Ever Asked a Hospital What a Procedure Costs Them?


Can the cost of a hip replacement in Philadelphia really vary from $11,000 to $125,000?

From white papers to published books, much has been written about how difficult it can be to find out what a hospital stay or outpatient procedure will cost. And as Anna Wilde Mathews observed in her article Lifting the Veil on Pricing for Health Care, the mystery surrounding healthcare pricing stems partly from the fact that hospitals and other providers generally don’t publicize how much they’re paid for services, which varies depending on who’s footing the bill.

Much has changed recently. And while it is difficult for websites like healthcarebluebook.com to quote exact pricing, they do suggest what a reasonable price should be based on what insurance carriers have paid hospitals for certain procedures in a certain geographic region.

It’s easy to understand why hospitals are reluctant to share price information. Consider the results of a study on hip replacement surgery published by JAMA Internal Medicine. According to Dr. Joseph Bernstein, professor of orthopedic surgery at the University of Pennsylvania, while more than half of the 120 hospitals surveyed could not provide a cost for the surgery, those that did quoted prices ranging from $11,000 to $125,000.

How can your health plan achieve price and quality transparency? Treat healthcare expenses like other business expenses! Self-fund with Medicare Reference Based Pricing and partner with a TPA that has the willingness and know-how to hold providers accountable.

These are today’s keys. These are the things we do for our clients each and every day. To take control of your healthcare costs, give us a call at your convenience.

Tell Us How You Feel!


More Patients Texting

mobile phoneHealthcare professionals that aren’t utilizing text communications are failing to meet their patients where they are. A 2018 survey found 11% of patients would rather communicate via text message, a number that is expected to grow as the Millennial population begins to outnumber Boomers. Text alerts and communications can be used for a variety of services, including preventative care such as periodic appointments and flu shots, post-treatment care information, remote health monitoring and chronic disease management.


IRS Releases Adjusted PCOR Fee

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of health insurance policies and plan sponsors of self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI), which was established by the Affordable Care Act (ACA). The institute assists, through research, patients, clinicians, purchasers and policy-makers, in making health decisions by advancing the quality of evidence-based medicine. The institute compiles and distributes comparative clinical effectiveness research findings. Under the ACA, all medical plans are responsible for paying the Patient-Centered Outcomes Research fee to the IRS, based on the number of plan participants. If the plan is fully-insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is self-insured, the employer/plan sponsor must file the Form 720 for the second quarter and pay the fee to the IRS directly.

The IRS recently published its PCOR fee for policy and plan years ending:  January through September 2018 the applicable dollar amount is $2.39, which is multiplied by the number of covered lives determined for the appropriate period. For policy and plan years ending October through December 2018, the applicable dollar amount is $2.45.

All self-insured medical plans, including health FSAs and HRAs must pay the fee unless they are considered an excepted-benefit:

  • A health FSA is an excepted-benefit as long as the employer does not contribute more than $500/year to the accounts and offers another medical plan with non-excepted benefits.
  • An HRA is an excepted-benefit if it only reimburses for excepted-benefits (e.g., limited-scope dental and vision expenses or long-term care coverage) and is not integrated with the group medical plan.

The PCORI fee is calculated off the average number of lives covered during the policy year. That means that all parties enrolled will have to be accounted for such as dependents, spouses, retirees, and COBRA beneficiaries. For HRA and health FSA plans, just count each participating employee as a covered life.

Payment of the PCOR fee for the calendar 2018 plan year — the last year the fee applies — will be due by July 31, 2019 (payments may extend into 2020 for non-calendar-year plans).

Clients who have elected to have Diversified Group assist with the PCOR fee calculation can expect an email in June 2019, which will include a copy of the completed Form 720 and a PCOR calculation worksheet with supporting documentation. Clients will need to file the Form 720 by July 31, 2019.


