Michigan Bans Most Favored Nations Contracts – Aetna Pursues Lawsuit

“The law just enacted by Michigan addresses the department’s concerns by eliminating MFNs and ensuring that Michigan consumers will benefit from enhanced health insurance competition,” Bill Baer, assistant Attorney General in charge of the Department of Justice’s Antitrust Division, said in an announcement.

We’re pleased that the Michigan legislature and insurance commissioner agree with our position that Blue Cross Blue Shield of Michigan’s practices only served to stifle competition in the insurance market and harm the state’s consumers,” Aetna spokeswoman Cynthia Michener told Michigan Live.

Continue reading Michigan Bans Most Favored Nations Contracts – Aetna Pursues Lawsuit

PPACA Made Simple

By Molly Mulebriar

If you are an employer with 50 or more full-time employees, your options under ObamaCare include (1). Play or (2). Pay. ………………It’s that simple.

To “Play” your plan has to be affordable and meet a minimum value. Affordable means the cost to plan participants is less than 9.5% of the employees gross income. Minimum Value means the plan pays 60% of health care expenses.

To “Pay” comes into play if you refuse to “play ball.” You are subject to sanctions not to exceed $2,000 per full-time employee (minus the first 30).

Which option is cheaper? No one disputes that to Pay is less expensive. Where can you find an affordable plan that meets mininum value for $166 per month?  And, by refusing to “play ball”, an employer doesn’t have to worry about pesky DOL and IRS audits, insurance agents and consultants and the extra expenses involved in the HR department.

Pay-to-Save garners new meaning under PPACA.



Hospitals Acquire Insurers & Insurers Acquire Providers

“One of the nation’s largest not-for-profit hospital operators is building its own insurance arm to sell health plans directly to employers……………………..Rowan anticipates employers will continue to move in the direction of contracting directly with health systems as they seek to reduce their healthcare costs.”

Continue reading Hospitals Acquire Insurers & Insurers Acquire Providers

Advanced Medical Strategies Announces New Fee Schedules

“An inefficient, corrupt health care delivery system creates opportunities which would not exist in a perfect world.  Inflated, arbitrary hospital bills are a gold mine for third party intermediaries“…………………………Making money off imaginary savings is an art form. -Homer G. Farnsworth, M.D.

Continue reading Advanced Medical Strategies Announces New Fee Schedules

Hospital Addresses Chargemaster Rates In Response To Time Magazine Story

Time Magazine Article: A chargemaster of fees for procedures and medications exist for all hospitals and appears inflated and arbitrary, producing unreasonable profits.

(Redacted) Memorial Hospital Response: By law, hospitals are required to maintain a uniform set of charges called the chargemaster. Patients are usually sent a copy of their bill wiich includes the fees for services rendered from the chargmaster. However, almost all insurance companies, as well as Medicare, pay hospitals on a negotiated pre-determined fee schedule. In fact, less than 4% of services provided at (Redacted) Memorial are paid on the basis of the hospital’s chargemaster. It is true that a hospital’s chargemaster has become increasingly irrelevant and is often a source of misinformation for consumers. With the cooperation of insurance companies, we are working on a plan to revise the chargemaster and align iut more closely to the actual fees paid by insurance companies.

Editor’s Note: Hospital response is telling  – “with the cooperation of insurance companies“…..we can fix these problems  – therein lies the problem.

Supreme Court To Hear Rx Drug “Pay For Delay” Case

On Monday, March 25, the Supreme Court will hear arguments concerning the legality under antitrust laws of “pay for delay” or “reverse payment” settlements, in which a brand-name drug manufacturer pays a patent challenger to keep the generic competitor out of the market until an agreed-upon date. A Health Affairs Blog post written last year, when the Supreme Court decided to take the case, FTC v. Watson Pharmaceuticals, provides a great overview of the issues that will be before the Justices on Monday.

Carriers Seek Lower Hospital Rates in Texas

By Molly Mulebriar

Credible data from three reliable sources indicate that Blue Cross, Aetna, United HealthCare, Cigna and Humana are renogiating lower hospital contracts specific to the Texas Exchange due to be up and running by October 1.

All are asking their PPO hospital partners to agree to accept Medicare reimbursement, or less, on insureds through the exchange.

Not all hospitals will agree, setting the stage for narrow networks. Less choice, lower rates will compete with commerical group accounts.

One source said “Cigna is rolling this out in Houston right now, but probably will go to other areas of the state soon. Interestingly, Blue Cross is running TV ads – image type ads – probably to gin up brand awareness in anticipation of people going on the exchange to buy their insurance.”

