Phia Group Media


Phia Group Media

Empowering Plans: P107 – Updates Employers Need to Know About the COVID-19 Vaccines

On April 30, 2021

As COVID-19 infection rates appear to be trending downwards in most areas in the U.S., employers across the country are hard at work on reopening plans in anticipation of the lifting of most occupancy limitations to slow the spread of the virus. The big question employers are asking themselves is whether to mandate COVID-19 vaccinations for employees returning to the workplace to ensure a safe work environment.

Phil and Brady take a deep dive into this issue discussing compliance considerations implicated when considering mandating vaccination as we as explore limitations, risks, and current trends being established by employers that have already reopened.

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

Face the Change – Plan Design, Administrative Claims Processing and Payment Changes Needed in Light of COVID-19 and New Regulatory Obligations

On April 27, 2021

Health benefit plans and the entities that serve them are feeling the squeeze.  Federal and State lawmakers are issuing new regulations on an almost monthly basis, including but not limited to the American Recovery Plan Act (ARPA), COBRA, Mental Health Parity, and the No Surprises Act.  Meanwhile, health care providers are making adjustments in response to the economic damage they suffered during the COVID-19 pandemic.  Join The Phia Group as they share with you the information you need to remain compliant, while also predicting what the provider industry will look like in the months and years to come.  In addition, The Phia Group will immediately host two breakout sessions following the webinar, with one session addressing ARPA, COBRA, regulatory updates and requisite plan updates in greater detail, and the other session will ensure attendees know what to do to maintain compliance with Mental Health Parity in the face of ever-changing provider practices.

Click Here to View Our Full Webinar

To obtain a copy of our webinar slides, please reach out to

To obtain a recording of our Breakout Sessions, please use the links below:

Breakout #1: New Regulations Impose Additional MHPAEA Compliance Requirements – Act Now!

Breakout #2: COBRA Changes Under ARPA – What You Need to Know

The Phia Group's 2nd Quarter 2021 Newsletter

On April 26, 2021

Phone: 781-535-5600 |


The Book of Russo:

Spring has sprung! The weather in Boston has already reached a balmy 70 degrees, (though I know it will likely be 40 degrees tomorrow). For me, nothing says springtime quite like seeing fans in the stands at Cleveland Indians’ games and at Fenway Park; a sight with more meaning this season than ever before – even if it is only at 20% stadium capacity. Meanwhile, I am sitting here in my office at The Phia Group headquarters, thinking about how there are less than 50 people in a beautiful facility that can fit 300. Will we ever return to what some of us consider a state of normalcy? Will I once again enjoy the sense of camaraderie that comes with a bustling workplace? Should we promote such a return to on-site work, or embrace a movement towards an off-site future?

When is the right time to ask these questions, and to begin developing a blueprint for whatever that future will be? Then my mind turns to the vaccine. What do I do as an employer? Promote vaccinations? Require it? How handcuffed am I by the limits set by law, can we rely on common sense, and for how long can I rely on my belief in human decency? From liability to legality to doing what is right.

These same concerns and issues are being pondered by employers across the Nation and beyond. Nobody really knows what they will or should do, but they are hoping with time it will “just come to them.” Just as employees are split between those that can’t wait to emerge from their basement offices and return to the watercooler, and those that have become comfortably accustomed to (and embrace) their remote workplace, so too do we in the health benefits industry see a spectrum of patients – from those anxiously awaiting the day they can comfortably seek in-person care, to those that will happily utilize virtual care indefinitely… I’ll admit, it’s hard to argue with no commute, no expensive clothes, and no showering!!! I am interested – professionally and personally – to see what occurs over the next few months… but for now, please enjoy this quarter’s newsletter. Happy reading!


Enhancements of the Quarter: Phia Unwrapped & No Surprises Act Consulting
Phia Fit to Print
From the Blogosphere
The Phia Group’s 2021 Charity
The Stacks
Employee of the Quarter
Phia News

Enhancement of the Quarter: Phia Unwrapped & No Surprises Act Consulting

From COVID related expenses and processing issues, to expanded timeframes for providers to submit claims, few can deny that these are trying times for health plans and those that service them. With this as a backdrop, we were called upon once again to make sudden and severe adjustments in response to the impending No Surprises Act.

The Phia Group has been Empowering Plans since 2000, and twenty-one years later we continue our quest by providing Phia Unwrapped clients with No Surprises Act consulting included at no extra cost.

You may already know of Phia Unwrapped as a leading out-of-network claims management solution. We’re enhancing Phia Unwrapped, however, to make sure our clients are able to comply with the No Surprises Act’s requirements, as well as understand how to manage the requisite Independent Dispute Resolution (or IDR) process.

IDR is still a mystery to providers and health plans alike. Congress has laid out certain factors that may or may not be taken into account by the IDR arbiter, but still confusion abounds as to what will actually happen – and perhaps more urgently – what a health plan will need to do to properly defend its proposed payment.

The self-funded industry has changed every year, and the impending effective date of the No Surprises Act is slated to bring some of the biggest changes since the ACA. This year, and beyond, make sure you’re prepared to help your clients and bolster your business by providing the services health plans need. Our offer to provide complimentary consultative services, as it relates to this new and confusing rule, is extended to all current Phia Unwrapped clients, as well as those that become clients on or before September 1, 2021.

For more information on Phia Unwrapped, please contact our Senior VP of Provider Relations, Jason Davis, at

Of course, if you’re not a Phia Unwrapped client, you can still get all the help you need by contacting – or, for clients of our Independent Consultation and Evaluation (ICE) service, via your dedicated ICE intake address.



Service Focus of the Quarter: PACE and Subrogation

In case you’re not familiar with The Phia Group’s Plan Appointed Claim Evaluator (PACE) service, it is designed to shift the fiduciary duty for second-level internal appeals to Phia, so the plan can ensure that a neutral third-party expert is the one making the most important appeal determinations.

You might think that the PACE service is completely unrelated to our subrogation and recovery services, but we don’t believe that’s the case. While the PACE service is designed to make sure the health plan and TPA have correctly adjudicated a given claim, our subrogation and recovery services focus not on the correctness of a payment, but on the correct coordination between the plan and any other applicable payors. Put simply, PACE helps the plan comply with its fiduciary duties (by removing the responsibility to adjudicate final-level appeals from the Plan Administrator to begin with), and recovery services help the plan recover money it has paid when another party is responsible. We think of these as two sides of the same coin: protection both before the appeals process is finalized (PACE), and protection after a claim is paid (recovery).

Over a year since the COVID crisis began, People are traveling again and living their lives. COVID claims are getting processed, are substantial in volume and cost, and are impacting our industry in unforeseen ways. COVID claims are routinely denied or paid incorrectly, since consultants, plans, and payors are faced with a larger-than-usual influx of claims due to the delayed claim and appeal submission timeframes allowed by the federal government. The Phia Group’s PACE service entails the utilization of attorneys, expert plan drafters, and seasoned appeals professionals to help you navigate these difficult appeals and avoid costly fiduciary liability. PACE ensures that plan determinations are defensible and accurate.

