In this episode, the crew once again sits down with a valued team member, whose role sits at the crossroads between technology and healthcare. Ensuring that the privacy and security issues hounding all businesses don’t threaten The Phia Group as it leverages technology to better serve its clients, Ashley is unique not only at the company – but industrywide. Listen in to find out why, and what you need to do to get her seal of approval.
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By: Chris Aguiar, Esq.
I read what I thought was a decent article this week on some of the advantages of self-funding but wanted to take an opportunity to comment/elaborate. Always great to see self-funding be touted in the public eye via highly visible media sources. It can certainly be difficult to give a very detailed explanation of this complex risk model in a capped word count article, but something jumped out at me that I thought relevant to note. The author describes self-funding generally as “the employer pays for its own employees’ claims, or at least to a certain amount, while larger claims would be handled by insurance companies”. Certainly that is a model we’ve all seen, but it is indeed only one model and the exact kind of description that drives the misconception that a self-funded plan that uses a traditional stop loss model is not fully self-funded and is therefore insured.
It's important to understand that many self-funded plans do not utilize the hybrid approach this description implies. To the casual observer this description suggests that a $1,000.00 claim is paid by the self-funded plan while a $100,000.00 claim is paid by some other health insurance arrangement entered into by the employer; that’s simply not accurate, certainly not among The Phia Group’s clientele. Rather, for many self-funded plans the plan is at all times responsible for the medical bills and, only after the paying, seeks reimbursement from another insurance company. That company from which the plan seeks reimbursement is not a health insurance carrier, rather, it’s a financial insurance vehicle that protects and ensures the viability of the Plan to make sure benefits continue to be available for all employees/beneficiaries of the plan.
So, just like the $1,000.00 medical bill, the employer/self-funded plan receives the $100,000.00 claim and must evaluate whether it is eligible for coverage and provide said coverage. Only then, does it submit a reimbursement request (assuming the $100,000.00 is above the applicable deductible). It is often the case that for some reason or another, the plan allows for coverage but the request for reimbursement is denied under the terms of the stop loss insurance policy. Certainly, that self-funded plan would tell you that they were unable to “transfer the risk” on that particular claim.
The description above alone is almost 350 words – so we certainly can’t expect an article of about 750 words intended to cover both self-funding and Direct Primary Care, one of the more innovative approaches being utilized by employers to provide more cost effective health plans to their employees, to describe it in depth. Notably, the author did not quote Mr. Thaxter when making that description, so it’s impossible to know exactly how it was described to him. As practitioner in the self-funded space, it’s incumbent on us to do everything we can to educate those who are self-funded, or looking to become self-funded on the benefits, the risks, and strategic and innovative steps that can be taken to minimize the risk and maximize the reward – more cost effective medical benefits!
Catch the article here - https://thebusinessjournal.com/self-funded-insurance-options-come/?fbclid=IwAR3D-CxhWa1vrUy1lkmNMKJTt3cAuucs6v5q7zT4mkQA7ytD9oBQsyl92Pc
How payers, providers, and those of us who serve them, can work together as a team and achieve a winning plan for the future of healthcare. In this episode, Adam, Ron and Brady, talk about how providers – like plan sponsors – are concerned with the state of things and want to identify what’s wrong, what’s right, and how we can collaborate on a new approach that works for us all, as members of a single industry – healthcare.
By: Ron E. Peck, Esq.
Let me first begin by reporting some good news. Those who follow our organization closely recall back in July that I announced my wife’s diagnosis of Non-Hodgkin’s Lymphoma. Six months later, I am pleased to announce that she is in complete remission. It will be some time before she can be deemed well and truly “cured,” but this news is still something I am thrilled to share with you. To the many (many) people who sent me well wishes, prayers, and requests for updates; thank you. Relevant to this blog post, however, I also want to thank the providers – the people who saved my wife’s life, and ensured my three year old son still has his mother.
As I work on behalf of the self-funded health benefits industry, including employers, employees, brokers, stop-loss carriers, MGUs, TPAs, and pretty much every entity that plays a role in the formation and administration of said plans – one attitude consistently seems to pop up. As payers, we assume the worst of the payees. In other words, we routinely state that the rising cost of health care is the providers’ fault. The affordability of health benefit plans (or lack thereof) is driven solely by exorbitant – and dare I say it – criminal pricing by hospitals and providers.
This desire to place all the blame on providers demonizes them, casts them in the light of an “enemy,” and eliminates any chance of coordinating with providers in an effort to peacefully resolve differences of opinion – hopefully before a patient is negatively affected – and fix the system we agree is flawed.
Many times have I been asked to assist in a situation where a provider has billed one amount for services rendered, the benefit plan pays a lesser amount it deems to be reasonable, and the patient is balance billed. After reviewing the entirety of the situation with the provider, sometimes they agree to accept some amount situated between their original charged amount, and the amount paid. The offer is fair, yet upon reviewing it with the plan sponsor or administrator, they refuse to pay more. The rationale sometimes has to do with fiduciary duty (fair), sometimes relates to financial limitations and stop-loss availability (understandable), but sometimes the stated rationale is akin to: “I’m tired of those crooks milking me for all I’m worth, and I refuse to negotiate with terrorists.”
It pains me to see this happening. I count myself lucky to live in an area where there are so many incredible providers of healthcare. More of my friends are providers than any other profession, and without exception, they are all 100% focused on improving patients’ health, and 0% focused on charge-masters, billing schemes, and squeezing plans dry. The issues (and there are many of them) are more a symptom of a broken system than intentional malfeasance on the part of all providers. Most providers, like us, are people so exasperated by their day-to-day duties that they throw their hands in the air and default to an “us versus them” mentality.
