ObamaCare May Lure Employers To Exchanges in 2017


Beginning in 2017, employers will have the option, if the Obamacare exchanges in their respective states allow it, of having their workers obtain coverage through such an exchange…..Across the board, at every level, average exchange premiums are lower than this year’s average premiums for employer-sponsored coverage………….Employers today are frustrated by the cost and hassle of providing health insurance, so they are looking for an affordable alternative to keep their employees healthy…….

Continue reading ObamaCare May Lure Employers To Exchanges in 2017

Selling Fear & Cost Plus Insurance


By William Rusteberg

The most powerful selling tool is fear. It motivates buyers to act quickly and decisively without basis of reasoned consideration.  Depending on the level of fear a seasoned salesman can gin up during his close,  fees to be charged and eagerly paid by the victim are directly and proportionally related. Higher fear levels bring higher fees.

As Sherlock Holms famously opined many years ago, “It is a capital mistake to theorize before one has data.” Such is the case with Cost Plus Insurance.

Moving away from managed care contracts by paying medical providers directly involves the risk of balance billing. For example, if a hospital bills $100,000 based on their charge master rates and Cost Plus Insurance reimburses only $15,000, it is expected that the hospital would balance bill the patient (not the plan) for the difference, or $85,000. Excellent fodder for a nice  lawsuit, right?

Not so. There are many consumer protections in the case of balance billing that if employed carefully, lawfully and properly, mitigates to a very large degree any chance of a lawsuit or dinged credit. ERISA, Assignment of Benefits, Fair Credit & Reporting Act and Plan Document language  are just a few tools to be employed to afford consumer protection in the case of balance billing by medical providers.

Most Cost Plus Insurance plans these days do not provide legal liability protection since many believe it is not needed. One TPA in Ohio doesn’t  feel the need for legal liability protection and  has not had a lawsuit in over 15 years in managing Cost Plus Insurance for his clients. Another nationally known TPA in Kansas markets their Cost Plus Insurance plan nationally without legal liability indemnity cover and guarantees no balance billing. A Texas based TPA is marketing a similar plan with the same results.

Yet some TPA’s are selling Cost Plus Insurance based on the fear of lawsuits and charging outrageous fees to provide “protection.”  An example are fees tied to a percentage of billed charges which can run as high as 12% or more. Since 40-45% of a group’s medical spend are facility charges, applying a 12% fee to inflated billed charges can equate to hundreds of thousands of dollars per year for a 350 life case.  These fees are shared by several parties involved in the administration of the plan, including the broker / consultant.

What is the potential liability for Joe Sixpack’s $100,000 hospital bill? In the example above, the hospital believes Joe owes the balance between what Cost Plus Insurance paid and what the hospital charged, or $85,000. So the liability to Joe is $85,000. There is no liability to the plan. Since no one ever pays 100% of billed charges, and since case law may apply, it is highly likely that the hospital will accept significantly less than $85,000 to settle Joe’s bill. In fact much less than paying enormous fees for balance bill protection. Hospitals don’t like lawsuits for a variety of reasons, including perceived poor publicity and public disclosure of pricing practices.

To an employer committed to self-funding his employee benefit plan, it makes perfect economic sense to  self-fund  balance billing risk too. The claim dollar savings of Cost Plus Insurance provide the funds to handle balance billing issues, whether a plan sponsor shares those savings in advance  in the form of fees paid to a third party intermediary for indemnification or sets those monies aside for future loss.

If an employer is hell-bent on having legal liability indemnity coverage, a quick check for surplus lines cover will indicate very low premium levels. Such coverage is much like aggregate stop loss insurance – low risk equals low cost. Many plan sponsors do not purchase aggregate stop loss insurance.

More employers are treating their employees like adults  these days. This stance will grow under ACA as Americans are required to seek health insurance or face punishment. Health insurance has now become an individual responsibility and not so much the employer’s moral responsibility. Under a Reference Based Pricing Model, which is where Cost Plus Insurance is heading in the marketplace, plan sponsors will view balance billing as the sole responsibility of the insured.

