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Dear Reader,
There is so much to discuss as to what has happened since our last newsletter. It seems like years have passed but its only been four weeks!
The wait is finally over as the Final Rules for the Summary of Benefits ("SBC") and Coverage and Uniform Glossary Templates and Instructions have arrived. This guidance sets forth the rules for group health plans to draft the mandated SBCs for the first year of their application and we here at The Phia Group are prepared to assist you in crafting the SBCs.
In addition, I got to write a nice letter to the Wall Street Journal in response to the January 7, 2012 Leslie Scism article titled "When Insurance Fails: Cheaper Policies Bought in the Workplace Can Have Drawbacks." As an attorney as well as a regular reader of the Wall-Street Journal, I was shocked to see such misinformation. I probably re-wrote the letter a dozen times because I was just being too mean! It you would like to see the actual article and my response, you can click here.
The bottom line is that self funding is still a mystery to most of the world and even many in the health insurance business. It's my personal mission to reach as many people I can to get the truth out. Enjoy this month's newsletter and the beginning of Spring Training in a few weeks!!!
Happy reading!
Adam V. Russo, Esq.
CEO
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Passion for Subro Blog
To get all the latest industry news, don't forget to visit www.passionforsubro.com.
Want to get involved? Share your opinion with us and comment on any of our articles.
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Letter from the Editor
Well...my New England Patriots lost the superbowl. The following night I headed to Las Vegas for the annual HCAA Conference where I was able to see all my industry friends and relive the Superbowl outcome over and over and over. But its ok, there's always next year and the important part is that I am out there, on the road and speaking with all of you.
This most recent trip was the first of many as we head into conference season. As I travel around and see all of you, it is my hope that you will share your thoughts and concerns about this industry and where we are heading. In the end, your feedback is the primary source of inspiration for The Phia Groups service offerings.
It is our goal as an organization to provide the industry with insight and solutions to address its most pressing needs. Whether you are concerned with SBCs or the implications of upcoming reform changes in general - I encourage you to take advantage of what we can offer.
The next place I will travel to is Vegas - again. After that its off to Texas where I look forward to seeing many of you and possibly The Alamo.
I hope you enjoy our latest - 25th edition of The Phia Group Newsletter!
Andrew Milesky
Director of Client Services
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Press Release - Adam Russo Fires at WSJ Article 'When Insurance Fails...'
On January 7, 2012, Leslie Scism wrote an article for the Wall-Street Journal, titled "When Insurance Fails: Cheaper Policies Bought in the Workplace Can Have Drawbacks." As an attorney as well as a regular reader of the Wall-Street Journal, I was shocked to see such misinformation. At the outset, the author mentions premium increases health insurance has been imposing upon us. These premium increases apply solely to what is called "fully funded insurance policies;" whereby an insured pays premiums to an insurance carrier, and the carrier bears the risk of loss.
The author quickly shifts her focus from increasing premiums to judicial deference shown to employer sponsored health plans. Self-funded benefit plans are not the same as fully funded insurance policies. As such, rising premiums (an issue involving fully funded insurance), and deference shown to self-funded benefit plans are two separate matters. Ms. Scism apparently hopes to advance her agenda (the demise of employment based self-funded benefit plans) by associating them with the rising cost of insurance. There is no relationship between the two, but a less informed reader wouldn't know that; they rely upon your periodical to be so advised.
Read On
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Press Release - SBC's
The Wait is Finally Over - The Final Rules for the Summary of Benefits ("SBC") and Coverage and Uniform Glossary Templates and Instructions Have Arrived
BRAINTREE, MASSACHUSETTS - February 10, 2012 - The guidance, scheduled for publication on February 14, 2012, sets forth the rules for group health plans top draft the mandated SBCs for the first year of their application. The Departments advise they are taking a "phased approach" to implementation, particularly since they acknowledge that January 1, 2014 will bring on new market reforms wherein additional changes will be prompted.
While revised, the rules on the SBCs are still flawed. For example, guidance provides that the rules apply for the "first year of application" - does that mean all of 2013? Until September 22, 2013? Until 2014? Also, compliance with this regulation has been scheduled around an insurer and plan's busiest renewal season - January. This will cause an already busy season to be even busier! Further, the regulations suggest that plans and insurers may use their "best efforts" to describe the relevant plan terms - but what are "best efforts" and who decides if "best efforts" have been made?
The Phia Group is cognizant of these issues and is prepared to assist plans and their administrators in crafting SBCs (whether stand-alone or incorporated into the other plan materials) which are compliant and manageable.
