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Empowering Plans: P70 – Surprise? Balance Bills!

With this episode, the guys define surprise balance billing, discuss movements to curb them (at the State and Federal levels), and harass Pat “The Man” Santos as well.  Stop reading this description and start listening! 

Click here to check out the podcast!  (Make sure you subscribe to our YouTube and iTunes Channels!)


Everything I Ever Needed to Learn, I learned in Pre-School!

By: Chris Aguiar, Esq.

As the saying goes, many of the basic skills we need to be effective in life are taught to us early. “Use your words” – a common instruction given to young children who are struggling to express themselves or communicate effectively, is an instruction I still use daily – albeit with a slight adjustment.  Especially with matters relating to plan administration, words alone aren’t enough! it’s important to use the correct words to avoid any confusion and ensure that everyone reading the plan understands exactly what you mean! 

A common example we often encounter is the exclusion of benefits incurred while someone is driving under the influence (“DUI”). Some plans use provisions excluding benefits arising from “serious illegal activity” or “felonious activity” and expect those exclusions to operate in a DUI situation.  You might be thinking, “yeah, Chris, a DUI is seriously illegal activity”. While virtually everyone will agree that a DUI is seriously illegal, in the law it may not always be considered a “serious illegal activity”.  Imagine someone is considered to be a very small amount over the limit (e.g. 0.0804) and they crash into a tree only to have an officer determine that they were in fact engaged in a DUI. They were not drastically over the limit, did not injure anyone but themselves, and this was their first offense. Is it conceivable someone might look at these facts and determine that this particular incident did not rise to the level of “serious illegal activity”?  Certainly, the participant seeking to have their benefits paid might believe the activity not to be sufficiently serious, and you can bet their lawyer will fee the same way. Furthermore, based on the facts above, the act would be considered a misdemeanor rather than a felony. It is quite possible neither of the provisions could be upheld!

The point is this – while this issue is not simple enough that a preschooler could handle it, plans can protect themselves by being careful how their provisions are drafted by using words that clearly state their intent. If you intend to exclude benefits when injuries arise while a participant is driving under the influence, ensure the terms of the exclusion clearly state that intent! Understanding the correct words to use is almost always the difference between a valid and invalid denial!


IP Law vs. Drug Prices – Round Two, Fight!

By: Nicholas Bonds, Esq.

Health and Human Services (HHS) Secretary Alex Azar’s recent rule requiring drug manufacturers to include the list prices of their drugs in their television ads is being received by big voices in the industry with about as much enthusiasm as you might expect. Although the rule will not take effect until July 9, big-name manufacturers Merck, Eli Lilly, and Amgen, with the Association of National Advertisers in their corner, are suing HHS and Secretary Azar to block the policy on a combination of likelihood of confusion and First Amendment grounds. Lawsuit aside, the HHS rule drew heavy inspiration from trademark law for its design, and the Federal Government continues to look towards the intellectual property framework for ideas to drag drug prices out of the stratosphere.

Representative Elijah Cummings, Chairman of the Committee on Oversight and Reform, has been among those in Congress leading the charge in this battle over drug prices. Representative Cummings and Senator Debbie Stabenow have joined forces to enlist the Government Accountability Office (GAO) to review HHS’s system for managing patent licenses, with a special focus on Gilead Science’s HIV pill. The drug manufacturer relied, to an extent, on taxpayer-funded research to invent this drug, and are now charging rates that puts it out of reach for many desperate patients. Lawmakers like Cummings and Stabenow believe HHS could better enforce the government’s rights to royalties and licenses, and should take pricing into account when granting such valuable licenses.  

Meanwhile, Senators John Cornyn and Richard Blumenthal have introduced the Affordable Prescriptions for Patients (APP) Act, which is designed to empower the Federal Trade Commission to challenge the anti-competitive nature of patent thickets using its antitrust authority. These thickets encircle drugs like Humira and Lantus with dozens of overlapping patents, effectively foreclosing the possibility of generics or biosimilars from giving consumers cheaper alternatives. The bill also takes aim at the practice of pharmaceutical “product hopping,” a practice similarly designed with an eye toward keeping generics out of the market. By tweaking the absorption rate or dosage level of a drug, manufacturers can take advantage of state substitution laws that prohibit pharmacists from offering a generic if the drug is not bioequivalent or therapeutically equivalent. The AAP would deem both patent thicketing and product hopping to be anticompetitive behavior, and could have sweeping implications for patent prosecution and enforcement.

