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.
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
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.
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.
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
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
Good Afternoon,
below please find our new format for the monthly industry related articles I have been sharing with you. Hopefully you are finding them informative, as well as useful. If you missed any of the previous ones, you can print out a PDF copy below.
This month we are discussing “Fair and Reasonable Reimbursement”. Would love to have any feedback you might have, as well as discuss how NCN could assist you.
Patti Brock-Chapman
Director of Business Development
NCN
222 West Las Colinas Blvd
Ste 1500, Urban Towers
Irving, TX 75039
972-373-2800, ext 114
pbrockchapman@ncnelink.com
Having trouble viewing this email? Click here <http://campaign.constantcontact.com/render?v=0010i9xHdlwjFm-T3pHDDIKD9RJmQ8g1se-BabbX-cfp2OIz2FejBpXkO5ZkPmRsEKIRbWhNCHE2KqeNfuxpbQpIfWT9QyV8cI8-X37tZHbPypQ3JftApcNMIG7cGxePr2aAtwYWL1F5hkPeIpiXvclWA%3D%3D>
[http://origin.ih.constantcontact.com/fs096/1102273237098/img/4.png?a=1102587100702]
NCN Takes a Hard Look at Healthcare
The Fifth in a Twelve-Part Series
May 2009
Claim a Better Way
Now, for the first time in the industry, NCN powered by Data iSight can give payers, providers and patients access to the exact same information. This new, patent-pending reimbursement methodology ensures a variety of other benefits to all three parties as well:
Transparent Reporting to all parties facilitates open dialog and builds trust.
Defensible Methods are based on solid data to validate settlements and streamline the negotiation process,
Repeatable Results provide consistency over time and prove the superiority of the solution.
Lower Cost means increased savings for payers and patients on claims of any size.
Efficient Turnaround means providers aren’t kept waiting by the process.
Get Data iSight, the solution that benefits all parties with lower costs, greater savings and more peace of mind.
Questions or Comments
pbrockchapman@ncnelink.com<mailto:kbattaglia@ncnelink.com>
[http://img.constantcontact.com/letters/images/1101093164665/jmml_opgr1_img12.gif]<http://visitor.constantcontact.com/email.jsp?m=1102273237098>
What Constitutes a Fair and Reasonable Reimbursement?
[X]
Capturing savings in healthcare claims is important. Our rich media presentation, What Constitutes a Fair and Reasonable Reimbursement?<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5TY-cTR2bL_d8kiTd4PXm8MwaaGeEIyIh0C4VYCGG9s3MRsfT6AElN4Gq4bW9KfMytnQn1iNCM33G7RxNEvGQwAnI1R4vb87hHsQlu-I4fZYNey8XpmF7CDwMshLhoN-sA_5XYz_Rvz9Cw==>, explores:
*
All Over the Map – Healthcare suffers from erratic pricing methods.
* An Unsustainable Model – Saturated healthcare markets can’t deliver promised savings.
* An Unbiased Benchmark – Third-party data holds facilities accountable.
* A Solution in True Cost – Cost-based methods change the trend of rising healthcare charges.
PDFs of Articles
Here are links to all the articles in our series, NCN Takes a Hard Look at Healthcare:
What Constitutes a Fair and Reasonable Reimbursement?<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5TYvAj6QR7jnPeEkdbJ-p6qA3eEpQgQhLMlomTAtN0LdiBBLFzQSeYX81n1LNr8uB-9eOWYTC_sX7xU89vGC7zWdInp4UpsjLoxzn4s4hu_5_IlNxjvPzufyuacQCwY_3AxScg4HBthjHQdRpKWErUXm_EPH5ccFx3crBhnZXCAX6LnoeSccuJGT>
Out-of-Network is a Good Place to Start When Trying New Technology in Healthcare<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5TYb6ZoL6K7wKEHs3DVwVBxR8i8dsMVJIGW4xtVdwgW_7nkBv4lw1vXTHwVrT35vxTgRgukuNx5GJMEGF13Itp3XzvBy1bu6KErCBMC6OqSx78bhGXdyCOZLpABk1k4mHFDArFO25C5moxYTVKHSsWEOUZABF3LCX4EKdFTdCgzVjY1RcmxxGLcZAbTswIYO3_4=>
<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5Tb-qDWoOV-RBANMx-Bn-uvYNYK6tCY-cGjp5ObLt075CcBRlLHFRVrTX1wjB49L17icp6CKpDl2DHnwA6hh2r3OWoOnQO9eNB5ouOZmAPNI6w==>
Are PPO Networks Relevant?<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5TaBBl8y2VpKY95fJnQKi1JtuukvOKDYqja3cTBnvbodi8VWZHZSkKaQA5d2gSWdipSParNCRsh43ZF1x0jPTvHY0AhWfebgzSUz3A7iqBV9vQQ9e7ls1DiQzhAwMu9bPMcgGd3v8zKETq6nT4FG7nhkBuYdnrapIPQ94j1VyMLfg_Sn5FMRyBoH> <http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5Tb-qDWoOV-RBANMx-Bn-uvYNYK6tCY-cGjp5ObLt075CcBRlLHFRVrTX1wjB49L17icp6CKpDl2DHnwA6hh2r3OWoOnQO9eNB5ouOZmAPNI6w==>
Costs vs. Billed Charges: What’s the Difference?<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5TaPG8hENCJCpHtOkTpLEqAkwtUvKKV2aSeDN7aiVBqKJN_b6qIgeyB-6gqKQp_mZ_l9Mzo3IoQ-kztMbprCny8NrD3iu6pPWVbPTYY4VmeAkLEnS7M0bsqYX9JxPC1Y2wcwn3ZLHJArVfuR5gVYdaI_8Wray-N4ocqbDmx4WGZkRRdgurz1Fc7BxOf7PLQiEmw=> <http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5Tb-qDWoOV-RBANMx-Bn-uvYNYK6tCY-cGjp5ObLt075CcBRlLHFRVrTX1wjB49L17icp6CKpDl2DHnwA6hh2r3OWoOnQO9eNB5ouOZmAPNI6w==>
