__MAIN_TEXT__

Page 1

J U LY 2 0 2 0

A S I P C P U B L I C AT I O N

COVID

Reshaping Health and Safety AS BUSINESSES RE-OPEN, WORKPLACE PRACTICES SPELL A NEW NORMAL

SIPCONLINE.NET


strength in

AN INTEGRATED APPROACH TO SELF-INSURED SOLUTIONS

balance Experts in coverage solutions for single entities, groups and public entities, our integrated approach gives self-insureds greater stability and control over their self-funded plan. Unparalleled underwriting expertise, innovative risk management and in-house claims management, work in sync and in perfect balance for best possible outcomes.

A Safety National® Company

800.800.4007 midlandsmgt.com publicentity@midman.com

WORKERS’ COMPENSATION | PUBLIC ENTITY | CATASTROPHIC CLAIMS MANAGEMENT | THIRD PARTY ADMINISTRATION | EXCESS WORKERS’ COMPENSATION | AUDITS | COMMUTATION | UTILIZATION & REVIEW


TABLE OF CONTENTS

JULY 2020 VOL 141

W W W. S I P C O N L I N E . N E T

FEATURES 4

COVID RESHAPING HEALTH AND SAFETY AS BUSINESSES RE-OPEN, WORKPLACE PRACTICES SPELL A NEW NORMAL

By Bruce Shutan

8

THE WAR ON MEDICAL MISINFORMATION EXPERTS PRESCRIBE THE USE OF VETTED CONTENT FROM CREDIBLE SOURCES, WARN AGAINST VESTED INTERESTS WITH WASTEFUL WAYS

By Bruce Shutan

ARTICLES 18

ACA, HIPAA and Federal Health Benefit Mandates THE AFFORDABLE CARE ACT (ACA), THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 (HIPAA) AND OTHER FEDERAL HEALTH BENEFIT MANDATES

38

COVID-19, BALANCE BILLING, OUT-OFNETWORK CLAIMS, AND CONFUSING CHARGES – AN UGLY COMBINATION

44

WHY SELF-INSURED EMPLOYERS NEED TO NEGOTIATE AIR AMBULANCE RATES

26

IRS CONTINUING ITS OFFENSIVE TOWARDS ENTERPRISE RISK CAPTIVES

50

NEWS FROM SIIA MEMBERS

32

HEMOPHILIA MANAGEMENT PROGRAM HELPS SELF-INSURED EMPLOYERS BATTLE HIGH COSTS

The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC). Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688

Self-Insurer’s Publishing Corp.

PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF OPERATIONS Justin Miller, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISORS Bruce Shutan and Karrie Hyatt, 2018 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary

JULY 2020

3


FEATURE

COVID

Reshaping Health and Safety

I

AS BUSINESSES RE-OPEN, WORKPLACE PRACTICES SPELL A NEW NORMAL

I

t’s challenging enough for self-insured employers to bend the cost curve and improve health outcomes with the help of third-party administrators, stop-loss carriers, managing general underwriters, captive insurance managers, case managers, actuaries, attorneys, brokers and consultants. But nowadays all of those entities face an equally daunting prospect: safely transitioning their teams into a post-pandemic new normal without undermining performance. Workplaces ranging from meat packing facilities to call centers are among areas with the largest number of coronavirus outbreaks, according to Erin S. Bromage, Ph.D., an associate professor of biology at the University of Massachusetts Dartmouth. “Any environment that is enclosed, with poor air circulation and high density of people, spells trouble,” she recently warned in a lengthy commentary on COVID-19. Others say further research on the pandemic suggest outdoor activities are safer than once thought, opening up the possibility of business meetings in fresh air.

Written By Bruce Shutan

“The challenge is going to be balancing these restrictions with operations, and frankly, staying productive,” says Brady Bizarro, a health care attorney and director of legal compliance and regulatory affairs for The Phia Group, LLC.

“If you don’t introduce enough restriction and protections for your workforce, then your liability will be significant increased, and we’re seeing that in increased workers’ compensation claims that are really blowing up across the country.” 4

THE SELF-INSURER


Covid Reshaping There’s no escaping the fact that businesses are swimming upstream. COVID-19 tests are scarce and expensive with a spotty track record on accuracy, notes Jeff Levin-Scherz, M.D., a senior consultant and co-leader of the North American health management practice at Willis Towers Watson. He expects offsite testing to be conducted and mounting interest in thermal scanning, coupled with completed questionnaires about symptoms and exposure.

home, seems to be up in the air. It also looks like social distancing will be with us for a number of years.”

Published reports have suggested that keycards or sensors could be used to monitor employee whereabouts throughout the day to avoid overcrowding. One-way walkways in China may come to Corporate America, while IBM is considering sensors or new technology to detect or predict when crowds form.

Organizations that consider broad employee testing measures as a primary means of risk management may struggle given the cost burden and need for frequent testing, according to Brad Nieland, president and CEO of Berkley Accident and Health. He believes direct sourcing of tests outside of their health plan benefit may prove to be a more cost-effective solution, while the pandemic “shines an even brighter light on the need for active risk management.”

Some companies will use split shifts that divide work facility hours into odd and even weeks, alongside social distancing and wearing masks, Levin-Scherz surmises, while work-from-home arrangements extend to knowledge workers who are older and might have more chronic diseases.

Whatever the case may be, he suggests self-insured employers will need to reevaluate their sick-leave policy in light of this game-changing pandemic. “As

Jeff Levin-Scherz

Thus far, working Americans appear to be ambivalent about working from home. A recent Gallup poll, for example, found that while more than half wanted to continue telecommuting as much as possible, their enthusiasm waned over time. Those in insurance, finance, professional services, technology and media preferred remote working to their counterparts in education, retail, construction and transport.

society moves toward a zero tolerance for sick workers, flexible leave is critical to controlling the spread of COVID-19,” he says.

Businesses that reopen will need to determine the maximum capacity of conference rooms and require that some staffers call in even if they’re physically in the building, Levin-Scherz says. Other expected changes will involve replacing finger food with individually wrapped fare, as well as continued closure of amenities such as onsite gyms.

MORE ACTIVE RISK MANAGEMENT While federal agencies such as Occupational Safety and Health Administration and Centers for Disease Control and Prevention (CDC) will maintain jurisdiction over workplace safety, Bizarro says governors have discretion over their reopening plans, and businesses will need to tailor their policies and practices to state requirements. Industries also will be classified as either low, medium or high risk, with compliance efforts matching those descriptions. “Many employers are going to be required to have their employees wear a facemask,” he says. “What that mask looks like, whether it’s special-issued or a cloth mask from

Brad Nieland Businesses also may want to put into place an infectious disease policy and tweaking safety protocols, suggests Amber Clayton, director of the Society for Human Resource Management’s Knowledge Center. This represents an opportunity to integrate benefits with HR and safety. Whereas risk managers

JULY 2020

5


• Consulting • Case Management • Big and Small Data Analysis & Predictive Modeling • Claims Audits • Risk Management

customerservice@arataiinternational.com www.arataiinternational.com

Call Us Toll Free: (888) 448-2470

Aratai International provides services to build and develop cost-effective and high quality healthcare strategies. We invest time in understanding your business goals, and we develop programs to help you reach them. We are committed to developing strong business relationships by exceeding your expectations. MEDICAL LEGAL

|

C O N S U LT I N G

|

MANAGEMENT

|

D A T A A N A LY S I S


Covid Reshaping public both within and outside the workforce, she predicts. This would help keep employees safe, reduce absenteeism and continue to promote health and wellness. With more than 94,000 Americans having died from COVID-19 as this issue went to press, Levin-Scherz laments the seriousness of the disease. But he also sees a few silver linings in a very dark cloud that include embracing virtual medicine and telecommuting, which save money, reduce traffic congestion and improve quality of life. Adds Clayton: greater use of telehealth “will hopefully reduce the cost of going into emergency rooms or urgent cares unnecessarily,” as well as minimize some of the mental and physical health issues that employees have.

Amber Clayton have overseen these areas prior to the pandemic, she says HR staffers can play a meaningful role in helping amend these policies.

Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.

Employers likely will continue to encourage social distancing, frequent handwashing and wearing masks in

ACQUIRE With

Claros Analytics

Health Benefits Consulting Suite Predictive Analytics that Optimize the Future

Actuarial Advisor The Healthcare Industry’s Most Credible Rating Manual

Analytics. Precision. Insight. sales@clarosanalytics.com | 609.275.6500 | clarosanalytics.com

JULY 2020

7


War on Medical Misinformation

FEATURE

The War on

Medical Misinformation EXPERTS PRESCRIBE THE USE OF VETTED CONTENT FROM CREDIBLE SOURCES, WARN AGAINST VESTED INTERESTS WITH Written By Bruce Shutan WASTEFUL WAYS

W W

hen it comes to health care, web browser searches and social media are rife with misinformation, confusion and conflicts of interest. This is especially true during the coronavirus pandemic when the alarming difference between knowledge and ignorance is a matter of life or death and critical to flattening the curve on outbreaks. The editors of more than two dozen cardiology-related scientific journals published an editorial expressing alarm about medical misinformation and reiterating the importance of debunking myths. For self-insured employers and their industry partners, the challenge is to ensure that health plan participants can access credible and trustworthy information about health conditions and remedies to help them make better decisions. Since medical information is so easily accessible, navigating such terrain is oftentimes a treacherous endeavor. Experts say the trouble with online content is that it’s not policed and the first items that appear in a web browser are determined by search engine optimization vs. credibility rankings. It’s potentially a recipe for disaster when diagnosing and treating illnesses.

8

THE SELF-INSURER


At AmWINS Group Benefits our team of specialists wakes up every morning committed to bringing your team innovative solutions to the opportunities and challenges you and your self-funded clients face. That’s the competitive advantage you get with AmWINS Group Benefits.

amwins.com


War on Medical Misinformation “The Internet is really a double-edged sword,” cautions Jenny Wan, manager of sales and marketing of Health Portal Solutions. “If I wake up in the middle of the night not feeling good and Google an article that gives me the wrong advice, I may end up in the emergency room.” Perhaps no topic is more prone to misinformation and confusion now than the coronavirus pandemic, especially when it comes to assessing the efficacy of testing and apprehension about returning to work, observes James Burkholder, president and CEO of Health Portal Solutions. A recent study published in the journal BMJ Global Health noted that more than 25% of the most-viewed YouTube videos in English on Covid-19 were factually incorrect or misleading. Jennifer Dressler, director of clinical services for WebMD Health Services, recalls an email circulating in early March suggesting how people could self-diagnose for Covid-19 that went viral on social media. The conclusion was that an ability to hold one’s breath for 10 seconds without coughing meant someone didn’t have the virus – a false claim that was erroneously attributed to Stanford University. Jennifer Dressler

“Even some people with seasonal allergies can’t hold their breath

without coughing,” she says. “If people don’t investigate what they’re reading and it gives them pause, they can really hurt themselves.” NEED FOR TRANSPARENCY It’s critically important to disseminate thoroughly researched and vetted health care content from credible sources in a secure portal, Burkholder explains. With that mission, he says, comes a responsibility to avoid or at least clearly mark information that relies on advertisements from prescription drug manufacturers and others that have a vested interest in the products or services they’re marketing. As with any media operation, comingling advertising with editorial content can be a slippery slope if the former dictates the latter. In the case of WebMD Health Services, there’s a disclaimer on the website landing page stating there are no financial relationships with any advertisers, while the wellbeing portal for employers and health

10

THE SELF-INSURER

plans is devoid of advertising. WebMD Health Services, which is part of the WebMD brand of companies, developed an internal culture that encourages sharing and vetting clinically driven content based on behavior change science methodologies prior to disseminating that information. With more than 60 million eligible participants having access to its digital telephonic and online services through their health plan or employer, it’s one of the nation’s most well-known, trusted and highly regarded source for health care information. WebMD.com, the source for public information, has its own editorial accountability with policies and procedures at the bottom of the landing page for complete transparency. “There are so many things you need to pay attention to so that people don’t associate you with the newest, latest and greatest Viagra pill that’s popping up and flashing, or it then takes you to additional links and you can’t close all your browsers,” Dressler cautions. There are also legal considerations that involve disseminating health information to employee populations. “As an employer, you Brady Bizarro don’t want to go beyond providing information,” explains Brady Bizarro, a health care attorney and director of legal compliance


War on Medical Misinformation and regulatory affairs for The Phia Group, LLC. “You don’t want to be an advocate for any particular drug or service. Even though it might be in the best interests of the plan, and therefore the employee, to select the lowercost option, the liability is too great to interfere.”

