Archive for February, 2012

Texas Doctor Bilks Medicare/Medicaid for $375,000,000

Wednesday, February 29th, 2012

In what is believed to be the biggest dollar amount scheme committed by a single doctor, Jacques Roy, who owned Medistat Group Associates in DeSoto, Texas, and six others have been indicted on charges of bilking Medicare and Medicaid out of $375 million in phony or unnecessary home visits between January 2006 and November 2011.

According to the indictment, Medistat certified more patients than any other medical practice in the United States during the five-year period the alleged fraud occurred. The 11,000 approvals amount to a whopping 500 times the number of home-health certifications than the average doctor.

The small, four-doctor practice allegedly found its patients by paying home health agency recruiters $50 per beneficiary they found by canvassing a Dallas homeless shelter and by offering free healthcare or food stamps to anyone who signed up and offered their Medicare number. Roy would then “make home visits to that beneficiary, provide unnecessary medical services and order unnecessary durable medical equipment for that beneficiary,” the indictment alleged. “Medistat would then bill Medicare for those visits and services.”

According to HHS, the department did not have the tools to detect the type of anomaly that spurred investigation until recently. “We’re now able to use those data analytic tools in ways–in 2012 and 2011–that no, we really could not have done in years past,” the department’s Inspector General, Dan Levinson, told The Washington Post.

Following the Roy investigation, HHS suspended payments totaling $2.3 million per month to 78 home healthcare agencies in Texas that are suspected of billing irregularities, The Wall Street Journal reported.

Roy has been charged with nine counts of healthcare fraud and one count of conspiracy to commit healthcare fraud. He could face 100 years in prison and a fine of at least $18.5 million, if convicted.

Coming To A Strip Mall Near You, A Health Insurance Store

Wednesday, February 29th, 2012

Soon millions of people will shop for health insurance on their own.

The health care overhaul requires nearly everyone to have health insurance, after all, and employer coverage has been slowly, steadily declining.

One way that some health insurers are angling to appeal to millions of new insurance shoppers by opening retail stores where people can buy a policy, check on an existing claim, maybe even take a class in healthy cooking or yoga. Highmark in Pennsylvania and Blue Cross and Blue Shield of Florida are the two insurers that have made the biggest commitment to retail, each with several stores statewide.

Does this make online insurance sellers anxious that insurers may bigfoot their customers and cut into their bottom line? Not at all.

“The better the experience that people have shopping for health insurance, that’s good,” says Sam Gibbs, president of the government systems business for “These retail outlets could potentially help all these people to learn about buying insurance.”

The way Gibbs sees it, people just aren’t yet comfortable buying a health plan the way they buy other consumer products, and retail stores might help move the needle and make it seem more routine.

Back in 2005, Costco, for instance, tested health insurance sales with individual policies in Southern California. Now the members-only retailer offers high-deductible plans from Aetna in eight states.

Besides, people are often looking for different experiences when they shop online versus at a store. At retail stores they can ask questions and get lots of one-on-one attention. But when they’re ready to buy, they may go online where prices may be slightly cheaper, he says.

In any case, there’s going to be plenty of business to go around. “They’ll be able to enroll a certain number of people [in retail stores], but they’re not going to be able to handle the mass volume [of insurance shoppers],” says Gibbs.

How to Control Group Health Insurance Costs

Wednesday, February 29th, 2012

Avid readers of this blog know the real answer to the anguished question CFO’s often ask when their insurance broker brings in the bad news, i.e, renewal , “Why are my costs going up again!”

It is not an aging population, new and expensive technological advances, cost shifting from government plans that drive medical trend – that is the agreed explanation that brokers, insurance companies and medical providers conspire to convey to ignorant consumers. 

Medical costs are going up because consumers let them and insurance companies and third party administrators are more than happy to assist. Insurance companies dont care what medical costs are – they simply pass 100% of the cost to the consumer, taking a cut as premium dollars are funneled through the system.  The higher the costs, the more third party intermediaries make in lucrative fees.

