LIFE INSURANCE & ANNUITIES

Life Combo Products See Double-Digit Growth

More than 86,000 life combination policies were sold in 2012, an increase of 19% over  2011, according to a LIMRA report. Consumers under 59 held more than half of in-force polices in 2012. Sixty percent of life combination policies are insuring women. Life combination products accounted for 11% of new premium for individual life insurance.

Sales of life combination products continue to grow at a remarkable rate as new carriers enter the market and existing players refine  products to remain competitive, said Catherine Ho, LIMRA product actuary. “This segment of the market weathered the storm pretty well during the recession when individual life sales declined significantly. Now that sales growth has returned for individual life, we anticipate life combination products to continue their steady growth,” she said.

All life combination product lines experienced growth in 2012, with whole life (WL) and universal life (UL) combination premium each growing 10% and variable combination premium growing 3%. Whole life combination policy count rose 23%; UL policy count rose 19%; and variable policy count rose 4%.All but one distribution channel experienced double-digit growth in 2012 (independent RIA). Banks and savings institutions posted the largest premium growth, rising 21%; affiliated agents recorded 30% growth in policy count.

Linked benefit products dropped 1% in policy count and held only 24% of the market in 2012. These products are mostly single premium and are packaged all-in-one. Acceleration policies grew 27%, capturing 76% of the market share. These products provide long-term care benefits up to the amount of the life death benefit. For more information, visit www.limra.com.

Income Annuity Companies Add Features to Attract Consumers

A majority of the companies that offer income annuities have added features to address consumer concerns and attract sales, according to a recent joint LIMRA/CANNEX study. Income annuities provide a guaranteed stream of income for as long as the owner or annuitant lives and can ensure that the income covers the lives of a couple.

Many income annuities now offer retirees increased access to cash or liquidity in case of an unforeseen need. Other features include death benefits to address a premature death and flexible income options to keep up with inflation.

Lowell Aronoff, CEO at CANNEX said, “There is a disconnect between the need and the amount of sales. Retirement income research universally suggests that income annuities should be a core product for nearly all retirees. Yet sales of these products are still fairly modest.”

Loss of liquidity is one objection that advisors have had to recommending income annuities. However, nine of the top 10 income annuity companies offer access to cash outside of their scheduled payments in case of emergency or other needs. Liquidity may come in several forms, such as access to the guaranteed payments, access to the life contingent payments, or an acceleration of several months of scheduled payments in advance.

All carriers surveyed offer the simplest form of death benefit: If the annuitant dies, payments continue to their estate for a specified number of years. Most companies offer at least one death benefit that provides additional money, as a payout option, upon the annuitant’s death .

All of the top 10 companies offer a cost of living adjustment (COLA) option that allows retirees to get increasing income and address one of their chief concerns, inflation. Retirees can choose various COLA rates, such as a 6% six percent increase or more. Other companies offer payments that are pegged to the Consumer Price Index.

Advisors who are engaged in retirement income planning are taking a second look at income annuities, said Mark Paracer, LIMRA research project director. LIMRA research indicates that there will be as many as 64 million retirees by 2025.

Having a deferred or immediate income annuity can help retirees ensure that  their essential expenses in retirement are covered, allowing an advisor to invest the remaining portion of their portfolio with a goal of acheiveing higher returns, he said. For more information, visit www.limra.com.

IN CALIFORNIA

What Clients Need to Know About ACA Changes

Susan Polk, a health insurance agent in San Luis Obispo, issued an advisory to help her clients sort out the Affordable Care Act (ACA), “Some people think that, come January 2014, a new insurance card will magically appear in their mailbox. This is most certainly not true. Enrollment will not be automatic, except in certain circumstances when you participate in an employer group plan of more than 200 employees, and you must make choices among various options, choose a plan, and enroll yourself and family members,” Polk says. She outlines the following key points:

• Individual health insurance – All insurance is guaranteed issue, meaning you are guaranteed to get coverage. There are no waiting periods for pre-existing conditions. Higher premiums cannot be charged for any health conditions, although an individual can be charged up to 50% more for smoking. California has decided not to implement this option.

• Free or low-cost health insurance – Individuals and families making less than 138% of the Federal Poverty Level (also known as the Federal Income Guidelines) will be eligible for MediCal in California (133% will be eligible for Medicaid in most other states). There is no longer an asset test, so people can now hold onto their retirement plans and other property and still qualify for free or greatly reduced medical care.

• Health Plans Offered – Insurance companies can offer four plans of insurance. Bronze plans must provide at least 60% coverage. Silver plans must provide at least 70% of coverage. Gold plans must provide at least 80% of coverage, and Platinum plans must provide at least 90% coverage. Deductibles and co-pays may vary from company to company. The only requirement is that they can prove that the actuarial value of the coverage meets the minimum percentages.

• Premium subsidies – Individuals and families making between 138% and 400% of the Federal Poverty Level will be eligible for premium subsidies. Your eligibility in 2014 will depend on your income in 2012. Each subsequent year, the eligibility will be based on your income in the calendar year two years prior, for example, in 2015 your subsidy would be based on your 2013 income. By purchasing insurance through the Health Benefit Exchange, they will be subsidized for the difference between the second lowest cost Silver Plan and the amount they are expected to pay, which varies from 2% to 9.5% of the Modified Adjusted Gross Income. For those who make over 400% of the Federal Poverty Level, there is no subsidy. However, they will be able to purchase any of the same products outside of the Exchange with no underwriting.

• Individual Mandate – Individuals will be required to purchase medical insurance starting in January 1, 2014. This is called the ìIndividual Mandate. Those not enrolling will pay a penalty along with their income taxes annually to the Internal Revenue Service, beginning in 2015. The penalty for not participating in 2014 will be the greater of 1% of Modified Adjusted Gross Income or $95, whichever is greater. This will increase each year, until it is the greater of 2% or $295.

• When to Enroll – The first open enrollment will start on October 1, 2013, and will continue until March 31, 2014. After that, open enrollments will occur each fall between October 15th and December 7th. There will be no enrollment into individual insurance outside of open enrollment except for certain qualifying events, including losing other coverage, birth, divorce, death, and a few other life events.

• Grandfathered Plans – If you have present individual insurance, you may be able to keep it, if your original effective date was before March 23, 2010, and you have not made substantial changes to your policy. In this case, your plan is said to be grandfathered and you can keep the plan even after ObamaCare is fully implemented. President Obamaís message to Americans in January of 2010 was that if we liked our health plans, that we would be able to keep it. He makes good on that promise if your plan is grandfathered. If your plan is not grandfathered, it will go away on December 31, 2013. You will then have a choice of any health plan offered by any health insurer in your county.

• Why enroll through a broker? – Private insurance brokers will go through a formal training process to be eligible to enroll folks in the Health Insurance Exchange (in California, this is known as Covered California). Health insurance brokers are qualified to assist people. Their training and experience with health insurers will make them the optimal choice for your enrollment needs. They can help you choose the best plan for your circumstances and help you with the tools youíll need to find a doctor and access care.

