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Phia Group Media


A Call To Action!
A Call To Action!

All too often, we find ourselves comfortably observing change from a distance, allowing others to dictate our destinies. Today, various litigious matters are being presented to courts of law, regulators are issuing new rules, law makers are drafting statutes, and insurance commissioners are releasing bulletins that impact how we operate. Elsewhere, stop loss carriers, TPAs, plan sponsors, networks, and other entities that should be working in concert are instead working against each other.

Thanks for joining The Phia Group’s legal team on October 14th as we discussed many such ongoing instances, and shared with you opportunities to take an active role in the preservation of our industry.

Download Webinar (Slides with Audio) Here

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Overpayment Recovery Services Suite | The Phia Group

TPAs Recently Deemed Liable for Failed Overpayment Recoupment

Since the inception of ERISA, but with startling frequency in recent years (with major cases being decided in the past year, and ongoing presently), TPAs, brokers, and other entities servicing self-funded plans are deemed to be fiduciaries and held directly liable to their clients for failing to adequately enforce overpayment recoupment provisions.  So why are most TPAs merely sending a few letters to providers and filing away cases that fail to result in a refund?  Because they feel that there is no other option available to them… until now.


Overpayments are Not a Sign of TPA Negligence

We look to TPAs to ensure the right amount is paid to the right parties.  When an overpayment occurs, TPAs feel personally responsible, and seek to handle recoupment on their own.  This desire to resolve matters in-house is proper, and should be the first step… but failing to take additional action when internal efforts fail is inexcusable.  Overpayments occur for any number of reasons, most of which are entirely uncontrollable by the TPA, including incorrect eligibility information; misrepresentation by patients and providers; and incorrect discounting by networks.  Indeed, providers now employ entire billing schemes meant to maximize billable rates.  It is impossible to identify every outside attempt to “game the system,” before the claim is paid.

Improve Results by Improving Your Approach

It is a credit to TPAs that resultant overpayments are identified at all.  Given ever-increasing costs, and the increased frequency of instances where TPAs are deemed liable for failing to recoup overpaid funds, it is crucial that self-funded health plans and their TPAs stop wasting time and resources on fruitless efforts, and execute a new process that increases their chance for success – adding additional layers of overpayment pursuit to existing internal procedures.


We Can Help

By combining technology with experience, The Phia Group empowers overpayment recovery efforts, reviews existing procedures, provides best practices to improve in-house efforts, and offers options to pursue refunds when those internal efforts fail.  We implement unique methods, such as bundling refund demands when a single provider is involved, thereby submitting a demand that is so large no provider can ignore it.  Only with strategies such as these, a dedicated overpayment recovery team, and attorneys experienced in dealing with providers, can a fiduciary ensure that their duty to recover overpayments will be fulfilled.


To learn more about The Phia Group and its Overpayment Recovery Service, please contact Michael Branco at 781-535-5618 or mbranco@phiagroup.com.  
 

Case Studies

A case was transferred to The Phia Group by another subrogation vendor, at the request of the Arizona benefit plan involved.  The subrogation vendor failed to recoup any funds even though they had over two years to do so.  The Plan participant’s dependent was involved in a severe motorcycle accident and there were reportedly policy limits of $100,000.  It was also discovered that the patient may not have been eligible for some of the later paid plan benefits after a subsequent termination date.
The other vendor failed to request refunds of the overpayments from providers for a lack of eligibility, and focused instead entirely on the motorcycle’s policy; the case was at a standstill.  After failing to convince The Phia Group to waive reimbursement rights, the parties involved requested a 50% reduction of the Plan’s lien.  The Phia Group refused and entered into negotiations knowing that it could recoup funds from the providers (overpayments) as well.  As a result, this case was finalized within three months and the Plan received close to full recovery.
Plan Exposure:                   $213,000
Phia Intervention Saved:  $175,000
 

The Phia Group was presented with an overpayment case stemming from the member’s misrepresentation on an accident report. The police report had a separate page discussing the member’s intoxication during a motor vehicle accident, but when that police report was provided to the TPA, the addendum describing the intoxication was omitted. As a result, the claims were deniable by virtue of both the misrepresentation and the member’s intoxication.
The Phia Group discussed the case with the provider, which had already been paid, to attempt to recoup the funds. The provider initially refused to even acknowledge our request, but after lengthy discussions and the involvement of The Phia Group’s legal team, the provider ultimately conceded and returned the money to the health plan. The health plan proceeded to deny the claims, and the provider sought payment directly from the member.
Plan Exposure:                   $31,000
Phia Intervention Saved:  $31,000
 

To learn more about The Phia Group and its Overpayment Recovery Service, please contact Michael Branco at 781-535-5618 or mbranco@phiagroup.com.


