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Empowering Plans Segment 18 - Responsibility - Beyond the Contract
In this episode, Adam and Ron discuss trends impacting health plans, employers, and employees. While these issues, such as the opioid epidemic, may not seem like the biggest costs facing benefit plans today, the long term costs are real. More importantly, issues like these can be identified by examining claims data; but most administrators are not contractually responsible to do so. Adam and Ron discuss why these entities should consider adding such services to their offerings – despite not being the most impactful cost containment option or being a contractual responsibility of the administrator.

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In God We Trust; All Others Pay CASH…I wish…
I love calling a provider before medical services are rendered to settle on financial terms, and I love it when they have a reasonable cash price ready for me – but it’s all too rare to get a reasonable price easily.  Usually, I need to wade through concepts and terminology like “regular rates,” “commercial contracts,” and “networks,” and excuses like “I’ll see what I can do,” “our clients don’t process claims that way,” and plenty more. It never ends.

I want to pay a cash lump-sum for a service you’ve provided hundreds (or thousands) of times, and you really can’t tell me the price?

However, with the steady emergence of more consumers being responsible for paying for their medical care (in the form of higher OOP) and perhaps continued provider frustration, more providers are now offering cash discounts (thanks to transparency pioneers like Surgery Center of Oklahoma). Consider these other examples:

[This clinic] does not accept any third-party payment and makes no apologies for this. In order to keep costs down for the uninsured and the increasing number of patients who have high copays and deductibles, we choose to not assume the massive overhead involved in billing third-party payers. This has the added benefit of eliminating bureaucratic hassles and intrusions into the doctor-patient relationship, ensuring confidentiality of patient information and keeping our typical charges usually between the costs of an oil change and a brake job.1

* * *    

[This health system] offers cash pricing for selected services. Cash-pricing packages must be paid in advance of receiving services. Insurance will not be billed and claim forms will not be provided. If you would like information on cash packages, please call …2  

* * *

Does [this hospital] offer a discount if I self-pay for services? [This hospital] offers a 75 percent discount on eligible services to patients who pay out of pocket for medical services — whether it’s because you don’t have insurance, your insurance doesn’t cover the services, or you’d prefer not to bill through your insurance provider.3

Swedish Health Services may have seen the writing on the wall when they decided to lower their charges for certain outpatient services (bear in mind these are ordinary charges, not cash rates). On their old billing platform, an MRI of the brain was billed at $6,143; the new billing is $1,810 (70% less).

In many ways, cash rates are a type of network unto themselves. Providers are basically saying, “If you can pay cash at the time of service, these are the rates, and they are good. If you want us to bill an insurer, have the claim repriced, pended, denied, re-coded, covered, denied, covered, we will bill you our much maligned chargemaster rates, and the claim will be paid with our equally maligned network rates.”   

We are truly only at the beginning of this trend, and it is difficult to assess how many providers are now offering cash rates and how many are publicizing that fact; offering cash rates can be viewed as a form of direct-to-consumer contracting.

The American Academy of Private Physicians estimates there are about 6,000 physicians in the US who contract directly with their patients without an intermediary. That is roughly 1% of physicians, but this number has reportedly been growing at a rate of 25% per year for the last four years 4, and despite the fact that this is decimal dust compared to the market at large, the trend is likely to continue.

All things considered, we need more providers to step up and post their cash prices for consumers to consider.  The providers who pioneer in this area will be rewarded with business from a large market that is getting increasingly desperate for honesty and transparency.