If payers and payees cannot work together to identify a middle ground that works, is fair, and is viable long term for all involved, then “someone else” will do it for us… and I fear what that “solution” will look like. Feel the burn?
This is why I am asking every person who reads this missive to step back, and remember who we are dealing with, and perhaps – on occasion – give them the benefit of the doubt. They, like us, are caught in a broken system whose shortcomings perpetually fuel a death spiral; and they – like us – are just trying to do right (as they see it) for their employer and their industry.
Do we truly believe hospitals want to bite the hand that feeds them, or do they look at their own (albeit inefficient and poorly conceived) processes, witness how we in the payer community are trying to “shortchange” them, and they – like us – become defensive?
The bottom line is this. We need to adopt and obey a process by which providers are adequately rewarded for their noble work, and on both sides waste is eliminated, innovation is awarded, and cost-containment isn’t a dirty word. Lastly, we need to change our perspective and understand that we are all (payer and payee) part of the same entity – the healthcare industry – and that without one, the other will cease to thrive.
By: Kelly E. Dempsey, Esq.
A legal earthquake hit the self-funded industry last week and seemed to result in multiple tremors of legal actions throughout the week. In addition to all the cases about contraceptives, the Eighth Circuit Court of Appeals issued a large blow to the self-funded industry by siding against UnitedHealth in a lawsuit brought by out-of-network providers due to UnitedHealth’s process of cross-plan offsetting (see Peterson vs. UnitedHealth Group, Inc.). Cross-plan offsetting means the claims administrator is recouping funds for one plan that were overpaid by reducing payments from a second plan to the same provider. The process was created due to the struggle to recoup overpayments from out-of-network providers. With no contract in place, providers are reluctant to refund a plan if the payment is equal to or less than billed charges.
In defending against the lawsuit, the core problem for UnitedHealth is that the plan documents did not support the practice. UnitedHealth had to get a bit creative with their arguments by arguing that they had discretionary authority to interpret the terms of the plan. The court did not accept this argument, but while the court implied that cross-plan offsetting violates ERISA’s fiduciary duties, it stopped short of saying the process does violate ERISA.
What does this mean for TPAs and employers? As offset amounts are generally not large, the likelihood of litigation is relatively low; however, there is still the potential for the DOL and other courts to weigh in on whether or not this practice violates ERISA fiduciary duties. If a plan (or TPA) wishes to proceed with this process, this case is another reminder to make sure the plan document supports the process by which claims are being administered.
By: Erin M. Hussey, Esq.
By now, most Americans, especially those in the healthcare industry and proponents of the ACA, are aware of the December 14, 2018 decision in Texas v. United States by Judge O’Connor of the Northern District Court of Texas. This decision shook the healthcare industry as it ruled that the individual mandate was unconstitutional and not severable from the rest of the Affordable Care Act (“ACA”), thus concluding that the ACA itself is unconstitutional.
More recently on January 3, 2019, the House filed a motion to intervene, and detailed that they have a “unique institutional interest in participating in this litigation to defend the ACA.” This motion was to intervene in separate claims that were made by the plaintiff states which were not ruled on in the December 14th decision. However, on January 7, 2019, the House filed a second motion to intervene which, if granted, would allow the House to defend the ACA alongside the intervenor states. The House argues that they have the right to defend the constitutionality of federal laws when the Attorney General or the Department of Justice (“DOJ”) do not.
However, this process will be slowed down as the government shutdown continues. The shutdown, which began on December 22, 2018, is interfering with the DOJ’s ability to meet the deadline to file their opposition to the House's motion. As a result, the DOJ asked the Fifth Circuit to pause all briefings since they will be unable to prepare their motion as Justice attorneys cannot work during the shutdown. On January 11, 2019, the Fifth Circuit issued an order, signed by Judge Leslie Southwick, granting the DOJ’s request to temporarily pause the case. While this shouldn't have a deep impact on the case, it presents just one example of many of how the government shutdown is impacting the country.
This year, we mark the ninth anniversary of the healthcare law that transformed our industry. The Affordable Care Act has been under assault from the White House, from Congress, and now, it has been declared unconstitutional by a federal court. Despite the embattled state of the ACA, the Trump administration has set an agenda for the ACA's implementation this year, and it remains the law of the land. In this webinar, The Phia Group's legal team will explore the many legal and political battles that threaten the ACA's existence while covering those key provisions that have changed, those that have remained the same, and everything in between.
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By: Jen McCormick, Esq.
Coverage of contraceptives for women and the availability of a religious or moral exemption (or an accommodation) has been hotly debated recently – particularly due to a new Trump administration rule. Specifically, this rule would expand the pool of employers eligible to opt-out of providing birth control for women based on religious objections. The rule was set to take effect January 1, 2019, but judges in California and Pennsylvania recently blocked these rules from taking effect.
Last week a California judge granted a request for a preliminary injunction for California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Minnesota, New York, North Carolina, Rhone Island, Vermont, Virginia, Washington and DC. This week (on Monday) a Pennsylvania judge took the next step and issued a nationwide hold on these rules.
Many entities and individuals have strong opinions on this topic, but for how (or whether) the rules may impact businesses we’ll have to wait and see. In the meantime, employers should pay attention and understand the current rules regarding religious exemptions and accommodations.
In this most recent episode, Tori Pace – another Phia superstar – shares experiences working with each department, what she’s learned from these experiences, and campaigns for a regular seat on the show.