Intel was rigorously managing its equipment suppliers but not its health care suppliers…….Intel decided it could use its purchasing power in markets where it had operations to influence health care players—care providers, health plan administrators or insurers, and other employers—to rise above their competing self-interests and work together to redesign the local health care system….
What business do you know that marks up their prices by 920% and still stays in business?
“By the time you add third party intermediary fees of $1 million and consider the additional balance billing liability to plan participants, Cost Plus Insurance may not make much sense to those in the domino parlor.”
The Weslaco ISD lawsuit against Aetna is a fascinating read. The pleadings provide clues for those who are curious about various revenue streams found (or not found) within some administrative contracts for third party administration of group medical plans.
“ACA is the fuel which fires the self-funded engine of employee health and welfare plans, providing flexibility, control and lower costs. It is the parking brakes of fully-insured plans.” – Bill Rusteberg
John, der irrt! Deutsch Bier und deutschen Frauen sind die besten! “There are plenty of reasons to brag about living in America, like the fact that we have the most innovative beers on the planet (sorry Germany)”
A study for a large group we manage is quite interesting. Over a three year period average hospital billed charges (Chargemaster Rates) have increased 27% while our costs have increased 2%.
An assorted collection of articles for those interested in Cost Plus / Reference Based Pricing models
An idea with bi-partisan support? If the federal government would rent their Medicare network and charge what the private market charges for access, the government would rake in millions, if not billions of dollars in access fees. This would generate enough money to buy health insurance for those that don’t need it.
“By the time you add third party intermediary fees of $1 million and consider the additional balance billing liability to plan participants, Cost Plus Insurance may not make much sense to those in the domino parlor.”
The Affordable Care Act (ACA) has had a fundamental impact on health care financing in this country. It has effectively provided added incentives for plan sponsors to consider modified self-funding arrangements for their employee health and welfare plans in lieu of fully-insured plans. The advantages of doing so are clear.
J. Patrick Rooney is the Godfather of Cost Plus Insurance. Rooney acknowledged that hospitals may need to charge more than Medicare will pay, but contended that authoritative research showed that Medicare plus 25 percent is the reasonable amount for hospitals to charge. J Patrick Rooney (1927 – 2008)
The PPACA [Game Changer for Health Care Financing] Posted on November 6, 2014 by Editors The fuel which fires the self-funded engine of employee health and welfare plans [By William Rusteberg] A SPECIAL ME-P REPORT Introduction The Affordable Care Act (ACA) has had a fundamental impact on health care financing in this country. It has effectively … Continue reading Medical Executive Post Publishes RiskManagers.us White Paper
All of us have purchased a vehicle at some time in our life. Vehicles are essential these days. It’s tough to walk those 20 miles to work in the morning, much less walking back after the five o-clock siren. So how many of you have paid the sticker price on a new vehicle? Probably not, … Continue reading Are You Paying The Sticker Price? If So, Your An Idiot!
Ocean Surgery Center explains why they chose the cash-friendly model (it’s not clear if they’re cash-only or also accept insurance). For regular readers of this blog, most of this will sound very familiar: The critical flaw in our for-profit healthcare system is the absence of price transparency. This flaw has allowed for price distortions to go unchecked, … Continue reading Ocean Surgery Center
While the big carriers who often are administrators of self-funded plans claim to have their client’s interests at heart, they shun from their network the highest quality and lowest priced players in the market, my facility being a classic example. Part of the reason for this is the massive revenue generated by selling their “discounts” … Continue reading Keith Smith, M.D., Opines About PPO Networks
1. CostPlus Insurance www.costplusinsurance.com/ ______________________________ www.costplusinsurance.com “Once we rid ourselves of traditional thinking we can get on with creating the future” – James Bertrand
By William Rusteberg The most powerful selling tool is fear. It motivates buyers to act quickly and decisively without basis of reasoned consideration. Depending on the level of fear a seasoned salesman can gin up during his close, fees to be charged and eagerly paid by the victim are directly and proportionally related. Higher fear levels bring higher fees. … Continue reading Selling Fear & Cost Plus Insurance
Growing pressure by policymakers, employers, consumers and the media to publicly reveal the prices charged by healthcare providers and reimbursed by payers is forcing providers and payers to reconsider their longstanding opposition to price transparency.