Since we have studied health care costs for the past four years, learning as much as we can and talking to as many people as we can, we have learned the truth about what drives health care costs. No doubt about our findings – volumes of documents back up the research. Insider information gleaned from talkative industry representatives including retired hospital administrators, industry lawyers and former managed care executives have laid bare a vast conspiracy.

Attempts by this writer, and two others of like mind, to publish articles exposing this vast and pervasive conspiracy in national publications have failed. Advertisers hold sway over editorial decisions it seems.

How to control group health insurance costs?   

If you want to know the truth about health care costs and how several San Antonio employers have cut their medical costs by 40% and more without reducing benefits (Bill Miller Forbes), you may consider attending our upcoming seminar in San Antonio, Texas in April. No tuition fee will be charged, admission is free. You will learn secrets insiders dont want you to know.  You will become armed with information and strategies that will change forever your perception of our current health care system.

Contact  or visit

“Once we rid ourselves of traditional thinking we can get on with creating the future” – James Bertrand

Negotiate Health Care Costs Upfront – Steerage on Steroids?

Tuesday, February 28th, 2012

Imagine a health plan that requires you to pre-authorize non-emergency claims such as a colonoscopy. Imagine area providers bidding on your medical care. If you can get the colonoscopy for $1,000 instead of $3,000, which one would you choose?

We have found several companies that will negotiate claims for self funded health plans on this basis. This is information on one of those companies –


Commander In Chief Trashes TriCare – Exempts Unionized Defense Workers

Tuesday, February 28th, 2012

The Obama administration’s proposed defense budget calls for military families and retirees to pay sharply more for their healthcare, while leaving unionized civilian defense workers’ benefits untouched.


Catholic Bishops Vow to Fight Coercive HHS Mandate

Monday, February 27th, 2012

Congressman Nails ObamaCare

Sunday, February 26th, 2012

Less Choice, Lower Cost

Sunday, February 26th, 2012

Do all PPO contracted providers have the same contract? The answer is “NO”.

Molly Mulebriar reports that her cousin, insured by one of the largest health insurance companies in Texas has first hand proof. Mulebriar has an EOB for a specific outpatient CAT Scan for services provided at two different outpatient clinics. Both facilities are within five miles of each other. For the same exact procedure, the PPO contracted price variers by over $1,500.

When asked, a local sales representative for this carrier owned PPO network stated “Bill, all our network providers have agreed to the same pricing. We dont pay one provider more than another provider. We use standard contracts.”

Mulebriar disagrees. “Bill, I have copies of EOB’s that show otherwise. ”   (This blog will publish those EOB’s soon).

Same procedure, same exact billing coding, same PPO network, vastly different pricing.

We are now seeing carriers and PPO networks touting new “mini-PPO networks. They are simply carving out those providers who have agreed to lower pricing and calling the network any number of names, such as Platinum Network, etc. We call it the SBPPO Networks ( – (


How Does Your Medical Costs Compare to Medicare Pricing?

Wednesday, February 22nd, 2012

Read the section Costs Compared to Medicare Prices –

The Company That Solved Health Care

Tuesday, February 21st, 2012

“How Serigraph dramatically reduced skyrocketing costs while providing better care, and how every company can do the same” , by John Tornius Jr.

Great book on how one company solved ever increasing health care costs.

The Truth About Assignment Of Benefits – Ultimate Balance Billing Protection?

Monday, February 20th, 2012

“When a patient offers their right to obtain benefits from their insurance, that assignment of benefits is in and of itself consideration in full, exchanged for services and treatment.  An assignment of benefits is thus not a form of access to consideration, and rather, is the consideration itself.  One might ask why a medical service provider would ever choose to accept an assignment of benefits in lieu of the right to bill a patient for 100%.  ”

This is an excellent article and a must read:

Editor’s Note: This is a powerful weapon in the hands of the consumer. Could this be the “secret ingredient” and essential element of Non-PPO plans?

Brownsville ISD Interviews Risk Manager Finalists

Friday, February 17th, 2012

Molly Mulebriar reports that the Brownsville Independent School District is close to hiring a risk manager. The selection process has narrowed  the field  to two candidates.