See http://blog.riskmanagers.us/?p=11943 . Visit www.referencebasedpricing.us for Cost Plus Insurance information and articles


United Claims Solutions


Medicare Plus Repricing

UCS has developed an innovative solution that offers an alternative to PPOs by applying Medicare Plus reimbursement to facility, physician and ancillary providers in lieu of traditional PPO discounts. The result is significantly reduced plan costs and lower stop-loss premiums. 

  • We offer a Hybrid model that utilizes PPOs for physician services and Medicare Plus pricing for facility charges
  • Medicare Plus can also be used to discount out-of-network medical bills
  • Programs range from basic repricing services, to full patient advocacy and legal intervention

For more information, visit www.unitedclaimsolutions.com

Editor’s Note:  Cost Plus, Medicare Based Reimbursement, Reference Based Pricing models are quickly replacing PPO networks in the United States. In response, PPO networks are offering “narrow networks” comprised of providers who charge less than others in their overall network.

Under ACA, the only way for TPA’s and carriers can compete is through provider reimbursement strategies. Since health plans are now limited to Bronze, Silver and Gold plans, little can be done to compete based on benefits alone. Cost shifting, in the traditional sense, is forever changed, especially for grandfathered plans.

More are beginning to understand that health care costs are a direct function of what we agree to pay.

Physician Office Posts Cash Prices – Prices for Small, Medium & Large


Talty takes direct payment from her patients, then turns those who have insurance over to an independent biller who processes their claims and has the insurance company send reimbursements to the policy-holders.

“I just got tired of running to the mailbox every day, wondering if I was going to be able to run my business,” Talty said in explaining why she decided to stop dealing directly with insurance companies.

“We have no rights anymore,” she said of doctors and their relationship with insurance companies. “We can’t practice medicine. They have us by the tail.”

Continue reading Physician Office Posts Cash Prices – Prices for Small, Medium & Large

Medicare For All – Will HR 676 Rise Again in 2014?


By William Rusteberg

ObamaCare, a well planned doomed-to-fail endeavor, may lead to a single payer system faster than a melting raspa.

Rising  from the dead, HR 676 may become a modern day reenactment of  Easter Sunday as it is fast becoming a beacon of hope for proponents of a single payer health care system in the United States –  Each reported failure of ObamaCare, along with  lack of Republican alternatives, adds irreversible momentum to single payer health care.


In 1966 when Medicare passed into law, few Republicans supported the enactment. “Socialized medicine” was decried as the “the beginning of the end of the Great American health care system.” Now you can’t find a single Republican against Medicare.

The same will hold true for the Medicare-for-all movement. How can one be against Medicare (for-all) when supporting Medicare? You are either for it or against it.

Plan sponsors may help fuel the shift to Medicare-for-all by enacting the same benefits and reimbursement rates as Medicare for their employees. The coverage is simple; In-patient hospital admissions subject to a $1,200 benefit period deductible, then 100%  and physician office visits a simple 20% co-payment.

Since ACA has yet to  address medical caregiver reimbursement rates, paying Medicare allowable should be just fine. If a government health plan (Medicare) pays $72 for an office visit for example, then a plan sponsor’s matching payment for the same service should be a no brainer. What is good for government beneficiaries should be good for all.

That’s called equality.

Continue reading Medicare For All – Will HR 676 Rise Again in 2014?

Brownsville ISD Lawsuit Alleges Insurance Purchasing Irregularities

browns“On or about July 20, 2011, insurance agents from the community and BISD employees publicly complained to the Board about the selection of insurance vendors and the process used to select them. They voiced their concerns that the selection and awarding contracts to vendors were not handled properly and fairly….”

“District Policy CH(Local) and (Legal) require purchases or services $25,000 or more to require Board approval before a transaction may take place. Escobedo and Peña voted against conducting an investigation of the Employee Benefits Department that paid $188,000.00 to an insurance company and another payment of $78,000.00 to a local insurance agent, in order to protect the administrator(s) that violated this policy.”


Hospital Chain Said to Scheme To Inflate Bills

By and

Jacqueline Meyers says she was fired by a contractor after she refused to fire emergency room doctors who admitted fewer patients. Anne McQuary for The New York Times

“While the lawsuits against H.M.A. provide a stark look at the pressure being put on doctors and hospital executives to emphasize profits over their patients, similar accusations are being raised at other hospital and medical groups as health care in the United States undergoes sweeping changes….”

