complete health care unit · 5 By The People, For The People, The Gathering to Get Health Care Now...
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1 By The People, For The People, The Gathering to Get Health Care Now Cooperative Medical Economics and Health Care System Development Cooperation, Education and Trusteeship By Don McCormick, Tony McCormick and Blair Korndorffer
Transcript of complete health care unit · 5 By The People, For The People, The Gathering to Get Health Care Now...
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By The People, For The People,
The Gathering to Get Health Care Now
Cooperative Medical Economics and
Health Care System Development
Cooperation, Education and Trusteeship
By Don McCormick, Tony McCormick and Blair Korndorffer
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By The People, For The People,
The Gathering to Get Health Care Now
Cooperative Medical Economics and
Health Care System Development Cooperation, Education and Trusteeship
By
Don McCormick, Tony McCormick and Blair Korndorffer
Published By
Copy Right 2019 Tomorrows Bread Today
P.O. Box 1838
Splendora, Texas 77372 http://tbt.org
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By The People, For The People, The Gathering to Get Health Care Now
Cooperative Medical Economics and Health Care System Development
Cooperation, Education and Trusteeship
Author: Don McCormick (October 1, 1941)
B.A. Degree from University of St. Thomas in Houston in June of 1967
University of Houston and Mills College for advanced studies in Insurance (1967-2075)
Licensed as a General Lines Insurance Agent in 1967
Marketing Director for New Communities Service Corporation HMO in 1975
Executive Director of Texas Health Plans HMO 1977-1980
President of Computech (Medical Accounting Software Company) 1980- 1984
President of National Association of Preferred Providers 1984-1995
Executive Director of SEMNet IPA (later to become USPCPs) 1996 to Present.
Founder of Senior Patient Association
AKA Patient Physician Cooperatives (PPC). 1996-Present
Trustee for TBT, a 501c3 organization and sponsor of PPC
President of Physicians ACO 2012-2013
President of Texas Physicians ACO 2013-Present
The economic ideas in this paper come from those described by E.F. Schumacher whose
background and history are taken from the article about him in Wikipedia.
Economic Ideas: Ernst Friedrich Schumacher (19 August, 1911 – 4 September, 1977) was a
German statistician and economist who is best known for his proposals for human-
scale, decentralized and appropriate technologies. He served as Chief Economic Advisor to the
British National Coal Board for two decades, and founded the Intermediate Technology
Development Group in 1966.
In 1995, his 1973 book Small Is Beautiful: A Study of Economics As If People
Mattered was ranked by The Times Literary Supplement as one of the 100 most
influential books published since World War II. Schumacher developed the set
of principles he called "Buddhist economics", based on the belief that individuals
need good work for proper human development.
He also proclaimed that "production from local resources for local needs is the
most rational way of economic life. Schumacher's experience led him to become a pioneer of what
is now called appropriate technology: user-friendly and ecologically suitable technology
applicable to the scale of the community. He founded the Intermediate Technology Development
Group (now Practical Action) in 1966. His theories of development have been summed up for
many in catch phrases such as "intermediate size", and "intermediate technology".
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Contents
Cooperative Medical Economics from a Distributist’s Point of View ................................... 17
Supporting ideas from Distributists ....................................................................................... 17
Siddhartha Gautama............................................................................................................... 17
Right view ................................................................................................................................ 17
Right intention......................................................................................................................... 18
Right view and right intention are the first steps ................................................................... 18
A better economic system ....................................................................................................... 18
An oxymoron ........................................................................................................................... 18
Six great (but dead) ideas from the 19th Century.................................................................. 18
Schumacher’s explanation of the six ideas ............................................................................. 19
The longing for education ....................................................................................................... 19
Ignorance and control ............................................................................................................. 19
Persuasion and exchange of values ......................................................................................... 20
The accountant in our brains .................................................................................................. 20
Reorganization of values ......................................................................................................... 20
Freedom from the past ............................................................................................................ 21
The “Gathering” ..................................................................................................................... 21
Schumacher’s plea .................................................................................................................. 21
Our hope for the children and grandchildren........................................................................ 21
Listen to people ....................................................................................................................... 22
Discuss wants and needs locally .............................................................................................. 22
Find the capacity to serve ....................................................................................................... 22
Have lower cost and better outcomes ..................................................................................... 22
Create Trusteeship .................................................................................................................. 23
“Gathering” is a Commonwealth or Cooperative .................................................................. 23
Schumacher’s insight about Cooperatives ............................................................................. 23
Emanation ............................................................................................................................... 24
Prudence and reality ............................................................................................................... 24
Health care system is unnatural ............................................................................................. 24
Top-down management has not worked ................................................................................ 25
Life sustaining systems arise from direct participation ......................................................... 25
The imposition of structure by government does not restore health ..................................... 25
Bottom-up organizational structure imitates nature and creates trust................................. 26
Step by Step reorganization leads to open systems ................................................................ 26
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Financial and medical education of people are the keys to reform ....................................... 26
The Accountable Care Act is a nudge to reform but is not a natural solution ..................... 27
Primary Medical Care is the smallest part of the cost ........................................................... 27
Paying a little more for labor stimulates changes for better health and economy ................ 27
Patient and physician friendships create medical homes ...................................................... 27
State Regulations are imposed on natural systems ................................................................ 28
Existing insurance pools can use the natural system of cooperatives.................................... 28
Focus on education, trusteeship, and physician incentives to make improvements ............. 28