Polk offers the following advice for 2013:
• Know your income and optimize the results. Falling above the 400% threshold will mean paying 100% of the cost of your health insurance with no subsidy. Some individuals may not want to fall below the 138% (in California, 133% in other States), as that would mean eligibility in MediCal or Medcaid and could restrict access to personal physicians.

• If your plan is grandfathered, don’t make any changes until after the summer or fall. A synopsis of plans will be available later in 2013. At that time, you will be able to preview plans and see how the premiums compare to your present plan. It is expected that once the Affordable Care Act is fully implemented, grandfathered plans will see much lower premium increases.

• Make your appointment early. We will begin making appointments in August for the October enrollment.

• Keep your records handy. You may be asked to bring your 2012 tax return to your appointment, and other important records. This information will help insurance agents quickly determine your eligibility for subsidies and help you get the best result. All personal information is kept strictly confidential.

LTC Partners Teams Up With the California Bankers Assn.

LTC Partners & Insurance Services, LLC, will be providing long-term care education to member banks of the California Bankers Association (CBA), one of America’s largest state banking trade organizations. A long-term care benefit will be available to employees of member banks throughout California, with education and policy options provided through a partnership between CBA and LTC Partners & Insurance Services.

“We think the CBA initiative is important because banks are prime sources of financial advice; and their middle-aged and older clients sorely need such advice to protect themselves from the financial drain of uninsured long-term care expenses. As California bank employees learn about long-term care protection for themselves, we think they will be better able to guide their customers. Now banks can become more solid sources of the necessary education. Already many financial advisors, based in banks, act as bridges to long-term care policy options,” says Cameron Truesdell, LTCFP’s CEO. For more information, visit www.ltcfp.com.

HEALTHCARE

Employers Are Planning for ACA Changes

Ninety percent of employers are developing tactics and taking steps to deal with the Affordable Care Act (ACA). Many are planning to modify their plans due to the ACA. Sixty-nine of employers say they will definitely continue providing employer-sponsored health care when health exchanges come online in 2014 compared to 46% who said they would in 2012, according to a survey by the International Foundation of Employee Benefit Plans. Twenty-five percent say they are very likely to continue their employer-sponsored health care offering.

In response the ACA, 18% of employers have already increased participants’ share of plan premiums and 25% plan to do so over the next year. Twenty-five percent of employers that are planning to make changes are increasing their emphasis on high-deductible health plans (HDHPs) with health savings accounts (HSAs) while an additional 14% are assessing the feasibility of adding doing so.

Employers are also encouraging healthy behavior in employees, with 19% developing or expanding organized wellness programs within the past year. Additionally, 14% of employers adopted or expanded the use of financial incentives to encourage healthier lifestyles within the past year, with another 25% planning to do so in the next year.

Julie Stich, research director for the International Foundation of Employee Benefit Plans said, “More and more organizations are losing their grandfathered status, dropping from 45% in 2011 to 27% in 2013. Also many organizations are redesigning their plans to avoid the 2018 excise tax on high-cost or so called ‘Cadillac plans.’ In 2011, only one in 10 said they were redesigning their plan to avoid the additional tax, but we’ve seen a steady increase over the past two years that shows the number will soon double.” For more information, visit www.ifebp.org/ACA2013.

Small Businesses Hold Off On Hiring Due to the ACA

Forty-one percent of small business owners say they are holding off on hiring because of the Affordable Care Act, according to a Gallup poll. Thirty-eight percent have pulled back on plans to grow their business; 19% have reduced their number of employees; 18% have cut employee hours; and 24% have thought about eliminating healthcare coverage for employees.

Forty-eight percent say the ACA will be bad for their business, compared to 9% who say it will be good, and 39% who expect no impact. Fifty-two percent say the ACA will lower the quality of healthcare; 13% say it will improve care; and 30% say it will have no impact.

Fifty-five percent of small business owners expect to pay more for healthcare as a result of the ACA. Five percent expect their healthcare costs to decline while 37% say the health law will have no effect on what they pay for healthcare. For more information, visit www.gallup.com.

Subcommittee Examines Health Insurance Tax

The House Small Business Subcommittee on Health and Technology Chairman Chris Collins (NY-27) led a hearing to examine the economic effects of the upcoming health care law’s insurance tax on small businesses. Beginning in 2014, the health care law imposes a new tax on the health insurance policies that most small businesses purchase. The tax will be $8 billion in 2014, will increase to $14.3 billion in 2018, and increase based on premium trends after that.

Dean Norton, president of New York Farm Bureau in Elba, NY said, “Health insurance costs for small businesses are already rapidly trending higher, increasing 103% since 2000. According to the Joint Committee on Taxation, the health insurance tax will further increase family premiums by $400 or 2.5% in the year 2016, making it even harder for farmers to purchase coverage for themselves, their families and their employees.”

Funds Available to Help Uninsured Enroll in ACA Coverage

Health and Human Services Secretary Kathleen Sebelius announced new funds to help uninsured Americans enroll in affordable health insurance coverage under the Affordable Care Act. In California, an estimated $22,029,348 is available to support 129 health centers’ enrollment efforts.

Nationwide, approximately $150 million in funding will enable community health centers to provide in-person assistance to help enroll uninsured individuals into affordable health insurance coverage. Sebelius said, “Community health center staff will provide unbiased information to consumers about health insurance, the new Health Insurance Marketplace, qualified health plans, and Medicaid and the Childrenís Health Insurance Program.”

ER Docs are Key to Reducing Health Care Costs

Emergency physicians are key decision makers for nearly half of all hospital admissions, highlighting a critical role they can play in reducing health care costs, according to a report from the RAND Corporation. Lack of access to follow-up care is a top concern that influences the decision of emergency physicians to admit particularly fragile patients to the hospital, rather than take a chance that they will fall through the cracks and suffer harm.

Efforts to reduce non-urgent and non-emergency use of emergency departments oversimplify a complex problem, and should instead focus on increasing access to affordable options outside the emergency room. Efforts to shift care into other facilities, such as retail clinics, have not always been successful because of the limitations of these facilities. For example, retail clinics lack diagnostic testing, are unable to admit patients to the hospital, and won’t see uninsured patients who can’t pay cash. For full copy of the report, go to www.rand.org

NEW PRODUCTS

LTC Planning Guide

Kiplinger’s Personal Finance recently published its annual 2013 retirement guide, which outlines programs and services that should be considered in long-term care planning. The issue also features three steps to living safely and independently as you age in your home. For more information, visit http://www.truefreedomhomecare.com.

Accident Insurance

American General Life introduced AG Accident Choice Plus. It provides benefits for a wide range of emergency medical costs from emergency room visits to physical therapy to diagnostic exams, even surgery related to accidental injuries. Available riders offer coverage in the event of critical illness, accidental death and dismemberment, and inability to work due to an accidental injury. For more information, visit http://www.americangeneral.com/accident.

Variable Annuities

Lincoln Financial Group’s new American Legacy funds allow advisors and their clients to build their own portfolio with Lincoln’s primary living benefit riders. These selections can be combined with a fixed income option to create a diversified portfolio. For more information, visit www.LincolnFinancial.com.

IN CALIFORNIA

Individual Rates to Soar In California

Expanded enrollment of a sicker population will drive up rates for individual health plans in 2014, according to a study by Milliman for Covered California, the state’s health exchange. The average premium increase will be an astounding 30.1% for people who make too much to receive the subsidy (more than $93,700 for a family of four or $45,960 for an individual).

