Free Market Healthcare Solutions by Fidelis Publishing Group, LLC

SOLUTIONS FREE MARKET

JULY 2018, VOLUME I, ISSUE 2

HEALTHCARE

BETTER BENEFITS LOWER COSTS

CREATING THE TOOLS FOR

HEALTHCARE COST

CONTAINMENT EXPERTISE, PROFESSIONALISM & COMPASSION â&#x20AC;&#x201D; THE PHIA GROUP VALUE OF THE FREE MARKET TO SELF-FUNDED EMPLOYERS

CLOSING THE GAP BETWEEN BUYER AND SELLER

LEGISLATIVE BATTLEGROUNDS IN DIRECT PRIMARY CARE

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SOLUTIONS FREE MARKET

HEALTHCARE

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VOLUME I, ISSUE 2

CO N T E N TS A publication designed exclusively for employers and patients as Buyers of healthcare and members of the Free Market Medical Association. Our Mission:

To promote, educate, and support the Healthcare Revolution, which will bring about true healthcare reform, based upon Buyers and Sellers working together in a mutually beneficial way, without the interference of the government or valueless third parties.

Our Standard:

Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives. -William Foster

ON THE COVER:

Adam V. Russo, Esq. is the Co-Founder and CEO of The Phia Group, LLC. Ron E. Peck, Esq. is one of the nation’s top ERISA lawyers, and among the nation’s premier self-funded health plan consultants and health benefits attorneys. The Phia Group’s overall mission is to reduce the cost of plans through its recovery strategies, innovative technologies, and legal expertise.

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Free Market Minute

”Solution Fatigue” by Megan Freedman

The Value of the Free Market to Self-funded Employers Transparency: Understanding Price Bundles, Self-insurance and Hidden Fees by Dr. Richard Kube

Direct Primary Care and Self-insured Employers A Benefits Trifecta by Dr. Robert Nelson

Free Market Pioneers

Dr. Joseph Costello, Costello Foot & Ankle

COVER - Self-funded Plans Lead the Way The Phia Group

Healthcare: What to Watch For Closing the Gap Between Buyer and Seller by Sean Kelley

The Best of Times and the Worst of Times

How Imperfect Regulatory Action May Still Create Opportunities for Self-funding by Jennifer McCormick, Esq.

DPC: State by State

Physician-Advocate Fighting for a Better System

Embrace Transparency and Grow Your Business by Megan Freedman

Online at www.USHealthMedia.com USHealthMedia.com | Vol. I | Issue 2

SOLUTIONS FREE MARKET

HEALTHCARE

free market

MINUTE

BETTER BENEFITS LOWER COSTS

STAFF

PUBLISHER Cathy Payne cpayne@ushealthmedia.com EDITORIAL MANAGER Megan Freedman megan@FMMA.org GRAPHICS / PRODUCTION Ann Marie Ludlow aludlow@ushealthmedia.com SENIOR MARKETING DIRECTOR Ben Daniel wbendaniel@ushealthmedia.com ADMINISTRATION / ACCOUNTS RECEIVABLE Debbie Tolliver dtolliver@ushealthmedia.com CIRCULATION Tom Higgs circulation@ushealthmedia.com CONTRIBUTING WRITERS Sean Kelley, Dr. Richard A. Kube II, Jennifer McCormick, Esq., Dr. Robert Nelson Free Market Healthcare Solutions welcomes FMMA members to submit articles, information, opinions, or ideas that enhance the mission of this publication. Please submit contributions to info@USHealthMedia.com or megan@FMMA.org. For information about becoming a member of the Free Market Medical Association, visit: FMMA.org. FREE MARKET HEALTHCARE SOLUTIONS © 2018 Published bi-monthly by Fidelis Publishing Group, LLC P.O. Box 217 • Jarrell, TX 76537 No part of this publication may be reproduced, translated, stored in a database or retrieval system or transmitted in any form by electronic, mechanical, photocopying, recording or other means, except as expressly permitted by the publisher. For permission contact Publisher@USHealthMedia.com. POSTMASTER: Send address changes to: Free Market Healthcare Solutions Subscriptions. P.O. Box 217, Jarrell, TX 76537 Articles and written content are the property of Fidelis Publishing Group, LLC, or are used with permission of the contributing authors as noted in the publication. Photos and graphics not otherwise credited are property of Fidelis Publishing Group, LLC. The information in this publication cannot and does not constitute medical or legal advice. Information herein is provided for general information and educational purposes only and is not a substitute for physician or attorney advice. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Fidelis Publishing Group, LLC.

BY MEGAN FREEDMAN

THE GOAL OF THIS PUBLICATION AND THE FREE MARKET MEDICAL ASSOCIATION IS TO EXPOSE THE CORRUPTION, EDUCATE YOU ON WHAT YOU CAN DO TO PROTECT YOUR PLAN, AND INTRODUCE YOU TO THE GOOD GUYS IN HEALTHCARE.

olution Fatigue; this is how a colleague recently described the current state of mind of employers. This description is incredibly accurate. When speaking with employers, benefits consultants, and TPAs, I frequently hear that the employers need the free market concept to be “made simple,” because they just can’t handle another complicated program, product, vendor, or “solution”. It’s not just the employers; the employees are just as overwhelmed with all of the different options to figure out how their health plan works. This magazine may be called “Free Market Healthcare Solutions”, but the intent is not to sell a product. We want to initiate a paradigm shift in the way employers, their employees and, ultimately, all of us make healthcare purchasing decisions. The brutal truth is, there is no specific product, program, widget, or vendor that completely solves the complicated issues in our healthcare system. Without a shift in the way everyone thinks about healthcare, the only end in sight is for the system to crash and the government to ‘save’ everyone with single payer. One reason this “solution fatigue” is happening is because each day there is something new we are expected to be outraged by, and a new product or proposed law that

will save us. From insurance carriers, to monopolistic hospital systems, group purchasing organizations, to pharmacy benefit managers; the list goes on and on! No one can keep up with who they are supposed to be mad at! The second reason is that there are just too many products, vendors, laws, regulations, legislators, bureaucrats, and industries that represent no true value in the transaction. The factions are bellowing at the employer that they must offer the best benefits while not charging too much, but they need to save money, etc. All of this conflicting, and often counterintuitive, advice is confusing. Adding insult to injury, employers must also be aware of all of the benefit laws and regulations they are subject to. Did you know that most of the “cost saving initiatives” or “solutions” that are being sold to you can be accomplished by you alone? A few more of them can be accomplished in partnership with the right kind of vendor. This issue is full of great advice and explanations of how you can take back control of your Plan, while having superior benefits. Still have questions or need more detailed advice? The FMMA, and any of our members, are more than happy to help.

Megan Freedman has worked with self-funded benefit plans since 2005. For the past 12

years, she has worked with The Kempton Group serving as the Vice President of Corporate Communications. Ms. Freedman has extensive experience not only in employee benefits, but also marketing, sales, account management, executive support, and member services. Ms. Freedman is the Executive Director of the Free Market Medical Association. She was recently featured on Kevin Price’s Pricing in Business Radio show and writes and co-authors many articles, white papers, and educational materials. She is licensed in Life, Health, and AD&D in Oklahoma and Texas.

USHealthMedia.com | Vol. I | Issue 2

Educate your employees about what being self-funded means. Any dollar they save by choosing a better value medical service stays in your company and can be used for salaries, bonuses, new equipment, and new hires. You know this. Make sure they understand it too.

STEP 2 Incent your employees to make better purchasing decisions. You can structure your benefits to reward employees for making good decisions; for example, add a benefit level for using transparent, high value facilities and imaging, include an HRA for Direct Primary Care. If an employee

gets a good cash deal that they have negotiated themselves, cover it! Encourage them to talk about price.

STEP 3 Use your Plan, and your Plan Document, to limit the truly egregious charges. You don’t need a separate vendor to negotiate with dialysis providers, air ambulance, or any of the other common “six figure offend-

I can almost hear you now…”But our network contract won’t allow any of this.” Renegotiate the contract or dump the network. Ask yourself what real value have they brought to you so far—besides obfuscating the true cost behind a shield of made-up ‘discounts’, and the ever-increasing cost to your Plan?

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STEP 1

FREE MARKET MINUTE

SOLUTION FATIGUE

MEGAN FREEDMAN

ers”. Put dollar limitations for those benefits in your Plan that have specific allowables. Implement a reference based pricing option for some, or all, of your benefits. Don’t be afraid of balance billing! You have already taught your employ- 5 ees to be better shoppers in Steps 1 and 2, and you have the power to intercede and assist with negotiations if necessary.

the

VALUE OF THE FREE MARKET

6 T H E V A L U E O F T H E F R E E M A R K E T TO S E L F - F U N D E D E M P LOY E R S

to Self-funded

EMPLOYERS

◦◦ Transparency in healthcare is crucial to fulfilling the fiduciary responsibility of being self-funded and using health plan dollars to only pay for reasonable costs.

he free market movement in healthcare is vital to fixing the problems with our country’s current care delivery system. The Free Market Medical ◦◦ Complying with the fiduciary responsibilities outAssociation was founded based on three pillars: Price, lined in ERISA is becoming a hot topic for the DOL. Value, and Equality. These pillars are essential to the Plan Administrators must pay special attention to long-term success of self-funded health plans. how Plan assets are being spent. Healthcare transparency provides you and your • The FMMA connects you with free market physicians employees with the information and the incentive to and facilities who have embraced bundled, cash choose health care providers based on value. Value is based pricing and understand that your Plan’s sucnot just about price; but rather price and quality. cess is an essential part of keeping the local commuYour employees are inundated with media, advertisnity strong. ing, and hype that incorrectly informs them that valuable healthcare has to be expensive; the highest quality will • The FMMA helps you find brokers/consultants and cost more. However, the quality of healthcare is not other vendor services who believe transparency is related to the price in the way consumers are taught to important to your Plan and understand that transshop for other goods and services. parency is important in their business as well. Better quality care is almost always a lower price. • Finding the right facilitators or vendors can greatly High quality and low complication rates combined with impact your plan. The FMMA educates employers on efficiency enables these providers to charge far less than how to find vendors that can have a good impact. a low value choice. ◦◦ For example, what value do your current vendors provide? In what way, and how much, do they get Why is the Free Market important to you? paid? Have they embraced the free market and For a self-funded employer, being part of the free maradvise you to use plan assets in the most prudent ket movement is very important to the long term success way? Do they understand that network/PPO disof your Plan. counts have no real world value? These questions are important and circle back to being a responsi• Competition in health care delivery is the key to ble fiduciary of your Plan. sustaining affordable, quality benefits for your employees.

