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New Benchmarks For Evaluating Vendors: Benefits Consultants, TPAs and Brokers
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TABLE OF CONTENTS
MARCH 2022 VOL 161
W W W. S I P C O N L I N E . N E T
NEW BENCHMARKS FOR EVALUATING VENDORS: BENEFITS CONSULTANTS, TPAS AND BROKERS
By Laura Carabello
IRS CONCEDES CASE TO CAPTIVE INSURER PRIOR TO TRIAL: IS IT A TREND BOUND TO CONTINUE?
By Karrie Hyatt
MAKE MENTAL HEALTH PARITY A PRIORITY FOR YOUR PLAN
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
THE PRICE IS RIGHT HOW TO TAME THE BEAST LURKING IN HOSPITAL CHARGEMASTERS
NEWS FROM SIIA MEMBERS
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 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
MARCH 2022 3
F E AT U R E
New Benchmarks For Evaluating Vendors:
Benefits Consultants, TPAs and Brokers Written By Laura Carabello
endors should be prepared to pivot in 2022 as the benefits landscape shifts, challenging them to be accountable, stay relevant and respond to increased pressures for quality and cost-containment. A return-to-normal and business-as-usual approach may be misguided as volatility and uncertainty remain primary issues for companies nationwide and throughout the world. As we enter this new phase of the unknown, certain adjustments should be made to provide employers and their workforces with the highest quality care while optimizing costs and maximizing plan flexibility. Overall, a Deloitte survey shows that 45% of insurance professionals believe living up to evolving client needs and expectations will be a major challenge over the next few years, and with good reason. Gone are the days of relying solely upon in-person meetings as a way of interacting with clients. Manual paper processes are also disappearing as digital technologies prevail and communications for sales and client-advisor interactions proceed via both online channels and in-person meetings.
“We do require “We further anticipate a any vendors who come on site to provide proof of COVID-19 shift in networks to make a vaccination.” But he emphasizes that difference, with an increased as part of their business practices, Nova focus on direct primary care, implements continuous improvement efforts to tiered networks and new help the Company match the pace of its rapidly networks emerging,” say the changing industry. “We’ve been able leaders. “With pharmacy drug to keep up with the changing costs crippling many plans, landscape, as we already had comprehensive vetting strategies we expect a continued focus Jim Walleshauser on improving Pharmacy in place and a strong focus on Benefit Management (PBM) cost containment.” programs through passNova requires a rigorous risk assessment for compliance, privacy and security, business continuity and financial stability. But they also take time to get to know the through PBM firms, and a team at each vendor and build a relationship based on shared values and goals that focus on drugs within the align with Nova’s model for elevated service and data-centered decision making to rein in costs. medical cost and pharmacy “As stewards of the resources entrusted to us by our clients, we expect our vendors reinsurance programs to meet the needs of our plan participants as if we were ourselves providing to reign in specialty the service,” says Walleshauser. “We have seen two trends emerging in recent years: 1) a demand for chat style servicing through a combination of bots and medications.” live service associates, and 2) an increase in mental health provided through a In fact, James Walleshauser, Nova Health president, advises,
variety of platforms—whether through stress reduction modules embedded in wellness platforms or comprehensive behavioral health services available through telemedicine.” At the Spring Consulting Group, Teri Weber, MBA, PMP, GBA, ICCIE, senior vice president, and Karin Landry, CEBS, ACI, CLTC, managing partner, expect that 2022 will herald continued popularity of point solutions, with the caveat that the priority be tried and true results as opposed to the trendy, check-the-box mentality seen in the past.
In order to set baselines and measure results, they say that data warehousing will be critical, adding, “Businesses are focused this year on achieving health equity, and want to leverage their vendors to help them get there or assess their current state.
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Evaluating Vendors DEFINING “HEALTHCARE VENDOR” For the self-funded community, if a company partners with TPAs, benefits consultants, brokers or other intermediaries to deliver goods or services, the company is considered a vendor. The Office of the Inspector General (OIG) broadly defines healthcare vendors as “any providers, suppliers, manufacturers and any other individual or entity regardless of the service the vendor provides.” For the purposes of this discussion, vendor companies span capabilities that include: •
Pharmacy Benefit Management
Physician and Hospital Services
Digital Health, Telehealth
Behavioral Health programs
Substance Abuse Recovery
Field Marketing Organizations
Defined Benefit Plans
Workers Comp Solutions
Vaccine Tracking/COVID-19 Testing
Vendor/strategic partner vetting is critical, says Mark S. Gaunya, GBA, LIA, principal of Borislow Insurance, and founder & CEO of Captivated
“We utilize a process performed by a cross-functional committee that evaluates an indepth questionnaire and makes a recommendation to our executive Mark S. Gaunya leadership team,” he explains. “Our nine-category qualitative and quantitative Scorecard with a minimum of four levels of scoring for each category ensures that the vendor/strategic partner is in alignment with our needs.” Health.
He explains that the Scorecard examines characteristics, including executive leadership, accessibility to culture and mission, possible conflicts of interest or ethical red flags. “If a vendor/strategic partner achieves a passing score, we move forward with deeper due diligence, including reference checks and, finally, engagement if they are selected.” Since the onset of the COVID-19 pandemic, Joe Meyer, SVP, Sales & Marketing at Maestro Health says they have made sure to prioritize tech-enabled solutions on behalf of their brokers and employers which helps them navigate the challenges of today’s healthcare landscape, and, as a result, have had to reevaluate vendor expectations.
“Cost-containment continues to be a major priority and many of our brokers require datadriven resources for COVID-19 services, such as the ability to analyze claims or help beneficiaries utilize telehealth applications without adding hidden costs to the client,” Joe Meyer
Evaluating Vendors use cases to be built around several core functions, ranging from simple tracking solutions to complex automation; and Connected Ecosystems with mature healthcare IT to help to improve patientoriented services, data management and interoperability. Vendor technology should easily integrate with health plans, payroll companies and other partners, offering a seamless link to systems via EDI, API and FTP protocols. Many are moving to newer, cloud-based and customizable integration, with a fully modular system running on a single code base.
he explains. “To provide these services, we expect that our vendor partners, from telehealth providers to our pharmaceutical partners, also follow the same technologybased model of our platform — creating the ability to use data to our advantage and prioritize cost savings in 2022.”
DIGITAL TRANSFORMATION, ESCALATING CONSUMERISM AND DEMANDS FOR CONVENIENCE
High on the list of expectations is the requirement that vendors undergo digital transformation as the way to becoming more consumer-friendly while simultaneously changing operations, culture and use of technology. But merely adopting individual technologies and digital solutions is no longer enough to leverage their full potential and differentiate an organization from its competition. Virtualization and digital ways of working are becoming the norm, giving high technology adopters an edge within the healthcare industry. For more progressive vendors, adoption of advanced technologies may provide key differentiators in this competitive marketplace where employers are reimagining healthcare as we know it. These technologies include: Artificial intelligence (AI) as it is being applied in healthcare to early diagnosis prediction; Medical IoT – The Internet of Things allows
These approaches should provide automated claim substantiation, allowing for instant updates and approval of plan options, gateways to educational material and instant access to data for real-time reporting and data analytics. Alongside these technologies, consumers are becoming more demanding, as people appear to be willing to shop around and switch plans if they aren’t happy. Driven by Amazon and other tech leaders that have set high consumer expectations when it comes to ease of use, accessibility and speed, the healthcare business space has new entries, such as retailers like CVS, Walmart and Walgreen’s. Vendors must satisfy requirements for more convenient, streamlined processes and work toward a greater relationship with their TPAs and consultant customers by offering features that include quality, ease of use and increased connectivity with the vendor and services that match the “Amazon-like” shopping experience.
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Evaluating Vendors Vendors need to ensure that members receive timely, easy-to-understand information through a variety of digital engagement tools, including webinars, easy-to-use websites and multiple communication channels that span emails, automated voice calls and texting. These touch-points work together to help members navigate their health journey -- from the day they select a plan to when coverage is initiated. Mary Catherine Person, president, Blue General Partners, says that expectations for vendors have increased dramatically over the past
“COVID has changed the way we work and as employers struggle with communication to their employees. It is more important than ever for vendors to Mary Catherine Person truly act as partners, integrating into the employer’s benefit plan more seamlessly. This partnership should also include a focus on the member as the most important part of any service due to the difficulties in hiring.” two years.
Claiming to be customer-centric is easy, but the pandemic quickly laid bare the customer experience weaknesses of many healthcare companies. As consumers are forced to play a much greater role in their healthcare decisions and, in many cases, contribute financially to the cost of care, vendors must be cognizant about the way they offer health services – from doctor’s visits to prescription medicines.
We’re also probing for technological capability - are they relying on daily, weekly or monthly EDI feeds to exchange data? If so, they’re not a technology company. We’re looking for organizations that have taken the step into using API and webhook technology to facilitate near real-time data transfer to truly affect patient engagement and outcomes. If a vendor can’t produce data and demonstrate that they’re evolving technologically, then they may not be ready for widespread use.” Care convenience is key to ensuring patient-centric care and improving the patient experience. Vendors must recognize that as more patients become responsible for a larger portion of their healthcare bill, they will naturally demand better services from their service and medical providers. Customer service levels may need some upgrading to match the level of attention people expect from traditional consumer brands.
For healthcare companies to become truly customer-focused, they have to focus on customer data, make sure their operations and processes have a customer connection and ensure that their staff members are customerfocused. Highlighting this point, IBM cites its 2021 CEO study which showed that 60% of CEOs who lead the most financially successful organizations cite “delivering better customer experiences” among their highest priorities in the next 2 to 3 years.
Kevin Schlotman, CCO, Flume Health, shares their corporate expectations for vendor partners, saying, “They must align with our vision and mission: to improve patient outcomes while containing costs. We believe these next-generation point solutions have the vision and potential to radically transform healthcare for the better. But our partners don’t simply promise better care and lower costs—they must have the data to back it up. For clinically focused solutions we ask first for independent, peerreviewed studies that demonstrate the effectiveness of the offering - instead of relying on marketing material promising results.
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Evaluating Vendors A streamlined patient experience should be in place to facilitate “self-service” to resolve most questions, issues or concerns – such as downloading an immunization record, accessing home based testing, participating in telehealth and virtual consults, booking an appointment, paying bills or checking their account/insurance status. Employees are expecting to have access to the most up-to-date patient information from one centralized location. This will not only deliver a better patient experience, avoid redundant activities to document medical history, but also help mitigate fatal mishaps such as drug interactions. Vendors looking to streamline the user experience and win more business are creating patient portals that keep all the patient interactions in one place.
ABILITY TO NAVIGATE AND COMPLY WITH INCREASED REGULATIONS
Moving to a more digital model is vital for health business practices, but it also comes with new privacy regulations and data security laws. Regulations like the NAIC’s Insurance Data Security Model Law are being widely implemented, and it is likely that similar regulations will be passed in the next decade. Vendors must respect that these laws are important in protecting clients’ privacy online, although they present roadblocks in the customer journey. In 2022, the ultimate challenge for industry professionals will be to provide a high-quality digital experience that allows for open communication while staying compliant with regulations. Allison R Johnson, president, Benefit Dynamics Company, points to the passage of H.R.133-Consolidated Appropriations Act 2021, providing nearly $1 trillion in COVIDrelated relief and what many employers regard as welcome relief for Flexible Spending Accounts (FSAs). “Passage of this recent legislation now makes it more imperative to ensure that vendors are in compliance with current laws,” she says. “There is a critical need for a very thorough process on vetting vendors for their clients.”
Source: IBM. https://www.ibm.com/thought-leadership/institute-business-value/ report/extending-digital-acceleration
Allison Johnson She continues, “Another example is the Pharmacy Benefit Management contract. It is important for the plan fiduciary to know all the different ways a PBM can generate additional revenue based on their contract. Most PBM purchase decisions have been made based on AWP discounts, repricing and rebate guarantees, and not on the actual contract language.” Further to this discussion on evaluating PBM vendors, John Adler, president and practice leader, ELMCRx Solutions, explains, “One of the greatest challenges in managing pharmacy benefits risk is the constant evolution of PBM programs, stand-alone third-party programs, and the ever-increasing utilization and cost of Specialty Drugs in both the pharmacy and medical benefits.” In light of this, he cites changes in their approach to evaluating potential vendors, noting, “There is an ever-increasing number of programs available to manage the cost and utilization of specialty drugs. Any evaluation must include all options and a ranking of the options based on financial impact, member impact, plan sponsor involvement and potential specialty pharmacy drug changes.”