However, Californians who will qualify for the highest premium tax credits, due to their income, will see an average drop of 85% in what they pay for health coverage. Depending on the individual’s choice of health plan, this premium tax credit could cover a higher percentage of the premium. There are 1 .6 million people uninsured and eligible for subsidies. Many of them could have 100% of their premiums covered through the Affordable Care Act. Those who make less money will be eligible for larger federal tax credits to make their health care more affordable. Households earning from 138% to 250% of the federal poverty level will likely see an average drop of 85% in what they pay for health coverage. Households earning 250% to 400% of federal poverty level will pay on average 45% less, for more coverage with lower copay and deductibles, than what they would have paid for an individual plan in 2013. The hope is that, in future years, Californians will see decreases in their health care costs as they no longer pay for the burden of the millions of uninsured and benefit from improvements in how care is delivered, according to Covered California.

Autistic Kids Being Denied Critical Care

A coalition of children’s health and autism support organizations says that hundreds of California’s children are suffering from disruptions in critical health care services as the state transitions from the Healthy Families Program to Medi-Cal. In particular, children in Healthy Families who had been receiving standard therapy for Autism Spectrum Disorders (ASD) are being denied these services in Medi-Cal, often with less than a week’s notice.

Governor Brown’s Administration has continually promised that no children would lose access to services during the multi-tiered transition of over 900,000 children from Healthy Families to Medi-Cal. California Health and Human Services Agency Secretary Diana Dooley was quoted as saying that officials would not shift children from Healthy Families to Medi-Cal unless they were sure the children would receive adequate health care: “We will delay the transition’ for certain children if they are unlikely to receive adequate care under Medi-Cal.” She said, “At this point, everything is on track.”

Now, after the transition of over 600,000 children to Medi-Cal, children’s health advocates say it is clear that everything is not on track. “These problems represent a shameful failure to provide for children who the state has known for at least six months were at risk of losing services,” said Ted Lempert, president of Children Now.

Advocates worry interruptions in autism services may foretell broader challenges. “We know that only a small percentage of affected families ever file a complaint, and since the state’s monitoring of the Healthy Families transition has been woefully inadequate, other continuity of care issues may take a while to surface,” added Karen Fessel, executive director and founder of the Autism Health Insurance Project.

HEALTHCARE

Rate of Employer Coverage Rises After Massachusetts Health Reform

In the seven years since Massachusetts enacted its universal healthcare law, the number of people covered by insurance through the workplace increased, running counter to nationwide trends. Employer-sponsored insurance rose about 1% in Massachusetts while the national rate fell 5.7%. The Massachusetts growth occurred in the midst of the recession and at a time when health insurance premiums in the state rose to the highest levels in the nation, according to a study by PwC’s Health Research Institute.
Michael Thompson of PwC said, “Health insurance benefits are a significant part of the total compensation package for a workforce, and that’s not likely to go away when the Affordable Care Act goes into full effect. Employer-sponsored coverage will continue to be a critical pillar of the U.S. health system. It has been an important part of employer strategy to attract and retain talent, and promote improved health and productivity. Most employers see this return on investment, alone, as a compelling reason to continue offering coverage.”

A combination of salary and health benefits through an employer is likely to be more efficient way to be compensated for Americans earning more than 400% of the federal poverty level or about $45,960, according to researchers. Due to federal tax exclusions, businesses can save thousands of dollars per-employee by using that compensation strategy. The second report on the Massachusetts Experience, to be later this month, will take a closer look at the implications for the state’s hospitals, physicians and insurers. To download the report, visit: http://www.pwc.com/us/Massachusettshealthreform.

Healthcare Spending Growth Expected to Remain Low

The growth in healthcare spending will continue to be held down by the sluggish economy, the continued shift of healthcare costs from the employer to the employee, and the movement towards value-based reimbursement models, according to a report by Fitch Ratings. The rate of increase in U.S. healthcare spending is likely to remain low even as the end of the tepid economic recovery gives way to more robust growth.

Health spending grew 3.9% annually from 2009 to 2011, compared to an annual growth rate of 4.7% to 6.6% the prior three years, according to data from Centers for Medicare and Medicaid Services. Two recent studies were published in Health Affairs that provide some insight into the causes.

One found the weaker economy accountable for 37% of the lower spending trajectory and attributed an additional 8% to cuts in Medicare reimbursement and decline in commercial insurance coverage. The study leaves 55% of the reduction unexplained. The other study indicated that benefit design changes (including higher deductibles and out of pocket costs) contributed to 20% of the lower increase in spending. For more information, visit www.fitchratings.com.

Medicare Hospital Price Data Reveals Wide Variations

For the first time HHS is giving consumers information on what hospitals charge for Medicare services. HHS Secretary Kathleen Sebelius said the new data reveals significant variation in what hospitals charge for common inpatient services across the country and within communities.

The CMS website compares charges for services associated with the 100 most common Medicare inpatient stays. These amounts can vary widely. For example, average inpatient charges for hospital services in connection with a joint replacement range from $5,300 at a hospital in Ada, Okla., to $223,000 at a hospital in Monterey Park, Calif.

Hospital charges for similar services can vary significantly, even within the same geographic area. For example, average inpatient hospital charges for services to treat heart failure range from $21,000 to $46,000 in Denver and from $9,000 to $51,000 in Jackson, Miss. For more information, visit
http://www.cms.gov

Employee Nabbed for Cheating a Wellness Plan

A Kansas City, Mo., employee pleaded guilty in federal court to his role in a scheme in which hundreds of public employees defrauded their health insurance program of more than $300,000 by falsely claiming to have run marathons and competed in triathlons for cash incentives. Matt Tholen, 29, of Kansas City, Mo., pleaded guilty before U.S. District Judge Gary A. Fenner to one count of wire fraud. Tholen, who was an emergency medical technician for the city, received health insurance coverage from Blue Cross/Blue Shield of Kansas City. As an insured, Tholen was eligible to participate in a wellness program offered by Blue Cross called “Points to Blue.” The program offered gift cards to insureds based on entries made to the Points to Blue Web site, logging various exercise programs and diet programs completed by the insureds. Every 1,000 points translated to one dollar towards a gift card, up to a maximum of $250 annually for each insured. The more strenuous exercises earned more points.

To make even more money in this scheme, Tholen admitted that he and others submitted false entries for other employees and their eligible dependents in exchange for a portion of the gift card proceeds. Tholen made fraudulent submissions on behalf of 62 employees, resulting in 144 gift cards worth a total of $17,600. Possibly not the sharpest tool in the shed, Tholen claimed that a 5-year-old had completed two marathons and two triathlons.

Under federal statutes, Tholen is subject to up to 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of an investigation by the United States Probation Office.

CRITICAL ILLNESS & DISABILITY

Consumers Are Not Prepared for a Critical Illness

Ninety percent of middle-income Americans say they are not financially prepared for a critical illness diagnosis, according to a study by the Washington National Institute for Wellness Solutions. The study surveyed 1,001 Americans ages 30 to 66 with annual household incomes of $35,000 to $99,999. The following statistics reveal that many have little, if any, savings to fall back on in the event of a critical illness:
• 75% have less than $20,000.
• 50% have less than $2,000.
• 25% have no savings.