Can Transparency Really Reform America’s Healthcare?<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5TYvBVyfi5cDFqjhtOvWz9okwkh_CPEqZz5MOZo-v3Qji3olkCV_bc2C9DFbqwUrfdp7NFQN4wPBCmlpfRgFVwovXSuaq-SzQPyCSrkiPBsOLqPytHhaDWWlF-cSk-a6wj2VUJmuFi-mW-IFKpokee3v6OEJBOxlRE5AU7CLhT76Pc4DhFFqDjo->
About NCN
NCN<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5Tb-qDWoOV-RBANMx-Bn-uvYNYK6tCY-cGjp5ObLt075CcBRlLHFRVrTX1wjB49L17icp6CKpDl2DHnwA6hh2r3OWoOnQO9eNB5ouOZmAPNI6w==>
[X]
is the national leader in cost management for out-of-network claims. We use cost-based data and transparent reporting to maximize savings on healthcare claims. At NCN, we claim a better way for payers, providers and patients. View a rich media presentation about NCN’s patent-pending cost-based methodology.<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5Ta9XgSHtshdIMCQLcjzihLKSVy6ZeZiwWr5CvrRC0wnN1nxuGNgC7eig4I4_P35XeLY8nRJ9q2aDIBVu1upnOCMRG9rS_oUeXNHLboVA4Zh5BsnHUYf7lC9GlIBno2JiPFKSEaX_P0U0Q==>
NCN at AHIP’s Institute 2009
If<http://rs6.net/tn.jsp?et=1102587100702&s=29&e=00172ABKRdj5Tb-qDWoOV-RBANMx-Bn-uvYNYK6tCY-cGjp5ObLt075CcBRlLHFRVrTX1wjB49L17icp6CKpDl2DHnwA6hh2r3OWoOnQO9eNB5ouOZmAPNI6w==> you’d like to meet with NCN reps at the Institute in San Diego, please contact Kelly Battaglia<mailto:kbattaglia@ncnelink.com>, Manager of Marketing Services.
Sen. Edward Kennedy (D-Mass.) has begun circulating drafts of his proposed health care reform legislation. Initial reports, including an op-ed in the Boston Globe by Kennedy himself, suggest that the bill will contain every one of the bad ideas that I outlined in my recent Policy Analysis on what to expect from Obamacare.
Among other things, the Kennedy bill will call for:
-An employer mandate;
=An individual mandate;
-A so-called “Public Option,” a Medicare-like plan that will compete with private insurance;
-The use of comparative-effectiveness/cost-effectiveness research to restrain costs;
-Subsidies for families earning as much as 500% of the poverty level ($110,250 for a family of four).
-Insurance regulation, including guaranteed issue and community rating. (He would also establish Massachusetts-style Connector); and Government-directed health IT.
There’s no indication yet of how much the plan would cost or how Sen. Kennedy plans to pay for it.
The bill will be formally presented to Senator Kennedy’s Committee on Health, Education, Labor & Pensions (HELP) sometime next week. Hearings could be held around June 10, and committee “mark up” could begin on June 17.
Senate Finance Committee chairman Max Baucus (D-Mont.) is expected to introduce his health care bill shortly before the Finance committee begins its scheduled mark up on June 10.
Meanwhile President Obama’s campaign apparatus is planning rallies and demonstrations around the country to build support for health care reform.
The battle over the future of health care in this country has begun.
Dr. Pruitt, a Ft. Worth dentist, understands the problem with “dental insurance” and is not afraid to speak out.
http://healthcarefinancials.wordpress.com/2009/04/06/direct-reimbursement-dr-and-riskmanagersus/
Brownsville Independent School District is seeking proposals for insurance consultant. This is the second time in the past two months that the BISD has sought proposals for insurance consultant. Apparently the Board of Trustees did not like the choices presented to them on the first go-around.
The administration’s recommendation was to re-hire the current consultant. One board member commented “why are we going to re-hire a consultant who last year recommended a change in PPO networks to save us money, when in fact we have not saved any money and are spending more?” A motion to approve died for lack of a second.
Proposal specifications will be released via the BISD website soon.
Editor’s Note: Can anyone verify that the current BISD PPO network has less provider discounts than the previous BISD PPO network of last year? Has anyone reviewed actual PPO provider agreements with the two Brownsville hospitals to compare? Has anyone reviewed each and every physician PPO agreement for all physicians in Brownsville and surrounding communities? Are all physician PPO contract the same, or do some physicians get paid more than others? Are 100% of the PPO “discounts” passed on to the consumer? Do PPO contracts contain excalater clauses that assure providers a “pay raise” every year? Do all PPO contracts with providers renew at the same time every year, or are the contracts renewed as the preceding contract term expires? Has anyone asked the two Brownsville hospitals which PPO network would provide BISD with the lowest health care costs?