MassHealth Reinstates HIRD Reporting for Employer Sponsored Health Plans

The Health Insurance Responsibility Disclosure (HIRD) form is a new state reporting requirement in Massachusetts beginning in 2018. This form differs from the original HIRD form that was passed into law in 2006 and repealed in 2014. The 2018 form is administered by MassHealth and the Department of Revenue (DOR) through the MassTaxConnect (MTC) web portal. The HIRD form is intended to assist MassHealth in identifying its members with access to employer sponsored health insurance who may be eligible for the MassHealth Premium Assistance Program. The HIRD form is required annually beginning in 2018. The reporting period opens on November 1 and must be completed by November 30 of the filing year. 

Any employers with six or more employees in Massachusetts in any month during the past 12 months preceding the due date of the form (November 30th of the reporting year) are required to annually submit a HIRD form. An individual is considered to be an employee if they were included on the employer’s quarterly wage report to the Department of Unemployment Assistance (DUA) during the past 12 months. This includes all employment categories, full-time and part-time.

The HIRD form is reported through MassTaxConnect (MTC) web portal (https://mtc.dor.state.ma.us/mtc/_/#1). The MTC is where employer-taxpayers register to file returns, forms and make tax payments. To file your HIRD form, login to your MTC withholding account and select the “file health insurance responsibility disclosure” hyperlink. If you do not have a MTC account or you forgot your password or username, follow the prompts on the site or call the DOR at 614-466-3940.


The HIRD Form will collect information about the employer’s insurance offerings, including:

  • Plan Information – plan year, renewal date.
  • Summary of benefits for all available health plans – information regarding in and out of network deductibles and out-of-pocket maximums can be found on the plan’s summary of benefits and coverage.
  • Eligibility criteria for insurance offerings – minimum probationary periods and hours worked per week to be eligible for coverage.  Employment based categories, such as full-time, part-time, hourly, salaried.
  • Total monthly premiums of all available health plans
  • Employer and employee shares of monthly premiums – information on employer and employee monthly contributions toward the cost of medical. Employer cost of coverage is your COBRA rate less 2% and less the employee contribution.

Due to the nature of the filing online, employers with employees in Massachusetts will need to complete this reporting themselves. However, Diversified Group may be able to assist you in the gathering of the required information. Please contact us by November 15th  if you need assistance with accumulating data.

Mass.gov has compiled a list of frequently asked questions regarding the HIRD form here.

Maine is Reinstituting the Per Member Per Month Assessment to Fund the Maine Guaranteed Access Reinsurance Program

Section 1332 of the Affordable Care Act (ACA) permits a state to apply for a State Innovation Waiver to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA. Recently several states have applied for waivers and have been approved. Among these is the State of Maine, which sought to reestablish the Maine Guaranteed Access Reinsurance Association – MGARA (originally established in 2012 but later suspended in light of the ACA’s transitional reinsurance program which expired in 2016). Maine’s Section 1332 waiver to reestablish MGARA was approved by the Department of Health and Human Services earlier this year. MGARA is a state instituted reinsurance program that automatically cedes high-risk enrollees with one of eight conditions (including various types of cancer, congestive heart failure, HIV and rheumatoid arthritis) and voluntary cedes other high-risk enrollees to the pool in an attempt to help stabilize individual medical premiums by about 9 percent each year beginning in 2019. The program is slated to initially run from January, 2019 through December, 2023. The Governor’s Office pushed to get the program up and running by January, 2019 in an attempt to substantially lower premiums in the individual market.

One of the funding sources supporting MGARA’s operations is a quarterly assessment due from each insured and self-insured plan that writes or otherwise provides medical insurance in Maine (other than federal or state government plans) beginning in 2019 at $4.00 per month for each covered person enrolled under each such policy or plan. Only federal and state employees are exempt from the assessment. The 2019 Quarterly Assessment will apply to policies and plans initiated or renewed on or after January 1, 2019, with the first assessment due on May 15, 2019, and 45 days from the end of each calendar quarter thereafter. Self-funded plans using a Third Party Administrator (TPA) will be assessed and reported through their TPA similar to other state assessments.

Diversified Group will collect and report the MGARA on behalf of our self-insured clients who have members residing in Maine.


