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California Senate Approves Reference Based Pricing
MyHealthGuide Source: Ana B. Ibarra, 8/30/2016, California Healthline and Senate Bill AB-72

Article referred by Bill Rusteberg, RiskManagers.us

A measure to protect California consumers from surprise medical bills — among the longest-debated issues to be considered by state lawmakers — moved closer than it’s ever been to becoming law when the Senate approved it Monday with a 35-1 vote.


The bill would relieve patients from having to pay surprise medical bills out of pocket by requiring insurers to reimburse out-of-network doctors and other health providers a “fair amount” and doctors to accept the payments, said its author, Assemblyman Rob Bonta (D-Oakland).

That rate would be 125 percent of the amount Medicare pays for the same service or the insurer’s average contracted rate for the service, whichever is greater.

The bill still faces additional review before Wednesday, the deadline for passage by the legislature, but its supporters expect it to be sent to the governor for signature.

Surprise medical bills can happen when patients at a hospital or other facility considered in-network by their insurance receive care from a provider who does not contract with the insurer and is considered out-of-network. Since the doctors have no contract with the insurers, they can bill the patients for the full cost of the care. These surprise bills commonly come from radiologists, anesthesiologists or pathologists, specialists likely not chosen by the patient or ones the patient may not even realize has been involved in the care.

Some doctors have chosen to not contract with insurers to allow themselves to command their own higher rates. However, if this legislation passes, providers will be forced to cooperate with insurers and agree upon rates, said Andrea Caballero, program director of the San Francisco nonprofit Catalyst for Payment Reform.

“Because contracted rates are usually higher than Medicare rates, it is hard to say whether the Medicare benchmark will kick in,” Caballero said.

A similar bill last year required that out-of-network providers be reimbursed 100 percent of the amount Medicare pays for a service, but it stalled in the Assembly.

This bill represents a more balanced approach, said Sen. Ed Hernandez (D-West Covina), another of the bill’s sponsors. “This is a more generous payment standard for non-contracting providers.”

But “more generous” depends on whom you ask. Sen. Joel Anderson (R-Alpine), who voted against the bill, said compensation to out-of-network providers could be improved.

“This bill is much closer to a true balance,” Anderson said, “but my problem is, if we don’t compensate [doctors] for all their effort, they won’t do the job. No one is going to work for free.”

Similar measures are being looked at in several other states. Florida recently passed a law exempting patients from having to pay the surprise bills.

Bonta’s bill specifically addresses medical bills only for non-emergency services. Billing patients for emergency care costs that insurers don’t cover is prohibited under state law.

The fight against surprise medical bills has been going on for 16 years, Hernandez said. This bill is the most promising solution thus far, he said.

The bill would also establish an independent dispute process in which doctors can make their case for higher payment.

The bill is significant because it takes the patient out of the middle of the payment dispute between doctors and insurers, consumer advocates say.

“This bill will give consumers some of the strongest protections against surprise out-of-network medical bills in the nation, while ensuring providers are paid fairly,” said Anthony Wright, executive director at Health Access, a Sacramento-based health care advocacy group. “Patients who go to in-network hospitals would only be responsible for in-network cost sharing for all the care they receive.”

To read the text of the legislation:   Assembly Bill No. 72

Unwrapping Your Wraps
Wrap networks provide plans with discounts off billed charges for claims that don’t fall within the plan’s primary network. But do these wraps really add value? With skyrocketing provider charges and static discounts off of those charges, the modern-day wrap network doesn’t seem to provide much help when it comes to claims costs.

Thank you for joining The Phia Group’s legal team on August 23rd, as we analyzed provisions of wrap network agreements, with a focus on what plans can or can’t do to cut costs. We proposed some innovative ways for your plans to save additional money above and beyond wrap networks, generating unprecedented value for your plans.

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The Phia Group's Response to the DOL Final Rule
Alternatively, you can download the file here.

Back to Basics: Plan Documents 101 (Part 2)
When we think of hot topics in the self-funded industry, plan document drafting is hardly the first thing that come to mind. Instead, issues such as fiduciary duties, reference-based pricing, transgender coverage, employee incentives, and provider abuse are on the tip of everybody's tongues. All these topics, however, share a common feature: they're all reflected, in some way or another, within the plan document. Without compliant and effective plan document language, a plan can't offer robust benefit programs while containing costs.
 
Thank you for joining The Phia Group's legal team (including Jen McCormick) on Wednesday, July 13th, 2016, at 1:00pm (EST), as we presented Part 2 of our "Back to Basics: Plan Documents 101" presentation. We discussed some more of the best and worst practices for plan drafting, to help you make the most of every page of your plan document.