In addition, and not unexpectedly, COVID has created a new world for subrogation and coordination of benefits. When COVID claims are paid, complex state law is triggered regarding if and when COVID claims are, whether presumptively or not, an occupational expense. The Phia Group has built a custom process, backed by its in-house legal team. This process flags COVID claims, highlights the patient’s job (i.e. a first responder or front line worker), and cross references this information against up-to-date state laws. By focusing on identifying COVID health claims, and understanding applicable laws, we are able to quickly determine whether workers compensation or other responsible parties may exist for payment of said COVID claims. The Phia Group has been following this new process since June of 2020. Without an innovative subrogation solution in place, plans are needlessly losing money.

To learn more about the Plan Appointed Claim Evaluator service, subrogation/recovery, or any other services The Phia Group offers, please contact

Success Story of the Quarter: Reviewing Proposed Service Agreements

Using the COVID third-party liability identification tools (as described within the Service Focus of the Quarter section), The Phia Group identified a COVID claim for which an applicable Workers’ Compensation carrier should have paid as primary, but these particular claims were submitted only to the health plan, and not to Workers’ Compensation.

Using our considerable resources and time-tested strategies, we managed to identify a $210,000 payment made by the health plan, which we worked diligently to have the Workers’ Compensation carrier adjudicate and ultimately reimburse – resulting in a full recovery, and truly significant savings for the health plan.

Phia Case Study: Keeping PACE with Your COVID-19 Appeals

The Phia Group’s PACE team was recently presented with a final, second-level internal appeal from one of its clients. In this scenario, a plan member was required by her school to obtain a weekly negative COVID test in order to attend the school in person. A local hospital offered drive-through testing (which is exponentially less expensive than testing in a facility), but the member choose to obtain her tests in an emergency room setting, resulting in bills totaling about $11,000 per visit, for five visits.

The medical records, as expected, documented that these services were not in response to emergencies. Further, because the tests were in response to the school requiring it, rather than being in response to the member showing symptoms, they were not medically necessary. The health plan denied the initial claim and the first appeal, on that basis.

When the appeal reached the PACE team, it was analyzed from scratch, and a medical review was obtained. The PACE team reached the same conclusion as the Plan: despite the FFCRA and CARES Act, this testing was not required to be covered by the Plan, nor was the ER visit medically necessary. We appreciate that services were performed and that resources were expended by the emergency department, but that does not change the Plan’s unambiguous requirement of medical necessity as a condition of coverage.

The PACE team issued its directive accordingly, and the Plan could rest easy knowing that its previous denials were affirmed by an objective third-party, and that even if somehow overturned by a court or IRO (which we have no reason to expect), the Plan would not be liable for any penalties resulting from the overturned decision.

Fiduciary Burden of the Quarter: Knowing Whether You Are A Fiduciary

The law is fairly well-settled regarding when a TPA is a fiduciary, and when it is not. In general, fiduciary duties are ascribed to TPAs that exercise discretion or control over plan decisions, and TPAs that perform purely ministerial duties are generally not held to be fiduciaries. It’s essentially a rule akin to “if it walks like a duck…”.

Or so we thought...

A recent case out of the US District Court for the Northern District of California takes a slightly different approach than usual. In Jane Doe v. United Behavioral Health, No. 4:19-cv-07316 (N.D. Ca. March 5, 2021), the court does apply the full fiduciary status analysis that has been around for decades, but reaches a different conclusion. The issue in this case is that United Health, acting as the TPA, administered a provision of the Plan Document that is alleged to be in violation of federal law. The compliance issue is separate, but the facts of the case tend to indicate that United Health simply did exactly what the Plan Document requires, without exercising discretion.

Despite citing to controlling case law that “claims administrator does not exercise fiduciary responsibilities in the consideration of claims if it performs only administrative functions, processing claims within a framework of policies, rules, and procedures established by the employer”, this court somehow concluded that United Health is, in fact, a fiduciary, simply by virtue of being the one to make the decision. UnitedHealth argued that it didn’t actually make any decision, but instead simply communicated the decision that the Plan had required via the Plan Document – but the court wasn’t swayed, despite the virtual mountain of case law to support UnitedHealth’s argument.

Although this can be expected to reach the 9th Circuit Court of Appeals for review, something we all need to keep in mind is that the law is fluid, and different courts take different interpretations – and TPAs, brokers, and consultants can be considered fiduciaries even when they don’t expect it. Courts read precedent differently all the time; although we believe there is a good chance this will be reversed on appeal, we can’t say that for sure. As a result, we advise that whatever you do, do it well. If you act prudently and in good faith, there’s a very good chance that even if you are ultimately held to be a fiduciary, you will have satisfied your duties.


• On March 25, 2021, The Phia Group presented, “Fallout in the Spring – COVID Claim Disputes, Surprise Billing RBP Opportunities & Return to Work Vaccine Mandates,” where we discussed post-COVID era regulations applicable to benefit plans, as well as industry issues emerging from this new chapter in the pandemic saga.

• On February 25, 2021, The Phia Group presented, “A Blueprint for Success – Lessons from 2020, Expectations for 2021,” where we discussed President Biden’s first month in office, identify whom he has appointed for key roles (and examine their track records on healthcare), as well as dissect the issues that were most relevant in 2020.

• On January 20, 2021, The Phia Group presented, “The “No Surprises Act,” COVID Relief, and Plan Design Changes Impacting Your Business in 2021,” where we discussed the COVID-19 relief bill, the impact on the industry, and everything in between.

Be sure to check out all of our past webinars!

Breakout Sessions

• Following our March webinar, The Phia Group presented two breakout sessions, “Stop-loss Claims, Fiduciary Obstacles & COVID-19” and “Surprise Billing & RBP Opportunities.” If you would like a copy of the recording or slide deck, please reach out to, Matthew Painten, at

• Following our February webinar, The Phia Group presented two breakout sessions, “Plan Document Evolution” and “Conflict & Compromise.” If you would like a copy of the recording or slide deck, please reach out to, Matthew Painten, at

• Following our January webinar, The Phia Group presented two breakout sessions, “Plan Design Changes” and “Hot Topics in Claims.” If you would like a copy of the recording or slide deck, please reach out to, Matthew Painten, at


Empowering Plans

• On March 17, 2021, The Phia Group presented, “COVID-19 Vaccine Candidates – Vaccinating Vulnerable Populations,” where our hosts, Jen McCormick and Andi Goodman, discuss the future of vaccinating vulnerable populations such as pregnant women and children, and the importance of vaccinating children in achieving herd immunity.

• On March 2, 2021, The Phia Group presented, “One Step Forward; Two Steps Back - The Lockdown and its Effect on Children with Disabilities,” where our hosts, Garrick Hunt and Timothy Pope, hold a candid discussion about the harmful effects that the sweeping lockdown has had on families, and in particular on children with disabilities.

• On February 12, 2021, The Phia Group presented, “CYA: Cover Your Assets,” where our hosts, Nick Bonds and Brady Bizarro, talk through some developing trends in ERISA litigation.

• On February 4, 2021, The Phia Group presented, “Groundhog Day - A Year of COVID-19,” where our hosts, Brady Bizarro and Jen McCormick, have a conversation about the impact of COVID-19 on employers, health plans, and employees.

