By: Jon Jablon, Esq.
Reference-based pricing is one of the most mysterious self-funding structures out there. At its core, it’s a simple enough idea: the plan changes what it pays for non-contracted claims. At its most basic level, it’s a way to redefine the traditional notion of U&C; generally, RBP plans base payment on some percentage of the Medicare rate. Guess what, though? If your plan defines U&C based on a database such as FairHealth (for instance), that’s a form of RBP too!
RBP isn’t a structure with a well-defined set of rules. Different plans, TPAs, and vendors do things very differently. The common denominator is that pricing for claims isn’t based on billed charges or an arbitrary percentage off billed charges, but an objective metric based on the value of services. If the plan considers rates set by a popular database to be indicative of the value of services, then that’s the reference upon which prices are based (there’s the R, the B, and the P!).
While of course there are practical differences between popular databases and Medicare, the easiest example being differences in the actual amounts generated), the major conceptual difference is that providers are generally more likely to accept rates generated by popular databases as payment in full than to accept Medicare rates as payment in full from the same payors. Even though the majority of hospitals do accept Medicare, the prevailing opinion among hospitals is that Medicare rates are essentially thrust onto them in a contract that they sign out of necessity (since many hospitals would lose a large percentage of their business if they didn’t accept Medicare). While payors may consider Medicare rates or a percentage above them to be reasonable, the majority of hospitals tend to disagree – at least at first.
When a health plan accesses the FairHealth database (again, just for example) to obtain pricing, there is often no patient advocacy needed, since many providers access the same database or consider those rates to be generally accepted – but to contrast that to Medicare-based pricing, a plan paying Medicare rates is much more likely to need some sort of advocacy since Medicare rates are not nearly as widely-accepted by providers. Patient advocacy is one of the must-haves in “traditional” RBP, which typically uses Medicare rates.
The morals of this story: (1) you may already be using RBP without realizing it! And (2) make sure your RBP program has patient advocacy, if necessary. If your chosen RBP payment methodology doesn’t need patient advocacy, then your RBP experience will probably be a bit simpler – but if you do need it, don’t skimp on it.
By: Patrick Ouellette, Esq.
Amid broader health policy discussions around the Affordable Care Act (ACA), the Trump Administration recently, and somewhat quietly, released new final rules that would expand the scope of the ACA contraceptive mandate exemption to potentially include more types of employers. The two rules are “Exemptions for Religious Beliefs” (CMS-9940-F2), aimed at large, publicly traded companies, and “Exemptions for Moral Convictions” (CMS-9925-F), which is geared toward nonprofit organizations and small businesses.
The intent of these rules was to extend the availability of the exemption to employers that, if they do not necessarily have sincerely held religious beliefs, can use “moral convictions” to oppose services covered by the ACA’s contraceptive mandate protections. If these rules sounds familiar, they should because the Department of Health and Human Services (HHS) released interim versions in October 2017 that were meant to accomplish the same goals. The most recent iteration of the rules were meant to be final, as they will take effect 60 days after their publication in The Federal Register, or in January 2019. Interestingly HHS estimated that the exemptions “should affect no more than approximately 200 employers with religious or moral objections, with many entities not being affected because they were already permitted not to cover contraceptives under the previous rules, or are protected by permanent court injunctions.”
Employers that have been closely monitoring HHS contraceptive mandate enforcement since 2017 and waiting to determine whether they qualified for religious exemptions would now have more a more concrete legal basis after the rules are published to make a contraceptive coverage decision either way. However, as my colleague Kelly Dempsey cautioned in January 2018, employers and TPAs should be wary of the litany of states that have already sued the Trump administration over the 2017 rules and the potential for more lawsuits against the administration.
As it stands now, the states that have sued include Pennsylvania, California, Washington, and Massachusetts. Delaware, Maryland, New York and Virginia joined California in its suit. The California and Pennsylvania attorneys general suits resulted in federal judges granting nationwide injunctions against the 2017 proposed rules, but both are currently under appeal. There will likely be more litigation in response to CMS-9940-F2 and CMS-9925-F; the new rules have also drawn scrutiny from groups such as the American Civil Liberties Union.
November 20, 2018 – For Immediate Release
The Phia Group, LLC Announces Expansion of Exclusive U.S. Relationship with Jason C. Davis Consulting (“JCDC”) and the Onboarding of Nick Fitzsimmons.
Braintree, MA. The Phia Group LLC, one of the health benefit industry’s leading cost-containment service providers, announced today that it has agreed to expand upon its existing exclusive consulting agreement with JCDC through the addition of Nick Fitzsimmons. Mr. Davis and Mr. Fitzsimmons will assist The Phia Group with sales and product development as it relates to its suite of Provider Relations services, including but not limited to Claim Negotiation & Signoff and “Phia Unwrapped.”