Texas news reporter seeks update on Weslaco ISD vs Aetna lawsuit: http://bloximages.newyork1.vip.townnews.com/galvestondailynews.com/content/tncms/assets/v3/editorial/6/08/6080d8ce-b862-11e2-afc1-0019bb30f31a/518b28d375654.pdf.pdf See original pleading: http://blog.riskmanagers.us/wp-content/uploads/2011/06/Weslaco-vs-Aetna.pdf Editor’s Note: From our perspective, the most interesting information coming out of this cause of action is the Aetna ASO contract provisions regarding earned fees derived from PPO discounts. Working the spread between charge master rates and managed care negotiated … Continue reading Weslaco ISD vs Aetna – News Reporter Seeks Update
By Tomas Philipson Nations around the globe are grappling with rising costs of health care. In the US, health care liabilities and the federal debt are on a trajectory that is difficult to sustain. As the figure below shows, the Congressional Budget Offices estimates that federal deficits under current law will continue to rise faster … Continue reading Health Care Costs Set To Soar
By: Mike Dendy, MHA/MBA – CEO/President Advanced Medical Pricing Solutions, Inc (AMPS) Our current system of corporate healthcare financing is nothing short of absurd. Health plan members seek care without regard for or knowledge of costs and administrative fiduciaries pay those bills without even the slightest bit of diligence to confirm validity of charges or … Continue reading Getting Control Of Healthcare Expenditures – The Reduction Of Healthcare’s Moral Imperative On Employers
Market Intelligence – Cost Plus Insurance/Reference Based Pricing Fees In Today’s Market By William Rusteberg “This is a competitive market. The difference in fees can be substantial. For example, a fee based on a percentage of billed charges can be significantly higher than a percentage applied to an allowed amount. The allowed amount equals … Continue reading Are You Paying Competitive Fees For Your Cost Plus Plan?
Mike Dendy, Woody Waters, Jeff McPeters and Bill Rusteberg may be the biggest looming nightmare of the insurance industry and the hospital billing department. But they don’t see it that way: They see themselves as a solution to a problem.
“What’s remarkable is that this is remarkable. Why should a business become the subject of news stories simply because it tells people the cost of its services?”
“Since all providers and health systems have to inflate their master charge sheet (so that brokers can negotiate a discount), a procedure like the colonoscopy has price inflation.” (See http://blog.riskmanagers.us/?p=11527)
In the article, Transparency And The Fallacy of Charge Masters the author exposes the fallacy of “charged based negotiations” with hospitals. “The charge masters are totally irrational…….over time, hospitals raised charges in anticipation of negotiating discounts with private health insurance companies while maintaining their revenue streams……….Over the years, the charge masters have become more and more disconnected … Continue reading % Of Savings Fee – Scam Of The Century?
“…This has led to the significant movement to eliminate PPO arrangements altogether as they not only provide no real value to the healthcare equation but in many cases promote a negative value…….”
“It is outrageous that a TPA/audit firm, who uses their own client’s buying power, will turn around and sell them access to a contract that is worse than Cost Plus, and as a result increase their net fees!”
“…..all elements within a market that do not add value to the overall market will eventually be eliminated……………….companies must work constantly to eliminate any cost factor that does not add value to a business process. ”
An implied contract is a contract agreed by non-verbal conduct, rather by explicit words. As defined by the United States Supreme Court, it is “an agreement ‘implied in fact’ as “founded upon the meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, … Continue reading Implied In Fact Contract
Hospitals and Preferred Provider Organizations (PPO) are team players. They are business partners who have forged lucrative business agreements with each other at the expense of the unsuspecting, ill-educated and clueless consumer. The scam is so well refined that the poor unsuspecting consumer is led to believe they are the recipients of a really good … Continue reading Let’s Screw Our Mutual Clients & Be Their Best Friends Too
According to recent media reports the Brownsville Independent School District has “saved” another $2.2 million by changing from the HealthSmart PPO network last year to the Texas True Choice PPO network. (Up from $6.8 million reported in October – see previous posting below) If true, the Brownsville medical community should be applauded. But has the BISD … Continue reading Update: Medical Community Gifts Another $2.2 Million to the Brownsville Independent School District
The cost of health insurance for the average working American more than doubled over the last decade, leaving many Americans feeling like they’re at the mercy of insurance companies, with no control over when the next exorbitant rate hike was coming. That’s not okay. And now it’s starting to change. Just yesterday, we announced … Continue reading Christmas Cheers From Kathy
Some of you have read this redacted email – PPO Rebates – in the previous posting below and have hypothesized that the end result in comparing PPO discounts versus what is actually paid to a participating provider is exactly the same. That is, no matter what the purported discount is, whether it be 48% or 50%, … Continue reading PPO Sales Rep. Verifies PPO Kickback Scheme (cont.)
Molly Mulebriar, private investagator, weighs in on the BISD audit story: I have both the MedReview LLC audit done in 2007 and the CTI audit done this year. I dont agree with either one to the extent that I dont believe their methodology is bullet proof. Both based their findings off “discounts” and neither one … Continue reading BISD Audit – Molly Mulbriar Weighs In
The Brownsville Independent School District’s external audit of their self-funded health plan is now part of the public record. The audit was a “review and verification of BISD Insurance Consultant Recommendation of the medical plan proposals for 2009-2010 and HealthSmart’s rebuttal of said recommendations.” A “he said, she said” it appears, is now a a “he said, … Continue reading BISD Audit Results In
Blue Cross and Blue Shield Featured Health Business Daily Story March 2, 2010 Michigan Blues Plan Is Sued by Municipalities Over Alleged ‘Hidden’ Network Access Fees Reprinted from The AIS Report on Blue Cross and Blue Shield Plans*, a hard-hitting independent monthly newsletter on business strategies, products and markets, mergers and alliances, and financing of … Continue reading
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 … Continue reading Humana Touts PPO Discounts