• As a Plan Fiduciary under ERISA, it is important for you to be part of the free market movement. 6

USHealthMedia.com | Vol. I | Issue 2

7 T H E V A L U E O F T H E F R E E M A R K E T TO S E L F - F U N D E D E M P LOY E R S

2019 FMMA Annual Conference The 2019 Annual Conference should be on your calendar as a “Do Not Miss” event. There will be an employer track of break-out sessions specifically geared toward your needs. • Free Market medical providers need to see and hear directly from you that bundled, transparent pricing is important to you and the success of your benefits plan. • Attend the employer track breakout sessions – tailored just for you! • Network with other self-funded employers and learn new strategies for lowering costs while maintaining valuable benefits!

Conference Details

Where: When: Register:

Hyatt Regency Dallas 300 Reunion Blvd. E Dallas, TX 75207 April 11-13, 2019 www.fmma.org

The FMMA cannot change the broken healthcare system alone. Your support and assistance is needed to create a better system in which you can create or maintain your own successful plan and offer your employees valuable healthcare choices. For questions about the FMMA or the Annual Conference, visit www.fmma.org or email support@fmma.org. Check out upcoming events in your area at www.fmma.org/events and www.fmma.org/local-chapters

#PlanHacks

How to Navigate Self-funding Potholes

☛ Do you have a TPA or network that won’t allow you to appropriately manage your Plan? Make a change to your vendors!

☛ Read all of your contracts thoroughly to guard against anti-competitive and anti-fiduciary language.

☛ Networks routinely “negotiate” provider contracts in their own best interest, not yours. Don’t fall for the myth of the great discount.

☛ Remember: it is your responsibility to only pay reasonable charges and to appropriately manage your Plan.

☛ Mind the gap! Ensure your Plan document language adequately supports your goals and strategies.

☛ Ceding control of your Plan assets to a vendor or third party does not protect you from a legal standpoint.

☛ Don’t be scared to exercise your rights as a Plan Fiduciary under ERISA due to vendor threats. USHealthMedia.com | Vol. I | Issue 2

Direct Radiology Services for the Free Market. Transparent Costs + Centralized Scheduling and Records + Expert Care

The Right Price Our efficient scheduling advocates work with our radiologists to ensure exam quality. No added bureaucratic costs, outsourcing surcharges, or expensive middle men inflate our fair flat price.

The Right Exam We protocol exams to maximize quality of care and minimize risk of additional testing. All imaging and reports are centrally archived and easily accessible in our cloud-based software.

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Same high quality medical imaging. At a fraction of the price.

greenimaging.net To discuss partnership directly with principal, Cristin Dickerson, MD: Call 713-775-7252 or email drdickerson@greenimaging.net. 8

USHealthMedia.com | Vol. I | Issue 2

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APPLYING FREE MARKET VALUES TO SPINE AND ORTHOPAEDICS

TRANSPARENCY:

Understanding Price Bundles, Self-insurance and Hidden Fees

DR. RICHARD KUBE

by dr. richard kube

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As a self-insured business, you must ask about all of the factors associated with an episode of care, and whether they are covered or contracted in the rates provided. Contracting with only the facility can leave a lot of costs unaddressed. Many services are often provided by independent

companies who do their own billing outside of the facility. As an example: the surgical assistant, when out of network or outside the facility contract can cost more than the actual surgeon. Therefore, it is important to demand transparency and to know your contract. A possible solution is contracting with a provider/facility that charges a “bundled”

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n the previous issue, we provided an overview of free market values applied to spine and orthopedics. Now we expand upon these topics and dive into how you, the consumer, can unpack the black box of healthcare by better understanding price bundles, self-insurance, and hidden fees. We will highlight the importance of price transparency as it is the cornerstone of a free medical market, which empowers you as a consumer. Understanding price transparency will arm you with the questions that need asked in order to contain cost. In Spine and Orthopaedics, many procedures are accompanied by hidden costs for additional persons and “unforeseeable events.” Therefore, a transparent price is critical. A business owner should know the full burden cost of an entire episode of care to plan for that financial burden. A typical procedure will utilize as much or more than a surgeon plus a surgical assistant, anesthesiologist, radiology services, pathology, lab, blood bank, neurologic monitoring, implants and disposables, and the facility charges. While one may be in network with the surgeon and the facility, these other line items can become expensive if not addressed up front.

T R A N S PA R E N C Y: U N D E R S TA N D I N G P R I C E B U N D L E S , S E L F - I N S U R A N C E & H I D D E N F E E S

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Richard A. Kube II, MD, FACSS, FAAOS, CIME is a fellowship trained spine surgeon and Founder/Owner of Prairie Spine & Pain Institute, in Peoria, Illinois. He also founded and owns Prairie Surgicare, an AAAHC certified surgical facility. He holds Board Certifications from the American Board of Spine Surgery, American Board of Orthopaedic Surgery and American Board of Independent Medical Examiners. His practice is dedicated to providing comprehensive operative and non-operative treatment for spinal ailments with a special interest in minimally invasive surgical techniques. Dr. Kube is also engaged in active research and education projects. His interests extend into strategic planning and entrepreneurship as he is Advisor to Twisted Sun Innovations, a Hydrogen energy company currently working on renewable energy solutions for the U.S. Department of Defense. Dr. Kube currently serves as clinical faculty at University of Illinois College of Medicine at Peoria.

rate. However, multiple providers include asterisks as part of their “all in” pricing. It is important to know what is behind those asterisks and what additional financial burden you may encounter after a service has been provided. There can be hidden costs with added service professionals or in the implants being used for the procedure. Ideally, you want to find someone who has no hidden fees. We use terms like “all in price” and total cost for the “entire episode of care.” There are no asterisks for any services provided at our site. There will always be some variables such as a patient having a cardiac event or other emergency requiring a transfer to the hospital. At that point, cost is out of the control of the original facility and agreement. Therefore, ask what the transfer rate is for a facility. While one cannot completely predict which patient will have a medical emergency, you can know which facility is best at making such predictions and therefore has a very low transfer and readmission rate.

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DR. RICHARD KUBE

cost goes up as the patient may require the surgery in addition to the injections. That is not to say injections are never indicated, one just needs to be aware of all the variables associated with cost, so those costs can be controlled as much as possible. Finding a center that performs many of the services associated with a disease can be helpful. You want groups focused upon disease management who can offer comprehensive options. A patient is more likely to receive what is needed because all options are available. As the saying goes, if all you have is a hammer, everything looks like a nail. Hopefully, these concepts have provided education and some questions to consider when reviewing that next contract. Know what you are paying to receive. That only happens when the seller is transparent about the product and its total cost. In the next issue, we will expand upon the more challenging concept of treatment outcomes touched upon above. You need

Paying attention to and asking questions about details such as transfers and readmissions can diminish extra fees making the procedure more cost effective and the financial burden more predictable. to know what to look for in a medical service provider and how that equates into healthy and happy patients/employees with the ability to return to their lives long term. No provider is perfect, and all will have complications, but some are more likely to achieve success than others. We will discuss how to find those successful providers and reap the added benefit of improved outcomes having greater durability with lower full burden cost, and hence, greater value to you.

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Paying attention to and asking questions about details such as transfers and readmissions can diminish extra fees, making the procedure more cost effective and the financial burden more predictable. Another issue is the full burden cost of a disease. A more advanced concept is cost per quality adjusted life year (QALY). This speaks to the durability of a procedure. As an example, an epidural spine injection for pain might be cheaper, usually around $1000, versus excision of a ruptured disc, usually $9,000-$10,000. However, if multiple injections are needed, the total

OUR SOCIETY IS INUNDATED WITH MEDIA, ADVERTISING, AND HYPE THAT INCORRECTLY IMPLIES HIGH QUALITY HEALTHCARE IS EXPENSIVE. —THE OPPOSITE IS TRUE— THE BEST OUTCOMES ARE FOUND AT LOWER COST FACILITIES DUE TO EFFICIENCY.

USHealthMedia.com | Vol. I | Issue 2

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MARRIAGE

MADE

H E A LT H C A R E

HEAVEN

DPC AND SELF-INSURED EMPLOYERS: A B E N E F I TS T R I F E C TA by d r . r o b e r t n e l s o n

DR. ROBERT NELSON

Dr. Robert Nelson received his M.D. degree at the Ohio State University College of Medicine. He is the Founder and Owner of Encompass Health Direct, in Cumming, Georgia; the publisher and editor of The Sovereign Patient blog; and a founding member and spokesperson for the Georgia chapter of the Free Market Medical Association. Dr. Nelson has spoken about healthcare economics and free market healthcare throughout the country, and has been a guest expert on multiple radio programs.

USHealthMedia.com | Vol. I | Issue 2

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of rising deductibles and payroll contributions. Just as corporations, land or automobiles don’t feel pain, neither do they pay taxes. Likewise, while our employers provide us with a healthcare “benefit”, the economic data showers very clearly^ that we all pay for these benefits with nearly a dollar-for-dollar reduction in wages and/or reduction in other voluntary benefits. But based on the arguments put forth in part 1^ of this series, we know there is a free-market-friendly alternative to the traditional network-based, insurance-accessed medical care that has been responsible for eroding our wages^ and purchasing power, while lining the pockets of industry “mis-stakeholders”. With the help of our knowledgeable Healthcare Czar^, we constructed a new model using Direct Primary Care as the clinical hub of our new healthcare Plan. This enabled us to fulfill our “must-have” criteria which starts with highly effective primary care (think DPC) without the hassles, conflicting priorities and expense of an exclusively claims-based insurance model – while maintaining patient sovereignty and physician independence! In addition, Self-funded plans under ERISA law can be designed to carve out primary care from under the insurance edifice, replacing it with DPC, thus ful-

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The linkage between Employer-sponsored health insurance and access to medical care is no less meaningful. The preeminence of this protected oligopoly as the only legitimate path to healthcare has become etched deeply into our collective consciousness. So pervasive is this notion that thoughts of market-based models have rarely reached our frontal cortex; that is until the advent of the DPC movement^ and the price transparency flag-plant by our free-market friends at Surgery Center of Oklahoma^. Our fear of being without employer-sponsored insurance (reasonable as it is in our current situation) is so palpable that the government created an even more expensive way to obtain it at the very time we’re without income: COBRA! But at least the name is fitting. Never mind that the whole debacle was spawned by decades of unwise tax and regulatory policy, and the rent-seeking behavior that it propagates, leaving the once-indispensable Individual Market to wither on the financial vine. It’s not that employers don’t have a role in helping us buy/access healthcare. Indeed, they do. But although the first order purchaser of health insurance is often the employer, they do not bear the ultimate impact of the cost, employees do^; and not just in form

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uly 4th & fireworks. Baseball & hot dogs. Birthday cake & ice cream. Movies & popcorn. These pairings have become tangible elements within the cultural zeitgeist of our country.

