Without a doubt, the service has been great.

            We appreciate the value added service that The Phia Group brings to us in helping to manage the health plan dollars of our clients. We choose our business partners very carefully and we are completely satisfied to have partnered with The Phia Group for subrogation recovery"


Steve Chapman

Vice President


Dear Reader,


Happy Holidays to all of you!  As we enter 2013, I just wanted to say thank you for the opportunity to serve you and the entire industry over the past 12 years and I look forward to doing so in 2013. 


I know that earlier this year, I asked many of you to support my 192 mile bike ride for my best friend Robert Pokorski or as I call him - Staga - who was diagnosed with Non-Hodgkin's Lymphoma.  Well, he is going in for a bone marrow transplant very shortly and my friends and I have organized a benefit to raise money for his medical bills and expenses. 


Staga is one of the kindest and gentlest souls you will ever meet and we have been best friends since we were kids growing up in the streets of Dorchester, MA, in what is now called the Polish Triangle of Boston.


He and his wife Aneta have two amazing children - their oldest, a son named Brandon, is 11 years old and their daughter Emma, my god-daughter-  is two and they need support as they battle this disease.  Together with your help we can help fight Staga's War.


In addition to your thoughts and prayers, there are two ways that you can help support Staga and his family:




  • Join us for an evening to help raise money for Staga's War: The Neighborhood Fights Back.  This benefit will be held on Saturday, February 9, 2013 at the Florian Hall in Dorchester, MA.  We are now accepting silent auction and raffle items.  Please contact me if you would like to donate anything for the auction and raffle. 

As the holidays are here, let us take time to appreciate our good health and remember those, like Staga, who need our help.  Thank you all so much.




Adam V. Russo, Esq.


Letter from Editor
by Andrew Milesky


Happy Holidays to all of our readers! 2012 was one heck of a year.  Now that NASA has shown us that the Mayans in fact did not predict 2012 as the end of the world, we can all get back to business.


2013 is shaping up to look like a special year. I expect big things from you and most certainly big things from The Phia Group.


Tomorrow, I head down to Texas for a good ole fashion road trip, where I will be visiting a few of our clients to see how things are going in the lonestar state. I will be landing in the always fun city of Austin for a meeting, then heading over to the city with the riverwalk in San Antonio and will eventually drive up to Dallas, a city made famous for this Boston boy by the evil tycoon JR Ewing.


After that, it's home for the holidays! I'll be back at it again for the HCAA conference in February, where I hope to see many of our readers in Vegas.


Until then, have a wonderful holiday and a happy new year!



Andrew Milesky

Director of Client Services

The Phia Group in the Community
Braintree Food Pantry 


Ron.PantryStarting this October, The Phia Group began a partnership with The Braintree Food Pantry located down the street from our office.


Once a month, Phia Group employees dedicate time after work to serve dinner to patrons or organize food in the pantry for hours.  We feel this is a worthy cause and one that we vow to continue indefinitely.


This December, The Phia Group  participated in their "Adopt-A-Child" program. Every year, children sign up to received Christmas gifts. They make a list of things they want and things they need. The Phia Group adopted 20 children this year.


On January 9th, we will heading back to the pantry to serve dinner to thier patrons. This has been an amazing exercise for our staff and we will continue to serve our community to the best of our ability.  


About The Braintree Food Pantry


Located in the First Baptist Church on 594 Washington St., Braintree


In an average month they purchase and distribute more than a ton of food and supplies Some food is provided by GBFB and a small grant from Project Bread, all other food and monetary donations are from organizations, community, etc.


Excerpts from Ron Peck's "Is There a Place for Preferred Provider Organization ("PPO") Networks In Today's Health Benefits Marketplace?"




Benefit plans are exploring alternative price methodologies.  We must explore the alternatives with an open mind, understanding that alternatives - while resulting in cost savings for the benefit plan - are not cost free.


