Self-Insurer Sept 2012 by SIPC

September 2012

www.sipconline.net

practical Steps to Improving

pharmacy network

participation

September 2012

The Self-Insurer

www.sipconline.net

September 2012 | Volume 47

September 2012 The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC), Postmaster: Send address changes to The Self-Insurer P.O. Box 1237 Simpsonville, SC 29681

FEAturES

Editorial Staff PuBlIShINg DIreCTOr James A. Kinder MANAgINg eDITOr erica Massey

SeNIOr eDITOr gretchen grote

practical Steps to Improving pharmacy network participation by Robert Bennett, Sherri Hickey and John T.Watts

DeSIgN/grAPhICS Indexx Printing CONTrIBuTINg eDITOr Mike Ferguson

ArtIclES 10

Member retention Tips From leading rrg Managers

From the Bench

ArT gallery: A dangerous environment for ArT

Closer to home: Captives are being attracted back onshore by business-friendly states and federal incentives

Setting health goals and Overcoming Barriers: Promoting health and healing through Motivational Interviewing

DIreCTOr OF OPerATIONS Justin Miller DIreCTOr OF ADverTISINg Shane Byars Editorial and Advertising Office P.O. 1237, Simpsonville, SC 29681 (888) 394-5688 2012 Self-Insurers’ Publishing Corp. Officers

Getting the Most from your Bill Audit company by Cynthia Freese, RN

InduStry lEAdErShIp 36

SIIA Chairman Speaks

James A. Kinder, CeO/Chairman erica M. Massey, President lynne Bolduc, esq. Secretary

The Self-Insurer | September 2012

practical Steps to Improving

pharmacy network

participation by Robert Bennett, Sherri Hickey and John T. Watts

September 2012

The Self-Insurer

harmacy networks selected by employers are not used to their potential. A review of employer prescription processes found that the percentage of utilization on a monthly basis was anywhere from 25% to 95%. A majority of the scripts not going through the selected network were being paid to third party billing services and/or to physician pharmacies - this defeats the process. The chart below illustrates the difference in costs for the most commonly prescribed medications. It shows the costs charged for typical workers’ compensation medications if filled in a physician’s office, a third party biller or by a pharmacy benefit network. The difference in costs can be 15 to 20 %. This adds up as an adjuster is probably paying $10,000 to $15,000 a month in prescriptions.

drug and State Fee Schedule cost comparison: Out-of-network vs. pBM network State Fee Schedule Texas louisiana Florida Tennessee Texas louisiana Florida Tennessee Texas louisiana Florida Tennessee Texas louisiana Florida Tennessee Texas louisiana Florida Tennessee Texas louisiana Florida Tennessee

drug (Qty 60) Meloxicam Tab 7.5mg Meloxicam Tab 7.5mg Meloxicam Tab 7.5mg Meloxicam Tab 7.5mg Zolpidem Tab 10mg Zolpidem Tab 10mg Zolpidem Tab 10mg Zolpidem Tab 10mg Celebrx 200Mg Celebrx 200Mg Celebrx 200Mg Celebrx 200Mg hydrocodone-Acetaminophen 5-500 Mg hydrocodone-Acetaminophen 5-500 Mg hydrocodone-Acetaminophen 5-500 Mg hydrocodone-Acetaminophen 5-500 Mg Oxycontin 40 Mg Oxycontin 40 Mg Oxycontin 40 Mg Oxycontin 40 Mg gabapentin 300 Mg gabapentin 300 Mg gabapentin 300 Mg gabapentin 300 Mg

re-package third party phy disp Billing $478.75 $199.35 $535.72 $271.94 $383.92 $270.87 $385.00 $195.20 $350.88 $389.45 $394.22 $394.31 $281.68 $281.53 $252.60 $280.45 $466.77 $343.79 $472.96 $339.79 $428.74 $338.14 $429.64 $339.10 $130.48 $35.08 $147.43 $40.52 $105.37 $29.64 $106.29 $30.71 $500.91 $292.58 $507.25 $297.00 $460.07 $268.94 $460.99 $269.86 $224.99 $103.83 $252.17 $117.58 $179.18 $84.05 $180.28 $84.97

pBM network $183.51 $183.51 $183.51 $183.51 $189.91 $189.91 $189.91 $189.91 $309.27 $309.27 $309.27 $309.27 $26.39 $26.39 $26.39 $26.39 $251.88 $251.88 $251.88 $251.88 $77.02 $77.02 $77.02 $77.02

A review of those employers who have 90% or better utilization, and those that don’t, revealed that employers that have a geographically centralized stable workforce, such as in a manufacturing or a public entity setting, had higher utilization than those where the workforce is spread out over worksites or were involved in transportation or seasonal employment. It was no surprise that centralized and stable workforces are more educated about the workers’ compensation process. These employers are more likely to funnel injured workers through an on-site clinic or through the hr department where they can be educated about the process. Outside of this assumption, the most important determining factors are knowledge and focus on the issue. Workers’ compensation is classified as property casualty coverage, and as such, the prevailing attitude by employers and adjusters is to treat claims as a liability and not as a benefit. Knowledge as to what happens in the workers’ compensation process is from the injured worker’s perspective; something they learn after they are injured. The problem this poses when using pharmacy networks is most claims are medical only claims. The injured worker has already been seen by the physician and the prescription has

been filled before the adjuster ever makes contact. Pharmacy networks depend on the injured worker being authorized in the system. To do this, an adjuster must key the authorization information into the network system or depend on a data upload from the claim system to the network system. In any event, these processes are usually at least 12 to 24 hours too late to authorize the first script. Subsequent scripts are also not filled using the network even if information about the network has been sent to the injured worker. This is because the pharmacist is more likely to fill a subsequent script the same way the first one was filled. It remains the same even if the injured worker remembers to present the pharmacist with pharmacy information that was received in his or her mail. Workers’ compensation prescriptions make up for 3% or less the total volume a pharmacist fills. As such, having to receive verbal instructions from an injured worker usually requires the pharmacist to stop what they are doing and call either the adjusting company or the employer for verification. An easier approach for the pharmacist is to use the connectivity they have with third party billing companies. Third party billing companies will take the risk of authorizing the scripts and in return will pay a lesser fee to the pharmacist immediately. These companies then identify the employer and present the bill for payment, usually with a significant mark up over average wholesale price. The fundamental disconnect is that employers and adjusting companies don’t appreciate their own mindset of handling injured workers as claims. Claims that have to be investigated before they are authorized is an interruption for

The Self-Insurer

| September 2012

pharmacists; therefore, enterprising business models have been set up to provide the pharmacist with what they want, a BIN and group number. With this arrangement, the pharmacist can process scripts without interruptions. Other companies have developed a variation of this business model. They have addressed the need of physicians to maximize profit per patient visit by assisting the physician in establishing their own pharmacy. These companies buy generic medications in bulk, repackage them and set a new AWP. Software for the physician to dispense medication allows the company to vertically integrate the process without the injured worker providing a script to a local pharmacy.

