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The Phia Group's 4th Quarter 2020 Newsletter

On October 21, 2020


Phone: 781-535-5600 | www.phiagroup.com


The Book of Russo:
From the Desk of the CEO

Welcome to the Fall Season! Here in Boston, the leaves are turning color and the air is getting a bit cooler. Meanwhile, at The Phia Group we are busier than ever (even though I haven’t been on a plane since February, and haven’t worn any of my beloved suits in over six months). What I have done, however, is learn that even though I can’t fly anywhere to see clients or prospects, we are still creating new opportunities together. Additionally, though miles may separate us, I am still thrilled to remain in close contact with so many of you virtually; be it by e-mail, phone, or video conference. In fact, in some ways, I actually feel like – since this

pandemic started – I have had more contact with you – my industry friends. Please, reach out any time, as communicating with you has been and will continue to be one reminder of better times. There is no question that my relationship with many individuals here at Phia has also grown tremendously since March. For instance, where we used to do monthly staff meetings, we now do them – virtually – on a weekly basis. Unlike the past, now we also invite our staff to have their children join in on the video calls; (plus pets too). Since all of this started, I have gotten to meet so many family members – both two legged and four – that I otherwise would not have encountered. I’m not even addressing the fact that I actually get to see all of my kids every day, instead of calling them from some random hotel room or airport terminal. If you think I am a “glass half full” type of person, then you are correct. I guess I have always tried to be optimistic in life. I am looking at the silver lining, as it applies to the pandemic, but I also feel the same way about self-funding, and where it is heading. The sky is the limit for our industry and we here at The Phia Group are ready to assist you in ensuring its success. Let the following serve as proof that we can do great things together, and don’t forget to reach out soon. Happy reading!

 


Enhancements of the Quarter: Phia Unwrapped & Balance Billing Value Reports
Phia Fit to Print
From the Blogosphere
Webinars
Podcasts
The Phia Group’s 2020 Charity
The Stacks
Employee of the Quarter
Phia News

 

 

Enhancement of the Quarter: Phia Unwrapped and Balance Billing Value Reports

Clients of both Phia Unwrapped and our Balance Bill resolution services will be excited to hear that we have this quarter created brand new reports for both services.

Both the Phia Unwrapped and Balance Billing Value Reports not only highlight performance for a particular group, or across a TPA’s entire block of business, but also compare those results to various benchmarks, to provide a feel for how those results hold up in a more objective manner. These new reporte provide the user with an easy-to-read summary of successes The Phia Group has achieved for groups it services, on a quarterly and yearly basis, both in relation to Phia Unwrapped and Balance Bill resolution services. What’s more, it will be automatically provided on a regular basis, but it can also be run on-demand by contacting The Phia Group’s Customer Success Team.

These new reporte highlight the value added by Phia Unwrapped, and conflicts resolved through Balance Bill resolution, both in an information-packed, but comprehensible, PDF. They are designed to not only be informational, but also an important client-retention and marketing tool for TPAs and brokers. Since these reports will be accurate as of the minute they were run, our clients can rest easy knowing that they will always be able to have accurate information at their disposal, whether it’s to provide progress reports to groups, to make tough payment decisions using past data for reference, to include within a renewal proposal, or simply out of curiosity.

 

 

The Phia Group is constantly seeking new ways to improve health plans’ self-funding experience; as always, we are Empowering Plans.

To learn more about Phia Unwrapped, Balance-Billing services, or any other services The Phia Group offers, please contact our Sales Manager, Garrick Hunt, at 781-535-5644 or GHunt@phiagroup.com.


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Service Focus of the Quarter: Patient Defender

Anyone reading this who personally uses RBP, has a client that uses RBP, or has even thought about using RBP is familiar with the concept of balance-billing. RBP is a great tool for plans to use to contain costs, and has proven monumentally successful for some groups – but the threat of balance-billing and collections still exists from some stubborn providers, no matter how effective the patient advocacy may be.

In response to the needs of the self-funded industry’s ever-growing RBP market, The Phia Group has created Patient Defender: a true legal tool to combat the balance-billing problem. Through Patient Defender, for a nominal fee, patients have access to an attorney to represent them if they are sued or sent to collections – and even if they choose to proactively litigate against a medical provider! Gone are the days when a TPA or employer has to tell a patient that the patient can litigate, but must pay his or her own attorney’s fees. Groups that the Patient Defender have pre-paid the attorney’s fee for the patient, removing the most substantial barrier to a patient’s legal defense.

This innovative tool is primarily designed for an RBP plan to supplement its existing patient advocacy program and further protect its members from balance-billing and collections, but it can be an add-on to any plan that pays any claims at any non-contracted rates (since it’s certainly not just RBP plans that may face balance-billing).

For more information about this unique service offering, contact our Sales Manager, Garrick Hunt, at 781-535-5644 or GHunt@phiagroup.com.

 

Success Story of the Quarter: Negotiating COVID-19 Test Claims

As you may know, and as you and your clients may have discovered, there is some recent federal legislation concerning payment rates for COVID-19 testing. In a nutshell, medical providers offering COVID-19 tests must post the price they charge for the test on their website, and health plans must pay those rates, absent a negotiated rate with the provider.

The legislation has been broadly read to imply that to be applicable, a negotiated rate must be in place prior to the test being performed. We see no evidence of that, though; we have been staunch proponents of the idea that the posting of the price does not preclude negotiation of that price following treatment. If the provider refuses to negotiate, we will counsel a client not to ignore the federal regulations – but we also believe this negotiation effort is in compliance with the law.

We have had occasion to approach a few providers in an attempt to settle, but the general response from providers has been to hold firm, under the theory of: “Why the heck would we lower this price that the law says you have to pay?!” A TPA client of ours informed us that they have a group benefit plan client that has incurred claims for a very large number of COVID-19 tests, with substantially all of them coming from the same provider. The TPA asked us if we could negotiate a better rate than the posted rate.

We’ll skip to the interesting part: this plan was willing to steer all of its patients to another provider if this provider didn’t agree to negotiate a better rate. Despite having the knowledge that the plan did have a legal obligation to pay the full bill, these other factors and our approach led to the provider ultimately being willing to negotiate a better rate for both the tests already incurred as well as future tests.

We knew it was possible – but seeing it happen felt good!

 

Phia Case Study: Unwrapping Without Unwrapped – Our Claim Negotiation & Signoff Service

A client of The Phia Group’s case-by-case negotiation service (Claim Negotiation & Signoff, or CNS) presented us with a very large hospital claim, and requested that we negotiate it. One of our experts approached the hospital to open a dialogue, but was immediately shut down with a stern note indicating the hospital’s unwavering refusal to negotiate.

Of course, our team was not about to give up, but it was cause to strategize. It seemed clear that throwing numbers at this hospital – even supported by data such as Medicare equivalents, cost-to-charge ratios, average commercial reimbursement, and more – was not going to get us anywhere. We tried to negotiate in good faith, but the hospital refused to entertain an offer.

Ultimately, our client wanted this to go away fairly quickly, so the Plan paid its minimum benefits and attempted a method called “accord and satisfaction,” where an additional conditional payment was made, the condition being that the hospital close its file. The theory is that negotiating in theoretical numbers is one thing, but having an actual, physical check for additional payment can yield better results. Alas, the provider rejected that conditional payment, and sent the check back.

After a series of conversations with the group, its broker, the TPA, the stop-loss carrier, and Phia, it was decided that Phia would attempt to enforce the plan’s initial payment (pursuant to the Plan Document), and the plan would essentially walk away for now, and deal with balance-billing if it happened.

