Self-Insurer Aug 2010 by SIPC

August 2010

TRENDS IN HOSPITAL PROFESSIONAL LIABILITY

OPERATIONS

ThreaTs

to Self-Insurance

sIIa OFFICers Chairman of the Board* Armando Baez, Vice President Global Benefits Group Foothill Ranch, CA President* Freda Bacon, Administrator Alabama Self-Insured WC Fund Birmingham, AL Vice President Operations* Alex Giordano, Executive Vice President / Chief Marketing Officer Starr Global Accident & Health Greenwich, CT

August 2010

FeaTures

Les Boughner, Executive Vice President & Managing Director Willis North American Captive and Consulting Practice Burlington, VT

Volume 27

repOrTs 4 DC HEALTH REFORM CONFERENCE

Vice President Finance/CFO/ Corporate Secretary* Robert Repke, President Global Medical Conexions, Inc. San Francisco, CA

sIIa DIreCTOrs

SIIA Voices Prominent in DC Health Reform Program

10 From the Bench Trends in Hospital Professional Liability Operations

James E. Burkholder, President/CEO TPABenefits, Inc. San Antonio, TX

PPACA, HIPAA and Federal Health Benefit Mandates: Practical Q & A

ART Gallery

John Jones, Partner Moulton Bellingham PC Billings, MT Daniel Lebish, President & CEO HM Insurance Group Pittsburgh, PA

The Risk Manager’s Client

Steven J. Link, Executive Vice President Midwest Employers Casualty Company Chesterfield, MO

2 President’s Message 28 Viewpoint

sIIa COMMITTee ChaIrs Chairman, Alternative Risk Transfer Committee Kevin M. Doherty, Partner Burr & Forman LLP, Nashville, TN Chairman, Government Relations Committee Jay Ritchie, Senior Vice President HCC Life Insurance Co. Kennesaw, GA Chairwoman, Health Care Committee Beata A. Madey, Senior Vice President, Underwriting HM Insurance Group Pittsburgh, PA Chairman, International Committee Liz Mariner, Executive Vice President Re-Solutions Intermediaries, LLC Minneapolis, MN Chairman, Workers’ Compensation Committee Chris Mason, Chief Operating Officer USATPA, Inc., Syracuse, NY

DeparTMenTs

Threats to Self-Insurance

august 2010 The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’

Publishing Corp. (SIPC), PO. Periodical Postage Rates paid at Tustin, California and at additional mailing offices. Postmaster: Send address changes to The Self-Insurer, P.O. Box 1237, Simpsonville, SC 29681 The Self-Insurer is the official publication of the Self-Insurance Institute of America, Inc. (SIIA). Annual dues are $1495. Annual subscription price is $195.50 per year (U.S. and Canada) and $225 per year (other country). Members of SIIA subscribe to The Self-Insurer through their dues. Copyright 2010 by Self-Insurers’ Publishing Corp. All rights reserved. Reproduction in whole or part is prohibited without permission. Statements of fact and opinion made are the responsibility of the authors alone and do not imply an opinion of the part of the officers, directors, or members of SIIA or SIPC. Publishing Director - James A. Kinder Managing Editor - Erica Massey Editor - Gretchen Grote Design/Graphics - Indexx Printing Contributing Editor - Tom Mather and Mike Ferguson Director of Advertising - Justin Miller Advertising Sales - Amanda Perry Editorial and Advertising Office P.O. 1237, Simpsonville, SC 29681 • (864) 962-2201 Self-Insurers’ Publishing Corp. Officers (2010) James A. Kinder, CEO/Chairman Erica M. Massey, President Lynne Bolduc, Esq. Secretary 2010 Editorial Advisory Board John Hickman, Attorney, Alston & Bird David Wilson, Esq., Wilson & Berryhill P.C. Randy Hindman, Deloitte & Touche, LLP Armando Baez, Global Benefits Group

The self-Insurer P.O. Box 1237, Simpsonville, SC 29681 Tele: (704) 781-5328 • Fax: (704) 781-5329 e-mail: ggrote@sipconline.net. The Self-Insurance Institute of America, Inc. (SIIA) is the world’s largest trade association dedicated exclusively to the advancement of the self-insurance industry. Its goal is to improve the quality and efficiency of self-insurance plans through education and to create a general acceptance in the public and business communities of this viable alternative to conventional insurance. Founded in 1981, SIIA represent the interest of self-funded employers, independent administrators, utilization review companies, managed care companies, underwriting management companies, insurance companies, reinsurers, agents, brokers, CPAs, attorneys, financial institutions, manufacturers, trade associations, retail and service companies, municipalities, and others. SIIA designs and implements programs and services for the benefit of its members, the industry, and the general public to increase the general level of knowledge about self-insurance plans, achieve greater professionalism in the industry, and enhance the general well-being and mutual interests of its membership. SIIA achieves its goals and objectives through several means: n International/national conferences and industry forums which provide educational opportunities, with substantial discounts on the registration fees offered to SIIA members. n Distributed monthly, The Self-Insurer, features useful technical articles as well as updates on topical issues of importance to the self-insurance industry. n The Self-Insurance Educational Foundation (SIEF) conducts statistical research regarding the industry and grants educational scholarships to promising students whose studies focus on the self-insurance industry. SIIA enjoys federal representation in our nation’s capital through counsel and staff on key legislative and regulatory issues. SIIA is the only national voice encompassing the whole self-insurance industry. If your company is involved or interested in self-funding risk for workers’ compensation insurance programs, employee benefit plans, or property and casualty exposures, then it should be a member of the association serving the industry - the Self-Insurance Institute of America, Inc.

The Self-Insurer

August 2010

PRESIdENT’S MESSAGE

s you have seen in my previous messages, SIIA is on the cusp of our industry opportunities and challenges. The recent London conference was just another example of the move-forward mentality and ability to adapt to our membership needs. Through networking and traveling to different regions around the world we have gained a better understanding of the insurance industry, regulatory environment and possible opportunities and barriers. This will only add additional value as SIIA’s membership increases on the global front. Here on the home front, SIIA has joined the call to protect self-insured workers compensation programs that have been under attack and have been threatened with shut-down in New York. The Workers’ Compensation Committee of SIIA and industry leaders are aggressively working with regulators to provide alternative methods. The diversity of the SIIA membership only enhances our efforts in this battle. The Washington staff of SIIA are still pounding away to digest the ramifications on our industry by the Health Care Reform legislation. Only by having staff in D.C., on the front lines, can we better communicate our concerns and provide input on the regulations and changes that will

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be put in place. Thirty years is a long time for an association to remain in existence, let alone maintain leadership, no matter what industry is involved. You can gather a lot of information and experience in 30 years! At the SIIA National Conference and Expo October 12-14 in Chicago, we will be celebrating 30 years of continued service to the selffunded industry, and will be the premier opportunity to “Share the Success of Self-Insurance”. I hope you have all made plans to attend this truly unique gathering of all sectors in the self-insured arena.

“Through networking and traveling to different regions around the world we have gained a better understanding of the insurance industry, regulatory environment and possible opportunities and barriers.” As I sign off, I am awaiting the return of my soldier son from Iraq. As we go through our day to day routines, take a few moments to thank those who are allowing us to enjoy our freedom and our way of life. God Bless Our Troops,

Freda Bacon, President

August 2010

NC O

30th Annual

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Ex p o

n a o i l Ed t a N u

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l C a o n n o i f t

Sharing the Success of Self-Insurance… With You October 12–14, 2010 Sheraton Chicago Hotel & Towers Chicago, IL www.siia.org © 800-851-7789

NC Overview Brochure.indd 1

4/19/10 11:03:27 AM

DC HEALTH REFORM CONFERENCE

SIIA Voices Prominent in DC Health Reform Program

IIA members including Director Daniel Lebish were prominent at an early-summer industry conference titled “Beyond Health Care Reform” at the American Society of Association Executives (ASAE) Conference Center in Washington DC, which surfaced some creative applications of alternative risk transfer (ART).

Lebish said that captives can address the concerns of employers as well as producers in developing structures to self-insure employee benefits reinsurance. He used the potential example of pooling groups of employees that may be covered by the new health insurance exchanges and reinsuring their excess losses through a captive structure.

Association sponsors, SIIA and the Captive Insurance Council of the District of Columbia (CIC-DC), contributed to a unique crossover event that attracted a large audience of self-insurers, captive managers and others who depend on expert analysis of federal healthcare reform.

Observing that the benefits managers have been slow to follow their property & casualty colleagues into captive insurance, Lebish said that HM’s goal is to raise the level of insured group persistency – “stickiness,” he called it – in a world where about 35 percent of clients change stop-loss carriers annually.

Lebish, chairman and CEO of HM Insurance Group, a major stop-loss insurer that is a subsidiary of Highmark Blue Cross Blue Shield, found an environment of opportunity for new captive insurance companies among the complex implementation of healthcare reform laws.

Lebish stated that many groups and individuals would be “in play” as health reform takes shape. “Fifty percent of the market will be moving in one direction or another as employers continue to look for lower costs and self-funding spreads to smaller groups. All of this will increase the opportunities for ART vehicles and we will be limited only by our imaginations.”

“Without a doubt, a lot of uncertainty exists,” said Lebish, now serving his first term on the SIIA Board of Directors. “And within the changes are opportunities to develop programs to reduce costs and share risks.” He said HM Insurance Group intends to partner with employee groups and producers in creating alternative risk transfer (ART) programs.

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August 2010

An example stop-loss captive that is already up and running was described by SIIA member Rod Kastelitz, vice president of sales and marketing for TPA Employee Benefit Management Services, Inc. (EBMS). EBMS has created a captive (EBMS Re) to reinsure excess losses of some of its TPA clients.

