Friday, September 30, 2011

Cavalcade of Risk #141: Call for submissions

Jay Norris hosts next week's CavRisk. Entries are due by Monday (the 3rd).

NB: We're now using this submission tool: The BC WorkAround

Once there, you'll be asked to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post ("Remarks")

At the bottom of the form, you'll see a drop-down menu; simply select "Cavalcade of Risk" then press "Submit" and you're good to go.

And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).


Thursday, September 29, 2011

Seniors Need to Pay Their Fare Share

A few weeks ago President Obama proposed a new tax on seniors that use THEIR OWN MONEY to purchase what he considers a rich Medigap plans. If you have a "first dollar" Medicare supplement plan, such as Medigap plan F, Obama believes you should pay more than anyone else for Medicare Part B.

On September 19, 2011, as part of his deficit reduction proposal, President Obama recommended charging a 30 percent surcharge on Part B premiums to new beneficiaries that purchase Medigap policies with “near firstdollar” coverage, beginning in 2017

I don't know about you but that doesn't sit well with me.Medicare cuts

The Medicare Trust Fund Lie

Where does he think he has the right to tell me how to spend MY money? After all, they took money from us for years to pay for Medicare. Money that was supposed to be safely stored in a trust fund.

Only recently did Washington finally admit there is no trust fund, it was all a lie. They spent almost every dime we "invested" and now they want more.

I don't think so.

More Rocket Surgeon Ideas from Washington

Some of the other big ideas from DC include:

bar Medigap policies from paying the first $550 in cost-sharing liability and limit coverage to 50 percent of the next $4,950 before the plan could cover 100 percent of beneficiaries’ out-of-pocket costs.

CBO estimates this policy would achieve $53.4 billion in savings over 10 years, if implemented in 2013.

An alternate approach, described by CBO in its 2008 report Budget Options, Volume 1: Health Care, and would impose a 5 percent excise tax on all Medigap insurers

Let's think about this a moment.

If WE pay more out of pocket that will save the GOVERNMENT money.

Apparently they believe we won't go to the doctor when we are sick if we have to pay for it.

That's like saying I need new brakes on my car but I won't get them fixed because my car insurance won't pay for them.

Their second proposal is just as goofy. If the government places a 5% surcharge on Medigap carriers guess who pays that tax?

The people who buy the policies.

We believe that Medigap plan F is a good plan but there are better VALUES to be found in plan G and plan N.

We also believe Washington has no right to tell us what we can and cannot buy and how we should spend OUR money when it comes to health care and health insurance.

Medigap F Over the Top

Medigap plan F is quite popular in Georgia, but is it a good value? Not in my opinion. Plan F is one of the highest cost Medicare supplement plans and in most cases is way overpriced.

Recently I was asked to compare an existing plan F against other carriers. This individual had a BCBSGA Medigap plan F, a very solid and competitive carrier. His current rate was $10 less than my best rate for the same plan.

But the story doesn't stop there.

BCBSGA uses a community rating system and will be increasing everyone's rates in January, 2012.

The same is true for USAA and AARP. They will be increasing rates for their policyholder in January as well. Even if you bought from them in October of 2011 your rates will increase in January.

What fun is that?

At this point we don't know how much the rates will change but they will go up.

If he bought the same plan F now (from a different carrier) his rate would hold for 12 months.

While we can't calculate the savings now for plan F vs. his new rate, I can tell him with certainty that enrolling in plan G will save him more than $300 per year vs. his current plan. Also, some Medigap carriers do not offer a plan G so they are effectively saying this is what we offer, take it or leave it.

Medigap plan F is the most popular so many carriers will price that product competitively on new business but will not be as aggressive on the value oriented plans such as G.

The spread will become more pronounced over the years as Medicare supplement plan F usually has higher rate increases than the other plans. So over time, plan F becomes increasingly more expensive while the other plans deliver more value.

Medigap plan F is a ripoff that is heavily promoted by carriers and agents that seek to take advantage of seniors.

If you have plan F, especially with a carrier such as AARP, Blue Cross, or USAA you should compare Medigap rates now and lock in a lower rate for 12 down the drain

Unless of course you just like paying more . . .

When you pay more you don't get more, it simply means you paid too much. That's just like pouring money down the drain.

Kermie says: It's Health Wonk Review Time!

Joe Colucci, of the New America Foundation blog, hosts this week's Muppet-inspired collection of wonky posts. So hop to it!

Wednesday, September 28, 2011

Welcoming 5772

As we enter a New Year, our thoughts turn to new beginnings, new possibilities, new hopes.

May you be inscribed for a blessing in the Book of Life.

L'Shannah Tovah T'kateyvu.

HHS Powergrab: 1st Amendment be darned

Cato's Michael Cannon reports on the latest shenanigans from HHS Secretary Shecantbeserious:

"The guidelines evidently require all communications to be approved by the Assistant Secretary for Public Affairs. Also: no off-the-record communications."

Hey Kathy: this word "transparency." I do not think it means what you think it means.

Baby Joseph Update: Sad (but not unexpected) news

Baby Joseph, whose story captured our hearts (and enraged our sense of fairness), passed away "Tuesday night in the comfort of his own home in Windsor, Ontario."

There really wasn't a realistic chance for long-term survival, but that was never the end-goal here. Rather, it was to grant him the chance to die with dignity and grace under the loving care of his parents.

Rest in peace, Baby Joseph.

Weird: IBD gets one wrong

Weird: IBD gets one wrong

"Despite ObamaCare, Costs Continue To Soar"

Reads the headline.

But it should read:

"Because of ObamaCare, Costs Continue To Soar"

As we've documented again, and again, and again, Obamneycare© is directly responsible for the recent increases in health insurance costs.

Of course, for its proponents, this is a feature, not a bug:

"If you get a job for 40 hours a week, you're going to pay more for your health insurance than if you don't get a job."


Lexis-Nexis Top 50 nominations

InsureBlog is once again nominated for the Lexis-Nexis Top 50 Insurance Law blogs, and we would really appreciate your support. . Would you please pop over (just click here) and leave a comment in support of us. You may need to register (it's easy and free), and please make sure to mention InsureBlog.