IN SEARCH OF INDEPENDENCE Basing medical decisions on information provided by sources with a vested interest in the outcome can exacerbate an already pressing problem with the nation’s health care system, warns Al Lewis, a seasoned health and wellness expert who founded Quizzify. In a nutshell: dramatic overuse of medical services.

Those that receive industry funding invariably will be advocating for more of something and have a better position on Google searches because of bigger marketing budgets and higher profits, he explains. Among the worst offenders, or those with the least amount of credibility, are medical specialty societies in the areas of urology, radiology, gastrointestinal, diabetes, dentistry, etc., Lewis laments. However, not all such organizations fall into this trap. He cites as examples the American Academy of Family Medicine, Society of General Internal Medicine and Endocrine Society.

Al Lewis

“Three times out of four, employees are going to opt for more medical care when the answer is less medical care,” he says.

YOUR STOP-LOSS RENEWAL PROCESS WITHOUT RINGMASTER

YOUR STOP-LOSS RENEWAL PROCESS WITH RINGMASTER CONTACT US NOW & RECEIVE: • ATTRACTIVE PRICING MODELS • FLAT FEE FOR UNLIMITED USAGE • NO SET-UP FEES • NEW BUSINESS BONUS INCENTIVES

rmtsales@ringmastertech.com • 330.648.3700 • ringmastertech.com JULY 2020

11


War on Medical Misinformation It behooves content developers in the commercial market to include links to external sources that have the luxury of maintaining their independence. Dressler cites several examples that include federal, state and local government, as well as the U.S. Centers for Disease Control and Prevention and World Health Organization. Others involve various .org designations and accrediting bodies such as through the National Committee for Quality Assurance. Bizarro suggests avoiding content that hasn’t been peer reviewed by the New England Journal of Medicine or similar publications, and not certified or at least promoted by federal agencies such as the Department of Health and Human Services or Centers for Medicare & Medicaid Services. Aileen Kantor, founder of Health Literacy Innovations, recommends that self-insured employers make available to their health plan members two invaluable resources. They include MedlinePlus, an online health information service of the National Library of Medicine and part of the National Institutes of Health, as well as PubMed, which comprises more than 30 million citations for biomedical literature from various sources. One big concern is that most wellness vendors exceed the U.S. Preventive Services Taskforce recommendations, Lewis observes. For example, the taskforce suggests that only people in their 50s with a 10% risk of heart attack in the next 10 years take baby aspirin, while countless articles have extended it to other age groups. “What you read on the Internet about baby aspirin is wrong,” he says. “You’ve got to look much harder at the actual data.”

“We integrate a lot with MeMD,” she reports. Another trusted partner Wan cites is HealthDay, which recently refreshed its online videos and articles with more research-based content. What’s needed is a common-sense approach to health care education and communication in a post-pandemic world that balances the need to reopen for business with necessary precautions that protect employee populations. For example, Burkholder touts a strategy built around frequent hand washing and social distancing, as well as added vigilance for people who are predisposed to serious medical conditions. Wan also sees a major role for telemedicine providers to help screen health plan members for COVID-19 and avoid trips to a doctor’s office, urgent care or the emergency room where they may be put in harm’s way.

Quizzify heavily relies on material reviewed by Harvard Medical School doctors in its quizzes, along with the Mayo Clinic and U.S. Preventive Services Taskforce. Although WebMD is a commercial vendor, Lewis considers it another solid source alongside Choosing Wisely, a joint venture of Consumer Reports and the American Board of Internal Medicine.

CORRECTING COVID CONCERNS The value of carefully vetted material cannot be understated during the pandemic. Burkholder lauds Healthwise for doing “a tremendous job of continually updating information with regard to COVID-19.” The nonprofit organization’s evidencebased content, written by physicians in a way that health plan members can easily understand, offers “a good first line of defense for researching a medical problem,” and avoiding unnecessary and expensive treatment, Wan adds. Telemedicine also can resolve many minor health issues with the help of a boardcertified physician whose virtual guidance can go a long way toward reducing wasteful spending.

12

THE SELF-INSURER

James Burkholder Quizzify, whose mission is to raise health literacy through trivia challenges in the workplace, was embroiled in controversy over a question about hydroxychloroquine it fielded in early March before the medical establishment finally recommended it not be used to treat COVID-19. A handful of people


Delaware’s Captive Bureau is business at the next level

In Delaware, our captive regulators are dedicated exclusively to our captive insurance clients’ needs, and work under the direction of our Captive Bureau leadership, directed by Steve Kinion.

There are 34 people working on Delaware’s Captive team. Of this total 15 are financial analysts. Under Delaware’s regulatory organization, the financial analyst is the first-line regulator who communicates with the captive manager or owner. As a result, all inquiries, business plan changes, dividend requests, and other related matters are first addressed by the analyst. The experience level of these analysts is unmatched. STEVE KINION, DIRECTOR

Call us today to speak with a team member

Bureau of Captive & Financial Products Department of Insurance Steve.Kinion@state.de.us

302-577-5280

Our team has 15 analysts 12 hold the Associate in Captive Insurance (ACI) designation 12 hold the Accredited Financial Examiner (AFE) designation 9 hold the Certified Financial Examiner (CFE) designation 2 are Certified Public Accountants (CPA)

BUREAU OF CAPTIVE & FINANCIAL INSURANCE PRODUCTS 1007 Orange Street, Suite 1010 Wilmington, DE 19801 302-577-5280  captive.delaware.gov


War on Medical Misinformation who took the quiz were perplexed that it cast doubt on the efficacy of this treatment for the virus when President Trump was touting its promise. Ironically, the commander in chief made a stunning admission in late May about taking hydroxychloroquine to guard against the coronavirus.

We looked at the science, and it was perfectly obvious that you should not be taking this stuff except when it was prescribed for particular ailments,” explains “

Lewis, whose trivia games have drawn more than 100,000 players. There are plenty of other myths over the years that Lewis has sought to debunk as a health literacy advocate and educator. One is that highend heartburn medicine such as Nexium or Prilosec safely provide relief. In fact, he says it spikes the stomach’s pH level and changes digestion, “which has consequences that we don’t really know about.” Another example involves elective cardiac stents for single-vessel occlusion stable angina, which Lewis says are no better than exercise, diet and pills. As a result, he notes that Americans get far more stents than people in most other countries. The value of a statin to lower cholesterol also has been called into question. It won’t reduce the risk of a

14

THE SELF-INSURER

heart attack “unless you’re in very specific sort of risk factor, demographic, etc.,” he cautions.

IMPROVING HEALTH LITERACY Some resources can help connect the dots between informing employees about health topics, improving their health literacy and actually suggesting prudent avenues of care. Bizarro, for instance, recommends the Leapfrog Group, a nonprofit watchdog organization for health care consumers and purchasers alike that compiles information about providers and rates them based on quality and cost of care, including the number of hospital infections and readmissions. Having access to credible information can improve health literacy, which in turn, helps individuals adhere to healthier lifestyles and saves money for both employees and employers. For example, Dressler notes that explaining how a person can decrease the need for prescription pain medication is linked to losing weight can, in turn, help alleviate the joint pain driving the need for medication relief. Health literacy is defined as the degree to which individuals have the capacity to obtain, process and understand health information to make appropriate health decisions, according to Kantor. She says just one in six adults and one in three seniors are believed to have proficient health literacy, while those with low health literacy experience four times higher health care costs and two day longer hospital stays, as well as a higher rate of hospitalization and emergency services.


Medical Stop Loss from Berkshire Hathaway Specialty Insurance comes with a professional claims team committed to doing the right thing for our customers – and doing it fast. Our customers know they will be reimbursed rapidly and accurately – with the certainty you would expect from our formidable balance sheet and trusted brand. That’s a policy you can rely on.

Reimbursement done right. www.bhspecialty.com/msl The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.


War on Medical Misinformation “The average American reads at a fifthgrade reading level, and the health care industry produces information at a tenthgrade reading level,” she explains. Both the National Committee for Quality Assurance and Utilization Review Accreditation Commission have standards for health literacy while accrediting bodies are increasingly requiring them for accreditation, reports Kantor, whose company introduced the nation’s first interactive health literacy software tool.

Member FDIC

Dependable Modular

Connect to a Flexible HSA Partner

“Healthcare literacy is so very important,” Dressler adds. “I know that there are so many different groups and entities out there that are trying to move that marker. And health care literacy definitely doesn’t mean just understanding an appendectomy. It’s that whole broad understanding about the cause and effect, the downflow influence and insurance costs.” Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.

Dedicated

Integrated

No Two Clients are the Same. That’s why UMB offers a wide range of HSA custodial options that support and differentiate your CDHP offering. You get choice and control to select the solution that aligns with your business goals. HSA.UMB.com/Flexible

HSAs + Payments + Card Solutions

16

THE SELF-INSURER


Claims Processing, Simplified.

See for yourself.

beaconspyglass.com


A QQ& A

ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

Practical

T

&

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, and Carolyn Smith provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley Gillihan and Carolyn Smith are senior members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at john.hickman@alston.com.

18

THE SELF-INSURER


HANDLING INSURER REBATES For a variety of reasons many employer plan sponsors may be pleasantly surprised when they are faced with potential insurer rebates and/or unexpected positive claims experience. In some cases, the positive claims experience may be attributable to the temporary and significant decline in utilization due to COVID interruptions. In addition to primary medical coverage, the excess amounts may be for ancillary coverage (e.g., dental or vision insurance). While there was great focus on the treatment of premium rebates after the ACA medical loss ratio (MLR) rules, many plan sponsors are surprised at the restrictions that ERISA may impose on the issue of such rebates. This article provides a high-level recap of the ERISA regulatory requirements.

IS THE REFUND AN ERISA PLAN ASSET?

Step 1: Who holds the policy? If the policy is in the name of the plan or the plan’s trust, then all of the refund is likely an ERISA plan asset. If the employer is the policyholder go to step 2. Step 2: If the employer is the policyholder then the plan document (along with certain other extra-contractual documents such as enrollment materials that reflect the parties’ understanding and representations) will control the disposition of the assets. In many situations, however, plan documents will not adequately address the issue of disposition of rebates. In such cases, the DOL looks to the relative portion of the premium paid for by the employer and employees for the period that gave rise to the rebate, as follows: IF

THEN

The plan or plan trust is the policyholder

The entire rebate is plan assets.

