Bringing Forward Thinking and Transparency to Employee Benefits

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Diversified Group continues its efforts to bring a revolutionary perspective and innovation to employee healthcare. With the recent launch of our monthly email newsletter, Healthcare Uncensored, we are attempting to break down the walls of healthcare complexity and shed light on the confusing state of employee health benefits. Each issue addresses and openly discusses a particular trend or pressing issue that is having great impact on employers and plan members.

“Real change in the world of health benefits won’t happen unless everyone – employers, brokers, providers and consumers – gets involved,” said Brooks Goodison, President of Diversified Group.

By encouraging all to join the conversation and asking questions most are afraid to address, we are paving the way for true healthcare transparency and trying to provide real solutions to the employee benefit concerns of many.

We are proud to say that our efforts are not going unnoticed. Earlier this month, Diversified Group was recognized by The Phia Group with the 2018 Empowered Plans Award at its annual MVP (Most Valuable Partners) event. “We analyzed all of our MVPs based on a number of parameters including, but not limited to, collaboration with The Phia Group, beta testing, using of services and products, a willingness to innovate and take risks, a forward-thinking methodology and efforts taken to secure the future of our industry. When we finished our calculations, Diversified Group was a clear winner.” stated Adam Russo, CEO of The Phia Group.

“We are very honored to have earned this recognition from The Phia Group. Empowering plans is the core value we bring to our customers seeking effective alternatives to the traditional carrier based ASO and fully insured plans – the market is hungry for empowerment,” stated Brooks Goodison in response to the announcement.

Furthermore, The Phia Group recently interviewed Brooks Goodison as part of their “Empowering Plans: Best of the Best – Sitting Down with an MVP amongst MVPs” Podcast. This was part of The Phia Group’s “Partners in Empowerment” series. In the episode, which is now available on YouTube, Brooks discusses the industry at large, the appeal as well as the challenges and what makes Diversified Group different than the typical Third Party Administrator.

Diversified Group is honored to see our cutting-edge focus and commitment to full transparency gaining recognition within the self-funded community.

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Jury deems Centura Health $230K surgical bill ‘unreasonable,’ awards $766

This article was published on June 21, 2018 on BenefitsPro, written by Greg Land. Photo Source: BenefitsPro.

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A Colorado jury declared a hospital’s billing unreasonable, turning aside its lawsuit demanding almost $230,000 from a patient whose insurer already covered the cost of her surgery.

The patient had already paid her deductible and her insurer had paid the hospital about $75,000, which an audit deemed the “reasonable value of the goods and services” she had been provided, her lawyer said.

Lead attorney Ted Lavender of FisherBroyles’ Atlanta branch, who represented the former patient with office partner Kris Alderman and Denver partner Frank Porada, said testimony in the case revealed just how murky hospital billing can be and how some patients are targeted for whopping bills to make up for those who pay substantially less for the same services.

“The hospital experts explained how the rates get set, and it ultimately devolved into this idea that paying patients have to pay more to make up for nonpaying patients, the uninsured, those on Medicare and Medicaid, who don’t pay full price,” Lavender said.

In his client’s case, records showed that surgical spinal implants cost the hospital about $31,000.

“They turned around and charged $197,640 for those items on the hospital bill,” said Lavender. “That is a 624 percent markup.”

The hospital is represented by Traci Van Pelt, Michael McConnell and David Belsheim of Denver’s McConnell Fleischner Houghtaling.

Van Pelt said they will file posttrial motions and appeal the verdict.

The case involved back surgery performed on Lisa French in 2014 at St. Anthony North Health Campus, north of Denver. Hospital filings said French’s surgery was to relieve back pain and was “considered elective.”

French’s employer had a self-funded ERISA insurance plan, and she was told prior to surgery that she would owe $1,336, of which she immediately paid $1,000.

French’s contract included phrasing that she “understand[s] that I am financially responsible to the hospital or my physicians for charges not covered or paid pursuant to this authorization.”

St. Anthony’s billed her insurance plan $303,888 after the surgery and for two presurgical consultations based on its “chargemaster” billing schedule, an industrywide practice whereby providers list all the prices they charge.