Editor’s Note: This article was sent to us from a fellow Health Care Revolutionary who noted: This is huge and continues to make our case.   Emergency room admissions is the tip of the iceberg.  Hospitals overcharge – PPOs create the opacity that allows the bills to be paid unscrutinized – Health insurers and administrators pay the bills and benefit from the illusion of discounting… to the detriment of employer sponsored plans  An employers only chance to protect themselves is through a professional audit and review service and eventually elimination of the contra-value PPO Networks

Brownsville ISD Lawsuit Points To Alleged Insurance Purchasing Irregularities


“……in July 2011 insurance agents and BISD employees complained to the board about the process used to select insurance vendors……….They voiced their concerns that the selection and awarding contracts to vendors were not handled properly and fairly because Escobedo had a personal relationship with Joe Salazar, an insurance agent, and after the passing of Johnny Cavazos, he had managed to gain control over BISD’s insurance contracts. Escobedo also had close ties with Kent Whittemore, and Whittemore helped select the insurance companies, all of which went to Joe Salazar.” On several occasions afterward, Longoria saw Whittemore dining with Salazar, the suit says. Whittemore said he has retained counsel to fight the allegations, which he said are without merit…………………”

Continue reading Brownsville ISD Lawsuit Points To Alleged Insurance Purchasing Irregularities

Sextant Self Funding Introduces Reference Based Pricing Underwriting Model


MyHealthGuide Source:  Sextant Self Funding, 1/15/2014,  www.ssfllc.com

Sextant Self Funding, a full service Medical Stop Loss Managing General Underwriter, recognized the need to provide alternatives to the traditional PPO based stop loss underwriting model and has met the market’s needs with a Referenced Based Pricing (RBP) underwriting methodology.

Continue reading Sextant Self Funding Introduces Reference Based Pricing Underwriting Model

Blue Cross Loses State Employee Plan – Will TRS ActiveCare Be Next?

trsTRS has put out for bid the position of ActiveCare plan administrator. Blue Cross Blue Shield has administered the plan since its inception……….Administration of the state employee plan was recently moved from Blue Cross Blue Shield to United Healthcare, so TCTA will monitor this process to see if a similar change could be in the works for ActiveCare………..The TRS Board is to make their recommendation in February 2014………….

Since claims drive costs, we would suppose that the carrier with the lowest pricing agreements with Texas medical caregivers will win the  TRS contract this year.

Continue reading Blue Cross Loses State Employee Plan – Will TRS ActiveCare Be Next?

Can Hospitals Survive ObamaCare On Operating Margins Of 2 – 3% ?


Market Trend? – “Premium Only” Policies

The economic condition of U.S. hospitals is more tenuous than private sector businesses. Citi Healthcare Investment Banking Group reports that hospital operating margins are 2 to 3.8%. These margins are very low when compared to target profits for commercial enterprises.”

Continue reading Can Hospitals Survive ObamaCare On Operating Margins Of 2 – 3% ?

Allied National’s Cost Plus Health Insurance Takes Off

alliedBy William Rusteberg

Allied National, one of the nation’s oldest and most experienced third party administrator, in partnership with Munich Re (A.M. Best A+ Superior) is gaining wide acceptance in the brokerage community with their Provider Freedom group health plans.

The Provider Freedom Plan allows participants to seek medical care from any provider of choice. Facilities are reimbursed on a cost plus basis while medical professionals are paid based on usual and customary fees. Groups as few as five employee lives or as many as 600 employee lives may apply for the program.

Fees and fixed costs are some of the lowest we have seen in the industry.

Allied National representatives are conducting broker seminars, experiencing record high attendance among health insurance professionals. A recent seminar in South Texas attracted 56 attendees, while another attracted over 70.

Utilizing a self-funded platform, the Provider Freedom plan provides solid stop loss protection including no lasers, extended benefit periods, immediate advancement, as well as other attractive features.

Allied National guarantees no balance billing as all claims are settled based on plan parameters with stop loss cover support.

