Archive for October 24th, 2010

Billion Dollar Health Care System Bends to Pressure

Sunday, October 24th, 2010

A Texas hospital system has blinked. The stare down began last month when the hospital system unilaterally decided to refuse to recognized as health insurance the group health policies in place with over 50 Texas employers.

The policies in question are plans that reimburse hospitals their cost plus a 12% profit margin. This was not enough for this hospital system. They are listed by Forbes recently as in the top 25 most profitable hospitals systems in the United States.

A cat-scan on an outpatient basis at one of their facilities was charged to one of the employer groups for over $12,000. Cost as reported to CMS by this same hospital showed that the actual cost was less than $300. The plan paid the hospital Medicare plus 20% , or about $900.  This triggered the decision by this billion dollar health care giant to demand cash up front at full billed charges for those patients insured under a cost-plus plan.

Employers became incensed. The threat of publicity, lawsuits, legislative intervention may have influenced the hospital system to finally agree to a meeting (after refusing or ignoring the request for a meeting for weeks prior).

A competing hospital system got wind of the controversey and is currently in negotiations with cost-plus groups to access their facilities based on a cost that is fair, reasonable, and transparent.

Reporters are aware, sensing a sensational expose that will surely increase circulation. The public may be outraged to learn the truth.

A meeting is scheduled soon between the hospital system and the employers whose plans have been blacklisted as “not insurance.”

Editor’s Note: We have never seen employers become so engaged with the health care delivery system as in this case. They are unanimous  in their anger at the perceived blackmail threat and heavy handed tactics employed by this health care “monster.” Some are so angry they want to call a press conference sooner than later, and file lawsuits. Calmer minds rule the day for now.

City of Lubbock Reaches No Deal

Sunday, October 24th, 2010

By Elliott Blackburn Avalanche-Journal

Lubbock’s City Council chose Saturday to let a more than two-year legal battle run a little longer.

The council will consider a settlement on countersuits to a 2008 defamation case filed by a former third-party health insurance administrator next week after meeting for 80 minutes behind closed doors and then taking no action on the matter at a special afternoon meeting.

“Being that settlement negotiations are still ongoing, settlement litigation is pending, I would not recommend any action today,” City Attorney Sam Medina advised in open session before Mayor Tom Martin adjourned the meeting.

The long-running fight with ICON Benefits Administrators and American Administrative Group — companies under an umbrella once called the Parker Group — could instead end Thursday. The council will include the issue in its agenda for a Thursday morning meeting.

Medina would not comment on how far the two parties were from agreement or whether he believed there would be a settlement next week.

“That’s an almost impossible question to answer,” he said.

A listed media representative for the benefits group, now called HealthSmart, has not returned phone calls from The Avalanche-Journal.

A jury trial in Dallas had been set for early November.

ICON and later AAG provided health insurance administration from 2004 to 2006 until questions about improper fees and commissions led the city to drop the companies.

City officials alleged the companies kept rebate money from a mail-in pharmacy provider and attached fees to prescriptions the pharmacy filled, charged the full cost for procedures that had a negotiated discount and charged unapproved commissions for certain coverage.

AAG management argued Lubbock improperly moved the business to a new provider, Blue Cross Blue Shield, and that city administrators defamed the companies in the process.

City Manager Lee Ann Dumbauld called the group “crooks, thieves and liars” and warned they could not be trusted, damaging their business, the companies alleged in a lawsuit.

The companies dropped the defamation lawsuits against Dumbauld, former Mayor David Miller and two other employees last spring, but the countersuits remained as the city sought money to cover legal expenses and an audit.

A separate arbitration process over the financial questions raised in the fallout was not a part of the settlement talks, Medina said.

“Two totally separate cases,” he said.

Companies Examine Health Care Law’s Effect on Employee Coverage

Sunday, October 24th, 2010

Published October 24, 2010

| Associated Press

(Reuters Photo)


(Reuters Photo)

WASHINGTON — The new health care law wasn’t supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.

But last week a leading manufacturer told workers their costs will jump partly because of the law. Also, a Democratic governor laid out a scheme for employers to get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it’s too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes.

“The economics of dropping existing coverage is about to become very attractive to many employers, both public and private,” said Gov. Phil Bredesen, D-Tenn.

That’s just not going to happen, White House officials say.

“The absolute certainty about the Affordable Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage,” said Jason Furman, an economic adviser to President Obama.

But at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

“I don’t think you are going to hear anybody publicly say ‘We’ve made a decision to drop insurance,’ ” said Paul Keckley, executive director of the Deloitte Center for Health Solutions. “What we are hearing in our meetings is, ‘We don’t want to be the first one to drop benefits, but we would be the fast second.’ We are hearing that a lot.” Deloitte is a major accounting and consulting firm.

Employer health benefits have been a middle-class mainstay since World War II, when companies were encouraged to offer health insurance instead of pay raises. About 150 million workers and family members are now covered.

When lawmakers debated the legislation, the nonpartisan Congressional Budget Office projected it would only have minimal impact on employer plans.