By: David Ostrowsky
For a quarter century, Mifepristone, the medication used to block a hormone necessary for pregnancy development, has been widely used throughout America. If anything, over the past few years, since the Supreme Court overturned Roe vs. Wade and permitted individual states to outlaw abortions, the pill, used in conjunction with Misoprostol, has become even more popular among women seeking to terminate their pregnancies. And yet, despite its far-reaching popularity and well-documented efficacy, the Food and Drug Administration (FDA) has maintained stringent restrictions on Mifepristone.
Restrictions that, in the eyes of attorneys general from California, New Jersey, New York, and Massachusetts, have become excessively stringent.
Earlier this month, the quartet of liberal, pro-abortion states filed a citizen petition to lift such restrictions and mandate that the FDA acknowledge the copious amount of scientific research that has invariably found Mifepristone to be safe and effective. Per the filing, the FDA would also not be allowed to alter Mifepristone regulations while the petition is pending.
“The FDA must follow the science and lift these unnecessary barriers that put patients at risk and push providers out of care,” Letitia James, the attorney general of New York, remarked after the petition was filed.
Perhaps the most prominent barrier is the regulatory framework called Risk Evaluation and Mitigation Strategy, or REMS, which the FDA imposed on Mifepristone. REMS is essentially a drug safety program that the FDA uses on medications for which it has considerable safety concerns. Within the context of Mifepristone, REMS requires prescribers to have the necessary qualifications to evaluate whether patients are proper candidates for the drug and ensure that the abortion pill is only dispensed by certified pharmacies or under the auspices of certified prescribers. Also, another requirement under REMS is that patients must sign an agreement acknowledging that they are taking Mifepristone because they decided to terminate their pregnancy.
In the citizen petition, the aforementioned states have advocated for a complete evisceration of the REMS framework, positing that “given mifepristone’s well-established, 25-year safety record, FDA’s current restrictions on mifepristone are no longer justified by science or law.” Furthermore, the states’ filing cites new studies in stating that “mifepristone’s safety has remained stable even as its restrictions have been lessened” and that continuing the restrictions “cannot be squared with the FDA’s lack of REMS programs on drugs that have significantly more risks than mifepristone.” In short, the four states filing the petition believe that these restrictions amount to unnecessary red tape and have discouraged some providers from offering the medication. It should be noted that in addition to the attorneys general of New York, New Jersey, Massachusetts, and California, prominent medical organizations have called for the removal of these restrictions.
The FDA has to respond to the petition within 180 days by granting or denying the request, or saying it needs an extension. In its responses, the agency must document its position, which could be used in lawsuits, including one that the four states could file should their petition be denied.
Surely, Americans’ unfettered access to Mifepristone, a drug that was approved for abortion in America in 2000, remains a contentious issue nationwide. Three Republican-led states (Idaho, Missouri, Kansas) have filed a lawsuit against the FDA challenging the agency’s prior approval of Mifepristone. While the Supreme Court dismissed the case last year, arguing that private parties did not have legal grounding to oppose access to the drug, a Texas federal judge ruled in January that Idaho, Missouri, and Kansas could resume their lawsuit. Meanwhile, the medication continues to be shipped across state lines into states that outlaw abortion, making it more complicated for said states to regulate the practice.
For sponsors of self-insured plans, it bears monitoring how such legal proceedings play out in the ensuing months. Many of their respective participants inclined to terminate their pregnancies may have limited resources and the inability to easily access Mifepristone could have a profound impact on their decisions. And from a legal perspective, there is a very important consideration: as self-insured plans governed by the Employee Retirement Income Security Act (ERISA) are generally exempt from a given state’s insurance laws due to ERISA preemption, plan sponsors—even those with plan participants residing in states with restrictive abortion laws—can typically elect whether or not to cover abortion medication, such as Mifepristone. Alternatively, non-ERISA plans, such as self-insured non-federal governmental plans or church plans, would not have the same flexibility in coverage and must comply with state insurance mandates to the extent they apply to self-insured plans.
By: Bryan M. Dunton, Esq.
In the recently decided case of BlueCross BlueShield of Tennessee v. Nicolopoulos, the Sixth Circuit delivered a clear message to insurers and third-party administrators (TPAs) who also act as ERISA fiduciaries: ERISA’s broad preemption clause does not always provide immunity from state-level regulation. This case underscores the enduring significance of ERISA’s “savings clause,” especially when state regulators act against insurers in their more traditional role.
BlueCross served as both the insurer and ERISA claims administrator for a Tennessee-based employer’s group health plan. The plan excluded coverage for fertility treatments. While Tennessee does not mandate such coverage, New Hampshire law does when it is deemed medically necessary. Here, a New Hampshire-based employee enrolled in the plan that submitted a claim for fertility benefits, which was denied pursuant to the plan’s existing exclusions.
At that point, the plan participant filed a complaint with the New Hampshire Insurance Commissioner. The Commissioner issued a show-cause order, demanding BlueCross explain the denial and threatened regulatory penalties, including a cease-and-desist order and $2,500 per day in fines, which totaled $52,000 over a 21-day period. BlueCross responded by filing a motion in federal court, arguing that the state’s enforcement action interfered with its fiduciary duties under ERISA. Both the district court and the Sixth Circuit disagreed. The Sixth Circuit held that the Commissioner’s action targeted BlueCross in its capacity as an insurer – not that of a fiduciary – falling squarely within the scope of state insurance regulation, which is preserved by ERISA’s “savings clause.”
For third-party administrators and insurers managing self-funded ERISA plans, this case reinforces a key point: if licensed to sell insurance or operate in multiple states, you can be subject to the insurance laws of each state that you conduct business in – even if you’re administering an ERISA plan. The distinction between fiduciary and insurer is not always clear-cut in practice, however. Many TPAs often assert that decisions about benefit denials, network design, and utilization management are made in a fiduciary capacity under ERISA. Often, that is a correct assertion. But Nicolopoulos confirms that when a state regulator enforces a law generally applicable to insurers, particularly those mandating coverage or regulating market conduct, the “savings clause” protects that action from being preempted under ERISA.
