Monday, September 15, 2008
Friday, September 5, 2008
On July 1, the father of a 7-year-old with autism filed a lawsuit
against Blue Cross Blue Shield of Michigan to force the insurer to reimburse
about $8,000 paid for therapy, according to one of the family's attorneys, John
J. Conway of Detroit. Another suit over autism therapy coverage was filed in
April against WellPoint, Inc. subsidiary Anthem Blue Cross and Kaiser Permanente
Autism is a baffling and costly developmental disability that
affects about 1.5 million Americans, according to the Autism Society of America
(ASA). The disorder is marked by impaired social interaction and communication,
and engagement in repetitive behaviors. The condition is on a continuum of
"autism spectrum disorders" that includes Asperger syndrome. Autism has become a
hot-button issue as its prevalence has increased dramatically in recent years
and as some critics have linked childhood vaccines to the condition. According
to the federal Centers for Disease Control and Prevention (CDC) in Atlanta, the
incidence of autism has almost doubled since 2000, now affecting about 1 in 150
American children. Autism cases in Michigan have skyrocketed from 4,700 in 2002 to 11,000 in 2006, according to CDC.
Treatment of autism can be expensive.
The ASA estimates that the lifetime cost of caring for a child with autism ranges from $3 to $5 million.
During a hearing scheduled for Oct. 22 in the
U.S. District Court for the Eastern Division of Michigan, Southern Division, the
court will consider a motion to certify the Michigan Blues suit for class-action
status. Certification as a class would broaden the suit "to represent other
potential claimants in the same situation" as his client, explains Conway.
At issue in the lawsuits against the Blues plans is an intensive one-on-one therapy
called applied behavioral analysis (ABA). A full course of ABA therapy costs
upwards of $90,000, according to Conway.Conway says the Michigan Blues plan
sent hisclient's family "a pretty bare-bones, perfunctory denial that says, 'Our
in-house people think [ABA] is experimental.'"Michigan Blues spokesperson
Helen Stojic declines to comment on the specifics of the lawsuit filed against
the plan. But, she says, "Blue Cross Blue Shield of Michigan understands the
concern and is very sympathetic to the challenges of families dealing with
autism. However, the push to expand employer insurance coverage — through the
courts or legislation — comes at a time when many employers are seriously
struggling to pay for their existing coverage."
Conway says that ABA is endorsed by the American Academy of Pediatrics, the U.S. Surgeon General, the Association for the Science of Autism Treatment and the New York State Department of Health, among other authorities, and notes that ABA therapy is covered by Blue Cross and Blue Shield of Minnesota.
"Applied behavioral analysis isn't experimental to Blue Cross and Blue Shield of Minnesota," he says. "They pay for the treatment in Minnesota, so we don't know why kids covered in Michigan don't get it, even though they're both covered by Blue Cross entities — same therapy, same medical cases."
Its interesting to me that as a nation we can relate poor education to higher crime rates yet we seem incapable of treating a disabilty that effects over 1.5M American children which if untreated will result in the need for lifetime care at an average cost of $3M-$5M. An autistic childs mind works differently an in integrating them into society as a whole we may find a whole host of creative thinkers and productive adults if we act. How can we not act in good conscience on this subject?
Friday, August 29, 2008
Wednesday, August 6, 2008
Ironic that answering your phone and returning your calls can be considered high tech but such is the current state of service in the era of the iphone.
Thursday, June 26, 2008
Not being an attorney(thank God!) I can nevertheless offer some observations as a disability professional which can not be considered legal advice but certainly offer insight into a decision which is about as clear as mud upon first reading;
- Firestone has certainly been breached
- If you doubt conclusion #1 see Brian King's take here, I happen to agree with Brian on where the trial lawyers will go to prove a conflict.
- I have already commented here on the poor argument set forth by Metlife's counsel in oral arguments which got Justice Alito to join the majority
Thursday, June 12, 2008
Monday, May 19, 2008
At the Internal Revenue Service, one employee over a two-year period took sick leave on 13 of the 14 Tuesdays after a Monday holiday
Pretty sweet huh?Sick Days are an entitlement. There is no way to manage an entitlement except to limit its scope while incenting the behavior you seek. Too many private sector firms have sick leave programs with similar charactersistics as the federal sick leave program
Wednesday, May 7, 2008
JUSTICE KENNEDY: Does it have to be just 12 the specific decisions? Suppose that
the company does 13 not have clear rules of, what do you call them, 14 firewalls
between the profit side and the claims
processing side. Would that be enough
to cause a 16 greater, more searching standard of review, say de novo? 17 MS. POSNER: I don't think it
would ever 18 result in a de novo review. I think what it is is a 19 factor that
should be weighed with all the other factors
that go to the actual benefits
decision. 21 JUSTICE KENNEDY: So then you're saying, A, 22 the fact that there
is a potential conflict is not 23 enough; B, the fact that there are no
procedures in the 24 company to ensure that the conflict doesn't affect the
judgment, that is not enough either.