Published today on the Senate Finance Committee website: http://finance.senate.gov/sitepages/leg/LEG%202009/051809%20Health%20Care%20Description%20of%20Policy%20Options.pdf
The government of Switzerland is considering changes to their Insurance Contract Act – a 100 year old Swiss law. Among the proposed changes is one that says insurance brokers must be paid only by insurance buyers. If an insurer pays any sort of commission to the broker, the proposal says that the money (commission) must be passed on to the policy holder.
Democrates have agreed to pass sweeping health care legislation by July 31yet they have no clue what they are going to pass. Like the stimulus bill, we suspect that 435 congressmen will be asked to pass the bill without reading it or debating it.
http://www.foxnews.com/politics/2009/05/13/obama-announce-deal-health-care-reform/
Admitted insurance felon, “Half Guilty” Arnulfo C. Olivarez, is scheduled to be sentenced for his crimes in Federal Court, McAllen, Texas on Friday, May 15 at 9:00 am. Bribery to obtain insurance contracts at the public’s expense is illegal. Unfortunately we believe that the practice is widespread and criminals experience a high success rate of not getting caught. We hope that Judge Hinojosa hands down a long prison term as a warning to others who may tempted to extort monies from local taxpayers.
Despite his guilty plea last August, Mr. Olivarez is still a licensed insurance agent representing insurance companies such as Blue Cross & Blue Shield of Texas.
Former CEO of the Brownsville Independent School District, Tony Juarez, filed a lawsuit against the district alleging bid rigging conspiracy regarding insurance bids received by the school district (See Jan. 17 article on this blog). As reported by the Brownsville Herald today, Joe Zayas, newly elected board member, told the superintendent in an executive session to “get rid of then Chief Financial Officer Tony Juaraz.”
“After a successful 14 year career in public school administration and finance, including eight years as deputy superintendent for finance and business operations of the San Antonio Independent School District, Juarez, 55, returned to his hometown of Brownsville to continue his career with BISD. He is a graduate of Brownsville Hich School who served in the US Army from 1972 to 1978 and graduated Cum Laude with an accounting degree in 1982 from Pan American University.”
But, ” a buzz saw met him in Brownsville” according to the lawsuit.
Apparently Juarez would not go along with a conspiracy to recommend the highest priced insurance bid during a bid process. Instead he insisted that the low bid be recommended.
BISD is currently out to bid again for their group health insurance program. Will the highest cost proposal be awarded. Is the “fix” in? Many in the insurance industry have “Red Lined” the BISD due to past perceived shenanagans.
As the discovery process continues, the truth will emerge. Unless, of course, a settlement is made and the matter hushed up.
| Example | |
|
ABC Group has 250 employees and is interested in offering voluntary products and will grant you face-to-face access to each employee. The decision has been made to offer three products – our universal life, short-term disability income, and group accident policies.
The following assumptions will be utilized – a) The average age of an employee at ABC Company is 42. b) The broker is on a contract that yielded first year commissions of 90%, DI of 55%, and Accident of 52.5%. c) Participation for life insurance is 25%, DI Plus (16%), and Accident (15%). d) The annualized premium for each product could be as follows – life insurance ($442), DI ($450), and Accident ($176). Hitting each of the targeted assumptions could yield $52,978 in annualized first year premium.
The commission revenue generated could be $38,717.
Put another way, the broker has provided a solution that pays him/her an additional $12.90 per employee per month. That is across all 250 employees – even the people who did not participate in the voluntary offering!
|
|
Worksite marketing can be financially rewarding for insurance agents.
Some worksite marketing companies have so many marketing levels that we wonder how there is any money left to pay claims. Somewhere on this blog we wrote about a 350 San Antonio employer group that does not know that they have 46 agents getting paid on their voluntary products (See – How Many Agents Do You Have Mr. Employer?).
The example on the left was part of an email blast to licensed agents in Texas, from a large nationally known insurance company.
With the uncertainty facing many group health benefits brokers, we expect many will concentrate on the voluntary benefits side of the business in the coming months. With numbers like the ones in the example, many will find a move to voluntary benefits just as rewarding as commissions earned selling group health insurance has been for the past 20 years.
Years ago we were asked to market voluntary employee benefits for a large national insurance company. We declined as “our plate was full”. The fellow who tried to recruit us is now earning over $1,000,000 per year on renewals alone, and has recently landed two large national accounts (Southwest Airlines and Pep Boys). We love success stories like this one.
www.patientcare4u.com This may be ideal for those employers whose HR department is understaffed, or doesn’t exist at all. And, it saves employers claim dollars with premium savings.
As I’ve been reporting for several months, Congressional Democrats and the President are working hard to increase reimbursement for cognitive services by up to 10%.
This would go a long way towards fixing what is perceived to be a core problem with US health care – overly generous compensation for procedures (surgery, imaging, etc) leads to over-utilization of those procedures, while under-reimbursement for office visits and other ‘primary care’ services results in a shortage of physicians willing to do primary care.
This morning’s New York Times features a headline story about the conflict in Washington, noting that the Obama Administration is very concerned about the shortage of primary care docs. The solution being discussed in DC is to get more applications into med schools.
Wrong answer.
The ‘right’ answer is staring us in the face – there are too many specialists, physicians who have already graduated from medical school and have lots of experience and training. It would be far easier, faster, and cheaper to re-train these physicians to take on more primary care responsibilities, albeit primary care with an orientation towards their specialty. Would this be difficult, and expensive, and meet with strong resistance from those docs?