The Sixth Circuit relied on the Supreme Court’s precedent in UNUM Lif Ins. Co. v. Ward to bolster its conclusion, which held that laws “directed at” insurers fall outside ERISA’s preemptive reach. Relying on that precedent, the Sixth Circuit notes that state-imposed fines and cease-and-desist orders are classic tools of insurance oversight, not those of fiduciary oversight.
So, what’s the key takeaway for TPAs and insurers? While ERISA preemption for fiduciary duties still plays a dominant role in protecting self-funded plans, this case serves as a cautionary tale that ERISA is not to be equated with blanket immunity from state insurance regulation. Beyond its legal implications, Nicolopoulos reflects a deeper tension in our health care system – the gap that can exist between employer-sponsored health plans and the evolving mandates of coverage by many states. Cases like this one highlight the real-world consequences of that disconnect, resulting in someone being denied access to medically necessary care. As more states expand coverage mandates for fertility treatment, mental health, and gender-affirming care, this ruling reinforces the concept that ERISA preemption is indeed not absolute and there are likely to be more conflicts like those illustrated by this case. This case also highlights the need for understanding where the line is drawn with respect to performing fiduciary duties and ensuring accountability in plan design.
If you have questions about fiduciary duties, or your own group health plan in general, please contact The Phia Group!
By: Kate MacDonald
For decades, Billy Joel has lit up stadiums across the globe, delighting fans with classic hits like “Only the Good Die Young,” “Uptown Girl,” and “Scenes From an Italian Restaurant.” People of all ages can recognize his songs with just a few notes on a piano. A musical icon since his debut in the early 1970s, Joel has won six Grammy Awards and has watched 43 of his songs make it to the Billboard Hot 100 chart.
His most recent song to make it onto the Hot 100 was the somewhat ironically named “Turn the Lights Back On,” his 2024 comeback single. Unfortunately, it might be sometime until his fans see him perform under stage lights again.
Joel recently announced that he’s suffering from normal pressure hydrocephalus (NPH), a rare brain disorder, and decided to cancel the rest of the shows on his 2025-2026 tour. The legendary singer-songwriter posted a statement to his social media accounts, explaining that the condition has taken a toll on his hearing, vision, and balance, making stage performances dangerous, and was resting, per his doctors’ advice. The announcement also explained that treatment will include specific physical therapy for the condition, and that the singer is aiming to make it back to the stage.
In March, Joel had to postpone several concerts due to a condition that required surgery and follow-up physical therapy. No further details were given, and it’s unknown whether this was related to NPH.
NPH occurs when cerebrospinal fluid flows in from around the brain and spinal cord and amasses inside the skull, which disrupts brain function. Symptoms include an unsteady gait, memory and thought processing problems, balance trouble, and bladder control difficulty.
While this is a rare disorder (0.2 percent of people from 70 to 80 suffer from NPH, and 6 percent of individuals over 80 will experience this condition), one’s sex, race, or ethnicity do not factor into the equation. Thus far, researchers are unsure if it passes down through genes.
Diagnoses for NPH can happen via CAT scan or MRI, where doctors can spot the cerebrospinal fluid buildup, but this can most definitively be confirmed with a spinal tap. When caught early, NPH is usually a treatable condition.
However, that brings up another issue, one that plagues many Americans no matter the diagnosis: NPH is often misdiagnosed. Given the symptoms (walking problems, incontinence, memory issues), NPH can be overlooked, dismissed as simply normal signs of aging.
For sponsors of self-insured plans, it is crucial to consider all facets of plan document language when considering possible diagnoses during the plan drafting process. For example, if a participant is experiencing new symptoms but they are brushed off because of their advanced age or because their situation is deemed a common ailment, they may want to examine their plan language for a “second opinion” provision, which may not be included in benefit language, but instead potentially nestled in the utilization management section. After all, as the Johns Hopkins Armstrong Institute Center for Diagnostic Excellence noted, approximately 12 million Americans are misdiagnosed every year, which results in harm to about four million.
Otherwise, the plan participant should be aware that even if they are diagnosed with a rare condition, the course of treatment may be somewhat commonplace as is the case with Billy Joel. Covered individuals should consult with their physicians about treatments, review their plan documents, and discuss next steps. For example, where NPH is concerned, potential surgery and physical therapy are common treatments (and typically covered by plans).
Catching many illnesses and ailments early can mean the difference between life and death, or at least a shorter course of treatment and a longer road ahead. While Billy Joel convalesces, he has fans across the globe sending him well wishes. For the average plan participant, although they may have more home-grown support, they can also count on the backing of strong self-funded plan language in their corner.
On the latest installment of the Empowering Plans podcast series, join attorneys Jon Jablon and Kendall Jackson as they discuss the integration of AI into the self-funded industry. From HIPAA considerations to current case law, this episode explores the impact of AI on health plans and TPAs thus far. It is an episode you can’t afford to miss! Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
By: Jon Jablon, Esq.
When it comes to self-funded health plans, fiduciary duties often tend to lurk in the background – acknowledged and respected, but not always fully understood. The recent Sixth Circuit decision in Tiara Yachts, Inc. v. Blue Cross Blue Shield of Michigan brings those duties into sharp focus, offering a valuable lesson for TPAs, brokers, and plan sponsors.
Tiara Yachts hired BCBSM to administer claims for its self-funded health plan. Tiara alleged that BCBSM systematically misapplied pricing rules when processing out-of-network, out-of-state claims. Specifically, BCBSM was supposed to apply negotiated Host Blue rates (i.e., discounted rates established by the Blue Cross entity in the provider’s region) but instead used what they internally called a “flip logic” workaround. Specifically, when the provider wasn’t in-network with the local Blue plan, BCBSM would treat the provider as out-of-network entirely – so instead of paying the negotiated Host Blue rate, BCBSM would pay the full billed charge. In effect, claims that should have been reimbursed at negotiated rates were paid at much higher amounts, without any clear benefit to the plan or its members, and allegedly in violation of the negotiated rate promises that BCBSM had made to their clients such as Tiara.