To pay for out-of-pocket critical illness costs, middle-income Americans say they would need to use credit cards (28%) or loans from family/friends (23%) or financial institutions (19%). Another 23% don’t know what resources they could use to pay their expenses. Millennials and Gen Xers anticipate greater reliance on credit cards and loans to pay for critical illness expenses. Thirty-eight percent say they might never recover financially from a battle with cancer and 45% believe they would never recover financially from an Alzheimer’s/dementia diagnosis.

Eighty-eight percent of middle-income Americans have had no conversations with loved ones or advisers about potential care-giving options and 60% have not discussed financial planning for critical illness. Only 12% have explored care-giving options. To learn more, visit WNInstituteforWellness.com.

Manufacturing, Health Care, and Education Workers Lack Disability Coverage

Workers in manufacturing, health care, and education have a significant gap in the level of disability insurance they purchase compared to what is typically recommended, according to a survey by Colonial. Manufacturing workers who purchase Colonial Life disability policies buy roughly half the amount of disability coverage they need. They only purchase enough coverage to protect 33% of their income instead of the recommended 60%. Employees who work in the education industry purchase only enough disability coverage to protect just 37% of their income. Health care workers buy only enough disability insurance to protect 36% of their income. Two-thirds of private sector American workers have no employer-sponsored disability insurance, according to the Bureau of Labor Statistics. For more information, visit www.coloniallife.

MOVERS & SHAKERS

Life Insurance Vision Award

The Life Insurance Direct Marketing Assn. (LIDMA) has awarded the 2013 LIDMA Vision Award to Kris Tomasini, development manager of Term Sales for Transamerica. The LIDMA Vision Award recognizes people and organizations that make substantial contributions to the advancement of the direct response segment of the life insurance industry. It is the highest honor that LIDMA can bestow on an individual or organization. “Kris has…worked tirelessly to improve the customer experience and expand the availability of life insurance to underserved Middle Americans. Her unique ability to utilize the customer perspective as a compass in solving complex business problems is a core principal of LIDMA’s Process Improvement initiatives,” said Andy Meehan, president of LIDMA.”

WEBINARS

Life Insurance Data Storage

Scott Price of Pass My Assets is hosting a webinar on the use of personal data management, storage and delivery to ensure that life insurance beneficiaries get their benefits. For more information, visit https://www1.gotomeeting.com/register/952036697.

NEW PRODUCTS

Disability

MetLife’s new Income Guard Disability Insurance allows consumers to customize their coverage. It is designed to meet the demands of a variety of specialized occupations, including most medical and dental professionals, pharmacists, attorneys, accountants, and white-collar executives. For more information, visit www.metlife.com/incomeguard.

Vision Website

MESVision launched www.MESVisionOptics.com where members can order their contact lenses online. The website allows members to have little to no out-of-pocket cost at the time of checkout and seamlessly apply their eligible contact lens benefits.

IRA Decision APP

A Smartphone and tablet friendly app helps users determine which IRA is appropriate for them based on their age, tax filing status, and estimated income. For more information, visit http://www.wealthmsi.com or call 203-245-4254.

Health Care Reform Guides

Unum is offering guides to help employers understand and prepare for health reform. The guides offer expert advice on a total benefit strategy, including financial protection benefits and a strong communication plan.
For more information, visit Unum.com/HealthCareReform.

Variable Annuities

For cost-conscious advisors and clients, Nationwide Financial introduced Nationwide Destination Architect 2.0, a low-cost, advisory based variable annuity. The company also introduced Nationwide Lifetime Income, an optional
Guaranteed Lifetime Withdrawal Benefit (GLWB) rider available for an additional cost with Nationwide Destination Architect for clients who want guaranteed lifetime withdrawals in retirement. For more information, visit www.nationwide.com.

PPO Power – Welcome to Our 13th Annual PPO Survey

Welcome to our 13th annual PPO survey. For this survey, seven PPOs in California diligently answered direct questions about their plans. Our readers, who are savvy health brokers, suggested many of the questions.
We hope this information will help the professional agent or broker better serve sophisticated healthcare clients.

1. 
Is an Approval Procedure required for Getting a Specialist Referral or a Diagnostic Test or Treatment In-Network or Out-of-Network?

Aetna: There is a high-tech radiology pre-certification requirement for some customers.
Anthem Blue Cross: It is not required for PPO plans, but the member ends up paying more if they go out-of-network without getting an out-of-network approval.
Blue Shield: No, PPO plan members can generally self-refer to any doctor for care. They can choose to use in-network or out-of-network providers with claims reimbursement based on their benefit plan. Out-of-network services are usually subject to a higher deductible and co-payment amount.
Cigna: No referrals or approvals are required since the PPO benefit plan is an open-access program. Customers are covered whether or not they get care from PPO network providers. Customers who use services from an in-network provider may have reduced co-payments and lower out-of-pocket costs.
Health Net: There are no approval procedure requirements for visits to in-network or out-of-network specialists. A prior authorization list for diagnostic tests or treatments is included in the member’s evidence of coverage (EOC).
Kaiser Permanente: No, the PPO plan does not require a referral to see a Specialist. Diagnostic tests are covered provided they are ordered by an insured’s doctor, are a covered benefit, and are deemed medically necessary. If a test or treatment is on the pre-certification list (e.g, MRIs and CT scans), it requires pre-certification.
UnitedHealthcare: To strengthen the patient-physician relationship, primary physicians are not required to request an authorization when they refer a patient to a network specialist for an office visit. Primary physicians are very effective at ensuring that our enrolled individuals receive medically appropriate and necessary specialty care. In fact, practice pattern analysis shows that primary physician referrals to network specialists have been almost 100 percent effective and medically appropriate.

2. Are there any restrictions on getting second opinions from an in-network provider or an out-of-network provider?

Aetna: A member, who has the option of an out-of-network benefit, may arrange their own second surgical opinion with a non-participating provider.
Anthem Blue Cross: No, not for the PPO.
Blue Shield: No, a member may get a second opinion from any in network or out-of-network provider. When an out-of-network provider is used, the member is responsible for any difference between Blue Shield’s payment and the billed amount.
Cigna: There are no restrictions. The PPO is an open access plan, allowing customers to seek care in-network and out-of-network at any time. When accessing medical services, customers have the option to decide whether to use a network provider. By using a network provider, customers have lower out-of-pocket costs.
Kaiser Permanente: Second medical opinions are covered. Coverage is limited to charges for physician consultation and any additional X-rays, laboratory tests, and other diagnostic studies. Benefits will not be payable for X-ray, laboratory tests, or diagnostic studies that are repetitive of those obtained as part of the original medical opinion and/or for which Kaiser Permanente Insurance Company (KPIC) has paid benefits. For benefits to be payable, the second medical opinion must be rendered by a physician who agrees not to treat the covered person’s diagnosed condition. The physician offering the second medical opinion may not be affiliated with the physician offering the original medical opinion.
Health Net: Health Net members may see any in-network or out-of-network provider for a second opinion without obtaining a referral. Members are encouraged to call our Customer Contact Center with any questions regarding their benefits.
Kaiser Permanente: Second medical opinions are covered. Coverage is limited to charges for physician consultation and any additional X-rays, laboratory tests, and other diagnostic studies. Benefits will not be payable for X-ray, laboratory tests, or diagnostic studies that are repetitive of those obtained as part of the original medical opinion and/or for which Kaiser Permanente Insurance Company (KPIC) has paid benefits. For benefits to be payable, the second medical opinion must be rendered by a physician who agrees not to treat the covered person’s diagnosed condition. The physician offering the second medical opinion may not be affiliated with the physician offering the original medical opinion.
UnitedHealthcare: A second opinion is not mandatory under our plans. Our UnitedHealthcare Options PPO product is open access. Members may seek second opinions from any participating or non-participating physician. The member’s benefit level will vary depending on the physician’s participation status.