The employer pays the entire premium

No part of the rebate is plan assets; the employer is entitled to the entire rebate

The participants pay the entire premium

The entire rebate is plan assets.

The participants and employer each pay a fixed percentage of the premium

The percentage of the rebate equal to the percentage of the premium paid by participants is plan assets.

The employer pays a fixed amount and participants pay the rest

The rebate is plan assets, except to the extent the rebate exceeds the total amount paid by participants.

Participants pay a fixed amount and the employer pays the rest

The rebate belongs to the employer, except to the extent the rebate exceeds the total amount paid by the employer.

TO THE EXTENT A REBATE IS PLAN ASSETS, DOES THE REBATE HAVE TO BE HELD IN A TRUST UNTIL DISTRIBUTED? ERISA generally requires that plan assets be held in trust. DOL Technical Release 2011-04 (the DOL Technical Release) describes two exceptions to this requirement that will be helpful for plan sponsors, recognizing that in many cases there is no trust maintained with respect to the group health plan (e.g., due to the cafeteria plan trust moratorium under Tech Rel 92-01).

First, the DOL Technical Release applies the same safe harbor to the trust requirement for rebates that currently applies with respect to cafeteria plan contributions and certain other contributory plans under Tech Rel 92-01. Thus, if a trust is not

JULY 2020

19


established for the plan in reliance on Tech Rel 92-01, then the rebate does not have to be held in trust if it is used within three months of receipt by the policyholder. Note that the DOL Technical Release specifically says that, under this safe harbor, the rebate must be used within three months “to pay premiums or refunds.” However, as discussed further below (under “To the extent a rebate constitutes plan assets, how can the rebate be used?”), rebates may be used for purposes other than payment of premiums or refunds. If a plan does have a trust, then this safe harbor does not apply.

PRACTICE POINTER: PRACTICE POINTER:

If a plan currently does not have a trust in reliance on the safe harbor the DOL has provided for cafeteria plan contributions, then rebates that are plan assets do not have to be held in trust if the rebates are used within three months of receipt by the employer in accordance with DOL guidance.

Second, under ERISA statutory rules referenced in the DOL Technical Release, the trust requirement does not apply to plan assets that are held by an insurance company. Thus, if the plan does not have a trust, another possibility is to have the insurance company hold the rebate to the extent it constitutes plan assets, and then distribute the rebate as directed by the employer/plan fiduciary. This avoids the need to incur costs associated with a trust when one is not otherwise established under the plan.

In either case, however, ERISA’s fiduciary requirements would apply to the use of the rebate. The DOL Technical Release specifically states that such an approach may, depending on the circumstances, be consistent with fiduciary responsibilities.

20

THE SELF-INSURER

TO THE EXTENT A REBATE CONSTITUTES PLAN ASSETS, HOW CAN THE REBATE BE USED? The DOL Technical Release does not contain specific rules or safe harbors regarding permitted uses of rebates that are plan assets. Rather, the DOL Technical Release restates general guidance on ERISA fiduciary principles, much of which is based on prior opinions regarding the distribution of demutualization proceeds. Thus, the method of allocation among plan participants and the particular use of the rebates (e.g., to reduce premiums, to make cash distributions or for other permitted plan purposes) is to be determined in accordance with ERISA’s general prudence standard. The plan fiduciary should take into account relative costs and benefits of different approaches. Based on the DOL Technical Release, as well as prior guidance, the following general principles emerge regarding the use of rebates that constitute plan assets:


· Rebates do not have to be precisely allocated among plan participants based upon their premium payments. The allocation method must be reasonable, fair and objective, and cannot benefit a plan fiduciary who is also a plan participant at the expense of other participants.

· Rebates may be allocated to current plan participants if the cost of allocating a portion of the rebate to former plan participants who were in the plan for the year to which the rebate relates is unreasonable. Thus, tracking down former participants to pay rebates is not necessarily required.

· Rebates are not required to be used in any particular way. Rather, rebates may be distributed in cash or may be used to reduce future premiums, enhance benefits or for any other permissible plan purposes, providing such use is consistent with fiduciary requirements. The amount of the rebate will be a significant factor in determining an appropriate use of the rebate. For example, administrative costs of reducing future premiums or distributing cash rebates are likely to be prohibitive in many cases. Thus, other uses are permissible. For example, depending on the circumstances, it may be appropriate to provide a wellness benefit under the plan or to use a rebate to offset plan costs that are not the obligation of the plan.

· If reasonable, rebates should be used for the participants covered by the policy to which the rebate relates. Similarly, if benefits are provided under multiple policies, the fiduciary should generally allocate the plan’s portion of the rebate for the benefit of participants who are covered by the policy to which the rebate relates. However, such an allocation is not required if the fiduciary determines that it is not prudent or in the best interests of plan participants. Thus, it may be prudent in some circumstances to use a rebate for all participants in a plan, not just those in the option that generated the rebate.

· In no event may the use of a rebate generated by one plan be used to benefit the participants in another plan.

WHAT PORTION OF THE REBATE MUST BE USED BY THE POLICYHOLDER TO BENEFIT PLAN PARTICIPANTS? The policyholder must use the amount of the rebate that is “proportionate” to the total amount of the premium paid by all subscribers under the policy, with respect to which the rebate is paid for the benefit of plan participants. Here is a very simple example of how this is determined. If the rebate with respect to a policy is $20,000 and the policyholder paid 40 percent of the total premium, then the policyholder is required to use $8,000 of the rebate for the benefit of plan participants.

22

THE SELF-INSURER


YOUR BEST PARTNER LEADS THE WAY

For more than 35 years, self-funded employers have trusted Sun Life to deliver flexible stop-loss solutions and seamless claim reimbursement. And now, with our new Clinical 360 program, our clinical experts will review your claims data to identify cost savings and care optimization. With high-cost medical and pharmacy claims growing every year, you need your best partner with you every step of the way. Ask your Sun Life Stop-Loss specialist about our latest innovations.

STOP-LOSS

|

DISABILITY

|

ABSENCE

|

DENTAL / VISION

|

VOLUNTARY

|

LIFE

For current financial ratings of underwriting companies by independent rating agencies, visit our corporate website at www.sunlife.com. For more information about Sun Life products, visit www.sunlife.com/us. Stop-Loss policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York, under Policy Form Series 07-SL REV 7-12. In New York, Stop-Loss policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. © 2019 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life Financial and the globe symbol are registered trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us. BRAD-6503k SLPC 29427 02/19 (exp. 02/21)


WHAT ARE THE PERMITTED MEANS OF USING THE

The policyholder may decide to distribute the participants’ portion of a rebate in any one of the following ways:

PARTICIPANTS’ PORTION OF A REBATE? There are three different permissible distribution methods with respect to the portion of a rebate that is attributable to participants. The policyholder may choose any one of these three methods with respect to a particular rebate. In all cases, the rebate can be used to benefit current participants—meaning those covered at the time the rebate is received—so there is no need to track former participants who were in the plan in the year to which the rebate relates.

-

to reduce premiums for the subsequent plan year for all participants in the plan (regardless of whether the participant is covered under the option that generated the rebate);

-

to reduce premiums for the subsequent policy year only for those participants who are in the plan option that generated the rebate; or

-

to pay cash refunds to participants enrolled in the group health plan option that generated the rebate.

HHS provides options for how the policyholder may divide the participants’ share among different participant groups. At the option of the policyholder, the rebate may be divided evenly among plan participants (e.g., on a per capita basis), divided based on each participant’s actual contributions to the premium or apportioned in a manner that reasonably reflects each participant’s contributions to the premium.

At Meritain Health, we are your Advocates for Healthier Living! We strive to help our members lead healthy, produc�ve lives. That's why we offer tools and services to promote long-las�ng health and well-being. For more information, visit www.meritain.com

24

THE SELF-INSURER


Being Powerful. Being Human. Being PharmPix.

Partnership is within your grasp.

Discover why PharmPix has been revolutionizing PBM since 2009. Schedule a personalized demo at www.pharmpix.com or call 404-566-2000.

POWERED BY ONEARK


IRS CONTINUING ITS OFFENSIVE TOWARDS ENTERPRISE RISK CAPTIVES

E E

nterprise Risk Captives (ERCs) are once again under attack from the Internal Revenue Service (IRS). The latest sally in an on-going offensive was a letter sent to tens of thousands of captives requiring information regarding their use of the 831(b) option of the U.S. Tax Code under threat of perjury. The letter was sent in March, only a few days into the National COVID-19 Emergency Declaration.

Written by Karrie Hyatt

26

THE SELF-INSURER

While poorly timed, as so many businesses are working to switch to telecommuting and are letting go of staff, the letter is also aggressive towards captives, threatening more exams of ERCs. Industry professionals are up in arms by the request as it places undue burdens on captives during a time of crisis and casts a wide net over the industry under the assumption that any captive taking the 831(b) option is partaking in an abusive tax scheme.


TIMELINE OF IRS ACTIONS

The IRS began aggressively auditing ERCs in the early 2010s. In 2015, the IRS named micro-captives to their annual “Dirty Dozen” list. This list is released each year to warn taxpayers of potential tax abuses and scams. Called “micro captives” in the IRS press releases, the “Dirty Dozen” list claims that some captives using the 831(b) designation are using it for reasons other than insuring genuine risk.

Also in 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), although it didn’t go into effect until January 1, 2017. The law created tax relief benefits for businesses and families, and, for the captive insurance industry, the PATH Act increased the limit of net annual written premiums to 2.2 million dollars for ERCs taking the 831(b) option.

In late 2016, the IRS issued Notice 2016-66 after again placing ERCs on the “Dirty Dozen” list. Notice 2016-66 named 831(b) captives as “transactions of interest” and requested specified entities to file additional financial disclosures by January 30, 2017—90 days after the Notice was issued. The deadline was moved to May 1, 2017 after vociferous outcry from the captive industry.

The Notice was an attempt by the IRS to collate as much information about ERCs as possible. However, it created a financial burden on these small captives to gather the additional materials requested. CIC Services, a Tennessee-based captive manager, filed a lawsuit against the IRS and Treasury Department arguing that Notice 201666 was unlawfully issued and did not meet the authority or “reasoned analysis” requirements of the Administrative Procedure Act. CIC Services lost the initial case and took it to the Appeals Court where it was denied. In May, the U.S. Supreme Court granted cert on the case, which will be heard in the upcoming term starting in October (CIC Services vs. IRS).

In August 2017, the U.S. Tax Court released its decision in the case of Avrahami v. Commissioner, a highly anticipated case regarding captive insurance companies electing to use the 831(b) option. The case was decided against the owners of the captive. The case was the first in a series of actions heard by the Tax Court and the decision had been much anticipated by the captive industry.

The Act also changed the qualifications regarding ownership diversity for those captives, requiring any captive electing for the 831(b) designation to meet a “Diversification Requirement” in ownership. The PATH Act, while supporting ERCs, also made it more difficult for bad actors to form them. Since the law was passed, the captive industry has been waiting for guidance regarding certain provisions in the Act, now going on nearly five years, and after numerous requests from SIIA and a number of state domiciles.

JULY 2020

27


The decision did offer some guidance to the types of risk structures captives that should be used when claiming the 831(b) tax option. In mid-2019, another case, Reserve Mechanical Corp. v. Commissioner, was decided against the captive. In addition, there are two other cases now awaiting decisions that may have continued repercussions on the captive industry’s relationship with the IRS.