or seasonal employment. This means that employees may be on their own when they are hurt or be directed by a job site supervisor to an immediate care facility. In either case, the employee has no documentation and no information other than to tell the doctor and the pharmacist that it is a workers’ compensation injury and provide them with a contact name for authorization. The first step towards saving money on pharmacy is to adopt the mindset of the third party billing companies. This can be done by no longer focusing on authorizations. The majority of prescriptions are going to be paid by the employer anyhow, and if the focus is on making sure all scripts are authorized, the annoyance created for the pharmacist funnels the scripts to the third party companies. The next step is to map out the workflow and look for bottlenecks. Below is a typical workflow:

employers don’t realize that large business models have been built to address the needs of the pharmacists. These needs include having immediate cash flow, and having another source of revenue which aligns the physician’s interests against using the employer’s pharmacy network. It’s not surprising that adjusters have situations where pharmacists and physicians openly refuse to use pharmacy networks even when provided the information. utilization rates in the 90 percentile are achievable when an employer focuses more on the process. employers with large centralized work groups may have a clinic where every non-emergency is directed. These first aid clinics serve a valuable role in educating the injured worker. The clinic provides the injured worker with the necessary information regarding pharmacy. Clinic personnel authorize the injured worker in the network system and the network usually takes the risk if subsequently the claim is deemed non-compensable. however, most employers either have a decentralized workforce, or they are involved in transportation

September 2012

The Self-Insurer

An operational review shows these areas have a high probability for improvement: 1. educate employees on the workers’ compensation process and provide information on the claim process. If employees have a card they will use it the same as a health card. There may be some abuse, but with fill limits or dollar caps the loss is minimal. 2. report claims immediately. The adjusting company enters the claim into the claim system which then feeds through a nightly process that uploads the new claims to the pharmacy network. This is at best a 24 hour process for the injured worker to be authorized in the network. Injured workers on the other hand usually need their medicine on the day of injury. rejections of scripts at the pharmacist counter because the system will not authorize the fill until the

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The Self-Insurer

| September 2012

next day leads to pharmacists having to call for authorizations. As stated earlier, the third party companies have built a business on eliminating this hassle and preventing the employee from being turned away without their medicine. 3. review your check register monthly and send details of scripts filled outside the network to you PBM. The PBM can call and get some charges reversed and sent through the network. 4. Discuss with adjusters, employer and network personnel the details that may create out of network opportunities such as: • Prescriptions which are outside the formulary may create messages such as “claim denied call 800-123-4567” when the pharmacist uses the system. using the term “claim denied” upsets the injured worker and frustrates the pharmacist when

a message such as “to complete processing claim call (800) 1234567” accomplishes the same thing without the risk. • Discuss third party biller authorization tactics with adjusting and clerical staff. Third party billers will aggressively call the adjusting company and/ or employer and try to get dates of injury and or claim numbers to put on the bills to make them look “authorized”. Third party billers realize that if they can get a claim number or some other information which makes it easy for the adjusting company to process it routinely, it is less likely to be reviewed and reversed. • Identify pharmacists that refuse to utilize the instructions for the network and continue to use third party software. Sometimes a call from the

HEALTHCARE PORTALS AND APPLICATIONS

employer and adjuster can bring about greater compliance. • The adjuster and your PBM should also monitor a claim for repeated refills for the same medication and recommend mail order delivery. This will save money on the cost of the medication, easy access for the injured worker, and keeps the script in your network. Keep in mind, mail order is not just for group health, it has its place in workers’ comp too. A war is being waged over who gets paid for filling prescriptions. Automation of the process has allowed new vendors who sell software products to eliminate the nuisance factor for pharmacists while placing physicians into the dispensing business. This creates a battle over every script. The most unprepared are the adjusting companies and the employers who are slow to change from an old mindset where controlling authorizations were the key to cost savings. Today, employers have to educate their workforce on the benefits of workers’ compensation and have similar education programs that are used for health benefits. Only by the employer, employee and adjuster working together can prescription over charging be reduced. n Robert Bennett is CEO of Alternative Service Concepts a TPA; Sherri Hickey is Medical Management Director at Safety National, and John T. Watts is National Sales Director at PMOA, Inc

September 2012

The Self-Insurer

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The Self-Insurer

| September 2012

Member retention tips From leading rrG Managers by Karrie Hyatt, Managing Editor, Risk Retention Reporter

key component to a successful risk retention group is member retention– even more so than in the traditional market as a rrg’s members are also its owners. To get a better understanding of what is involved in successful member retention, the Risk Retention Reporter talked to three long-time rrg managers to determine key elements they use to keep their members satisfied year after year. The three rrg managers who were interviewed all manage wellestablished rrgs. Janice Abraham is the president and CeO of united educators Insurance, A reciprocal rrg (ue), which has just celebrated its 25th anniversary and which has a member retention rate of 98%. Michael Bemi is

September 2012

The Self-Insurer

the president and CeO of The National Catholic rrg, Inc. (TNC), which began writing business in 1988 and has a retention rate of 99.1%. Brian Donovan is the president of STICO Mutual Insurance Co. rrg, originally licensed as a captive in 1988, it was converted to a rrg in 2002 and has a 98% member retention rate. The initial question asked of each person was: what are the most important factors in your view that help you achieve a high retention rate? While their answers varied, everyone indicated that a close understanding of the needs of their insureds was key to keeping their members. “Our excellent retention is primarily the result of four factors: 1) much broader than industry coverage; 2)

competitive but stable pricing; 3) great claims service; and 4) knowledge of and identification with the Church’s mission,” said Michael Bemi. According to Brian Donovan, “There are a number of factors that contributed to our retention success including fair premium rates, fair claims handling, active involvement with our insureds, dividend payments, and reminding our insureds that we are a mutual and they are all owners of the company.” ue has actually asked their members this question. “We completed a member research study in 2011,” said Janice Abraham, “Which indicated that our education-specific expertise coupled with our risk management services, including online courses,

podcasts, checklists, white papers, webinars, and one-on-one technical advice were the principal factors in our high retention.” Playing a major role in maintaining a high member retention rate is member selection and screening. According to Abraham, ue really looks for a commitment from its new members, “Our prospecting and underwriting definitely looks for schools, colleges, and universities that want to make investments in risk management best practices, don’t shop their insurance every year, and articulate a commitment to being part of a member-owned company.” TNC, as a religious-oriented insurer, is available, “to any institution of the Church that meets our underwriting standards, accepts the initial three year required participation, and injects the required ownership capital. Consequently, the hurdles we establish to participate probably do help us achieve a better risk profile overall.” “Initially, at our formation, we accepted all companies within our niche for membership,” said Donovan. “Over the years we have refined our focus and learned what makes for a loyal, long-term insured. While we have slightly expanded our niche over the last 25 years, we continue to be selective as to our prospects.” In recent years the soft market has increased competitiveness among traditional insurers and captive insurers. RRGs often find that their members have “short memories” concerning market trends and are liable to switch to a traditional insurer when rates are low. how can a rrg deal with those market forces? “At this time, most of our insureds have ‘tribal memory’ and do not need to be reminded of the beneficial aspects of staying with us,” said Donovan, “The insureds that we have lost have been short-term insureds who came to us without intentions to stay for the long term. Over the past five years our dividends have averaged

