Archive for June, 2009

Carrier Guards PPO Information – Best Kept Secret Since Coca Cola Recipe

Tuesday, June 30th, 2009

bcbsi-fedtradecom – but secrets are never secret forever. We have reviewed a BCBS hospital contract in it’s entirety.

Network Leasing

Tuesday, June 30th, 2009

When insurance consultants review and evaluate PPO networks, which networks are they really evaluating? In this case, are they properly evaluating United HealthCare’s PPO network or are they evaluating a network leasing agreement instead, or a combination of both?

nationet-physician-agreement  

Physician Price Fixing In Laredo, Texas ?

Monday, June 29th, 2009

This makes for fascinating reading – laredo-provider-community-conspiracy. Behind the scenes PPO physician contracting may be good material for a “whodunit” best selling novel.

Could a hospital administrator, whose hospital competes with another hospital five minutes away, have any financial intersts in the amounts paid to doctors who have admitting privilages at both hospitals?  With leverage applied to PPO networks, could a hospital administrator get better reimbursement rates for key community physicians who agree to “play ball” with steerage of patients to his facility?

There are a lot of unanswered questions it seems.

BUCA Hospital Contract Reviewed

Monday, June 29th, 2009

We received a copy of one of the BUCA’s hospital contracts from a reliable source. We compared it to several rental PPO hospital contracts we have acquired recently. Contrary to popular perception, these contracts are not lengthy but short, 9-12 pages long, excluding the addendums. A side by side comparision of these contracts, hospital specific, is the only method to be employed in comparing who has the best and lowest cost for their insureds.  Otherwise the “smoke & mirrors” approach most commonly (actually exclusively) used will prolong the medical  and insurance community conspiracy of silence.

Some employers rely on professional, licensed and credentialed fee based insurance consultants to guide them through the PPO maze of hype and deception. These “experts” employ strategies in PPO comparisons such as an exercise of “re-pricing” a sampling of claims. In a future posting we will show the reader why this method does not produce a viable comparision and in fact leads to a numbers game that can be twisted in the direction the consultant wants the client to embark upon. As you know, you can make numbers tell any story you want to tell.

Rental PPO Network Responds

Monday, June 29th, 2009

discount-de-bunking-healthsmart – Pay particular attention to the fourth slide – ever wonder why PPO’s wont give you their entire contract to review?

Empire Chiro PPO Fee Schedules Exposed – 8% Provider Re-Pricing Fee Disclosed in Contract

Sunday, June 28th, 2009

This is an interesting website. You can actually see PPO specific contracts posted here: http://www.empowerchiro.com/ClientLists.html

A Testimonial posted says: “Through my membership in your network, in the past 12 months, I have received $38,566.32.  Being a member of this network (FHA/EmpowerChiro) is a valuable part of my practice!”
Join the EmpowerChiro PPO network and start receiving patients with good insurance now!  EmpowerChiro has been bringing patients to chiropractors for nearly fifteen years. 

Here is a sample PPO network fee schedule you will find on this website:

TEXAS TRUE CHOICE FEE SCHEDULE
CPT DESCRIPTION ALLOWED FEE
98940 CMT (1-2 body regions) $ 25.30
98941 CMT (3-4 body regions) $ 32.20
98942 CMT (5-6 body regions) $ 37.95
98943 CMT (extraspinal, 1 or more regions) $ 25.30
99201 New Patient Initial/focused $ 22.77
99202 New Patient Initial/expanded $ 40.25
99203 New Patient Initial/detailed $ 45.77
99204 New Patient Initial/comprehensive $ 51.75
99205 New Patient Initial/complex $ 57.50
99211 Brief $ 17.82
99212 Focused $ 27.60
99213 Expanded $ 35.19
99214 Detailed (includes re-exam and manip.) $ 42.43
99215 Comprehensive $ 52.09
97260 Manipulation $ 27.60
97010 Hot or cold pack $ 13.80
97012 Traction $ 13.80
97014 Electrical Muscle Stimulation $ 13.80
97016 Vasopneumatic Devices $ 13.80
97024 Diathermy $ 13.80
97026 Infrared $ 13.80
97035 Ultrasound $ 13.80
97124 Massage $ 13.80
97530 Kinetic exercise $ 13.80
72010 Full spine AP/LAT $ 50.02
72020 Spine (single view) $ 28.98
72040 Cervical spine AP/LAT $ 47.72
72050 Cervical complete (4 views) $ 83.49
72052 Davis series (7 views) $113.85
72070 Thoracic spine AP/LAT $ 56.92
72100 Lumbosacral AP/LAT $ 55.43
72110 Lumbosacral with oblique $ 96.02

Note: Any code that is not included in the above CPT codes will be discounted 20 percent off the billed charge.

