Case Studies

The Phia Group's client referred two out-of-network claims, for the same patient and provider, totaling approximately $77,000. The provider was one which had historically never offered the TPA's former negotiation vendor a reduction higher than 14%.

Once the referral was received, The Phia Group performed a preliminary review of the claims and called the provider to engage it in a dialogue. The provider, as is the case with many, initially told us that it was not interested in negotiating at all, but we obtained a fax number for the provider nonetheless. The provider was not interested in discussing the particulars over the phone.

A member of The Phia Group's negotiation team sent a very strongly-worded correspondence that unpacked benchmarks on the claims, explained some coding considerations, and detailed legal and financial reasons why a settlement was in the provider's best interests.

Upon receipt of this letter, the provider promptly executed the agreement to accept $17,500 as full and final payment from the health plan, resulting in savings of nearly $50,000. As with all of The Phia Group's claim negotiations, the provider agreed not to balance-bill the patient for the remainder.

Billed:         $77,000
Paid:           $17,500
Savings:     $59,500

Independent Claim Evaluation

A TPA engaged The Phia Group to help analyze an appeal filed by a large law firm representing a comparably large provider system in Texas. The claim had originally been denied in its entirety due to a determination that the patient had been engaged in an illegal act which resulted in the injuries sustained; this denial was supported by Plan language to the effect of excluding injuries resulting from "serious illegal acts," but the Plan did not elaborate on the term.

After the Plan Administrator's denial of the claim and the denial of the first internal appeal, the provider requested all documentation related to the claim itself, as well as summaries of past determinations made by the Plan Administrator that relied on the same "serious illegal acts" exclusion.

The TPA provided the requested information, including a summary of a few-year-old claim in which this same exclusion was applied to exclude an injury stemming from a near-identical series of events. That appeal, however, was overturned after the attorney appealed and cited binding law to argue that driving while intoxicated is not "serious" as far as illegal acts go. The result was that the Plan Administrator overturned its initial appeal, and did not ultimately consider driving while intoxicated to be a "serious illegal act" in that previous case.

The attorney in this case filed its second internal appeal, citing DOL regulations stating that the Plan Administrator is bound to interpret the same provision in the same way among similarly-situated individuals. The Phia Group was asked to provide its consulting opinion to the group and TPA regarding this appeal; our opinion, after a careful analysis of the facts and the law, was that it seemed that the attorney was actually absolutely correct in this case. The TPA thanked us for our opinion, but the group's counsel discounted it and advised the group to continue to deny the claim, based strictly on Plan language and not taking into account the applicable regulatory guidance from the DOL.

The TPA and Plan Administrator were subsequently engaged in binding arbitration over the second appeal denial, and the arbitrator rendered a determination that was near identical to The Phia Group's previous consulting opinion.

Not only was the Plan required to pay the medical claims, but the provider was also awarded attorney's fees and interest on this five-year-old claim, totaling almost $100,000 in addition to the amount of the claim payment.

The Stacks  

Be Smart When Self-Funding

By Adam V. Russo, Esq.

(As published in Thompson Information Services' Employer's Guide to Self-Insuring Health Benefits)

While we are seeing record growth across the country, self-funding is a topic that few are familiar with, even though many participate in self-funded plans. It is an ever-growing trend in the industry, yet it is still largely a mystery to many.  The problem is that many plans that do self-fund aren't very smart about it.  As most of you know, self-funding is a type of health benefits coverage whereby the employee pays a contribution to the employer - generally out of his or her paycheck - and the employer keeps the contribution amount as part of the employer's assets and, in turn, provides the employee and any eligible dependents, with certain health benefits coverage . The employer pays for eligible health claims out of its own pool of assets.  As readers of this article know, we here at The Phia Group have been self-funded for years.

In self-funding, the employer retains all risk and can purchase stop-loss insurance to  mitigate the ever present risk. As I love to preach as often as I can, self-funding lets the employer customize the benefits it provides and offer a broad framework of benefits to better its business and the quality of its employees' lives.

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Ready or Not, Here it Comes!  The Employer Mandate is Finally Applicable

By Kelly E. Dempsey, Esq.

(As published within The Self-Insurer)

The Employer Shared Responsibility provision of the Patient Protection and Affordable Care Act ("ACA") went into effect for certain applicable large employers on January 1, 2015.[1]  The Employer Shared Responsibility provision is often referred to as Pay or Play, the Employer Mandate, or 4980H subsections (a) and (b).  The applicability date of the Employer Shared Responsibility provision ("Employer Mandate") depends on an employer's size, as well as, whether or not the plan is a non-calendar year plan and meets the non-calendar year plan transition relief (provided by the final regulations issue on February 12, 2014).[2]  As of January 1, 2015, the Employer Mandate is applicable to employers with one hundred or more full-time employees including full-time equivalents.  Transition relief for certain smaller employers expires for 2016. Therefore, as of January 1, 2016, the Employer Mandate is applicable to employers with 50 or more-full time employees including full-time equivalents.  It's important to note that the size of the employer is based on actual employees, and not based on the number of employees enrolled in the employer's health plan.  The Employer Mandate is in effect for applicable large employers regardless of whether or not the employer's plan is grandfathered or non-grandfathered.

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By Adam V. Russo, Esq.

