Phia Group Media

rss

Phia Group Media


It’s Time for a Wake-Up Call!

On June 26, 2017
By: Jen McCormick, Esq.

Healthcare has received so much attention over the past 10 years. Everyone has something to say about its current form, how comprehensive it should be, or who should be have a role in providing the coverage.   The most contentious piece of the conversation, however, is cost.  Healthcare can be expensive – particularly if you don’t pay attention.  Guess what – it’s time to pay attention… This mean you employers!

As an employer, do you take steps to encourage employees to make smart choices when it comes to healthcare? Are they encouraged to select generics? Are they told to read and understand the benefits available to them? Are they aware of the incentives the employer may offer for making an informed choice? These incentives don’t have to be limited to the plan document either!  Consider having a staff meeting to review all the great benefits the plan offers, maybe poll the staff and see if the employees want to offer a certain benefit (i.e. acupuncture), or even have a quiz which asks questions about the benefits and rewards the highest scoring employee.  

Whatever the method – it’s time to do something different and get employees engaged at the outset (prior to receiving healthcare benefits)!

Behind Closed Doors

On June 19, 2017
By: Brady C. Bizarro, Esq.

Anyone paying attention to national politics in the past six months knows that Washington has a problem with leaks; leaks from the White House, leaks from the intelligence community, and unsurprisingly, leaks from Capitol Hill. While many of these leaks come from “anonymous” sources and some are later debunked, they can be extremely damaging to both administration officials and lawmakers. Leaks, however, are not typically an issue in the legislative process. This is because, although legislation is not usually made public until it reaches a congressional committee, Congress routinely holds public hearings, meetings, and roundtable discussions after introducing legislation that could have a significant impact on domestic policy. This time around, however, Republican leaders have chosen to write their health care bill behind closed doors, and that decision should worry employers, insurers, and providers alike.

Back in March, the Washington Post reported that the House bill to repeal and replace Obamacare was being kept secret in an undisclosed room in the U.S. Capitol. This led Republican Senator Rand Paul (R-Ky) on a rather public quest to find the bill and to demand that his House colleagues show him the secret draft. Eventually, a draft leaked to the press, causing Republicans significant grief and making the task of passing the legislation that much more difficult. The Senate has also chosen secrecy, opting not to hold any public meetings on their version of a repeal and replace bill. The strategy seems to be to wait until the Senate has enough votes to pass the bill before unveiling it. Unsurprisingly, an outline of that bill emerged last week and is now causing Senate Majority Leader Mitch McConnell (R-Ky) many headaches.

According to the leaked outline, the Senate bill requires insurance companies to offer coverage to people with preexisting conditions and, unlike the House bill, it prohibits them from charging sick people higher premiums. The outline still permits states to seek waivers that would permit insurers to decide not to cover essential health benefits. This effectively means that insurers can reinstate lifetime and annual limits on coverage since the ban on limits applies only to essential health benefits. Finally, the outline reveals that heavy cuts to Medicaid are still planned, but are pushed out a few more years. In short, these changes represent a compromise between hardline conservatives who want a full repeal of Obamacare and moderate Republicans who are concerned about the impact on low-income Americans and those with pre-existing conditions.

Since we do not know for sure what the final bill will look like, it is futile to try to assess its impact on the health care industry as a whole and on the self-insurance industry in particular. Still, one conclusion we can draw is that the legislative strategy at play is creating substantial uncertainty for our industry. When the Affordable Care Act was being passed, Democrats held public hearings involving industry experts, advocacy groups, and other key stakeholders. While the bill was far from perfect, at least interest groups got the chance to give their input and to discuss their concerns in an open forum. By writing their health care reform bill behind closed doors, Republicans are making themselves susceptible to leaks and to charges that they shut key stakeholders out of the process. It remains to be seen if this strategy is more or less likely to produce a bill that works for the health insurance industry and the American people.

