Phia Group Media


Phia Group Media

Plan Appointed Claim Evaluator (PACE)
Making determinations on medical claim appeals is a frightening prospect. The process can involve complex factual, legal, and medical issues, and can distract a plan administrator from its ordinary business functions, posing a significant resource drain. The PACE service is designed to let the plan administrator shift the fiduciary duty away, onto the PACE, for final-level, internal claim appeals.

Questions & Answers
PACE Flyer
Guide To Implementation
Guide To Appeals
PACE Webinar Slides

In the classic TPA arrangement, the TPA does not assume fiduciary duties, instead relying on the plan administrator for guidance on claims and appeals that require discretion. Many TPAs are still living in the past – an era where Plan Sponsors embraced fiduciary duties – but now,  plans and their brokers exist in a new paradigm, in which a TPA not offering a fiduciary option stands at a substantial disadvantage. As such, business opportunities are lost.

With this in mind, The Phia Group has developed PACE.  With a PACE, plan sponsors and TPAs assign the riskiest fiduciary duty (that is, the power to make payment decisions in response to final appeals), to The Phia Group.  This authority carries with it the most risk, because it is this final payment directive that will be scrutinized upon external review.

Self-funding veterans and novices alike will benefit from PACE. Groups that are moving from fully-insured or ASO arrangements can use PACE as a valuable tool to aid in the transition; these groups have never before had to be the fiduciary of their plans – and with the PACE, that daunting responsibility can be delegated to a neutral and capable third party.

The PACE not only enables the TPA to obtain new business not previously available to it, but also encourages client “stickiness” and also creates a new profit center for the TPA in the form of an administrative fee paid directly by The Phia Group to the TPA, in exchange for the TPA’s facilitation of the PACE service. In other words, PACE adds unprecedented value to the TPA from both a business and a revenue perspective.

In addition to having a third party expert analyze all appealed claims before they reach an external review, the PACE also ensures that legally mandated independent review organizations (IROs) are in place, and the PACE handles facilitation of external appeals with these IROs. Regardless of whether the PACE upholds or reverses a denial, the PACE’s service continues to apply.  From handling external appeals of denied claims to negotiating amounts payable for claims deemed to be covered by the benefit plan, the PACE works to ensure the correct and optimal outcome every time. This includes coordinating efforts with stop-loss, plan sponsors, brokers, and TPAs whenever these partners do not align.

As we know, any entity exercising control over a benefit plan or its assets may be deemed to be a fiduciary; third party administrators, brokers, and any other entity making decisions on behalf of these benefit plans may be dealing with liability for which it simply isn’t prepared. PACE is a way for the employer to be able to focus less on the complexities of its health plan, fiduciary duties, and stop-loss concerns, and more on what matters – its business.

PACE is also a way for the TPA to rest easy knowing that it is not unwittingly assuming fiduciary duties on final appeals.

For years, self-funded plan sponsors and TPAs have asked how they can avoid the risks inherent in self-funding, while still enjoying the benefits of that plan structure.  According to our CEO, Adam Russo, “With a PACE in place, we’re taking a giant step in the right direction. It’s a game changer.”

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

Download Slides Here

Download Audio Here

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  

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

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

Download Slides Here

Download Audio Here

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

Click Here to read more!

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

Beating Medical Trend – Managed Care vs Reference Based Pricing
MyHealthGuide Source: Bill Rusteberg, 7/2015, White Paper <>

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]
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 (<> ) 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.