Rapid change is possible ......................................................................................................... 29
Cooperation between the patients within a practice is the first step ..................................... 29
Restore trusteeship .................................................................................................................. 29
Where trusteeship is lacking ................................................................................................... 30
Carpe Diem ............................................................................................................................. 30
Capital ..................................................................................................................................... 30
Letter of Credit ....................................................................................................................... 31
Commitment ............................................................................................................................ 31
A Comparison ......................................................................................................................... 31
Compare an NFL Franchise with a Local MSO Physician Team ......................................... 32
Summary ................................................................................................................................. 32
Universal health care from Congress is unlikely ................................................................... 32
Grass roots organization of local cooperatives reduces cost .................................................. 33
The $10,000,000 prize to fix health care is too small compared to the problem ................... 33
Compromise gets the country started ..................................................................................... 33
Just do it .................................................................................................................................. 34
Advocacy and The Cooperative .............................................................................................. 34
Patients and Physicians need to organize ............................................................................... 34
Teaching and measured learning............................................................................................ 35
Goals ........................................................................................................................................ 35
Continuous Process ................................................................................................................. 36
Leadership and Support ......................................................................................................... 36
The thirteen declarations: ....................................................................................................... 37
The eight propositions: ........................................................................................................... 38
Organization of the Physicians into Local Teams .................................................................. 38
Honor knowledge and skill ..................................................................................................... 38
Our health care cost too much and it can be fixed ................................................................. 38
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Find your physician leaders .................................................................................................... 39
Middle Management ............................................................................................................... 39
Reform from the grassroots .................................................................................................... 39
Truth and relief of suffering have built good teams .............................................................. 39
Know everyone ........................................................................................................................ 40
Limit team size ........................................................................................................................ 40
Examples of organization of teams ......................................................................................... 40
Move patients to the contracted plans .................................................................................... 40
ACOs ....................................................................................................................................... 40
Contracts with The Medical Practices.................................................................................... 41
How do the physicians organize their IPA and their medical teams? ................................... 41
Practice Size ............................................................................................................................ 41
Performance and budgets ....................................................................................................... 41
Specialty Types ........................................................................................................................ 42
Referral Patterns ..................................................................................................................... 42
Contracting between the IPA and physicians ........................................................................ 42
Standardize the agreement in booklet and electronic forms ................................................. 43
Insurers enforce their financial goals ..................................................................................... 43
IPAs can avoid cancellations................................................................................................... 44
Organization of the Physicians within the IPA ...................................................................... 44
Do the work without interference that is driven by money ................................................... 44
Hospitalists .............................................................................................................................. 44
Attention to detail.................................................................................................................... 45
Proper motives ........................................................................................................................ 45
A little advice ........................................................................................................................... 45
Becoming a team ..................................................................................................................... 46
Contracting with the Insurance Companies........................................................................... 46
Direct Contracts with insurance companies are not physician friendly ............................... 46
What has worked .................................................................................................................... 47
Temptation .............................................................................................................................. 47
A better strategy ...................................................................................................................... 47
Enrollment of Patients ............................................................................................................ 48
No expectations of Congress or the Administration .............................................................. 49
The agency system ................................................................................................................... 49
PPACA’s different approach to enrollments ......................................................................... 50
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Employer driven systems ........................................................................................................ 50
Medicare Advantage ............................................................................................................... 50
Tuning Medicare Advantage .................................................................................................. 51
Home visits with each of the patients ..................................................................................... 51
A positive experience with home health care ......................................................................... 51
Delivery of Health Care Services ............................................................................................ 53
Patient relationships ................................................................................................................ 53