And here’s where it gets good.
BCBSM applied a “Shared Savings Program” to recover those overpayments, designed to correct the BCBSM-created errors in pricing and recover the very funds that BCBSM had systemically overpaid. Despite the nature of this program as correcting BCBSM’s own mistakes, BCBSM charged a fee of 30% of the amounts recovered. They created the mess, and sold their client the mop.
The court’s central question was whether BCBSM acted as a fiduciary under ERISA. The Sixth Circuit said yes, and not at all subtly. In line with ERISA’s longstanding “functional fiduciary” approach, the court held that BCBSM’s authority over claim payments, and its discretion to compensate itself from plan assets, was more than enough to establish fiduciary status. Though the court noted that BCBSM was aware of the “flip logic” errors rather than necessarily overpaying intentionally in order to create a revenue opportunity, the court also reasoned that the fact that the alleged errors were systemic didn’t absolve them; if anything, the scope of the errors strengthens the fiduciary argument. Charging a fee to rectify the mistake is a separate, but significant issue, and it is central to the alleged breach, and it will carry significant weight when the case returns to the trial court.
This case underscores that fiduciary status isn’t conferred by contract or by title, but by action. There are two central questions: whether BCBSM was a fiduciary, and if so, whether it violated its duty. The deciding factor for whether fiduciary duties exist is whether the TPA had discretion over plan assets, and the question of whether the duty was breached hinges on whether the TPA used that discretion to enrich itself. The implication here is that when the same entity both erroneously pays and reclaims plan funds, any appearance of self-dealing is magnified, particularly when the TPA is charging the plan to rectify its own systemic errors, and when there’s no independent check on the reasonableness of the fee involved.
This is where a smart separation of functions becomes important. This case underscores not just the importance of understanding fiduciary boundaries, but also the prudence of outsourcing high-risk functions like third-party liability and overpayment recovery. Doing those things in-house without guardrails creates a dual risk: both the appearance of profiting from your own errors, and actual fiduciary exposure if the math doesn’t hold up. Using an independent vendor both adds a layer of auditability and removes any suggestion that the fox is guarding the henhouse.
Tiara Yachts serves as a compelling reminder that fiduciary duties aren’t theoretical. They’re real, enforceable, and they have some serious teeth when warranted. For anyone handling plan assets – especially in contexts involving provider reimbursements or overpayment recovery – it’s crucial to focus on transparency, documentation, and often, outsourcing.
As a general lesson from this case, as a TPA, if your fees to fix your own errors start to feel more lucrative than your actual claims administration, it might be time to give that model a second look (or at least run it by legal before a federal court does).
If you have questions about your own program, a vendor’s program, or even just fiduciary duties in general, please contact The Phia Group!
For fiduciaries of health and retirement plans, things have gotten more complicated.
In what has been a very busy spring for the Supreme Court, it recently heard the case of Cunningham et. al. v. Cornell University, in which the plaintiffs, representing over 30,000 current and former employees enrolled in Cornell University’s 403(b) retirement plans (which contained approximately $3.4 billion in net assets), claimed that the plan fiduciaries violated ERISA by neglecting to remove low performing investments and engaging in prohibited transactions, namely paying excessive recordkeeping fees to retain two recordkeepers. While most of these claims had been dismissed by lower courts—the Second Circuit interpreted ERISA to mean plaintiffs were required to show that services were unnecessary or fees were unreasonable to state a claim—the plaintiffs ultimately prevailed as the high court, in a unanimous 9-0 ruling delivered by Justice Sotomayor, agreed to reverse the lower courts’ rulings.
Essentially, the Supreme Court’s decision will empower millions of employees belonging to retirement and health benefit plans nationwide to file claims by alleging improper transactions without having to prove additional elements such as harm or unreasonable conduct in the pleading stage. More specifically, they will only have to allege three things—the fiduciary caused the plan to engage in a transaction; the fiduciary should have known the transaction involved furnishing of goods and services; and the transaction was between a plan and party of interest—and no longer have to defeat the affirmative defense that reasonable compensation is necessary, a pleading standard that is very hard to meet. In short, it will be easier for them to survive a motion to dismiss their respective cases. Meanwhile, administrators of private health and retirement plans will now be under greater scrutiny to fulfill their fiduciary obligations to plan participants and thus be accountable for demonstrating compliance with rules regarding prohibited transactions, documenting necessity of services procured, and evaluating reasonableness of fees.
But, looking at this case from a different perspective, it’s interesting to examine who exactly are the plan participants in the case of Cunningham et. al. v. Cornell University. As previously mentioned, tens of thousands of Cornell employees—both past and present—took their case to the Supreme Court because, quite simply, they felt as though they were getting shortchanged by the stewards of their retirement plans. While some of these employees were extremely well-compensated (i.e., the president, the provost, and the chancellor), the majority of them were not. Whether they were janitorial workers, lab technicians, administrators, or nursing assistants who toiled for years to keep the university up and running, every dollar in their respective retirement accounts really mattered and understandably they want to know how those dollars are being spent. And in the world of healthcare benefits, health plan members stand to enjoy greater transparency when it comes to being aware of not just fees specifically for health services, but also those for brokers, vendors, pharmacy benefit managers (PBMs), and TPAs among other entities. After all, there are so many fees a health plan pays and participants have a vested interest in ensuring they are reasonable and not duplicative.
That is why this case really matters, because regardless of the industry involved, plan administrators are safeguarding the hard-earned retirement funds (and in many cases, assets used to fund healthcare services) of real people. And now they are going to be held more accountable for properly doing so while acting in a transparent manner as the risk of encountering lawsuits brought on by plan members for allegedly high fees will be heightened.
