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“Stay away from Back Surgery”: A Warning from NBA Coach Steve Kerr

On June 14, 2017
Steve Kerr’s comments can be viewed as a warning for self-funded payers and their administrators to educate their members on the shortcomings of some surgeries which are extremely expensive and often unnecessary.  

According to the American Journal of Orthopedics, over a third of Americans reported some musculoskeletal conditions that significantly impaired their normal routines. For many, these issues develop into the perceived need for serious orthopedic procedures and joint replacements, which are among the most profitable surgeries in all of medicine based on the time the surgeries actually take.

It therefore comes as no surprise to discover that, in the last 10 years, the occurrence and associated costs of serious orthopedic procedures have both jumped by 300%. Current projections are that this trend will continue, and (as an example) we may see an additional 400% increase in joint replacements by 2030.

What is the reason for this steady and significant increase in serious orthopedic surgeries and joint replacement procedures?  Regardless of whose opinion you read, you will be told that the reason for more orthopedic procedures is because we are getting older, and we are getting heavier.  This, however, does not fully capture the often-overlooked third factor: consumers are simply being offered greater access to more surgical options.  As an example, adjusted data from the Orthopedic and Arthritis Center for Outcomes Research demonstrates that obesity and the aging population fails to account for the 134% increase in total knee replacements between 1998 and 2007 (overall, a 300% increase).  So how do we account for it?  It is not a stretch to suggest that at least part of the increase in serious orthopedic procedures and joint replacements is attributable to the provider community pushing for these surgical options more often than ever before (as mentioned, these surgeries are huge revenue drivers).

Steve Kerr is a powerful voice that is highlighting the importance of understanding pros/cons of surgery, exploring alternatives, and getting a second medical opinion – preferably from someone without a financial incentive to supporting the surgery in the first place.  

Empowering Plans Segment 09 - In the Land of the Blind

On June 12, 2017
Who will and who won't get (or lose) health insurance coverage under the AHCA? Join The Phia Group's CEO, Adam V. Russo, Sr. VP, Ron E. Peck, and Attorney Brady Bizarro as they discuss the most recent report by the Congressional Budget Office (CBO) on the new Republican health care bill. Despite the debate in Washington, people are still missing the point: affordable health insurance is not affordable health care.

Click here to open the Podcast!

A Win for the Good Guys!

On June 7, 2017
By: Chris Aguiar, Esq.

Subrogation added another case to the win column last week when the 5th Circuit ruled in favor of a benefit plan’s reimbursement rights even though the Plan only had an SPD, and that SPD referenced another, nonexistent document.  I know what you are thinking … “Wait a minute, Chris, most of my clients only have an SPD, so why should I care about this?”  The answer is because in 2011, the Supreme Court gave us a decision in Cigna v. Amara that muddied the waters on whether an SPD alone can be the governing document for an ERISA health benefit plan.  In short, the late Justice Antonin Scalia indicated that it couldn’t be, but that case was about pension benefits that were being altered and it included a plan that did in fact have two documents.  The truth is ERISA requires “a written instrument”; nowhere in the statute is that requirement defined to mean that multiple documents are required, but that didn’t stop Justice Scalia from writing in his opinion that a summary by definition implies that a more comprehensive document is available.   Many attorneys attempt to use that decision to argue that if a plan doesn’t have a “plan document” and only an SPD, it cannot enforce its rights.  In some areas of the country, where a plan’s subrogation rights are always under attack (e.g. the 9th Circuit), decisions like this cause problems.  Anytime the Supreme Court makes statements that may be subject to interpretation, a plan’s rights can be called into question until a court in that plan’s jurisdiction (or the Supreme Court itself) provides clarification.  The 5th Circuit gave us that clarification with this decision and it gives us another tool to fight the argument we contend with every day.

The Rules of the Game are Still Changing

On June 1, 2017
By: Kelly Dempsey, Esq.

It’s clear the rules of the Health Care Reform game we’ve been playing for the last seven years are going to be changing.  If you’ve been living under a rock and haven’t heard about the ongoing debates on Capitol Hill, you’ll be unaware of the fact that an ACA replacement bill is in the works.  There have been numerous articles recently on the impact the new bill would have on the amount of individuals in the United States that would lose coverage.  With the mainstream media focused on the full ACA replacement, you may have missed that another Executive Order associated with the ACA was issued.  