“How plans process claims, apply new pricing methodologies, and interact with healthcare providers will determine who thrives in the years to come,” remarked Adam Russo, CEO of The Phia Group, “Jason and Nick are here to help us and our partners reach the next level as it relates to this increasingly important topic.”
Prior to becoming independent consultants, Jason Davis and Nick Fitzsimmons helped manage the U.S. Markets for Global Excel Management and have a combined provider relations experience of over 35 years.
“Though we consult in other markets, we wanted one exclusive, long-term strategic partnership in the United States; and The Phia Group’s innovative, forward thinking attorneys and industry specialists – with their energy, market presence, and industry know-how – just seemed like a good fit for us,” stated Jason Davis. Nick Fitzsimmons explained, “I look forward to further enhancing the already incredible collaboration between JCDC and The Phia Group. Together we will continue to positively impact the viability of the benefit plans they service, and improve the lives of their plan members, by building products and services that are uniquely valuable, and distinctly Phia.”
To learn more about The Phia Group, its Provider Relations services, or any of its offerings, please contact The Phia Group’s Sales Executive, Garrick Hunt, at 781-535-5644 or Info@PhiaGroup.com.
This Podcast is HUUUUGE – Brady and Ron will dig deep, analyze the recent election results, and determine how they will impact the health benefits and health care industries. Bottom line? If you listen to this episode, you will definitely impress everyone at the Thanksgiving dinner table. You’re Welcome.
Click here to check out the podcast! (Make sure you subscribe to our YouTube and iTunes Channels!)
In this “Partners in Empowerment” episode, Ron and Brady enjoy chatting with Michael Meloch, President of TPAC Underwriters and valued member of The Phia Group’s own advisory board. Michael isn’t shy when it comes to diagnosing the issues, boiling healthcare cost containment down to simple basics we can all appreciate, and telling it like it is. His employer based perspective and focus on the bottom line (a/k/a “risk”) is as refreshing as it is informative. Don’t miss this one!
In today’s episode, our hosts chat with Norma Phillips… our first official “Face of Phia;” (sorry Matt). Norma explains what makes her different (and special) as well as what makes The Phia Group so unique. From Friday night films, to saving the American workers’ job… Norma and the team touch all the bases.
By: Philip Qualo, J.D.
The Occupational Safety and Health Administration (OSHA) released a memorandum last month clarifying the agency’s position on post-incident drug testing under 29 C.F.R. § 1904.35(b)(1)(iv). Although OSHA requirements are generally set by statute, standards and regulations, memorandums from the agency are helpful as they explain these requirements and how they apply to particular circumstances.
On May 12, 2016, OSHA published a final rule that, among other things, amended 29 C.F.R. § 1904.35 to add a provision prohibiting employers from retaliating against employees for reporting work-related injuries or illnesses. In the preamble to the final rule and post-promulgation interpretive documents, OSHA discussed how the final rule could apply to action taken under workplace safety incentive programs and post-incident drug testing policies. Specifically, OSHA’s guidance cautioned employers against administering blanket post-accident drug tests in situations when drug use likely did not cause an injury. Without further clarification by OSHA, the final rule left many employers confused regarding their own post-incident drug testing policies and whether enforcing such a requirement would be considered retaliatory under the new rules.
In the memorandum issued by the agency on October 11, 2018, OSHA clarified its position on post-accident drug testing and confirmed that such policies are not prohibited under applicable regulations. The agency concluded that most employers that conduct post-incident drug testing likely do so to promote workplace safety and health. The agency further elaborated their position by noting that action taken under a post-incident drug-testing policy would only violate the law if an employer conducted the drug test to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health.
The key takeaway from this guidance is that most workplace drug-testing programs are permissible, including:
Furthermore, OSHA noted that drug testing that is conducted to evaluate the root cause of a workplace incident that harmed or could have harmed employees is allowed if the employer tests all workers who could have contributed to the incident, rather than just the employees who reported injuries.
The future is here! As we’re about to enter 2019, the undercurrents of the self-funded industry are as exciting as they are dynamic, and changes are happening at an unbelievable pace. Join The Phia Group’s legal team as they present Part 1 of this two-part series on What to Expect in 2019, which will highlight current industry happenings and our predictions to help you look forward to the coming year. Miss this one, and you’ll be left behind.
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By: Ron E. Peck
If you are looking for a blog post listing specific healthcare related questions appearing on ballots, and a technical assessment of each, look elsewhere. If you were hoping for a dissection of candidates advertising heavily their support or opposition to the Affordable Care Act, and how that position will likely effect their likelihood of being elected (and what they says about the population’s attitude regarding healthcare and “Obamacare”), you can find a million articles on that topic somewhere else. My goal is to step back and assess the big picture.