Mulebriar’s sources indicate that interviews were held today with the final selection  said to be as soon as next week. Both finalists offer the district a background familiar to many in the insurance industry. 

Glenn Hillyer and Adan Perez are the top two finalists, according to Mulebriar.

Hillyer’s employment record includes sales representative for Health Administrative Services, a Houston based TPA  followed by employment in sales with AAG (HealthSmart). He was the HealthSmart sales representative that landed the Brownsville ISD account several years ago. Subsequent employment includes a brief stint as sales representative for Valley Baptist Health Plans in Harlingen, and Mainstreet Insurance Group, an insurance brokerage firm in Houston.

Adan Perez’s past employment includes risk manager for several political subdivisions including Weslaco ISD and Hidalgo County.

The BISD risk manager position includes a  salary range between $69,151.00 to $99,580.00.




Beximco – Fast Growth at Cheap Prices Spur Investor Opportunity

Friday, February 17th, 2012

Branded drugs worth $150 billion in global annual sales are coming off patent in the next few years. Beximco will play a role in cranking out knocks offs of those blockbuster drugs, and will make them available at prices consumers in developing markets can afford.


“Free” Medical Debt Reduction Services

Friday, February 17th, 2012

Free? Really? For those consumers to fearful and timid to negotiate their  own medical costs, this may be a “free” but expensive  avenue to take in getting health care debt relief:

In the alternative,  a quick five month wait and a quicker five minute telephone call, many consumers gain Premium Account Status  and Life Long Membership in the Fifty Percent Club. Membership is free and inexpensive:

Editor’s Note: provides claim negotiation for clients at no charge. Experience shows that a five minute phone call can reduce medical debt  as much as 50% or more, time and again. Of course, there are parameters within which one must operate to succeed.


685,000,000 Join Health Care Cooperative for $7 Per Year Premium

Thursday, February 16th, 2012

China overhauled their health care system as a result of the failure and collapse of the old state-funded health system which existed before China’s program of economic reforms in the 1980s.


Public Backs Obama on Insurance Mandate

Wednesday, February 15th, 2012

It’s not even close: By a lopsided margin of 66 percent to 26 percent, Americans support President Barack Obama’s proposal to require private health insurance plans to cover the full cost of birth control for women, according to a new CBS/New York Times public opinion poll.

Sales Tips For Pharmacy Reps – Turning Doctors Into Salesmen

Wednesday, February 15th, 2012

Group health plans attempt to control prescription costs by placing higher co-pays on expensive brand name drugs. The theory is to encourage lower cost generic drug utilization.

Pharmacy drug manufacturers are fighting back by buying down the co-pay at the point of sale.


Texas Department of Insurance To HHS – You Lie!

Sunday, February 12th, 2012

Below is a Texas Department of Insurance press release:

In denying Texas’ application, HHS stated that it took into account each carrier’s MLR and profitability in making its decision and asserted that few issuers are reasonably likely to exit the individual market in Texas. 

The Department’s application clearly showed otherwise. 

Of the 34 Texas carriers subject to the law, 23 will pay rebates based on 2010 data; at the 80 percent MLR threshold, these rebates will absorb the net underwriting profit for the entire individual market.

HHS’ decision does not allow sufficient time for carriers to adjust their operating models, nor does it contemplate the effects on small and mid-level carriers that lack the resources and administrative economies of scale to compete in the individual market under PPACA. 

A reasonable, responsible phased-in approach would still have afforded rebates to Texas consumers without risking disruption, dislocation and withdrawal of carriers in the individual market.  The Department will continue to work to ensure the availability of high-quality, high-value health insurance to this important underserved segment of the market. 

For more information contact:

Editor’s Note: Health insurance companies are in business to earn a profit. Government dictates on profit margins a company may earn is un-American.

Texas Pharmacists Brace For Government Issued Haircut

Sunday, February 12th, 2012
“……………independent pharmacy owners worry that dropping fees for filling Medicaid prescriptions from $6.30 for each prescription to $1.35 each will cause small companies like his to close some of their drugstores and other pharmacies, especially in poorer neighborhoods, to completely shut down.”

