Meritain Health, an Aetna owned TPA, has developed a program in partnership with HealthCare Blue Book, that provides self-funded plans a viable solution to the high health care costs associated with traditional managed care plans.

Reference based pricing makes sense. For example, why should one employee get paid more than another for an MRI? Medical insurance indemnifies the insured, who in turn pays the provider. Assignment of Benefits is simply a billing function courtesy extended by the provider of medical services.

Reference based pricing solves the unequal medical “pay” problem among plan participants. It incentivizes the insured to check costs, something alien to many who have experienced managed care since the early 1980’s.  Money affects behavior, OPM (other peoples money) drives ever increasing medical inflation and over utilization. Managed Care Plans are being replaced with Managed Money Plans.

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In reaction to rising rates from providers and payers, employers – typically self-insured or self-funded employers – are rejecting participation in insurance companies’ networks.

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By Melanie Evans

“I don’t think hospitals are afraid of insurance companies,” he said in an interview. “I don’t think hospitals are afraid of employers. I think hospitals are afraid of consumers. If consumers care about price, hospitals care about price. If consumers care about quality, hospitals care about quality.”

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http://www.nytimes.com/2013/08/27/health/exploring-salines-secret-costs.html?pagewanted=1&&%2359;_r=0

“In a few years, it will be clear that the ACA will have failed to provide universal coverage and failed to control costs. …..only a single payer program can provide universal coverage, and only a single payer program can control costs. The ACA may be the last bad idea that Americans try; after it fails, we will finally do the right thing: single payer health insurance….”

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As insurers continue launching health plans built around limited networks, some hospitals are fighting back after being excluded from these networks.

Highmark is facing such pushback in a very public forum as Geisinger Health System, based in Danville, Pa., has accused the state’s largest insurer of forcing patients away from its hospitals. Highmark’s Community Blue health plan requires members to pay more for Geisinger’s three hospitals and physician group than other providers, reported the Pittsburgh Tribune-Review.

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The City of McKinney will be changing their PPO network to save the city’s health care fund a projected savings of +$2,000,000. An analysis by city staff and their insurance consultant, based on re-pricing historical claims for the past year, indicates significant savings to be gained by a change in networks.

Cigna was awarded the contract to administer the city’s self-funded plan as well as provide access to the Cigna network of providers.

See finance workshop meeting here – http://mckinney.granicus.com/MediaPlayer.php?view_id=5&clip_id=2131 – Start 53:45 End 1:02:30 (approx. 10 minutes).

Editor’s Note: PPO re-pricing methodologies are seldom accurate. Those who rely on re-pricing strategies embark on a slippery slope indeed.

Previous postings on PPO re-pricing include:  http://blog.riskmanagers.us/?p=5195    http://blog.riskmanagers.us/?p=1832

Editor’s Note: This article reinforces how crazy health care pricing is in the United States. Self-funded employers would be wise to implement a “Cash Plan” rather than continue their failed managed care plan foisted upon them by third party intermediaries who have a financial interest in continuing the biggest financial scam ever devised in modern times. Managed Care is a complete failure with too many financial supporters – http://costplusinsurance.com/articles/Managed%20Care%20Under%20Siege.pdf

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Ancira Auto Group, the largest minority owned San Antonio business with 11 dealerships and over 500 employees has implemented a Cost Plus Insurance health & welfare plan for their employees.

Cost Plus Insurance is a cost effective method of paying health care providers on a transparent, fair and reasonable basis. Traditional insurance plan cost’s can be reduced from 15-40% using reference based pricing, detailed facility audits and direct contracting with willing providers.

For more information visit www.costplusinsurance.com

Last night the city commission of the City of McKinney elected to enter into an administrative agreement with Cigna to administer the city’s self-funded group medical plan – Resolution. Cigna, a major player in the Dallas/Ft. Worth area, was selected through a competitive proposal process, receiving the highest ranking from city staff through a thorough review process – Selection Matrix (1).