Join attorneys Bryan Dunton and Cindy Merrell as they explore President Trump’s latest moves to address the rising cost of prescription drugs. Cindy and Bryan discuss potential impacts of recent Executive Orders and proposed tariffs. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
Review hundreds of health benefit plans, and it’s unlikely you’ll find one that is fully compliant with the Mental Health Parity and Addiction Equity Act (MHPAEA). It’s not that these plans are poorly constructed, it’s just that satisfying compliance requirements is incredibly challenging. Non-quantitative treatment limitations (NQTLs) present an incredibly challenging regulatory hurdle, amid an ever-shifting governing landscape. Given the enormous penalties that plans will incur for eschewing compliance, NQTL comparative analysis testing is a lifesaver. Join The Phia Group’s mental health parity professionals and learn from unrivaled experts as they share their experiences and learnings with you, right in the heart of Mental Health Awareness Month. We break down the latest regulations and discuss cost containment options, not to mention the social impact of these issues. Plus, we explored the latest breaking development: President Trump’s executive order to cap all prescription drug prices, and what this could mean for your plan. This is one webinar you truly cannot afford to miss.
Click Here to View Our Full Webinar To obtain a copy of our webinar slides, please reach out to [email protected].
In this episode, we unpack the Supreme Court’s unanimous decision in Cunningham v. Cornell University — a landmark ERISA case with major implications for retirement and health plan fiduciaries. We explain the facts behind the case, what “prohibited transactions” really mean, and why the Court's ruling on affirmative defenses matters. If your health plan pays fees to TPAs, PBMs, IDR vendors, or brokers, this episode is for you. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
The numbers are simply too grim to ignore.
Not even a month ago, on April 4, the results of the West Health and Gallup poll survey, conducted from mid-November to late December last year, were published, revealing that quality, affordable healthcare eludes 35 percent of Americans (representing some 91 million adults), a four-point jump from 2023 and the highest mark since 2021. Meanwhile, approximately 29 million Americans, or 11% of those surveyed, reported that they lacked the means to afford medication and care as recently as over the past three months. Just as unnerving—but most certainly not surprising—is that the disheartening trend has been most prominent among lower-income individuals (those who belong to families earning less than $24,000 per year) as well as Hispanic and Black Americans; conversely, there has been negligible change in this regard among mid- to high-income earners and whites. Hence, one reason why there is the ever-widening healthcare social disparity plaguing our nation.
Not that it provides any sense of relief to the millions having to choose between paying their electric bills or backlog of medical co-pays, but in its report, West Health and Gallup provide some useful context by rationalizing that there are essentially three categories into which American healthcare consumers can be classified:
In a nutshell, the West Health and Gallup report concluded that, based on these classifications, the gap between those Americans who can access and afford quality healthcare, essentially half the nation, and those who lack the basic resources to do so – the other half of our country’s population – has widened significantly. Of course, lower-earning Americans have always struggled to afford healthcare but the relentless forces of consumer and medical inflation, lingering drug shortages, and escalating rates of Medicaid disenrollment thanks to the expiration of the continuous enrollment provision and significant cutbacks to Children’s Health Insurance Program (CHIP) enrollment have pushed so many financially insecure individuals to the brink. In contrast, these recent trends have had negligible adverse effects, if any, on so many Americans who have the means to afford robust health services.
Socio-economic concerns aside, the erosion of so many Americans’ wherewithal to consume healthcare presents grave practical implications for the country. Per recent research from West Health and Gallup, American adults borrowed nearly $74 billion last year to pay off healthcare-related debts while close to 60% of U.S. adults reported being “somewhat” or “very” concerned about taking on debt following a major medical event. Given the current economic climate in which interest rates remain stubbornly high, taking out significant bank loans to pay down debt does not augur well for the average American household’s financial welfare. If Americans have to invest so much into just one facet of their lives, albeit an extremely important one, it naturally means there’s less funds available for higher education, home improvements, and travel and leisure among other services that comprise a strong national economy. Put another way, the increasing percentage of what West Health and Gallup refer to as “Cost Desperate Americans” serves as further indisputable proof that the financial strain and subsequent high levels of stress experienced by healthcare consumers in the U.S. – including those who are not just underinsured but feel compelled to remain in an undesirable job solely for the health benefits -- continues to be a dire nationwide problem.
While West Health and Gallup poll results and accompanying report thoroughly addressed healthcare access and affordability, there was scant mention of another vital part of the equation: health insurance access and affordability. Which, is of course, a discussion for another blog.
The Run for the Roses is here! Join two of Phia’s Louisville, Kentucky, employees, Corey Crigger and Cindy Merrell, as they discuss the event that takes over their city once a year! Coming on the heels of a historic weather event, Corey and Cindy discuss all things Derby. From Cindy’s experience at Dawn at the Downs to predictions for winners, this podcast has it all. Don’t be fooled, this podcast isn’t just about horse racing. Corey and Cindy also discuss pitfalls of AI use in the legal world. Can attorneys depend on AI for their legal research? Meanwhile, which horse has the best chance to win the Derby? Can Corey hit the trifecta for the second year in a row? Tune in to the Empowering Plans Podcast for these answers and many more!
Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
In 2008, under the George W. Bush administration, the Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted to ensure that health insurance plans did not impose more restrictive limitations on mental health and substance use disorder (MH/SUD) benefits – assuming they were initially covered – than those imposed on medical and surgical (M/S) benefits. More specifically, health insurers were forbidden from applying limitations such as prior authorizations, unreasonably high copays, or visit restrictions to mental health/substance use disorder treatments when medical/surgical treatments did not have such imposing constraints.