3. Where are decisions made about specialist referrals, testing, treatment, surgery, and hospitalization?

Aetna: Our patient-management staff is regionally located. The region is determined by the location of the customer.
Anthem Blue Cross: Members may see specialists without referrals. Our Medical Management Department handles the review and approval for services that require pre-authorization.
Blue Shield: Treatment decisions such as these are made between the patients and their doctors. In the case of surgery, hospitalization, or major diagnostic tests, Blue Shield’s prior authorization process is used to review the proposed treatment for medical necessity.
Cigna: These decisions are made by a customer’s physician in conjunction with the customer.  Cigna’s clinical programs, nurse case managers and health coaches can help individuals make decisions about their care. Cigna also offers award-winning online quality and cost information tools to help customers make informed choices.  Some types of services require prior authorization by Cigna in order for the services to be covered under the individual’s plan. Customers can call Cigna Customer Service 24 hours a day, seven days a week with any questions about how their specific plan works.
Health Net: Decisions regarding specialty referrals for testing, treatment, surgery or hospitalization are made with the member, the member’s physician and Health Net’s Care Management team.  Members may also call Nurse24 SM, a nurse-driven telephonic support program that empowers participants to better manage their health.   Nurse24 SM offers assistance to participants coping with chronic and acute illness, episodic or injury-related events and other health care issues. Highly trained registered nurses are available 24/7 to monitor and process health care inquiries that help participants make informed health care decisions.
Kaiser Permanente: In most cases, the insured does not need a referral to see a specialist. Decisions regarding testing, treatment, surgery, and hospitalization are made by the insured and his or her physician. The insured is required to obtain pre-certification for any hospitalization or certain special procedures as defined in the insured’s Certificate of Insurance. Pre-certification to verify the medical necessity of a particular service or procedure ordered by a physician for an insured is performed by Permanente Advantage.
UnitedHealthcare: The treating healthcare professional and the patient make decisions about providing specialist referrals, testing, treatment, surgery, and hospitalization. We determine whether such services are covered by referencing the member’s summary plan description.

4. Which complementary medical disciplines are covered under the PPO or will be covered under the PPO?

Aetna: Members can get special rates on visits to acupuncturists, chiropractors, massage therapists, and nutritional counselors, which they pay directly to the participating provider. Participating providers and vendors in the alternative healthcare programs are solely responsible for their products and services. We have not credentialed or reviewed them. Members can save on over-the-counter vitamins and supplements, aromatherapy, foot care, and natural body-care products.
Anthem Blue Cross: Physical therapy, occupational therapy, chiropractic care, speech therapy, DME, and acupressure/acupuncture.
Blue Shield: We offer the following:
• All members in our fully insured PPO groups are covered by our disease and case management programs.
• LifeMAP and Guided Imagery Program.
• Our Wellness Assessment customizes referrals to lifestyle management programs. There are cash incentives to reward participation – available as a buy-up option.
• CareTips for Physicians: This clinical messaging program sends patient-specific messages highlighting gaps in care to the member’s primary care physician.
• LifeReferrals 24/7 to experts in financial planning, education, and law, along with personal consultations. It is included with all fully insured PPO plans and is available as a buy-up option for self-insured plans.
• Self-funded groups may now purchase the Managed Behavioral Health buy-up package. This program is included with all fully insured PPO plans and is available as a buy-up option for self-insured plans.
• All members can search our Health Library; sign up for Blue Shield condition management and wellness programs; and subscribe to the Health Update eNewsletter. Online decision making tools allow members to compare hospitals, explore treatment options for their condition, and learn more about prescription drugs.
• Members can get 25% off or more from published fees for acupuncture, chiropractic, and massage therapy. Members can also get up to 40% off of selected vitamins, herbal supplements, homeopathic remedies, diet and sports nutrition, yoga and fitness equipment, personal body care, and health and wellness books, audio, and DVD products. (free shipping in most cases.)
• Wellness Discount Programs on Weight Watchers, 24-Hour Fitness, Drugstore.com, and LASIK.
A Discount Vision Program.
• Chiropractic Network: Blue Shield has a directly contracted statewide network with more than 5,000 licensed chiropractors.
• Blue Shield Centers of Expertise and Blue Distinction Centers: Members can find facilities and doctors that meet high-quality standards for transplant, cardiac, and bariatric surgeries within California.
Cigna:  This depends on the plan selected by the employer.  Cigna also offers its Healthy Rewards discount program, which provides discounts for many types of complementary and alternative treatments.
Health Net: Complementary medical disciplines vary by each employer contract. If an employer chooses to offer complementary medicine, Health Net’s program offers direct referral to chiropractic and acupuncture care.
All Health Net members, whether HMO or PPO, can access Health Net’s Decision Powers Healthy Discounts program at www.healthnet.com. The Healthy Discounts program provides Health Net members with discounts when they receive selected complementary health care services from American Specialty Health Plans (ASHP) providers.
The Healthy Discounts program offers direct access to chiropractors, acupuncturists and massage therapists. Members may find ASHP providers via www.healthnet.com or by calling (877) 335-2746. The member assumes liability for claims and is responsible to pay the provider directly on a cash-pay basis at a pre-negotiated fee schedule.
Healthy Discounts provides Health Net members with discounts of up to 50 percent on a vast selection of vitamins, supplements and other health and wellness-related products. Healthy Discounts offers discount savings on these products through ASHP via www.choosehealthy.com. Members have direct access to products through www.choosehealthy.com for vitamins and minerals, herbal supplements, yoga, relaxation products, books and videos. The Healthy Discounts website also provides educational information on a wide range of complementary health care topics.
Kaiser Permanente: The PPO plan does not currently offer coverage for any complementary and alternative medicine (CAM) services. The insured can, however, choose to purchase the chiropractic/acupuncture rider. The rider offers a variety of plans with different benefit maximums or visit limit.
UnitedHealthcare: American Chiropractic Network, a business segment of UnitedHealth Group, provides chiropractic benefits as well as discounts for the following complementary alternative medicine services to our enrolled individuals:
• Acupuncture
• Massage therapy
• Nutritional counseling
• Naturopathic medicine services (in states where naturopathic physicians are licensed).
UnitedHealthcare also offers employers an optional acupuncture benefit. Finally, through UnitedHealth Wellness programs, we provide discounts on products and services for nutrition, weight-management, fitness, stress management, and other wellness products and services.

