Phia Group Media

rss

Phia Group Media


The Phia Group's 1st Quarter 2021 Newsletter

On January 19, 2021


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

 

 



The Book of Russo:

When asked whether I believe the “glass is half empty, or half full,” I’m “positive” that I am an optimist. I realize that it can annoy people, but I assume it’s in a good way. Whoops; there I go again.

Looking at 2020, I can’t help but note the positives that emerged from the previous year. Though I wasn’t able to travel (and my stockpile of hotel pens and miniature bottles of shampoo have reached an all-time low), The Phia Group still saw its client base expand, and retained the talents of many new Phia Group team members. That in turn means I got to meet and spend time with so many new employees and clients (albeit over Zoom, Skype, Ring Central, and a million other programs with which I’m not yet familiar). In truth – this led to me likely spending even more time with those great people than I would have spent pre-pandemic.

Perhaps, most important, I truly got to enjoy more quality time with my four kids and incredible wife. I saw how my children have persevered through the pandemic and rolled with the punches. They did the best they could with virtual birthday parties, distanced Halloween trick or treating, and intimate Christmas celebrations.

So – in addition to positivity – I also feel pride. Pride in my family. Pride in my colleagues. Pride in our industry.

Speaking of The Phia Group, and how it too has rolled with the punches – our Friday “Staff Zoom Meetings” will never go away; even after we’ve all been vaccinated and are once again occupying the same physical space. People love them, especially when the kids (including the furry four legged ones) join the calls. You can only truly get to know your employees by examining what is in their “home office” backgrounds!

Additionally, in 2020 we moved into two new beautiful offices, we already hired almost 40 people, we added close to 3 million lives of business, we more than doubled our technological power and added two successful service lines.

This experience and our ability to keep pushing forward, showed me that The Phia Group is truly a family that can conquer anything.

Oh! I almost forgot to mention that we were named a 2020 Best Place to Work by the Boston Globe. This would be a tremendous honor any other year, but this year – it’s “next level” amazing. While other employers are cutting staff, pulling back benefits, withholding information, and always a little “too late” to respond to the needs of their team – The Phia Group approached how it deals with its own staff in the same way it approaches its clients and services. With innovation, and thinking ahead; with empathy and generosity, speed and customization.

This, then, was one of my proudest moments and verified for me that our emphasis on amazing benefits and employee satisfaction proved successful. If your staff is happy, their worst product will still be better than the competitions’ best. Your clients will feel the love, and remain beyond satisfied. Internally and externally, that is the foundation of loyalty.

I truly thank all of you – partners and Phia team members – for believing in Phia and partnering with us; it means the world to me. Be well. Be safe. Happy reading.

The Phia Group Named as a Top Place to work 2020

It is with great honor and humility that The Phia Group announces it has been named by The Boston Globe as one of the Top Places to Work in Massachusetts. In its 13th annual employee-based survey, The Boston Globe – having assessed anonymous employee feedback, and details about the company – determined that The Phia Group provides one of the most rewarding, meaningful employment experiences in the Commonwealth of Massachusetts.

Enhancements of the Quarter: Phia Unwrapped
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: Patient Defender Value Reports

Clients of Patient Defender will be excited to hear that we have created a brand new report for them. Clients of The Phia Group’s innovative Patient Defender service can access this quarterly snapshot of the service and the client’s activity. It contains a myriad of data, including both currently active and historical items.

While the Patient Defender service itself can be a life-saver for groups subject to claims being balance-billed, this report provides information that demonstrates the true value of the service, allowing users to continue to make informed decisions about their actions.

With over 35,000 employee lives represented in these reports, we have already received positive feedback, and we will continue to monitor clients’ usage and feedback!

To learn more about these reports or to receive a sample report, please contact our Sales Manager, Garrick Hunt, at 781-535-5644 or GHunt@phiagroup.com. Likewise, to learn more about Patient Defender, Phia Unwrapped, balance-billing support services or any other services The Phia Group offers, Garrick is available to you.

 


_

 

Service Focus of the Quarter: Phia Unwrapped

If you’re not familiar with reference-based pricing (or “RBP”), get familiar. RBP started as an outlier in the industry, but it’s getting more and more popular, even being embraced by many networks and providers as the new norm. As helpful as RBP can be for non-contracted claims, however, it is not without the risk of balance-billing and member disruption – which is why many TPAs and groups that would otherwise embrace RBP instead shy away from it.

To anyone who sees the value in RBP but can’t tolerate the risks: The Phia Group is here to help!

The Phia Group has for decades provided services meant to supplement and enhance RBP programs; from balance billing support – which is plugged into plans that choose not to use any network, to Phia Unwrapped. Phia Unwrapped is designed to pair with plans that opt to supplement, rather than replace, a primary PPO, targeting out of network claims and allowing a health plan to shed its wrap network … and with it the meager but expensive discounts it allows providers to charge (or requires plans to pay, depending upon how you look at it).

Phia Unwrapped is anything but traditional; by replacing wrap network access and modifying non-network payment methodologies, this service enables health plans to secure payable amounts that are unbeatably low. Phia Unwrapped places no minimum threshold on claims to be repriced, and sets no limit on balance bills eligible for negotiation. Looking at those instances in particular, The Phia Group attempts to secure sign-off, ensuring providers will accept the plan’s payment as payment in full.

Out-of-network claims run through The Phia Group's Unwrapped program yield an average savings of 74% off billed charges (three times the average wrap discount). There’s very little member disruption to boot, since the plan would keep its existing PPO and use Phia Unwrapped only for non-contracted claims. Phia Unwrapped can also be a way for a plan to switch from a traditional ”mega” network, with no meaningful steerage and therefore no meaningful discounts, to a narrower network with real steerage and real discounts, recognizing that a narrow network potentially means more non-network claims – which is exactly what Phia Unwrapped is designed to not only address, but leverage.

 

Success Story of the Quarter: Reviewing Proposed Service Agreements

The Phia Group’s consulting department (via PGCReferral@phiagroup.com) was recently asked by a broker to review a proposed service agreement between an employer group and a vendor. After the broker confirmed our written scope of work and flat fee quote, we got to work, and immediately noticed some odd provisions in the vendor’s draft agreement.

Chief among them was a provision that guaranteed the vendor a certain PEPM fee per contract that the vendor was able to enter into with any medical provider. Percentage-of-savings fees are the norm as payment for obtaining contracts, since payment should ideally depend on the value added, but the PEPM fee increase per contract seemed unusual. Although there is a possible world in which that provision benefitted the group, there were no provisions whatsoever to qualify the extent of this requirement. The example we provided to the group (based in New York) when discussing the language was that if the vendor calls fifty doctors in California and negotiates 1% discounts with all of them, that’s fifty contracts, and fifty separate additions to the PEPM cost of the vendor’s service – despite the fact that the CA-based doctors would be unusable by the NY-based employees, and, maybe more importantly, that those negotiated discounts would be a joke.

We provided the broker with a full explanation of our issues with this language, as well as numerous other problematic or otherwise notable things we saw within the agreement. The broker subsequently requested from the vendor a list of its contracted discounts, with which it received and was thoroughly dissatisfied. The vendor refused to change its payment model to a percent-of-savings, and the deal was terminated.

 

Phia Case Study: A Common Claim with Complications

A plan participant was involved in a motor vehicle accident while riding a motorcycle, and suffered severe injuries. The Plan suspended payment until the police report was received, after which the Plan excluded claims due to the report indicating that the participant had been driving recklessly, and based on witness testimony, may have been intoxicated. Worth note is that this exclusion was applied despite the accident apparently being primarily caused by another driver rather than the plan participant’s own recklessness.

The police report also noted that the participant’s injuries were too emergent for the officer on scene to be able to determine the participant’s sobriety (or lack thereof), so the police report was not conclusive on the question of intoxication. As a result, the Plan sought the medical records.

The ER physician’s report vaguely mentioned that intoxication was a possibility, but the physician did not have concrete evidence. Subsequently, the lab results came back and lacked any evidence of intoxication.

The Plan felt that the physician’s initial comment about possible intoxication was sufficient to allow the Plan Administrator to deny the claims on the basis of DUI, but the TPA sought out the opinion of The Phia Group regarding whether the claims were deniable on this basis. The TPA correctly noted that while the Plan did not need evidence that proved intoxication “beyond a reasonable doubt,” it did need “some” evidence.

After a review of the file and relevant facts, we concluded that the physician’s initial speculation absent any real basis would not likely constitute evidence upon which a decision could be based without risking arbitrariness; it does not constitute a medical opinion that the patient was in fact intoxicated, nor is it substantiated by the physical evidence provided. We therefore opined that it would likely not be reasonable for the Plan to deny the claim on the basis of intoxication, since there was no evidence of intoxication upon which the Plan Administrator could reasonably rely.

Ultimately, based on this information, the Plan paid the claims, and the participant’s attorney subsequently agreed to reimburse the Plan from any settlement ultimately received from the driver who caused the accident.

 

Fiduciary Burden of the Quarter: Complaint Remark Codes

Adjudicating health claims is hard work. It can get complicated, especially in light of what can sometimes be tight timeframes within which EOBs must be provided. For that reason, in the face of numerous possibilities for why certain line items might be denied, it can difficult to comply with ERISA’s regulations requiring certain information within a remark code. Compliance with those regulations, however, is still very important.

The Plan Administrator has a duty to ensure that the plan provides reasonable claim procedures, in accordance with regulations found at 29 CFR §2560.503-1. Among other things, these regulations provide that an EOB must provide both “The specific reason or reasons for the adverse determination” and “Reference to the specific plan provisions on which the determination is based.” We often encounter EOBs that identify a given line item as denied or partially denied with a justification such as “denied pursuant to the Plan Document”, and generally something so vague would tend to not satisfy these regulations. It’s also somewhat common for plans utilizing reference-based pricing methodologies to use a remark code to the effect of “denied due to reference-based pricing,” which in our opinion is similarly vague and likely noncompliant. Remark codes like these fail to identify the plan language to justify the denial, and they fail to provide the required level of specificity in rendering a denial.

The purpose of these claims regulations is to promote a “meaningful dialogue” between the plan and claimant such that the claimant may formulate an appeal of a denial if necessary; for that reason, a remark code like “denied pursuant to the Plan Document” cannot possibly suffice, since it does not provide nearly enough information to allow the claimant to have that “reasonable dialogue” and formulate any meaningful appeal of a denial.

The practical effect of issuing remark codes that are too broad or vague to meet the requirements of the claims regulations is that the plan will have failed to provide reasonable claims procedures, and the claimant will be deemed to have exhausted its administrative remedies (i.e. the claimant can jump straight to a lawsuit, since the plan has effectively denied the claimant its right to appeal), effectively nullifying the plan’s internal appeals requirements.

For those of you with children, remark codes like the examples here roughly equate to the classic “because I said so.” That can work well in the parenting context, but not so well under ERISA; luckily, parents are not required by law to provide the child proper reasoning and an opportunity to appeal the decision – but health plans are.

If your remark codes include “denied because the plan said so”, please don’t hesitate to have them reviewed. The Phia Group is here to help!
 


 

Webinars:

• On December 16, 2020, The Phia Group presented, “A Transparent 2021 - Further Analysis of the Year to Come,” where we discussed the rules that will impact 2021, including the recently released transparent pricing rules.

• On November 16, 2020, The Phia Group presented, “Desperately Looking Forward to 2021,” where we discussed hot topics, forecasting what we expect to see in 2021, and giving you a head start as you – like we – plan, and look forward, to 2021.

• On October 19, 2020, The Phia Group presented, “New Opportunities to Save, Create Revenue & Avoid Scary Practices,” where we discussed some of the industry’s scariest blunders and gruesome practices.

Be sure to check out all of our past webinars!



 

Podcasts:

Empowering Plans

• On December 23, 2020, The Phia Group presented, “Balance Billing During COVID-19 and Beyond,” where our hosts, Brady Bizarro and Mitch Hilbert, discuss how balance billing has been on an uptick during COVID, and how patients can possibly prevent this from occurring.

• On November 30, 2020, The Phia Group presented, “COVID-19 Vaccine Candidates – What Health Plans Need to Know,” where our hosts, Brady Bizarro Andrew Silverio, discuss current COVID-19 vaccine candidates and everything health plans and employers need to know about them.

• On November 13, 2020, The Phia Group presented, “Election Aftermath – Where Things Stand,” where our hosts, Ron Peck, Brady Bizarro, and Nick Bonds reunite to discuss their developing thoughts on the presidential election results.

• On November 9, 2020, The Phia Group presented, “2020 Election Results (So Far) – Our Takeaways,” where our hosts, Ron Peck and Brady Bizarro, are joined by Nick Bonds, to discuss the 2020 election results.

• On October 26, 2020, The Phia Group presented, “The Final Debate & Election Predictions,” where our hosts, Brady Bizarro and Nick Bonds, break down the final presidential debate of the campaign season, focusing in on the candidates’ healthcare plans.

• On October 19, 2020, The Phia Group presented, “Behind the Scenes – Town Halls, Nominees & Medicare-for-All,” where our hosts, Ron Peck and Brady Bizarro take you behind the scenes, avoiding the bright lights of presidential town halls and Supreme Court confirmation hearings.

• On October 13, 2020, The Phia Group presented, “Healthcare on Stage & COVID-19 in the White House,” where our hosts, Ron Peck and Brady Bizarro guide you through a chaotic week for healthcare news, including the first presidential debate, COVID-19 infecting the President and much of the West Wing, and more.

Be sure to check out all of our latest podcasts!

 



Back to top ^


Phia Fit to Print:

• BenefitsPro – https://www.benefitspro.com/2020/12/17/leave-entitlements-under-the-ffcra-set-to-expire/ – December 17, 2020

• BenefitsPro – Hispanic and Latino health and the Affordable Care Act – December 07, 2020

• Self-Insurers Publishing Corp. – Best Practices For Updating The Employee Handbook In A Pandemic – December 3, 2020

• BenefitsPro – Remembering why we do it: Employer-sponsored health plans – November 20, 2020

• BenefitsPro – ACA in court: Reactions from around the industry – November 11, 2020

• Self-Insurers Publishing Corp. – Cobra Coverage and COVID-19 – November 5, 2020

• Self-Insurers Publishing Corp. – Planning Ahead: COVID-19 And Other Considerations For 2021 Health Plan Renewals – October 2, 2020



Back to top ^


From the Blogoshpere:
 

Offer More for More! If and when private health benefits cannot compete with a public option on price, they will need to re-invent the industry.

Updating the Employee Handbook in Unprecedented Times. Have you made your updates yet?

There is no Such Thing as a 1099 Employee. A 1099 employee isn’t an employee of yours at all!

FFCRA Leave Entitlements Set to Expire December 31, 2020. How much do you know about the Families First Coronavirus Response Act?

I Hate Surprises! Surprise billing expected to come to a halt.

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


Back to top ^


The Stacks:

Best Practices For Updating The Employee Handbook In A Pandemic
 

By: Philip Qualo, J.D. – December 2020 – Self-Insurers Publishing Corp.

For many employers, the start of the holiday season usually brings forth the time of year to brush the dust off of the employee handbook and determine what changes are desired, and required, for the upcoming year. Although employers have generally been quick to adopt and enforce policies addressing COVID-19, the rapidly changing guidance and onslaught of personal and professional restrictions necessitate swift revisions as best practices and requirements continue to change from day to day.

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. After an unprecedented year that unleashed a pandemic on the world, however, employers and their compliance teams are scanning their employee handbooks, scratching their heads, and wondering where to begin. In finalizing our own employee handbook for a hopefully better 2021, I thought it would be helpful to share some lessons I learned on updating an employee handbook in challenging times..

Click here to read the rest of this article
 

Cobra Coverage and COVID-19

By: Kevin Brady, Esq. – November 2020 – Self-Insurers Publishing Corp.

It is an unfortunate, but well-known, fact that the COVID-19 pandemic has had a significant impact on the U.S. economy. With the unemployment rate reaching a high of 14.7% in April, it is no surprise that many hard-working Americans lost their jobs. Given that many Americans rely on those jobs for their health plan coverage, the loss of income, combined with the loss of health coverage, has been and could continue to be catastrophic for many.

Click here to read the rest of this article
 

Planning Ahead: COVID-19 And Other Considerations For 2021 Health Plan Renewals

By: Jennifer M. McCormick, Esq – October 2020 – Self-Insurers Publishing Corp.

As summer fades away and the leaves start to fall, many of us must start planning for 2021. The expectations and goals we set in January of 2020 have likely required review and adaptation. As a result of COVID-19, employers encountered unprecedented hurdles. In addition to the economic costs facing employers due to this pandemic, employers need action plans to address the logistical and morale challenges of COVID-19. While financial considerations are typically on the list of perpetual concerns, employers must now ensure they have action plans for employees needing to balance work and childcare, workplace safety, and the continually evolving regulations regarding COVID-19. Thankfully, with 2021 around the corner, employers have an amazing opportunity to boost employee morale and mitigate costs with thoughtful plan design. Employers can (and should) use the upcoming renewal opportunity to let their health benefits shine and invite excitement for employees about their 2021 health benefits.

Click here to read the rest of this article


Back to top ^


The Phia Group's 2021 Charity

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

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



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

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

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


Thanksgiving Dinner Delivery

Thanksgiving dinner delivery to The Boys & Girls Club of Metro South was a little different this year. The Phia Family was out and about the week of Thanksgiving, delivering dinners to the The Boys and Girls Club of Metro South, so the families could pick up their meals when they picked up their children. Additionally, our Phia Family in Idaho and Louisville were out and about spreading the same cheer to five families in the Boise area and five families in the Louisville area. In total, we delivered 32 meals this year! Check out the great picture we were able to get from that special day! We hope everyone had a wonderful Thanksgiving!

 

Angel Tree

Each year employees of The Phia Group pick nametags from the Angel Tree that sits in our main lobby. On those tags are names, ages and the wish lists of children from The Salvation Army. This year we had over 130 nametags! The Phia family loves to give back to the community; our greatest joy is providing these children with all of their holiday wishes.


Christmas Came Early

The Phia Group had the pleasure of bringing Christmas joy to the Boys & Girls Club of Metro South. Adam Russo and his helpers virtually passed out hundreds of gifts to over 130 children. We hope these children enjoy their new toys as much as they enjoyed spending time with virtual Santa!




Back to top ^

 


Get to Know Our Employee of the Quarter:
Kaitlyn Lucier

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 Kaitlyn Lucier, The Phia Group’s Q4 Employee of the Quarter!

Kaitlyn has been able to handle any challenge that has been thrown at her with ease. She has done a phenomenal job training the new hires in CSD. She is always available to help others in need and being able to rapidly answer a question along with giving informative answers, so others are not lost. She is a valuable asset to CSD and is an outstanding hard worker.

 

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

Get to Know Our Employees of the Year: Philip Qualo

To be designated as an Employee of the Year 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 Philip Qualo, The Phia Group’s 2020 Employee of the Year!

Philip has done a phenomenal job with the Diversity Inclusion Committee- conducting the meetings, putting together all of the plans, reviewing with the Executive team & providing staff with the information. He has put in a lot of extra hours working late many nights, to ensure that everything was completed along with his PGC tasks. He definitely deserves recognition for all of his hard work!