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Back to Basics: Plan Language 101
Most situations that involve self-funded benefit plans revolve around language within the plan document. Whether deciding if a service is experimental, or figuring out whether a dependent is actually covered, or deciding whether a leave of absence will extend coverage, the plan document controls in just about all situations. For that reason, it's all the more disastrous when poor plan language handicaps plans and TPAs. Like we always say, your rights are only as good as your language.

Back by popular demand, The Phia Group's very own Jen McCormick was the star of this webinar, since nobody knows plan documents like Jen.

Thank you for joining The Phia Group's legal team - and Jen McCormick - for an hour on Wednesday, June 15th, 2016, at 1:00pm (EST), as we went "back to basics" and discussed some best and worst practices for plan drafting, to help make sure your plans don't lose their rights by failing to claim them in the first place.

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Federal regulators may try to kill critical illness insurance
Jun 09, 2016 | By Allison Bell
Obama administration officials want to limit use of short-term health insurance in the United States to periods of three months or less.
Officials are also thinking about the possibility of banning the sale of critical illness policies and other policies that cover two or more specific diseases.
The so-called “tri agency” team — the Internal Revenue Service, the Employee Benefits Security Administration and the U.S. Department of Health and Human Services — has included those proposals in a new batch of draft regulations.
The agencies developed the draft regulations to implement the Expatriate Health Coverage Clarification Act of 2014, and to adjust the requirements for health insurance products other than major medical coverage.
With Americans living longer, it might be a good idea to take another look at critical illness insurance.
The three agencies are preparing to publish the regulations in the Federal Register Friday. Members of the public can send in comments up until 60 days after the official publication date.
The Centers for Medicare & Medicaid Services (CMS), part of HHS, announced the release of the draft in a statement about what HHS doing to help the Patient Protection and Affordable Care Act (PPACA) public exchange system.
CMS said it and HHS want to:
• Improve the PPACA risk-adjustment program, which is used to use cash from health plans with low-risk enrollees to compensate competitors that end up with high-risk enrollees. CMS wants to create an adjustment mechanism for part-year enrollees and let plans include enrollees’ prescription information when calculating health risk scores, according to a new batch of risk-adjustment program guidance.
• Forge ahead with previously announced efforts to increase documentation requirements for consumers who seek coverage outside the usual open enrollment period window. Officials say they hope getting tough on special enrollment period applicants will keep healthy people from waiting until they get sick to pay for health insurance.
• Limit use of products that some consumers might see as an alternative to buying major medical coverage. The three agencies described the limits in the draft regulations.

For more details about what the tri agencies said about health insurance products other than major medical insurance in the draft regulations, read on:
Expat coverage
The three agencies want to distinguish travel insurance that happens to cover travel-related health problems from “expatriate health plans,” or coverage aimed at U.S. citizens or U.S. residents who live outside of the United States on a long-term basis, according to the introduction to the draft regulations.
The three agencies want to require an issuer of expat coverage to be a substantial issuer of expat coverage. An issuer would, for example, have to maintain call centers in three or more countries, accept calls from customers in eight or more languages, and process at least $1 million in claims per year in foreign currency equivalents.
An expat plan would be exempt from some requirements that apply to ordinary major medical plans. In the United States, individuals usually need to show they have “minimum essential coverage” to escape from the penalty PPACA imposes on the uninsured, or underinsured. A minimum essential coverage plan cannot impose lifetime or annual limits on the amount of medical benefits a patient can get.
The tri agencies say they would exempt expat plans from some of the PPACA requirements that apply to minimum essential coverage, such as the ban on annual and lifetime benefits limits. But, to qualify as minimum essential coverage, an expat plan would have to cover inpatient services, outpatient facility services, physician services and emergency services.
An employer that sponsored a group health expat plan, and wanted to get credit for offering minimum essential coverage, would have to “reasonably believe” that the expat plan met the usual minimum essential coverage minimum value standards.
Critical illness insurance
PPACA exempts indemnity insurance from the PPACA major medical requirements.
The tri agencies have given their blessing in the past to indemnity products that pay a set, time-based benefit. The agencies have said, for example, that an insurer can pay $100 per day to a policyholder who enters the hospital. Insurers have asked the agencies to allow the sale of traditional supplemental policies that pay benefits to consumers who have certain kinds of conditions or get certain kinds of medical service.
The tri agencies say they are not sure whether a policy that covers multiple specified diseases or illnesses should qualify for excepted benefits status.
The agencies “are concerned that individuals who purchase a specified disease policy covering multiple diseases or illnesses (including policies that cover one overarching medical condition such as ‘mental illness’ as opposed to a specific condition such as depression) may incorrectly believe they are purchasing comprehensive medical coverage when, in fact, these polices may not include many of the important consumer protections,” officials say.
The tri agencies “solicit comments on this issue and on whether, if such policies are permitted to be considered excepted benefits, protections are needed to ensure such policies are not mistaken for comprehensive medical coverage,” officials say.
If the agencies let insurers continue to sell the policies, the agencies might limit the number of conditions that a policy could cover, officials say.
Short-term health insurance
The three agencies have been letting consumers continue to buy traditional short-term health insurance coverage outside the PPACA framework.
A short-term health insurance issuer usually requires applicants to go through a simple medical underwriting process. The issuer may decline to cover pre-existing conditions, and it may leave out benefits for mental health care, maternity care and other types of care that a PPACA-compliant major medical plan would cover. An issuer may also impose annual benefits limits of $100,000 or less.
For qualified applicants, short-term health insurance is often cheaper than major medical coverage, marketers say.
Issuers of short-term health insurance can sell the coverage all year round. Issuers of individual major medical coverage require consumers to show they have a legal excuse to get a special enrollment period before selling them outside the annual open enrollment coverage. The open enrollment period now lasts from Nov. 1 through Jan. 31. The rules mean that, for much of the year, short-term health insurance may be the only health insurance some consumers can buy, marketers say.
In most states, issuers can offer short-term health insurance available for periods of up to one year.
The three agencies want to keep consumers from using short-term health insurance as a convenient major medical alternative by limiting use of a policy to three months. The three-month time limit would include the period of any policy renewals as well as the original policy duration, officials say.
Indemnity insurance
In the past, the three agencies have let insurers continue to sell hospital indemnity insurance plans, which pay benefits to insureds who enter the hospital, or to cancer insurance policies and critical illness insurance policies, which pay benefits when insureds suffer from the covered diseases. The three agencies have said those products would be “excepted benefits.”
Excepted benefits are products free from the federal benefit design rules that usually apply to major medical policies.
In the past, federal agencies have said that excepted benefits policies should be used to fill in the gaps in the major medical policies that comply with PPACA, not as an alternative.
The tri agencies now say they are hearing about group health plan operators telling workers in employer-sponsored group health plans that indemnity policies and other supplemental products count as minimum essential coverage.
The agencies “are concerned that some individuals may incorrectly understand these policies to be comprehensive major medical coverage that would be considered minimum essential coverage,” officials say.
The agencies want issuers of the supplemental products to include prominent notices, in large type, stating that the products are supplemental products, not minimum essential coverage.