He says many of these programs are redundant with the PBM offering programs under current contract that duplicate all
“It is important to review all offerings for overlap,” he continues. “In addition, any evaluation must John Adler include the ability to vet all programs for the net savings from each, taking into account fees and the loss of rebates. It is also necessary to understand any clinical impacts.” or part of a stand-alone program.
Casey Hancock, CTO, Flume Health, sums up market expectations, saying, “We want to assess the partner's ability to deliver the value that they claim, and we want to integrate with them in a modern manner. We are interested in accurate and frequent data delivery that proves out the vendor's value. Particularly as it relates to NSA- and COVID-related regulations and requirements, we prefer vendors that are agile in the way that they can interoperate as data needs change and grow. Within engineering, we pay attention to availability in scope and timeliness, accuracy and richness of data when integrating with partners.
What is the bottom line? “It takes a combination of specific expertise, analytical resources and awareness of what programs are available in the market to conduct a complete evaluation of the vendors available to help manage pharmacy benefit risk, especially for high-cost claims,” concludes Adler.
ENSURING SUCCESS -- RISKING FAILURE As market stakeholders hone their expectations and carefully establish partnerships, vendors are tasked to: • Raise their true understanding of the legal/regulatory environment • Understand roles and responsibilities about payment, ERISA fiduciary duty and laws such as health reform • Respond to prevailing requirements for meeting consumer demand for improved access to quality, convenient healthcare products and services • Step up digital capabilities In this age of uncertainty, employers are more cautious, skeptical about vendor overpromises that under-deliver and continue to strive for pandemic resiliency. Vendors serving the benefits marketplace must tailor their offerings, especially new services, to demonstrate problem-solving capabilities and ability to thoroughly understand the needs of intermediaries and their clients. A word of caution to vendors: do not confuse the role and needs of the TPA, consultant or broker with an insurance company. The goal is to be mindful of federal laws and regulations and present customized pricing options tailored to client requirements.
Casey Hancock It's the ideal if integration partners behave like a tech company. However, it's not the norm and is contextual. With networks, for example, we would prefer that the network has handled NSA compliance in an agile manner. In reality, that's not something any network is really measured on—their core business is contracts and traditionally access to information is actually problematic. However, we've seen a few instances where PBMs have a tech-company ethos.”
MARCH 2022 13
Finally, employers have a rising consciousness of racial, social and economic injustices and are further challenged by labor shortages and private-sector wage increases. Pressures continue to mount for making adjustments and responding to these issues that continue to fall on the shoulders of those who are in the best position to influence benefits decision-making.
Laura Carabello holds a degree in Journalism from the Newhouse School of Communications at Syracuse University, is a recognized expert in medical travel, and is a widely published writer on healthcare issues. She is a Principal at CPR Strategic Marketing Communications. www.cpronline.com Karin Landry
At HPI, innovation is in our DNA. We know that in order to meet the ever-changing needs of our clients, we need to consistently evolve as a TPA. That’s why we are constantly evaluating the healthcare landscape to seek out, discover, and create ground-breaking solutions that bring value to our partners. From advancements in clinical services that help better manage claim trends, to new technologies that engage members and enhance the payment process, we explore every opportunity to progress, advance and step outside the box as a third-party administrator. SIIA provides a fantastic forum to explore new ideas with our peers and continue to work toward the common goal of transforming healthcare. – Paul Forte
Innovative solutions built around you. HPI specializes in scalable, customized solutions across industries and the country. • A la carte services, full replacement, or custom plan designs • Numerous network options, including custom-built • Pharmacy benefit integration with all major national PBMs • Ancillary benefit administration COBRA, HRA, HSA, FSA, STD, dental, vision • Preferred A-rated reinsurance carrier relationships • Best-in-class Reference-Based Pricing options • Full-service navigation tools and concierge services to enhance the member experience • Captive arrangements
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People are talking about Medical Stop Loss Group Captive solutions from Berkley Accident and Health. Our innovative EmCap® program can help employers with self-funded employee health plans to enjoy greater transparency, control, and stability. Let’s discuss how we can help your clients reach their goals. This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.
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F E AT U R E
IRS Concedes Case to Captive Insurer Prior to Trial: Is it a trend bound to continue?
Written By Karrie Hyatt
he captive insurance sector got a small win against the Internal Revenue Service (the Service) last year, when the Service conceded a U.S. Tax Court petition that had been brought against it by an 831(b) captive.
While industry professionals were hoping for the case to make it to court in order to get an important legal opinion, the concession by the IRS shows that there is at least some 831(b) captive circumstances that the Service finds acceptable.
THE CASE Puglisi Egg Farms is a family-owned agricultural business that raise hens to produce eggs for resale to grocery stores and restaurants. Finding traditional means of insurance not adequate to insure their risk, the Puglisi family established a series captive, Puglisi Egg Farms of Delaware, LLC, domiciled in Delaware utilizing an 831(b) tax election. Managed by Oxford Risk Management Group, the captive is reinsured through Oxford’s risk pool.
IRS Concedes Case According to Susan M. Euteneuer, Esq., General Counsel and Chief Compliance Officer with Oxford, “Years ago, [the Puglisis] were working with their risk management and insurance advisors, recognized that their business had real potential risks from avian flu, salmonella, and others, and they shopped the traditional commercial insurance market to try to obtain cover for that insurable risk. Then they explored captive insurance options and, after evaluating various structures and options, decided to form a captive insurance company with Oxford.” Beginning in 2017, the Puglisi captive was audited by the IRS for more than two years, with the Service requiring thousands of documents. In December 2019, the IRS issued statutory notices of deficiency (SNODs) for the years 2015 and 2016, and for 2018 issued in 2020. Penalties ranged from 20 to 40 percent.
“At the end of an examination,” said Charles M. Ruchelman, member, Caplin & Drysdale Attorneys and the co-lead counsel for the case,
“The IRS can either issue a no change letter or issue a notice of deficiency. They issued notices of deficiency to both the owners of Three Puglisi Brothers, Inc. and series KF of Oxford. Once you have that notice of deficiency, that is your ticket to the U.S. Tax Court. You can either accept it and pay the tax or you can contest the determination and you can file a petition in the U.S. Tax Court, which is what we did on behalf of this client.” The Puglisi family had decided to take the matter to the U.S. Tax Court and filed petitions for each SNOD over the course of 2020. According to Jeffrey K. Simpson, partner, Womble Bond Dickinson (US) LLP, and who also worked on the case, “The Puglisis felt they really had followed the rules. They were in this for a bona fide risk management reason. They had insurance issues they were trying to manage and they needed a captive for that purpose. They were very careful to make sure they got good advice on the way in and as the captive operated. They followed that advice, so they were confident that they had done the right thing. The IRS either hadn’t understood or hadn’t taken the time to try to understand that during the audit process.” In April 2021, the IRS made a motion to concede the issue, but the Puglisi’s wanted the Court to make a decision on the issue. Without a Tax Court decision, the Puglisi’s felt that the issue could reoccur years later without a precedent-setting court decision.
“As the Puglisis explained to the court, they wanted to have their case heard, because they value the insurance in their Oxford captive, and the Service could audit subsequent years of insurance premium deductions. The [Puglisi family] did not want to land in court again,” said Euteneuer. According to Ruchelman, “On behalf of the Puglisis we contested the IRS’s motion to concede that concession. This was an important issue for the company as they continue to buy the insurance every year and need the insurance. They wanted a determination by the court as to the validity of the insurance as well as there are hundreds of other taxpayers that are in a similar arrangement and they need guidance from the court. It was a strategic concession by the IRS, because for whatever reason the Service decided they did not want to have the court decide the validity of the insurance and the insurance structure.” In late October 2021, the Court sided on behalf of the IRS saying that the taxpayers are not owed an opinion on issues on which the IRS concedes. While ultimately a win for the Puglisi’s and the captive insurance sector, without the guidance that a court decision would have provided, the IRS is free to continue pursuing similar captives. “As the Court noted in granting dismissal of the Puglisi’s tax court petition,” said Euteneuer, “pursuant to U.S. tax law, the IRS may decide which cases it wishes to litigate, and, in making those decisions, is permitted to dismiss those cases it does not believe it will win at trial.”
IRS Concedes Case For Simpson, “We think [the IRS] concluded that they couldn’t win their case. The fact that the Puglisi family had followed the rules and, as we believe, that the [captive] arrangement did meet the elements of insurance for tax purposes meant the captive should have been respected. It just took the IRS a really long time to get to that understanding.”
THE IRS After several high-profile Tax Court wins concerning 831(b) captives, this is the first case that the IRS has conceded. The Puglisi Egg Farm captive was being audited only because it was established as an 831(b) captive. “The IRS has been on a campaign, that’s what they call it, to examine as many 831(b) captive insurance companies as possible. The Puglisi’s were caught up in that campaign,” said Ruchelman. According to Charles J. Lavelle, partner with Dentons Bingham Greenebaum LLP, who also worked on the Puglisi case, “The IRS started auditing these kinds of captives several years ago, and has developed that into a formal program. The IRS has announced that it intends to audit essentially all captives that elect section 831(b). It deployed 12 audit teams to audit captives that elect section 831(b) two years ago, and recently announced that it was hiring 200 more lawyers for tax shelter issues, including microcaptives.” Lavelle is referring to the IRS’s January announcement that
it will be hiring at least 200 more lawyers to work audits on what the Service labels abusive tax schemes. “Rather than issuing guidance, the Service instead continues to exert pressure against the entire industry through aggressive and expensive audits, both of bad and good actors, without distinguishing between the quality of the programs,” said Euteneuer. “It appears, from the taxpayer’s point of view,” said Simpson, “That the IRS, when they audit an 831(b) captive, they have already concluded that because it is an 831(b) captive they are not going to find in favor of it. When they are looking at the records they do not seem to be genuinely considering whether the captive should be respected. Instead, they seem to be looking for details they can use to challenge a captive’s position that they have achieved insurance for tax purposes.” Not only were the Puglisis hoping for a Tax Court opinion with their petition, so was much of the captive insurance sector. The IRS has dragged its heals in issuing guidance for small and medium captives electing to take the 831(b) tax option for nearly a decade, despite continued pleas from those in the industry. An opinion in the Puglisi case would have helped create at least some guidance that captive owners could use to lawfully and successfully manage their captive.
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IRS Concedes Case
Despite not getting the opinion that they wanted, captive insurance professionals are optimistic that the IRS’s concession could have influence over future audits. According to Euteneuer, “The Service, as it promised it would, continues to audit many captives and has, at least so far, shown no signs of modifying this overall approach. At the audit level, though, some examiners could begin to exercise the independent judgment provided by the audit rules and decide to stop painting all captives with the same brush.” Simpson has a similar opinion, “I hope it has influence over the IRS on how it analyzes cases in that they’re a little more thoughtful in challenging rather than just arbitrarily arguing with everything.” “Hopefully, this means the IRS will concede all other cases that it views as meeting the insurance tax tests, including making early decisions on programs that qualify,” said Lavelle. Lavelle added some historical context for what is happening between 831(b) captives and the IRS. “The large captive litigation occurred in the late 80’s and early 90’s. The IRS won the first several cases, then lost most of the next group. Through this process, the captive rules developed. I think the IRS thinks that there are still a lot of inferior arrangements (while the industry may think those arrangements qualify as insurance) … I think the IRS will continue to litigate cases until taxpayers begin winning cases; some of those cases may be appealed. This process will develop rules for small captives, which may take more than five years to solidify.”
