At www.freeerisa.com you can find a wealth of information through filed 5500 forms. For example, we checked on a San Antonio group of 450 employees and found that during a one year period they paid 28 agents a commission on voluntary products through one insurance company. This is an example of how some insurance companies distribute their product through various marketing levels. For example, there may be a State Manager, Regional Manager, District Manager, Area Manager, Sr. Sales Leader, Agent and Broker all paid in accordance to a commission hierarchy system. The money flows from the top down. In this case, this well known voluntary benefits carrier paid 28 agents a total of $47,883. The higest paid agent received $26,280 and the lowest paid agent received $2.

We have several clients who have decided to take control of their health care spending by reimbursing hospitals on a cost-plus basis rather than rely on PPO discounts off billed charges.

Here are a few recent examples:

                                Billed Charges                             Plan Payment

1.                             $59,248.72                                       $11,034.84

2.                             $ 7,682.20                                        $     865.02

3.                             $25,245.63                                       $  6,864.73

4.                           $443,076.26                                      $116,086.39

Under ERISA a Plan Fiduciary must pay only what is fair and reasonable. Fiduciary liability is transfered to a third party who handles claim appeals and provides defense in Federal Court. An insurance policy indemifies the employer.    

hospital-net-income

Political subdivisons may benefit from an Employee Benefit Trust – Click here and go to page 8 – http://www.kerrville.org/DocumentView.asp?DID=3377 See Chapter 222.002 Texas Insurance Code here – http://law.onecle.com/texas/insurance/222.002.00.html

A small but growing niche in health care delivery is becoming popular with both physicians and their patients.  Physicians charge patients an annual fee of $1,500 and reduce their patient load down to about 600, which is significantly less than normal. No insurance company to mess with, no claims to file, less overhead. So, for about $900,000 per year, the physician can pay his staff, spend more time with his patients and make a good profit.  These physicians provide same day appointments, house calls, extensive physicals and diagnostic testing and more consultation about topics such as diet and exercise.

In our continuing struggle to bring transparency to medical care pricing, we have yet another hospital claim that was incurred in August that reveals the level of price gouging we find in almost all hospital claims. Total billed charges were approximately $109,000. The hospital graciously offered to discount this by 7%, and would settle for $101,000 if we agreed to pay quickly. We repriced this claim under Medicare 2008 RVRBS and found that Medicare would have paid about $18,000 on this claim.  The billed charges are 575% of Medicare. 

We hope our client is not going to “play ball” with this hospital, as the bill is not fair and reasonable in our opinion.

As reported to CMS, this hospital’s cost for this admission was $27,862. Therefore, the hospital will make a profit of about $73,000 for this 2 week hospital admission.   

Since the employer is a political subdivision, and ultimately the taxpayers will foot this bill, we believe that if the hospital does not come to a reasonable and fair price, the taxpayers should be informed.