4 factors driving adoption of telehealth

This article was published on October 8, 2018 on BenefitsPro, written by Dan Cook.


Photo source: BenefitsPro

Five years ago, when talk turned to telemedicine or telehealth, the word “potential” either preceded or closely followed the discussion. In 2018, that potential is finally being realized.

You don’t need to look further than a physician’s office, a benefits consultant’s option packages, or the details of a major employer-sponsored health plan. From online consultations to take-home self-diagnostic kits to remote specialist networks, telemedicine is suddenly everywhere.

The National Business Group on Health, which represents major employers, has charted the growing adoption of telemedicine by its members. Today, 96 percent offer some type of telemedicine benefit as part of their health plan, compared to 46 percent in 2015. NBGH’s 2019 Health Care Survey confirmed the shift. “The adoption of telehealth among large employers has been made nearly ubiquitous due to health plans offering telehealth to all its members,” NBGH said.

Yes, engagement numbers are still fairly low. Generally, less than 10 percent of employees had a telehealth visit last year, the NBGH survey reported. But driving that engagement upward is among the NBGH’s 2019 priorities.

The group’s vice president for public policy, Steve Wojcik, says telemedicine is here to stay. “With large employers, adoption is growing pretty rapidly. The large employers view it as a value add for their plan. They believe it will reduce costs over time. They just need to make sure their employees understand that it is a benefit and one that can improve their lives.”

Wojcik and others interviewed for this article pointed to four key factors that have unleashed telemedicine’s potential: convenience, demonstrated time and cost savings, greater acceptance by younger workers, and acceptance by the health care brokerage community.

Other factors have contributed, among them improved user experience. Even the smoothest functioning and most effective telehealth tools will defy engagement if they are not well designed from an accessibility standpoint. But here are the big four that are unleashing the long-simmering potential of telemedicine.

Convenience: It has to be easy

For patients to accept any changes in the way they receive health care, convenience has been shown to be a key to utilization. Avoiding the clinic’s waiting room is a powerful incentive for an employee to test drive an employer plan’s telehealth visit with a physician. Fitbits have paved the way for a flood of products that deliver non-invasive, real-time collection of an increasing range of health data that allow clinicians to get a much more complete picture of one’s health.

And employer onsite clinics have taken telehealth convenience to a new level. Astute employers are integrating telemedicine into the onsite clinic to leverage the high levels of employee engagement. Services such as First Stop Health can connect the onsite primary care physician with a nationwide network of medical specialists who can provide same-day, and sometimes same-hour, diagnoses for conditions and symptoms that are outside the PCP’s expertise. Simply put, the telemedicine industry is focused on convenience—and it’s working.

The convenience factor of many telehealth products has opened up new areas for addressing employee health. Increasingly, the NBGH found, employers are using telehealth to meet multiple health needs: “A trend of note is the growing interest in telebehavioral health, or mental/behavior health services made available through phone or video consultations.”

Demonstrated time and cost savings: Money (saving) talks

Time is money, and employers understand the link between telemedicine/telehealth and the amount they spend on employee health. If telehealth is convenient, employees will use it. The more they use it, the more these three outcomes can be measured:

  • Time saved by telehealth visits that replace trips to the clinic;
  • Reduced absenteeism due to improved health outcomes;
  • Reduced claims due to improved health outcomes.

A fourth outcome, increased productivity, remains difficult to pin down. In theory, a healthier workforce should be a more productive one. But to prove the connection between telehealth and productivity, employers need more experience and more data.

The telemedicine industry knows that it must demonstrate to employers both greater employee engagement and cost savings over time. Patrick Spain, CEO of First Stop Health, a telehealth network of medical providers, says the first wave of telehealth devices and services failed to take into account the employer’s need to reduce cost as well as to see workforce health improvements. The result: participation barely hit 5 percent.

“We think the payers, like Amazon and Berkshire Hathaway, are the most important part of the equation. We think about how we can create a better experience at a lower cost for our patient and member, and then how does that stream back to the client?”

