On this episode of the Empowering Plans podcast, attorneys Corey Crigger and Kendall Jackson discuss the hot button topic of weight loss drugs. Tune in to learn more about the latest advances in this space and the various coverage and exclusion options plans may pursue.
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By: Bryan M. Dunton, Esq.
Unknown to many of us, celebrities suffer from mental health and substance use disorders just like anyone else. Recently, country music megastar Luke Combs openly discussed his struggles with obsessive compulsive disorder (OCD). Combs hopes that his discussion of the topic will reduce stigma that often comes with a mental health diagnosis. Taylor Swift has previously discussed her own struggles with an eating disorder for similar reasons. Before Robert Downey Jr. became Iron Man on the big screen, he suffered from substance use disorders for years before seeking treatment, ultimately becoming sober and remaining so to this day.
Barriers to mental health and substance use disorder treatment have existed in some form or another for quite some time, in part because of the aforementioned stigma. When Congress signed the Mental Health Parity Act (MHPA) 29 years ago, it was the first significant step towards addressing some of these roadblocks to care. The Mental Health Parity and Addiction Equity Act (MHPAEA) built upon the MHPA by prohibiting group health plans from imposing more restrictive non-quantitative treatment limitations (NQTLs) – non-numerical limits – on mental health or substance use disorder (MH/SUD) benefits compared to those placed on similar medical/surgical (M/S) benefits. The government’s reaffirmation that individuals need access to MH/SUD care has subsequently impacted benefit offerings.
The most important change, however, came only a few years ago when Congress signed the Consolidated Appropriations Act, 2021. This Act amended the MHPAEA to require NQTL testing that includes a comparative analysis for review of plan design, underlying plan and vendor policies and procedures, and de-identified aggregate claims data. For the first time, group health plans and their vendors were required to prove out their parity status.
In the four years since, we have seen this testing requirement trigger significant changes to how the self-funded health insurance industry perceives MH/SUD benefits. No longer an afterthought, MH/SUD benefits are often at the forefront of plan administrators’ minds when they make changes to plan design, attempting to avoid parity concerns.
So, how has this materially impacted people receiving benefits for MH/SUD conditions? Anecdotally, we have seen a significant focus on plan design changes to eliminate longstanding MH/SUD limitations that are more stringent than M/S limitations, particularly when plans have been unable to objectively justify their continued existence. For the past several years, we have received additional insight from the MHPAEA Reports to Congress that regulators submit annually. For example, we have seen exclusions relating to nutritional counseling, a core component of treatment for eating disorders, have been removed from 602 group health plans, impacting approximately 1.2 million plan participants. Additionally, the removal of exclusions of applied behavior analysis (ABA) therapy for the treatment of autism spectrum disorder (ASD) from many group health plans has increased access to this critical treatment for millions of plan participants over the last several years. This increased access to care helps children get the habilitative services they need, allowing parents to breathe a sigh of relief.
Health plans have also expanded access to medication-assisted treatment (MAT) and opioid treatment programs since enforcement efforts began in 2021. This development is critical since approximately 8.9 million people misused opioids in 2023 alone. Treatment and intervention for opioid use disorder can provide necessary help for an individual and help prevent the vicious cycle of abuse from inflicting further torment on their respective families.
Another benefit of heightened parity in benefits design is that it reduces individual out-of-pocket spending as better MH/SUD benefits are being offered in-network. Group health plans are often also supplementing their networks with telemedicine for MH/SUD treatment to ensure there is robust access to care for the individuals who need it most.
Improving access to MH/SUD benefits also broadly improves the health and productivity of the country’s workforce. Prior to NQTL testing being required, the World Health Organization (WHO) released results of a study showing that every dollar invested in mental health saved four dollars due to improved worker productivity. National Institute of Health (NIH) research notes that the improvement in access to care continues to reduce workplace absenteeism and presenteeism. Maintaining a happy and healthy workforce is not just good for the individual; it is good for employers, too.
If you or someone you care about has ever lived with a mental health condition, or struggled with a substance use disorder, you know exactly how challenging it can be to feel like it is acceptable to seek treatment, let alone find the right provider for you. The good news is that there are more evidence-based treatment options available now than ever before. The MHPAEA, and its NQTL testing requirements, are important to ensure that services are made available and affordable for individuals when they need them the most. Just like celebrities openly discussing their personal mental health and substance use diagnoses, laws like the MHPAEA are helping to break down these barriers to care so everyday people can live normal, productive, and happy lives.