When payment is made, TTC will send repricing report to FHA then FHA will bill the provider 8% of the allowed amount to cover administrative costs. The allowed amount includes the insurance reimbursement plus the patient’s liability (copay, coinsurance and/or deductible).

 

Editor’s Note: See the last paragraph in bold – a provider re-pricing fee of 8%. This means that your claims are inflated 8% due to this “fixed cost” repricing fee, but it shows up as a claim cost on the claim side of your ledger. Most employers dont know about this fee.

Just for fun, go to the website listed above, click on Private Health Care System (PHCS) PPO network contract and compate to the Texas True Choice contract.

 

Humana Touts PPO Discounts

Sunday, June 28th, 2009

In the June 2009 Connections Newsletter, Humana writes:

“When it comes to helping self-funded accounts reduce their total medical expenses, Humana offers significant savings through out network discounts. Across the United States, we’re able to negotiate substantial discounts from hospitals, doctors, and other providers. As a result, ASO’s may realize greater savings by using Humana’s nationwide network that includes more than 350,000 providers.

In our major regions, Humana’s network offers discounts that average up to 20 percentage points greater than rental networks can offer – and is competitive with or better than other national carrier’s networks. In fact, if your clients are currently using leading national rental networks in these areas, they’ll likely improve their discounts by switching to Humana.

Editor’s Note: Humana is going out on a limb making these statements. How do they know that their discounts can be 20 percent or better than the rental networks? Have they compared contracts? All 350,000 of them? Now let’s see, Blue Cross touts that their PPO discounts are at least 20% better than anyone’s out there, now Humana says they are beating the rental PPO networks by as much as 20%, so if all of this is true, than Blue Cross has at least a 40% better discount than the rental networks (BCBS beats Humana by 20% and Humana beats the rental networks by 20%, so 20% + 20% = 40% better discounts). Of course, a discount off what number” Are billed charges with Humana higher than with rental networks? Or vice versa? Do providers have multiple billed charge masters? Will hospitals admit to that? What about doctors, do all doctors have the same contract? Is Dr. Jones contract with Humana better than Dr. Smith’s contract with Humana?

PPO Discount Games continue to be played towards ignorant consumers of care.

Confidential Blue Cross ASO Contract Exposed

Saturday, June 27th, 2009

http://www.ncpolicywatch.com/docs/pdfs/BCBS_Contract.pdf See post below this post.

The Truth (as we see it) About the Blues PPO Discounts

Saturday, June 27th, 2009

It is hard to cope with the dynamo known as Blues. Who is going to tell them what to do when they have about a 30% market share in Illinois with no competitor even close to that number? The “caring card” carries considerable weight with employees who equate it with security and the heavy advertising for the health plan that says they care. Employers have been known to be too scared to change away from the Blues, due to the perception on the part of employees, that there is no better coverage. The advertising that they do by sponsoring what seems to be every home run or first down in Chicago sports is effective. This will tell at least in part, how they can afford to pay for it, when most other insurance carriers can’t.

By the way, this article is not being written because we won’t do business with the Blues or because we see them as the only carrier with faults. However, over the years we’ve gotten tired of hearing the misconceptions and deceptions about what is being offered and how and why they are able to make some of the offers that they do. Suffice it to say that knowing how certain carriers operate can protect an employer from making a choice that can later make it difficult to move on to another vendor. For instance, knowing that the Blues continually only provide claim data that is outdated, helps one prepare for the fact that leaving the carrier will be difficult at best. If you would like us to provide an analysis of your current situation and an underwriting evaluation of where you stand, please feel free to contact us at mail@ssbenefits.net .

The Question is- Is what you see, what you get?

When receiving a group medical insurance proposal from the Blues, they can claim to have better discounts than the rest of the competing offers (be it a self-funded or fully insured plan) and their pricing to get the business will surely reflect substantial discounts. But now what? Will you as the client ever actually receive the full value of their hospital contracts or physician discounts? Most likely not. Will your broker or consultant advise you of the same? Most likely not. Many broker/consultants don’t have a clue how to experience underwrite and have even less of a clue as to how these plans really operate.