First Stop Health offers employer plans a nationwide network of medical professionals to whom plan members have immediate access when a health concern arises. In a few short years, utilization among employees has topped 50 percent—six times the average telehealth participation rate NBGH found in its 2018 study.

Spain says a key was working with employers to promote the plan. “They offered [telehealth] benefits before, but as a copay, and without any promotion. We insist that employers help us educate employees, and we won’t charge a copay or anything else.”

Today, few large employers question the value of a telemedicine component to their plan. According to a 2016 Mercer employer health survey, “Offering telemedicine services has quickly become the norm: 59 percent of all large employers offer these services, up from just 30 percent [in 2015]. Savings for members can be significant, especially before the deductible is met, as a typical charge for a telemedicine visit is $40, compared to $125 for an office visit.”

Greater acceptance by younger workers: Millennialism strikes again

No doubt, millennials are the most surveyed, studied and profiled generation that has ever lived. Researchers and pundits broadly attribute any number of characteristics to the simple fact that someone was born between the early 1980s and the mid-1990s to early 2000s. Research on adoption of new technology clearly shows that millennials lead the way, and that love of technology has translated into a ready adoption of telehealth products and services.

“Younger employees are used to getting everything through their phones,” Wojcik says. “They want to access their health care through the same device.”

Because they now represent the largest generational slice of the workforce, millennials are rapidly driving expansion of employer plan telemedicine. Led by the millennials’ enthusiasm for telehealth, older employees are following suit. And of course, Generation Z, soon to assert itself in the workplace, is perhaps even more at ease with technology that the millennials.

Noting the results of the 2017 survey by the Employee Benefit Research Institute (EBRI)/Greenwald & Associates, The Robert T. Waters Center for Telehealth and e-Health Law remarked: “The results of [the survey] are shedding light on something else about millennials: they love telemedicine … Younger health care consumers are happier to receive care in non-traditional health care settings, including via telemedicine and in walk-in clinics, than their older peers.”

Brokerage community acceptance: “I can’t sell low engagement”

In general, health insurance brokers have approached telemedicine and telehealth benefits gingerly. They would often rather just sell insurance policies and standard benefits; but that’s changing.

For years, telehealth benefit engagement numbers were extremely low. And while they remain modest, according to the NBGH survey, they are improving. Some options are reporting employee participation in the 50 percent to 60 percent range, numbers unimaginable just a few years ago.

Insurance brokers are overcoming their telemedicine benefits reservations as more clients demand such products and services. “We are seeing increasing interest from brokers and employee benefits consulting firms,” says Anu Nadkarni, vice president, Payer Solutions, Tyto Care, which provides a telehealth solution for performing comprehensive at-home physical exams and diagnoses. “They see this as a game changer to utilize telehealth benefits. They’re looking at new opportunities, asking themselves, ‘Where can we improve the member experience?’”

The problem hasn’t been with the products or services, says Rachel Miner of Thrive Benefits. Neither brokers nor employers have been effective at selling telehealth benefits to employees. “Telemedicine has to be a benefit that people see as a benefit,” she says. “Part of it is making sure people will use it.” If the benefit offers convenience, saves time, and is easy to use, employees will engage. But first, brokers and employers have to do a better job of communicating the benefits. “For a broker to offer these services, you need to have strong utilization and have it work for the client. You have to be able to say, ‘Here’s the ROI.’ And we are finally seeing that.”

One product she likes is the HealthJoy concierge app.

Here’s how HealthJoy describes itself: “The platform brings together medical professionals, advocates, Rx savings, an artificial intelligence-powered virtual assistant, and more into an easy-to-use app that employees love.”

Here’s how it works for Miner’s trucking company client: A driver is on the road, far from his or her home health-care turf, when a sudden medical concern flares. The driver simply opens the HealthJoy app, places a call to be connected with a doctor to discuss the condition, and is quickly connected with a medical professional who can start the diagnosis and treatment process on the phone.

“You can show the ROI there,” Miner says. “Think of the savings for a trucking company client. And what if you can just call a doctor on the road and they will send the prescription to where you are? That’s a benefit that works.”