Before we get to what the Executive Order says, what is an Executive Order?  The power to issue Executive Orders is granted under Article II of the Constitution.  An Executive Order is directive from the President to certain identified federal agencies that the President oversees on how to direct their resources – in other words, the President is telling the agencies how to operate with the parameters of the applicable rules already in place.  These orders are published in the Federal Register, the same as the interim and final rules associated with the ACA.      

So what’s this new Executive Order you may have missed?  On May 4, 2017, the President issued an Executive Order related to the ACA’s contraceptive coverage mandate.  The Executive Order directs the agencies involved in issued ACA regulations (the Department of Labor, Health and Human Services (HHS), and the Internal Revenue Service) to re-examine and consider amending the ACA’s preventive service regulations “to address conscience-based objections” to the contraceptive coverage mandate.  HHS issued a statement in response welcoming the opportunity to re-examine the preventive services mandate to help safeguard deeply held religious beliefs.    

We’ve already seen multiple challenges, specifically to the contraceptive coverage portion of the preventive services mandate, heard in front of the various courts, including the Supreme Court of the United States.  As a result of these cases accommodations were made to “pardon” certain entities from complying with the contraceptive coverage piece of the preventive services mandates.  With this new Executive Order, it appears the rules of this game may change again, but it’s still unclear what will be changing.  As always, stay tuned…

Bite the Hand

On May 30, 2017
By: Ron Peck, Esq.

In case you missed it, there is a movement afoot.  It’s found some real purchase in California, but you hear rumblings everywhere.  A call for a single payer system.  Medicare for all.  I’m going to avoid discussing the pros and cons of this idea, as it relates to patients, employers, and us – the folks tied into the benefit plan industry.  Instead, I’m going to focus on (*gasp*) the provider community.  I was researching this topic when I stumbled upon the Physicians for a National Health Program (“PNHP”) website.  Interesting stuff!  While there, I saw a massive “FAQ” page; (http://www.pnhp.org/facts/single-payer-faq).  Looking at the first few lines, I suddenly realized how far apart some people are from each other.  For instance, consider the following: “Question: Is national health insurance ‘socialized medicine’?  Answer: No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. The health systems in Great Britain and Spain are other examples. But in most European countries, Canada, Australia and Japan they have socialized health insurance, not socialized medicine. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage medical practices or hospitals.  The term socialized medicine is often used to conjure up images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance where doctors and patients often have more clinical freedom than in the U.S., where bureaucrats attempt to direct care.”

Stop.  Wait.  This seems to indicate that providers are free to charge whatever they want, and Medicare (blessed, generous Medicare) pays the bill.  Yet, whenever a private benefit plan offers to pay Medicare PLUS 20%, 40%, or even (sometimes) 200% of Medicare, they are laughed at by the hospital.  They are told that if the hospital accepted what Medicare pays (or even double what Medicare pays), from its privately insured patients, they’d go bankrupt!  Why?  Because Medicare has the size (steerage), clout, and statutory backing to set its own prices.  So, despite the aforementioned FAQ, Medicare DOES dictate what is paid, and DOES control what hospitals and doctors receive.  Imagine how much MORE power Medicare would have, to dictate what is and is not payable, if they WERE THE ONLY PAYER IN THE NATION!!!

This, then, is my point.  Support for a single payer / Medicare for all model is out there… and it is growing.  If this became a reality, forgetting all the other issues, as it relates to providers – hospitals wouldn’t be getting Medicare “plus” anything.  In fact, once Medicare (or whatever the single-payer called itself) literally holds ALL THE PURSE STRINGS I imagine the payable rates would drop BELOW the current Medicare payable rates.  Ouch!

So… doesn’t it benefit these hospitals to preserve private benefit delivery systems?  Shouldn’t they be scrambling to retreat from a single payer?  Given what balance billing hospitals say to me about “Medicare based payments,” I should think so.  Yet, every time a private plan or carrier is charged 1,000% or more of what Medicare pays, that payer is being pushed one step closer to financial ruin.  If that happens, and we are stuck with a single payer, I am convinced it will end badly for my friends in the health care delivery community.  Thus, every time a provider refuses to work with a private payer, to find common ground… it is a prime example of biting the hand that feeds you.  You may be able to squeeze a few more bucks out of the plan today, but mark my words, those dollars will cost you exponentially when the legs are kicked out from under our system and we’re stuck with a single payer.  Trust me.  It is a simple economic truth that when there is one, and only one customer – that customer controls the pricing.