• On January 22, 2021, The Phia Group presented, “President Biden's First 100 Days - What to Expect,” where our hosts, Ron Peck and Brady Bizarro discuss the inauguration of President Biden and what his presidency could mean for healthcare policy.

• On January 13, 2021, The Phia Group presented, “Balance Bills, Medical Tourism, and Vaccines – Oh My!,” where our hosts, Ron Peck and Corey Crigger discuss balance billing in the COVID world, medical tourism, and vaccine passports.

Be sure to check out all of our latest podcasts!


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Phia Fit to Print:

• BenefitsPro – The No Surprises Act: Taking control of rate-setting – March 31, 2021

• BenefitsPro – The No Surprises Act: When negotiations break down – March 30, 2021

• BenefitsPro – The No Surprises Act: What is a ‘surprise’? – March 29, 2021

• Self-Insurers Publishing Corp. – Pharmacy Deserts: A vicious cycle threatens to bottleneck vaccine rollout – March 5, 2021

• BenefitsPro – Born during a pandemic: COVID's impact on pregnant employees and their employers – March 2, 2021

• Self-Insurers Publishing Corp. – Mental Health Parity Compliance In The ERA of COVID-19 – February 5, 2021

• BenefitsPro – The semi-resurrection of IRS Notice 2020-29 – January 26, 2021

• Self-Insurers Publishing Corp. – Supreme Court Upholds State Regulations of PBMS - Other Vendors Could Be Next – January 2, 2021

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From the Blogoshpere:

A COBRA Conundrum! COBRA continuation coverage has never been intuitive.

So the Outbreak Period Ended? In case you haven’t heard, the Employee Benefits Security Administration (EBSA) released Disaster Relief Notice 2021-01.

HIPAA Compliance Audits – Good News and Bad News. The government recently released findings of the extensive HIPAA compliance audit performed in 2016 and 2017.

Addition By Division. Learn all about what a "spinoff" is when it comes to health benefit plans.

Choose Your Own Adventure: President Biden’s Healthcare Agenda. There are a few different outcomes for big developments the Biden administration is planning in the healthcare sector.

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The Stacks:

Pharmacy Deserts: A Vicious Cycle Threatens To Bottleneck Vaccine Rollout

By: Nick Bonds, Esq.– March 2021– Self-Insurers Publishing Corp.

One of the brightest spots in the headlines over the past few months has been the success of several vaccine candidates to inoculate the world against the scourge of the coronavirus pandemic. These vaccines have been developed at an unprecedented pace in the face of an unprecedented public need. They are truly a marvel of modern medical technology, and likely our most direct path back to some semblance of normalcy.

Click here to read the rest of this article

Mental Health Parity Compliance In The ERA of COVID-19

By: Corrie Cripps – February 2021 – Self-Insurers Publishing Corp.

The COVID-19 (“coronavirus”) pandemic has led to a spike in mental health and substance use disorder (“MH/SUD”) challenges, especially in the employer/employee realm, which highlights the importance of MH/SUD benefits in health plans. Even before the coronavirus pandemic, many health plans struggled in the area of Mental Health Parity and Addiction Equity Act (MHPAEA) compliance, especially since case law is being developed in this area on a regular basis across the country.

Click here to read the rest of this article

Supreme Court Upholds State Regulations of PBMS - Other Vendors Could Be Next

By: Brady Bizarro, Esq. – January 2021 – Self-Insurers Publishing Corp.

The United States Supreme Court has experienced a whirlwind of a year. Early on, the threat of COVID-19 forced the Court to take the unprecedented step of hearing oral argument via telephone conference call. Other notable headlines throughout the year included the Court deciding important cases on abortion, religion, and immigration, hearing a crucial case on the Affordable Care Act, rejecting an urgent case on the 2020 presidential election, mourning the loss of an esteemed colleague, and welcoming a new justice to the bench. You would be forgiven, then, if you missed the case of Rutledge v. Pharmaceutical Care Management Association, decided on December 10, 2020. For employer-sponsored health plans and the healthcare industry as a whole, this 8-0 decision may prove to be the most important of its kind in the last several years because of what it foreshadows – more state regulation of PBMs and the possible regulation of other third-party vendors involved in ERISA plan administration.

Click here to read the rest of this article

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The Phia Group's 2021 Charity

At The Phia Group, we value our community and everyone in it. As we grow and shape our company, we hope to do the same for the people around us.

The Phia Group's 2021 charity is the Boys & Girls Club of Metro South.

The mission of The Boys & Girls Club is to nurture strong minds, healthy bodies, and community spirit through youth-driven quality programming in a safe and fun environment.

The Boys & Girls Club of Metro South (BGCMS) was founded in 1990 to create a positive place for the youth of Brockton, Massachusetts. It immediately met a need in the community; in the first year alone, 500 youths, ages 8-18, signed up as club members. In the 25 years since, the club has expanded its scope exponentially by offering a mix of Boys & Girls Clubs of America (BGCA) nationally developed programs and activities unique to this club.

Since their founding, more than 20,000 youths have been welcomed through their doors. Currently, they serve more than 1,000 boys and girls ages 5-18 annually through the academic year and summertime programming.

Youth of the Year

Each year, the Boys & Girls Clubs of Metro South holds a competition to award the most prestigious honor that a teenager can receive as a member of their local Boys & Girls Club. The Youth of the Year award is the Boys & Girls Club signature effort to foster a new generation of leaders, fully prepared to live and lead in a diverse, global and integrated world economy.

One lucky teen will be awarded a $5,000 scholarship and a new laptop, courtesy of The Phia Group. The Boys and Girls Clubs of Metro South will announce the Boys & Girls Clubs of Metro South’s 2021 Youth of the Year on April 29, 2021. Make sure you check out our next newsletter to find out who won!

Phia Group Great Futures Scholarship

The Phia Group Great Futures Scholarship was established in 2018 by Adam V. Russo, Esq, co-founder and CEO, of The Phia Group. Once a Boys & Girls Club kid himself, Adam has set his mind and heart on supporting the ambitions of the Boys & Girls Club kids and their amazing potential. Adam realizes first-hand the struggles and challenges to overcome obstacles, facing adverse circmstances and the determination for self-perseverance. The Phia Group Great Futures Scholarship recognizes one graduating senior annually for their commitment to education and dedication to a better future. With Adam's vision, the Boys & Girls Club of Metro South annually awards a $10,000 scholarship to assist one student in the pursuit of their educational dreams, development of strong work ethic, and development of self-appreciation. The Boys and Girls Clubs of Metro South will announce The Phia Group Great Futures Scholarship winner on April 29, 2021. 

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Get to Know Our Employee of the Quarter:
Andrew Mead

To be designated as an Employee of the Quarter is an achievement that is reserved for Phia employees who truly go above and beyond their day to day responsibilities. This person must not only transcend their established job expectations, but also demonstrate with fervency a dedication to The Phia Group and its employees that is so unparalleled that it cannot go without recognition.

The Phia Explore team has made the unanimous decision, without hesitation, that there is no one more deserving than our very own Andrew Mead, The Phia Group’s 2021 Q1 Employee of the Quarter!