The Principles of Deception

Let’s look at a few things. Back in the mid-1980’s competition was stiff. There were a lot more insurance carriers. The TPA business was getting off the ground. HMOs were popping up in people’s garages, and PPOs were being added to indemnity plans. Managed Care was booming. What were the Blues doing? Offering proposals that included “negative retention!” (For those of you who don’t know, retention is the fancy word for expenses to run an insurance program.) Brokers were actually telling clients (and competitors quoting against the Blues) that the Blues could operate programs with less than zero expenses! You’d think there was enough common sense in the business to think something fishy was going on, but that is not always the case. There’s nothing like a juicy override agreement to override common sense.

So, how do they do that?

The answer is, they don’t. The Blues were ingenious enough to know the market was changing and they had the advantage. The advantage was their relationship with the hospitals and doctors. They had the original PPO, except nobody knew it other than them.

Let’s concentrate on the hospitals. The Blues provide an annuity to every hospital in their network. They have most hospitals in their network. Some would say every hospital in the Western Hemisphere . The hospitals depend on this “annuity” since the Blues are the dominant player in Illinois . (That’s not to say this isn’t or wasn’t happening in other states). The Blues reimburse all hospital claims to the hospitals at Cost, Plus roughly 5% profit.

Let’s say the hospital charges are $10,000, but the cost is really $7,000. Cost plus 5% is $7,350. The Blues pay $7,350 to the hospital and keep the $2,650 profit. By keeping the difference, but charging the client as though the claim was for $10,000, the Blues could claim that there was no retention due to the profit they were taking (but charging as a claim to the client). The claim report to the client shows the $10,000 in hospital charges. (By the way, do you think the employee paid coinsurance on $7,350 or $10,000?)

Well, you say, what about PPOs?

Surely things are different there. Well, yes and no. The hospital accounting still is applicable, but new items have been added. The Blues have had to give up some of their profits in order to compete with other PPO plans, but they have still found a way to keep more than most. Negative retention had to give way and eventually disappeared, once they had to give up some money and show some PPO discounts.

Access Fees you will not believe

One of their brilliant ideas that most don’t catch is that they charge for access to their PPOs as a claim charge rather than identifying a per employee fixed monthly fee (we can’t recall if they had this idea first or stole it from First Health/Affordable).

Their charge for accessing the PPO can amount to as high as 28% of projected net paid claims (including non-PPO claims). On one case reviewed, that charge amounted to $31.11 per employee per month (and this was before the pooling and risk charges were added and the whole amount was divided by the objective loss ratio to make the charge even higher). That is far higher than the usual $3 to $6 per head that most independent PPOs charge.

But that’s OK, the discounts are greater with the Blues, aren’t they?

Maybe the Blues discounts are greater, but we will never know. Unlike (most, but not all) other carriers and third party administration arrangements, the Blues never show their actual discounts.

When we underwrite and review network performance, we usually like to separate billed charges on an In and Out of Network basis. Then we remove ineligible charges from the amounts billed In Network and see what the discounts were compared to actual eligible In Network charges. This gives a more true picture of the discounts achieved.

The Blues only provide their discounts on renewal as projected savings. You never get to see what the real number was! The number initially looks pretty good at 35% to 42% of projected paid claims. But, if you look at other networks with good coverage, as a percentage of actual paid claims, the discounts are usually much higher (50% to 55% of actual paid claims), with access charges that are far less. Remember, most other networks report their actual discounts too, so you actually know what you are getting for your access charge. So, the Blues might have better discounts, but chances are that you, the employer, may never benefit any more than you would with another network. In fact, you may end up paying more.

There are other tricks that are used by companies to overcharge for network access or overstate their discounts. You can review on this web site another article on that subject in THE TRUTH section of the web site.

What about that National Network?

Yes, there is a thing called the Blue Card network that can make sure that you have the opportunity to be in network on a national basis or cover your employees in other states. Just be aware of a few things. Those other state plans get the claim first and then process the claims with the local Blues. It is not a seamless proprietary network. Each Blues plan wants their piece of that discount pie. The delays can also be a bone of contention, since the delay can cause duplicate bills. If the Blues charge for access to the network as a percentage of network savings (as they have been known to do), how do you know you aren’t being charged for savings on duplicate charges due to delayed payment?