The 2008 law was hailed as a great advancement for the millions of Americans long struggling to afford adequate treatment for their respective mental health and substance use disorders. However, in the ensuing years, many insurers found ways to skirt around the legislation without incurring devastating financial ramifications; subsequently, this vulnerable segment of the population was deprived of many protections that the MHPAEA was ostensibly created to provide. Subsequently, in 2021 the Department of Labor (DOL) passed the Consolidated Appropriations Act, 2021 (CAA), which further required health plans to meticulously document their compliance with nonquantitative treatment limitation (NQTL) requirements under the MHPAEA by completing an NQTL comparative analysis. Essentially, health plans and issuers are required to prepare a comparative analysis of how NQTLs are applied to their respective MH/SUD benefits and M/S benefits to ensure parity. But even the DOL’s concerted efforts to enforce consistent standards earlier this decade were not deemed fully sufficient.
And so, this past New Year’s Day, new MHPAEA rules went into effect in order to bolster parity between MH/SUD and M/S benefits. For plan sponsors charged with guaranteeing that mental health parity is embedded into their plans, the bar has been raised. The stewards of health plans need to be even more mindful of working closely with their TPAs, PBMs, network administrators and other service providers to thoroughly execute NQTL comparative analysis reports that comply with the more stringent DOL standards that are now in place, some of which have already taken effect while others will not go into effect until January 1, 2026. Here are some specific considerations that would be prudent for plan sponsors to bear in mind throughout the balance of the year:
Though it remains to be seen whether some of the provisions of the new mental health parity rules such as the novel “meaningful benefits” standard and mandates for addressing “material differences” between a plan’s MH/SUD and M/S benefits will be challenged in court, plan sponsors will still need to conduct NQTL comparative analysis reports – and have those results readily available – for the foreseeable future. As such, it is paramount for plan sponsors who have not yet hired an NQTL comparative analysis report vendor to do so sooner rather than later.
Phone: 781-535-5600 | www.phiagroup.com
The Book of Russo:
We have all seen the same reports – Large health insurance carriers suffering record losses in 2024, with no relief in sight. In a panic, rates are multiplied to stop the bleeding. Employers, feeling powerless, are led to believe that they either need to acquiesce to these skyrocketing rates (and reduced coverage), or cease providing health benefits to their valued staff and families. A toxic combination of ignorance, laziness, and risk aversion leads to a very limited set of options being presented; cookie cutter solutions and a choice of columns A, B, or C – none of them good. If this isn't a time to self-fund, I don’t know what is!
“Sure, Adam…” you’re likely saying to yourself. “Easy for you to say. When you and your team live and breathe this stuff – in the capital of quality healthcare no less – it’s easy to maintain a high quality, low cost health plan. What about the rest of us?” I get it, and I promise that we can all elevate our plans. Customization, data analysis, partnerships and effort are the key ingredients to empower your plan and your people to lower costs while increasing quality. Is anything more important than your employees and their families? At The Phia Group, we’ve always believed in leading by example. Nearly two decades ago, we told the industry that self-funding health benefits shouldn’t be reserved for only large employer groups. We said that a small group of dedicated, informed health care consumers could self-fund sucessfully. We proved it with a plan (our plan) that – at the time – covered fewer than twenty people. As our costs dropped and benefits improved (in direct opposition to the national health insurance trends), people said it couldn’t be replicated because our members were too young and healthy. We matured. People said it couldn’t be replicated because we were too centralized in one location, Boston, where health care and awareness is unrivaled. We expanded to every State in the nation. People said it couldn’t be replicated because we were (ironically) too small. We multiplied our enrollees by more than ten-fold. People said it couldn’t be replicated because our staff are too well informed regarding benefits and cost containment. We taught clients and their many diverse plans to do the same thing. The time for excuses is over. With some knowledge, innovation, and elbow grease, we can bend the curve. That is why we exist - it is our sole mission to ensure all Americans have access to low cost and high-quality care. This isn't a fantasy. It's a reality for our “Phia family” and many of our closest partners and client’s plans. Nobody enjoys less member abrasion, the highest discounts, and net savings with quality facilities than us and those like us that are willing to ask the questions, and do the work. Combine that with best-in-class plan design and compliance, and you’ve got a team of passionate all-stars excited to bring you along for the journey. Oh, I forgot to say that in the world of subrogation, we recover the most (by far) compared to our competition. Yeah; that “Passion for Subro” still burns. Ensuring the right parties pay the right amount in the right order for the best results? Phew. That’s what gets me up in the morning. We have been your trusted industry partner for 25 years by focusing on your needs and taking care of you (and our!!!) employees. It's a simple formula that too few follow. Let’s change that! I'm proud to be the CEO and co-founder of Phia. Come and find out why. Happy reading!
Service Focuses of the Quarter Phia Fit to Print From the Blogosphere Webinars Podcasts The Phia Group’s 2025 Charity Employee of the Quarter Phia News
Service Focus of the Quarter: PACE
The Phia Group's Plan Appointed Claim Evaluator (PACE) service is revolutionizing how self-funded health plans manage final-level internal appeals. PACE alleviates the administrative burden and fiduciary risks traditionally borne by plan administrators and their TPAs; PACE ensures that second-level appeals are processed in strict accordance with plan terms, while also providing a robust layer of protection against fiduciary breaches. Whether your plan uses traditional PPO networks, reference-based pricing, or other unique designs, PACE seamlessly integrates to promote compliance and streamline decision-making. With The Phia Group’s legal expertise and clinical resources, PACE delivers peace of mind by handling complex appeals and mitigating exposure to costly external reviews or lawsuits.
What sets PACE apart is its proactive approach. From reviewing plan documents for compliance to coordinating with IROs, PACE ensures optimal outcomes at every step. Through PACE, plans and TPAs can focus on their core operations while reducing risks and costs associated with complex appeals handling.
PACE not only protects plans, but also enhances their operational effectiveness, making the service an indispensable resource in today’s challenging benefits landscape.
Enhancement of the Quarter: John Blaney
This quarter, The Phia Group celebrates a pivotal enhancement to its leadership team with the promotion of John Blaney to Executive Vice President of Transformation and Recovery Services.