“Stay away from Back Surgery”: A Warning from NBA Coach Steve Kerr

On June 14, 2017
Steve Kerr’s comments can be viewed as a warning for self-funded payers and their administrators to educate their members on the shortcomings of some surgeries which are extremely expensive and often unnecessary.  

According to the American Journal of Orthopedics, over a third of Americans reported some musculoskeletal conditions that significantly impaired their normal routines. For many, these issues develop into the perceived need for serious orthopedic procedures and joint replacements, which are among the most profitable surgeries in all of medicine based on the time the surgeries actually take.

It therefore comes as no surprise to discover that, in the last 10 years, the occurrence and associated costs of serious orthopedic procedures have both jumped by 300%. Current projections are that this trend will continue, and (as an example) we may see an additional 400% increase in joint replacements by 2030.

What is the reason for this steady and significant increase in serious orthopedic surgeries and joint replacement procedures?  Regardless of whose opinion you read, you will be told that the reason for more orthopedic procedures is because we are getting older, and we are getting heavier.  This, however, does not fully capture the often-overlooked third factor: consumers are simply being offered greater access to more surgical options.  As an example, adjusted data from the Orthopedic and Arthritis Center for Outcomes Research demonstrates that obesity and the aging population fails to account for the 134% increase in total knee replacements between 1998 and 2007 (overall, a 300% increase).  So how do we account for it?  It is not a stretch to suggest that at least part of the increase in serious orthopedic procedures and joint replacements is attributable to the provider community pushing for these surgical options more often than ever before (as mentioned, these surgeries are huge revenue drivers).

Steve Kerr is a powerful voice that is highlighting the importance of understanding pros/cons of surgery, exploring alternatives, and getting a second medical opinion – preferably from someone without a financial incentive to supporting the surgery in the first place.  

Bite the Hand

On May 30, 2017
By: Ron Peck, Esq.

In case you missed it, there is a movement afoot.  It’s found some real purchase in California, but you hear rumblings everywhere.  A call for a single payer system.  Medicare for all.  I’m going to avoid discussing the pros and cons of this idea, as it relates to patients, employers, and us – the folks tied into the benefit plan industry.  Instead, I’m going to focus on (*gasp*) the provider community.  I was researching this topic when I stumbled upon the Physicians for a National Health Program (“PNHP”) website.  Interesting stuff!  While there, I saw a massive “FAQ” page; (http://www.pnhp.org/facts/single-payer-faq).  Looking at the first few lines, I suddenly realized how far apart some people are from each other.  For instance, consider the following: “Question: Is national health insurance ‘socialized medicine’?  Answer: No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. The health systems in Great Britain and Spain are other examples. But in most European countries, Canada, Australia and Japan they have socialized health insurance, not socialized medicine. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage medical practices or hospitals.  The term socialized medicine is often used to conjure up images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance where doctors and patients often have more clinical freedom than in the U.S., where bureaucrats attempt to direct care.”

Stop.  Wait.  This seems to indicate that providers are free to charge whatever they want, and Medicare (blessed, generous Medicare) pays the bill.  Yet, whenever a private benefit plan offers to pay Medicare PLUS 20%, 40%, or even (sometimes) 200% of Medicare, they are laughed at by the hospital.  They are told that if the hospital accepted what Medicare pays (or even double what Medicare pays), from its privately insured patients, they’d go bankrupt!  Why?  Because Medicare has the size (steerage), clout, and statutory backing to set its own prices.  So, despite the aforementioned FAQ, Medicare DOES dictate what is paid, and DOES control what hospitals and doctors receive.  Imagine how much MORE power Medicare would have, to dictate what is and is not payable, if they WERE THE ONLY PAYER IN THE NATION!!!

This, then, is my point.  Support for a single payer / Medicare for all model is out there… and it is growing.  If this became a reality, forgetting all the other issues, as it relates to providers – hospitals wouldn’t be getting Medicare “plus” anything.  In fact, once Medicare (or whatever the single-payer called itself) literally holds ALL THE PURSE STRINGS I imagine the payable rates would drop BELOW the current Medicare payable rates.  Ouch!