The Phia Group, LLC Announces the Release of its New "Phia Document Management" (PDM) Software

October 1, 2014; Braintree, MA — A first of its kind plan document drafting solution, Phia Document Management (PDM) was created to satisfy the needs of the entire health plan industry. PDM allows for instant population of an online template featuring The Phia Group’s critically acclaimed plan language, while still ensuring customization to meet each client’s unique needs.

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The Phia Group, LLC Announces Exclusive U.S. Relationship with Jason Davis

September 2, 2014; Braintree, MA — The Phia Group LLC, one of the health benefit industry’s leading cost-containment service providers, announces that we have agreed to a U.S. exclusive consulting agreement with Jason C. Davis. Mr. Davis will assist The Phia Group with sales and product development.

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Inc. Magazine Unveils Its Annual Exclusive List of America's Fastest-Growing Private Companies - The Inc. 500|5000

New York, August 22, 2013 — Inc. magazine today ranked The Phia Group on its annual Inc. 500|5000; an exclusive ranking of the nation’s fastest-growing private companies.  The list represents the most comprehensive look at the most important segement of the economy—America’s independent entrepreneurs.  The Phia Group joins LivingSocial, Edible Arrangements, CDW and Lifelock, among other prominent brands featured on this year’s list.

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"Phia Case Studies" - When Silence is Loud and Assumptions Mean Disaster

We’ve got the stories that will enable us all to learn from others’ mistakes, and see that “what we have here…is a failure to communicate.”

As employers look to self-fund with increasing frequency, expectations that brokers, vendors, and third party administrators will take on more binding authority are trending as well. Cases where an entity is held liable for failing to uphold a responsibility it didn’t intend to adopt are consequently on the rise as well. These recent cases impact how you are (or at least should be) handling claims.

Are you living up to expectations? Gaps in coverage and a lack of clarity expose you all to punishment and regulation.

Thanks for joining The Phia Group’s legal team on September 17th, at 1:00 PM EST, as they analyzed recent cases featuring communication breakdowns, regulation popping up in its wake, and best practices to make sure you know your role and do your job.

Download Webinar Here

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2nd Quarter Newsletter 2015

 The past few months have brought so much intrigue to our industry.  Everywhere you looked, something or someone was affecting health care and the insurance industry as a whole.  We saw the Supreme Court make a few monumental decisions that will affect how plans are written in the future and the viability of the ACA.  We saw interesting court cases placing more potential fiduciary risks upon brokers and administrators.  We watched and reacted as more states attempted to limit the ability for smaller employers to self fund their benefits through the use of stop loss coverage and last, but certainly not least, we have seen a monumental increase in the DOL audits to our clients and the industry at large.  If there ever was a time that The Phia Group’s services were needed, this is it!

There is no question that health claims costs continue to skyrocket and the use of so called wrap discounts on many of these claims isn’t helping to reduce the burden.  If you are looking for some innovative options to stand out from the pack, please contact me as there are so many great ways to truly make a powerful impact on behalf of your employer plans.  We can save you and your plans significant claim dollars, you just need to strategize and identify your major pain points.