By: Kate MacDonald
Chances are that cancer has touched the lives of nearly every American. Maybe it’s a suspicious mole that turns out to be a carcinoma, an old high school friend’s social media post raising awareness of the need for mammograms after a scare, or a grandparent who battled lung cancer after years of smoking. As the years go by, studies show that the frequency is increasing. The National Cancer Institute estimated that last year alone, more than two million Americans were diagnosed with a form of cancer, and 600,000 lost their fight. This can be compared to a diagnosis rate of 1.9 million in 2022. Statistics show that the most common types of cancer remain breast, prostate and lung cancer, but one stands out above the rest as having the lowest survival rate.
Tragically, pancreatic cancer has a reputation for being one of the deadliest forms of cancer – it has a notably low survival rate, as it is often not caught until the later stages, and it is a fast-spreading disease. Fewer than 13 percent of individuals live for more than five years after diagnosis. There is also no go-to screening process that has been developed specifically for this form of cancer, which can make detection harder.
But there may be some hope on the horizon for the future, as there is an ongoing clinical trial involving personalized mRNA vaccines treating pancreatic cancer, currently in the first phase. This trial, following an initial 2023 trial, followed sixteen individuals with operable pancreatic cancer, a rare situation, as pancreatic tumors are often inoperable (particularly without chemotherapy, radiation, and immunotherapies). The trial participants had their tumors removed, and then genetic materials were used to design personalized mRNA vaccines to train the individuals’ immune systems to attack the cancer cells.
Half of the participants responded to the vaccine – half did not. For those with a positive response, the team believes 20 percent of the cancer-fighting T cells would survive for decades and fend off cancer’s return. The next phases of the trials would explore what this may mean for extending a person’s life expectancy.
This is also not the only team working on a pancreatic cancer vaccine – there is a team of scientists at The University of Texas MD Anderson Cancer Center working on a non-personalized, off-the-shelf mRNA immunization, which would have a common target for all pancreatic tumors based on a common mutation, called KRAS.
It comes as no surprise that fighting pancreatic cancer can be both emotionally and financially fraught. According to the National Cancer Institute, when caught in an early stage, pancreatic cancer can set a patient back between $30,000 and $100,000. On the other hand, fighting advanced-stage pancreatic cancer tends to run from nearly $62,000 to upwards of $135,000 for life-saving treatments, procedures, and medications. Of course, this cost can vary further depending on severity, duration of treatment, geographic location, insurance coverage, and other factors.
MRNA vaccines are also being looked at as a method of treatment for melanoma, colorectal cancer, and solid tumors. The melanoma vaccine is being spearheaded by Merck and Moderna and came to fruition after lessons learned by the COVID-19 clinical trials. The colorectal cancer vaccine is also still in early stages and is based on targeting the KRAS mutation; early results show promise, according to a study led by researchers at Memorial Sloan Ketting Cancer Center.
A vaccine that has the potential to one day make its way onto the schedule could have a real impact on tens of thousands of Americans’ lives. Not only would this be a gamechanger in terms of access to quality healthcare, but it could also mean real relief for what may have otherwise been a devastating financial burden.
While cancer vaccines, thankfully, have been in the medical zeitgeist for the past couple of decades (more recently regarding human papillomavirus infections), future developments in this field may provide help on multiple levels for Americans across the country.
Artificial intelligence may be changing the trajectory of the self-funded industry – but can it negotiate? In this episode of The Phia Group’s Empowering Plans podcast, attorneys Brian O’Hara and Jon Jablon break down 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. From missing claim numbers to automated counteroffers that make no sense, Brian and Jon discuss whether AI is making negotiations easier, or defeating the purpose of the statutory process to begin with. Tune in for an honest discussion of the pitfalls of AI in No Surprises Act negotiations. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
By: David Ostrowsky
A preferred provider organization, known colloquially as a “PPO,” is a network of contracted – or preferred – providers who offer care at a minimal out-of-pocket cost compared to rates offered by out-of-network providers. A PPO plan is a very popular type of health insurance in which the insurance plan pays its network of preferred providers a set fee to provide certain healthcare services, enabling plan participants to pay a reduced copay or coinsurance when they receive care within said network. Patients can still see providers out of their preferred network, but they will likely be subject to a higher cost-sharing amount and have to satisfy a separate out-of-network deductible.