So… doesn’t it benefit these hospitals to preserve private benefit delivery systems?  Shouldn’t they be scrambling to retreat from a single payer?  Given what balance billing hospitals say to me about “Medicare based payments,” I should think so.  Yet, every time a private plan or carrier is charged 1,000% or more of what Medicare pays, that payer is being pushed one step closer to financial ruin.  If that happens, and we are stuck with a single payer, I am convinced it will end badly for my friends in the health care delivery community.  Thus, every time a provider refuses to work with a private payer, to find common ground… it is a prime example of biting the hand that feeds you.  You may be able to squeeze a few more bucks out of the plan today, but mark my words, those dollars will cost you exponentially when the legs are kicked out from under our system and we’re stuck with a single payer.  Trust me.  It is a simple economic truth that when there is one, and only one customer – that customer controls the pricing.

The time has come to play along, for everyone’s sake.

It's Never Too Soon

On May 22, 2017
By: Jen McCormick, Esq.

Although the regulations may change, it's important to begin thinking about plan changes for the upcoming plan year.  The specifics for compliance requirements may still be unclear, employers should already be in process of contemplating cost containment updates.

There are many ways to add value to an employee health benefit plan. An employer should perform an annual review of their plan to confirm that the plan takes advantage of as many cost containment opportunities as possible. For example, does the plan have strong third party recovery language? Overpayments language? Clearly defined terms? Appropriate definitions? Vendor program with corresponding language? If not, the plan should be cognizant of what's missing or not working, so updates can be made.

In addition to cost containment, and while some rules are in flux, there are many regulatory requirements a plan must be aware of and having corresponding language. For example, is the employer subject to ACA Section 1557? Employer Mandate? Does the plan comply with the MHPAEA? Did the plan pick a benchmark for defining essential health benefits? With all the regulatory changes, plans should stay alert and ready to make renewal modifications.

Last, but definitely not least, employers should ask their employees to weigh in on the plan. Remember it's an employee benefit to offer coverage - so employers should be offering beneficial coverage.  For example, is there a specific service that many employees wish was covered? Could that be added to the plan? Is there a trend in services for employees for which you may want to offer an incentive?  Being self funded allows you to be creative - take advantage!

Plans have freedom to design benefits to suit their needs. With this privilege comes the need to plan ahead and be creative.  Employers should be proactive and ensure this opportunity to annually update the plan design is taken seriously!

Words With No Meaning - Subrogation Accident Questionnaire

On May 1, 2017

By: Chris Aguiar, Esq.

Google “average words spoken per day” and you might see some interesting entries – such as, men use 7,000 words a day on average, as compared to women’s 20,000.  When deciding what to write about today – it struck me that so much of my day handling issues on behalf of the benefit plans I represent have to do with words; which ones are used, the context in which they are used, and what they mean.  When having discussions with the Phia Team, we always find ourselves asking, “what does that mean”?  That’s because so much of the law, especially in health plan law, rests on just how clear the terms of the Plan are.  It’s important that everyone be on the same page.  When someone uses the word “normal”, everyone thinks they know what that means – but in reality, it means something slightly different to everyone.  Norms are subjective, so use of the word isn’t necessarily sending the same message universally.  When viewed that way, of course there are misunderstandings.

This whole line of thinking stemmed from a subrogation investigation I was involved in a few weeks ago.  Interestingly, it wasn’t on behalf of a client - I was involved in it for my sister.  My sister fell down the stairs at home and sprained her ankle– and of course, she received an accident questionnaire; naturally, she called me and the following conversation ensued:

… Cell phone rings …

Sister: Hi Chris, I got a letter from my insurance company asking about my ankle.  Isn’t this what you do for a living?

Me:  Yes, it is.  What do you need?

Sister:  Why are they asking me this?