 

Underwriting

Needless to say, with the discount game being played, there is lots of room in underwriting to price for the competition. They may have to give up something in the rates on the front end, but the profits will most likely be there. The Blues also like to give claim experience that is six months old as part of their renewal. This makes it especially difficult for other carriers to underwrite, since the usual standard is to have claims experience that comes to within at least three months (and preferably two) of the proposed effective date. This helps the Blues to insure that you will receive higher than normal quotes from the competition. Underwriters from other carriers view Blues experience with trepidation, since the discounts are unknown and the experience is old. This forces the competing underwriter to be conservative in their assumptions.

The Blues (unfortunately now other carriers are following this poor example) also won’t provide experience on groups of less than 150 employees, although they want that experience if the group is over 100 lives and you want them to quote. Makes sense? You’ll also have to cite federal law and fight with them a bit to get Schedule A information for a group of less than 150, even though the IRS demands the information for a group of over 100 employees.

What the Blues have been able to do is successfully continue to market their market dominance by appealing to those who fear they may not have the same coverage elsewhere. For employers, the fear of employee reprisal and discontent is often enough to get them to accept some pricing tactics that they would not accept from other insurance carriers or third party administrators. Those brokers who continuously push the Blues are easily motivated to do so by override agreements to commission arrangements that Eliot Spitzer has no need to challenge, since they are not in his state. The weak and continually changing insurance commissioners in Illinois are not about to challenge the Blues and their tactics either.

Editor’s Note: Author of this piece is Jeff Seiler, an Illinois insurance consultant. His web site is www.ssbenefits.net. It pays to read contracts, if you can get them for review. This is especially true if you are a third party beneficiary but not a party to the contract. A journalist in North Carolina has done a little work in that area – http://pulse.ncpolicywatch.org/2009/03/18/blue-cross-takes-state-to-the-cleaners-in-contract/

If your a physician in Illinois, and dont remember what you signed with BCBS, request your fee schedule here – http://www.bcbsil.com/PDF/fee_schedule_request_form_BlueChoice.pdf

 

Senate Introduces Surplus Lines Reform Bill

Friday, June 26th, 2009

http://www.businessinsurance.com/article/20090626/NEWS/906269991

New Health Plan Proposal Makes Sense

Friday, June 26th, 2009

http://www.reason.tv/video/show/560.html

Two Insurance Agents Indicted (cont.)

Thursday, June 25th, 2009

See indictment here – https___ecftxsduscourtsgov_cgi-bin_show_temppl_file677145-8843129-0-headed_lm

Cuero Livestock Commission – Highest Priced Calf

Wednesday, June 24th, 2009

Letter received today from the Cuero Livestock Commission to Martha:

Congradulations. Your calf was the highest priced calf in its weight class. The attached slip came from the market report that the computer program generates from the sale each week. It comes from all classes of calves in each 50 pound weight class. We like producers to know when their calf tops the entire sale for its weight class. So we thank you for your business and again congratulations on topping the market.

Insurance Agents Indicted in Rio Grande Valley

Tuesday, June 23rd, 2009

More bad news for ethics amongst insurance agents in the Lower Rio Grande Valley, Texas. Mr. Arnulfo “Half Guilty” Olivarez, admitted felon and still licensed insurance agent, awaits his sentencing on August 14. Aaron Gonzalez, former and defrocked insurance agent from Elsa, is also awaiting his date with destiny after having his sentencing postponed more than once. Now another insurance agent from the Valley is accused of evil and illegal activities.

Ethical insurance agents suffer from the broad brush of public opinion whose only source of information are news announcements of insurance agents gone bad. That’s unfortunate.

 

http://www.valleymorningstar.com/news/carter-54429-fraud-insurance.html

Dental Coverage Online

Tuesday, June 23rd, 2009

Individuals can enroll on a dental insurance program in minutes by going to www.dentalcoverageonline.com

This plan is one of the most competitive individual dental plans we have found. Rates are comparable to group rates. We compared this individual plan to a voluntary group dental plan in a 7000 life South Texas school district and found the individual dental rates to be slightly lower than the group rates, with comparable benefits.

Agent Commissions Exposed in Lawsuit

Saturday, June 20th, 2009

Sometimes it takes a lawsuit to find out how much you are paying your insurance broker. This is a exerpt taken from a lawsuit in South Texas that reveals the broker who placed the business with this political subdivision was paid 50% of the TPA’s administrative fees.

Before HIGGINBOTHAM, DAVIS, and WIENER, Circuit Judges.

PER CURIAM:*

Plaintiff-Appellant XXXXX XXXXXX appeals from the district court’s grant of summary judgment for Defendant-Appellee the City of Corpus Christi (“the City”), dismissing XXXXX§ 1983 First Amendment retaliation claim. Concluding that XXXXX lacks standing to pursue his asserted claim, we vacate the judgment of the district court and remand with instructions to dismiss.