In contrast to PPO arrangements in which select providers charge members for medical services at established rates as set forth in their contracts and conventional reimbursement methods are grounded in the plan’s administrative system, reference-based pricing (aka “RBP”) plans are based on a healthcare reimbursement methodology that relies on a benchmark (typically Medicare rates) to negotiate lower prices from healthcare providers. Generally speaking, RBP plans will pay claims based on a “maximum allowed charge,” which traditionally equates to a percentage above what Medicare pays the provider for the same service.
Large self-funded employers, in particular, have been increasingly inclined to incorporate reference-based pricing as part of their health plan coverage (sometimes as an option alongside PPO plans) as the model provides them with heightened autonomy in deciding what they will pay and can help them avoid unnecessary procedural costs. In other words, RBP plans, grounded in an objective, data-based methodology and reliant on proprietary software, can act as a safeguard against providers arbitrarily charging sky-high rates, resulting in upcharges that can grossly surpass what Medicare expends for the very same services. With RBP plans, healthcare facilities may still charge unreasonably high prices under the guise of convoluted cost structures and hidden fees but the reimbursement amount isn’t tethered to the charges. Furthermore, reference-based pricing doesn’t just benefit plan participants who pay lower plan contributions but also stop-loss carriers who have fewer claims that reach the specific or aggregate deductible, as the plan’s payment levels are lower. However, it should be noted that the RBP approach does still pose a significant financial risk to patients, who could unexpectedly get balance billed if the established reference price falls far below what the actual provider charges – even though the No Surprises Act (NSA) does prevent certain claims from being balance billed.
Aside from the potential drawback of unforeseen balance billing, RBP plans do present other obstacles for self-funded groups. There are, in fact, some RBP programs that will only reimburse a limited network of providers who have consented to RBP rates, which can make it difficult for employees to access proper care for their needs. Additionally, adoption of RBP plans can create a serious administrative burden as establishing and maintaining accurate benchmarks and managing contracts with provider networks can be quite time consuming.
That being said, RBP plans represent a viable alternative to the scarce price transparency inherent in PPO plans, which leaves many patients saddled with devastating bills after insurance has paid its portion for a service and unaware that there could have been a far more affordable option. In many cases, under PPO plans, the cost of the claim can be marked up to account for administrative managerial expenses and add-on premiums. Furthermore, it is often the case that different healthcare facilities charge wildly different prices for the very same services. (This is a trend that is particularly applicable to maternity services, which tend to be on the more expensive end.) When a self-funded health plan is encumbered by an unexpectedly high out-of-network cost, it is not just employees who are burdened but also employers who find themselves struggling to effectively budget for healthcare expenditures that could have a profound impact on their bottom line.
In addition to reaping potentially significant financial benefits, participants on RBP plans are often able to enjoy greater agency over their healthcare due to the inherent flexibility of the plans. RBP plans allow patients to maneuver around restrictive networks so if they deem that a particular provider is capable of performing higher quality work, there is no need to question whether or not the service would be covered. Conversely, PPO plans often require services to be performed within their respective networks to guarantee coverage. Thus, most patients on PPO plans are unable to analyze empirically-backed information delineating pricing options and quality metrics – concerning both providers and facilities – in order to make enlightened decisions about their healthcare.
Of course, neither RBP nor PPO plans are without their drawbacks and ultimately, it behooves a self-funded group to decide which approach most appropriately aligns with its employee population, total claims spend, and other financial factors.
On this episode of the Empowering Plans Podcast, attorneys Brady Bizzaro and Cindy Merrell delve into the details of the Lewandowski v. Johnson & Johnson case. Is this case a big win for plan fiduciaries or a warning? Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
For well over a century, medical oxygen has been used for treating patients with an assortment of medical needs, most notably respiratory issues such as pneumonia, as well as those undergoing surgery, experiencing heart failure, and receiving maternal care. Utilized by over 370 million medical patients worldwide, medical oxygen was, in fact, added to the World Health Organization’s Essential Medicines List in 2017. And yet, according to a recent report published in The Lancet medical journal, well over half of the world’s population does not have access to safe and affordable medical oxygen services; unsurprisingly, this segment of the population is largely comprised of those living in lower-income and developing nations where it is more difficult to access facilities that offer basic oxygen services of reasonable quality.