Andrew was hired as an intern about 6 months ago, with the intent to only stay with us until June. In his short time here he has made a pretty big impact on Phia… and people were not shy about letting Explore know! We received tons of feedback & outreach regarding Andrew this quarter, and brought it all to Adam’s attention. I am happy to announce that Andrew has been offered a full time position and starting May 3rd he will no longer be an intern! Congrats Andrew- we are very excited to have you as an “official” member of the Phia Phamily!


Congratulations Andrew, and thank you for your many current and future contributions.


Job Opportunities:

• Claim Recovery Specialist

• Case Investigator

• Legal Intern – Contracts

• Customer Service Representative

See the latest job opportunities, here:


• Hannah Sedman has been promoted from Legal Services Coordinator to Contracts Administration Manager

• Mattie Tigges has been promoted from Director of Recovery Services to Senior Director of Recovery Services

• Jennifer Armstrong has been promoted from Senior Subrogation Attorney to Director of Recovery Services

• Daiana Williams has been promoted from Manager of Recovery Services to Director of Recovery Services

• Andrew Fine has been promoted from Team Lead, Intake to Data Analyst, PGC

Phia News:

COVID - Appeals, Subrogation, and Stop Loss Issues No One Saw Coming - Help is Here

COVID claims are coming - whether you pay or deny claims tied to COVID, you need The Phia Group.

Claims tied to the treatment of COVID-19 are being submitted for payment and are passing through the claims process in record numbers. Many of these claims are substantial, with these considerable costs impacting our industry in both anticipated and unforeseen ways. As with any influx of new claims, we are also seeing growth in the number of denials and appeals arising from these COVID claims, as well as subrogation issues tied to the disease.

COVID claims are routinely denied and/or paid incorrectly, due in large part to the inadequate time provided to consultants, administrators, and payers, to familiarize themselves with the ever changing rules, and thereby standardize appropriate handling of these claims in accordance with law and their plan documents. As a result, we are also seeing an increase in COVID related claim appeals, with heightened fiduciary liability issues also arising from these claim payment decisions.

The Phia Group's PACE Service has existed for years and is the only service on the market where expert plan drafters, attorneys, and seasoned appeals professionals help you navigate these and other difficult appeals, thereby avoiding mistakes and costly liability. PACE ensures claim denials are legitimate, enforceable, and defended.

As with claims processing and appeals, COVID has also created a new world for subrogation. When COVID claims are submitted, complex state law may be triggered regarding if and when COVID is "presumed" to be an occupational expense. The Phia Group was the first subrogation provider to build a custom process backed by its in-house legal team with a focus on identifying COVID related claims, determining whether the applicable geographic location and occupation are addressed by a regulation that presumes a link between the occupation and diagnosis, and quickly asserts a right to reimbursement against responsible parties if possible. The Phia Group has been applying this procedure to its existing process since June of 2020. Without an innovative subrogation solution like ours in place, plans not only lose money, but also fail in their obligation to stop-loss; a failure stop-loss carriers are increasingly unwilling to overlook.

The stop-loss world has been handed a unique and difficult scenario. As it relates to claims arising from or tied to COVID-19, carriers are suspending reimbursement and asking questions such as: what is the Plan Participant's job description; is the Plan Participant a front line worker; what date did they test positive; are they an essential worker; did they file a workers' compensation claim; and so on. The Phia Group has the expertise to assist in these difficult stop-loss collaborations.

Ensuring appeals are handled correctly, aligning plan documents with stop-loss policies, and fully understanding the bigger picture has never been more important. The Phia Group is uniquely positioned to help in this difficult time. With our unrivaled team and technology ready to help, there is no better partner to assist you now and in the days to come.

Contact Garrick Hunt at or to request more information and set a call to learn how The Phia Group can assist you with these COVID claim issues.

Scripta Going to Work for Phia

Scripta is a partner of The Phia Group that monitors plan participant spending on pharmaceutical drugs and devices. They identify unnecessary expenditures, inappropriate charges, and opportunities to replace or alter medications with equally effective - or more effective - options. Thanks to their services the Scripta program generated a 3.8x ROI for The Phia Group in 2020. Scripta expects at least a 4x ROI in 2021 as well.

Take a look at how The Phia Group is doing:


If you are interested in learning more about Scripta and how they can help your health plan, please contact our Sales Manager, Garrick Hunt, at 781-535-5644 or

The Phia Group Reaffirms Commitment to Diversity & Inclusion

At The Phia Group, our commitment to fostering, cultivating, and preserving a culture of diversity and inclusion has not wavered from the moment we opened our doors 20 years ago. We realized early on that our human capital is our most valuable asset, and fundamental to our success. The collective sum of individual differences, life experiences, knowledge, inventiveness, innovation, self-expression, unique capabilities, and talent that our employees invest in their work, represents a significant part of not only our culture, but also our company’s reputation and achievements.

We embrace and encourage our employees’ differences, including but not limited to age, color, ethnicity, family or marital status, gender identity or expression, national origin, physical and mental ability or challenges, race, religion, sexual orientation, socio-economic status, veteran status, and other characteristics that make our employees unique.

The Phia Group’s diversity initiatives are applicable to all of our practices and policies, including recruitment and selection, compensation and benefits, professional development and training, promotions, social and recreational programs, and the ongoing development of a work environment built on the premise of diversity equality.

We recognize that the success of our company is a direct reflection of each team member’s drive, creativity, diversity, and willingness to exercise initiative. With this in mind, we always seek to attract and develop candidates who share our passion for the healthcare industry and our commitment to diversity and inclusion.

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Revisiting PPO Contracts & Stop-Loss Gaps

On April 26, 2021

By: Jon Jablon, Esq.

There’s no question that stop-loss insurance is important – or, more likely, absolutely necessary – for the viability of a self-funded health plan. As helpful as this measure of protection can be, however, it is not without certain risks. One such risk comes in the form of the potential for denials; it is insurance, after all. There are many potential “gaps” in coverage (where a health plan is required to pay a certain amount but the stop-loss carrier is not required to reimburse that entire amount), and one of the most prevalent tends to be those involving allowable amount calculations.

There are many ways that an SPD and stop-loss policy might define their respective payable amounts, and unfortunately the most prevalent gap comes in the form of the standard definitions: the SPD provides for payment at a negotiated rate, commonly a rate agreed-to within a PPO contract, and the stop-loss policy excludes anything in excess of “the general level of charges” or “the prevailing charge” in the area.

To use the example of a $100,000 procedure, let’s assume the health plan is required to pay billed charges less a 20% discount, netting an allowable of $80,000. Meanwhile, when the claim is submitted to the stop-loss carrier, the carrier may reach a far lower allowable. Assuming the stop-loss policy does not promise to reimburse negotiated rates, which the vast majority do not, the carrier is not in any way bound to abide by the plan’s pricing, despite the plan’s contractual requirement pay the $80,000.

Many (or even most) stop-loss policies may be interpreted to allow the carrier to determine its allowable amount using certain tactics, such as (1) using a larger “area” than just the intuitive metro area of the hospital, considering charges of lower-priced rural hospitals outside of the metro area; (2) defining “charges” to be the amount actually accepted by providers, as opposed to the amount charged in the first instance; and (3) factoring in public payors as well, which skews the payor mix, rendering the “prevailing charge” far lower than amounts paid by just the private payor market.