Kastelitz said the goal of EBMS was to offer a long-term solution to stabilize stoploss premiums, eliminate lasering and raise the rate of renewals. “Self-preservation prompted us to try something different and offer our clients a different approach,” he said.

Purcell said the dynamics of selfinsured versus fully-insured plans has changed. “Self-insurance has picked up a competitive edge because the non-discriminatory rule is now shared by fully-insured plans and the insurer tax does not apply to self-insured plans.”

“Our clients who participate in this understand the benefit of a long-term solution. They are purchasing stop-loss insurance with the caveat that they share in the profits.” Kastelitz said that 80 percent of stop-loss profits of EBMS Re go back to employers in the form of future premium credits.

Tess Ferrera, a lawyer with Miller & Chevalier who is a former Department of Labor attorney specializing in ERISA litigation, addressed the effect of healthcare reform on ERISA preemption: “Nobody really knows how it will play out,” she VHN_SelfInsurer_4.5x6.75_bw:Layout admitted. “We’re too early in the process to know. The only guarantee is that it’s an

absolute freakin’ mess.” Ferrera was equally outspoken on other aspects of healthcare reform: “There’s nothing in this bill that will control costs,” she said, pointing out that the reform law contains possible preemption provisions that could be interpreted as being even broader than those of HIPPA. The day-long joint program put on by SIIA and CIC-DC clearly demonstrated that the appetite of the industry for expert analysis and new creative applications of 1 11:40 AM the Page ART6/24/09 will continue well into future1 as healthcare reform regulations begin to take effect. n

Two members of the co-sponsoring Baker & Daniels law firm, Michael J. Nader and John W. Purcell, presented “Health Care Reform:The Employer Perspective.” In a light moment, they compared the new employer healthcare environment to the San Francisco 49ers football team because many new regulations are expected to apply to employee groups of 50 or more. “We expect a creative reduction of employee groups to the magic 49 level,” Nader said, commenting that reduction of full-time employees through leased workers or independent contractors could become prevalent. On the key issue of “pay or play,” Purcell said, “I think employees are going to play. If all you worry about is the cost of health insurance, you would have gotten rid of your plan a long time ago. You can’t deduct penalties and when your employees join an exchange you lose two tax breaks in the process.”

Agreement on new opportunities was registered by Ed Dougherty of B&D Consulting, a division of law firm Baker & Daniels LLP, which co-sponsored the conference. “Businesses that adjust rapidly and well to the new rules stand to gain a significant competitive advantage,” he said, pointing out that self-insured plans may have more flexibility to more efficiently build new service and payment models.

YOU SAY,

“I could use a creative way to attract new health-plan business.” WE SAY,

“We crafted a lower-priced PPO network. How’s that for creativity?” When a client wants to self-insure for the chance to keep the insurer’s profit, VHN PLUS provides the opportunity. For the client’s employees, it provides over 12,000 healthcare professionals and 80-plus hospitals in network. To learn more, including how to use VHN PLUS through fully insured carriers, please visit www.vhn.com/plusnetwork; or contact Jim Gore at jgore@vhn.com or 800-989-3837 ext. 105. And put our creativity to work for you. 7400 B EAU FONT SPR I NGS DR IVE, SU ITE 505 R I C H M O N D , V I R G I N I A 2 3 2 2 5 • www.vhn.com

The Self-Insurer

August 2010

Hospital systems today are facing an increasingly difficult operating environment. Revenues and reimbursements are decreasing, the capital market is becoming more and more restrictive and regulatory requirements and reporting are increasing. Add to this bleak financial picture the fact that medical school enrollments are declining annually and the shortage of physicians is increasing with a projected shortage of 100,000 by 2015.

TRENDS IN HOSPITAL PROFESSIONAL LIABILITY

The result? Hospitals are being forced to cut costs thereby jeopardizing patient safety and increasing risk. The effects of these factors are expected to result in an increase in frequency and severity of claims within the next 24 months.

www.siia.org

August 2010

OPERATIONS By Phil Abrams

s individual hospitals consolidate into larger hospital systems, there has been an increase in the formation of Risk Retention Groups (RRGs) and Captives. As a result, self-insurance is replacing traditional carriers as the most cost-effective insurance solution. Risk management departments end up being responsible for administering the self-insurance operations including policy and claims administration without having the right tools in place. In order to support the self-insurance processing needs, most risk management departments resort to spreadsheets or try to utilize their existing risk management software solution. Some hospitals, as an alternative to in-house processing, have elected to outsource their policy and claims administration processing to Third Party Administrators (TPAs). This frequently results in an increase in processing costs and a loss of control. Micro Trends in hospital Insurance Operations Historically risk managers have been accustomed to managing risks on an incident and claims level. This approach has resulted in increasing concerns at the policy and underwriting level as rating procedures shift from actuarial “whole account” rating to factor-based rating. This shift is influencing underwriting practices and has a direct impact on the hiring of doctors. Challenges Facing hospital Captives Risk managers and hospital medical professional liability managers know that

one of the critical paths to succeeding in a rapidly changing business environment is to have dynamic and flexible business processes and systems that can change with the pace of the current market. This agility enables them to overcome the challenges of today’s market such as the: • Need to reduce the frequency and severity of claims. • Necessity to more tightly manage underwriting practices (understand ‘bad” risks and refine future risk assessment procedures). • Difficulty integrating claims management and policy administration applications to: o Eliminate dual entry and the resulting errors. o Monitor limits and automate deductible billing. o Provide experience reporting by physician, specialty, coverage, etc. • Need to tie claims statistics directly to the corresponding policies. • Difficulty synthesizing information from multiple departments/systems to derive actionable business intelligence. • Necessity to manage outcomes in order to more accurately forecast future claims. • Difficulty generating accurate and timely reports. • Lack of confidence in the accuracy and auditability of manual processes. • Difficulty managing exposures, incidents and claims. • Increasing need to support the Medical Affairs, Risk Management, and Legal Departments. • Uncoordinated litigation management resulting in imperfect physician defense efforts. • Need to be able to Slot Rate and tie specific claims back to the responsible individual. • Difficulty managing the spikes in renewal processing. • Need to quickly respond to market conditions by adopting changes to policy terms and conditions in the least time possible. • Difficulty utilizing the latest advances in technology and integrating with other software solutions. If you can’t measure your risk exposure, you can’t manage it. So, what’s the answer? Today’s technology solutions automate your complex business processes and decisions in order to support your organization’s best practices. This enables you to streamline operations from the front office to the back office through process automation, intelligent decision-making and system flexibility. The results? Improved operational efficiencies, enhanced levels of customer service, and a technology solution that provides the flexibility and scalability required for future growth. automating Business processes and Decisions With the arrival of more personalized service levels, new regulations and reporting requirements and increased consolidation and competition, hospital systems face challenges that are becoming more and more complex. By effectively managing and automating business policies and processes, organizations can address the challenges of increasing complexity and ongoing change while creating a sustainable business advantage.

Macro Trends in Hospital Insurance Operations Independent Doctors • • • • moving toward • • • • hospital employed / affiliated Doctors hospitals • • • • combining to form • • • • health systems Carriers • • • • losing business to • • • • alternative risk Transfer Market risk Management • • • • taking on the activities of • • • • Insurance Operations

continued on page 8.

The Self-Insurer

August 2010

continued from page 7.

To help hospital systems manage the complexity of change across their operations, solutions with a tight focus on medical professional liability offer all of the functionality needed to administer policies handled by the hospital. These solutions utilize business rules to automate both processes and practices, creating a customized corporate asset that can be leveraged across the enterprise. This enables you to automate decisions and processes based on your organization’s best practices to ensure consistency and adherence to organizational policies. In addition, new technology has made it possible for these solutions to integrate with existing systems, enhancing a company’s capabilities while, at the same time, leveraging past investments in systems. ‘Rip and replace’ is no longer your only option.

Today’s Integrated Solutions Deliver Service and Operational Excellence Core Business Modules policy Manager

Web Services

Claim Manager

Billing Manager

reinsurance

Manager

Core Enterprise Modules

Online applications Work Center

policy holder services

Workflow

Manager

event Manager

Forms Manager

Data Services advanced BI analytics

report Manager

Comparative analytics

Central Information Manager Broker/agent services

predicitive analytics

Interface Manager accounts General payable Ledger Interfaces Interfaces

Imaging agency system system reporting Interfaces Interfaces Interfaces

Document

Other Interfaces

Every enterprise system supporting medical professional liability should have a “core” set of modules. These include:

policy Management An automated underwriting solution enables your organization to apply its best practices for underwriting across all new business and renewals to maximize benefits such as improved underwriting productivity and reduced underwriting expense, reduced loss ratio, ease of doing business, improved individual risk selection and pricing, and streamlined processes and reduction of expenses. Leveraging these benefits allows you to gain consistency in risk acceptance, rejection criteria, and premium pricing.

Claims Management A multi-line claims tracking and management system lets you capture extensive information for all claims functions and puts that data at your fingertips resulting in improved claims handling efficiency, decreased losses, and improved data integrity. Robust functionality includes: online incident reporting; skills-based adjuster assignment; automated workflow management; scheduled and ad hoc diary system; litigation management; payments; claims adjuster workload management; subrogation management; automatic coverage verification; reinsurance recoveries; track, report, and calculate lost work time; and define, manage, create form letters; full notes capability; and complete online claims history.