The next quarter will continue to be eventful so while you enjoy your summer weather, please be sure to let us know if you need some assistance – we are here for you.  Happy reading

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Second Quarter Newsletter 2015 – Phia News
New Faces at Phia
James Newell Jr.
Hired April 20, 2015 into the Claim & Case Support department
Wayne Andrews 
Hired May 11, 2015 into the Claim & Case Support department
Mia Shabazz 
Hired June 1, 2015 into the Case Investigation department
Brigid Bowser
Hired 06/01/2015 into the Phia Group Consulting department

Movers & Shakers

Jason Kemp earned his paralegal certificate

Amanda Grogan is now a Claim Recovery Specialist IV, handling bodily injury cases

Jason Kemp and Kerri Sherman are now Senior Claim Recovery Specialists 

Tumi Gugushe moved from the Consulting department to the Case Identification department

Derrick Mish moved from the Claims Support department to the Claims Analysis department

Danielle Bates moved from the Case Investigation department to the Customer Service department

Additions to the “Phamily

Jillian McCallum’s baby, Owen, was born Friday, April 24, 2015.

Tara Trojano’s baby, Grace, was born Wednesday, July 1, 2015.

2015 Charity

The Komen Promise – To save lives and end breast cancer forever by empowering people, ensuring quality care, and energizing science to find the cures.
 
 
On September 25, 2015, The Phia Group’s Boston-area staff will be helping to set up for Komen’s Race for the Cure, which takes place on September 27th at Carson Beach in South Boston. The Phia Group thanks the Massachusetts affiliate of Susan Komen® for its service and the dedication that it shows.

For more information or to get involved, visit  www.komenmass.org.

Beating Medical Trend – Managed Care vs Reference Based Pricing
MyHealthGuide Source: Bill Rusteberg, 7/2015, RiskManagers.us White Paper <http://www.riskmanagers.us/>

The Problem

Medical inflation continues to rise. Facing rate increases year after year, plan sponsors, with their financial backs to the wall, have historically resorted to cost shifting. These continued failed attempts to control costs have driven some to seek alternate means to restore pricing sanity to health care. To many, the cost of health insurance can mean the difference between profit and loss.

Understanding the cost of health care is directly related to what we agree to pay; more and more employers are questioning managed care contracts upon which their health care costs are based. Many are discovering the truth for the first time. Secretive contracts between health care givers and third party intermediaries contain provisions that guarantee continuous and systematic cost increases. Shared savings side agreements and other schemes found in the health industry economic chain help fuel raging health insurance costs.

Known as medical trend, cost increases have proven to be consistent and predictable. The expected rise in the cost of medical services over time is expressed as an annual percentage increase and is an important element in underwriting future risk. Medical trend is a dominant cost driver in rate making. The annual compounding effect can double or triple health care costs over time.

“For managed care plans, the medical care inflation part of trend is a function of the changes in provider reimbursement rates that are negotiated. To the extent that such negotiations entail factors such as outliers and provider bonuses, the trend rate may be materially more than simply the weighted average increase in fees.” Kevin Gabriel, MBA, FSA, MAAA, Chief Actuary of Sierra Berkshire Associates, Inc.


The Solution
Moving away from managed care contracts, more and more employers are embracing a myriad of reference based pricing models. These models can vary in scope and reach; however all share certain common characteristics in conformance with prudent business practices. Price transparency and claim benchmarking are key elements.


In 2007 — 2008 we approached several of our clients to suggest something different to control costs. The concept was simple. Eschew managed care contracts in lieu of claim benchmarking off multiple data points such as Medicare reimbursement rates. Removing managed care contracts, i.e, PPO, and paying providers quickly, fairly and directly had an immediate impact on claim costs.

After 15 months we performed a study by running 100% of claims back through the prior PPO network reimbursement rates. This exercise proved a net savings of 43% above and beyond the PPO discounts we would have otherwise experienced. Instead of doing the same thing year after year, our client did something different and it worked.

It has been seven years since our first client exited the managed care world. Subsequently more clients have embarked on the same journey, most with equally good results. None have returned to the world of managed care.

The Evidence

Skeptics may ask “How have your clients fared over time? Have they won the battle against medical trend?” The answer may be found by reviewing the experience of four of our clients who have been on a reference based pricing model for five years or more.

Our study is based on actual paid, mature medical claims through succeeding plan years starting in the first year on reference based pricing benchmarked off the prior year under a managed care plan. All claims above stop loss levels have been excluded.