So, we waited. And waited. And we’re still waiting. There has been no balance-billing; just angry letters from the hospital demanding that the plan pay more, but no mention of threats to balance-bill the member nor a formal appeal. That isn’t uncommon; a show of strength from a health plan can go a long way to show a provider that the plan means business. Many providers are loathe to balance-bill their patients, and the only way to find out is to test those waters. If the hospital does decide to balance-bill the patient, we’ll sic our experienced balance-billing team on it – but things are looking good for the time being.

Now just imagine this strategy being applied to all out-of-network claims (via Phia Unwrapped), whereby a plan pays its minimum benefits, stands firm, and combats balance-billing on the back-end, as such issues arise.

 

Fiduciary Burden of the Quarter: Determining Which Services Can Be Covered

This following decision about which we will now discuss, is not traditionally thought of as invoking a fiduciary duty, and that thought is generally accurate in most contexts. In the midst of a pandemic, however, some health plans have been delving more deeply into the question of what services they may cover. In general, ERISA and the IRS rules permit health plans to cover any medical services, and for the vast majority of services, there is no question whether or not they fall into that category. But what about things like art therapy? As some individuals seek to transition from more “traditional” medical care to alternatives, perhaps not in a traditional hospital or physician office setting, questions are arising, most relevantly whether the IRS rules even allow a health plan to cover these types of services.

In general, the IRS has made certain rules regarding which services can be covered by a health plan; and those are, broadly, services that constitute medical care. That term is defined in terms of services designed for “the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.”

The decision of whether or not a particular service complies with that definition (and therefore the tax rules) is left to the Plan Sponsor. The regulators generally require that Plan Sponsors use a good faith, reasonable interpretation of the relevant rules and guidance, in order to best comply when it might not be 100% clear – so unfortunately, plans (usually via the TPA) will need to scrutinize these services and determine, on a case-by-case basis, whether something like art therapy was truly medical in nature.

What little guidance we’ve gotten from the IRS on this topic suggests that it is not necessarily the case that including things such as art therapy as line items within a Plan Document are necessarily dispositive of whether or not the plan is complying with tax rules in any given case; for instance, Mary may have a legitimate need for art therapy as a form of medical care, whereas Michael may be a rambunctious child whose parents send him to a two-week insurance-funded art therapy retreat in lieu of expensive summer camp. For Mary, the art therapy was medical care, and therefore the IRS rules permit the plan to cover it – but for Michael, the IRS rules would not permit it.

The moral of this strange story is that a health plan may only cover medical care, and the plan will need to be careful if it lists any non-traditional treatment in the SPD. There is nothing inherently noncompliant about simply listing that care – but benefits should only be actually paid by the health plan if the care truly meets the definition of “medical care.”
 


 

Webinars:

• On September 22, 2020, The Phia Group presented, “Benefits on the Ballot – A Political Update for Health Benefits Professionals,” where we discussed the most important elections (including candidates’ positions on health), ongoing legal cases, and proposed laws.

• On August 17, 2020, The Phia Group presented, “Conflicts Abound – Providers & Facilities Fight Back,” where we discussed new aggressive tactics used by providers and facilities, as well as the conflicts they are causing with networks and stop-loss.

• On July 15, 2020, The Phia Group presented, “The Underlying Regulatory Landscape - Don’t Get Lost in the New Normal,” where we discussed statutes, regulations, and case law that have been and continue to be considered, debated, and finalized; resulting in serious, lasting effects.

Be sure to check out all of our past webinars!



 


Podcasts:

Empowering Plans

• On September 24, 2020, The Phia Group presented, “The Pandemic & The Employer Mandate,” where our hosts, Kelly Dempsey and Brady Bizarro, discuss a particularly damaging impact of the pandemic that does not get much media attention: with many businesses forced to operate at reduced capacity, they still have to comply with the ACA's employer mandate.

• On September 15, 2020, The Phia Group presented, “IRS Notice 2020-29, COVID-19 and Cafeteria Plans: Self-Funded Plans Beware!,” where our hosts, Jennifer McCormick and Philip Qualo, discuss how the COVID-19 pandemic has brought about an unprecedented wave of federal legislation in a short period of time specifically aimed at regulating employer-sponsored group health plan coverage.

• On September 2, 2020, The Phia Group presented, “Healthcare Policy at the DNC/RNC,” where our hosts, Ron Peck and Brady Bizarro, assess what we learned from the candidates on healthcare policy at the virtual Democratic and Republican national conventions..

• On August 3, 2020, The Phia Group presented, “SCOTUS & HHS – ICYMI,” where our hosts, Jennifer McCormick and Nick Bonds, discuss significant developments in nondiscrimination regulations, and the implications for those in the self-funding industry.

• On July 23, 2020, The Phia Group presented, “COVID-19’s Catch-22,” where our hosts, Ron and Brady, discuss a Catch-22 emerging in the midst of the global pandemic - as more government intervention is needed to deal with COVID-19, calls for a public option and Medicare for All grow louder.

• On July 17, 2020, The Phia Group presented, “COVID, Floyd, and the Fight for Social Justice,” where our hosts, Ron Peck and Brady Bizarro, address recent events that have altered the world as we knew it in a matter of months, and in one notable case, in one day.

• On July 10, 2020, The Phia Group presented, “Catching up with the Courts,” where our hosts, Ron Peck and Brady Bizarro, jump into a discussion about recent high-profile court cases that could shape our industry: from requiring hospitals to post their negotiated rates with insurers online to the Trump administration's latest action in the Supreme Court case that could spell the end of the entire Affordable Care Act.

Be sure to check out all of our latest podcasts!

 



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Phia Fit to Print:

• BenefitsPro – https://www.benefitspro.com/2020/09/24/president-trumps-latest-eo-on-drug-prices-whats-changing/ – September 24, 2020

• Self-Insurers Publishing Corp. – RISE AND SHINE: Employment-Based Health Benefits In A Post-COVID Future – September 3, 2020

• BenefitsPro – How COBRA premium subsidies can protect employer-sponsored coverage – September 1, 2020

• Self-Insurers Publishing Corp. – SUBROGATION: The oldest and most effective form of cost containment – August 6, 2020

• BenefitsPro – Considerations for group health plans in 2021 – July 24, 2020

• Self-Insurers Publishing Corp. – COVID-19, Balance Billing, Out-Of-Network Claims, and Confusing Charges - An Ugly Combination – July 7, 2020

• BenefitsPro – Worker’s comp recovery in a COVID-19 world? It depends! – July 2, 2020



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From the Blogoshpere:
 

Plan Mirroring: What Does It Really Mean? Is your stop-loss carrier mirroring your SPD Language?

Returning to Work Safely and Smartly. Who Bears the Cost? How is it possible to keep everyone in your office safe?

New Rules on Prescription Drug Importation Are Released – Or Are They? At first glance, the order seems to take sweeping steps to facilitate the importation of prescription drugs, but does any of it really represent a departure from existing law?

A Brief Anecdote on Testing for COVID-19. Find out where you can get tested for COVID-19.

Simple Negotiations Made Not-So-Simple. Even something as simple as a plain old claim negotiation can still develop certain unexpected hiccups.

To stay up to date on other industry news, please visit our blog.

 



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The Stacks:

RISE AND SHINE: Employment-Based Health Benefits In A Post-COVID Future
 

By: Ron E. Peck, Esq. – September 2020 – Self-Insurers Publishing Corp.

One would reasonably assume that, when discussing a pandemic and health care, the natural direction in which we would head next would be a discussion regarding the health impact – present and future – of COVID-19. The treatment options, the cost of said treatment, as well as short-term and long-term impact of the disease on patients. Yet, here I will not attempt to dissect the clinical issues presented by coronavirus, and the immediate, direct impact it will have on our health benefit plans, and self-funded plan sponsors. Instead, I will be discussing a threat to our industry not called COVID-19, but rather, a growing sociopolitical threat that has emerged in response to a larger economic victim of the virus.