The time has come to play along, for everyone’s sake.

Empowering Plans Segment 08 - Healthcares? Alternative Provider Payment Programs

On May 22, 2017
The Phia Group’s CEO, Adam Russo, and Sr. VP & General Counsel, Ron Peck, discuss movements within the healthcare provider community to change how they charge (and receive payment) for services rendered.  For better or worse, change is on the way!

Click here to open the Podcast!

Keeping PACE with Appeals, Trends and Fiduciary Responsibility

On May 22, 2017
As TPAs, consultants, and Plan Sponsors utilizing The Phia Group's Plan Appointed Claim Evaluator service, you are entitled to exclusive educational material. Join The Phia Group's PACE legal team as they provide insight drawn from within the past 2 years of the PACE service.

During this webinar, you will be provided an insider's view into the latest health plan appeals trends, plan document best practices related to appeals and fiduciary concerns, as well as an update on the current, fiduciary landscape.

Download our PACE Webinar!

It's Never Too Soon

On May 22, 2017
By: Jen McCormick, Esq.

Although the regulations may change, it's important to begin thinking about plan changes for the upcoming plan year.  The specifics for compliance requirements may still be unclear, employers should already be in process of contemplating cost containment updates.

There are many ways to add value to an employee health benefit plan. An employer should perform an annual review of their plan to confirm that the plan takes advantage of as many cost containment opportunities as possible. For example, does the plan have strong third party recovery language? Overpayments language? Clearly defined terms? Appropriate definitions? Vendor program with corresponding language? If not, the plan should be cognizant of what's missing or not working, so updates can be made.

In addition to cost containment, and while some rules are in flux, there are many regulatory requirements a plan must be aware of and having corresponding language. For example, is the employer subject to ACA Section 1557? Employer Mandate? Does the plan comply with the MHPAEA? Did the plan pick a benchmark for defining essential health benefits? With all the regulatory changes, plans should stay alert and ready to make renewal modifications.

Last, but definitely not least, employers should ask their employees to weigh in on the plan. Remember it's an employee benefit to offer coverage - so employers should be offering beneficial coverage.  For example, is there a specific service that many employees wish was covered? Could that be added to the plan? Is there a trend in services for employees for which you may want to offer an incentive?  Being self funded allows you to be creative - take advantage!

Plans have freedom to design benefits to suit their needs. With this privilege comes the need to plan ahead and be creative.  Employers should be proactive and ensure this opportunity to annually update the plan design is taken seriously!

Decisions, Decisions: Which Plan Types Work Best for Which Groups, and Why?

On May 16, 2017
Between a traditional PPO plan, a MEC or “skinny” plan, reference-based pricing, narrow network, cafeteria plan, or high-deductible health plan, who can choose? They all have their nuances, and which plan type is best for a given plan sponsor will depend on factors including risk tolerance, geographical location, employee base, and more.

Thank you for joining The Phia Group’s legal team on Tuesday, May 16, as they discussed the different plan options available to plan sponsors these days – including benefits, dangers, best practices, stop-loss and network considerations, and the future.

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Dear Stop-Loss: A Ballad

On May 15, 2017
By: Jon Jablon, Esq.

Author’s Note: Written in ballad meter, this can be sung to the tune of “Gilligan’s Island.”

You carriers are sometimes great,
all flexible and fair;    
But sometimes you issue denials
That make me lose my hair.

Prevailing charge in the area
is what the policy allows;
Yet when presented with a claim,
some of you break your vows.

An auditor has been brought in
to reprice the group’s claim
based on Medicare or cost…
But carriers: for shame!

The promise to strictly abide
by the policy
goes out the window, and quickly
becomes a fallacy.

Each and every claim that’s denied
must be supported by
the policy your groups have bought
when they did apply.

All carriers must use good faith
in everything they do;
making things up as you go
is legally taboo.

To cap your risk with those objective
methodologies,
make sure you always use good faith…
Revise your policies!

When an employer signs with you,
you’re expected to pay out
benefits you have promised
in the policies you tout.

The whole entire industry
is worse-off when you fail
to follow your own written rules;
in court, you won’t prevail.

The Phia Group is here to help
all those who have been harmed;
info@phiagroup.com...
You’ll never be unarmed.