When this happens – the Plan pays its network rate but the Carrier allows substantially less than that amount – this is not necessarily the carrier doing anything shady or dishonest or “wrong”, but instead this is a gap in coverage like any other. Although candidly most carriers will not be open to changing their basic U&C calculation and instead allowing whatever negotiated rate the Plan has paid, some carriers will work with their insured plans on a claim-by-claim basis to try to avoid or mitigate this dilemma.

For some of you, this is old news. The reason it’s worth bringing up again is because the memory of this important scenario tends to be somewhat cyclical: after stop-loss renewals are over for the year, people tend to forget about this potential gap, and an employer gets blindsided when it experiences a stop-loss denial on this basis later in the year. When reviewing a policy document for signature or even when a large in-network claim is incurred, we urge you to keep this potential gap in mind, so you can have a proactive conversation with the carrier. The Phia Group can offer to perform a “Gap-Free Analysis” to compare a plan document with a proposed policy document, and alert you to this type of issue – and many more!

The moral of the story? Check your policy – preferably, before it’s signed – so you know what to expect, and so you can talk to the carrier about this potential “gap” in coverage before you experience it first-hand.

The Stacks – 2nd Quarter 2021

On April 20, 2021

Supreme Court Upholds State Regulation of PBMs – Other Vendors Could Be Next

By: Brady Bizarro, Esq.

The United States Supreme Court has experienced a whirlwind of a year. Early on, the threat of COVID-19 forced the Court to take the unprecedented step of hearing oral argument via telephone conference call. Other notable headlines throughout the year included the Court deciding important cases on abortion, religion, and immigration, hearing a crucial case on the Affordable Care Act, rejecting an urgent case on the 2020 presidential election, mourning the loss of an esteemed colleague, and welcoming a new justice to the bench. You would be forgiven, then, if you missed the case of Rutledge v. Pharmaceutical Care Management Association, decided on December 10, 2020. For employer-sponsored health plans and the healthcare industry as a whole, this 8-0 decision may prove to be the most important of its kind in the last several years because of what it foreshadows – more state regulation of PBMs and the possible regulation of other third-party vendors involved in ERISA plan administration.

At its core, Rutledge involved an attempt by a state to regulate its own healthcare market in the face of federal preemption under the Employee Retirement Income Security Act of 1974 (“ERISA”). To properly understand the context of the state law at issue, a brief overview of drug pricing and the process by which many Americans get their prescription drugs is required. Most Americans are covered by private health insurance (specifically, employer-sponsored health plans) and they purchase prescription drugs from retail pharmacies. Hardly any health plans contract directly with pharmacies. Instead, they contract with pharmacy benefit managers (“PBMs”). PBMs are an integral part of this process, serving as intermediaries between health plans and the pharmacies that plan members use.

When a plan member fills a prescription at a pharmacy, the pharmacy checks with the contracted PBM to confirm insurance coverage and determine any cost sharing requirements. After the plan member’s transaction is complete, the PBM reimburses the pharmacy for the prescription (less any cost sharing). Finally, the health plan reimburses the PBM. The amount at which a PBM reimburses a pharmacy for a drug is set by a contract between the PBM and the pharmacy. In that contract, rates are set according to a list specifying the maximum allowable cost (“MAC”). Similarly, the amount at which a health plan reimburses a PBM is set by contract. These contractual arrangements are often crucial to the success of each entity because each relies on access and steerage to some degree.

Consider the following scenario: a pharmacy pays a drug manufacturer $250 to obtain a drug. The PBM has set a MAC of $200 for the drug. If a plan member pays a $15 copay for the drug, the PBM would reimburse the pharmacy $185. Under its contract with the PBM, the health plan reimburses the PBM $300, which includes a spread price or fee for the drug (in some cases a manufacturer rebate is involved). In this example, the pharmacy lost money because the MAC was less than the price the pharmacy paid the manufacturer to obtain the drug in the first place. How or why this occurs is disputed by pharmacies and PBMs alike; however, this situation has caused many independent and rural pharmacies to lose money and close over the past few decades.

In 2015, the Arkansas state legislature took action to protect its independent pharmacies (which are common in rural Arkansas) from this fate. It passed Act 900, which regulates the price at which PBMs reimburse pharmacies for the cost of drugs covered by health plans. Specifically, the bill requires that PBMs reimburse pharmacies at or above their acquisition costs, and it included three key enforcement mechanisms. First, the law requires PBMs to tether reimbursement rates to pharmacies’ acquisition costs by timely updating their MAC lists when drug wholesale prices increase. Second, PBMs must provide administrative appeal procedures for pharmacies to challenge MAC reimbursement prices that are below the pharmacies’ acquisition costs. Finally, the law permits a pharmacy to decline to sell a drug to a beneficiary if the PBM at issue will reimburse the pharmacy at less than its acquisition cost. Ark. Code Ann. § 17-92-507(c)-(e).

Soon after the law passed, the Pharmaceutical Care Management Association (“PCMA”), representing the eleven largest PBMs in the country, filed suit against the state, alleging that Act 900 was pre-empted by ERISA. Under 29 U.S.C. § 1144(a), ERISA pre-empts “any and all [s]tate laws insofar as they may now or hereafter relate to any employee benefit plan.” Courts have broadened the scope of pre-emption over time to include state laws that have a “connection with” or “reference to” an ERISA plan; though the Supreme Court’s jurisprudence in this area has arguably been conflicting. The lower courts, including the Eighth Circuit Court of Appeals, sided with the PCMA, ruling that the Arkansas law had an impermissible “connection with” ERISA plans by interfering with central plan functions and nationally uniform plan administration, as well as an impermissible “reference to” ERISA plans by regulating PBMs that administered benefits for those plans. Arkansas appealed this decision to the U.S. Supreme Court.

To resolve this case, the Court considered whether the Arkansas law had an impermissible “connection with” or “reference to” an ERISA plan. In its brief to the Court, PCMA argued that Act 900 impermissibly affected plan design by mandating a particular pricing methodology for pharmacy benefits. Then, it argued that the law’s appeal procedure interfered with central matters of plan administration. Further, PCMA asserted that the enforcement mechanisms interfered with nationally uniform plan administration by creating “operational inefficiencies.” Finally, PCMA contended that by allowing pharmacies to decline to dispense prescriptions in certain cases, the law effectively denied plan members their benefits.

Writing for a unanimous Court (Justice Amy Cony Barret took no part in the consideration or decision of the case), Justice Sonia Sotomayor first outlined the Court’s ERISA pre-emption scheme. Then, she dealt with the two issue in turn. First, she noted that “not every state law that affects an ERISA plan or causes some disuniformity in plan administration has an impermissible connection with an ERISA plan . . . especially so if a law merely affects costs.” Rutledge, 2020 U.S. LEXIS 5988, at 10. For support, she cited to New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995). In that case, New York state imposed a surcharge of up to 13% on hospital billing rates for patients covered by insurers other than Blue Cross and Blue Shield (“BCBS”). The Court presumed that the surcharges would be passed on to ERISA plan members, which in turn would incentivize ERISA plans to steer their plan members to BCBS networks. Still, the Court found that the “indirect economic influence” did not create an impermissible connection between the state law and ERISA plans because it did not “bind plan administrators to any particular choice.” Travelers, at 659.