10%, which often exceeds any savings that the traditional market offers.” On the other hand, ue concentrates on offering the best possible coverage. “We simply stay focused on being the experts on education’s risks, putting out risk management materials that are practical and help them do their jobs, and have the best claims staff in the business for when claims occur,” said Abraham. For Bemi and TNC, “We have never found this to be a problem. Most of our members remember–or at least know of–how badly the market has treated the Church in prior hard markets. They are generally disinclined to reward prior industry ‘offenders.’ They also recognize and appreciate the long range stability we provide.” education can play a vital role in keeping members engaged, but how big a role does, or should, it play? As ue insures education institutions, continuing education is a major factor for its members. “education, or in our world, risk management, is huge and the clearest differentiator for our members.” For Donovan, “Member education is very important both to retain members as well as to upgrade members understanding of their insurance purchase. We have at least two opportunities per year to present important information to our insureds as a group. Furthermore we have a number of one-on-one discussions with individual insureds throughout the year, without the filter of a broker or agent. We publish an annual report each year with a strong educational component, and we have a dedicated website that we use to both educate and communicate with our members.” TNC also offers educational opportunities for members. According to Bemi, “We think member education plays a significant role. Besides our quarterly newsletters (which are largely educational in format) we offer an annual winter meeting with multiple risk management workshops presented by bona fide experts in their disciplines. We also offer two annual workshops that are devoted to claims management and litigation management education. All of our educational tools are provided free of charge to members. We believe all this raises our company profile very positively and generates much good will. It also demonstrates the quality of our service to members.” One benefit of being a member of a RRG is that the insureds are also owners. however, there are other valuable take-aways that these rrgs provide their member owners. As is fitting for an educational-related risk retention group, UE concentrates on educational programs available only to members. “Our risk management products and services, including our superb online courses, are only available to members. This can save them thousands and thousands of dollars each year as they use our free materials in lieu of the courses or training they could buy off the shelf or develop in house if they were not ue members,” said Abraham. “We have 25,000 faculty and staff at our member institutions using our online Preventing Workplace harassment and Discrimination course. We just launched a 30-minute interactive online course for college students that meets a college’s compliance requirement to train its students on sexual assault prevention. And it is free and only available to members.” For STICO, they tailor their policy specifically to their industry niche as well as offering personal consulting and, often, dividends. “First, our policy form is unique to our industry and has a number of features that provide additional coverage. The form has been evolving over our 25 year history and the changes reflect unique claims experiences within our industry. Second, we are available 24/7 to discuss various issues with our insureds regardless of whether or not a claim has been

The Self-Insurer

| September 2012

presented. Finally, we have told our insureds that our surplus is more than necessary to meet our obligations and that we will return unneeded pre-tax profits to them.” As for TNC, “We offer no special incentives or value added options other than our high quality claims management and risk control and our excellent coverage and stable, fair pricing. We have occasionally paid out cash and/or share dividends,” said Bemi. The final question asked of each of the three RRG managers was: Do you have any unique strategies for keeping members? According to Abraham, it is a great working relationship with their brokers, “The brokers who work with our members and ue are great advocates for keeping members. They know the superior services that our members get and how we help brokers deliver value added services to their clients, our members.” For both Bemi and Donovan, they don’t believe their strategies are all that unique. Bemi said, “We have a distinct strategy, but we don’t think it is necessarily unique. We provide excellent coverage; with very high available limits; at reasonable, fair and stable premium levels; with great service. We think that all of this, rather than some ‘flash and dash’ options, is what our insureds really need and desire. “ According to Donovan, “Our strategy is not really unique, but maybe it is in the insurance business. We develop fair, stable rates. We are honest with our insureds. We provide a clear and easily understood policy form. We tend to interpret the gray areas of the insurance contract for the benefit of our insureds. We return profits in the form of dividends to our insured owners.” For ue, TNC, and STICO it is not just about keeping members, but keeping members satisfied with their liability coverage. These groups use their RRG not only as an insurer, but also as a sort of ‘club’ that keeps their insureds up-to-date and educated. According to Donovan, “Member retention is a key element in the success

September 2012

The Self-Insurer

of our rrg. how many traditional insurers can claim that over 90% of their insured customers from 1988 are still with them?”n Karrie Hyatt is the managing editor of the Risk Retention Reporter. The Risk Retention Reporter (RRR) has been the leading publication oriented specifically towards Risk Retention Groups and Purchasing Groups since 1987. The flagship monthly newsletter, the RRR, covers news and developments in the industry with detailed analysis and 24 years of historical data. Four quarterly publications and one annual directory compliment the RRR’s coverage of the risk retention marketplace. For more information about the RRR and its sister publications, visit www.rrr.com.

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The Self-Insurer

| September 2012

bench From the

by Thomas A. Croft, Esq.

U.S. Court of Appeals Affirms Decision for Stop Loss Carrier in Eligibility case (Clarcor, Inc. v. Madison National Life Ins. Co., No. 12a0822n.06, in the U.S. Court of Appeals for the Sixth Circuit, July 31, 2012 (unpublished opinion).

t was just a year ago when I reported here on a Tennessee federal court’s decision rejecting a self-insured group’s claim that a stop loss carrier had breached its contract by denying a claim for reimbursement of medical expenses for an employee on eligibility grounds. (See “From the Bench: Tennessee Federal Court Decides eligibility Issue in Favor of Stop loss Carrier,” The Self-Insurer, September 2011.) At the time, I observed that I thought “the Court got this one right.” On July 31, 2012, the u.S. Court of Appeals for the Sixth Circuit agreed, affirming the trial court’s rulings in all respects, and making others consistent with the result reached by the court below. Clarcor, Inc. v. Madison National life Ins. Co., No. 12a0822n.06, in the u.S. Court of Appeals for the Sixth Circuit, July 31, 2012 (unpublished opinion). The facts were relatively straightforward. Plan participant I.K.’s last day of regularly scheduled work at Clarcor was October 20, 2007. She continued her coverage via FMlA leave through January 12, 2008. At that time, I.K. was not offered COBrA, but was instead placed on “short-term disability” until June 23, 2008, when she was terminated. upon her termination, Clarcor offered her COBrA coverage. Madison National denied all Clarcor’s claims for reimbursement under the stop loss policy for medical expenses incurred by I.K. after January 12, 2008 – the date