ObamaCare Compromises on Contraception

Friday, February 10th, 2012

You dont have to pay for contraception under your group health insurance program if it is against your religion, however your insurance company must.

Editor’s Note: This is the damnest thing we have witnessed since another President defined what the definition of “is” is.

Vertox Wins Approval For Kalydeco To Treat Cystic Fibrosis

Friday, February 10th, 2012

Drug costs keep going up. Here is one that could cost your group insurance plan up to $300,000 per year for one patient taking Kalydeco.

 “Kalydeco will cost $294,000 a year per patient, Nancy Wysenski, executive vice president and chief commercial officer at Vertex, said on a conference call today with analysts and media.”

Actually, it is not really true that this drug will cost that much in the eyes of the consumer. From the patient’s perspective, it will only cost about $30 a month, a typical Rx copay under most group health plans. So, John or Susan, the new employee working in the mail room, earning a paltry $18,000 per year, could in reality be costing the employer hundreds of thousands of dollars a year in benefits.


The Right Kind of Healthcare Reform

Friday, February 10th, 2012


The Right Kind of Healthcare Reform

Over the past year, The Obama administration’s push for health insurance reform has used insurance companies as the scapegoat. Insurance companies have been part of the problem for sure. They have stymied competition by “cutting deals with providers” to pay exorbitant charges for services. Collusion between insurance companies and hospitals was highlighted in a Boston Globe investigative article a short time ago. It works like this: The CEO of Blue Cross Blue Shield got together with the CEO of Partners Healthcare and agreed to pay the hospital a lot more money for services if the hospital would agree to provide Blue Cross Blue Shield with its “best discounts” off these inflated charges. This verbal agreement resulted in Blue Cross Blue Shield essentially eliminating, or at least putting at a great disadvantage, its competitors.

It is my belief that this type of arrangement has gone on all around the U.S., resulting in minimal competition and higher prices for medical care. As a result, see the example below of a recent medical claim from a hospital in Lubbock, Texas. Due to HIPPA regulations, I will not disclose the patient’s name or medical condition.

This inpatient stay was for a total of 52 days. The average length of stay nationwide for this condition is 29 days. Total billed charges were $1,016,000. Texas’ largest Third Party Administrator’s PPO discount of 40% brought the claim down to $610,000. Sounds like a great deal, right? Not so.

This claim was sent out to a company called NCN for further review. NCN can determine the hospital’s true cost of providing services through the hospital’s own numbers, in reports they provide to Medicare. NCN determined that this stay cost the hospital $134,600. The amount that Medicare would have reimbursed would have been $132,562. The U.S. average cost based on 14,688 studied cases would have been $64,864.

In summary, this Lubbock Texas hospital marked up the cost of care from seven to fifteen times what it should have been. Our Congress should focus on this type of abuse by having hospitals and other providers post their prices for all services in advance to afford consumers and insurers to shop for the best value. The price for services should not be different for consumers or insurers. One competitive price for all patients would greatly reduce the cost of healthcare for all without the government spending one tax dollar. Couple this with malpractice reform and combine with a health savings account and we have a model that works and breaks up the insurance company/medical provider monopoly. This is a solution we cannot afford to go without.

We can solve the health care crisis immediately, with a few changes and no increase in taxes:

  1. Medical providers should post their best price and third party “outcomes data” for all major procedures, for all customers to see, so consumers can shop for the best Price/quality deal.
  2. Medical mal-practice reform is needed to stop frivolous law suits which increase the cost of care.
  3. Employer plans should include provisions that limit payments for medical procedures to no more than the “best deal” the plan can negotiate with a quality provider located within a 250 mile radius of the employer. The cost of transportation should be covered by the plan to make travel easy for plan participants. Plan participants can then take the “best deal” price and go wherever they want for services, recognizing they may be required to pay more if the local hospital or provider will not meet the “best price” at a highly rated hospital..
  4. HRA’s and HAS’s should be a requirement of all employer sponsored plans so employees will watch for good deals on smaller claims.

I encourage you to offer true competition based medical reform without spending any more tax dollars. Providers need to be required to post their best price for all to see with no special deals on pricing for inefficient insurance companies. With your support, we can make healthcare more affordable for all which should be the ultimate goal of reform.