5. Describe your coverage for mammograms.

Aetna: Mammograms are included in the clinical screening annually beginning at age 40. This is only part of physical exam  benefit when the customer’s benefit plan does not include a separate  benefit.
Anthem Blue Cross: Once a year routine mammograms when ordered by a physician. No limit in frequency, meaning as medically necessary when ordered by a physician.
Blue Shield: One annual mammography test is covered for screening and diagnostic purposes without illness or injury being present.
Cigna: Mammograms are covered annually for women age 40 and over or more frequently and at younger ages when medically indicated.
Health Net: Health Net’s preventive care and diagnostic procedures for adults (age 17 and older) are covered at a physician’s direction.  When medically indicated, one mammography every calendar year for women.  HMO members must obtain a referral from their primary care physicians to receive the preventative care service.
Preventive care services for adults and for children include annual preventive physical examinations and preventive hearing and vision screening examinations.  Preventive care services for adults also include immunizations, well-woman examinations, mammograms, cervical cancer screening tests, pelvic exams, breast exams, colorectal cancer screening and screening and diagnosis of prostate cancer.
Preventive care is not covered if provided by an Out-of-Network Provider.
Kaiser Permanente: Mammograms are covered as part of the adult preventive screenings benefits as follows:
• For women age 35 to 39, one baseline mammogram.
• For women age 40 to 49, one mammogram every two years, or more frequently upon recommendation of a physician.
• For women age 50 and older, one yearly mammogram.
UnitedHealthcare: Options PPO provides coverage for mammograms as part of our standard outpatient surgery, diagnostic, and therapeutic services benefit. It is covered both as a preventive and diagnostic service.
6. Do you cover PSA tests for non-symptomatic men? If so, at what age?
Aetna: Yes. If a state has specific legislation, we will pay it in accordance with the law. There is no age limit unless it’s being paid under a specific benefit (like the Trust benefit), which has a contractual limit.
Anthem Blue Cross: Yes, at age 50 or when ordered by a physician.
Blue Shield: Coverage includes, but is not limited to, prostate-specific antigen testing and digital rectal examinations, when medically necessary and consistent with good professional practice. There is no age limit for PSA testing when billed with a preventive-care diagnosis.
Cigna: These tests are covered based on the treating physician’s recommendations.
Health Net: Preventive care and diagnostic procedures for adults (age 17 and older) are covered at a physician’s direction.  When medically indicated, screening and diagnosis of prostate cancer includes: tests and procedures for the screening and diagnosis of prostate cancer, including but not limited to, prostate-specific antigen testing and digital rectal examinations.
HMO members must obtain a referral from their primary care physicians to receive the preventative care service.
Preventive care is not covered if provided by an Out-of-Network Provider.
Kaiser Permanente: The following prostate-specific antigen (PSA) tests are covered as part of the adult preventive screenings benefits, which are available at age 18: screening and diagnosis of prostate cancer, including but not limited to PSA testing and digital rectal examination when medically necessary and consistent with good professional practice. This coverage does not cover the surgical and other procedures known as radical prostatectomy, external beam radiation therapy, radiation seed implants, or combined hormonal therapy.
UnitedHealthcare: Network physicians are encouraged to follow the Guide to Clinical Preventive Services of the United States Preventive Services Task Force (USPSTF) as the basis for preventive care. We cover PSA tests regardless of age even though the USPSTF indicates this screening lacks clinical value.

7. Describe your drug formulary. (Three tier etc.) If it’s a closed formulary, what happens if a non-formulary drug is needed?

Aetna: The formulary may be open or closed, depending on the benefit plan. In plans with an open formulary, both formulary and non-formulary drugs are generally covered subject to applicable limitations and conditions. With a closed formulary, formulary and non-formulary drugs are generally covered, except for drugs on the formulary exclusions list. Formulary exclusions provide less overall value than therapeutically equivalent formulary drugs. The member’s physician can request approval for coverage for a formulary exclusion.
Anthem Blue Cross: We offer both open formulary and closed formulary benefit options. Non-formulary or non-preferred drugs are covered at the tier 3 copay level on an open formulary benefit.   On a closed formulary benefit, non-formulary or non-preferred drugs are not covered unless nonformulary exception criteria are met.
Blue Shield: The Blue Shield Drug Formulary is a list of preferred generic and brand name drugs that have been reviewed for safety, efficacy, and bio-equivalency, and are approved by the Federal Food and Drug Administration (FDA). This formulary is developed and maintained by the Blue Shield Pharmacy and Therapeutics (P&T) Committee, which meets on a quarterly basis. The P&T Committee consists of independently licensed physicians and pharmacists in community practice and who are not employed by Blue Shield. A drug prior authorization program is available for selected drugs on the formulary as well as for non-formulary drugs to promote appropriate first-line therapy or to reserve use of certain medications with specialized uses or significant potential for misuse or overuse.
Blue Shield offers these types of outpatient prescription drug benefits:
• A closed formulary plan provides coverage for generic drugs, formulary brand-name drugs, and specialty drugs. Non-formulary drugs and most specialty drugs are covered only when prior authorization is approved.
• An incentive formulary plan provides coverage for generic drugs, formulary brand-name drugs, and specialty drugs. Non-formulary drugs are also covered for a higher copayment. Prior authorization may be required to cover some specialty and certain non-formulary drugs. If coverage for a non-formulary drug requiring prior authorization is approved, the member is responsible for the non-formulary copayment.
Cigna: We offer several kinds of formulary including open, closed, and tiered.
Health Net: Health Net of California’s most common benefit structure is a three-tier open formula.  Tier 1 (lowest copay) includes most generic, Tier 2 (next higher copay) contains preferred brands and Tier 3 (highest copay) is comprised of non-preferred brands and generics.
Kaiser Permanente: The PPO plan has an open formulary, which means most FDA-approved drugs, with the exception of those listed in the Optional Prescription Drug Exclusions and Limitations are covered for the insured. The insured pays a copay based on whether the drug is generic or brand. Self-injectable drugs are also covered at a coinsurance.
UnitedHealthcare: Unlike a formulary, the prescription drug list does not imply any drug therapy recommendations. Rather, we assign prescription medications a co-payment tier based on an evaluation of clinical, economic, and pharmacoeconomic evidence. Unlike our competitors, some brand drugs are placed in Tier 1 and some generic drugs are placed in Tier 2 or Tier 3 based on the overall value (for example, the lowest net cost that they offer our clients). UnitedHealth Pharmaceutical Solutions (UHPS) offers a three-tier plan and an open benefit design. Tier 1 drugs represent the lowest co-payment option and include many generic drugs. Tier 2 drugs represent a middle co-payment option and include many brand name drugs. Tier 3 drugs represent the most costly drugs, often with Tier 1 or Tier 2 alternatives, and have the highest co-pay option. A drug’s tier placement is subject to change when its value changes as a result of a patent expiration, new product introduction, or other important clinical, safety, or economic information. When a generic drug is more costly than the brand drug, UHPS may place the generic in Tier 2 and move the generic to Tier 1 once the price decreases.
 