1 MS. POSNER: No. I'm not saying that. I'm 2 saying that
if -3 JUSTICE KENNEDY: I'm positing. Does the 4 fiduciary at least have the, the
burden of production to
show that it has established clear lines of
demarcation, 6 firewalls, whatever you call them, within the company? 7 Does it
have at least that obligation going forward? 8 MS. POSNER: No, Your Honor, it
does not, 9 and as the United States -
JUSTICE KENNEDY: Well then, I don't
know 11 what effect you're giving to the fact, as the earlier 12 questions have
indicated, that there is a structural 13 conflict. 14 MS. POSNER: That's a
that ERISA anticipates and, as the United States said in
16 its brief to this court in Pegram v. Herdrich, that 17 ERISA tolerates this dual role and this level of 18
conflict in order to keep these plans that are so vital 19 in our country's
economic interests in underlying the
employee's well-being -21 JUSTICE
KENNEDY: You want us to write an 22 opinion to say that it's irrelevant that a
company does 23 not have procedures to insulate the profit section from 24 the
claims processing section? I'll use those terms.
MS. POSNER: No, Justice
1 not. But what we are saying is that if there were
2 a fiduciary that factor must be weighed, but it doesn't
the abuse of discretion standard.
4 CHIEF JUSTICE ROBERTS: How does that
I don't understand. You go through, you've got a
whatever, it's a health insurance decision
7 that this procedure -- to
determine that this procedure
8 is not covered under the, the plan, that the
9 has the discretion to make that determination. But you
aha, he's got a conflict of interest, so that's a 11 factor we take into
account. Well, how does -- what 12 does that mean? 13 MS. POSNER: It means again,
remembering 14 that these are claims under 29 U.S.C. 1132(a)(1)(B) for
benefits due under the terms of the plan, it's very 16 important that the
courts remember to look at the terms 17 of those plans -18 CHIEF JUSTICE
ROBERTS: All right, you've 19 got two cases, one where the person does not have
conflict of interest under a particular plan, the other 21 where he does.
It's the same decision: We're not going 22 to cover this procedure. How is the
review different in 23 each of those cases as a practical matter?
Tuesday, May 6, 2008
Whether an ERISA plan administrator that both evaluates and pays claims
operates under a conflict of interest that must be weighed on judicial review of
Most insured LTD plans contain a discretionary clause where state law permits which allows insurers to make claim decisions that are enforceable providing the actions are neither arbitrary or capricious--the standard set down in Firestone Vs Bruch for ERISA plans by The Supreme Court. Trial Lawyers have been seeking to crack ERISA for years and desire a "de novo standard of review". In English we are talking about the difference between a deferential standard--arbitrary and capricious and a much lower bar--de novo. The former requires the claimant to prove an administrators actions were arbitrary and capricious to win and the latter allows a completely new and complete review of the case where a claimant is much more likely to prevail. At stake for employers is significantly higher costs should Firestone v Bruch be modified or should the NAIC prevail in its attempt to remove discretionary clauses from LTD policies( see brief for NAIC in Metlife Vs Glenn). You attorneys should consider that a gross simplification and not legal advice.
Jannell Grenier at Benefits Blog covers these matters very well from a legal perspective as do each of the bloggers linked to her thread.
Without question there are disability insurers who utilize the arbitrary and capricious standard to support claim decisions that would be suspect at best under a de novo review. It was interesting to read the exchange between MetLife's counsel and the justices below concerning how it is conceivable a claimant could be awarded Social Security Disability Benefits and denied benefits following the change in definition to inability to perform any occupation;
JUSTICE GINSBURG: But then you come to the
end of the line. You have to
prove that the authority
6 was misused. And as I understand the Sixth
7 decision, what those judges were doing, they say we're
going to look at this with some skepticism because of
9 the conflict. And
let me give you a concrete example.
This woman got Social Security
disability benefits and 11 she did it at the suggestion of MetLife is; that so?
12 MS. POSNER: She actually applied herself. 13 JUSTICE GINSBURG: But she got a
lawyer that 14 they recommended that she have.