The tides may be turning for captives electing the 831(b) option. While the Puglisi case only got the IRS’s concession, it is not the only case out there in which the IRS has conceded, and the next 831(b) audit case may find its way to a favorable opinion. The cases decided in Tax Court up until now involved 831(b) captives that were organized during the early years of captives opting for the 831(b) code, with the Court deciding on facts from a decade ago and captive arrangements that hadn’t matured yet. As Simpson put it, “The captive arrangements happening today reflect the learning that has happened over the last decade. They include lessons learned from the cases where an opinion was delivered. Today’s captives, and the insurance programs in them, have matured. Where they are insuring highseverity, low-frequency events, you don’t often see losses. If you look at a one
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IRS Concedes Case
or two year window, you may not see much action. But if you look at it over a decade, you are going to start to see more evidence that it’s working the way it’s supposed to work. It just takes time to bear out.” While 831(b) captives still have to contend with the IRS’s campaign against them, the Puglisi Egg Farm case sets an unofficial precedent for how the future of IRS audits might turn. For
“What the Puglisi case says about the future is impossible to tell, but I consider it very interesting that the IRS has conceded a case involving a structure that they have said publicly over and over again that they are going to audit every one of, going so far as to say that they don’t like them. I guess they found one they like.”
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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.
MAKE MENTAL HEALTH PARITY A PRIORITY FOR YOUR PLAN Written By Kaitlyn MacLeod, Esq.
n their recent 2022 Mental Health Parity and Addiction Equity Act (“MHPAEA”) Report to Congress, the U.S. Department of Labor (“DOL”) reiterated that mental health parity is a top enforcement priority for the current administration. In the DOL’s eyes, plans are not fully complying with the MHPAEA Non-Quantitative Treatment Limitations (NQTL) Comparative Analysis requirement put in place last year, resulting in DOL audits and insufficiency findings.
WHAT IS THE MHPAEA AND DOES IT AFFECT YOUR PLAN? The goal of the MHPAEA is to reduce stigma, discrimination and barriers inside and outside of the health care system for people with mental health or substance use disorder (“MH/SUD”) conditions.
Treatment for MH/SUD conditions often operate in a disparate and separate system than treatment for medical and surgical (“M/S”) care. The MHPAEA is intended to promote equal access to treatment for MH/SUDs by prohibiting coverage limitations that apply more restrictively to MH/SUD benefits than to M/S benefits. The Consolidated Appropriates Act of 2021 amended the MHPAEA to require covered plans to produce a current NQTL Comparative Analysis that can be requested at any time by a plan participant or the DOL/CMS. This required report must include an analysis of the plan’s NQTLs in both writing and in practice, along with conclusions on parity and corrective action plans. Typical NQTLs include utilization reviews, prior authorization, provider credentialing standards, and plan provisions (like medical necessity or experimental/investigative determinations and exclusions). MHPAEA applies to self-funded or fully-insured plans with over 50 employees, meaning that these plans also need to have a NQTL Comparative Analysis on file. While the MHPAEA does not apply directly to small group health plans, its requirements are applied indirectly through the ACA’s essential health benefit requirements for mental health coverage. Even if the MHPAEA does not apply, some states have implemented mental health parity requirements that are even stricter than federal
requirements, so mental health parity is still a concern.
BARRIERS TO MENTAL HEALTH AND SUBSTANCE USE DISORDER ACCESS FOR PLAN PARTICIPANTS
Seeking treatment for MH/SUD conditions can often be a significant barrier to individuals who may need said treatment – there is a stigma attached to “needing help” to manage these issues. Labor Secretary Marty Walsh expressed his own experience with the struggle to seek help with alcoholism by writing “I knew something was wrong, but it was so hard to take that first step. I’m so grateful that as a union member I had access to the care I needed, because once I did ask for help, my life started to change for the better.” Once an individual does decide to seek care, obtaining that care can often be an obstacle in its own right. Walsh described that “[f]rom identifying professionals who will take your insurance to figuring out what requirements you need to meet for treatment to be covered by your plan, the process can be incredibly difficult to navigate. Not only is this frustrating for those who need critical services – in many cases, it’s illegal.” In 2019, nearly 52 million adults in the United States experienced some form of mental illness and in 2020, an estimated 40.3 million people had a substance use disorder. The COVID-19 pandemic has only exacerbated MH/SUD conditions in the US – between August 2020 and February 2021, the percentage of adults exhibiting symptoms of anxiety/depressive disorder has increased from 36.4% to 41.5%.
Further, deaths resulting from substance overdose rose by approximately 30,000 from when comparing 2019 numbers to 2022. U.S. Secretary of Health and Human Services Xavier Becerra noted that access to mental and behavioral health support is critical as the COVID-19 pandemic continues to impact so many lives across the country, but “health plans and insurance companies are falling short of providing access to the treatment many working families need.”
JUMPSTART INTO COMPLIANCE Now that NQTL Comparative Analyses are required for most plans, how do you complete one? It is a detailed process that takes vendor and plan administrator participation to obtain sufficient information to conduct an analysis of each individual NQTL to ensure that MH/SUD benefits do not have any limitations that are stricter than corresponding M/S benefits. A common example is duration limitations – many plans impose visit limits for higher cost services, but plans must understand that those limits should not apply to MH/ SUD benefits if there are not any limits for M/S benefits. It is essential to have a plan’s NQTL Comparative Analysis on hand before a DOL audit occurs. The DOL typically require plans to produce a detailed NQTL analysis within a very short timeframe (10-14 days). It is not practical to compile a detailed report with the level of information needed within that short timeframe.
The 2022 MHPAEA Report’s main takeaway is that many plans and issuers were unprepared for a request of their analysis – and approximately 40% of plans responded to the DOL with a request for an extension to compile the required analysis. EBSA found that plans stated they were unable to comply because they erroneously assumed that vendors would prepare a comparative analysis for the plan, or that those vendors would have prepared their own comparative analysis that the plan could rely on – in many cases, vendors had not. Compliance is ultimately the responsibility of the plans themselves.
CHALLENGES IN CURRENT PLAN LANGUAGE
When drafting NQTL Comparative Analyses, we have come across plan language and operational data that is consistently problematic. In the past year, EBSA has requested a NQTL analysis on the following common NQTL violations:
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Pre-certification/concurrent care requirements;
Limitations on applied behavior analysis or treatment for autism spectrum disorder;
Network provider admission standards;
Out-of-network reimbursement rates; and
Treatment plan requirements.
The following is an overview of common compliance issues that often trip up plans.
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Many plans exclude ABA Therapy, one of the key treatments used for Autism Spectrum Disorder, due to the high cost of the treatment. Research has shown that early intervention and access to ABA therapy can improve the trajectory of a child’s development.
While providing coverage in line with state law will meet compliance on a state-level, it does not guarantee compliance with any federal laws. In particular, the MHPAEA requires that any of these limitations on autism spectrum disorder be no stricter than similar M/S conditions – this means that age limitations, duration of coverage, and weekly hour limitations cannot be stricter than any limitations that are in place for M/S conditions.
The DOL has indicated that ABA Therapy in particular is a MHPAEA compliance concern – and that plans need to have evidence that an ABA Therapy exclusion is no more stringent than any comparable M/S benefit. Pre-Certification Requirements for MH/SUD Benefits It is not uncommon to come across precertification requirements for all (or the vast majority of) MH/SUD benefits, while not requiring pre-certification for the same scope of M/S benefits. This is a classic example of a parity issue. Plans cannot have an overly strict list of MH/SUD benefits subject to pre-certification, without also having an equally strict list of M/S benefits subject to those requirements. EBSA has identified pre-certification as a common issue and has had plans alter pre-certification requirements and even provide an opportunity for participants to submit claims through retroactive changes in plan terms. Autism Spectrum Disorder Autism Spectrum Disorder coverage and associated limitations can often crop up based on state-level requirements for coverage. For instance, some plans follow Wisconsin state law’s requirement to cover Autism treatment for ages two to nine, for a cumulative total of four years, and for intensive-level treatment of
In many cases, M/S conditions do not have age, duration, or weekly hour limitations, so these restrictions may create compliance issues with the MHPAEA.
NEXT STEPS FOR THE DOL AND COMPLIANCE The DOL is seeking action from Congress to amend ERISA to expressly provide the DOL with the authority to directly pursue parity violations by entities that provide administrative services to ERISA group health plans, as well as assess civil monetary penalties for parity violations. The DOL and EBSA have made their stance clear – mental health is their priority and it should be a plan’s priority to comply with the MHPAEA as well. Now more than ever, it is imperative to ensure that plans are complying with the MHPAEA and its NQTL Comparative Analysis requirement. This is important not only to avoid the consequences of a DOL audit, but also to ensure that access to mental health treatment is available to plan participants in a meaningful way.
Kaitlyn MacLeod, Esq. joined the Phia Group, LLC as an attorney in the summer of 2021. As a member of the consulting team, Kaitlyn works on general consulting, plan document compliance, mental health parity analyses, and general compliance issues. Kaitlyn attended University of Massachusetts Amherst, graduating cum laude with her B.A. in Political Science and Legal Studies. She earned her Juris Doctor at Northeastern University School of Law where she participated in the Amicus Curiae project and graduated with a concentration in Labor, Work & Income. After law school, Kaitlyn worked as an attorney representing and advising employers on employment law compliance. She is licensed to practice law in the Commonwealth of Massachusetts.
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A QQ& A
ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:
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, Carolyn Smith, Ken Johnson, Amy Heppner, and Laurie Kirkwood 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, Carolyn, Ken, Amy, and Laurie are senior members in 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.
TESTING FOR COVID AND YOUR KITS FOR FREE:
EXPANDED COVERAGE OF OTC COVID-19 TEST KITS AND DEVELOPMENTS IN PREVENTIVE CARE On January 10, 2022, the U.S. Departments of Labor (DOL), Health and Human Services (HHS), and Treasury issued FAQs Part 51, which expands coverage of COVID-19 diagnostics tests by plans and issuers to include over-the-counter (OTC) COVID-19 at-home tests without a prescription. Two preventive care items are also included in FAQs Part 51. On February 3, 2022, the Centers for Medicare and Medicaid Services announced that Original Medicare and Medicare Advantage will provide coverage for up to eight OTC COVID-19 tests for beneficiaries at no cost starting in early spring. On February 4, 2022, the departments released FAQs Part 52 as a partial modification to and clarification of FAQs Part 51 on the COVID-19 test issue.
KEY PROVISIONS •
Required coverage of OTC COVID-19 tests by group health plans. For tests purchased on or after January 15, 2022, group health plans must extend coverage to OTC COVID-19 tests that a participant purchases without an order or clinical assessment from a health care provider and without imposing any cost-sharing, prior authorization, or other medical management requirements. Consistent with prior guidance from the departments, coverage of OTC tests for public health surveillance or employment purposes is not required. Under a safe harbor established in the FAQs, plans may limit reimbursement for tests purchased out of network to $12 by providing “direct coverage” through preferred pharmacies and retailers and offering a direct-to-consumer shipping option. There is significant flexibility to providing direct coverage through various mechanisms (e.g., coupons, drivethrough distribution sites, existing online platforms for retailers), and there is enforcement relief in times of test supply shortages. Through a second safe harbor, plans are allowed to set limits on the number and frequency of OTC COVID-19 tests purchased. The OTC test coverage requirement applies to grandfathered plans but does not apply to retiree-only plans (i.e., plans with less than two participants who are active employees) or excepted benefit plans (e.g., vision only, dental only, FSA). Preventive care requirements for colonoscopies. For plan or policy years beginning on or after May 31, 2022, colonoscopies conducted as a follow-up to a positive non-invasive stool-based screening test or direct visualization screening test for colorectal cancer for individuals ages 45–75 are required preventive services under the ACA.
Preventive care requirements relating to contraceptive services. In response to complaints and public reports of potential violations of the contraceptive coverage requirements, the FAQs make it clear that, under the ACA preventive care requirements, nonexempt plans must provide coverage for all FDAapproved, cleared, or granted contraceptive products that are determined by an individual’s medical provider to be medically appropriate for such individual without cost-sharing, whether or not specifically identified in the current FDA Birth Control Guide.
