Archive for March, 2012

Employers Direct HealthCare

Friday, March 30th, 2012

“Transforming health care for self-funded employers” –

Editor’s Note: This is exactly where the market is going. Traditional managed care has failed. Self-funded employer groups are seeking more cost effective reimbursement methodologies.

Employers Direct Health Care can be reached in Austin, Texas – (512) 651-5551

Editor’s Note: We have tried to call Employers Direct Health Care. Their phone system is fully automated (no live person to talk with). To date, we have not received a return phone call. If any of our readers are successful in getting through to a live human being at Employers, please let us know as we will record the feat here.  Write


Does Medicare Have An RBRVS Fee Schedule?

Thursday, March 29th, 2012

“Chances are good that one of your health plan contracts uses fee schedule language that refers to a multiple of a resource-based relative value scale (RBRVS). While it’s likely that the parties understood this multiple of the RBRVS to mean a multiple of the payment method used by Medicare, there is no such thing as an “RBRVS fee schedule” in the Medicare program.”

Holy Smoke! An Obama Convert!

Thursday, March 29th, 2012

Blue Shield of California CEO Bruce Bodaken said he believes that the Supreme Court, which just finished hearing arguments about the constitutionality of the healthcare reform law, should uphold the individual mandate. “I’m no lawyer and the
Court will decide whatever they decide,” Bodaken told KQED. “But I do know this–we mandate many things in this society. … I have to send my children to school, at least to a certain age. If you want to drive a car, you have to have auto insurance. I don’t think this is all that different.”


Brownsville Independent School District Seeks Insurance Consultant

Monday, March 26th, 2012


Current Consulting Agreement: BISD Consultant Agreement


Is $2,000 Fine Per Employee Cheaper than Group Health Plan?

Monday, March 26th, 2012

If ObamaCare survives Supreme Court scrutiny, will employers drop their group health plans and pay the fine instead? After all, the fine is much less than the cost of providing health insurance. Or is it?

Verisight has a software application that employers can utilize to see the true cost of dropping group health insurance versus paying a fine under PPACA –

See Business Insurance article –

Pareto Captive Services – An Alternative To Traditional Stop Loss Insurance

Sunday, March 25th, 2012

If you have moved away from managed care and have entered the world of Common Sense and Fiduciary Responsibility you may want to consider a captive in lieu of traditional and expensive stop loss cover –

Editor’s Note: A 9% paid loss ratio on a block of existing non-managed care business should consider a Captive.


Friday, March 23rd, 2012

Turbo-Charging – the act of inflating medical charges to maximize reimbursement by crossing an outlier’s artificial threshold faster than a speeding bullet.

Do All PPO Providers Cost the Same?

Friday, March 23rd, 2012

Do all your PPO providers cost the same? From an insured’s point of view the answer is  yes. After all, going to Dr. Jones costs the same $20 co-pay as going to Dr. Smith.

But self funded plan sponsors know that costs are not the same within a PPO panel. ClearCostHealth helps to bring transparency to the market –

McCarron-Ferguson Obituary – Will Senate Officiate Over Burial?

Friday, March 23rd, 2012

R.I.P. McCarran-Ferguson – We won at last, you bastard!


Battling Excessive Medical Charges – The Assignment of Benefits Nuclear Option

Thursday, March 15th, 2012

Editor’s Note: Previous posting –

Do Personal Injury Attorneys Drive Up Health Care Costs?

Tuesday, March 13th, 2012

Below is a redacted email we received yesterday from a company president that owns a string of MRI clinics. His published rate for an MRI is $295:

I am sure you are already aware but I wanted to pass along some interesting facts.  I recently met with several personal injury attorneys and guess what?  They are not at all interested in working with my company for the following reason:

Our services are not expensive enough.  They told me that they would use me only if I inflated my MRI bill towards $2500.00 like several providers in XXXXXXX  do.  Why?  So those attorneys can commit insurance fraud and when the case is settled, by providing a larger MRI bill (I am sure they have this arrangement with ALL providers), more money is paid to their client.  That means a happy client and a happy attorney as their percentage is larger.

To say the least, wow wee.  There is a company here in XXXXXXXX that caters to this attorneys that company is XXXXX XXXXXX, one of the shadiest providers in the region.  I thought you might find that side of healthcare interesting.  