YOUTUBE.COM/JOHN LOCKE FOUNDATION MARK WATSON DISCUSSES DIRECT PRIMARY CARE BENEFITS FOR UNION COUNTY, NC

Katherine Restrepo, previously of the John Locke Foundation, had this to say in Forbes^:

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DR. ROBERT NELSON

filling a fundamental maxim of insurance: Never insure what you expect to lose and what you can afford! Vis-àvis routine visits to your family doctor. By contracting with a Direct Primary Care practice and re-routing subsequent encounters away from the more expensive insurance-based protocols, Self-insured employers can utilize creative plan designs to cut costs and improve employee satisfaction. The savings can be substantial even after accounting for membership costs. Enough with the rhetoric. Where’s the data to back up the talk? Does this new model really translate into savings and value for the Self-insured employer, while improving health care outcomes for employees? That prospect sounded too good to be true to Mark Watson, chief executive of Human Resources for the employees of Union County, NC. Union County was the first public, self-insured employer in North Carolina to offer a DPC option for primary care, starting in April 2015, when they entered into an agreement with Paladina Health^, a healthcare delivery organization providing care via a membership model. With a savings of over $1.4 million on medical claims, Mr. Watson is now a believer!

“Adding the DPC option has not only saved Union County on claims, but has improved health outcomes for almost 70 percent of patients. With the luxury of around-the-clock care and longer appointments, Paladina physicians enhance patient engagement and guide them to find the best value for medical decisions that fall outside a primary care setting. For anyone skeptical that the clinic attracts a healthier patient pool, the available data indicate otherwise. The total number of paid claims exceeding $50,000 is evenly divided between DPC enrollees and traditional health plan enrollees.” To summarize the Union County experience per the Forbes article:^ • Of Union County’s 2,000 covered lives, 40% are DPC participants, while the remaining 60% are signed up with the CDHP. ◦◦ DPC participants incur 38% less in medical expenses than CDHP participants, yielding annual 12

savings of $1,408,089. ◦◦ DPC participants incur 37% less in prescription expenses compared to CDHP participants, yielding annual savings of $269,680. ◦◦ DPC participants spend 46% less out of pocket for prescription and medical expenses than CDHP patients, a $333,639 annual savings. ◦◦ 73 percent of DPC participants report significant improvement in their overall health since electing the DPC option.

And more DPC-Employer data from DPC Journal^: “Colorado-based DigitalGlobe^, a self-insured provider of high-resolution Earth imagery products and services, partnered with Nextera Healthcare^, Colorado’s first direct primary care (DPC) provider, to evaluate the effectiveness of DPC membership for employees and their dependents. The seven-month case study revealed improved health outcomes, enhanced patient satisfaction and reduced healthcare costs, including a 25.4 percent reduction in claims costs and a 4.7 percent reduction in risk scores for members who participated.” “…DigitalGlobe enrolled 205 employees and dependents. The company covered 100 percent of participants’ fixed per-person, per-month DPC membership costs.” “ Next-day appointments and 24-hour access to providers via phone, email and text messaging furthered the DPC commitment to providing convenient, personalized care and attention. Eighty-nine percent of employees reported via a post-study survey that they received flexible, timely appointments and follow-up visits.” “There was also a significant reduction in spur-of-themoment emergency room and urgent care visits.” “Based on study results, DigitalGlobe will offer DPC through Nextera Healthcare to all of its 1,233 employees and their dependents nationwide beginning Jan. 1, 2017.” DPC is not just for large employers who have traditionally offered benefits. The platform works for small businesses with only a handful of full-time employees; even those that fall beneath the ACA mandate cut-off have found value in establishing a DPC relationship. One such business is The Walnut River Brewing Company^ in Dorado, KS. They contract with AtlasMD, a DPC practice in Wichita, KS to provide primary care for their dozen USHealthMedia.com | Vol. I | Issue 2

One of the most innovative and comprehensive DPC-Employer solutions available for a range of employer sizes and needs is MyMD Connect^, founded by Dr. Jeremy Smith. MyMD Connect has developed a seamless connection between the normal documentation

DR. ROBERT NELSON

This discussion would not be complete without including the landmark data provided to us by our pioneer DPC colleagues at Qliance, formerly based in Seattle. The study data compared each companies DPC cohort with their non-DPC (nonQliance) enrollees. As you can see from the chart below, DPC enrollees achieved nearly 20% savings per employee compared to traditional coverage, which translated to an average savings per person per year of $679. Of note is a huge 60% reduc-

can afford and anticipate losing. To put this into perspective, an analysis^ of health insurance compared to auto insurance, the latter existing within a robust direct pay market for routine maintenance/ 13 upkeep/repair, found the addition of auto insurance adds about 18% to the cost of auto ownership. While in healthcare, the way we access and bill for routine health services via insurance protocols adds at least 50% to the cost of care. Adding DPC to a well-designed package of health benefits gets us closer to financial sanity and sustainability, comparable to the auto insurance market. Many Self-insured companies are beginning to discover the value and savings in this approach, while breaking free of the coverage trap and the myth that health insurance equates to health care. The corollary being ■

“...it saves small businesses time by allowing staff to visit during the day and get back to work. It’s possible to have very reasonably priced healthcare for all staff. The last main point is that it’s simple, it cuts down on insurance needs for normal visits thus saving countless hours on hold and disputes. We’ll never go back to the traditional model. Ever.”

ministrators, and innovative medical management solutions, including virtual concierge and brick-and-mortar concierge medicine services, in order to increase quality of care and optimize economic use of resources for the self-funded health plan. Watch the video to learn more about the many benefits of MyMD Connect!”

D P C A N D S E L F - I N S U R E D E M P LOY E R S

full-time employees. Here is what Walnut River Brewing founder B.J. Hunt had to say about DPC and their relationship with AtlasMD.

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By breaking free of the conventional overage model, self-insured companies are finding innovative ways to improve the health of their workers, and at lower cost. Business leaders and policy makers should take note. ~Mike Ferguson, President & CEO Self-Insurance Institute of America, Inc. ^

that all doctors perform during a patient encounter and the data that a self-insured plan requires for their due diligence. Their platform allows doctors maximal independence while standardizing access, fees and data reporting from MyMD Connect to their health plan clients. Dr. Smith explains the moving parts of MyMD Connect^: “MyMD Connect is an innovative solution to bring together self-funded employer groups, third party ad-

USHealthMedia.com | Vol. I | Issue 2

tion in number of inpatient days and 29% reduction in specialty radiology imaging. Both categories are sources of a large portion of medical spend for employers. In summary, and in juxtaposition to government mandated coverage for unwanted or unneeded “benefits”, which necessarily increase premiums for everyone; the determination of what services to insure should be guided by time-tested economic principles and our common-sense tenet of insurance: Never insure what you

the realization that access to inflated “pricing” and the phony discounts used to fleece the buyer is no longer a conversation they are willing to have. With DPC at the hub of the benefits package, combined with proper utilization of insurance, Self-insured employers and employees are enjoying the Benefits Trifecta: Fewer Claims. Better “coverage”. Lower Costs. ^Please visit our website (USHealthMedia. com) for additional information and references included by Dr. Nelson.

Shop Online for Healthcare with ShopHealth!  Save an average of 50-70% on your care by using the FMMA ShopHealth online marketplace!  Know before you go with bundled, transparent, and up-front pricing.

SHOP TODAY! WWW.FMMA.ORG

 Search and compare procedures, services, locations, physicians, surgeons, imaging providers, or facilities. USHealthMedia.com | Vol. I | Issue 2

M A R K E T

PIONEERS

n October, 2017 Dr. Joseph Costello and his wife Ashlea opened Costello Foot and Ankle Clinic and successfully implemented a direct pay business model. Their mission was to provide the highest quality podiatric medical care without accepting insurance of any kind. Their clinic utilizes only the latest in technology and offers next day appointments, no lobby wait times and lengthy, non-rushed visits at prices that are usually much lower than utilizing insurance. Dr. Costello is the spokesperson for the Missouri chapter of the Free Market Medical Association. Dr. Costello believes the practice has been very successful because early in his career he experienced, first-hand, the frustrations of third party interference. This experience inspired the Costellos to break away and venture into the free market. “Ultimately I did what I believed was better care for the patient.” Like a majority of doctors, Costello began his career with carriers. “Entering the workforce, I thought I had found a golden opportunity by hiring a management company to perform all of my administrative duties; scheduling, marketing and insurance claims. I believed my claims would be processed correctly. More importantly, I believed that by enlisting their services, I would be able to focus completely on providing great patient care and still have time to pursue other things I enjoyed in life.” Dr. Costello quickly found, however, he could not have been more mistaken. By handing over all administrative responsibilities to someone else, especially an insurance company, he realized he had absolutely no control USHealthMedia.com | Vol. I | Issue 2

Dr. Joseph Costello | Kirksville, MO COSTELLO FOOT & ANKLE CLINIC in any aspect of his business. After suffering through numerous unfulfilled promises and being routinely overworked by 55-85 patients per day, he realized that he and the management company had much different goals in mind. “After much deliberation I was able to break away from my agreement with them successfully,” Costello says. “I regained my freedom to practice podiatry in the way I chose, with the primary goal of placing the patient first.” Following his separation from the management company, Dr. Costello

details and happily welcomed my wife and me to the conference with open arms.” While his new membership felt promising, Costello was still not completely at ease about taking the leap. He recalls while he was certain he did not want to incorporate insurance, there was still the challenge of finding a workable business model for a specialist who does not have a high volume of routine or repeat patient visits. “I knew the widely used subscription model successfully incorporated by numerous direct primary care

searched intensely to discover a way to practice medicine without third party interference, while simultaneously sustaining a viable business with a great quality of life. Frustration ensued, but eventually he came across the Free Market Medical Association during an online search and set about attending their next national conference. “Megan Freedman of the FMMA provided

physicians would not work for me.” However, at the conference, he heard an a very talented featured speaker, Jack Brown and his wife, Dr. Kathleen Brown. The Browns own Oregon Coast Dermatology, a successful free market dermatology practice and a light bulb went on. Jack described the direct pay model they used at their practice, “My heart began to race,” Costello recalls. 15

15 FREE MARKET PIONEERS

F R E E

“Instantly, I realized this model would work great for podiatry as well and it has proven to do so.” He adds that the Jack and his wife have become great mentors and been a tremendous source of inspiration. “They have always been there to offer guidance and wisdom during our struggles.”