MS. POSNER: MetLife
recommended a lawyer to 16 her and also said she could use her own lawyer, which
17 was consistent with the plan design. 18 JUSTICE GINSBURG: But the point is
they 19 came to her and said: Get Social Security disability
to get those she would have to show that 21 she is totally and permanently
disabled. 22 MS. POSNER: Correct. 23 JUSTICE GINSBURG: So here is a company that
24 says: Tell the U.S. government that you are totally and
disabled, but -- and then we'll recoup all
11 Alderson Reporting Company 5
10 15 20 25 Official - Subject to Final Review
1 that money that we paid out
to you; but then when we get 2 a chance to look, look it over, we'll say you're
not 3 disabled. Why isn't it appropriate to regard just that 4 set of
circumstances with suspicion?
MS. POSNER: Because, Your Honor, at the 6 time
that that letter was written to the Respondent here 7 in October of 2000, in
fact MetLife had granted her 8 benefits. And the action of helping an employee
perfect 9 their entitlement to Social Security is in fact not a
all. It's a fiduciary obligation under the 11 terms of a plan and it helps the
employee as well. 12 JUSTICE GINSBURG: Yes, I'm not questioning 13 that at all.
14 MS. POSNER: When -
JUSTICE GINSBURG: That sounds fine. It's a 16 question
of why, after helping her tell the government 17 that she was totally disabled,
they, after the initial 18 two-year period, turned around and said she's not. 19
MS. POSNER: The -- the reason is -- and
it's unfortunate that often Social
Security makes the 21 same decision that the plan fiduciary has made two years
22 earlier, and the government is looking backwards at 23 certain evidence that
may not be before the ERISA plan 24 fiduciary. The ERISA plan fiduciary at that
point is looking at that evidence at that time and at a
Alderson Reporting Company 5 10 15 20 25 Official - Subject to Final Review
1 change in the terms of the plan. 2 JUSTICE SCALIA: Ms. Posner, it seems to
me 3 that that ought to be looked at with suspicion, whether 4 or not the person
making the decision has a conflict. I
mean that smells bad or doesn't smell
bad, as you say, 6 either way. 7 MS.
Monday, May 5, 2008
I wonder when PBM's are going to figure out their business model is in trouble?
Saturday, May 3, 2008
Friday, May 2, 2008
Thursday, May 1, 2008
...the swelling ranks of the uninsured are severely stressing local hospital emergency rooms and driving up medical costs for those with insurance.
The census bureau reported yesterday that Texas leads the nation in the growth in its Hispanic Population.
The Texas Health Institute, a nonpartisan health advocacy group, described them this way in a report that was released in January:
• They work. At least 72 percent live in households where one or more family members work full time.
• They are young. Twenty-three percent are children, and an additional 36 percent are between 18 and 34.
• They are not all poor. Forty percent of families without coverage have incomes of $40,000 a year or more.
• Geography matters. Almost half of the uninsured live in Texas' five largest urban centers, and Harris County leads the pack with about 1.1 million, according to state estimates.
• Ethnicity matters. Hispanics are three times more likely to be uninsured than whites; blacks are twice as likely.
So lets break this down for the Marxists at The Houston Comical Editorial board who could not even wait for May Day to bring us that observant editorial yesterday.
- We have a growing population of uninsured Houstonians.
- Our uninsured population has learned they can access free care at Houston Hospitals. Why pay a premium for health insurance when you get services for free at the ER?
- The number of Hispanics in Houston is growing and they are three times more likely to be uninsured.
Insurance carriers have been offering low cost limited medical benefit policies for several years to allow for basic health coverage for a premium equal to two hours of weekly wages. Many employees still do not enroll. Why? See #2 above
Thursday, April 24, 2008
A 2005 U.S. Center for Disease Control study reported that 95 percent of tested Americans contained bisphenol A at levels known to cause abnormalities in lab animals. This compound, which mimics the female hormone estrogen, can disrupt an animal’s endocrine system and, even in tiny amounts, scramble early cell development in mice and other lab animals. “Too much of any hormone at the wrong moment can be risky,” explains vom Saal. Lacing any animal system with it can have consequences. As vom Saal relates, “You have essentially set a time bomb in the genes of that animal.”
It seems the USA now has its first lawsuit over BPA according to Reuters. Here is the portion that caught my eye. I would not be using plastic bottles or liners to feed an infant formula or milk as the PBS program tested the impact of a dishwasher on baby bottles and the leaching accelerated.
Wal-Mart Stores Inc also said on Friday it will pull baby bottles and other products made with BPA from its Canada stores immediately and phase the items out of its U.S. stores next year.