Tuesday, September 27, 2011

This Sceptered Isle - Part CLXXIII

Last week the UK announced that it will scrap its 9-year-old Information Technology (IT) project intended to digitize all National Health Service patient records and link all parts of the enormous NHS together.

The reason? According to Britain’s department of health, the project “has not and cannot deliver to its original intent”.

What has this project cost so far? About $6.4 billion British pounds, or about $10 billion US dollars. In response to charges that this money was wasted, NHS indignantly responded that “around two thirds” has resulted in “substantial achievements.” Well, whatever those achievements may be, that response is a clear admission that the other one-third was, indeed wasted. That one-third waste is the equivalent of more than $3 billion US dollars.

Perhaps more important is the global impact on thinking about health IT. For example US policymakers hope that IT will save scads, tons, bundles, oodles of money in the delivery of medical care. That would make medical care more effective and less costly, it would make Americans healthier, make us live longer, and make all our children handsome and above average.

Perhaps now that hope needs to be re-examined. Hope, you see, is necessary when there is no evidence. In the UK contrary evidence has been accumulating.

Disabled Economy?

From time to time, we note trends in various lines of insurance, and a recent email from the Council for Disability Awareness has information from the 2011 Long-Term Disability Claims Review.

Disability insurance replaces lost income in the event of an injury or (usually long-term) illness. It's available in both group and individual flavors.

I found these results particularly noteworthy:

1) Over half 50% of those carriers which participated "reported increased claim incidence, and most suggested the increase was impacted by the recession."

That conclusion's not as far-fetched as it may sound: these numbers track pretty well with previous recessions.

2) The number of folks covered by disability insurance actually declined, and again the economy was cited as the primary factor.

This also makes sense: if you're out of work, you don't need (and may not be able to afford) disability insurance.

3) On the other hand, applications for Social Security Disability benefits increased by almost 3 million people in '10, "the most ever."

That's the "good news." The bad news is that the percentage of these applications that were actually approved by Social Security remained pretty much "near its 25-year low."

There's much more in the report, including this interesting graphic:

Click here for the full report.

[Hat Tip: Barry Lundquist]

Meanwhile, back in the Lab (LabCorp, that is)

If you're a United HealthCare insured and you've had any lab work done the past few years, then you're probably familiar with LabCorp. That's because they're (apparently) the largest such labs in the market, and they (again, apparently) had quite the cozy relationship with UHC.

Maybe a little too cozy for some: Andrew Baker (formerly of Unilab) has filed a suit against LabCorp, alleging a rather massive fraud at the expense of Medicare and its beneficiaries (not to mention taxpayers). In brief, LabCorp is accused of charging Medicare much more than it charged United HealthCare, which is also accused of pressuring its network doc's to use LabCorp exclusively.

I was offered, and gladly accepted, the opportunity to interview Mr Baker. Here's that interview, as well as some observations:

InsureBlog: Thanks for agreeing to speak with us, Mr Baker. Could you tell us a little about yourself, and why you brought this lawsuit?

Andrew Baker: Of course. I was President of MedPath, which was owned by Corning Glassworks. That was spun off, and I ended up buying the lab, which became Unilab. Eventually, I sold the lab to a private equity firm, which then re-sold it a short time later at a much greater price. I was a bit curious about the difference because, as far as I could tell, the market itself hadn't changed dramatically in such a short time, and I didn't understand how the value could have increased so quickly and so greatly.

As it turns out, the lab had increased its use of "pull-through" business, which I had objected to during my tenure there. This is the practice of enticing business through deep discounts and kickbacks, and I was, and continue to be, an opponent of it.

After speaking with several law firms, I decided to press forward, because it's wrong and anti-competitive to small business. as well as costly to Medicare.

IB: Your fact sheet accuses UHC of threatening to kick providers out of their network if they didn’t play ball. This seems unlikely. What proof can you offer that this occurred?

AB: We have plenty of documentation to back that up. Doctors were not happy to have their livelihood threatened, as would be the case if they were kicked out of UHC's network.

IB: The Stark Law has some pretty severe restrictions regarding this kind of activity. Why would providers risk their own licenses (insurance notwithstanding) in such a scheme?

AB: That really applies to providers steering patients to vendors in which the doctors have an ownership stake, which was not the case here. In fact, this was sort of a reverse-Stark situation, in that doctors who refused to participate could end up losing, but were actually paid nothing for the referrals.

IB: In reviewing the facts, it’s clear that Medicare was not defrauded in the generally understood meaning of the term. If LabCorp had not discounted their billed charges to UHC, Medicare would have paid the exact same amount. So who got hurt here?

AB: Medicare could have been paying less versus the capitated (insured) plans. The law says they can't charge Medicare and insurers different amounts, and yet they did, and so Medicare, and thus the taxpayer, ended up spending more than necessary [ed: here's where Mr Baker and I really part company; I'll explain why in a moment].

IB: The fact sheet and legal briefs refer to UHC’s fully insured business. Was their ASO line also involved? What did the TPA’s and plan sponsors think of this arrangement?

AB: Yes, I believe that was the case, although it wasn't consistent along all the lines. That is, some plans got the severely discounted rate, and others didn't.

IB: It appears that the folks who most benefited from this arrangement were UHC’s insureds, who will now have to pay higher costs. Is that right?

AB: Yes, that seems to be the case. But why should UHC benefit at Medicare's expense?

IB: What relief are you actually seeking here? How much do you think you’ll net from this lawsuit?

AB: I want the rules to change so that Medicare gets the same rates as UHC and others, or "Most Favored Nation" status, and I want the existing rules enforced so that this pull-through activity comes to an end.

As to what my share of any settlement might be, I really have no idea. Frankly, it's not something I necessarily count on; I have other business and income. And, of course, being in England now, half would go to taxes anyway. I do plan to donate at least a portion of any proceeds to charity.

IB: Thanks, Mr Baker, for your time and candor, and best of luck with your efforts.

I'd like to thank Co-Blogger Kelley and FoIB Nate for their help in formulating the questions and reviewing the final interview, and to Ania Kapla of Hinton Communications for making it happen.

Now, let's cast a more critical eye on this lawsuit, shall we?