Justice Sotomayor reasoned that the Arkansas law in this case was merely a form of cost regulation, much like the New York law which had been upheld by the Supreme Court in Travelers. She rejected all of PCMA’s arguments, finding that Act 900, as a form of cost regulation, and despite its enforcement mechanisms, did not require plan administrators to structure their benefit plans in any particular manner and did not lead to anything more than potential operational inefficiencies, which by themselves are insufficient to trigger ERISA pre-emption.

Having dealt with the first issue, Justice Sotomayor then easily dispatched the second issue; whether Act 900 impermissibly referenced an ERISA plan. She argued that the law does not act immediately and exclusively upon ERISA plans because it applies to PBMs whether or not they manage an ERISA plan. It affects ERISA plans only insofar as PBMs pay pass along higher pharmacy rates to plans with which they contract. Rutledge, at 12.

After the Court’s decision, the PCMA released a statement expressing disappointment and noting, “As states across the country consider this outcome, we would encourage they proceed with caution and avoid any regulations around prescription drug benefits that will result in higher healthcare costs for consumers and employers.” It is possible, as the Court noted, that one consequence of this decision will be higher drug prices for employer-sponsored health plans and their plan members as PBMs look to recoup losses in revenue. It is far more likely, however, that more states will pass laws modeled on Arkansas’s Act 900, without fear of them being pre-empted by ERISA (though additional litigation is likely to ensue).

Having announced a distinction between cost regulations and dictating plan choices, the Court has also opened up the possibility that states may try to regulate other third-party vendors involved in ERISA plan administration; from third party administrators to provider networks to audit firms. As we in the self-funded space have been saying for years, on issues where the federal government and the relevant industry players have failed to provide relief; prescription drug pricing, balance billing, and price transparency (just to name a few), states will step in to fill the void. Now, with a unanimous Supreme Court restricting the scope of ERISA pre-emption, those state have new latitude to enact laws which may ultimately prove unpopular or even counterproductive for all involved in the fight to contain healthcare costs.

Mental Health Parity Compliance in the Era of COVID-19
By: Corrie Cripps

The COVID-19 (“coronavirus”) pandemic has led to a spike in mental health and substance use disorder (“MH/SUD”) challenges, especially in the employer/employee realm, which highlights the importance of MH/SUD benefits in health plans. Even before the coronavirus pandemic, many health plans struggled in the area of Mental Health Parity and Addiction Equity Act (MHPAEA) compliance, especially since case law is being developed in this area on a regular basis across the country.


The MHPAEA, as amended by the Affordable Care Act (ACA), generally requires that group health plans ensure that the financial requirements and treatment limitations on MH/SUD benefits they provide are no more restrictive than those on medical or surgical benefits. These are also referred to as quantitative and non-quantitative treatment limitations (“QTL” and “NQTL” respectively).

MHPAEA generally applies to group health plans that provide coverage for MH/SUD benefits in addition to medical/surgical benefits. Some self-insured plans are exempt from MHPAEA, such as those with 50 or fewer employees.[1] MHPAEA does not require that self-insured group health plans cover MH/SUD benefits; it only requires that if a plan does cover MH/SUD benefits that the benefits are in parity with the medical/surgical benefits.

The U.S. Department of Labor (DOL), specifically the Employee Benefits Security Administration (EBSA), has primary enforcement authority with regard to MHPAEA over private sector employment-based group health plans.

Expansion of the Regulations

The Consolidated Appropriations Act, 2021, (“the Act”) further enhances federal mental health parity protections, with an emphasis on compliance regarding NQTLs on MH/SUD benefits.[2]  On and after February 10, 2021, health plans that impose an NQTL on MH/SUD benefits must perform and document a comparative analysis of the NQTL’s design and application. The comparative analysis and other plan information (such as applicable plan provisions and evidentiary standards relied upon to design and apply the NQTL) must be made available to the applicable state or federal agency upon request.

At the time of this publication, we are currently waiting for additional guidance from the federal agencies on this comparative analysis documentation requirement. In the meantime, plan sponsors should continue their MHPAEA compliance efforts.


NQTLs are generally limits on the scope or duration of benefits for treatment that are not expressed numerically, such as medical management techniques, provider network admission criteria, or fail-first policies. In terms of MHPAEA compliance, plans should ensure that any NQTLs applicable to MH/SUD benefits are comparable to the limitations that apply to the medical/surgical benefits in the same classification.

NQTLs are commonly the area where health plans fall short of MHPAEA compliance. In its “Warning Signs” document, the DOL provides examples that serve as a “red flag” that a plan may be imposing an impermissible NQTL.[3] The examples include preauthorization and pre-service notification requirements; fail-first protocols; probability of improvement; written treatment plan required; patient non-compliance; residential treatment limits; geographical limitations; and licensure requirements. This is a good resource for plans to use when reviewing their plan documents for MHPAEA compliance.

Another helpful DOL resource is its self-compliance tool for evaluating compliance with the MHPAEA, which was just updated in October 2020.[4] The tool includes best practices, warning signs/red flags, guidance for developing internal plan compliance procedures, and a table for evaluating provider reimbursement rates in the MHPAEA context. However, plans should note that the self-compliance tool is not intended to be a substitute for full MHPAEA compliance testing.

In terms of a Plan’s Plan Document/Summary Plan Description, you will often find NQTL language in the utilization management/pre-certification/preauthorization section as well as in the sections that describe the medical benefits and medical exclusions. Some plans make the mistake, when reviewing their documents for MHPAEA compliance, to only update the medical benefit grids, unaware that other sections of the document have an impermissible NQTL on a MH/SUD benefit.

MH/SUD and the Coronavirus Pandemic

There have been several recent studies on the MH/SUD crisis that is linked to the coronavirus pandemic. A U.S. Centers for Disease Control and Prevention study, published in August 2020, found that almost 41% of respondents are struggling with mental health issues stemming from the pandemic.[5] Similarly, the Kaiser Family Foundation (KFF) published its findings from its July 2020 poll, which concluded that “[t]he pandemic is likely to have both long- and short-term implications for mental health and substance use, particularly for groups likely at risk of new or exacerbated mental health struggles.”[6]

A recent article on CNN highlights that many people who had MH/SUD issues before the pandemic are experiencing their levels of uncertainty and fear double.[7] The challenges that stem from the pandemic affect eating disorders, can cause drug relapses, as well as lead to increased levels of depression. And those who may not have experienced MH/SUD issues before the pandemic may now have issues with their stress levels, depression, and sleep disturbances.

As noted above, the MHPAEA does not require that self-insured group health plans cover MH/SUD benefits. Some self-insured group health plans choose not to cover any MH/SUD benefits; however, this is not a common plan design. What these recent studies and polls indicate is that now, more than ever, health plans should consider not only the physical aspects of the pandemic but also the mental health and substance abuse struggles many plan participants are facing. If your current plan design excludes all MH/SUD benefits, maybe now is the time to reevaluate this decision. Alternatively, if your current plan design does cover MH/SUD benefits, it is recommended that you perform of audit of the plan to ensure parity between the medical/surgical and MH/SUD benefits, which also includes any medical necessity standards.