COVERAGE FOR OTC COVID-19 TESTS
Background FAQs Part 51 provides the guidance promised by President Biden on December 2, 2021 for implementing coverage of OTC COVID-19 diagnostic tests as required by the Families First Coronavirus Response Act (FFCRA), the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the Affordable Care Act (ACA). FAQs Part 52 is a response to questions raised by stakeholders regarding FAQs Part 51. Beginning March 18, 2020, the FFCRA has generally required group health plans and health insurance issuers offering group or individual health insurance coverage (including grandfathered health plans) to cover certain items and services related to COVID-19 tests without cost-sharing, prior authorization, or other medical management. The CARES Act expanded the scope of covered items and services.
The coverage mandate applies for the duration of the public health emergency (PHE) relating to the COVID-19 pandemic, which has been renewed effective January 16, 2022. The coverage mandate does not apply to retiree-only plans or to excepted benefit plans. Under previously issued FAQs, plans are required to cover testing for asymptomatic individuals, but not for public health surveillance or employment purposes. The departments clarified in FAQs Part 43 that the testing mandate applied to OTC COVID-19 tests intended for at-home testing if the test was ordered by an attending health care provider. FAQs Part 51 Q1 expands the coverage of at-home OTC COVID-19 tests to include those tests purchased for personal use, without a prescription, and that can be used and processed without the involvement of a laboratory or other health care provider. FAQs Part 52 Q4 clarifies that at-home specimen collection COVID-19 test kits that can be purchased over the counter but that require the specimen to be processed in a laboratory are not covered by the new mandate in Part 51; however, these types of tests must still be covered in accordance with the FFCRA if ordered by an attending health care provider. FAQs Part 51 reiterates that plans are not required to cover tests for public health surveillance or employment purposes. In all cases, including under the safe harbors, required tests must be covered without imposing any cost-sharing requirements, prior authorization, or other medical management requirements.
FAQs Part 51 provides two safe harbors that plans may use to satisfy the coverage mandate for obtaining OTC COVID-19 tests without a prescription: (1) a “direct coverage” safe harbor that allows plans to limit the dollar amount of reimbursements for OTC COVID-19 tests purchased from a nonpreferred seller to no more than $12 per test, so long as participants can obtain tests with no upfront out-of-pocket expenditure directly from a participating pharmacy or retailer and through a direct-to-consumer shipping program; and (2) a cap of eight tests per covered person, per 30-day period (or calendar month). Initially, FAQs Part 51 left many unanswered questions about satisfying these safe harbors, and the departments responded with much-needed clarification in FAQs Part 52.
DIRECT COVERAGE SAFE HARBOR
Plans cannot limit coverage of OTC COVID-19 tests to only those tests purchased through preferred pharmacies and retailers. However, FAQs Part 51 Q2 permits plans that satisfy a “direct coverage” safe harbor to limit reimbursement for tests from nonpreferred pharmacies and retailers to $12 per test (or actual price if lower). For tests that come more than one to a package, each test in the package can be treated as a single test for purposes of the $12 calculation. Plans may provide more generous reimbursement above the $12 limit (up to actual cost) if they choose to do so. The safe harbor is designed to encourage direct coverage of OTC tests without requiring an up-front payment by the plan participant, who must then seek reimbursement post-purchase, thus helping to remove potential financial barriers for participants. To qualify for the “direct coverage” safe harbor and limit exposure to the cost of tests purchased from nonpreferred sources, Q2 of Part 51, as modified by Q1 of Part 52 (effective February 4, 2022), provides: •
A plan or issuer generally must make OTC COVID-19 tests available “through both its pharmacy network and a direct-to-consumer shipping program.” However, Q1 of Part 52 provides some additional, albeit likely limited, leeway. The direct-to-consumer shipping program may be provided through innetwork pharmacies and retailers, or through an entity designated by the plan. FAQs Part 52 Q1 allows for numerous options for direct coverage mechanisms:
Direct-to-consumer shipping mechanism. Any program that allows a participant to obtain an OTC COVID-19 test with no upfront cost and does not require them to pick up the test at an inperson location will meet the departments’ safe harbor requirement for a “direct-to-consumer shipping program.” A direct-to-consumer shipping mechanism can also include online or telephone ordering and may be provided through a pharmacy or other retailer, the plan directly, or any other entity on behalf of the plan. The program does not have to provide exclusive access through one entity, as long as it allows a participant to place an order for OTC COVID-19 tests to be shipped to them directly. For example, if a plan has opted to provide direct in-person coverage of OTC COVID-19 tests through specified retailers, and those retailers maintain online platforms where individuals can also order tests to be delivered to them, the departments will consider the plan to have provided a direct-toconsumer shipping mechanism. In-person mechanisms. In-person mechanisms can include nonpharmacy retailers, distribution of coupons for OTC COVID-19 tests from certain retailers without cost-sharing, and alternative distribution sites established by, or on behalf of, the plan, such as a stand-alone drive-through or walk-up distribution site. Such sites can operate independently of a pharmacy or other retailer.
“Direct coverage” means that the participant “is not required to seek reimbursement postpurchase; instead, the plan or issuer must make the systems and technology changes necessary to process the plan’s or issuer’s payment to the preferred pharmacy or retailer directly (including via a directto-consumer shipping program) with no upfront out-of-pocket expenditure by the participant.” Q1 of Part 52 reiterates the “no upfront out-of-pocket expenditure” requirement of Part 51. Q2 of Part 52 adds that “plans and issuers must cover reasonable shipping costs [for the direct-to-consumer shipping mechanism] in a manner consistent with other items or products provided by the plan or issuer via mail order.” For purposes of reimbursing a participant for a test purchased by a nonpreferred seller, sales tax and reasonable shipping cost related to the test are included in the total price and would need be to be covered, up to $12 per test. This means that if an OTC COVID-19 test purchased from a nonpreferred seller costs $10, and shipping plus tax totals $12 or more, the plan would be responsible for covering $12, and not $10.
Individuals must have “adequate access” to OTC COVID-19 tests through an “adequate number” of retail locations (in-person and online). Adequate access is an “all relevant facts and circumstances” analysis, and Part 51 Q2 gives two examples: (1) the locality of participants or
coverage; and (2) current utilization of the plan’s pharmacy network by its participants. Part 52 provides that providing adequate access “will depend on the facts and circumstances, but will generally require that OTC COVID-19 tests are made available through at least one direct-to-consumer shipping mechanism and at least one in-person mechanism.” Part 52 Q1, footnote 14, provides that there may be “some limited circumstances in which a direct coverage program could provide adequate access, and therefore satisfy the requirements of the safe harbor, without establishing both a direct-toconsumer shipping mechanism and an in-person mechanism.” The footnote provides an example of a small employer plan with a population that lives and works in a localized area. For such a plan, it could be possible that no direct-to-consumer shipping program is needed so long as distribution at a nearby location provides adequate access to OTC COVID-19 tests. While there might be other limited circumstances beyond the example, the departments clearly contemplate both a direct-to-consumer shipping mechanism and an in-person mechanism in most instances. •
Part 52 Q1 clarifies that adequate access does not require a plan to make all eligible OTC COVID-19 tests available to its participants through its direct coverage program. Subject to an all relevant facts and circumstances analysis, a plan could limit the direct coverage program to designated manufacturers, such as those with whom the plan has a contractual relationship or from whom the plan has been able to obtain OTC COVID-19 tests directly. However, the safe harbor still requires the plan to reimburse, up to $12, any OTC COVID-19 test eligible under the FFCRA purchased from a nonparticipating provider.
• Key information needed to access OTC COVID-19 testing must be effectively communicated to participants, such as dates of availability of the direct coverage program, participating retailers or other locations, distribution sites, or other mechanisms for distributing tests, as well as which tests are available under the direct coverage program. Part 52 Q1 emphasizes that such notices should be very clear to explain which tests are available under the direct coverage program, and if the plan offers different mechanisms for obtaining tests under its direct coverage program, which tests are available under each mechanism. For example, if tests from Manufacturer X are available for direct coverage, but only from Provider A, then precise and accurate information must be communicated to participants. We recommend that plans have a process for keeping this information current, such as through a website. Meeting the requirements of the direct coverage safe harbor under FAQs Part 51 has been burdensome for plans, and FAQs Part 52 Q1 has provided muchneeded modification and guidance. In FAQs Part 52 Q2, the departments address the OTC COVID-19 testing supply shortage and provide some enforcement relief. Because of widespread shortages of OTC COVID-19 tests at the time FAQs Part 51 was issued, many plans were unable to meet the safe harbor even when making goodfaith, diligent efforts to do so, putting into doubt whether the $12 cap for
reimbursements for tests purchased from nonpreferred sellers could be applied. While plans are still responsible for taking “reasonable steps” for ensuring accessibility of direct coverage options for obtaining OTC COVID-19 tests, and while plans should still avoid delays that are “significantly longer than the amount of time it takes to receive other items under the plan’s or issuer’s direct-to-consumer shipping program,” FAQs Part 51 Q2 states that a plan will not fail to satisfy the direct coverage safe harbor if it has established a direct coverage program that otherwise meets the requirements (as revised by Q1 of FAQs Part 52) but is temporarily unable to provide adequate access due to a supply shortage. In that circumstance, a plan that otherwise complies with the safe harbor may continue to limit reimbursement to $12 per test (or the full cost of the test, whichever is lower) for OTC COVID-19 tests purchased from a nonpreferred provider. Can an employer purchase OTC COVID-19 tests in massive quantities and provide them to plan participants in lieu of using a third party for the direct coverage program? FAQs Part 52 Q1 confirms that the direct coverage mechanisms can be flexible and include distribution directly by the plan or by an entity on behalf of the plan.
Presumably, this is broad enough to include the employer. However, an employer designated by the plan to step in to take on the role of the direct-toconsumer shipping program or set up an in-person distribution site will face a number of logistical and compliance issues (e.g., HIPAA compliance). For fully insured plans, states will not be considered to have failed to substantially enforce Section 6001 of the FFCRA if a state follows this safe harbor.
MONTHLY TEST LIMIT SAFE HARBOR
FAQs Part 51 Q3 provides that plans can limit the number of OTC COVID-19 tests purchased to no more than eight tests per covered person per 30-day period (or per calendar month). FAQs Part 52 clarifies that a 30-day period can be a rolling 30-day period.
This safe harbor is designed, in part, to discourage behaviors that could lead to future shortages, such as stockpiling. The limit does not apply to COVID-19 tests purchased with a prescription or other health care provider involvement. Plans cannot set a lower limit, even if proportional with the safe harbor. For example, a limit of four tests per 15-day period is not allowable under the safe harbor, even if the monthly outcome is the same. If several OTC COVID-19 tests come in one package, each test can be counted individually for purposes of enforcing the eight-test limit. Presumably, this means that only a pro-rata portion would need to be reimbursed for packages that exceed this limit. For example, if a package of 10 OTC COVID-19 tests costs $100, it is reasonable to assume that only $80 would be eligible for reimbursement in a given month (or 30-day period) for one covered person. Because the safe harbor provides that the eight-test limit can be per 30-day period or per calendar month, plans should determine which unit of time to use and clearly communicate that to plan participants. Plans can have a higher limit but may wish to consider potential availability issues. FAQs Part 52 footnote 16 clarifies that a plan does not fail to meet this safe harbor due to a supply shortage of OTC COVID-19 tests. If a participant is unable to obtain eight tests in a 30-day period (or calendar month) due to a shortage, the plan will not be out of compliance.
PLAN ENFORCEMENT EFFORTS TO PREVENT FRAUD AND ABUSE FAQs Part 51 Q4 provides that plans can take reasonable steps to ensure that OTC COVID-19 test kits purchased without a prescription or health care provider involvement are being purchased for the permitted purpose of personal use, so long as they are not burdensome nor create significant barriers for participants. FAQs Part 52 Q2 also allows plans to protect against fraud and abuse for OTC COVID-19 tests purchased from a private individual, online auction, resale marketplaces, and resellers. Examples provided in FAQs Part 51 Q4 and FAQs Part 52 Q3 include: •
Requiring an attestation that the test is for a personal use, not employment purposes, will not be and has not been reimbursed by another source (such as a spouse’s plan or health FSA), and will not be used for resale.