For more information visit www.alliednational.com or contact Daniel Meylan, National Sales Director – dmeylan@alliednational.com and Randy Wehner – rwehner@alliednational.com

Why Carriers Support ObamaCare: Corporate Welfare

“……. insurance companies won’t bear the cost of their own losses—at least not more than about a quarter of them.  The other three-quarters will be borne by American taxpayers…..80% of individual costs between $45,000 and $250,000 are paid by the government (taxpayer)…”

See previous posts: http://blog.riskmanagers.us/?p=12875  and http://blog.riskmanagers.us/?p=13336

Continue reading Why Carriers Support ObamaCare: Corporate Welfare

Wellness Company May Provide Services To Brownsville Independent School District – Board Votes Tuesday

The Brownsville Independent School District will consider awarding a contract to a San Antonio company at their next board meeting. Van Ackeren Consulting lLC, DBA Personalized Prevention, provides employers a comprehensive on-site wellness program designed to improve employee health and lower costs.

Continue reading Wellness Company May Provide Services To Brownsville Independent School District – Board Votes Tuesday

Presumptive Medicaid Eligibility – Will Presumptive ObamaCare Eligibility Be Next?


Presumptive ObamaCare Eligibility  may be next – hospitals enrolling patients at point of service. Imagine lying in the ER, signing up for insurance while filing a claim then suffering the indignation of having to pay a co-pay.  – Homer G. Farnsworth, M.D.

Your crazy! I’m not signing up unless the hospital pays the premium and the co-pays! Let the insurance company pay my claim! – Mary Freeloader

Continue reading Presumptive Medicaid Eligibility – Will Presumptive ObamaCare Eligibility Be Next?

Business Savior – Self Insurance & Shifting Sick Workers To Exchanges


With health care costs skyrocketing, many business owners are now investigating whether it would be beneficial to pay chronically ill workers to leave the company health plan and purchase insurance through the exchanges created by Obamacare. The key is the self-insurance marketplace……………..As the American public has begun to discover, the Affordable Care Act contains various exemptions, surprises, and omissions, and one of its major dispensations is for companies that “self-insure,” meaning they give employees a stipend to purchase their own insurance rather than purchase insurance for those employees.”

See previous postings: Employers Consider Shifting Sickest Workers To Exchanges Through Loophole and ObamaRe Debuts In 2014 – The Ultimate Stop Loss Insurance Policy

Continue reading Business Savior – Self Insurance & Shifting Sick Workers To Exchanges

Los CUBA’s

cuba1Always nice to meet new friends. Today I met two very interesting health care revolutionaries.  I was told that in Florida, the BUCA’s are referred to as CUBA’s. Very appropriate considering that there is little, or no competitive market-driven enterprise  in Cuba – rather state mandated price controls (PPO contracts) managed by a few in power (BUCA’s) with no accountability or market recourse to speak of.

CUBA will forever replace BUCA  in insurance vernacular………………..A powerful and defining moment in the continuing evolution of health care terminology…………

The Delay in the Play or Pay Mandate Could Put Employers in a Precarious Situation in 2015

pissed Happy Employee Masks Feelings

Many employers were relieved to hear the Play or Pay Mandate had been delayed until 2015.  Employers happily put off worrying about some of the ACA’s provisions for one more year.  However, few employers have thought of the employee relations nightmare the delay created for certain employers.

Employers Consider Shifting Sickest Workers To Exchanges Through Loophole


There were “anti-dumping” provisions in the Affordable Care Act that prohibited employers from pushing sick employees into high-risk insurance pools……. But those provisions were not carried through into the rules governing exchange coverage. “It’s almost like they forgot to include that clause on the exchange side of the equation“……………….

Continue reading Employers Consider Shifting Sickest Workers To Exchanges Through Loophole

What You Need To Know About Provider Networks Under ACA

By   – January 6, 2014 •


“PPACA started to phase in limits on how insurers could use annual benefits limits, medical underwriting and plan benefits choices to hold rates down. Insurers reacted by creating narrow, ultra-low-cost networks; narrow networks made up of providers with high quality scores (LOW FEES); and big networks (High Fees) aimed at the Cadillac plan market.”