First, do no harm ..................................................................................................................... 53
Historic cooperatives ............................................................................................................... 54
Results of KP ........................................................................................................................... 55
Reporting Health Care Encounters ........................................................................................ 55
Payment systems drive the need for automation ................................................................... 56
Advance payment is better...................................................................................................... 57
What about the poor? ............................................................................................................. 58
Reports to the IPA from the Insurance Companies ............................................................... 59
The details ............................................................................................................................... 59
Performance Bonuses .............................................................................................................. 60
Capitalist republican democracy ............................................................................................ 60
The right solution .................................................................................................................... 61
Rate setting .............................................................................................................................. 61
Better outcomes ....................................................................................................................... 62
Distribution after final accounting ......................................................................................... 62
Business as usual ended in 2015 .............................................................................................. 62
Accounting within the IPA...................................................................................................... 63
Legal Support for the IPA ...................................................................................................... 63
Affinity Groups ....................................................................................................................... 64
Co-op Clinics ........................................................................................................................... 65
Solutions are outside of our systems ....................................................................................... 65
Cooperatives ............................................................................................................................ 66
Concierge Medicine ................................................................................................................. 66
Community Support ............................................................................................................... 66
Value Based Health Care ........................................................................................................ 67
Steps in building the Value Based Health Care System......................................................... 68
The Accountable Care Organizations .................................................................................... 69
Administration of the IPA ...................................................................................................... 70
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Infrastructure and Automation .............................................................................................. 72
Technologies ............................................................................................................................ 72
Communication ....................................................................................................................... 73
Data Management ................................................................................................................... 74
Application Software............................................................................................................... 74
Free Open Source Software (FOSS) ....................................................................................... 75
Medical Facilities.................................................................................................................... 76
Clinic Buildings for Participating Medical Practices ............................................................. 76
Description of the Medical Services Organization and the Facilities Projects...................... 77
Community Hospitals for Local Support of IPA’s Patients .................................................. 78
Capital for Development and Ownership of Medical Teams ................................................ 80
Addendum A - Patient/Physician Cooperative (PPC) Directory of Benefits ........................ 83
Patient Association (PPC) Membership ................................................................................. 83
Organization History .............................................................................................................. 83
Senior Patient Association (Patient Physician Cooperatives) ................................................ 83
Discount Healthcare Program Operator Registration # 1721390 ......................................... 83
Disclosures ............................................................................................................................... 83
Discount Plan Organization .................................................................................................... 84
Teladoc Disclosures ................................................................................................................. 84
Pharmacy discounts .............................................................................................................. 84
What is PPC and how is it different from an insurance plan? .............................................. 84
Membership Agreement with Doc Wellbee ............................................................................ 84
Benefit Types for Each Plan Being Offered ........................................................................... 85
Type of Benefits in each Plan .................................................................................................. 86
MultiPlan ................................................................................................................................. 87
Plan Benefits Summaries ........................................................................................................ 88
Basic Membership in the Association (A) .............................................................................. 88
Concierge, Concierge Plus, Concierge Elite Medical Care (B) .............................................. 88
Lab Tests (C) ........................................................................................................................... 88
Diagnostic Imaging (D) ........................................................................................................... 89
Teladoc (E) (800-835-2362) ..................................................................................................... 89
When Do You Use Telemedicine? .................................................................................................. 89
What conditions would you use Telemedicine for? (Not an inclusive list) ....................................... 89
Dental Care Discounts (F) (800-290-0523) ............................................................................. 89
Dental Plan Features ...................................................................................................................... 90
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Vision Care (G) ....................................................................................................................... 90
Eyewear ......................................................................................................................................... 90
Qualsight Lasik ............................................................................................................................... 90
Prescription Drugs (H) ............................................................................................................ 91
Hearing (I) ............................................................................................................................... 91