William McKelvey

After college, I worked for what is now CIGNA and later State Mutual Life as a group sales representative marketing Group Medical and other products in the New England area.  In 1975 I established Medical Claims Service, Inc, a third party administration company, in Boston.  I started AMF Risk Management Solutions in 1979. AMF is a risk bearing Managing General Underwriter for American Fidelity Assurance Company of Oklahoma City, Oklahoma. Medical Claims Service was sold to Excellus BCBS of New York in 2006, so I could devote more time to my Reinsurance Business.  My background in both reinsurance and claims administration has allowed me to put together some turnkey innovative solutions for self funded employer group medical plans.  Our Aggregate Wrap and U.S Health Options plans are good examples.  Please see our website for more details.  Thanks for your interest.  Bill

Insurers Increasingly Basing Out-Of-Network Reimbursements On Medicare Rates

Thursday, February 9th, 2012

USA Today /Kaiser Health News (2/9, Appleby) discusses “a new twist” to the cost of out-of-network healthcare: “a growing number of insurers have changed the way they calculate reimbursements to shift more of the expense to patients. Now, instead of paying a percentage of the ‘usual and customary’ charges from physicians and other providers, insurers are basing reimbursements on a percentage of what Medicare pays, which can be much less.” Insurers argue that “the new approach offers greater consistency and thwarts efforts to game the system,” citing cases “‘where 98% of the physicians would charge $5,000, but some outlier would decide to charge $50,000,’ which would drive up the average.”


Data Mining

Tuesday, February 7th, 2012

Ever wonder how your health claims compare to the market? How do you know you are paying a fair price? Or do you look at your claim runs with the assurance your TPA and managed care company are giving you the best in health care finances? Have you ever checked? Why not? It might be informative if you did.

Take for example a case we looked at today. All in-patient hospital claims for the past 12 months were reviewed  through a comparative analysis using multiple PPO contracts, Medicare and Medicaid benchmark data.

How do the claims look? How much would have Medicare or Medicaid paid? What did a sample of PPO contracts allow? How did the PPO allowable compare to benchmarks used? Could the client have done better than actual paid claims? If so, how much could have been saved?This exercise should be par for the course for ERISA plans. It is much like interviewing departing passengers from a flight; Sir, how much was your ticket? As is true with health care, not all passengers pay the same. But, would it not be useful to have this information? It might be helpful in  knowing what prices to pay for the best deal.

Editor’s Note: Joining the 50% Club is always an option  –

RPN of California – Home Of The $295 MRI

Sunday, February 5th, 2012

How do you make a profit charging only $295 for an MRI when we see much higher rates charged in the market? Could elimination of third party margins have anything to do with this competitive pricing model?

Pricing transparency in medical costs is being talked about all over the country. But only a few like Robert Cloutier of RPN of California and others  including  Jeanne at Clear Health Costs , Brian Klepper of WeCare, Jeff McPeters of GPA and others are doing something about it.

Editor’s Note: See also on the Clear Health Cost website.


Physician Owned Third Party Administrator – New Business Opportunity Under ObamaCare?

Friday, February 3rd, 2012

“TPAs already exist and are making money in your market. Unfortunately, you’re not getting any of the revenue for those services.”


Brownsville ISD To Select Risk Manager – A Molly Mulebriar Report

Friday, February 3rd, 2012

Molly Mulebriar, frequent contributor to this blog, and her God Father,  Don Pedro,  reports that the Brownsville Independent School District may be on the verge of hiring a mystery applicant for the new risk manager position recently approved by the Board of Trustees.

The position of risk manager entails overseeing a major budget item.

Mulebriar reports “Several of my sources are concerned that a poor, unqualified and inexperienced risk manager can do more harm than good, potentially subjecting  the district to unnessary liabilities. ”

Qualifications outlined in the BISD Risk Manager criteria include at least 10 years of risk management and/or insurance experience. It appears that in lieu of risk management experience, applicants with ten years or more of experience in the insurance industry may qualify for the BISD risk manager position.

