Archive for September, 2012

Montana Governor Sees Big Savings With New State Clinic – Care Here Gains State Contract

Sunday, September 30th, 2012
“This is a game changer,” said healthcare consultant Mike La Penna, who has been studying the on-site clinic industry for the last decade and recently published a book on the subject. “Other states will be watching this closely.”

Providers Jack Up Prices – Outpatient Hospital Services Worst Offender

Saturday, September 29th, 2012

Healthcare spending, which has continued to climb in recent years, is driven by ever-rising prices charged by providers, not increased utilization of healthcare services, said a new reportfrom the Health Care Cost Institute (HCCI).


Big Firms Overhaul Health Coverage – Self Insured Employers Bailing Out

Saturday, September 29th, 2012

Sears Holdings Corp. and Darden Restaurants Inc. are planning a radical change in the way they provide health benefits to their workers, giving employees a fixed sum of money and allowing them to choose their medical coverage and insurer from an online marketplace, says the Wall Street Journal.



Friday, September 28th, 2012

V-pay is an electronic banking arrangement some third party administrators employ to pay claims. TPA’s are targeted prospects for this lucrative business –

No access fees, no start up fees, no transaction fees are touted as a selling point. But as we know, nothing is ever free. There is a cost of providing services, and someone has to pay for that. Could that be you?

Do TPA’s share in the V-pay revenue stream? If so, how much? 1% of claims, 2%, 3%? If true, a TPA can gain a lucrative, undisclosed revenue stream tied to a percentage of paid claims. For example, if annual claims are $2,000,000, a 1% TPA fee would be $20,000. Not bad money for almost no work.

Editor’s Note: A TPA recently told us they were offered a fee based on a percentage of paid claims to use a vendor’s system to access a V-pay type program. We are in the process of securing documentation of that if it turns out to be true.

From a TPA:

We use two electronic payment services. The first one is through FIS and we pay a few cents per ACH transaction. This was free to providers but we had terrible participation. Very few providers signed up.

Recently we also started using a Vpay/credit card system through PHX which does pay us less than 1%, disclosed to all clients. Wish we did nothing, there is a provider relations element, we get more provider calls then we did before. We have seen far more conversion with hundreds of our providers already accepting this method. No where near the total I would like to see but better then the ACH only option.

It will be a short term industry in my opinion, as soon as more providers sign up for ACH this will go away.

After getting stuck with EDI cost so providers can eliminate their postage cost sticking it back to them was actually one of the selling points.

We have had issues with PPOs, the providers complain to the PPO they aren’t getting their contracted reimbursement.

PAC or AWP? Which is Better In Containing Rx Costs?

Wednesday, September 26th, 2012

Standardized price information is a vital part of the drug purchasing/supply system. Visibility into true acquisition cost is the first step to containing prescription drug costs. Until now, the lack of transparency has made tracking drug acquisition costs all but impossible. But a new price type, Predictive Acquisition Cost (PAC), tracks true acquisition cost more closely than AWP or any other existing or proposed price type.

Prevent over-paying, contain costs, and ultimately provide better health benefits using PAC, the only drug price type that meets all of the industry-defined criteria for a new drug price benchmark:

  1. Transparency
  2. Accessibility
  3. Comprehensiveness
  4. Timeliness
  5. Immunity to Manipulation
  6. Administratively Simple


New Hope For Health Insurance Agents

Wednesday, September 26th, 2012
Benefit adviser representatives were encouraged by recognition of their role in employee benefits delivery as exclusion of commissions from medical loss ratio calculations moved forward last week.

AARP Makes $2.8 Billion Off ObamaCare

Wednesday, September 26th, 2012

Public Opinion Favors ObamaCare

Monday, September 24th, 2012

“……..the public supports Medicare by 95 percent to 3 percent, Social Security by 95 percent to 4 percent, and Medicaid by 92 percent to 6 percent. How can a public that so overwhelmingly supports those far more government-involved programs complain that the ACA “creates too much government involvement”?


Cost Plus / Medicare Benchmarking Gains Market Momentum

Sunday, September 23rd, 2012

United Claim Solutions (UCS), a leading Claims Flow Management and Medical Cost Reduction firm, is offering an aggressive alternative to PPOs; Medicare Plus repricing.

Editor’s Note: To the best of our knowledge, there are six TPA’s operating in the Texas market that offer administration of non-PPO plans, using Medicare pricing as a claim reimbursement benchmark. We have identified  four audit firms that provide backroom support, along with legal indemification services. TPA /Audit pricing varies.