FREE MARKET PIONEERS

Making it Work As the business continues to expand, the Costellos are reaching out to self-insured employers to let them of the benefits to be had by aligning themselves with providers who utilize a direct payment system. The Costellos’ business model implements time-based billing, which is very similar to other professional services.

The Strength of FMMA The Costellos report spreading the word of the benefits of free market medicine has been made easier with help of the FMMA. However, the challenge still remains to shift the mindset that direct pay is a more viable option. As the spokesperson for the state of Missouri, Costello is actively reaching out to other health care providers and consumers. He and the FMMA are educating the public and uniting direct primary care providers and specialists throughout Missouri.

Showing Results

Costello Foot and Ankle Clinic has been in business for eight months and they are pleased to have received an enormous amount of positive feedback from patients. Dr. Costello sees no more than “After much deliberation, I was able break away from my agreement with eight patients per day and allows [my medical management company] successfully. I regained my freedom at least one hour for each patient. to practice podiatry in the way I chose, with the primary goal of placing the Patients report they love that their doctor is not in a hurry to patient first ... Implementing a direct pay model has not been easy, get their appointments completbut it has definitely been worth it.” ed. ~Dr. Joseph Costello As a result, there is never any lobby wait time. In addition, they use only the latest in technology, and because they have no Adherent to the overhead associated with accepting insurance, pillars of the Free prices are usually much more affordable than Market Medical an insurance co-pay. Association, all of “Since opening our doors I have found a their prices are listed sense of happiness that I thought was lost;” online and they behe says. “I now look forward to each day and lieve in providing complete transparency to the always sleep soundly knowing that I provided consumer at all times. the best care possible at prices that were fair.” Unlike insurance-based medicine, care is the He does admit that he may never have taken product, and by creating a high-quality product the leap had he not experienced the managewhere value is based on price and quality, the ment struggles early on, but it has definitely self-insured employer can rest assured their been worth it. money is being well spent. He also credits his wife and family as partners and loving supporters and adds emphatically, “To all the providers considering a direct payment model, I say take the leap. It’s time to get your life back. I know you can do it!“

USHealthMedia.com | Vol. I | Issue 2

PHIA GROUP PHEARLESS ADVOCACY:

SELF-FUNDED

THE PHIA GROUP

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S E L F - F U N D E D P L A N S L E A D T H E W AY

PLANS LEAD THE WAY

HARD WORKING AMERICANS DESERVE ROBUST HEALTH BENEFIT PLANS, AND EMPLOYERS WANT TO PROVIDE THEM WITH ACCESS TO HIGH QUALITY, AFFORDABLE COVERAGE. THE PHIA GROUP’S MISSION IS TO MAKE THIS A REALITY.

ealth care costs too much. That cost is increasing. This forces employers to offset costs onto employees through higher co-pays and deductibles. The result—the cost of providing health benefits to employees is increasing. The Phia Group is comprised of two sister organizations: The Phia Group, LLC and Phia Group Consulting, LLC. They share a simple mission—reduce the cost of health benefits using technology, legal expertise, and focused flexible customer service. The result? Making health benefits affordable for employers and employees. Employers working with The Phia Group “empower” their plans; maximizing benefits and minimizing costs. The Phia Group begins by promoting and educating employers about self-funding their health plans. Next, they create and implement cost containment services, while delivering solutions meant to meet specific client needs.

About Phia The Phia Group story begins in 1999 with two friends in a basement in Quincy, Massachusetts. Founders Michael Branco and Adam Russo combined their knowledge and experience with data analysis, finance, and law to create an innovative approach to coordinating benefits between health benefit plans and other “third party” payers. They began by accepting claims data directly from third party administrators (TPAs) who were processing claims on self-funded employer plans’ behalf. Next, they painstakingly analyzed the entirety of the (at the time) current ICD-9 billing codes to identify any and all that might relate to injuries caused by a third party, or for which a third party might be responsible for payment. Next, they built—from the ground up—a proprietary system that could analyze the aforementioned claims data. The system applied the coding rules, flagged “groups” of claims that appeared to relate to an incident giving rise to third party payment responsibility. As their ability to identify such opportunities USHealthMedia.com | Vol. I | Issue 2

USHealthMedia.com | Vol. I | Issue 2

Providing the most effective cost containment tools to combat the increasingly high cost of health care, The Phia Group boasts a large and ever-growing team of industry recognized attorneys and specialists. Constantly leveraging proprietary technology, The Phia Group is poised to shape the future of healthcare, and is committed to the preservation of the self-funded industry.

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The Phia Group Silos

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The Phia Group’s services can now be divided into four silos: Learn, Plan, Save and Protect. They help clients “learn” by providing best-in-class consultative services and compliance guidance, especially through its subscription based Independent Consultation and Evaluation service or “ICE.” With ICE, clients receive unlimited access to The Phia Group’s team of attorneys, specialists, and answers to all questions regarding benefit plan administration and legal compliance. Next, The Phia Group helps clients “plan,” by reviewing, revising, and drafting benefit plan documents. This can be done on a per-plan basis, or via their web-based plan creation software, Phia Document Management (or “PDM”). These services also include access to their best-practices template—The Phia Flagship—summary of benefits coverage (SBCs), and “gap-reviews,” whereby they compare the plan to other binding documents and contracts; pinpointing inconsistencies and conflicts before they cause trouble. The Phia Group also helps clients “save” by delivering subrogation (third-party claim recovery services), overpayment recoupment, large claim negotiation, and out-ofnetwork repricing services. Finally, The Phia Group’s plans are protected, thanks to defense provided by The Phia Group. Whether it is shifting fiduciary liability for final

THE PHIA GROUP

evolved, so too did their ability to maximize the amount of funds recovered on a per-case basis. Applying legal knowledge and a unique talent for negotiation, The Phia Group’s team of claim recovery specialists grew; eventually becoming the health benefit industry’s most renowned subrogation team. To strengthen their efforts further and ensure self-funded health plans would only pay the right amount at the right time to the right entity, The Phia Group then began drafting subrogation, reimbursement, and third party liability provisions for their clients’ plan documents. This very limited service soon expanded, until The Phia Group found itself being asked to draft entire plan documents. Drafting documents soon evolved into assisting plan administrators with the application of those terms to claims, consulting on claims processing and legal compliance. The creation of Phia Group Consulting soon followed. The Phia Group has grown both in the size and scope of services working with entities coast to coast, and in all 50 states. The Phia Group’s goal and passion is and always will be empowering self-funded plans to maximize benefits while reducing costs through innovative plan architecture, robust cost containment services, and offering clients a means to protect themselves against looming fiduciary liability and unjust billing or abusive practices. Now headquartered in Braintree, Massachusetts, The Phia Group is a recognized leader in cost containment within the health insurance industry. They have secured this reputation by forging partnerships with and providing unrivaled results to their clients; a group that includes (but is not limited to) employers, third party administrators, stoploss insurance carriers, and broker advisors.

appeal decision making onto The Phia Group, acting as a Plan Appointed Claim Evaluator (PACE), or defending a plan’s pricing methodology in the face of pushback, The Phia Group “protects” the plan.

Phia Outreach Committed to education and guidance, The Phia Group provides various free informational webinars and podcasts that provide the most cutting innovations, legal and regulatory updates, and state of the industry trends. The Phia Group’s passion is bottomless and they are committed to creating a more affordable healthcare system. To date The Phia Group provides services to TPAs, ASOs, stop-loss carriers, reinsurance carriers, MGUs, and brokers; representing

THE PHIA GROUP

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municipal health plans, multi-employer health plans, and self-funded health plans. The Phia Group also works with government agencies, Medicare and Medicaid plans, Taft-Hartley entities, High Risk Pools (state and federal), as well as other consortia. Together, these entities represent thousands of employer-sponsored

#PlanHacks

12 Ways to Free-marketize Your Plan

RX Costs

Out-of-the Box Tips

• Encourage employees to “shop” for their prescriptions; costs can vary widely between pharmacies, even with a PBM.

• Cover over the counter drugs! Often, when commonly used heartburn and allergy drugs go OTC, patients switch to another RX because it’s no longer covered by their health Plan. You can cover these OTC drugs at 100% to lower your RX spend! Why stop covering it when it gets cheaper? (HDHP rules would still apply)

• Many PBM contracts make the cost of a drug higher than if it was bought with no contract in place. • If employee pays cash for lower-cost RXs, structure your Plan to reimburse these purchases. • Cover the cost of RXs purchased by the employee from their DPC; generally at wholesale prices. • Check out free market pharmacies.