Once these carriers build their “exchange” network, a published list of hospitals will indicate those willing to accept lower fees than they are now accepting/demanding from their  carrier partners – a prospect listing for Cost Plus plan sponsors?

Another source, a freelance hospital consultant, said “Some of my clients are pissed.  They are not about to accept Medicare rates when they get +200% of Medicare now through managed care contracts.”

With exchange reimbursement rates at Medicare or below, and with many plan sponsors offering employees a minimum value Bronze Plan with provider reimbursement rates somewhere between Medicaid and Medicare fee schedules, market pressure for lower hospital reimbursement schemes will become intense.

Cost Plus at a 12% margin may begin to look good to shell shocked hospital administrators in 2014. (www.costplusinsurance.com)


Mulebriar’s Prediction Proves True – Now Prediction #2 Upcoming

By FRANCISCO E. JIMENEZ Staff Writer repo@sbnewspaper.com

SBCISDThe Salazar Insurance Group (SIG) was selected Tuesday by the San Benito CISD Board of Trustees as the new insurance agents handling the voluntary and major medical plans for the school district, replacing former agent Bob Trevino Insurance, who had served in such capacity for approximately 12 years.

“………..consultant Glenn Hillyer recommended for one agent to handle both the voluntary and major medical plans, which ended up being SIG”

Continue reading Mulebriar’s Prediction Proves True – Now Prediction #2 Upcoming

PPACA – Elementary Insurance Principles Under Stress

“Guaranteeing health coverage to anyone who applies  strips insurance companies of their ability to mitigate moral hazard where individuals wait to purchase insurance when they are sick or in need of medical attention and drop coverage if they recover…… the collapse and redistribution of rate bands and ratios and the limitation of underwriting factors will reshuffle the insurance underwriting deck ………………….”


Editor’s Note: Will property casualty cover be next? Wouldn’t it be cool if you could run down to the State Farm office 24 hours before Hurricane Obama hit your property to get adequate coverage for wind, flood and personal property? Pay for insurance only when you need it!

Ah, but it really is the ChargeMaster…………..

 “If you don’t like paying the Cleveland Clinic Medicare at + 50% they will bill you Medicare + 500% and sue you if you don’t pay. It is not a case that private insurance is happy with Medicare + 50%, they can’t afford Medicare + 500% which is the alternative. If hospitals had reasonable charge masters that more closely reflected what they were actually willing to accept more people would go without PPOs.”

Ben Carson: Defunding ObamaCare is “Fine” – We Must Find A Better Model

“Eighty percent of the encounters between a patient and a healthcare provider could easily be handled by a health savings account, without the need to insinuate a third party or a bureaucracy that sucks out at least a third of the money,” he said. “There are ways we can do this: We can use bridge insurance and catastrophic insurance.”

Controversy Follows Insurance Agents In Rio Grande Valley

By Molly Mulebriar (www.mollymulebriar.org)

The Lower Rio Grande Valley of Texas is unique. First time visitors wonder where the Valley begins and ends, as there are no descernable boundaries.

So too are the traditions of indigenous insurance agents plying their trade among political subdivisions  in deep South Texas  – a well practiced trade with no descernable boundaries, legality aside.

A large number of School districts in the Valley are tax funded cash machines. In other parts ofTexas, over 90% of public school districts have joined the TRS ActiveCare plan, a government run health cooperative that eschews insurance agents. In the Lower Rio Grande Valley however, over 30% of the school districts have elected to remain outside the TRS program.

At least 12 Valley school districts are up for grabs each year. Insurance agents, either acting alone or in packs, know how to count to four. The stakes are high. Commissions range as high as $600,000 per sale, creating taxpayer supported wealth to be shared by various cartels committed to continuing the scheme year after year.

Open records requests can provide interesting reading. One school district in the Upper Valley, for example, hired a new risk manager who soon discovered that the three Agents of Record were earning over $500,000 on their account (A classic case of agents working together in a pack).  When called in for an explanation, the agents quickly posed as deer in the headlights. The district demanded a return of the commissions.

Weslaco Independent School District sued their agent and carrier after realizing contract descrepancies. The district claimed that agent commissions were never disclosed by the agent or carrier – Weslaco-vs-Aetna

The recent La Joya Independent School District insurance controversy has now heated up to include one insurance agent suing another agent and the district for “breach of contract.” http://blog.riskmanagers.us/?p=10920

The San Benito Independent  School District’s insurance turmoil has been well documented and continues as of this writing. (http://blog.riskmanagers.us/?p=9090)  Currently out to bid for Agent of Record as well as third party administrator, controversy swarms around which agent will get the nod (type in San Benito ISD in the search box on this blog).