Mike Dendy, Woody Waters, Jeff McPeters and Bill Rusteberg may be the biggest looming nightmare of the insurance industry and the hospital billing department. But they don’t see it that way: They see themselves as a solution to a problem.

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Molly Mulebriar, investigative reporterette and forensic auditor is a frequent contributor (and reader) of this blog. Last night Mulebriar called our offices and left the following message:

“Hey guys, read your latest posting on San Benito schools. I watched the video, twice. Something caught my attention which aroused my investigative instincts.

A statement was made about a lawsuit the district filed some years ago against a stop loss carrier, TPA and an MGU. So, I checked online and sure enough I found it. I have read the documents  and there is enough there to write a “As The World Turns” novel which I am certain would be an insurance industry best seller .

Characters involved include two recently convicted felons (one is currently in the hokey serving time), a TPA which documentation shows asked for  a 2% monetary override from the MGU, and other fascinating documentation such as the original stop loss contract showing the policy to be in effect for only 24 hours (a typo the district, the district’s consultant, and the district’s insurance agent failed to notice – no one ever seems to read their contracts!). Expert testimony is interesting too.

One document, a hand written fax transmittal from the TPA the stop loss carrier reads ” The one (stop loss application) I had signed showed 10% but I should have had the 12% commissions one. They elected to use a 15/11 spec & agg contract $75,000 deductible to reduce the rates 10%. The other 2% we would like to go to Companion & then have that reimbursed to MBA as an override. Thanks. Have a new application sent to me.”

One may wonder if the stop loss contract awarded recently by San Benito includes more than a 10% commission. Most policies pay more, usually 15% with the proceeds divided between the broker/consultant and the TPA.

The difference in the allusion portrayed on the video and the actual lawsuit referenced is significant. Most learn from past mistakes, some don’t. San Benito may be the later.

I’m on this and will. publish my report in about a week on www.mollymulebriar.org , unless, of course, you guys want to publish it”

This is an insurance classic:  http://www.youtube.com/watch?v=Vruz7uLd3SQ  Start 20.27 End 39.30

Editor’s Note: See previous posting for more details.

“Today, the district has 100-percent liability if a mistake is made on filing a stop loss claim,” Hillyer said.

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One underwriter  asks  another “How do we know we are doing much better this year than last year?

The second underwriter replies “What was this year is last year plus or minus this year’s change.”

The first underwriter replies “If change is the only constant why do we need to measure it?  You don’t know if something is better if you didn’t know how to measure what it was before.”

Three underwriters on the way to a conference decided to stop along the way and get a hotel room. It was late at night, but they saw in the distance ahead a hotel with a neon light that said “Vacancy.”

The three underwriters asked to rent three rooms, but was told only one was available. “How much is it?”  asked the lead underwriter. “It’s $30” replied the clerk. So each underwriter forked over $10, received the key and went to their room to retire for the night.

But the clerk soon realized that he overcharged the three. Instead of $30, the actual room rate was $25. So he gave his assistant $5 and said “I’ve overcharged for room 34 – return this refund please.”

On the way to room 34 the assistant thought “I will give each of the three men $1 as a refund, and keep the remaining $2 as my tip!”

The men were delighted to receive their refund of $1 each. So each originally spent $10, but received $1 back for a net cost of $9 each. That means the three in total spend $27 for the room. And of course the bell hop kept $2 as his “tip”. But where is the missing dollar?

This is much like a TPA showing a renewal increase of 4% when it is really much more than that. Here is how that works:

Fixed from $250,000 to $250,000 (no change), stop loss from $250,000 to $312,500 (+25%), agg attachment from $1 million to $1 million (no change) = 4% “rate increase”

Fuzzy math? A 25% increase in stop loss premium at a 4%  “renewal” seems reasonable, doesn’t it?   “Sir, you should be happy your getting only a 4% overall rate increase this year. Never mind my 25%  increase in stop loss commissions for an additional $9,375 . To renew, just sign here………… (15% of $312,500 – 15% of $250,000 = $9,375 “commission bonus.”