Click here to read the rest of this article
 

SUBROGATION: The oldest and most effective form of cost containment

By: Maribel Echeverry McLaughlin, Esq. – August 2020 – Self-Insurers Publishing Corp.

For many health plans, the first interaction with any type of cost containment method usually comes about when they begin to utilize subrogation as a way to keep plan costs low, and recover monies owed to them by third parties. It is one of the original, yet consistently effective, cost containment concepts that, as of recently, tends to get overlooked when discussing new and more innovative ways to enhance plan savings.

The history of subrogation can be traced back to as far as the origins of the Court of Chancery in the Elizabethan period. The English Court of Chancery had jurisdiction over all matters in equity, such as trusts, land disputes, the estates of lunatics and guardianship of infants. In this period, subrogation was a common equitable remedy, where one party was permitted to assume a third party’s legal right to collect a debt.

Click here to read the rest of this article
 

COVID-19, Balance Billing, Out-Of-Network Claims, and Confusing Charges - An Ugly Combination

By: Jon Jablon Esq., and Tim Callender Esq. – July 2020 – Self-Insurers Publishing Corp.

The COVID-19 crisis has sparked a discussion on an old, but repeatedly important and troublesome issue: balance billing and/or overbilling. During the early days of the COVID-19 crisis, news outlets were quick to report examples of health insurance coverage confusion, network issues, and billing issues, all related to a variety of COVID-19 claims.

In April, the federal government chose to tackle this concern by placing prohibitions on how providers could bill COVID-19 patients who received services from providers receiving funds under the Public Health and Social Services Emergency Relief Fund. This attempt to control balance billing and excessive charging practices led to media confusion, with numerous media outlets reporting that the federal government had banned all balance billing and/or all surprise billing, which was not the case.

Click here to read the rest of this article

 

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The Phia Group's 2020 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 2020 charity is the Boys & Girls Club of Metro South.



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

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

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

Learning Pods Program

The Boys & Girls Club of Metro South’s Brockton Clubhouse has created a Learning Pods Program designed to support K-8 Students as they adapt to distance learning. This full-day program hosted by The Boys & Girls Club of Metro South was designed to help students and their parents get back into the swing of things, given the change in how students are learning. As you know, The Phia Group is dedicated to ensuring children in the Boys & Girls Club of Metro South are always prepared for their school year. When we heard that they were in need of school supplies for 100 students, we jumped to the opportunity to help. We have compiled a list, loaded up the Amazon cart, and placed our order. The money that we used to purchase these suppliles comes from donations made by the Phia Family and we are proud to announce that we have raised the $2,500 needed to purchase all of the school supplies. We hope all of the children have an amazing school year and can’t wait to hear all about the progress being made with the Learning Pods Program!

The Phia Group’s Diverse Library Exchange

The Phia Group and the Diversity Inclusion Committee are excited to announce the opening of Phia’s Diversity Exchange Library. Inspired by a recent article that featured Adam’s friends and family, the Phia Diversity Exchange Library is a designated space where employees can loan as well as pick up books that are written by authors, or feature characters, from diverse backgrounds.

The Library includes both adult and children books with the goal of facilitating cross-cultural book sharing and dialogue so that employees, and their families, can learn more about other cultures and diverse communities. It is through knowledge and education that we can become more aware of our own place in this world and learn how to respect and embrace others from different backgrounds.


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Get to Know Our Employee of the Quarter:
Aditya Sukumar

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

The Phia Explore team has made the unanimous decision, without hesitation, that there is no one more deserving than our very own Aditya Sukumar, The Phia Group’s Q3 Employee of the Quarter!

Adi has been a valuable asset to the PDM and PMO teams. He dedication and commitment to client success is commendable. He has demonstrated his expertise in PDM and good communication skills during client demo’s and meetings. His goal oriented approach with focus on client success is very valued, especially his ability to carefully review and resolve client issues with a quick turnaround. He’s a wonderful team player, and doesn’t hesitate to take time out of his schedule to step in and help others when needed. He is truly a great asset to Phia.

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

 


Job Opportunities:

• Customer Care Representative

• Accounting Administrator

• Chief Financial Officer

• Claim Analyst

• Claim and Case Support Analyst

• Case Investigator

• Health Benefit Plan Administration Attorney

• ETL Specialist

• Executive Assistant

See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers

Promotions

• Sabrina Centeio has been promoted from Claim Recovery Specialist IV to Sr. Claim Recovery Specialist

New Hires

• Dennis Ferzoko was hired as a Claim and Case Support Analyst

• Kaitlyn Furtado was hired as a Case Investigator

• Trina Garcia was hired as a PACE Specialist

• Jenny Armstrong was hired as a Sr. Subro Atty

• Brad Lee was hired as an IT Developer

• Emily King was hired as a Customer Service Rep

• Jillian Stone was hired as a Claim & Case Support Analyst

• Andrea Goodman was hired as a Plan Drafter

• Sneh Gaonshindhe was hired as a Sr. Software Engineer

• Adam Doherty was hired as a Claim & Case Support Analyst

• Anna Lopes was hired as a Claim & Case Support Analyst

• Bradley Bedarian was hired as a Case Investigator

• John Pagnotta was hired as a Case Investigator

• Soumya Gampa was hired as a Sr. Software Engineer

 


Phia News:

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.

Welcome to Phia's New Home!

The Phia Group has officially moved! We are proud to announce that after 20 years in business, we have officially moved into an office that we have worked extremely hard for. Our growing staff needed more room and we wanted to make sure they felt right at home when they came to work. Check out our new office!



Welcome to Phia’s New Home in Louisville, KY!

The Phia Group has officially outgrown its Kentucky office after less than one year of opening, and will in Septemeber be moving to a bigger, better location. Since operations began in Kentucky, we have hired over 20 individuals from the Louisville area. We are amazed by the rapid growth of The Phia Group’s sister office and can’t wait to add more Louisville locals to the Phia family!

Welcome to Phia’s New Home in Louisville, KY!

The Phia Group has officially outgrown its Kentucky office after less than one year of opening, and will in Septemeber be moving to a bigger, better location. Since operations began in Kentucky, we have hired over 20 individuals from the Louisville area. We are amazed by the rapid growth of The Phia Group’s sister office and can’t wait to add more Louisville locals to the Phia family!

Customer Success Team

The Phia Group is proud to announce the restructuring of it’s Customer Success Team. As many of you may know from experiences within your own organizations, every sector is experiencing a fundamental shift in customer expectations. It no longer is enough to just be the industry leader in results, one must be the industry leader in customer relations as well. Our Customer Success Team (“CST”) is lead by Rebekah McGuire-Dye. Mrs. McGuire-Dye has over 25 years of experience working in cost containment. Her experience lends her to be an exceptional advocate for The Phia Group’s clients. Mrs. McGuire-Dye will lead her team in providing not just reactive responses to our clients, but in a pro-active approach to ensure every client of The Phia Group is maximizing the value of our many services while always looking for new and innovative products to help our clients grow and lead in their respective areas.

Here are a few items with which the CST can assist you with:

• Identify concerns regarding any and all Phia Group services or results, confirm the absence of an issue or resolve the matter, and ensure customer satisfaction with the explanation or revision;

• Identify any delays or roadblocks to remove them and ensure optimal performance;

• Deliver all reports and resolve any issues associated with them;

• Fully analyze, utilize, and interpret Value Reports and other reporting tools to identify both issues and opportunities;

• Respond to routine file specific client questions (e.g., status on file #12345); and,

• Provide subject matter expert (“SME”) assistance as needed.

Although our CST team continues to grow, it is already one of the best staffed and most professional departments at The Phia Group. We encourage all clients to reach out directly if they have any questions at CustomerSuccessTeam@phiagroup.com.