These examples of insurance agent generated controversies, unfortunately, are not uncommon. http://blog.riskmanagers.us/?p=123……….http://blog.riskmanagers.us/?p=1593

Some districts in the Valley have wised up. The Brownsville Independent School District fired their Agent of Record several years ago and now works directly with their group medical provider. Cameron County and the City of Brownsville have done the same.

Working without an insurance broker is less stressful it seems. Over 90% of Texas school districts do not and cannot employ an Agent  of Record for their TRS ActiveCare plan and seem to be doing fine – no agent inspired controversies to deal with there.

A Texas Attorney General Opinion advises against school districts from hiring an insurance agent of record – Commissioner’s Bulletin #B-0041-07 Many districts have taken note. Others, however, continue to use an agent of record. And it is not at all uncommon for a Valley district to employ both an agent of record and an insurance consultant – figure that one out Uncle Hermann!

Next week the San Benito school district will meet to award Agent of Record and third party administration contracts.



Fund Balance Theory

Assuming economies of scale, if you fund $1 and your claims are $1.23, then change to another managed care plan and fund the same $1 and claims end up at $0.89, is this conclusive evidence that the later managed care plan has better pricing than the former one?

Editor’s Note: The Fund Balance Theory is plausible and effective. Salesmanship is a science.

From A PPO Provider:

I read your “Funding” BCBS piece. Pretty funny the way they try to arrange reality. Smart marketing.

From A TPA:

Nope it just means I denied more claims then usual and sat on some more till after renewal so I could proclaim how well I managed the claims. Next year when it all catches up was an abortion, just look how good I did last year.

From an insurance consultant:

I have not heard of it. However, in looking at your blog, it doesn’t make any sense to me. How can you compare claims year to year like that? Maybe one year claims are up, the next they are down, with nothing to do with the managed care arrangement.  I prefer to have actual discount data, which Blue Cross does not provide.


Mulebriar Reports Anonymous Tip Of The Week

“Use of physician only networks in conjunction with reference based pricing creates a highly successful option for those who,look to offer Cost Plus, Medicare benchmarked, and other non traditional network offering plans. There are several physician only networks now coming forth to offer access. Also ancillary only network. Incorporating these eliminates the potential for balance bill in 85 plus % of claim volume. Leaves a very attractive option for employers who are tired of paying 200% + of Medicare equivalent for claims but concerned with balance billing.”


Aetna, Blue Cross Defy Regulators

Aetna and Blue Shield of California have defied state regulators and will proceed with double-digit rate hikes that were deemed unreasonable.

After the insurers initially proposed to increase their premiums, officials from the California Department of Managed Health Care unsuccessfully tried to negotiate lower rate hikes, reported the Los Angeles Times.

“I am disappointed that after lengthy negotiations, Blue Shield and Aetna were unwilling to bring their proposed health plan increases down to a reasonable level,” DMHC Director Brent Barnhart said Wednesday in a statement.

Aetna and Blue Shield both wanted to increase rates by an average of more than 11 percent. After finding those hikes unreasonable, state officials could only get Aetna to agree to an ever-so slight decrease, cutting its small group premium increase from an average of 10.9 percent to 10.6 percent, according to Payers & Providers.

Blue Shield, however, continued with its originally planned rate hike of 11.8 percent, which took effect March 1 and impacted 27,000 members. Spokesman Steve Shivinsky told the Southern California Public Radio that Blue Shield “worked tirelessly with the Department of Insurance to address all of their questions and concerns,” but “unfortunately, we could not agree.”

But state regulators were able to reach a deal with Anthem Blue Cross, which agreed to reduce its average 15 percent premium increase for 94,000 individual members to 12.5 percent. Anthem also said it would waive completely a separate rate hike for some small employers, amounting to $6 million in savings, the LA Times noted.

Preparing for 2014 – Information Overload

By Molly Mulebriar

Taking advantage of Information Overload is one heck of a way to prove value to clients in a competitive world.

Plan Sponsors, concerned about the effects of ObamaCare, are desperate for guidance. A growing addiction for information driven by fear of punishing government sanctions, provides the perfect storm for aggressive marketers who fuel the addiction.