Caprock Health Plans offers self-funded plan sponsors competitive alternatives to traditional group health insurance plans. Their CapCost program reimburses  providers on a fair and reasonable basis using Medicare pricing benchmarks.

“Most providers accept Medicare reimbursements as the single most common reimbursement they receive. Providers charge commercial Health Plans up to 900% of Medicare. CapCost plans pays reasonable and appropriate amount……………….often resulting in payment at 130% to 160% of Medicare.”

CapCost provides patient advocacy services and legal protection. For more information go to www.caprockhp.com

Editor’s Note: Caprock recently purchased Verity National, a San Antonio TPA. We expect Caprock will become a dominant player in the San Antonio market.

.

..”in February, the Department of Labor published a little-noticed rule delaying the cap until 2015. The delay was described yesterday by Robert Pear in the New York Times.”

Editor’s Note:  Little noticed? And we are just now hearing about this, almost 6 months later? What else have we missed? Thank you Robert Pear and the New York Times for watching out for us.

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By William Rusteberg

Have you ever wondered if your TPA is faithful? The joint bank account you share may provide clues. Where is the money going? Who is Coco? Did you do a background check before the marriage ceremony?

Molly Mulebriar to the rescue! Mulebriar, a forensic auditor and freelance reporterette from Waring, Texas reminded us the other day that a Texas TPA, the subject of an investigative report several years ago, is back in action.  (www.mollymulebriar.org )

Using ObamaCare fear tactics, reports Mulebriar, agents for the TPA are sending out emails to all their old flames warning them that their current partner is an uncaring, disinterested and inept provider unable or unwilling to keep up with ObamaCare rules and regulations. “Honey, you married the wrong guy…..you should have never divorced me…..look at the mess your in now!”

To some, gaining business is all about destroying relationships.

“As fee based insurance consultants, it is our job to keep up with the market on behalf of our clients” Homer G. Farnsworth, M.D. said in an article in Sports Illustrated. “We strive to know who the players are, their methods of operation, who their silent partners are, and how they acquire new customers and retain old ones. That’s why we earn big bucks saving our customers from making costly, and often crippling  mistakes.”

See original story here:   http://blog.riskmanagers.us/?p=3535

Amazes me how many TPAs are crooked.  It’s why one TPA will seldom buy another….it’s almost always an outsider wanting in that buys – Former TPA owner

Senate Majority Leader Harry Reid said the implementation of Obamacare is a step toward an eventual single-payer national healthcare system.

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Aflac District Sales Manager – To qualify for this position you must be able to:

• Set appointments with business owners
• Follow a proven success system
• Build a team by recruiting sales professionals
• Field train your team
• Lead your team through example Successful candidates will be entrepreneurs, energetic, have a desire to work hard and have an expectation to earn an above average income. If this opportunity is something you would like to know more about, I would like to hear from you. Please forward your resume to me with your request for an interview. The Compensation Plan:
•  Advanced commissions
• Stock bonus plan with immediate 100% vesting
• Non-decreasing renewal commissions paid monthly
• Override commission on all your teams’ production
• Unlimited leadership bonus potential
• Recognition awards and trips Our Agents’ Average Earnings:
• Top 25       $1,251,189.29
• Top 50       $943,052.94
• Top 100     $652,711.84
• Top 200     $453,986.47
• Top 500     $283,993.96
• Top 1000   $199,946.09
• Top 2500   $121,773.37
• Top 5000   $78,481.94

I look forward to hearing from you.

Michael A Cutaia

michael_cutaia@us.aflac.com

Aflac Regional Sales Coordinator Houston, TX

Editor’s Note: AFLAC sales will soar under ObamaCare and will explode and thrive under the inevitable one-payer system that will be here sooner than a melting raspa. This position may lay the foundation of a sound economic survival strategy for one whose livelihood currently depends on health insurance brokerage sales, a doomed and soon to be extinct profession.