September 2012

The Self-Insurer

she went on “short-term disability”-because Clarcor’s Plan did not refer to “short-term disability” as an exception to the Plan’s requirement that an eligible participant be a “regularly assigned, full-time employee...regularly scheduled to work a minimum of 40 hours per week.” rather, the only exceptions the Plan Document made to this condition were for qualified retirees, employees on FMlA leave, and employees receiving COBrA coverage. Nevertheless, Clarcor insisted that its “corporate practice” was to continue coverage for employees on short-term disability regardless of their reduction in hours, and, in fact, Clarcor did continue to make deductions from I.K.’s pay for health coverage during her period of

disability, and reported her name to the carrier as an individual covered under the Plan for whom stop loss premium was being paid. The Court of Appeals was unpersuaded by these arguments. relying on the 2009 decision of the Illinois federal court in The Majestic Star Casino, llC v. Trustmark Ins. Co. (see www.stoplosslaw.com for full text), the Court of Appeals reiterated the district court’s conclusion that “Clarcor cannot avoid the consequences of Plan and Policy language by offering insurance coverage not otherwise provided by the Plan.” In other words, regardless of the corporate practice of the group to continue coverage under the Plan for those on “short-term disability,” the Court of Appeals’ conclusion that the language of the Plan did not support that was fatal to Clarcor’s claim under the stop loss policy. helpful to the carrier in this regard was the language in the stop loss policy stating that Madison is not responsible “for any liability [Clarcor] assume[s] under any contract or agreement other than the Plan.” Clarcor, as one would expect, did argue in its briefing in the Court of Appeals that it had discretion under the Plan to make eligibility decisions – decisions that the stop loss carrier had no right to second guess – absent a showing that Clacor had acted in an arbitrary and capricious manner. This kind of argument has derailed the reasoning of some other courts recently – notably regional Care Services Corp. v. Companion life Ins. Co. (D. Ariz. 2012) and Diversatek, Inc. v. QBe Ins. Corp. (D. Wis. 2010) (appeal pending)(see www.stoplosslaw. com for case summaries and full court opinions) – but the Sixth Circuit Court of Appeals gave those arguments short shrift in its opinion. essentially,

the Court of Appeals found that the language of the Plan could not be squared with any interpretation other than that I.K. lost her eligibility once her FMlA leave ran out.

expiration, she could have sued us and recovered them. So these expenses were in fact a legal obligation of the Plan at the time, and thus our stop loss carrier must reimburse them.”

As for the “we paid stop loss premium argument,” the Court expanded upon the district court’s treatment of this issue as follows:

I think this kind of argument could have legs, but for the “late COBrA” exclusion in the stop loss policy, which excluded “[e]xpenses for any COBrA continue or retiree whose continuation of coverage was not offered in a timely manner or according to COBrA regulations.” The Court of Appeals expressly held that the Madison policy’s “late COBrA” exclusion protected the stop loss carrier in this situation.

“Clarcor next contends that I.K. was eligible for coverage under the Plan because she continued to pay her premiums, and Clarcor, in turn, continued to pay premium to Madison. This argument is easily rejected. When Madison was accepting these premium payments, it was not aware that I.K. was no longer eligible under the Plan. Accordingly, the acceptance of premium payments does not constitute some sort of admission or waiver. More importantly, the Policy clearly states that Madison will not reimburse Clarcor for liabilities assumed but not covered by the Plan… The acceptance of premium does not alter the unambiguous coverage requirements of the Plan and Policy.” Typically, the stop loss carrier is not furnished with a list of the names of Plan participants for whom premium is being remitted monthly, but apparently Madison was in this case. As can be seen from the quote above, it made no difference here. lurking in the background of this fact pattern, as I noted a year ago, is a “late COBrA” issue. Although it does not appear that the argument was advanced by Clarcor in quite this way, it could go something like this: “OK, Court, you’ve decided that we should have offered I.K. COBrA back when her FMlA leave expired, which means she was entitled to it under federal law as of that date. If you are right, then she was eligible for COBrA coverage as of that date even if we didn’t offer it then. If we hadn’t paid for her medical expenses following her FMlA leave

Federal court permits claims against Insurance Auditing Firm to proceed in dispute over Monthly Aggregate Advances (Certain Underwriters at Lloyd’s, London v. R.J. Wilson & Associates, Ltd., et al., No. 1:11 cv 01809, in the United States District Court for the District of Maryland, July 17, 2012). Well-known consulting and insurance services organization Northshore International Insurance Services, Inc. (“NiiS”) was recently brought into an ongoing suit in Maryland between certain lloyds underwriters (“lloyd’s”) and two other entities, r.J. Wilson and Associates, Ltd. (“Wilson”) and Medical Benefits Administrators of MD (“MBA”). According to the Court’s opinion, in 2005, lloyd’s and Wilson entered into a contract under which Wilson was to serve as program administrator for lloyd’s “Client First” insurance program whereby lloyd’s provided medical excess loss coverage for certain selfinsured employee benefit plans in the united States. MBA was to serve as the “claims administrator.” lloyd’s suit, filed in federal court in Maryland in June 2011, alleges that Wilson failed to secure the repayment of over $1

The Self-Insurer

| September 2012

million in Aggregate Accommodation Advances made to lloyd’s stop loss insureds in 2008, committed fraud, failed to keep adequate records, breached the contract, and breached fiduciary duties owed to Lloyd’s. lloyd’s further alleged that it retained NiiS to do a “reconciliation audit” of the aggregate advances, but that NiiS was unable to complete it due the alleged missing records and other issues. Wilson and MBA filed Answers to lloyd’s Complaint, denying the material allegations thereof, and asserting a host of affirmative defenses. On December 30, 2011, Wilson and MBA requested permission from the Court (known as “leave,” procedurally) to file a Third-Party Complaint against NiiS, asserting various claims against NiiS.

later amended, the proffered Amended Third-Party Complaint included claims for indemnity, contribution, and tortious interference with contractual relations between Wilson/MBA and lloyd’s by NiiS, and asserted that NiiS had “wrongfully interfered with and improperly interrupted the subject insurance contracts, claims processes, and business practices for its own pecuniary gain.” Accordingly, alleged Wilson/MBA, NiiS was liable to them if they were found to have any liability to lloyd’s in the underlying suit. Lloyd’s filed a brief in opposition to Defendants’ Motion for Leave to File ThirdParty Complaint, and Wilson/MBA filed a reply. The Court concluded last week that Wilson/MBA should be allowed to file their claims against NiiS, so that NiiS has now been added to the case as a party. The granting of leave to file a third-party complaint rests in the sound discretion of a trial court, and is (in this author’s experience) usually granted in the ordinary course, unless it would prejudicially delay the existing proceedings, or inject completely new facts/law into the existing case. The Court analyzed these and other factors in its opinion, and, unsurprisingly, concluded that leave should be granted in this instance. The Court was careful to point out that its decision to grant leave for the filing of the Third-Party Complaint was not a comment on the merits of the claims set forth by Wilson/MBA in the Third-Party Complaint, and that NiiS was free to bring a motion to dismiss those claims for the Court’s consideration, once it was served with the Third-Party Complaint. n

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The Self-Insurer

| September 2012

getting the

mOSt Bill Audit company from Your

by Cynthia Freese, RN

September 2012

The Self-Insurer

s we all know, there are a multitude of bill audit companies from which to choose. They range from organizations that provide bill audit services only, to companies offering a full suite of cost-containment services, including bill audit. And companies that only offer bill audit services are not necessarily more effective than companies offering bill audit as part of their product portfolios. In the final analysis, it is about their focus on service, their relationship with the providers, their willingness to be flexible, and yes, their overall success.