Roadside Assistance (J) ........................................................................................................... 91
Patient Advocacy (K) .............................................................................................................. 92
Group Hospital Indemnity Insurance (L) .............................................................................. 92
Group Lump Sum Cancer Insurance (M) .............................................................................. 92
Stop Loss Insurance (N) .......................................................................................................... 92
Employer-Sponsored ERISA Trusts (O) ................................................................................ 92
Health Club Membership (P).................................................................................................. 92
Simple Save Rx (Q) ................................................................................................................. 93
HRA Debit Card (R) ............................................................................................................... 93
Specialist Network (S) ............................................................................................................. 93
Provider Directories ....................................................................................................................... 93
PPC Membership By-laws, PCP Payment Agreement, Imaging Facility Payment
Agreement, Lab Payment Agreement, Group Health Election, Declarations and Signature
Pages (5 Sections) .................................................................................................................... 95
Section 1: BY-LAWS OF SENIOR PATIENT ASSOCIATION, LLC d/b/a Patient/Physician Cooperatives
(PPC).............................................................................................................................................. 95
Section 2: AGREEMENT FOR PRIMARY CARE PHYSICIAN SERVICES PAYMENT PLAN, called Concierge
and Concierge Plus ........................................................................................................................ 98
Section 3: AGREEMENT FOR DIAGNOSTIC FACILITY PHYSICIAN SERVICES PAYMENT PLAN ............ 101
Section 4: AGREEMENT FOR PRIMARY CARE & Specialty PHYSICIAN SERVICES PAYMENT PLAN,
called Concierge Elite ................................................................................................................... 105
Section 5: AGREEMENT FOR LAB SERVICES PAYMENT PLAN ......................................................... 108
DECLARATIONS AND SIGNATURES RELATED TO MEMBERSHIP AGREEMENTS PRECEDING THIS PAGE
.................................................................................................................................................... 111
Addendum B – Health Plan Explanations, Questions and Answers ................................... 116
The Employee Benefit Trust ................................................................................................. 116
Introduction........................................................................................................................... 116
Who Is Eligible? .................................................................................................................... 116
Additional Eligibility Requirements ..................................................................................... 117
When Can I Join the Plan? ................................................................................................... 117
What Is an Accountable Care Organization (ACO)? .......................................................... 117
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Qualifying Events/Status Changes ....................................................................................... 118
How Do I Locate Participating Providers? .......................................................................... 119
How Do I Check on the Status of a Claim? .......................................................................... 119
What Services Must Be Pre-Certified? ................................................................................ 119
Notice of Rights to Reconstructive Surgery Following Mastectomy ................................... 119
Notice of Children’s Health Insurance Program (CHIP) .................................................... 120
Frequently Asked Questions ................................................................................................. 120
Plan Availability .................................................................................................................... 123
Plan Limitations: ................................................................................................................... 123
Addendum C – Employer Sponsored Health Plan in an Employee Retirement Income
Security Act Trust ................................................................................................................. 125
Complete Plan Document ..................................................................................................... 125
SECTION 1 - DEFINITIONS AND EXCEPTIONS ........................................................... 125
SECTION 2 - ELIGIBILITY ............................................................................................... 132
A. EMPLOYEE ............................................................................................................................... 132
B. DEPENDENT SPOUSE: ............................................................................................................... 133
SECTION 3 - BASIC COVERED SERVICES .................................................................... 135
A. Professional and Hospital Services ........................................................................................... 135
B. Emergency Services ................................................................................................................. 139
C. Ambulance Services ................................................................................................................. 140
D. Durable Medical Equipment and Prosthetics ........................................................................... 140
E. Preventive Dental Services ....................................................................................................... 140
F. Basic Dental Services (Non-Orthodontic) .................................................................................. 141
G. Restorative Dental Services ..................................................................................................... 141
H. Periodontic Services ................................................................................................................ 141
I. Oral Surgery .............................................................................................................................. 141
J. Prosthodontic Services ............................................................................................................. 142
K. Other Services.......................................................................................................................... 142
L. Major Dental Services............................................................................................................... 142
M. Fee Limitation Schedule .......................................................................................................... 143
N. Vision Care .............................................................................................................................. 143
O. Mental Health Services ............................................................................................................ 143
P. Limitations ............................................................................................................................... 143
Q. Exclusions................................................................................................................................ 147
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SECTION 4 - CLAIMS PROCEDURES ............................................................................. 151
A. NOTICE OF CLAIM .................................................................................................................... 151
B. PAYMENT OF CLAIMS ............................................................................................................... 151
C. CLAIM DENIAL .......................................................................................................................... 152
D. REVIEW OF DENIED CLAIM....................................................................................................... 152
E. ARBITRATION ........................................................................................................................... 152