Please contact Andrew Milesky at (ph) 781-535-5636 or (e) amilesky@phiagroup.com for further information and details.
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Featured Article - North Carolina Supreme Court To Decide on Case of $14,000 Hospital Bill
By Shauna White
We recently heard of an interesting case in which a North Carolina man, Robert Talford, is contesting a $14,419 bill from Charlotte-Mecklenburg Hospital. Talford received treatment at the hospital for a three day stay back in 2007, and refused to pay the bill because he believed the charges were unreasonable. Talford claimed that the hospital charged 24 times more for medications than what the local pharmacy would charge. The hospital brought suit against Talford for not paying his bill, and the lower court granted summary judgment in favor of the hospital. Talford appealed, and the appeals court held that a trial should determine whether the bill was reasonable because the only evidence showing that the charges were appropriate came from the hospital's own employees.
The Phia Group was hoping to get involved in this case by submitting an Amicus Brief, but after speaking with a representative at the Supreme Court of North Carolina, we found out that the Court heard arguments earlier this week. The representative informed us that a decision should be published in three to nine months. We will be sure to monitor this case, and inform our readers when a decision is made. For more information, please see the Associated Press article on this case here: http://finance.yahoo.com/news/nc-high-court-hear-case-14k-hospital-bill-150904908.html
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Client Spotlight - CDS Group Health
This month, The Phia Group would like to place a spotlight on CDS
Group Health. "CDS" has been a client of The Phia Group since January 13, 2005. We have enjoyed a successful partnership over the last 7 years and consider our friends at CDS an extension of The Phia Group family.
About CDS Group Health
Cost management for quality health care.
As a full-service third-party administrator, CDS partners with self-funded employer groups and their broker consultants to customize plans that meet the specific needs of employers and their members. Our team of dedicated experts can meet the needs of any employer group including benefit plan design, medical management, open enrollment tools, reporting capabilities, out of area network solutions and specialized claims processing.
An affiliate of Saint Mary's Health Plans, CDS Group Health is a member of Catholic Healthcare West (CHW) and is the largest third-party administrator (TPA) in northern Nevada. We provide a comprehensive continuum of health insurance products and services in multiple markets delivered by a compassionate, effective, customer-focused team. Our affiliation with CHW brings added strength to a major managed healthcare program and allows us to be a leader in healthcare management.
To learn more, please visit www.cdsgrouphealth.com.
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Consulting Case of the Month
Recently, Phia Group Consulting received a question from a self-insured church-affiliated organization regarding mandated coverage of contraception. The organization's leaders were concerned that they would be forced to offer coverage of contraception under the Patient Protection and Affordable Care Act. The coverage of contraception has sparked a national debate that has unfolded over the last year.
In August 2011, the Department of Health and Human Services released an expanded definition of women's preventive care. This expanded definition indicated that non-grandfathered plans would need to provide coverage for the following items without co-payment starting in August 2012: all FDA-approved contraception, contraceptive counseling, well-woman visits, gestational diabetes screening, HPV DNA testing, breastfeeding support, breastfeeding supplies, breastfeeding counseling and domestic violence screening. Federal officials have said that they will give church-affiliated one additional year (August 2013) to comply.
Read On
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Legal Issue of the Month
Another one bites the dust? Equitable limitations on an ERISA Plan's right to reimbursement on the horizon?
Anyone who reads this newsletter regularly may have read my recent discussion in our December issue regarding the 3rd Circuit case, U.S. Airways v McCutchen. The 3rd Circuit Court of Appeals reversed a decision rendered by the Western District of Pennsylvania awarding a Plan full reimbursement even though the member's net recovery was not sufficient to reimburse the Plan in full. In effect, if the Plan had succeeded, the plan participant would have had to reimburse the entire net settlement (the amount received after paying legal fees and costs), as well as an additional $800 out of his own pocket. The court held that ERISA allows a Plan "appropriate equitable relief" and that the word "appropriate", by its very nature, implies that Congress intended to limit a Plan's recovery subject to certain equitable limitations, such as the Common Fund Doctrine and the Made Whole Rule. The court went on to say that if the Plan were to succeed in recovering these funds, it would amount to a windfall and constitute "unjust enrichment" of the Plan. The Court, however, opted not to define what would have been considered appropriate, instead, remanding the case back to the Western District of Pennsylvania for further proceedings and a determination of appropriateness subject to certain factors.