But Information Overload works against these aggressive marketers. Seminars, webinars, emails, meetings, articles, lawyers, accountants, brokers, carrier reps., consultants and other sources provide a never ending stream of confusing information every day. Stunned and overwhelmed, informational addiction causes plan sponsors to become indecisive, a common sign of overdose. Suicide seems attractive.

RiskManagers.us,  an information overload de-programmer firm  licensed in all fifty states and 231 countries, has developed an intervention strategy that involves a two-path approach for hopelessly addicted victims of Information Overload. ObamaCare’s +2,700 pages plus +34,000 pages of HHS regs are reduced to 9 easily understood pages custom made for each plan sponsor and addresses: What are my options, how much will each cost, and how do I implement them?

Making complex issues simple is not hard to do.

Editor’s Note: Molly Mulebriar is a free lance reporter in Buffalo Breath, Montana –  (www.mollymulebriar.org )



Trickle Up Economics

By Rob Lamberts, M.D.

It’s been a month since I started my new practice.  We are up to nearly 150 patients now, and aside from the cost to renovate my building, our revenue has already surpassed our spending.  The reason this is possible is that a cash-pay practice in which 100% of income is paid up front has an incredibly low overhead.  My admitted ineptitude at financial complexity has forced me to simplify our finances as much as possible.  This means that the accounting is “so simple even a doctor can do it,” which means I don’t need any front-office support staff.  I don’t send out bills because nobody owes me anything.  It’s just me and my nurse, focusing our energy on jury-rigging a computerized record so we can give good care.

Continue reading Trickle Up Economics

Surgical Notes Launches Ambulatory Surgery Center Network

DALLAS, March 7, 2013 /PRNewswire/ — Jeff Blankinship, president of Surgical Notes, the preeminent nationwide provider of transcription, coding and other related information technology services for ambulatory surgery centers (ASCs), has announced the launch of the Surgery Center Network (SCN), a new service that highlights and connects ASCs to the general public, insurance plans, group health and workers’ compensation payers.

Hosted at www.SurgeryCenterNetwork.com, SCN features an established network of ASCs. By accessing the network, users can perform surgery cost comparisons, receive surgery education and outcomes data, and conduct searches to locate and evaluate ASCs in their neighborhood or throughout the country. Surgery centers joining the SCN network receive significant benefits, including a comprehensive listing and direct link to their website, and increased exposure to work-related and cash-paying patients.

“We have designed SCN to be a high-performance, specialty carve-out network that will educate healthcare consumers on what is an ASC and its benefits,” said Blankinship. “Physicians at ASCs perform a diverse and growing range of surgical procedures that are safer, better quality, and more affordable than having these same procedures performed in hospitals and other settings. By providing information about the tremendous value of receiving care in an ASC, SCN will help bring to surgery centers the incremental patient volume they need and desire from private-pay patients, group health third-party administrators, employer groups, and workers’ comp carriers.”

There are significant plans to expand the services provided through SCN. In the coming weeks, the website will see a number of new features added, including a data quality and performance analysis portal developed with leading IT firm Fusion Labs and a property, casualty and medical malpractice rate estimator developed with Gallagher & Associates, the fourth largest risk management company in the world.

“We expect SCN to quickly become the premier direct listing association for ASCs,” adds Blankinship. “It will bring choice to outpatient care, and do so through quality medicine with pricing transparency.”

Another Carrier Touts Self-Funding

Date: March 4, 2013 12:28:24 PM CST
To: undisclosed-recipients:; Subject: BIG NEWS: Assurant locking in renewals until Dec. 2014 and Self Funded now Available!
Last year there was BIG news at Assurant Health with the addition of the Aetna Signature Administrators network and this year there are several changes that will be extremely positive as we move forward in the year.  We will still have the Aetna network which gives your clients access to over a million providers. This year and beyond we will continue to focus on you, The Agent.  Take a look below at these Business Building Enhancements for 2013 from Assurant Health!  1. Beginning with 4/1 effective dates, rates and plans will not come up for renewal until December 2014 ( as long as the group doesn’t make a plan change).  So new groups that are effective April 1,2013, don’t have to worry about a rate increase or making a plan changed until December 2014. 2. We will NOW underwrite using HB 2015 information. As long as we have ALL of the requested information we will rate the case.  If we don’t like the result we can always submit full applications to have a full underwriting review in hope of a better rating. 3. We will be introducing our small group self funded plan to the market in the second quarter! This is a great option for groups concerned with an increase in rates in 2014. Since self funded falls under ERISA guidelines, it is not subject to the same health care reform rules and we can keep rates low (subject to underwriting).  This is currently being offered to group with 15 lives or more. 4. Our ancillary products are now available via an online web link that I can have set up for you on your website. Your clients can go in and buy a great product… accident, cancer, heart/stroke, dental, etc… and you will be paid the commission which starts at a minimum of 35% and goes up to 55% depending on plan choice. 5. We now have a new Occupational Accident Product that includes Employer Liability coverage!!  This is a great alternative to workers compensation coverage, which is easy to quote, easy to issue and easy to sell! It offers 15% first year and renewal compensation. These are just a few of the exciting things we are doing NOW as we continue to be the AGENT Centered company we’ve always been and our commitment to the small group market remains steadfast. If you would like to discuss any of these enhancements please give me a call.  I look forward to writing some business with you this year. [attachment “Proposal Request Form.xls” deleted by Jennifer Ranker/HEALTH/ASSURANT/US]
***Please note new phone number and address****
Jenny Ranker Irwin Small Group Sales Specialist Assurant Health 9990 Richmond Ave, Suite 375 Houston, Texas 77042 T 800.444.7322 ext 5869 F 414-299-1301 jennifer.ranker@assurant.com
Earn up to 70% commission with Assurant Supplement Products.  Register or Log in to assuranthealthsales.com to start selling today!