1 Sean Parnell, “The Self-Pay Patient”, January 2014, pg. 28
2 https://www.uclahealth.org/pages/patients/patient-services/cash-pricing.aspx
3 https://www.elcaminohospital.org/patients-visitors-guide/billing/faq
4 Sara Rosenbaum, “Additional Requirement for Charitable Hospitals: Final Rules on Community Health Needs Assessments and Financial Assistance”, http://healthaffairs.org/blog/2015/01/23/additional-requirements-for-charitable-hospitals-final-rules-on-community-health-needs-assessments-and-financial-assistance/ (January 23, 2015)

It’s Time To Renew – Revisiting Stop Loss Trends

 

It’s that time of year again – renewal season!  What is often overlooked is the type of stop loss carrier to partner with for the next plan year. Stop loss choices are often made just on the premium cost, however plans should look at more than just the price. Stop loss is something most self funded benefit plans rely upon to ensure their financial viability and long term success. Yet, too often plans seek to change benefit structures or implement cost containment programs without coordinating those changes with stop loss. Understanding procedures preemptively, reviewing a plan document side-by-side with the stop loss policy, and agreeing upon language interpretations are some of the important things plans and carriers must do to achieve harmony.

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Natural Disasters (Hurricanes Harvey and Irma) - Don’t Let Them Wreak Havoc on Your Health Plan

By: Kelly Dempsey, Esq.

The last few weeks have been difficult for several states and U.S. territories.  Hurricanes Harvey and Irma have caused significant flooding and damage.  In addition to the loss of power, many people are homeless and corporations/employers are without a place to conduct business.  Depending on the level of damage, it may take a long time for different areas of the country to rebound and rebuild.  Chances are that employee benefits, specifically the health plan, are the last thing on employers’ and employees’ minds, but there are some very important considerations.  So what do Hurricanes Harvey and Irma mean for employers, employer sponsored health plans, TPAs, and employees?  

Self-funded health plans are required to comply with various federal laws that carry different responsibilities including, but not limited to, ERISA, COBRA, FMLA, HIPAA, and the ACA.  These federal laws come with a wide array of notice requirements and time frames for processing claims and appeals and other requests for documents or information.  As such, the Department of Labor and the Department of Health and Human Services (collectively referred to as “the Departments”) have issued press releases and bulletins that provide general guidance and limit exposure to penalties.  These press releases were specifically issued after Hurricane Harvey; however, it’s likely that additional releases will be issued to address Hurricane Irma.  Below are links to important press releases; however, the following is one of the key summary statements:

The guiding principle for plans must be to act reasonably, prudently and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time-frames.

Health plans and their supporting vendors will likely need to review situations on a case by case basis to determine what is reasonable for each plan and employer.

If you’ve listened to any recent Phia Group webinars, presentations or podcasts, or read our blog or published articles, you already know we’ve been focusing on leaves of absence and gaps between handbooks and plan documents.  You’re probably thinking, “Yes, I know, so what’s your point?”  With all the damage to homes and job sites, it is possible employees may seek leaves of absence and/or employees will ask questions about existing leaves of absence and how the leave is impacted if an employer ceases operations.  While FMLA is generally not available for employees to use as time off to attend to personal matters such as cleaning up debris, flood damage, home repair, etc., FMLA may come into play if an employee or their family member suffers a serious health condition as a result of the hurricane.  For those employees that were already out on FMLA, if an employer ceases operations, the time operations are stopped would not count towards FMLA leave.  As always, FMLA and other leave situations should also be reviewed on a case by case basis.   

In summary, the Departments have issued guidance specifically related to Hurricane Harvey; however, we anticipate additional guidance associated with Irma as well.  The bottom line is that employers, health plans, and applicable vendors will need to act reasonably when administering the health plans (i.e., processing claims and appeals, issuing notices such as COBRA notices, etc.) and take into consideration the locations and entities that were impacted and allow grace periods or other relief as applicable.

Important Press Releases and Relevant Guidance:
- U.S. Department of Labor Issues Compliance Guidance For Employee Benefit Plans Impacted by Hurricane Harvey
- Secretary Acosta Joins Vice President Pence in Texas
- FAQs for Participants and Beneficiaries Following Hurricane Harvey
- Hurricane Harvey & HIPAA Bulletin: Limited Waiver of HIPAA Sanctions and Penalties During a Declared Emergency


Stop Loss and My Infinite Sadness
By: Ron Peck, Esq.

