Archive for June, 2014

Reference Based Pricing

Friday, June 27th, 2014


By Ralph Weber

Early in May 2014, the administration released guidelines  that stated that balanced billing which exceeds the reference price is not subject to the employee out of pocket limit of $6,350 for single people and $12,700 for those with dependents. This means that if your plan sets the reference price for a procedure at $5,000, and the provider bills $25,000, the insured may have to cover the additional $20,000 out of their own pocket, in addition to any plan deductibles, co-pays, and co-insurance.


Half Of Benefit Brokers Considering Quitting

Friday, June 27th, 2014
By Melissa A. Winn
June 27, 2014

In response to health care reform, nearly half of benefit brokers say they are considering getting out of the benefits game, despite the fact that many agree a huge opportunity exists for advisers willing to remain in the business and adapt to their clients’ changing needs.


Cost Plus Insurance To Make Offer To Hospitals?

Wednesday, June 25th, 2014


By Molly Mulebriar

Is Cost Plus Insurance in the process of formulating an offer to hospitals to end the impasse between hospitals relying on egregious charge master rates (Hospitals Dismiss Significance Of Chargemaster Prices?) coupled with phony “discounts” and willing payers seeking transparency and fair market value based on a competitive market as opposed to a market cloaked in secrecy aided by nefarious PPO contracts that no one can see or examine?

Officials of Cost Plus Insurance are meeting today in Costa Rica to discuss strategies. After almost seven years in business, Cost Plus Insurance continues to grow market share. Initially it was thought hospitals and their PPO partners would put a quick end to the scheme of transparent and defensible payment, but that didn’t happen. Fearful of publicity and exposure of egregious pricing strategies, hospitals quietly cashed their Cost Plus Insurance checks after a cursory attempt to balance bill indigent patients.

Cost Plus Insurance officials are wondering why hospitals are leaving money on the table these days. Paying hospitals Cost Plus 12%  or Medicare +20% incurs expenses on behalf of the Plan Sponsor. Added to the reimbursement rate are fees for numerous items such as audit fees, patient advocacy fees, legal defense fees, TPA commissions, broker commissions and specialized clerical support.

On a 600 life group, Milliman estimates the fees to exceed $500,000 per year. See Milliman Analysis Of Cost Plus vs PPO Plan

Some TPA’s and audit firms charge 12% of billed charges. That is a big number and represents money that goes to third party intermediaries, not medical care givers. And, as much as 25% of that fee are commissions to  TPA’s who do little to earn it.

Unidentified sources tell us Cost Plus Insurance officials are to make an announcement soon on the steps of the Texas Hospital Association headquarters in Austin sometime next week.

“We are going to offer Texas hospitals a choice. Either keep cashing our checks based on 120% of Medicare and continue to lose the balance billing battle, or agree with us it makes more sense to accept 150% of Medicare, cash bigger checks and be happy” stated Homer G. Farnsworth, M.D., Senior Vice President at Cost Plus Insurance.

Assent Medical Cost Management Launches MAXpay – A Reference Based Pricing Model

Tuesday, June 24th, 2014


MIAMI, FL–(Marketwired – Mar 12, 2014) – Assent Medical Cost Management (Assent) announced the launch of MAXpay, a fixed dollar reference based pricing program. Targeting Self Insured Plans, MAXpay increases control over healthcare expenses by setting reasonable and fair benefit limits. To determine reimbursements, MAXpay utilizes cost data, multiples of Medicare reimbursement and Medicare-like methodologies, all of which are fully defensible.

Editor’s Note: Cost Plus Insurance /  Reference Based Pricing is a growing market phenomenon – Xerox, Eastman Kodak And Cost Plus Insurance


Clear Cost Health

Tuesday, June 24th, 2014

ClearCost Health

Whether you’re a large self-funded employer or a union health and welfare trust, ClearCost Health —

1 Saves money for plan sponsors and plan participants

1 Is low risk and easy to implement, requiring no changes in plan design or health care vendors

ClearCost Health delivers both cost and quality information to health plan participants before they seek care. With this information in hand, they are empowered to make better health care decisions in concert with their health care professionals.

ClearCost Health offers self-funded plan sponsors a free, claims-based market analysis that details:

  • In-network provider price disparities and your group’s utilization of high- and low-cost providers
  • The savings that can be achieved as plan participants begin to factor price into their care decisions
  • A roadmap of how to easily and affordably implement this service

Summer Session 2014

Tuesday, June 24th, 2014

This seminar will have class topics that emphasize cost savings to government entities. It is designed for persons having administrative responsibilities in the area of purchasing, especially applicable to all areas of the public sector including counties, municipalities, council of governments, state agencies, and other special governmental districts.