Before we start, I do want to mention that I had asked Mr Baker about his standing to bring the lawsuit. He demurred (correctly) to his attorneys, who confirmed that this is a qui tam (aka "whistleblower") lawsuit, so standing is not an issue here.

Based on the facts we've been given (and which I will happily forward to interested readers), it seems pretty clear that LabCorp engaged in fraud based on Medicare's definition of fraud.

Isn't that nit-picking, you may ask?

No, it's not, and here's why: the general legal definition of fraud is "a false representation of a matter of fact ... by false or misleading allegations, or by concealment of what should have been disclosed — that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury."

Medicare fraud, though, is really more analogous to "breaking our rules." As Kelley explains:

"We would not consider this fraud since the labs billed Medicare the correct fee and collected the correct fee. However, the government states this is fraud because the lab charged Medicare more than they charged the other lab. In the business world, this is called giving discounts for volume."

The key is that "if LabCorp had not discounted their billed charges, Medicare would have still paid EXACTLY the same amount. No more or no less money was paid by the Federal Government to LabCorp than to any other labs for the same service."

As to Mr Baker's assertion that this was a sort of "reverse-Stark" scenario, in that doc's weren't remunerated for referrals, but punished for the lack of them, well, that doesn't hold water, either. As Kelley points out, he's "technically incorrect because the physician would benefit financially by keeping his United Healthcare patients, so the Stark Law could be applied in this case. The Stark Law is written such that it implies any type of compensation, be it pens and pads, or monies received from "funneled patients."

Mr Baker also avers that "the law says they can't charge Medicare and insurers different amounts, and yet they did," which serves as the crux of his Medicare fraud argument.

Kelley expands on this point:

"The law states that all patients must be charged the same amount, without differentiation based on any type of preferred status: i.e. physician courtesy discounts, discounts to people without insurance, etc. It is not that LabCorp charged a different amount, it is that they accepted a reimbursement lower than the Medicare Fee Schedule. Thus, the lawsuit stems not from the charges but the reimbursement accepted."

So who was hurt here?

Not Medicare or its beneficiaries or the taxpayer. Not United HealthCare's insureds, who benefited from lower health care costs (hey, aren't we supposed to want that?). It seems to me that the only folks who were really hurt by this activity - and I'm in no way minimizing their loss - would be the smaller labs who couldn't compete. And that's not a little thing: absent a level playing field, free markets founder.

Still, I'm having a very difficult time casting LabCorp as "bad guys" here. If anyone fits that role, it's Medicare and HHS Secretary Shecantbeserious. As we saw just two weeks ago, it's darned near impossible to get that agency to actually police its providers. Of course, it's not their money, so no harm no foul.


Grand Rounds is up!

Doc Zubin hosts this week's humor-themed collection of great med-blog posts. Careful of your funny bone!

Monday, September 26, 2011

On The Record (Yours, that is)

Speaking of passing the bill to see what's in it, HHS Secretary Shecantbeserious gets to see what's in your medical records:

"(T)he federal government is demanding insurance companies submit detailed health care information about their patients"

And, of course, we're all confident that these records will be secured in a HIPAA-compliant manner and would never be used by, oh, Death Panels.

As Rep. Huelskamp points out, the reality is less, um, confidence-boosting. For example:

"(T)the HHS contractor who lost a laptop containing medical information about nearly 50,000 Medicare beneficiaries."

Of course, when such things happen in the private sector, there is legal recourse via the courts. But how do you sue the Fed's?

Well, it's just data, so no worries, right?


Friday, September 23, 2011

UARS Update: Are you covered?

As we watch (not without trepidation) the descent of the UARS satellite, it's becoming increasingly likely that it will land in an American backyard or, worse, living room.

So, is that a covered exposure?

It's not an Act of War or G-d, but it's not your typical hail- or windstorm, either. So, as with most things P&C, I turned to FoIB (and P&C Guru), Bill M.

With the usual caveats (including "read your policy!") Bill's "reasonably certain they'd pay for that."

So now you know.

CLASS Dismissed

We get results:

"The Obama administration is reassigning the workers in the office that was developing the Community Living Assistance Services and Supports (CLASS) Act long term care benefits plan."

"Reassigning," hunh?

Sounds innocuous enough, right?


"[T]he office was being “reduced.”

I bet.

Never fear, though, HHS Secretary Shecantbeserious' spokescritter assures us that "the office is not closing and that HHS is continuing its analysis of the CLASS Act program."


Perhaps we can save Ms Shecantbeserious (and the taxpayers) some time and money:

"[A] plan that's guaranteed issue, with (ostensibly) no waiting or elimination period and "unlimited" benefits is not exactly a candidate for "most stable rates." In fact, the only real "certainty" is that rates will increase, perhaps quickly and dramatically, as those least able to find real long term care insurance (LTCi) flock to the government plan."

On Balance Billing

Bob recently posted about the act of balance billing by providers.

While I would never question Bob’s expertise in the field of insurance, I would like to clarify some points about balance billing. To begin, we need to understand how we have the health care payment system that is currently in place. The insurance structure that exists today came about during World War II. At the time, there was a wage freeze on American business, so in order to attract new employees, the benefit of paying for the employee’s health insurance was introduced. As employer-sponsored health insurance become more popular, the revenue cycle of medical care changed. Instead of the patient paying for the entire service at the time of treatment, the patient would pay a small amount of the medical bill and the insurance would pay the rest. Then patients began to ask the providers to submit the bill prior to them paying. The patients were tired of doing the paperwork to be reimbursed by the insurance company. (I remember sitting at my dining room table filling in my Champus forms for reimbursement for my daughter’s treatment.) The providers agreed, which created an entire medical billing industry. Then suddenly there were no monies due at time of service, or a nominal charge of $10.00, and the patient agreed to pay the provider whatever the insurance company stated was their responsibility. These changes dramatically affected how Americans viewed health care. First, by not paying the premium, they no longer had the knowledge of the cost of premiums. Secondly, by not paying for the medical care at the time of service, they no longer had the knowledge of the cost of health care.

From this system, we now have several terms: co-pay, deductibles, out-of-pocket and co-insurance. All of these terms refer to monies owed by the patient to the provider under the insurance contract system. Co-pays are the monies paid by the patient at the time of service. The other types of monies are determined after the claim has been submitted to the carrier as the patients responsibility. These are legal monies owed to the provider by the patient.