Durable Medical Equipment • Many pieces of durable medical equipment (crutches, breast pumps, CPAP machines, etc.) can be bought for much less on the open market than through the network. • Incentivize your participants to shop for DME based on price! • Structure your Plan to allow reimbursement if your employee finds their equipment online or through a non-network provider and pay it at 100% (HDHP rules would still apply). 20

health plans covering millions of lives nationwide. The diverse nature of these organizations means The Phia Group is equipped to handle any problem with the highest level of professionalism and expertise. This level of passion for the self-funded industry has led to The Phia Group being a prominent figure in many leading industry organizations. Executives and employees sit on boards of the most well respected industry organizations and travel across the country to present new ideas, The Phia Group is proud to share its passion nationwide, and looks forward to helping every person take back control of their health care and empower their plans. phiagroup.com

• Work directly with high value, low cost lab providers and incentivize your employees to use them. • Place dollar caps or a reference based pricing cap on services that have the most unpredictable, and often incredibly high, cost; such as air and ground ambulance, implantable items, interoperative nerve monitoring, dialysis, and more. If an employee gets balanced billed, you can step in and help negotiate a more reasonable reimbursement. • Many out-of-network physicians and facilities are actually high value! Penalizing patients for using a ‘good guy’ even though they are a better deal is not in your Plan’s best interest. Eliminate out-of-pocket penalties for non-network providers and allow your employees to shop for the best value.

USHealthMedia.com | Vol. I | Issue 2

Self- Funded Employers

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Offering the highest quality at the lowest cost. CO-FOUNDER USHealthMedia.com | Vol. I | Issue 2

HEALTHCARE WHAT TO WATCH FOR

H E A LT H C A R E

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W H AT TO W ATC H F O R

IF IT SOUNDS TOO GOOD TO BE TRUE

With the runaway increase in the cost of benefits, many employers are looking for ways to reduce their spending, while being able to hire and retain high quality employees. However, some of the newest benefit arrangements being created and sold to employers (especially smaller employers that cannot self-fund their benefits) may put the employer, and their employees, in an adverse situation. Many of these programs promise to drastically lower costs, however, great caution must be taken as many of these arrangements can put an employer at risk for audits and costly fines. Additionally, an employee can be placed in adverse tax situations due to decisions made by their employer of which they had no knowledge. This is a complicated issue because there are multiple federal laws and state laws involved where the rules and regulations may be unclear, difficult to understand, or oppose each other in certain areas. Some of these programs are playing fast and loose with regulation, or to put it bluntly, being ‘cute’ with the letter of the law. It is vitally important for an employer looking to offer an unconventional or untraditional benefit option to speak with an independent health plan attorney and/or accountant regarding their potential liability and compliance with the various federal and state laws regarding employer sponsored health plans.

for use with a Health Savings Account is a Qualified High Deductible Health Plan as defined by the IRS. This plan must conform to established federal guidelines. To be an eligible individual and qualify for an HSA, you must meet the following requirements. You are covered under a high deductible health plan (HDHP)…on the first day of the month. You have no other health coverage except what is permitted under other health coverage. You aren’t enrolled in Medicare. You can’t be claimed as a dependent on someone else’s tax return. HDHPs have mandated limitations on deductibles and require that the participant must meet their deductible prior to any benefits for services being paid by the Plan (except for ACA mandated Preventive benefits). If a participant is found by the IRS to have an active HSA account without the required participation in a Qualified High Deductible Health Plan, they could be placed in an adverse tax situation. The employee can be placed in this situation due to decisions made by their employer, of which they had no knowledge or control. It does not matter whether the employer or the employee is contributing to the HSA for this to be the case.

OFFERING DPC TO PARTICIPANTS WHO ARE ENROLLED IN AN HDHP WITH AN HSA

Anyone familiar with the commonly promoted premise that HDHPs and HSAs are free-market-friendly and encourage good consumer behavior would assume Many in our free market space promote the use of that having a Direct Primary Care membership would Qualified High Deductible Health Plan (HDHP) and Health be a perfect fit. However, the IRS takes a different view Savings Accounts (HSAs), however, we are frequently entirely. seeing employers and individuals who are offering or utiA letter from IRS Commissioner Patty Murry on June lizing HSAs without utilizing a qualified High Deductible 30, 2014 (copy available on fmma.org), states clearly: Health Plan (HDHP). An HDHP is a highly regulated plan design with specific “For an individual to be eligible to make tax-demandatory benefits that a patient/participant MUST be ductible contributions to an HSA, however, the inenrolled in to be able to contribute to a tax advantaged dividual must be covered by an HDHP and no other HSA. HSAs are a tax-advantaged option that may be used plan that is not an HDHP, unless the other plan is to save for health care expenses on a pre-tax basis.* disregarded coverage under section 223(c)(1)(B) or (Note: HSAs and Health Reimbursement Accounts are preventive care. A DPC medical home plan appears different vehicles and have different requirements). not to be one of the listed disregarded coverage The most important thing to remember is that the only plans in section 223(c)(1)(B). When that is the health plan design that is authorized by HHS and the IRS case, an individual would not be eligible to make

PARTICIPATING IN A HSA WITHOUT A QUALIFIED HIGH DEDUCTIBLE HEALTH PLAN

USHealthMedia.com | Vol. I | Issue 2

There are additional considerations for an employer who wants to pay for DPC membership for their employees who do not have a High Deductible Health Plan (or for those who offer no health benefits at all). The employer must be careful not to violate the regulations under IRC s104, IRC s105, and s213 regarding offering benefits pre-tax and what are considered ‘deductible medical expenses’ by the employer. Currently, Direct Primary Care is not considered a qualified medical expense, and employers who pay these fees directly run the risk of it being considered a health plan that is non-compliant with the ACA. Employers can still offer DPC by utilizing an integrated Health Reimbursement Account (HRA) or by paying the membership as a taxable benefit.

EMPLOYERS AND HEALTHSHARE MINISTRIES

Healthshare ministries are an amazing option for individuals who need coverage but want an alternative option to the policies being sold in the marketplace. A standard healthshare ministry is an organization that facilitates the sharing of health claims costs by its membership who have common religious beliefs (there are a few who do not have this requirement). Members are generally required to sign statements of faith and/or behavior. These organizations are not insurance; they do not perform underwriting, accept risk, or make guarantees of payment of claims. Some states have regulations blocking healthshare ministries as selling unauthorized or unregulated insurance. Conversely, many states have laws protecting healthcare ministries. Due to the individual mandate provision in the Patient Protection and Affordable Care Act (ACA) (which has been repealed, but is still in effect until 2019), healthUSHealthMedia.com | Vol. I | Issue 2

IRS Regulations The IRS rules do not allow for an employer to contribute to a healthshare ministry for their employees on a pre-tax basis as healthshare ministry expenses are not tax deductible for the individual member. * In correspondence dated June of 2016, the IRS stated, “the law does not exclude employer payment for the cost of employee participation from the employee’s gross income. Instead, the law considers it as taxable income and wages to the employee.” Healthshare ministry costs, premiums, or contributions are not a tax-deductible expense. If the employer reimburses any portion, the employee must pay Federal, State, Local and Social Security taxes.

ACA requirements Healthshare ministry plans do not make an employer compliant with the ACA Employer Shared Responsibility Provisions (Play or Pay provisions). For an employer, healthshare ministries plans are not considered Minimum Essential Coverage, nor are they a Qualified Health Plan with Essential Health Benefits. • Discrimination. There is potential for the employer to be considered discriminatory due to the requirement of a “statement of faith” by the healthshare ministries organizations. An employee who is not of the same faith or does not share the values of the healthshare could sue their employer for offering benefits that they cannot utilize due to their religious beliefs. • Taxes. The employer shared responsibility provisions under section 4980H of the Internal Revenue Code require that employers of a certain size must offer coverage to their employees with Minimum Essential Coverage, that includes Essential Health Benefits, and that is “affordable” (these rules can be found on the IRS website). ◦◦ These two sets of standards, often called Pay or Play, are distinct from each other. More details on these regulations can be provided upon request.

W H AT TO W ATC H F O R

OFFERING DPC AS A BENEFIT OUTSIDE OF AN HDHP

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Current proposed legislation may change these rules, but as of today, employers, and those marketing this combination, should also be very careful. You may be putting the patient or employee in an adverse tax liability situation. Many states have passed legislation stating that DPC is not a health plan. However, these state rules are for purposes of State Insurance Department regulation and have no impact on Federal IRS rules.

share ministries are a great way for individual consumers to purchase a level of protection that was more affordable that typical insurance. There are a few issues regarding employers offering a healthshare ministry as their benefit plan.

H E A LT H C A R E

tax-deductible contributions to an HSA while covered by both an HDHP and a DPC medical home plan, unless the DPC medical home plan provided only preventive care.”

• Compliance. Employers below the employee threshold are not required to offer coverage, BUT if they decide to do so, it must be a Qualified Health Plans or they will face hefty fines. ◦◦ All non-grandfathered plans sold to individuals or small employers must be Qualified Health Plans (QHPs), whether sold in the state or federal Marketplace or sold outside the Marketplace.

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W H AT TO W ATC H F O R

H E A LT H C A R E

Closing th

COMBINING THESE APPROACHES

Even more importantly, some brokers, agents, and organizations are offering options that include combinations of the options listed. Plans that have annual or lifetime limits, limits on essential health benefits, pre-existing condition limitations, etc. do not meet the standard. If an employer chooses to offer any benefits in addition to Minimum Essential Coverage, they must be structured correctly, or the employer may face costly penalties. Please consult your legal counsel before adopting one of these programs or options to ensure compliance.

SUMMARY

We can all agree that solutions must be found to encourage value-based healthcare decisions, lower the cost of care, and maintain and improve quality; however, it is important for employers to be fully aware of what the regulations may impact them to safeguard against inadvertently putting themselves, or their employees, in an untenable situation. It is important for an employer looking to offer an unconventional or untraditional benefit package to speak with an independent health plan attorney or CPA (not employed by the agency selling the program) regarding potential liability and compliance with federal and state laws regarding employer sponsored health plans. Can your employee afford to reimburse the IRS for taxes not collected on an inappropriately structured HSA? Can your business afford a fine of $100 per day per employee for every day that the unqualified arrangement was offered? These are just some of the potential liabilities. The rules and regulations are complicated, and the fines can bankrupt a business. The importance of seeking specific, independent, and expert legal advice on benefits cannot be overstated, it could save your business. *Please review IRC s104, IRC s105, and s213 for regulations regarding pre-tax benefits. This information is not intended to be legal advice and is of an informational nature only. Citations are not provided; however, all rules, regulations, and correspondence mentioned herein are available via the U.S. Internal Revenue Service and Department of Health and Human Services websites. New legislation or regulations implemented after the date of publication may impact the details outlined herein.