 


Job Opportunities:

 

• Chief Financial Officer

• Customer Service Representative

• Senior Vice President, Sales

• Claim Analyst

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

Promotions

• Liz Pereira has been promoted from Case Investigator to Case Analyst

 

New Hires

• Nathan Letourneau was hired as a Claim and Case Support Analyst

• Alexander Araujo was hired as a Customer Care Representative

• Brittany Farr was hired as a Customer Care Representative

• Thalea Gauthier was hired as a Customer Care Representative

• Alexia Holloway was hired as a Customer Care Representative

• Catherine Villanueva was hired as a Customer Care Representative

• Lisa Hill was hired as a Sr. Subrogation Attorney

• Anthony Jean was hired as an Accounting Administrator I

• Thomas Cole was hired as a Claim Analyst

• Skyla Mrosk was hired as a Claim Analyst

• Andrew Mead was hired as an IT Intern

• Alexandre Houle was hired as a Provider Relations Clinical Claims Specialist

• Aastha Vats was hired as an ETL Specialist

• Julie Padden was hired as an Executive Assistant

• Sheena Roberts was hired as a Sr. Administrative Assistant

• Kristen Melanson was hired as a Claim and Case Support Analyst

• Hillary Burmester was hired as a Claim Recovery Specialist

• Kaitlyn MacDonald was hired as a Health Benefit Plan Consultant I

 

 


 

 

Phia News:

Candy Corn Contest

We set up our annual Candy Corn Contest in the front lobby of our Canton office and asked everyone to guess how many pieces of candy corn were in the jar! For those working from home, we sent out pictures of the candy jar with measurements, and had over 100 submissions. The winner of this contest was Lisa Decristoforo, and the total count was 811. Lisa guessed that there were 803 pieces of candy corn. It’s hard to believe that all of those pieces of candy fit into that small jar!

Pumpkin Carving Contest

In October, The Phia Group held its first Pumpkin Carving contest. We had over 20 submissions and it was a tough decision to make, but the Phia family had to pick one. Congratulations to the winner, Catherine Baskerville. We are all so impressed with your creativity and carving skills. We look forward to our next Pumpkin Carving contest!


 

 

Mask Contest

With everyone being asked to work from home, we wanted to make sure we kept all employees engaged and entertained. We put our thinking caps on and asked everyone to submit photos of their most creative masks, and we had the Phia family vote for their favorite mask during a virtual staff meeting. We are proud to announce that Regina Cattel was the winner of this contest, with her super fun tiger mask!


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!

 

The Phia Group Reaffirms Commitment to Diversity & Inclusion

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

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

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

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

 



Back to top ^

info@phiagroup.com
781-535-5600

The Stacks – 1st Quarter 2021

On January 19, 2021

Best Practices for Updating the Employee Handbook in a Pandemic

By Philip Qualo, J.D.

For many employers, the start of the holiday season usually brings forth the time of year to brush the dust off of the employee handbook and determine what changes are desired, and required, for the upcoming year. Although employers have generally been quick to adopt and enforce policies addressing COVID-19, the rapidly changing guidance and onslaught of personal and professional restrictions necessitate swift revisions as best practices and requirements continue to change from day to day.

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. After an unprecedented year that unleashed a pandemic on the world, however, employers and their compliance teams are scanning their employee handbooks, scratching their heads, and wondering where to begin. In finalizing our own employee handbook for a hopefully better 2021, I thought it would be helpful to share some lessons I learned on updating an employee handbook in challenging times

 

Avoid Non-Static COVID-19 Provisions
 

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, as well as 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 imposing new leave paid entitlements on covered employers, such as the Families First Coronavirus Response Act (FFCRA). In addition to the FFCRA, state and local laws guidance continue to be updated at an unpredictable frequency that often necessitates a quick and temporary change to workplace rules in order to comply safety requirements. For employers that sponsor self-funded plans, it is also important to keep in mind that for any newly enacted leave entitlements that continue coverage, the applicable Plan Document should be amended to reflect this continuation of coverage and communicated to the stop-loss carrier so ensure no gaps in coverage.

In order to avoid the challenge of updating and re-distributing an employee handbook multiple times within a single year, it may be helpful to limit specific references to COVID-19. For example, I chose to use terms such as “Public Health Emergency” and “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, we now know that public health emergencies and pandemics can happen to us… yes, even to us. As such, including language in an employee handbook referencing an employer’s responsibility to contain a public health emergency or pandemic would apply to COVID-19 and other critical health crisis that poses a threat to workplace 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 reference them in the employee handbook and detail them in a separate platform or notice that can be updated and re-distributed with ease. For example, we use an intranet platform to house our most up to date COVID-19 policies. This allows for quick enhancements of relevant policies and immediate notification to employees. Although any platform accessible to all employees may 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.

For example, I expanded the handbook to include language that referenced the “Direct Threat Exception” to Americans with Disabilities Act (ADA) limitations to explain my employer’s ability to temperature check and inquire about health status. In this provision, I chose to leave out the term “COVID-19” because the direct threat exception would likely apply to any other declared public health emergency that may arise. The temperature check policies, on the other hand, may not be applicable in a different type of pandemic.

 

So You’re Saying Not to Include Any COVID-19 Language?
 

Employee handbooks are more than just a collection of policies for most employers, they are a snapshot of that year, a yearbook of sorts. Although some memories are better left … not remembered…employers may one day want to reminisce on challenging year. On the other hand, as COVID-19 is likely not going anywhere as soon as we hoped for, it may be a good idea to include some static references to COVID-19. So I would not recommend pretending COVID-19 does not exist when it comes to the employee handbook.
 

For example, in our own employee handbook, I developed a paragraph that describes COVID-19, briefly, and details our companies commitment to follow all state, local, federal and Centers for Disease Control (CDC) guidance. As this guidance is subject to change, and has from day to day since the start, I did not include specific references to our face mask policy. Is this important? – absolutely. Is the handbook, however, the best place to house a policy that may be outdated by the time it is distributed? – probably not.

In summary, there are rarely two employee handbooks that are entirely alike in this world. There are not many rules surrounding what needs to go in one, or what needs to go out. For the most part, employee handbooks are not even legally required. It is, however, a strongly recommended best practice for an employer to maintain one and ensure appropriate policies as determined by their specific compliance needs. Therefore, employers are free to include any and every COVID-19 policy and language they desire. In minimizing the non-static language, however, employers can demonstrate compliance with all applicable rules while sparing the administrative burden involved in reconciling existing handbook provisions with the day to day changes to mandated workplace safety guidance.

____________________________________________________________________________________________________

COBRA Coverage and COVID-19

By: Kevin Brady, Esq.

It is an unfortunate, but well-known, fact that the COVID-19 pandemic has had a significant impact on the U.S. economy. With the unemployment rate reaching a high of 14.7% in April, it is no surprise that many hard-working Americans lost their jobs. Given that many Americans rely on those jobs for their health plan coverage, the loss of income, combined with the loss of health coverage, has been and could continue to be catastrophic for many.

On the (somewhat) bright side of things, those who lose their jobs are not always left optionless, as most individuals who lose their employer-sponsored health coverage will generally be eligible for continued coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA provides workers and their families the option to continue group health plan coverage (for a limited period of time) under certain circumstances which cause a loss in group health plan coverage. Further, the employee, rather than a combination of the employee and employer, bears the full cost of coverage when enrolled in COBRA. From the individual’s perspective, the cost alone, especially in the midst of the pandemic and the resulting economic uncertainty makes COBRA a tough sell for former employees, especially those who have other coverage options available. 

From an employer’s perspective, administering COBRA coverage effectively- and most importantly, correctly is a difficult task. Employers have strict obligations under COBRA. They must provide adequate notice of a “qualifying event” to ensure that their former employees and their dependents are offered coverage. What makes things even more complicated, is that employers who self-fund their health plan coverage actually serve as both the employer under COBRA (subject to certain obligations), and the plan administrator (subject to a distinct set of obligations) as well. This nuance only adds to the multitude of obligations and the resulting confusion that an employer must contend with. As is this case with a great many other things, those obligations have become even more difficult to understand and satisfy in the wake of the COVID-19 pandemic.

As mentioned above, COBRA provides the opportunity to continue group health plan coverage if certain criteria are satisfied. Private employers who employ 20 or more workers, are generally subject to COBRA if they offer if a group health plan. COBRA must be made available for the “covered employees” of the employer, and their dependents, if they experience what is known as a qualifying event.

The COBRA regulations provide that a qualifying event may be any of the following occurrences:

  • Voluntary or involuntary termination of the covered employee’s employment other than by reason of gross misconduct;
  • Reduction of hours of the covered employee’s employment; Divorce or legal separation of the covered employee from the employee’s spouse;
  • Death of the covered employee;
  • A dependent child ceases to be a dependent under the generally applicable requirements of the plan;
  • A covered employee becomes entitled to benefits under Medicare; and
  • An employer’s bankruptcy, but only with respect to health coverage for retirees and their families.

While the situations and occurrences which are considered qualifying events may be widely known, what is often overlooked is that the qualifying event must also cause a loss of coverage under the plan. Therefore, if plan coverage does not terminate as a result of the qualifying event, then the individual does not become eligible for an offer of COBRA coverage from the employer.

One instance where this principle is becoming more and more relevant, relates to employees who are furloughed or laid off. Given the economic uncertainty surrounding the COVID-19 pandemic, an unprecedented number of employers have turned to workforce reduction measures such as furloughs and/or layoffs to ensure business continuity.

On the surface, a layoff or furlough may appear to be a qualifying event which triggers an offer of COBRA coverage to the affected individuals. While it may very well be a qualifying event, it very much depends on the facts and circumstances of the given case. For example, many health plans choose to continue plan coverage in the event of a leave of absence, or even a temporary layoff or furlough. This approach is actually quite common. Although typically outlined within an employer handbook or policy manual, effectively outlining the instances in which plan coverage will be continued within the plan document can mitigate the risk of a potential dispute with the stop loss carrier.

In essence, the employer must review the plan document to determine whether it properly allows for continued coverage while an individual is furloughed or laid off. If the plan outlines said continuation, then the individual has not experienced a qualifying event and the employer’s obligation to offer COBRA coverage has not been triggered.

Of course, the individual may become eligible for COBRA continuation coverage if they do not ultimately return to work or if their continued plan coverage expires during the maximum coverage period of COBRA. If that is the case, the employer’s obligations would then be triggered, and the employer would be required to offer coverage in accordance with COBRA’s requirements. Fortunately for employers, there is some flexibility in the timeframe in which the offer of coverage must be made.

The Internal Revenue Service (IRS) along with the Department of Labor (DOL) issued final rules which extend a number of important benefit plan timeframes. As it relates to COBRA, plan administrators do have some flexibility as it relates to their obligation to notify the individual of COBRA coverage.

On the other hand, the rules also extend the period in which individuals can elect COBRA coverage, as well as the period of time in which an individual must pay their premiums. These extensions are sure to make administering COBRA eligibility another difficult task for the foreseeable future.

Any way you look at it, COBRA continuation coverage generally imposes a number of obligations on employers, plan administrators, and those who would enroll in COBRA coverage as well. Determining what those obligations are, how to apply them, and who may be eligible for them is no small feat even without the regulatory and economic uncertainty of the COVID-19 pandemic factored in. In order to avoid potential compliance issues, as well as mitigating the risk of reimbursement issues down the road, plan administrators should pay special attention to these COVID-19 related issues. Review the plan document to determine whether individuals furloughed and laid off are eligible to continue coverage under the plan, or alternatively under COBRA. Until the economic consequences of the pandemic dissipate, the complications and nuances associated with COBRA continuation coverage are sure to persist along with it.

____________________________________________________________________________________________________

Planning Ahead:  COVID-19 and Other Considerations for 2021 Health Plan Renewals

By: Jennifer M. McCormick, Esq.

As summer fades away and the leaves start to fall, many of us must start planning for 2021.  The expectations and goals we set in January of 2020 have likely required review and adaptation. As a result of COVID-19, employers encountered unprecedented hurdles. In addition to the economic costs facing employers due to this pandemic, employers need action plans to address the logistical and morale challenges of COVID-19.  While financial considerations are typically on the list of perpetual concerns, employers must now ensure they have action plans for employees needing to balance work and childcare, workplace safety, and the continually evolving regulations regarding COVID-19. Thankfully, with 2021 around the corner, employers have an amazing opportunity to boost employee morale and mitigate costs with thoughtful plan design.  Employers can (and should) use the upcoming renewal opportunity to let their health benefits shine and invite excitement for employees about their 2021 health benefits.

In planning for the upcoming benefit year, design modifications can generally be categorized into two categories: (1) regulatory changes; and (2) recommended changes.  Lingering uncertainty and future unknowns make both categories of design modifications equally important. 

Regulatory Changes 

While the list of regulatory items that must be changed may seem overwhelming, some of the changes may ultimately be welcomed by employers or employees.

For example, benefit updates for COVID-19 related services and modified rules regarding continuation coverage were likely well received by employees.  In addition to the benefits and continuation coverage provided for by The Coronavirus Aid, Relief, and Economic Security (CARES) Act and Families First Coronavirus Response Act (FFCRA), the Department of Labor (DOL) and Internal Revenue Service (IRS) issued regulations offering additional relief for participants.  Specifically, the regulations allow additional time for participants to take actions such as electing (or paying premiums for) continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and filing an appeal of an adverse benefit determination or requesting an external review.  Relief will apply retroactively from March 30, 2020 until 60 days after the end of the national emergency.  

Relevant regulations did specify that penalties would not be imposed if plans were administered in compliance with the extended timeframes, even if contrary to the specific terms of the underlying plan document materials.  Ambiguity surrounding deadlines, however, leads to unnecessary confusion for individuals enrolled in the health plan.   To eliminate this concern, plan materials should be updated and include details regarding the extended timeframes.  Disclosure and inclusion of such information will also function to mitigate potential gaps that may arise between plan materials and stop loss policies.

In addition to the tolling of certain timeframes, employees may also welcome the updated Summary of Benefits and Coverage (SBC) templates for 2021, also requiring revision and implementation.  The SBC is intended to provide uniform and consistent information regarding available plan benefits.  While modifications to the 2021 SBC template are not extensive, they do include updates to the coverage examples and the removal of information pertaining to the individual mandate.

Regarding employers, however, certain review and revision may be needed pertaining to plan out-of-pocket maximums.  Specifically, on an annual basis the Department of Health and Human Services (HHS) determines the adjustments for the Affordable Care Act (ACA) in-network out-of-pocket maximums for non-grandfathered plans.  In addition, the IRS sets the standard for high-deductible health plans. These iterations are expected annually and should be reviewed and applied in alignment with employer intentions.   

The interesting twist on out-of-pocket maximums that employers may be contemplating (or have already addressed) is the policy change on drug manufacturer assistance calculations for non-grandfathered plans.  An employer plan is not required, but may, count toward the out-of-pocket maximum drug manufacturer assistance, coupons, or other cost reductions. This is true even if the assistance in question is available on a drug without a generic equivalent.  This update may create an opportunity for cost-savings as plan out-of-pocket maximums are reviewed; however, employers should examine whether any other state laws require consideration.

Another regulatory update seemingly well received by both employers and employees is the relief contained within IRS Notice 2020-29. This relief, while temporary until December 31, 2020, relaxed the rules for mid-year election changes offered under Section 125 cafeteria plans.  Pursuant to this guidance, employees (if the employer decides to offer this optional election, and documents the offering accordingly by way of amendment) could revoke an existing health plan election if certain factors were met.  For employees, this opportunity might be the flexibility needed to reduce or modify coverage as finances face greater and continued uncertainty. For employers, this offering might foster goodwill among employees anxious to make plan modifications as a result of less certain financial times.

Recommended Changes

Since the list of 2021 required regulatory changes may not be as extensive as in prior years, employers may want to consider modifying benefits to account for the evolving needs of their workforce.

Health benefits remain valuable during the pandemic.  Employers who consider implementation of 2021 updates that coalesce with employee needs and wants will only enhance goodwill.  For example, as part of end of year discussions, an employer should consider polling employees to identify benefits they consider absent or not robust enough.  It is possible the stress of a pandemic means more employees are desirous of holistic health options such as acupuncture or nutritional counseling. Identifying benefit enhancements that most effectively promote employee wellness and have the greatest potential to improve employee happiness and productivity is of paramount importance.

Incentivization of certain behaviors under the plan is one avenue employers might explore. It is evident that certain benefits were more heavily accessed than others during this past year. Heeding feedback regarding the needs of employees during this trying time poses an opportunity to incentivize utilization that benefits both the employer and the employee.  For example, many appointments with primary care physicians were postponed due to limited availability, discouraged, or canceled, and employees did not have access to care as they would under traditional circumstances.  An alternative, offering focused medical care for employees while promoting financial predictability (i.e. potential cost savings) for the health plan, is direct primary care.  As permissible per other plan agreements, the addition of a direct primary care benefit should be considered.  This additional benefit would create direct access for employees to connect with a physician and receive the customized, tailored care needed during these challenging times, simultaneously easing ‘access to care’ anxiety during a pandemic.

In addition to direct primary care, technology offers availability of greater connections to care via telehealth and telemedicine.  Telehealth services have been valuable as this option reduces the risk of exposure or transmission of COVID-19, while still providing the necessary virtual care. For example, telehealth has been useful for screening and accessing whether potential COVID-19 patients need to be seen in a hospital setting or care can be managed from home. Over the course of the pandemic, eased restrictions encouraged providers and patients to utilize telehealth services. Employers should revisit their benefit designs to determine whether and to what extent telehealth services are currently available to participants, and whether further modifications are necessary. By way of illustration, employers should review whether telehealth is a current standalone benefit or offered only through a specific vendor.  The availability of telehealth services should be clearly addressed and denoted within the plan materials to eliminate coverage related confusion under the health plan.

At the outset of COVID-19, many individuals feared limited supplies, supply chain disruptions, or quarantine status restrictions would impact the ability to access necessary medications.  It is very common, and for myriad reasons, however, for health plans to impose prescription refill restrictions. Limited access has the potential of leaving employees in a situation where they are without life-saving medications.  With the continued unknowns of the pandemic, employers may consider relaxing refill protocols, ensuring access to critical prescriptions.  As permissible by the relevant plan agreements, employers could allow a 90-day supply instead of a 30-day supply in certain circumstances, investigate the availability of home delivery for prescription drugs, or evaluate mail-order pharmacy services. Prescription drug design flexibility not only has the potential to safely improve employee access to medication, but also create alternative prescription options that save money for the health plan.

Employees continue to face uncertainty as it relates to COVID-19, and this likely creates additional worry, stress and anxiety.  Many employees are parents and caregivers and entering another school year with distance and remote learning, presents challenges for everyone. Pandemic related hardships and disruptions have had a negative impact on mental and behavioral health. As a result, taking care of mental and behavioral health needs is essential.  Enhanced benefits should be prioritized as employees need access to resources to address any mental and behavioral health concerns they face during these challenging times.  Employers should examine the current health plan to determine whether revised benefits are necessary to offer increased support.

Next Steps

With the end of the year rapidly approaching, employers must soon make critical decisions about employee benefit offerings.  Once solidified, a review and update of the current health plan materials is necessary to ensure these benefit modifications are described accurately.

In addition to updating plan document materials, employers must review and revise other corresponding agreements and policies to ensure seamless and gap free benefit administration. For example, the updated plan document materials should be compared against the stop loss policies, network agreements, and vendor agreements to identify (and eliminate) coverage gaps.

It may seem like an overwhelming task, but by proactively revising employee benefit materials to address these items employers can generate employee enthusiasm for the upcoming 2021 benefit year. 

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.


_

 

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!

 



Back to top ^


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



Back to top ^


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.

 



Back to top ^


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

 

Back to top ^


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.


Back to top ^

 


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.


Back to top ^

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

 

____________________________________________________________________________________________________

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

____________________________________________________________________________________________________

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.

 

The Phia Group's 3rd Quarter 2020 Newsletter

On July 20, 2020


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




 

The Book of Russo:
From the Desk of the CEO

July in Boston is wonderful – great weather, great beaches, great barbeques – well ... maybe not this year. Seriously, though, in my opinion, there really isn’t a better time of year to be in New England. So one day ... soon ... maybe all of you can come visit.

So much has happened at Phia since the last newsletter. We successfully moved into our new Canton, MA facility; we secured a larger space for our Louisville employees; we established our Customer Success Team (that will proactively reach out to you and your teams); we enhanced many of our client reporting tools, case descriptions and options: and

last but not least, we have ensured that you all have the latest and most valuable information relating to COVID-19, how it impacts your businesses and client plans.

With that in mind, let's continue the trend of entertainment and education, with yet another Phia Group Newsletter! I truly hope you will enjoy the valuable information this edition has in store for you, and as always, thank you for being part of The Phia Family. Enjoy!