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info@phiagroup.com
781-535-5600

The Stacks - 4th Quarter 2020

On October 21, 2020

Rise and Shine: Employment-Based Health Benefits in a Post-COVID Future

By: Ron E. Peck, Esq.

It is a summer day in August.  The year is 2020.  I dropped my son off at daycare this morning.  I feel guilt, fear and anxiety over having done so.  That is not how I felt upon doing so in August of 2019.  What has changed?  We are busy enduring COVID-19; a pandemic the likes of which the United States has not seen in one hundred years.

COVID-19 has caused a ripple effect, felt by almost every facet of our modern society.  From retail and food services, to ride sharing and travel.  Tourism, education, and of course – health care.

One would reasonably assume that, when discussing a pandemic and health care, the natural direction in which we would head next would be a discussion regarding the health impact – present and future – of COVID-19.  The treatment options, the cost of said treatment, as well as short-term and long-term impact of the disease on patients.  Yet, here I will not attempt to dissect the clinical issues presented by coronavirus, and the immediate, direct impact it will have on our health benefit plans, and self-funded plan sponsors.  Instead, I will be discussing a threat to our industry not called COVID-19, but rather, a growing sociopolitical threat that has emerged in response to a larger economic victim of the virus.

As retail and restaurants have closed shop – for many, permanently; as businesses have had to suddenly adjust to a “work-from-home” environment – for many, without success; as an economy that was thriving has suddenly been thrust into a recession – so suddenly you would be forgiven for thinking you have whiplash … Employers, and thus employees, have been victims of a pandemic economy. 

People have been furloughed or laid off in record numbers.  Visit any nation, anywhere on the planet, and involuntarily losing one’s job is never deemed by the ex-employee to be a happy, welcome circumstance.  Universally, we work to provide for ourselves a sense of purpose, make a positive impact, and enjoy an income.  Thus, regardless of where you live, losing your job is usually not a cause for celebration.  In the United States, however, another reason for which people seek employment is to receive benefits.  Amongst those highly desired benefits, and perhaps primary amongst them, are health benefits.  Whether an employer pays premium to a carrier in exchange for traditional, “fully-funded” insurance… or… the employer sets aside contributions from itself and its employees, to “self-fund” its health plan… employees appreciate health benefits.  So much so, it only makes sense that employers realized they could craft, manage, and fund attractive health benefit plans, using them as an incentive – luring in job seekers and keeping existing employees.  Indeed, in a capitalistic economy like ours, employers are always hunting for the most effective ways to attract and keep the best talent.  In an economy that is functioning well, it only makes sense to allow employers to do so.

What about an economy that is not functioning well?  If and when employers are not using health benefits to attract the best talent, because they cannot afford to pay for health benefits – let alone hire said talent in the first place… naturally, those people who were banking on employment as a source for benefits; people who only a few months prior were singing employment based benefits’ praises… will now question the wisdom of such an arrangement.  One study1 suggests that more than five million Americans have lost their health benefits due to being laid off, as a result of COVID-19.

Add this to a society that – at least in part – is already contemplating a “Medicare-for-All” option, and we have a perfect storm.  
One person wrote, “Corporate America fights single payer universal health care afraid to lose power over workers. Insurance companies fight single-payer universal health care because they make money not providing health care. If small business didn’t have to pay for medical, they could raise wages, modernize, expand their businesses and grow our economy. Workers could leave toxic and unsafe working environments or raise their voices when feeling abused without fear of losing their benefits2” and they aren’t alone.  There exists a perception that employment-based health plans offer no benefit whatsoever over Medicare, and that – therefore – there is no reason to maintain it.

Whenever we, as human beings, make a decision – we perform a cost/benefit analysis.  When I wake up in the morning, and decide to brush my teeth, I perform a cost/benefit analysis.  I weigh the time it takes to brush against the bad breath and tooth decay I’ll suffer if I fail to brush.  If and when we have an interest in another’s cost/benefit analysis, it behooves us to explain to them the benefits and costs involved in that decision.  Consider the following example…

When my previous automobile hit 100,000 miles, I began contemplating my next automotive purchase.  I am constantly being exposed to manufacturer’s marketing – lauding their cars’ qualities.  Thus, when I was shopping around, I was more than armed with the costs and benefits of each option.

Consider the average American voter.  Can you confidently say they are aware of the benefits of employment-based health plans?  I doubt it!  Can you confidently say they are aware of the costs of an alternative?  I doubt it!

The bottom line is this – most people believe that providers of health care services charge one amount to all payers.  They believe that different health care providers in the same area charge about the same amount for the same services.  They believe that health insurance – whether it is fully-insured, self-funded, Medicare, or Medicaid – pays the bill in full, and if there is a discount, those savings are for the benefit of the payer, not the patient.  They believe there is no difference between a private plan and Medicare, aside from the means by which they pay for coverage – premiums or taxes.

Rather than continuously allow our industry to be bashed by the media, to be misunderstood by the public, and thus fall short when forced to endure a cost/benefit analysis against Medicare-for-All … all with a backdrop of a pandemic economy … it behooves us to educate the public regarding the benefits of employment based health plans.

Looking at my own employer, and our self-funded health plan; if Medicare-for-All or some other public option were made available at a lower cost to me than my current plan, I would not make the switch.  Why?  The answer, simply put, is that I understand the benefits of our plan.  I recognize that it is customized to match the needs of a population most like me in needs and wants.  I recognize that the costs I pay up front are used to enhance benefits I may need later.  I recognize that individuals who passionately care about my wellbeing are monitoring my plan and ONLY my plan, to ensure it functions well.

COVID-19 and the unemployment it has triggered armed our adversaries with ammunition.  They point at the state of things and argue that health benefits are a human right – and as such – they cannot be tied to something as fickle as employment.  Yet, they fail to address that, whether through premiums or taxes, someone needs to pay for health care.  Should we all be covered by Medicare, those unemployed individuals will be called upon to pay their share, via taxes, using funds they don’t have.  As such, passing the buck is not a solution either.  The burden is on us to offer a better solution, and to suggest policies meant to contain the cost of the care itself. 

Above all else, our job is to remind people of the benefits of private health plans – benefits that Medicare can’t match.  We need to change the dialogue – shifting the focus away from unemployment as an excuse to abolish health plans, and instead shift the focus onto reducing the cost of care regardless of who is paying.

1  https://www.familiesusa.org/resources/the-covid-19-pandemic-and-resulting-economic-crash-have-caused-the-greatest-health-insurance-losses-in-american-history/
2  https://www.concordmonitor.com/End-employer-based-health-care-35555925

 

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Subrogation: The Oldest and Most Effective Form of Cost Containment

Maribel Echeverry McLaughlin, Esq.

For many health plans, the first interaction with any type of cost containment method usually comes about when they begin to utilize subrogation as a way to keep plan costs low, and recover monies owed to them by third parties. It is one of the original, yet consistently effective, cost con-tainment concepts that, as of recently, tends to get overlooked when discussing new and more innovative ways to enhance plan savings.

The history of subrogation can be traced back to as far as the origins of the Court of Chancery in the Elizabethan period. The English Court of Chancery had jurisdiction over all matters in equity, such as trusts, land disputes, the estates of lunatics and guardianship of infants.  In this period, subrogation was a common equitable remedy, where one party was permitted to assume a third party’s legal right to collect a debt.  

In the present day, when plans pay for claims that are owed to them by third parties, they naturally expect to be reimbursed for those costs. However, during the Covid-19 crisis, many states were locked down, and people were forced to stay home; which meant less car accidents, less elective treatments due to statewide bans, and thus less money paid out by plans for medical claims.