Further analysis of the report’s findings paints a grim picture of a glaringly obvious health equity issue that was magnified during the COVID pandemic and, tragically, remains quite relevant now. As cited in the Lancet Global Health Commission report, which represents the first comprehensive estimate of disparities in medical oxygen availability, “more than 5 billion people—i.e., more than 60% of the world’s population—do not have access to safe, quality, and affordable medical oxygen services. In low- and middle-income countries (LMICs), only 89 million (30%) of the 299 million people who need oxygen for acute medical or surgical conditions receive adequate oxygen therapy, with the lowest access in sub-Saharan Africa.” Meanwhile, in addition to acute medical needs, approximately 9.2 million people with chronic obstructive pulmonary disease (COPD) require long-term oxygen therapy (LTOT) annually.
Increasing the number of worldwide oxygen recipients will be a costly endeavor. The commission estimated that it would cost $6 to $8 billion annually to narrow this coverage gap due to the many complexities and multi-faceted steps inherent in the process of supplying patients with medical oxygen. After all, delivering oxygen requires having the proper infrastructure for transporting heavy oxygen tanks across long distances. Even when oxygen supply is secured, the equipment to transport the oxygen directly to patients has to be routinely maintained and sanitized, while spare parts could take months to be delivered. Furthermore, healthcare facilities also necessitate pulse oximeters to screen and monitor blood oxygen levels during treatment—however, in poorer nations, pulse oximetry is used on fewer than one in five patients in general hospitals, and it is hardly ever used at primary healthcare facilities.
Of course, it is not just a matter of investing in appropriate equipment—it’s a matter of investing in the training of healthcare workers who can properly operate the equipment, which is often unfeasible in less industrialized countries. While this may be an extreme example, only until recently, Sierra Leone, where over half of the population lives below the national poverty line, had merely one public hospital in the entire country with a functioning oxygen plant, which by all accounts, resulted in thousands of avoidable deaths. Conversely, Nigeria, a few countries east of Sierra Leone, has recently made substantial investments in bolstering oxygen access by establishing 20 cost-effective plants for generating oxygen on-site for hospitals while also exploring liquid oxygen plants that can supply large swaths of urban areas.
Though the medical oxygen crisis may not be particularly acute in the United States right now— at least when compared to less industrialized countries—there’s no telling if the dire situation could eventually become an American problem whereby millions of our fellow countrymen suffering from infections and chronic lung conditions are left gasping for air on hospital beds. A problem that would, of course, become greatly exacerbated should a new pandemic descend on humanity.
Attorneys Kelly Dempsey and Bryan Dunton dive into the results of the 2024 MHPAEA Report to Congress. The EBSA and CMS have continued to improve their focus on network design and adequacy for group health plans. In this episode, Kelly and Bryan discuss how these parity problems manifest themselves in testing and what plans can do to resolve them. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
Like every other industry in America right now, healthcare is at a flash point. Amidst President Donald Trump’s flurry of executive orders, everyone from healthcare executives to patients is trying to anticipate what the future holds. What will happen to directives by former President Joe Biden that reduced drug costs and broadened coverage under the Affordable Care Act and Medicaid? What’s the future of gender-affirming healthcare for transgender people under the new look HHS? Will the number of uninsured Americans spike in the coming months? What’s the latest on proposed new cybersecurity requirements for HIPAA? Naturally, such questions – and so many more – have surfaced in the wake of a tidal wave of sweeping executive orders. The Phia Group’s panel of experts provides insight into topics that matter greatly to you. Click Here to View Our Full Webinar To obtain a copy of our webinar slides, please reach out to [email protected].
Every year, tens of millions of opioid prescriptions are written for Americans experiencing searing pain caused by broken bones, burns, procedures, and wounds. In most cases, the medications produce efficacious results without causing patients to become overly dependent and ultimately addicted. Still, there is a relatively small percentage of users (numbering in the tens of thousands) who develop severe – and sometimes fatal – addictions, hence the well-chronicled national opioid crisis that has descended on humanity this century.