8.Which Requested Procedures are Denied Most Frequently on the Basis of “Experimental/Investigative” or “Not Medically Necessary” Exclusions?

Aetna: We seek to minimize the number of claims denied based on medical necessity through our extensive patient management program, which includes features such as pre-certification, concurrent review, and close communication among our staff and attending physicians.
Blue Cross: It varies greatly. Each request is reviewed on a case-by case basis to determine medical necessity based on the latest medical standards. Factors that might influence the decision would be the season, say during flu season, or the age of the member for a certain procedure.
Blue Shield: Each request is reviewed on an individual basis to determine medical necessity. We do not have statistics on which procedures are most frequently denied.
Cigna: CIigna has a comprehensive policy for ensuring the efficacy of the latest medical treatments. We have an extensive process that includes review of outside, professional literature and input from physicians to determine the safety and efficacy of procedures and interventions. We work closely with customers and physicians to help determine treatment protocols that ensure appropriate and quality care while reducing the number of denials.
Health Net: N/A.
Kaiser Permanente: Requests are received on a case-by-case basis.
UnitedHealthcare: UnitedHealthcare does not deny procedures on the basis of medical necessity and our benefit plans do not contain medical necessity exclusions. We believe that healthcare consumers and their doctors are best qualified to make decisions about healthcare. Denials on the basis of “experimental or investigative” are very rare. If an individual has a life-threatening sickness or condition (one that is likely to cause death within one year of the request for treatment), we may determine that an experimental, investigational, or unproven service meets the definition of a covered health service for the sickness or condition. This determination is based on whether we find the procedure or treatment to be promising and that we find that the service uses research protocol that meets standards equivalent to those defined by the National Institutes of Health.

9.Do You Capitate PPO Providers? If Not, How Are They Compensated?

Aetna: No. Physicians are paid based on a negotiated fee schedule,  which compensates physicians at the lesser of their usual charge or the negotiated fee. Each of our networks has a unique fee structure. We incorporate the federal government’s RBRVS methodology for procedure-related services while allowing for local differences for office and hospital visit services.
Blue Cross: No, payment is determined by applying available member benefits to a pre-determined fee schedule.
Blue Shield: Blue Shield does not capitate PPO providers. PPO contracted providers (physicians and ancillary providers) have agreed to accept Blue Shield’s allowances as payment in full, which are valued-based and reviewed annually.
Cigna: No, we reimburse physicians on a maximum allowable fee schedule or a discounted fee-for-service arrangement. For physicians who are part of our collaborative accountable care initiatives, we also provide reimbursement for care coordination services and have a pay for performance component if physicians meet  targets for improving quality and lowering medical costs.
Health Net: PPO physicians are typically reimbursed at a discounted contract-fee schedule
Kaiser Permanente: No, our PPO providers are part of the Private Healthcare Systems (PHCS) Network. PHCS Network contracts with the Providers to negotiate a lower rate for services rendered. Providers are paid based on claims submitted for covered services.
UnitedHealthcare: The majority of physicians in our networks are reimbursed according to a Maximum Allowable Fee Schedule based on the Resource Based Relative Value Scale Fee Schedule (RBRVS). Our fee schedule is established by applying a conversion factor to RBRVS values. The conversion factor is based on competitive market conditions, medical expense expectations, and physician acceptance. The advantage of this funding arrangement is that we reimburse physicians only for services rendered based on time and intensity with adjustments for geographical differences. For some high-cost specialists, we employ prepayment (capitation). This ensures that we are able to manage expenses for high-cost services to a planned target.

10. What Happens When a Member Provider Bills a Participant Inappropriately for Services?

Aetna: Balance billing of the patient is not permitted. The provider-relations staff monitors compliance and educates providers. A provider who is found to have inappropriate balance billing may have his or her contract terminated in some cases.
Blue Cross: Customer service works with the member and provider to resolve billing issues. Dispute-resolution procedures are available to members and providers.
Blue Shield: Network providers are prohibited from balance billing patients. When a member is billed inappropriately for services, Blue Shield customer service representatives can usually resolve the issue by contacting the provider’s office to clarify the member’s benefit and the Blue Shield reimbursement schedule.
Cigna:  Our contracts prohibit balance billing by physicians. The customer  should contact us about the issue and we will investigate. Our customer service associates are available by phone 24 hours a day, seven days a week.
Health Net: Health Net will intervene on the member’s behalf by working directly with the provider’s office.
Kaiser Permanente: In the unfortunate event that a provider bills an insured inappropriately, the insured should contact the KPIC customer service line at 1-800-788-0710. If the issue requires any type of special handling, KPIC operations staff will intervene and assist in reconciling the claim.
UnitedHealthcare: Our physician and other healthcare professional contracts preclude physicians and other healthcare professionals from balance billing enrollees. The contracts also address how physicians and other healthcare professionals must submit claims. We take appropriate action if network physicians or other healthcare professionals attempt to balance bill enrollees or to bill enrollees for covered services in breach of their contract requirements. We protect our customers from claims liability by fulfilling all state mandates concerning participation in guaranty associations, maintaining state contingency reserve requirements or obtaining reinsurance agreements. Our standard hospital contracts also contain provisions to protect individuals receiving health services from balance billing when an insurer becomes insolvent. If a network physician or other healthcare professional becomes insolvent or otherwise unable to continue to render healthcare services to individuals, we help reassign individuals enrolled in our plans to other physicians.

11. Do You Have a Registered Nurse on Call 24 Hours a Day for Questions at the Plan Level and the PPO Level?

Aetna: Yes, nurses provide information on a broad spectrum of health issues virtually 24 hours a day, seven days a week. They also provide ongoing follow-up information as needed and perform customized research when appropriate. Standard service is included in the full-risk, prospectively rated PPO plan. The informed Health Line may be purchased as an additional service for self-funded or retrospectively rated PPO plans with over 1,000 or more total enrolled employees. The minimum group size can be a mix of active employees and retirees (e.g., 800 active and 200 retirees).
Blue Cross: Yes, most PPO members have access to professional, reliable healthcare information toll-free, 24 hours a day, seven days a week. Registered nurses answer questions and help with decisions. Members also have access to educational audiotapes on more than 200 health topics.
Blue Shield: Yes, Blue Shield’s NurseHelp 24/7 is a service for all of our fully insured groups and is available as a buy-up for self-insured groups. It provides a nurseline, which is staffed 24 hours a day, seven days a week with registered nurses and master’s-level counselors. Any member of a fully insured Blue Shield health plan can take advantage of this service at no extra charge.
Cigna: Yes, Cigna’s customer service line is open 24/7 365 days a year. We also offer a 24-hour Health Information Line staffed by nurses.
Health Net: Yes, Nurse24 is a nurse-driven telephonic support program that empowers participants to better manage their health. Nurse24 SM offers assistance to participants coping with chronic and acute illness, episodic or injury-related events and other health care issues. Highly trained registered nurses are available 24/7 to monitor and process health care inquiries that help participants make informed health care decisions. The Nurse24 SM program is accredited by both URAC and NCQA.  Access to evidence-based, reliable clinical support for decision support after hours increases the likelihood that our members will seek care at the appropriate level when their physician is not available to support the decision.  Seeking care at the appropriate level increases the efficiency and reduces the cost of after-hours care. Program highlights include:
• Chat capability from our website with Nurse24 SM clinicians
• Health information managers with experience in health issue discovery and trained in telephone triage
• Improved continuity of care – integration with Decision Power disease management services
• Significant cost savings potentia – convenient and useful alternative help to reduce excessive or unnecessary emergency room visits
• Access to nationally recognized  Healthwise(r) Knowledgebase with more than 5,500 health topics
Kaiser Permanente: The insured have access to Kaiser Permanente Healthy Solutions, which will give them access to a personal health coach, online health and wellness programs and information, and the Kaiser Permanente Healthwise Handbook online. (Services under the Healthy Solutions program are value-added services provided by Kaiser Permanente Healthy Solutions, an affiliate of Kaiser Foundation Health Plan Inc. (KFHP). These services are not in lieu of any services covered under the PPO Group Policy. Likewise utilization of these services does not constitute receipt of benefits under the PPO Group Policy. The Kaiser Permanente PPO Plan is underwritten by Kaiser.)
UnitedHealthcare: Optum, the UnitedHealth Group care management company, provides toll-free, 24-hour, 365-day access to the “NurseLine.” Experienced registered nurses discuss treatment options and help individuals get the appropriate level of care. NurseLine gives individuals information that helps them make educated decisions about their personal health and use of medical resources. Some services must be purchased as a buy-up based on the funding arrangement of the plan.