 


Service Focus of the Quarter: Plan Appointed Claim Evaluator® (PACE)
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: Subrogation Value Reports

To the Phia Group’s valued recovery clients: rejoice! We have supplemented our already-extensive reporting suite to provide you with a brand new report. The “Subrogation Value Report” is a new report that highlights recovery performance for a particular group, or across a TPA’s entire block of business – as well as compares those results to various benchmarks. The Subrogation Value Report provides the user with an easy-to-read summary of how much The Phia Group has recovered, on a quarterly or yearly basis (based on your preference), and it can also be run by The Phia Group’s Customer Success Team, on-demand.

This new report presents as a clean, clear PDF. Through the use of graphics and design, it provides an easy to digest yet comprehensive summary of the most valuable performance benchmarks, as well as compares those results to The Phia Group’s entire book of business, utilizing various useful metrics; an important retention and marketing tool for any user!

The Subrogation Value Report will be automatically provided on a regular basis, as well as being available to all clients upon request, so be sure to contact The Phia Group’s Customer Success Team as needed – and as with all our reports, they will be accurate as of the minute they were run.

 

 


_

 

New Service Offered by Phia: Patient Defender

The Phia Group is proud to introduce its “Patient Defender” program. For a PEPM fee, every plan participant has access to legal representation against collections lawsuits or crippling balances being sent to collections before legal action ensues. Best of all, Patient Defender can be coupled with any type of health benefit plan – from reference-based pricing plans to traditional network plans; if and when a patient is threatened by aggressive tactics, Patient Defender will be there.

To learn more about Patient Defender or any of The Phia Group’s services, please contact our Vice President of Sales and Marketing, Tim Callender, Esq., at 781-535-5631 or tcallender@phiagroup.com.

 

Service Focus of the Quarter: Plan Appointed Claim Evaluator® (PACE)

Years ago, in response to growing industry concern regarding fiduciary duties and appeals, The Phia Group created its Plan Appointed Claim Evaluator (PACE) service. PACE is a service whereby The Phia Group takes on fiduciary duty for, and protects clients against fiduciary liability arising from, final-level internal appeals. It is designed to help health plans ensure adverse benefit determinations are correct and defensible, thereby insulating the plan from liability and allowing the Plan Administrator to focus on its core business rather than difficult determinations, and free itself from worry that an unintentional yet arbitrary mistake could result in excessive damages.

PACE includes:

• Plan Document and stop-loss policy “Gap Reviews” to ensure compliance, eliminate coverage gaps, and ensure PACE readiness

• Advanced-level webinars exclusively for PACE clients

• Assessment of eligible, final internal appeals resulting in a written directive

• Unsurpassed legal analysis, clinical review and access to URAC-accredited IROs (with The Phia Group covering all external review costs)

The PACE Certification Program is free of charge and will create immense value for your organization. By going through the Certification program, you, or a select person, or team, within your organization, can become PACE Certified. Once PACE Certified, the Program participant(s) will become highly educated PACE business owners and will serve to assist your organization in growing your PACE business, enhancing your PACE revenue, and assuring your appeals processes are the most compliant and best in the industry. Those who complete the Certification will also receive a PACE Certification Fact Sheet, providing an easy to understand summary of the content and best practices covered, which will allow you to maximize the lessons learned within your business.

The PACE Certification program will educate you using 3 distinct chapters of information:

Chapter One

Explore the ins and outs of self-funding while learning about its risks and rewards. This chapter will transform any individual into a self-funding pro.

Chapter Two

Take a deeper dive into the laws that apply to self-funded plans. We cover it all, from federal preemption to adverse benefit determinations and appeals.

Chapter Three

Explains what PACE is, what PACE does, and how it's obtained, implemented, and utilized.

Please see the PACE Certification flyer, as well as this video for more information.

Please contact Michael Vaz (mvaz@phiagroup.com) for more information.


Success Story of the Quarter: The Second-Level Appeal

A client of The Phia Group’s Plan Appointed Claim Evaluator (PACE) service recently received a large claim. The medical service from which the claim originated was performed in the emergency room of an out-of-network hospital, but the TPA’s initial medical review deemed it to be of a non-emergency nature; so the claim was processed the same as any normal non-network claim, rather than as a claim for emergency services. The provider was adamant that the services were emergency services, placed numerous calls to the TPA, and wrote an extremely long and detailed appeal.

On appeal, the TPA diligently had the claim reviewed by a qualified medical reviewer, with the same results, so the appeal was denied. The provider continued its tirade against the TPA’s customer service staff, and eventually submitted a second-level appeal, which the TPA referred to The Phia Group for review pursuant to the PACE service agreement.

The Phia Group obtained an independent medical review, which yielded the same results – that the claim was not emergent in nature. Phia rendered its determination, as a fiduciary, which the TPA relied upon in communicating the second-level appeal denial. As expected, the hospital renewed all its objections, but the administrative appeals were exhausted.

This situation is still ongoing. Since the second-level appeal response was issued, the hospital has made numerous threats to sue the Plan, the TPA, and Phia; luckily, the Plan and TPA can rest easy knowing that the second-level appeal determination was made by The Phia Group, rather than by the Plan or TPA, so in the event of a lawsuit, Phia is responsible for any fiduciary damages assessed should the court deem the denial to be inappropriate.

Regardless of the outcome, this is a perfect example of exactly how the PACE service works: the TPA and Plan can get back to their everyday business without worrying about liability from this and similar appeals.


Phia Case Study: The ASC OP

The beauty of this case study is in its simplicity.

A client of The Phia Group’s overpayment recovery service had issued an overpayment to an ASC to the tune of over $12,000 due to incorrect application of the plan’s Usual and Customary limitations. Specifically, the Plan allowed the claim at 140% of Medicare, but the TPA had incorrectly processed the claim at 80% of billed charges. The TPA had sent half a dozen letters to the ASC to no avail; ultimately the TPA referred the case to The Phia Group, to see if we could get any movement.

Upon receiving the file and discussing it with the TPA, we commenced recovery efforts, including sending an initial introductory and demand letter and following up with phone calls every few days. There was no response, so our legal team got involved; an attorney sent a very strongly-worded letter along with a vague warning that the Plan may be forced to take additional action if there was no response.

Within a week of sending that letter, we received a call from the ASC’s owner, apologizing for the delay and letting us know the overpayment request would be reviewed in the coming days. One week later, to the day, the owner called again to let us know that the check was in the mail.

The moral of this story? Sometimes all it takes is having that “Esq.,” on the end of a signature to make things happen – and sometimes having a reputation helps! In this case, The Phia Group’s legal team was able to recover $12,000 for the Plan.


Fiduciary Burden of the Quarter: SPD & PPO Contract Harmony

ERISA contains a broad framework of requirements regarding how health plans must notify claimants of a plan’s claim and appeal process and determinations. In the event of an Adverse Benefit Determination, a health plan must satisfy certain requirements. Three important requirements are (1) notifying the claimant of “[t]he specific reason or reasons for the adverse determination,” (2) including “[r]eference to the specific plan provisions on which the determination is based,” and also, (3) including “[a] description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary.” These are three requirements that are frequently overlooked.

The following example is simplified from the original issue, but it is still noteworthy: The Phia Group recently worked with a TPA who denied a claim on behalf of its client health plan because the provider erroneously submitted the claim directly to the TPA, rather than to the network. The TPA included verbiage on the EOB to the effect of – to paraphrase – “please submit this claim directly to the network for repricing.” There can scarcely be any doubt about what that means. Especially for a medical provider who is contracted with the network, and who understands how the network works.

Now, the interesting part of this anecdote is not really what happened, but instead the fact that even though the PPO contract specified that the claims should be submitted directly to the network – lending credence to the EOB’s remark code, the SPD itself did not contain that same requirement. Instead, the SPD specifically stated that claims must be submitted directly to the TPA. This creates a discrepancy between the PPO contract and the SPD in the most basic aspect of a claim: how to submit it! Recall that while benefit plans are contractually bound to abide by the terms of their network agreement, they – and beneficiaries of the Plan – are bound to obey the terms of the plan document. As a result, the EOB could arguably be deemed not to reflect the terms of the Plan, and the provider can thereby argue that the denial was not sufficient, (since the SPD technically does not support the denial, even though the provider is party to a network contract that says otherwise).

So, while this EOB remark code does seem to have contained “[a] description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary,” it arguably cannot meet the other two requirements since, literally speaking, language in the SPD does not exist to that effect.

This is an example of the common situation where two agreements conflict with one another, and the Plan Administrator has to make a choice of which one to follow. Making that choice is never ideal, so our advice is to say what you mean and mean what you say, in every agreement you have signed. Do not leave anything to chance or to anyone’s imagination!
 


 

Phia Fit to Print:

• Self-Insurers Publishing Corp. – Be Ready For The Drug Pricing Debate To Return With A Bang – June 3, 2020

• BenefitsPro – Voluntary travel, COVID-19 and hazardous activity exclusions – June 03, 2020

• Self-Insurers Publishing Corp. – Continuing Coverage During COVID-19 – May 6, 2020

• BenefitsPro – Employer compliance beyond CARES and FFRCA: Don't forget the basics – April 22, 2020

• Self-Insurers Publishing Corp. – Are Your ICS Really EES? A Look Who's Who on an Employee Benefit Plan – April 7, 2020

• BenefitsPro – The black box: A cautionary anecdote – April 3, 2020


Back to top ^


From the Blogosphere:

No Contract? No Problem! Without a signed service agreement, some things can be left up in the air.

Privacy Pitfalls – Considerations for Reopening the Office. Planning on reopening your office? Here’s what you need to know.

DPC During a Crisis. The many benefits of Direct Primary Care.

Did HHS Just Ban All Surprise Billing During The COVID-19 Pandemic? Apologies for the attention-grabbing headline, but no, as good as that would be for payers, it didn’t.

COVID-19: Social Distancing and Paid Sick Leave. The national shift to social distancing has effectively changed the way almost all of us go to work.

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


Back to top ^


Webinars

• On June 16, 2020, The Phia Group presented, “Old Issues, New Environment – Not The Same Old Song,” where we discussed familiar issues such as balance billing, surprise billing, mental health parity, telemedicine, COB, and others, while framed in the context of these unique times.

• On May 19, 2020, The Phia Group presented, “A Pandemic Economy – Industry Risks and Opportunities,” where we took a deeper dive on ways administrators are extending benefits and taking care of those in need.

• On April 23, 2020, The Phia Group presented, “Reasons for Optimism,” where we discussed the many GOOD and POSITIVE things that have both improved our industry since the end of 2019, and that are on the way.

Be sure to check out all of our past webinars!


Back to top ^


Podcasts:

Empowering Plans
 

• On June 1, 2020, The Phia Group presented, “Workers' Comp. & COVID-19 - Preparing for an Influx,” where our hosts, Jennifer McCormick and Brady Bizarro discuss the impact of COVID-19 on workers' compensation claims.

• On May 6, 2020, The Phia Group presented, “A Million Dollar Start,” where our hosts, Ron and Brady, interview, Attorney Robert Martinez, and explore a case in which he secured a massive balance bill write-off from a hospital using some creative tactics.

• On April 27, 2020, The Phia Group presented, “Video Conferencing & the Risk to PHI,” where our hosts, Ron Peck and Brady Bizarro are joined by consulting attorney Nicholas Bonds to discuss the unique concerns facing covered entities and their business associates as more of us utilize video conferencing platforms while under quarantine.

• On April 13, 2020, The Phia Group presented, “COVID-19: Studies on Treatment Costs & Industry Impact,” where our hosts, Jennifer McCormick and Brady Bizarro, discussed some of the latest studies on the potential cost of COVID-19 treatment for self-funded plans, the projected impact on employer-sponsored insurance, and how they think this pandemic could change the industry.

Be sure to check out all of our latest podcasts!


Back to top ^


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


Youth of the Year: Abiana Cruz

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

One lucky teen has officially been awarded a $5,000 scholarship and a new laptop, courtesy of The Phia Group. The Boys and Girls Clubs of Metro South has announced, Abiana Cruz, as the Boys & Girls Clubs of Metro South’s 2020 Youth of the Year.

Cruz is a junior at Taunton High School and has been a member of the Taunton Clubhouse for 10 years. In addition to her many contributions to the Taunton Clubhouse as a member, Cruz works at the Club after school as an arts specialist, sharing her passion and creativity with younger Club members, and at Camp Riverside in the summer months as a camp counselor.


Grab-and-Go Dinner Program

The Boys & Girls Club has been hit hard and the Phia family is here to help! The Boys & Girls Club is averaging 100 meals served per night with 85% of those meals being served in Brockton. They are also providing boxes with fresh produce and non-perishable food (pasta, canned goods, etc.) to an average of 25 Brockton families per week on Friday afternoons.

Since the pandemic started in March, The Boys & Girls Club has been suffering financially. In total, the loss of programming revenue, public support, and special events fundraising between March 15th and June 30th is estimated at nearly $1M, or roughly 25% of their FY20 operating budget of $3,890,498.

That figure continues to climb each time Clubhouse re-openings are further delayed. The Phia family came together and donated a total of $3,500.00 while our employees were working from home. We encouraged employees to utilize Venmo to make their donations, and they happily did so. We are so proud of the Phia family and happy to have the ability to assist families in need.

If you would like to make a donation, please visit their website today and help a family in need. Here is their donation link: https://www.bgcmetrosouth.org/donate


Back to top ^


The Stacks

Be Ready For The Drug Pricing Debate To Return With A Bang

By: Nicolas Bonds, Esq. – June 2020 - Self-Insurers Publishing Corp.

As 2020 dawned, one of the fiercest debates around containing healthcare costs pivoted on addressing the runaway prices of prescription drugs. In May of 2018, the Trump administration first floated their “blueprint” to lower drug prices, but hit a number of walls, legal and political.

Meanwhile, Congress labored on a number of pieces of legislation to curtail drug prices, with House Democrats’ approach culminating in the Elijah Cummings Lower Drug Costs Now Act. Named for the late Baltimore Democrat who pressed the Trump administration to do more to rein in drug costs, the bill was designed to empower the federal government to negotiate Medicare drug prices directly. The bill would have also placed a cap on the out-of-pocket prescription drug costs paid by those covered by Medicare Part D, while expanding dental, vision, and hearing coverage for Medicare recipients.

Click here to read the rest of this article


Continuing Coverage During COVID-19

By: Andrew Silverio, Esq. – May 2020 – Self-Insurers Publishing Corp.

For the last month or so, like just about every industry, self-funded plan sponsors and those serving them have been frantically grappling with how to quickly and thoroughly address issues they’ve never had to encounter before. Entire segments of our economy have shut down essentially overnight, travel has screeched to a halt, and employers are dealing with questions of a type and scope they’ve never seen. Against this backdrop, individuals’ healthcare needs have never been more vital, while for many employers the path to ensuring they can continue to be covered has never been more wrought with pitfalls.

Click here to read the rest of this article
 

A Look Who's Who on an Employee Benefit Plan

By: Kelly Dempsey, Esq. – April 2020 – Self-Insurers Publishing Corp.

The glory of self-funding is the flexibility an employer has to create a benefit plan that truly suits the individual employer. Employers with ERISA-governed self-funded plans have the opportunity to craft benefits and exclusions that align with the needs of their employee population, while implementing various cost containment solutions to assist the employer in offering a robust benefit plan, and, perhaps even more importantly, controlling the costs for the employees and the employer. But where does that flexibility stop?

Click here to read the rest of this article

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

Back to top ^


Get to Know Our Employee of the Quarter: Regina Cattel

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 will only allow an Explore member to receive this award in the most exemplary of situations; and it is without question that we had one of those types of situations this quarter. As the pandemic advanced, and forced Phia to send most of us home to weather the storm, this employee made herself available to perform any and all duties necessary to maintain Phia’s essential operations that went above and beyond her day to day job duties. Whether it was taking on responsibilities such as managing and sorting the mail, scanning, assisting facilities with the office move, working late handling COVID task force preparations, while still managing to be available 24/7 for employee questions and concerns…you name it – this person has truly done it all. She has made The Phia Group a truly exceptional place to work, and strives to make us even better!

Explore has made the unanimous decision, without hesitation, that there is no one more deserving than our very own Regina Cattel, your Q2 Employee of the Quarter!

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


Job Opportunities:

• Case Investigator

• Health Plan Documentation Specialist/Plan Drafter

• Claim and Case Support Analyst

• Sr. Software Engineer

• Health Benefit Plan Administration Attorney/Consulting Attorney

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


Promotions

• Alyssa Pisco has been promoted from Case Investigator to Claim Recovery Specialist III


New Hires


• Nicole Capazzoli was hired as a Sr. Claim Recovery Specialist

• Krishna Pathuri was hired as a Director, Business Analysis

• Morganne Wagner was hired as a Project Manager

• Irene Yalch was hired as an Office Administrator

• Michael Young was hired as a Legal Intern

• Michael Hutshell was hired as a Sr. Claim Recovery Specialist

• Tara Otoka was hired as a Plan Drafter

• Susan Bivens was hired as a Data Architect

• Cindy Merrell was hired as a Subrogation Attorney

• Katelyn Jalkka was hired as an Accounting Intern

• Caelin McDonald was hired as a Sales Coordinator

• Pruett Cunningham was hired as an Executive Assistant


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!


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.

 


Back to top ^

info@phiagroup.com
781-535-5600

The Stacks - 3rd Quarter 2020

On July 20, 2020

Be Ready For The Drug Pricing Debate To Return With A Bang

By: Nick Bonds, Esq. 

As 2020 dawned, one of the fiercest debates around containing healthcare costs pivoted on addressing the runaway prices of prescription drugs. In May of 2018, the Trump administration first floated their “blueprint” to lower drug prices, but hit a number of walls, legal and political.

Meanwhile, Congress labored on a number of pieces of legislation to curtail drug prices, with House Democrats’ approach culminating in the Elijah Cummings Lower Drug Costs Now Act. Named for the late Baltimore Democrat who pressed the Trump administration to do more to rein in drug costs, the bill was designed to empower the federal government to negotiate Medicare drug prices directly. The bill would have also placed a cap on the out-of-pocket prescription drug costs paid by those covered by Medicare Part D, while expanding dental, vision, and hearing coverage for Medicare recipients.

Though far from perfect, the legislation was ambitious policy and it received broad support from Democrats. Meanwhile, Republicans in the House and Senate released their own drug pricing plans, both echoing the Democrats’ approach of tuning up Medicare Part D. The House Republicans’ policy package, the Lower Costs, More Cures Act, included a suite of transparency measures and caps on insulin costs. Senate Republicans’ Prescription Drug Pricing Reduction Act imposed penalties for price increases above inflation for Medicare Part B and Part D drugs, and capped expenses for seniors, among other things. While there was no consensus on the precise approach, there was virtually universal acceptance that the American people wanted to see movement on drug pricing reform.

Even so, partisan gridlock kept any of those bills from becoming law. The dust up did, however, lead President Trump to put even greater pressure on HHS Secretary Alex Azar to get the ball rolling on their plan to encourage state importation of a significant number of cheaper Canadian prescription drugs – one of the many steps laid out in the aforementioned blueprint to reduce drug prices. The President then doubled down on his renewed push for drug pricing legislation at the most recent State of the Union, using his address to make the issue one of the central planks in his 2020 election platform.

Drug pricing discussions have taken a back seat to the more pressing pandemic. The federal government has understandably been more focused on dealing with the dual health and economic crises of unprecedented scale. To that end, the Families First Coronavirus Response Act (“FFCRA”) and Coronavirus Aid, Recovery, and Economic Stimulus (“CARES”) Act were passed rapidly and with wide-ranging bi-partisan support. Together, these laws took steps to ensure Americans receive testing and treatment for Covid-19, but the financial toll of contracting the virus will still be a devastating blow to most individuals.

The world may have a year or longer to wait for a vaccine to prevent Covid-19, and nascent treatments for the virus have yet to be perfected. While some therapies are showing promise (even some involving llamas), no treatment has received quite so much of the limelight as remdesivir. An experimental drug developed by Gilead Sciences, remdesivir has received the blessing of White House coronavirus task force member Dr. Anthony Fauci, and been granted an emergency use authorization (“EUA”) by the Food and Drug Administration.  