Central Information system One of the most important modules is a central information system that stores all contact data used by other modules and applications, as well as the relationships

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August 2010

between entities that have a connection to a claim or policy. A central information system eliminates the possibility of information being duplicated and improves the integrity of your organization’s data. The information entered into the central information system relates to the individuals (policyholder, claimant, employee, doctor, nurse, attorney, investigator, expert witness, etc.) or organizations (hospital, managed care facility, law firm, etc.) that you do business with. All clients or entities, regardless of their relationship with your company, must be entered in the central information system before they can be used in association with a claim or policy. Once the client information has been entered, it becomes available to any user with the appropriate clearance.

self-service Web portal Self-service web portals are the most efficient and cost-effective way to improve customer service. Once your physicians have registered, they can securely log into the self-service web portal where they can quickly access all of the functionality available to them including the ability to update information and request Certificates of Insurance (COIs). Access to information is secure and roles-based, and the functionality provided to each role is configurable.

Today’s Technology Solutions Deliver Measurable Business Results Increased Operational efficiency Organizations can simplify complexity by controlling multiple sources of data through intelligent business rules and workflow management. Automated underwriting reduces the cost of processing new business and renewals by streamlining underwriting workflows and eliminating steps in the process – without

sacrificing any of the business intelligence that goes into sound underwriting decisions. In addition, by automating key activities throughout the claims process, the claims solution delivers increased productivity in the back office and reduces the operational cost of processing and settling claims.

Flexibility for Growth An easily configurable architecture means your organization will never find technical limitations to be a barrier when a growth opportunity presents itself.

Increased Business agility and Flexibility In today’s competitive environment, the ability to adapt to rapidly changing market conditions often determines a company’s ability to retain its competitive edge. Today’s solutions are built to empower business users to rapidly modify operations in response to new product opportunities, market needs, and regulatory requirements. As a result, business processes and rules become corporate assets, enabling easy deployment across departments and geographies while still allowing for the specialization needed in each area. This enables organizations to use their business rules, policies, and processes for competitive advantage, achieving rapid change and easy deployment.

educated risk Management through Better Business Intelligence Having all information available for coordinated reporting facilitates risk management, reconciliation of books, actuarial work, program analysis, loss runs, and refinement of future risk assessment procedures. This enables you to make more informed business decisions.

Better Data Controls for Transparency / auditability Online audit tracking and workflow automation ensure procedures are followed and traceable, as required for Sarbanes-Oxley compliance.

summary There is an increasing need to leverage purpose-built applications to support the administration of Risk Management within emerging Insurance offices supporting patient safety and loss development for Risk Retention Groups (RRGs) and Captive organizations. The return on investment is often measured in months rather than years. n Phil Abrams is the Director of Sales at Delphi Technology, Inc. He has 10 years of experience supporting insurance operations in the US. In addition, he has authored numerous whitepapers on topics from business process automation through enterprise architecture modeling and optimization.

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02/22/2010 2:40:16 PM

The Self-Insurer

August 2010

Bench from the

By Thomas A. Croft, Esq.

I.The supreme Court Clarifies erIsa attorney Fee provision

e have two reasons for reviewing Hardt v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149 (2010). First, it is the latest ERISA decision from the United States Supreme Court, and since Supreme Court cases define ERISA jurisprudence, they cannot be ignored. Second, the case addresses an issue near and dear to our hearts – attorneys’ fees. On its facts, Hardt is something of a plain vanilla disability case. Hardt was an executive assistant to the president of Dan River, Inc., a textile manufacturer. After being diagnosed with carpal tunnel syndrome, Hardt applied for long term disability (“LTD”) benefits. Her claim was denied by Reliance Standard Life

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August 2010

Insurance Company (“Reliance”), Dan Rivers’ LTD insurer. On appeal, Reliance reversed itself in part and determined that Hardt was totally disabled from performing her current job, thus entitling her to 24 months of coverage. Hardt’s condition worsened, however, and she developed new symptoms. She applied for Social Security benefits during her appeal process, and was awarded those benefits. Shortly, thereafter Reliance informed Hardt that her LTD benefits would expire at the end of the 24-month period and asked that she reimburse Reliance approximately $15,000 to offset the benefits she received from The Social Security Administration. Hardt paid the money and filed another appeal, submitting updated medical records and vocational capacity evaluations. Hardt sought to

have the 24-month limit on her LTD benefits lifted. Reliance denied her appeal, again. Hardt sued. The District Court found that Reliance had ignored key medical evidence, had relied on its own physician’s report which the Court found to be “vague and conclusory” and had ignored Hardt’s evidence regarding her substantial pain. While the Court found “compelling evidence” in the record that “Ms. Hardt [wa]s totally disabled due to her neuropathy,” it nevertheless, remanded the case back to Reliance to give it a chance to address the “deficiencies in its approach.” Reliance did that, and on remand, awarded Hardt full LTD benefits and paid her $55,250 in accrued, past-due benefits. Hardt then sued for attorneys’ fees under ERISA § 1132(g)(1). The Court

followed the three step framework established by the Fourth Circuit. First, the Court asked if Hardt had been a “prevailing party.” Second, the Court determined whether an award was appropriate under the five factor test used in the Fourth Circuit. These five factors are (similar tests apply in other circuits): (i) the degree of bad faith, if any, (ii) ability of party to satisfy the award, (iii) would an award of attorneys’ fees deter other persons acting in similar circumstances, (iv) whether the award would provide a common benefit to similarly situated parties, and (v) the relative merits of the parties positions. Finally, if an award is appropriate, the Court must review the attorneys’ fee requested and limit them to a reasonable amount. Applying that framework, the Court awarded Hardt attorney fees. Reliance appealed the award of attorneys’ fees, and the Fourth Circuit reversed. It determined that Hardt was not a prevailing party. Relying on the U.S. Supreme Court decision in Buckhannon Board & Care Home, Inc. v. W. Va. Dept of Health and Human Resources, 532 U.S. 603 (2001), which held that a fee claimant was a prevailing party only if he has obtained an “enforceable judgment on the merits” or a “courtordered consent decree.” The Fourth Circuit reasoned that because the District Court did not order Reliance to award benefits to Hardt, its order did not constitute an “enforceable judgment on the merits.” The Supreme Court reversed the Fourth Circuit. Following its strict statutory construction approach, Justice Thomas, writing for a near-unanimous court (Justice Stevens concurred in the judgment and the preponderance of the Court’s rationale, but felt the opinion was too glib when comparing other federal statutes that provided for awarding attorneys’ fees) , looked

at ERISA § 1132(g)(1), and noted that the words “prevailing party” do not appear anywhere in the text, and nothing else in that provision purport to limit the award of attorneys’ fees to a “prevailing party.” “Instead, § 1132(g)(1) expressly grants district courts ‘discretion’ to award attorneys’ fees ‘to either party [emphasis in original].’ ” Emphasizing that the American Rule requires that each side must pay its own attorney’ fees, unless a statue expressly decides otherwise, the Court realized that case law construing statutes that granted fee awards to prevailing parties could not provide the rule of decision in this instance. Instead, it looked to a line of cases that interpreted statutes that awarded fees on a different basis, and looked to Ruckleshaus v. Sierra Club, 463 U.S. 680 (1983), which construed the fee award provisions of the Clean Air Act, and which also had granted to district courts the discretion to award attorneys’ fees. Under Ruckleshaus, the standard articulated was that attorney fees should not be awarded “absent some degree of success on the merits by the claimant,” but a claimant does not satisfy this requirement by achieving “trivial success on the merits” or a “purely procedural victor[y].” Noting that the District Court here had applied the five-factor test, the Supreme Court found that this test bore “no relation to the ERISA test nor to its prior fee-shifting jurisprudence; hence, they are not required for “channeling a court’s discretion when awarding fees under this section [i.e., ERISA § 1132(g)(1)].” Thus, under ERISA, a claimant must show “some degree of success on the merits” to be awarded attorneys’ fees under § 1132(g)(1). Here, Hardt had persuaded the District Court that Reliance had failed to give her a full and fair review as required under ERISA and the Court had found compelling evidence that Hardt was totally disabled. Though she did not win summary judgment, she had obtained a judicial order instructing Reliance to adequately review all the evidence within 30 days. She thus achieved far more than a “trivial success on the merits” or a “purely procedural victory.” Thus, she was entitled to the attorneys’ fees awarded by the District Court. While the Hardt decision is likely to be enthusiastically received by the plaintiffs bar for establishing a more clearly attainable standard for an award of attorneys’ fees, it must be noted that ERISA provides for an award of attorneys’ fees “to either party.” While defense counsel may have a more difficult time convincing courts to exercise their discretion in favor of the defense, the statute clearly provides for a level playing field in that regard. We will have to see how these new standards play out in the various circuit courts. II.The ninth Circuit applies Hardt: Were They Listening? It did not take long for a circuit to be confronted with an attorneys’ fee case following the Supreme Court’s Hardt decision. In Simonia v. Glendale Nissan/Infiniti Disability Plan and The Hartford Insurance Company, 2010 WL 2521036 (9th Cir.), the Ninth Circuit had reason to apply the Supreme Court’s new ERISA attorneys’ fee jurisprudence as set forth in Hardt. The Simonia decision came exactly 30 days after the Hardt decision. Conscious of that recent Supreme Court decision, the Ninth Circuit understood that it must assess the award of attorneys’ fees based on the new “some degree of success on the merits” standard articulated in Hardt , rather than the traditional “prevailing party” rationale. But in reviewing the Supreme Court’s discussion of the role of the five-factor test in limiting the District Court’s discretion under § 1132(g) (1) – “Because these five factors bear no obvious relation to § 1132(g)(1)’s text or to continued on page 12.