Most recently, on September 16, 2019, the IRS sent a settlement letter to around 200 captives that were then under audit. The letter was part of a Global Settlement Initiative and included a one-time offer requiring the captive to pay penalties and concede a substantial portion of the tax benefits that were previously claimed. At the time it was estimated that there were more than 500 ERCs being audited or in the appeals process.

28

THE SELF-INSURER

MARCH 20, 2020

Increasing its hostility towards ERCs, on March 20th, the IRS sent Letter 6336 (32020) to captives that have taken the 831(b) option on their tax filings. The IRS cast a broad net with this letter, sending it to approximately 150,000 captive owners. It was sent to both currently operating and closed captives, as well as to captives that are already under exam or are in the appeals process or in litigation. In one case, an individual received a letter regarding a captive that ceased operations in 2011.

Citing Notice 2016-66, the letter is addressed to those who have, “Taken a tax deduction or other tax benefit related micro-captive insurance on a prior year tax return.” The letter states that, “The IRS is increasing enforcement activity in this area and has deployed several examination teams to open additional examinations of returns that included micro-captive insurance transactions.”

The letter requires captive owners to sign a “penalties of perjury statement,” which is included with the letter. Additionally, the letter asks for the last tax year in which the deduction was claimed and the date the receiver “ceased participating in the microcaptive insurance transaction,” if applicable. It is indicated that compliance with the request will reflect favorably on those captives. The letter ends with cautionary advice for ERCs to consult an “independent, competent tax advisor.”


The March 20th letter named May 4, 2020 as the due date for the information. In light of the National COVID-19 Emergency Declaration, and after a push from SIIA, the IRS extended the deadline to June 4, 2020.

After the settlement offer from last fall, which indicated to many that the IRS was shoring up its aggressive auditing of ERCs, this letter indicates that is intensifying its examination of captives claiming the 831(b) deduction. Rather than acknowledge that most ERCs are operating in compliance with the law, the IRS seems to be working under the assumption that any captive taking the tax option is abusing tax law.

INDUSTRY REACTION

SIIA’s letter was followed by letters from the Vermont Captive Insurance Association (VCIA), and captive insurance associations from North Carolina, Arizona, Montana, Tennessee, Georgia, Nevada, and Utah, among others—many of whom sent letters to their Congressional delegation as well. SIIA is leading a grassroots effort with captive owner engagement. Dozens of captive owners are sending letters to Congress, several of which have also had virtual phone meetings to discuss captive issues, which SIIA has helped coordinate.

Captive industry professionals were fuming by both the timing of the letter and the intent. SIIA led the conversation with a letter to Steven T. Mnuchin, secretary of the Department of the Treasury and Charles P. Rettig, commissioner for the IRS, sent on March 30 from Ryan Work, SIIA’s vice president of Government Relations.

Specializing in serving the risk management needs of over 2,300 clients. GPW offers a unique combination of captive and reinsurance management, accounting, tax compliance, and actuarial services all under one roof, providing clients with efficient and comprehensive service. GPW’s team of experts includes credentialed Actuaries, Certified Public Accountants, and Associates of Captive Insurance. GPW and Associates, Inc. 3101 North Central Ave., Suite 400 Phoenix, Arizona 85012 Ph 602.200.6900 Fx 602.200.6901

JULY 2020

29


The primary point of contention for much of the industry was the vastly inappropriate timing of the letter. While the IRS had likely been working on it for months, deciding to send it after the “Safer at Home” orders were issued, was beyond bad timing. Many, if not most, businesses in the country were shut down, inaccessible, or operating at a diminished capacity when the letter was received. This placed an undue burden on captive owners, particularly ERCs, which are generally small to mediumsized businesses.

As the due date for federal taxes being filed for individuals, families, and businesses has been delayed during this time of crisis, the captive industry is wondering why ERC owners have not been given the same grace period regarding the requests in Letter 6336. Particularly since the businesses that ERCs insure are being hit particularly hard.

sector, for the IRS to approach 150,000 captives assuming they are abusing tax law is heavy-handed. After spending close to a decade being critical of the captive structure, the IRS still has to offer any guidance regarding ERCs taking the 831(b) option. Industry professionals have been requesting guidance for years, especially in the last five years since the PATH Act was passed in Congress.

Right now, ERCs are proving their now by providing relief for “supply chain and business interruption, contamination clean up, medical costs, crisis management expenses, and other highseverity, low-frequency events,” according to SIIA’s letter.

For example, the IRS Letter requires taxpayers who have ceased participating in micro-captive transactions to report the date they ceased participating. Unfortunately, there are a number of dates that could provide reasonable responses to the question, including: the date the last insurance policy expired, the date the last insurance obligation was resolved, the date the captive surrendered its insurance license or the date the captive was liquidated, just to name a few.”

While SIIA and captive associations acknowledge that there may be a few bad actors operating in the ERC

30

THE SELF-INSURER

The letter is also considered poorly written and vague on key points. According to SIIA’s letter, “The IRS Letter, itself, is so unclear that taxpayers making good faith efforts to comply could inadvertently put themselves in a position to be accused of perjury.

Captive industry professionals and associations have called for the suspension of the request until at least the national emergency is over. The Utah Captive Insurance Association’s letter called for the suspension of “This unnecessary and overlyaggressive audit and examination activity until at least a year after the national COVID-19 emergency declaration is withdrawn.”


In the letter to the IRS from VCIA’s president, Richard Smith, he sums up the industry’s opinion this way, “We request that the IRS withdraw this letter and suspend its audit activities of ‘micro-captives’ until the COVID-19 crisis is over and the nation’s economy is on the road to recovery.... We also request that the IRS, when it resumes it examination of ‘micro-captives,’ take a more appropriate approach focusing on those organizations that show evidence of malfeasance, and not to condemn an entire industry.”

Karrie Hyatt is a freelance writer who has been involved in the captive industry for more than ten years. More information about her work can be found at: www.karriehyatt.com.

You deserve custom-built plans

Not off-the-shelf products Let AccuRisk Solutions design a plan for you.

info@accurisksolutions.com | accurisksolutions.com | (312) 857-9100

JULY 2020

31


HEMOPHILIA MANAGEMENT PROGRAM HELPS SELF-INSURED EMPLOYERS BATTLE HIGH COSTS

B

Written by Dea Belazi, president and CEO, AscellaHealth

B

leeding disorders, like hemophilia, are among the most expensive conditions to manage, and many self-insured employers face up to $1 million a year on patient care. Cancer treatments make up most of the cost for the top 20 highcost injectables overall. However, for the top 20 high-cost injectables associated with individuals with over $1 million in claims, medications used to treat blood disorders, like hemophilia, become dominant. While hemophilia is a rare disease, affecting approximately 13 out of every 100,000 lives, it is still common enough that most employer groups will eventually deal with the challenges of providing care to hemophilia patients in their workforce.

32

THE SELF-INSURER


With the development of new technology and tools for addressing these challenges, employers can adopt a comprehensive hemophilia management program designed to provide an unprecedented level of control, transparency and accountability, not only for payers but also physicians, specialty pharmacists and patients alike.

Second, patients can be classified by severity from mild (about 25% of patients) to moderate (about 15% of patients) to severe (about 60% of patients). These two factors play an important role in treatment. Patients with severe disease face a higher risk for spontaneous bleeds, utilize prophylaxis factor replacement therapy and generate the highest costs.

Specialty pharmacy benefit managers (SPBMsTM)--innovative, pharmacy benefit managers providing high quality prescription drug management services specifically for those with chronic diseases that require specialty drugs-offer transparency and launch innovative treatment programs using existing tools to negotiate favorable rebates, advocate for patients and reduce costs.

TREATMENT OPTIONS, COSTS AND CHALLENGES

One SPBMTM program for hemophilia patients generated a cost savings for one hospital that reduced its specialty spend by 30% in the first year. Other annual cost savings include multiple sclerosis ($26,000) hemophilia ($99,480), immune deficiency ($80,000), spinal muscular dystrophy ($466,232) and hereditary angioedema ($708,000). For self-insured employers, this approach enables them to contain prescription costs, ensure appropriate medication utilization and monitor physician and pharmacy performance in real-time.

A third factor is patients with inhibitors, meaning they develop antibodies that reduce the efficacy of replacement products (20 to 35% of patients), have fewer treatment options and are more complex to treat.

Scanning the current treatment options, there are 48 drugs on the market, compared to only one available 40 years ago. This means that a patient born with hemophilia today can be treated appropriately and potentially live a normal life span. Nevertheless, despite these advances and array of options, treatment costs remain high. Many self-insured employers spend up to $1 million a year on patient care. For a patient with hemophilia A, the annual cost of treatment ranges from $59,101 for those with mild disease to $301,392 for patients with severe disease receiving prophylaxis. For a patient with hemophilia B, the cost of treatment ranges from $85,852 to $263,253. Factor replacement products represent up to 94 percent of total costs for patients with severe disease. On top of high treatment costs, payers also face key management challenges, including:

• Fragmentation of care and lack of uniformity due to no standardized guidelines or care models for treating hemophilia

• Need for reinsurance programs for high-cost members • High pharmacy and medical benefit utilization • Potential stockpiling and product waste • Limited payer insight into clinical data beyond factor product cost

UNDERSTANDING THE HEMOPHILIAC PATIENT When classifying patients with hemophilia, there are three key differentiators. First, they can be categorized based on their factor deficiency -- hemophilia A or hemophilia B. Hemophilia A is four times more common than hemophilia B.

• Limited provider insight into product utilization, dispensed amounts and total healthcare resource utilization

• Lack of individualized treatment • Robust and complex product selection Current management strategies include:

• Utilization management that encourages more frequent patient interaction and emphasis on best practices

JULY 2020

33


• Individualized prophylaxis dosing protocol to ensure that treatments are reassessed and readjusted based on patient needs

• Evaluation of management and standardized dispensing criteria • Collaboration with local hemophilia treatment centers • 340B pricing • Product referencing • Patient engagement and care management Going forward, data collection and analysis will be essential to determine benchmarks and measure relevant outcomes. Equally important, collaborating with local centers of excellence under pre-agreed upon standards of care and data sharing arrangements can help to prevent the need for prior authorization. Also, holistic care and coordination of care designed to consider the whole patient – and not simply the disease – will be of utmost importance.

FINDING THE RIGHT HEMOPHILIA MANAGEMENT PROGRAM An effective all-encompassing hemophilia management program should be designed to provide an unprecedented level of control, transparency and accountability for all stakeholders, including payer, physician, specialty pharmacy and patient. It should effectively manage the complications of bleeding disorders by mitigating unnecessary

costs, providing intended clinical outcomes and supporting the member/ client experience to:

• Decrease number of bleeds • Reduce number of infusions, continuing bleeds and target joint development

• Prevent avoidable ER visits • Provide dosing accuracy within + 2% or less

• Enhance the client’s journey

It should also provide performance accountability by monitoring therapy adherence, documenting interventions, reporting outcomes and tracking cost savings.

FINDING THE RIGHT SPBMTM An effective all-encompassing SPBMTM should be designed to provide optimal levels of control, transparency and accountability for all stakeholders, including payer, physician, specialty pharmacy and patient. The optimal programs offer 100 percent control of the prescription through a network of reliable and transparent specialty pharmacies, prior authorization control and real-time benefits verification, prescription fill dates, refill alerts, pharmacy fulfillment accuracy and quick turnaround time.