Webb County Seeks Insurance Consultant

Tuesday, March 13th, 2012

We received word this morning that Webb County is seeking competitive proposals for insurance consultant. The county seat is located in Laredo, Texas.

Aetna Sues Surgery Centers For Over Billing Practices

Tuesday, March 13th, 2012

Aetna is suing seven California surgery centers, claiming they illegally lure customers and overbill up to 2,500 percent more than they pay providers for procedures, reported Bloomberg. The lawsuit, filed in California state court in Santa Clara County, alleges that aetna paid excessive fees to the Bay Area Surgical Management and the six centers it manages, citing a $22,027 bill for shoulder arthroscopy and $119,671 each in fees for 12 lower-back surgeries. Aetna also seeks to stop the centers from waiving coinsurance payments required for out-of-network providers. The “scheme must be promptly declared illegal to preclude its continuation and replication throughout California, and to avoid the potential consequences of irreparably damaging a system of healthcare delivery on which millions of citizens rely,” aetna said in the suit. Article

Looking At The PPO Perspective From All Points of View

Tuesday, March 13th, 2012

    Adam Russo nails it again

Editor’s Note: A visit to Russo’s website is a must for students of self-funded employee welfare programs. No tuition  required and access is free.

Proposed Health Care Reimbursement Model

Saturday, March 10th, 2012

Stealing ideas to build a better mousetrap is a good strategy for challenged innovators. Such is the endeavor assumed here – Proposed Health Care Reimbursement Model.

From a midwest insurance consultant:



 From a PBM:

Sticking to my very small area of knowledge, I have a couple of comments on the prescription piece.  The 50% copay should save a lot of employer expense on prescriptions but could run up the medical.  The obvious example would be Type 1 diabetes, where 50% of the cost of insulin and supplies could very possibly be out of the reach of patients and thus could result in dialysis, amputation, transplantation, etc.  However, if you start making exceptions based on disease states it becomes difficult to know where to draw the line.


 When we look at excluding “Specialty Drugs” we would need to really clarify the definition of  specialty drugs.  A generally accepted definition is  drugs utilized by a very limited number of patients for specific disease states that are associated with a very high cost.  That definition works fine when defining a copay tier but may be difficult to defend when someone is denied coverage of a drug.


Edinburg Independent School District Seeks Insurance Consultant

Friday, March 9th, 2012

The Edinburg Consolidated Independent School District is seeking an Insurance Consultant through a competitive RFP process. Proposal deadline is March 28, 2012. A complete set of specifications may be downloaded from the ECISD website at or contact Amaro Tijerina at

HealthGram Brings Transparency To Health Care Costs

Friday, March 9th, 2012

HealthGram is bringing transparency to health care. Utilizing  their tools, a self funded group can managed costs, engage employees in the health care transaction, and save money. Case rate negotiation on precertified services allow providers to compete for business. Insureds win, employer wins, and providers are paid a fair and reasonable rate.

See fee schedule here:

For more information, contact David McChechern 800-446-5439

Editor’s Note: See Steerage On Steroids

Romney Supports Universal Health Care

Thursday, March 8th, 2012


Blue Cross Posts Record Earnings of $1 Billion in Net Income

Thursday, March 8th, 2012

Several Blue Cross Blue Shield plans have reported their 2011 earnings, with the largest reporting more than $1 billion in net income.


High Health Care Costs: It’s All In the Pricing, Pendejo!

Wednesday, March 7th, 2012

“There is a simple reason health care in the United States costs more than it does anywhere else: The prices are higher.”


Mexico Tourist Tip: Don’t Drive At Night

Tuesday, March 6th, 2012

From Mexico Insurance Online:

I mentioned in the last newsletter we were starting to see a positive growth trend in our Mexico insurance products. Did it continue in February? I am pleased to say that it did. February was up roughly 10% over last year. We have you, our agency partners, to thank for that. So, thank you.

As you know, March is typically a great month for the Mexico insurance industry. Spring break attracts thousands of people to all over Mexico. This year will be the same. However, there are always bumps in the road. Some of you may have seen the recent travel warning addressing some of the issues in Mexico, originally it was one of the strongest warnings we have seen. However, the warning was quickly clarified in an interview with the Associated Press: “The federal government is not telling people to stay out of Mexico. That is not the purpose of this travel alert,” said Chad Cummins the U.S. consul in Nogales, Sonora.

