Archive for October, 2011

Can A Texas Political Subdivision Contractually Commit Future Revenue?

Friday, October 28th, 2011

If a Texas political subdivision signs a five (5) year contract for a copy machine for example, does the political subdivision retain the continuing right under Texas law to terminate the contract prior to the expiration of the contract?

The answer is yes.

Texas Local Government Code Section 271.903Commitment of Current Revenue, stipulates that a political subdivision retains the continuing right to terminate a contract at the expiration of each budget period. 

Attorney General Opinion DM-418 states that a political subdivision may execute a contract for a longer period than one year if the contract contains a continuing right to terminate.

Editor’s Note: This applies to all contracts including insurance related contracts. Damn – Who Signed This!

 

ObamaCare Declares War On Doctors

Thursday, October 27th, 2011

The worst fears about Obamacare are now being realized in a decision on Monday by the Medicare Payment Advisory Commission (MPAC) established by the law to supervise $500 billion in Medicare cuts. MPAC, whose decisions have the force of law, has voted to impose drastic pay cuts on all doctors under Medicare and, by extension, under Medicaid (which tends to follow suit). The cuts will effectively reduce the real pay for specialists by 50% over the next ten years — including a 25% reduction over the next three years — and cut general practitioners’ pay by one-third over ten years (and that assumes that inflation stays down at 3% a year).

 

MPAC has ruled that specialists must accept a 6% cut in their fees per year for each of the next three years followed by a seven year freeze in their fees without any adjustment for inflation. If inflation stays very low — at 3% per year — this cut amounts to an 18% cut in nominal pay and a 50% cut in real pay for specialists. General practitioners will face a ten year freeze on their pay, reducing their real compensation by one-third assuming ongoing low inflation. Higher inflation, of course, would make the cuts in real pay even more drastic.

The consequences of the MPAC decision will be immediate and drastic:

* Many physicians, and many more specialists, will refuse to treat Medicare patients. It will become very, very difficult to see a cardiologist or an oncologist or a gastroenterologist or OB-GYN specialist if you are on Medicare unless you are willing to pay out of pocket or have the kind of health insurance coverage from a private source that would reimburse for their care.

* More and more medical care will be turned over to nurses or physician assistants, and fewer people will ever get to see a doctor on Medicare.

* Private health insurers will follow in the footsteps of the Medicare program and likely slash their fees as well.

* Fewer students will enter medicine, and a major shortage of doctors will reduce the quality of medical care in America drastically.

The MPAC cuts will bring American doctors’ incomes more into line with European doctors who typically earn half or less of what their American counterparts earn — and deliver worse medical care as a result.

We have got to stop these MPAC cuts from taking effect. The very future of Medicare and of our entire health care system is at stake. If they are allowed to stand, Medicare will become akin to Medicaid or public housing — a program for poor people who cannot afford to pay for medical care from specialists outside the system.

Please take a moment and click here to sign the petition asking Congress to overrule the MPAC decision. Providing quality medical care and preserving the Medicare program is something that can reach Republicans and survival-minded Democrats, but we need to raise a storm of protest!

Click Here to sign the petition asking Congress to overturn the MPAC decision.

Click Here to watch my video on Obamacare Declares War On Doctors.

Tale of a One Hospital Town

Tuesday, October 25th, 2011

We are going to post a story soon about a one hospital town in Texas and how the town’s largest employer fought back against the areas largest health care monopoly. This national hospital chain, knowing there was no other competition in the area, set up shop in this desolate part of Texas and has, for years,  charged third party payers exhorbitant fees for service, as much as 50% or more than they charge elsewhere.

This story will be posted soon.

Hospitals Demand Pay Increase – UHC Refuses, Aetna Agrees

Monday, October 24th, 2011

“If the insurer agreed to ECHN’s terms, the cost of baby deliveries would increase from $3,500 to $8,840 and emergency room visits would increase from $480 to $1,252…..”