Balance billing is not legal. Balance billing is the act by the provider of billing the patient the write off amount or the negotiated reduction between what the provider bills and what the insurance company pays. When a provider signs a contract with an insurance company, they are accepting the negotiated fee payment for the opportunity of having more patients directed to him by the insurance company. In this way the provider will make up in quantity the monies lost between the charges and the payments. This sounded like a great idea to physicians and they signed on by the bucketload. What happened was that the physicians set their charges based on the financial needs of the business and were getting paid 70% of that charge. The physicians were suddenly writing off 30% of each visit charge and finding that the increased number of patients were not bringing in the needed revenue. So what was a physician to do? The idea of balance billing was created. The reasoning was that the money was owed the provider since it was part of the original charge and since the insurance will not pay, then the patient must be obligated. However, the provider signed a contract with the insurance company that they would not seek the difference from the patient.

Non-participating (non-par) providers do not practice balance billing, as there is no contractual agreement for payment, as opposed to participating providers who do sign a contract. A non-par provider is free to charge the patient the entire charge without discounts. Additionally, there are no co-pays, deductibles, co-insurances or out-of-pocket expenses with a non-par provider. A non-par provider is one that does not have a signed contract with your insurance company, and as such the contract for payment for services rendered is strictly between you and the provider. However, you still can't negotiate prices with this non-par provider if the provider has a contract with Medicare; as a provider's contract with Medicare stipulates that the provider will treat all patients equal in regards to payment, whether they are a Medicare patient or not.

Many times patients feel that the provider is balance billing because they are receiving a bill after they already paid at time of service. The provider is actually billing the patient the difference between what the insurance paid of the negotiated rate and what is still owed. This is not balance billing, as the insurance company has determined that the patient still owes the monies, not the provider.

Thursday, September 22, 2011

Intriguing Employer Tricks

Regular readers know that we're big fans of Consumer Driven Health Care (CDHC). When consumers (insureds) have "skin in the game," they're more likely to be careful health care shoppers. After all, if it's their cash at stake, there's an incentive to become actively engaged in the process. The fly in this particular ointment has always been a lack of transparency in the actual cost of care.

When we use the buzz-word "transparency," we generally turn to the McDonald's model; that is, when I walk into a Ronnie Mac's, I can look up and see exactly what my fries and Diet Coke will cost. This isn't always applicable to health care, especially when it's an emergency, but certainly for chronic illnesses or elective procedures, it should be easy to find the cost of a given service (of course, this wouldn't take into account potential complications, but it's a starting point nonetheless).

One major benefit of this model is that cost-conscious health care consumption can have a positive effect on the cost of delivery. If providers have to compete not just on outcomes but also price, then it's a win-win for consumers.

And that's just what Prodigy Health (a health services holding company in Buffalo, NY) has decided to do with its group health benefits. Like many (most?) employers that offer (and subsidize) group health insurance, Prodigy looked around for some way to rein in skyrocketing costs. They found the answer at the drive-thru:

"Before the new program, workers' incentive to shop around was limited because they had no idea — or any easy way to find out — that prices for many types of medical treatments varied widely."

The "new program" is elegant in its simplicity: the company sets the price they'll pay for a given procedure, and then employees (or their covered dependents) call in for a list of local providers who meet that price-point. They can also opt for another provider, but would then be responsible for the cost difference.

And it's not just a wing-thing, either: on the other coast, Safeway Foods has a similar program in place.

By shifting not just the cost, but the responsibility for health care back to the insured, employers are accomplishing several things: first, of course, is a potential cost savings. But beyond that, it's a signal to folks that we need to be more actively engaged consumers - who goes and buys a car without checking the price? Look for more of this to take hold as tech and prices begin to catch up.

Shameless Self-Promotion Bleg

We've had the honor of being a Lexis-Nexis Top Insurance Law Blog since that appellation has been in existence. And we're very proud to announce that we've been nominated as a candidate for the LexisNexis Top 50 Insurance Law Blogs of 2011.

The folks at L-N are inviting folks to comment on our worthiness, and we would certainly appreciate our readers letting Lexis-Nexis know why they find InsureBlog worthy of remaining in that Top 50.

To do that, you'll need to leave a comment; it's easy and only takes a minute. Just click here to get started. If you don't already have an account there, it's easy (and free!) to sign up.

Once you're there, please leave your comment (please mention InsureBlog by name) and you're good to go.

Thanks again for all your support - it means a lot to us!

Wednesday, September 21, 2011

From the Spindle: Wednesday Link Potpourri

Here are some interesting tidbits that, for one reason or another, never made it to full-post status:

First up, healthcare in England (Olde and New).

"A leading teaching hospital faces closure as a result of the financial crisis gripping the NHS ... The health trust, one of the largest in the country, is effectively bust."

But, but, but: we've been told (ad nauseum) how much more efficient gummint-run healthcare is, and how much money it saves.

Meanwhile, in New England, RomneyCare© continues to implode:

"Five years after Gov. Mitt Romney signed Massachusetts’ groundbreaking health care legislation, it has met its chief goal of extending insurance coverage to most residents — but with costs rising faster than inflation, lawmakers face the challenge of how to pay for it all."

An unforeseen circumstance, or a feature?

You be the judge.

Just remember: ObamneyCare© is based on this model, as well.

And finally, in breaking news, a major story that will not be a surprise to regular readers. Via email:

"Medicare scam by Labcorp & Quest Diagnostics costs taxpayers billions of dollars ... The complaint accuses LabCorp, the second largest medical lab in the country, of illegal kickbacks to insurance companies that pressure their in-network doctors to send lab work to LapCorp exclusively."

I'm looking into interviewing the individual behind the lawsuit; let me know in the comments if you'd like more info.

UPDATE: Our interview with the principal litigant is here.

State-based Medical Care: Rx or Bust

It ain't just the MVNHS©:

"Swiss drug giant Roche Holding AG has stopped delivering its drugs for cancer and other diseases to some state-funded hospitals in Greece..."

Oh, the humanity! That evil, greedy Big Pharma, putting innocent lives at risk in favor of their obscene profits?