SECTION 5 - COORDINATION OF BENEFITS ............................................................... 153
A. BENEFITS SUBJECT TO THIS PROVISION: ................................................................................... 153
B. DEFINITIONS SUBJECT TO THIS PROVISION:.............................................................................. 153
C. ORDER OF BENEFIT DETERMINATION: ...................................................................................... 153
D. COORDINATION OF BENEFITS WITH MEDICARE ....................................................................... 154
E. AMOUNT OF BENEFITS ............................................................................................................. 155
F. FACILITY OF ADMINISTRATION ................................................................................................. 155
SECTION 6 - CONTINUATION OF BENEFITS UNDER THE CONSOLIDATED
OMNIBUS BUDGET RECONCILIATION ACT OF 1985 (COBRA) ............................... 155
A. COVERED EMPLOYEE ............................................................................................................... 155
B. COVERED DEPENDENT ............................................................................................................. 156
C. ELECTION OF CONTINUATION COVERAGE ................................................................................ 156
D. TERMINATION OF CONTINUATION COVERAGE ........................................................................ 156
E. SUBROGATION ......................................................................................................................... 156
F. TERMINATION OF PLAN............................................................................................................ 157
G. WORKER'S COMPENSATION .................................................................................................... 157
H. MISCELLANEOUS ..................................................................................................................... 157
SECTION 7 - GENERAL PROVISIONS ............................................................................ 157
A. CHANGE IN BENEFITS ............................................................................................................... 157
B. NO PRE-EXISTING CONDITION LIMITATION .............................................................................. 158
C. RIGHT OF RECOVERY ................................................................................................................ 158
Addendum D – Agreement and Declaration of Trust .......................................................... 161
ESTABLISHMENT OF TRUST .......................................................................................... 161
PURPOSE OF TRUST ......................................................................................................... 162
DEFINITIONS ...................................................................................................................... 162
DECLARATION OF TRUSTEE, ........................................................................................ 163
TRUSTEE.............................................................................................................................. 163
POWERS AND DUTIES OF TRUST .................................................................................. 164
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PLAN ADMINISTRATOR .................................................................................................. 166
POWERS AND DUTIES OF THE ADMINISTRATOR .................................................... 166
RESPONSIBILITIES OF FIDUCIARIES ........................................................................... 167
SIGNATURE OF TRUSTOR ............................................................................................... 168
COLLECTION OF CONTRIBUTIONS ............................................................................. 168
LIABILITY FOR BENEFITS IF PAYMENTS LATE ....................................................... 168
RECORDS OF THE TRUSTEE .......................................................................................... 168
INDEMNIFICATION ........................................................................................................... 169
LIABILITY OF TRUSTEE .................................................................................................. 169
DUTY TO ACT ..................................................................................................................... 169
FILING WITH PUBLIC AUTHORITIES .......................................................................... 169
RIGHTS OF EMPLOYER ................................................................................................... 169
COMPENSATION AND EXPENSES OF TRUSTEE ........................................................ 170
ACCOUNTS AND RECORDS OF TRUSTEE .................................................................... 170
GENERAL TERMS .............................................................................................................. 171
Addendum E – Coop Development Slide Presentation ........................................................ 173
Addendum F – PPC Brochure .............................................................................................. 185
Addendum G – Clinic Buildings for Medical Practices ....................................................... 187
Addendum H – Complete Health Care System and Facilities Development ...................... 191
Executive Summary .............................................................................................................. 191
The Executive Team .............................................................................................................. 194
Acronyms and Definitions Page ............................................................................................ 204
Addendum I – PanaMed Indemnity Policy for Senior Patient Association ........................ 205
Addendum J – Group Lump Sum Cancer Insurance for Senior Patient Association ........ 215
Addendum K – BY-LAWS OF SENIOR PATIENT ASSOCIATION, LLC
d/b/a Patient/Physician Cooperatives (PPC) ........................................................................ 224
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Preface
This book discusses the economic systems from a fresh point of view. It helps people to organize
themselves into local cooperatives that satisfy their wants and needs in health care. It produces a
new understanding of how health care economics will work when it is “cooperative” and not
“dog eat dog” and not “somebody else’s problem.” It is a guide for how to create cooperatives
that are economical and produce good health outcomes within the current laws and regulations.
Making it universal can be done. It is not based on faith and hope but cooperative action,
education, trust and love.
Trusteeship and transfer of ownership of health care premiums paid to third parties by members
of a health plan for future health care expenses is the core problem to solve in the United States.
Insurance companies, employer-controlled trusts, and health benefits managers prosper when
health care expenses are less than was predicted by premium setting. Beneficiaries have not
shared in those saving but have continuously paid higher premiums and increased out-of-pocket
costs for health care services. Consequently, money spent by member patients has not protected
their health and welfare as intended. Payments of premiums to private companies which contain
funds for payment of future health care services and supplies cannot be converted to profits by
denial of payment or failure to properly predict future health care expenses. Payment of taxes
and premiums in the Medicare and Medicaid plans in the United States are supposed to be in
trust funds and price regulated by types of covered services. However, the methods used to claim
and to distribute trust funds result in extraordinary waste in which most of the money goes to
non-medical suppliers and facilities and not to providers of medical and surgical services. Less
than 20% of claims paid is for professional fees. The result is “no valid accounting” from the
point of view of the member who pays taxes, premiums and seeks services. The result is
members pay twice as much for health care in the United States as is paid in other countries that
have universal health care systems. Direct payments by members to providers for services not
covered by insurance are as much as the total cost of health care services in other industrialized
countries. This includes Medicare premiums and out-of-pocket expenses. It does not have to be
that way and cooperatives can fix the problems.