I’ve read that “healthcare” is the biggest topic on most voters’ minds. That makes me laugh, because “healthcare” is such a broad topic, it captures everything. Further, it is something about which most people are painfully misled or ignorant.
In many other areas, some politicians basically say: “I want more of this. If I do what I want, these great things will happen…” and the opponent says, “Yes… but that thing will cost this much, and we will need to pay for it with higher taxes. It’s a nice idea, but not worth the money. We have more important things to do with that money.” Voters then decide whether that “thing” is worth the cost.
When I was in the 6th grade, we held a mock election. I was one of two presidential candidates, and was up against Zach. In the primaries, we all had discussed things that were important to us, and realistic goals we had for our classmates in the coming year, and apparently the majority of kids agreed with me and Zach. So we get to the election, and during our debate, Zach unleashes a barrage of questions about topics I’m sure he didn’t understand (that his parents fed him)… I mean… what 6th grader is asking another about their position on abortion; am I right? Regardless, when faced with this ridiculous assault, me and my team resorted to the age old strategy of smearing the other candidate. My team and I brought up every nasty thing Zach had ever done to someone else. I won, though I’m not proud of it. That year I learned that smear campaigns work.
The next year was my first year of junior high school. We promptly began elections for student council, and given the previous year’s success, I was sure I had it in the bag. That’s when another candidate did something I’d never seen, and will not soon forget. He made promises. He promised better food in the cafeteria; longer recreation periods between classes; and more. By the time he was done, I was ready to vote for him too! The issue? After he won, nothing happened. Why? Because no one could realistically pay the cost of delivering on those promises.
Fast forward only a few years (yeah right), and here I sit. I witness before me politicians promising to maintain (or – gasp – expand) health benefits and coverage, without addressing the cost of doing so. The opposition, meanwhile, can’t whip out the old reliable “anti-promises” stick (also known as the “we don’t want higher taxes” campaign), because – unlike almost all other issues politicians debate – we have privatized a huge portion of healthcare taxes. Make no mistake. When we force people to either pay a penalty or buy insurance, and the money that we all contribute is used to pay for “things” that benefit society… and when we increase the size and scope of those “things” and the resultant payments we all make to purchase insurance increases … that is the same as an increase in taxes. The problem is that by privatizing this tax as “insurance,” we dumbfound politicians and confuse the public.
No one will look at an image of a sick child, and argue they should not receive care. No one is “pro-illness” or “pro-death” and “anti-healthcare.” Yet, anytime anyone argues that buying more healthcare without assessing what we’re buying, or more importantly, the price of what we’re buying, they are labeled as those things… and worse.
Meanwhile, the voting public is blissfully unaware of how increasing coverage on the one hand, will cost them more on the other hand. Our healthcare payment system is so convoluted, people don’t see how an action today will cost them down the line. For most, mandating coverage for this condition or expanding coverage to that person is – in their mind – free. The only one who suffers is the “greedy insurance companies.” Bottom line? If you order a cheeseburger, and I ask if you want fries with it… and I tell you the fries are free… YOU AREN’T GOING TO SAY NO TO THE FREE FRIES!
Sadly, many insurance carriers and benefit plans do suffer from inefficiencies and other issues that result in them receiving too much, and handing out too little. It is true that for some payers, they could “tighten the belt” a little, to ensure more is covered without passing the cost onto everyone else. But, for the most part, what people don’t understand, is that along with the people working for the carrier, they too – the policy holders – are also part of the so-called “insurance company.” The money used to pay for healthcare comes from the pockets of the patients and policyholders. Whether it be through contributions to a self-funded plan or premiums paid to a carrier, we – as the people paying the bills – deserve to know that our plan or policy is being managed prudently and effectively. We have a right to demand that the carrier or plan is not wasteful or too focused on profits at our expense, and that they are coordinating with providers of healthcare to ensure we have access to care at an affordable price. As the ones “footing the bill” we should rest assured that everyone involved has the information they need to achieve an exchange of consideration that doesn’t overly favor one party or abuse another.
I have no issue with making efforts, legally or otherwise, to expand healthcare and improve the overall health and wellbeing of my fellow Americans. My concern is that until people truly understand the cost of healthcare, and who’s ultimately paying for the fries (in the form of an upcharge on the burger), people won’t make educated decisions or first assess our current spending to identify and eliminate inefficiencies BEFORE we throw more money at the problem.
But then again… what do I know? I couldn’t even win my student council election.
Like it or not, healthcare is on the ballot – nationally, statewide, and locally. The questions asked and people we elect will have an impact on how we receive and pay for healthcare – and for those of us in the benefits industry – failing to identify the trends, issues, and opportunities is tantamount to waving the white flag. Stay in the know and get ready to go; don’t miss this episode of Empowering Plans.