Wait, what?

Turns out, it's not so much greed as necessity:

"...some state-funded hospitals in Greece that haven't paid their bills."


But surely Greece is an outlier here, what with their well-publicized financial turmoil, right?

Um, not so much:

"Roche may need to adopt in Spain, as well. Some state-funded hospitals in Portugal and Italy have also fallen far behind on payments"

But I thought that state-run health care was more efficient and saved more money than our terrible private-sector system? And that folks got better care with fewer delays and hassles?

What's next?

That would be the newest form of healthcare delivery, self-serve:

"Patients at some hospitals now must take their prescriptions to a local pharmacy, and ... bring them back to the hospital to be administered"

Yikes! But surely this is an exceptional time, what with the global economy and all, right?

Guess again:

"There are hospitals "who haven't paid their bills in three or four years"

So this has been going on for over 4 years? Since before ObamneyCare© was even passed? But how could that be? That whole effort was based on the premise that our system was inferior to the European model, but now that turns out not to have been the case?

Okay, as terrible as this is, it's only one drug manufacturer, so things will start improving, right?


"Roche isn't the first pharmaceutical company to stop supplies to some Greek buyers. Denmark's Novo Nordisk S/A last year stopped shipping certain brands of insulin"

Those poor diabetics! Why would Big Pharma leave them twisting in the wind?

Hmm, maybe a clue here:

"Greece said it would cut the prices by more than a quarter."

Arbitrarily nationalize and then artificially reduce the price of a commodity? One wonders what they might have been thinking when they made that brilliant move.

Luckily for Greece, their national health care system is far superior to our version. Or maybe not:

"(C)ritics of the health-care system say it is bogged down in waste."

Ya don't say.

Cavalcade of Risk #140: Doom & Gloom edition

Dr Jaan Sidorov presents this week's collection of risky, often scary posts, all tied together with a big dollop of (very dry) humor.

Don't miss this one!

Tuesday, September 20, 2011

As long as we're being silly: Bruce Banner, CLU

MSN had a rather silly little post the other day, wondering if Batman needs life insurance:

"A survey asking which fictional characters need life insurance suggests most of us don't know much about coverage."

After reading the article, it's apparent that the author still doesn't.

Let's do a little fisking, shall we?

First up, the strange case of Batman. His alter ego, Bruce Wayne (who lives in stately Wayne Manor, of course), is quite well off. One might think that his vast assets would mitigate the need for life insurance, and that's just what the article says.

Trouble is: that's quite wrong.

Life insurance is not just for estate creation, but estate conservation. Given the profligate spenders in DC, Mr Wayne would most likely have a team of estate planners and attorneys scouring the books for ways to minimize estate taxes and the like. Permanent life insurance is a perfect fit for such cases.

Next, Peter Parker (aka Spiderman) gets the Investopedia treatment. The article notes that although Peter may well need coverage, his dangerously swinging lifestyle might make it difficult to come by.

Never fear, though: Peter's job as a news photographer probably grants him access to worksite insurance products (think Aflac and the like), including simplified or even guaranteed issue life insurance plans.

And although the article is about life insurance, we'd be remiss if we failed to point out that Aunt Mary ought to be considering some Long Term Care insurance for herself.

The piece has an obligatory reference to Harry Potter, as well. Here, it notes the lack of dependents who would suffer financially from his premature demise at the hands of Lord Voldemort. While that may indeed to be true now, we know that he eventually gains a spouse; what better way to protect his future insurability than with a life insurance policy bought, and priced, at a young age?

Following Spidey and Harry, we turn to Fred, Wilma and Pebbles (and don't forget Dino!). Of course, Fred most likely has at least some group coverage thanks to his employment at Slate Rock and Gravel Company. He should also have at least some life insurance that he actually owns, and which is not dependent on his continued employment.

Hot on the heels of Fred & Family we have the Queen of Big Hair, Marge Simpson. Here, I agree with the Investopedia folks:

"Marge also needs more life insurance than the aforementioned superheroes; her nonfinancial contributions provide vital services to the family."

That's because, as a stay-at-home parent, her income value to the family is non-trivial. In fact, it could be the equivalent of over $120,000 a year. That's a lot of Duff Beer.

Haggling will reduce the cost of health care: The eternal hope of optimists

Consumer Reports Magazine, in its Oct. 2011 issue, has an article How to Haggle with your Doctor. Once again we have an article that directs the consumer, in this case a patient, to haggle with a physician over the cost of medical care. While being able to haggle with a physician seems like a great way to bring down the cost of that health service, the reality is that the physician has the least control over prices in healthcare. Now, some of you non-trusting souls will say yeah, it is all the insurances. Nope, that is also incorrect. The entity with the most control over prices in healthcare is the U. S. Government. As many readers of my past blogs already know, Medicare prohibits any provider from discounting or in any way changing a charge for any patient for any reason. That one regulation nullifies this article, but let’s look at some of the finer points of it. The article present three possible scenarios, 1) You are healthy, 2) The unexpected occurs, and 3) You are having an elective procedure.

In scenario number 1 the article states: “Physicians, nurses, and other providers have a professional obligation to take your financial resources into account when recommending and delivering care”. Actually, providers cannot take your financial resources into account. The provider must recommend the best option regardless of price. To do otherwise would appear as if the provider is only looking at your financial resources and not what is best for you medically. This is a big no-no from the federal government. The federal government wants the provider to recommend the best treatment, period. That is why physicians are the last people who truly know what procedures cost since they cannot use that information to determine their plan of treatment.

In scenario number 2, the article suggests that you review your medical bill with the doctor after the treatment to ensure that the treatment was necessary. Well, if you are alive, I would think that determines that the treatment was necessary. But let’s look at this from another business, food. How many of us would haggle with a chef after a meal at a restaurant? “The chicken did not meet my standards of preparation and thus I would like to have a 50% discount”. The next sound you hear is laughter from the chef and the request to pay or he will be forced to have you arrested for theft. Unfortunately, a provider cannot have you arrested for theft after failure to pay since a provider delivers a service, not an actual product. As to collecting after the medical treatment, I heard a great quote from a manager of a large acute care facility, “Can I have my medical treatment back?

