Many political subdivisions within Texas self-fund their group medical plans. In fact, most choose this financing method over purchasing fully-insured cover from a carrier. The choice seems obvious: self-funded group medical plans save money.

Or do they?

With the need to bid out their health insurance plans, cities, counties and school districts bid out everything except the component that drives 100% of their risk. They bid out third party adminstration services, PPO access, Rx administration and stop loss insurance. All these services account for as little as 10% of the Plan’s total cost.

What about the other 90% of Plan costs? Why don’t political subdivisions bid out that too?

Because they are ignorant, or just naive. Or, they trust their advisors who are ignorant or naive.

Political subdivisions should bid out provider costs too. They should invite interested hospitals and doctors to bid for the Plan’s substantial assets. Providers will compete for business, as has been proven by such groups as Bill Miller Bar B Q (Bill Miller Forbes), Tyler Independent School District, Blue Bell Creameries, San Patricio County, Texas Med Clinic, and many more progressive employers whom we have had the pleasure of working with in the past three years.

The problem is that political subdivisions have never bid out the dominant risk factor of their plan and instead have historically  ”gifted” public funds through intermediaries who have negotiated secretive contracts with health care providers. See Health Care Strategies for Texas Political Subdivisions.

This is upside down.

   At 2:00 pm cst, Judge Hinojosa’s court was packed with spectators. The sentencing of Half Guilty, Half Pregnant and admitted felon Arnulfo Olivarez was due. Yet, sentencing was delayed once again due to “legal technicalities” until late January 2011.

Seems the Feds can’t get their act together.

http://www.valleycentral.com/news/story.aspx?id=547346

Editor’s Note: We predict that Judge Hinojosa will earn the name “The Hanging Judge” upon sentencing day. We expect lengthy prison sentences as well as significant fines to be imposed.

Half Guilty, Half Pregnant and still licensed Texas insurance agent Arnulfo C. Olivarez is scheduled to be sentenced for his crimes on Monday, at 2:00 pm CST in Federal Court, McAllen, Texas, Judge Ricardo Hinojosa presiding.

Prior sentencing dates have been postponed over the past three years at least six times.

   Admitted felon Olivarez has plead guilty to bribing South Texas public officials in exchange for lucrative insurance contracts worth millions of dollars.

For more information, type in “Olivarez” in the search box on this blog to read prior postings. Also see http://www.valleycentral.com/news/story.aspx?id=543677.

Editor’s Note: The Texas Department of Insurance website shows Olivarez recently renewed his insurance license – https://www.texasonline.state.tx.us/NASApp/tdi/TdiARManager

Texas Administrative Code – Licensing of Convicted Felons – http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=T&app=9&p_dir=P&p_rloc=148044&p_tloc=&p_ploc=1&pg=2&p_tac=&ti=28&pt=1&ch=1&rl=503

Admitted felon Arnulfo Olivarez currently represents the following insurance companies:

Read about “The Rest of The Story” here: http://www.brownsvilleherald.com/news/official-85637-board-rep.html

Health insurance agents earn commissions from the sale of health insurance policies. Over time, renewal commissions build up and provide an independent agent a “base salary” which provides for his or her monetary needs to pay mortgages, car payments, education for their children, living expenses, etc. And, renewal commissions on health policies are low, unlike the upfront first year commission paid by carriers to incentivize independent producers to bring in new business.

With ObamaCare, indepedendent health insurance agents will be cast aside. No longer will carriers be able to pay commissions and remain within the Minimum Loss Ratio requirement effective January 2011.

In a November 2010 Agent Compensation Statement, a major A+ Carrier put the following notice to their health insurance agents:

“Beginning 11-15-10 any commission transactions for major medical policies with effective dates of 1-1-2011 and after will be held. Commissions on all other lines will not be held and will process normally.”

LOUISVILLE, Ky.–(BUSINESS WIRE)–Humana Inc. (NYSE: HUM) today announced it has signed a definitive agreement to purchase Concentra Inc., a privately held health care company based in Addison, Texas, for approximately $790 million in cash. Through its affiliated clinicians, Concentra delivers occupational medicine, urgent care, physical therapy and wellness services to workers and the general public from more than 300 medical centers in 42 states. Nearly 3 million Humana medical members live near a Concentra center. In addition to its medical center locations, Concentra serves employer customers by providing a broad range of health advisory services and operating more than 240 worksite medical facilities.

“Concentra’s focus on evidence-based, cost-effective medical care and a service-driven culture parallels that of Humana and ultimately results in tremendous opportunity across the combined enterprise.”

“Concentra brings solid experience across a number of fronts that fit well with our consumer-focused strategy and will allow both organizations to provide a wide array of services to individuals needing access to convenient and affordable high-quality health care,” said Michael B. McCallister, Humana’s chairman of the board and chief executive officer. “We are excited about the opportunity to acquire a strong stand-alone business that reinforces our core businesses while providing both revenue diversification and opportunities for strategic expansion longer term.”

“This combination with Humana is an excellent opportunity to expand service to patients and employers, as well as enhance access to convenient medical care for patients in communities nationwide,” said James M. Greenwood, Concentra’s chief executive officer. “Concentra’s focus on evidence-based, cost-effective medical care and a service-driven culture parallels that of Humana and ultimately results in tremendous opportunity across the combined enterprise.”