Health care is a human right. That idea is derived from a basic need for humans to cooperate
with each other to survive. Such rights are built on foundations of material and labor, love and
respect for each other, honesty and truth in our interactions. It is difficult to impose a right on
any group of people by fiat or force. But it is even harder to deny that right when those people
create it by individual labor and by collectively sharing material goods, teaching each other
skills, and cooperating in the welfare of their families, friends, and neighbors. Whether the
people in a “Gathering” are rich or poor is of no consequence in the creation of their rights. What
matters is that every human being in a “Gathering” is cared for and everyone who can provide
skills and resources is participating.
The economic and political systems in which rights can be established are mostly matters of
opinion but systems in which universal rights established by the participants are denied or
become exclusionary are faulty. Capitalism and Socialism have manifested such faults and need
not have significant influence on the creation of a health care system by a “Gathering” of people
who love and care for each other. “Health care for all” can be built on a “Gathering” in each
community everywhere. It should be enabled by honest trusteeship of required resources which
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must be shared between the communities. Presently, governments in the United States are often
not honest trustees despite desires of many representatives to change laws and regulations to
make trusteeship vibrant. Governments, State and Federal, can help by creating risk pools under
real trusteeship for large losses that the local Gatherings cannot anticipate. However, the private
sector plans must contribute to these risk pools if universal coverage is to be attained.
Compensation of professional health care providers needs to be on a retainer basis adjusted by
semi-annual retrospective analysis. Such analysis requires a relationship to both the problem
treated and the cost of the service provided, material and labor. The current method of payment
causes this analysis to be done after the services have been rendered and before payments are
made which results in three-way adversarial relationship between the professional, insurer and
patient. And the analyst is usually the employee of the health plan. Consequently, high prices,
excessive services, denials of payments, and transfer of expenses to patients by copayments,
deductibles and exclusions create chaos and increase the administrative burden. Knowing the
earning a professional medical care provider wants and needs, his or her capacity to serve
patients, and the frequency of his or her type services within a defined population determines the
retainer. Most of the services of professional medical care providers do not rise to the level cost
sharing through insurance but are merely a line item in a family budget. Retainers rather than
premiums are far less expensive to both patients and the providers. They have the added
advantage of taking away adverse encounters between providers, insurers and patients.
Complaints about opacity of pricing, complexity of reporting, confidentiality of records and
independent verification of transactions and payments are mostly solved from the patient and
provider points of view. Individuals who cannot support a line item budget for professional
medical care need income subsidy not their uncompensated labor or tax payments to be given to
a paternalistic third parties to be reduced in value by their handling.
The hospitals and suppliers are the “elephants in the room.” They are big boxes, electrical-
mechanical devices, drugs, chemicals and their investor groups and they eat 40% of all the
money available for health care. Patients can own all of these needed tools and reduce the load to
20%. When that happens, you will not have people confusing hospitals with medical care
providers. It has never been that physicians needed to own these shelters, tools, chemicals and
medicines, they just needed to use them. It is best to operate hospitals at cost so that the surplus
they now drain can expand the supply of medical care providers and restore wealth to those who
struggle to get fair wages and proper support when needed. Hospitals would be owned by patient
physician cooperatives. It is the beginning of a system in which people matter and they know it
because they provide the ways and means.
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Cooperative Medical Economics from a Distributist’s Point of View
Supporting ideas from Distributists
1. The current health care delivery system and the economic system within which it should
develop and operate are discussed within the ideas of Siddhartha Gautama and E.F.
Schumacher. Gautama was the Prince who founded Buddhism and Schumacher was the
economist that advanced the ideas of the Distributists.
(Distributism is an economic ideology asserting that the world's productive assets should be
widely owned rather than concentrated. It was developed in Europe in the late 19th and early
20th centuries based upon the principles of Catholic social teaching, especially the teachings
of Pope Leo XIII in his encyclical Rerum novarum (1891) and Pope Pius XI in
Quadragesimo anno (1931). It views both capitalism and socialism as equally flawed and
exploitative, and it favors economic mechanisms such as small-scale cooperatives and family
businesses, and large-scale anti-trust regulations - Wikipedia)
2. Modern economics is not working for patients and physicians. The view of a Distributist
economist, like Schumacher, shows a path that could be used to fix a broken health care
system in which the relief of suffering and stress have been lost in the pursuit of money
and/or fame by providers of medical services, administrators and insurers who seem to
control access to care.
Siddhartha Gautama
3 Thirty years ago, Memphis, Tennessee, and Birmingham, Alabama were economically
depressed, but each had two very rich enterprises: medical businesses and pawn shops. Pain
and suffering had built the medical businesses and need caused by poverty had built the pawn
shops. These cities and their conditions were examples of growth in areas of our economy
where pain and suffering were rising as poverty increased. Compassion and a new
understanding of how economics should work are the cures for a health care system that
continues to fail. Gautama has described the first two steps: (1) Right View and (2) Right
Intention.