We received an email this morning from a stop loss carrier we know:

“I left a voicemail on your cell phone a few minutes ago; I’d like to get your advice regarding Cost-Plus vendors……….there seems to be more such vendors popping up so I’m wondering if you have any insight on the new guys.”

This is another indication that Cost Plus, or Referenced Based Pricing is rapidly gaining market share.

www.costplusinsurance.com

Editor’s Note: We have compiled a listing of vendors actively engaged in Cost Plus / Reference Based Pricing – to be published soon on this blog. If your company wishes to be listed, please reply to RiskManager@Riskmanagers.us

By Molly Mulebriar

Having nothing better to do this morning, I went back  through my medical / insurance records just to see how much I ended up spending out of my pocket over the past 12 years.

I have maintained a high deductible plan all those years through Blue Cross. My annual deductible is $10,000, after which the policy pays 75% up to a maximum out-of-pocket limit. I like the plan, and I have always been willing to assume part of the risk.

During this 12 year period, I had occasion to use the policy for a major health condition. Three in-patient hospital stays, a 5 hour surgical procedure, two trips to emergency room treatment, numerous follow-up visits with various specialists, and now check-ups every three months.

My out-of-pocket totaled $52,000. My insurance premium was $60,000, bringing my total cost to $112,000. If I had no insurance at all, my total cost would have been $80,000, or $33,000 less than it cost to have the insurance policy.

It would appear that the insurance company won, and I lost. But the truth is Blue Cross lost money on my policy in this instant. So that must mean I won, the insurance company lost. But wait, I could have saved $33,000 without the policy! So I lost! If I lost, Blue Cross must have won! But Blue Cross lost too! So Who won?

Actually, I have no complaints at all. Insurance is a risk transfer strategy used to indemnify against unexpected, catastrophic losses.  I would have been happy to have had no losses the past 12 years  in exchange for $60,000 in insurance premiums.

http://www.youtube.com/watch?v=airT-m9LcoY

Editor’s Note: Molly Mulebriar is a forensic auditor/investigative reporter from Waring, Texas and a frequent contributor to this blog. www.mollymulebriar.org

“What’s remarkable is that this is remarkable. Why should a business become the subject of news stories simply because it tells people the cost of its services?”

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Americans’ health and well-being would benefit from a complete expansion of Medicare, essentially eliminating the “wasteful” private insurance industry, according to a new study from the Physicians for a National Health Program.

What’s more, expanding Medicare to cover every individual would save billions of dollars each year. Study author Gerald Friedman, an economics professor at the University of Massachusetts, estimated a Medicare-for-all plan could save $592 billion next year.

“Paradoxically, by expanding Medicare to everyone we’d end up saving billions of dollars annually,” Friedman wrote. “We’d be safeguarding Medicare’s fiscal integrity while enhancing the nation’s health for the long term.”

Friedman concluded if HR 676, a bill introduced by Rep. John Conyers Jr. (D-Mich.) that would establish a national single-payer system by expanding Medicare, became law, it would save $476 billion in administrative waste found within the private insurance industry.

“Nearly five decades after its enactment, here’s what we know: Medicare saves money by eliminating all the waste associated with the for-profit insurance industry,” Conyers and Public Citizen President Robert Weissman wrote in a Huffington Post blog post.

The savings would translate to “truly universal coverage, improved benefits and the elimination of premiums, co-payments and deductibles, which are major barriers to people seeking care,” Friedman said.

Plus, Conyers and Weissman added, “Americans would never have to fight with their insurance company ever again.”

To learn more: – here’s the PNHP study (.pdf) – read the Huffington Post blog post

Editor’s Note: See previous posting http://blog.riskmanagers.us/?p=8474