ER docs sue HHS over out-of-network payments
By Maria Castellucci

The American College of Emergency Physicians is suing HHS, claiming a provision of the Affordable Care Act allows insurers to underpay for out-of-network emergency medical services.

The federal lawsuit asks that insurers be transparent on the data they’re using to pay for services rendered by an out-of-network hospital.

Read more…

The Tangled Web of Contracts
The self-funded industry is made up of a complex system of contracts, and navigation across them is anything but simple. Network contracts supersede plan documents; Administrative Services Agreements “add” plan provisions, stop-loss policies embrace carve-outs but networks prohibit them, employee handbooks promise benefits not provided by the SPD…and those are just a few examples of areas of confusion.

Thank you for joining The Phia Group on May 12th, 2016 as its legal team gave a crash course in contracts. Cost-containment can be impacted by the contracts you sign, and there are often exceptions and restrictions buried deep down, or potential issues not considered beforehand. In this webinar, The Phia Group explained some of the contracting pitfalls experienced on a daily basis within the self-funded industry.

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Unraveling FAQ Part 31
Reference-based pricing is unquestionably a hot topic in the self-funded industry today. So hot, in fact, that the federal government has taken an active interest in it for the third time now; in its latest FAQ, published just last week (FAQs about Affordable Care Act Implementation, Part 31), the regulators reiterate concerns regarding network adequacy and how it relates to - and regulates - reference-based pricing arrangements.

Thanks for joining us as The Phia Group's legal team and special guest Tim Martin of Payer Compass helped unravel the mystery of the DOL's latest FAQ - and what it means for you and your plans.

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Reference-Based Pricing Webinar: Unraveling FAQ #31

UNRAVELING FAQ #31

Monday, May 2nd, 2016
3:30 PM (EST) to 4:30 PM

Join Us – Register Now!

Reference-based pricing is unquestionably a hot topic in the self-funded industry today. So hot, in fact, that the federal government has taken an active interest in it for the third time now; in its latest FAQ, published just last week (FAQs about Affordable Care Act Implementation, Part 31), the regulators reiterate concerns regarding network adequacy and how it relates to – and regulates – reference-based pricing arrangements.

Join us on Monday, May 2, at 3:30pm (EST) as The Phia Group’s legal team and special guest Tim Martin of Payer Compass help unravel the mystery of the DOL’s latest FAQ – and what it means for you and your plans.

ATTENTION: If you do not receive a confirmation email shortly after registration with webinar log-in details, check your spam filter.