Effectively, this EUA means that under the FFCRA and CARES Act, health plans will be required to cover this therapy, but an unanswered question lingers: How much does remdesivir cost? Gilead Sciences has yet to set the price for its drug, though the company has donated 1.5 million doses. The drug maker faces a difficult decision, needing to balance the development costs and potential profits of remdesivir against the desperate public need for viable treatments. Estimates of the drug’s prospective price vary wildly. The Institute for Clinical and Economic Review (“ICER”), a Boston-based nonprofit that performs cost analyses on medical treatments, released a recent report estimating that a “cost recovery” pricing model may run as low as $10 for a ten-day course of treatment. Alternatively, under a more traditional “cost-effectiveness” pricing model, ICER estimates place the cost of that same course of treatment closer to $4,500.

To complicate matters, Gilead Sciences may actually have a viable patent on remdesivir, so until other therapies are developed the company may have a government-backed monopoly on the treatment of Covid-19. The development of the drug, however, may well have been at least partially subsidized by federal money. Gilead previously faced a similar situation with their HIV treatment Truvada – which led the government to sue for a license to the drug.

Gilead Sciences will have to balance public opinion, social responsibility, their own finances, and the potential government response as they consider how to price remdesivir. As will any other drug maker who develops a treatment for Covid-19. Whatever price point Gilead settles on, the fallout from their decision will certainly linger. A drug this high profile, coming along amid a global emergency, cannot help but reignite the drug price debate. It may be a slow burn – that debate may need to be tabled until the pandemic is under control, maybe even beyond the 2020 election – but the fuse is most certainly lit.

____________________________________________________________________________________________________

Continuing Coverage During COVID-19

By: Andrew Silverio, Esq.

For the last month or so, like just about every industry, self-funded plan sponsors and those serving them have been frantically grappling with how to quickly and thoroughly address issues they’ve never had to encounter before.  Entire segments of our economy have shut down essentially overnight, travel has screeched to a halt, and employers are dealing with questions of a type and scope they’ve never seen.  Against this backdrop, individuals’ healthcare needs have never been more vital, while for many employers the path to ensuring they can continue to be covered has never been more wrought with pitfalls.

As self-funding consultants, we’ve already fielded just about any question one could imagine relating to the COVID-19 pandemic.  It is encouraging though, from a human perspective, that the most common questions we’re seeing don’t relate to how to comply with new federal laws, or even how to contain costs in a time when most employers are being forced to tighten their belts dramatically.  Rather, the most common and urgent inquiries we receive are all variations on the same basic issue – how can we ensure our employees can remain covered?

This seemingly simple question often gets extremely complicated though, as plan sponsors are dealing with business decisions they never envisioned.  What if you have to close down completely for a month?  Two months?  What if you have to cut everyone’s hours to be able to ensure everyone continues receiving a paycheck?  What if employees are placed on leaves of absence or furloughed?  Will stop-loss cover continuations of coverage?  It’s very unlikely that even a well-drafted plan document is already set up to address situations like this.

The first and most important item to check off the list is to ensure that the plan document allows for continuation of coverage in whatever situation you’re dealing with.  Just how to label that situation has become a point of confusion in itself, however.  Employers are getting hung up on terminology – do we call it a layoff or a furlough? Can we call it a leave of absence?  Does this impact actively at work status?  Our general guidance has been to forget about terminology – it doesn’t matter.  If your plan clearly describes the events that would otherwise cause a loss of eligibility and clearly establishes that eligibility is intended to continue regardless, it doesn’t matter if the break in service is called a layoff, a furlough, a leave of absence, a pastrami sandwich, etc.

Another significant source of anxiety for plan sponsors is how stop-loss carriers will treat plan changes in connection with COVID-19.  Many carriers have issued releases that seem very reassuring – saying in broad terms that plans need not worry, and that stop-loss will honor COVID-19 updates and amendments won’t be required of applicable stop-loss policies.  We would caution against taking these representations too broadly, however.  A reasonable interpretation of most of these releases is that carriers will honor any plan changes to the extend necessary for plans to comply with the law (namely the Families First Coronavirus Response Ace and the CARES Act).  However, most plans are contemplating changes beyond what’s required by law.  For example, to date there is no federal requirement to extend coverage which would otherwise be terminated after layoff or due to a reduction in hours – the only required extension of coverage under these laws would fall under a new category of FMLA leave.  There’s also no federal mandate to waive cost sharing for most COVID-19 treatment, as opposed to diagnostic testing (a step many plan sponsors are taking to mirror trends in the fully-insured world).  The prudent approach is to expect collaboration, but not rely on it, and take all the proactive steps that may be necessary to protect the plan and employer.

____________________________________________________________________________________________________

Are Your ICs Really EEs? A Look Who’s Who on an Employee Benefit Plan

By: Kelly Dempsey, Esq.

The glory of self-funding is the flexibility an employer has to create a benefit plan that truly suits the individual employer. Employers with ERISA-governed self-funded plans have the opportunity to craft benefits and exclusions that align with the needs of their employee population, while implementing various cost containment solutions to assist the employer in offering a robust benefit plan, and, perhaps even more importantly, controlling the costs for the employees and the employer. But where does that flexibility stop?

Flexibility can begin to taper off when it comes to determining which individuals are eligible for employer-sponsored coverage. In short, the relevant regulations mandate that only employees of the employer sponsoring the health plan should be eligible to participate. So the logical next question is: who qualifies as an employee?

In general, individuals that are issued a 1099 instead of a W-2 are independent contractors (“ICs”) and are accordingly not employees (“EEs”), and thus should not be offered employee benefits; to that end, the Internal Revenue Service (“IRS”) provides various resources to assist employers in appropriately classifying workers. The IRS looks at three areas of the relationship: (1) the behavioral control the employer has on the individual, (2) the level of financial control, and (3) the type or nature of the relationship. 

Interestingly, the IRS specifically lists “benefits” under the “type of relationship” category as a consideration for classifying a worker. While the considerations are a sliding scale rather than a hard-and-fast rule (as in, simply offering benefits does not necessarily make the individual an employee), it is certainly a factor. There is also a 20-factor (yes – 20) test found in Revenue Ruling 87-41 (1987-1 C.B. 296), but the IRS is aware that certain factors may not apply to every situation.  Ultimately, misclassifying individuals may jeopardize the IC’s “IC” status, which leads to various complications for the employer, the IC, and the health plan.

As states continue to develop employment-related laws to address various aspects that either directly relate to or at least tangentially effect employee benefits, one such development is of specific interest. New Jersey in particular has issued several new laws that took effect immediately in late 2019, related to independent contractor status and worker misclassifications. The New Jersey Department of Labor and Workforce Development now has the authority to issue monetary penalties for misclassification. If a labor contractor is involved, the employer and the labor contractor have joint liability for any violations and penalties. In April 2020, New Jersey employers will also be required to post a notice regarding worker misclassification. The poster will include information about the prohibition on misclassification of workers, information on the differences between ICs and EEs, the benefits and protections employees are entitled to under state law, the remedies available to misclassified workers, and contact information for complaints or notification of alleged violations. These laws are the result of Governor Murphy issue Executive Order No. 25 in May of 2018 that established the Task Force on Employee Misclassification, making it a top priority to put guidelines in place to diminish work misclassification, which is believed to be widespread problem.

If the State of New Jersey determines that individuals are being identified as ICs when they really are EEs (and vice versa), the State may issue specific penalties and even stop-work orders, in addition to other remedies or penalties found in other applicable law. There are two penalties that can be imposed. The first is an administrative penalty for misclassifying an employee. For the first violation, the administrative penalty is $250 per misclassified employee. Subsequent violations may increase the penalty up to a maximum of $1,000 per misclassified employee. The second penalty is structured a bit differently and the monetary amount is to be no more than 5% of the worker’s gross earnings over the past 12 months. The limitation applies to the earnings from the employer that actually misclassified the individual – meaning a new employer that has contracted to work with the IC cannot be held accountable for the prior employer’s mistake. The State may dictate that the penalty is paid directly to the misclassified workers, or the employer may be required to pay into a trust account for any applicable workers. Employers are to be provided with notice and given the opportunity to appeal by requesting a hearing with the Commissioner of Labor and Workforce Development.

As with most laws, there is a good faith factor worked into the analysis. Ultimately the State must look to a variety of factors when applying penalties, including any previous violations by the employer, the seriousness of the violation, the employer size, and the good faith of the employer.   

If you’re still reading, you’re probably thinking: why does this matter to me? Over the last few years there has been an uptick in the number of self-funded plans that appear to want to include ICs as eligible, so if you’re a claims administrator, a consultant, or a broker, one of the plans you work with is likely impacted. Aside from specific state law penalties, there are a variety of considerations.

Plan language is a major consideration (as it so often is). This may seem like the easiest piece of the puzzle, but as we dig in a bit, it becomes clear that it’s not so simple. Clear eligibility language is crucial to ensure compliance with ERISA Summary Plan Description requirements, so the first step is to modify the eligibility provisions of the document, including how a covered person or participant is defined. Again, determining when to offer coverage is usually simple, but the length of coverage and termination of coverage get a bit trickier. How long will the IC be eligible? Are ICS only covered when working on a project? Would the IC be terminated immediately when a project is over? Would an IC be interested in such coverage if only offered for a limited period of time?

Benefits are usually offered when there is a permanency of the relationship between the employer and individual; generally, true employment relationships do not have defined end dates, while IC relationships usually have a more definite timeframe. That defined timeframe can make crafting the plan language offering coverage to ICs into a tedious process, and could be difficult for a TPA to administer!

Employers also need to consider whether they are inadvertently creating a MEWA – a multiple employer welfare arrangement. The offer of coverage to non-employees (i.e., the ICs) likely creates a MEWA. Generally speaking, a MEWA is created when one benefit plan is offered to two or more unrelated entities. Because each IC is a separate entity, it could create a de facto MEWA by including even one IC in the plan benefits. As the MEWA and Association Health Plan (“AHP”) space is another area of developing law, the company would need to properly form the MEWA or AHP first before modifying plan eligibility provisions, and an employer that forms a MEWA loses many of the coveted protections afforded by ERISA.

If the employer still wants to continue down this path, the next consideration is tax consequences for both the employer and the IC. By classifying an individual as an IC, an employer avoids paying employment taxes; however, the IC is likely to be taxed on the benefits provided by the employer, since pre-tax protections generally do not apply.

Certain employers may be eligible for the IRS’ Voluntary Classification Settlement Program (“VCSP”), which allows employers to reclassify workers and receive some relief from federal employment taxes that the employer was not paying. Employers can also seek a proactive determination from the IRS regarding the proper classification of workers (although it’s not easy to estimate how long that might take to receive). Last, but not least, there are resources for individuals to calculate unreported taxes and report an apparent misclassification to the IRS.

In addition to the above, stop loss is also a consideration; in order to ensure that these individuals’ claims will be covered under the stop loss policy, it need to be underwritten accordingly and the policy must be written to include coverage for ICs. It generally goes without saying, but the stop loss carrier will need to sign off on the plan language modifications as well (generally before the changes go into place).

With that said, will other states follow New Jersey’s lead? The answer to that question is unclear; however, since the passage of the Affordable Care Act in 2010, the United States Department of Labor is continuing to audit self-funded ERISA-governed plans on a regular basis, looking at a variety of things. Some audits are truly randomized, while others begin due to a complaint from a plan beneficiary. Employers should take a proactive approach to review their benefit offerings and assess whether the health plan’s actual eligibility exactly matches what is stated in the Plan Document, Summary Plan Description, and employee handbook, and update the documents accordingly (or correct any EE or IC statuses accordingly).

In summary, it’s natural for an employer to want to offer benefits, including a robust health plan, to the individuals working for the benefit of the employer; however, if those individuals are not actual employees, things can go sideways quickly. Employers should proceed with caution when deciding to offer employer benefits to independent contractors. In this ever-changing industry, states are continuing to develop new rules for employers that bleed into the employee benefit space and can impact their self-funded health plan offerings. These new state laws, combined with existing federal guidelines, can be difficult to navigate, but with some careful planning, employers are given the tools they need to figure it all out!

The Phia Group's 2nd Quarter 2020 Newsletter

On April 21, 2020


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



The Book of Russo:
From the Desk of the CEO

The world has changed for all of us, and we are all presently facing challenges and obstacles that none of us could have previously imagined. That being said, I’m not going to sit here in my basement office and cry a river. Instead, I see all of the amazing things that have happened over the past month. I see my kids as I teach them math, reading, and how to create anything that comes to their minds; (we are actually building a pretty awesome fort in the backyard). I see my Phia Group team members and their children during our weekly video calls, and my determination to ensure that we suffer no layoffs is renewed. I see the opportunities ahead of us, as a company, an industry, and as a nation.

I see what we can do as colleagues and as friends to emerge even stronger, blazing a path to an improved future. This experience will forever change us, but I choose to see how that change can be for the better. I do know that my Phia family has shown exceptional resilience and grown stronger through this ordeal - our employees believe in each other and our collective future is bright. I hope that our webinars, podcasts and articles have helped you and your clients do the same in these bizarre times. We are here for you. Be well, and stay in touch.

 


 

Service Focus of the Quarter: Phia Unwrapped
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: Subrogation Value Reports

To the Phia Group’s valued recovery clients: rejoice! We have supplemented our already-extensive reporting suite to provide you with a brand new report. The Value Report is a new activity report that highlights recovery benchmarks for a particular group, or across your entire block. This report will provide the user with an easy-to-read summary of how much money The Phia Group has recovered for the client health plans, on a quarterly or yearly basis. The Value Report also contains metrics comparing this performance to The Phia Group’s entire book of business.

This new report presents as a clean, readable PDF; it can be run on-demand and is designed to give a comprehensive summary of the most valuable performance metrics, which can be an important retention and marketing tool for any user!

The Value Report will be added to our client-ready Tableau reporting suite, so recovery clients can run them as needed – and as with all our reports, they will be accurate as of the minute they were run.

 


 

Phia’s Latest Hire – Rebekah McGuire Dye, J.D.

Rebekah McGuire Dye was recently hired as the new Vice President of Client Solutions and Account Management with the Phia Group. Ms. Dye is leading the Phia Group’s client care service to the highest level of concierge client service ever established in the cost containment industry.

As a partner to clients’ senior leadership, Ms. Dye and her accomplished team provide an authentic level of customer caring to ensure every aspect of the Phia – client relationship is positive, productive and genuine.

Ms. Dye comes from a 25-year career with the largest cost containment provider in the industry. During her tenured career she has served over 150 health benefit providers in roles ranging from front line file handler to Group Vice President overseeing all Commercial subrogation operations for over 20 million benefit recipient lives. Her lengthy cost containment career, while focused on the Health Care line of business, also includes expertise in both Disability and Property & Casualty subrogation matters.

Ms. Dye is an active member of both IDS and NASP. You can find several published articles by Ms. Dye in the NASP Subrogator magazine and she is a frequent subject matter expert speaker on recovery matters.

While not pursuing cost containment endeavors, she is an avid reader, nature lover and family-centered person residing in rural Kentucky. Her favorite stewardship is serving as an elected member of the Nelson County Kentucky school board. Her passion for education and children make her an invaluable member of the Board.
 


 

Service Focus of the Quarter: Phia Unwrapped

Wrap, extender, and other leased networks offer small discounts and audit restrictions, affording providers nearly unlimited billing rights. With Phia Unwrapped, The Phia Group replaces wrap network access and modifies non-network payment methodologies, securing payable amounts that are unbeatably low, based upon fair market parameters.

Phia Unwrapped places no minimum threshold on claims to be repriced or potential balance billing to be negotiated. Additionally, The Phia Group attempts to secure sign-off, ensuring providers will accept the plan’s payment as payment in full. – and if there’s pushback or balance-billing, our Provider Relations team is ready to handle it.

Phia Unwrapped implementation entails setting up an EDI feed with the claims administrator, so claims are flagged, transferred, and repriced automatically. Phia Unwrapped is billed based on a percent of actual savings, leading to fair rates and no excessive costs for unprecedented savings.

Out-of-network claims run through The Phia Group's Unwrapped program yielded an average savings of 74% off billed charges (three times the average wrap discount). On average, The Phia Group sees roughly 2% of claims result in some form of balance-billing; these results are similar throughout many different plan types and geographies, proving that this program and these results can be replicated nationwide.

Contact our Vice President of Sales and Marketing, attorney Tim Callender, to learn more about Phia Unwrapped. Tim can be reached by phone at 781-535-5631 or by email at TCallender@phiagroup.com.
 

New Service Offered by Phia: Patient Defender

The Phia Group is proud to introduce its “Patient Defender” program. For a small PEPM fee, every plan participant has access to legal representation against lawsuits targeting patients, or crippling balances being sent to collections, when efforts to amicably resolve these disputes fail, Patient Defender is the ultimate weapon in the battle against abusive balance billing tactics. Best of all, Patient Defender can be coupled with any type of health benefit plan – from reference-based pricing plans to traditional network plans; if and when a patient is threatened by these increasingly aggressive tactics, Patient Defender will be there.

Patient Defender finally plugs the gap that has existed across the industry in relation to reference-based pricing programs and balance billing concerns. With Patient Defender, a small PEPM rate ensures that a trusted law firm is placed on retainer, ready and willing to assist the patient when balance-billing occurs. Health plans, TPAs, and brokers can now contain costs while knowing that patients have a legal advocate standing by.

To learn more about Patient Defender or any of The Phia Group’s services, please contact our Vice President of Sales and Marketing, Tim Callender, Esq., at 781-535-5631 or tcallender@phiagroup.com.


Success Story of the Quarter: Managing COVID-19

We have all heard enough about COVID-19 to last a lifetime, but in this difficult time, this quarter’s success story is designed to thank you for your contribution to stopping the spread of the virus.

We have been asked – or ordered – by our various governments to practice social distancing, or even true quarantining. This is neither easy nor convenient; the economy is suffering and many are getting laid off from their jobs, but humans are facing a dangerous threat against which we must unite.

This success story is ongoing. The Phia Group has committed to enabling all employees to work remotely to avoid the need to congregate in an office, to ensure that our valued clients and the industry can keep functioning as normally as possible, and we thank you for whatever actions you have taken to help stop the spread of the COVID-19 virus.

We wish you all good health.
 

Phia Case Study: Outpatient Detox Negotiation

A health plan utilized the Phia Unwrapped service, allowing out-of-network claims at the rate of 150% of Medicare. This plan did not use a large national network, but instead used a narrow, regional network (which was less expensive and yielded better discounts, since each provider was afforded greater steerage).

One particular out-of-network substance abuse provider billed $2,900 per day for outpatient detox, which is many times what Medicare would allow. The plan’s TPA had tried to secure a direct contract multiple times, but each time the provider stalled the conversation, and once the statutory timeframe to pay was about to toll, the provider denied the attempts to contract and forced the plan to pay the claim or watch its member be balance-billed.

When the matter was escalated to The Phia Group, the Provider Relations team leveraged certain data as well as innovative arguments and tactics to yield a result where the provider agreed to a flat fee of 175% of Medicare per day.

In just the first few weeks since this negotiation was finalized, the plan has already saved over $22,000.


Fiduciary Burden of the Quarter: The Black Box

Whether it’s Usual and Customary, Maximum Allowable Charge, billed charges (GASP – why?!) or a network rate, or something else entirely, health plans obviously need to pay some amount for claims. That much is obvious. What is not so obvious, however, is how some plans and administrators come up with these amounts. We have seen many instances of the “black box” approach, where a number goes in one side and another number comes out the other, with no indication of how that repricing was performed; what’s worse is when neither the SPD nor the EOB provides any indication of what the repricing is based on.

New York, for one, has historically taken issue with this approach. ERISA favors extreme transparency, as do state laws. ERISA provides a self-funded health plan with an extremely wide latitude to structure benefits however it chooses, as long as the plan explains what it’s going to do.