Product Design: The Importance of Complete Bundles The Free Market Medical Association and its members have defined and stand behind the three pillars of a free market: price, value and equality. These pillars are not window-dressings; they are foundational to the well-functioning of any market where price represents the agreement of value to buyers and sellers. Today’s focus is the importance of product design; the underlying reasons why it is so wrong today and how the free market pillars correct it. First let’s define a few terms to ensure there is a common understanding: • Prices in Competitive Markets: In any free and competitive market, the fundamental basis of any transaction occurs when a willing seller and a willing buyer agree on a transparent price of a defined product. The keys here are ‘transparent price’ and ‘defined product’. • Products from a Buyer Perspective: When buyers need to get a job done, “they hire a product or service to do it for them”. As Professor Theodore Leavitt used to tell his students, “People don’t want a quarter inch drill—they want a quarter inch hole.” Accordingly, buyers analyze products by their ability to satisfactorily solve a problem or, as Professor Clayton Christensen teaches, a ‘job-to-be-done’. When shopping for a solution or ‘job-to-be-done’, buyers compare sellers’ products by ‘job-to-bedone’ attributes: completeness, fit, ease of use, location, quality, etc. • Product Failure in Fee-For-Service Healthcare: The art of medicine has produced many incredible advances and a wide variation in care and outcomes, both patient and financial. One of healthcare’s most glaring failures is the dearth of ‘jobs-to-be-done’ products, which is shocking. Many large sellers price and bill according to whatever specificity

USHealthMedia.com | Vol. I | Issue 2

he Gap Between Buyer and Seller B y S e a n K e l l e y | Te x a s Fr e e M a r k e t S u r g e ry

Everyone Pays the Cost Let’s look at the details to see how product failure is the cause of wasteful spending. The Institute of Medicine estimates that unnecessary services represented about 10% of all U.S. healthcare spending—nearly $300 billion a year. Additionally, both sides engage in a tit-for-tat battle to defend against, and outmaneuver, each other’s tactics; the cost of which is estimated by Dr. Don Berwick to be 9% of all U.S. healthcare spending—nearly $270 billion a year. Lastly, this mess produces another costly problem: excessive pricing by a small number of sellers. This last category is estimated to represent 5% of all U.S. healthcare spending or $150 billion a year. All told, the cost to the U.S. is 24% of all U.S. healthcare spending or $720 billion per year.

Free Market Medical Products (i.e., Bundles) On the other hand, free market medicine sellers define their products in medical bundles (e.g., hernia) which seek to more completely solve a buyer problem (e.g., hernia). In the case of a hernia, a typical bundle includes all the services needed to care for the patient problem. In this way, sellers design bundles to compete based on solving the buyers ‘job-to-be-done’, greatly reducing USHealthMedia.com | Vol. I | Issue 2

Note: Not all medical solutions ought to be bundled. Diseases or conditions such as Cystic fibrosis or intractable epilepsy that are not well-understood or do not have well-defined treatments are examples.

Free Market Principles at work Bundles represent the standardization of buyers ‘jobsto-be-done’ and close an important knowledge gap that exists between buyer and sellers. Buyers can confidently purchase a ‘job-to-be-done’ product at a transparent price with the knowledge that it solves their problem for a fixed cost. Sellers can confidently market a ‘job-to-bedone’ product at a transparent price with the knowledge that it covers their costs and produces a profit. Working with FMMA members helps tremendously, as their understanding of these concepts is solid. For the others, many are awakening to learn that the old tactics of forcing top-down pricing leads to poor results for everyone. If FMMA members stand behind the free market pillars and explain their bundles and pricing to buyers, they will convert many more to the cause. Sean Kelley is the President of Texas Free Market Surgery and his passion is revolutionizing healthcare. Sean brings a diverse business background to this challenge. Currently, he is developing new business models and the enabling technologies needed to advance the transition from fee-for-service to value-based healthcare. In 2014, Sean was a member of a talented team working on a stratified risk HMO based in South Florida. Presently, Sean is focused on building the foundational elements for future marketplace for healthcare delivery products. sean.kelley@texasfreemarketsurgery.com

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buyer confusion and fear. Bundles standardize many routine medical solutions including surgical and medical treatments. This standardization will lead to an increasing focus on the underlying costs. With full knowledge of the underlying costs, sellers will price with confidence that each bundle covers those costs and includes a reasonable profit.

C LO S I N G T H E G A P B E T W E E N B U Y E R A N D S E L L E R

suits their needs and bottom line. In today’s fee-forservice market, each service is contracted and priced discretely. In this model, discrete services (such as surgery or anesthesia) do not completely solve the buyer ‘job-to-be-done’ and it is nearly impossible for a buyer to know all of the services needed for the ‘job-to-be-done’. The result is sellers create custom solutions that sometimes include unnecessary and costly services. Yet in 2018, one would expect sellers to build ‘jobs-to-be-done’ products to compete for volume like most other markets. Two important culprits are top-down pricing of discrete services by network intermediaries and rent-seeking and gaming behaviors by sellers striving to survive. Combined, both impede the creation of ‘jobs-to-be-done’ products and competitive pricing.

SEAN KELLEY

The Best of Times and the Worst of Times

H O W I M P E R F E C T R E G U L ATO R Y A C T I O N M AY S T I L L C R E AT E O P P O R T U N I T I E S F O R S E L F - F U N D I N G

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How Imperfect Regulatory Action May Still Create Opportunities for Self-Funding JENNIFER McCORMICK, ESQ.

egulators have been busy over the past few months. Between the issuance of executive orders, a tax bill, and state regulatory action, employers are scrambling to understand the implications. And while regulatory action has been quick, it has not necessarily been thorough; creating possibilities and opportunities for self-funded health plans. Upon review of the various regulations, it seems new incentives for the creation of self-funded employer plans now exist. Employers may investigate taking advantage of this environment to form, create, or modify their self-funded benefit plans. Let’s examine certain recent regulatory developments.

Executive Order 13813 On October 12, 2017 President Trump issued Executive Order 13813 to save “the American people from the nightmare of Obamacare.” While this executive order did not modify any laws or regulations, it did direct the Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury to issue proposed regulations concerning expanded coverage under health reimbursement arrangements (HRAs) and association health plans (AHPs). HRAs are tax advantaged arrangements subject to the Affordable Care Act (ACA) regulations. As a result, an HRA may not impose annual dollar limits on benefits unless it is integrated with a group health plan. An exception exists, howev-

er, for small employers. Pursuant to a provision within the 21st Century Cures Act, certain small employers may offer a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). This provision allows small businesses (i.e., employers with under 50 employees) to reimburse employees for out of pocket costs and premiums on the individual market. The regulations, however, impose tight restrictions on the employers’ ability to offer a QSEHRA. Based on the current regulations and guidance for QSEHRAs issued by the Internal Revenue Service (IRS) in Notice 2017-67, an

Jennifer M. McCormick joined The Phia Group, LLC as corporate counsel in 2008. As a healthcare attorney and ERISA lawyer with The Phia Group, Attorney McCormick concentrates on a variety of healthcare and regulatory issues facing employee benefit plans and their administrators. As Vice President of Phia Group Consulting she focuses on health benefit plan regulatory compliance services, including but not limited to self-funded health plan consulting, health plan exclusions, health plan limitations, health plan revisions, defining key items such as usual and customary fees, and the entire health plan summary plan description and summary of benefits and coverage. She is a constant contributor to The Phia Group’s webinars and other educational media. Attorney McCormick earned her J.D. from the Syracuse University College of Law, with certificates in Estate Planning and Family Law, and her B.A. in both Psychology and Criminal Justice from Indiana University, graduating with distinction as a National Dean’s List Scholar. While attending Syracuse, Attorney McCormick served as an Intercollegiate Director of the Moot Court Honor Society and as a Student Attorney in the Low Income Taxpayer Clinic where she counseled clients on state and federal tax matters and the US Tax Court appeals process.

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Proposed DOL Regulations In addition to the expansion of HRAs, the executive order directed regulators to increase access to healthcare by allowing a broader pool of employers to create AHPs. In early January 2018, responding to the executive order, the DOL issued proposed regulations to extend the circumstances under which an association may function as an employer under the Employee Retirement Income Security Act (ERISA). Currently, coverage provided via an AHP is regulated pursuant to the same standards applicable to the individual and small employer health insurance market. Under ERISA, an AHP’s reach is currently USHealthMedia.com | Vol. I | Issue 2

In December 2017, the Tax Cuts and Jobs Act (Act) was signed into law, reforming both individual and corporate income tax issues in the most sweeping and drastic changes to the Tax Code since 1986. While the Act maintains seven tax brackets for individuals, it reduces the rates and increases the thresholds on the brackets for individuals. Potentially even more significantly, the Act reduces the individual mandate penalty to $0 (as of January 1, 2019). While the elimination of the individual tax penalty will likely have a significant negative impact on employers, and their employer sponsored health plans, the greater fear is that if individuals are no longer required to have coverage, the healthy, low risk individuals will terminate coverage altogether (whether individual or employer based). Without healthy lives the risk pools will suffer. While the Act affects the individual mandate, it does not alter current employer mandate requirements; employers are still required to offer affordable coverage meeting minimum value requirements, or face an excise tax. This is troubling for employers. If, with the reduction of the individual mandate penalty to $0 employees are effectively no longer required to maintain coverage, employers anticipate covering a less balanced risk pool, making (still) mandated employer coverage more expensive. 27

J E N N I F E R M CC O R M I C K , E S Q .

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limited to circumstances where it is an employer sponsored plan. Specifically, association members must share a common interest, connect for reasons other than providing health insurance, exercise sufficient control over the health plan, and have at least one non-business owner employee. The proposed rules may be game-changing for working owners (i.e., sole proprietors and self-employed individuals), allowing them to function as both the employer— for purposes of joining the association—and as the employee, for purposes of being covered by the plan. This unique dual status could allow working owners to participate in association health plans, and the adjustment could allow a new class of individuals (and potentially attract a large and previously ineligible pool of individuals) to self-funding. Additionally, the proposed regulations contemplate the formation of an association for the purpose of offering health insurance. The rule does not impose prohibitions on forming new associations (or specify size limitations), but it does provide formal organizational requirements for associations. These newly-formed associations would need affordable health insurance options, and may want to explore the benefits of self-funding. This could also create a new pool of entities for self-funding.