(As published in Thompson Information Services' Employer's Guide to Self-Insuring Health Benefits)
 

What is the perfect size for a self-funded plan?  This is one of my favorite questions and I love to ask it at any conference at which I happen to have the pleasure of attending and speaking.

The answers I receive are pretty funny and actually typical, ranging anywhere from 200 lives to 1,000,000.  Yes, somebody actually stated that the perfect self-funded plan size is 1,000,000 lives.  I almost passed out when he said this as I realized right away that this gentleman is a broker and has clients who place their trust in him.  I started praying for those clients right after that session!  The right answer is surprising to most as it potentially can be just one person.  A self-employed person who happens to have a lot of money and is in great health could easily be self-insured.  It really isn't the size that matters at all; it is the behavior of the employee population.  That one person can walk into any medical facility and negotiate his or her own bills.  We all know that cash is king!

Think this through...which is the better plan to self-fund?  (This is just a hypothetical, so please do not get upset at this example - I have plenty of friends and family who drive trucks for a living!)  The first plan is the 5,000 employee plan of truck drivers where the average employee is 75-lbs overweight.  The employee population has a major drug addiction issue, loves to drink, smoke, and do some very dangerous activities outside the workplace.  Or would you believe that the plan with 30 yoga instructors who don't drink, don't smoke, don't do drugs, are in better shape than anyone could possibly be in and just overall make everyone else in the country look out of shape?  Who do you think is the better risk for self-funding their benefit plan?  If you are the stop-loss carrier, who would you rather insure?  Exactly.  The size of the employer doesn't always matter.  The plan demographics, the plan language, the claims data, and potentially the wellness programs are what matter the most.

The Problem with Wraps

By Adam V. Russo, Esq.

(As published in Thompson Information Services' Employer's Guide to Self-Insuring Health Benefits)
 

If you are a long time reader of mine, I would first like to say thank you for being the only person other than my mother to read what I write.  It is extremely kind of you to do so!  As a loyal reader, you would also know that it doesn't take a lot to get me going and in the self insured industry it seems like something new happens on a weekly basis that gets my water boiling.  For the past few years, amongst the threat of the exchanges and the state regulation of stop loss, nothing has bothered me as much as the wraps!  Wrap networks that is.  If PPO networks weren't bad enough, in case you have a claim that doesn't belong to a network, you can always pay the claim through the wrap network.   So if one network wasn't enough, with a wrap you can even work with more.

What we have is an industry phenomenon.  TPAs and self funded plans complain about their networks all the time.  How the discounts are bad, how you don't have the ability to audit the claims, how the networks really work on behalf of the hospitals and not the plans. Everyone seemed to complain about them yet need them to attract clients that aren't willing to go the reference based pricing route.  You need a network to survive as I am told by every executive that has been in the industry longer than I have been alive. 

Yet at the same time, these professionals long for the day when they see a large claim and have the ability to fight the facility about the excess charges, save their clients money, look like a hero to the broker, have the stop loss carrier thank them, and make the TPA some extra revenue from the savings they found.  The problem is they have this option right now and it's called the out of network or wrap network claim.  Every day I see TPAs and self funded employee benefit plan throw good money down the proverbial toilet.

Cost containment: The Golden Oldies

It's no secret that America devotes more of its gross domestic product to healthcare expenses than any other country.  Runners up, including Canada, the Netherlands, France, Germany, and Switzerland, don't even come close.  There are many reasons we spend so much on healthcare; the blame can be properly distributed among many parties and over many decades, and it is hardly worth even getting into such a discussion in such a brief article.  To such a complicated problem, it is of course no surprise that there is no silver bullet solution.  However, from the perspective of health plans, there are several methods which have emerged over the years as successful ways to minimize costs.

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Phia News

New Faces at Phia

• James Newell Jr.
• Hired April 20, 2015 into the Claim & Case Support department
• Wayne Andrews 
• Hired May 11, 2015 into the Claim & Case Support department
• Mia Shabazz 
• Hired June 1, 2015 into the Case Investigation department
• Brigid Bowser
• Hired 06/01/2015 into the Phia Group Consulting department

Movers & Shakers

• Jason Kemp earned his paralegal certificate

• Amanda Grogan is now a Claim Recovery Specialist IV, handling bodily injury cases

• Jason Kemp and Kerri Sherman are now Senior Claim Recovery Specialists 

• Tumi Gugushe moved from the Consulting department to the Case Identification department

• Derrick Mish moved from the Claims Support department to the Claims Analysis department

• Danielle Bates moved from the Case Investigation department to the Customer Service department
   

Additions to the "Phamily"

 

Jillian McCallum's baby, Owen, was born Friday, April 24, 2015.

 

 

 

 

 

Tara Trojano's baby, Grace, was born Wednesday, July 1, 2015.

  

The 2015 Charity is ...

 

The Komen Promise - To save lives and end breast cancer forever by empowering people, ensuring quality care, and energizing science to find the cures.

On September 25, 2015, The Phia Group's Boston-area staff will be helping to set up for Komen's Race for the Cure, which takes place on September 27th at Carson Beach in South Boston. The Phia Group thanks the Massachusetts affiliate of Susan Komen® for its service and the dedication that it shows.

For more information or to get involved, visit  www.komenmass.org.