Requiring documentation in the form of the UPC code of the test or a receipt from the seller with the purchase price and date of purchase.
Limiting coverage to tests purchased from established retailers that would typically be expected to sell OTC COVID-19 tests.
The ability to exclude reimbursements for tests purchased from nontraditional sellers is significant for plans as a fraud and abuse deterrent. Should a plan implement such a policy, participants must be provided with accurate information about the retailers from which purchased tests are generally covered by the plan and general information about the types of resellers for which reimbursement will be declined. There is flexibility in drafting the attestation form that FAQs Part 51 Q4 suggests because there is no model attestation form or claim form from the departments. We recommend using language that can be easily understood by the average participant. The differences between personal use and employment use for purposes of coverage should be clearly explained to avoid misunderstandings that could lead to delays in processing reimbursements. If the plan has a fraud and abuse rescission clause, this could be included in the attestation as both a reminder and acknowledgement of the consequences of serious fraud and abuse.
PLAN COMMUNICATIONS ON OTC COVID-19 COVERAGE Plan sponsors must provide notice of the coverage changes as soon as reasonably practicable. The notice would include: •
A statement of which plans must cover the OTC COVID-19 tests, taking care to exclude retiree plans and plans offering excepted benefits if OTC testing coverage is not extended.
An explanation of the types of OTC tests covered. For example, clarify that only OTC tests that can be used and processed at home without the involvement of a laboratory or other health care provider are covered without a prescription and that other types of COVID-19 tests, including specimencollection tests that must be processed in a lab, are not covered without a prescription.
If using the direct coverage safe harbor, a detailed explanation about which tests are available under the direct coverage program, and if different mechanisms apply for obtaining tests from specific manufacturers, explain which tests are available under each mechanism. Also provide instructions for the process (e.g., take your insurance ID card to the pharmacy counter), locations, relevant contact information, dates of availability, and any other information necessary to ensure easy access and a seamless process for direct coverage.
If using the monthly limit safe harbor, a clear explanation of the per-person limit, the time frame (i.e., fixed 30-day period, rolling 30-day period, or calendar month), and how multitest packs are counted and reimbursed.
Information for participants on how to submit a claim for reimbursement (e.g., online, mail, fax), whether the claim should be submitted to the medical plan or the pharmacy benefit manager, and a description of the required documentation needed for substantiation.
If the plan chooses to limit reimbursements for tests purchased from nonpreferred sellers to established retailers that would typically be expected to sell OTC COVID-19 tests, a clear explanation of the types of sellers that may be excluded (e.g., private individual, online auction, resale marketplaces, and resellers).
We also recommend including a reference to any applicable appeal procedures for denied claims. If a selffunded plan has a carve-out vendor or PBM for pharmacy, the communication should clarify whether the coverage is being provided through the pharmacy vendor, the group health plan, or both. Offering through both may present coordination challenges in limiting the tests to eight per month or 30-day period. Although not required, education and consumer support can also be provided to participants. Any communication or resource must be clear that the plan covers OTC COVID-19 tests and be consistent with the emergency use authorization (EUA), including practical information to help consumers understand how OTC COVID-19 tests performed and read at home are different from tests performed by a doctor or processed in a laboratory. Consumer education materials should also offer guidance for assessing quality information for specific OTC COVID-19 testing products, such as shelf life and expiration dates, as well as reliability information about OTC COVID-19 test results, such as the expected rate of false positives and false negatives based on the test’s labeling.
Resources for where to find active FDA recalls of OTC COVID-19 tests would also need to be included in these communications. Plans and plan sponsors are not required to provide educational materials or consumer support, but if they choose to, these guidelines should be reviewed and followed.
PLAN AMENDMENTS Nonenforcement policies provided in FAQs Part 42 Q9 apply here for purposes of communicating plan changes. As under that guidance, the departments will not take enforcement action against any plan that makes modifications consistent with the latest FAQs to provide greater coverage related to the diagnosis and treatment of COVID-19 without providing at least 60 days’ notice. Plans must provide notice of the changes as soon as reasonably practicable. HHS will not take enforcement action against any health insurance issuer that changes the benefits or cost-sharing structure of its plans mid-year to provide increased coverage for services related to the diagnosis and treatment of COVID-19.
HRA/HSA/HDHP ISSUES As indicated in IRS News Release IR 2021-181, OTC COVID-19 tests are already eligible medical expenses for purposes of reimbursement under health flexible
spending arrangements (health FSAs) and health reimbursement arrangements (HRAs). FAQs Part 52 Q5 provides some helpful guidance. When notifying participants of OTC coverage, plans should consider a notice to individuals not to use a health debit card or otherwise seek reimbursement from a health FSA or HRA for the cost (or the portion of the cost) of OTC COVID-19 tests paid or reimbursed by the plan. The health FSA or HRA administrator will also want to be prepared to assist individuals with correction procedures should they mistakenly receive reimbursement from a health FSA or HRA for OTC COVID-19 test costs covered by a plan.
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Likewise, FAQs Part 52 Q5 explains that expenses incurred for OTC COVID-19 tests already paid or reimbursed by a plan are not HSA-qualified medical expenses, and an individual that mistakenly takes a distribution to pay for such test that has been paid for or reimbursed by the plan must either (1) include the distribution in gross income; or (2) if and as permitted under Q&A 37 and 76 of IRS Notice 2004-50, repay the distribution to the HSA. High deductible health plans (HDHP) are not addressed in either FAQs Part 51 or 52. However, as with the preexisting testing mandate, the relief provided in IRS Notice 2020-15 should apply. That notice provides that, for the duration of the PHE, HDHPs may provide coverage for COVID-19 testing and treatment before the deductible is met. The IRS may provide additional guidance on issues for HSAs and other accountbased arrangements regarding the OTC testing coverage mandate.
ENFORCEMENT FAQs Part 52 Q1 states that the departments may request information from plans and issuers to ensure that participants, beneficiaries, and enrollees have adequate access to OTC COVID-19 tests, such as the number and location of in-person options. In April 2020, the departments stated in
Our approach to implementation is and will continue to be marked by an emphasis on assisting (rather than imposing penalties on) group health
FAQs Part 42 that “
plans, health insurance issuers and others that are working diligently and in good faith to understand and come into compliance with the new law.” It is hoped that the departments will be lenient as plans work in good faith to put systems in place to come into compliance with the testing requirements in FAQs Part 51, as modified and clarified by Part 52. That said, FFCRA Section 6001(b) provides that the testing provisions (which now include the OTC requirement) “shall be applied by” HHS, DOL, and Treasury “as if included in the provisions of” the Public Health Service Act (PHSA), the Employee Retirement and Income Security Act (ERISA), and Chapter 100 of the Internal Revenue Code (IRC) that contain the ACA requirements.
ERISA comes with DOL enforcement, and a violation of Chapter 100 of the IRC carries with it the $100 per person per day penalty under Code Section 4980D pursuant to Code Section 9834. This $100 per day penalty would be in addition to paying the full amount for the test (i.e., excess over $12 if a direct coverage violation is found).
EFFECTIVE DATE The requirement to cover OTC COVID-19 tests as set forth in FAQs Part 51 is effective for tests purchased on or after January 15, 2022 until the end of the COVID-19 PHE. Plans may provide coverage for OTC COVID-19 tests purchased without an order or individualized clinical assessment before January 15, 2022. The modifications provided in FAQs Part 52 Q1 are effective as of February 4, 2022.
PREVENTIVE CARE REQUIREMENTS UNDER THE ACA The ACA requires non-grandfathered group health plans, other than retiree plans or plans providing only excepted benefits, to cover certain preventive care items and services without cost-sharing. In Q8 and Q9, FAQs Part 51 addresses two issues under the ACA preventive care requirements: colonoscopies and contraceptive coverage requirements. The preventive care requirements do not apply to retiree-only plans or excepted benefit plans.
COLONOSCOPIES For individuals 50–75 years old, non-grandfathered group health plans and health insurance issuers have had to cover, without any cost-sharing requirement, colonoscopies scheduled and performed as a screening procedure pursuant to the U.S. Preventive Services Task Force (USPSTF) recommendation. Any items and services that are an integral part of performing the colonoscopy likewise must be covered without cost-sharing. On May 18, 2021, the USPSTF updated its recommendation for colorectal cancer screening by extending it to adults aged 45 to 49 years. In addition, the updated recommendation includes a follow-on colonoscopy conducted after a positive noninvasive stool-based screening test or direct visualization screening test for colorectal cancer for individuals ages 45–75. As stated in USPSTF recommendation, the follow-up colonoscopy is an integral part of the preventive screening without which the screening would not be complete. FAQs Part 51 provides that the USPSTF recommendation is considered to have been issued as of May 31, 2021. Thus, in accordance with the ACA, non-grandfathered plans must provide coverage without cost-sharing consistent with the May 18, 2021 recommendation effective for plan or policy years beginning on or after May 31, 2022.
CONTRACEPTIVE COVERAGE Under the ACA preventive care requirements, nonexempt plans are required to cover all FDA-approved, cleared, or granted contraceptive products that are determined by an individual’s medical provider to be medically appropriate for such individual without cost-sharing, whether or not specifically identified in the current FDA Birth Control Guide. Reports and complaints over the years indicate that participants are being denied contraceptive coverage in violation of some of these safeguards. The departments are actively investigating these complaints and reports and may take enforcement or other corrective actions. The departments are also assessing what types of changes to existing guidance or regulations may need to be made to better ensure individuals receive the coverage they are entitled to under the law and will issue additional guidance. Plans and issuers should revisit their mechanisms and processes used to review these claims and requests.
Stealth Captive Solutions – The Rising Tide That Lifts All Boats Soaring healthcare costs are an ongoing market trend. Stealth Captive Solutions helps your clients pool together for lower health costs with more choice and provides unique funding arrangements that allow employers the flexibility of self-insurance combined with the advantages of customized risk-sharing. Capitalizing on economies of scale, Stealth Captive Solutions provides you with more choices to adapt to market conditions and employee needs through transparency, flexibility, cash flow and potential savings. Ideas and solutions helping you chart your course forward to a better future.
Written By Bruce Shutan
THE PRICE IS RIGHT
How to tame the beast lurking in hospital chargemasters
he federal government recently sought to shield consumers of U.S. health care from excessive out-of-pocket costs and surprise bills in a hospital setting. But in spite of the Hospital Price Transparency and Transparency in Coverage rules, many industry observers believe that ending these practices and replacing them with meaningful price transparency will continue to be an uphill climb. Just 14% of 1,000 hospitals recently reviewed by Patient Rights Advocate were fully complying with an order to publicly post their prices. Large self-insured employers also lack enough market firepower to effectively negotiate hospital prices in most metropolitan statistical areas, according to a study published last summer in The American Journal of Managed Care. As such, the team of researchers behind this conclusion recommended that they consider teaming up with state and local government employee groups to establish purchase alliances to help negotiate lower prices for hospital services.
The hope is that rules requiring hospitals to display their prices on shoppable services in a consumer-friendly format or face large penalties will finally tame the beast lurking in chargemasters. But until that time, self-insured health plans still have options with the help of valuable data and information technology. Some service providers have managed to crack the code on the most common hospital procedures. Healthgrades lists them as cataract removal, C-section, joint replacement, circumcision, broken bone repair, angioplasty and atherectomy, stent procedure, hysterectomy, gallbladder removal and heart bypass surgery. The trick is to determine reasonable fees from wild price variations on the biggest pain points and steer health plan participants to the highest quality providers and facilities, which will improve clinical outcomes and lower costs. As more data becomes available, the expectation is that health care consumers will become more knowledgeable and make wiser choices – a change that is likely to be evolutionary.