This abbreviated analysis does not recognize changing demographics and plan changes. For example the leveraging effect of higher deductibles will increase trend factors. Of particular importance it should be noted that plan changes occurred in each case through improved benefits supported by prior year claim savings. This study includes medical claims only.

One must understand that medical trend is just one of the factors used to calculate renewal rates for health plans and stop loss insurance. Each year carriers set their own trend level based on various factors, including the current health care inflation rate, analysts’ forecasts and their own experiences. However, our clients are self-funded and thus bear most risk with actual trend directly affecting costs without the benefit of pooling to any significant degree.

“Over the past several years, trend rates have consistently run 8-10% nationally, though certain regions have seen significantly higher or lower figures. Prescription drug trends (which are a component of this) have been more volatile. In the early 2000’s these trends were above 15%. They then fell back to single digit levels. But they have now returned to the teens,”  said Gabriel.

In comparing our client’s experience with average medical trend, we relied upon Heffernan Benefit Advisory Services — 2013 Trend Report; Historical Trend Factors. Based on this report, we are using 9.615% as average annual medical only trend factor.

Political Subdivision — 400 Employee Lives
This case has been on RBP for 7 years. They experienced poor claim years in 2010 and 2012. In 2012, for example, there were 14 large claims that approached or exceeded $125,000. Medical PEPM for 2014 and 2015 (to date) is less than 2008. Benefits have been improved; no deductible or co-insurance features with all benefits subject to co-pays only. Funding increase over seven years has been 15.6% or 2.23% per year.

[Political Subdivisoin]
Public School District — 900 Employee Lives
This case has demonstrated a consistent downward claim trend. Current PEPM (2015) is less than 2008-2009. No benefit reductions. Some benefit improvements. Plan funding has remained essentially static for the past five years.

[Public School District]
Medical Industry — 280 Employee Lives
Plan year 2012-2013 experienced an outlier year with several large claims and 34 pregnancies. Current medical PEPM is 16% higher than under managed care plan in 2008-2009, representing a 2.66% increase per year (sans outliers). This illustrates that higher utilization and outlier claims will result in increasing cost which would occur under either managed care or RBP model. However, RBP trend factor continues below industry benchmarks.

[Medical Industry]
Retail Business — 818 Employee Lives
This case has consistently been well below medical trend. Current medical PEPM is significantly lower than plan year 2008-2009. This case has not raised plan contributions in seven years.

[Retail Business]
Conclusion
Managed care has failed. Medical costs continue to soar. Providers are charging more and we continue to agree to blindly pay up through secretive contracts negotiated by vested interests. Medical trend has, and continues to be, consistently at double digits or close to it.

Cost plus insurance / reference based pricing is a proven method to maintain and even improve comprehensive coverage while at the same time keeping costs reasonable, predictable and consistent. Industry sources estimate reference based pricing plans represent 10% market share and rising. An east coast hedge fund, seeking opportunities in reference based pricing models, predicts reference based pricing will gain 60% market share within the next five years.

“What moves things is innovation. But it’s not easy to innovate in stagnant, hyper-regulated, captured sectors” – Max Borders ( www.fee.org<https://t.e2ma.net/click/hcsgk/l7ixcb/lf924f> ) Cost shifting under the Affordable Care Act will continue to fail to control costs.

Reference Based Pricing represents the last frontier in innovation to control health care costs in a tightly regulated and controlled market.

Plan sponsors can reasonably expect to reduce their health care costs below medical trend without benefit reductions or cost shifting of any kind.

The Problem with Wraps
By Adam V. Russo, Esq.
(As published in Thompson Information Services’ Employer’s Guide to Self-Insuring Health Benefits)

If you are a long time reader of mine, I would first like to say thank you for being the only person other than my mother to read what I write.  It is extremely kind of you to do so!  As a loyal reader, you would also know that it doesn’t take a lot to get me going and in the self insured industry it seems like something new happens on a weekly basis that gets my water boiling.  For the past few years, amongst the threat of the exchanges and the state regulation of stop loss, nothing has bothered me as much as the wraps!  Wrap networks that is.  If PPO networks weren’t bad enough, in case you have a claim that doesn’t belong to a network, you can always pay the claim through the wrap network.   So if one network wasn’t enough, with a wrap you can even work with more.