In applying the equitable doctrine of unjust enrichment, the court essentially brought equitable arguments back to the table and opened the door for the Made Whole Rule and Common Fund Doctrine to severely impact a plan's reimbursement right. That decision seems to illustrate the latest bow in the quiver of those who look to extinguish an ERISA plan's right of reimbursement. If Plaintiff attorneys across the county can convince courts that the statute itself allows for equitable limitation of a plan's rights, the Made Whole Rule and Common Fund Argument could once again become incredibly effective tools for forcing an ERISA Plan's hand in reducing its rights.
Read On
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Department of the Month - Phia Group Consulting "PGC"
As the laws affecting plan rights have changed, The Phia Group's services have evolved to include specialized cost containment solutions and ensuring claim cost efficiencies. As The Phia Group expands its service offerings, its mission to reduce the cost of clients' health benefit plans through innovative technology, legal expertise, and personalized service remains unrivaled.
The Phia Group offers specialized cost containment solutions and consults on best practices. From dispute resolution to general consultation, our legal team provides invaluable services in response to the industry's most pressing needs.
Third Party Agreement Review & Revision - Review agreements to reveal conflicts, as well as provide revised terms.
- Stop Loss Contracts - Review both the applicable stop-loss policy and plan document to identify gaps in coverage
- PPO Contracts - Identify issues and consult on solutions
- TPA ASA Agreements - Review or draft Administrative Services Agreements, as well as provide our own template
Dispute Resolution - Assist with grievances and manage conflicts
- Combat Balance Billing - Support negotiation efforts, minimize conflicts, and cease balance billing by service providers
- Defend Claims Processing - Assist in the enforcement of plan terms and defend adverse benefit determinations
- Resolve Stop Loss Disputes - Obtain facts and ensure excess coverage issues are resolved efficiently and effectively
General Healthcare Consulting - Quickly assess clients' needs, recommend options, and develop customized solutions.
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Recovery Case of the Month
A Plan member was injured when he fell off a ladder assisting his friend with some roof repairs. Despite the fact that he fell approximately 18 feet and suffered $40,000.00 in medical bills, he opted not to file a claim against his friend's homeowner's policy.
Initially, the Plan attempted to deny the claims under the work related injury exclusion, but were unable to do so because the member was not paid for his services, a requirement set forth by the Plan in order for the exclusion to apply.
After performing a cost benefit analysis, the Plan decided not to go forward with a subrogation action because it deemed that that the amount of money that it would be able to recover did not justify the cost of pursuit that it would be responsible for because liability was questionable. However, the Phia representative assigned to the case was able to uncover that the homeowner actually had a $10,000.00 Med Pay policy.
The Phia Group was able to utilize the Plan's strong, subrogation language which specifically afforded it a right of subrogation against a premises Med Pay policy, as leverage against the carrier to elicit the $10,000 limits of the policy. In essence, since the benefit Plan had already decided that it was not interested in filing a liability action, it was able to use the threat of an action to convince the carrier that it should reimburse the full $10,000.00, rather than the $5,000 offer it had made, in order to avoid any possible future action.
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Spotlight Employee of the Month - Lauren Bishop
 | | Lauren Bishop |
Lauren has been an employee of The Phia Group since June 2009. She was hired to be a part of our Administrative Assistant Team. Since being hired, Lauren joined The Phia Group Consulting team as a Legal Coordinator. Within this role she has expanded her knowledge of plan document language and Healthcare Reform becoming an integral part of the plan drafting team.
From 2009 through 2011, Lauren simultaneously attended Blue Hills Regional - Continuing Education and Massasoit Community College. Lauren received her Massachusetts Cosmetology License and her paralegal certificate in 2011.
Lauren lives locally and enjoys spending time with her family, friends and dog! She also enjoys reading, cooking and shopping.
Lauren looks forward to her future with The Phia Group and hopes to continue to be a part of its growth and success.
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Upcoming Webinars
March Webinar
"Servicing Your Service Agreements - Steps to Take When Drafting an Airtight ASA"
As PPACA and rising costs of health insurance incentivize organizations to consider other options for their benefit plans, many employers will be embarking upon their maiden voyage into the mysterious realm that is "self-funding." One of the first things these newly minted self-funded plans will need to do is retain a third party administrator, ("TPA"). The health of that relationship... from implementation to claims processing, network usage to stop-loss submissions... will hinge upon the quality of the administrative services agreement ("ASA"), between the TPA and their client. When the difference between success and failure relies heavily upon a clear, concise, yet all encompassing ASA, the importance of an effective agreement cannot be overemphasized.
March 21, 2012
1-2PM EST
To register click here.
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April Webinar
"A Detailed Assesment of the Stop-Loss Policy & Impact of its Terms"
Stay tuned for more information...
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