Though health insurers and healthcare providers may continue steering patients toward these affordable, generally effective opioid prescriptions, an intriguing and potentially game-changing alternative has just emerged: Journavx (suzetrigine), a nonaddictive non-opioid analgesic designed to treat moderate to severe acute pain in adults, which was produced by Boston-based Vertex (the company most famous for generating cystic fibrosis treatments like the blockbuster Trikafta) and recently greenlighted by the FDA. Journavx has been hailed as a potential groundbreaking scientific development because it alleviates discomfort by working on nerve cells outside the brain – it never actually enters the brain -- thus lowering the risk of addiction and dependence that can cause some patients to consume dangerously high doses. Furthermore, Vertex’s new medication has not been reported to have opioids’ notoriously unpleasant side effects, namely nausea and drowsiness.
While Journavx presents as an FDA-backed, more salubrious alternative to traditional opioid drugs -- “an important public health milestone in acute pain management” according to Dr. Jacqueline Corrigan-Curay, the acting director of the FDA's Center for Drug Evaluation and Research -- questions remain as to how accessible it will be to healthcare consumers. More specifically, from a financial standpoint, Journavx is undeniably expensive, with each 50-milligram oral tablet costing $15.50. With patients expected to take two pills a day, the daily total cost would amount to $31. In contrast, comparable doses of the hydrocodone and acetaminophen combination retail for approximately $7 per day. Thus, without the availability of patient assistance programs or robust insurance coverage, the daily price of Journavx may prove to be prohibitively expensive for many Americans.
Fortunately, there may be some government-sponsored relief available, courtesy of the No Pain Act, which, effective this past January 1, mandates that Medicare provide additional reimbursement for non-opioid pain management in ambulatory surgical centers and hospital outpatient departments. Prior to 2025, hospitals were paid by Medicare at the same rate, irrespective of whether a doctor prescribed an opioid or a non-opioid medication; consequently, hospital providers have steered patients toward opioids, which are dispensed by a pharmacy upon a patient’s discharge at little or no cost to the facility. However, should Journavx be included among the list of non-opioid pharmaceuticals subject to the Act’s provisions, Vertex’s new pain drug would be more accessible in the aforementioned settings. Nevertheless, there is still the likelihood that commercial and Medicaid insurer challenges will ensue as the Act’s provisions are not applicable to these payers. Furthermore, even in the realm of Medicare, health plans have the ability to pursue coverage restrictions in the form of utilization management practices.
Yet there may be an alternative means for patients on Medicare plans to acquire non-opioid medications more affordably. In an effort to augment the No Pain Act amidst overdose deaths of seniors having soared over the past decade, Senators Thom Tillis (R-NC) and Mark Kelly (D-AZ) last year introduced the Alternatives to Pain Act to provide elderly Americans and those with disabilities easier access to non-opioid treatments at the pharmacy counter. If enacted, this law would reduce cost-sharing for patients receiving non-opioid pain medication under Medicare plans that cover outpatient therapeutics; eliminate the utilization of step edits that require patients to try a lower-priced prescription drug before “stepping up” to a costlier medication like a non-opioid alternative; and advocate for shared decision-making between patients and their healthcare providers pertaining to preferences for pain management medications.
Of course, the emergence of Journavx won’t be a panacea for the devastating opioid crisis. But, if Big Pharma, commercial insurers, and legislators can work towards a viable solution for ensuring broader accessibility, Vertex’s new creation could be a tremendous boon to humanity.