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Is Everybody Charged The Same For Health Care?

Sunday, October 23rd, 2011

     If airlines can charge differing fares for the same flight, why cant hospitals charge differing rates for the same services too?  It’s all about a free market economy.

If the price of an airline ticket is too high, there is nothing to stop you to shop around for a better one. Same goes for health care.

Editor’s Note: A total hysterectomy for $10,000, all incluesive? First quote received was for about $25,000. We negotiated a total incluesive fee of $10,000 with the assistance of a hospital administrator who put the package together for our client who was in need of immediate surgery. Patient’s group medical plan paid the $10,000 up front as a condition for the transaction. The surgery was successful.

Health Care Pricing – How Much Can I Get Away With And Still Go To Heaven?

Sunday, October 23rd, 2011

“Prices charged by providers are a significant driver of premium increases and a factor in coinsurance amounts, but are even less transparent than health plan pricing structures. Individual providers and facilities deliver and price thousands

                                                  

of services and prescription drugs, and each may price those services and drugs differently. The same provider or facility may also charge different amounts by payer, including various carriers and the uninsured.” – exerpt from The Extended Health Exchange, July 2011 (www.extendhealth.com)

With the existing health care model, consumers are shielded from true health care costs. Little Suzi Secretary, whose group medical plan she relies on, has no clue that Hospital A is the best and lowest cost facility in her area. And, she doesnt care, after all, she has to pay the same deductible and co-insurance no matter which hospital she goes to that are in-network. And, Hospital A may be an out-of-network hospital so going there would cost Little Suzi more but her employer’s plan less. More for less……………………

And, Little Suzi’s employer has no clue either. The employer relies on group insurance premium rates as the benchmark on “the best deal”. The insurance plan with the lowest premium most certainly has the best provider pricing, right?

Editor’s Note: Hospital pricing differential between hospitals can be significant. We know. Recently we reviewed pricing at two hospitals located within the same city. One was, on average, 300% higher than the other. The higher cost hospital was “in-network” with a local political subdivision, while the less expensive hospital was not. The annual estimated cost differential to the political subdivision insuring approx. 300 employees was in excess of $1,000,000.00. In other words, if the less expensive hospital had been utilized during the past 12 months, the group self-funded benefit program would have enjoyed a healthy fund balance instead of a negative fund balance requiring more taxpayer infusion.

A decision to utilize the savings at the competing hospital was never made. East Texas politics intervened.

 

Apollo Munich Insurance – World Class Health Insurance

Saturday, October 22nd, 2011

http://www.apollomunichinsurance.com/

Are Hospital Charge Master Rates Unreasonable?

Friday, October 21st, 2011

“It has been common for hospitals to raise their Charge Master rates substantially every year in an effort to win higher reimbursement rates from health insurers.”

Buying hospital care is like buying a new car; the sticker price has no relationship to reality and is an arbitrary number. It gives the provider of goods an advantage to negotiate down from a high number  rather than up from a low number (Huh?).

And, doesn’t it feel good to have been able to save money?

Chargemaster Lawsuit

Editor’s Note: A friend of ours in East Texas called us the other day. “Bill, you always told me that cash is king. I have in my hands an outstanding bill for about $2,600 that the insurance did not pay for my wife’s recent hospital stay. What advice can you give me in getting this dawg bill reduced.” “It’s easy Larry, just call the hospital, and ask them if they will take 50 cents on the dollar if you pay them today.” Twenty minutes later Larry called; “Bill, I owe your a case of beer. It took about 15 minutes on the phone to get the bill reduced in half!”

There are companies out there that will help timid health care consumers in negotiating hospital bills for a percentage of savings. In this case, if we had made the call, and if we were in the business of helping consumers for a percentage of the savings to be realized, we would have made about $300 for 15 minutes of work. What a way to make a living! We’d be driving a cadallac by Xmas if we were to start a claim negotiating business for timid consumers. Got to love timid people!