According to information released by UC Davis, traffic accidents and crash-related injuries and deaths decreased by 50% during the first three weeks of California’s shelter-in-place order. The order began on March 20 and the university estimates that the decrease saved the state about $40 million each day. In other words, the state saved $1 billion in three weeks by having to respond to fewer car accidents.  The department found that the state’s reduction in accidents was paired with up to a 55% reduction in traffic and a 40-50% decrease in serious injuries for drivers, pedestrians, and cyclists.1

While motor vehicle accidents have been less frequent, ironically the drivers that are on the road daily, have become increasingly more reckless. According to the National Safety Council’s President and CEO, Lorraine M. Martin, “disturbingly, we have open lanes of traffic and an apparent open season on reckless driving,” causing more fatal accidents in many states.* Fatalities caused by car accidents increased in Massachusetts and Minnesota2, with the latter seeing deadly accidents more than double typical rates. Other states like Nevada and Rhode Island experienced an increase in pedestrian accidents.3

You would think that during a pandemic, plan spending would increase as the injuries in motor vehicle accidents get worse and the cost of a hospital admission for patients with COVID-19, the dis-ease caused by coronavirus, can top tens of thousands of dollars. Especially as there were over a hundred thousand hospitalizations just in the early months of the pandemic. Eventually, we can expect new additional costs to plans when an effective pharmaceutical treatment is identified, or hopefully a vaccine becomes widely available. However, social distancing measures, concerns over hospital capacity, and fears of contracting the virus are leading to other critical healthcare services being delayed or forgone.  For example, providers have delayed elective surgeries during the pandemic, thus having a downward effect on health costs, at least in the short term.4  Taken together, this data shows that there has been an abrupt and sizable decrease in healthcare utilization, at least in the early months of the pandemic. The exception has been telehealth, which has experienced an increase; however, the increase so far in telehealth was not enough to offset the decrease in in-person office visits. 4 In the first quarter of 2020 (January through March), spending on health services was relatively flat overall. Across all health care services, which excludes prescription drugs and social services, spending was down about -0.4% relative to the first quarter of 2019. Spending was up on nursing homes (5.9%), physician offices (3.9%), outpatient care centers (1.1%), but spending on medical labs (-2.7%) and hospitals (-4.1%) was down in the first quarter of 2020 com-pared to last year.4 Federal spending data from the BEA are reported monthly on an annualized basis. If sustained for a year, the drop in personal consumption expenditures on health care services seen in April would total roughly $1 trillion dollars over a 12-month period.4

Property and casualty insurers are also reporting a 40 to 50% drop in claims volume for personal automobile claims and a 30 to 40% reduction for commercial claims due to the Covid-19 pandemic.5  It is too soon to say whether the drop in frequency will fully offset the rebates that many auto-mobile insurers have been extending to consumers, which the Information Insurance Institute estimates will amount to $10.5 billion.

With all this information, it is easy to conclude that health plans are also saving money in not paying for motor vehicle accident related claims. According to the National Highway Traffic Safety Administration (NHTSA), U.S. motor vehicle crashes in 2010 cost almost $1 trillion in loss of productivity and loss of life.6 The Centers for Disease Control and Prevention (CDC) said in 2010 that the cost of medical care and productivity losses associated with motor vehicle crash injuries was over $99 billion, or nearly $500, for each licensed driver in the U.S.7 In 2015, the CDC report-ed that the average cost for a treatment for motor vehicle accident was $2,314. Which means, if a health plan has 100,000 employees, and roughly one in 150 lives will be involved in one motor vehicle accident per year, then a plan has a potential exposure of 600 lives with accident-related claims that year. If 600 lives have an average of $2,314 in costs, a plan could have had an expense of approximately $1.3 million in costs that year.  It is easy to conclude then, if accidents approximately decreased by 50%, then the plan’s expenses may have also decreased by 50%, thus saving a plan approximately an excess of $690,000, this year, alone. The Phia Group boasts their recoveries for established clients total an average of $30 recovered per employee per year.8 That could trans-late, for a 100,000-employee plan, into a $3,000,000 recovery on a good year.

It is apparent, by way of current events in this country, that this new normal will be here for quite some time.  It is probable that when social distancing rules become more relaxed, people will feel more comfortable going back to provider’s offices and having elective surgeries, thus increasing plan expenses. But until the virus is under control, and an effective treatment is found, we can only assume that we will continue in this pattern of uncertainty.  Plans more likely than not, will see less expenditures this year in claims paid for members. This will allow for next year’s premiums to stay low and provide exceptional benefits to members at a low cost.

A plan could determine that not paying claims is less lucrative than getting claims reimbursed back to them. But the only way a plan would get any claims reimbursed to them, would be if they paid the claims in the first place.  Even though subrogation tends to be the main form of cost containment for plans, it is safe to say that the best form of cost containment is to not have to pay those claims at all.

1  Fell, A., Kushman, R., Oskin, B., Perez, T., & Bankston, E. (2020, June 09). California COVID-19 Traffic Report Finds Silver Lining. Retrieved July 10, 2020, from https://www.ucdavis.edu/news/california-covid-19-traffic-report-finds-silver-lining
2  Wilson, K., Aued, B., Hertz, D., & Cuba, J. (2020, April 10). COVID-19 Cuts Car Crashes - But What About Crash Rates? Retrieved July 10, 2020, from https://usa.streetsblog.org/2020/04/09/covid-19-cuts-car-crashes-but-what-about-crash-rates/
3  Have Car Accidents Decreased During the COVID-19 Crisis? (n.d.). Retrieved July 10, 2020, from https://www.hhrlaw.com/blog/2020/may/have-car-accidents-decreased-during-the-covid-19/

4  Twitter, C. (2020, May 29). How have healthcare utilization and spending changed so far during the coronavirus pandemic? Retrieved July 10, 2020, from https://www.healthsystemtracker.org/chart-collection/how-have-healthcare-utilization-and-spending-changed-so-far-during-the-coronavirus-pandemic/
5  *, N. (2020, April 15). Auto Claims Decline 40 to 50% as Consumers Stay Home, Snapsheet Says. Retrieved July 10, 2020, from https://www.claimsjournal.com/news/national/2020/04/15/296565.htm
6  Vi.chilukuri.ctr@dot.gov. (2020, July 06). National Highway Traffic Safety Administration. Retrieved July 10, 2020, from http://www.nhtsa.dot.gov/
7  Centers for Disease Control and Prevention. (n.d.). Retrieved July 10, 2020, from http://www.cdc.gov/
8  Services. (n.d.). Retrieved July 10, 2020, from https://www.phiagroup.com/Services/Save-Claims-Recovery-Subrogation-Services

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COVID-19, Balance Billing, Out-of-Network Claims, and Confusing Charges – An Ugly Combination

By Jon Jablon, Esq., and Tim Callender, Esq.

The COVID-19 crisis has sparked a discussion on an old, but repeatedly important and troublesome issue: balance billing and/or overbilling. During the early days of the COVID-19 crisis, news outlets were quick to report examples of health insurance coverage confusion, network issues, and billing issues, all related to a variety of COVID-19 claims.  

In April, the federal government chose to tackle this concern by placing prohibitions on how providers could bill COVID-19 patients who received services from providers receiving funds under the Public Health and Social Services Emergency Relief Fund. This attempt to control balance billing and excessive charging practices led to media confusion, with numerous media outlets reporting that the federal government had banned all balance billing and/or all surprise billing, which was not the case. The confusion on this basic attempt to stymie out of control billing, during a health crisis, highlights to need to discuss, yet again, the ever-pressing problem of balance billing, cost, network controls, and why excessive balance billing continues to happen.     