How To Stop Hospitals (& Dr. Hodad) From Killing Us

Sunday, September 23rd, 2012

Stunned, I soon saw just how scary the works of his hands were. His operating skills were hasty and slipshod, and his patients frequently suffered complications. This was a man who simply should not have been allowed to touch patients. But his bedside manner was impeccable (in fact, I try to emulate it to this day). He was charming. Celebrities requested him for operations. His patients worshiped him. When faced with excessive surgery time and extended hospitalizations, they just chalked up their misfortunes to fate.


San Antonio Patient Billed $1,574.34 For A Cold – ER Versus Urgent Care Clinics

Thursday, September 20th, 2012

Reverse Deductible Health Plan – Reference Based Pricing

Wednesday, September 19th, 2012

Excellent article – common sense, prudent business practice, transparency, this approach to financing health care makes sense:

Health Affairs – Sept 2012 – Reference Based Pricing

Editor’s Note: This is nothing more than indemnity insurance.


ObamaCare – Era Of Cost Plus Contracts Has Begun

Friday, September 14th, 2012
The era of guaranteed “cost plus” contracts for huge private health insurers has begun………………..

Lessons From The Abyss

Friday, September 14th, 2012
As a primary-care internist in Seattle for almost 30 years, I’ve loved every day and most of the patients I’ve cared for. I have also watched medical care descend into a deep abyss—one in which quality, access, and cost have all been severely compromised. I think I may know the way back, and I want to share that with you.

DOL To Increase ERISA Audits

Friday, September 14th, 2012

The Employee Retirement Income Security Act is probably not high on HR practitioners’ things to ponder list, but a new push by the Department of Labor should change that.


Insurance Debacle Perks Interest of Local Gumshoe Reporter

Wednesday, September 12th, 2012

San Benito reporterette Healther Cox may be on to something in her recent reporting of the insurance controversy at the San Benito Independent School District. What is driving the insurance mess, and who benefits from the controversy? Are the insurance problems at San Benito ISD systemic to politics in the Valley, or is this an isolated case?

Editor’s Note: “Money affects behavior” – Molly Mulebriar ( )


San Benito ISD Insurance Controversy Continues

Wednesday, September 12th, 2012

Monday, the San Benito CISD Board Trustees voted to approve a proposal on the district’s stop loss insurance with an added provision to speak to ING Employee Benefits and to discuss removing Bob Treviño Insurance as the stop loss agent.

The original proposal was to move the insurance filing from the agent to the school itself, thus saving the district, according to Board Secretary June Aguilera, a total of $104,000 a year.

“I do not understand why we have an agent with a 10 percent commission when we can do it ourselves,” Aguilera said during the meeting. “It makes no sense.”

The decision came after heated debate from Board Member Oscar Medrano, who asked about the liabilities caused by the proposed removal of the agents.

Editor’s Note: Stop loss commissions are 15% with another commission on top of that for marketing expenses. Stop loss is not subject to MLR rules under ObamaCare. The Brownsville Independent School District fired their stop loss broker last year to save hundreds of dollars in stop loss insurance commissions. Brownsville ISD also uses ING as their stop loss carrier. For more information on the San Benito ISD insurance fiasco, type in San Benito ISD in the search box on this site.

Does Blue Cross Charge A Hidden PPO Access Fee? Are Fees Disguised As A Claim?

Tuesday, September 11th, 2012


The plaintiffs are two employers sponsoring self-insured health plans for which Blue Cross Blue Shield of Michigan provided claims administration services and health care provider network access under an Administrative Services Contract. “These cases are about certain fees that Blue Cross allocated to itself as additional administrative compensation…. Section 1106(b)(1) prohibits a fiduciary from ‘deal[ing] with the assets of the plan in his own interest or for his own account.’ This is plainly what Blue Cross did when it unilaterally determined the amount of Disputed Fees to keep as part of its administrative compensation and collected those fees from plan assets. Because Section 1106(b)(1) sets forth ‘an absolute bar against self dealing’ by a fiduciary, Blue Cross is liable.” [Boroughs Corporation v. Blue Cross Blue Shield of Michigan, No.11-12565 (E.D. Mich., Sept. 7, 2012)]

Hospital Contract Offer Brings Ridicule

Monday, September 10th, 2012

Would you agree to this hospital contract reimbursement offer?  Hospital Proposed Fee Schedule

From a Chicago Insurance Consultant: Crap

From a former hospital administrator: Bill, you didnt sign this did you?

From a TPA: No outlier, not bad. But you can do better on both in and out patient. We are getting 135%

From an actuary: Not a bad start. Is this their first offer?

Editor’s Note: If you have an opinion, write


Doctors Craft New Business Model

Sunday, September 9th, 2012

The medical care market is increasingly becoming like the real estate market:  you get what you pay for.  The top complaints from patients regarding  doctor visits typically include long waits for just a few minutes of doctor face  time, impersonal care, lack of appointments and slack follow up.