With decades of experience in healthcare cost-containment, John is now spearheading (and taking a deep dive into) all recovery functions, including subrogation, overpayment, and other cost-saving opportunities. His leadership has already driven significant advancements in automation and process optimization, ensuring that The Phia Group continues to deliver unmatched recovery results for its clients; by leveraging cutting-edge technology and innovative strategies, John is positioning the company to further elevate its industry-leading services.
John’s promotion represents more than just a title change – it’s a transformative shift in how The Phia Group approaches recovery and cost-containment as a whole. Under his guidance, Phia’s recovery departments are streamlining operations and identifying new opportunities to enhance client outcomes.
This leadership enhancement underscores The Phia Group’s commitment to staying at the forefront of healthcare cost-containment, empowering plans to achieve greater savings and operational efficiency.
Phia Case Study: Paying Second-to-None
It seems like every other week that someone discusses with our consulting team the ability to “coordinate” benefits with Medicare even when a participant has not enrolled in Medicare.
The short answer? Can’t be done. It ends up being either – or both, generally – a violation of the Medicare Secondary Payer Act, or age discrimination. Coordination can only be performed if there are multiple payers; when the plan is the only payer, there can be no coordination, and so in practice the plan would be systematically subtracting 100% of Medicare from plan benefits for individuals over 65.
Recently, a broker inquired about an audit that had been in progress for quite some time but had expanded in scope since its inception. The Department of Health and Human Services had some questions regarding Medicare coordination, and the broker ran the language by us, under the impression it was fully compliant. We informed the broker, TPA, and group of the issue, and they promptly fixed it, and presented the fix to HHS as a good faith effort to ensure compliance.
This change did not affect the plan’s past language (though, very luckily, the plan had never actually had occasion to apply this provision!), but the auditor looked upon it favorably and it appears the plan has avoided any formal enforcement action. But the close call is a good reminder: a provision that “coordinates” with Medicare, when Medicare isn’t actually a payer, risks violating federal law.
Fiduciary Burden of the Quarter: Aligning Written and Operational Processes
In the course of performing NQTL comparative analyses for self-funded groups, The Phia Group’s team often comes across situations where the SPD says one thing – like requiring pre-cert for all substance use disorder treatment – but the UM vendor’s processes don’t actually enforce it. On the surface, that might seem like a harmless (or even helpful) disconnect. After all, not enforcing this type of overly broad requirement can alleviate parity concerns in practice.
But here’s the problem: even if not enforced, the written requirement is still there. The DOL has been clear that this NQTL in plan documents, regardless of how it’s applied, can constitute a parity violation. In other words, “don’t worry, we don’t enforce it!” isn’t a valid defense, since the SPD says the plan can enforce it.
It’s a good idea to do a periodic check-in with vendors to make sure what they’re doing actually matches what the SPD says they’re doing. Catching these mismatches early isn’t just about compliance; it’s about protecting the plan and its fiduciaries from risk that’s avoidable with a little bit of coordination.
Webinars:
• On February 12, 2025, The Phia Group presented “The Future of Healthcare Under Trump 2.0,” in which we discussed President Donald Trump’s flurry of executive orders.
• On January 21, 2025, The Phia Group presented “Fiduciary Challenges and Risk Exposure Growing for Plans in 2025 – What to Know, What to Do,” in which we discussed potential changes that may be afoot in the new year – and ways that you can be best prepared.
Be sure to check out all of our past webinars!
Podcasts:
Empowering Plans
• On March 13, 2025, The Phia Group presented “Unpacking Weight Loss Drugs,” in which our hosts, Corey Crigger and Kendall Jackson, discussed the hot button topic of weight loss drugs.
• On March 13, 2025, The Phia Group presented “Error 304: Good Faith Negotiation Not Found,” in which our hosts, Brian O’Hara and Jon Jablon, discussed real-life examples of AI-driven responses in the No Surprises Act’s Open Negotiations process that range from nonsensical to outright misleading, where negotiating with AI is like trying to haggle with a toaster.
• On February 27, 2025, The Phia Group presented “Lewandowski v. Johnson & Johnson – Big win or warning?,” in which our hosts, Brady Bizzaro and Cindy Merrell, discussed the details of the Lewandowski v. Johnson & Johnson case.
• On February 13, 2025, The Phia Group presented “Network Adequacy Under MHPAEA,” in which our hosts, Kelly Dempsey and Bryan Dunton, dove into the results of the 2024 MHPAEA Report to Congress.
• On January 30, 2025, The Phia Group presented “Mental Health Parity: New Year, New Rules, New Lawsuits,” in which our hosts, Jen McCormick and Nick Bonds, discussed the ERIC v. HHS lawsuit in which an industry advocate challenged the federal regulators’ new Final Rules enforcing the MHPAEA and mental health parity rules.
• On January 16, 2025, The Phia Group presented “2025 Healthcare Hot Takes,” in which our hosts, Ron Peck and Corey Crigger, delved into their bold predictions of what we will be talking about in 2025.
• On January 2, 2025, The Phia Group presented “The Evolution of the Birth Control Benefits Mandate,” in which our hosts, Kendall Jackson and Brian O’Hara, discussed the Biden administration’s decision to withdraw proposed rules that would have expanded the birth control benefits mandate.
Be sure to check out all of our latest podcasts!
Back to top ^
Phia Fit to Print:
• BenefitsPro – Beyond the recipients: How Medicaid cuts could change health care forever – March 2025
• Newsweek – Map Shows States With the Worst Health Care – February, 2025
• The Self-Insurer – Navigating In The New Age Of Cybersecurity Threats – February 2025
• ABC 4 News – SC ranks near the bottom of new healthcare cost to quality index: Phia Group – February, 2025
• BenefitsPro – GLP-1s: The pros, cons, and my personal weight loss journey – February 2025
• Worklife – WorkLife Research: How today’s HR pros match job seekers with open roles – January, 2025
• The Self-Insurer – The Obesity Epidemic is Forcing New Health Plan Coverage Decisions – January 2025 Back to top ^
From the Blogoshpere:
• RBP vs. PPO Plans. Learn the ins and outs of RBP and PPO plans.