The Federal Government went on to further clarify, stating that people should use caution. What is meant by “caution?” I am not sure, but I would like to share a tip that I received two years ago when visiting with the Consul General in Hermosillo. While I don’t remember the exact words he used, Mr. Breidenstine said that if American’s would quit driving at night, most of the issues he sees would be taken care of.

While this may not solve every issue, the counsel is wise. For more information about the clarification, please visit the following site:

Brownsville, Texas: Tale of A Two Hospital Town

Friday, March 2nd, 2012

Brownsville, Texas is located on the southern most tip of Texas bordering Mexico  22 miles from the Gulf of Mexico. The population exceeds 200,000 during the day, slightly less at night. 

The  two main  hospitals in town, Valley Baptist and Valley Regional Hospital compete  for patients . Part of the strategy of hospitals  to attract patients is to join various PPO networks that promise steeragy, yet  in the case of Brownsville both hospitals belong to essentially the same networks.  As a result, PPO steerage is not a factor in Brownsville.

Brownsville Independent School District  (BISD) is the town’s largest employer. The BISD group health plan spends over $45 million annually towards employee health care, most of which is spent locally.

A look at claim untilization of the Brownsville Independent School District over the past several years is intriguing. Prior to Valley Baptist purchasing Brownsville Medical Center (BMC), it appears that BISD utilization at BMC was 2 to 1 over Valley Regional Hospital, i.e, most BISD hospital care was at BMC. Then, after Valley Baptist purchased BMC, the utilization between the two hospitals apparently did an 180 degree turn, favoring Valley Regional Hospitald 2 to 1 over Valley Baptist.

What caused the added steerage to Valley Regional Hospital? With both hospitals on the same PPO network used by the BISD there is no incentive on the part of BISD plan participants to choose one hospital over the other since the in-network plan benefits are the exactly the same  at either hospital.

Since PPO steerage is not a factor, could the source of steerage be local physicians who direct care? And if that is the case, why has steerage changed between the main two local hospitals? Better care and equipment at one hospital? Or financial incentives?

Editor’s Note: To our knowledge, the BISD has never studied nor quantified their health care costs at either hospital accurately.  Rather, the BISD has relied on expert consultants, audit firms, and PPO representatives for advice as to claim costs. Unfortunately, these experts have not benchmarked claim costs at either hospital using Medicare/Medicaid benchmarking. Instead all have relied on claim “discount” methodologies which utilizes proprietary, arbitrary and inflated billed charges against illusory discounts.


From a Dallas reader:

Bill, 8,000 employees, $40,000,000 they could buy their own hospital and make money of the PPO!

Editor: Yes, forget about on-site medical clinics, they could actually build their own employee hospital with that kind of money.


McAllen, Texas: The Town Medicare Built

Friday, March 2nd, 2012

Undercover video exposes Medicare fraud in McAllen, Texas:

McAllen has been the focus of other media outlets in the past:

Editor’s Note: Who says you cant make money on Medicare?

Texas Governor Rules Against HEB – Profits Deemed “Excessive”

Thursday, March 1st, 2012

Texas governor Rick Perry issued an executive order this morning denying HEB’s request to raise the price of a gallon of milk. HEB’s rate hike request  would have increased the grocery giant’s profit margin to a net 3%.

In a statement released this morning, Governor Perry, who switched party affiliation from Republican to Democrat recently, noted  “HEB’s unfair rate hike request would have hurt struggling fellow Texans who are trying to make ends meet. This has been another example of Big Grocery Store Chains taking advantage of our citizens.”

Governor Perry approved a profit margin of 1%. Texas Chapter of ACORN  President Sarah Palin applauded the order. “Rick Perry deserves credit for stopping greedy big business from gouging our voter base with higher cost food to be charged through the Lone Star “free food” program funded by people who actually work for a living,”

HEB spokesman, Duane Chapman, responded “We cannot survive financially on a 1% profit margin. We are considering a move to Communist China where capitalism thrives on supply and demand. We hope our customers will follow us.”

See similar article below