The Self-Insurer

August 2010

continued from page 11.

our fee-shifting jurisprudence, they are not required for channeling a court’s discretion when awarding fees under this section.” – the Ninth Circuit read it in a somewhat expansive manner.

it to be. We would expect that under the Supreme Court’s strict reading of the statutory text, the current court might be comfortable dispensing with the five-factor test altogether, though they might have some qualms about untethering the discretion of the lower courts altogether. It is not likely, however, that the Supreme Court will entertain another ERISA attorneys’ fee case in the near future, so until then, a lot more litigation of attorneys’ fees in ERISA cases should be expected. III. eighth Circuit Finds spD’s Grant of Discretion Inadequate When plan Document Is silent

“But the Supreme Court expressly declined to foreclose the possibility that, once a court has determined that a litigant has achieved some degree of success on the merits, it may then evaluate the traditional five factors under Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980), before exercising it discretion to grant fees. Because we continue to believe that ‘district courts should have guidelines to apply in the exercise of their discretion under § 1132(g)’ Hummell, 634 F.2d at 453, we hold that district courts must consider the Hummell factors after they have determined that a litigant has achieved ‘some degree of success on the merits.’ ” The facts before the ninth Circuit tracked the dispute in Hardt in many respects, but here the issue in dispute was the amount the claimant was required to repay the insurer based on a favorable determination of disability by the Social Security Administration. Simonia had challenged Hartford’s decision to limit his LTD benefits to a disability based on non-physical factors; Hartford had countersued for reimbursement of its prior payments from Simonia’s Social Security award. Simonia did not prevail in his claim for benefits, but settled the counterclaim. He sought $63,745 in attorneys’ fees based on the successful settlement of the counterclaim. The District Court denied his claims based on its analysis of the five factor test. The Ninth Circuit affirmed the denial of attorneys’ fees finding that the District Court had not abused its discretion in applying these factors. Following the Ninth Circuit, Hardt may simply mean that that the door a party must go through is labeled “some degree of success on the merits” instead of “prevailing party,” and while it may be easier to walk through that door, claimants still must wend their way through the five-factor test applicable in his or her circuit. If this becomes the majority rule, Hardt may not as disruptive to ERISA fee award jurisprudence as might have been expected. Of course, if other circuits disagree with the Ninth Circuit’s rationale here, the issue may well come before the Supreme Court again, and we will learn if its discussion of the connection between the five-factor test and the ERISA text was as permissive as the Ninth Circuit believed

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August 2010

In Jobe v. Medical Life Ins. Co. n/k/a Ft. Dearborn Life Ins. Co., 598 F.3d 478 (8th Cir. 2010), the Eighth Circuit refused to apply a deferential standard of review to a plan administrator’s final claim determination when the plan document (here, the insurance policy) did not expressly grant the administrator discretion, and was silent on the issue, but the SPD (here, a certificate of coverage that included an “ERISA Information Statement” and referred to the two together as the SPD) expressly granted such discretion. The SPD also stated that in case of a conflict between the policy and the SPD, the policy would control. The issue arose in a dispute over the denial of Jobe’s application for long term disability benefits. Jobe contended that the SPD was an impermissible amendment to the plan document, and so should not be given credence. Ft. Dearborn argued that the SPD is part of the ERISA required documentation and so no formal amendment was needed. It also argued that Eight Circuit precedent was clear that where the terms of an SPD conflicted with those of the plan document, the SPD controlled. The District Court agreed with Ft. Dearborn and decided against Jobe. The Eight Circuit did not agree, reversed, and

remanded the case back to the District Court to review the administrator’s decision de novo. Reviewing its prior jurisprudence as to when an SPD trumps a plan document, the Court noted that the prior cases were based on ERISA’s policy of adequate disclosure to plan participants, but found that the application of this policy required a more nuanced approach. “The disclosure purpose will not always be advanced, however, by holding that the summary plan description prevails over the policy in all circumstances. Where the entity seeking enforcement of the summary provision drafted the more detailed policy and can be presumed to know its terms, allowing that party to rely on the summary plan description – which it also drafted – would do little to enhance either party’s understanding of their legal rights and responsibilities.” The Court’s explanation here to some extent tracks the traditional rule of construction for insurance policies that ambiguities are to be construed against the drafter. In addition, because the SPD here contained language saying that if the terms of the two documents conflict, the terms of the policy control, the Court found that a conscientious participant, reading both documents

carefully, would be led back to reliance on the policy language, which contains no grant of discretion. Moreover, and the Eighth Circuit emphasized this concern, if the terms of a policy or plan could be negated simply including contrary provisions in an SPD, then ERISA’s requirement for a clearly identifiable amendment procedure and the Supreme Court decision in Curtis Wright Corp. v. Schoonejongen (1995) clarifying that requirement would be seriously undermined. While noting that this issue of discretionary authority only being granted in an SPD was one of first impression in the Eight Circuit, the Court noted that three other circuits have held that a grant of discretion to a plan administrator, appearing only in an SPD does not vest the administrator with discretion, where the underlying insurance policy provides a mechanism for amendment and disclaims the power of the SPD to alter the terms of the policy. The key issue for these courts, as well as for the Eighth Circuit, was that an SPD was intended to accurately reflect the terms of the policy, and could not result in an “unnegotiated enlargement of the administrator’s authority.” It is a fair question as to how this holding might apply to self-funded

plans. One advantage self-funded plans may have here is that it is possible to draft the plan document and summary plan description as a single document, thus avoiding the potential for conflict between two separate documents and avoiding the necessity for including a provision addressing which document controls in case of a conflict. Where both plan documents and SPDs are drafted for a self-funded plan, however, the drafter will need to take pains to ensure that the provisions addressing the grant of discretion is consistent, or at least, be sure not to expressly state that the document that is silent on the matter controls. We would also note that for both insured and self-funded plans the requirements of the Affordable Care Act (“ACA”) that will require plans to provide, in addition to an SPD and/or a plan document, a four page, 12-point type “summary of benefits and coverage (required by March 23, 2012), and that will require notice of material modifications to plans 60 days before they become effective (required for plan years beginning on or after September 30, 2010) is certainly likely to complicate these plan documentation issues going forward. n

Health Care Plan Practitioners and Professionals Be a Risk Manager and prepare, deliver and consult using a pre-formatted Risk Memorandum that is both customized for your clients and that uses your letterhead. Attached to your Risk Memorandum will be an online computer-prepared risk/actuarial work-product that provides the supporting details and computations. A menu of risk topics is available. For more information visit www.awpse.com/RiskMemorandum or contact: Self-Funding Actuarial Services, Inc. Tel. 336-759-2035 or harker2@earthlink.com

The Self-Insurer

August 2010

“i don’t have clients! i’m the risk manager in a self-funded company.” Well, guess what? You do have clients and you had better treat them right. Clients of a risk manager can ease your burden tremendously, or make your job so much harder. it’s not a matter of kissing up to anyone; it’s about forging and maintaining a relationship between a client and you, the professional. My first job as a risk manager was with the City of Oklahoma City. Actually, i was the City’s first risk manager and i had a lot to learn about customer service, not to mention risk management. Prior to accepting the risk manager position, i had been the City’s Assistant Budget Director. this meant i knew all of the City Department Heads, but it also meant i had a history with many of them. Sometimes it wasn’t a history that either or both of us remembered with warmth or good humor. Our industry is too small, never burn your bridges.

The Risk Manager’s

Client by Lester Nixon

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August 2010

hese days “professional” goes in front of risk manager without being said. Our industry has grown tremendously in the last fifty years, and has truly become “professionalized”. One way to cultivate a professional relationship with your company peers is to create and defend some type of risk management chargeback or internal service fund. Department heads should know how much risk management costs them, how costs are apportioned, and how well the program is working. Transparency for all! This transparent accounting relationship serves as the foundation for your relationship with your client. You can advance to an objective, professional relationship. Following the establishment of a relationship at this level, the risk manager ought to personalize the relationship with regular contact, sharing of pertinent information, and a genuine regard for the department heads’ business. This will create an atmosphere of appreciation for each other’s perspective.

at the time, I worked with the Sheriff to show him his portion of our overall cost of risk, and what any savings could do to improve his budget. As typical with most law enforcement agencies,

your interaction and the relevance to how we interact with our “customers.” Good customer service is easily identified; bad customer service is never forgotten. n

“Most risk managers I’ve known have a great streak of curiosity, which makes them good listeners. Being a good listener is necessary to provide excellent customer service.”

Most risk managers I’ve known have a great streak of curiosity, which makes them good listeners. Being a good listener is necessary to provide excellent customer service. Engaging department heads, listening, and understanding what they have to say, and following up on any requests are hallmarks of good customer service, and evidence of the personal aspect of professionalism. When I became the risk manager of Humboldt County in northern California, I worked hard to cultivate a relationship with our Sheriff. Although we didn’t have an internal service fund

our Sheriff ’s office was responsible for about two-thirds of vehicular frequency and about forty percent of the total cost of risk. The relationship we developed worked well for us and the Sheriff became willing to involve me and ask for my risk management advice on his issues as they arose.

Lester Nixon has been Risk Manager of the City of Oklahoma City, Humboldt County, CA, and the Seattle Public Schools. He has been the managing executive of the risk sharing pools of the New Mexico Association of Counties, Utah Counties Insurance Pool, and the North Carolina Association of County Commissioners.

I once received a phone call from the Sheriff, telling me that he thought his deputies had uncovered the “Ho Chi Minh Trail” used by protestors who were illegally camped in a privately-owned forest of Redwoods. “Do you want to come along with us and observe the handling of the protestors?” was his question to me. As a public entity risk manager, it just doesn’t get much better than that.