CASH IS KING Most hospitals use the chargemaster number as their default option, explains Jeff Toewe, founder and CEO of Medxoom, whose pricing database of all U.S. hospitals compares typical BUCAH rates to Medicare, cash and referencebased pricing (RBP). He says only some of them have taken the initiative to publish a favorable cash price. “Every front-desk clerk in every finance department knows that magic secret number that they’ll accept from a selfpay-at-time-of-service rate,” he says. “It’s
out there, but it’s just not always available as an official data point.” Medxoom helps self-insured health plan members determine what it will cost them at the time of service and learn a good target price from an RBP-derived price point. Payment is then authorized for the agreed amount, which is always cheaper than a post-paid claim.
“Forget about what the negotiated Jeff Toewe rate table is because that’s where the scam is,” notes Toewe, whose clients are often TPAs. “Even if the rates have yet to be published by a particular hospital, we see them. We know exactly what’s going on to the penny where they have audit rights.” Medxoom has a proprietary mechanism that determines how different factors are weighted, the variety of providers and cost spreads seen in the market. Clients set their maximum outlay, then the target price is calculated with automatically geoadjusted rates. In addition, quality data from the Centers for Medicare & Medicaid Services (CMS), Quantros (which was acquired last year by Healthcare Bluebook) and Embold Health is analyzed for clients, some of whom have licensed their own source of information. “We can tell them which providers are, in fact, more cost effective, and we can offer pre-negotiated, favorable arrangements as well,” Toewe explains. “Some people call them bundles. Some call them direct contracts. Some call them cash payment at time of service. I don’t care which method it is, but it’s that service for as close as possible or below our target price.”
INTEREST-FREE CREDIT While cash is king at the point of service, it’s not always readily available for a vast majority of health care consumers who end up rationing, deferring or skipping important medical care. Another solution to the high cost of hospitalization beyond educating health plan members about their options and helping them find lower-cost quality care is to turn unexpected out-of-pocket costs into an easy and affordable payment plan. Some self-insured employers and health insurers are offering interest-free credit without any fees to plan members layered on top of their flexible spending accounts (FSAs) and health spending accounts (HSAs).
“Knowing the price and being able to afford care are two different challenges,” observes Brian Whorley, CEO of Paytient, which for a small subscription fee enables self-insured employers to fill voids created by larger deductibles and help broaden
“I think that we have to fix the liquidity crunch that too many folks are in.”
The interest-free line of credit for Paytient members includes care at eligible out-of-network and mental health providers. The No Surprises Act and Non-Qualified Treatment Limitations requirements pertain to the employer group and/or individual health insurance benefit.
access to important care. Brian Whorley
His company seeks to equalize the playing field so that low-income working Americans can access cash for medical care. More affluent households also enjoy an alternative to triple tax-advantaged HSA dollars that they can invest and grow rather than burn through for uncovered health care expenses. “If somebody has an FSA, they should use that first,” Whorley suggests.
‘DEFENSIBLE REIMBURSEMENT RECOMMENDATIONS’
RBP is often the foundation for building a better plan to combat wild price variations and shield members from unaffordable medical bills that may cause financial ruin.
That suggestion is conveyed to the employee populations he serves, along with other educational resources that include access to educational blog posts and on-site employee training. “We believe that having the ability to better access and afford care empowers members to become more engaged consumers in their health care journey,” he says, “which leads to better health and cost outcomes through earlier care, prescription adherence and care-selection at more optimal providers.”
Paytient’s business model is different from CareCredit, a division of publicly traded Synchrony Financial whose pioneering provider-originated credit card comes with a catch. “Most of that revenue is coming when people don’t pay off their service or treatment in that promotional period, and they get hit with a 28% interest rate,” he says. “They’re clearly creating value for providers and unlocking demand that otherwise wouldn’t occur.” Paytient card holders pick a payment plan that works best for their budget through payroll deduction or a bank account link. In addition to hospitalizations, which are the largest single transactions, these credit cards are used for other smaller medical bills, as well as mental health, dental, vision, pharmacy and even veterinary expenses. And, in fact, those ancillary costs are showing up more than Whorley expected. “When I came into this, I thought that we would see large, infrequent transactions,” he reports. “In reality, what we see are monthly or very frequent $100 or $200 transactions at the emergency room where they’re asking for a $200 copay. It is also a mental health visit that’s not covered by insurance. It’s copays at the pharmacy, which accounts for nearly 30% of all our transactions.”
Rob Gelb Elevating the concept so that it’s more collaborative and less adversarial can not only replace opaque hospital pricing with fair and transparent rates, but also please multiple stakeholders and stay out of court. Most RBP companies adopt an aggressive approach to cutting claims, cautions Rob Gelb, CEO of Vālenz, whose transparent solution helps ensure that medical-service charges are appropriate and accurate along the road to finding optimal care.
“They don’t really communicate with the provider until the explanation-of-benefits statement goes out and the provider gets a surprise,” he opines. “We actually try to speak to the majority of our providers, particularly on larger-dollar claims, and say, ‘here’s the methodology. Here’s what we’re going to recommend for reimbursement.’ We’re already beginning a process of open dialogue and collaboration with the provider versus really just sending it out and saying, ‘hey, take this reimbursement, or else.’” His company’s next-generation version of RBP features a methodology that transcends the Medicare multiple in setting up what he calls “defensible reimbursement recommendations.” Two usual and customary datasets are used alongside Medicare, as well as both scrubbed customer claims and acquired paid claims data in jurisdictions that Vālenz may not have any specific personal repricing experience in. “Our algorithm inside that system will then really try and contract a payer all three datasets to make a recommendation for reimbursement,” Gelb adds. For claims with up to $2,000 in billed charges, an aggressive recommendation is made for reimbursement on all bills that are non-contracted. If the provider pushes back and wants to start an appeals process, then Vālenz will take care of the additional dollars and go at risk.
presence of a concierge navigation solution that embeds and integrates with the network offering. “We also have noncontracted networks.”
POWER OF TECH SOLUTIONS There’s power in policies such as RBP, but perhaps nowhere is the path of least resistance to securing reasonable rates for health plan members on a myriad of hospital services easier to navigate than in the growing use of advanced technology. One such avenue is deep learning, a subset of artificial intelligence and machine learning, which is a broader category in the field of computer science.
What this does is remove 91% of the volume of claims out of the risk category of balance-bill friction, he explains, providing peace of mind to both health plan members and sponsors because the remaining 9% tend to be about 60% or 70% of the charges.
“In the end,” Gelb notes, “we’re measuring outcomes along three continuums: quality, advocacy and the total cost of the experience for the member. The other thing that we do is we balance our approach to reimbursement across all the parties: the payer, provider and patient. We make sure that everybody feels good about what the reimbursement recommendation looks like.” Quantros quality metrics also are loaded into Vālenz’s database and available to both health plan members and navigators. Since much of parent company Healthcare Bluebook’s data is weighted toward Medicare, Gelb says the quality scoring has a heavier tilt to CMS than it does to the commercial market. But the latter category is being fleshed out with the help of Turquoise Health, which is still building out its data set for quality scores that aren’t yet widely seen. “We’ve done the credentialing of the provider and the health system, and we’ve negotiated a contractual rate with them for services,” he says, also noting the
Edmundo Gonzalez The focus of this emerging technology, which is becoming an integral part of health care data analytics, is on processing massive amounts of information and spotting data patterns. By developing more reliable prediction models, the hope is that earlier intervention will help halt the progression of chronic and costly diseases as well as better anticipate high-cost surgeries. “Let’s say that our algorithms, based on all of the data we have access to, are saying that I’m at risk to end up in the ER
in six months,” explains Edmundo Gonzalez, CEO of Marpai Health, which uses deep learning to predict near-term health events, reduce chronic conditions and costly procedures. “The counter to that is preventative care,” he continues. “If I go to my doctor tomorrow and get on a maintenance drug that may be $50 a month, I may avert that hospitalization in the many, many thousands. In the case of surgeries, our job is to get in front of that event six months and educate that member that there’s options.” When it comes to measuring quality, Gonzalez cites two critically important benchmarks: the fewest number of hospital readmissions and number of times a procedure has been performed. While those areas are straightforward, there are others that represent varying shades of gray. For example, he says “you may have a tremendous orthopedic surgeon. He may just not be excellent in the knee or rotator cuff.” Therefore, the aim is to cherry pick those areas of expertise.
Where this mission gets tricky is that no one facility is the master of all medical care. Of the thousands of unique procedures at different facilities, he says the objective is to find ones with the best outcomes at a reasonable price. Bottom line, he explains: “You have to look at stuff by procedure.”
Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.
The same thinking applies to facilities. In predicting as many events as possible and getting out in front of them, Marpai Health’s job is to essentially educate members to use, say, Facility A vs. Facility B. But it’s not a black-and-white choice.
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IIA has two in-person events coming up soon.
The SIIA Spring Forum will be March 30th-April 1st at the JW Marriott Grande Lakes in Orlando, Florida.
The Spring Forum is expected to be the largest gathering of senior-level selfinsurance industry professionals for the first half of 2022. Industry expertise and perspectives will be shared through targeted and interactive educational sessions, group discussions, association task force reports and a unique “focus group” participation opportunity.
HOW ADVANCED AI ADVANCES THE HEALTH OF A COMPANY Marpai uses proprietary deep learning models to predict potential near term health events for health plan members. Marpai Care Guides intervene early to put members on the best care journey. This helps prevent and reduce costly claims. As an AI-powered TPA alternative, Marpai works to create healthier members and a healthier company bottom line.
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ENDEAVORS Price Transparency Developments – What You Need to Know in 60 Minutes
This will be combined with multiple networking functions along with a table-top exhibitor program to help you make important connections. New for this year, we have incorporated “business hours” during the program to make it convenient for attendees to schedule/participate in important meetings.
PROGRAM HIGHLIGHTS INCLUDE: Industry Focus Group – Live Audience Polling Get off to a fast and fun start this morning by offering your anonymous opinions on the hottest industry issues for 2022 and see aggregated audience results in real time via SIIA’s attendee polling technology. And since it’s an election year, we’ll also throw in some political questions to make it fun. Finally, we’ll also have the opportunity select which exhibitors should be given a five-minute live pitch opportunity during the hosted luncheon. Be sure to bring a fully-charged mobile device to this session.
Just one month before this event, SIIA will be holding an intensive, full-day educational program focused specifically on regulatory and business environment developments related to health care price transparency, including surprise medical billing. We are going to distil down eight hours of detailed content into a one-hour “key take-away” session to provide you with an executive summary of what senior self-insurance industry executives really need to know now. The panel is comprised of members of SIIA’s Price Transparency Committee.
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ENDEAVORS RBP Strategies and Considerations for TPAs SIIA’s TPA Task Force concluded its work last year by completing a detailed white paper discussing how third party administrators should consider reference based pricing arrangements. Members of the task force will present key findings/ recommendations included as part of the white paper and take audience questions. While the white paper is focused on TPAs, this session promises to be of interest to TPA business partners (stop-loss, brokers, etc.) as well.
Self-Insurance Claims & ERISA Compliance Classroom During this interactive session, attendees will be presented with various realworld scenarios triggering important legal compliance questions related to self-insured plan design, claims administration, and/or stop-loss reimbursement process…and then be requested to provide their anonymous opinions on the appropriate course of action via SIIA’s real-time polling technology. Expert analysis will be provided for each scenario along with commentary about audience polling results.
SIIA Drug Pricing Task Force Report – A Roadmap for Controlling Pharmacy Spend SIIA’s Drug Pricing Task Force has been working for nearly two years to develop a targeted list of recommendations on how self-insurance industry stakeholders can better control the rising cost of
pharmacy spend, including for specialty drug. This work has now been completed and representatives of the Task Force will present its final report.
Legislative/Regulatory Update SIIA’s government relations team will provide the latest legislative/regulatory updates at both the state and federal level affecting self-insured employers and their business partners.
SIIA’s Future Leaders Forum will be April 11-12th at The Westin Indianapolis in Indianapolis, Indiana.
The self-insurance industry has started to witness a significant generational change, with an increasing number of its long-time leaders transitioning into retirement. If you are a younger (under 40) self-insurance/captive insurance industry professional, this is a must-attend for you.
