Archive for July 20th, 2010

Tuesday, July 20th, 2010
Tue, July 20, 2010 4:30:17 PM
Humana Dental ASO Plans – special pricing options for California
From:
Humana Dental <humana@humana-email2.com>  

Add to Contacts

To: riskmanager@sbcglobal.net  

When you partner with Humana as your plan administrator, you’ll work with a company that has more than 30 years of dental benefits experience. With Humana, you’ll get:
• A recognized service leader
• One of the largest dental PPO networks
• More than 130,000 dentist locations nationwide
• Significant in-network discounts
Plus, you’ll have direct influence in the design and benefit offerings of your dental plan.
We now offer our California brokers a premier ASO dental
plan that includes:
Savings — Your employees will benefit from our network discounts, which average 34 percent in California. Service guarantees — Humana often agrees to service standards. We’ll place a portion of the administrative fees at risk.
Network strength — Our dental PPO network is one of the largest in California, with more than 27,000 dentist locations. Nearly 99 percent of dentists who join our network stay in our network. Friendly, personal service — You and your employees can expect friendly, prompt, and accurate answers to your questions. We also can assist non-English-speaking members.
Provider recruitment — We commit to a unique recruiting campaign targeting the dentists your employees use. We encourage our members to nominate dentists through our dental referral card that can be used during open enrollment, our website, or toll-free number. Education — Your employees have access to information on the importance of regular dental care They can go to MyDentalIQ.com and take a free dental health assessment. They also can visit Humana.com to read BrushUp, an online publication that provides tips on how to maintain good dental health.
Claims processing — We audit and pay most dental claims in 14 days with 99.8 percent accuracy. We also provide detailed reports of claim payments.    
         
 
Editor’s Note: You will begin to see carriers re-positioning their offerings to self-funded platforms. Fully insured business offerings for health insurance will evaporate with MLC requirements to kick in in 2011.

TPA Refuses to Disclose Underwriter Notes (Continued)

Tuesday, July 20th, 2010

Molly Mulebriar reports that further investigation indicates that the TPA owns the brokerage for which the group’s insurance agent works for.

“Bill, found documentation that the TPA incorporated XXXXXX Insurance Agency in June 2001. M M works for the agency and is the group’s insurance agent. So what you have here is a TPA that owns the insurance agency that placed the business, and also has a profit/loss marketing agreement with the stop loss carrier which currently insures the group. A definite conflict of interest.”

“I called the three MGU’s that the SEC 10k report shows are the carrier’s agents, and none show record of insuring the group. I then called the carrier direct and left a message. I am awaiting their return phone call. At this point, I am not asserting that there is no stop loss in place, and I certainly hope that is not the case. I will get down to the bottom of this and report back to you by week end.”

“Thanks for the check – I need a new dress and this will help.”

BELOW IS THE ORIGINAL POST

We recently aquired a new client in Texas that is self-funded. Our task is to evaluate the current plan and make recommendations.

The current TPA is Texas based, but relatively unknown. The stop loss contract in force is between the employer and the carrier but was brokered by the TPA several years ago.

In reviewing the existing program, we asked for the carrier’s underwriter notes from the TPA. The TPA refused to release the underwriter notes, as well as refused to disclose the name and telephone number of the underwriter handling this case. We found this suspicious and unprecedented. Certainly, the employer has a right to this information. The TPA was, after all, not a party to the stop loss contract. They simply acted as an insurance broker in placing the cover.

Usually, when a TPA, carrier or insurance agent refuses to give you information proprietary to you, then you are probably paying too much. At least that has been our experience gleaned over the past 35 years in the business.

So, we wondered, what was the TPA hiding?

We compared the Stop Loss Contract rates to the rates being billed by the TPA on behalf of the stop loss carrier. They did not match. We reviewed the loss runs produced by the TPA and noticed that the contract type on the worksheets indicated, in tiny print, that the specific contract was an aggregating specific. So we went back to the actual Stop Loss Contract and noticed that under Options, the box next to the Aggregating Specific Option was not marked, but next to it in the margin it was, or so it seemed.  Then, we discovered that on the past four renewals, the Stop Loss Contract was renewed on a 12/12 basis each year. That is unusual and could put the employer at risk every renewal (but save the stop loss carrier added exposure therefore better chance for profits).

So, we employed Molly Mulebriar, investigative reporterette, to check into this. Her initial report is below:

“Bill, did some quick checking this morning over a bloody mary at Star Bucks. I checked the Security & Exchange Commission (SEC) 10k report for XXXXXXXX XXXXXXXXX XXXXXXX (name of stop loss carrier) through 12/31/2009 and found that there is a marketing agreement between them and XXXXXXXXX XXXXXX XXXXXX (TPA) that expires 12/31/2014. Among other things, in exchange for $2.5 million the carrier shares underwriting profits and losses with the TPA of 35%, with bonus compensation payable annually based on a formula of profit/loss ratio of the entire block of business generated by the TPA.”

“I also found out that in 2007 the TPA got into a tift with a mutual insurance company, a nasty lawsuit was filed, and the carrier pulled all their business from the TPA and sued for repayment of a promissory note totaling about $4 million. So it seems, according to the SEC 10 k report referenced above, that the TPA moved their block of businss to the new carrier and negotiated a profit and loss sharing arrangement to “sweeten the offer.”

“I also found that about the same year, the Texas Department of Insurance issued a Commissioners Order against the TPA including a fine of over $150,000. Seems there was some sort of scheme in play to stiff the Texas Risk Pool to the tune of over $12 million by siphoning off poor risks within an employer group to the small group fully insured market.”

“This is amazing stuff. Will continue to investigate. When are you going to pay me for my time and efforts on this?”

Editor’s Note: We hesitated to put this story on our blog since there is definitly more to learn here. But to molify Molly, we felt the urgency of reporting this to our three regular readers. More to follow, with actual name of the TPA and a copy of the Commissioners Orders to be posted. Regarding Mulebriar’s quest for compensation – she is on a retainer, rather sizable. We have to continuously remind her of that.