Compliance Actions

The DOL and the Centers for Medicare & Medicaid Services (CMS) issues an annual “MHPAEA Enforcement Fact Sheet”. The fiscal year 2019 Fact Sheet was issued on March 16, 2020.[8] In fiscal year 2019, the EBSA conducted 183 MHPAEA-related investigations. Of these, 68 investigations involved fully-insured plans, 91 investigations involved self-insured plans, and 24 investigations involved plans of both types (the plan or service provider offered both fully-insured and self-insured options). EBSA cited 12 MHPAEA violations in 9 of these investigations.

This Fact Sheet gives a glimpse into the kinds of compliance issues that the DOL is seeing in health plans. The main issues for MHPAEA compliance still appear to be dollar limitations/visit limits and NQTLs on MH/SUD benefits that are not similarly applied to the medical/surgical benefits. Employers can use this information to ensure they do not have these same issues in their plans.


The DOL’s published enforcement reports suggest that the DOL is continuing to investigate compliance with MHPAEA. To ensure compliance, self-insured health plans should consider conducting periodic claims audits and reviews, and can use the DOL’s self-compliance tools to assist with this. This is especially important since the Consolidated Appropriations Act, 2021, added a new requirement for comparative analysis of the NQTL’s design and application (if the health plan has an NQTL on MH/SUD benefits). Due to the coronavirus pandemic, MH/SUD issues will be in the limelight in 2021, which may mean even more health plan investigations by EBSA. Plan sponsors should review cost-containment techniques with counsel to ensure they are designed to mitigate risk in this area while ensuring compliance.

[1] Mental Health and Substance Use Disorder Parity,, (last visited January 5, 2021).

[2]    H.R.133 - Consolidated Appropriations Act, 2021, December 27, 2020,, (last visited January 5, 2021).

[3] Warning Signs – Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance,  (last visited January 5, 2021).

[4]    Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA), October 23, 2020,, (last visited January 5, 2021).

[5]    Mental Health, Substance Use, and Suicidal Ideation During the COVID-19 Pandemic — United States, June 24–30, 2020, August 14, 2020,, (last visited January 5, 2021).

[6]    The Implications of COVID-19 for Mental Health and Substance Use, August 1, 2021,, (last visited January 5, 2021).

[7]    Mental Health is One of the Biggest Pandemic Issues We’ll Face in 2021, CNN Health, January 4, 2021,, (last visited January 5, 2021).

[8]    FY2019 MHPAEA Enforcement Fact Sheet, March 16, 2020,, (last visited January 5, 2021).

Pharmacy Deserts: A Vicious Cycle Threatens to Bottleneck Vaccine Rollout

By: Nick Bonds, Esq.

One of the brightest spots in the headlines over the past few months has been the success of several vaccine candidates to inoculate the world against the scourge of the coronavirus pandemic. These vaccines have been developed at an unprecedented pace in the face of an unprecedented public need. They are truly a marvel of modern medical technology, and likely our most direct path back to some semblance of normalcy.

Even so, the promised miracle of these vaccines cannot be fulfilled until the doses find their way into the arms of the public. As dramatic efforts are being undertaken to ensure adequate supplies of vaccines, the rollout of a mass vaccination campaign is impeded by logistics. Individuals otherwise eligible to receive the vaccine struggle to schedule appointments, are discouraged by long lines at administration sites, or they struggle to make their way to one such site to begin with. These are all problems at least partially amplified by a dilemma that has been quietly festering within the healthcare industry for years: the pharmacy desert.

The “pharmacy desert” is a companion of the “food desert” – a concept utilized by the U.S. Department of Agriculture to denote a geographic area with insufficient access to fresh, healthful food. Residents living in these food deserts experience a number of negative impacts from this phenomenon, including significantly higher food expenses, and substantially inadequate nutrition, as well as a myriad of related detrimental health and developmental complications. These food deserts disproportionately impact low-income and minority communities, in both urban and rural settings.

In 2014 article, Dr. Dima M. Qato and her co-authors expanded on this concept, coining the term “pharmacy desert” to describe a parallel anomaly in the health care space.[1] Through their research, they identified a trend in areas around Chicago where whole communities were losing access to pharmacies. Residents of these pharmacy deserts found themselves with little or no avenue to obtain not just prescription drugs, but also the other myriad services for which had come to depend upon their local pharmacy: over-the-counter products, diagnostic services, even a level of preventive and urgent care services. For some in these low-access areas, even a pharmacy more than two miles away could be completely inaccessible in an urban setting where individuals lack readily available personal vehicles or efficient public transportation. For rural pharmacy deserts the distances may be even greater, with the nearest pharmacy upwards of ten miles away. Simply being unable to physically reach a pharmacy could make it impossible to complete a course of pharmaceutical treatment.  

While the 2014 article focused on Chicago, the trend they detailed were troubling. About 32% of the census tracts they observed were located within a pharmacy desert, translating to roughly a million Chicagoans with little to no ability to easily fill their prescriptions at a pharmacy.[2] Development of these pharmacy desserts is driven by a number of factors. Lower income and minority neighborhoods tended to have lower rates of insurance coverage and pharmacy providers in those areas experienced lower rates of reimbursement for prescription drug claims. Smaller pharmacy operating on relatively thin margins struggle to stay afloat, with many selling out to larger chains or closing entirely. Areas with higher reliance on Medicare and Medicaid also tended to have lower rates of reimbursement for prescription drugs, and saw their local pharmacies going dark.

While the hardships faced by smaller pharmacies led to increased consolidation by the massive chain stores like CVS, Duane Reade, and Walgreens, these pharmaceutical behemoths were not immune to the negative economic forces. These chains have resorted to closing substantial numbers of their locations in areas where they are less profitable, thus expanding the radius of the pharmacy deserts.

On top of relatively mundane market forces, the companies administering state Medicaid plans have made changes that effectively cut off access for individuals relying on Medicaid for prescription drug coverage. As detailed by the Chicago Tribune, near the end of last year, Aetna drooped Walgreens from its pharmacy network, meaning about 400,000 Medicaid members could no longer fill their prescriptions at a Walgreens location. These new holes in prescription drug available effectively riddled Illinois with a new swath of pharmacy desserts just as the economic impacts of the coronavirus pandemic drove more and more pharmacies to shutter their doors, spurring the cycle of contributing factors faster still.

For self-funded plans, these developments are especially troubling. Prescription drug spending is a huge expense for many plans, particularly those with older employee populations – the same populations that are at elevated risk of infection by the coronavirus. The expansion of pharmacy desserts serves to drive up prescription drug prices. Additionally, many plans are already struggling to contend with the cost of coronavirus testing, a service frequently performed at local pharmacies. For populations in a pharmacy desert, the associated cost of this testing – which self-funded plans are mandated to cover – will also continue to be pushed ever higher.

Perhaps most importantly, the efforts to vaccinate the public are also being exacerbated by pharmacy deserts, blunting the impact of one of our key weapons to address this public health struggle. Pharmacies like CVS and Walgreens are two of the biggest vectors through with many are likely to seek their coronavirus vaccine. For individuals living in a pharmacy desert, this avenue may be prohibitively difficult, thus delaying distribution of the vaccine to some of our most vulnerable populations. The virus has already hit lower income communities the hardest, and areas caught in a pharmacy desert will struggle to share equitably in the most effective solution.