Editor’s Note: Translation – ACA limits insurers to pre-defined “metal” plans that leave no room for cost shifting. So, how do carriers compete now? By paying providers less. Narrow networks are  SBPPO’s – composed of providers who charge less than others – (type in “sbppo” in search box on this blog for information on SBPPO’s).

ACA provides  high octane fuel for Cost Plus / Reference Based Pricing schemes.

Continue reading What You Need To Know About Provider Networks Under ACA

San Antonio Attorney Faces 42 Counts Of Health Care Theft, Fraud

stop loss

By Kathryn Brenzel

Law360, New York (August 13, 2013, 4:27 PM ET) — A Texas attorney has been indicted on charges that he ran a Ponzi-like scheme that scammed insurance plan managers and their clients out of millions intended for stop-loss insurance for health care benefit programs, instead spending the money on credit card and mortgage payments.

Editor’s Note: This article sounded familiar so we went back through our archives and found this:  TexcessRe

Continue reading San Antonio Attorney Faces 42 Counts Of Health Care Theft, Fraud

Cost Plus / Medicare Benchmarking Continues To Gain Market Acceptance – Are PPO’s Facing Extinction?


“INETICO has put together a complete and effective option to the traditional PPO model……………..”

Editor’s Note: Cost Plus insurance, also known as Reference Based Pricing, is becoming a growing market phenomenon. In Texas, Cost Plus Insurance (www.costplusinsurance.com ) made a debut about 6 years ago.  A handful of employers who had the intestinal fortitude to step away from the managed care world, decided to purchase health care using common sense and traditional American business practices rather than rely on secretive managed care contracts between health care givers and their PPO partners.

The market was confined to one or two “Out-Of-The-Box” TPA’s who, much to their credit,  risked retaliation from the managed care industry. Their perseverance paid off – clients saved as much as 50% or more above and beyond managed care contracts – and TPA profits soared through a percentage of savings scheme or fees of up to 12% of billed charges that netted millions in new found wealth.

(Hospital Charge Master is an intermediary’s best friend – Hospitals Dismiss Significance Of Chargemaster Prices? – “greatest fraud foisted upon consumers since Vicor Lustig sold the Eiffel Tower in 1925″).

Markets evolve. Opportunities abound. Free enterprise rewards those who build a better mousetrap, keeping  competitors at bay through innovative strategies, good service and competitive pricing. (Xerox, Eastman Kodak And Cost Plus Insurance)

Continue reading Cost Plus / Medicare Benchmarking Continues To Gain Market Acceptance – Are PPO’s Facing Extinction?

United HealthCare Announces Agreement With DaVita


Press released received from United HealthCare last week via email:

New DaVita Agreement: After months of negotiations we have a new agreement with DaVita HealthCare Partners (DaVita dialysis) allowing UnitedHealthcare members immediate access to all of DaVita’s 1,949 facilities. The new agreement also includes commercial Medicare and Medicaid business. Previously we had announced the expiration of our network agreement with DaVita effective Sept. 30, 2013.

Editor’s Note: Third party intermediaries negotiate medical care pricing for many of us. Yet, we are not allowed to see the terms of the agreed pricing until we have a claim. Then all we see is an inflated, make believe number off which is applied  a “significant discount” (designed to make us happy) leaving a net number against which we are unable to compare with other provider’s costs.

Reports Of UFO Sightings Across California – Alien Abduction Insurance Sales To Surge?


“I seen like six bright orange colored lights,” Kaye Pinlac of Stockton told         ABCNews affiliate News 10. “They were almost like in a diamond or triangle shape. It was weird. And so they started just separating.” Pinlac captured a video of the lighted object on his iPhone.

Continue reading Reports Of UFO Sightings Across California – Alien Abduction Insurance Sales To Surge?

What Is ERISA?

erisaIf a medical care giver accepts assignment of a claim and thereby steps into the shoes of the Plan Document, how does ERISA, if applicable, address or view balance billing issues under a Reference Based Pricing scheme, or other similar claim benchmarking process? This  short video provides clues: http://fieldsdehmlow.com/what-is-erisa-video/

Hint: Federal Judge only looks at administrative functions and procedures.