Larry is retired. If he ever gets the itch to make a little pocket money, maybe he should advertise ” I ASSIST TIMID HEALTH CARE CONSUMERS FOR FREE.”

SeeChange Health Coming To Texas? – Value Based Insurance Product

Wednesday, October 19th, 2011

SAN FRANCISCO—A California company has introduced a value-based insurance design product for fully insured small and midsize employers that provides financial incentives to encourage employees to access preventive care and manage chronic conditions.The program, developed by San Francisco-based SeeChange Health Insurance Co., provides up to $1,000 deposited into a health incentive account that plan members can tap to reduce their out-of-pocket medical costs if they take three steps: see their doctor for a checkup, take a basic lab test and complete a health-risk questionnaire.

If the screening process determines that the plan member has a chronic condition, the insurer will deposit another $200 in their health incentive account to help cover maintenance costs, provided they meet a further set of conditions based on treatment guidelines established by such organizations as the U.S. Preventive Services Task Force.

Other perks

The plan also offers other wellness-oriented perks such as admission to state parks to encourage outdoor activity, and access to a physician house-call service to deter use of hospital emergency rooms.

The insurer also is in talks with Cupertino, Calif.-based Apple Inc. to create personal computer, iPhone and iPad applications to monitor blood pressure and infant care.

The product, available only to employers in California with two to 300 employees, is among the first VBID products to be offered to the fully insured group health market. The primary objective of a VBID is to remove the financial barriers to purchasing “high-value” drugs or services with the hope of raising compliance and avoiding more expensive future medical costs, such as hospitalization.

Plans to expand

Though VBIDs have been widely adopted by large, self-insured employers, access to fully insured employershas been limited for a variety of reasons. Among other things, health insurers have blamed the need to seek regulatory approval, restrictive community rating laws, and the fact that small and midsize employers often shop their health coverage annually, either inviting adverse selection or not allowing sufficient time for the benefit changes to positively affect plan members’ health.

Having gone statewide Aug. 1 after launching the product on a limited basis in Fresno, Calif., SeeChange plans to expand nationally once it receives regulatory approval for its product in the 24 other states where it has insurance licenses, according to SeeChange CEO Martin Watson.

Editor’s Note: SeeChange Health’s application to the Texas Department of Insurance is pending at this time.

Employers Interested In Joining Hospital’s ACOs

Wednesday, October 19th, 2011

Accountable care organizations (ACOs) could prove a popular option with employer groups looking to keep their workers insured while controlling costs, concludes a new study by consulting firms Aon Hewitt and Polakoff Boland. This ultimately could prove beneficial to hospitals, which have been moving toward forming ACOs but are still unsure of what market demand for such arrangements would be.

According to the study, more than three-quarters of employers are likely to keep providing their workers health insurance coverage rather than moving them to state health exchanges.

“This finding indicates that employers intend to remain ‘in the game’ of offering healthcare benefits for the foreseeable future. Sixty-five percent of respondents have expressed interest in exploring the use of ACOs as an option for providing healthcare benefits to their workforce,” the report said.

However, limiting employee care only to ACO provider networks may have a stifling effect on uptake, the report warned.

“It’s clear that ACO proponents need to educate the public about the trade-offs between networks,” Polakoff Boland Managing Partner Phil Polakoff said in a statement. “ACO models help organizations reduce healthcare cost, waste and inefficiencies, as well as support the movement from volume to value-based approaches.”

Hospitals Spend Little on Charitable Care, Yet Evade Taxes

Wednesday, October 19th, 2011

Many Iowa hospitals spend far less than 1 percent of their revenues on care for poor patients while reaping tax exemptions on nearly $2 billion worth of property, reports the Des Moines Register.

According to the newspaper, 46 not-for-profit hospitals reported $295 million in earnings in 2009. Less than half of that amount was earmarked toward care for the poor and uninsured. Fifteen facilities applied less than 1 percent of their profits toward charity care, while 11 hospitals spent more than 2 percent.