Absolutely. But on balance it would be much easier, and faster, than waiting at least eight years for the supply of primary care docs to begin to meet anticipated demand.
Compensating docs more for primary care would potentially have another effect; it might reduce the volume of procedures performed, as specialists would also benefit from the higher compensation for evaluation and management services. I wouldn’t bet too much on this, as docs – like the rest of us – won’t change dramatically overnight. That said, increasing compensation for primary care service codes (the 99xxx CPTs) would help take a bit of the sting out of reduced reimbursement for surgery etc.
What does this mean for you?
A lot.
Most network contracts are based on Medicare’s RBRVS; if the Feds change, your provider compensation will too. Think about the potential impact, and think deeply. The trickle-down will likely cause specialists to seek higher network reimbursement for two reasons – first the base from which their reimbursement (RBRVS) has declined, and second, they’ll want to make up their lost revenue from Medicare by increasing reimbursement from private payers.
As the biennial Texas legislative session nears its end, it looks like the legislature may pass a bill that would have a dramatic effect on workers comp PPO networks.
According to WorkCompCentral (subscription required):
“HB 223 would regulate “discount brokers” that are engaged in (for money or other consideration) “disclosing or transferring a contracted discounted fee of physician or health care provider.” hb223
A broker could not transfer a physician’s or health care provider’s contracted discounted fee or any other contractual
obligation unless the transfer is authorized by a contractual agreement that complies with the provisions of the bill.
Those provisions include notifying each physician and provider of “the identity of the payers and discount brokers authorized to access a contracted discounted fee of the physician or provider.”
The notice must be provided at least every 45 days through “electronic mail, after provision by the affected physician or health care provider of a current electronic mail address” and posting of a list on a secure Internet website.”
Now that’s a huge change, one that would effectively stop much of the rental network business cold. The dirty secret of the work comp PPO business (well, one of the dirty secrets) is that networks don’t have direct contracts with providers in all states – every ‘national’ PPO uses another network’s contracts in at least a few jurisdictions.
Docs sign contracts in return for direction – they are trading a discount for the promise of more volume. Yet few networks actually drive any significant volume to the vast majority of their contracted physicians.
We’ve been seeing a rapid rise in the volume of litigation from providers contesting reduced reimbursement due to PPO contracts, with three payer clients reporting a significant upsurge in the last twelve months.
What does this mean for yuo?
Find a better, and more sustainable, way to reduce medical expense. The days of cutting costs by slashing provider reimbursement on the basis of some flimsy network contract are rapidly ending.
Editor’s Note: This was written by Joe Paduda
The Brownsville Independent School District is seeking competitive proposals for group health insurance – Specifications will be posted soon on: http://www.bisd.us/PURCHASING/bids_for_vendors.htm
To the best of our knowledge, 100% of Texas school districts self-fund their group medical plans (TRS ActiveCare is a self-funded plan), yet 100% of Texas schools fully-insure their athletic insurance. We are wondering why. If districts save money through self-funding their medical plans, why cant they save money on student accident plans as well?
Basic student athletic insurance offers limited benefits. In addition to this basic cover, many districts purchase catastrophic cover starting at $25,000. It seems to us that it makes perfect economic sense to self-insure the limited benefits portion of the program and purchase stop-loss cover with a $25,000 retention. We have identified several carriers that will offer specific stop loss for student accident plans.
Districts can partner with area medical providers for the best cover at the lowest cost. After all, medical providers in the community are school district taxpayers too. They would support such a partnership.
One possibility to consider would be to fund an athletic insurance program through a captive with more than one school district participating through an interlocal agreement. Participating districts would then be able to participate in underwriting profits and maintain control of plan benefits and costs. An interlocal agreement would preclude districts from bidding out their student accident insurance every year.
An agent solicitation from a major health insurance carrier, sent out this week to agents throughout the United States, announces a $20,000 cash bonus to those agents who sell 20 group health insurance cases between April 1, 2009 and December 31, 2009. And, if the agent sells only 10 groups, the bonus is $10,000.
This is a powerful incentive to place business with this carrier, over another carrier wherein little or no bonus is offered. A broker, supposedly representing the client with whom he works for, may not disclose this arrangement. A conflict of interest would be apparent it would seem.
Acorn will surely get wind of this and organize a bus tour to homes of participating agents and brokers.
Congress began “debate” yesterday on health care. Pundits predict a Bill will be crafted by no later than June 1 upon which Congress will act. We predict passage of a sweeping national health care scheme that will bring this country firmly into an expanded welfare state.
TEXAS: The new “Healthy Texas” proposal targeting uninsured small businesses was passed in the Senate last week. The bill would allow a special insurance product to be offered to previously uninsured small businesses with at least 30 percent of its eligible employees receiving annual wages of less than 300 percent of the federal poverty level. The bill would require a 60 percent participation rate, and insurers would be responsible for all payments up to an annual threshold of $5,000 per individual. Once that threshold is met, the Healthy Texas Program would cover 80 percent of claims, up to $75,000, through a reinsurance fund for that individual.
Editor’s Note: This is an excerpt from an Aetna News Release to Agents & Brokers received today via email.
In Texas, those in the insurance industry are a dysfunctional, yet close knit community wherein what one does in North Texas is common knowledge in South Texas and vice versa. Everyone knows everybody, and thus it becomes fairly easy to ascertain outcomes with various insurance consultants who work on behalf of their clients.