The article then suggests that you ask a provider for the same discount that he takes from insurance companies. A provider signs a contract with an insurance company accepting lower reimbursement because the insurance company agrees to direct its customers to him for medical treatment. As an individual you have signed a contract with the provider that you will pay all fees as charged by the provider in accordance with your insurance contract. The provider has already agreed to a reduction in payment from your insurance company and now you want him to take less from you as well. Let me know how that works for you.

Section 3 actually has sound advice, which is do your research. Find out the costs, the charges, the results.

Health care is expensive because there is a perception that all diseases and injuries should be treated and cured and mankind should not suffer death any longer. Well, the reality is that man is mortal, man does die and the cost to keep man alive is, in some cases (cancer, heart disease, genetic complications and injuries) very expensive. It is a simple mathematical equation: the willingness to spend money on healthcare is directly proportional to the value one holds over one's quality of life. I for one have never haggled over my own or my family’s healthcare, and I would hope that you, dear reader, would not haggle over yours.

Grand Rounds is up!

Dr Ramona Bates hosts this week, with an eclectic collection of great medblog posts.

Monday, September 19, 2011

Let the Games Begin: AIDS version

This is kinda cool:

"In just three weeks, online gamers deciphered the structure of a retrovirus protein that has stumped scientists for over a decade ... their breakthrough opens doors for a new AIDS drug design."

Kind of reminds me of the SETI program that used a distributed computing model to track potential messages from "out there." In this case, scientists had hit a wall in their efforts to deactivate a protein called "protease," which "plays a critical role in how some viruses, including HIV, multiply."

Scientists in Washington state decided to give a computer program, called "Foldit," a go (it turns science problems into computer games). Gamers stepped up, and very quickly created helpful computer models, which the scientists can now use in their research.

Talk about bonus rounds!


More on this shortly, but just received this in email:

"Anthem has made a difficult decision to non-renew all PFFS plans in all states and counties for 2012."

Regular readers may recall Kelley's post explaining how Private Fee-For-Service (PFFS) plans work. For now, the bottom line is that the $500 million hit Medicare took for ObamaCrap is already paying dividends.

And by "paying dividends," we of course mean "hurting seniors."

Friday, September 16, 2011

Dangerous Carrier Games

In addition to a great speaker, yesterday's festivities included a kind of "Expo" where one could meet with representatives of various carriers and other vendors. The gentleman from Assurant (nee: Time Insurance) touted their recently revamped "Access" program. It's essentially a simplified (as opposed to guaranteed) issue mini-med type program.

Here's the problem: he told me that the company recommends this plan for folks waiting to hop on the PCIP wagon.


Well, he continued, since it's not considered "creditable coverage" it doesn't count as "insurance."


A very simple search of the Ohio PCIP site yields this:

"To qualify for the Ohio High Risk Pool, you must meet the following eligibility criteria, as established by the U.S Department of Health and Human Services:

•Be uninsured for six months prior to the date you apply for coverage;"

Do you see the phrase "have creditable coverage" anywhere?

Me, either.

So, I contacted the folks running the Ohio PCIP initiative to confirm whether or not this was accurate.

Turns out, it is: as long as whatever plan one has is not "creditable," then it doesn't count.

Still, I'm a bit leery of this idea, and here's why:

The most generous mini-med I've seen includes a 6 month (sound familiar?) wait for pre-existing conditions
(and the Access plan's is 12). So one is still gambling on any such condition, which would most likely be the one causing one to be uninsurable in the first place.

I think an agent would have to be very careful about pitching this, and I'm a bit surprised that any top tier carrier would be recommending their agents do so.

An Afternoon with the Commish

Yesterday, I had the opportunity to listen to a brief presentation by our new Insurance Commissioner, Mary Taylor. Although she took office only a few months ago, she had some interesting things to say, and gamely took questions from a group of (understandably) discomfited insurance agents (I got the first one).

We only had her for about half an hour; she spoke for maybe 20 minutes, but that was fine since it left time for questions.

Right out of the box, she mentioned that Ohio is a fairly competitive state, health insurance-wise. That is, we have several carriers vying for market share, which helps to keep rates in the reasonable range (by comparison to other states only, of course).

She spoke at length about ObamaCare©, as would be expected (she also observed that we probably had our own name for it, which was, of course, correct). One major concern is that it's expected to increase Buckeye state Medicaid rolls by 1 million people. When questioned about that later, she re-confirmed that this expansion was due exclusively to ObamaCare©, not the current economy (which, of course, also adds to those numbers).

Ms Taylor also expressed her regret at how Washington has forced so many ill-conceived mandates on the states (more on this in a few moments), and the current administration in Columbus is very much in the Repeal-and-Replace camp, with an emphasis on state-based reforms.

As mentioned, I got the first question. Before I asked it, though, I told her that "my co-blogger calls it ObamaCrap," which got chuckles from both her and my fellow agents.

My question for her was: "Given the boundaries of McCarran–Ferguson, why aren't state DOI's screaming bloody murder at HHS usurping their regulatory power?" Since I knew that she was relatively new to her job (she, like pretty much every Insurance Commissioner I've ever heard of, has no background in the industry), I gave her examples such as Waivers and Guaranteed Issue for kiddies (which has killed the child-only market), which were never in ObamaCare© itself but "forced" on the states by Shecantbeserious. Her answer was a bit disappointing, if not unexpected: she and her boss (she's also the Lt Governor) feel that the best way to fight it right now is by educating the public. Meh.

The other interesting question that came up was about Medical Loss Ratios (MLR). The question was why hadn't we (Ohio) applied for a waiver on MLR. She answered that they didn't think MLR was a problem here, since we have a pretty competitive market (for now). The guy who asked it followed up by pointing out that it does have a direct affect - on us.

She replied that she'd be happy to hear more about that - we'll do our best to oblige.

Overall, color me impressed: she only took office in January and, as much as I hate to admit it, health insurance is not her only raison d'etre. Hopefully, we'll see more proactive initiatives out of Columbus, especially in the fight against ObamneyCare©.

Cavalcade of Risk #140: Call for submissions

Jaan Sidorov hosts next week's CavRisk. Entries are due by Monday (the 19th).