Will Fee-For-Service Become Obsolete?

National Commission on Physician Payment Reform Recommends Five-Year Transition Plan Away From    Fee-for-Service:
CPR will tell us how far we have to go on March 26th


Dear Colleague:The United States spends an unprecedented $8,000 per person on health care each year – more than any other nation. These costs are unsustainable. One of the single greatest factors driving health care costs is how we pay physicians – and it is fundamentally flawed. We cannot control runaway medical spending without changing how providers are paid. That’s why I formed Catalyst for Payment Reform and why I joined the National Commission on Physician Payment Reform.
A new Report from the Commission released today recommends that we move away from fee-for-service, where doctors are paid for each service they provide. Fee-for-service offers skewed incentives that promote fragmented care and encourage doctors to provide more – and more costly care – regardless of the benefit to patients.
OnTarget03 2
The Commission’s recommendations provide a blueprint for phasing out fee-for-service and transitioning to a more value-oriented, mixed payment model over a 5-year period. The recommendations are well aligned with CPR’s goal of achieving 20 percent of payments tied to value by 2020.On March 26th, Catalyst for Payment Reform will release a first-of-its-kind National Scorecard on Payment Reform, measuring what portion of private sector payments are currently tied to value versus fee-for-service. The Scorecard will give us a sense of how far we have come and how far we have to go to realize our goal. I hope you can join us in person or via webinar.Sincerely,

Suzanne Delbanco

From A Physician:

From a professional perspective, I resent not being paid for the expertise and time that I bring to the table, and that my services are being treated much like an assembly line worker.  Yes, I’m an old fart, and it’s hard for me to change, but that’s how professionals are paid in our society – based on complexity, time spent, and risks of the procedures we do.  Think about lawyers, engineers, architects, etc.  It’s piece work.  Is it efficient?  I would argue that it is.  What is not efficient is the unfricking-believable complex system we have of being reimbursed.  If I see you, send you a bill, and you pay it, it’s no different than any other service that is provided in this country every day.

Keep in mind that the other main method of payment is a flat fee basis (ala HMO full risk model) that transfers the insurance company’s risk to physicians who, by and large, are woefully inadequate at managing that risk – that’s simply not what we do.   And it has been proven to incentivize physicians to under utilize services that are reasonably necessary and appropriate due to financial incentives the other way.  I know insurers and employers like this b/c it cuts down on care and money spent, but it is not what is in the best interests of patients.  The problem began when we let 3rd party payers get between physicians and patients.  I know we’re not going back at this point.  But I’m not ready to concede that FFS is gone.  It will have a place in a substantial part of medical practice in the future – just not for everyone.  People with the financial wherewithal to pay a premium for convenience will continue to seek out those physicians who can offer them that service, and provide good medical care – all for a fee.  It may be a chicken or a pot of beans, but at least I won’t have to deal with fricking BCBS, and all those pointy headed bureaucrats that add nothing to the equation, but suck the life out of the system.

So, this self proclaimed “National Commission” is full of shit.  They can kiss my ass.

I feel better now.

From a TPA:

“The problem began when we let 3rd party payers get between physicians and patients.”

I seem to remember the providers pushing this not the payors. Any time providers want to go back to collecting from members I am reading to go. Won’t miss those 1099 love letters from the IRS for a second.