Canton, MA – February 10, 2025 – Twenty-five years ago, The Phia Group was nothing more than a dream. No outside investors, no loans, no safety net—just $8,000, donated hand-me-down furniture and computer equipment from friends and family, and an unwavering belief that there was a better way to serve the self-funded healthcare industry. In fact, the first Phia System was built by us and family members on nights and weekends. It’s in our core - it’s what guides us every day. From day one, The Phia Group grew the right way—one client at a time. No acquisitions, no shortcuts. Just relentless dedication to cost containment, innovation, and putting clients first. Now, a quarter-century later, we stand as an industry leader, proving that passion, grit, and a commitment to doing things the right way in order to build something extraordinary. "This company was built on sweat, sacrifice, and a refusal to take ‘no’ for an answer," said Adam V. Russo, CEO and co-founder of The Phia Group. "We started with nothing but a vision, and today, we have revolutionized how employers and plans approach healthcare costs. Every milestone, every client, every success is a testament to the people who have helped build this company—our employees, our clients, and our partners." Over the past 25 years, The Phia Group has transformed the landscape of healthcare cost containment. Through innovative solutions, expert legal guidance, and a relentless pursuit of excellence, we have saved employers billions of dollars while ensuring quality healthcare remains accessible. Fittingly, The Phia Group’s twenty-five-year anniversary coincides with its recent marquee unveiling of Care Empowered Pricing, a cutting-edge Reference-Based Pricing (RBP) model providing quality care and fair pricing. As The Phia Group looks to build on its first quarter century of success and further strengthen its foothold in the self-funded space, Care Empowered Pricing promises to be a critical enhancement to the company’s industry-leading ecosystem of cost containment services, which include ICE, Subrogation & Recovery, PACE, and Phia Unwrapped. “It’s hard to believe that The Phia Group is 25 years old,” Chief Legal Officer Ron E. Peck remarked. “In that time, we’ve seen groundbreaking laws, regulations, and case precedent. We’ve witnessed the rise and fall of innovative approaches and technologies. Things that we thought might shape the future are already in the rearview mirror. In all of that time, so much has changed – but one thing has been constant. Our dedication to our clients, partners, plan sponsors, and the hard-working participants they support has remained unwavering and constant, through it all. We never stop moving, innovating, and questioning the status quo – because every hard-working American deserves robust health benefits and affordable access to the highest quality health care. We look forward to seeing what the next twenty-five years will bring.” But at our core, The Phia Group is about more than business—it’s about people. Our clients are family, our employees are the heartbeat of our success, and our mission remains unchanged: to drive the industry forward, challenge the status quo, and fight for a system that works for everyone. While establishing itself as a trailblazer in the healthcare cost containment field, The Phia Group has also been annually recognized as a Top Place to Work by USA Today, including most recently in 2024, while remaining heavily invested in supporting The Boys & Girls Club of Metro South among other community engagement initiatives. As we celebrate this incredible milestone, we look forward to the next twenty-five years of innovation, impact, and unwavering commitment to the self-funded industry. The best is yet to come. About The Phia Group Founded in 1999, The Phia Group is a premier provider of healthcare cost containment solutions, offering innovative legal, consulting, and technology-driven services. Dedicated to empowering plans and reducing healthcare expenses, The Phia Group continues to lead the industry with integrity and passion. For more information, visit www.phiagroup.com.
By: Ron E. Peck, Esq. and David Ostrowsky
Traditional health benefit plans and insurance carriers pay medical bills that generally fall into one of two buckets, based on the “network status” of the applicable healthcare services provider. If the benefit plan or carrier is utilizing a network (such as a PPO) and the applicable provider is a participating provider, then the provider is deemed to be “in-network.” When a provider is in- network, the plan or carrier will pay the provider’s billed charges minus a discount defined by the network agreements. If the provider is not participating in the network, they are deemed to be “out-of-network.” In instances where the provider is out-of-network, the plan or carrier will determine how much of the applicable medical bill is payable by the plan or carrier – utilizing factors that are outlined within the applicable plan document or policy. Usually, this “maximum payable amount” is less than the amount being billed by the out-of-network provider. Whereas network agreements prohibit in-network providers from “balance billing” patients the difference between their billed charges and the network discounted payment, there is no contractual obligation prohibiting out-of-network providers from balance billing patients the difference between their billed charges, and the maximum allowable amount payable by the plan or carrier to out-of-network providers. Many will argue that network discounts have little to no value, due to the fact that the