This seminar is intended to highlight the latest developments that are essential in the purchasing management of our government institutions; be abreast of the current popular purchasing methods, the new rules and regulations, and the methods of evaluation to handle the modern taxpayer’s attitudes, particularly in periods of economic skepticism.

This seminar is designed for directors of finance, directors of purchasing, purchasing clerks, buyers, risk managers, elected officials, and anyone interested in learning more about the purchasing profession, This program is applicable to all areas of the governmental sector.

This seminar is divided into three sections. General sessions will be held on Wednesday, June 25th and Friday, June 27th. Participants will select to attend the class of his/her choice on Thursday, June 26th.

For more information:

Funding New Texas Insurance Company Proves Problematic

Monday, June 23rd, 2014

mulebriarTwo Brownsville men with a history of regulatory complaints about their insurance businesses have been indicted on securities fraud and theft charges related to the sale of a $1 million investment contract that was supposed to help fund a new insurance company called Nafta Holdings LLC. In case you’re wondering, the proposed company had nothing to do with the North American Free Trade Agreement. 


Texas Firm Provides Medicare-Reference Based Pricing for Self-Funded Employer Groups

Monday, June 23rd, 2014

payercompassPayer Compass has a reimbursement technology that defines reimbursement in a new way. That new way is Medicare. Medicare is based on cost. We help you move away from discounts and charges to understanding actual cost—to look at cost and then build in a fair margin for providers. That is what we do—very different from traditional discounting.

Medicare-Reference Pricing and Medicare repricing have similar elements but are distinctly different in their application. We are the experts in using Medicare to create a viable price for the commercial market whether the plan chooses to pay from the plan document or contract with a provider. Medicare-Reference Pricing uses Medicare payment methods along with a customized reimbursement schedule to create reimbursement for a particular plan. (For example, 120% of Medicare for inpatient and outpatient and 130% of Medicare for physicians.) Additionally, we can customize the various components of both IPPS and OPPS modules or set the various edits for OPPS and physician reimbursement.

Payer Compass, LLC3401 Custer RoadSuite 183Plano, Texas 75023     (972) 964-6655          ​E-mail:


Brownsville ISD Slated To Award Insurance Consultant Contract To McGriff, Seibel and Williams

Sunday, June 22nd, 2014

June 25 Board of Trustee Agenda Item: Recommend awarding RFQ #15-022 Insurance Consultant to McGriff, Seibel and Williams for a three year period with an option to renew for two (2) additional one (1) year terms and allow administration to negotiate a fee for service.

Brownsville ISD is the largest employer south of San Antonio with over 7,000 employees. The current health plan is self-funded. The administrator is Blue Cross & Blue Shield. Estimated annual spend is +$50 million.


The “Evil” Profit Motive

Sunday, June 22nd, 2014


The biggest laugh I received during my recent talk given in Quebec was when I characterized the operation of the U.S. health care system as no different than a Mexican drug syndicate or cartel.  I relayed to the audience the idea that the dysfunction of the U.S. health care system is not due to any failure of the free market, but rather the almost complete absence of a free market.


Role of Drug Reps In Off-Label Prescription Drug Habits

Sunday, June 22nd, 2014


By Joel Lexchin

Off-label prescribing is widespread in Canada and the United States. One in nine prescriptions for Canadian adults are for off-label uses with the highest percentages coming from anticonvulsants (66.6 percent), antipsychotics (43.8 percent), and antidepressants (33.4 percent). Overall, 79 percent of the off-label prescriptions lacked strong scientific evidence for their use.

For 160 drugs commonly prescribed to U.S. adults and children, 21 percent were for off-label indications totaling 150 million prescriptions. In this case, 73 percent had little to no scientific backing and once again psychoactive drugs such as gabapentin had the highest level of off-label use.