• Journavx: Is Relief on the Way? Every year, tens of millions of opioid prescriptions are written for Americans experiencing searing pain.
• House Republicans’ Proposal Related to HSA-Qualified HDHPs. The vast number of new proposals related to reducing government spending is unsurprising.
• Why Wesco v. BCBSM Matters (A Lot). Was it a standard administrative cost or a true “phantom tax” allegedly stifling competition?
• No Extension for HDHPs and Telehealth. 2025 has arrived with no extension to the telehealth services safe harbor for high deductible health plans that are HSA-qualified.
To stay up to date on other industry news, please visit our blog.
The Phia Group's 2025 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 2025 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 to 18, signed up as club members. In the 30-plus years since then, 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 programs.
Youth of the Year
Each year, The Boys & Girls Clubs of America (BGCA) holds a nationwide competition to award the most prestigious honor a teenager can receive as a member of their local Boys & Girls Club. Each Club across the country selects and honors one member who goes on to compete in statewide and regional Youth of the Year competitions, and then annually one exceptional nominee is selected to be BGCA's National Youth of the Year, serving as an ambassador for all Boys & Girls Club youth across America as well as a voice for all of our nation’s young people. The winner was awarded a $5,000 scholarship & a laptop, courtesy of Phia!
Wizard of Oz: The Play
The Phia Group invited 30 children from The Boys & Girls Clubs of Metro South to watch Wizard of Oz at the Inly School. They were accompanied by a large number of Phia employees and had a blast watching Adam and the cast put on a phenomenal show!
Phia News:
Phia Turns 25!
On Monday, February 10, 2025, we celebrated our 25th birthday. We started off the celebration with a party in the office, followed by a fun day of bowling, and ending the day at Trillium Brewery. We look forward to the next 25 years!
How Many M&M's
Phia held its annual M&M Counting Contest. The Phia Family made some great guesses, but there was one person who came particularly close to guessing the exact number. Congratulations to Mitch Hilbert on guessing 1,157 M&Ms. This was a good guess, as we had 1,166 M&Ms in the jar!
Candy Heart Contest
As is tradition, Phia held its annual Candy Heart Contest. The Phia Family made some great guesses, but there was one person who came particularly close to guessing the exact number. Congratulations to Kelvin Chun on guessing 485 pieces of candy hearts. This was a very close guess, as we had 486 pieces of candy hearts in the jar!
Kentucky Hiring Event
The Phia family is growing! We hosted a hiring event at our Louisville, KY, office in February, and had an amazing turnout. The office was buzzing with candidates and we had a huge number of positions filled due to this event’s success.
Get to Know Our Employee of the Quarter: Irene Yalch
Being named Employee of the Quarter is an achievement that is for Phia employees who truly go above and beyond their responsibilities. This person must not only transcend their established job description but also demonstrate such unparalleled dedication and passion to The Phia Group and its employees that it cannot go without recognition.
The Phia Explore team unanimously agrees that there is no one more deserving than Irene Yalch to be recognized as The Phia Group’s Employee of the Quarter for Q1 of 2025.
Congratulations, Irene, and thank you for your ongoing and future contributions.
Phia Attending the SIIA National Conference
Several of Phia’s industry experts will attend SIIA’s 2025 National Conference in Phoenix, Arizona, from October 12th – 14th. If you are interested in attending or learning more about SIIA’s National Conference, visit their website: https://www.siia.org/i4a/calendar/?pageid=7767&showTitle=1
Job Opportunities:
• Sr. Claim Recovery Specialist
• Claims Specialist
• Reimbursement Specialist
• Accounting Assistant
• Software Engineer
• Sr. IT Administrator
• Automation Data Engineer
• Project Coordinator
See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers
Promotions
• Olesya Avramenko has been promoted to Team Lead, PGC
• Mattie Bean has been promoted to Vice President, Recovery Services
• Hillary Burmester has been promoted to Training and Auditing Specialist
• Samantha Canestraro has been promoted to Training and Auditing Specialist (March 2025)
• Nicole Capozzoli has been promoted to Team Lead, Case Investigation
• Amanda DeRosa has been promoted to Sr. Manager, Recovery Services • Hemant Dua has been promoted to Chief Technology Officer (CTO)
• Bryan Dunton has been promoted to Health Benefit Plan Consulting Attorney III
• Rebekah Dye has been promoted to Vice President, Subrogation Efficiency
• Brittany Farr has been promoted to Training and Auditing Specialist
• Kaitlyn Fedele has been promoted to KP Administrator
• Ethan Forrest has been promoted to Team Lead, Recovery Services
• Trina Garcia has been promoted to Health Benefit Plan Consultant, Process Improvement
• John Gresh has been promoted to Sr. Attorney, Provider Relations
• Jeff Hanna has been promoted to Team Lead, Accounting
• Mitch Hilbert has been promoted to Manager, Provider Relations
• Lisa Hill has been promoted to Director, Recovery Services
• Sarah Hobbs has been promoted to Senior Subrogation Service Onboarding & Support Specialist
• Alex Houle has been promoted to Asst. Vice President, Provider Relations
• Kendall Jackson has been promoted to Health Benefit Plan Consulting Attorney II
• Rose Jardim has been promoted to Director, Accounting Administration
• Jamie Johnson has been promoted to Sr. Manager, Recovery Services
• Amy-Jo Justice-Isaacs has been promoted to Team Lead, Recovery Services
• LaTrisha Keierleber has been promoted to Team Lead, HBPC & QAS
• Emily Kewer has been promoted to Team Lead, Recovery Services
• Caitlin Lankston has been promoted to Sr. Data Scientist (Transfer to IT)
• Vanessa Leurini has been promoted to Claim Recovery Specialist
• Kate MacDonald has been promoted to Health Benefit Plan Consultant III
• Krishna Malyala has been promoted to Data Architect (Transfer to IT)
• Zack McLaren has been promoted to Team Lead, Recovery Services
• Ashley McSweeney has been promoted to Team Lead, Provider Relations
