By: Chris Aguiar, Esq.

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

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

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

By: Andrew Silverio, Esq.

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

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

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

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

By: Jon Jablon, Esq.

 

You asked whether your clients can decide to not utilize their wrap network for a given claim, right? Oh, you didn’t? Well, why didn’t you?

 

We get it. Wrap networks are very simple to use and they guarantee against balance-billing. Those are great things. But despite the ease of use, do wrap networks offer the best bang for your buck?

 

Research shows that the average wrap network discount ranges from 18% to 25%. There may be outliers, though; if you’ve got a 65% discount, it’s often worth it to take it with no questions asked. But if you’ve got a 20% discount on a very large claim, it will probably be beneficial to explore other options. In many cases, individualized negotiations can yield far better results than wrap discounts, since wrap discounts are pre-determined and predicated on arbitrary percentages off arbitrary billed charges. When negotiating a claim on an individual basis, though, there’s an opportunity to use benchmarks (such as Medicare), examine the specifics of the bill, and actually discuss the claim and its merits with a human being. More often than not, individualized negotiations yield better savings than pre-negotiated wrap discounts.

 

In a recent poll of many of The Phia Group’s clients, 75% of those who responded indicated that they weren’t aware that they were able to forego utilization of the wrap network on a case-by-case basis. It’ll depend on the contract, but in just about every case, a health plan does have that right.

 

Plus, if a negotiation outside the wrap isn’t successful, the health plan will still have the wrap discount to fall back on!

 

If you need a contract reviewed, The Phia Group can do just that – and if a benefit plan incurs a large claim that should have a better rate than what the wrap will offer, let us know as soon as possible, because we can help.

 

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

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

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

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

* * *    

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

* * *

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

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

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

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

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

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

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

By: Jen McCormick, Esq.

Healthcare has received so much attention over the past 10 years. Everyone has something to say about its current form, how comprehensive it should be, or who should be have a role in providing the coverage.   The most contentious piece of the conversation, however, is cost.  Healthcare can be expensive – particularly if you don’t pay attention.  Guess what – it’s time to pay attention… This mean you employers!

As an employer, do you take steps to encourage employees to make smart choices when it comes to healthcare? Are they encouraged to select generics? Are they told to read and understand the benefits available to them? Are they aware of the incentives the employer may offer for making an informed choice? These incentives don’t have to be limited to the plan document either!  Consider having a staff meeting to review all the great benefits the plan offers, maybe poll the staff and see if the employees want to offer a certain benefit (i.e. acupuncture), or even have a quiz which asks questions about the benefits and rewards the highest scoring employee.  

Whatever the method – it’s time to do something different and get employees engaged at the outset (prior to receiving healthcare benefits)!

Steve Kerr’s comments can be viewed as a warning for self-funded payers and their administrators to educate their members on the shortcomings of some surgeries which are extremely expensive and often unnecessary.  

According to the American Journal of Orthopedics, over a third of Americans reported some musculoskeletal conditions that significantly impaired their normal routines. For many, these issues develop into the perceived need for serious orthopedic procedures and joint replacements, which are among the most profitable surgeries in all of medicine based on the time the surgeries actually take.

It therefore comes as no surprise to discover that, in the last 10 years, the occurrence and associated costs of serious orthopedic procedures have both jumped by 300%. Current projections are that this trend will continue, and (as an example) we may see an additional 400% increase in joint replacements by 2030.

What is the reason for this steady and significant increase in serious orthopedic surgeries and joint replacement procedures?  Regardless of whose opinion you read, you will be told that the reason for more orthopedic procedures is because we are getting older, and we are getting heavier.  This, however, does not fully capture the often-overlooked third factor: consumers are simply being offered greater access to more surgical options.  As an example, adjusted data from the Orthopedic and Arthritis Center for Outcomes Research demonstrates that obesity and the aging population fails to account for the 134% increase in total knee replacements between 1998 and 2007 (overall, a 300% increase).  So how do we account for it?  It is not a stretch to suggest that at least part of the increase in serious orthopedic procedures and joint replacements is attributable to the provider community pushing for these surgical options more often than ever before (as mentioned, these surgeries are huge revenue drivers).

Steve Kerr is a powerful voice that is highlighting the importance of understanding pros/cons of surgery, exploring alternatives, and getting a second medical opinion – preferably from someone without a financial incentive to supporting the surgery in the first place.  

By: Ron Peck, Esq.