Moreover, doctors do not seem to know what are and are not approved FDA use for many of the drugs that they prescribe. Now an article published in the June issue of Health Affairs by Ian Larkin and colleagues points to active promotion by sales representatives as one reason for the widespread off-label use of antipsychotics and antidepressants in children. Read the rest of this entry »

Medi-Share Members Exempt From PPACA Mandate

Friday, June 20th, 2014

Health Reform

The Affordable Care Act contains a special provision for members of Healthcare Sharing Ministries, making Medi-Share members exempt from the mandate to purchase insurance in 2014 or face financial penalties. Law Language  – (Sec 1501, page 148 addresses the exemption)


Ruling: Hospital Bills Should Reflect ‘Reasonable Value’ of Service

Wednesday, June 18th, 2014


“………hospitals can no longer expect to get reimbursement from health plans in amounts well in excess of the actual value of services provided to plan members…………”


New Pre-Cert Program?

Wednesday, June 18th, 2014

thinkTexas law gives patients the right to request, in advance, estimates of charges from providers and facilities and estimated payments from health plans. Providers, facilities, and health plans have 10 days to produce the estimates – The Texas Department of Insurance

Why don’t Plan Sponsors in Texas use this little known law as the basis of a pre-cert program? Precertification of what the plan will pay and what the patient will be responsible for prior to services rendered. We have been doing exactly this on most dental plans for years.

Ternian Offers Stop Loss Solutions

Wednesday, June 18th, 2014

Traditional stop loss participation requirements will prevent many employers from pursuing an affordable self-funded solution for ACA-compliance.



City of Lubbock Releases HealthSmart Audit

Tuesday, June 17th, 2014


“The audit was part of a city controversy revolving around an “unsatisfactory” report of HealthSmart and a Federal Bureau of Investigation probe into city practices, according to A-J archives.”

Note: To the layman, this article appears to be damaging to HealthSmart. However, there is another side of the story that needs to be told. That’s bad news to most TPA’s in the business who are practicing the same business deals. We will be exploring this in the next few days for the benefit of our readers – Molly Mulebriar


Sierra-Berkshire Associates – Actuarial Consultants

Friday, June 13th, 2014

Sierra-Berkshire Associates, Inc. (SBA)  pro­vides Health, Life & Disability actuarial consulting services for employee benefit plan sponsors, insur­ance carriers, hospital, physician & other provider groups, TPA’s and marketing firms.


Private Health Care Exchanges Enroll More Than Predicted

Friday, June 13th, 2014

“Three million people signed up for workplace health coverage for this year through private exchanges … That’s roughly three times the number of people [one] firm had estimated last fall … The growth was driven largely by smaller and midsize companies — those with no more than 1,000 employees[.]”  – Wall Street Journal 6-13-2014

Risk Management For The Financial Risk of Litigation

Friday, June 13th, 2014


Attorneys’ Fees Risk Insurance

Sonoma Risk Insurance Agency has created a suite of litigation insurance solutions to protect plaintiffs and defendants from the risk of having to pay their adversary’s attorneys’ fees in litigation. Coverage for this risk is generally excluded from most traditional insurance programs, leaving litigants exposed to a large and potentially catastrophic risk if they lose their case.


Aon Hewitt Survey Shows Reference Based Pricing A Growing Strategy

Wednesday, June 11th, 2014


“… 68 percent of employers plan to adopt reference-based pricing—where employers set a pricing cap on benefits for certain medical services for which wide cost variation exists with no discernible differentiation in quality. Just 10 percent of employers have adopted reference-based pricing as a health tactic today.”


400,000 Canadians To Obtain Marijuana Under Health Care System – $1.3 Billion Industry

Wednesday, June 11th, 2014


“Health Canada expects the country’s medical cannabis industry to reach $1.3 billion in size by 2024 under the new MMPR, driven by a 10-fold increase in the underlying patient market size to over 400,000 enrolled patients. ”


PPACA Made Simple – Fueling China’s Economy?

Tuesday, June 10th, 2014


By Molly Mulebriar

The Affordable Care Act is not confusing. Evil and greedy employers  with 100 employees or more face three basic options:

►Offer no health plan and pay $166 punishment tax per employee per month and be done screwing with insurance and government dictates

►Offer a qualified, affordable health plan and pay +$350 per employee per month (National average is +$500 per month per employee)  and continue to face government harassment and oversight

►Offer a Minimum Essential Coverage plan and pay $250 per month (in addition to the cost of the plan) for each employee  who seeks coverage through the Public Exchange and receives a subsidy and deal with employees who think they have real insurance until they have a major claim through their ultra-limited Minimum Essential Coverage Plan

With minimum wage requirements, multiple government surcharges, punitive regulations and now government mandated health care in lieu of further punishment, a move offshore looks attractive to many these days.


Consultant Warns Of New DOL Audits – Are You Ready?