For example, one well known Dallas consultant, who specializes in assisting political subdivisions, made a video taped presentation to a county Commissioner’s Court wherein he stated that after an exhaustive and thourough review of area PPO network pricing, that “XXXX XXXXX” (insurance company) has the best PPO discounts by a minimum of 20%, and if you go with XXXX XXXXX you will save 20% off your claims next year.” This public statement put this consultant in a corner on subsequent assignments – he had no other option other than to recommend XXXX XXXXX on every analysis he did. In his next two assignments, as all of us predicted in advance, he moved the employer to XXXX XXXXX even though in both instances his methodology was flawed (we reviewed both cases after the fact and found the decision to move as problematic).
A well known (to us in the industry) and unknown (to uninformed employers) practice employed by some insurance consultants include dual compensation schemes – we will go into that in a later posting.(http://www.workforce.com/section/00/article/24/45/82.html)
An employer who is considering the services of a fee based insurance consultant, should ask for a listing of recent recommendations made to clients. A pattern may appear.
Many insurance consultants are biased. Analysis can be skewed honestly (with a dishonest intent). Numbers can tell any story one wants to tell. Employers can defend themselves by implementing certain defenses for effective and honest outcomes.
wall-street-journal-insurance-consultants
We have obtained a legal opinion (availble upon request) that Texas requires licensure to act as a fee-based insurance consultant. Two licenses are required: Life & Health Counselor License and Risk Manager License. Texas Department of Insurance lists of licensed insurance consultants can be found on the TDI website.
The following was written by Joe Paduda, 4-9-09 in Managed Care Matters:
“TPAs and employers and insurance companies send out requests for proposal to each other, to managed care firms, specialty providers, voc companies, IT providers, law firms. All have been on the receiving end of a voluminous, detailed, structured and rigorous RFP – so big that it clogs their virtual and/or physicial mailbox.
The erstwhile vendor is initially happy. Hey, we made the cut, were on the list, we “get” to respond. We have an opportunity.
Then the work starts. Even if the vendor is big, and has staff to help write the responses, and even if it has a ready-made library of canned responses, it is still a lot of work. We arent talking a couple of hours here and there by a junior staff writer – every question has to be reviewed and assigned, then the answer checked for accuracy, grammer, and consistency with other answers. Then someone has to find all the reports and IT flow documents and disaster recovery plans and professional certifications and insurance coverage documents and CVs and make sure they have the right appendix numbers and are in the right format. Then it has to be collated, checked one more time, signed by an executive, and shipped out. All on the prospect’s schedule.
And that’s if it’s a big vendor; if it a small company, the folks who are doing this work are also the folks who are supposed to be doing the “real ” work – handling the tasks that actually deliver value to customers and owners alike.
The point is there is a lot of work involved, and most of the vendors who are doing the work are not going to get anything out of it – at least in terms of revenue. No, they’re going to have to savor the joys of a job well done, even if not done well enough to actually win the business.
I know, the “customer” has also put a lot of work into the process – no argument there. Just understanding what it is you want, what restrictions exist, what the timeline should be and who should be involved in the process from initial specs to final decision means meetings on top of meetings.
But just for a minute think about it from the vendor’s perspective. The erstwhile vendors want to deliver for your company, they think they can do a better job of anyone else, yet they’re forced to only answer what they’re asked, not allowed to demonstrate their abilities and insights and expertise and knowledge. Yes, they may be able to – in response to the “is there anything else we should know, or other ideas you have.” But the responses to these questions don’t fit the scoring methodology. Even if they are creative and innovative and fresh, and look promising, it’s tough for them to see the light of day in the typical RFP process.
Now comes the waiting, and the waiting, and the waiting.”
Editor’s Note: We sent this to an insurance consultant in Illinois. His comments: “Exactly…..which is why I rarely respond to public bid inquiries, and as a carrier (his previous employer) I did not either….also, when it comes right down to it….no one reads all the crap……they put you on a spreadsheet and then read later (if at all)…..I quote first with trusted vendors and then do the questions that really matter….when is the last time you had to worry about someone’s disaster recovery plan and whether or not it would work?”
We also rarely respond to RFP’s for the reasons stated by our friend in Illinois. Last year we bid on four jobs, along with the usual crowd of interested consultants. On one case, out of five respondents, our firm was ranked dead last. No interviews or follow up questions to the RFP were asked. Then, on another case, we responded to, we were competing with the same four consultants – the RFP included an interview process of all the respondents – we were ranked number one and obtained the business.
The Lewin Group, a consulting firm, outlines their analysis of the impact of a National Health Insurance Plan in this report – http://www.lewin.com/content/publications/LewinCostandCoverageImpactsofPublicPlan-Alternative%20DesignOptions.pdf.
There’s little doubt hospital reimbursement methodology is going to change dramatically over the next few years.
We’re going to see a shift from fee for service to global episodic reimbursement, a shift that has already begun. I’ll get into that next week, but for now, there’s increasing evidence that private payers’ hospital costs are rising in large part due to several recent changes in reimbursement policies.
Over the last year, there have been three major changes in hospital reimbursement: the implementation of MS-DRGs (increase in the number of DRGs to better account for patient severity); a 4.8% cut in Medicare hospital reimbursement spread over three years; and the decision by the Centers for Medicare and Medicaid Services (CMS) to stop paying for ‘never ever’ events – conditions that are egregious medical errors requiring medical treatment.