NB: We're now using this submission tool: The BC WorkAround

Once there, you'll be asked to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post ("Remarks")

At the bottom of the form, you'll see a drop-down menu; simply select "Cavalcade of Risk" then press "Submit" and you're good to go.

And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).


Thursday, September 15, 2011

CLASS Warfare

Well, it only took seven-plus months, but the MSM has finally caught up with us:

"[G]overnment experts repeatedly warned that a new long-term care insurance plan could go belly up, saddling taxpayers with another underfunded benefit program, according to emails disclosed by congressional investigators."

Actually, we could have saved these investigators some time (and the taxpayers some cold hard cash), if they'd only simply read this:

"[A] plan that's guaranteed issue, with (ostensibly) no waiting or elimination period and "unlimited" benefits is not exactly a candidate for "most stable rates." In fact, the only real "certainty" is that rates will increase, perhaps quickly and dramatically, as those least able to find real long term care insurance (LTCi) flock to the government plan."

But we weren't even the first to draw this (rather obvious) conclusion:

"Seems like a recipe for disaster to me," William Marton, a senior aging policy official in the administration, wrote in an October 2009 email."

The problem, as both Mr Marton and our own fine selves pointed out, is that this type of plan will attract those least able to qualify for underwritten plans. That is, only the least healthy are going to want to sign up for a plan with a five-year waiting period, coupled with rates based on guaranteed acceptance. It is a recipe for disaster, which has been long known and discussed.

And there's this: recall that one of the most contentious pieces of ObamneyCare© is the (Evil) Mandate. The ostensible justification for the Mandate is that, without it, the guaranteed issue and community rating aspects won't fly. And so it may very well be for the CLASS(less) Act: without a mandate that all eligible workers participate, the program is unsustainable.

Of course, like everything else in ObamneyCare©, we had to pass it to learn just how awful it is.

Health Wonk Review: Our Own Words edition

FoIB David Williams hosts this week's collection of healthcare polity and policy, eschewing his usual format in favor of letting each of us summarize our own posts. Very cool.

Wednesday, September 14, 2011

Competitive Oncology

A close friend (for 40-some years) was diagnosed a year or so ago with breast cancer. She recently moved to Cincinnati, but her oncologist is in Columbus (a good hour-and-a-half drive each way). She likes her doc, but would prefer someone "closer to home," so she's started oncologist shopping.

I asked her how that was working, and about her criteria. The first doctor she met with claimed that the practice was quite cost-effective. Now, that's probably a good thing from the insurers' point of view, but not my friend's ("I don't want her being frugal with my care").

So what is she looking for?

Well, obviously that they "connect" on a personal level, but then she said "I want a doctor who's competitive." When I asked what that meant, her answer stunned and delighted me:

"I want a doctor who looks at the median life expectancy of cancer patients, and makes it his goal to have all his patients beat that."

Beat that.

Been tellin' ya so...

We've long maintained that ObamneyCare© would ring the death-knell for group insurance. It appears, though, that we may have miscalculated when that might happen.

Turns out, a lot quicker than even we'd anticipated:

"Fewer people received insurance coverage through their employer in 2010 than in 2009, and the number of people covered through government insurance programs continued to rise, according to 2010 data reported Tuesday by the U.S. Census Bureau."

This follows what we've long noted, that employers aren't stupid, and understand that the smart-money move is to let the taxpayer pick up employees' health insurance tab. It's also additional proof - as if any is needed - that the end goal here is single-payer.

The problem, of course, is that we now have fewer choices, although they are more expensive. As Ohio's Insurance Commissioner Mary Taylor notes:

"By requiring consumers to buy services they do not want or need, costs will rise significantly."

We're already seeing that.

She continues:

"Obamacare limits the deductible amount a consumer can choose to pay each year."

Say goodbye to HSA's, which were really the only product capable of actually affecting the cost of health care.

"Obamacare squeezes the rating rules for insurance carriers in Ohio forcing some to pay higher premiums."

This is one that, in my opinion, gets far too little play in the media. It means that companies have less room for differentiation, and thus competition. That, in turn, means less ability to reduce premiums, or even just mitigate increases.

Ms Taylor has more on this:

"And because choices are no longer rewarded, insurance companies will be forced to treat everyone the same resulting in skyrocketing premiums for many low-risk, health conscious consumers."

One of ObamneyCare© proponents' favorite go-to arguments is to compare health insurance to car insurance. Their point is that since auto insurance is "mandatory" (which, of course, it's not), health insurance should be, as well. What they don't tell you is that auto insurance companies can - and do - discriminate against young male drivers, and speeders, and drunk drivers.

But then, logic was never one of their strong suits.

[Hat Tip for Mary Taylor article: FoIB Holly R]

Tuesday, September 13, 2011

A(nother) Kick in the Kidneys [UPDATED!]

If there's a downside to almost 7 years of posts, it's that there seems to be very little new under the sun:

"A Nashville woman seemingly has to choose between her family's financial well-being and a distant relative's health ... The challenge is that the procedure would require her to miss quite a bit of work, and her employer is unwilling to guarantee that her job will still be there for her when she returns."

That was 4 years ago. Apparently, we've learned nothing:

"A Philadelphia mother was left jobless Tuesday after she took time off work to donate a kidney to her dying son and was fired during her absence."

As in the Nashville case, FMLA (Family Medical Leave Act) "does not apply to companies with under 50 employees."

I'm reminded of an aphorism: just because it's legal, doesn't make it right.

UPDATE: In the comments, Deon makes a very good point about the practical implications of this story. Recommended.

UPDATE #2: Ms Rendon "has been put back on full salary until another position opens up at her company."

On the one hand, this is great news for her. But as our commenter yesterday observed, this puts a lot of financial pressure on the employer. I'm not convinced that this is a win-win.

On Fraud, Abuse and Medicare

As Bob pointed out this summer, "fraud and abuse" represents a pretty hefty chunk of Medicare's budget. Of course, we'd all like to see less of both, but that agency's own culture of incompetence makes it darned unlikely:

"It started when Richard West went for some dental work and was told his Medicaid benefits had somehow maxed out ... He called various government hotlines but got no help."