Developed by the SIIA Future Leaders Committee, this forum will feature educational content targeted for younger professionals with multiple networking opportunities to help you make important connections with those in your age group.
PROGRAM HIGHLIGHTS INCLUDE: Leveraging SIIA Involvement for Greater Industry Career Success What do many top executives in the self-insurance/captive insurance industry have in common? Most have been actively involved with SIIA for many years. This is not a coincidence. Though its initiatives related education, networking, solutions/ innovations and advocacy, the association is a particularly valuable resource for younger professionals who want to progress in their careers. This panel discussion will coach you up on how you can “work” SIIA in ways that will benefit you in both the short and longer term.
Self-Insurance/Captive Insurance 101 and How You Fit In The self-insurance/captive insurance industry “ecosystem” consists of multiple players. This session will provide an overview of who operates in this ecosystem (TPAs, stop-loss careers, captive managers, etc.) and their respective roles.
ENDEAVORS The Life Cycle of a Self-Insured Health Plan Claim As a follow-up to the previous session, our panel will lead the audience through the “life cycle” of a typical self-insured health plan claim. This fictional case study will highlight who “touches” the claims and what value they bring to the administrative, cost containment and/or reimbursement process.
Leadership Hacks — Smarter and Faster Ways to Make Your Mark Younger professionals have unique challenges in developing leadership capabilities, but there are also many leadership “hacks” available to help them successfully navigate a variety of work environments. Our featured speaker will talk about how age influences your leadership style and how to most efficiently refine, mold and improve this style for the benefit of your employer, and in turn, your own career advancement objectives.
Power 90 Networking
“We are thrilled to be holding our annual Forum created specifically for our age group in person this year! It's going to be a huge networking opportunity, over 50 people signed up just in the first three days. Our goal is to provide content that will help attendees advance their expertise and personal growth. This year, we're also going to provide information on how to take full advantage of the tools SIIA offers, such as marketing, education, and advocacy. We hope everyone can make it, we're excited to take advantage of seeing each other in person.” Cassie Bachman, Esq. ACI, Chair of SIIA Future Leaders Committee.
For more information on these events, including registration, sponsorship opportunities and more, visit www.siia.org.
One of the keys to becoming a successful future leader is to develop a professional network of other up and upcoming “A players” within the self-insurance industry. Get a head start on building such a network by participating in a structured, 90-minute networking session where you are assured to make multiple new connections. Cassie Bachman
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NEWS FROM SIIA MEMBERS 2022 MARCH 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 email@example.com. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org. If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and firstname.lastname@example.org. 54
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NEWS GOLD MEMBERS 6 DEGREES HEALTH WELCOMES ERIC WRIGHT AS VICE PRESIDENT OF BUSINESS DEVELOPMENT
Hillsboro, OR - 6 Degrees Health is pleased to announce that Eric Wright has joined the company as VP of Business Development. Eric will draw upon his extensive selffunding experience to be a passionate and driven ally in support and develop of our TPA partners.
“Eric’s tenure in the self-funded industry will be an immeasurable asset in supporting the growth of our TPA’s, their clients and partners. It is great to bring such experience and knowledge to 6 Degrees Health and we are sure our TPA partners will experience further success through Eric’s involvement.” -Heath Potter, Chief Growth Officer Eric brings over 25 years of self-funding experience, a passion for TPA’s, transparency, service and follow through. His experience includes executive leadership, sales, and an account management background. In addition, he has held several advisory or board leadership roles with the State of Oklahoma Health Plan (HealthChoice) as Vice Chairman, HCC Life, Mutual of
Omaha, Cigna (Emerging Markets), and the HighMark Advisory Council. As a representative to Third Party Administrators for 6 Degrees Health, Eric’s clients can expect to have a partner that will intensely listen to their needs and advise on solutions that will improve their business and help them to deliver cost savings to their clients. Having been on the TPA side for most of his career, Eric understands the full picture of what our TPA clients do every day from claims administration, customer service, eligibility management, medical management, pharmacy benefit management, and stop-loss reinsurance. Eric can be reached at deric. email@example.com
6 DEGREES HEALTH WELCOMES CHRIS POWERS AS VICE
PRESIDENT OF BUSINESS DEVELOPMENT
Hillsboro, OR - 6 Degrees Health is pleased to announce that Chris Powers, an industry veteran, has joined the company as a VP of Business Development.
“Chris brings a wealth of industry knowledge and experience to our team of Business Development professionals. We are excited to have him focus on driving new business for 6 Degrees Health.” - Heath Potter, Chief Growth Officer
You look out for them. We look out for you. 45+ years of stop loss expertise. Symetra Stop Loss protects your self-funded medical plan against large and catastrophic claims—so you can keep protecting your team. Learn more at symetra.com.
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Chris has years of experience in the employee benefits industry, providing employers with behavioral healthcare, disease management, and healthcare advocacy through their consultative partners. He has a deep passion for transparency in healthcare, both for employers and employees. He is an active member of the National Association of Health Underwriters. Previously, Chris worked for United Benefit Advisors (UBA) as the Director of Partner Relations. In that role, he aligned UBA Partner Firms with the programs and services that helped them support their clients and grow their firms.
Focused on Clients.
Dedicated to Results.
Chris joined 6 Degrees Health to help our consultant partners bring healthcare cost containment solutions to their clients by listening to and understanding their unique needs. Chris can be reached at firstname.lastname@example.org.
6 DEGREES HEALTH WELCOMES JODI HAMMER AS VICE PRESIDENT OF BUSINESS DEVELOPMENT
Hillsboro, OR - 6 Degrees Health is pleased to announce that Jodi Hammer, an industry veteran, has joined the company as a VP of Business Development. Jodi will focus on growth development for our Payment Integrity solutions for health plans, stop-loss carriers, and reinsurance. “Having known Jodi for years, I have gained immeasurable respect for her, like what she has earned from her clients, and across the whole industry. She is excellent at her craft and conducts herself with the highest level of integrity. It is exciting to have Jodi join 6 Degrees Health and now work on the same team.” - Heath Potter, Chief Growth Officer
Our Complex Claim Consulting Practice is committed to making your business better. We have a team of Clinicians and risk managers working to simplify your most complex claims
Complex Claims Medical Beneﬁts
Risk Management Pharmacy Analytics
WE LIVE SERVICE! Insurance • Risk Management • Surety Expertise
2100 Ross Ave. Suite 1200
Dallas, TX 75201 • 214.969.6100
© 2021 Lockton Companies. All rights reserved.
HCC Life Insurance Company operating as Tokio Marine HCC - Stop Loss Group
We Know... Risk We study it, research it, speak on it, share insights on it and pioneer new ways to measure it. With underwriters who have many years of experience as well as deep specialty and technical expertise, we’re proud to be acknowledged as experts in understanding risk. We continually search for fresh approaches, respond proactively to market changes, and bring new flexibility to our products. Our clients have been benefitting from our expertise for over 45 years. To be prepared for what tomorrow brings, contact us for all your medical stop loss, captive, Taft-Hartley and organ transplant needs.
Visit us online at tmhcc.com/life
Tokio Marine HCC - Stop Loss Group A member of the Tokio Marine HCC Group of Companies TMHCC1169- 12/2021
NEWS Jodi has been working to reduce healthcare costs and improve outcomes since 2008. Her early years were spent selling transplant network, cost containment, and transparency solutions. Most recently she has been selling enterprise-wide SaaS solutions to large health plans. Jodi has a strong understanding of both fully and self-insured health plans, as well as challenges regional health plans, stop-loss and reinsurance carriers, and TPAs continue to face. Recognized for her integrity and ability to build trustworthy relationships, Jodi will join 6 Degrees Health as VP of Business Development focused on Payment Integrity solutions for regional health plans and stop-loss carriers. Jodi can be reached at email@example.com. About 6 Degrees Health 6 Degrees Health is built to bring equity and fairness back into the healthcare reimbursement equation. Industry-leading MediVI technology supports our cost containment solutions with objective, transparent, and defensible data. 6 Degrees Health’s solutions include everything from provider market analyses, reasonable value claim reports, ad hoc claims negotiations, evergreening provider contracts, and referenced- based pricing. Our veteran cost containment team partners with health plans and their channel partners to deliver unparalleled cost containment results. Visit www.6degreeshealth.com
SILVER MEMBERS NOVA HEALTHCARE
URAC ACCREDITATION IN CASE MANAGEMENT
BUFFALO, NY– Nova Healthcare Administrators, Inc. (Nova) is proud to announce it has earned URAC accreditation for Case Management. URAC is the independent leader in promoting health care quality by setting high standards for clinical practice, consumer protections, performance measurement, operations infrastructure and risk management. By achieving this status, Nova demonstrates commitment to quality care, enhanced processes, patient safety and improved outcomes. Coupled with URAC accreditation in Health Utilization Management, receiving re-accreditation for Case Management reflects Nova’s adherence to rigorous clinical and operational standards, including excellence in care coordination, improved patient engagement, service access and utilization and transitions of care. Nova’s case management programs are a key component of our efforts to help clients manage their health care trend. “We are proud of this achievement and thrilled to have again earned URAC accreditation in Case Management,” said James Walleshauser, president of Nova.
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Heading to SIIA Spring Forum? See us in person in Orlando!
MARCH 30 - APRIL 1, 2022 | JW MARRIOTT, ORLANDO
firstname.lastname@example.org | 1.866.731.1571 | vbasoftware.com
NEWS “Nova’s continued dedication to upholding these standards in our services demonstrates our commitment to the highest level of accountability and quality in health care for our clients and their members. The result is improved health outcomes and optimized plan performance.”
“We applaud Nova on achieving URAC accreditation. With this distinction, Nova demonstrates excellence in quality health care delivery and their commitment to ensuring patient safety,” said URAC President and CEO Shawn Griffin, M.D.
including medical, dental, vision, COBRA, reimbursement account administration, and private-labeled solutions. Nova also offers awardwinning, in-house, integrated medical management programs. We are the stewards of our clients’ benefit plans, offering best-in-class partnerships, customized solutions, and personalized service. To learn more, visit www. novahealthcare.com.
Founded in 1982 and headquartered in Buffalo, NY, Nova is one of the largest third-party administrators of self-funded employee benefit programs in the nation, providing the health care solutions our clients need in the way they need them. And we go far beyond the basics. We are creative problem solvers who build custom solutions. Nova provides a unique, comprehensive array of services,
Founded in 1990 as a non-profit organization, URAC is the independent leader in promoting health care quality and patient safety through renowned accreditation programs. URAC develops its evidence-based standards in collaboration with a wide array of stakeholders and industry experts. The
Scalable Solutions for Self-Funded Employers We’re a leading third party administrator for self-funded employers of all sizes, in all industries. Driven by the unique needs of our employers and brokers, our proprietary technology systems enable us to administer cost-effective plan designs that match the needs of your organization. Full Suite of Solutions
In addition to claims and beneﬁts administration, we offer pharmacy beneﬁt management, health management and wellness programs, stop-loss insurance, and print and payment solutions. Seamless Integration
We offer a broader range of services compared with other TPAs and administer solutions that seamlessly integrate with your vendors. See What Pinnacle Can Do For You
866.930.PCMI Quotes@pinnacleTPA.com www.PinnacleTPA.com
NEWS company’s portfolio of accreditation and certification programs span the health care industry, addressing health care management and operations, pharmacies, telehealth, health plans, medical practices and more. URAC accreditation is a symbol of excellence for organizations to showcase their validated commitment to quality and accountability.
TO ALIGN WITH GROWTH
AND CLIENT DEMAND, PAYER
COMPASS EXPANDS MEMBER ADVOCACY AND MEDICAL
MANAGEMENT TEAMS: ANITA WALKER AND ROSIE FIELDS
PLANO, TX – Payer Compass, a leader in healthcare cost containment, announced the addition of two new team members – Anita Walker, VP of Member Services, and Rosie Fields, RN, CCM, Director of Clinical Services. They are welcomed additions in light of the organization’s continued growth and will provide valuable support to the company and leadership to their respective teams.