The net result of these changes has been a drop in governmental payments to hospitals, the decision by several major commercial payers to not pay for never-evers, and increased cost-shifting from hospitals to private payers.
The implementation of MS DRGs and the accompanying decrease in reimbursement looks to be the most significant of the changes, and is already having a dramatic impact on hospital behavior patterns. By adding more DRG codes, CMS is acknowledging there are different levels of patient acuity – that performing a quadruple bypass on an otherwise-healthy patient takes fewer resources than doing the same operation on an obese patient with diabetes and hypertension. While these different levels were somewhat factored in to the ‘old’ DRG methodology, the new MS-DRGs better tie actual costs to reimbursement. (for a more detailed discussion, see here)
CMS projected that these changes would reduce Medicare’s total reimbursement for cardiovascular surgery by about $620 million, while orthopedic surgeries are projected to see an increase in reimbursement of almost $600 million.
Orthopedic reimbursement is increasing because there are now more MS DRGs for orthopedic surgery, and the additional DRGs will likely mean hospitals will be able to get paid more in 2009 and beyond than they were last year.
Hospitals are going to work very hard to get more orthopedic patients in their ORs, and they are going to carefully examine these patients to make sure they uncover every complication and comorbidity – because a ‘sicker’ patient equals higher reimbursement.
Editor’s Note: This is an excerpt sent to us by email this morning. We do not know the author or what publication this appeared in.
This is an excellent synopsis of health care legislative matters published yesterday from Assurant
Admitted felon and still licensed insurance agent “Half Guilty” A.C. Olivarez, after having his sentencing postponed two or three times since August 2008, is now scheduled to be sentenced in McAllen, Texas on May 15 at 9:30 am. See related stories on this blog.
Editor’s Note: Bribery of public officials to gain insurance contracts is a crime. To continue to act as a licensed insurance agent after pleading guilty to a felony seems improbable. The Wheels of Justice turn ever so slowly.
WASHINGTON (Reuters) – Support grew on Friday for insurance industry demands that all Americans be required to obtain coverage as part of a planned healthcare system overhaul, with a senior Senate Democrat and a coalition of business and consumer groups promoting the idea.
Senate Finance Committee Chairman Max Baucus, a Democrat who is helping write healthcare legislation, said an insurance requirement, or mandate, would help the market function better and reduce premium costs for everyone.
Baucus argued that the cost of medical care for people with no insurance is being shifted to those with insurance, forcing costs higher.
Editor’s Note: Insuring everyone will not lower health care costs.
A $175,000 heart surgery in the United States goes for about $10,000 in India. What is up with that? Indian doctors practicing in the United States charge more than if they were in India? Seems logical that one should consider going to India for surgery to save money. In fact, an employer would do well to encourage it. If employee Jones needs heart surgery, why not offer him the option of traveling to India with his wife, free of charge, pay 100% of all expenses, including medical expenses, and hand employee Jones a check for $20,000.
http://www.cnn.com/2009/HEALTH/03/27/india.medical.travel/index.html?eref=rss_topstories
Next Tuesday a Senate hearing will be held to highlight medical out-of-network issues. The issues include the contention that insurance companies are low-balling out-of-network reimbursement and leaving the consumer to pay more than they should.
Editor’s Note: It is frustrating to watch Congress delve into areas they have no business delving into. They should let free market forces reign. This is another example of why PPO networks drive costs up, not down and have become nothing more than a smokescreen to allow providers to inflate their fees. The only thing that a PPO guarantees is the promise of no balance-billing. But, we have found a solution to the balance billing issue which defuses the fear mongering tactics used by medical providers, insurance companies and PPO network salesmen.
Rep. Howard Berman (D-Calif) added funding to allow Providence Health & Services to purchase a $200,000 tattoo-removing laser to expand their ten year-old program that removes gang-sign tattoos. The program, run out of North Hollywood, has removed tattoos from 12,000 former gang members, helping them get jobs with employers who otherwise would not hire them. Berman spokesman says the program actually makes the streets safer for all Southern California residents. “When former gang members with these tattoos go walking around, they become targets of drive-bys and other shootings” he said.
Editor’s Note: This article appeared in the March 9, 2009 issue of Modern Healthcare magazine. Appropriately, the beneficiaries of the plan are residents of California.
A stop loss carrier sent this to us this morning which bears worth watching:
HB 1578 has been introduced in the Texas Legislature. The Bill would affect stop loss and reinsurance policies. Under the Bill reinsurance would be prohibited and stop loss insurance required to cover a self-funded plan. All stop loss policies must be approved by the Commissioner. An individual stop loss policy must have a deductible between $5000 and $100,000 or it will not be approved.
Editor’s Note: This is another example of government interferance in private enterprise. It appears that the State of Texas wants to become an insurer and will prohibit the private sector from reinsuring medical stop loss policies. Specific stop loss limit of $100,000 will significantly increase costs for larger self-funded groups that currently have their specific level at $250,000 or higher. And, for those groups, it would not be actuarial sound to limit their exposure to $100,000.
Health care reform has taken center stage this week and we expect headline news on this in the coming days. Yet, no one really knows what changes are to be proposed or what specific directions a national health care plan will take.
