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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 click: mailto:jseiler@ssbenefits.net                                              http://www.ssbenefits.net/ November 2005 Issue

UnumProvident settled with California claim investigators for $8.6M for allegations of improper disability claim handling without admission of any wrongdoing.

In a suit brought by AARP, a federal judge had ruled that employers could not tie their retiree benefit plans to Medicare eligibility. This would have cost employers millions of dollars and probably forced cancellation of many of the plans. However, the judge has now reversed her ruling, which allows retiree benefits for Medicare eligibles to continue with the practice of co-coordinating with Medicare.

UnitedHealthcare and its Georgia unit face a proposed fine of $2.4M for not promptly paying doctors and hospitals. A hearing is scheduled for Halloween day to rule on the matter. Georgia ís prompt pay law states that an insurer must pay a medical providerís claims in 15 working days or explain the delay. UHC claims to be paying 98% within that time frame and says that it is impossible to reach the 100% standard set by Georgia simply due to improper submissions by providers. In the meantime, UHC has won a contract to run Georgia ís health insurance network for 300,000 state employees and insures more than 500,000 Georgians in private insurance plans. No word as of this afternoon as to the outcome of the hearing.

Cigna has teamed with Kmart to offer a Medicare Part D prescription plan, similar to AARPís branding relationship with UHC. No word yet on whether blue light special pricing is going to be available.

Vista Health has sold its two Waukegan hospitals (Victory and St. Therese) to Tennessee based Community Health Systems. The two hospitals had lost $90 million on operations over the last five years.

New data from EBRI indicates that Americans often view cost as one of the least important factors when judging health care quality. The study indicates that 90% of Americans evaluate their doctors on factors other than cost, but 63% do believe that cost is important. Roughly 57% of Americans are extremely or very satisfied with the quality of care they received in the last two years, while only 28% were satisfied with the cost. Among those who experienced an increase in cost in the last year, 79% switched to generic drugs, 71% claim to be taking better care of themselves. Further, 40% said they delayed seeing a doctor for treatment and 21% skipped prescription medications.

As expected, Adventist Health Systems in the metro Chicago area did renew their agreement with PHCS, after initially announcing the cancellation of their contracts. The hospitals in the system include Hinsdale , Glen Oaks and LaGrange Memorial.

A new report by Express Scripts says that consumers and employers in health plans in the commercial market could have saved over $20 Billion through increased use of generic drugs. The study examined six major classes of drugs, including cholesterol lowering medications and antidepressants. The average generic drug costs $60 less per script than a brand name drug.

The nationís HMOs reported a $3.6 billion profit for the first quarter of 2005, a 21.4% increase over the figures for the first quarter of 2004. The industry profit margin was 4.6% according to Weiss Ratings.

The 2006 Towers Perrin health care survey of 200 of the largest U.S. employers shows that those employers are expecting an average 8% increase in their 2006 costs for health care (up to $8,424 per employee per year) for all types of plans. The cost sharing continues to average 20% for employees and 80% for employers. Retirees will contribute about 43% of their costs. Low cost companies average $6,866 PEPY in costs, while high cost companies average $10,022 PEPY. Lower cost companies tend to have large differentials in copays for Rx Brand vs. generic coverage and they also have moved away from copays for other coverage and have moved towards coinsurance.


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