As Lavender explained, French’s employer’s insurance plan contracts with a health care consulting firm, ELAP Services, which audits claim costs and negotiates with providers for self-funded insurers. On its website, ELAP says it “assists in plan design and jointly establishes limits for payment of medical claims that correlate to the providers’ actual cost of services.”

ELAP audited the fees St. Anthony’s charged French and determined that her actual charges came out to about $70,000, Lavender said. Between her co-pays and the insurance plan, St. Anthony’s was paid $74,597.

St. Anthony’s parent company, Centura Health Corp., sued French in state District Court in Adams County, Colorado, seeking an additional $229,112 in 2017.

ELAP provides legal representation to clients facing suit pursuant to its services, and Lavender, Alderman and FisherBroyles Denver partner Frank Porada were assigned French’s defense.

According to defense filings, Fishers contract with St. Anthony’s contained no stated price and was thus ambiguous.

The hospital was already paid the reasonable value for the services, according to a defense account. The chargemaster rates are “grossly excessive and defendant had no choice but to sign the Hospital Service Agreement, making them unconscionable” and thus unenforceable, the defense said.

During a six-day trial in Brighton, Colorado, before Judge Jaclyn Brown of Colorado’s 17th Judicial District, Lavender said the entire dispute was over the prices and methodologies medical providers use.

“We had one expert, and they had three,” said Lavender. “They spent $100,000 on experts.”

“The reality is that there’s nobody to say how much they’re charging is reasonable,” Lavender said.

The jury made that determination for French on June 11, answering “no” when asked whether her bills were reasonable. The panel agreed she had a contract with St. Anthony’s to pay “all charges of the hospital,” but that those charges were “the reasonable value of the goods and services provided,” not those set by the hospital’s chargemaster.

The jury awarded the hospital $766.74.

The hospital’s attorneys did a good job explaining how hospitals have to shoulder the burden for underpayments and nonpayment by other patients, Lavender said.

“They know they’re not going to collect from everybody,” he added. “But in the end, it just reveals how antiquated and nontransparent the system is, because nobody understands the bill.”

How Much Is Fraud & Abuse Costing Your Health Plan?

newspaper-headlinesFrom a drug manufacturer that contributes money to a non-profit Copay Assistance foundation and then steers Medicare patients taking their drugs to that foundation to a diagnostic lab that pays doctors for every blood test they refer, disguising the payments as “processing and handling fees”, there seems to be no end to the costly schemes plaguing our healthcare system. What is an employer group to do?

For starters, use partial self-funding to provide health benefits to your workers – even if your group is small. It’s the only way to know where your health plan dollars are going from month to month and year to year. Choose an independent TPA to design your plan, manage costs and advocate for your members. This way, you and your plan will have a dedicated, experienced team looking out for your best interests, rather than those of a provider or a large health plan (who may both be part of the same organization).

We can’t keep fraud and abuse out of the healthcare system. But by paying claims in strict accordance with your plan document, providing special handling for members with a serious condition or chronic illness, and helping your members choose high quality, high value providers, we can do everything in our power to keep it from impacting your health plan directly.

Tell Us How You Feel!

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Association Health Plans Final Rules Released

On June 19, 2018, the U.S. Department of Labor released the final rule on Association Health Plans (AHPs). The rule seeks to expand health coverage among small employer groups and self-employed individuals. It will make it easier for small business to join together to purchase health insurance without the myriad of regulations individual states and the Affordable Care Act (ACA) imposes on smaller fully insured employers. AHPs are not required to provide the essential health benefits (EHBs) package included in the ACA. The plans have been intended to provide less expensive options for small businesses, regional collectives, and industry groups that may not be able to purchase insurance through the public exchanges.

The rule broadens the definition of an employer under the Employee Retirement Income Security Act of 1974 (ERISA), to allow more groups to form association health plans and bypass rules under the Affordable Care Act. ERISA is the federal law that governs health benefits and retirement plans offered by large employers. Below is a comparison of the original proposed rule and the final rule just released.

