S&S Benefits.....Opinion,
Hearsay & News Review
The investigation by NY
Attorney General Andrew Cuomo that was settled with United Health Group agreeing
to sell Ingenix, found that the databases, “intentionally skewed usual and
customary rates downward through faulty data collection, pooling procedures and
lack of audits” and that the underpayment rate was 10% to 28%. Now we just
wonder what Cuomo will say to AMA physicians that intentionally try to skew
rates upward by charging more than reasonable and customary? Will he sue the
doctors who are trying to increase employer and employee costs through
overcharging? Is he alleging that there are not enough network doctors in any
carrier’s network that employees do not have a choice? What mathematical
skills does he bring to the table to make the assessment that he made?
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Now the AMA and several state
medical associations have sued Aetna and Cigna in
New Jersey
federal court alleging underpayment for out of network services. The insurance
carriers are accused of violating ERISA and RICO and the Sherman Antitrust Act.
In a statement, Cigna said it plans to vigorously defend itself.
Noticeably missing from all
these lawsuits are the Blue Cross plans. Why is that? Since Blues plans are
known to pay no more than their negotiated rate for out of network services
(which is well below usual and customary), why are they excluded for the
New Jersey
suit or Cuomo’s investigation? Could it be the amount of money they
contribute to the AMA or to certain political campaigns? Could
it be that they are too big for Cuomo or the AMA to take on? How about
investigating the fact that discounts from their Rx cards are not passed back to
their customers and never disclosed? How about their rebate deals and the Blue
Card fees and the supposed discounts where they charge a percentage of savings?
Just wondering how only non-Blue Cross plans get sued. As in most situations, if
you are not sure why something happens, just follow the money.
New medical research shows
that heart conditions and mental disorders accounted for 17% and 9%,
respectively of health conditions in 2005. Spending growth rates were the
lowest for lung cancer, COPD, pneumonia, coronary heart disease and stroke. With
the beginning of the new mental health laws covering mental health the same as
any other illness with no limitations next year, one wonders how high the mental
disorder costs will rise.
We recently reviewed a renewal
for a HDHP. This is the kind of plan that is supposed to provide immediate
savings and cut employer costs in the long term. Funny how this high deductible
plan was under-priced by 13% according to the renewal. Was that a recovery of
the immediate savings the quote originally delivered? Are the carriers now
beginning to understand that they gave far too much credit for higher
deductibles? The trend on this renewal was 13%, which is 2% to 3% higher than
trend factors we are seeing in non-high deductible plans. But as these plans
became popular, we did let it be known that higher deductible plans have higher
trend rates, despite all the articles that touted these plans and claimed the
contrary.
We have put out numerous news
alerts regarding the “stimulus” plans for COBRA and CHIP plans- two not very
well thought out programs if we supposed to be stimulating the economy. If you
missed those notices, contact us and we will resend them to you. The DOL is
supposed to put out their model notices for employer compliance on March 19th
and will post them on their web site.