A Brief History of PPOs


PPO's were originally developed so that select providers could offer services at discounted rates to benefit plans in exchange for steerage.  Over time, exclusivity of in-network status became significantly lessened.  This loss of exclusivity resulted in less value attached to in-network status for providers.


The Status Quo


Discounts are not the only reason to use a PPO.  PPO agreements represent pre-negotiated terms and include a contractual prohibition on "balance billing."


Forced Change


Stop-loss carriers are being more judicious in their review of claims payments and are stringently enforcing plan language that caps allowable payable amounts. Forced to choose a side, many benefit plan administrators are choosing to shed their PPO and administer claims solely in accordance with the terms of their plan document.


The Conflict


PPO network agreements make it difficult, if not impossible to audit claims submitted by in-network providers, openly prohibit the application of plan-based limitations, such as usual and customary rates, prohibit the review of provider bills, limit or eliminate the plan's ability to obtain invoices, disallow audits by the plan, and apply ambitious deadlines. 


Mercury Rising


Providers are not always to be blamed for these inherent conflicts.  Providers execute contracts with the PPO (negotiating on the plan's behalf) that providers presume will control the relationship.  Providers proceed in reliance upon the (reasonable) belief that the network contract will control the entire procedure.  Some providers, however, take this advantage to the next level.  In the State of California, the State's insurance commissioner identified multiple instances where - it is alleged - facilities committed billing fraud.  The State, furthermore, asserted that the terms of the network agreements concealed the billing practices, by limiting the payors' rights to review the claims.


Cost Plus is a Real Plus


The industry at large is now contemplating new pricing methodologies, whereby the benefit plan identifies a fixed rate upon which it bases what it deems to be a fair market value.  The benchmark can be based upon some percentage of Medicare, or any other number of parameters. 


Fair and Balanced Billing


In response to this trend, some providers have advised that implementation of such fixed-cost systems may result in balance billing of the patients, similar to any out of network procedure.  The benefit plan pays the amount set by the plan document, and the provider balance bills.


How Much is that Transplant in the Window?


Despite its name, health "insurance" is not "insurance" as that product is known in other industries.  Insurance is purchased by insureds so that if and when they suffer a loss, they are provided with compensation equal in value to that loss.  In health care, nobody knows what the fair market value of a particular loss (i.e. a hospital bill) is.


Contract to Kill


Contracts requiring one or all parties to commit a crime are void for illegality.  Health plan administrators have a fiduciary duty, under ERISA, to uphold the terms of the plan document.  The plan administrator is required to pay no more than the maximum allowable amount, in accordance with the terms of the plan.  If paying claims in accordance with a network contract means payment in excess of what the plan document allows, it can be fairly said that the network agreement requires the plan to breach its fiduciary duty, and may be void. 


Agreeing on the Options


Providers and PPO networks are justified in their outrage.  Benefit plans have for decades taken advantage of discounts, and much more importantly, have stifled providers' rights to balance bill.    Providers and networks, however, must come to terms with the facts.  Benefit plans cannot be chastised back into the classic PPO arrangements that have, for many years, been the status quo.  In the coming years, the rising cost of doing business within the traditional PPO structure and complying with the new law will drive employers away from private plans. 


Making the Pie Larger


Benefit plans need to work, hand in hand, with providers to develop new programs that offer true value to providers in exchange for cost-effective care.  If all of the beneficiaries of private health insurance do not innovate together, traditional health insurance will lose out to the exchanges, or benefit plans will become nothing more than auto insurance policies and homeowner's insurance... prohibiting assignment of benefits entirely.



PGC  Issue of the Month - "Fiduciary Breach"

by Ron Peck, Esq.


Medicare+ / Cost+ is getting all of the attention lately, but when it comes to what people are talking about, paying to pass the fiduciary buck onto the TPA is running a close second.


A couple organizations that we know of (a vendor and a TPA) accept a fee in exchange for taking on the fiduciary mantle. 


Most people confuse "fiduciary breach" with "plan disputes."  There is a huge difference. 