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The final rules confirm that self-insured Association Health Plans are considered Multiple Employer Welfare Arrangements (MEWAs) and does not curtail a state’s ability to regulate self-insured AHPs. This means that self-insured AHPs will be subject to MEWA laws in each state where coverage is offered/where members are located. Self-insured AHPs will have to follow the MEWA rules of the state with the most restrictive rule on an issue by issue basis. The final rule did leave an opening for future self-insured AHPs with the following language on page 96 of the 198 page regulation: “a potential future mechanism for preempting State insurance laws that go too far in regulating self-insured AHPs…” But for now, there is not anything in the final regulation designed to help self-insured AHPs thrive.

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Value Based Pricing Gaining

While plenty of folks talk about value based, or reference based, pricing as though it’s a fad that has come and gone, we’re finding more interest from employers all the time. This may be because many like to brand it as another form of disruption, but regardless of how you brand it, value based pricing is becoming a more important part of our value proposition all the time. It’s becoming more widespread because it enables a self-funded plan to limit costs to an extent that few other measures, if any, can match. This is primarily because by negotiating in advance with hospitals to accept a schedule of fixed payments for certain healthcare services, carrier-sponsored provider networks can be bypassed.

The fact is that while value based pricing may be considered disruptive by many hospitals, it works. It is a transparent approach that can save a lot of money for self-funded health plans and their members. And finding ways to help self-funded employer plans provide high quality, high value healthcare to their members is our most important job.

How America got hooked on a deadly drug

This article was published on June 14, 2018 on BenefitsPro, written by Fred Schulte, Kaiser Health News (Maria Fabrizio for KHN) . Photo Source: BenefitsPro.

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Purdue Pharma left almost nothing to chance in its whirlwind marketing of its new painkiller OxyContin.

From 1996 to 2002, Purdue pursued nearly every avenue in the drug supply and prescription sales chain — a strategy now cast as reckless and illegal in more than 1,500 federal civil lawsuits from communities in Florida to Wisconsin to California that allege the drug has fueled a national epidemic of addiction.

Kaiser Health News is releasing years of Purdue’s internal budget documents and other records to offer readers a chance to evaluate how the privately held Connecticut company spent hundreds of millions of dollars to launch and promote the drug, a trove of information made publicly available here for the first time.

All of these internal Purdue records were obtained from a Florida attorney general’s office investigation of Purdue’s sales efforts that ended late in 2002.

I have had copies of those records in my basement for years. I was a reporter at the South Florida Sun-Sentinel, which, along with the Orlando Sentinel, won a court battle to force the attorney general to release the company files in 2003. At the time, the Sun-Sentinel was writing extensively about a growing tide of deaths from prescription drugs such as OxyContin.

We drew on the marketing files to write two articles, including one that exposed possible deceptive marketing of the drug. Now, given the disastrous arc of prescription drug abuse over the past decade and the stream of suits being filed — more than a dozen on some days — it seemed time for me to share these seminal documents that reveal the breadth and detail of Purdue’s efforts.

Asked by Kaiser Health News for comment on the OxyContin marketing files and the suits against the company, Purdue Pharma spokesman Robert Josephson issued a statement that reads in part:

“Suggesting activities that last occurred more than 16 years ago, for which the company accepted responsibility, helped contribute to today’s complex and multi-faceted opioid crisis is deeply flawed. The bulk of opioid prescriptions are not, and have never been, for OxyContin, which represents less than 2% of current opioid prescriptions.”

Purdue first marketed OxyContin for cancer pain but planned to expand that use to meet its multimillion-dollar sales goals.

The marketing files show that about 75 percent of more than $400 million in promotional spending occurred after the start of 2000, the year Purdue officials told Congress they learned of growing OxyContin abuse and drug-related deaths from media reports and regulators. These internal Purdue marketing records show the drugmaker financed activities across nearly every quarter of medicine, from awarding grants to health care groups that set standards for opioid use to reminding reluctant pharmacists how they could profit from stocking OxyContin pills on their shelves.

Purdue bought more than $18 million worth of advertising in major medical journals that cheerily touted OxyContin. Some of the ads, federal officials said in 2003, “grossly overstated” the drug’s safety.

The Purdue records show that the company poured more than $8 million into a website and venture called “Partners Against Pain,” which helped connect patients to doctors willing to treat their pain, presumably with OxyContin or other opioids. Continue reading