34

THE SELF-INSURER


The right program should also offer unprecedented access to physician, specialty pharmacy and patient data and visibility into how prescribers are writing scripts. It should also provide dose optimization, identify prescribers according to the label and provide insight into which prescribers are driving the best outcomes.

reporting. It’s important to find a program with a patient-centric approach that supports hemophiliac treatment center alignment.

For specialty pharmacy, the management program should compare all network pharmacies in real-time on a leaderboard, provide visibility into factor units prescribed vs. units dispensed, drop shipment/over shipment prevention and ensure appropriate shipment of on-demand and bleed doses.

A value-based program allows for greater transparency and accountability for patient and pharmacy activity and is more likely to provide utilization management and clinical interventions based on active patient management that leads to contained costs and predictability on usage and costs.

There should also be real-time visibility into medication adherence, infusion adherence reporting, including prophylactic versus bleed/on-demand doses, in-home patient inventory, medication hoarding prevention, outlier infusions (with or without bleeds) based on prescription and visibility into frequency of patient dosing. In addition, it should ensure compliance with label and clinical trial literature.

In this way, an appropriate utilization management and pharmacy network design can contain costs by as much as 10 to 42%. These programs align BEST-IN-CLASS HEMOPHILIAC MANAGEMENT PROGRAM with specialty pharmacy partners and These costs can be attributed to a number of key challenges for payers, including care have developed an innovative program fragmentation, lack of standardized care guidelines, high pharmacy and medical benefit around a customized specialty pharmacy utilization, potential stockpiling and product waste, as well as limited payer insight into network that is tailored towards calculated cost savings with customized clinical data beyond factor product cost and product utilization, dispensed amounts clinical management and innovative and total healthcare resource utilization. Payers also lack reinsurance programs for technology. high-cost members and robust and complex product selection. The most effective hemophiliac management programs offer specialty networks that cover most limited distribution drugs (LDD) products. Look for a hemophilia management program that is flexible and sustainable, with a guaranteed pharmacy performance product and treatment cost containment, customized pharmacy network therapy management in real-time data and outcomes

INNOVATIVE STOP LOSS AND ANCILLARY SOLUTIONS At BenefitMall, we know that employer groups benefit most from treating their health plan as an investment rather than an expense. Our team of self funded consultants can help you succeed by offering: • Reporting, Compliance Services and Plan Document Review • Billing and Premium Collection • Ancillary Products and Services

• Unbiased Expertise and Review • Initial Placement, Implementation and Renewal of Coverage • Claims Audit, Submission, Tracking, and Resolution Services

©2020 BenefitMall. All rights reserved.

www.benefitmall.com/Self-Funded

888.248.8952

JULY 2020

35


All of this falls in line with the intention of the latest proposed CMS rule.

Result

For benefits professionals striving to relieve clients concerns about how to finance the high cost of new million-dollar drug therapies, SPBMsTM can make an enormous difference. They combine a trusted and transparent network of specialty pharmacies with the most up-to-date technology to contain prescription costs, ensure appropriate medication utilization and monitor physician and pharmacy performance in real-time.

One year into the program the program partner found that its union client’s financial goals were being met, and client adherence rates were increasing.

For patients, it should provide seamless patient care experience across channels, real-time visibility into medication adherence, infusion adherence reporting, including prophylactic vs. bleed/on-demand doses, in-home patient inventory, medication hoarding prevention, outlier infusions (with or without bleeds) based on prescription and visibility into frequency of patient dosing. It should also ensure compliance with label and clinical trial literature.

CALL OUT Real World Scenario Consider this real-world case study to better appreciate the advantages of partnering with a hemophilia management program provider. Challenge A large, self-insured labor union group needed to find a hemophilia management program that would focus on the group’s unique needs in a very personal way. The union demonstrated a need to reduce drug spend, while ensuring that the needs of their members were being met. After review of the group’s claims data, the management program provider they chose noted that a virtual lack of mail order utilization was impacting the union’s bottom line. The challenge, as they saw it, was how to incent members to use mail order pharmacy services. Strategy The program partner was already partnered with more than one mail order pharmacy, ensuring that the goals of reducing costs were aligned with the clients. They found that one of their mail order pharmacies was a union-staffed facility. To incent member utilization, the program partner used an effective, but simple marketing campaign about union members serving union members to ensure that this offering would meet the groups’ primary goal of reducing drug costs and increasing adherence and health outcomes, while including certain formulary incentives designed to drive the most efficacious and lowest cost solution.

36

THE SELF-INSURER

BREAK DOWN OF TIME/COST SAVINGS The best hemophiliac management program’s offer specialty networks that cover most limited distribution drugs (LDD) products. Look for a program that helps payers by reducing their members’ drug waste through clinically appropriate interventions, resulting in significant savings for the payer and reductions in member cost share. It should target highcost medications, allowing providers to prescribe a clinically equivalent dose to minimizes the amount of drug waste. The program should be flexible and sustainable, with a guaranteed pharmacy performance product and treatment cost containment, customized pharmacy network therapy management in realtime data and outcomes reporting. Overall, it’s important to find a program with a patient-centric approach that supports hemophiliac treatment center alignment. Keep in mind that a value-based program allows for greater transparency and accountability for patient and pharmacy activity. It will also be more likely to provide utilization management and clinical interventions based on active patient management that leads to contained costs and predictability on usage and costs. In this way, an appropriate utilization management and pharmacy network design can contain costs by 12 to 25 percent.


Dea Belazi, PharmD, MPH has more than 20 years of experience in the healthcare industry, mostly developing and managing pharmacy benefit management companies. He is currently the President and CEO of AscellaHealth, a national PBM with almost 2 million lives under management. He was part of the development of PerformRx, a PBM owned by Keystone First Health Plan as well as another, Future Scripts, an Independence Blue Cross company that was sold to Catamaran a few years ago. Dea holds a PharmD from the University of RI and completed his dissertational work at Brown University and later completed an MPH from Johns Hopkins University and a post-doc health outcomes research fellowship at Thomas Jefferson University. He is a reviewer for multiple medical journals and sits on multiple boards.

Dea Belazi

AscellaHealth, a national specialty pharmacy benefit manager (SPBMTM)--serving commercial, Medicare and Medicaid segments offers high quality prescription drug management services along with other customizable services, such as carved-out specialty pharmacy services and cost-savings discount programs through its unique and proprietary service that extends discounts on prescription medications to customers more than any other PBM in the industry. Visit www. ascellahealth.com.

Work with Anthem Stop Loss and you’ll be in good company As one of the top 5 Stop Loss carriers* in the nation, Anthem Stop Loss has the size, strength and reputation to deliver solid protection — with NO surprises. So you can budget with confidence and protect your cash flow.

For Stop Loss that’s safe, secure and surprisingly nimble, visit anthemstoploss.com.

* MyHealthGuide. (2019, March). Stop-loss Premium Ranking. MyHealthGuide Newsletter. Retrieved from myhealthguide.com. 112174MUBENASL 12/18

JULY 2020

37


COVID-19, BALANCE BILLING, OUT-OF-NETWORK CLAIMS, AND CONFUSING CHARGES – AN UGLY COMBINATION

T

Written by Jon Jablon, Esq., and Tim Callender, Esq.

T

he COVID-19 crisis has sparked a discussion on an old, but repeatedly important and troublesome issue: balance billing and/or overbilling. During the early days of the COVID-19 crisis, news outlets were quick to report examples of health insurance coverage confusion, network issues, and billing issues, all related to a variety of COVID-19 claims. In April, the federal government chose to tackle this concern by placing prohibitions on how providers could bill COVID-19 patients who received services from providers receiving funds under the Public Health and Social Services Emergency Relief Fund. This attempt to control balance billing and excessive charging practices led to media confusion, with numerous media outlets reporting that the federal government had banned all balance billing and/or all surprise billing, which was not the case.

38

THE SELF-INSURER


The confusion on this basic attempt to stymie out of control billing, during a health crisis, highlights to need to discuss, yet again, the ever-pressing problem of balance billing, cost, network controls, and why excessive balance billing continues to happen. Practically speaking, when a member receives a balance-bill, the employer itself, the sponsored health plan, and the payer all go into “panic mode,” which is understandable. It is no secret that hospital chargemasters are essentially arbitrary. Leaving aside the fact that many plans have engaged a patient advocacy solution to assist with balance-billing, many health plans, TPAs, brokers, and patients want to know: Who’s to blame, and why is balance-billing allowed to happen? What is really going on when a provider balance-bills a patient? What can be done to avoid it?

Nothing illegal, hopefully, but if something is within our legal rights and it saves or makes us money, most people can reasonably be expected to operate within the parameters of that advantageous loophole. Instead, perhaps we should scrutinize the legal regulatory authority. For years there have been certain legislative proposals in the works, both on the federal and state levels, that would effectively limit provider billing to a more reasonable amount, or at the very least provide a system of checks and balances.

WHO’S TO BLAME? It’s easy and intuitive to blame medical providers for overbilling. The bill has the hospital’s name on it, and the bill is designed to compensate the hospital for use of its operating room, staff, and other resources. But blaming the provider is like blaming a person for taking advantage of a large loophole. It’s a dog-eat-dog world out there, and most of us take advantage of loopholes.

As it stands, though, alarmingly few laws like this exist today, and those that do tend to favor providers far more than any fairness they offer to health plans or patients. The reason? Everyone is stuck in the past. The old system, where insurers have unlimitedly deep pockets, is not at all the case with self-funding, yet that still seems to be the mentality that legislatures and medical providers are using. Until there is a meaningful legislative change to add some sort of limitation on, or even a reasonable formula that must be followed by, provider billing, there won’t be any change to the paradigm where any price goes.

40

THE SELF-INSURER


WHAT IS REALLY GOING ON? Over years of dealing with overbilling and the problems it creates, it has become clear to many in the industry that hospitals do not really expect to get paid their gross charges. Hospitals do not collect, nor do they intend to collect on balance-bills. It seems that the collections threats are scare tactics used to gain higher payments from health plans, as many plans will do whatever it takes to protect the patient. With some plans, that tactic works well; other plans call a hospital’s bluff. Think of it this way: when I walk into my local bike shop and ask for a tune-up, they quote me $179. Does it actually cost them the full $179 to provide the service? Probably not. Could they charge less? Sure. But the market bears it, and, more importantly, there’s no law prohibiting the shop from charging that fee. Many suggest comparisons to other markets are inappropriate, since there’s a thirdparty payor (i.e. insurance) involved – but that does not fundamentally change the dynamic except to remove the relevance of the “the market bears it” factor.

The medical services industry is not a “free market” since in most cases, expecting patients to actually shop around is extremely unrealistic; without the market-bearing aspect, we are left with only the reasoning of “there is no law against it.” For payors, that is not a good enough justification for such inflated, arbitrary billing.

WHAT CAN BE DONE ABOUT IT? How about patient advocacy? With respect to plans that systematically allow non-network claims at any amount less than full billed charges, most have adopted some form of patient advocacy or defense, to attempt to minimize the noise

Renalogic has driven positive change managing kidney disease for 20 years. We improve member health to reduce and avoid future high-cost claims. We save clients an average of 81 percent on billed charges for dialysis–and never lost an appeal.

Let us provide comprehensive risk management for your organization.

844.841.5065

www.renalogic.com

JULY 2020

41


and impact of balance-billing, protect patients, and still ultimately save money on claims. That is what reference-based pricing vendors typically aim to accomplish and most do a pretty good job.

• 76% of responders

But, no matter the vendor, there are still some providers who simply will not go away without a big fight. The prevailing reference-based pricing mentality seems to be that no network is the best network, and for some plans that works very well.