What we have is an industry phenomenon.  TPAs and self funded plans complain about their networks all the time.  How the discounts are bad, how you don’t have the ability to audit the claims, how the networks really work on behalf of the hospitals and not the plans. Everyone seemed to complain about them yet need them to attract clients that aren’t willing to go the reference based pricing route.  You need a network to survive as I am told by every executive that has been in the industry longer than I have been alive.

Yet at the same time, these professionals long for the day when they see a large claim and have the ability to fight the facility about the excess charges, save their clients money, look like a hero to the broker, have the stop loss carrier thank them, and make the TPA some extra revenue from the savings they found.  The problem is they have this option right now and it’s called the out of network or wrap network claim.  Every day I see TPAs and self funded employee benefit plan throw good money down the proverbial toilet.

Wraps are everywhere yet I don’t see how they can actually help any self insured plan.  Before I start ranting about wrap networks too much, let me formulate a typical example for you and I will use our own self funded plan to illustrate.   The Phia Group’s self funded plan has primary access to the Blue Cross network in Massachusetts.  Over 98% of all of my plan’s claims are under $1000 and there is a network discount that applies to all in network facilities.  I cannot audit these claims, I cannot negotiate these claims but the reality is that I do not need to and I don’t want to.  The claims are small and the discounts off the charges are reasonable.  There is no need to make much of a fuss.  Now, the remaining 2% of claims are the issue and while my hands are pretty much tied on the large in network claims, luckily I am in Boston where there is a lot of competition for my dollar and the charges by the well respected hospitals in the city aren’t too much when compared to Medicare pricing.  So, you must be asking by now where is the problem.

The problem exists when there is a large claim outside of my network.  For example, let’s say I am on business in Montana and while on a trip, I decide to go skiing.  Let’s knock on some wood please as I keep the hypothetical going.  Let’s say I break my leg and need to be rushed to a rural hospital that is obviously not in my network.  This would be viewed as an out of network claim.  At this point I have two options, hire a negotiator to get the claim resolved or access a wrap network through my administrator that can offer immediate access to discounts without having to worry about picking up the phone and trying to work out a deal and ensure that there is no balance billing to me.  Even when the plan or administrator hires a firm to negotiate a claim, all that may be happening is that the negotiating firm is accessing the wrap discount rate and making a quick deal.  They aren’t negotiating anything but you think they are.  They are just accessing the same wrap network rate that anyone else (including you) can.  It’s stealing your money since not only are you paying way too much on the claim, you are paying the negotiation company a percentage of the so called savings for doing two minutes of work for you.

Wrap networks are a great option on a low dollar claim when the hassle of negotiating a deal isn’t worth the money but most out of network claims are large claims since they are typically emergency situations.  The greatest thing about wrap networks is that you do not have to use them!  This is what most of my clients do not understand.  There is a huge difference between a primary network and a wrap network. The biggest being that contractually you may be bound to pay the network rate on a primary PPO regardless of how outrageous the claims may be but in the wrap scenario, the use of the wrap is optional.  This is absolutely huge when it comes to finding some true savings.

I have spent almost two years convincing my TPA clients that there is a distinct difference between primary network and wrap claims yet so many administrators use the same claims process on both.  In this industry when someone says in-network they include wrap claims top that definition but they are just dead wrong.  Educating plan administrators on this is huge since if people do not know they have options then they will never choose an option.  As you know, the plan has a fiduciary duty to be prudent with plan assets.  Too many times they are being fooled by these so called cost containment firms that these claims are being negotiated when all that is happening is that the company is applying the agreed up wrap discount rate.  It’s embarrassing that we have snake oil salesmen in our industry but the reality is that we have plenty of them.

If you want to save some easy money for your plan, carve out these large out of network claims, place strong language into your plan document, and hire a true claims negotiation firm that will use innovative data and legal techniques to negotiate a fair deal and get signed off agreements on each claim.   A single claim can save your plan hundreds of thousands of dollars.  I see millions upon millions wasted every month by those in the dark.  Please do not continue to be one of them.