H O W I M P E R F E C T R E G U L ATO R Y A C T I O N M AY S T I L L C R E AT E O P P O R T U N I T I E S F O R S E L F - F U N D I N G

employer offering any group health plan is ineligible. As a result, even employers who only offered group dental coverage, for example, would be disqualified. The IRS did request comments on this guidance. The anticipated comments on Notice 2017-67, combined with the executive order directing the agencies to propose regulations expanding opportunities for employers to offer an HRA, may loosen current restrictions and expand the employer eligibility requirements. Guidance is still pending, but the proposed regulations could present options for self-funding, which do not currently exist.

H O W I M P E R F E C T R E G U L ATO R Y A C T I O N M AY S T I L L C R E AT E O P P O R T U N I T I E S F O R S E L F - F U N D I N G

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J E N N I F E R M CC O R M I C K , E S Q .

While the individual and employer mandate were intended to work together to increase access to care and balance risk, the elimination of the individual mandate does not fully undermines the continued value of offering employer sponsored coverage as an employee benefit. Employers still recognize the culture and corporate benefits that attract and retain a talented work force, like 28 employee health plans. Many employees (even healthy ones) value the benefit of comprehensive healthcare and the elimination of the individual mandate will not deter them from continuing coverage under an employer plan, or seeking an employer that provides one. This does mean, however, that employers will need to be creative and flexible to counterbalance the potential new costs. One way to offset costs would be to create a tailored plan, designed specifically for the individuals that value healthcare as an employee benefit, and the best way to offer flexibility is via a self-funded plan. This might be an opportunity to attract more employers who are concerned about rising costs and investigating new solutions. Only with self-funding can an employer implement a targeted health plan that is loaded with unique benefits and creative cost-containment methodologies. The Act also creates tax savings for businesses by slashing the corporate income tax rate from 35% to 21%, and creating a 20% deduction for qualified business income (QBI).

While the specifics of the business tax changes are beyond the scope of this discussion, and the determination of QBI is not a straightforward analysis, the takeaway is that these tax benefits should (in theory) generate opportunities for employers to save on their tax bill. With the savings, employers invest in more creative employee benefits, like self-funded healthcare plans. Despite the complexity of the Act and the continued uncertainty of some of its implications, the potential opportunities for self-funding should not be overlooked. Employers should discuss the impact of the Act on their individual situation with their tax advisors to better understand planning opportunities.

State Action In response to the Act’s repeal of the individual mandate, certain states are taking action. For example, a Maryland proposal would require individuals to have insurance or pay a penalty of 2.5% of their income or $696 (whichever is greater). The imposition of insurance mandates at the state level would encourage participation in employer plans, making employer sponsored coverage an attractive option and broadening the risk pool. If states like Maryland join Massachusetts in mandating coverage it could positively impact self-funding. More individuals would be looking for cost effective health plan options, something that an employer with a self-funded plan would be able to provide.

Summary While recent regulatory developments have been swift, leaving anxiety over their interplay and interaction, employers should look for opportunities to embrace change as it relates to benefits they must offer (i.e., employers are still subject to the employer mandate), and those that could be advantageous or strategic to offer. With new challenges come new opportunities for HRAs, AHPs, and employers under the executive orders, proposed DOL regulations, tax reform, and state level developments. Self-funding, with unmatched flexibility for employers of all sizes, could be a cornerstone of the solution to reduce costs in the provision of healthcare.

FREE MARKET PROVIDERS MAY COST UP TO 80% LESS THAN “NETWORK ALLOWABLES” WITH HIGHER QUALITY AND BETTER OUTCOMES. NETWORKS AND CARRIERS ARE INCENTIVIZED WHEN CLAIMS COSTS ARE HIGH DUE TO THEIR REVENUE STREAMS. REMOVING THESE VALUELESS THIRD PARTIES DRIVES DOWN COSTS.

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DPCs: STATE BY STATE BY ANN MARIE LUDLOW

Physician-Advocate Fighting for a Better System

P H Y S I C I A N - A D V O C AT E F I G H T I N G F O R A B E T T E R S Y S T E M

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A N N M A R I E L U D LO W

“Instead of hiring people to treat insurance, 29 we hire people to treat patients.” ~Dr. Lee Gross challenges, to its success. “It cross the nation, 23 states took five years to pass a threehave passed bills that direct- page bill in Florida and we had ly affect direct primary care (DPC) 170 lobbyists against us.” practices. Legislative debates focus, Dr. Gross believes great among other things, on whether things will continue to happen DPC should be considered insurance, at the grass roots level. “The a classification that opens the door conversation is being driven by to government involvement in praca small number of people with tice operations beyond medical care. a large voice. Hospitals don’t Physicians like Dr. Lee Gross fall want people to know it, but we heavily—and with certainty—on Dr. Gross says the Insurance Lobby have seen them negotiate cash the “no” side of the debate. DPC prices and side deals many times, so is strong, so businesses and DPCs advocates agree the DPC model is a need to fight vigorously. He and we need people to understand they physician-patient contract, without his partners at Docs4PatientCare have that option.” the “middle man” of insurance and Foundation (D4PCFoundation.org) As one in the trenches, Dr. Gross other third parties. are working every day with legislahelps businesses lobby for passage Dr. Gross began his solo practice of DPC laws. “On the legislative side, tors, business experts and the media in 2004 when he realized everything business owners need to contact to develop common sense workable he worked for to become a family alternatives from a unique perspecstate and federal representatives doctor was being taken away by the tive. and tell them they want healthcare government and other third par“It’s impossible to know the without insurance hassles and the ties. “The patient was no longer the future, but we don’t have a care necessary army of staff members target. Every time I created a new problem; it’s a cost problem and needed to deal with those daily service to help patients and generuptions, as well as DPC inclusion in self- funding will be critical to solving erate revenue for my practice, the it.” Health Savings Accounts. These will government stepped in and found a Dr. Gross encourages physicians help practices and businesses see way to shut it down. What the govhuge decreases in plan expenses and and employers to be a part of the ernment doesn’t want is any sense free market healthcare economy. enable physicians in DPC practices that physicians can regain control of to keep their patient panel sizes “It’s happening where you are and the healthcare business.” it’s just beginning. ” reasonable and their But, when the owner of a small prices affordable. On local company asked him to see all the home side, busiof his employees for a set fee, the ness owners need solution became clear, and Dr. Gross to demand price re-created a practice based on that transparency from partnership. Epiphany Health was all parties, and launched in 2010 and has grown brokers need to also steadily since. include their prices in Dr. Gross has become a force for transparent fashion. Be change to help others replicate his ready to refuse a middle success (and life balance). He has man getting paid for referrals testified at the state and national but not actually level to make DPC exempt, everyproviding value.” To date, 23 states have passed laws, with positive results, for DPC operations. Oregon’s where, as an insurance product, and bill is considered the worst of the lot (ORS 735.500). Minnesota, is committed, in the face of great Pennsylvania and South Carolina have proposals in committee. USHealthMedia.com | Vol. I | Issue 2

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CALL TO ACTION

EMBRACE TRANSPARENCY AND GROW YOUR BUSINESS

TRANSPARENCY IS VITAL TO A SELF-FUNDED HEALTH PLAN Many healthcare providers and hospital systems have a great deal invested in the status quo of healthcare. It is

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TRANSPARENCY FROM THE TPA Transparency from an independent TPA is not scrutinized as closely as the free market movement in the provider sphere. However, it is just as important for the TPA to embrace transparency in their own business as it is for the providers. Many times TPAs have multiple revenue streams from commissions to percentage of savings on out of network or third party recovery. This may be standard industry practice, but is not transparent, nor is it in the best interest of the client.

IS YOUR CLIENT AT THE FOREFRONT OF YOUR DECISIONS? Regulatory compliance- ERISA requires that employers use plan funds for reasonable expenses. The inability to quantify the exact compensation paid to their TPA puts employers in a non-compliant position with ERISA. (Class action suit example)

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The free market movement in healthcare is gaining steam quickly. As the industry grows and changes, with premiums and out-of-pocket costs soaring, consumers are taking a much closer look at their total healthcare costs than ever before. Consumers expect to know the value of a purchasing decision. Before setting out to make major purchases, individuals scan the landscape of advertisements and consumer reviews, looking for quality products and determining a fair price they are willing to pay. However, when making healthcare purchasing decisions, any analysis of cost versus value is nearly impossible. It stands to reason that a patient in pursuit of actual pricing for medical treatment should be able to obtain that information. Frustratingly, that is rarely the case. The American healthcare system functions on the predication of a lack of transparency. As more and more patients begin to scrutinize their own healthcare costs, the demand for transparency is intensifying. Healthcare transparency provides consumers with the information and the incentive to choose healthcare providers based on value. Value is not just about price; but rather price and quality. True free market healthcare is consumer-driven. Patients are taught that valuable healthcare has to be expensive and that the highest quality will cost more. But when it comes to health services, the opposite is true, the quality of healthcare is not related to the price in the way we are used to. In reality – the vast majority of the time better quality care is almost always a lower price. A recent study indicated that if everyone in the U.S. got their care from the Mayo clinic, health costs would sharply decline. Mayo has excellent quality care, but their prices are far less than the competition.

becoming widely known that many healthcare systems are masking revenue streams, taking federal dollars to reimburse themselves for ‘uncompensated care’, and relying on political favors to maintain their monopoly status. They are bankrupting patients and self-funded health plans while claiming imminent bankruptcy. Self-funded employers have been forced to rely on PPOs to give a percent off billed charges from these providers. This has done nothing to curb the rising cost of care as most PPOs are taking a portion of ‘savings’ as an additional revenue stream. It benefits them if the billed charge is excessive. In addition to the PPO, many more layers between the patient and the provider further add to the cost. For a self-funded employer, these costs are not monopoly money. The cost increases can mean the difference between paying claims or giving raises; buying new equipment or increasing staff. Incenting employees to use providers who offer bundled, cash-based pricing can save that employer millions of dollars in claims in just a few years.