Me:  … Gives long detailed explanation about subrogation and why the insurance company would be asking this question… (Omitted in the interests of brevity)

Sister:  I don’t want to deal with this, what do I do?

Me:  Put that you fell at home and let’s see if they ask any more questions.

As it turns out, the insurance company didn’t ask any more questions.  You might be thinking, “of course they didn’t, Chris – your sister fell at home”.  Well, that’s only partly true.  See, to my sister she was “home” but as far as the insurance company is concerned, she wasn’t.  That’s because my sister doesn’t own her home – she lives in the 2nd floor walk-up apartment owned by my immigrant parents.  Technically, she could bring a claim against my parents and as we know, so could the insurance company.  See “home” is another word on a list of words I call “words with no meaning.”  “Home” is where you lay your head at night, but depending on the context in which it’s being used – it isn’t necessarily something you own, and that has implications on a subrogation investigation.

But I knew what any good subrogation investigator knows – and that is that most of the time, the insurance company will get an accident letter that reads “fell at home” and they close the investigation without further research.  It may not have been a lot of money, but for my immigrant parents, it was a headache I didn’t want them to have to deal with, and it was definitely a lost recovery opportunity for the insurance company.  If you just take the words that people say at face value, you may misunderstand what they actually mean because the fact of the matter is, you have a different idea in your head of what was meant when they used certain words.  Whether it’s in your everyday conversations or in the terms of an employee benefit plan – make sure you say what you mean and you mean what you say.  Prepare yourself properly for a subrogation accident questionnaire. In your day to day life, it most often leads to minor misunderstandings and maybe some hurt feelings, but in the world of health benefits, it could lead to lengthy legal disputes and significant losses in Plan assets.

Pay the Cost to be the Boss!

On April 24, 2017
By: Ron Peck, Esq.

Between Friday and Saturday I was feeling under the weather.  By Easter Sunday, my chest was terribly congested, my nose running, breath wheezing, and more.  My assumption was that on this holiday, I wouldn’t be able to find a provider – and given my breathing issues – I might find myself in the ER.  I contacted my local Urgent Care anyway, and – lo and behold – they were open.  30 minutes later I was being tested for flu, and hooked up to a nebulizer to ease my breathing.  The quality care I received, on this holiday, aside… I want to address the global issue as I see it.  I knew which options were available to me, and made an effort to pursue the option that was best for me AND my employer (as well as our self-funded benefit plan), because we have made efforts to ALIGN THOSE INTERESTS.  I was educated, aware, and incentivized to check the urgent care option before rushing to an emergency room.

Too many employers, that wisely choose to self-fund their health plan, assume that once they pick a claims processor and broker, they are off the hook and some third party will take over.  This dereliction of fiduciary duty saddens me.  Being self-funded means more than funding claims directly.  It means taking ownership over your staff… your team… your second-family (for, indeed, I consider my co-workers to be a second family; who else besides family occupies so much or our time?), and ensuring they understand the options available to them.  Making sure they understand how different choices impact the company, the plan, and their own financial bottom lines needs to be a priority for the employer.

Ask the average American employee if their health plan is self-funded.  They don’t know.  There is a greater than 60% chance they are self-funded, but they will instead quote the name of their network.  Ask how much a visit to the ER costs, compared to their primary care or urgent care, and they will quote the co-pay.

Employers!  Self-funders!  This is a call to action.  Stop passing the buck.  Start explaining how your plan is funded, and take proactive measures to align employee and employer interests.  Information is power.  Furthermore, don’t resort to a high deductible plan – again passing the buck – (this time onto the employee).  How is any employee supposed to “shop around” if they have no access to the cost of care?  As an aside, I think it’s hilarious how we gripe over the ACA, and how “Obama” focused too much on “who” is paying, and not enough on “how much” is being paid… that shifting the burden onto insurance doesn’t solve the issue of cost… and then we turn around and increase deductibles; ignoring the cost and instead shifting the burden.  When we simply pass the buck instead of addressing the cost head-on, we are just as bad as the politicians we complained about!