“We are pleased to welcome Anita and Rosie to our team and believe they will each bring a fresh perspective as Payer Compass continues the push for positive change in health plans and self64
funded insurance,” says Rick Ellsworth, Chief Operating Officer. “They both have had an exceptional career in healthcare and their industry expertise perfectly complements the background and talents of our team members.” Anita is leading the Member Advocacy Team to set a new industry standard in service for plan members through upfront provider reimbursement strategies and intelligent post-treatment billing resolution. Leveraging her firsthand knowledge of payers and providers, she is also an asset to solution development and enhancement that support the organization’s position in the self-funded marketplace as a pillar for compliance and cost control. Key solutions of focus for Anita and her team include Payer Compass’ comprehensive Reference Based Pricing solution, Innovate360, and CompassConnect, their enterprise transparency solution to address the No Surprises Act and Transparency in Coverage Rule. Rosie leads Payer Compass’ Medical Management operations and strategic program development for Pre-Certification, Utilization Review, and Case Management with the goal of optimizing patient experiences and clinical outcomes. She brings an accomplished and tenured career in Medical Management to the URAC-accredited team. Her impressive versatility in understanding and managing different plan types will add further value to the client and members served by the company’s overarching Care Management solution, CareAdviser. About Payer Compass Payer Compass is dedicated to restoring rationality to the cost of care. We focus squarely on tackling the most elusive problems in today’s healthcare landscape: spiraling costs and associated lack of price transparency. For self-insured organizations, our innovations and services are driving down the costs of healthcare claims reimbursement. And for health plans, we are minimizing overall spend on claims pricing, administration, and processing. By combining our next-gen technology — Visium™, a multi- faceted pricing platform — with an emphasis on client success, Payer Compass is helping your organization control the cost of care. Contact Ginger Barrientez, Director of Marketing at 469.215.2654, gbarrientez@ payercompass.com. and visit payercompass.com.
Vālenz ® Solutions Suite
Clinical & Member Advocacy
Validation, Integrity & Accuracy
Care Management Clinical Review Member Concierge Navigation
Reimbursement Reliance Payment Assurance Claim Transparency
Simplify the complexities of self-insurance Partner with Vālenz®. As a health data tech company with deep roots in member advocacy and a decades long commitment to the validity, integrity and assurance (VIA) of claims, Valenz simplifies the complex issues of health insurance. Through our data-rich Valenz ecosystem, we provide unrivaled transparency and solutions that improve cost, quality and outcomes for you and your members. By engaging early and often, we keep providers, payers and members informed and aligned for smarter, better, faster healthcare. To see how you can achieve significant savings and make your business strong, vigorous and healthy, visit valenzhealth.com or call (866) 762-4455.
23048 N 15th Ave., Phoenix, AZ 85027 • (866) 762-4455 • valenzhealth.com Proud to be a Diamond Member
NEWS MARPAI AIMS TO CUT SKYROCKETING HEALTH PLAN COSTS IN HALF WITH LAUNCH OF SUITE OF AI-POWERED SERVICES
Fueled by a year of innovation and development, Marpai brings a suite of techenabled services for self-insured health plans to cut employer costs in half while improving member health
of members.” Through extensive development work at Marpai Labs over the past year, Marpai’s R&D center, Marpai has introduced several techenabled services: •
Marpai Cares: proprietary deep learning algorithms predict potential near-term health events related to chronic illness and major procedures to activate early clinical intervention to prevent and reduce costly claims for members.
Gaps in Care: text and email reminders help members maintain annual exams, vaccinations, and screenings.
MyMarpai SMART App: lets members show their digital health ID card, view spending and deductibles, review
NEW YORK— Marpai, Inc., (“Marpai”) (Nasdaq: MRAI), a deep learning technology company transforming the $22B Third-Party Administrator (TPA) market supporting self-funded employer health plans, has launched AI-powered services aimed at reducing costly health claims, lowering reinsurance premiums and elevating care quality for plan members. Employer health plans cover 156 million Americans, and 64 percent of these plans are self-funded plans representing over $1T in health care claims annually. Marpai entered the TPA market through acquisition in April 2021 to bring the power of deep learning, the most advanced AI, to employer health plans to improve health outcomes and radically reduce plan costs. According to Marpai CEO Edmundo Gonzalez, “Our ambition is use the most advanced AI to cut employer health plan costs in half while improving the health
claims, see health benefits, use telehealth and find a provider with just a click. • Empowering Member Engagement: ongoing digital content and experiences improve member health literacy and benefits utilization. • Premium Health Partners: technology integrations with
Being Powerful. Being Human. Being PharmPix.
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Discover why PharmPix has been revolutionizing PBM since 2009. Schedule a personalized demo at www.pharmpix.com or call 404-566-2000.
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NEWS innovative health partners bringing the next generation care solutions.
“We’ve built another level of value beyond our world-class TPA services to enable employers and health plan members to get much more from their health plan and spend much less on health care over time,” says Marpai CEO Edmundo Gonzalez. “Traditional cost containment strategies are not enough to stem the tide of rising costs. We need new tools, particularly predictive technologies, to significantly change the cost curve and outcomes.” Self-insured employer health plans require TPAs for support. As health plan costs continue to climb (estimated to increase over 5 percent in 2022), employers are seeking innovative alternatives to curb these costs. “What Marpai is doing is revolutionary in the self-funded market,” says Ed Ligonde, Executive Vice President of the Nielsen Benefits Group, an employee benefits consulting firm based in California. Recently recognized as Broker of the Year by
BenefitsPro, Ligonde adds “Most TPAs just focus on paying claims. Marpai is organized around the member and brings the advanced technology this sector needs to improve member health and reduce claims costs as a result. AI with a member-centric approach is a real game changer.” Marnie Zimmerman, Healthcare Benefits Consultant at Ward-Kraft, Inc., a Marpai client, adds, “Our CEO wants the best for our employees. Marpai brings a solution that connects our health plan members with top-quality healthcare providers and it has made a real difference in the lives of many of our employees and their families. Marpai is doing a lot of things aimed at improving health without increasing costs which is what we all want.”
Unlock the Power of Stop-Loss Automation Ringmaster Technologies is a cloud-based, healthcare software provider. We build our products exclusively to simplify, enhance and drastically reduce the complexity and time necessary for Stop-Loss quoting, contracting, and policy administration. We know the value of client relationships and are committed to helping you make them even stronger. Our cloud-based Stop-Loss software products include: Deliver productivity and strategic gains to your Stop-Loss marketing and procurement teams.
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“Our aspirational vision of cutting health plan costs in half is only achievable with the power of advanced AI,” says CEO Gonzalez, “Our tech capabilities position us to rapidly grow our customer base and strengthen our ability to retain longterm customers.” For more information on Marpai, visit www.marpaihealth.com. About Marpai, Inc. Marpai, Inc. (Nasdaq: MRAI) is a technology company bringing AI-powered health plan services to employers providing health benefits to employees. Primarily competing within the $22B TPA (Third Party Administrator) sector serving selffunded health plans, representing over $1T in annual health care claims, Marpai’s SMART services focus on reducing claims costs, lowering reinsurance premiums, and elevating care quality for plan members. Marpai’s proprietary deep learning algorithms predict potential near-term health events related to chronic illness and major procedures to help prevent costly claims and support the best outcomes. Operating nationwide, Marpai serves over 60,000 members, offers access to provider networks including Aetna and Cigna, and partners with brokers and consultants. For more information, visit www.marpaihealth.com.
Do you aspire to be a published author? We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world. The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since 1984. Articles or guideline inquires can be submitted to Editor Gretchen Grote at ggrote@ sipconline.net The Self-Insurer also has advertising opportunties available. Please contact Shane Byars at sbyars@ sipconline.net for advertising information.
Corporate Solutions You want unparalleled customer service. Employers need the right stop loss coverage. At Swiss Re Corporate Solutions, we deliver both. We combine cutting-edge risk knowledge with tech-driven solutions and a commitment to put our customers first. We make it easy to do business with us and relentlessly go above and beyond to make stop loss simpler, smarter, faster and better. We’re addressing industry inefficiencies and customer pain points, moving the industry forward – rethinking employer stop loss coverage with you in mind. corporatesolutions.swissre.com/esl
Employer Stop Loss: Limit Health Care Exposure. Advancing Self-funding Together.
Insurance products underwritten by Westport Insurance Corporations and North American Specialty Insurance Company. © Swiss Re 2020. All rights reserved.
SELF INSURANCE INSTITUTE OF AMERICA, INC. 2022 BOARD OF DIRECTORS
CHAIRWOMAN OF THE BOARD*
Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston Salem, NC
Laura Hirsch Co-CEO Aither Health Carrollton, TX
Deborah Hodges President & CEO Health Plans, Inc. Westborough, MA
Elizabeth Midtlien Vice President, Emerging Markets AmeriHealth Administrators, Inc. Bloomington, MN
TREASURER AND CORPORATE SECRETARY*
John Capasso President & CEO Captive Planning Associates, LLC Marlton, NJ
Lisa Moody Board of Directors Chair Renalogic Phoenix, AZ
SIEF BOARD OF DIRECTORS Nigel Wallbank SIEF Chairman Dani Kimlinger, PhD, MHA, SPHR, SHRM-SCP, SIEF President
DIRECTORS Freda H. Bacon Les Boughner Alex Giordano Virginia Johnson
Shaun L. Peterson VP, Stop Loss Voya Financial Minneapolis, MN
Thomas R. Belding President Professional Reinsurance Mktg. Svcs. Edmond, OK Amy Gasbarro Chief Operating Officer Vālenz Phoenix, AZ
* Also serves as Director Please forward any changes to your contact information to Amy Troiano at firstname.lastname@example.org.
SIIA NEW MEMBERS MARCH 2022 REGULAR CORPORATE MEMBERS
Mari Mescolotto Chief Marketing Officer AMC Health New York, NY
Simon Boehme COO BillingNav LLC Atlanta, GA
Tina Wheeler Director, Customer Success Deerhold, Ltd. Lexington, MA
Mike Orth Founder & Principal LaunchPad Health St. Paul, MN
Kim Daigle Administrator Maine Credit Union League Insurance Trust Westbrook, ME
Jennifer Berman CEO MZQ Consulting Pikesville, MD
Donna Williams myRx Benefits Product Manager Prescryptive Health, Inc. Redmond, WA
Jeffrey Beane Executive of Sales SwiftMD Exton, PA
Sarah Arnold Account Manager Valentine Insurance Services Johnson City, TN
Jason Hager Chief Executive Officer WeCare Wilmington, DE
SILVER CORPORATE MEMBERS Raghavendra Pawar Director CoverSelf, Inc. County of Sussex, DE
Christie LaGrange Director of TPA & Payer Partnerships Healthcare Bluebook Brentwood, TN
Trina Schaetz Senior Digital Marketing Specialist Milliman Brookfield, WI
Gregory Pavlic National VP of Sales/Account Management UHC Stop Loss UnitedHealthcare LaCrosse, WI
Price Comparison Machine Readable Files Provider Directories
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Qualified Payment Amounts Arbitration Defense Advanced Explanation of Benefits
Pay for care, with care.
Stability for those balancing risk and reward.
Those who self-fund a health plan seek autonomy and control over their benefits program and costs. It can be rewarding, but it does come with risk. Stop Loss protection from HM Insurance Group works to mitigate that risk for self-funded employers should high-dollar claims arise – delivering steadiness to the performance and confidence in the outcome. Find more on hmig.com.
CONNECT WITH ONE OF OUR EXPERTS ON OUR REINSURANCE OPTIONS: Employer Stop Loss: Traditional Protection • Small Group Solutions • Coverage Over Reference Based Pricing Managed Care Reinsurance: Provider Excess Loss • Health Plan Reinsurance
In all states except New York, coverage may be underwritten by HM Life Insurance Company, Pittsburgh, PA, or Highmark Casualty Insurance Company, Pittsburgh, PA. In New York, coverage is underwritten by HM Life Insurance Company of New York, New York, NY. The coverage or service requested may not be available in all states and is subject to individual state approval. MTG-3355 (12/20)