Lester spent ten years with Sedgwick in Oklahoma City, specializing in selfinsured accounts. He was the head of office when he left Sedgwick in 1994 to return to risk management.

The next time you call your cable or other service provider, think of

With the recent formation of Nixon and Associates Consulting Group LLC, an independent risk management consulting firm headquartered in Raleigh, NC, Lester Nixon has positioned himself to share his expertise and experience with risk managers and alternative risk practitioners throughout the country.

The Self-Insurer

August 2010

PPACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

Practical

Q&A

The Patent Protection and Affordable Care Act (PPACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on PPACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan and Johann Lee provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte and Washington, D.C. law firm. Mr. Gillihan and Mr. Lee are members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by email to Mr. Hickman at john. hickman@alston.com.

n June 22, 2010, the U.S. Departments of Treasury, Labor and Health and Human Services jointly issued another set of interim final regulations (“Interim Regulations”), this time implementing the provisions of the Patient Protection and Affordable Care Act (PPACA) on preexisting condition exclusions, lifetime and annual dollar

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August 2010

limits on benefits, rescissions and patient protections. For group health plans and group health insurance coverage, the Interim Regulations are effective for plan years beginning on or after September 23, 2010 (except for preexisting condition exclusion limitations for individuals 19 or older, which apply for plan years beginning on or after January 1, 2014). The regulations reiterate that

the requirements relating to preexisting condition exclusions, lifetime and annual limits, and rescissions apply to grandfathered group health plans (in certain cases, compliance is not required by grandfathered health plans that are individual health insurance coverage). The rules relating to patient protections, however, do not apply to grandfathered health plans. While the Interim

Anne Tyler Hamby, Esq. from the Atlanta office of Alston & Bird, LLP assisted with this article.

Regulations also address individual health insurance coverage, this advisory is limited to the rules as they apply to group health plans and group health insurance coverage. For convenience, the term “group health plans” is used in this advisory to refer to both group health plans and group health insurance coverages. Comments on the Interim Regulations are due 60 days after publication in the Federal Register (June 28, 2010). Practice Pointer: As with all of the health insurance reforms that were added to Title 27 of the PHSA, these rules do not apply to “excepted” benefits as defined in PHSA 2791(c).

prohibition on preexisting Condition exclusions PPACA prohibits group health plans from denying coverage based on an applicant’s preexisting condition. Essentially adopting the existing HIPAA definition, the Interim Regulations define preexisting condition exclusion as a benefit limitation or exclusion or denial of coverage based on the fact that the condition was present before the effective date of group health plan coverage (or

if coverage is denied, the date of the denial), whether or not any medical advice, diagnosis, care or treatment was recommended or received before that date. It includes benefit limitations or exclusions as a result of health conditions identified through a pre-enrollment questionnaire or physical examination, or review of medical records relating to the pre-enrollment period. A benefit limitation or exclusion is not a preexisting condition exclusion, however, if it applies regardless of when the condition arose relative to the effective date of coverage. The prohibition on preexisting exclusions is effective for plan years beginning on or after September 23, 2010 (January 1, 2011, for calendar year plans), with respect to individuals who are under age 19. For all other individuals, the prohibition on preexisting condition exclusions is effective for plan years beginning on or after January 1, 2014. In the interim, HIPAA’s current preexisting condition exclusion and limitation rules apply. Example: A group health plan provides benefits through an insurance policy issued by Issuer A. At the expiration of the policy, the plan switches coverage to a policy offered by Issuer B. B’s policy excludes benefits for oral surgery required as a result of a traumatic injury if the injury occurred before the effective date of coverage under the policy. This is a preexisting condition

exclusion because it excludes benefits based on the fact that the condition was present before the effective date of coverage under the policy. For individuals under age 19, this provision is impermissible starting with plan years beginning on or after September 23, 2010.

Lifetime and annual Dollar Limits PPACA generally prohibits group health plans from imposing lifetime or annual limits on the dollar value of “essential health benefits.” This prohibition applies to group health plans, without regard to their grandfathered status, for plan years beginning on or after September 23, 2010 (January 1, 2011, for calendar year plans), except that “restricted annual limits” on essential health benefits are allowed for plan years beginning before January 1, 2014. PPACA’s prohibition on lifetime and annual dollar limits does not prohibit a complete exclusion of benefits for any particular condition (although other laws, such as the Americans With Disabilities Act, might), but if coverage is provided to any extent with respect to a condition, PPACA’s annual and lifetime dollar limit rules apply. Practice Pointer: Only essential health benefits are subject to these rules. Plans may impose per beneficiary, lifetime and annual limits on non-essential health benefits.

What are essential health Benefits? PPACA defined “essential health benefits” to include, but not be limited to, the following categories and items and services covered within the categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription continued on page 18.

The Self-Insurer

August 2010

continued from page 17.

drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. No guidance has been issued to date regarding which other benefits qualify as “essential health benefits.” Until guidance is issued, the regulators have stated that for plan years beginning before additional guidance is issued, they will take into account consistent and good faith efforts to comply with a reasonable interpretation of the term “essential health benefits.” Practice Pointer: An interpretation of the term “essential health benefits” is not reasonable or consistent if a plan applies a lifetime limit to a particular benefit— thus taking the position that it is not an essential health benefit—and at the same time treats that particular benefit as an essential health benefit for purposes of applying the restricted annual benefit.

restricted annual Limits on essential health Benefits The Interim Regulations adopt a three-year phase-in approach for restricted annual limits on essential health benefits. Annual limits on the dollar value of essential health benefits may not be less than the following amounts per individual for plan years beginning before January 1, 2014: • $750,000 for plan years beginning on or after September 23, 2010, but before September 23, 2011 • $1.25 million for plan years beginning on or after September 23, 2011, but before September 23, 2012 • $2 million for plan years beginning on or after September 23, 2012, but before September 23, 2013 Practice Pointer: While not specifically addressed in the regulations, a non-monetary limitation (e.g., a limitation on the number of days or incidences

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August 2010

of treatment) seems to be permissible under these rules. For example, plans could, instead of an annual maximum on hospitalization, limit the number of hospital visits covered under the plan. The Interim Regulations specifically exempt health flexible spending arrangements (FSAs) as defined in Code Section 106(c)—which may also include many health reimbursement arrangements (HRAs) where the benefit is less than five times the value of coverage. In addition, the preamble to the Interim Regulations states that the annual limit rules do not apply to Medical Savings Accounts (MSAs), Health Savings Accounts (HSAs) or retiree-only HRAs. Also, when HRAs are integrated with other coverage as part of a group health plan and the other coverage alone would comply with the annual limit restriction, the fact that benefits under the HRA by itself are limited does not violate the annual limit restriction. Despite the exemption for “health flexible spending arrangements,” the preamble specifically requests comments regarding application of these rules to stand-alone HRAs that are not retiree-only plans. HHS Waivers: The preamble notes that for plan years beginning before January 1, 2014, the Department of Health and Human Services (HHS) may establish a program under which a waiver may be provided to plans with non-compliant annual limits if compliance with the annual limit requirements would result in a significant decrease in access to benefits under the plan or would significantly increase premiums for the plan. If established, this may provide much needed relief to so called “mini-med” plans that are otherwise subject to these lifetime and annual limit restrictions.

Transition rules For any individual whose coverage or benefits ended due to reaching a lifetime limit and who becomes eligible

(or is required to become eligible) on the first day of the first plan year on or after September 23, 2010, for benefits not subject to lifetime limits by reason of PPACA, the plan is required to give the individual a written notice that the lifetime limit no longer applies and that the individual, if covered, is once again eligible for benefits under the plan. In addition, if the individual is not enrolled, or if an enrolled individual is eligible but not enrolled in any benefit package under the plan, then the plan must also give such an individual at least 30 days in which to enroll. This notice and enrollment opportunity must be provided beginning not later than the first day of the first plan year beginning on or after September 23, 2010. Coverage for individuals who enroll in this manner must take effect not later than the first day of the first plan year beginning on or after September 23, 2010. An individual eligible for an enrollment opportunity must be treated as a HIPAA special enrollee. Specifically, the individual must be given the right to enroll in all of the benefit packages available to similarly situated individuals upon initial enrollment, and cannot be required to pay more for coverage than similarly situated individuals who did not lose coverage by reason of reaching a lifetime limit.

prohibition on rescissions PPACA prohibits a group health plan from rescinding health coverage except in the case of fraud or intentional misrepresentation of a material fact. The prohibition on rescissions applies to plans and insurers (including grandfathered plans) for plan years beginning on or after September 23, 2010. The Interim Regulations define rescission as a cancellation or discontinuance of coverage that has retroactive effect. A cancellation or

discontinuance is not a rescission if it has prospective effect, or if it is effective retroactively to the extent it is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage. The Interim Regulations also require that a group health plan provide at least 30 days’ advance written notice to each participant who would be affected before coverage may be rescinded, regardless of whether the rescission applies to an entire group or only to an individual within the group. Example: Employer sponsors a group health plan that provides coverage for employees who work at least 30 hours per week. Individual C has coverage under the plan as a full-time employee. The employer reassigns C to a part-time position. Under the terms of the plan, C is no longer eligible for coverage. The plan mistakenly continues to provide health coverage to C. After a routine audit, the plan discovers that C no longer works at least 30 hours per week. The plan rescinds C’s coverage effective as of the date that C changed from fulltime employee to part-time employee. In this example, the plan cannot rescind C’s coverage because there was no fraud or intentional misrepresentation of material fact.