Our predictions include a two payer system; a government run system that will compete with private health care companies such as Aetna and Cigna. This arrangement will be problematic since a government run plan can mandate costs while a private health care company can only negotiate costs. Our second prediction is all health care costs will be taxable income to plan beneficiaries. Our third prediction is that the government will mandate expense ceilings for private health care plans as well as mandated target loss ratios. This will diminish the role, and the need for, independent insurance agents and brokers as well as damper financial interests of private payers such as United HealthCare, Aetna and their respective share holders. In time, the private sector health care payers will fade away and a one payer natiional health plan will become reality.
A Texas public school district could join the TRS ActiveCare Plan, essentially maintain the same level of benefits, and save the taxpayers over $16,000,000. Current annual cost of the district’s self-funded health insurance exceeds $42,000,000. When you add in claim run-off liability, that figure jumps to over $50,000,000. Yet by joining the TRS ActiveCare Plan this district’s cost would below $30,000,000 annually.
More employers are considering captives as a method to fund their employee benefit programs. We have been reporting on this for the past six months – see previous articles on this weblog. There is an excellent article in the March 2009 Employee Benefit News on captives. The theme of the article is that “captive owners can have increased control through tailor-made benefit designs and claims cost management.”
We are currently working with a captive manager with a proven track record of establishing and managing captives for employers who self fund their group medical plans. A unique scheme to band small employer groups into a captive without becoming a MEWA may be a viable option for employer groups that are currently fully-insured with 50 – 500 employees. These employers can band together for the purpose of establishing a captive to fund their health care plans, yet remain independent of each other.
Brownsville Independent School District is actively seeking a fee-based insurance consultant to provide expert insurance advice for the district’s insurance needs. The current consultant from Dallas is charging the district an annual fee of $24,500. The consultant before him , from San Antonio, charged an annual fee of approximately $35,000. In our opinion, neither fee supports the work to be provided.
This group is the largest employer south of San Antonio, with over 7,000 employees. It will be interesting to see who bids on this and how much their fees will be. Once the insurance consultant contract is awarded, we will post the bids on this weblog.
el-paso-isd-rfq-insurance-consultant
Editor’s Note: We have monitored insurance consulting fees charged to policitical subdivisions in Texas for several years and find no rhyme or reason for fee structures. We have seen fees as low as $5,000 for the same work as performed for an awarded fee of $100,000. We do not understand how some consultants make money with the low fees they sometimes charge. A 7,000 life political subdivision, for example, awarded a twelve month insurance consulting contract to a large national consulting firm for $24,500. The consultant agreed to review, assist, monitor all lines of cover. In estimating expenses, we concluded that this firm will not make a profit on a $24,500 fee and will in fact lose money. One would wonder if there other revenue streams in play? Of course, dual compensation in Texas is prohibited.
New Yorker Oberste Justizbeamte Cuomo Himmler befahl gestern AIG, eine Mitarbeiterauflistung von denjenigen zur Verfügung zu stellen, die Bonus vom Versicherungsriesen erhalten sollen. Zur gleichen Zeit gab bayerischer Unteroffizier Schummer bekannt, dass die Bonus-Schuldigen streng bestraft werden, wenn sie nicht bereit sind, die Bonus zurückzugeben. Ein Senator von Iowa fügte hinzu, dass schuldige Beamte von AIG Selbstmord begehen sollten.
Editor’s Note: Is 2009 beginning to look like 1937?
AP – In this May 22, 2008 file photo, Sen. Charles Grassley, R-Iowa is seen on Capitol Hill in Washington. …IOWA CITY, Iowa – Iowa Sen. Charles Grassley suggested that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.
Editors Note: This is so amazing and counter to our upbringing that we cannot find the words to express our outrage and contempt for this idiot.
March 10, 2009 scheduled sentencing of admitted felon and still active insurance agent , “Half Guilty” Arnulfo Cuahtemoc Olivarez was cancelled until “further notice.” This is the second or third time that sentencing has been delayed.
Part of a Plea Agreement finalized last year included dropping a separate indictment (edcouch-indictment). See August 2008 archives for more information.
Will Aetna buy Humana next week? If so, how will the two corporate philosophies morph into one? Aetna is viewed by many as a Round Peg fits only a round hole and a square peg fits only a square hole type of company. Humana, on the other, has a different corporate philosophy and allows Regional Managers to manage their own territories with little or no home office interference. At Humana innovation is rewarded. At Aetna, direction flows from the top down.
In 2008 an employer group decided to move away from the PPO world into a program that utilizes Federal Law (ERISA) to pay providers a fair and reasonable fee for services. Here is a summary of results after six months:
Allowed Amounts: Under PPO Contract Fair & Reasonable
– Facilities 43% off Billed 85% off Billed
– Physicians 41% off Billed 57% off Billed
Plan paid facilities on a cost-plus basis. All other providers were paid using a uniform formula applied to 2008 RBRVS as the basis of payment. Since ERISA mandates that a plan fiduciary must only pay a fair and reasonable rate, balance billing issues are subject to an appeal process handled by an out-sourced plan fiduciary. Plan participants are protected against balance billing through a propriety arrangement.
Total hard dollar savings for this South Texas employer during the six month period exceeded $800,000.
Editors Note: Tyler Independent School District and Blue Bell Creameries, among others, have achieved similar results utilizing out-of-the-box risk management techniques. Employers who are willing to consider these proven techniques can cut their health insurance costs by as much as 50% or more.
“If you are not part of the solution, there is good money to be made in prolonging the problem.”
Our Comments: PPO’s have successfully insulated the consumer from the reality of health care costs. The fear of balance billing is a good sales tactic utilized by those in the industry that are profiting from the system. The only thing PPO’s guarantee is the promise of no balance billing.