12. What is the Plan or PPO Doing to Have Online Systems for Eligibility, Administrative Changes, Referrals, Etc.?

Aetna: EZLink streamlines several benefits and HR functions. It links to our enrollment and billing systems and provides real-time eligibility; online enrollment, account maintenance, online billing, and electronic-funds transfer for payment.
Blue Cross: Our Website offers online services to providers and members for eligibility, claim status, and benefit inquiries. Other features include a provider finder and a wide variety of Web and organizational resources.
Blue Shield: Our website has a password-protected section with personalized member health plan account information. Members can view detailed benefit information and find customer service phone numbers and addresses. Via e-mail, they can reach customer service, submit changes to account information, request new member ID cards, download claim forms, and request a new personal physician. Blue Shield can offer online enrollment to all our employer groups through our partnership with leading online vendors. This partnership gives benefit administrators direct access to the eligibility system as set up by the vendor allowing for functions such as employee eligibility tracking, plan enrollment, open enrollment, and life event enrollment transactions. Additionally, the use of an outside vendor allows for incorporation of benefit design from more than one carrier, providing employer groups with a single online enrollment service.
Cigna: The Cigna for Health Care Professionals website (www.cignaforhcp.com) offers secure and easy access to real-time transactions such as pre-certification, claim status, eligibility, and benefits. Information on Cigna policies and procedures is also available. In addition, Cigna has enhanced the myCigna.com portal, which enables members to personalize their site for their individual use. Information includes the ability to review hospital and provider quality data, gather specific disease information, track claims and explore drug alternatives that might be a cost savings.
Health Net: Health Net’s website, www.healthnet.com, is a secure website that requires a personalized identification number (PIN). Members, employers, providers and brokers can perform a wide range of online administrative functions. Members in an active or COBRA program can view or modify their enrollment information. Providers can verify eligibility, find specialists for referrals, and submit and check claims status. Health Net’s  Online Billing and Enrollment for members, brokers, and employers offers 24-hour online account access to process enrollment and maintain member’s eligibility; users can also view, print and pay billing. Enhancements for both sites are ongoing.
Kaiser Permanente: Kaiser Permanente offers online billing and administration functions to its employer groups through a system called Online Account Services-www.kp.org/accountservicestour.
UnitedHealthcare: Members, physician, and employers have access to their data and the capability to communicate directly with us online. Our consumer Internet solution – myuhc.com – allows people to do the following:
• Choose a plan.
• Locate network professionals.
• Access claims history and explanations of benefits (EOBs).
•Complete a health assessment and develop an action plan.
•Order ID cards and print temporary ones.
•Communicate with a nurse.
• Compare hospitals.
Healthcare professionals can do the following:
•Verify patient eligibility, applicable co-payment amounts, and YTD and out-of-pocket accumulators.
•Search the notification database and complete multiple notifications in one session
•Submit claims.
•Receive payment statements and reimbursement.
•Perform online reconciliation and electronic funds transfer.
•Submit credentialing data online.

Complete online CE programs
The following features are available through Employer eServices:
•Receive Web-based eligibility management.
•Get simplified invoices, real-time calculations, and downloadable data.
•Do Customer reporting
•Get Claim status information.

13.What is the Relationship of your HMO Provider Network (if you have one) to Your PPO Provider Network? Do HMO Providers Have to Participate in the PPO Network? How big is your PPO Network compared to your HMO Network?

Aetna: Standard provider contract provisions generally apply to all of our plans and products that the provider participates in. However, it is not mandatory for a provider to participate in all products.
Blue Cross: All of our California networks are proprietary, whether they are PPO/HMO/EPO etc. A provider may participate in one or more of our plan products, but it is not mandatory for a provider to participate in all products. Our physician network has more than 57,000 members.
Blue Shield: Blue Shield’s HMO and PPO networks are separate. The HMO network is capitated based on medical group and IPA contracts throughout the state with some directly contracted networks in specific geographies.
With the PPO, there are value-based allowances and contracts with individual physicians and medical groups. HMO providers do not have to participate in our PPO network, though many of them do.
Blue Shield’s PPO network has 65,000 physicians (defined by access points) and 350 hospitals, and our HMO network has 32,000 physicians (defined by access points) and 300 hospitals.
Cigna: Cigna does not require PPO network physicians to participate in the HMO (or vice versa). The HMO network is contracted with Cigna HealthCare of California Inc. The PPO network is contracted with Connecticut General Life Insurance Company, a Cigna company. While there is considerable overlap, we have many physicians just in one network (e.g. PPO only). In California, our HMO network is about 80% of the size of our PPO Network.
Health Net: Health Net of California has taken a multi-product approach in contracting with providers, with approximately 65% of Health Net’s PPO network practitioners also participating in the HMO network. While HMO providers are not required to participate in Health Net’s PPO network, approximately 88% of them do so. Health Net of California’s HMO network includes more than 49,000 Primary Care Physicians and specialists in the California 30-county HMO service area and more than 65,500 Primary Care Physicians and specialists in the PPO network.
Kaiser Permanente: Our PPO and HMO networks are not affiliated. For our PPO, KPIC contracts with PHCS Network to provide access to providers and facilities nationwide. They currently have more than 658,000 providers and 4,200 acute care facilities nationally and more than 68,000 providers in California. Our HMO offers more than 9,100 providers and more than 160 facilities in California.
UnitedHealthcare: UnitedHealthcare’s network includes 570,000 physicians and healthcare professionals and 4,800 hospitals nationwide. In general, UnitedHealthcare’s contracts apply to all of our commercial products ensuring that employees have a consistent experience throughout the country. Providers are not required to participate in all our products, but the majority of them do. The UnitedHealthcare Select or Choice HMO networks apply locally and are subject to state laws.