To that end, transparency is king; regardless of whether the plan is paying dollar number one and incentivizing employee behavior, or the employee is paying the first few thousand dollars via a high deductible.  That’s why I’m excited by organizations like The Free Market Medical Association, and the recent surge in subscription based direct primary care.  By investigating trends like these, educating employees about their plan’s funding mechanism, and actually incentivizing them to behave in a way that benefits them and the plan, we will begin to see real change – just like I did this past Sunday.

Cyborgs – Moving From Science Fiction to Science Fact

On April 20, 2017
By: Garrick Hunt

The word “cybernetics” tends to invoke images of Robocop or The Million Dollar Man.  These examples are just the creation of the imagination, but how far away are we really from such technological and biological advancements?

The answer is that it has already begun. While we don’t have 7-foot-tall walking cyborgs that administer swift justice in some kind of post-apocalyptic nightmare world, we are seeing advancements in the realm of prosthetic limbs, ocular augmentation, and even artificially grown organs.

While I was recently traveling, I picked up a National Geographic which had an amazing article on the future of human evolution and how humans are beginning to influence biological advancements. The article discussed a man, who was born colorblind and underwent a procedure that implanted a device (a sort of antenna) at the back of his head. This device can interpret the ultraviolet (UV) light spectrum and infrared (IR) spectrum, then convert these light waves into sound that feeds to his brain and allows him to “hear” color. Technology is helping this man use synesthesia, often considered a disorder of sorts, to his advantage.  What could this mean for the future of healthcare?  Who would be responsible for the costs of such augmentations? What would be the medical standards and indications of such an adventurous advancement?

Implants, like the one described above, offers a glimpse of the future.  While all of this seems a little farfetched, I would argue that no one anticipated George Klein’s electric wheelchair in the early twentieth century nor the profound change it would cause in our industry and in the lives of so many people. No one thought that anyone would be able to afford one, and now I can buy one on eBay for a cool $700, cheaper than a road bike.

The initial shock of new technology will always be a cost concern.  For example, exoskeletons, like those being developed for the military to  increase  lifting power and allow the wearer to walk and run long distances without becoming fatigued, are currently very much cost-prohibitive, yet these  devices are also being developed for paraplegics to utilize in the civilian sector. The ReWalk is one such exoskeleton that has been FDA approved, and at a price point of $70,000, it poses a high cost barrier that most people could never afford on their own. This means benefit plans may be on the hook for this new bill and others like it. Now, if a healthy individual wants to squander their savings to purchase an exoskeleton and pretend to be Iron Man, then all the power to them – but what about someone who needs it?

It’s not just exoskeletons; many prosthetic limbs can cost up to $50,000 in the current market.  Throw in a few computer chips and motherboards that allow for advanced articulation and a wide range of movement, and we could be looking at a hefty $100,000 price tag for that prosthesis. It seems likely that early medical applications of new technologies would bring with them medical indications for periodic maintenance, upgrades, or replacement… on the health plan’s dime.

There are three major ways a health plan can address this emerging technology; all three stem from solid plan language. First, a plan should assure it has the ability to review invoices against some sort of cost standard. Ensuring that the plan includes language indicating that alternating pricing, at the Plan Administrator’s discretion, will be applied when a particular medical device exceeds the set standards will help ensure that the plan has secured its right to properly utilize such standards. Secondly, a plan should including language that grants the plan the ability to suggest to the member a more cost-effective treatment option so long as it does not reduce the quality of treatment – and if the member foregoes that suggestion, the plan should ideally retain the right to limit its payment for the chosen service to the price of the lower-cost service that the member has chosen to forego. This means that while the plan will cover treatment for medical device, it will only do so up to a reasonable cost limit, and members are encouraged to not be extravagant simply because their OOP amount is the same either way.  Finally, a plan must include strong “experimental and investigational” language, ensuring that the procedure is FDA approved, has been adequately tested, and is actual applied science rather than still science fiction.