choosing your bill audit company This is the hard part. With so many options, how do you narrow down the list? The good news is that there are several keys to identifying leaders in bill auditing. 1. communication with the client: This seems like a no brainer. Of course they are going to keep you updated. But do they understand your benefit plan(s) in detail? Do they ask for a copy of the SPD or plan documents? If you are a TPA, do they have a list of all the accounts for which they are providing services, and detailed SPDs for all of them? If not, you run the risk of audits not being supported by plan documents. This creates issues for you, the patient and the provider. 2. How do they define an audit? Isn’t an audit pretty much the same regardless of the vendor? Actually, no. It is important to understand what the vendor considers an “audit”. Do they look at medical necessity, which requires provider notes and charts? This is often challenging, and can create issues in terms of second guessing the medical management process (e.g. utilization and case

management). More often, bill audits review the billing and insure that services billed match the diagnosis. This should be done on a line item basis. • Alert: Does the company apply a line item uCr reduction and include that in their audit? This can be a valuable service, but should be applied AFTer reductions are made by eliminating or revising services billed inappropriately. For example, the audit company identifies that certain CPT codes were used separately, but in fact are rolled up under another single code. Once that change is made the fees will be adjusted downward as appropriate. At that point a uCr reduction can be applied to the bill. This way the line item reduction is taken on the corrected billed charges, not on the inflated bill. • Additionally, if the provider is in-network, the PPO discount should be taken after the bill audit adjustments have been made. 3. Who does the audit? Are they using a glorified negotiator or at a minimum using an experienced rN? And not any rN will do. You want to make sure they are utilizing nurses that have a successful bill audit track record. If they are using nurses fresh from a hospital or physician environment, they are not likely to understand the nuances of the audit process. This only comes from first hand experience. 4. What resources do they use to support their audits? As mentioned above, it is critical to have appropriate plan documents to support the process. But what other sources do they site? Make sure they are only making recommendations

that can be supported by outside, industry supported resources like the AMA, FDA, CMS NCCI edits, and CMS guidelines. 5. proactive communication with the provider: This is one of the most critical elements of a successful audit, but is infrequently done. Contrary to the opinion of some audit companies, the providers are not our enemies. There are times when legitimate errors are made and resolution can be obtained quickly and smoothly with just a phone call and bill resubmission. In other cases, the provider may not know a reduction is appropriate and a call can quickly identify an opportunity to share information and resolve the issue. • Alert: There may be times when a provider is a little “creative” in its billing and may be more adversarial when approached. In order to address the issue effectively, the provider should be offered a formal letter outlining the deductions prior to adjudication. This helps clarify the stance of the audit company in advance. We have found that contact upfront can move the process forward more quickly than addressing the provider push back after the bill has been paid based on the audit results. This is especially true when the billing is in conflict with plan documents. • There are also instances where the provider will agree to audit findings but does NOT want a formal letter, because that creates a document trail suggesting that the provider agrees that it has incorrectly billed. Working with the provider can create goodwill, and may facilitate future audits. • Occasionally, a provider may not understand the difference between an insured plan and

The Self-Insurer

| September 2012

one that falls under erISA guidelines. Being able to communicate this clearly to the provider, along with providing plan details early on in the process can help resolve the issue favorably. 6. do they negotiate with the provider beyond the audit? OK, the audit company has done a good job eliminating inappropriately billed services. Now what do you do? how about negotiating on the remaining legitimate services. This is may be an option especially when the provider is “outof-network” and the audited reductions are reasonable. 7. defending the audit is critical: After the audit, does the company defend their work? Do they stand by you if the provider gets aggressive with you and/or the patient? The answer should be YeS! You are relying on them to provide a realistic and defensible audit.You should also expect them to step up and deal with the provider if there is push back. however, as indicated above, if the audit company is proactively communicating with the provider, the dispute after the adjudication can virtually be eliminated.

• Alert: Internal documentation is key to ongoing success. Obviously, it is important to have details of the interaction with the provider, including phone conversations and e mails so we can insure there is no miscommunication between the auditor and the provider. Additionally, personnel can frequently change in the provider world. having detailed notes can help eliminate issues should a new provider contact question the resolution of an audit.

Is your bill audit company a partner? Once you’ve made your selection, that organization should do everything in its power to support you in generating savings, maintaining clients, and growing your business. In other words, they are your partner. A couple of additional things to consider when choosing your bill audit partner. Do they understand your pain threshold? In other words, how aggressive are you willing to be in accepting the audit and paying at the reduced amount. If there is push back, do you want them to vigorously defend the results? Make sure they work within your requirements. reporting is important.They should be willing to provide you the reporting necessary to support your business, including addressing stop-loss issues. Agree on a turnaround time that makes sense for you, not just the audit company. Do they put their money where their mouth is? In other words, do they only get paid when the results are successful and you use the audit in the adjudication process, or do you get charged regardless of the outcome of the audit? A partner recognizes that there may be limited instances where an audit does not get used in the adjudication process. Additionally, in the rare situation where the push back from the provider results in a renegotiation of the repriced amount, you should not be on the hook for the total originally billed fee.Your bill audit partner should only charge for work completed and used in the normal course of business.This is why pricing on a percentage of savings can be valuable, rather than a flat dollar amount regardless of the results yielded. At the end of the day, their success should be tied to your success. n Cynthia Freese is the Director of Claim Audits for United Claim Solutions (UCS). She has over 10 years audit experience in the Medicare, Medicaid and Commercial markets. UCS is a Claims Flow Management and Medical Cost Reduction company located in Phoenix, AZ. Cynthia can be reached at cfreese@unitedclaim.com

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September 2012

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| September 2012

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| September 2012

Art gAllerY by Dick Goff

A dangerous environment for Art

e who toil in the fields of self-insurance and ART find ourselves in a strange and dangerous environment. It’s like walking through a minefield – during an earthquake – while trying to dodge a tornado. Our enemies seem to have us surrounded, and these include that high-level trade group, the National Association of Insurance Commissioners (NAIC), the Obama administration fronted by its Treasury Department and IrS, and individual state insurance commissioners led by NAIC poster boy Dave Jones of California. Whew, it’s no wonder we’re so tired at the end of the day! But in the meantime, we trudge on. Self-insured employee health plans continue to flourish and Business Insurance has marveled at the growth of ArT in the great middle market. Of course, the enemies cited above are largely the stalking horses for the traditional insurance industry whose mega-lobbyists troll the halls of Congress on the lookout for representatives who may lean in our direction – as well they should, given that self-insured erISA plans are the most efficient and effective health plans available. It’s a shame, really, that a few state insurance commissioners can come so close to undoing a great form of risk management just because they’re afraid of losing their turf. State insurance commissioners began jumping