The nonprofit exemptions allow the state’s hospitals to not pay $58 million a year in property taxes.

“Nonprofits, because of the tax benefits they have, ought to be doing more charitable care than for-profit hospitals,” said Sen. Charles Grassley, an Iowa Republican who has been critical of the way not-for-profit hospitals operate. “Hospitals that aren’t doing the proper amount of charitable care should lose their nonprofit status.”

However, the Iowa Hospital Association contended that the numbers hide the true story. “If you’re just looking at charity care numbers, you’re not looking at care that gets provided and never gets paid for,” said IHA President Kirk Norris.

Lone Star TPA Opens For Business

Wednesday, October 19th, 2011

A new TPA competes for business in East Texas and beyond. Lone Star TPA of Tyler will become a major player  in East Texas in short order. Knowledge of East Texas managed care contracts and contacts, prior experience in marketing in the East Texas biosphere, aggressive and out-of-the-box strategies  historically demonstrated by it’s principals over the past 30 years is a  combination and a formula  for success.    http://www.lonestartpa.com/

Government Mandated Fee Schedule: Does History Repeat Itself?

Monday, October 17th, 2011

Here’s a modest suggestion re an alternative fee schedule methodology that deserves careful consideration by legislators and regulators alike –

From the medical fee schedule section of the Code of Hammurabi (1730 BCE):

215 If a physician make a large incision with an operating knife and cure it, or if he open a tumor (over the eye) with an operating knife, and saves the eye, he shall receive ten shekels in money.

216. If the patient be a freed man, he receives five shekels.

217. If he be the slave of some one, his owner shall give the physician two shekels.

218. If a physician make a large incision with the operating knife, and kill him, or open a tumor with the operating knife, and cut out the eye, his hands shall be cut off.

219. If a physician make a large incision in the slave of a freed man, and kill him, he shall replace the slave with another slave.

220. If he had opened a tumor with the operating knife, and put out his eye, he shall pay half his value.

221. If a physician heal the broken bone or diseased soft part of a man, the patient shall pay the physician five shekels in money.

222. If he were a freed man he shall pay three shekels.

223. If he were a slave his owner shall pay the physician two shekels.

224. If a veterinary surgeon perform a serious operation on an ass or an ox, and cure it, the owner shall pay the surgeon one-sixth of a shekel as a fee.

225. If he perform a serious operation on an ass or ox, and kill it, he shall pay the owner one-fourth of its value.

Gary Anderburg of Broadspire was kind enough to forward this to my attention; he included the veterinary section just for comparison purposes. Gary says, and I agree, that we should give serious thought to reinstituting this, and go back to shekels.

That said, I’m wondering if Medata, Coventry, Mitchell, Stratacare, MCMC, and ACS/CompIQ can get this programmed…

Posted by Joe Paduda at 7:33 AM | Link to this post | Comments (3)

HB 2697

Monday, October 17th, 2011

Out-of-network ASC charges subject to U&C payment under HB 2697 – http://e-lobbyist.com/gaits/text/254579

Editor’s Note: If passed, this could have a profound effect on Cost Plus groups in Texas. Are PPO negotiated rates higher than U&C rates? The answer is YES in most cases. If that is true, then why would anyone want to pay more?

Texas May Shift Convict’s Care – New Provider Network Contemplated

Monday, October 17th, 2011

                Convict Health Care

 

Proposed: Texas Medical Reinsurance System

Monday, October 17th, 2011

               A Bill introduced in the Texas House, HB 2165 establishes the Texas Medical Reinsurance System that will assist self-funded employer sponsored health plans in the purchase of competitive stop loss cover.

Health insurance stop loss cover is essentially a twelve month contract, with the right of the carrier to re-evaluate the risk upon renewal. Large potential claims identified as possible risks to be paid in the succeeding Plan year may be passed on to the Plan Sponsor in whole or in part, thereby limiting competition for the Plan Sponsor seeking competitive stop loss cover.