New Service Offered by Phia: Patient Defender

The Phia Group is proud to introduce its “Patient Defender” program. For a PEPM fee, every plan participant has access to legal representation against collections lawsuits or crippling balances being sent to collections before legal action ensues. Patient Defender is a key tool in the battle against abusive balance billing tactics. Best of all, Patient Defender can be coupled with any type of health benefit plan – from reference-based pricing plans to traditional network plans; if and when a patient is threatened by aggressive tactics, Patient Defender will be there.

To learn more about Patient Defender or any of The Phia Group’s services, please contact our Vice President of Sales and Marketing, Tim Callender, Esq., at 781-535-5631 or tcallender@phiagroup.com.


Phia Fit to Print:

• BenefitsPro – Expanded paid sick leave requirements under the Families First Coronavirus Response Act – March 17, 2020

• Self-Insurers Publishing Corp. – Utah Goes To Mexico - A First For The Drug Importation – March 3, 2020

• BenefitsPro – The 'cost of care' contradiction – February 25, 2020

• Self-Insurers Publishing Corp. – A Case Study In Savings: How The Phia Group is Offering Employees Free Healthcare – February 6, 2020

• BenefitsPro – Changing perceptions of health benefits, one pregnancy at a time – February 4, 2020

• BenefitsPro – California’s new FSA notice requirement not so clear – January 14, 2020


Back to top ^


From the Blogosphere:

EMPLOYERS BEWARE: Handling Employee Absences Resulting from Coronavirus Quarantine. Facts you should know about this pandemic.

New Insight on Provider Surprise Billing. These state-based laws have limited applicability.

I Got a Fever, and the Only Prescription is More Transparency. Another transparency-minded federal rule is getting some push back.

“Incur”-aging a Review of the Term “Incurred.” Make sure you know the meaning of this word when it comes to your plan documents and stop-loss policies!

What Happens to a Health Plan during a Merger or Acquisition? There are typically three types of transactions when it comes to mergers and acquisitions.

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


Back to top ^


Webinars

• On March 30, 2020, The Phia Group presented, “COVID-19: The CARES Act & Workplace Safety FAQs,” where we discussed the impact of this historic federal legislation on our industry and answer your questions about workplace safety.

• On March 23, 2020, The Phia Group presented, “Special Edition - The Phia Group and COVID-19 FAQs Answered,” where we addressed the COVID-19 pandemic and the industry's most frequently asked questions.

• On March 10, 2020, The Phia Group presented, “The Top 10 of 2020: Cost Containment Measures to Implement Right Now,” where we discussed the cost-containment measures they encounter most frequently, and tell some success stories, some horror stories, and how you can make the best decisions for your clients’ bank accounts.

• On February 12, 2020, The Phia Group presented, “Double Dose: Revisiting Rx Drugs and Answering Your Questions,” where we took a deeper dive on the topic of Rx drugs, tackle the difficult questions asked in last month’s webinar, and help plans protect themselves while staying ahead of the curve.

• On January 21, 2020, The Phia Group presented, “A Dose of Savings – Addressing Drugs, PBMs, and the Controversies Surrounding Them,” where we discussed the Rx trends to watch for, the biggest threats to health plans, cost-containment strategies to implement, political efforts underway, and an injection of information you can’t do without.

Be sure to check out all of our past webinars!


Back to top ^


Podcasts:

Empowering Plans

• On March 31, 2020, The Phia Group presented, “COVID-19: Provider & State Impact,” where our hosts, Kelly Dempsey and Brady Bizarro discuss the unique responses we have seen from individual states and providers while evaluating their impact on the self-funded industry.

• On March 19, 2020, The Phia Group presented, “COVID-19: Latest Updates & Legislation,” where our hosts, Ron Peck and Brady Bizarro discuss the latest developments related to COVID-19, the impact on the self-funded industry, and review the contours of the Families First Coronavirus Response Act, which guarantees free coronavirus testing for all Americans as well as an expansion of paid sick days for a subset of workers.

• On March 11, 2020, The Phia Group presented, “COVID-19 Preparedness: What Self-Funded Plans Should Be Doing Right Now,” where our hosts, Brady Bizarro and Jennifer McCormick discuss the recent outbreak of COVID-19 (coronavirus), and provide insight into how you should be preparing, what concerns you should have about your benefits documents, and how to navigate applicable law.

• On March 6, 2020, The Phia Group presented, “Debating the Debates,” where our hosts, Ron Peck and Brady Bizarro assess candidates’ (and EX-candidate’s) proposals, and what it all means for our industry.

• On January 31, 2020, The Phia Group presented, “Care Where? Care Everywhere!,” where our hosts, Adam Russo and Ron Peck interview industry legend, Ernie Clevenger, regarding CareHere, LLC, the future of consumer-centric medicine, technology – and most importantly – the MyHealthGuide newsletter!

• On January 24, 2020, The Phia Group presented, “Taking the Stage in 2020,” where our hosts, Ron Peck and Brady Bizarro discuss the first Democratic debate of 2020 and the latest ruling from a federal appeals court on Obamacare.

• On January 3, 2020, The Phia Group presented, “Free Health Benefits at Phia,” where our hosts, Adam Russo and Ron Peck discuss the different tactics used to offer Phia's employees FREE health benefits!

Be sure to check out all of our latest podcasts!

 



Back to top ^


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

Youth of the Year

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

One of these lucky kids will be awarded a $5,000 scholarship and a new laptop, courtesy of The Phia Group. Good luck to all of these amazing students and we wish you the very best in your future endeavors!


Back to top ^


The Stacks

Utah Goes To Mexico - A First For The Drug Importation

By: Brady Bizarro, Esq. – March 2020- Self-Insurers Publishing Corp.

Much ink has been spilled about prescription drug importation as a strategy for combating America’s exorbitant drug prices. Despite this practice being technically illegal, many self-funded plans have engaged in it for years without facing any repercussions. With Congress and the Trump administration still unable to agree on a drug pricing reform bill, these programs will almost certainly become more widespread. As they proliferate, they are likely to attract more scrutiny from the Food and Drug Administration (“FDA”), which, although it has rarely enforced the law in this area, has recently taken action against vendors engaged in drug importation. One large insurer, the state of Utah, has become the first to deliberately adopt a type of drug importation program which is much less likely to attract the attention of the FDA and might serve as a roadmap for other self-funded plans in search of relief.

Click here to read the rest of this article


A Case Study In Savings: How The Phia Group is Offering Employees Free Healthcare

By: Philip Qualo, J.D. – February 2020 – Self-Insurers Publishing Corp.

The Founder and Chief Executive Officer (CEO) of The Phia Group, LLC, Adam V. Russo, Esq., made an announcement at our most recent Christmas party that caused a reaction that could be heard all throughout the New England region. An overwhelming explosion of applauses, screams, and in some cases, tears and sobs, shook the entire venue as the CEO described a major milestone that made Phia history. What was this groundbreaking announcement? The Phia Group has joined the ranks of only a handful of employers in the United States that offers free healthcare… yes… FREE… healthcare coverage to their employees! Despite astronomical increases in healthcare and prescription drug costs throughout the nation, and soaring insurance premiums, Phia now offers free healthcare coverage to all employees who have been enrolled in the group health plan for a period of time. We did this without raising out-of-pocket costs or employee contributions!

Click here to read the rest of this article

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

Back to top ^


Get to Know Our Employee of the Quarter:
Cindy Monfils

In addition to her daily tasks, Cindy has been coming into the office to handle all faxes & outgoing mail to ensure the company is functioning as normal. In addition to helping with the annual Phia Forum, she helps to manage all aspects of The Phia Group’s office. Cindy comes in on weekends and helps with other tasks such as painting and putting together chairs. Cindy goes out of her way to make Phia a great place to work. She is a phenomenal asset to the company, and The Phia Group’s transition into working remotely would not have gone so seamlessly if it weren’t for her.

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


Phia News

Celebrating 20 Years of Empowering Plans!

On February 10, 2020, The Phia Group celebrated 20 years of being in business! The Phia Group was founded in Adam Russo’s basement in February of 2000. Since that time the company has grown beyond any dream that Adam could have imagined. It is hard to believe how fast 20 years have passed, but we are looking forward to many more years of success!

 


PACE® Certification Is Making Waves

The PACE Certification program will educate you using 3 distinct chapters of information:

Chapter One
Explore the ins and outs of self-funding while learning about its risks and rewards. This chapter will transform any individual into a self-funding pro.

Chapter Two
Take a deeper dive into the laws that apply to self-funded plans. We cover it all, from federal preemption to adverse benefit determinations and appeals.

Chapter Three
Explains what PACE is, what PACE does, and how it's obtained, implemented, and utilized.

The PACE Certification Program is free of charge and will create immense value for your organization. By going through the Certification program, you, or a select person, or team, within your organization, can become PACE Certified. Once PACE Certified, the Program participant(s) will become highly educated PACE business owners and will serve to assist your organization in growing your PACE business, enhancing your PACE revenue, and assuring your appeals processes are the most compliant and best in the industry. Those who complete the Certification will also receive a PACE Certification Fact Sheet, providing an easy to understand summary of the content and best practices covered, which will allow you to maximize the lessons learned within your business.

Additionally, the PACE Certification program provides education on self-funding in general, claims and appeals regulatory education, and overall best practices surrounding fiduciary duties, claims, and appeals.

Please see the PACE Certification flyer, as well as this video for more information.


Please contact Michael Vaz (mvaz@phiagroup.com) for more information.

 

Job Opportunities:

• Plan Drafter

• Case Investigator

• Claim Recovery Specialist III

• Consulting Attorney

• Claim and Case Support Analyst

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


Promotions


• Zachariah John has been promoted from Manager, Applications Development to Sr. Manager, Applications Development

• Igor Senic has been promoted from Accounting Administrator to Senior Accounting Administrator • Ulyana Bevilacqua has been promoted from Supervisor, PGC to Manager, Drafting Services

• Andrew Fine has been promoted from Intake Specialist to Team Lead, Intake

• Cara Carll has been promoted from Manager of Claim Evaluation to Manager of Claim & Case Support

• Lisa Decristoforo has been promoted from Team Lead of Case Evaluation to Team Lead of Case Evaluation and Customer Service

• Ashley Hoey has been promoted from Team Lead of Customer Service & Claim Analysis to Team Lead of Claim Analysis and Claim & Case Support

• Kelly Dempsey has been promoted from Director, Consulting and ICE Services to Vice President, Consulting

• Kelsey Dillon has been promoted from Claim and Case Support Analyst to Senior Claim & Case Support Analyst

Ulyana Bevilacqua has been promoted from Supervisor, Drafting Services to Manager, Drafting Services

Lauren Radley has been promoted from Manager, Drafting Services to Director, Drafting Services

New Hires

• Rebekah McGuire-Dye was hired as the VP, Client Solutions and Account Management

• Josh Jones was hired as a Claim Recovery Specialist IV - BI

• Timothy Pope was hired as a Provider Relations Attorney

• Jessica Riley was hired as a Sr. Administrative Assistant

• Hollan Holm was hired as an Attorney I

• Laura Pickett was hired as a Sr. Claims Recovery Specialist

• Julia Goyette was hired as a Legal Intern

• Nick Frederick was hired as a Claim Recovery Specialist IV - BI

• Daniel Scalzi was hired as a Case Investigator I

• Brad Tramontozzi was hired as a Manager of Talent Acquisition

• Kori Watkins was hired as a VP, Project Management Offices (PMO)

• Mitch Hilbert was hired as a Claims Specialist, Provider Relations

• Larry Moffett was hired as a Claims Specialist, Provider Relations

• Jessica Dunn was hired as a Plan Drafter


Superbowl Festivities

The Phia family held its famous Superbowl Sunday pride party the week before Superbowl Sunday, and we had a great turnout this year! With all of the great gear, our Phia family wore this year, we got a great picture that you can check out below. Congratulations to the Kansas City Chiefs on their big win!


Candy Heart Contest

We set up a little contest at the front desk for Valentine's Day and asked everyone to guess how many candy hearts were in the jar! The winner was Samantha Cox with a guess of 258 candy hearts. There were a total of 267 candy hearts in the jar. It’s hard to believe that all of those pieces of candy fit into that tiny jar!
 


Back to top ^

info@phiagroup.com
781-535-5600

The Stacks – 2nd Quarter 2020

On March 19, 2020

A Case Study In Savings: How The Phia Group is Offering Employees Free Healthcare

By: Philip Qualo, J.D.

 

The Founder and Chief Executive Officer (CEO) of The Phia Group, LLC, Adam V. Russo, Esq., made an announcement at our most recent Christmas party that caused a reaction that could be heard all throughout the New England region. An overwhelming explosion of applauses, screams, and in some cases, tears and sobs, shook the entire venue as the CEO described a major milestone that made Phia history. What was this groundbreaking announcement? The Phia Group has joined the ranks of only a handful of employers in the United States that offers free healthcare… yes… FREE… healthcare coverage to their employees! Despite astronomical increases in healthcare and prescription drug costs throughout the nation, and soaring insurance premiums, Phia now offers free healthcare coverage to all employees who have been enrolled in the group health plan for a period time. We did this without raising out-of-pocket costs or employee contributions!

Six months before this announcement, when the CEO first considered offering free healthcare, I was tasked with identifying other employers that offer free healthcare, and more importantly, how they did it. Although identifying employers that offered some variation of free healthcare was an easy task, since there are approximately only ten or eleven employers currently doing this, what we could not find was information on how they did it. Consistent with our stated mission to reduce the cost of healthcare through innovative technologies, legal expertise, and focused, flexible customer service, we have decided to break away with this tradition of mystery and intrigue and share with the world how we accomplished this milestone. This is how we did it…

To Insure … or Self-Insure?

Our journey started many years ago when we decided to self-insure our employer-sponsored group health plan. We realized early on that choosing the right type of health insurance would be an essential part of the growth and long-term success of our company. The Phia Group started with a handful of employees twenty years ago, and now, we have several offices throughout the country. But when Phia was still a seedling, we knew that the key to our success hinged on not only attracting top talent to our workforce, but more importantly, retaining them. As healthcare is one of the top factors employees consider when they assess their employment satisfaction, we knew the key would be to offer a robust health plan that would appeal to a wide demographic of diverse individuals. With healthcare costs skyrocketing, however, we weren’t sure how to accomplish this without annihilating our budget.

Ultimately, we decided to take the risk and self-insure our group health plan. We realized that by self-insuring our own group health plan, we could avoid the off-the-shelf price tag sticker shock of a fully-insured plan, and have the flexibility to customize our benefits to meet the specific needs of our growing employee population. Unlike traditional health insurance plans which require employers to pre-pay for potential claims through monthly premiums, self-insuring our health plan provided us with a wide range of saving opportunities as we were only required to pay claims as services were rendered. By choosing a benchmark that met the needs of our workforce, we were able to cut out the wasteful benefits we do not need to keep our costs low. The savings allowed us to add more desirable benefits to our health plans that kept our employees not only healthy, but more importantly, happy. Healthy and happy employees are more likely to be more productive and stay with their employer even in the most competitive of job markets.

Maximize Savings

So we decided to self-insure … what next? Since our goal was to enhance our savings potential, with the hope of one-day passing along the savings to our workforce, our next step was to develop the most effective and clear plan language that would minimize our risk and liability while keeping our expenditures low. We wanted to accomplish this, however, without stripping our plan of the benefits are employees have grown to enjoy. To meet this goal, we developed our own plan design and incorporated the most innovative cost-containment techniques, working within the boundaries of our network agreement, and integrated them into our group health plan in easy to understand language aimed at educating our participants to ensure they utilize the high quality lower cost healthcare options. For example, our plan rewards employees for making cost-effective decisions by waiving co-pays when utilizing the reasonably priced yet effective facilities, generic prescription drugs and other low cost alternatives. Finally, to avoid the financial pitfalls of excess or erroneous payments, we created and adopted some of the strongest subrogation plan language in the country that further empowered our plan to identify more claim recovery opportunities as well as maximize our those recoveries.

Empower the Plan … Empower the Employees

Another benefit of self-insuring that played a role in our ability keep our costs low was access to our claims data. In the fully-insured world, carriers traditionally raise rates annually with little to no explanation. Since carriers are not required to provide employers with claims data, fully-insured employers are basically left powerless to develop strategies to keeping their premiums low. Information is power. Because we self-insure, we enjoy complete access to our claims data and rely on this vital information to identify wastes, high expenditures, and develop innovative and unique ways to save costs on an annual basis. However, we were still not satisfied.

As an industry expert in the self-insured arena, we knew there was more we could do as a plan sponsor to maximize our savings even more, but we knew we could not do this alone. We realized that without the support of our employees, our efforts to enhance our group health plan savings could only go so far. Without employees, a group health plan is nothing but a Plan Document/Summary Plan Description. So how do we get employees interested in, and more importantly, excited about keeping plan expenses low by opting for high quality low cost options? We wanted to be able to maximize options for our employees without dictating their healthcare needs or placing restrictions on our health plan.

The lightbulb went on – rather than dictate or limit healthcare options – we decided to incentivize our employees towards high quality low cost care options. We developed a broad range of employer cost-containment incentives aimed at educating our employees about their healthcare options with an irresistible incentive – a percentage of the savings! For example, by simply consulting with our Human Resources department before selecting a provider for certain procedures, a participant is eligible to receive a percentage of the savings that may result from the consultation. We also created a plan option with a Direct Primary Care (DPC) feature that is paid for company and completely free to our employees – no copays and no out-of-pocket when utilizing our DPC – ever! As an employer invested in our workforce, we always strived to keep our employee contributions low. However, by incentivizing employees to make cost-effective decisions about their healthcare needs and keeping their contributions low, employees not only became interested in keeping our health plan costs low … they became obsessed! In their mind, they were in it for the incentives – extra cash for picking the best care at the lowest cost? Why not?

Passing It On

What our employees did not realize until our most recent Christmas party, however, is that by utilizing our cost-containment incentives we covertly evolved into a work culture with a shared commitment – keeping our health plan costs low. To our employees, our incentives were just opportunities to get some extra funds or save some money while still accessing the best healthcare. With a strong group health plan, and plan participant’s eager to reap the rewards of our cost-containment incentives, our dream became a reality. Our group health plan savings had maximized to a point that we are now able to offer our employees a benefit that few companies provide … free healthcare coverage.

____________________________________________________________________________________________________

Utah Goes to Mexico – A First for Drug Importation

By: Brady Bizarro, Esq.

 

Much ink has been spilled about prescription drug importation as a strategy for combating America’s exorbitant drug prices. Despite this practice being technically illegal, many self-funded plans have engaged in it for years without facing any repercussions. With Congress and the Trump administration still unable to agree on a drug pricing reform bill, these programs will almost certainly become more widespread. As they proliferate, they are likely to attract more scrutiny from the Food and Drug Administration (“FDA”), which, although it has rarely enforced the law in this area, has recently taken action against vendors engaged in drug importation. One large insurer, the state of Utah, has become the first to deliberately adopt a type of drug importation program which is much less likely to attract the attention of the FDA and might serve as a roadmap for other self-funded plans in search of relief.

The Legality

There are two traditional types of drug importation: mail order and pharmacy tourism. By and large, most self-funded plans engage in mail order drug importation: that is, they partner (directly or indirectly) with a vendor that assists plan participants in obtaining a drug from outside of the country by U.S. mail. All forms of drug importation are illegal under federal law. The Food, Drug, and Cosmetic Act (“FDCA”), codified as 21 U.S.C. §§ 301 et seq., broadly prohibits the importation of prescription drugs. The statute specifically prohibits the importation or introduction of any “new drug” into interstate commerce which has not been approved by the FDA, any prescription drug not labeled as required by federal law, or any prescription drug dispensed without a valid prescription written by a licensed American practitioner. See 21 U.S.C. § 355; 21 U.S.C. § 352, 353; 21 U.S.C. § 353(b).