September 2012

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up and down in frustration when erISA plans with federal preemption became available, and their heirs in those cushy jobs continue sniping at us to this day. Insurance is still operating in a colonial American kind of way where each state sets the rules and each state insurance commissioner is a little king. Imagine if other industries had to operate under such a load: you’d have 50 different rules for information technology, automobile manufacturing (and California has even tried that, surprise!) and any number of other products. Through their NAIC – which has no legislative or regulatory authority! – the insurance commissioners have worked for years on “model” rules that would hamstring all aspects of the self-insurance industry, and now they’re playing a fullcourt press against self-insured health plans by trying to raise the minimum stoploss insurance attachment points beyond the affordability of smaller employers. The California commissioner, Mr. Jones, has been accused of trying to stifle selfinsured health plans among small businesses in order to drive more customers to his state insurance exchange that will be open for business in 2014. So, Obamacare strikes again! The IrS is now considering a reversal of its position regarding its treatment of captive insurance of employer health plans, which could make it more difficult for captives to demonstrate sufficient risk distribution to qualify for tax characterization as insurance companies. This issue will be fully addressed next month during SIIA’s Annual Conference in Indianapolis by a panel of captive management and legal experts including randall Beckie of Frontrunner Captive Management who wrote on this issue in the February Self-Insurer, and two distinguished attorneys specializing in self-insurance and captives, Thomas M. Jones of McDermott Will & emory, llP, and Charles J. lavelle of Bingham greenebaum Doll, llP. Another session at SIIA will bring together three state captive regulators: Michael Corbett of Tennessee, Steve Kinion of Delaware and Steve Matthews of Montana. It will be interesting to compare their approaches to learn if any common threads exist in captive regulation. regardless of how regulators and government try to push us around, captives and risk retention groups aren’t going anywhere but up, in my opinion. For example, if stop-loss attachment points are established at high levels, a captive structure can put a “collar” around self-insured plans that could look like a layer of stop-loss but not be stop-loss for regulatory purposes. employers sponsoring employee benefit plans could access coverage defined as contractual liability insurance for the employer rather than the plan itself. Such captives could be created in almost any structure: single-parent or group, with the option of segregated cells. These wouldn’t even be visible to a state mandating high stop-loss attachment levels, and that insurance would still be used for excess of loss coverage. So, you see, things aren’t so bad for us. Now, just be careful as we walk through the minefield, and watch out for that funnel cloud. n Dick Goff is managing member of The Taft Companies LLC, a captive insurance management firm and Bermuda broker at dick@taftcos.com.

The Self-Insurer

| September 2012

ClOSer to

Home © A.M. Best Company - used with permission

captives are being attracted back onshore by business-friendly states and federal incentives by Michael Serricchio

ver the past decade there has been a significant shift toward domiciling captive insurance companies onshore rather than in historically popular offshore domiciles. Between 1991 and 2000, just 35% of all captives formed by Marsh clients were domiciled onshore – in the united States or european union – according to data from Marsh’s 2012 Captive Benchmarking report. But this trend largely reversed itself over the decade that followed. From 2001 to 2011, 52% of all captives formed were domiciled either in the united States or eu. So just what is driving this trend

September 2012

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toward onshore domiciling? Why are more captive owners – particularly those headquartered in the united States – now seeking to form captives close to home? The answer is a combination of recent actions taken by u.S. states to facilitate captive formations and federal laws that provide incentives for captives to remain onshore. In the wake of the global recession, many local economies are looking for ways to drive economic growth and create jobs – two goals that captive insurance companies can help states achieve. Today, 30 states plus the District of Columbia and the u.S. virgin Islands have laws allowing captive formations.

Many of these domiciles, including Oregon, New Jersey, Connecticut and Alabama have created new captive laws over the past decade. Others, like Florida, have improved existing laws or simply resurrected old ones in an effort to better compete. The District of Columbia’s captive law, drafted in 2000 and amended in 2004 and 2006, now includes a provision that allows captive owners to engage in any business practice, provided that captive legislation approving such practices exists in another u.S. state. This gives captive owners greater flexibility to consider alternative structures, including protected cells, risk retention groups

and rent-a-captives, or to use their captives to underwrite unique and emerging risks, such as employee benefits and medical stop-loss. Meanwhile, Florida’s newly revamped captive law lowered its minimum capitalization requirement to $100,000 for pure captives, putting it in line with Bermuda, the Cayman Islands and other offshore domiciles. Other factors also are leading captive owners to stay closer to home. Over the past several years, mergers and acquisitions involving the parent companies of multiple captive insurance companies have resulted in captive consolidation. After all, a single captive is far easier to manage and more costefficient than operating three or four separate captives. generally, friendly captive laws in the united States make it relatively easy for parent companies to change their captive address. In addition, managing a captive close to a parent company’s headquarters can yield further cost savings as the captive’s board of directors can meet in the same boardroom used by the parent company, thus reducing or eliminating entirely any travel or meeting expenses. Meanwhile, a key driver of recent captive growth in the united States has been the popularity of small captives taxed under Section 831(b) of the Internal revenue Code. under Section 831(b), insurance companies with less than $1.2 million in annual premiums are allowed to pay federal taxes based solely on investment income and not on the captive’s underwriting income. Kentucky and utah are two domiciles that have seen a large uptick in the number of these microcaptives – a trend that is expected to contribute to further growth nationally. Perhaps the most significant driver of onshore domiciling going forward will be the Non-Admitted and

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reinsurance reform Act, part of the federal Dodd-Frank Wall Street reform and Consumer Protection Act of 2010. under the NrrA, the home state of a company that independently procures insurance from an unapproved nonadmitted insurer may collect self-procurement taxes on the insurance premium paid. Such taxes, prevalent in a majority of states, can range from 2% to 6% of premium. Though it has not led to significant redomiciling to this point, some owners may ultimately decide to relocate their existing captives to their home state in order to avoid paying the selfprocurement tax.

Thanks to their established infrastructures, low taxes and captivefriendly but pragmatic regulations, Bermuda, Cayman, guernsey, Isle of Man and other offshore jurisdictions largely remain the domiciles of choice for companies looking to form new captives. But as more u.S. states pass legislation to attract captives, and as regulatory and cost drivers within the united States continue to provide strong incentives for domestic captive formation, it is likely that the onshore domiciling movement will continue in the years to come. n

likewise, companies seeking to form a new captive may view the selfprocurement tax as another incentive to domicile locally.

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Setting health Goals and Overcoming Barriers: promoting health and healing through Motivational Interviewing by Patrice Sminkey, RN, Jolynne “Jo” Carter, BSN, RN, CCM Commission for Case Manager Certification

hen employees become ill or injured, whether due to occupational or non-occupational causes, an open and honest two-way conversation may be one of the most effective interventions for improving health and promoting recovery. using a communication technique known as motivational interviewing, qualified professionals, such as board-certified case managers, engage individuals in discussions around their goals for better health and to identify barriers and resistance that stand in their way. Motivational interviewing draws upon a supportive and empathic counseling style of communication, which helps people move toward a course of desirable change.1 This technique provides the structure, accountability, expertise, and inspiration that allows an individual to participate in understanding the areas for health improvements that will result in desired outcomes. Behavioral changes–even when the individual recognizes the importance of altering his or her behavior and health habits (e.g. quitting smoking or losing weight)–do not happen easily or quickly. Furthermore, maintaining behavioral changes is even more difficult. Studies have shown that the best chance for success is when the individual is empowered, educated, and supported– all of which can be accomplished when motivational interviewing is utilized.

