, Esq.

Reference-based pricing is a huge hot topic in the industry today, and different entities have very different ideas of how to accomplish a given health plan’s RBP goals. Doing it right isn’t difficult, especially when you have the right partners on your side – but doing it wrong is even easier. Here are a few of the most common RBP “bloopers and blunders.”

Lack of preparation: poor (or no) supporting SPD language

A health plan’s rights are only as good as its language. This is true regarding subrogation, assignments, and many other facets of plan benefits and administration – but it is especially true, and immediately noticeable, in the context of the plan’s payment parameters. Since RBP necessarily entails changing the way the health plan pays claims, the plan language must reflect how the Plan Administrator will adjudicate allowable amounts for claims submitted to the plan. If the language is vague, ambiguous, or unsupportive, the plan is giving medical providers the ammunition they need to invalidate the plan’s RBP-based payment determinations.

Looking at claims in a vacuum: applying RBP payments to contracted claims

Simply put, if a health plan has agreed to a contract, it must follow that contract, or prepare for the consequences. If a plan wants to use a reference-based pricing methodology, it should ensure that it doesn’t have contracts that require claims to be paid at a higher amount. One of the biggest issues we see is when a health plan pays a claim based on Medicare rates because it is payment the plan has deemed reasonable – only to later encounter pushback from a provider that asks, “what about our contract?” The world of insurance is a world full of contracts – especially self-funded insurance, where plans have to arrange their service agreements themselves rather than relying on an insurer to handle everything for them. Ignoring contracts is one of the most problematic things there is for a self-funded health plan.

Not knowing your audience: refusing to settle claims with providers (or choosing too-low standards)

Calling someone’s bluff when negotiating can be a useful tactic at times, but be aware that medical providers have the right to send patients to collections or even sue them. Calling a hospital’s bluff would be a more enticing prospect if not for the fact that the patient’s credit is held hostage – and unlike in Bruce Willis or Denzel Washington movies, hostages do sometimes get hurt… Just because the health plan may have the right to walk away from the bargaining table doesn’t mean it’s a good idea.

Not knowing all the options: thinking RBP is all or nothing

When looking into a reference-based pricing option, many TPAs, brokers, and health plans have the impression that they either use RBP, or they don’t. The reality is that there are other options out there! For some plans, physician-only networks and narrow networks will help the plan achieve its goals without the burden of “full” RBP; for many plans, though, the out-of-network option is the best way to go. If the plan accesses a provider network that adds significant value for the plan, and one that members are well-accustomed to, then perhaps losing that network access would not be the best route to take.

The bottom line is that the self-funded industry contains various vendors and consultants that can offer reference-based pricing guidance and options to suit every health plan’s needs. Feel free to contact The Phia Group to learn more.

A True Impact on the Bottom Line – Identifying Current Issues, Implementing Solutions & Seeing Results!

On August 22, 2017
The Phia Group’s legal team frequently addresses the biggest issues impacting the health benefits industry today. Join them as they dissect the conflicts threatening every entity involved in the business of health benefits, and share real life examples of clients who implemented forward thinking solutions… and those that didn’t. From fiduciary liability to claim re-pricing by stop-loss carriers… from international importation of prescription drugs to handling large out of network costs and resolving balance billing of patients… We will together discuss the biggest trends, solutions, and results.

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Empowering Plans Segment 16 - In Reference to Reference Based Pricing

On August 22, 2017
This week, Adam Russo and Ron Peck accept that an answer to the high cost of healthcare won’t be coming from D.C., and that health plan administrators (with the help of their partners and advisors) need to address the costs internally.  Amongst options to do just that, so-called “Reference Based Pricing” is a hot topic in our industry.  Join Ron and Adam as they pick apart this method for containing costs, identify the pros and cons of an “RBP” plan, and discuss options to customize such a program.
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Hope for Self-funded Plans in Connecticut..

On August 16, 2017
By: Chris Aguiar, Esq.

Subrogation is tough.  Even the best language possible is susceptible to issues like limited funds, or worse, a Plaintiff’s attorney who refuses to acknowledge the realities of the law.  Of course, self-funded benefit plans who find themselves subject to state law, such as government entities, can find themselves in even worse positions when located in certain areas of the Country.  New York, New Jersey, and Pennsylvania, to name a few, are notoriously averse to the rights of benefits plans.  Connecticut was among the worst on that list …until now.  As of October of 2017, the State of Connecticut has enacted an exception to its anti-subrogation law which will give self-funded benefit plans some reprieve.  

Connecticut HB 6221 takes its cue from some of the other anti-subrogation states who have provided an exception to their law for cities, towns, and municipalities; allowing them to take advantage of some more of the cost saving benefits of self-funded plans.  Specifically, it allows self-funded local government entities with a third party interest to seek recovery from judgments or settlements obtained by plan participants.  While this is great news, this change doesn’t come without limitations.  The bill appears to only allow recovery from the part of the judgment or settlement that represents payments for medical, hospital, or prescription expense damages.  This will no doubt entice plan participants and their lawyers to structure settlements in such a way as not to include those damages.  Either way, it gives plans, administrators, and their recovery partners another tool to utilize.

Stopping the Bleeding

On August 11, 2017
This week, The Phia Group’s CEO, Adam Russo and Attorney Brady Bizarro interviewed Garrick Hunt, Phia’s Sales Executive, about some of the most common burdens self-funded employers are facing in our industry. From out-of-network claims to air ambulance to specialty drugs, we explore cost-containment strategies and discuss the potential compliance concerns for employers. Finally, we answer a question from our mail bag regarding best practices for handling overpayments.

Click here to check out the podcast!

The Benchmark Shuffle

On August 9, 2017
By: Kelly Dempsey, Esq.

Sadly this is not some new dance craze (though we can make one up if you want us to).  We know that the state of the health care industry requires us to be flexible and stay on our toes, especially on the regulatory front; so instead of a traditional “dance,” we’re talking about a fun regulatory topic – benchmarks and essential health benefits (EHBs)!  While ACA repeal and replace proposals have been in debate for months now, a consensus hasn’t been reached and it’s unclear what will be coming next on health care legislation.  As mentioned in previous blogs, for now, employers and health plans should continue to comply with all applicable provisions of the ACA, including the EHB rules that were the center of focus in some of the proposed repeal/replace bills.  

The EHB rules (i.e., the prohibition on annual and lifetime dollar limits for in-network EHBs and the requirement for self-funded health plans to select a benchmark) have been around for quite some time now.  The bottom line of picking a benchmark is for the determination of which benefits are EHBs and which benefits are not EHBs, thus helping plans determine which, if any, dollar limits can be maintained.

It’s important to remember that each state is responsible for their benchmark and the original benchmarks and the rules allow changes after designated timeframes.  Revised benchmark summaries were released for 2017 that reflect updates to the benchmarks, thus requiring employers to review their health plans and make necessary changes to ensure compliance.  Just like the benchmarks changed, health plans change too.   

Benefit changes are the nature of the beast in health care – be it to maintain compliance, to better align with the needs of the employer’s employees, or in an attempt to better contain costs – which means employers have to review and revise their benefits from time to time.  It’s easy to forget all the nuances of the ACA, so when an employer makes changes to benefits, they need to take into consideration the implications of those changes, including a potential change to the benchmark selected.  Whether or not a different benchmark will work for a plan, and which benchmark best aligns, is a case by case analysis based on the benefit changes the employer is looking to make.  

If your plan, or a client’s plan, is looking to make benefit changes, remember to review the benchmark and “shuffle” as needed.