Wednesday, April 23, 2008
"I would say over the last five to seven years, (the rate) has doubled," said David Lintner, an orthopedic sports medicine specialist who is Eovaldi's doctor and also serves as the Astros' team medical director. "And it goes up steadily every year."
Dr. James Andrews, one of the nation's most respected orthopedic surgeons, has also seen a spike in the number ofhigh school pitchers he has performed the procedure on.
In a three-year span from 1996-99, Andrews performed Tommy John surgery on 164 pitchers, 19 of whom were high school aged or younger. From 2004-07, that number had jumped to 588 pitchers, 146 of whom were high school or youth league players — a seven-fold increase.
"Without a doubt, it's an issue," said Glenn Fleisig, the Smith and Nephew Chair of Research at the American Sports Medicine Institute, which was founded by Andrews. "The numbers are staggering in adolescents. More and more high-school-aged kids are having the surgery."
The big question: Why is a procedure once used mostly on college and professional players becoming more prevalent in kids who can't legally vote?
There are many factors, including how much a pitcher throws, what type of pitches he throws and whether he has good mechanics. But one factor stands out as the main culprit.
"Without a doubt, the No. 1 statistical cause (of UCL injuries) is overuse," Fleisig said. "In our studies, when a pitcher regularly threw with arm fatigue, he was 36 times more likely to be in the surgery group as opposed to the non-surgery group. That's the strongest statistical correlation in any study we've ever done."
Friday, April 18, 2008
Friday, March 28, 2008
Commuting to work on crowded roadways is a daily task I do not miss. Working a short distance from home has added two productive hours to my workday. Working for myself affords me the ability to set appointments to avoid peak traffic congestion most of the time.
Yet driving around a major city provides the opportunity to observe far too much road rage.
- The evening news is full of traffic fatalities.
- Tailgaters are everywhere.
- Why some drivers seem to accelerate to a stop is beyond me but I see cars speed up to get to the redlight where traffic is clearly stopped.
It can be very reasonable for employers to consider a business travel accident policy that offer coverage for commuting to and from the office. The daily commute is the most dangerous task many workers undertake. Perhaps the hours I have spent with my teeenage daughter and her learning permit recently have made me appreciate the danger of a sressed out driver in traffic. The risk increases with annoyance and other distractions.
Friday, March 14, 2008
Often brokers and consultants who are revenue and acquisition driven pursue make recommendations to change vendors when it serves their interest not their clients. Where service or problem solving skills fall short at a brokers firm the path of least resistance is often to change carriers or vendors.
Here are a few key points for employers to consider before changing carriers;
- Ask who benefits from the sales pitch as its detected. You need consultative problem-solving skills from an intermediary not pitches.
- Meet with your incumbent and price the same alternatives.
- If you have built up a track record with a health insurer and matured your run out changing insurers will result in another first year renewal where you are again facing both trend and a mature adjustment. It will be tough to negotiate that down with a new carrier but with your incumbent its far easier.
- Continuing to change carriers will limit the markets who will consider you in the future and limit your options. Carriers just decline companies that shop and change annually.
- Try to resolve issues directly with the incumbent before leaving them. Counseling is always cheaper than divorce. If your broker cannot or will not setup a meeting with the people who can resolve a problem that should be a telling signal to you that perhaps you need a new intermediary.
I spoke this morning with a client who had entertained a pitch from a competing broker suggesting a carrier change. The client has been with their health insurer for 4 years and has been treated very well and we were successful in negotiating a 13% renewal down to 4.5%. All of the plans being suggested are available through the incumbent without a carrier change. Yet that did not prevent a recommendation that the baby be tossed with the bath water which is never a good idea.
Wednesday, March 12, 2008
Many Texans buy life insurance and file the policy away without an annual review. Those who have quit tobacco who were issued smoker rates can reapply for a safer risk classification and receive a lower premium.
John and Melissa are clients in their mid 20's who quit smoking 6 months ago. Since they smoked cigarettes within the last 12 months they qualify for preferred tobacco rates and their monthly premium outlay is $155. In 6 months they will be tobacco free for a year and can apply for standard non-tobacco rates which would drop their monthly premium outlay to $95. A 39% reduction in premium will save this young couple $720 annually. Over the remaining period of their 30 year term policy the savings totals $21,240.
It pays to re-evaluate your life insurance policy annually.
Friday, March 7, 2008
- What did the sick days/personal days cost in 2006 and 2007? What was the year to year trend? Not sure of the cost but the trend went from 7 days used to an average of 6 days.
- How many sick days/personal days do employees receive and how many do they use on average? 6 days was average use.
- What type of return on labor is targeted in your industry? 3-1 is goal.