There is widespread confusion in the marketplace as the claim negotiation companies like to state that they negotiate your claims but the reality is that in many instances there is no actual negotiation as these vendors just access the wrap network so-called discounts and spend approximately 5 seconds on the actual claim.  Basically anyone on the street could actually get the same discounts that many of these wraps have just by picking up the phone and calling the facility.  You just tell them that you want 20% off the bill in exchange for sending the money within 30 days.  People do this with their credit card bills every day.  There is an entire industry built around credit card negotiations.  This is no different as you can do this yourself.  Think about it – these are out of network claims that otherwise would have balance billing to the member.  Do you really think that these facilities want to be chasing dollars from members by collecting ten dollars a week?  Of course not!  They want the money from the deep pockets of a health plan right away even if it’s 50 cents on the dollar.

Then there is the actual wrap contract that is no better in most cases than the typical primary network access contract.  The rate is set at the percentage of billed charges and with wraps the discounts are much smaller that the primary networks.  In addition, the plan is also specifically prohibited from using any sort of usual and customary or clinical editing logic.  Therefore, the one time you can actually audit the claim for excess charging, you agree not to!  The wrap agreement is also tethered to a participating provider agreement – and that, of course, is still confidential like in primary networks.

The bottom line is that wrap contracts are just as bad as primary contracts, except often worse, because the discounts are lower. A TPA is doing its groups a disservice if it accesses a wrap network instead of negotiating claims. That’s especially true when it comes to a complimentary or supplemental wrap when the payer is not obligated to use the wrap.  In these situations it would be insane not to negotiate the claims. A claim that can be out of network if the payer so chooses is always better off paid as out of network with the ability to negotiate than using a wrap network meager discount.

The best approach is to have well written plan document language that gives you the best possible weaponry to negotiate these claims.  You must leverage favorable plan language into settlements with providers that result in a plan payment of far less than it would have otherwise had to pay if a network rate was used.

There are hundreds of vendors that negotiate claims; most TPAs are either familiar with more than a few or perform their own negotiations. Either way, though some providers will negotiate robotically without regard to whether the plan is required to pay their bills, others – including the most egregiously charging ones, with expensive legal counsel to prevent exactly this – scrutinize the plan document language and are able to pick apart arguments to negotiate. Defining usual and customary as the prevailing charge in the area, grouping payment based on the provider rather than the claim, and not affording the plan administrator the proper discretion to determine payable amounts are examples of plan language that will make cost containment unduly difficult.

Here is what you should be stating in your plan document to ensure the most rights possible when it comes to negotiating large out of network claims.  The plan should state that claims must be reasonable meaning that services and fees are in compliance with generally accepted billing practices for unbundling or multiple procedures.  Usual and customary shall mean the lesser of fees that a provider most frequently accepts from the majority of patients for the service or supply, the cost to the provider for providing the services, the prevailing range of fees accepted in the same area by providers, and the Medicare reimbursement rates.   Usual and Customary charges may be determined and established by the Plan using normative data such as Medicare cost to charge ratios, average wholesale price for prescriptions and manufacturer’s retail pricing for supplies and devices.

At the end of the day, you want to give your plan as many options as possible to get the biggest savings possible on a claim.  Networks – especially large ones – are not known for their sensitivity to the plan’s problems. There are dozens of different scenarios that can arise within any given plan that will lead to a dispute with the network over payable amounts.  Having clear language that comports with network agreements and discussions with providers regarding carve outs are crucial aspects of effective cost containment programs when using networks. Some networks allow plans to engage in creative cost containment techniques such as carving out dialysis, specialty drugs, air ambulance claims, and carving out certain specific providers – but many others don’t.

Here is my bottom line – if you have a large claim (define large based on your risk level) and have the ability to negotiate the claim, do it.  Prepare yourself for the opportunity by having the best possible language in your plan document, ensuring that your administrator doesn’t automatically send these claims to a wrap network that you don’t need to use, and ensure that you work with a claims negotiator that not only has the ability to work a claim but has access to the best claims data, legal minds, and plan language to ensure maximum savings.  Besides it’s your fiduciary duty to do it so stop breaching your obligation to be prudent with plan assets.  The employee benefit plan bank account will thank you for it.