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 271.903 – Commitment 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!

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.

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.

     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.

“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.

http://www.apollomunichinsurance.com/

“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.”

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.

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.”