Category Archives: HMO

Cross-border Health Care and the ACA

From the ‘before you go to the WCRI conference’ department is an article about a subject not on the agenda in Boston this week, and since I convinced the WCRI that crossing the Hudson river is not medical travel, nonetheless, people are leaving the country and one US state for medical care, and not just for work-related issues.

Jim Arriola, COO of MediExcel Health in California, and Caitlin Gadel, an attorney at Seaton, Peters & Revnew, wrote an article this month in California Broker magazine (pg. 20-22), outlining how cross-border health plans in California are complying with many of the provisions of the Affordable Care Act (ACA).

You may recall that I wrote about cross-border health care, especially for workers’ comp, in my article, “Cross-border Workers’ Compensation a Reality in California“, as well as these two articles, “NAFTA, Work Comp and Cross-Border Medical Care: A Legal View” and “NAFTA, Work Comp and Cross-Border Medical Care: A Legal View: Update“.

According to the article, almost twenty years ago, the California Department of Managed Health Care (DMHC), began regulating a consumer driven phenomena for receiving employer-sponsored health coverage south of the border.

As stated in the article, on a daily basis, up to 40,000 workers cross the border from Mexico to work in California. These workers and their families live in Mexico, and prefer to get their medical care in Mexico.

Changes to the Knox-Keen HMO Act allowed US and Mexican health plans to establish cross-border coverage. Much of this is occurring in the San Diego and Imperial county area, as discussed in “Cross-border Workers’ Compensation a Reality in California” with the Mexican HMO, SIMNSA, as well as others such as Blue Shield of CA, Health Net, Cigna, Aetna, and MediExcel Health Plan.

Depending upon the benefits of the plan, some cross-border coverage plans have premiums that are 40% to 50% lower than those in California.

There are an estimated 60,000 enrollees in various health coverage plans in California, and some experts predict the total number will increase to over 100,000 as more employers offer coverage as a result of the ACA rules and regulations, according to Gadel and Arriola.

Gadel and Arriola report that many ACA provisions (as well as the thousands of pages of regulations), apply to cross-border coverage, especially if the coverage is not a qualified expatriate plan.

Gadel and Arriola advanced the idea that some brokers may be concerned whether a cross-border plan satisfies the ACA definition of a minimu-essential coverage (MEC) when the provider network is in Mexico.

They also said that legal experts have noted that under federal regulations, employer-sponsored plans approved by state regulators are MEC plans.

In order to receive approval from the DMHC, such plans must submit evidence of their compliance with ACA regulations.

Brokers, it is suggested by the authors should not offer cross-border plans exclusively because of the differences between cross-border plans and expatriate plans.

However, the authors note, because of the complexity of the ACA’s conflicting interpretations, some cross-border plans may have been erroneously classified themselves as group expatriate coverage.

The reality, they say, is that the vast majority of cross-border plans and their enrollees do not meet the federal criteria for expatriate classification.

My last post, “Borderless Healthcare: A Model for the Future of Medical Care in Workers’ Comp” was based upon a presentation given last Thursday about medical tourism to Mexico. So if there are health care plans in California providing cross-border health care into Mexico, and there is also cross-border workers’ comp occurring between California and Mexico, and in both of these cases, the mode of transporatation is generally automotive, and the presentation by Manatt, Phelps & Phillips requires airfare to Mexico, why is it that workers’ comp cannot do the same?

I don’t want to hear excuses, I want to hear why this industry refuses to join the 21st century, why it points to laws and statutes nearly a hundred years old that restrict injured workers to their own states or to the US for medical care requiring expensive orthopedic surgery, when there are less expensive and better alternatives a short flight away?

A fellow blogger wrote today about this industry’s failure to fully embrace technology, and the answer to his questions, and to mine were right there…if this industry were to change, the status quo would be undone and many companies would be forced to go out of business and their profits with them.

Our workers’ comp “system” mirrors the general health care system in many ways, as per this quote from Uncle Walter:

“America’s health care system is neither healthy, caring, nor a system.”

Walter Cronkite

It is a profit-making endevour that preys upon the sick and injured and lines the pockets of lawyers and vendors. That is why no one in this industry is listening to us…greed.



Accountable Care Organizations May Shift Claims into Workers’ Comp

As reported Monday on the Insurance Information Institute’s blog, Terms + Conditions, and posted by Claire Wilkinson, the Affordable Care Act (ACA) may actually cause millions of claims dollars to be shifted into the workers’ comp system, according to research by the Workers’ Compensation Research Institute (WCRI).

Under the ACA, a mechanism called an Accountable Care Organization (ACO), which was designed to control costs, was used by the researchers at WCRI to estimate the nature of the cost shift, as well as giving a general idea of the magnitude of the shift. They used the ACO’s similarity to Health Maintenance Organizations (HMOs) in their research.

The ACA calls for the creation of ACO’s, which is a network of doctors and hospitals that share the financial and medical responsibility for a group of patients. The ACO receives a set amount per patient for a year, regardless of the services. This is called a capitated plan.

What the WCRI found by looking at a nationwide sample of more than 700,000 claims from 2008 to 2010, was that about 17 percent came from HMO’s. In those states with a large HMO presence, HMO doctors declared 26 percent of soft tissue injuries into workers’ comp. This was 30 percent higher than doctors in fee for service arrangements.

The Executive Director of WCRI, Dr. Richard Victor, estimated that ACO’s could increase the percentage of workers in capitated plans by 25 percent. Such an increase was determined would allow capitation plans to regain 15 percent of the market it has lost since 2000.

As stated in the blog article, cost-shifting in Illinois would out $90 million of claims into workers’ comp. and in Pennsylvania, it would cost insurers $55 million.

As I’ve said in my post, Workers’ Comp at a Crossroads: Where Does it Go from Here?, and in many other articles, things are not looking up for workers’ comp in the near term and well into the future.

But still, with the handwriting on the wall, and the trumpets blaring that will bring down the walls of the padded cell that is the American workers’ comp system, this industry insists on playing the “see no evil, hear no evil, speak no evil” game.

A conversation I had earlier today with a broker about medical travel and workers’ comp convinced me that at some point there needs to be a safety valve in this system, otherwise it will collapse in on itself.

Shortages of doctors, nurses, rising inpatient and outpatient costs, consolidation of hospitals, and other pressures will mount even greater, and not even the move towards domestic medical travel within the US will be sufficient to alleviate the bottleneck that is coming down the road.

But go ahead and keep running around on that wheel you see in squirrel cages, because in the final analysis, you are all just rats in a maze, with no clue.


I am willing to work with any broker, carrier, or employer who is sick and tired of being bled by the Wall Street vulture capitalists and the entire medico-legal system known as workers’ comp, to save money, and to provide the best care for their injured workers or their client’s employees, while at the same time, helping to break the monopoly of the American health care cartel.

Call me for more information, next steps, or connection strategies. Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with and follow me on LinkedIn and my blog. Share this article, or leave a comment below.