September 2012

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By using specific communication techniques including open-ended questions, listening with empathy and without judgment, providing ample time for the person to reflect and respond, and repeating back what the person has said, the interviewer establishes trust and rapport. The focus is always on the individual’s health goals, with the best health outcome in mind. The professional’s role is to provide the tools, education, and support that empower the individual to make the changes he or she desires. Motivational interviewing is best handled by a qualified professional such as a board-certified case manager who possesses both the requisite clinical knowledge and the skills to

conduct comprehensive assessments; identify intended outcomes, gaps, or conflicting goals; and devise plans. Most importantly, when a professional case manager is working with severe or complex cases, such as a serious illness or injury or when the individual has multiple underlying health issues known as co-morbidities, clinical expertise and motivational interviewing are a powerful combination. The professional case manager has the competence to balance between being an expert who provides access to the care and treatment resources that the individual needs, and being a facilitator who helps individuals to find their own answers as to why and how they can make positive changes in their health behaviors. The process begins with rapport established between the professional and the ill/injured employee. The individual must see the case manager as someone who is on his or her side and who will listen to his or her goals, fears, frustrations, setbacks, incremental achievements, and all the rest without judgment. All too often, people provide incomplete or inaccurate information to a health professional, such as a case manager, out of embarrassment, shame, or fear of being judged. An example is the individual who claims to have quit smoking when in fact he or she still smokes occasionally. The power of motivational interviewing lies in the ability to unlock the issues surrounding health behaviors. For the employee, motivational interviewing opens up discussion around barriers and resistance, empowering that individual to take positive steps toward the necessary behavior changes. For the employer, having competent professionals such as board-certified case managers engage with those employees who would benefit most fosters health and wellness in the workplace, which promotes productivity. For the

self-insured employer, in particular, improved employee health translates directly to shorter duration of absences and reduced expenses across all benefits, from workers’ compensation to group health. given the aging of the workforce and the prevalence of co-morbidities that increase the health risk among mature individuals, motivational interviewing establishes a client-centered process to identify change and explore a course of action. As is often seen in the workers’ compensation arena, many workers have poor, deeply entrenched health behaviors and other long-standing maladaptive behaviors. extraordinary efforts are needed to facilitate change in support of improved clinical outcomes. Motivational interviewing can facilitate and strengthen those efforts.

how Motivational Interviewing Works The skills and techniques of motivational interviewing are aligned with the role of the case manager as an advocate who works on behalf of the individual. As the Commission for Case Manager Certification (CCMC), the first and largest nationally accredited organization that certifies case managers, states in its Code of Professional Conduct for Case Managers: “Certified case managers will serve as advocates for their client [the individual receiving services] and ensure that: (a) a comprehensive assessment will identify the client’s needs; (b) options for necessary services will be provided to the client; [and] (c) clients are provided with access to resources to meet individual needs.2 Advocacy is experienced in motivational interviewing when the professional and the ill/injured employee engage in a two-way conversation that leads to deeper discussion and sharing of information. Open-ended questions are intended to

prompt the client to assess the most important health considerations and his or her own current state of readiness for change. The individual is supported to look deeper inside and identify facilitators and barriers to change, and to provide meaningful responses that can influence the development of a case management plan of care.3 In addition, the motivational interviewing process provides communication tools for the person to share more deeply–not only information but emotions and feelings behind behaviors. For example, when a professional case manager makes strategic observations–What I hear you saying is… or What I see you doing is not in alignment with the goals you have discussed–the resulting discussion becomes more effective as the employee begins to truly consider the areas in which they are invested in making changes about and then mimics or parrots that style of communication. Case managers can make the most of teachable moments by utilizing these motivational interviewing tactics and providing information when the individual is ready for it. Knowledge about the stages of change theory helps case managers listen for key phrases and determine when to ask the right questions, and by doing so-more effectively help the client behavioral change. • I can’t. I won’t. The individual is not intending to make behavioral change during the following six months. • I may. The individual is thinking about making behavioral change. • I will. The individual intends to take action within a month. • I am. The individual is making a specific change. I still am. The individual is continuing the course to prevent a relapse, with a behavior change lasting for six months or more.

The Self-Insurer

| September 2012

patient-centered care taking the holistic View When an employee has an underlying risk, such as tobacco use, obesity, hypertension, asthma, or cardiopulmonary disease, the individual’s overall health is impacted. If the person becomes injured on the job, the duration and cost of a workers’ compensation claim are often increased by such underlying health conditions. Although these conditions are not directly related to the occupational injury, addressing them through motivational interviewing can result in improved health status and, therefore, a more successful return to work. After John fractured his leg at work, the injury was slow to heal because of his excessive weight and impaired mobility. As the professional case manager assigned to his case conducted an assessment and coordinated his care and recovery, issues around John’s weight had to be addressed because of the impact on his acute injury. rather than tell John that he had to lose weight, the case manager engaged in a motivational dialogue with John to discuss his goals and barriers around weight loss. John identified weight loss as an important goal for himself; however, he was not sure he would be successful. In fact, on a scale of 1 to 10, John assigned weight loss a 9 in terms of importance, but ranked his ability to achieve that goal as only a 2. This discussion helped the case manager target additional dialogue and interventions to influence his confidence in his own abilities to make changes that would result in weight loss.

As the example shows, health and wellness are holistic. Thus, improvement does not just reduce the cost and duration of a workers’ compensation claim, but also positively impacts group health expenses and overall health care spending. Most important, the individual is better able to be productive and engaged in work and in his or her life. Motivational interviewing can become a significant factor in the journey toward achieving multi-faceted goals, for both employee and employer.Telling people what to do or trying to prescribe change is not nearly as effective in helping people to find their own solutions. When handled by a professional with clinical expertise and a high degree of competence, such as a board-certified case manager, motivational interviewing empowers and supports the individual to attain his or her health goals. n

tips for Employers • What health coaching or wellness strategies are in place in the organization? • Is there coordination among wellness and prevention offerings among benefit plans, e.g., smoking cessation, weight loss, and education/support for chronic conditions? • What are the credentials of the professionals providing health coaching? Do they have a certification that requires a clinical background (such as the Certified Case Manager® credential)? • Are these professionals skilled in motivational interviewing? Patrice V. Sminkey, RN, is the CEO of the Commission for Case Manager Certification (CCMC) (www.ccmcertification.org), the first and largest nationally accredited organization that has certified more than 35,000 case managers with the Certified Case Manager® credential. Jolynne “Jo” Carter, BSN, RN, CCM, is a past chair of the CCMC. She is also an associate vice president, network services, for Paradigm Management Services, LLC, accountable for managing a national network of nurse case managers and physicians. hussein A. Tahan and Patrice v. Sminkey, “Motivational Interviewing: Building rapport with Clients to encourage Desirable Behavioral and lifestyle Changes,” Professional Case Management, July/August 2012. 1.

Commission for Case Manager Certification, “Professional Code of Conduct for Case Managers,” 2009, http://ccmcertification.org/sites/default/files/downloads/2012/ Code%20of%20Professional%20Conduct%20for%20Case%20Managers.pdf 2.

Tahan and Sminkey.

John attended weekly meetings to discuss his goals as well as what he saw as the barriers to losing weight. Over a period of months, John lost 50 pounds, which helped his leg fracture to heal and also improved his overall health status, to the point that he could discontinue his diabetic medication and his hypertension improved.