Federal law considers a drug to be misbranded if, at any time prior to dispensing, the label of the drug fails to include the symbol “Rx only.” See 21 U.S.C. § 353(b)(4)(A). Drugs that are dispensed by international pharmacies do not bear this label. For example, Canadian pharmacies label their drugs with the tag “Pr,” as opposed to “Rx only,” and federal law does not consider these labels to be functionally equivalent. Therefore, even drugs that are manufactured abroad with the same chemical composition as their U.S. counterparts are considered illegal to import because of these strict labeling requirements.

Selective Enforcement

Although the practice is technically illegal, it appears that enforcement is selective, particularly when small amounts of prescription drugs imported for personal use are involved, either via U.S. mail or in baggage. According to the FDA’s own website, it does not typically object to the personal importation of unapproved drugs when all of the following conditions are met: the drug is for use for a serious condition for which effective treatment is not available in the United States; there is no commercialization or promotion of the drug to U.S. residents; the drug does not represent an unreasonable risk; the individual importing the drug verifies in writing that it is for his or her own use and provides contact information for the treating physician or shows that the product is for the continuation of treatment begun in a foreign country; and, generally, no more than a three-month supply of the drug is imported. See http://www.fda.gov/AboutFDA/Transparency/Basics/ucm194904.htm.

While individual consumers may reasonably rely on the FDA’s selective enforcement in this context, a company maintaining a business model or a self-funded plan utilizing a drug importation program might not. When the FDA has acted, it has been against companies engaged in or assisting with the importation of drugs through the U.S. mail. For example, on February 26, 2019, the FDA issued a “Warning Letter” to CanaRx, a vendor which administers a popular drug importation program to self-funded employers and their covered participants. See https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm632061.htm.

Though this mail order program, the vendor essentially acts as an agent connecting patients to foreign pharmacies in “Tier 1” countries - those which meet certain standards in drug regulation - which ship the foreign version of a prescription drug directly to the patient. The patient’s health plan is then invoiced for the cost. The FDA’s warning letter asserts that this mail order program violates numerous provisions of federal law. While CanaRx responded to the warning letter defending the legality of its program, the position taken by the FDA with respect to mail order drug importation is consistent with similar enforcement actions the FDA has taken in the past. 

Utah’s Pharmacy Tourism Program

In contrast with using mail order drug importation programs, the state of Utah has become the first large health insurer to utilize a pharmacy tourism drug importation program. Implemented in 2019, the program has already saved the state nearly $250,000, according to the plan’s managing director. Due to the program’s avoidance of the U.S. mail system, carefully crafted policies and procedures, and narrow criteria for eligibility, it appears far less likely to attract the attention of the FDA than typical mail order programs.

Utah’s Public Employee Health Plan is self-funded and self-administered, covering roughly 160,000 individuals. The state had been considering various options to deal with skyrocketing drug costs. It decided against using a mail order program and instead opted for a pharmacy tourism model. In 2019, it implemented a voluntary Pharmacy Tourism Program which is offered to patients taking one or more of thirteen specialty drugs, dealing mostly with rheumatoid arthritis, multiple sclerosis, and other serious, chronic conditions. The program currently covers approximately 400 people.

As part of the program, the plan pays its plan participants to fly to either San Diego, California or Vancouver, Canada. If they are headed to Mexico, the plan pays to drive them to a specified hospital in Tijuana to pick up a 90-day supply of medicine. A representative from a specialty pharmacy escorts the plan participant across the border and stays with the individual at all times. If necessary, the plan also covers lodging costs. Plan participants still pay their usual copayments and are incentivized to participate in the program through a $500 cash incentive. The plan works with a designated hospital to coordinate travel and arrange for the purchase of the drugs. Throughout this process, the plan tracks the medications from the manufacturer to the pharmacy to the patient, increasing the likelihood that the integrity of the chain of custody is maintained.

In reviewing the FDA’s previous enforcement actions, it is clear that the integrity of the chain of custody is one important factor in determining whether the agency will scrutinize any particular drug importation program. The agency seems more concerned about programs that involve introducing foreign drugs into the U.S. mail system than it is about individuals acquiring foreign drugs at the point of sale and carrying them across the border. With mail order programs, such as the one introduced by the state of Maine a few years back, there could be many entities mailing foreign drugs to individuals in the U.S. It would be very difficult for the FDA to track those entities and to ensure the integrity of the chain of command.

By contrast, with Utah’s program, an individual is completing the transaction in person at a designated facility and is accompanied by a representative from a specialty pharmacy. There is no middleman involved in transporting the foreign drug from the pharmacy to the individual, which significantly lessens the commercialization of the process. Also, scale matters in this context and for pharmacy tourism programs, utilization is lower than it would be for mail order programs (so far only ten plan participants have traveled to Mexico under Utah’s program).

As explained, all drug importation programs are technically illegal in the United States. There are no guaranteed approaches to avoiding FDA enforcement of federal law. Still, the FDA applies enforcement discretion and very seldom seizes incoming drugs or prosecutes individuals when the importation is conducted under the right circumstances. Politicians in Utah estimate that its pharmacy tourism program could save the state’s self-funded plan north of $1 million if more eligible individuals sign up. So long as bipartisan legislative reform remains just out of reach, self-funded plans will continue to pursue alternative approaches as cost-saving measures. If nothing else, these approaches are a constant reminder of a broken system in desperate need of repair.

The Phia Group's 1st Quarter 2020 Newsletter

On January 16, 2020


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



The Book of Russo:
From the Desk of the CEO

 

Happy New Year everyone! 2020 marks the 20th anniversary of The Phia Group and it made me realize just how much we have accomplished and how far we have come. I am not going to sit here and tell you that this was the dream - to have a leading cost containment firm in the self-funding industry with over 200 employees. I just wanted to create something, anything that would change the status quo. I had no concept of the size of Phia, the revenues, the expertise, the reputation, the services, or the technology we have created.

I just had a passion to offer more than what was being offered at that time. I was 26, living in my mother’s basement, and basically had nothing to lose. We never got a loan, never had investors, never hired top talent - we couldn’t afford anyone!  What we had was a determination to have fun, disrupt and innovate. What we created after 20 years still boggles my mind.  I want all of you to know how much I appreciate the friendships, the loyalty and the collaboration we have built together. I will never forget where I came from or how I got here - thank you. Happy reading and I hope you all have an amazing 2020.  I know we will. 


Service Focus of the Quarter: Plan Appointed Claim Evaluator® (PACE)
Phia Group Case Study
Phia Fit to Print
From the Blogosphere
Webinars
Podcasts
The Phia Group’s 2020 Charity
The Stacks
Phia’s Speaking Events
Employees of the Quarter & Year
Phia News

 

We Are Proud to Announce: Free Health Benefits for Phia Employees & Their Families

The Phia Group, LLC is pleased to announce that with the ringing in of the new year, it will be offering FREE HEALTH BENEFITS to employees and their families.  Specifically, plan participants that have been enrolled in the plan for five or more years will be enrolled in January of 2020 and have zero contribution or premium; 100% of the cost of their and their families’ membership is paid for by The Phia Group. Further, no plan participant’s contribution rate will increase in 2020.

This remarkable achievement is made possible thanks to the application and utilization of cost containment measures developed and provided by The Phia Group to the self-funded health benefits community, and proactive efforts on the part of its own plan membership to be educated, and cost-conscious “consumers” of healthcare.

Adam V. Russo, remarked – in response to those that believe cost-shifting the burden of rising healthcare costs onto employees is inevitable – that, with the right tactics in place, health benefits can be affordable and employees do not need to bear the burden of an inefficient health plan.  “If our approach to health benefits didn’t work,” Adam continued,“… could we afford to maintain our contribution levels, year after year?  Could we continue to offer benefits with no co-pays or deductible?  The answer is no.”

Ron E. Peck, explained, “Our mission is to ensure health benefits are robust and affordable for hard-working Americans.  Very few people work as hard as our own employees, so providing them with the best, most affordable benefits is us living our mission.”

“We are very proud to be able to offer our employees and their families the types of benefits they’d only see at a very small number of businesses, nationwide;” Adam concluded.

 

Service Focus of the Quarter: Plan Appointed Claim Evaluator® (PACE)

Some years ago, in response to growing industry concerns over fiduciary duties and appeals, The Phia Group created its Plan Appointed Claim Evaluator (PACE) service. PACE is a risk-sharing service for final-level internal appeals. It is designed to help ensure Plans and their TPAs made correct determinations in response to appeals, thereby insulating the health plan from liability and allowing the Plan Administrator to focus on its core business rather than difficult fiduciary determinations.

PACE includes:

• Plan Document and stop-loss policy “Gap Reviews” ensure compliance, eliminate coverage gaps, and ensure PACE readiness;

• Advanced-level webinars exclusively for PACE clients;

• Assessment of eligible final internal appeals resulting in a written directive; and,

• Unsurpassed legal analysis, clinical review, and access to URAC-accredited IROs (and PACE covers all external review costs).

We also now offer complimentary PACE Certification – with which your organization can enhance your PACE business, improve your internal appeals processes, ensure regulatory compliance, and improve your operation as a whole.

Chapter One of PACE Certification explores the ins and outs of self-funding; Chapter Two takes a deeper dive into the laws and regulations applicable to self-funded health plans; Chapter Three explains what PACE is, how it works, and how it can best be utilized.

To learn more, contact Michael Vaz at mvaz@phiagroup.com or 781-884-4971.

 

Phia Case Study: Claim Negotiation & Signoff (CNS) 

The Phia Group was asked to negotiate a high-dollar claim on behalf of a self-funded health plan sponsored by a non-profit religious order. The charges totaled just over $100,000.00, and repricing yielded a Medicare rate of only $7,500.00 (a mark-up of over 1300% over Medicare). To compound the situation, the plan document had not been updated since the early 1990s, and had very weak language governing payment for out-of-network claims.

One of The Phia Group’s negotiators noted that the hospital bore the same name of the religious order of which the patient was an ordained member. After some investigation, Phia learned that this religious order was the very same that founded the hospital nearly a century ago.

In the initial outreach to the provider, we explained the claim’s metrics and equivalent Medicare rate; it was our hope that even without strong plan language or unloading our newfound argument regarding the member’s relationship to the hospital, the hospital would recognize the importance of settlement. Unfortunately, the provider was largely unresponsive to our efforts. After over a month of constant persistence in the form of calls, e-mails, and faxes, we finally received an offer from the provider to accept 35% off of billed charges. While not the smallest discount, that payment still would have constituted almost 900% of the applicable Medicare rate, and our client was not inclined to accept the offer.

In crafting a response, we got a little creative, and quoted some language directly from the “history” section of the hospital’s website. This patient, we noted, is a member of the religious order that founded this hospital back in 1922, and which transformed it into a hospital for children in 1936. That the hospital was now seeking almost 900% of the applicable Medicare rate from one of its founders seemed unreasonable and disingenuous. We also quoted a study that found that the average charge for an out-of-network claim in the state was 176% of Medicare; through this figure, we were able to base our client’s counteroffer in a concrete metric, even though the plan’s cost-containment language left much to be desired.

Ultimately, the provider agreed to accept our offer of 176% of the Medicare rate, and close its file. By going the extra mile, The Phia Group was able to save its client over $88,000; since the Plan Document didn’t have strong cost-containment language, the Plan would have legally been on the hook for the vast majority of it, had this settlement not been achieved.




 

Fiduciary Burden of the Quarter: New Denial Reasons on Appeal

It’s not uncommon for health plans to realize, while adjudicating a claimant’s appeal, that the initial denial reason was incorrect or incomplete. That’s one major function of appeals – to let a claimant identify that the denial reason is inapplicable. For instance, if the initial Adverse Benefit Determination denies a claim on the basis that the service is experimental, the claimant may appeal and present evidence that the claim is not in fact experimental. The fiduciary, when reviewing the appeal, may realize “whoops – this claim should have been denied for lack of medical necessity, but we used an experimental code by mistake!”

The result is generally that the fiduciary will still deny the appeal, but write that the claim is denied for medical necessity, rather than being experimental. The appeal is a request for additional benefits, but if additional benefits are not payable for some other reason that was not written in the initial denial, then the appeal should still be denied. Health plans often do not consider this to be a “separate” or “new” denial – but legally, it is.

Considering appeals to have been exhausted despite having provided a new denial reason effectively leaves the claimant with no opportunity to appeal that new denial for medical necessity. Courts have iterated that this is contrary to the intent and requirements of ERISA, which are designed to ensure that claimants are afforded the opportunity to appeal an adverse benefit determination. An appeal denial with a reason not previously given for that particular claim’s denial is therefore considered to be an initial adverse benefit determination all over again, even if given as part of a second-level appeal.

In short, any time a new denial reason is given for an existing claim, the claimant has the right to appeal that denial reason.

This could in theory create an absurd situation where the plan must accept many different appeals for the same claim – but to avoid that, we would suggest that the plan list all its denial reasons in the initial denial, when possible. That way, the plan can ensure that it does not need to respond to multiple unnecessary appeals, and also that a claimant is not strung along with the undue burden to appeal multiple times to try to get a straight answer out of her health plan.

 

Success Story of the Quarter: Balance-Billing at its Best!

The Phia Group was presented with a balance-billing claim from a client of Payer Compass’ INNOVATE360 service, for which The Phia Group provides back-end balance-billing support. This particular claim was billed at $1.57 million; the health plan allowed 150% of Medicare, which was about $289,000. The balance, billed in full to the patient, was nearly $1.3 million.

The TPA had been told prior to The Phia Group’s involvement that the maximum “discount” the provider would allow was 15%. Understandably, this payor would not accept that, and instead engaged The Phia Group to try to resolve this claim to alleviate the balance-billing. The payor was potentially willing to pay additional money to settle the claim, but certainly not the amount the provider was demanding.

The Phia Group engaged the provider, and right off the bat, attorney Rob Martinez unloaded all the arguments he had in his arsenal. They included arguments based on the ID card, the plan document, the hospital’s financial assistance policy, detrimental reliance, and more – and on a more personal note, the fact that this hospital was sending bills to its supposedly valued patient for $1.3 million.

Amazingly, the hospital conceded that Rob’s arguments were sufficient to extinguish the balance. The account was awarded a zero balance, and poof – just like that – Rob “the Magician” Martinez made a $1.3 million balance-bill disappear.

New Service Offered by Phia: Patient Defender

The Phia Group is proud to introduce its “Patient Defender” program. For a small PEPM fee, every plan participant has access to legal representation against lawsuits targeting patients, or crippling balances being sent to collections, when efforts to amicably resolve these disputes fail, Patient Defender is the ultimate weapon in the battle against abusive balance billing tactics. Best of all, Patient Defender can be coupled with any type of health benefit plan – from reference-based pricing plans to traditional network plans; if and when a patient is threatened by these increasingly aggressive tactics, Patient Defender will be there.

Patient Defender finally plugs the gap that has existed across the industry in relation to reference-based pricing programs and balance billing concerns. With Patient Defender, a small PEPM rate ensures that a trusted law firm is placed on retainer, ready and willing to assist the patient when balance-billing occurs. Health plans, TPAs, and brokers can now contain costs while knowing that patients have a legal advocate standing by.

To learn more about Patient Defender or any of The Phia Group’s services, please contact our Vice President of Sales and Marketing, Tim Callender, Esq., at 781-535-5631 or tcallender@phiagroup.com.

 


 

Phia Fit to Print:

• BenefitsPro – COBRA can be complicated: What to watch for – December 4, 2019

• Self-Insurers Publishing Corp. – ACA Enrollment By The Numbers! Administration's Attempts To Stall The ACA At Work? – December 1, 2019

• BenefitsPro – Trending therapy options: Gene and stem cell therapy for self-funded plans – November 22, 2019

• Self-Insurers Publishing Corp. – ACA Round-Up for 2020: Items Affecting Employer-Sponsored Group Health Plans – November 5, 2019

• Self-Insurers Publishing Corp. – The Tower of Babel-Talking Heads Talking Past Each Other – October 4, 2019



Back to top ^


From the Blogosphere:

Washington’s “Surprise” Billing Law Goes Into Effect – January 2020. One less surprise you’ll have to worry about.

New Transparency Rules Released, But Will They Last? A proposed rule to bring transparency to hospitals near you.

Theories v. Practicality: The Simplest Answer is Often the Best! The easiest path to third party recovery.

Happy (Almost) New Plan Year! Preparing your plan documents for 2020!

Battle Lines Drawn over Medicare for All in the Latest Democratic Debate. Is there truly a cure for our healthcare system?

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



Back to top ^


Webinars

 

• On December 17, 2019, The Phia Group presented, “A Perfect Vision for 2020,” where we review the issues, topics, and innovations of 2019 that we believe will impact 2020, as well as the strategies you need to implement now to conquer the coming year.

• On November 13, 2019, The Phia Group presented, “Plan Language, Rx, and Lawsuits to Watch (and File): Innovation for a Changing Industry,” where we discuss innovative programs to manage vendor fees, balance-bill litigation, Rx manufacturer assistance, and other ideas being proposed by players in the industry.

• On October 17, 2019, The Phia Group presented, “2020 Forecast - Storm Clouds, Clear Skies, and the Issues that will Dominate Next Year,” where we discuss the issues that impacted 2019, and are poised to dominate 2020, including (but not limited to) Mental Health Parity, Paid Leave, Health Insurance Taxes, Drug Prices, Regulations, and Coupons.

Be sure to check out all of our past webinars!



Back to top ^


Podcasts:

Empowering Plans

• On December 19, 2019, The Phia Group presented, “Medicare Podcast for All” where our hosts, Ron Peck and Brady Bizarro, pick apart Elizabeth Warren’s Medicare-for-All proposal, and the concept as a whole; the good, the bad, and the really bad.

• On December 11, 2019, The Phia Group presented, “Preparing Your Plan Document for 2020,” where The Phia Group’s Executive Vice President and General Counsel, Ron E. Peck, and Senior Vice President of Consulting, Jen McCormick, sit down to discuss the top-rated topic chosen by Phia’s webinar listeners. Make sure you tune in to find out what Ron and Jen have to say about plan documents and learn the do’s and don’ts when it comes to reviewing and updating your plan document in 2020!

• On November 21, 2019, The Phia Group presented, “The Young & The Restless,” where our hosts, Adam Russo and Brady Bizarro sit down with Craig Clemente, Chief Operations Officer at Specialty Care Management and outgoing Chairman of the SIIA Future Leaders Committee, to discuss the future of the committee and the many ways they intend on engaging the younger generation.

 

Face of Phia

• On November 15, 2019, The Phia Group presented, “Shauna Makes a Comeback,” where our hosts, Adam Russo and Ron Peck, sits down with Shauna Mackey, The Phia Group’s Associate General Counsel. Tune in to learn more about Shauna and her experience with both public and private healthcare throughout her pregnancy and delivery.

• On November 4, 2019, The Phia Group presented, “Battling Balance-Billing,” where our hosts, Adam and Ron, interview Lyneka Hubbert, a Medical Claim Negotiator here at The Phia Group.

• On October 16, 2019, The Phia Group presented, “Reminiscing on Memories with Mrs. Marsh,” where our hosts, Adam and Ron, interview Jen Marsh, our Client Satisfaction & Quality Control Manager.

 

Tales From the Plan

• On October 24, 2019, The Phia Group presented, “Translating Phia’s Benefit Plan,” where our hosts, Adam Russo and Ron Peck, interview The Phia Group’s Human Resources Manager, Linda Pestana. Learn how Linda was able to navigate our health plan and negotiate with a provider to make her son’s hearing aids affordable.

Be sure to check out all of our latest podcasts!

 

 



Back to top ^


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 Brockton 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.

 

Angel Tree

Each year employees of The Phia Group pick nametags from the Angel Tree that sits in our main lobby. On those tags are names, ages and the wish lists of children from The Salvation Army. This year we had over 130 nametags! The Phia family loves to give back to the community; our greatest joy is providing these children with all of their holiday wishes.

 

Christmas Came Early

The Phia Group had the pleasure of bringing Christmas joy to the Boys & Girls Club of Metro South. Adam Russo and his helpers passed out hundreds of gifts to over 130 children. We hope these children enjoy their new toys as much as they enjoyed spending time with Santa!