I. FACTS & PROCEEDINGS

In 1998, XXXXX prepared and submitted to the City, on behalf of XXXXXXXXXXXX (“XXXXXXX”), a proposal to provide third-party claims administration and accounting services to the City in connection with its health insurance program. In January 1999, XXXXXXX separately agreed to pay XXXXX half of all monthly administrative fees that it would receive if it should be awarded the health plan administration contract (“the Contract”).1 The letter from XXXXXXX to XXXXX memorializing this agreement does not precisely identify the services that XXXXX had provided or would provide in exchange for his payments.

In February 1999, the City awarded XXXXX the Contract

www.AWAC.md

Wednesday, June 17th, 2009

If your interested in controling your health care costs, a visit to AWAC is mandatory. Below is an excerpt from their website:

AWAC® or Advanced Warning and Containment®, a product of AWAC, LLC, is a sophisticated new way to save health plans money, while also improving patient outcomes. AWAC’s proprietary software actually detects situations that are likely to become catastrophic before they reach that state and makes recommendations. The AWAC multidisciplinary team of physicians and clinicians devise and implement a strategy or intervention, ultimately resulting in lower claims costs and healthier patients.

Dr. Richard’s Rules for IT:   1. He who has data wins. 2. He who has good data wins a lot. 3. He who has good data in real time wins it all.

UK Tax Increase – “Please Boss, Transfer Me to a Field Office in France”

Thursday, June 11th, 2009

http://www.insurancetimes.co.uk/story.asp?sectioncode=13&storycode=378872&c=2

Medical Tourism – A Booming Industry

Wednesday, June 10th, 2009

With the passage of a national health care plan will come health care rationing and long waits to see a doctor. Certain surgical procedures will require governmental approval and months if not a year or more wait time to have the needed surgery. Such is the nature of socialized medicine as evidenced in Canada, United Kingdom and other countries that have embraced the socialized medicine concept.

Physicians in the United States will be mandated to accept 110% of RBRVS through the govenment plan and will be required to see patients who participate in the socialist program. Since it is estimated that 62% of all United States physicians are over the age of 55, we suspect that many will retire early leaving an even greater shortage of physicians in this country.  With an estimated 50 million additional health care participants covered, it does not take a rocket scientist to see that health care in this country will be necessarily rationed and waiting lines will be long.

These are undeniable facts.

What we expect to see is the rapid rise of competitive health care schemes for those able to seek and pay for care in other countries such as Mexico, Costa Rica and Singapore. High quality care is available overseas with costs as low as ten cents on the dollar as compared to fees charged in the United States.

It is estimated that over 1 million Americans will seek health care in other countries in 2009, up from approximately 500,000 in 2008.

We are currently working with several overseas organizations to help facillitate access to quality health care in Mexico, Costa Rica, India and Singapore. We are finding that some of our clients are willing to look at this option now, and we expect this interest will grow once Americans realize what “free” socialized medicine really means to them personally.

http://www.cmi-matamoros.com/

www.globalmedicalprices.com

Highmark Opens Two Health Insurance Retail Stores – A New Trend?

Monday, June 8th, 2009

Highmark, a Blue Cross Blue Shield plan, has opened two health insurance retail stores in Pennsylvania, called Highmark Direct.  With a national health care delivery overhaul expected this year, Highmark may be on the leading edge in positioning themselves under the new system Congress is expected to pass before Labor Day. Read full article here – store-front-health-insurance

Medical Tourism – A Growing Trend

Monday, June 1st, 2009

A Dallas Friend of Mine Shared This With Me:

John C. Goodman Health Alert
I have glimpsed at the future of U.S. health care and I am pleasantly surprised. Instead of
continuing to rise at twice the rate of growth of income, health care spending will slow
dramatically. Future prices will actually be lower than they are today. Providers will
bundle their services into easily-understood packages with a single fee. They will compete
against each other on price and quality and the data will be transparent. Health care will
be provided in a free, competitive marketplace. Third-party insurance will be relied upon
only for rare, very expensive events. Medical malpractice suits will be virtually unknown.

There is only one catch. All this will happen outside the United States.

Cheers,

John Goodman
President and CEO
Kellye Wright Fellow
National Center for Policy Analysis
12770 Coit Rd., Suite 800
Dallas, Texas 75251

http://www.ncpa.org