What Mr West is referring to in the first place is something generally not known by we lowly citizens: that Medicare has limits on certain benefits, and that some of his had been used up without his knowledge, or consent:

"After checking his own medical records [he] discovered the company providing him with nursing care appeared to have overbilled Medicaid for hundreds of hours for people who were never there."

Now, multiply that by the almost 50 million people enrolled in Medicare, and the numbers boggle the mind. Certainly, most providers aren't engaging in fraud, but how many have to be to generate huge dollars, and lots of folks with exhausted benefits?

The story doesn't end there, of course:

"The case involved the U.S. Attorney’s office, the FBI, the Department of Veterans Affairs, the Department of Health and Human Services, and Medicaid Fraud Control Units in New Jersey, Virginia and Massachusetts."

All vying for a slice of the ($150 million) pie and bragging rights.

Even that, though, fails to illustrate the magnitude of the problem:

"One of West’s nurses ... had been told she would be paid $27 an hour. When she received her paycheck, it showed her hourly rate was only $21 an hour ... the manager of the office showed her payroll stubs indicating that she was being paid for administering to a patient she had never seen ... If you want to make the money, this is how we do it"


Mind you, this went on for almost a decade, and would still be draining our tax dollars were it not for a feisty, disabled Vietnam vet.

So: Thank you for your service to your country, Mr West. Twice.

More from the D'Uh! Dept.

As Bob noted a while back, the response to PCIP (Pre-existing Condition Insurance Plan) has been, well, underwhelming. There seem to be a number of reasons for this, but my hometown paper, The Dayton Daily News, may be on to something:

"Ohio's high-risk health insurance pool that began a year ago as part of the federal health care overhaul is facing higher-than-expected costs, which are limiting enrollment."

Ya think?!

Although touted as "one of the most successful in the country," Ohio's PCIP plan has so far attracted less than 2,000 suckers souls, while still managing to run through its initial $150+ million budget in record time. In fact, officials estimate that the plan will be full - and broke - by next year.

It was supposed to get us to full implementation of ObamneyCare© in 2014.


Kathleen Gmeiner, who runs the "advocacy group" Ohio Consumers for Health Coverage, sums it up for us:

"Unfortunately, the high-risk pool simply has fallen short of what it was originally hoped it could do."


Our own DOI seems equally clueless; its assistant director for health policy, Carrie Haughawout, offered this scintillating analysis about how rates are regulated:

"somewhat mirror the market in the given state"

"Somewhat mirror?" What does that even mean? Either they're regulated based on claims and demographics, or they're picked out of the air.

Which is it, Carrie?

[Hat Tip: Bill M]

Out of Network Balance Billing

Out of network balance billing for P.A.R.E. claims are lurking and will pick your bank account clean. These hidden providers are like gunslingers in the wild west. They are not beholding to any rules and are free to charge whatever they want. If you don't pay they can ruin your credit and there is little you can do about it other than pay up.

Georgia State Representative Rusty Kidd found out the hard way when he took a tumble down a flight of stairs and had to be airlifted to Atlanta for treatment.

Kidd recovered. But he got another jolt when he opened a bill for the helicopter ride — about $27,000. Kidd’s insurer paid what it thought was reasonable: about $8,000. The company wanted Kidd to pay the rest.

“The average person can’t pay $19,000 and I can’t pay $19,000,” said Kidd, an independent.

People such as Kidd, who have what is considered full medical coverage, can end up with crushing medical bills on top of what they pay in deductibles and co-pays through a practice called “balance billing.”

It happens when patients get care from a hospital, doctor or ambulance company that is not part of the network of providers under contract with the patient’s insurer.

This is what insurers refer to as P.A.R.E. (Pathology, Anesthesiology, Radiology, Emergency) claims. While you MAY find par (network) providers in these situations the chances are these providers are not part of any network and are free to bill a "market" rate for their services.

Consumers who study their insurance benefit statements often marvel at the difference between the full-priced charges for a lab test or a hospital stay and the discounted rate negotiated by the insurer. The negotiated rate is often just a fraction of the full charge. Doctors and hospitals say their full charges reflect the expense of providing charity care and accepting government insurance plans that don’t cover their costs. But those footing the bill say that being asked to pay a charge that is often many times what an in-network or a Medicare patient pays simply isn’t reasonable.

How does the consumer know the amount charged isn't reasonable?

If two people buy an airplane ticket from Atlanta to New York, and one pays $99 while the other pays $450 for the same flight, which fare is "reasonable"?

Retail stores inflate their prices to cover such things as bank fee's charged for using debit and charge cards. Is it fair or reasonable for them to "overcharge" customers who pay cash?

Doctors say they also get squeezed by inadequate payments. What many insurers consider a “reasonable” payment is a sum many doctors say is too low. Some doctors are supporting a bill that would allow Medicare patients and their doctors to negotiate a rate — with the patient agreeing to pay what Medicare doesn’t cover.

Failing to pay what doctors consider a reasonable rate is hurting both the doctors and their patients, said Donald J. Palmisano Jr., executive director of the Medical Association of Georgia. “The patient doesn’t realize why they are paying more money and the physician is getting frustrated with the insurance company.”

There is no reason for the doctor to blame the insurance company. When a medical provider such as a doctor joins a PPO or HMO network they tacitly agree to the NEGOTIATED pricing for services rendered. In other words, by signing the contract they agree to accept the designated pricing as payment in full for services rendered.

Just as the non-par doc is free to bill a market rate, you are free to try and negotiate a lower fee directly with the provider. Since the provider is out of network, your health insurance company is unable to compel the provider to accept their payment as "in full". This is a private negotiation between you and the provider.

If you are unwilling to pay the amount as billed, and the provider is unwilling to discount their services, you are obligated to pay as billed. If you fail to do so the provider is free to turn your account over to collections.

This is not just limited to health insurance carriers. The same applies to docs that accept Medicare assignment.

If they don't like the payment schedule, they don't sign the contract.

Monday, September 12, 2011

Well, D'unh!

Ladies and gentlemen, I give you the meme of the week:

"Drops in the number of major hospitals and major health insurers seem to contributing to increases in the cost of health coverage."

Ya think?!

Carnegie Mellon University economist Martin Gaynor shared this amazing observation with the health subcommittee of the House Ways and Means Committee.

We could have saved him the trouble.