Right view
4. Right view means to see and to understand things as they really are. It means to see things
through, to grasp the impermanent and imperfect nature of worldly objects and ideas. It is not
an intellectual capacity. It is attained, sustained, and enhanced through all capacities of mind.
It begins with the intuitive insight that all beings are subject to suffering and ends with
complete understanding of the true nature of all things. Since our view of the world forms
our thoughts and our actions, right view yields right thoughts and right actions.
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Right intention
5. Right intention refers to the volitional mental energy that controls our actions. Right intention
is a commitment to ethical and mental self-improvement. There are three types of right
intentions: (1) the intention of renunciation or resistance to the pull of desire, (2) the intention
of good will, resistance to feelings of anger and aversion, and (3) the intention of
harmlessness, or compassion.
Right view and right intention are the first steps
6. The reformation and recreation of the health care and its delivery system in the United States
starts with these first two steps but complete reform may require that every step be taken in
the noble eightfold path to enlightenment.
A better economic system
7. Before the relief of suffering and in addition to the right view and right intention we found
the need for understanding an economic system that would facilitate reform. It is not the
dominant economics of our time, nor necessarily any of the cruder forms of them from the
distant past. It is something that was suggested by Gautama, “to understand things as they
really are.” In our time, it is often said that capitalism is “dog eat dog,” but under socialism
“both dogs starve.” We think those are major flaws and that neither of those popular
economic systems will foster good health and prosperity. Other thoughts that have been well
described may lead us to a way to exchange values that will make it possible to see things as
they really are and to have health and health care the way nature intends. The economics
described here is a starting place for change that can be embraced by both science and
metaphysics within the confines of nature for personal and environmental wellbeing. E.F
Schumacher has described this starting point in his book, Small is Beautiful. This essay is an
attempt to expand on his ideas within our discussion of health and health care improvements.
An oxymoron
8. Medical Economics is an oxymoron. It is difficult to imagine that the practice of medicine is
joined to knowledge concerned with the production, consumption, and transfer of wealth. If
that were true humans and the whole of sentient being would not regard health and the
recovery from sickness and injury as a universal want and need, instinctive in every mother
and father regardless of the species.
Six great (but dead) ideas from the 19th Century
9. The two words, “medical” and “economics,” are used together only because ideas rooted in
the nineteenth century have yet to be purged from this generation. While we find truths in the
works of Darwin, Wallace, Marx, Freud, Einstein, and Keynes, contrary to the six great ideas
from these men of the nineteenth and early twentieth century, we have: (1) not evolved in
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hopeful ways, (2) the fittest do not necessarily survive, (3) religion and philosophy are not
supplements of material life processes, (4) unfulfilled incest wishes are not root causes, (5)
sometimes we know what we are talking about and whether it is true, and (6) know-how
about scientific matters does not lead to objective knowledge about meaning and purpose.
Schumacher’s explanation of the six ideas
10. These six great ideas have not been verified, even though they “… represent tremendous
leaps of the imagination into the unknown and unknowable. Of course, the leap is taken from
a small platform of observed fact. These ideas could not have lodged themselves as firmly in
men's minds, as they have done, if they did not contain important elements of truth. But their
essential character is their claim of universality. Evolution takes everything into its stride,
not only material phenomena from nebulae to homo sapiens but also all mental phenomena,
such as religion or language. Competition, natural selection, and the survival of the fittest
are not presented as one set of observations among others, but as universal laws. Man does
not say that some parts of history are made up of class struggles; no. ‘scientific materialism,’
not very scientifically, extends this partial observation to nothing less than the whole of ‘the
history of all hitherto existing society.’ Freud, again, is not content to report a number of
clinical observations but offers a universal theory of human motivation, asserting, for
instance, that all religion is nothing but an obsessional neurosis. Relativism and positivism,
of course, are purely metaphysical doctrines, with the peculiar and ironical distinction that
they deny the validity of all metaphysics, including themselves. What do these six ‘large’
ideas have in common, besides their non-empirical, metaphysical nature? They all assert that
what had previously been taken to be something of a higher order is really ‘nothing but’ a
subtle manifestation of the ‘lower’ - unless, indeed, the very distinction between higher and
lower is denied. Thus man, like the rest of the universe, is really nothing but an accidental
collocation of atoms. The difference between a man and a stone is little more than a
deceptive appearance. Man's highest cultural achievements are nothing but disguised
economic greed or the outflow of sexual frustrations. In any case, it is meaningless to say
that man should aim at the ‘higher’ rather than the ‘lower’ because no intelligible meaning
can be attached to purely subjective notions like ‘higher’ or ‘lower,’ while the word ‘should’
is just a sign of authoritarian megalomania.
