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Bite the Hand
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.


Empowering Plans Segment 08 - Healthcares? Alternative Provider Payment Programs
The Phia Group’s CEO, Adam Russo, and Sr. VP & General Counsel, Ron Peck, discuss movements within the healthcare provider community to change how they charge (and receive payment) for services rendered.  For better or worse, change is on the way!

Click here to open the Podcast!

Keeping PACE with Appeals, Trends and Fiduciary Responsibility
As TPAs, consultants, and Plan Sponsors utilizing The Phia Group's Plan Appointed Claim Evaluator service, you are entitled to exclusive educational material. Join The Phia Group's PACE legal team as they provide insight drawn from within the past 2 years of the PACE service.

During this webinar, you will be provided an insider's view into the latest health plan appeals trends, plan document best practices related to appeals and fiduciary concerns, as well as an update on the current, fiduciary landscape.

Download our PACE Webinar!

It's Never Too Soon
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!


Decisions, Decisions: Which Plan Types Work Best for Which Groups, and Why?
Between a traditional PPO plan, a MEC or “skinny” plan, reference-based pricing, narrow network, cafeteria plan, or high-deductible health plan, who can choose? They all have their nuances, and which plan type is best for a given plan sponsor will depend on factors including risk tolerance, geographical location, employee base, and more.

Thank you for joining The Phia Group’s legal team on Tuesday, May 16, as they discussed the different plan options available to plan sponsors these days – including benefits, dangers, best practices, stop-loss and network considerations, and the future.

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Dear Stop-Loss: A Ballad
By: Jon Jablon, Esq.

Author’s Note: Written in ballad meter, this can be sung to the tune of “Gilligan’s Island.”

You carriers are sometimes great,
all flexible and fair;    
But sometimes you issue denials
That make me lose my hair.

Prevailing charge in the area
is what the policy allows;
Yet when presented with a claim,
some of you break your vows.

An auditor has been brought in
to reprice the group’s claim
based on Medicare or cost…
But carriers: for shame!

The promise to strictly abide
by the policy
goes out the window, and quickly
becomes a fallacy.

Each and every claim that’s denied
must be supported by
the policy your groups have bought
when they did apply.

All carriers must use good faith
in everything they do;
making things up as you go
is legally taboo.

To cap your risk with those objective
methodologies,
make sure you always use good faith…
Revise your policies!

When an employer signs with you,
you’re expected to pay out
benefits you have promised
in the policies you tout.

The whole entire industry
is worse-off when you fail
to follow your own written rules;
in court, you won’t prevail.

The Phia Group is here to help
all those who have been harmed;
info@phiagroup.com...
You’ll never be unarmed.

You Are Not Going to Sue Us, Are You?
…is what a nice lady asked me when we were discussing the charges her office submitted for drug addiction treatments. You see, this office billed $3,800.00 per day for inpatient detox, and separately, under a different corporate name (but same billing office), they billed our client for drug screenings at a whopping $4,000.00 per screen – with one screen performed per day.

Our communication with their office (written and sent by one of our attorneys) was stern but professional; we seriously questioned the propriety of those charges and made it clear that our client would not pay for them since they are considered part of the per diem for detox.  

“You are not going to sue us, are you?”  They were worried about a class action.  Think about that.  The provider representative’s guilty conscience was palpable.  We settled the claims at a small percentage above the Medicare equivalent rate, and we closed the account...no lawsuit needed.  Everyone walked away happy.

We are seeing more and more of these types of billing practices sprouting up in sunbelt regions.  

Treating addiction is a serious issue, and I am absolutely not diminishing the need for this type of service. In fact, I am married to a family and marriage therapist, so I understand mental health issues better than most.  That said, it is somewhat ironic that this particular example is of addiction claims, as it would seem that such high billed charges and ridiculous margins are a serious form of corporate addiction within the provider community. Effectively, we have addicts treating addicts.

If you have claims from providers that are “getting high”… let us know. We can help.  


Empowering Plans Segment 07 - The American Health Care Act
Repeal and replace, the ACA, the AHCA - what does it all mean? How does it affect us? What’s next? Join The Phia Group's CEO, Adam V. Russo, Sr. VP, Ron E. Peck, and Attorney Brady Bizarro as they discuss the American Health Care Act, which passed the House of Representatives on 05/04/2017.

Click here to open the Podcast!

Adam’s Key Takeaway from the 2017 MassAHU Benefest Conference
By: Adam Russo, Esq.

I spoke at the 2017 MassAHU Benefest Conference today in Westborough, MA, where I was lucky enough to see 9 of the CEOs for the various insurance carriers in our state.  I was pleasantly surprised to hear what they had to say.  They not only talked about transparency needs and the fact that pharmacy costs are out of control, many of them actually stated that we need to increase the incentives that we offer employees and members, in order to get them to care about the cost of care.  

This wasn’t just some vendor saying this, or a self-funded employer, these were actual carriers who said the word “empower”.  We do need to empower our plans and their employees to care about the actual cost of care, and the best way to do this is through real and valuable incentives – not just some small co-pay differential.  This is what The Phia Group has been preaching for years.  Words are a great start - so let’s hope for some action!

A Call for Defensive Legislation
By: Brady Bizarro, Esq.

On April 5th, the House of Representatives passed the Self-Insurance Protection Act (SIPA; H.R. 1304) by a vote of 400 to 16. This was the third iteration of this bill, originally introduced at the suggestion of the Self-Insurance Institute of America (“SIIA”). This legislation is very important for our industry because it blocks federal efforts to regulate small stop-loss plans as health insurance by excluding the plans from the federal definition of “health insurance coverage.” If you were struggling to think of a federal law which redefines stop-loss as health insurance, that is okay. There is no such federal law on the books. Indeed, there has been no legislative proposal at the federal level to redefine stop-loss insurance in this way. This was defensive legislation, designed to ensure that federal regulators do not try to redefine stop-loss insurance. State legislatures around the country should take notice of this approach before it’s too late.

At the state level, we have already seen numerous efforts (often successful) at redefining stop-loss insurance or placing restrictions on coverage. Why are states pushing this kind of legislation? One development that added fuel to the fire was the U.S. Department of Labor’s Technical Release on November 6, 2014. It expressed the opinion that states should not be concerned that stop-loss regulation restricting policies based on attachment points would be preempted by the Employee Retirement Income Security Act (“ERISA”). Since that time, we have seen efforts to restrict stop-loss coverage in California, the District of Columbia, Maryland, New York, New Mexico, Florida, Delaware, Washington, Connecticut, and Utah.

In states where restrictions have not been put in place, or where the restrictions are not severe, employers and insurers alike should be pushing for defensive legislation to reaffirm that stop-loss insurance is not health insurance.