Urban communities tend to be hot spots of viral transmission. Where these hot spots overlap with a pharmacy desert, not only are efforts at testing and treating that community greatly hindered, on top of the effort to vaccinate that community being hamstrung as well. In other words, a pharmacy desert becomes a vaccine desert, and these communities are hit doubly as hard. This perpetuates a vicious cycle of ever-burgeoning risk alongside the intractability of the underlying problem: the economic havoc wrought by the pandemic squeezes out small, local pharmacies. The reduced pharmacy access expands the radius of pharmacy deserts. And the diminishing access to pharmacies and all the services they offer (e.g., vaccinations) intensifies the health and financial impacts of the pandemic, ad infinitum. 

This quandary will inevitably begin having an impact on self-funded plans covering individuals in these urban pharmacy deserts similar to the struggles faced by plans whose participants are in more remote rural areas. As participants find themselves with ever more limited access to pharmacies, the plan’s spending on prescription drugs will begin creeping higher. Furthermore, as the pandemic rolls on and plans find themselves covering more and more coronavirus testing, treatment, and vaccinations, the ultimate costs of those services will be driven higher as well.

Where an individual lives should not determine their access to prescription drugs, let alone the coronavirus vaccine. Ultimately, the only solution is to break this particular wheel. In the near term, that means overcoming the coronavirus, which necessarily requires a significant push in testing, tracing and vaccinating – all of which appear to be priorities of the Biden administrations pandemic response. Beyond that, addressing the expansion of pharmacy deserts will require a broad policy push, including: funding to expand pharmacy access in underserved communities; expansion of telemedicine and direct shipment of prescription drugs; adjustment to Medicaid and Medicare requirements on when and where prescriptions can be filled; and continued efforts to rein in the total cost of prescription drugs.

Empowering Plans: P106 – A No-Surprises Party – The No Surprises Act Dissected

On April 16, 2021

In this episode we welcome back to the mic EVP and General Counsel, Ron Peck, as well as SVP of Consulting, Jen McCormick.  These industry legends discuss the No Surprises Act, its likely impact on both the payer and provider industries, and provide listeners with guidance on what they need to do now, to ensure compliance when it goes live.

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Doe v. United Behavioral Health – A Fiduciary Twist

On April 9, 2021

By: Andrew Silverio, Esq.

On March 5, 2021, the northern district of California came down with a decision that is causing some justifiable concern among TPAs in California and beyond.  The root of the dispute is a self-funded plan’s application of its exclusion for Applied Behavioral Analysis (“ABA”) therapy for treatment of autism, but notably, the lawsuit is brought not against the employer or plan, but against United Behavioral Health and United Healthcare Services, the plan’s claims administrator (collectively “United.”)

The interesting conversation here revolves around the question of whether United, by applying the plain language of the plan in enforcing its ABA exclusion, was performing a fiduciary act. The Court cited the appropriate case law, most notably Aetna Health Inc.  v. Davila, 542 U.S. 200, 218-19 (2004), which held that “‘A benefit determination under ERISA . . . is generally a fiduciary act’ and is ‘part and parcel of the ordinary fiduciary responsibilities connected to the administration of a plan.’”  In its analysis, however, the court essentially disregards the myriad of case law outlining that a claims administrator is not exercising discretion and therefore not engaging in a fiduciary act when it acts in a purely ministerial nature.  Discussion often revolves around whether ambiguous or vague plan terms are being interpreted, drawing the distinction between that distinction and the situation here – when the claims administrator is simply applying the clear written terms of the plan as established by the employer.  In essence, the court interpreted a “benefit determination … is generally a fiduciary act” as meaning that a benefit determination is a fiduciary act… period, foreclosing the possibility of all the exceptions that “generally” necessarily invites.  It found that by applying this clear ABA exclusion, United exercised discretion and rendered itself a fiduciary.  The reason for alarm here is clear – under this standard, essentially any claim determination, no matter how routine or how clearly the plan terms dictate the outcome, could subject a TPA to fiduciary liability.

The silver lining, at least at this point, could be that rather than willingly creating new law, the court seems to have simply applied existing law incorrectly.  It would come as a surprise to us if this decision was upheld at the circuit level – but if that happens, TPAs will want to take steps to ensure they are protected from the additional potential liability.

Empowering Plans: P105 – The Mystery Surrounding COVID-19 Long Haulers: Employment & Benefit Considerations

On April 6, 2021

Legal Compliance & Regulatory Affairs Consultant, Phil Qualo, and Vice President of Consulting, Kelly Dempsey Esq., explore the phenomena surrounding COVID-19 long haulers. Although the term “long haulers” trigger thoughts of cross country truck driving, it has actually been used as a common reference to people who have been infected with the COVID-19 virus and have not fully recovered for weeks, months, and even up to a year after first experiencing symptoms. This episode provides personal insight into the challenges that these long haulers are facing that impact both employer and benefit considerations, including access to disability benefits and health care.

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

Here for the Long Haul – Are Employers and Plans Ready?

On April 6, 2021

By: Kelly Dempsey, Esq.

Change that creates challenge is nothing new for the self-funded industry, which is why the amount of changes that have been required to address COVID-19 are not a shock to our industry. But now that we’re over a year into a global pandemic, the long-term consequences are only beginning to come to the surface. To date the focus has been on prevention and vaccines, but do you know what a long hauler is? No, not a truck driver, a COVID long hauler: individuals who are not recovered from COVID-19 weeks and even months after the initial onset of symptoms (which may include a positive diagnosis). This concept of long haulers includes those that have experienced subsequent diagnoses that are potentially linked to COVID-19. I have a friend who is a long hauler and her story has captivated me as I’ve watched and listened to her discuss her struggles, including the fact that she hasn’t been able to smell or taste since October 2020. It took her months of being her own advocate to find a doctor that didn’t dismiss her persisting symptoms of extreme fatigue, migraines, and heart rate that spikes from 65 to 150 just by standing up. Can you imagine living your life with these symptoms for over 6 months?!? How would this impact your ability to work? Do you know if you’d still have access to health benefits or short term disability benefits? Check out an upcoming new podcast titled "The Mystery Surrounding COVID-19 Long Haulers: Employment & Benefit Considerations" where I’m joined by Phil Qualo to discuss COVID long haulers and some emerging considerations for self-funded plans and employers which are likely to be felt more deeply in our industry in the coming months.

Fallout in the Spring – COVID Claim Disputes, Surprise Billing RBP Opportunities & Return to Work Vaccine Mandates

On March 24, 2021

The costs and conflicts ushered in by the COVID-19 fallout are becoming more apparent. Industry members are debating numerous issues, such as when a plan should pay and whether workers’ compensation should be a primary payer. Both opportunities and challenges appear, especially for fiduciaries, from post-pandemic legislation, such as the No Surprises Act, to state and federal COVID-19 rules – impacting Reference Based Pricing and claims processing in general.  Join The Phia Group as we discuss post-COVID era regulations applicable to benefit plans, as well as industry issues emerging from this new chapter in the pandemic saga.

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Breakout #1: Stop-loss Claims, Fiduciary Obstacles & COVID-19

Breakout #2: Surprise Billing & RBP Opportunities