A $60,000 annual salary equates to $5,000 monthly.
There are 21 working days in the average month excluding weekends and 2 weeks vacation.
$5,000/21 working days = $238.10 as the direct cost of a sick day.
Since the company is seeking a 3-1 return on labor they are actually out the $238.10 in direct costs plus the value of a days pay to the firm which is 3 times the daily wage or $714.30
So the actual cost of a sick day to the firm is $238.10+$714.30 or $952.40.
250 employees using an average of 6 sick days generates an annual cost of $1,428,600
$1,428,600 is 9.5% of payroll.
A reduction for this firm of one sick day represents $238,100 annually or $952.40 per employee. Folks that's enough to buy major medical for an entire family in my market.
What is truly sad is that this employer like many believed they had insured the real risk which was long term disability which has a cost of less than 1% of payroll. Not to mention there is a gap between day 14 when sick days end and day 90 when LTD benefits begin.
Some may say there is no way to get a reduction of one sick day without taking away benefits or the cost of sick days is not a real expense since its buried in payroll anyway. Really? This is the black hole of STD I have previously written about. I would point such naysayers to what innovative and truly lean companies do to reward perfect attendance. Did you know Toyota employees with perfect attendance can win a free car?
The reality is that sick days are an entitlement. You do not manage entitlements. You do limit their scope and put into place incentives to drive the behavior you are seeking. It helps to have a benefit design aligned with your business objectives and that's precisely where our firm assists employers. We will assist this employer with a design that not only lowers costs but eliminates benefits gaps.
Wednesday, March 5, 2008
The sudden death of a key employee last week leaves a family with no life insurance and the company scrambling to fill the shoes of a key employee. Most life lessons are tough but life insurance lessons can be brutal.
Tuesday, February 12, 2008
2008 will mark the 18th year anniversary of the passage of The Americans With Disabilities Act yet yesterdays ABC News Broadcast with Charlie Gibson shows how newsworthy it is for a corporation to actually comply with the spirit and intent of the law. Walgreens has a distribution center in Anderson, SC staffed with a workforce which is 40% disabled.
The quiet revolution happening in Anderson is the brainchild of Walgreens executive Randy Lewis, who has a 19-year-old son with autism.
"As a parent, I saw the future and so the question is, given our position, what do we do about it? Maybe we could be an example, maybe we could use our position of leadership to try to change the work environment."
NBC News Brian Williams covered the story as well last July.
Evidently, what was news last July is still news today. Randy Lewis deserves credit for focusing attention on functionality, choosing to see what people can do versus what they cannot. A stable workforce that is 20% more productive than other distribution centers
As our workforce ages and the baby boomers gray it will become important for many companies to consider functionality and ability both in hiring as well as stay at work and return to work programs for existing employees.
Mr Lewis is correct and on point IMHO both in hiring as well as stay at work and return to work programs for existing employees. Too often companies take an all or nothing view of work in regard to the disabled which prevents them from equally obtaining talent as well as retaining it. In their disability programs such assumptions manifest in higher than average disability costs to the company as well. This phenomenom has been apparent to me on multiple occasions while analyzing diability loss experience in Fortune 1000 business'.
Lewis says the distribution center in Anderson is no less productive than others. In fact, Anderson is more productive. The training and technologies that help disabled workers do their jobs better help all employees do their jobs better, he said."People come to me and say, will this work in my environment? Yes, it will. This is not just a good thing to do, the right thing to do. This is better," Lewis said.
One of the most profitable studies an executive could commission at their company would be to consider the ROI possible from re-examining the impact of attitudes in hiring and retaining the disabled. This is not just a good thing to do, the right thing to do. This is better. Indeed. As we approach Valentines day this week Mr Lewis reminds us having a heart is better than the right thing to do.
Friday, January 11, 2008
I just received a proposal for a well qualified prospect from a major big 4 health insurer. The prospect is buying and I have a several questions for my group rep. While I have a name and an email address for my group rep all my emails from her lack a phone number.
It is truly amazing to me that any sales person can send out an email and exclude a signature line missing their direct phone line, cell phone or fax on their corporate email as well as PDA. Yet it happens.
So young group reps if you want a call back here are several tips. If you are not going to actually call on me in person and provide a business card at a bare minimum you should know what I am thinking.
- Make sure your PDA and email contains a signature with your phone number and cell phone.
- Its nice to have your fax # and address as well so we will know where to send those apps and checks.
- Make it easy on me to click on your phone number and reach you directly in the office or on your cell without reaching your voicemail or pbx without entering an extension. I am after all out selling your product and if I die in a car wreck who will sell your product?