Some lawmakers, however, have jumped in the trenches alongside the pharmaceutical industry and are actively fighting to loosen requirements for securing patents. Senators Thom Tillis and Chris Coons have written a bill, to big pharma’s delight, that would amend Section 101 of the Patent Act to allow patents on products and laws of nature, abstract ides, and other areas of general knowledge – all areas the Supreme Court has previously ruled ineligible for patent protection under the current wording of the Patent Act.

Most on Capitol Hill agree: the drug prices are too damn high. IP law is indelibly embroiled in the battle to bring these prices down, and combatants on both sides are turning to the IP well for any tactical advantage they can find.


The Impact of State, Federal Laws, and Current Market Trends on Self-Funding

Attention, self-funders: things are happening! State and federal governments have been busy beavers, either passing legislation or at least looking into it. Whether it's surprise billing laws, Medicare-for-all initiatives, or public exchange options, you need to know about it.

Join The Phia Group's legal team as they share some interesting perspectives on the current legislative climate.

Click Here to View Our Full Webinar on YouTube

Click Here to Download Webinar Slides Only


No No-fault – Michigan Revamps its Auto Insurance Rules

By: Andrew Silverio, Esq.

Recently, the Michigan Senate passed sweeping legislation in an effort to get their auto insurance rates, which are the highest in the nation, under control.  The main way Michigan aims to accomplish this is by eliminating their requirement that auto insurance policies carry unlimited “Personal Protection Insurance” (commonly referred to elsewhere as “Personal Injury Protection” or “PIP” coverage), which is no-fault first party medical coverage.  Under the old system, with exposure to the carrier being quite literally unlimited, premiums predictably climbed to unsustainable levels.

The new law will require that carriers offer PPI options with $500,000 and $250,000 limits, as well as an unlimited option.  It also allows for a $50,000 limit for policyholders on Medicaid only, and importantly, allows policyholders to waive PPI coverage completely if they have Medicare coverage or “other health or accident coverage” which provides benefits for accident claims.

So, why are we talking about changes to auto insurance laws?  Because policies carrying these new limits will shift liability onto health plans.  In light of the previous availability of unlimited PPI coverage, many self-funded Michigan health plans already exclude charges resulting from auto accidents completely.  Under the new law, this should exclude an individual from waiving PPI, however it’s probably unreasonable to expect individuals to be educated enough or review applicable requirements in enough detail to understand these requirements, or for carriers offering these policies to do the legwork to determine whether an applicant’s health plan actually covers auto accident claims.  So, the end result may be that individuals are left with no coverage at all for auto accident claims.  This means that in addition to making sure that plan language is tight, it’s crucial for employers to educate their employees about health coverage and their responsibility to have other coverage available via auto insurance.

This could also impact how plans who don’t exclude auto claims completely – the approach of quickly paying everything up front without question with the understanding that unlimited PPI coverage is available for reimbursement after the fact is no longer such an appealing option.  No matter what the existing approach to these claims, now is the right time for Michigan employers to reexamine how they handle auto accident claims and coordinate with PPI coverage.


MA PAID FAMILY & MEDICAL LEAVE UPDATE: Required Contributions Delayed…and Increased

By: Philip Qualo, J.D.

The commencement of the required contributions for the Massachusetts Paid Family and Medical Leave (“PFML”) program was scheduled for July 1, 2019, but on June 11, 2019, Massachusetts Governor, Charlie Baker, along with members of the Commonwealth’s House and Senate, issued a joint statement agreeing to postpone the start of required contributions for the PFML program by three months. While the legislature will need to pass an emergency bill before the delay is official, this announcement is welcome news for employers scrambling to comply with what was supposed to be a July 1 contribution start date. Adversely, this announcement also brings unwelcome news to employers and their employees because in order to maintain the amount of pre-funding and not reduce total contributions paid to the PFML trust fund, the total contribution rate will be increased from .63% to .75%of wages  and will be deducted on October 1, 2019, the new start date for required contributions.