It depends on the employee population, employer’s risk tolerance, geographical location, and provider population density (and potentially other factors), and a health plan’s friendly neighborhood RBP vendor or broker are in the best positions to advise on that aspect – but at the end of the day, small, regional networks have tended to be a key to successful reference-based pricing for many health plans.

DIRECT CONTRACTS & NARROW NETWORKS “Narrow networks” constitute a middle ground between a direct contract with a provider and a traditional PPO model; although some large national networks now offer certain “narrow network” options, a health plan or TPA can create a de facto narrow network by simply contracting with a small curated group of providers. By picking and choosing providers, the payor is able to limit the size of the network (making the steerage created more valuable to each individual provider) and ensure that providers make certain concessions in exchange for the increased steerage. “Custom” narrow networks can exponentially increase steerage for the chosen providers, but keep in mind that to many providers, the decision of whether to contract, or what rate to offer, depends on the volume of steerage – and volume is measured in number of lives, not in percent of lives. In other words, a health plan that contracts with two local physicians will in theory give each provider 50% of its total steerage, which is a very attractive percentage – but when the hospital asks how many lives make up that 50%, if the answer is 25 lives, the conversation is going to become much more difficult. If, however, the answer is 2,500 lives, you may have another story. That is one reason that TPAs often negotiate direct contracts across an entire block of business – however, that may leave the hurdle of having all groups potentially opted-in to the contract, possibly without wanting to be.

WHAT DOES THE FUTURE HOLD? A couple of years ago, we at The Phia Group conducted a survey. One of the questions was “How do you view reference-based pricing?” The results were as follows:

42

THE SELF-INSURER

said, “Catalyst for change (part of a greater solution that will be a long term answer).” 14% of responders said “Stop-gap (a band aid that won’t resolve excessive healthcare costs long term).” 6% of responders said “Harmful (once enough people get balance billed, we’ll look bad and it will become prohibited by law).” 4% of responders said, “The whole shebang (the way to permanently solve healthcare price gouging).”

State surprise billing legislation definitely seems to be a step in the right direction toward curbing provider billing (although some states have shifted a higher burden onto the health plan rather than truly limiting billing). It is difficult to tell whether the rise of referencebased pricing has been a catalyst for that change, or simply the self-funded industry realizing, fifteen years ago, what legislatures have only just begun to realize in the last few years.


WHY SELF-INSURED EMPLOYERS NEED TO NEGOTIATE AIR AMBULANCE RATES

T

Written by Randy King

T

he term “air ambulance� refers to both helicopters and fixed-wing aircraft that are specially equipped to safely transport patients from accident scenes and small hospitals to large hospitals (usually Level One trauma centers in big cities).

It is clear that air ambulance companies have helped save lives during the COVID-19 pandemic. The most striking example is the air ambulance plane that flew an American COVID-19 patient in Peru to a large hospital near his home in Colorado.

44

THE SELF-INSURER


Air ambulance services are regulated not by healthcare agencies but by the Federal Aviation Administration as authorized by the Airline Deregulation Act of 1978. This law prohibits states from limiting aviation rates, routes and service terms. There are two parts to most air ambulance bills: the lift-off fee and a per-mile charge.

are then able to balance-bill patients for the difference, which can be significant.

Some self-insured employers eventually make exceptions to pay the entire amount on behalf of their employee. This approach is a band-aid that does not benefit the employer in the long term.

THE PROBLEM OF RURAL HOSPITAL CLOSURES Roughly 75 percent of air ambulance flights involve Medicare and Medicaid patients – and reimbursement is usually capped at around $6,500. Air ambulance providers have indicated that this reimbursement amount is too low, given the high cost of maintaining 24/7 readiness and having to provide service for the 85 million Americans who live more than an hour from a Level 1 or Level 2 trauma center.

To offset the limited revenue from Medicare/Medicaid, most air ambulance companies prefer to remain out of network on private insurance and self-insured plans. According to a recent Government Accounting Office (GAO) report1, nearly 70 percent of air ambulance services are out of network for privately insured patients – while about half of ground ambulance providers are out of network. The GAO study found that privately insured and self-insured companies pay an out-ofnetwork median price of about $36,400 for helicopter transport and $40,600 for fixed-wing transport.

More than 25 percent of Americans live in rural areas where ground ambulance transport to a hospital is not timely enough to save lives. But since 1990, nearly onefourth of rural hospitals have closed. And over the last decade, they have closed at the rate of one per month. This drives transport time and costs significantly higher for air ambulance providers.

Protecting plans and patients across the U.S.

297

99.1%

50

On average,

aequum has

aequum has handled

aequum resolves

generated a savings

claims in all 50 states

claims within 297

of 99.1% off disputed

days of placement

charges for selffunded plans

In many cases, privately insured and self-insured companies pay an amount less than billed charges due to benefit limitations. The air ambulance companies

1111 Superior Avenue East Suite 2500 Cleveland, OH 44114

P 216-539-9370 www.aequumhealth.com

No Guarantee of Results – Outcomes depend upon many factors and no attorney can guarantee a particular outcome or similar positive result in any particular case.

JULY 2020

45


Many rural patients are either on Medicare or Medicaid, which often covers a small percentage of the cost of air transport. For example, Pennsylvania and Utah reimburse just $200 for each air transport of a Medicaid patient. This is forcing many air ambulance companies to close bases and halt service, especially in rural areas.

Save Our Air Medical Resources (SOAR) is an alliance of air ambulance companies and rural healthcare providers that is calling attention to these issues.2 This group insists that private insurers often designate air transport as “not medically necessary” (despite the fact that an air ambulance cannot take flight until a doctor or trained first responder authorizes it).

Groups like SOAR maintain that private insurers – not air ambulance companies – are the ones who resist negotiating in-network agreements. SOAR is advocating common-sense solutions, like having private insurers charge members a small annual fee to cover emergency air medical transport. One Montana study found that air ambulance coverage would add just $1.70 to each member’s monthly premium. A similar study in Kentucky estimated that the increase could be as little as 92 cents per month.

THE TIME IS RIGHT FOR NEGOTIATION

The most important thing to remember when negotiating out-of-network air ambulance fees is to not dispute the billed charge amount. The key to reaching an equitable agreement is to rationally look for win/win scenarios that will benefit both parties.

Do you choose a stop loss carrier based on price alone? At Optum, we believe that stop loss is more than a rate on a spreadsheet. We deliver intrinsic value by providing distinctive features, including: • A claims team that verifies billing accuracy with prompt and precise reimbursements • A clinical team dedicated to quality and cost of care • Long-term partnerships that return premiums to employers • Sales, account management and under writing teams that span nationally, yet are local in focus

Learn more on how Optum can drive value for your customer. Please contact your Optum Sales or Account Management team member.

optum.com ©2020 Optum, Inc. All rights reserved.

46

THE SELF-INSURER


Here are some negotiation tips for selfinsured employers:

Reach out with courtesy – Tactfully explore the air ambulance company’s willingness to reach an agreement or innetwork participation.

Seek the counsel of experienced third-party negotiators – Crafting an air ambulance agreement takes expertise. Look for an advisor who has wide-ranging experience with both selfinsured companies and air ambulance providers.

Set realistic expectations – Some Fortune 100 companies have been able to obtain significant percentage discounts from air ambulance providers, but that may not be possible for smaller companies.

Offer employees optional air ambulance coverage – This preempts any surprise billing and the premium increase is often very low.

Pre-negotiate the terms of nonemergency air transport – For example, if an employee receives medical care overseas and needs to return home, the cost of medical air transport should be carefully negotiated in advance.

LEGISLATIVE SOLUTIONS ON THE WAY

There is a bill in the U.S. Congress that aims to eliminate surprise billing in healthcare. H.R. 5826 is sponsored by House Ways and Means Committee chairman Rep. Richard Neal (D-Mass.) and is known as the Consumer Protections Against Surprise Medical Billing Act of 20203.

Due to the coronavirus legislative logjam, the bill probably will not come to a vote until later this year. But it already has bipartisan support in both the House and Senate, where Sen. Lamar Alexander (R-TN.) and Sen. Patty Murray (D-WA.) have previously sponsored similar legislation.

Here are some of the key provisions of the bill:

Protection from surprise medical bills for out-of-network services – All providers (not just air ambulance companies) would be prohibited from balance-billing patients.

New patient protections – If the law is enacted, all patients would receive an Advance Explanation of Benefits that describes which providers will deliver their treatment, the cost of services and provider network status.

Mediated dispute resolution process – In most cases, plans and providers will resolve payment issues without federal intervention. But if the requested payment amount is not satisfactory, a two-step process would be available to resolve disputes. There would be no minimum dollar threshold to bring disputes. The Secretary of Health and Human Services (HHS) would be permitted to batch similar claims for greater efficiency. Either party would be able to open a 30-day negotiation period. If there is no resolution in that timeframe, either party would be able to initiate the mediation process, administered by independent third parties without any affiliation to providers or payers.

During mediation, the parties would be allowed to present best and final offers. The mediator would consider the median contracted rate specific to the plan – and would examine what other providers in the region are charging.

JULY 2020

47


Help for uninsured patients or those paying cash – The bill would require providers to share cost estimates with uninsured or cash patients prior to a procedure. If the final charge is significantly higher than the estimate, the final payment would be determined through mediation.

A joint statement from Rep. Neal and Rep. Kevin Brady (R-TX.) says that “We recognize that any solution to this [surprise billing] problem touches on every part of our nation’s healthcare system. We want to minimize the burden on patients and keep the dispute resolution process neutral. Our priority throughout the painstaking process of crafting this legislation has been to get the policy right for patients, and we firmly believe that we have done that.”

It should be noted that most air ambulance providers feel that a simpler legislative solution would be a bill that calls for complete price transparency so that private insurers, self-insured companies and the Centers for Medicare and Medicaid could clearly see the fixed costs involved in emergency air transport.

DO NOT VILLAINIZE AIR

Health were down 24 percent in March of this year compared to March 20194.

Many emergency medical services have deemed that transporting COVID-19 patients by ground is safer than by air. A ground ambulance can be specially outfitted with filtered air circulation – and can provide greater physical separation than what is usually available on a helicopter5.

When we get to the other side of the coronavirus crisis, both air ambulance providers and self-insured employers have a lot to gain by negotiating more equitable out-ofnetwork rates. No industry wants to be labeled as a price-gouger – and no selfinsured company wants to pay exorbitant bills for medical air transport.

Now is the time to bring self-insured companies and air ambulance companies to the negotiation table. Whether it is by mutual agreement – or Congressional action – fairer medical air transport charges are on the horizon.

Randy King is president of Healthcare Horizons, headquartered in Knoxville, Tennessee since 1993. The company is one of the nation’s largest healthcare claims auditing firms, focused exclusively on self-insured employers. With over 24 years of healthcare experience, Randy has worked with both payers and providers. He has expertise in claims auditing, big data analytics, and cost-containment strategies. Randy is particularly skilled at building strong business partner relationships. Under his leadership, Healthcare Horizons has recovered millions of dollars for its clients through auditing and air ambulance negotiations.

References:

1.

https://www.gao.gov/products/GAO-19-292

2.

https://www.soarcampaign.com/

3.

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house. gov/files/documents/Ways%20and%20Means%20Surprise%20Billing%20

AMBULANCE PROVIDERS

Summary_02%2006%2020%20(final).pdf 4.