In case you missed it, there is a movement afoot.  It’s found some real purchase in California, but you hear rumblings everywhere.  A call for a single payer system.  Medicare for all.  I’m going to avoid discussing the pros and cons of this idea, as it relates to patients, employers, and us – the folks tied into the benefit plan industry.  Instead, I’m going to focus on (*gasp*) the provider community.  I was researching this topic when I stumbled upon the Physicians for a National Health Program (“PNHP”) website.  Interesting stuff!  While there, I saw a massive “FAQ” page; (http://www.pnhp.org/facts/single-payer-faq).  Looking at the first few lines, I suddenly realized how far apart some people are from each other.  For instance, consider the following: “Question: Is national health insurance ‘socialized medicine’?  Answer: No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. The health systems in Great Britain and Spain are other examples. But in most European countries, Canada, Australia and Japan they have socialized health insurance, not socialized medicine. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage medical practices or hospitals.  The term socialized medicine is often used to conjure up images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance where doctors and patients often have more clinical freedom than in the U.S., where bureaucrats attempt to direct care.”

Stop.  Wait.  This seems to indicate that providers are free to charge whatever they want, and Medicare (blessed, generous Medicare) pays the bill.  Yet, whenever a private benefit plan offers to pay Medicare PLUS 20%, 40%, or even (sometimes) 200% of Medicare, they are laughed at by the hospital.  They are told that if the hospital accepted what Medicare pays (or even double what Medicare pays), from its privately insured patients, they’d go bankrupt!  Why?  Because Medicare has the size (steerage), clout, and statutory backing to set its own prices.  So, despite the aforementioned FAQ, Medicare DOES dictate what is paid, and DOES control what hospitals and doctors receive.  Imagine how much MORE power Medicare would have, to dictate what is and is not payable, if they WERE THE ONLY PAYER IN THE NATION!!!

This, then, is my point.  Support for a single payer / Medicare for all model is out there… and it is growing.  If this became a reality, forgetting all the other issues, as it relates to providers – hospitals wouldn’t be getting Medicare “plus” anything.  In fact, once Medicare (or whatever the single-payer called itself) literally holds ALL THE PURSE STRINGS I imagine the payable rates would drop BELOW the current Medicare payable rates.  Ouch!

So… doesn’t it benefit these hospitals to preserve private benefit delivery systems?  Shouldn’t they be scrambling to retreat from a single payer?  Given what balance billing hospitals say to me about “Medicare based payments,” I should think so.  Yet, every time a private plan or carrier is charged 1,000% or more of what Medicare pays, that payer is being pushed one step closer to financial ruin.  If that happens, and we are stuck with a single payer, I am convinced it will end badly for my friends in the health care delivery community.  Thus, every time a provider refuses to work with a private payer, to find common ground… it is a prime example of biting the hand that feeds you.  You may be able to squeeze a few more bucks out of the plan today, but mark my words, those dollars will cost you exponentially when the legs are kicked out from under our system and we’re stuck with a single payer.  Trust me.  It is a simple economic truth that when there is one, and only one customer – that customer controls the pricing.

The time has come to play along, for everyone’s sake.

…is what a nice lady asked me when we were discussing the charges her office submitted for drug addiction treatments. You see, this office billed $3,800.00 per day for inpatient detox, and separately, under a different corporate name (but same billing office), they billed our client for drug screenings at a whopping $4,000.00 per screen – with one screen performed per day.

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

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

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

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

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

By: Kelly Dempsey, Esq.

If you’re paying any attention to the news these days, you know that the healthcare industry as a whole has been facing some pretty large issues.  In addition to “repeal and replace,” we’re also faced with the skyrocketing cost of healthcare in the United States.  Both topics are focused on money – either loss of money by insurers who are now threatening to leave the Marketplace or the high costs of new drugs that have hit the market, that have the potential to cripple employer health plans.  While both of these are clearly issues that need attention, let’s look at something other than the turmoil in the Marketplace or shiny new things that are also fueling the fire.  

What about the costs of standard medical procedures?  When your doctor says you need a medical procedure and you actually think to ask “how much will this cost,” do you get a straight answer?  In some cases, you might. Maybe you’ll get a ballpark figure. But most of the time, the response will be wishy-washy because the procedure is unique to you and the providers cannot foresee complications that may change the projected cost.  

You may be thinking, “Ya, ya, ya.  I’ve heard this speech about price transparency before.”  In the past I had the same thought, but then I experienced the radical difference in charges for the same service and my view has been forever shifted.  I received the same procedure two years apart, at two different facilities, in two different states.  It’s been quite a while since these procedures happened, but I still think about it often.  