September 2012

The Self-Insurer

| September 2012

SIIA ChAIrMAN SPeAKS Alex Giordano

Missing your boss? check SIIA at Indy

xecutive suites all across the country will be curiously empty the first few days of October. That will be because a good proportion of top executives of self-insurance related organizations will be doing business at SIIA’s 32nd Annual National educational Conference & expo, October 1-3 in Indianapolis. The leading achievers in our industry will be sharing their experience, insight and strategic acumen in sessions across the full spectrum of our four educational tracks of health Care, ArT, International and Workers’ Compensation. If there was ever a time you thought you’d like to rub (or bend) elbows with our industry’s role models, this is your chance. Timely programs on health care reform from three perspectives will be sure sell-out seminars, so get your seats early for:

health care reform and Other hot topics – the Employers’ perspective – Three leading employer executives will open up about their health plans, management challenges and vendor issues. Speakers are Dianne Harrington, hr Director of Otto environmental Systems North America, Inc.; Stephanie Hearn, executive Director of Butler health Plans; and Hicks B. Morgan, general Counsel of Morgan Buildings & Spas. the Stop-loss Insurer/ MGu perspective – Presidents of four leading stop-loss 36

September 2012

The Self-Insurer

carriers/Mgus will discuss how the self-insured marketplace is working and how their underwriting practices have adapted to new regulatory realities. The panel will include Paul Fallisi of Munich re; Heather Lavallee of INg Employee Benefits; Michael Meloch of TPAC underwriters, Inc.; and Michael W. Sullivan of hM Insurance group. the tpA perspective – Thirdparty administrators find themselves under pressure from new regulations and federal policies. Four chief executives of leading TPA firms will speak: Daniel Dugan of North America Administrators; Andrew Fujimoto of AmeriBen; Mark Schmidt of Meritain health; and Dirk Visser of Allegiance Benefit Plan Management, Inc. here are samples of additional sessions where you can meet and mingle with top executives: under construction: the new technology of health care – A behind the scenes look at health reform regulation by hhS, DOl and IrS plus 2014’s state health insurance exchanges will be provided by three executives of healthcare Interactive: Henry Cha, Chief executive Officer; Todd Thompson, Chief Operating Officer; and Gene Walker, President. health plan cost Saving Strategies – catching the Eye of the Stop-loss carrier – This will be “gold standard” advice to self-insured employers on controlling health plan costs to earn discounts on stop-loss premiums. Speakers will be Jerry Castelloe, regional President of CoreSource, Inc.; Eric Dove, President

of elite underwriting Services; Kevin Larson, President of Employee Benefit Management Services, Inc.; and Daniel Strusz, executive vice President of hCC life Insurance Company. AcOs – reality or Mirage? – This session will focus on the good, the bad and the ugly characteristics of Accountable Care Organizations from both the standpoints of self-insuring organizations and business opportunities ACOs represent for serving provider companies. Speakers are Larry Dust, President of American health Data Institute; Kevin Fickenscher, MD, President/ CeO of American Medical Informatics Association; Jack Hill, executive vice President of Accountable Care Solutions group, llC; Kathy Major, President and general Manager of Medical TPA Innovante Benefit Administrators division of healthTrans; and Dan Yunker¸ Senior vice President of Metropolitan Chicago health Care Council. captive Manager panel Discussion – Employee Benefit captives – Addressing hot topics relating to employee benefit captives both for single parent and group programs, this moderated session will encourage audience interaction for a free exchange of questions and comments. Panelists are Kirk Mooneyham, Managing Director of Captive Management Services, Wilmington Trust SP Services, Inc.; Kathleen Waslov, Senior vice President, Willis North America, Inc.; and Brady Young, President & CeO, Strategic risk Solutions, Inc. Sessions in the International track will include presentations by leading global

executives including Bill Fitzpatrick, vice President of Corporate Risk Benefits of Deutsche Post Ag; Mark Reinhardt, President and Senior regional Manager of Generali Employee Benefits Network, David Levine, Senior vice President, and Sashya D’Souza, vice President, global Development, both of PPC Worldwide; Rob Leonardi, head of regional Markets for Asia Pacific for Munich Health; and Mike Malouf, Senior vice President of global Strategies of Met life. executives participating in workers’ compensation programs will include Charles C. Caldwell, President & CeO of Midlands Management group; Melodee Saunders, President & CeO of Midwest employers Casualty Company; Gene Maier, Senior vice President, underwriting, for Safety National; and Stu Thompson, CeO of The Builders group. And for those who are on the lookout for future bosses, SIIA in Indy will be a treasure trove. All this and more about the conference will become known to you at www.siia.org. I am told that a sellout date is approaching, so you’d better register today. I’ll see you there,

The Self-Insurer

| September 2012

SIIA would like to recognize our leadership and welcome new members Full SIIA Committee listings can be found at www.siia.org

2012 Board of directors CHAIRMAN OF THE BOARD* Alex giordano, vice President of Marketing elite underwriting Services Indianapolis, IN PRESIDENT* John T. Jones, Partner Moulton Bellingham PC Billings, MT VICE PRESIDENT OPERATIONS* les Boughner, executive vP & Managing Director Willis North American Captive + Consulting Practice Burlington, vT VICE PRESIDENT FINANCE/CHIEF FINANCIAL OFFICER/ CORPORATE SECRETARY* James e. Burkholder, President/CeO health Portal Solutions San Antonio, TX

committee chairs CHAIRMAN, ALTERNATIVE RISK TRANSFER Andrew Cavenagh, President Pareto Captive Services, llC Conshohocken, PA CHAIRMAN, GOVERNMENT RELATIONS Horace Garfield, vice President Transamerica Employee Benefits louisville, KY

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SIIA New Members regular Members company name/Voting representative lisa Carlson, Marketing Manager, Acclaris, Inc., Tampa, Fl

CHAIRWOMAN, HEALTH CARE elizabeth Midtlien, Senior vice President, Sales Starline uSA, llC Minneapolis, MN

ginger Campbell, VP Health Benefits Analytics, BancorpSouth Insurace Services, Baton rouge, lA

CHAIRMAN, INTERNATIONAL greg Arms, Global Head, Employee Benefits Practice Marsh, Inc. New York, NY

robert Feld, President, robert Feld Brokerage Services, Inc., Billings, MT

CHAIRMAN, WORKERS’ COMPENSATION Skip Shewmaker, vice President Safety National St. louis, MO

contributing Members gerald Mcelroy, CeO & President, Ailan Corporation, Portland, Or

directors ernie A. Clevenger, President Carehere, llC Brentwood, TN

Employer Members

ronald K. Dewsnup, President & general Manager Allegiance Benefit Plan Management, Inc. Missoula, MT

Barry Forester, executive vice President, Medafford global, Inc., Florham Park, NJ

Affiliate Members

Donald K. Drelich, Chairman & CeO D.W. van Dyke & Co. Wilton, CT Steven J. link, executive vice President Midwest employers Casualty Company Chesterfield, MO

J. Kim Walker, CeO, Special Markets Insurance Consultants, Inc., Chicago, Il

elizabeth D. Mariner, executive vice President re-Solutions, llC Wellington, Fl

The Self-Insurer

| September 2012

September 2012

The Self-Insurer