The First 100 Days: President-elect Donald Trump, Healthcare, and Self-Funding

On November 21, 2016
The election is behind us, and no matter who you supported, it was one of the most divisive in recent history. Regarding the contentious topic of healthcare, President-elect Donald Trump has promised to repeal the Affordable Care Act and replace it with a better, more efficient system. The future of our industry is sure to change.

Thank you for joining The Phia Group as we shared our predictions in a special-edition webinar. It’s going to be an interesting year…

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The Good, The Bad, and The Ugly – Ethics: Simple Mistakes vs. Breach

On November 15, 2016
As the Department of Labor hones in on what is ethical (or unethical) and what constitutes fiduciary liability, plan administrators, third party administrators, brokers, and various advisors who service self-funded plans must make a renewed effort to ensure that their actions are in compliance with current legal and ethical standards. All self-funded entities must take steps to avoid actions that may be deemed unethical or in violation of their considerable responsibilities - and even when exercising good faith, it is still possible to act unethically.

“Every day, millions of dollars are responsibly handled by HCAA members on behalf of self-funded health plans. Unfortunately, we all know of cases where our fellow administrators have made errors or acted unethically,” said HCAA’s CEO, Carol Berry. “The Phia Group’s attorneys are experts in the fields of ethics and fiduciary liability, and we thought it timely to partner with them in presenting an informational webinar to our industry.”

Thank you for joining The Phia Group’s CEO, Adam V. Russo, Esq., and Sr. Vice President and General Counsel, Ron E. Peck, Esq. on November 15, 2016. In this presentation, they delved into the intricacies of the law surrounding self-funded ethics and examine recent case law involving entities that have toed the line of unethical behavior, sometimes finding themselves on the wrong side of this quagmire.

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How Low Can You Go? Managing Specialty Drugs, Reducing Overall Pharmacy Spend, and Unraveling the Mystery Behind PBMs

On October 27, 2016
Pharmacy Benefit Managers, or PBMs, are an important factor in the cost and value of self-funding - yet many TPAs, brokers, and plan sponsors feel it is impractical to even look into changing the status quo. Self-funded plans and those who service them, however, should be constantly on the lookout for effective alternatives to their current procedures - especially in this aggressive economic and legal climate.

Thank you for joining The Phia Group's legal team on October 27, 2016 as they analyzed some of the processes and agreement terms offered by PBMs, to help you make the decision regarding whether or not your current PBM is the best choice for you, your employees, and your clients.

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Aetna to subsidize Apple Watch for health monitoring

On September 28, 2016
By Morgan Haefner 

Health insurer Aetna will subsidize Apple Watches for select large employers and individual policyholders during November’s open enrollment as a healthy living initiative.

The Hartford, Conn.-based insurer said it is the first major healthcare company to subsidize the Apple Watch. Aetna will also freely offer the watch to 50,000 of its employees who participate in the company’s wellness reimbursement program.

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Recoupment or Embezzlement? Cross-plan Offsets in the Crosshairs

On September 26, 2016
By Andrew Silverio

When a self funded employee benefit plan, or indeed any payer of health benefits, overpays a benefit claim to a medical provider, it is often a tall task to later secure refunds.  This is especially true when the payment, even if clearly an “overpayment” pursuant to the terms of the plan document or policy, is still less than the amount of the provider’s billed charges.  From the provider’s prospective, they have received less than the amount of their bill, and from the payer’s perspective, the beneficiary and/or provider have been paid more in benefits than they are entitled to.  It is no surprise, then, that payers have developed various methods to facilitate overpayment recoveries beyond simply asking for refunds.  One of the most common such methods is “offsetting”, reducing the amount of future benefit claims to “cancel out” a previous overpayment.


The practice of offsetting claims as a method of overpayment recovery has been the subject of much conflict, and more than handful of lawsuits in the past months and years, and the practice does indeed appear more objectionable the farther removed the claims being offset are from the original overpayment.  For example, reducing a later benefit claim from the same plan participant for treatment at the same facility may seem perfectly reasonable.  However, reducing a benefit claim from another, unrelated participant may seem unjust, as the plan participant whose benefit payments are being reduced will be subject to additional exposure from the provider, despite having no connection to the original overpayment.

A major step beyond this practice of cross-participant offset is the primary conduct in question in Red oak Hospital, LLC v. AT&T Inc., AT&T Savings and Security Plan, and Larry Ruzicka, case 4:16-cv-01542 (S.Dist. TX, June 01, 2016).  In this case, it is alleged that United HealthCare, acting as claims administrator for AT&T’s self funded benefit plan under an ASO arrangement, violated ERISA by recouping claims overpaid by the plan from future claims submitted to a different payer, even, as is alleged, a fully-insured plan insured by United.  If true, this would mean that self-funded plan assets are essentially being converted into United HealthCare assets under the guise of overpayment recoupment. The Plaintiff’s complaint goes so far as to describe the practice as:

. . . an elaborate scheme to abstract, withhold, embezzle and convert self-insured Plan Assets that were approved and allegedly paid to Plaintiff for Plaintiff’s claim, to purportedly, but impermissibly, satisfy a falsely alleged ‘overpayment’ for another stranger claim, especially when the stranger is a plan beneficiary of a fully-insured plan that is insured by the Plan’s co-fiduciary, United Healthcare . . . Defendants knew or should have known . . . that converting the Plan Assets by a fiduciary or co-fiduciary of the Plan, in this case United, to the use of another and ultimately its own use, to pay to its own account is absolutely prohibited under ERISA statutes.

The complaint continues:

Defendants and United continued to conceal this kind of unlawful embezzlement and conversion of Plan Assets, camouflaged as overpayment recoupment or offset, even after becoming fully aware of   this self-dealing and embezzlement through investigation by the Department of Labor and repeated appeals, notices, and alerts from Plaintiff.  Defendants failed to remedy the verified embezzlement even after investigation by the Department of Labor and at least three (3) levels of administrative appeals, notices, and alerts by Plaintiff.

This complaint is not the first against UnitedHealth, and similar complaints have been filed against other large carriers acting as ASO claim administrators in the self-funded realm, such as Cigna. Interestingly, United HealthCare, the alleged perpetrator of the conduct in question, is not a party to the action.  The benefit plan itself, AT&T (as Plan Sponsor), and the plan’s individual Plan Administrator are collectively named as Defendants.  Employers and advocates of self funding everywhere should be cognizant of this fact – as plan fiduciaries, any of these parties can be found liable, and there is no better reason to seek out trustworthy and transparent partners.

Independent Consultation & Evaluation: ICE, ICE, Baby!

On September 22, 2016
Our industry is plagued by issues related to compliance, contracts, and cost-containment – and a myriad of other legal issues as well. Engaging an expert for a second set of eyes is a chore in itself, requiring approval from management or an individual group as well as a cost-benefit analysis of the expert’s fees – sometimes resulting in the decision not to consult a neutral third-party at all.

The Phia Group has been providing consulting services since its inception seventeen years ago. We have seen thousands of problems that could have been mitigated or avoided entirely by consulting an expert. As a result, we have created the ICE service – short for Independent Consultation and Evaluation.

Thank you for joining The Phia Group’s legal team on September 22, 2016 at 1:00pm (EST) as they discussed some of the problems facing the self-funded industry today, provided examples of situations where being proactive rather than reactive would have been beneficial, and presented the value that ICE can hold for TPAs and health plans.

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California Senate Approves Reference Based Pricing

On September 8, 2016
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

On August 23, 2016
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

On August 17, 2016
Alternatively, you can download the file here.

Back to Basics: Plan Documents 101 (Part 2)

On July 13, 2016
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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