By way of background, the PFML law, enacted in 2018, provides a right to up to 26 weeks of combined family and medical leave in each benefit year, and pay during such leave, to eligible employees, former employees, and self-employed individuals in Massachusetts. The earliest that such leave and pay benefits will be available is January 1, 2021. Leave under the PFML is job protected and will require continuation of health benefits for the duration of such leaves. Pay during this leave is administered by the state and funded through employer and employee contributions that employers must remit to the state on a quarterly basis. Employers with more than 25 covered employees were required to contribute 60% of the medical leave portion on behalf of their employees. Covered employees’ contribution rate was initially established at 0.63% (0.52% for medical leave and .11% for family leave) of the covered individual’s gross wages or other payments to all covered individuals.

The Department of Family and Medical Leave (“DFML”) has yet to provide updated guidance on whether there will be a change in the medical and family leave allocation of the increased .75% contribution rate or any change in the required employer contribution. However, the DFML has confirmed that June 30th deadline for covered employers to comply with workplace poster and employee notification requirements has been extended to September 30, 2019. In the meantime, we recommend employers with employees based in Massachusetts continue to monitor the DFML website for updated guidance. To learn more about self-funded health plans click here


Tales From the Plan: Episode 1 – Putting the Benefit in Benefit Plan with Jennifer McCormick

In our inaugural episode of “Tales from the Plan,” our own Sr. VP of Consulting, Jennifer McCormick, opens up and candidly discusses her own experience as a consumer of healthcare and member of The Phia Group’s health plan.  Jen is brutally honest, and will make you realize that anyone can be taken advantage of, and anyone can take advantage of, our nation’s healthcare system.  This is mandatory listening.

Click here to check out the podcast!  (Make sure you subscribe to our YouTube and iTunes Channels!)


Faces of Phia: Episode 13 – Glutton for Punishment

Amanda Lima celebrates more than 6 years with Phia (most of that time working closely with Adam), by chatting about her time here, the company, and the amazing work she’s doing on our clients’ behalves – delving deeply into matters of excessive and abusive provider billing. This is a topic about which everyone is buzzing, and Amanda has got the dirt!

Click here to check out the podcast!  (Make sure you subscribe to our YouTube and iTunes Channels!)


Will Sex Discrimination be Re-Defined?

By: Erin M. Hussey

Section 1557 of the Affordable Care Act (“ACA”) prohibits discrimination on the basis of race, color, national origin, sex, age, or disability with regards to certain covered entities’ health programs. A covered entity is one that receives federal funding as outlined in the ACA.

The US Department of Health and Human Services (“HHS”) has issued a proposed rule that would revise the regulations implementing and enforcing Section 1557. This proposed rule, among other things, would essentially allow HHS not to include “gender identity” and “termination of pregnancy” within the definition of “sex discrimination.”

By way of background, HHS’s 2016 regulation on Section 1557 redefined sex discrimination to include gender identity and termination of pregnancy. However, on December 31, 2016, a US District Court issued a nationwide injunction on certain parts of Section 1557, including gender identity and termination of pregnancy, and that injunction is still in effect. As such, this proposed rule would follow suit with that injunction. HHS details that this part of the proposed rule would “not create a new definition of discrimination ‘on the basis of sex’ . . . [but] would enforce Section 1557 by returning to the government's longstanding interpretation of ‘sex’ under the ordinary meaning of the word Congress used.”

In addition, plans that are not directly subject to Section 1557, must still ensure that the employer sponsoring that plan remains in compliance with Title VII of the Civil Rights Act. Title VII prohibits employment discrimination based on race, color, religion, sex and national origin. The Equal Employment Opportunity Commission’s (“EEOC’s”) interpretation of its prohibition on sex discrimination includes discrimination based on gender identity and sexual orientation. However, there have been similar discussions of whether sex discrimination should be redefined under Title VII. HHS detailed this issue in their fact sheet on the proposed rule:

“On April 22, 2019, the U.S. Supreme Court granted petitions for writs of certiorari in three cases, which raise the question whether Title VII’s prohibition on discrimination on the basis of sex also bars discrimination on the basis of gender identity or sexual orientation.”

Therefore, while we wait to see if the proposed rules on Section 1557 are finalized, and for the outcome of the above-noted Supreme Court cases on Title VII, applicable health plans should remain cautious with regards to benefits and exclusions that may implicate sex discrimination issues. If you feel as if you are being discriminated against and would like to negotiate a fair rate, visit our claim negotiation page to learn more.