Fiduciary breach (a situation wherein the fiduciary may find itself in trouble) happens when the fiduciary does something contrary to their obligation.  In our case, a fiduciary is obligated to pay claims in accordance with the terms of the plan.  If you pay more or less than the plan allows, you breach the duty.  Being a fiduciary, therefore, isn't very scary if you have a clear benefit plan and stick to it.  Might you have to defend the decisions on a regular basis?  Sure.  Will you lose?  Rarely.


Plan disputes, however, are much more common.  When the plan pays less than the provider's charge amount, and the provider balance bills... When the provider accuses the plan of breaching its network contract, and the participant sues the plan for bad faith...  These things are not about the plan's fiduciary duties.  It's about people being mad, and causing trouble for the plan.


Look at it this way - I could have a plan document that says we have no PPO network, and we only pay 50% of what Medicare pays.  That's right...  If Medicare would pay $400, I pay $200.  A provider treats one of my patients, and bills the Plan (via assignment of benefits) $5,000.00.  Medicare would pay $4,000.00, so I pay $2,000.00.  The provider is (as you can imagine) mad as heck, and he screams at me that he's going to sue me.  I tell him to pound sand.  He balance bills the patient for $3,000.00, and the patient screams at me that he's going to sue me.  I tell him to pound sand too.  Why?  Because I fulfilled my fiduciary duty and paid per the terms of the plan.


So, the moral of the story is this - Being a fiduciary is easier than people think.  Dealing with the types of issues we've described above extends beyond who the fiduciary is.  Will the plan sponsor, providers, participants and courts look to you - as the fiduciary - to justify your decisions?  Yes.  Will you have to make the final decisions, rather than turning tough questions over to the Plan to exercise their discretionary interpretation?  Yes.  In the end, however, changing who the fiduciary is doesn't resolve the core issues - such as providers charging more to the Plan than the Plan can afford, and the Plan being afraid to pay what it says it pays in its document for fear of balance billing.


The immediate benefit (and risk) relates to exercising discretionary authority; being the final say regarding whether the Plan providers coverage in a given situation.  Beyond that, the major issues impacting the industry remain.


Recovery Case of the Month

by Jamie Calder

This case involves an ATV accident. The insured was a minor who was riding an ATV that collided with another ATV due to trees obstructing both drivers' views. This accident resulted in the patient sustaining a serious injury to her face, ultimately making her unrecognizable. The total charges exceeded $50,000 dollars.


The Phia Group's Claims Recovery Specialist immediately contacted the auto insurance carrier, placed the adjuster on notice of the Plan's reimbursement interest and verified that there was ample coverage of $500,000 dollars. During the investigation of this case, the auto carrier argued comparative negligence on the part of the Plan participant. When both parties contribute to an accident, comparative negligence determines who will receive compensation for losses and how much will be received. The auto carrier ultimately determined that the plan participant was found 50% liable for this accident. Due to this determination, the insurance company offered to settle the Plan's reimbursement interest at a reduced amount of $25,000.


Upon review of the Plan's SPD, it was found that the SPD contained subrogation and reimbursement language which stated that the Plan's right of subrogation and reimbursement will not be reduced as a result of any fault on the part of the Covered Person, whether under comparative fault or contributory negligence or other similar doctrine in law.  Due to the Plan's language, The Phia Group was able to argue for the full amount of the Plan's lien and obtain maximum reimbursement for the Plan.


This case shows how important it is for a Plan to include strong plan language which is able to ensure a Plan's full rights.



Department of the Month - Phia Group Consulting


Regulatory Compliance Services


Our experts navigate the complexities of regulatory law as they relate to the health care industry. Regardless of whether your inquiry relates to State or Federal regulation; issues involving State Insurance Departments, the NAIC, HHS, CMS, and DOL are handled by our Regulatory Compliance team.


The Time for Procrastination is Over - PPACA is Here


The floodgates are open and a tidal wave of mandates is fast approaching.  PPACA is the law of the land and the freeze on regulatory activity is at an end. 