• Larry Moffett has been promoted to Sr. Reimbursement Analyst
• Michelle Moyal has been promoted to Team Lead, HBPC & QAS
• Angela Norris has been promoted to Team Lead, Provider Relations
• Naveen Omkar has been promoted to Manager, Infrastructure
• Elizabeth Pels has been promoted to Sr. Manager, Recovery Service Onboarding & Support
• Ania Russo has been promoted to Sr. Manager, Training Development & Coordination
• Jackie Ryan has been promoted to Accounting Administrator II
• Kerri Sherman has been promoted to Sr. Reimbursement & Business Analyst
• Stephanie Smith has been promoted to Health Benefit Plan Consultant I
• Lindsay Stewart has been promoted to Case Analyst
• Alex Stoner has been promoted to KP Recovery Specialist
• Giuliano Stracco has been promoted to Sr. Data Quality Analyst
• Ashley Turco has been promoted to Director, Infrastructure & IT Security
• Saheed Yussuff has been promoted to Staff Accounting II
New Hires
• Amy Smith was hired as an HM First Party Claim Recovery Specialist
• Mandy Deese was hired as a Mass Tort - Claim Recovery Specialist
• Justin Stafford was hired as a Sr. Data Analyst
• Allyssa Pogue was hired as a Health Benefit Plan Consultant
• Rhys Cundiff was hired as a Subrogation Attorney
• Sydney Sumner was hired as a Case Investigator
• Karlee Castorena was hired as a Sr. Claim Recovery Specialist
• Stewart Miller was hired as a Subrogation Attorney
• Cassidy Osbourne was hired as a Sr. Claim Recovery Specialist
• John Gullett was hired as a Subrogation Attorney
• Ronnie Lytle, Jr. was hired as a Sr. Claim Recovery Specialist
• Eric Belmonte was hired as a Sr. Claim Recovery Specialist
• Naga Vivekanandan was hired as a Health Benefit Plan Consulting Attorney
• Harsh Neelathi was hired as a Software Engineer
• Ivy McGehee was hired as a Sr. Claim Recovery Specialist
• Katie Corrigan was hired as an AR Specialist
• Autumn Boone was hired as a Health Benefit Plan Consultant
• Stephanie Burgraff was hired as a Claims Specialist
• Patricia Smart was hired as a Sr. Contested Claim Recovery Specialist
• Matt Jelacic was hired as a Sr. Contested Claim Recovery Specialist
• Robert Balchunas was hired as a Configuration Specialist
• Tyler Hammons was hired as a Sr. Contested Claim Recovery Specialist
• Leslie Decker was hired as a Sr. Contested Claim Recovery Specialist
• Jennifer Rose was hired as a Third Party Recovery Specialist
• Gracie Beck was hired as a Notice Specialist
• Blake Drake was hired as a Sr. Contested Claim Recovery Specialist
• Chelsea Mullis was hired as a Claims Specialist
• Courtney Justice Isaacs was hired as a Sr. Contested Claim Recovery Specialist
• John Shouse was hired as a Sr. Contested Claim Recovery Specialist
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. Back to top ^
By: Kendall Jackson
The high costs associated with prescription drugs consistently provoke conversation in the self-funded healthcare industry. Not only is it an issue that most health plans encounter, but it is also a concern that trickles down to the member-level. Whether you’ve personally experienced the effects of high-cost drugs, or they have impacted a close family member, we can all empathize with the stress of having to pay for an expensive prescription.
In an effort to minimize these concerns, President Trump issued an executive order (EO) titled “Lowering Drug Prices by Once Again Putting Americans First.” One goal of this EO is to modify the Inflation Reduction Act that was originally signed into law by the Biden Administration in 2022. The Inflation Reduction Act included the Medicare Prescription Drug Negotiation Program, which aimed to reduce drug prices for Medicare beneficiaries. President Trump’s EO seeks to modify this program to improve transparency and minimize the negative impact of high-cost prescription drugs.
Beyond Medicare, the EO questions the current role of middlemen in the pharmaceutical industry and instructs several entities to provide recommendations of how to best “promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans.” These recommendations, and any potential rulemaking that may stem from them, could have a significant impact on the self-funded industry. Currently, there are six pharmacy benefit managers (PBMs) that dominate the market, with three of them holding the majority of the market share. The vertical and horizontal consolidation of the market has stifled the marketplace, given the disproportionate amount of power these PBMs wield in comparison to smaller, independent entities. Since these large PBMs are integrated with suppliers and operate their own pharmacies, they are incentivized to utilize affiliated pharmacies to generate higher profits. Furthermore, the major PBMs often retain a portion of rebates, which can lead to higher costs for health plans and plan participants.
Only a few years ago, the Federal Trade Commission (FTC) launched an inquiry into the business practices of PBMs. The FTC found that the PBMs paid their own pharmacies significantly more for commonly prescribed drugs that were otherwise available for lower costs at rival pharmacies. Additionally, the FTC noted that between 2013 and 2022, 10% of rural, independent retail pharmacies closed their doors, demonstrating how the major PBMs’ control of the market can negatively impact smaller players.
With this data from the FTC and the general desire for PBM reform within the industry, the EO is a step in the right direction. It will be interesting to see how the tasks imposed on Secretary of Health and Human Services Robert F. Kennedy Jr. and other federal entities by this EO play out over the coming months. Any rule-making that may spring from their guidance and recommendations that limit the major PBMs’ control of the market would likely have a positive outcome that broadly benefits the industry, whether that be assisting smaller pharmacies in the market or lowering costs for health plans and plan participants.
Our consulting team has received numerous questions in Q1 2025 about employers considering self-funding their health plans. Join Attorneys Jennifer McCormick and Kelly Dempsey as they go through what the driving factors are behind employers considering self-funding, the pros and cons of self-funding, and some of the major differences employers will encounter. If you’re considering taking the leap, take a listen first!