Annual revenues for Concentra approximate $800 million. The transaction is subject to certain regulatory approvals and is anticipated to close in December 2010. Humana’s financial guidance for the years ending December 31, 2010 and December 31, 2011 exclude the impact of this pending transaction. Concentra is expected to be slightly accretive to Humana’s earnings for the year ending December 31, 2011.

Editor’s Note: American health insurance companies are seeking new opportunities – some are focusing on health insurance markets in China, India and other countries where free enterprise offers economic gain. The Humana purchase of Concentra signals entry into the Workers Compensation market in the United States, in our opinion. A good business decision it seems.

WASHINGTON, D.C., Nov. 22, 2010 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) expressed disappointment with the interim final rule on Medical Loss Ratios (MLRs) released by the U.S. Department of Health and Human Services (HHS) today. The rule includes agent and broker commissions as ‘non-claims costs’ when calculating an insurer’s MLR as part of the new health care reform law.

“The Big ‘I’ is disappointed with the interim final MLR rule, and we are extremely concerned that this rule will lead to severe market disruption, especially in the individual and small group markets,” says Robert Rusbuldt, Big “I” president and CEO.

Throughout the process, the Big “I” has urged the National Association of Insurance Commissioners (NAIC) and the HHS to exclude agent commissions from the MLR calculation. The Big “I” has argued that these agent commissions are passed 100% to third parties and are therefore pass-through payments that should not be included in the formula. While acknowledging the potential impact of the MLR standard on agents and brokers and including that impact as a factor in considering whether a particular individual market would be destabilized, HHS did not appropriately exclude agent commissions and fees from the MLR calculations.

“The Big ‘I’ is very concerned that the MLR provision of the new health care reform law will have a devastating effect on the private marketplace and that consumers will be negatively impacted,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs. “After hearing from various interested parties if HHS does not fix this language before the rule is final, we hope that Congress will step in and revise the MLR formula through the legislative process.”

Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address: www.independentagent.com.

http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20101122/NEWS01/101129994

A major Texas hospital system has agreed to a fully transparent hospital contract using Medicare base rates as the benchmark for all in-patient and out-patient claims. Payers (self-funded employers), for the first time,  will have direct access for full disclosure.

Competing payers such as the BUCA’s will continue to tout their “superior” discounts. However their continued refusal to show their clients actual contracts they have negotiatated with area hospitals will preclude payers from knowing the real truth about hospital costs.

Participating employers will be able to forecast their group health costs with a greater degree of accuracy as well as retain full audit rights.

For more information contact RiskManager@sbcglobal.net .

TribalCARE, powered by HealthSmart, is a major event for Tribes seeking to reduce healthcare costs while improving quality of life for all Native Americans. Only HealthSmart’s TribalCARE brings all the pieces and blends them into the product best suited — and ready today — for Tribal Communities.

Getting To Know TribalCARE

• TribalCARE is a trademarked new service from HealthSmart (patent pending)
• TribalCARE coordinates with Indian Health System (IHS) and 638 facilities to maximize the availability of Medicare Like Rates (MLR) for eligible Tribal Members
• TribalCARE obtains IHS authorization, notifies the provider and coordinates payment to the provider at 40% to 65% MLR savings

Why Tribes?

In 2003, Congress approved the Medicare Modernization Act (MMA) permitting Tribes to obtain MLR for Tribal Members. However, few Tribes currently take advantage of this law due to a lack of understanding, specialized administration and a lack of service providers willing to work with IHS and 638s on obtaining MLRs.

HealthSmart ignited the MLR Tribal services industry and has a rich history of providing MLR services, Tribal healthcare claim processing and managed care services. TribalCARE was developed out of our experience in working with Tribes, processing claims and providing Medicare pricing expertise.

With TribalCARE, now all Tribes, including government and enterprise entities, have the opportunity to participate in Medicare Like Rate repricing.

Which Tribes?

Any Tribe may qualify. TribalCARE is available for all Tribal and Tribal enterprise self-funded plans. Our wellness and managed care services can also be tailored to best meet your specific Tribe’s needs, budgets and community healthcare priorities.

TribalCARE, Powered by HealthSmart, Offers:

• MLR Reduced Rates on Eligible Services: Allows the Tribe to keep more of its money to use for other Tribal health-related priorities
• Coordination With Tribal Sovereignty: Including the unique laws that apply to Tribal entities and coordination with your IHS or 638 facility to maximize funding and get the most out of your dollars spent
• Enhanced Quality of Life: Access quality of life enhancing services designed to not only save Tribes more money, but also provide coaching for Tribal Members and work with them to develop healthy lifestyle changes

How It Works

TribalCARE works with the Tribe’s healthcare network, physicians and hospitals to provide reduced rates and increased access to life-enhancing services.

• Pre-Cert / IHS Authorizations: TribalCARE coordinates with IHS, the doctor and the Tribe to ensure every eligible Tribal Member gets the MLR for eligible services
• Claims Processing: TribalCARE ensures all claims are paid quickly and accurately to each provider for each MLR-eligible claim
• Reporting & Accountability: TribalCARE provides detailed monthly reports denoting claim activities and the MLR claims along with Tribal savings from month to month

TribalCARE Benefits

• Combines A Unique & Rare Solution
• Delivers 40%+ Medicare-Like-Rate (MLR) Savings
• Processes MLR & Commercial Claims
• Offers each Tribal Group a Single Vendor / Single Contact

Editor’s Note: Reducing health care costs by paying “Medicare Like Rates” to providers? What a novel idea!