Patient Protections Background PPACA imposes a set of three requirements relating to the choice of a health care professional and requirements relating to benefits for emergency services (collectively referred to as “patient protections”). The patient protections apply to plans beginning in plan years on or after September 23, 2010. None of the patient protections apply to grandfathered plans.

Choice of health Care professional Generally, the requirements relating

to choice of health care professionals apply only with respect to a plan with a network of providers. A plan or insurer that has not negotiated with any provider for the delivery of health care but merely reimburses individuals covered under the plan is not subject to the requirements relating to the choice of a health care professional. The patient protections

care and require the designation of an in-network primary care provider may not require authorization of referral by the plan, insurer or any person (including a primary care provider) for a female participant who seeks obstetrical or gynecological care. However, nothing precludes the plan or insurer from requiring an in-network obstetrical or

provide that if a plan or insurer requires designation by a participant of a participating primary care provider, then the plan or insurer must permit such individual to designate any participating primary care provider who is available to accept the participant. Similarly, if the plan or insurer requires designation of a primary care provider for a child by a participant, the plan or insurer must permit the designation of a pediatrician as the child’s primary care provider if the provider participates in the network of the plan or insurer and is available to accept the child. If a plan or insurer requires designation by a participant of a primary care provider or pediatrician, the plan or insurer must provide a notice informing each participant of the terms of the plan regarding such designation.

gynecological provider to otherwise adhere to policies and procedures regarding referrals, prior authorization treatments and the provision of services pursuant to a treatment plan approved by the plan or insurer.

Plans or insurers that provide coverage for obstetrical or gynecological

notice The Interim Regulations provide model language for providing notice to participants to (i) choose a primary care provider or pediatrician when a plan or issuer requires designation of a primary care physician, or (ii) obtain obstetrical or gynecological care without prior authorization. The notice must be provided whenever the plan or insurer provides a participant with a summary plan description or other similar description of benefits under the plan or health insurance coverage.The model language for the notice is as follows: continued on page 20.

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August 2010

continued from page 19.

emergency services A plan or insurer providing emergency service benefits must do so without the individual or health care provider having to obtain prior authorization, and without regard to whether the health care provider furnishing the emergency services is an in-network provider with respect to the services. Generally, emergency services must be provided without regard to any other term or condition

of the plan other than the exclusion or coordination of benefits, an affiliation or waiting period permitted under ERISA, the PHSA or the Code, or applicable cost-sharing requirements. For a plan or insurer with a network of providers that provides benefits for emergency services, the plan or insurer may not impose any administrative requirement or limitation on benefits for out-ofnetwork emergency services that is more restrictive than the requirements or limitations that apply to in-network emergency services. The Interim Regulations define emergency services in accordance with the Emergency Medical Treatment and Labor Act (EMTLA) as, with respect to an emergency medical condition:

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August 2010

• a medical screening examination (as required under Section 1867 of the Social Security Act (42 U.S.C. § 1395dd)); and • such further medical examination and treatment, to the extent they are within the capabilities of the staff and facilities available at the hospital, as are required under Section 1867 of the Social Security Act (42 U.S.C. § 1395dd) to stabilize the patient.

emergency services and Cost-sharing The Interim Regulations impose certain cost-sharing requirements for emergency services. Cost-sharing requirements expressed as a copayment amount or coinsurance rate imposed for out-of-network emergency services cannot exceed the cost-sharing requirements that would be imposed if the services were provided in-network. However, a participant may be required to pay (in addition to in-network cost-sharing) the excess of the amount of the out-of-network provider charges over the amount the plan or insurer is required to pay (so-called “balanced billing”), provided that the plan pays a

reasonable amount. In order to ensure that a plan pays a “reasonable amount” of the cost of emergency services, the Interim Regulations provide that a plan or insurer satisfies the copayment and coinsurance limits in the statute if it provides benefits for out-of-network emergency services in an amount equal to the greatest of the following three amounts: (1) The amount negotiated with in-network providers for the emergency service furnished; • If there is more than one negotiated amount for a particular emergency service, the median of these amounts is used. In this regard, each amount negotiated with each provider must be treated as a separate amount in determining the median. For example, if for a given emergency service a plan negotiated a rate of $100 with three providers, a rate of $125 with one provider and a rate of $150 with one provider, the amounts taken into account to determine the median would be $100, $100, $100, $125 and $150, and the median would be $100. If there is an even number of amounts, the median is the average of the middle two. Cost sharing imposed with respect to the participant is deducted from this amount before comparing with (2) and (3) below. (2) The amount for the emergency service calculated using the same method the plan generally uses to determine payment for out-of-network services, but substituting the in-network cost-sharing provisions for the out-ofnetwork cost-sharing provisions; • This amount is determined without reduction for out-ofnetwork cost-sharing. For example, if a plan generally pays 70 percent of the usual,

customary and reasonable amount for out-of-network services, the amount for (2) for an emergency service is the total (i.e., 100 percent) of the usual, customary and reasonable amount for the service, not reduced by the 30 percent coinsurance (but reduced by the in-network copayment or coinsurance that the individual would be responsible for if the emergency service had been provided in-network). (3) The amount that would be paid under Medicare for the emergency service. Example: A plan imposes a $60 copayment on emergency services

without preauthorization, whether provided in network or out of network. If emergency services are preauthorized, the plan waives the copayment, even if it later determines the medical condition was not an emergency medical condition. In this example, by requiring an individual to pay more for emergency services if the individual does not obtain prior authorization, the plan violates the requirement that the plan cover emergency services without the need for any prior authorization determination.

is disregarded, meaning that the greatest

For plans and health insurance coverage under which there is no per-service amount negotiated with in-network providers (such as under a capitation or other similar payment arrangement), the amount in (1) above

out-of-network benefits.The purpose

amount is going to be either the out-of-network amount or the Medicare amount. The Interim Regulations impose an anti-abuse rule with respect to other cost-sharing requirements. Any other cost-sharing requirement, such as a deductible or out-of-pocket maximum, may be imposed on out-of-network emergency services only if the costsharing requirement generally applies to of the rule is to prohibit a plan or health insurance coverage from structuring plan rules so as to require a participant to pay more for emergency services than for general out-of-network services. n

The Self-Insurer

August 2010

ThreaTs

to Self-Insurance By Mike Ferguson sIIa Chief Operating Officer

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August 2010

ith the recent passage of federal health care reform legislation after an extended time period of intense lobbying by SIIA and other organizations, we understand many of our members may believe that our industry can take a break for a while on being concerned about legislative/ regulatory/legal developments. In fact, nothing could be further from the truth. Passage of the Patient Protection and Affordable Care Act (PPACA) has created new lobbying challenges for our industry, which will unfold in the coming months and years ahead.These challenges are combined with ongoing threats coming from multiple directions. To help our members see the “big picture,” we have detailed these threats and challenges and encourage you to read this communication in detail.This information will take some time to digest, but we believe it is critical to re-engage our members now in preparation for the many battles that are sure to come. SIIA will further intensify our lobbying efforts and communication strategies in order to protect your interests.To be successful, we will need your help. It has been very interesting to hear feedback from members over the past year expressing skepticism (and then disbelief) that comprehensive health care legislation would pass despite repeated warnings coming from SIIA. Perhaps that is understandable given the history of previous reform efforts, but the fact is that things can happen in Washington, DC very quickly under the right political circumstances...and that’s exactly what occurred. Please consider this fact when you hear new “calls to action” from SIIA, which are certain to come. In a busy life, people often “click past” some e-mail messages, especially about discomforting issues. But please be assured that all SIIA messages on these subjects are designed to serve your direct business interests. And, most importantly, our communications provide you the information you need to actively participate in the political process that is

so important to preserving the right of employers to utilize alternative risk transfer programs. The complete report follows. Please read it and pass it on to anyone else in the industry who you think should be supporting SIIA’s government relations and legal defense efforts. We hope that once you read this you will be re-engaged and be motivated to help SIIA protect the industry.

additional Federal Legislation/Oversight In the last half-year of this session and certainly after this fall’s contentious mid-term election, Congress can be expected to keep healthcare reform on the front burner. We anticipate oversight hearings to receive testimony on how PPACA is working and what “technical” legislative changes may be needed as well as any amendments to the law. In preparing Congressional hearing testimony, SIIA will be soliciting feedback from our members with regard to PPACA compliance issues. It is vital that we hear about issues and problems encountered by self-insured health plans as a result of PPACA.Your first hand experiences provide SIIA the ammunition we need to engage our contacts on Capitol Hill to make sure that critical issues are addressed in any future remedial legislation. Congress needs to hear about how reform may weaken healthcare plans for millions of Americans who belong to self-insured plans. We also anticipate introduction of new legislation, unrelated to PPACA, focused on health care cost control given that costs are expected to continue to rise, likely at an even faster rate as a result of the passage of PPACA. Yes, believe it or not, Congress is certain to focus on health care reform again once it becomes clear that the cost curve has not been “bent” as promised. sIIa will be calling you to action when the new legislative proposals start to emerge. And by the way, in case you think a possible Republican takeover of Congress will create a more favorable political government, think again.The reality is

that many Republicans do not like the employment-based health care system and would likely push for more individualized coverage approaches.