Practically speaking, when a member receives a balance-bill, the employer itself, the sponsored health plan, and the payer all go into “panic mode,” which is understandable. It is no secret that hospital chargemasters are essentially arbitrary. Leaving aside the fact that many plans have engaged a patient advocacy solution to assist with balance-billing, many health plans, TPAs, brokers, and patients want to know: Who’s to blame, and why is balance-billing allowed to happen? What is really going on when a provider balance-bills a patient? What can be done to avoid it?

Who’s To Blame?

It’s easy and intuitive to blame medical providers for overbilling. The bill has the hospital’s name on it, and the bill is designed to compensate the hospital for use of its operating room, staff, and other resources. But blaming the provider is like blaming a person for taking advantage of a large loophole. It’s a dog-eat-dog world out there, and most of us take advantage of loopholes. Nothing illegal, hopefully, but if something is within our legal rights and it saves or makes us money, most people can reasonably be expected to operate within the parameters of that advantageous loophole.  

Instead, perhaps we should scrutinize the legal / regulatory authority. For years there have been certain legislative proposals in the works, both on the federal and state levels, that would effectively limit provider billing to a more reasonable amount, or at the very least provide a system of checks and balances. As it stands, though, alarmingly few laws like this exist today, and those that do tend to favor providers far more than any fairness they offer to health plans or patients. The reason? Everyone is stuck in the past. The old system, where insurers have unlimitedly-deep pockets, is not at all the case with self-funding, yet that still seems to be the mentality that legislatures and medical providers are using. Until there is a meaningful legislative change to add some sort of limitation on, or even a reasonable formula that must be followed by, provider billing, there won’t be any change to the paradigm where any price goes.

What Is Really Going On?

Over years of dealing with overbilling and the problems it creates, it has become clear to many in the industry that hospitals do not really expect to get paid their gross charges. Hospitals do not collect, nor do they intend to collect on balance-bills. It seems that the collections threats are scare tactics used to gain higher payments from health plans, as many plans will do whatever it takes to protect the patient. With some plans, that tactic works well; other plans call a hospital’s bluff.

Think of it this way: when I walk into my local bike shop and ask for a tune-up, they quote me $179. Does it actually cost them the full $179 to provide the service? Probably not. Could they charge less? Sure. But the market bears it, and, more importantly, there’s no law prohibiting the shop from charging that fee.

Many suggest comparisons to other markets are inappropriate, since there’s a third-party payor (i.e. insurance) involved – but that does not fundamentally change the dynamic except to remove the relevance of the “the market bears it” factor. The medical services industry is not a “free market” since in most cases, expecting patients to actually shop around is extremely unrealistic; without the market-bearing aspect, we are left with only the reasoning of “there is no law against it.” For payors, that is not a good enough justification for such inflated, arbitrary billing.

What Can Be Done About It?

How about patient advocacy? With respect to plans that systematically allow non-network claims at any amount less than full billed charges, most have adopted some form of patient advocacy or defense, to attempt to minimize the noise and impact of balance-billing, protect patients, and still ultimately save money on claims. That is what reference-based pricing vendors typically aim to accomplish and most do a pretty good job.

But, no matter the vendor, there are still some providers who simply will not go away without a big fight. The prevailing reference-based pricing mentality seems to be that no network is the best network, and for some plans that works very well. It depends on the employee population, employer’s risk tolerance, geographical location, and provider population density (and potentially other factors), and a health plan’s friendly neighborhood RBP vendor or broker are in the best positions to advise on that aspect – but at the end of the day, small, regional networks have tended to be a key to successful reference-based pricing for many health plans.

Direct Contracts & Narrow Networks

“Narrow networks” constitute a middle ground between a direct contract with a provider and a traditional PPO model; although some large national networks now offer certain “narrow network” options, a health plan or TPA can create a de facto narrow network by simply contracting with a small curated group of providers. By picking and choosing providers, the payor is able to limit the size of the network (making the steerage created more valuable to each individual provider) and ensure that providers make certain concessions in exchange for the increased steerage.

“Custom” narrow networks can exponentially increase steerage for the chosen providers, but keep in mind that to many providers, the decision of whether to contract, or what rate to offer, depends on the volume of steerage – and volume is measured in number of lives, not in percent of lives. In other words, a health plan that contracts with two local physicians will in theory give each provider 50% of its total steerage, which is a very attractive percentage – but when the hospital asks how many lives make up that 50%, if the answer is 25 lives, the conversation is going to become much more difficult. If, however, the answer is 2,500 lives, you may have another story. That is one reason that TPAs often negotiate direct contracts across an entire block of business – however, that may leave the hurdle of having all groups potentially opted-in to the contract, possibly without wanting to be.

What Does The Future Hold?

A couple of years ago, we at The Phia Group conducted a survey. One of the questions was “How do you view reference-based pricing?” The results were as follows:

  • 76% of responders said, “Catalyst for change (part of a greater solution that will be a long term answer).”
  • 14% of responders said “Stop-gap (a band aid that won’t resolve excessive healthcare costs long term).”
  • 6% of responders said “Harmful (once enough people get balance billed, we’ll look bad and it will become prohibited by law).”
  • 4% of responders said, “The whole shebang (the way to permanently solve healthcare price gouging).”

State surprise billing legislation definitely seems to be a step in the right direction toward curbing provider billing (although some states have shifted a higher burden onto the health plan rather than truly limiting billing). It is difficult to tell whether the rise of reference-based pricing has been a catalyst for that change, or simply the self-funded industry realizing, fifteen years ago, what legislatures have only just begun to realize in the last few years.

 

Updating the Employee Handbook in Unprecedented Times

On October 21, 2020

By Philip Qualo, J.D.
 

In general, employers should review and revise their employee handbooks at least annually to account for changes in local, state, and federal laws and workplace safety requirements. As employers begin to focus on reviewing their employee handbooks in preparation for a… hopefully better… 2021, many are pondering how to update their handbooks to adequately respond to the challenges presented by the COVID-19 pandemic and continuing racial tensions sparked by the murder of George Floyd. Although employers have generally been quick to adopt and enforce policies addressing COVID-19-and diversity related issues, the rapidly changing guidance and dramatic shift in cultural perspectives has also necessitated swift revisions as best practices and requirements continue to change from day to day. In finalizing our own employee handbook for the upcoming year, we can share two important tips employers may want consider in reviewing and updating their employee handbooks in these challenging times.
 

Tip #1: Limit the Handbook to Static COVID-19 Language Where Possible

As updating an employee handbook multiple times within a fiscal year can be an administratively burdensome task, a best practice is to ensure all policies included or updated in the handbook are relevant, or static, for the duration of the applicable fiscal year. This has been simple in most years, however, in response to the COVID-19 pandemic, the federal government passed a series of comprehensive laws with rapidly approaching expiration dates aimed at protecting American workers by regulating group health plans and providing for new leave paid entitlements, such as the Families First Coronavirus Response Act (FFCRA). In addition to FFCRA, state and local guidance and laws continue to be updated at an unpredictable frequency that often necessitates a quick and temporary change to employment policies changes in order to comply work safety work requirements. 

In order to avoid the challenge of updating and re-releasing multiple times throughout these unprecedented times, it may be helpful to limit specific references to COVID-19. We chose to use terms such as “Public Health Emergency” or “Pandemic” where possible. If COVID-19 has taught us anything, it is that life is unpredictable. Now that we have collectively experienced and continue to endure this pandemic, including language in an employee handbook referencing an employer’s responsibility to contain a public health emergency or pandemic could apply to other critical situations that pose a threat to future safety.

For policies with an approaching expiration date, or that are likely to change frequently based on changing guidance, it may be helpful to generally refer to them in the employee handbook and detail them in a referenced platform or notice that can be updated with ease. For example, we use an intranet platform to house our most up to date COVID-19 policies which allows for quick enhancements and immediate notification to employees. Although any platform accessible to all employees would be appropriate, an employer should take the additional step of distributing, announcing, or where applicable, requiring sign-off for each and every change to document compliance with notification requirements.