It is important to remember that air ambulance providers save countless lives each year. And their revenues have been negatively impacted by the coronavirus crisis. For example, medical helicopter transports at University of Wisconsin

48

THE SELF-INSURER

https://madison.com/wsj/news/local/health-med-fit/med-flight-transports-downduring-covid-19/article_066b0ab1-5476-5625-92ff-21ed14fbfd9c.html

5.

https://www.verticalmag.com/news/coronavirus-helicopter-ems-safety-measures/


NEWS

NEWS FROM SIIA MEMBERS

2020 JULY MEMBER NEWS SIIA Diamond, Gold & Silver Member News SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to membernews@siia.org. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org. For immediate assistance, please contact Jennifer Ivy at jivy@siia.org. If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy at jivy@siia.org. 50

THE SELF-INSURER


NEWS DIAMOND MEMBERS

we introduce new ways to integrate and streamline all our Specialty businesses.”

QBE ANNOUNCES

Gransbury joined QBE in 2009 when the company acquired SLG Benefits & Insurance, LLC, a program management company co-founded by Gransbury.

PROMOTIONS: STEVE GRANSBURY, HEAD OF SPECIALTY INSURANCE AND TARA KRAUSS, HEAD OF ACCIDENT & HEALTH STEVE GRANSBURY TO RUN NEW SPECIALTY DIVISION Gransbury will be leading a newly created Specialty business pillar within QBE North America, consisting of the Accident & Health, Aviation, Trade Credit and Surety practices. These established, specialized businesses present tremendous opportunities for growth for the company. “QBE Accident & Health has enjoyed tremendous success over the last several years. Much of that is due to Steve’s hard work and his commitment to his team and his customers. Aligning our Specialty businesses within a single unit furthers our dedication to being an integrated specialist insurer and Steve was the clear choice to lead the newly formed group,” said Tom Fitzgerald, President of QBE Specialty & Commercial. “The creation of the Specialty business unit further formalizes QBE’s longstanding commitment to the Specialty market. We’ve seen tremendous growth over last several years throughout our Specialty lines of business, and it’s been an honor to lead Accident & Health,” stated Gransbury. “We have a tremendous team that I could not be prouder of. I’m looking forward to being a part of A&H’s continued success, while

With over 25 years of experience in the insurance, reinsurance and captive industry, Gransbury is a member of the QBE North American Underwriting Committee, National Leadership Team and a past North American representative to the QBE Global Underwriting and Distribution Forum. He began his insurance career as an independent employee benefits consultant. In 1996, he joined LDG Insurance Underwriters which was later acquired by HCC Insurance Holdings. He holds a Bachelor of Arts in Economics from Hartwick College.

TARA KRAUSS TO LEAD ACCIDENT & HEALTH As Gransbury takes on an expanded role in the company, Tara Krauss has been promoted to replace Gransbury as the leader of QBE’s Accident & Health business. Krauss will report directly to Gransbury as she develops and executes strategic plans that accelerate profitable growth for the Accident & Health business. The company pointed out that Krauss has already been leading many of these growth and technical initiatives for several years.

“Tara has a long track record of significant successes within QBE,” said Gransbury. “That’s included implementing underwriting guidelines that allow our team to solve customers’ challenges quickly and effectively, as well as mentoring teammates to help them reach their professional aspirations. Whatever she does, she’s always been totally focused on achieving solid results, and we’re all confident that she’ll bring the same passion and resolve to her new role.”

JULY 2020

51


NEWS Krauss is a seasoned insurance executive with 24 years of experience. According to Gransbury, “Her promotion is a recognition of her skills and the integral leadership role she plays in Accident & Health’s continued growth.” Krauss joined QBE in 2009 and has led many of the company’s transformation initiatives centered on their people, customers and portfolio. She has held several leadership roles with increasing responsibilities, over the past five years serving as SVP of Underwriting Operations for A&H, accountable for several core elements of the business. Prior to joining QBE, Krauss held various underwriting positions with HCC Insurance (formerly LDG) and SLG Benefits & Insurance, LLC. She holds a Bachelor of Science degree in Finance from Merrimack College, where she graduated Magna Cum Laude. “I’m excited about the opportunity to lead QBE’s Accident & Health business unit, and eager to continue executing on our strategy, while capitalizing on the many opportunities we see ahead of us,” said Krauss. “Customers will remain at the very center of everything we do. I’m proud to take the helm of such a talented, engaged and committed team of experts. Working together, we have great plans to help our customers succeed, while we take our business to the next level,” she added.

52

THE SELF-INSURER

About QBE QBE North America is part of QBE Insurance Group Limited, one of the largest insurers and reinsurers worldwide. QBE NA reported Gross Written Premiums in 2019 of $4.6 billion. QBE Insurance Group's 2019 results can be found at qbe.com. Headquartered in Sydney, Australia, QBE operates out of 27 countries around the globe, with a presence in every key insurance market. The North America division, headquartered in New York, conducts business through its property and casualty insurance subsidiaries. QBE insurance companies are rated "A" (Excellent) by A.M. Best and "A+" by Standard & Poor's. Visit qbe.com/us and follow QBE North America on Twitter.


NEWS HM INSURANCE GROUP ANNOUNCES DERRICK RODNEY AS NEW DIRECTOR OF CINCINNATI REGIONAL SALES PITTSBURGH – Derrick Rodney recently joined HM Insurance Group (HM) as director, Cincinnati Regional Sales. In this role, he will work to grow and maintain the HM Stop Loss book of business in the company’s Cincinnati territory, which serves Ohio, Kentucky, southern Indiana and Michigan. Rodney comes to HM from TMS Re, Inc., where he served as vice president of regional sales and was responsible for the marketing and sales of stop loss products and contract options to self-funded clients through brokers and third party administrators across a 15-state territory. He also previously worked as a sales director for Munich Re and as a stop loss sales executive at OptumHealth. Additionally, Rodney has significant underwriting and sales experience at the Hartford Life Insurance Company.

Sales. In this role, she will work to grow and maintain the HM Stop Loss book of business in the company’s Seattle Regional Sales territory, which serves Washington, Oregon, Idaho, Montana and Alaska, as well as its San Francisco Regional Sales territory, which serves northern California and Hawaii. Day comes to HM from Accolade, Inc., where she served as a regional sales executive and implemented advocacy solutions for employers. Over the course of her career, she’s worked on both the carrier and brokerage sides of the health insurance business, which has enabled her to acquire a deep understanding of the needs of both brokerage firms and their clients. An experienced sales executive in the insurance industry, Day has a bachelor’s degree in Mathematics as well as Master of Business Administration from the University of Washington. About HM Insurance Group HM Insurance Group (HM) works to protect businesses from the potential financial risk associated with catastrophic health care costs. The company provides reinsurance solutions that address risk situations confronting employers, providers and payers. A recognized leader in employer stop loss, HM also offers managed care reinsurance nationally. Through its insurance companies, HM Insurance Group holds insurance licenses in 50 states and the District of Columbia and maintains sales offices across the country. Contact Jennifer Mahan, Marketing & Communications Consultant, at jennifer.mahan@hminsurancegroup.com and visit hmig.com.

With more than 35 years of insurance sales and underwriting experience, Rodney brings extensive stop loss product knowledge to HM. He has a Bachelor of Science degree in Business Administration from Georgetown University and is a member of the Ohio Group Underwriters Association.

HM INSURANCE GROUP HIRES LAURA DAY AS NEW DIRECTOR OF SEATTLE AND SAN FRANCISCO REGIONAL SALES PITTSBURGH – Laura Day has joined HM Insurance Group (HM) as director, Seattle and San Francisco Regional

JULY 2020

53


NEWS BERKLEY ACCIDENT AND HEALTH APPOINTS THERESA GALIZIA AS CHIEF UNDERWRITING OFFICER Hamilton Square, NJ – Berkley Accident and Health, a Berkley Company, has appointed Theresa Galizia as Chief Underwriting Officer. In this role, Theresa is responsible for the leadership and underwriting strategy for the company’s Employer Stop Loss, Group Captive, and Managed Care segments. She will drive all aspects of underwriting process and analytics and contribute to the continued success for Berkley Accident and Health and its clients.

Theresa comes to Berkley Accident and Health from a large property and casualty insurer, where she managed a block of Employer Stop Loss, HMO Reinsurance, and Provider Excess Insurance. She received an MBA from the University of Hartford and has extensive expertise, having held underwriting and business leadership roles with a focus on strategy, product development, and data analytics. “Theresa joining our company strengthens an already outstanding leadership team,” said Brad Nieland, President and CEO of Berkley Accident and Health. “She brings a depth of technical and leadership skills that will be invaluable in leading our talented underwriting organization, and her innovative mindset will help us to better serve our clients now and in the future. I am thrilled to have Theresa join our team.” About Berkley Accident and Health Berkley Accident and Health is a member company of W. R. Berkley Corporation, a Fortune 500® company. Berkley Accident and Health provides an innovative portfolio of accident and health insurance products. It offers four categories of products: Employer Stop Loss, Group Captives, Managed Care (including HMO Reinsurance and Provider Excess), and Specialty Accident. The company underwrites Stop Loss coverage through Berkley Life and Health Insurance Company, rated A+ (Superior) by A.M. Best. Visit www.BerkleyAH.com or connect with us at Contact@BerkleyAH.com.

LEARN | PLAN | SAVE | PROTECT RECOVERY DOLLARS MULTIPLIED

PLAN DOCUMENTS PERFECTED

FIDUCIARY DUTY SHIFTED

LEGAL EXPERTISE SECURED

www.phiagroup.com | 781-535-5600 | info@phiagroup.com 54 THE SELF-INSURER


NEWS GOLD MEMBERS BERKSHIRE HATHAWAY SPECIALTY INSURANCE NAMES PHIL GARDHAM TO HEAD MEDICAL STOP LOSS DIVISION BOSTON & IRVINE, CA -- Berkshire Hathaway Specialty Insurance (BHSI) announced the appointment of Phil Gardham as SVP, Accident & Health U.S. and Head of Medical Stop Loss. Phil takes the reins of BHSI’s Medical Stop Loss division from John Snyder, who is retiring after a distinguished industry career spanning more than four decades. “We wish John all the best in his retirement and are grateful for his contributions founding our Medical Stop Loss operation and building a stellar team and infrastructure.”

“Phil is a top-caliber industry leader and we are pleased to have him onboard to drive the continued growth of our Medical Stop Loss operation and the expansion of our A&H footprint in the U.S.,” said

Company in various roles, including President. Prior to that he was with Munich Re in Princeton, NJ. He began his career at Mercantile & General Reinsurance Company in Toronto, Canada. BHSI provides Medical Stop Loss coverage across the U.S. Coverage is backed by exceptional underwriting experience, financial strength and BHSI’s commitment to providing excellent claims service that expedites payments to optimize customer cash flows. Phil starts with BHSI on June 29th. About Berkshire Hathaway Specialty Insurance Berkshire Hathaway Specialty Insurance provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, accident and health, medical stop loss, and homeowners insurance. The actual and final terms of coverage for all product lines may vary. It underwrites on the paper of Berkshire Hathaway's National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor's. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Boston, Chicago, Houston, Indianapolis, Irvine, Los Angeles, New York, San Francisco, San Ramon, Seattle, Stevens Point, Adelaide, Auckland, Brisbane, Cologne, Dubai, Dublin, Hong Kong, Kuala Lumpur, London, Macau, Madrid, Melbourne, Munich, Paris, Perth, Singapore, Sydney and Toronto. Visit www.bhspecialty.com.

