For those concerned about rising group health care costs, a preview of this video may provide alternatives. http://www.brainshark.com/brainshark/vu/view.asp?pi=4568064
January 31, 2009
Can Anyone Explain This to Us?
Here we go again…………..our office was asked to investigate a provider claim to determine if the billed charges were fair and reasonable. The provider is a radiology group in a large metropolitan area in Texas.
The provider’s billed charges were, on average, +370% of 2008 RBRVS. We ran the charges through a large PPO network and discovered the billed charges were reduced down to +235% of 2008 RBRVS. This significant “discount” would certainly look good on an EOB. It would also look good on a year-end PPO claim anaylsis report. You would think that the PPO people really negotiated a great deal for you, right?
However, on behalf of the employer’s self-funded group medical plan, we have negotiated fees of 115% of 2008 RBRVS with similar providers in the same geographic area.
So, why would you want to pay a bill that is 120% higher for the same exact service you could get from a provider just down the street? Can anyone explain this to us? 
January 24, 2009
Deviated Septum Repair Costs $58,000, Dr. Fees Extra
Recently an employee took his dependent son to a physician owned out-patient surgery center for a 45 minute operation to repair a deviated septum. This facility was out-of-network (they have not joined any network). Prior to the surgery, the employee was told by the business office of the clinic that his portion of the claim would be about $1,400 (included deductible and estimated co-insurance). The employee wrote the check and the surgery was performed successfully.
The claim was received by the employer’s third party administrator who negotiated the $58,000 in billed charges down to $56,000, and wrote a check for that amount on the employer’s claim account. A weekly check register sent to the employer for review prior to releasing claim checks for that week, caused the comptroller to question this claim as appearing to be too large for such a simple surgical procedure. The claim check for $56,000 was put on hold pending our investigation.
Medicare would have paid the clinic approximately $2,700 for this procedure. In contacting a medical care supplier that supplies this particular surgical center, the sales representative told us that the supplies used in a typical deviated septum surgery such as this one was less than $500. In contacting the Bexar County Medical Society about this claim, we were told that it was certainly cause for concern and they would be more than happy to have their peer review committee review the claim. Then we met with the business manager of the clinic, showed him our research, and told him that we would pay him $2,000 as payment in full for his services (employee already had paid $1,400, so with our $2,000 the total payment to the clinic was $3,400). His response was “we hardly ever get questioned on our bills, and most insurance companies just pay us!”
This is just one example of what we have documented regarding inflated medical billing. What amazes us is that most employers, insurance companies and third party administrators don’t question medical charges and blindly pay claims. After all, it seems, it is not their money and any losses are simply passed on to the employer in the form of a rate increase.
January 22, 2009
Consumer Questions Doctor’s Charges
Yesterday we received an email from one of our clients, asking us to review his recent medical charges from a local physician. He wanted to know how the charges compared to 2008 RBRVS. Here is what we found:
CPT 86000 Billed $292.80 2008 RBRVS $9.75
This represents a +3000% markup from Medicare reimbursement formula.
About 6 months ago we moved an employer from a PPO plan to a plan that pays claims using 2008 RBRVS as a claim payment benchmark. To date the plan has saved approximately $500,000. And, we put in place a mechanism that addresses the balance billing issue so often raised by PPO representatives as a tactic to hold employers hostage to the PPO method of controlling costs.
Consumers should compare medical costs but most don’t
January 18, 2009
PPO Discounts: “My Discounts are 37-55% Better Than Yours”
A large health insurance carrier has been touting their PPO discounts as being as much as 37-55% better than anyone else. And, three licensed consultants, each independent of each other, has “verified” those discounts. One consultant “proved” that average discounts on one rental PPO was 23%, while the large health insurance carrier PPO averaged 57% discounts. The PPO discount differential in this case, is a whopping 248%.
So, you would think that going with the better PPO discounts offered through this large health insurance carrier, the employer would see immediate and significant plan savings.
What we have found is the opposite. Not only are the so called discounts a figment of a salesman’s imagination, but provably untrue. Plus, in certain instances, the costs to the client actually went up, all things being equal.
We are in the process of documenting this using multiple case studies utilizing documented claim data. Once completed, this report should put an end to the unfair and untrue sales tactices employed by some.
A quote from an email received recently is a basic truth and shows the fallacy of comparing PPO discounts off billed charges:
“Our audits represent a complete flip to status-quo. We start at cost and add a margin (ground up) rather than start with the (phantom) original bill and take a percentage-off (top-down). This is much more in line with (A). common sense, (B). typical American business practices, and (C). fiduciary duty.
January 17, 2009
Former CEO Alleges Bid Rigging Conspiracy
Attorneys for Antonio Juarez, BISD’s former chief financial officer, on Friday filed a lawsuit alleging a conspiracy by former and current school board members to coerce his participation in the “manipulation of the bidding procedures” used to award a district basic life and stop-loss insurance contract.
The lawsuit alleges that when Juarez would not participate, current majority members of the Brownsville Independent School District Board of Trustees coerced Superintendent Hector Gonzales to obtain Juarez’s resignation. Gonzales then reassigned Juarez as BISD’s grants administrator.
At the same time, the lawsuit alleges that current and former BISD trustees sought to coerce Juarez into a conspiracy to oust Gonzales, for which Juarez was promised support for restoration to his status as chief financial officer.
The lawsuit says the board members attempted to force Juarez to file a grievance against Gonzales prior to a Jan. 6 board meeting concerning the superintendent’s contractual status. It says Juarez was threatened with retaliation if he did not.
The lawsuit was filed against Gonzales, in his capacity as the district’s chief executive officer, as well as any successor; Mike Saldaña, who serves as BISD’s counsel, and board members Rolando Aguilar, Joe Colunga, Ruben Cortez Jr. and Rick Zayas.
“ C o m p l a i n t a n t (Juarez) has chosen not to participate in the Board’s conspiracy, and fears that termination will result by not taking action,” the lawsuit states.
The lawsuit is a petition for declaratory judgment that seeks an injunction to prevent BISD from firing Juarez or taking action that would affect his contractual status.
It was filed by Brownsville attorneys Ben Neece and Star Jones in state District Judge Janet Leal’s 103rd District Court.
FBI – Brownsville, Texas (956) 546-6922
January 15, 2009
San Antonio Insurance Agent Becomes Speaker of the House
It appears the House will be getting a new Speaker, Rep. Joe Straus. Known as a moderate Republican, he has served only two terms in the House but has lined up significant support. A wealthy San Antonio businessman, Straus held minor posts in the Bush and Reagan Administrations. He is a principal in the insurance and executive benefits firm of Watson, Mazur, Bennett & Straus, L.L.C. He also is affiliated with National Financial Partners, a leading financial services company in the insurance, investments, and benefits industry.
Texas Bill Would Mandate Medical Loss Ratios
TEXAS: A bill was filed last week that would require insurers to report their medical loss ratios to the Department of Insurance on an annual basis and to maintain those ratios at 75 percent. The bill further gives authority to the Commissioner to order rebates, rate rollbacks or take other necessary steps to penalize any carrier in violation of the minimum ratio.
Text of Bill: texas-house-bill-medical-loss-ratio-hb00531i