Tip #2: Closely Review and Update Anti-Harassment, Nondiscrimination and Sexual Harassment Policies

In the “Black Lives Matter” and “MeToo” era, organizations are taking the extra step of ensuring all policies and employment practices reflect their organizations commitment to diversity inclusion. As such, we encourage employers pay special attention to their anti-harassment, non-discrimination, and sexual harassment policies to ensure proper reporting, investigation, and anti-retaliation protocols are documented and in place. These policies send a message to employees about expected behavior.  In the event of a claim against the organization, they also help to demonstrate that the organization takes its obligations seriously.  Social media policies are similarly becoming a focus of concern for many employers in this day and age, when a single unwise employee post or public statement can subject the organization to a litany of negative publicity to their places. As demonstrated by the increasingly popular wave of “Karen” videos that have gone viral in recent months, employers may want to consider establishing or updating their policies to clearly reflect the handling of employees involved in large scale publicity due to inflammatory behavior or comments that could shed a negative light on the employer.

We hope these tips are helpful and provide some insight on how to enhance your employee handbook in challenging times.

New Opportunities to Save, Create Revenue & Avoid Scary Practices

On October 19, 2020

Join The Phia Team as they share some of the industry’s scariest blunders and gruesome practices. Turn down the lights and prepare to be horrified; but fear not... with this trick there are also treats. Not only will attendees learn from others' mistakes, but we will also pull from our bag of goodies new sources of revenue and savings for plans and administrators alike. If you miss this one, it will haunt you for the rest of your life.

Click Here to View Our Full Webinar on YouTube

Click Here to Download Webinar Slides Only

Empowering Plans: P93 - Behind the Scenes – Town Halls, Nominees & Medicare-for-All

On October 19, 2020

In this episode of the Empowering Plans podcast, Ron Peck and Brady Bizarro take you behind the scenes, avoiding the bright lights of presidential town halls and Supreme Court confirmation hearings. What is really going on? Is Medicare-for-All still a threat? Where is the Trump administration’s healthcare plan? How will a potential Justice Amy Cony Barrett rule on the Affordable Care Act case? Tune in to find out!

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

Empowering Plans: P92 - Healthcare on Stage & COVID-19 in the White House

On October 13, 2020

In this episode, Ron Peck and Brady Bizarro guide you through a chaotic week for healthcare news. What did we learn (if anything) from the first presidential debate? With COVID-19 infecting the President and much of the West Wing, what can we learn from the President’s experimental treatment? Would self-funded plans cover this treatment? What impact could all of this have on the Affordable Care Act lawsuit? Join us to find out!

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

Offer More for More!

On October 8, 2020

By: Ron E. Peck, Esq.
 

COVID-19 and the current pandemic has caused even more attention to be paid to health care and health insurance.  Yet, despite health care being a topic of discussion “in general,” during this Presidential election, I am surprised by how “little” airtime the specific issue of “Medicare-for-All” is receiving, compared to (for instance) the Democratic primaries.  Yet, I wonder if that is due (in part) to a false belief that, by nominating Joe Biden (as compared to, for instance, Elizabeth Warren) the people of this nation have rejected the idea of Medicare-for-All, and can move on to the issue of saving or eliminating the ACA.
 

Yet, some eagle-eyed viewers will note Vice President Biden’s oft referenced “Medicare-for-All-Who-Want-It” and “Public Option” rhetoric.  Make no mistake; if such a plan proceeds, it will amount to – eventually – a Medicare-for-All scenario. 
 

Looking at individual States that have already proposed public options for its citizens, the backbone of such programs is a payment methodology, with that methodology centering on payment of a “percent of Medicare.”  In other words, these public options will pay using a Reference Based Pricing (“RBP”) approach.  Unlike private plans that dare such an approach, however, these public option plans will protect their participants from balance billing, using law and regulation.  In other words, a private plan using an RBP methodology will see its members balance billed, and no legal protections exist to combat it.  The public option plan, however, will pay the same (or lesser) percent of Medicare, and protect its members with the power of the law.
 

This will, obviously, result in the public option costing less than private options; (absent other cost drivers).  If things do indeed go this way, more people will migrate from their private plans to the public option.  Only the sickest members (fearful that coverage under the public option will be inadequate) will remain on the private plans, making those private plans too costly to sustain.  This is called adverse selection, and it would – presumably – be the last straw that breaks the private industry’s back.
 

Yet, this long, drawn out road to an eventual “singer payer” scenario is not guaranteed.  Only if our industry strives to beat the public option at its own game – specifically, “price” – will it lose.  Yet, in so many other markets, private industry competes – and beats – government programs despite being more costly.  In many scenarios, sending a parcel via the USPS is less costly than, for instance, via DHL, UPS or FedEx… yet… many choose to pay more for the private carrier’s service.  Why?  Likewise, taking public transit is often less expensive than driving (and parking) your own vehicle, catching a ride share, or other private means of transportation.  Yet, we don’t all take the train.  Public schools are readily available for most, at little to no cost, but some choose to pay tuition and send their children to private schools.
 

Note that I am not here to opine on these decisions or suggest why people make the choices they make.  What I will say, however, is that – presumably – the people who pay more for the private option do so because, right or wrong, they perceive they are receiving more for their money.  They believe they are receiving added quality, features, or benefits that make the added cost worthwhile.  Further, the service provider has advertised the difference in quality – true or simply perceived – so much so that the consumer readily chooses the more costly, private option.
 

Members of the current health benefits industry are so accustomed to competing with each other over price.  Yes, each entity offers things that differentiate their services from those offered by the competition, but the consensus is that these services are similar enough that price is the big difference maker.  If they maintain this attitude, they will not be able to compete with a public option. 
 

Enter “premium” services; enter “luxury.”  In so many other industries, service providers exist – and thrive – despite prices that exceed those offered by the competition.  Ask these entities whether their prices are higher than the competition, however, and they only consider vendors offering similar levels of luxury (for similar prices) as the “competition.” 
 

It may be the case that, if and when private health benefits cannot compete with a public option on price, they will need to re-invent the industry, and instead view themselves as purveyors of “luxury” benefits.  Offer services people want to buy.

Value is not synonymous with inexpensive.  Value means getting more for your money.  This industry’s future may, therefore, depend upon providing value – something or some things the public option does not offer – resulting in an admittedly higher price still representing value.

COVID-19 Impact on Self-Funded Health Plans

On September 29, 2020

COVID-19 has impacted just about every aspect of our lives, and self-funded health plans have not been spared. Along with being mindful of employees' health during the pandemic, employers and HR managers must also be mindful of the state of their self-funded health plans.

More than half of the non-elderly population in the United States receives health care coverage through an employer-based plan. The majority of this group are covered by either fully or partially self-funded health care plans. As such, the health care plans of many Americans could be impacted by COVID-19. 

What Are Self-Funded Health Plans?

Despite so many Americans having self-funded health plans, many are unfamiliar with the term. So what exactly are self-funded health plans? A self-funded health plan, also referred to as a self-insured plan, is a health an welfare plan through which the employer takes on the full financial risk associated with providing health care benefits to employees. Usually, self-insured employers establish a special trust fund to cover incurred claims.

Self-funded and fully insured health plans operate similarly. Money is collected and covers medical expenses for the insured population. Where self-funded plans differ from fully insured health care plans is that self-funded plans do not pass the responsibility for the financial risk onto a third party, which fully insured plans do; in a self-funded plan, claims are usually paid with a mixture of the plan sponsor's (i.e. the employer’s) assets and employee contributions.

Fully insured plans are what most people think of when they think of health insurance; it is a more traditional model, and self-funded healthcare has changed that model for the better. 