Direct Contracting With Businesses By Family Physicians

Sunday, September 9th, 2012

Family Physicians have often looked at direct contracting with businesses as a way to bypass the insurance industry’s control of the revenue stream.


Primary Care Direct Model – Neither Insurance Nor Health Plan

Sunday, September 9th, 2012

A new model of health care delivery — direct primary care — could be déjà  vu for some Californians, a retreat to the past when insurance wasn’t a part of  the health care equation. Direct primary care emphasizes prevention and a  reduction in the use of “downstream services” — treating symptoms rather than  the problems themselves.


Employers May Avoid Hiring Smokers As ObamaCare Kicks In

Thursday, September 6th, 2012

“Under a provision of the ACA, smokers can be charged up to 50 percent more than nonsmokers for health insurance. ”


Out-of-Network Scorpion Bite Costs $83,000

Wednesday, September 5th, 2012

PHOENIX (AP) — An Arizona woman is wondering what hurt more: getting stung by a scorpion or seeing her hospital bill after treatment.

Marcie Edmonds says the bill from Chandler Regional Medical Center was more than $83,000. That includes two doses of anti-venom at nearly $40,000 per dose.

The Arizona Republic ( says Edmonds’ insurer has paid more than $57,000 and the suburban Phoenix hospital is asking Edmonds for the balance of about $25,000.

The 52-year-old Ahwatukee (ah-wha-TU’-kee) Foothills resident was stung in June while opening a box of air conditioner filters in her garage.

Edmonds says an emergency room doctor told her about the Mexican anti-venom Anascorp that could quickly relieve her symptoms, but she was never told about the cost.

Chandler Regional says Edmonds’ bill represents the out-of-network costs for her treatment.

Editor’s Note: Produced in Mexico, this drug is administered for much less in that country than in the United States. $100 versus $64,000? Why? Issues Business Statement

Wednesday, September 5th, 2012

Business Statement

The Health Care Dirty Dozen

Wednesday, September 5th, 2012

The U.S. Supreme Court may have upheld most of the Patient Protection and Affordable Care Act, but that won’t fix its many flaws. Here are 12 problems that still riddle the 2,700-page law known as ObamaCare.


Comptroller Warns Of Undisclosed Revenue-Share Agreements By TPA’s

Wednesday, September 5th, 2012

“The side agreements, or “undisclosed revenue-share agreements,” involve money paid to TPAs by companies they contract with, such as managed care providers and medical bill repricing services.The money paid to the TPA is hidden from employers that contract with the TPA for claims management services.”


Department of Labor Toughening Enforcement of Fee Disclosure Rules – Advisor Fined $1.27 Million

Wednesday, September 5th, 2012
“……you cannot use your fiduciary authority to receive an additional fee or to receive compensation from third parties for your own personal account in transactions involving plan assets

ERISA – Is Saving $667,817 Fullfilling A Fiduciary Duty?

Tuesday, September 4th, 2012

ERISA – Employee Retirement Income Security Act of 1974 provides the basis of most employee benefit legislation. This federal legislation allows for and sets guildelines regarding a group’s ability to self-fund their benefits. ERISA governs most group health plans.

A responsible plan fiduciary must engage in an objective process to assess the reasonableness of the fees charged in light of the services provided and a responsible plan fiduciary must act solely in the interest of plan participants and with an undivided loyalty to beneficiaries.

So the question begs – is a plan fullfilling it’s fiduciary duties when accessing  a PPO contract as a third party beneficiary only,  and prohibited from reviewing PPO contracts with specified providers and waiving most if not all audit rights (PPO Letter) ?

Many have found that the answer is probably no.

We recenty reviewed a full year’s worth of hospital claims on a group of approximately 200 employees to determine the relationship between billed charges and paid amounts, and what Medicare  and several selected PPO networks would have allowed.

We reviewed 20 in-patient hospital admissions and 27 out-patient hospital claims. In the aggregate, total billed hospital charges were $2,018,665.

PPO allowed was $1,163,817 for a discount of 42.35%. (The PPO discount was 42.59% in-patient and 41.28% outpatient).

Medicare allowed was $396,988 for a discount of 80%.

The PPO allowed represents 293.16% of Medicare. Inpatient  was 280.05%  and outpatient was 367.65% of Medicare.

Is this Plan engaging in an objective process to assess the reasonableness of medical fees through this evaluation? The answer may be yes. To fullfill his fiduciary duties, the Plan must decide if  paying hospitals  300% – 400%  of Medicare  is reasonable and in the best interests of the plan participants.

Editor’s Note: In lieu of continuing on a PPO plan, this client changed their plan document to reflect hospital reimbursment of 125% of Medicare.  Had they paid 125% of Medicare instead of relying upon purported PPO discounts, they would have saved $667,817 last year,  plus another + $10,000 in PPO access fees.