Customized Compliance Support


With the ability to customize our services, we can provide timely support tailored to your specific needs. Our Regulatory Compliance team will assist you for a fraction of the cost traditional law firms will charge, while addressing topics regarding but not limited to:


  • Stop-Loss Regulation at State and Federal Levels
  • Benefit Plan Status and Rights
  • Internal Investigation
  • Human Resource Compliance for Employers
  • Licensure Compliance
  • Federal and State Law


  • ADA
  • The Public Health Services ActAlternative Risk Sharing Models


  • MEWAs
  • VEBAs
  • HRAs
  • Captives      
  • Taft-Hartley           
  •  Legislative Entities and Their Mandates


  • HHS
  • DOL
  • NAIC
  • CMS

Contact The Phia Group's Director of Client Services, Andrew Milesky today. The Phia Group's Regulatory Compliance Team can be reached toll-free at 888-986-0080, directly at 781-535-5636, and via e-mail at [email protected].

Employee of the Year - Andrew Milesky 


AndrewEEAndrew Milesky started in our Case Evaluation Department analyzing all our potential cases to determine whether or not they had recovery potential. A fast learner, Andrew soon moved up to Supervisor of the department and Liaison to all of Phia's clientele. Under Andrew's lead, the Case Evaluation department evolved into a team of case evaluation experts trained in identifying potential recovery opportunities and analysis of plan language.


In 2010 Andrew was promoted to Director of Client Services. With his experience and knowledge of our industry, Andrew is in position to provide our clients with guidance towards all of our services. He has spent this last two years traveling around the country to conferences and our various clients. With a passion for his job and this industry, Andrew has been the voice of Phia to many of our clients for the last few years and we hope many more.


Andrew was a business major and is a graduate of the Sawyer School of Management at Suffolk University in Boston, Massachusetts.

In his spare time, Andrew enjoys working on projects for his new home and spending time with his friends.

Client Spotlight  - Auxiant 


This month, we'd like to place a spotlight on our old friends at Auxiant in Madison, Wisconsin. Auxiant has been a client of The Phia Group since 2006. They have been a wonderful client for the last 6 years and we hope for many more.


About Auxiant 


Auxiant is a Third Party Administrator (TPA) of self-funded benefit plans. Our specialty is customization, technological tools for clients and individuals, and cost-control and health management. We provide administration for over 33,000 employees from our administrative offices in Madison Wisconsin and Cedar Rapids, Iowa. Our Sales offices are in Cedar Rapids, Iowa and Milwaukee, Wisconsin.

TPAs are one of the best-kept secrets in the country. Many people do not know TPA firms exist--yet about 2/3 of all employee benefit plans in the U.S. use TPA services. As a TPA, we are dedicated to taking excellent care of the employer and the individuals covered under their employer-sponsored health plans.

A health plan is a highly valued component of a company's employment package. With the rising costs of medical care, a health plan has also become a major employer expense. We know how important careful administration of an employer health plan is.

We chose the tagline, your integrated benefits partner because we realize that as the administrator of your health plan, we become an extension of your company. As your benefits administrator, we are responsible for an integration and partnership of programs and organizations--all with one goal in mind: provide the best, most effective and most efficient benefits for employers and employees.


We believe it is important to provide our plans with cost-management strategies, while providing plan participants with tools to help them deal with the complexities of health care purchasing.



Auxiant is member of the Society of Professional Benefit Administrators, and a member of the AWAC Alliance.
In This Issue
Letter from the Editor
The Phia Group in the Community
Is There a Place for Preferred Provider Organizations Networks...
PGC Legal Issue of the Month
RecoveryCase of the Month
Department of the Month
Employee of the Year
Client Spotlight
 Upcoming Webinar

Our next webinar will be January 16, 2013 @ 1pm EST


"The State of the Subro-Union Address "


To register, click HERE. 







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