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S&S Benefits.....Opinion, Hearsay & News Review

S&S Benefits Consulting, Inc.  219 Darien , Dundee , IL 60118   Phone: 847-428-5353, Fax:847-428-9876

Email : jseiler@ssbenefits.net                                               http://www.ssbenefits.net/   March 2009 Issue


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.