E M B R A C E T R A N S PA R E N C Y A N D G R O W YO U R B U S I N E S S

TRANSPARENCY AND THE FREE MARKET = FOCUSING ON VALUE

MEGAN FREEDMAN

BY MEGAN FREEDMAN

E M B R A C E T R A N S PA R E N C Y A N D G R O W YO U R B U S I N E S S

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MEGAN FREEDMAN

Trust of the client- When your total compensation is stated on an up front, per employee per month basis, it shows the client that you have their best interest in mind. Aside from potential ERISA issues, it is an example that you will work for their best interest. Recommendations for plan design, stop loss, cost containment vendors, etc. can be made purely with your client’s goals in mind. These decisions will never again impact your bottom line. Getting an automatic raise when your client has a poor claims year puts the TPA at odds with the best interest of the client. Self-funded employers should never need someone to ‘protect’ them from their TPA! Compensation should always be based on value. Value is determined based on what is fair and equitable to both the buyer and the seller. Equality- When a TPA embraces and promotes the free market in healthcare, how then does it look when the TPA gains compensation in the exact manner that they are asking the providers not to use? Why make the change to bundled administration fees? Because it is knowable to the client; it is in the client’s best interest; it is in your best interest; and it is the right thing to do.

WHY CAN EMBRACING TRANSPARENCY AT ALL LEVELS GROW YOUR BUSINESS? TPAs who have embraced transparency at all levels of their business have seen their businesses grow and thrive over the last few years. Refocusing the independent TPA industry back to their roots of providing valuable services based on their client’s needs and goals helps independent TPAs take back their niche from the carrier ASOs.

PUTTING THE BUYER BACK IN THE DRIVER’S SEAT Many TPAs like the idea of transparency, but do not know the howto’s of working with free market providers or how to structure the benefit designs. They may be utilizing carrier networks with contracts that do not allow direct contracting or enhanced benefits for specific providers. Their compensation may be entirely dependent on anti-free market revenue streams. These are all things that can be easily worked around!

HERE ARE SOME TIPS: Plans can include incentives for the free market! The Phia Group can help with this. Fire the carrier PPOs! This may seem scary, but there are PPOs who will not prohibit direct contracting with free market providers. Worried about discounts? Don’t be. The discounts off of ‘billed’ charges are entirely made up and hold no value. Utilizing free market healthcare sellers will more than make up for any loss in ‘discounts’. Do the math. Add up your total compensation and figure out what it would take to convert it to one line item on the spreadsheet. Start with one client. They may be astounded when your admin fee line goes from $15 to $40, but when they see the overall picture of reduced stop loss premiums and return of the whole amount on subrogation or out of network negotiations, they will sing your praises and trust will grow. Still need help? Call the Free Market Medical Association 866-901FMMA (3662).

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free market medical association

CHAPTER DIRECTORY

To learn more about FMMA Local Chapters, visit FMMA.org/ Local-chapters

F M M A C H A P T E R D I R E C TO R Y

CAROLINAS

NORTH AND SOUTH CHAPTER Shane Purcell carolinas@fmma.org 864-225-7878

MICHIGAN

OKLAHOMA

FLORIDA CHAPTER Chris Markford florida@fmma.org 727-448-0822

MICHIGAN CHAPTER Theresa McIntosh Dr. Roland Tindle michigan@fmma.org 810-695-8011 Facebook: michigan fmma

OKLAHOMA CITY (FOUNDING) CHAPTER Sharon Hodnett okc@fmma.org 405-265-2778 Facebook: oklahoma fmma

GEORGIA

MINNESOTA

TULSA CHAPTER Paul Mackey tulsa@fmma.org 918-295-7534

FLORIDA

GEORGIA CHAPTER Dr. Robert Nelson georgia@fmma.org www.Linkedin.Com/ groups/7015203 Facebook: georgia fmma 770-881-3906

ILLINOIS

ILLINOIS CHAPTER Colleen Ingraham illinois@fmma.org 309-691-7774

MASSACHUSETTS

MASSACHUSETTS CHAPTER Dr. Jeffrey Gold, Matthew Painten massachusetts@fmma.org Phone: 781-535-5651

MINNESOTA CHAPTER Merlin Brown, MD Tyler Lowthian minnesota@fmma.org 612-430-8110

MISSISSIPPI

MISSISSIPPI CHAPTER Micah Walker Becky Russell mississippi@fmma.org 662-402-1219

OHIO

OHIO CHAPTER

Louis Flaspohler ohio@fmma.org 513-351-0800

OREGON

MISSOURI

OREGON CHAPTER Jack Brown oregon@fmma.org 541-267-0347

NEBRASKA

PENNSYLVANIA CHAPTER Dr. Nick Pandelidis pennsylvania@fmma.org 717-718-2000

MISSOURI CHAPTER Dr. Joseph Costello missouri@fmma.org 660-665-3338 NEBRASKA CHAPTER Pete Larson nebraska@fmma.org 402-680-9387

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PENNSYLVANIA

TEXAS

AUSTIN CHAPTER Sean Kelley austin@fmma.org 512-590-1136 DALLAS CHAPTER Cristin Dickerson, MD dallas@fmma.org 713-775-7252 HOUSTON CHAPTER Dr. Geetinder Goyal houston@fmma.org 713-280-7991

VIRGINIA

VIRGINIA CHAPTER Dr. Jordan Hackworth virginia@fmma.org 434-971-3421

WISCONSIN

WISCONSIN CHAPTER Dr. Kevin Tadych wisconsin@fmma.org 715-444-2873

WHY BE INVOLVED IN A LOCAL FMMA CHAPTER?

W H Y B E I N V O LV E D I N YO U R LO C A L F M M A C H A PT E R

Local chapters of the Free Market Medical Association connect you with like-minded employers, physicians, facilities, industry experts, and experts in your own community. Local chapter groups help facilitate and implement strategies, ideals, and goals important to you. Bringing buyers and sellers of health care goods and services together to strategize, identify, and implement solutions is groundbreaking and paradigm shifting. For too long, third party vendors have kept two of the biggest stakeholders in our healthcare system apart—the providers, and the employers. Both sides recognize that the only way for providers to provide the highest value, and employers to offer comprehensive benefits without runaway healthcare costs, is to work together to advocate for change. Your local chapter connects you with free market-friendly providers who have embraced transparent pricing and quality. FMMA member physicians and facilities understand helping your business succeed is an essential part of keeping the local community strong, and helps them succeed! What should you expect? Amazing conversation, new friends, expanded resources, and maybe some answers and solutions. Your chapter may meet monthly over lunch at a local business, or may choose to meet regularly by video chat or conference call, and only meet in person every quarter. Each local chapter has its own

#PlanHacks We’ve established free market providers and facilities charge far less than non-transparent facilities and hospitals. What if you want to stay with your current provider but save yourself (or your health plan) a lot of money? Here are tips for negotiating with your local provider who does not have bundled, cash pricing.

schedule and topics based on what is best for the participating members, but the relationships formed are beneficial across the board. Recently, the Austin chapter held a highly successful event featuring FMMA Founders, Dr. Keith Smith and Jay Kempton, FMMA Beacon Award Winner, Texas Free Market Surgery, and the President of the Oklahoma Council of Public Affairs, Jonathan Small. The topic was Red River Rivalry, How Texas Can Beat Oklahoma in the Free Market. This event drew more than 100 attendees from as far away as 300 miles! By the conclusion, participants were fired up to be part of this community and to collaborate with fellow members to create solutions. Don’t have a local chapter in your area? You can start one! Starting a local chapter is easier than you think—simply talk to the FMMA staff, fill out some paperwork, then invite anyone you know to sit down and have a conversation. Chapters grow steadily over time as attendees invite someone they know to the next meeting. The FMMA currently has 20 local chapters, and more than 300 members in 33 states. You may have free market warriors in your own back yard! Join the FMMA and support or start a local chapter. FMMA.org/local-chapters/

Negotiating a Free Market Price ◦◦ Can’t find a bundled cash price? Call FMMA at 1-866-901-FMMA (3662) we can help! • Print out the cash price for the procedure and show it to your local provider. ◦◦ Take this to your provider and show it to them. ◦◦ If applicable, find out the cost of a plane ticket or gas, for travel.

• Find out the price from your provider. ◦◦ If the price is not bundled, you will need to find the price of the surgeon, facility, anesthesia, and any labs or pathology that is needed. At minimum, try to find out what the “charge master” price is. ◦◦ If the provider/facility/anesthesiologist refuses to give you any price for whatever reason, make sure your physician or surgeon is aware of this, and that you are considering leaving their practice for a transparent, high quality, provider. • Find the free market price. ◦◦ To find a bundled cash price for a procedure, there are some options: 1. Go to www.fmma.org and search. 2. Use a free market facility’s price from their website. 3. Go to HeatlhCareBluebook to find a ‘fair price’.

◦◦ Let your provider know that you are willing to leave them to save money, while still getting a high quality procedure. This method is effective whether you are a cash pay patient, have a high deductible health plan, or a self-funded health plan. •

Get A Written Consumer Cash Price Agreement ◦◦ If your provider (and all of the ancillary providers if necessary) agree to price match and compete, get a Cash Price Agreement in writing!

• Be prepared to call their bluff. ◦◦ Many providers have no interest in competing with their peers. You must be prepared to travel for your procedure if they refuse to negotiate. ◦◦ It is common for a provider to relent after losing a few patients to a free market facility.

“A man in Georgia needed a prostate operation and was quoted $40,000 by the local hospital. Our price online was $3,600, so he took a plane ticket to Oklahoma City in one hand and our price list in the other hand to this hospital administrator. The administrator caved and said ‘we’ll do it for $4,000’ so we saved that guy $36,000 to get his surgery.” ~Dr. Keith Smith, Surgery Center of Oklahoma

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2018-19 PUBLICATION SCHEDULE ISSUE DATE

CLOSE DATE

August 2018

July 12, 2018

October 2018

Sept 13, 2018

December 2018

Nov 5, 2018

February 2019

Jan 10, 2019

April 2019

Mar 7, 2019

June 2019

May 2, 2019

August 2019

July 11, 2019

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HEALTHCARE

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