Sanjay Godhwani, Executive Vice President, BHSI. “We wish John all the best in his retirement and are grateful for his contributions founding our Medical Stop Loss operation and building a stellar team and infrastructure.” Phil comes to BHSI with more than 30 years of industry experience. He spent 13 years at Companion Life Insurance

JULY 2020

55


NEWS ARTEX LAUNCHING NEW TRANSPORTATION RENT-ACAPTIVE Rolling Meadows, IL- Artex is launching a new alternative risk program designed for the transportation industry. TOPIC (Transportation Owners Protection Insurance Cell) is a rent-acaptive solution offering many of the advantages of captive ownership with the simplicity of renting. Advantages include potential return of underwriting profit, as well as unbundled claims handing, loss control and claims advocacy services. Coverages include workers compensation, commercial auto and general liability, with a minimum annual premium of $250,000 for all lines. “The transportation industry is facing a number of challenges, ranging from restricted insurer capacity, expanded

regulations and driver shortages, to name just a few,” explained Martin Hughes, Executive VP-Underwriting at Artex. “Our clients are looking for expanded alternative risk options to service their insurance needs. TOPIC provides for the addition of a rent-a-captive solution, which combined with other Artex products, further rounds out the range of solutions available to the Transportation industry.” This Artex-owned facility is an excellent fit for best-in-class companies with a desire to move from guaranteed cost to an alternative risk program. Dry van, refrigerated goods, grain and agricultural products, flatbed operations, and sand and gravel exposures are excellent candidates for TOPIC. Employee drivers are preferred. To learn more, contact Artex at 630.694.5050.

About Artex Artex provides a full range of alternative risk management solutions, customized for our clients' individual challenges and opportunities. Powered by independent thought and an innovative approach, we empower our clients and partners to make educated risk management decisions with confidence. Licensed in 32 jurisdictions around the globe, we are critically resourced to supply any alternative risk need. Artex is a solutions company, and we invite you to learn more about our breadth of services and depth of talent at www.artexrisk.com.

INTRODUCING HPGPS Mobile App and Website for H.H.C. Group RBP Plans

User friendly Health Plan GPS (HPGPS) is designed to increase member engagement and satisfaction while reducing plan and member healthcare costs for H.H.C Group Reference Based Pricing Plans. HPGPS is ideal for secure member engagement, communications, steerage to safe harbor providers, balance bill appeal support, e-payments to providers and much more…

Contact Stella Chung for a HPGPS demo | schung@hhcgroup.com, 301-963-0762 ext. 130 Claims Negotiation & Repricing | Claims Editing | Medical Bill Review (Audit) | Reference-Based Pricing DRG Validation | Utilization Reviews and Independent Reviews | Independent Medical Examinations

56

THE SELF-INSURER


Ann Vasile, MD Paradigm Medical Director

Unparalleled care for unprecedented times To meet the health care needs in this unprecedented era, Paradigm has created a first-of-its-kind solution to give injured workers with COVID-19—and their families—the very best chance at an optimal outcome. Our new Pandemic Clinical Management Program brings Paradigm’s outcome-focused approach to injured workers regardless of the severity of the injury and whether COVID-19 is a primary diagnosis or a complicating factor.

Reduced duration. Reduced volatility. Reduced psychosocial risks. Call us. We can help. (877) 875-9479

Learn more at: www.paradigmcorp.com


NEWS

SILVER MEMBERS H.H.C. GROUP LAUNCHES HEALTH PLAN GPS H.H.C. Group announced the launch of Health Plan GPS (HPGPS) powered by Medxoom, a user-friendly member mobile app and web site. HPGPS is the latest addition to the Company’s Reference Based Pricing (RBP) suite of services. HPGPS gives H.H.C. Group’s RBP clients a powerful, modular tool for increasing member engagement and satisfaction while reducing Plan and member healthcare costs. Using HPGPS, members will be able to receive messages from their Plan, track the status of their benefits, review plan information, pay providers and notify their group administrator in case they get balance billed. HPGPS options also include API integration with HSAs and PBMs, as well as links to call centers and telemedicine providers. Plans choose the HPGPS features they want to offer to their members. The app utilizes HIPAA and PCI compliant technology and is available on the App Store and Google Play.

58

THE SELF-INSURER

“Health Plan GPS is like a digital wallet for the member while providing HHC’s RBP clients a highly effective and cost-efficient tool for secure member messaging, engagement and communication”, said H.H.C.Group President and CEO, Dr. Bruce Roffé.


NEWS accredited Independent Review Organization for Internal and External Reviews. For additional information about H.H.C. Group and our services, visit www.hhcgroup. com or contact Bob Serber at rserber@ hhcgroup.com or 301-9630762 ext. 163.

“Anyone who would like a demo should contact Stella Chung, our Executive Vice President of Sales, at 301-9630762 ext. 130 or via email at schung@hhcgroup.com”. About H.H.C. Group H.H.C. Group provides containment solutions for Insurers, Third Party Administrators, Self-Insured Employee Health Plans, Health Maintenance Organizations (HMOs), ERISA and Government Health Plans. H.H.C. Group utilizes a combination of highly skilled professionals and advanced information technology tools to consistently deliver targeted solutions, significant savings and exceptional client service. H.H.C. Group's services include Claim Negotiation, Claim Repricing, Reference Based Pricing (RBP), DRG Validation, Medical Bill Review (Audit), Claims Editing, Medical Peer Reviews/Independent Reviews, Independent Medical Examinations (IME), and Pharmacy Consulting. H.H.C. Group is an URAC

SPECIALTY CARE MANAGEMENT HIRES EXECUTIVE-LEVEL DIRECTOR OF BUSINESS DEVELOPMENT Doylestown, PA – Specialty Care Management (SCM) is pleased to announce and welcome Kimberlee Langford as the company’s Director of Business Development. In this capacity, Langford will further SCM’s marketing and sales efforts, contribute to service/product development, oversee customer relations, and, ultimately, drive revenue. She brings to the company 20 years of sales and marketing experience, with the past seven years specializing in the realm of

JULY 2020

59


NEWS cost-savings and improving outcomes in CKD-ERSD (chronic kidney disease-end stage renal disease), the main aspect of SCM’s business. Craig Clemente, SCM’s COO, said

“a key addition who will complement our team as she facilitates an important aspect of our company’s efforts. She brings us a singular background highlighting notable experience in our core competencies.”

Langford is

Langford, who is also a registered nurse, has a 20-year background in healthcare sales and marketing. Further, significant experience in acute and critical chronic care, and case management, enhances her proficiencies. SCM Founder and Chairman Robert Clemente says of Langford, “Kimberlee’s passion to help and empower others fuels her energetic drive for excellence in her work, which has brought her to the SCM team.” With Langford in place, SCM expects to expand in the marketplace utilizing her proven skills, capabilities, clinical knowledge, and relationships with people and entities within SCM’s area of expertise. Langford, a mother of three, resides with her husband in Idaho. She is a veteran of the US Coast Guard who is a Ham Radio Operator, a Reiki Master,

60

THE SELF-INSURER

and community volunteer. She earned her RN, BSN, degree from Lewis-Clark State College.

About Specialty Care Management Based in Doylestown, PA, SCM is a national company which pioneers valueadded strategies for the self-insured industry. A leader in managing and significantly reducing high cost healthcare claims, the company specializes in minimizing the extraordinary costs and managing risk of renal dialysis. With some of its key executives working together in this healthcare niche since 2002, SCM was created in 2006.


SIIA 2020 BOARD of directors & committee chair ROSTER

CHAIRMAN OF THE BOARD*

DIRECTORS

COMMITTEE CHAIRS

David Wilson President Windsor Strategy Partners, LLC Princeton, NJ

Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston-Salem

PRESIDENT/CEO

Jeffrey K. Simpson Attorney Womble Bond & Dickinson (US) LLP Wilmington, DE

CAPTIVE INSURANCE COMMITTEE John R. Capasso, CPA, CGMA, PFS President & CEO Captive Planning Associates, LLC Medford, NJ

CHAIRMAN ELECT*

Peter Robinson Managing Principal EPIC Reinsurance San Francisco, CA

Mike Ferguson SIIA Simpsonville, SC Robert Tierney President StarLine Osterville, MA

TREASURER AND CORPORATE SECRETARY* Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA *Also serves as Director

SIEF BOARD OF DIRECTORS Nigel Wallbank Chairman Heidi Leenay President

Thomas Belding President Professional Reinsurance Marketing Services Edmond, OK Laura Hirsch Co-CEO Aither Health Carrollton, TX Lisa Moody President & CEO Renalogic Phoenix, AZ

GOVERNMENT RELATIONS COMMITTEE Steven B. Suter President & CEO Healthcare Management Admtrs., Inc. Bellevue, WA CHAIR, INTERNATIONAL COMMITTEE Liz D. Mariner Ford Senior Vice President Re-Solutions, a Risk Strategies Company Minneapolis, MN CHAIR, SIIA FUTURE LEADERS COMMITTEE Brady Bizarro Director, Healthcare Attorney The Phia Group, LLC CHAIR, TPA BEST PRACTICES TASK FORCE Jerry Castelloe Principal Castelloe Partners, LLC CHAIR, WORKERS’ COMP COMMITTEE Shelly Brotzge Regional Underwriter, Group Self-Insurance Midwest Employers Casualty

Freda Bacon Director Les Boughner Director Alex Giordano Director

JULY 2020

61


SIIA new members JULY 2020

REGULAR CORPORATE MEMBERS

Yvonne Daugherty Chief Marketing Officer FairosRx Amarillo, TX

Derek Spitzer Director HIG Captive Insurance Group, LLC Arlington, TX

Eddie Maria VP of Sales & Account Management, West TruHearing Draper, UT

Stop Loss that does more than stop loss Looking for an insurance carrier that does more than identify trends? At Voya Employee Benefits, we take the next step, providing in-depth insights into what’s driving costs. Our proprietary data and analytics tools reveal the solutions that help your self-funded clients manage risk better—and protect assets over time.

For Stop Loss insurance that does more, contact your local Voya Employee Benefits sales representative or to download our latest proprietary insights visit voyastoploss.com.

Stop Loss Insurance is underwritten by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Both are members of the Voya® family of companies. Voya Employee Benefits is a division of both companies. Product availability and specific provisions may vary by state. ©2020 Voya Services Company. All rights reserved. 1151065 205914 - 05012020

62

THE SELF-INSURER


IS 1 TRILLION DOLLARS

in healthcare waste & errors too much?

YES. At Zelis, we listen to what payers and providers want and bring technology, people, expertise, and entrepreneurial energy together to create smart solutions and a better way for the industry. Integrated solutions to price, pay, and explain healthcare on a claim by claim basis, all offered by one trusted company.

Maximized Claim Savings. Optimized Payments. Transparent Explanations. Contact Zelis today at 888.311.3505 or visit zelis.com to find out how our pre-payment solutions are helping control the rising cost of healthcare.

Better Service. Better Performance.

zelis.com Copyright 2019 Zelis. All rights reserved.


We’re simplifying the healthcare experience

Teladoc Health provides employees one convenient entry point for comprehensive virtual care and gives employers a single resource to help reduce claims and drive productivity.

Telehealth | Expert Medical Services | Behavioral Health Learn more about what we can do for your self-funded clients. TeladocHealth.com | 1-844-798-3810 Š 2020 Teladoc Health, Inc. All rights reserved.

Profile for SIPC

Self Insurer July 2020