Federal Legislation The PPACA’s 2500-plus pages of statutory provisions, which become effective as early as September 23, 2010, call for more than 100 sets of regulations to be issued by federal agencies including the Department of Health and Human Services (HHS), Department of Labor (DOL) and Treasury Department. SIIA members face a vastly more complex and costly administrative burden to comply with PPACA. While this is undoubtedly one of the most controversial and far-reaching laws ever passed by Congress, its actual implementation will be determined by interpretations by the regulatory agencies. Federal agency regulations often expand on the statutory language and go beyond the legislative intent of Congress. In addition to the Obama Administration agencies cited above, the Internal Revenue Service (IRS) will determine tax rules for healthcare plans. In a letter to Congress on May 25, 2010, HHS Secretary Kathleen Sibelius outlined the key insurance reform questions her agency currently addresses which included: What benefits are included in a minimum “essential benefit package?” How will the small business tax credit operate? What are the new implementation rules for “pre-existing condition” exclusions? And, how will the employer “pay or play” mandate be administered? The clear implication is that the Obama administration’s hhs will largely dictate how health reform will or will not work. Key details now being hashed out by regulators include: Definitions of grandfathered plans HHS has already started to spell out what benefit and other plan design changes (deductibles, coinsurance, etc.) will affect grandfather status for plans in existence as of March 23, 2010. continued on page 24.

The Self-Insurer

August 2010

continued from page 23.

adult child coverage - HHS has already issued proposed rules extending coverage for young adults allowing them to stay on their parents’ health plans until age 26. On April 27, the IRS issued guidance concerning the tax treatment of this coverage. pre-existing conditions - Effective for plan years that begin on or after September 23, rules to be issued by HHS will address the ban on exclusion of children up to age 19 from policies and plans because of pre-existing conditions. Coverage requirements for adults with pre-existing conditions will begin starting in 2014. early retiree reinsurance program - In connection with a June 21 start date, HHS will issue rules implementing a $5 billion early retiree reinsurance program under which participating employer plans will be eligible to receive reimbursement for a portion of their costs for providing certain medical claims to early retirees age 55 through 64. SIIA will continue to educate HHS and DOL regulators about self-insurance, including ongoing consultation with DOL to influence fair treatment of self-insurance in its report on self-insured plans that is due March 23, 2011. Our objective is to broaden DOL’s data input beyond the current Annual Return/ Report of Employee Benefit Plan - Form 5500, which we feel does not provide a complete view of self-insurance. While recommending ways DOL can take a broader look at self-insurance, we are also positioning SIIA as a resource through the development of the report. SIIA will also be representing the industry in the development of a mandated-HHS report analyzing the large group market and compare fully-insured and self-insured plans. In a similar way to our effort with DOL, we want to make sure that HHS has the full story when it considers self-insurance. Make no mistake, there are interest groups working aggressively to influence the conclusion of these reports so that self-insurance looks bad.

www.siia.org

August 2010

state regulator and health Insurance Industry attacks While continuing developments in Congress and federal regulatory agencies pose significant challenges, the selfinsurance industry also faces the threat of being undercut by state regulators who feel threatened by federal entry into insurance regulation and by the commercial health insurance industry. Both the national association of Insurance Commissioners (naIC) and the association of health Insurance plans (ahIp) are actively attacking self-insurance! The NAIC wrote earlier this year to congressional leaders expressing concerns that reform provisions might encourage more businesses to self-insure to avoid costlier coverage as a result of the new law.They moaned that an increase in the self-insurance marketplace would be “devastating” for businesses, employees and healthcare providers. For its part, AHIP continues to claim that as a significant number of Americans are covered through self-insured plans, these plans and their employer sponsors should contribute to the funding from which self-insurance is exempted under the PPACA (sIIa succeeded in keeping self-insured plans from having to pay these fees.) Another AHIP spokesman has stated publicly that under reform healthier lives will move to self-insurance thus undermining the solvency of plans within state exchanges. SIIA rejects AHIP’s unfounded and unsupportable propaganda as another example of the traditional industry’s ongoing attacks against the alternative market. On the basis of fair competition in a free market, we do agree with AHIP’s statement that incentives for employers to self-fund are stronger under reform! If that’s a bad thing for them, it’s good for thousands of employers across the country who need a more cost effective way to fund health benefits risks. While these are not new threats, they have intensified and should not be taken lightly by our industry.These efforts once again show that we must continue to educate our elected officials about self-insurance and defend against these baseless claims.

SIIA will also take a more aggressive stance in responding to attacks from AHIP, NAIC or other interest groups who would like nothing better than for the self-insurance industry to be dismantled.

state Legislative Developments Self-insurance continues to be attacked in a variety of state legislatures seeking to impose various forms of taxation - all violations of federal law under ERISA. SIIA will continue to monitor state legislative and regulatory developments and will vigorously oppose unjustified state regulation. Following are just three current and recent examples: Connecticut - An example of a state’s attempt to regulate self-insurance indirectly through direct TPA regulation is found in Connecticut HB 5090. A comprehensive bill regulating TPAs, this measure would have prohibited TPAs from earning compensation contingent on cost savings achieved by the TPA in the claims processing of self-insured plans.The bill also would have provided preferential treatment for ASOs over traditional TPAs. Faced with vigorous opposition from SIIA members in Connecticut, the bill did not come to a vote in the Senate as the legislature adjourned for the year. Oklahoma - Further illustrating the threat to self-insurance posed by state legislatures, Oklahoma lawmakers passed a bill that will impose “access payments” on all claims paid by a” health insurance carrier.” In particular, the bill would redefine “health insurance carriers” to include non-carriers such as self-insured “employer welfare arrangements” and “third party administrators.” Such state “access payments” (or taxes) to fund Medicaid targeted on specific groups such as self-insured health plans and TPAs would redefine the common meaning of the term “insurance carrier.”The state law would impose significant new rate increases on employers and individuals who contribute to health plans and pay premiums, adding to already skyrocketing healthcare costs.This type of state law creates yet another legislative disincentive for employers to continue offering self-insured

health benefits to employees and their dependents. Clearly self-insured plans are not carriers. State legislation that seeks to impose assessments on self-insured employer welfare arrangements is preempted by ERISA. “Employee welfare benefit plans” is a defined term under ERISA providing that “any and all state laws...that may...relate to any employee benefit plan shall be superseded [by federal law].This provision has been upheld by numerous decisions of the U.S. Supreme Court. SIIA opposed the Oklahoma legislation and Chief Operating Officer Mike Ferguson wrote to Governor Brad Henry to urge him to veto the bill.The bill was an “eleventh hour” measure introduced during the final week of the session, and passed largely without due consideration and without the opportunity for opponents to effectively register objections. The bill was eventually signed into the law by the governor but it is expected to be challenged in Court. SIIA will monitor the anticipated legal developments and get involved as appropriate. Oregon - The state of Oregon

operates the Oregon Medical Insurance Pool (OMIP) to provide insurance to high-risk individuals who have been denied coverage in the individual market. Due to the existence of the OMIP pool the individual health insurance market declines one in every four applications and pushes the individual into OMIP where the pool losses are subsidized by insurance companies writing individual health insurance, group health insurance and stop-loss coverage. OMIP is designed to provide affordable coverage to those with high cost or ongoing medical conditions at a cost that is within 125% of the average industry rate.Therefore the plan is designed to have claims exceed premium income. These losses are passed on to the health insurance and stop-loss market in the form of an assessment that is based on a per covered life basis.This results in significant disparity for stop-loss carriers licensed in Oregon since the stop-loss premiums are a fraction of the premium amounts collected by the traditional insurance market. SIIA has long opposed Oregon’s view

of treating stop-loss insurance as health insurance. Many federal and state courts have agreed with our position, but not this state.The level of assessments in Oregon for the OMIP program has damaged the availability of stop-loss insurance in the state. Further, a bill that would also assess TPAs is expected to be revived in the next session after being defeated earlier. n

Conclusion This report obviously represents a point in time.There will be new legislative, regulatory and legal threats to come some anticipated and others not. What we can say with certainty is that SIIA will continue its leadership role in working to protect the employmentbased health care system and the interests of our members. Please watch for updates on the issues discussed in this report and instructions on how you can support our government relations and legal defense efforts. We trust we can count on your involvement and support as we enter yet another critical time period for our industry.

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The Self-Insurer

August 2010

arT GALLERY By dick Goff

Workers Comp Can Be a Big pain

here are few bigger problems for a transportation company than workers comp. And there’s no bigger problem for a workers comp plan than pain – it’s literally a pain! Better management of pain would shave millions from the costs of comp plans – ART as well as traditional.

assessing a patient’s self-descriptions of pain, and then send that patient along to a betterinformed diagnostic and treatment process. And the best part was convenience: the pain validation test could be taken on the Internet, in English or Spanish, in any of thousands of proctored settings.

Assessing, diagnosing and treating pain has been the elusive goal of medical science as well as risk managers down through the years. The transportation company in question had the usual roster of hundreds of comp cases involving various injuries to extremities and other body parts, with pain most times the common element.

It also must be noted that the insurance industry has never proven cost effectiveness for any standard workers comp procedures including specialist evaluations, surveillance, functional capacity evaluations or others. There is no evidence that any of these are costeffective. There is only “company policy.”

It’s a rule of thumb that workers off the job on comp for more than two years won’t be coming back. You may as well wave them off to Margaritaville. Well, this company had plenty of those. It wasn’t that nobody was paying attention. Their comp program included the best available medical providers, physical therapists and case managers. They even had the occasional surveillance experts trying to determine that the effort that caused pain on the job didn’t have the same effect on the golf course. But nothing – in a statistical sense – worked. Then we ran across a little startup company by a gang of Johns Hopkins trained doctors – curious how much credibility that conveys, isn’t it? The docs had pooled their research to put together a program that could improve the accuracy of

www.siia.org

July 2010

The way we understood it, the scientifically constructed questionnaire would be near impossible to fool (they told us it would work at 85% accuracy or more). The way answers correlated to each other would illuminate the patient as (a) not actually in pain, (b) experiencing imaginary pain that still requires treatment – but different treatment, or (c) experiencing objective pain but, depending on the duration, may have been misdiagnosed and needs alternative treatment.