It will still be many years before we see a proper medical cyborg, but this doesn’t mean that we shouldn’t prepare for costs now…

My Trip to the Emergency Room

On April 18, 2017
By: Jen McCormick, Esq.

Since becoming a mom, I’ve experienced two pretty scary parenting adventures – taking a toddler to Disney World solo and taking a toddler to the emergency room. While I faced long lines, costly food, and anxiety during both events, it was the emergency department visit that by far was the scariest.

After a same-day sick visit at the pediatrician’s office, we were sent to the emergency room. Our pediatrician administered a treatment onsite, but after not quickly seeing results or improvement in my toddler’s condition, we were sent to the emergency department. This was terrifying to hear, but also a bit surprising to me. My toddler seemed in good spirits and seemed happy.

Of course I didn’t want to second guess the doctor, especially when my child’s health may be on the line, but I had to ask why they needed us to rush to the emergency department – was something happening and I just didn’t realize it? Not exactly. The pediatrician said that our toddler’s oxygen level was too low and his respiratory rate was too fast – and he needed to be monitored and that was not something the pediatrician’s office could do or had time to do.

I couldn’t help but question whether this was the most effective (cost or otherwise) way to manage care. Then again, it was my toddler and being a mom superseded my desire to argue. We went, and were monitored, and I continually questioned what was happening (and why) during each treatment step.

We try to encourage patients to take control of their health care – make informed decisions and properly utilize the emergency room (for emergency situations). I am not suggesting that our situation was not urgent or an emergency, but it was unexpected that the next step for us was the emergency department.  Maybe this is a trend (sending patients to emergency departments after a primary care visit) or due to time or resources. Either way, question what is happening so you better understand, and more importantly, ensure you receive the most appropriate care (particularly for our patients too young to speak for themselves).


Repeal and Replace Faces a False Start - Affordable Care Act Review

On April 10, 2017

By: Brady Bizarro, Esq.

After the surprising collapse of the American Health Care Act (“AHCA”), House Speaker Paul Ryan (R-Wis.) remarked, “We’re going to be living with Obamacare for the foreseeable future.” Tom Price, the Secretary of Health and Human Services, proclaimed that Obamacare was “the law of the land.” In the immediate aftermath of the stunning political defeat, many political analysts concluded that the effort to repeal and replace Obamacare was finished. Only a few days later, however, there were talks of reviving the legislation over the next few weeks. The President himself took to social media to proclaim, “We are all going to make a deal on health care . . . that’s such an easy one.”

What changed? Republican leaders faced immense pressure from conservative activists, interest groups, the insurance lobby, donors, and constituents to follow through on one of their most significant campaign promises. In addition, the President has targeted individual congressmen, mostly from the House Freedom Caucus, and pressured them to get on board with the AHCA. Whatever the Republicans decide to do, they need to act fast. The legislative calendar is jam-packed with other top priorities, including passing a budget and tackling tax reform. Additionally, insurers are developing premiums and benefit packages for health plans to offer in 2018, and these will need to be reviewed by federal and state officials over the summer.

In the immediate future, despite the legislative failure, the Trump Administration still has plenty of ways it can cripple the ACA. The President himself has said the law would “explode” on its own, but that process could certainly be accelerated. For example, the Administration could block funding for ACA subsidies, refuse to enforce the individual and employer mandates, and redefine Essential Health Benefits (“EHBs”).

That last part, redefining EHBs, could have a significant impact on employer-sponsored health insurance. In fact, a new bill is in the works, and one of its provisions (included by the Freedom Caucus) is to repeal EHBs entirely. Essential Health Benefits are requirements that insurers have to cover services like maternity care, mental health care, and hospitalization. According to Republican lawmakers, removing these requirements would significantly lower the cost of certain health plans because they would not be forced to cover a defined list of services.

We will continue to follow new developments closely, especially those that impact employer-sponsored health care.
 

Contact The Phia Group today about an affordable care act external review!