 

 

2019 Kennedy Service Award

Adam and Kelly Russo were honored with the 2019 Kennedy Service Award last week at the 2019 Great Futures Gala hosted by The Boys & Girls Clubs of Metro South. Check out the link below to see highlights from this unforgettable night! To learn more about this award, please visit

 

Thanksgiving Dinner Delivery

The Phia Family was out and about the week of Thanksgiving, delivering Thanksgiving dinners to the families of The Boys and Girls Club of Metro South! Additionally, our Phia Family in Idaho was out and about spreading the same cheer to five families in the Boise area. Check out the great picture we were able to get from that special night! We hope everyone had a wonderful Thanksgiving!

 



Back to top ^


The Stacks

ACA Enrollment By The Numbers! Administration's Attempts To Stall The ACA At Work?

By: Chris Aguiar, Esq. – December 2019 – Self-Insurers Publishing Corp.

With headlines focused on collusion, corruption, impeachment, and a wall being erected in Colorado, much of the political discourse in 2019 has avoided Healthcare Reform. In contrast, 2017 and 2018 featured many headlines with the current Administration doing everything within Its power to make good on a touchstone of Its 2016 campaign platform; President Trump and the Republican Party pushed for repeal and replacement of Barak Obama’s crowning achievement, the Affordable Care Act. When they were unable to garner the votes, the President utilized powers outside the control of Congress to weaken key parts of the Law designed to ensure the viability of the Insurance Marketplace, as well as keeping the American public in the dark regarding enrollment by virtually defunding marketing efforts. Many feared these tactics would encourage disengagement of the young and healthy, demographics crucial to maintaining a balanced risk pool covered by the Marketplace. Did it work?

Click here to read the rest of this article  


ACA Round-Up for 2020: Items Affecting Employer-Sponsored Group Health Plans

By: Corrie Cripps – November 2019 – Self-Insurers Publishing Corp.

During this open enrollment season, plan sponsors of group health plans should be aware of any Affordable Care Act (ACA) changes that may affect the design and administration of their plans.

The case Texas v. United States is the ongoing litigation challenging the constitutionality of the ACA. A decision on this case is expected at any time from the Fifth Circuit Court of Appeals (“Fifth Circuit”). Any decision appears likely to be appealed to the Supreme Court. Whether or not the Supreme Court will take the case depends on how the Fifth Circuit rules. If the Supreme Court does not take the case, the Fifth Circuit’s decision will remain the law; however, the agencies will most likely need to issue regulatory guidance on how they interpret the decision.

Click here to read the rest of this article

 

The Tower of Babel-Talking Heads Talking Past Each Other

By: Ron E. Peck, Esq. – October 2019 – Self-Insurers Publishing Corp.

As the 2020 Presidential Election draws closer, the topic of healthcare continues to dominate the airwaves. Be it media or debate, this is one of the (if not the) issue about which everyone is talking; but pay close attention and you’ll notice they aren’t all speaking the same language.

One word everyone can agree upon is “affordability.” The issue, however, is that depending upon whom you ask, what it is that ought to be “affordable” differs. Some people throw the term “access” around, while others seek affordable “care,” whilst still others focus (candidly) on affordable insurance.

Click here to read the rest of this article

 

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

Back to top ^


Phia’s 2019 Speaking Engagements:

• 1/9/2019 – FMMA Conference – Austin, TX

• 2/27/2019 – Sunlife 2019 MVP Academy – Denver, CO

• 3/8/2019 – UnitedAg Conference – Anaheim, CA

• 3/19/2019 – SIIA Self-Insured Health Plan Executive Forum – Charlotte, NC

• 3/21/2019 – CGI Business Solutions Seminar – Woburn, MA

• 3/26/2019 – HFTPA Broker Meeting – Tyler, TX

• 4/3/2019 – BenefitsPRO Broker Expo – Miami, FL

• 4/5/2019 – Pareto Conference – Nashville, TN

• 4/7/2019 – Captive Symposium – Cayman Islands

• 4/8/2019 – National Beer Wholesalers Association Legislative Conference – Washington DC

• 4/12/2019 – FMMA 2019 Annual Conference – Dallas, TX

• 4/23/2019 – Johns Hopkins Industry Education Series – Baltimore, MD

• 4/24/2019 – Sunlife 2019 MVP Academy – Kansas City, MO

• 4/25/2019 – BevCap’s Best Practices Workshop – Orlando, FL

• 4/26/2019 – Society of Professional Benefit Administrators Annual Conference – Washington, D.C.

• 5/2/2019 – MassAHU Benefest 2019 Conference – Westborough, MA

• 5/14/2019 – Cypress Unversity – Las Vegas, NV

• 5/30/2019 – Contrarian Captive – Austin, TX

• 6/11/2019 – Leavitt Conference – Big Sky, MT

• 7/16/2019 – HCAA TPA Summit – Dallas, TX

• 7/31/2019 – 2019 MVP Academy – Wellesley, MA

• 8/20/2019 – Pritchard & Jerden Employee Benefits Forum – Brookhaven, GA

• 9/17/2019 – WebTPA Annual Confernece – Dallas, TX

• 9/19/2019 – Employee Benefits Planning Association Conerence – Seattle, WA

• 9/30/2019 – SIIA National Educational Conference & Expo – San Francisco, CA

• 10/27/2019 – 2019 Annual NASP Conference – Washington DC

 

Phia’s 2020 Speaking Engagements:

• 1/30/2020 – SunLife MVP Academy – San Diego, CA

• 1/31/2020 – 2020 Kairos Risk Management Summit – Phoenix, AZ

• 2/13/2020 – Artex Risk Solutions Conference – Orlando, FL

• 2/18/2020 – HMIG Producer Advisory Counsil – Amelia Island, FL

• 3/9/2020 – CICA Captive Conference – Palm Springs, CA

• 3/12/2020 – SunLife MVP Academy – Kansas City, MO

• 3/26/2020 – TABA Spring Conference – Woodlands, TX

• 4/26/2020 – Berkley Captive Symposium – Caymen Islands

• 6/10/2020 – Leavitt Conference – Big Sky, MT

• 6/18/2020 – SunLife MVP Academy – Kansas City, MO

• 7/14/2020 – HCAA TPA Summit – St. Louis, MO

 

Back to top ^


Get to Know Our Employees of the Quarter:
Igor Senic & Desireé Erskine

Desireé is always going above & beyond to help everyone in the company. From trying to fix the fax machines & printers, sending out all of the mail when we are short-staffed at the front desk, to setting up a computer at a coworker’s home & driving them to and from work. She does all of these extra things while being the main component of the OP department. Desireé is an extremely hard worker who has passion and truly cares about this company.

Igor has worked so diligently over the past year in Accounting and it is well deserved. He has come up with multiple enhancements to improve and benefit the Accounting department.

A few examples:

(1) He has stepped up and has become someone on the team that the others can come to for assistance, ask questions, and resolve issues. (2) He set up training for the new Kentucky claims recovery specialists to make sure they are more comfortable with the Accounting payment process, along with trainings for the other accounting team members. (3) His knowledge of OP has helped make the OP payment processing more efficient & he was part of updating the OP payment process from processing payments individually to being able to process multiple payments at one time.

 

Congratulations Desireé (pictured above) and Igor, and thank you for your many current and future contributions.

 

Get to Know Our Employees of the Year:
Megan Colter & Joanna Wilmot

Megan joined our team as a Consultant in 2018. Since that time Megan’s duties have expanded to include final reviews of plan document checklists, assessments and SBC services. Megan has also been very helpful in training and mentoring new employees. Megan always makes sure the client’s expectations and deadlines are met. She has been staying late and/or working from home and her effort is appreciated. Megan is a pleasure to work with and we are happy she is part of our team!

Joanna is an exceptional example of a model employee. Her kindness, loyalty, enthusiasm, and dedication are only a few of the reasons why she deserves an employee of the year title. She is never short of energy which she selflessly offers to the team, her work product, and our clients.

She is dedicated and hardworking. Over the course of this year she reviewed, audited and revised each process to maximize efficiency and productivity. Specifically, our clients continue to ask for customized approaches, reports, and notifications. Most recently a TPA client requested a tailored notification process for when a mutual client was being onboarded by a partner vendor. Joanna not only went out of her way to build a notification process for this TPA but she also immediately implemented this process for all clients. This is an example of the personal touch and consistency she exemplifies every day. Building a sense of community is important to Joanna as well. For Thanksgiving she organized a team-building and community give back opportunity for PACE. This shows she not only cares about her team, but about her community and the team’s contribution to the community.

 

Congratulations Joanna & Megan, and thank you for your many current and future contributions.

 


Phia News

 

PACE® Certification Is Making Waves

The PACE Certification program will educate you using 3 distinct chapters of information:

Chapter One

Explore the ins and outs of self-funding while learning about its risks and rewards. This chapter will transform any individual into a self-funding pro.

Chapter Two

Take a deeper dive into the laws that apply to self-funded plans. We cover it all, from federal preemption to adverse benefit determinations and appeals.

Chapter Three

Explains what PACE is, what PACE does, and how it's obtained, implemented, and utilized. The PACE Certification program is free of charge and will create immense value for your organization. By going through the Certification program, you, or a select person, or team, within your organization, can become PACE Certified. Once PACE Certified, the Program participant(s) will become highly educated PACE business owners and will serve to assist your organization in growing your PACE business, enhancing your PACE revenue, and assuring your appeals processes are the most compliant and best in the industry. Those who complete the Certification will also receive a PACE Certification Fact Sheet, providing an easy to understand summary of the content and best practices covered, which will allow you to maximize the lessons learned within your business.

Additionally, the PACE Certification program provides education on self-funding in general, claims and appeals regulatory education, and overall best practices surrounding fiduciary duties, claims, and appeals.

Please see the PACE Certification flyer, as well as this video for more information.

Please contact Michael Vaz (mvaz@phiagroup.com) for more information.

 

Ugly Sweater Contest

The Phia family held its famous ugly sweater contest the week before Christmas, and we had a great turnout this year! With all of the great sweaters, it was a close race for finding the person with the ugliest sweater, but once we tallied up all of the votes, we found a winner. Congratulations to Rob Jolly, who is pictured below in the brown bear getup!

 

 

Halloween at Phia

Phia had its annual Halloween costume competition in late October. There were a lot of great costumes on display, but we could only choose one winner. Congrats to Ben Mooney, the homeless man with a passion for healthcare!

 

 

Candy Corn Contest

We set up a little contest at the front desk and asked everyone to guess how many candy corn! The winner was Andrew Fine, and the total count was 408. Andrew guessed that there were 402 pieces of candy corn. It’s hard to believe that all of those pieces of candy fit into that tiny jar!

 


 

Job Opportunities:

• PACE Specialist

• Administrative Assistant

• Staff Attorney – PGC

• Health Plan Documentation Specialist

• Claims Specialist, Provider Relations

• Manager, Talent Acquisition

• Case Investigator I

• Data / ETL Analyst

• Provider Relations Client Concierge

• Vice President of Client Solutions and Account Management

• Human Resources Compliance Specialist

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

Promotions

• Bethany LaChance has been promoted from Case Investigator to Claim Recovery Specialist III

• Dylan Fry has been promoted from Case Investigator to Senior Claim Recovery Specialist

• Allison Britton has been promoted from Case Investigator to Legal Assistant

• Brenna Jackson has been promoted from Legal Assistant to Senior Claim Recovery Specialist

• Jiyra Martinez has been promoted from Customer Service Representative to Senior Claim Recovery Specialist

 

New Hires

• Diane Mcauley was hired as an Executive Assistant

• Arianna Hibbard was hired as an Executive Assistant

• Robert Jolly was hired as a Claim And Case Support Analyst

• Jessica Grande was hired as an Intake Specialist

• Alyssa Campbell was hired as a Case Investigator

• Elizabeth Painten was hired as a Human Resources Assistant

• Corey Crigger was hired as a Provider Relations Attorney

• Joshua Farley was hired as a Provider Relations Attorney

• Cole Wagner was hired as an Accounting Assistant



Back to top ^

info@phiagroup.com
781-535-5600

The Stacks – 1st Quarter 2020

On January 14, 2020

ACA Enrollment By The Numbers! Administration’s attempts to stall the ACA At Work?

By: Christopher Aguiar, Esq.

With headlines focused on collusion, corruption, impeachment, and a wall being erected in Colorado, much of the political discourse in 2019 has avoided Healthcare Reform. In contrast, 2017 and 2018 featured many headlines with the current Administration doing everything within Its power to make good on a touchstone of Its 2016 campaign platform; President Trump and the Republican Party pushed for repeal and replacement of Barak Obama’s crowning achievement, the Affordable Care Act. When they were unable to garner the votes, the President utilized powers outside the control of Congress to weaken key parts of the Law designed to ensure the viability of the Insurance Marketplace, as well as keeping the American public in the dark regarding enrollment by virtually defunding marketing efforts. Many feared these tactics would encourage disengagement of the young and healthy, demographics crucial to maintaining a balanced risk pool covered by the Marketplace. Did it work?

It all came to a head when, in rather theatrical fashion, the late Senator John McCain stood on the Senate floor and casted his vote with a momentous thumbs down, as though he was a dictator in Ancient Rome deciding the fate of a gladiator on the heels of a losing battle. This iconic moment marked the end of a legislative war of words, highlighted to that point by Twitter attacks from the President, himself, where the Republican Party was unable to garner the 50 votes necessary under the Budget Reconciliation Act to pass the Better Care Reconciliation Act. What followed was a tactical maneuvering by President Trump to undermine of key features of the ACA through his control of federal agencies and national purse strings.

First came a backhanded legislative maneuver wherein the Administration built Reform provisions into a tax bill. In December of 2017, President Trump signed the Tax Cuts and Jobs Act (“TCJA”). Among many other provisions, the Bill effectively directed the Internal Revenue Service to cease enforcing the Individual Mandate. In so doing, the Government would no longer penalize Americans who chose not to purchase health insurance. So, even though the Affordable Care Act was still the Law of the Land, one of the key provisions intended to protect the health of the risk pool by ensuring it was balanced and included not only the old and sick but also the young and healthy, now had no teeth. Many posited this lack of enforcement could hamstring the Law by encouraging the very malady it was designed to avoid, adverse selection. Without the tax to be levied upon non-compliant Americans, another important challenge to the Law was also set in motion, Its constitutionality.

When now Chief Justice Roberts upheld the constitutionality of the Affordable Care Act in an historic 2012 Supreme Court decision, it was upon enforcement of this provision that he relied. Specifically, Roberts held in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012) that the Law was constitutional because the Federal Government was empowered to generate revenue. This penalty, as it was initially labeled, to be levied against Americans who chose not to purchase health insurance, then, was actually a tax, a permissible exercise of the Government’s power of taxation. So, too, was the Affordable Care Act considered constitutional. With the Administration’s removal of enforcement of this tax, without repealing the Law or provision itself, the constitutionality of the Affordable Care Act is again called into question because where no revenue is generated, the Individual Mandate is now arguably invalid. Such is the question to be answered by The Supreme Court when it issues a ruling Texas v. US, 809 F. 3d 134 (2015). Though oral arguments took place in July of 2019, no ruling has been issued.

The final act taken by the Administration was an exercise of the Executive Branch’s control of money. Specifically, it is within the power of the president to control how certain federal funds are spent, a power which allowed President Trump to slash the Affordable Care Act’s marketing budget by 90%. The fear? With significantly less advertising of open enrollment, would American’s be aware of the Open Enrollment period and how they could go about purchasing coverage on the Exchange?

Though not significant, the efforts may have had some impact on the enrollment which occurred from November 1 through December 15, 2018. According to Kaiser Family Foundation as well as the Centers for Medicare & Medicaid Services (“CMS”), enrollment through Healthcare.gov was down 4% in 2018 as compared to 2017. Overall, enrollment was down 3% in 2018 as compared to 2017. Those numbers seem insignificant when you consider the significant budgetary limitations that were placed on advertising, but perhaps the more telling and concerning data lies in the decline of new enrollees and percentage of those who qualified for subsidies. With respect to enrollees, 39% of enrollees were new in 2016. That number in 2017 had fallen to 31%, and even further in 2018 to 24%.

Perhaps the most concerning data point, however, is the percentage of new enrollees who qualify for premium subsides/tax credits. Those who qualify for these subsidies do so because they are individuals or families with low to moderate income levels. In 2017, 83% of new enrollees qualified for these subsidies. In 2018, that number grew to 87%. This indicates that lower income individuals and families are flocking to the health insurance exchanges at significantly higher rates than their wealthier (and perhaps, healthier) counterparts. Historically, data suggests that lower income individuals also tend to be less healthy. Accordingly, it appears the fear of adverse selection may indeed be manifesting itself as the young and healthy seem to be avoiding entering the Marketplace, either due to obtaining benefits through employee sponsored plans, or their willingness to gamble on their youth to save a buck.

It is difficult to ascertain with certainty whether the policy decisions made by the current Administration truly have a causal link to the drop indicated above, or if the connection is simply correlative. The numbers themselves speak to a very ominous reality. The number of new enrollees is declining each year. Additionally, the Marketplace appears to be obtaining a higher rate of enrollees annually in the low to moderate income demographic. Finally, 1/3 of new enrollees, annually, appear to be over the age of 55 and 64% are over the age of 35. As we head into 2020 and what should be another year of significant reform rhetoric, a Supreme Court decision that could leave the Country without a healthcare system on the books, and Healthcare once again top of mind in a presidential election cycle, the Administration will continue to attempt to repeal the Affordable Care Act, or endeavor to limit its efficacy. If adverse selection is in fact coming to fruition as the data seems to support, the Affordable Care Act may be headed for its demise either organically or though direct legislative attacks. It will certainly not be aided by an administration that will actively undermine the parts of a healthcare system that were intended to ensure its success; a flawed system that often leaves Americans footing a significant bill. Even with these attempts, the Republican Party has failed to clearly put forth a viable replacement. Be it with the ACA in some form, a Republican alternative, or the “Medicare for All” approach being touted by the large contingent Democratic candidates, Healthcare discussion is here to stay.

____________________________________________________________________________________________________

ACA Round-Up for 2020: Items Affecting Employer-Sponsored Group Health Plans

By: Corrie Cripps

During this open enrollment season, plan sponsors of group health plans should be aware of any Affordable Care Act (ACA) changes that may affect the design and administration of their plans.

The case Texas v. United States1 is the ongoing litigation challenging the constitutionality of the ACA. A decision on this case is expected at any time from the Fifth Circuit Court of Appeals (“Fifth Circuit”). Any decision appears likely to be appealed to the Supreme Court. Whether or not the Supreme Court will take the case depends on how the Fifth Circuit rules. If the Supreme Court does not take the case, the Fifth Circuit’s decision will remain the law; however, the agencies will most likely need to issue regulatory guidance on how they interpret the decision.

As of the date of this article, the Trump administration is continuing to enforce the ACA. As such, plans will need to ensure they are maintaining compliance with the ACA provisions. The following is a summary of the recent regulatory actions that will affect self-insured plans in 2020.

ACA Contraceptive Mandate

Update on the Obama-Era Rules

On June 5, 2019, U.S. District Judge Reed O’Conner of the Northern District of Texas issued a nationwide injunction2 against the Affordable Care Act’s (ACA’s) contraceptive mandate and its accommodation process, stating the mandate can no longer be enforced against employers who object to contraceptive coverage as it violates the Religious Freedom Restoration Act (RFRA). The injunction applies to all employers and individuals who object to contraceptive coverage based on sincerely held religious beliefs.

The case, DeOtte v. Azar3, was filed in October 2018 on the grounds that the plaintiffs (two Christian couples and one business whose owner is a Christian [Braidwood Management Inc.]) are forced to choose between purchasing health insurance that includes contraceptive coverage or not having insurance. The basis of the claim is having to choose between covering contraceptives under its group health plan, complying with the accommodation process of the contraceptive mandate, or paying a penalty for noncompliance. The court ruled that requiring employers with religious objections to use the contraceptive mandate’s accommodation violates RFRA, as does requiring individuals to obtain coverage with contraceptives.