I am a firm believer in self funding.  I believe that, when done well and properly, no other type of health plan can compare to a self funded plan.  I also believe that most well formed self funded plans need stop loss insurance.  That’s why it makes me so sad to see infighting between self funded plans and their stop loss carriers.  They are on the same side; they should be allies!  Yet, too often I see a plan pay claims in accordance with one set of rules, and then stop loss re-prices the plan’s submission for reimbursement using a different set of rules.  Sometimes this is based on differing verbiage in the plan document versus the stop loss policy.  Sometimes this is based on differing interpretations of the same verbiage.  Sometimes there is no real basis for the conflict at all.  Too often it feels like the carrier is trying to deliver a heavy handed form of tough love: “If you won’t take action to contain costs, I’m going to do it for you.  It hurts me worse than it hurts you; you’ll thank me later.”  Other times it feels like a short term maneuver to cut costs, even if it means losing business long term.  Indeed, when I describe some of the positions some stop loss carriers take when dealing harshly with their plan clients, the reaction is that those carriers are being foolish – and they will certainly lose their clients… and yet… they do continue to write new business and are maintaining a client base.  This tells us that, by offering a very low rate, they attract clients.  This also tells me that those clients (and their broker/advisors) aren’t investigating the carrier’s track record.  This, in turn, makes me just as sad as the fighting.  Why?  It breaks my heart that those stop loss carriers who go above and beyond to work with their plan clients, find ways to reimburse, and collaborate with us all are not receiving the due credit they deserve.  In fact, sometimes the “premium” they charge for their white glove service ends up knocking them out of the running when they are up against a bargain basement carrier.  Trust me – the savings on premium will never equal the loss you suffer the first time a carrier denies your claim for reimbursement because they “say” you overpaid.

The moral of the story is this – First, don’t pick a carrier based solely on the premium.  You get what you pay for.  Second, review the stop loss policy, network contract, administrative service agreement, employer handbook, and plan document side-by-side-by-side.  Identify areas where they require the same entity or entities to do different things; things that can’t coexist.  Third, talk through conflicts and potential conflicts BEFORE there is a claim, and agree how they will be handled if they occur.  Fourth, carriers should incentivize plans to engage in cost saving procedures before claims are incurred – not punish them for failing to do so after the fact.  Both plans and carriers need to recognize that while it may be easier to beg forgiveness rather than ask permission, it rarely works out well for anyone.

Empowering Plans Segment 17 - Cutting Out Conflict

When it comes to securing stop-loss, too many benefit plans think the ball is only in the stop loss carrier’s court.  Today, our hosts explain what plan administrators can do to cut out conflict and tie up loose ends before they suffer a costly loss.  Ensuring an ongoing and fruitful relationship between plans and stop loss tomorrow requires intensive work today.  Addressing these potential costly issues now will guarantee reimbursements are in the bag later.

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Change is Good
By: Jen McCormick, Esq.

As we are closing in on the calendar year, Plan Administrators are starting to reflect on the past year.  In relation to self-funded health and benefit plans, they consider the laws and regulations that changed (or didn’t change) over the past year and how they might impact the plan.  Also, they consider claim occurrences – good and bad – that may impact benefit changes for the following plan year.  The most important question, however, when considering renewal changes is how to offer a valuable benefit plan to employees which takes advantage of as many cost containing opportunities as possible.
 
ERISA plans do have minimum standards as far as basic information which must be included within the documentation (i.e. benefits and eligibility, claims procedures, COBRA information, fiduciary information, etc).  As Plan Administrators, however, there is great flexibility to design a benefit program that captures the compliance information but also is tailored to the specific needs of an Employer.  Remember that ERISA does not mandate a specific format for how a benefit plan must be presented.
 
In light of the requirements, and notable flexibility, consider that change is good. Many entities specialize in the creation and administration of plan design documents, and happily wish to share the value of why certain provisions should be outlined or presented in particular fashion.  As a result, may it’s time to consider reviewing the benefit structure and organization to ensure that it’s organized in a fashion that truly meets the needs of participants. Consider reviewing the text to ensure it offers the best possible cost containing opportunities for participants.  A refresh of a document can be advantageous for the plan, and so remember to keep an open mind at renewal!