discount is being applied to an extremely inflated price, resulting in a still excessive payable amount. For those who assign little to no value to network discounts, the knee jerk reaction may be to abandon networks altogether, and pay all providers an objectively fair amount, based upon the plan’s definition of maximum payable amounts and utilizing objective metrics to calculate said payable amounts. On the surface, it may seem that this approach, commonly referred to as reference-based pricing (RBP), is a viable solution for plan fiduciaries trying to responsibly manage costs amid a marketplace rife with price variation. However, upon closer review, there are, in fact, multiple problems inherent in the RBP methodology: tremendous unanticipated out-of-pocket costs for patients when providers opt to balance bill for services exceeding the reference based price; a very limited number of providers willing to treat patients who participate in such plans due to many providers feeling disinclined to accept the reference price; price of services taking precedence over quality of services; and the undue administrative complexity of implementing and managing an RBP plan. Indeed, many benefit plans continue to utilize network plans, despite being contractually obligated to pay excessive prices, solely due to the protections networks afford against these issues. Fueled by the belief that the American workforce deserves better, The Phia Group is championing an alternative to RBP: Care Empowered Pricing (CEP). CEP represents a new methodology providing first-class plan support, substantial savings, and advocacy for both members and employers, among other features. Not only does CEP feature an exhaustive review of regulations and balance bill resolution support handled by The Phia Group’s team of experts, a repository of compliant cost containment language, and cutting-edge Ignite Repricing technology software, but it also tailors the program to a group’s specific needs by customizing rates based on plan terms, direct contracts, and provider profiles. In line with The Phia Group’s mission of empowering patients with access to high quality and justifiably priced care, CEP enables the TPA or health plan to assume ownership of the program. In contrast to a traditional RBP plan where the vendor manages the entire program in a black-box, and the TPA or health plan merely administers the claims, CEP is engineered in a collaborative manner that truly reflects a group’s brand, purpose, and market standing. As its name suggests, Care Empowered Pricing sincerely embodies compassionate care for plan participants. Whereas RBP programs, with their shortcuts in compliance reviews, understaffed services, and obsolete provider data for quality metrics, often leave plan participants at risk of receiving poor care riddled with delays, CEP equips TPAs with technology-enabled provider selection and access support so that they can operate with the best interests of plan members in mind. CEP isn’t just a new methodology for claims pricing. It is a complete solution meant to address access, pricing, and dispute resolution. With a quarter century of healthcare cost containment industry experience, The Phia Group has developed a revolutionary program in CEP that not only provides a bulwark against balance billing but also buttresses their entire ecosystem of cost containment services. Ultimately, it is the plan members – and their families – who are the real beneficiaries as they receive healthcare of the highest quality and at the lowest possible price point.
Attorneys Jen McCormick and Nick Bonds ring in the Lunar New Year by breaking down 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. Could this case blaze a new path for challenging agency actions in a post-Chevron Doctrine world? Join us as we discuss the potential implications for group health plans. Click here to check out the podcast! (Make sure you subscribe to our YouTube and Apple Podcasts Channels!)
By: Kendall Jackson, Esq.
As we close out the first month of 2025 with a new administration, the vast number of new proposals related to reducing government spending is unsurprising. Only a week ago, two documents were leaked related to House Republicans’ “Spending Reform Options,” which provided insight into their policy objectives.
One proposal that was particularly significant was the goal to pass H.R. 5688, referred to as the Bipartisan HSA Improvement Act of 2023. While this bill has several objectives, the most notable may perhaps be to allow an individual to continue contributing to a health savings account (HSA), as part of a high deductible health plan (HDHP), while participating in a primary care service arrangement, such as direct primary care (DPC). This would be a big shift from the current regulations and would be very beneficial to individuals with HSAs.
Currently, Section 223(c) of the Internal Revenue Code provides that an individual who is covered under an HDHP may not be covered by any other health plan that (1) is not a high deductible health plan, and (2) which provides coverage for any benefit that is covered under the HDHP. Consequently, when a DPC is offered outside the employer’s health plan it is considered by the IRS to be a second health plan and impermissible “other coverage.” This structure often presents issues for employers seeking to offer access to a DPC arrangement in addition to an HSA-qualified HDHP because the threshold for creating a “group health plan” is very low, including essentially any program offered by an employer or association for the purposes of paying medical expenses.
