Traditional stop loss participation requirements will prevent many employers from pursuing an affordable self-funded solution for ACA-compliance.

Many brokers have been under the impression that Minimum Essential Coverage (MEC) or “skinny” plans were subject to the same Transitional Reinsurance Program (TRP) fees that are being levied against traditional self-insured group plans in light of the ACA. However, CMS has just addressed this issue during a webinar Q&A at the Healthcare Administrators Association (HCAA) Annual conference on July 14.  A representative from CMS has said that these fees will not apply to MEC plans.  (These fees are $63 per employee per year for 2014, substantially adding to the cost of self-insured MEC coverage.)

Ternian Insurance Group is dedicated to keeping you informed about the latest news that impacts your business…including guidance on all of the recent changes, final rules and updates to the ACA. If you have any other questions about how MEC plans can be offered as a standalone solution or used side-by-side with an ACA-compliant major medical plan, contact us at (602) 216-0006 or email info@ternian.com

Ternian Insurance Group
info@ternian.com
(602) 216-0006

www.ternian.com

By Molly Mulebriar

What should plan sponsors, who take their fiduciary duties seriously, pay for managing Cost Plus / Reference Based Pricing plans? What is fair market value to provide claim re-pricing, patient advocacy, medical review, defense and indemnification? We can look for clues in the market today to determine “average market price.”

For example, one provider is charging 12% of billed charges. However, there is a 25% commissions and overrides payable to TPA’s, consultants and brokers. The net is 9% of billed. This same provider charges an additional 20% as a premium for their captive (retirement plan?) which provides minimal coverage up to $75,000 only. Taking away the premium load leaves a net cost to be charged to a plan sponsor of 6.6% of billed.

Another provider charges 15% of allowed for the same services. However, after taking out commissions, overrides and premium loads, the net is 8.25% of allowed.

We have kept on top of the market and know what most providers charge and the level of service they provide. Whereas several years ago there were few providers in the Cost Plus / Reference Based Pricing arena, there are now many. Competition benefits plan sponsors - Xerox, Eastman Kodak And Cost Plus Insurance

Our best estimation of true market value in today’s market is 6% of billed or 8% of allowed.  On a PEPM basis we see a range of $8 to $12.

What are you paying these days?

Editor’s Note: It is unfortunate that plan sponsors pay fees to third party intermediaries that could otherwise go to health care givers - Cost Plus Insurance To Make Offer To Hospitals?

The push for enforcement is not showing any signs of slowing down. In February 2014, OCR began the process for its next round of audits by initiating a pre-audit survey of some 1,200 organizations (approximately 800 covered entities and 400 business associates) from which it intends to select audit targets

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Current medical payment and reimbursement structures involve the submission and payment of medical CPT® coded claims.  So, some doctors feel they need to “up-code” to maximize revenue; or “down-code” for fear of having a claim denied………Obviously, contradictory business goals bastardize the system into a payer versus provider tug-of-war, with patient care as a potential bargaining chip.

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We are pleased to announce that UnitedHealthcare and Tenet Healthcare have reached agreement on a three-year contract renewal. Therefore, Tenet Healthcare will remain a participating provider with the UnitedHealthcare, Neighborhood Health Partnership and Oxford networks for all commercial fully insured and self-funded products. Members can continue to use Tenet Healthcare facilities on an in-network basis.

The national contract covers both commercial and Medicare plans and applies to 79 Tenet facilities across 14 states: Alabama, California, Florida, Texas, Pennsylvania, South Carolina, Tennessee, North Carolina, Georgia, Missouri, Arizona, Michigan, Illinois and Massachusetts. The agreement includes all Vanguard facilities acquired by Tenet in Texas, Arizona, Michigan, Illinois and Massachusetts.

Our responsibility and commitment to our members and employers is to balance affordability and access. As such, we will continue to advocate on their behalf in future hospital negotiations to ensure that we deliver access to affordable health care services.

Editor’s Note: We will never know what sort of agreement these two made. Neither Tenet nor UnitedHealthcare will publish their reimbursement schedule. Would it violate a plan fiduciary’s duties to be a third party beneficiary of a contract which can’t be seen?

How can an employer shift sick, high cost plan participants into a public exchange? (1). Make company sponsored plan as unattractive as possible and (2). Employer pays for Platinum Plan for the targeted plan member – deemed legal under the Affordable Care Act

Open enrollment for Public Exchange is November 15 through December 31, 2014 – Plan Sponsors must notify all employees of their options each year Read the rest of this entry »

DALLAS — The cost-plus basis under which most public and private health insurance plans are set up is forcing business to discard conventional health insurance plans and adopt self-insured programs at a considerable saving, recent research indicates.

A study by the National Center for Policy Analysis, a privately funded research group in Dallas, concluded: “An insurance system designed to make sure that hospitals cover their costs is inherently adverse to the interests of those who are insured.

See article here - http://articles.chicagotribune.com/1985-10-07/business/8503080343_1_hospital-s-patient-days-health-insurance-cost-of-charity-care

Editor’s Note: If the  cost plus insurance scheme gains too much market share, will costs go up? Hospitals will have no incentive to reduce costs. The higher their costs the more they make under a Cost Plus Insurance plan. This 1985 article warns readers about the fallacy of cost plus driven pricing that still holds true 29 years later.

Solvadi costs $84,000 for a 12 week treatment course. Sovaldi has prompted fears among insurers and state officials that the breakthrough drug, despite its benefits, could explode their budgets. And that has sparked an urgent and highly sensitive debate in Medicaid offices across the country: How far should society go to make sure the poor get the best available treatments?

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