We have an incredible story regarding a group that eliminated their PPO plan last year – the plan savings were astounding. As a result, the plan is now considering removing their calendar year deductible completely and other benefit improvements.
The economic stimulus legislation signed into law in February could be onerous for employers and their health care partners. The law now requires “covered entities”, which in the past typically included employers and insurers who sponsor health plans, to notify individuals in writing if their personal health information is compromised. Notification of a breach in privacy must be made within 60 days of the breach.
For the first time, the law extends direct HIPPA enforcement to “business associates” which include consultants, pharmacy benefit managers, third party administrators and other vendors. The legislation gives state attorney generals the authority to bring lawsuits seeking statutory damages and attorney fees for HIPPA violations.
This law will have a direct impact on employer’s relationships with their vendors, including consultants. If, for example, a consultant breaches HIPPA, he/she must notify the insured within 60 days of the breach. The state attorney general can then bring suit against the consultant for damages.
E&O coverage needs to be amended, in some cases, to cover this liability.
Brokers are beholden to the insurance companies they represent and know that moving business from them can bring them severe economic disaster. Every agent contract we have reviewed allow the carrier to terminate the agent/broker appointment at any time without cause. Overrides and bonuses (often not disclosed to the customer) based on production have the intended effect of “capturing” the agents self-interests controlled by the insurance company he represents. The broker/agent is thus held hostage by the insurance company at the expense of the interests of his client. This conflict of interest is not clearly understood by most employers who purchase insurance through independent brokers.
Insurance brokers fear insurance companies because they know the carriers can, and have, terminated agent contracts at will.
We know of many instances wherein a carrier has terminated an agent’s contract without cause, leaving the agent without commission income earned through his efforts on behalf of the carrier he represented. We have also had a carrier group representative boast to us that he was about to have his company terminate a local broker’s contract because “he moved a major account from us last month and we dont think he gave us a fair shot at renewing it.”
Employers should demand full disclosure of all compensation earned by their agent/broker. This should include bonuses, overrides, servicing fees, commissions, vacations, vouchers and anything else of value. And, it should be contained within a written contract between the employer and the agent/broker.
Yesterday we received the following email from a third party administrator which illustrates how a PPO network can actually increase claim costs:
“Bill, here’s one for you. We had a non-network dialysis clinic treating on of our patients. Rather than taking the wrap discount , we audited the dialysis charges and paid the clinic on a cost-plus basis. After six months of accepting payments. the dialysis clinic sought out the network and got themselves in-network. The end result? Charges went up $200,000. Since we continued paying on a cost-plus basis the network contacted us and told us that we could no longer do that but had to accept the % off billed charges since they had a contract with the clinic. Our response to the network was that if they could convince the employer and the stop loss carrier that this is in their best interest then they would qualify as the best sales organization in the world. “
RiskManagers.us represents five Mexican insurance companies to provide cover for your Mexican risk exposure. 
http://www.cnbc.com/id/15840232?video=1039849853
Also, Putin Warns Against Socialism – http://www.americanthinker.com/blog/2009/02/putin_warns_us_to_eschew_socia.html
Glenn Beck – http://www.youtube.com/watch?v=lNS8IY_Td14
In 2001, the Texas House passed Texas HB 45, the cents-per-mile choice law, authorizing insurance companies to offer a cents-per-mile alternative to their dollars-per-year prices. Texas was the first state to change its insurance laws; others are now considering similar changes.
www.milemeter.com http://springwise.com/financial_services/auto_insurance_by_the_mile/
http://www.pegasusnews.com/news/2008/oct/21/dallas-based-insurance-carrier-milemeter-offers-un/
The TRS ActiveCare plan for Texas educators has announced their new rates for Plan Year 2009-2010. Currently over 330,000 Texas educators participate in the program, comprising over 85% of Texas public school districts.
The TRS ActiveCare program is self-insured. There is no stop loss cover in place and the plan is not marketed through independent agents and brokers. The funding rates are competitive. Many Texas school districts that are not participating are paying substantially more.
http://www.trs.state.tx.us/TRS_activecare/documents/123_plan_rate_changes_fy10.pdf
U.S. Legal Services providers numerous legal protection plans, including their CDL Protector Plan. The CDL Protector Plan helps transportation companies to improve their bottom line, improve or maintain their SafeStats rating and provide the company’s safety director with timely violation data to supervise drivers and their fleet. For more information go to www.uslegalservices.net .
CoverageFirst is an independent, online wholesale insurance marketplace, serving more than 7,000 independent agencies and brokerages. CoverageFirst helps these agencies find and access the P&C insurance products they need for their clients.
Small independent producers who qualify can access competitive markets in seconds. Quotes can be generated in hours instead of days. For more information go to www.coveragefirst.com. Another source can be found at www.psgins.com and www.applieduw.com.
Using a national wholesale broker, independent insurance brokers can quote, bind and deliver to your email inbox liquor liability coverage through an “A” rated non-admitted carrier. More than 1,000 clases of P&C business written under immediate binding authority. Visa, MasterCard and HCH payments accepted. For more information go to www.gotapco.com .
Many employers do not offer group or individual disability insurance for their employees. Yet, statistics show that the need is higher than group term life insurance, which most employers offer.
Group disability insurance cost averages 1% of payroll while individual payroll deducted disability insurance averages 1-5% of one’s gross monthly salary (rates based on each individual’s age).