The Texas Medical Reinsurance System would provide protection in such events by offering aggregate stop loss cover to insure claims exceeding a specified dollar amount or a percentage of expected claims. A two year extention of coverage for two succeeding policy years plus portability would move to any new carrier should one replace the previous carrier.

See details here – http://e-lobbyist.com/gaits/text/264416.

Section 1676.004, Repricing Schedule, (B) (1) & (2) provides for the basis of medical care reimbursement. Physicians to receive 110% RBRVS and facilities (hospitals, out-patient surgical centers, etc) to receive 140% RBRVS.

Editor’s Note: While the concept is a good one, and will fix an inherent problem associated with a self-funded employee welfare plan, we think the private sector is better equiped to facilitate the scheme rather than a single payer reinsurance system as proposed by HB 2165.

Reputational Risk Cover Announced

Friday, October 14th, 2011

LONDON and NEW YORK—Willis Group Holdings P.L.C. and Chartis Inc. this week have separately introduced insurance products addressing an organization’s reputational risk.Willis has developed reputational risks insurance coverage for the hotel industry, the London-based insurance brokerage said in a Wednesday statement.

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Ironshore Announces News Managed Care Liability Cover

Friday, October 14th, 2011
HAMILTON, Bermuda—Two health care-related errors and omissions programs, one for managed care organizations and the other for medical billers and coders, have been launched.Ironshore Inc. said Wednesday that its specialty health care unit, IronHealth, has expanded its government billing E&O product suite to include a tailored policy form for managed care organizations.
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HealthSmart Announces New VP of Sales

Friday, October 14th, 2011

HealthSmart Holdings today announced that Mark Stadler will join the company as Senior Vice President of Sales and Marketing. Mark has a superb sales and management background, having held executive roles at Mercer, Great-West, and AON. He understands HealthSmart’s business model and is uniquely qualified to provide the direction for its continued growth. Mark will work with the sales team, along with HealthSmart’s business partners and distribution networks, to align its organizational strengths and facilitate opportunities in traditional and emerging markets.

“Mark joins HealthSmart at an exciting time. As we continue to expand our product and service offerings, his background and industry experience will guide the development of our team to reach its full potential. He is a strong addition to our executive team,” said Jim Pennington, HealthSmart’s President.

About HealthSmart
HealthSmart Holdings, Inc. is an innovative healthcare solutions company that manages more than $3.2 billion in claims. The company’s headquarters is in Irving, Texas, and it currently maintains seven service operations around the country. The HealthSmart companies are dedicated to delivering integrated self-funded solutions by utilizing proprietary products and services, including benefit administration, provider networks, care management, Our mission is to improve member health and lower healthcare costs.

Clueless Politician To Evil Insurance Company – “Waive That Deductible!”

Friday, October 14th, 2011

U.S. Senator Richard Blumenthal (D-Conn.) called on State Farm Insurance to drop its hurricane deductible for Connecticut residences whose homes were damaged by Tropical Storm Irene.

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Insurers Partner With Drug Stores To Offer Medicare Rx Plans

Monday, October 10th, 2011

Aetna and Coventry announced separate arrangements to offer Medicare prescription drug plans, in an attempt to woo the burgeoning senior market.

Aetna is partnering with CVS to provide its plan, which has no deductible for generic drugs and costs $26 per month in premiums, Reuters reports. It also offers one-on-one counseling about prescription directions and potential drug interactions, according to Bloomberg BusinessWeek. Seniors may use the plan at 7,200 CVS locations and more than 65,000 pharmacies in Aetna’s Medicare network, the Wall Street Journal notes.

Coventry, meanwhile, has joined forced with Walgreens, Wal-Mart, and Target to offer its plan with an average monthly premium of $25.60 and no annual deductible, Reuters reports.