This decision will apply to all employers that object to the contraceptive mandate, based on sincerely held religious beliefs, regardless of size or status as a nonprofit or for-profit entity. Since these employers are now exempt from the accommodation process, employees under these employer group health plans will no longer have coverage for some or all contraceptive services.

As for individuals, this decision allows individuals who object to some or all contraceptive services based on sincerely held religious beliefs to “…purchase or obtain health insurance that excludes coverage or payments for some or all contraceptive services from a health insurance issuer, or from a plan sponsor of a group plan, who is willing to offer a separate benefit package option, or a separate policy, certificate, or contract of insurance that excludes coverage or payments for some or all contraceptive services.” Based on this injunction, it is not clear if self-funded plans will need to offer a separate plan that does not include contraceptive coverage for employees who are religious objectors.

There is a safe harbor for officials who enforce the contraceptive mandate. Under the safe harbor, the federal government can ask whether an employer or individual that fails to comply with the contraceptive mandate is a sincere religious objector and file notice in court “…if the defendants reasonably and in good faith doubt the sincerity of that employer or individual’s asserted religious objections”. Federal regulators can also enforce the mandate against those who are found by a court to not be sincere religious objectors.

Update on the Trump Administration Rules

There are at least three lawsuits—brought in California, Massachusetts, and Pennsylvania—challenging the Trump administration’s final rules on religious and moral objections to the contraceptive mandate.4,5 Those rules were set to go into effect in January 2019 until they were enjoined by federal district court judges in Pennsylvania and California.

The rulings in Pennsylvania and California do not permanently block the new rules on the contraceptive coverage exemptions; however, the rulings stop the rules from going into effect while legal challenges are pursued.

Those employers who are potentially eligible for the expanded exemptions of the Trump administration’s final rules and wish to utilize an exemption in the future will need to closely monitor the latest developments.

Out-of-Pocket Limits for Non-Grandfathered Plans

2020 Out-of-Pocket Maximums

For non-HDHPs:

The Health and Human Services Department issued a Final Rule on its Notice of Benefit and Payment Parameters for 2020 (2020 NBPP Final Rule).6 The ACA 2020 maximum annual limitation on cost-sharing is $8,150 for individual coverage and $16,300 cumulative for family coverage. (Note that the ACA’s embedded self-only limitation is $8,150 for family plans).

For HSA-compatible HDHPs:

In Revenue Procedure 2019-25, the Internal Revenue Service (IRS) provided the inflation-adjusted Health Savings Account (HSA) contribution limits effective for calendar year 2020, along with minimum deductible and maximum out-of-pocket expenses for the high-deductible health plans (HDHPs) that HSAs are coupled with.7 For HDHP self-only coverage, the minimum deductible amount cannot be less than $1,400. The 2020 maximum out-of-pocket expense amount for self-only coverage is $6,900. For 2020 family coverage, the minimum deductible amount is $2,800 and the out-of-expense maximum is $13,800. (Note that the ACA’s embedded self-only limitation is $8,150 for family plans).

Drug Manufacturer Coupons

Per the 2020 NBPP Final Rule, health plans are not required to count drug manufacturer coupons toward the annual limit on cost-sharing when a medically appropriate generic equivalent is available.

On August 26, 2019, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, “the Departments”) issued a joint FAQ regarding limitations on cost-sharing under the ACA.8 Specifically, the FAQ addresses whether non-grandfathered group health plans must count drug manufacturers’ coupons toward the annual cost-sharing/out-of-pocket limits under the ACA.

Per this new FAQ, it came to the attention of the Departments that the drug manufacturer coupon  provision of the 2020 NBPP Final Rule could create a conflict with the IRS regulations pertaining to HDHPs. Specifically, Q&A 9 of IRS Notice 2004-50 provides that the provision of drug discounts will not disqualify an individual from being eligible (for the HDHP) if the individual is responsible for paying the costs of the drugs (considering the discount) until the deductible is met.9 This Q&A requires the HDHP to disregard the drug assistance when determining whether the minimum deductible for an HDHP had been satisfied by only allowing amounts actually paid by the individual to be taken into account for that purposes.

The 2020 NBPP Final Rule, layered with the existing IRS Q&A, creates conflicting policy. As a result, the Departments, as stated in this August 2019 FAQ, realize this “ambiguity” and intend to undertake future rulemaking for 2021. In addition, until 2021, the Departments will not initiate an enforcement action if a group excludes the value of drug assistance from the annual limitation on cost sharing, including in circumstances in which there is no medically appropriate generic available.

Plans, however, when implementing or utilizing such a provision should be cognizant that this does not conflict with the existing Q&A for HDHPs.

Prior to adopting such a provision, the plan, employer, and all related entities should ensure they understand the impact for the participants and the plan.

New (or Modified) Preventive Care Recommendations for Non-Grandfathered Health Plans

The Affordable Care Act’s (ACA) preventive services mandate for non-grandfathered plans requires certain preventive services be covered in-network without cost-sharing for plan participants. The ACA uses the following when determining the preventive services that must be covered:

  1. Evidence-based items or services rated A or B in the United States Preventive Services Task Force (USPSTF) recommendations.
  2. Recommendations of the Advisory Committee on Immunization Practices adopted by the Director of the Centers for Disease Control and Prevention (CDC).
  3. Comprehensive guidelines for infants, children, and adolescents supported by the Health Resources and Services Administration (HRSA).
  4. Comprehensive guidelines for women supported by the Health Resources and Services Administration (HRSA).

The final preventive services regulations, issued in July 2015, contain guidelines for when plans must incorporate any modified recommendations.10

The following are new or modified preventive care recommendations that become effective in 2020:

1. Skin Cancer Prevention (Date Issued: March 2018; Best practice is to incorporate by the first day of the plan year on or after January 1, 2020)

The USPSTF updated its 2012 recommendation on skin cancer prevention. In this updated recommendation, the USPSTF expanded the age range for behavioral counseling interventions to include persons aged 6 months to 24 years with fair skin types (the previous recommendation applied to persons aged 10 to 24 years, based on the evidence available at that time).11

2. Screening for Osteoporosis to Prevent Fractures (Date Issued: June 2018; Best practice is to incorporate by the first day of the plan year on or after January 1, 2020)

The USPSTF recommends osteoporosis screening for postmenopausal women younger than 65 years at increased risk of osteoporosis (created from prior osteoporosis screening mandates, this requirement clarifies the population for screening, introduces reference to menopause, and references clinical risk assessment for determining increased risk).12

3. Spinal muscular atrophy screening for newborns (Date Issued: July 2018; Best practice is to incorporate by the first day of the plan year on or after January 1, 2020) 

The Uniform Panel of the Discretionary Advisory Committee on Heritable Disorders in Newborns and Children (an HRSA task force) added newborn screening for certain kinds of spinal muscular atrophy.13

4. Interventions to Prevent Obesity-Related Morbidity and Mortality in Adults (Date Issued: September 2018; Best practice is to incorporate by the first day of the plan year on or after January 1, 2020)

The USPSTF updated its previous 2012 recommendation statement on screening for obesity in adults. While it is still a “B” recommendation, the USPSTF expanded the description of behavioral counseling interventions. As with the 2012 recommendation, the 2018 recommendation is that clinicians offer or refer adults with a body mass index (BMI) of 30 or higher (calculated as weight in kilograms divided by height in meters squared) to intensive, multicomponent behavioral interventions.14 The only update to the recommendation is the expansion of the type of behavioral counseling interventions.

5. Screening for Intimate Partner Violence, Elder Abuse, and Abuse of Vulnerable Adults (Date Issued: October 2018; Best practice is to incorporate by the first day of the plan year on or after January 1, 2020)

This USPSTF recommendation incorporates new evidence since 2013 and provides additional information about the types of ongoing support services that appear to be associated with positive outcomes.15

ACA Reporting

Both the Employer Shared Responsibility Mandate (“Employer Mandate”) and the Individual Shared Responsibility Mandate (“Individual Mandate”) of the ACA continue to apply. As such, Applicable Large Employers (ALEs) will need to ensure they file the applicable forms for Internal Revenue Code (IRC) §§ 6055 and 6056 reporting in early 2020.

Conclusion

For plans and TPAs, being well-informed on regulatory developments is always of the upmost importance. Plan sponsors should review their plan documents as well as their plan administration procedures to ensure they are compliant.

1Texas v. United States, Partial Summary Judgment, https://www.documentcloud.org/documents/5629711-Texas-v-US-Partial-Summary-Judgment.html, (Last visited October 1, 2019).

2DeOtte v. Azar, Summary Judgment Order, https://affordablecareactlitigation.files.wordpress.com/2019/06/deotte-summary-judgment-order.pdf, (Last visited October 1, 2019).

3DeOtte v. Azar, Plaintiffs’ Class-Action Complaint, https://affordablecareactlitigation.files.wordpress.com/2019/05/deotte-complaint.pdf, (Last visited October 1, 2019).

4Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017, https://www.gpo.gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21851.pdf, (last visited October 1, 2019).

5Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017,  https://www.gpo.gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21852.pdf, (last visited October 1, 2019).

6Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2020, 45 CFR Parts 146, 147, 148, 153, 155, and 156, April 25, 2019, https://www.govinfo.gov/content/pkg/FR-2019-04-25/pdf/2019-08017.pdf, (last visited October 1, 2019).

7Internal Revenue Bulletin: 2019-22, Rev. Proc. 2019-25, May 28, 2019, https://www.irs.gov/irb/2019-22_IRB#REV-PROC-2019-25, (Last visited October 1, 2019).

8Employee Benefits Security Administration, Frequently Asked Questions (FAQs) about Affordable Care Act (ACA) Implementation Part 40, August 26, 2019, https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-40, (Last visited October 1, 2019).

9Internal Revenue Bulletin No. 2004-33, August 16, 2004, https://www.irs.gov/pub/irs-irbs/irb04-33.pdf, (Last visited October 1, 2019).

10Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Parts 2510 and 2590, 45 CFR Part 147, July 14, 2015, https://www.govinfo.gov/content/pkg/FR-2015-07-14/pdf/2015-17076.pdf, (Last visited October 1, 2019).

11U.S. Preventive Services Task Force, Skin Cancer Prevention: Behavioral Counseling, March 2018, https://www.uspreventiveservicestaskforce.org/Page/Document/UpdateSummaryFinal/skin-cancer-counseling2, (Last visited October 1, 2019).

12U.S. Preventive Services Task Force, Osteoporosis to Prevent Fractures: Screening, June 2018, https://www.uspreventiveservicestaskforce.org/Page/Document/UpdateSummaryFinal/osteoporosis-screening1?ds=1&s=osteoporosis, (Last visited October 1, 2019).

13Health Resources & Services Administration, Recommendations to HHS Secretary with Responses: Spinal Muscular Atrophy (SMA), https://www.hrsa.gov/advisory-committees/heritable-disorders/recommendations-reports/index.html, (Last visited October 1, 2019).

14U.S. Preventive Services Task Force, Weight Loss to Prevent Obesity-Related Morbidity and Mortality in Adults: Behavioral Interventions, September 2018, https://www.uspreventiveservicestaskforce.org/Page/Document/UpdateSummaryFinal/obesity-in-adults-interventions1, (Last visited October 1, 2019).

15U.S. Preventive Services Task Force, Intimate Partner Violence, Elder Abuse, and Abuse of Vulnerable Adults: Screening, October 2018, https://www.uspreventiveservicestaskforce.org/Page/Document/UpdateSummaryFinal/intimate-partner-violence-and-abuse-of-elderly-and-vulnerable-adults-screening1?ds=1&s=violence, (Last visited October 1, 2019).

_________________________________________________________________________________________________

The Tower of Babel – Talking Heads Talking Past Each Other

By: Ron E. Peck, Esq.

As the 2020 Presidential Election draws closer, the topic of healthcare continues to dominate the airwaves.  Be it media or debate, this is one of the (if not the) issue about which everyone is talking; but pay close attention and you’ll notice they aren’t all speaking the same language.

Access vs. Care vs. Insurance

One word everyone can agree upon is “affordability.”  The issue, however, is that depending upon whom you ask, what it is that ought to be “affordable” differs.  Some people throw the term “access” around, while others seek affordable “care,” whilst still others focus (candidly) on affordable insurance.

Interestingly, for many, the term they use (access versus healthcare) matters little, as – once their position is better defined – a shrewd listener will note that the goal is ultimately the same; make insurance cheaper.  They seem to believe that insurance is healthcare, and cheaper insurance is thereby cheaper healthcare.  Further, they believe that the only “cost” of healthcare, incurred by an insured person is their premium, co-pay, coinsurance, and deductible.

This, then, is one misconception that continues to dominate political, regulatory, and economic discourse; that by attacking the cost of insurance for the general populace (i.e. premiums/contributions, co-pays, coinsurance, and deductibles), you somehow fix the problem of limited access and/or the high cost of healthcare.

Health Insurance is Not Healthcare

I’ve written in the past, and continue to argue today, that health insurance is not healthcare.  Health insurance is one means by which the risk of payment for healthcare is shifted from the consumer of healthcare to a third-party payer.  Changing who pays for healthcare doesn’t (on its own) address how much the healthcare costs.  For instance, before you argue that Congress should establish a funding mechanism to support the “cost of caring” for those with significant medical needs, ask first what it means to pay for care.  Are you referring to the cost of insurance, or the cost of the “actual” health care for which insurance pays?

Some might argue, however, that when a “new” payer is designated, (be it insurance, a self-funded plan, or the government), if they are large enough and possess enough clout, they can strongarm the provider into accepting lower prices for care – thereby reducing the actual cost of care.  Thus, while making insurance more affordable doesn’t in and of itself reduce the cost of care, by providing more lives (and this negotiation power) to the payer, those payers in turn are provided with more “power” to force providers into accepting lower prices.  Indeed, a single-payer would hold all the cards, and thus name their own price.

In a vacuum it makes sense, and if we were purchasing potatoes or tires it may work (in a truly free-market environment), however, in healthcare some features apply that are unique to this industry.

A Non-Market Market

In any other market, a vendor of goods or services can set any price for those goods or services.  Supply, demand, and competition will then force the vendor to increase or reduce their price or fail.  This allows the “free market” to naturally set prices at a level both the seller and buyer can live with.  In healthcare, however, providers leverage things like technology, reputation, rankings, and sponsorships to compete for “customers” (a/k/a patients), rather than the price.  Providers compete for these other things; if and when price is a matter over which there is competition between vendors (providers), it’s a competition to see who can charge the most.  Indeed, one of the big pushbacks against transparent pricing in healthcare is that some providers will see that other providers “get away” with charging higher prices for the same services … and will increase their rates to match.  Imagine if that same argument applied to every other industry; that the cost of bananas couldn’t be transparent, because grocers will compete to raise prices faster than the competition.  Welcome to a world where the consumer has no skin in the game, and no price-based incentive to pick the lower cost options exists.

In healthcare, where patients don’t know, or (they think) pay the price of healthcare (at the time the care is consumed), and the consumer doesn’t appreciate the impact of higher healthcare prices on insurance costs, providers are able to freely raise prices without the negative repercussions vendors in other industries would immediately suffer.  Additionally, even if patients know the price, if they (at least in their mind) don’t think they are the ones paying the price, then higher prices will – at best – not dissuade them from consuming care, and – at worst – will steer them away from reasonably priced care to higher cost providers, thanks to an (inaccurate) assumption that higher price equates to higher quality. 

Quantum Meruit

At the same time, contract law states that a customer who agrees to pay a certain price for a service or product has entered into a contract with the vendor.  This preemptive agreement between the customer and vendor, regarding what will be paid, and what will be received by the customer, is titled a “meeting of the minds.”  If the customer later fails to pay the amount to which they’d previously agreed, this would be deemed a breach of contract.  Even if objectively, one could argue the agreed upon price is excessive, assuming the customer had the requisite capacity to enter into such a deal, the contract is binding.  If, however, someone receives a good or service but there was no meeting of the minds (agreement about what would be provided, and a specific price for said goods or services), the customer will be forced to pay an objectively reasonable price – determined by an objective third party, using objective pricing parameters – and NOT whatever price the vendor chooses to collect.  This concept, called Quantum Meruit, ensures vendors are adequately compensated based upon objectively reasonable parameters, and customers are not unjustly enriched (don’t “get something for nothing”) but also aren’t forced to pay a price they never agreed to (and which is excessive by all reasonable, objective measurements).

In healthcare, however, rarely can we say there is truly a meeting of the minds.  It is rare indeed to see a provider (the vendor) and patient (the consumer) agree upon a price prior to the provision of services.  Yet, despite this, Quantum Meruit – applicable to other commercial exchanges – has no place in healthcare, and rather, the provider is allowed to balance bill the patient whatever amount it wants – usually the amount that exists between the provider’s “charge master” price, and what it already received from the applicable carrier or benefit plan.  Note that the only prohibition on this billing practice is the prior existence of a contract between a payer and the provider, by whose terms the provider agrees to accept the payer’s payment as payment in full.  This agreement, many argue, is the greatest value a network offers.

Given that the law protects a provider’s right to charge whatever they wish – with no limits based in reasonableness, meeting of the minds, or Quantum Meruit – and limited only by pre-negotiated contracts, payers generally negotiate from a weak position.

As such, simply ensuring everyone has insurance will not drastically reduce the cost of healthcare itself.  Further, people – whether they are insured or not – will pay the cost when healthcare is too expensive.  Be it balance bills for the uninsured, or rising premiums and deductibles for the insured – the money needs to come from somewhere.

Compounding the issue further is that fact that Americans generally suffer from a lack of long-term vision.  We are, as a society, driven by a need for instant gratification.  People use credit cards to buy things now, that they can’t afford later.  People purchase homes and take out mortgages now, that they can’t afford later.  Likewise, people obtain healthcare now that they can’t afford later.  Make no mistake; even those with insurance pay the cost later, in the form of higher premiums, co-pays, deductibles, and co-insurance.  Therein lies the rub – people are quick to target out of pocket expenses at the time care is received, and the cost of insurance in general, but they do so without asking why insurance is expensive or addressing that root cause.

Until people understand that – with or without insurance – patients will ultimately be responsible for the actual cost of care, then the issue will not be resolved.  In other words, focusing on the rising out of pocket expenses, such as premiums, co-pays, and deductibles – without also focusing on why these expenses are increasing – addresses a symptom without diagnosing the disease.

What Does This Mean for Us?

Many candidates and their supporters are proponents of the so-called “Medicare for All” plan, yet even many who support those candidates are beginning to hesitate, worrying that under Medicare payment rates (forced down providers’ throats by a single payer monopoly), some hospitals struggling to stay open might close.  Here, then, we see the opposite issue – ushered in when a monopoly is in place.  A single payer with too much power can force opposition into accepting unduly low, unfair rates.

Is there a happy medium?  Some have argued that a so-called “public option” may be one such “middle ground,” but this idea cannot live in harmony with private benefits for long … resulting in the demise of private plans, and eventual monopoly that is a single payer, and which (as already discussed) most agree needs to be avoided.

Consider as “Exhibit A” the State of Washington.  Washington is set to become the first state to enter the private health insurance market with a so-called “public option,” at rates supporters say will be 10% cheaper than comparable private insurance.  Almost as if the lawmakers read my article above (before I even wrote it), they claim these savings will be achieved thanks to a cap on rates paid to providers.

Without going into too much detail regarding the pricing model (spoiler alert – it’s a percentage of Medicare), if this public option is indeed available to all residents, and if they can “force” providers to accept these payments as payment in full (thereby preventing balance billing), why would anyone sign up for a private plan?  If, then, all private plan members are steered by sheer common sense to this public option, private plans will cease to exist and – in this way – a single payer emerges from the exchange.

It was this threat that caused a public option to be removed from the proposed PPACA legislation, but now it’s back, at the State level as well as in proposals presented by Democratic candidates for the Presidency.

In the end, unless private plans and providers can achieve a meeting of the minds … and make healthcare affordable long term … this may be the future sooner than we think.