Tuesday, June 10th, 2014


“The DOL has made it clear that the honeymoon is over, but it is also clear a lot of people just aren’t prepared…”


ObamaRe – The Ultimate Stop Loss Policy

Monday, June 9th, 2014


By William Rusteberg

Self-funded medical plans should  rejoice. There is good news on the horizon. No need to purchase stop loss insurance protection anymore. ObamaRe will assume the risk anytime you need it. Beginning in 2014 ObamaRe will become the ultimate insurer of last resort for struggling self-funded plan sponsors. Placing cover for burning buildings has never been easier.

Employers who set up a trust through which defined health benefits are funded are under no obligation to continually fund the trust through unlimited contributions. After all, no employer can commit to unlimited funding for future health care costs – corporate dollars can only stretch so far.

A plan sponsor may elect to fund the trust to a certain, pre-determined annual limit with stipulation in the Plan Document that, if in the event plan assets are depleted during the plan year ,the plan terminates. At that point ObamaRe steps in to assume the risk. Plan participants are guaranteed continued coverage through ObamaRe, an exchange plan with pre-existing conditions covered immediately. No lasers, no declines, no kidding.

Employers who drop conventional stop loss cover in lieu of ObamaRe can mitigate their exposure. Health benefit dollars can be leveraged through cost plus or reference based pricing models. In our experience we have found that paid claims in excess of $100,000 are infrequent while paid claims in excess of $250,000 are virtually non-existent. Plus, $1,000,000 claims simply don’t exist. For example, the TRS ActiveCare plan for Texas school employees with over 280,000 plan participants, had only three (3) claims surpassing the $1 million mark last time we looked at their financials. And the TRS plan does not employ cost effective reimbursement methodologies as is found under cost plus or reference based pricing.

Self funding makes economic sense, especially when you can rely on ObamaRe to step in when you need it the most. And it’s free.

Connecting Dots (Again)

Monday, June 9th, 2014

Source: Insureblog

So there’s this (from FoIB Holly R):”The uninsured rate for U.S. adults appears to be leveling off … The uninsured rate so far in the second quarter of 2014 is 13.4%“Which is pretty much what it was beforethe ObamaTax and all its broken promises. Great. But it gets better (for a certain value of “better”): (more…)

Private Health Insurance Exchanges

Monday, June 9th, 2014

Employers not yet acquainted with the concept of private Health Insurance Exchanges likely will become very familiar with them sooner, rather than later.


Update: Source Says FBI Now Involved In School District Bribery Scandal

Monday, June 9th, 2014

tikia Rina Tikia

“It appears the FBI is now involved in a bribery scandal  ………………..allegations of bribery first surfaced after Tikia sent a letter to the LPSB demanding more than $200,000 in payment”


Why Medicare-Based Pricing, And Why Now?

Monday, June 9th, 2014

Clear Health Strategies

The healthcare landscape has never gone through as significant a change as it is experiencing right now. Medicare-based pricing, or a multiple of Medicare, is becoming the standard in PPO replacement, out-of-network reimbursement, and aiding in the claim negotiation process. Payers, third party administrators, self-insured employers, and others managing healthcare claims risk are looking to replace or augment their existing primary and supplemental network programs by using Medicare rates to drive increased plan savings.

Hospital Charges Surge For Common Ailments

Thursday, June 5th, 2014
Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday.
Editor’s Note: Hospital charge master rates are whatever a hospital wants them to be. These rates have nothing to do with costs, or what patients actually pay. In fact, hospitals say that charge master rates are not really important – see Hospitals Dismiss Significance Of Chargemaster Prices?

South Texas County Reaps Benefits of Re-Distribution of Wealth – “Free” Money For Unpaid Medical Bills

Thursday, June 5th, 2014

wealth“The county’s $9 million (taxpayer funded)  investment will become $22.5 million, which will be used to reimburse hospitals that provide care for uninsured people who can’t afford to pay their medical bills”.

Editor’s Note: Lets see here, taxpayers fund $9 million so that taxpayers can fund an additional $13.5 million. Yes, that makes perfect sense……….


Boon Group Inc. Announces New Self Funded Insurance Product

Wednesday, June 4th, 2014


Our plan today encourages a direct relationship between the insured, the provider and the plan to deliver the best possible outcome for all. We expect savings to be in excess of 25 percent over our previous networked PPO plan,” says Boon Group President and Chief Operating Officer James Patton.


Are Group Health Plans Doomed?

Sunday, June 1st, 2014