“Everyone will be much more aggressive this year and there potentially could be a lot of movement between plans,” Dave Shove, an analyst with Bank of Montreal in New York, told BusinessWeek. Providing Medicare drugs “is a commoditized generic, over-the-counter world now and it may be a better fit for the Wal-Marts of the world than for the insurers.”

Payers Pay Up – 6 Recent Fines on Insurers

Monday, October 10th, 2011

Health insurers are no strangers to fines and other disciplinary actions. Payers this year have felt increasing pressure from state insurance departments to improve efficiency and quality–or pay the price.

Even though insurers have been busy looking for ways to curb escalating healthcare costs and reduce administrative spending under MLR requirements, some have had to shell out big bucks for wrongly denied coverage, improper claims processing, and unprotected health information. Such penalties can provide a cautionary tale for other health payers to get their own houses in order.

With that in mind, FierceHealthPayer presents six recent fines on health insurers. Click on a company below to learn more.

Self-Funding Under Attack

Sunday, October 9th, 2011

“Employers that want to self-fund their health benefits (and the vendors and attorneys who want to serve them) have yet another (as they see it) unreasonable opponent to self-insuring health benefits.”

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Medical Costs Are Flat – Premiums Are Way Up – Why?

Sunday, October 9th, 2011

“As long as employers are going to provide coverage for employees and help pay the premiums, why wouldn’t insurers increase premiums? ”

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“The Days Of New Doctors Hanging Out A Shingle In An Independent Solo Practice Is Over”

Sunday, October 9th, 2011

Despite some physicians resisting hospital employment, more of them are favoring the model, according to a new Merritt Hawkins & Associates survey released yesterday.

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Houston Insurance Broker Pleads Guilty – Sold Fake Insurance Policies

Sunday, October 9th, 2011

“The owner of a Houston-based insurance brokerage faces up to 20 years in federal prison………………… ”

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Highmark: Conspiracy To Monopolize Health Care?

Sunday, October 9th, 2011

“Highmark Inc., conspired to monopolize the city’s health care market ……..raise prices at the expense of employers and consumers……………..Highmark is one of the nation’s largest independent licensees of the Blue Cross & Blue Shield Assn. ……………….”

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Funding Stop Loss Cover Through A Captive

Wednesday, October 5th, 2011

Stop loss insurance is not a value added product. It is a commodity.

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Health Insurance Claims Paid in 30 Seconds?

Tuesday, October 4th, 2011

When a covered medical service or supply is received

1.

The insured presents the MasterCard® sleeve to the provider’s office.
This “ClaimPay” sleeve contains information similar to a medical identification card. The provider accesses a website listed on the sleeve to submit the claim online.

2.

The website determines, based on the type of services received, the benefit amount payable.

3.

Similar to a pre-paid gift card, in less than 30 seconds the online system automatically loads the benefit amount onto the insured’s plan MasterCard®.

4.

The provider’s office can then swipe the card to receive payment for services, up to the benefit amount stored on the card.

5.

If additional payment is due, the provider can communicate the outstanding balance to the insured.

Editor’s Note: This is part of an email we received today from an insurance company announcing that they can pay claims in 30 seconds. PBM’s have been doing that for years. Medical providers, we feel  sure, would treat this as a CASH TRANSACTION with significant discounts, maybe even better than traditional PPO discounts?

 

 

 

SIIA Conference

Tuesday, October 4th, 2011

Upcoming SIIA Conference will have numerous classes  like the one below:

Tuesday, October 11, 2011, 3:15-4:30 pm

Speaker:

Adam V. Russo, Esq.
Co-Founder and Chief Executive Officer
The Phia Group, LLC

H17: Medical Devices and Other Provider Mark Ups – Challenges and Solutions for Self-Insurers to Better Negotiate Lower Pricing
It has been determined that hospitals and other provider organizations often incorporate huge price mark-ups for medical devices, which inflate health care costs for self-insured employers. Learn more about this mark-up practice and negotiation approaches intended to produce more equitable reimbursement arrangements.

For more information visit www.siia.org