Even if the DPC is offered under the employer’s health plan, as opposed to outside the health plan, it still presents issues. Under the IRS rules, an HDHP is prohibited from providing any first dollar coverage for benefits until the minimum deductible is satisfied. There is, however, an exception for preventive care, and other limited exceptions where first dollar coverage would be available under an HSA-qualified HDHP. However, since the services provided by DPC are not always considered preventive care, there will inevitably be times when the patient's care must be subject to the deductible. Considering DPC does not typically include a fee for service, there is no fee to apply to the deductible, which is problematic. To offer a DPC or other PEPM-based non-preventive service arrangement under an HDHP, the plan must find a way to hold participants responsible for the full cost of services received until the minimum deductible is met. This structure is often not pursued because this largely defeats the purpose of PEPM-based services.
With the host of issues noted above, the passing of H.R. 5688 would be a significant modification to the current regulations. Not only would the noted concerns be alleviated, but it would benefit individuals with HSA-qualifying HDHPs by allowing contributions to the HSA while simultaneously capitalizing on the availability of a primary care service arrangement.
When you’re shopping for a new car, you expect that shelling out more money will correlate with a more high-powered, fancier, and durable vehicle. The same logic – that price and quality run parallel to one another – would seemingly apply to flat screen TVs, smartphones, stereo systems, laptops, vacuum cleaners, snowblowers, and every other item that Americans race to the stores to purchase on Black Friday. It is human nature to assume that a higher price equates to higher quality . . . unless information is provided to the contrary. As savvy shoppers are well aware, there are user reviews online that could potentially reveal that the higher cost vacuum or TV is no better than (and is sometimes worse than) a lower cost alternative. As such, price transparency on its own may be harmful as people gravitate to the higher cost item based on an assumption that it is better; however, when price transparency is combined with quality metrics, consumers can truly make the most enlightened and informed decisions.
When it comes to healthcare, the belief that a higher price of services equates to more optimal outcomes is also widely prevalent. However, because there is such scarce transparency regarding price and quality metrics of healthcare services – in stark contrast to such information being readily available for the aforementioned consumer products – this belief is so often not grounded in reality.
And The Phia Group, as the country’s foremost expert in healthcare cost containment, has the numbers to prove it.
While the United States spends more on healthcare than any other developing country and still ranks last for quality of healthcare, the same dynamic plays out among the individual states. As indicated in the recently released The Phia Group Healthcare Index, a state-by-state healthcare quality and cost analysis grounded in clinician and facility data from publicly available CMS sources, incorporating both quality metrics and cost data derived from Medicare payment files, the states that ranked at the top (Minnesota, Hawaii, and Montana) had high quality healthcare and lower aggressive billing/more affordable services while those states ranking low on the list for healthcare quality (Nevada, South Carolina, and Texas) had more aggressive billing rates/less affordable services.
This tremendous irony may confound readers, but, in a sense, it should not come as a major surprise given that so many Americans are unaware of how to access information pertaining to healthcare quality and cost metrics. Subsequently, the overwhelming majority of people have no real understanding as to what their respective medical treatments cost – or that there is often such a wide range of prices for a given service. For just one example, the price of a knee surgery at one facility could be thousands of dollars higher than it is at another facility; in so many cases, unfortunately, the quality of the surgery at the higher-priced facility may be of vastly inferior quality, resulting in further costly complications and re-admissions. In other words, it’s a vicious cycle that can keep repeating itself. This same dynamic certainly holds true with maternity services, which tend to be some of the costliest medical services people consume.
So why aren’t more people aware of the actual costs of the medical services they receive? While there is such financial data available, it certainly takes a longer Google search to find than that for most consumer products. Also, because participants on health insurance plans are not paying the entire bill – but instead focused on their deductible amount and co-pays – they have little incentive to do some research and learn what the total price is. Indeed, many expecting mothers would be shocked to find out that they could be saving their respective health plans tens of thousands of dollars by delivering at certain hospitals, ones that may just so happen to offer superior services.
Ultimately, the mindset of patients needs to change. They need to view themselves as engaged consumers of healthcare services who shop around by comparing cost and quality metrics – no different than they would for products such as a lawn mower or refrigerator. By law, healthcare facilities are required to provide clear pricing information online for services rendered; patients/engaged healthcare consumers need to feel empowered to search for that information and then make educated decisions that are in their best interest.
That is, quite simply, the only way to prevent healthcare costs from spiraling out of control.
For reference, the list of states, ranked top to bottom, is as follows:
**Maryland was excluded due to its unique all-payer model, which regulates hospital payments differently from other states.