Mulebriar reports that in Texas, to engage in the business of insurance an individual must be appropriately licensed. “In this case, it would appear the district will require the successful applicant to provide proof of proper licensiing. for a continuous ten year period.” 

Don Pedro cautions that a careful background check on potential applicants should be a part of the selection process. Potential conflicts of interest need to be considered, as well as past employment history and potential prior vendor relationships with the district.  Don Pedro cautions that failure to do so may result in embarrasment to the Board of Trustees and their supporters.

Editor’s Note: Molly Mulbriar can be contacted at

San Benito Independent School District Seeks RFP For On Site Clinic

Thursday, February 2nd, 2012

Editor’s Note: A quick calculation using the RFP data supplied (above link) gives a ball park figure to beat of $33.74 PEPM to run the clinic, all inclusive. How does this compare to the market? We have seen a PEPM as high as $65 and as low as $13.

Obama To Catholic Church: Your Health Plan Must Cover Contraception

Thursday, February 2nd, 2012

New York’s Catholic archbishop, Timothy Dolan pushed back hard against Obama’s commandment, saying, “never before has the federal government forced individuals and organizations to go out into the marketplace and buy a product that violates their conscience.”


The End Of Health Insurance Companies

Wednesday, February 1st, 2012
Opinionator – A Gathering of Opinion From Around the Web
January 30, 2012, 9:00 pm
The End of Health Insurance Companies EZEKIEL J. EMANUELand JEFFREY B. LIEBMANEzekiel J. Emanuel
Ezekiel J. Emanuelon health policy and other topics.
Here’s a bold prediction for the new year. By 2020, the American health insurance industry will be extinct. Insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients.

Physician Extinction

Wednesday, February 1st, 2012

Doctor Diaries: Physician Extinction

by par8o

Guest post, authored by Charles Yowell, MD

We are witnessing “Physician Extinction”.

I saw it in person last night, when I was invited to our hospital’s “Physician Leadership University” event. Mind you, there were 60+ Hospital Administrators and “Vice Presidents,” and only 30+ physicians at this “Physician’s” meeting. Admin support always fears for their jobs if not seen supporting the propaganda at these free dinners (it was finger food, I had to eat again later when I got home). Here was the message, as given to us by a non-practicing MD/MBA from Palo Alto California: (I paraphrase) “The economy is so bad that we have to change the way Hospitals and Physicians ALIGN themselves to get the most VALUE offered to the patient.”

The theme of the night was “ALIGN” the physician with the hospital, under the auspices of creating “VALUE” for the patient. All just thinly veiled propaganda to say that “WE, the Hospital, OWN YOU doctors and WE NEED you to use our services exclusively, refer within the system exclusively, and take a salary cut or we will all lose.” Unsurprisingly, the Hospital announced a salary freeze and no cost of living increases for ALL employees, excepts senior Administrators. This is blatant and wanton manipulation. Thankfully, I have already found a new job, in a new town. But others can not leave this town where they have practiced for 10-20 years. Tonight’s presentation felt like I was at a “vacation rental time share pitch”, where the physicians are being sold crap and being told it is gold, “the fantastic future” and the way “it’s gotta be.” Well, not one practicing MD in that room was buying it.

This must be the moment just before a group realizes that extinction is in the air. You can not move. Can not panic. Can not feel. You are vastly outnumbered and unprepared to defend yourselves. You just have that sense of impending doom, of being on the endangered species list, facing mass and final extinction.

I witnessed the Normalcy Bias playing out in a room of defenseless, well meaning, well trained, great docs. Physicians have about a 5-10 year life left in America. After that we are extinct. Nurses, Pharmacists, and Administrators will be all that is left to run a hospital. The doctor is too expensive and is the largest single monthly expenditure for the budget every month (my fiance is a Hospital Accountant). All I can say is, it made me sick to my stomach to have the Non-Physicians tell us how to be physicians, when to take calls and where to send our patients, according to their “managed care protocols”.

It’s over for us.

Unless Par8o saves the day.

If you are a physician and would like to share your experiences from the front lines, email us at to be featured on our blog.