COVID-19 Impact on the Self-Funded Industry

How has COVID-19 impact on health care spread to the self-funded industry? What has been the financial impact of COVID-19 on the self-funded industry? Currently, benefits professionals are working hard to ensure stability for organizations during this chaotic time, and to figure out the answers to these difficult questions.

Employers with self-funded health plans are also working hard to ensure that their employees and employees' dependents can access COVID-19 testing, treatment, and medical assistance while the entire country copes with this pandemic. A self-funded health plan insures many people generally over a long period of time, which is why protecting the plan's financial viability and assessing the possible financial effects of COVID-19 is essential for employers and HR managers.

Projecting the possible financial impact of COVID-19 on a self-funded health plan is no simple task, as numerous variables should factor into projections, such as the number of infected plan members, the duration of shelter-in-place orders, employee furloughs, and many more factors. Despite these challenges, employers are still working diligently to address challenges related to COVID-19 and health care, such as adjusting eligibility standards, expanding benefits, and waiving cost-sharing for treatment related to COVID-19 performed by in-network providers.

Many employers are also relaxing open enrollment restrictions and offering more flexibility to individuals who want to join a company's benefits plan outside the traditional open enrollment period. Due to job losses, many individuals and their dependents are finding themselves without coverage, so many are scrambling to find other insurance coverage wherever possible. 

Next Steps for Employers

Many employers are unsure about how COVID-19 will impact group health care plans. While expenses for the treatment and testing of COVID-19 are rising, utilization is down for elective and preventive services. Even employee benefits experts are still unsure of how the pandemic will continue to impact health plans, with some experts predicting an increase in employer health care costs and others predicting a decrease.

Employers who have self-funded group health care plans need to be particularly mindful of this wide range in predictions and take steps to ensure the financial viability and stability of health plans during the COVID-19 crisis. Since every plan is different, employers and HR managers will need to consider their own employee populations when trying to predict future costs and utilization, as well as their own business needs. 

1. Adjust Plan Documents

If your company has adjusted coverages to account for services related to COVID-19, you need to amend plan documents to reflect these adjustments. Coverage requirements have been expanded for all health plans as a result of the Coronavirus Aid, Relief and Economic Security Act and the Families First Coronavirus Response Act. Many major insurance carriers in the U.S. have chosen to go beyond requirements set by the new legislation, such as by waiving cost-sharing for COVID-19 related hospitalizations.

2. Accrue Funds

Though there may be a drop in health care costs in the short-term, most experts agree that this will not be the case forever. After the pandemic, there could even be an unusually sharp increase in health care costs as a result of individuals delaying care during the pandemic, and resuming care immediately afterwards.

Shelter-in-place orders could also lead to a spike in behavioral health claims due to issues with anxiety, stress, and depression. Many Americans are dealing with the loss of loved ones and loss of employment, along with loneliness as a result of unprecedented isolation. Changes in supply and demand could also contribute to an increase in health care costs. As such, you should continue accruing funds in anticipation of a need for these funds in the future. 

3. Determine Whether to Add Telemedicine

Consider whether you want to add telemedicine to your self-funded health plan. Though historically telemedicine has seen a low level of usage, the appeal of telehealth services has spiked during the COVID-19 pandemic. Through telemedicine, which often now includes video conferences, individuals can access medical services without leaving their homes.

Even post-pandemic, telemedicine is likely to remain a popular option for Americans who want to receive medical services from the convenience of their own homes. 

4. Reassess the Risk Level of Your Group

Now is the time to reevaluate how the characteristics of your company's insured population could negatively affect a self-funded health plan. Are the employees frontline restaurant workers, retail workers, health care professionals, or other employees who frequently come into contact with the public and may be at a higher risk of becoming infected with COVID-19? Factors like that can greatly alter a self-funded plan’s viability.

Has your company reduced staff? Furloughing or laying off employees could increase the volatility of claims. Volatility increases as the number of insured employees decreases. These changes in risk level could negatively affect your health plan and should be addressed. 

Learn More About Our Independent Consultation and Self-Funded Health Plan Evaluation at The Phia Group, LLC

The Phia Group, LLC has been working to ensure that health benefits remain affordable for employers and employees. We tailor our various cost-containment services to our clients' specific needs. If you are ready to regain control of your operations, including switching from “traditional” insurance to a self-funded health plan, we can help you minimize costs while maximizing benefits.

We provide consulting services to address a wide range of compliance concerns, business disputes, and claim-specific dilemmas. Learn more about our independent consultation and self-funded health plan evaluation or contact us today.

Empowering Plans: P91 - The Pandemic & The Employer Mandate

On September 24, 2020

In this episode of the Empowering Plans podcast, Brady is joined by Kelly Dempsey to discuss a particularly damaging impact of the pandemic that does not get much media attention: with many businesses forced to operate at reduced capacity, they still have to comply with the ACA's employer mandate. That can be very burdensome given falling revenues. What can be done by the regulators and by Congress? Find out in our latest podcast.

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

Drug Pricing Still on the Ballot in 2020

On September 24, 2020

By: Nick Bonds, Esq.
 

I doubt I am alone in feeling that 2020 has already crammed in roughly a decade’s worth of health crises, and we still have months to go. From murder hornets to the ever-present threat of the coronavirus, from wildfires turning the West Coast skies orange to so many hurricanes we are running out of names; our collective physical, mental, and emotional health has been through the ringer this year. Not to mention the tumbling dominoes of economic impacts wrought by all of the above, which by itself can have a substantial impact on our health.
 

The cost of prescription drugs, already high even before 2020 built up a head of steam, continues to be a source of financial pain for American households. Nearly 30% of Americans have reported not taking their prescription medicine as directed due to its cost. This is one of the most glaring examples of individuals’ medical decisions being driven not by medical judgment, but by financial circumstance. 
 

At the beginning of the year, prescription drug prices ranked top among the “pocketbook” issues most primary voters were focused on. Though the debate around Medicare for all became a clear fault line among the Democratic presidential nominee hopefuls, virtually all the candidates threw their support behind a plan to give Medicare authority to negotiate drug prices with manufacturers. They also tended to favor plans to facilitate importation of cheaper medications from overseas and reigning in drug makers’ penchant for manipulating the patent system to artificially delay development and marketing of low-cost generic drugs.
 

Since clinching the Democratic nomination, Vice President Biden’s stance on drug pricing reform has come into sharper focus. The Biden-Sanders “unity task force” published a detailed list of policy recommendations, including a plan for “bringing down drug prices and taking on the pharmaceutical industry.” The primary prongs of which include empowering Medicare to negotiate drug prices, pushing to keep drug price increases in line with inflation, capping prescription costs for seniors, and cracking down on anti-competitive practices among drug manufacturers.
 

Not to be outdone, President Trump recently announced a “hail Mary” effort on drug prices, signing his “Executive Order on Lowering Drug Prices by Putting America First” on September 13. Ostensibly, this order is designed to bring down domestic prices for prescription drugs by tying what Medicare pays for prescription drugs to the “most-favored-nation price” of those same drugs abroad. Specifically, capping Medicare’s rate to the lowest price for a pharmaceutical product that drug maker sells in a member country of the Organization for Economic Cooperation and Development (OECD).
 

It seems unlikely that this plan could be effectively implemented before the upcoming election, but it does show that the President still sees prescription drug prices as a viable campaign issue, even after campaigning on it in 2016 and hitting mostly dead ends in his efforts to address the issue in his first term. Recent polling shows that drug pricing remains one of the few healthcare issues where the President outstripped his Democratic challenger, and the President’s most-favored-nations policy appears to resonate among his base.
 

Whomever lands behind the Resolute desk in 2021, we can be sure that drug pricing reform will be high on their agenda. In the meantime, everyone stay safe, stay healthy, and be ready to vote on November 3.