Well, the pain validity approach sounded too good to be true (as those things usually are). So we decided to call the little company’s bluff and loaded up a carton of 260 comp cases, and we didn’t give them the easy ones. All were over six months old. We found that 48% were identified as sprains or strains, which is already suspicious or misdiagnosed because sprains/strains usually heal in 7-10 days. The only really consistent element of these comp files was the continual increase in costs for both medical care and disability income. The oldest 15 cases carried a current average cost of $248,925. Stunning! Each of the claimants was scheduled to take the Pain Validity Test at a proctored examination site. Then, if appropriate, they were scheduled for the followup diagnostic and treatment protocols. The good news was that 30 people were able to get back to work immediately – there was nothing wrong with them except they had fallen through the cracks. Other cases were redirected to new diagnoses and treatment plans. In a large way, this company had stopped the bleeding. The transportation company figured out that if the Pain Validity Test worked that well on old cases, it would begin sending all its claimants through the Independent Medical Evaluations (IME) system. It operates through several thousand health provider settings around the country, is easy to access and inexpensive at $300 per individual. The beauty of the system is not only to assess pain, but also to overcome the grim statistic that 40 to 71 percent of claimants with chronic pain problems are misdiagnosed at the beginning of the case and everything flowing from that point takes the wrong direction. It’s no secret that workers comp is the most inefficient, ineptly operated part of the health care system. That’s because of its need to operate in an ambiguous state subject to the awkward cross currents of regulatory, legal, health and HR priorities. If just one part of workers comp can be fixed, the results would reverberate throughout the system, and serve us all. I think getting a good start in each case with a scientific validation of the claimant’s pain could be the part that gets fixed first. n Dick Goff is managing member of The Taft Companies LLC, a captive insurance management firm and Bermuda broker at dick@taftcos.com.

MeMBer NOTES London, England Axis

Global Accident & Health announces that Paul Chapman has been named CEO of International Accident and Health operations and that he will lead international market expansion out of the London office. Axis Global, a division of Axis Capital Holdings Limited is now actively marketing its capability to write accident and specialty health reinsurance coverage from Ireland and the UK, complimenting its existing offerings in the U.S. “Paul brings us his exceptional knowledge of the global accident and health market,” said Chris DiSipio, CEO and President of Axis Global Accident & Health. “His specialized expertise will more quickly enable us to reach our goals for global expansion in insurance and reinsurance.” For further information contact Linda Ventresca Simon at gsimon@ projectmarketinginc.com

Tampa, FL PMSI, one of the nation’s largest providers of specialty products and services for the workers’ compensation market, today announced the release of its 2010 Annual Drug Trends Report.The report represents one of the most extensive analyses of workers’ compensation pharmacy spend and is based upon PMSI’s analysis of millions of retail and mail order pharmacy transactions from 2009. “PMSI is a leader in providing insight specific to the workers’ compensation market,” stated Jay Krueger, PMSI’s Chief Strategy Officer. “Our annual reports have consistently served as a valuable resource to help our customers understand market trends, benchmark their programs and gain insight on how to better manage prescription drug spend.” For the complete 2010 Annual Drug Trends Report, or to register for PMSI’s upcoming Drug Trends webcast, visit www.pmsionline.com.To schedule an interview with Dr. Maria Sciame, contact Audrey Jackson at 813.318.6810 or audrey.jackson@pmsionline.com. Indianapolis, IN OneAmerica Financial Partners announced today that

it has agreed to acquire Indianapolisbased McCready and Keene, Inc., one of the nation’s largest independent actuarial and consulting firms specializing in the design and administration of retirement plans.The transaction is scheduled to close on July 1, 2010.Terms of the transaction were not disclosed. McCready and Keene will work together with the retirement services division of OneAmerica company American United Life(AUL). “Adding McCready and Keene to the OneAmerica family of companies is a strategic move that supports our aggressive growth strategy,” said Dayton H. Molendorp, OneAmerica chairman, president and CEO. “Their trust solution and other offerings will complement and expand AUL’s already strong retirement program. In addition, our national presence and distribution structure will help deliver McCready and Keene’s products to new markets around the country.” For further information contact Paul T. Branks, Assistant Vice President, Corporate Communications at paul. branks@oneamerica.com, or Beth King, APR, Media Relations Manager at beth. king@oneamerica.com.

SIIA New Members REGULAR MEMBERS Company name/Voting representative

Joyce Mireault, Vice President Health Management, FirstSolutions, Duluth, MN Emil Bravo, Executive Vice President, Gallagher Bassett, Itasca, IL Paul Broughton, Director of Marketing & Administration, Markel, Glen Allen, VA Tony Benedetto, Executive Vice President, NASW Assurance Services, Inc., Frederick, MD Mary Borland, Sr. Director of Sales & Account Mgmt., National CooperativeRx, Madison, WI Maureen Lawson, Manager Product Development, Network Health Plan, Menasha, WI Gregory Webb, President & CEO, PTRX, Inc., San Antonio, TX debbie Weiner, Senior Account Manager, The Bailey Group, St. Augustine, FL James Tehero, CEO, Tribeca Strategic Advisors, Mesa, AZ Peter Gallaher, President, WorkSTEPS, Inc., Austin, TX EMPLOYER MEMBERS

Indianapolis, IN R. E.

Moulton, Inc., a OneAmerica company, is pleased to announce the availability of an unlimited specific coverage reimbursement option for American United Life Insurance Company® (AUL) stop loss insurance policyholders, effective immediately. Additionally, for AUL policyholders requiring a maximum specific benefit, R.E Moulton will continue providing annual maximums with options of up to $10 million in coverage. “We remain confident that selffunded health plan employers are best positioned to manage medical trends while adopting measures that are consistent with health reform laws,” said Bill Knarr, president of R.E. Moulton. “These actions speak to our commitment toward remaining a leading solutions-driven, flexible stop loss insurance source.” For further information contact Beth King, APR, Media Relations Manager at beth.king@oneamerica.com.

Company name/Voting representative

Julie dePasse, CEO, AHRMA, Rantoul, IL Mike Tiffany, Administrator, Arizona School Alliance For Workers Comp., Inc., Phoenix, AZ Kevin Hazelwood, Vice President Human Resources, Cactus Operating, LLC, Amarillo, TX Laura Zehm, Vice President & CFO, Community Hospital of the Monterey Peninsula, Monterey, CA Kathy Campbell, Asst. Vice President Partner Benefits, National HealthCare Corporation, Murfreesboro, TN david Zrostlik, President, Stellar Industries, Inc., Garner, IA Kevin Potts, Vice President, Union Pacific Railroad Employes Health Systems, Salt Lake City, UT CONTRIBUTING MEMBERS Company name/Voting representative

LaRea Albert, COO, HealthFirst TPA, Tyler, TX

The Self-Insurer

August 2010

VIEWPOINT Tom Mather

ongwriters, singers and musicians often bend the facts when they produce music and plagiarism has run rampant in that art form for centuries. Example: in his most famous song, Tony Bennett says that he “left his heart in San Francisco,” causing millions of us to believe that San Fran was his home town. In fact, he was born, raised and has lived most of his life in Queens, New York. In a similar vain, Frank Sinatra flatly states that Chicago “is my home town” in his rendition of that Fred Fisher hit song of the 50’s but in reality Ol’Franko was born and raised in Hoboken, New Jersey and lived most of his illustrious lifetime on the road around the World. None the less, these guys got their point across. San Francisco is indeed a lovely place, where little cable cars climb halfway to the stars and morning fog that chills the air. And of course, Chicago has State Street – that great street, where they do things they don’t do on Broadway! It just so happens that Chicago is my home town. At one time or another I have had the opportunity to visit every major city in this great land of ours and a whole bunch of smaller ones as well. But I always think of Chi-town as my starting place in the world and it is true, they do things there that they don’t do on Broadway. Try as she did during the Prohibition years, even Billy Sunday couldn’t shut the place down, and yes, I’ve seen a man who danced with his wife, many times—my Mom & Dad.

“The self-Insurance Institute of america’s 30th annual national educational Conference & expo... I can assure you will be the biggest and best event in the history of this organization.”

Most everyone who travels has been to Chicago at one time or another since it has been the crossroads of our country for a long time. Our rail systems, highways and waterways have converged upon and passed through the place since the very beginnings. If you combine the flights into and out of O’Hare International Airport and Midway Airport you have the greatest number of take offs and landings in the world. So that “Toddling Town” that Frankie sang of keeps right on toddling along. Now is the time to make your reservations. The Self-Insurance Institute of America’s 30th Annual National Educational Conference & Expo kicks off at the Sheraton Chicago Hotel and Towers on October 12-15, 2010 in what I can assure you will be the biggest and best event in the history of this organization.

www.siia.org

The timing couldn’t be more critical for the educational aspects of this conference, since we are in changing times in our industry and every other aspect of the healthcare delivery system. This opportunity is a “can’t miss” educational venture for all of us as we study the means by which we can all help preserve, protect and grow our industry for the future. Add to that a worldclass tradeshow of industry products and service providers and you will have four fast-paced days like we’ve never seen before. Make your reservations today. Visit our website at www.siia.org. Things are filling up fast. And of course, don’t forget to look into late evening possibilities for some of the world’s best dining and entertainment in the downtown area because, in my hometown “they do things there they don’t do on Broadway.” Tom Mather Contributing editor

August 2010

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