A few years ago (ok, maybe more than a few, but who’s counting), I had flu-like symptoms and also some sharp-shooting pains on both the left and right side of my abdominal area that I just couldn’t shake with extra rest and sleep.  My mom (a nurse) suggested that my issues may have been related to my gallbladder, so I took some over-the-counter medicine and my symptoms disappeared.  But a week later, I was back to where I started despite still taking the medication.  I reluctantly went to the doctor (in northeast Ohio), who said that there were many possibilities, but that it could be appendicitis.  My doctor told me that the last time she had seen someone with sensitivity to the abdominal region (i.e., sensitive to the touch), she didn’t send them for a CT scan, but the end result was appendicitis and emergency surgery was performed.  I didn’t have the classic symptoms of appendicitis, but a CT scan was ordered just to be sure.  I won’t bore you with the details, but the CT scan showed that it was appendicitis and I had a scheduled surgery to remove my appendix.  Weeks later the bills started rolling in, including a bill for the CT scan…$1,900.  I’d never had a CT scan before, so I had no idea what to expect, but $1,900 clearly wasn’t it (and I think this was after the PPO discount).    

Two years later, I found myself feeling under the weather.  I went to the doctor and an ultrasound was ordered.  Of course my appointment was on a Friday and it was a holiday weekend, so I had to wait to get the ultrasound, but I had a trip to Niagara Falls planned and I wasn’t cancelling it.  Unfortunately before I could have the ultrasound done, I woke up early on a Saturday morning with more sharp-shooting pains, but this time more in my side and back.  Being out of state, I didn’t know where else to go except to the emergency room at the hospital in Niagara Falls, New York.  The doctor who saw me took one look at me and said “kidney stone, but we’ll do a CT scan to confirm.”  A few hours later a kidney stone was my official diagnosis.  I spent six hours in the emergency room before I was discharged.  By this time I was working in the industry and dreaded the bills I knew I would be getting.  To my surprise, the bills weren’t nearly as large as I had anticipated.  Of course there were three: the hospital, the ER doctor, and the interpretation of the radiology report, totaling a little over $3,000.  This wasn’t nearly as high as I anticipated.  The hospital bill was itemized, and as I read through it, I stumbled upon the CT scan charge… “$234.”  I thought to myself, “ummmm, excuse me?  That can’t be the only fee for the CT scan.”  I decided that this couldn’t be accurate and waited for another radiology bill to arrive.  No additional bills ever arrived.  

I’m not a medical professional and I’m sure there were differences in the CT scans (maybe the type of machine, etc.), but how could I be charged $1,900 for a CT scan and two years later be charged $234 for a CT scan?  Considering the second procedure was in New York, and Niagara Falls is twice the population than my tiny suburban city outside of Cleveland, Ohio, I was sure the New York charges would be higher, but they weren’t.  The difference in charges for the same (or very similar procedure) is an issue that has stayed with me.  

In doing more research and looking at the figures, it’s amazing to see the variances in the cost-to-charge ratio (i.e., how much a provider charges compared to how much it actually costs them to do a procedure) from provider to provider.  The ACA’s price transparency provision really never got off the ground and other proposed bills haven’t had much success – it’s also unclear if the current administration is motivated to support price transparency.  As the self-funded industry looks at cost containment measures as a whole, medical tourism is growing in popularity, especially when there are high value providers that are willing to offer services at lower costs and be more transparent with pricing.  Medical tourism and other cost containment methods, as well as consumer education, can help employer health plans contain costs; however, there is a need to look at the bigger picture and strive for more price transparency to help stabilize and support our fragile healthcare industry.   

By: Jen McCormick, Esq.

Since becoming a mom, I’ve experienced two pretty scary parenting adventures – taking a toddler to Disney World solo and taking a toddler to the emergency room. While I faced long lines, costly food, and anxiety during both events, it was the emergency department visit that by far was the scariest.

After a same-day sick visit at the pediatrician’s office, we were sent to the emergency room. Our pediatrician administered a treatment onsite, but after not quickly seeing results or improvement in my toddler’s condition, we were sent to the emergency department. This was terrifying to hear, but also a bit surprising to me. My toddler seemed in good spirits and seemed happy.

Of course I didn’t want to second guess the doctor, especially when my child’s health may be on the line, but I had to ask why they needed us to rush to the emergency department – was something happening and I just didn’t realize it? Not exactly. The pediatrician said that our toddler’s oxygen level was too low and his respiratory rate was too fast – and he needed to be monitored and that was not something the pediatrician’s office could do or had time to do.

I couldn’t help but question whether this was the most effective (cost or otherwise) way to manage care. Then again, it was my toddler and being a mom superseded my desire to argue. We went, and were monitored, and I continually questioned what was happening (and why) during each treatment step.

We try to encourage patients to take control of their health care – make informed decisions and properly utilize the emergency room (for emergency situations). I am not suggesting that our situation was not urgent or an emergency, but it was unexpected that the next step for us was the emergency department.  Maybe this is a trend (sending patients to emergency departments after a primary care visit) or due to time or resources. Either way, question what is happening so you better understand, and more importantly, ensure you receive the most appropriate care (particularly for our patients too young to speak for themselves).