The longing for education
11. These nineteenth-century ideas are firmly lodged in the minds of practically everybody in the
Western world today, whether educated or uneducated. In the uneducated mind they are still
rather muddled and nebulous, too weak to make the world intelligible. Hence the longing for
education, … for something that will lead us out of the dark wood of our muddled ignorance
into the light of understanding.” E.F. Schumacher
Ignorance and control
12. This “dark wood of muddled ignorance” has led the elite and powerful people who control
medicine and insurance away from trying to understand economics and allowed them to
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infect almost everyone in the world with irrational systems of funding for health care, ones in
which the delivery of health care is judged based on whether it is producing a profit, and not
on whether it is effective and available when and where it is needed. The physical world, as
economists see it, is built on measures and weights and the movement of those things in
relationship to each other. Economists have assigned values to classes of those things that are
traded between people. Assigning arbitrary values to different classes of measurable things is
arbitrary, regardless of how it is represented: Silver, Gold, Paper, Promissory Notes,
Electronic Records of transactions.
Persuasion and exchange of values
13. So, before the notion of “Medical Economics” the issue of money and the arbitrarily
uneconomic nature of most of the goods and services that are exchanged must be resolved.
As Antoine de Saint-Exupéry said in The Little Prince: “Grown-ups love figures... When you
tell them, you've made a new friend they never ask you any questions about essential matters.
They never say to you 'What does his voice sound like? What games does he love best? Does
he collect butterflies?' Instead they demand 'How old is he? How much does he weigh? How
much money does his father make?' Only from these figures do they think they have learned
anything about him.” When the Prince talked to the accountant and asked what he was doing,
the accountant said he was naming the stars so that he could be their discoverer. The Prince
replied: “You - you alone will have the stars as no one else has them...In one of the stars I
shall be living. In one of them I shall be laughing. And so, it will be as if all the stars were
laughing, when you look at the sky at night...You - only you - will have stars that can laugh.”
This point is missed in weights and measures and money by contemporary economists and
made in the arguments by E.F. Schumacher in his book, Small Is Beautiful. There is an order
higher than money and counting and it was lost in the six great ideas of the nineteenth
century. It must be recovered in a joyful way as Antoine de Saint-Exupéry tells us in his
book. Purpose sets up what is economical and allows for an understanding of things as they
really are.
The accountant in our brains
14. So, how do humans agree about what value is and how it is to be exchanged? The way our
brains work there must be an accountant who records everything exactly as it was and every
added encounter that will happen whether it can be measured by weight, size or frequency.
That notion is in deference to science and technology, but likely not as important as it is
thought to be when it is a barrier to health care and treatment.
Reorganization of values
15. How are we to begin the transformation of economics so that it fulfills our health care wants
and needs? Taking the measure of what we see, and what we feel is the starting place. Of
course, you cannot measure anything without the right view and right intentions. When there
are preconceived material barriers to the collection of evidence then right intentions cannot
be reached. We cannot exchange values for services and materials if the work that makes
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those values is determined by fiat based on mere consumption of unrelated goods and
services. If you start a system with a price for something, then the margin sought will be
distorted by exchanges in the general marketplace. You will never know by nature what you
desire. Your senses will deceive you and change the work, the advice, and the cooperation
needed for right intentions.
Freedom from the past
16. The medical community must be free of the six great ideas of the 19th century and find joy
“in doing the right thing always” with other people who share those wants and needs. No
“fiats,” No “best practices,” No “predetermined rates of exchange” are needed. The material
is already there. The energy for the work is in the group that gathers, and the exchange will
be fair regardless of what it is because it will have been measured and watched and shared
without waste and with the right view and right intentions.
The “Gathering”
17. Some very smart people (scientists) are certain that what humans do and say will not matter
and that most people will not last beyond this century. But, like patients who have been told
their time is short and nothing can be done to reverse death, humans will persist without
regret. T.S. Eliot said, “I have known…the evenings, mornings, afternoons. I have measured
out my life with coffee spoons, I know the voices dying with a dying fall….” So, the time
humans have is not bound by the six great ideas but crowned by hope and the notions that life
is suffering. Humans are here to relieve that suffering for as long as necessary because they
“…have seen the eternal Footman hold [their coats], and snicker….”
Schumacher’s plea
18. “Despite reams of press about the state of the environment and a raft of laws attempting to
prevent farther loss, the stock of natural capital is plummeting as are vital lifegiving services
that flow from it. Having inherited a 3-8-billion-year store of natural capital, at present rates
of use and degradation, there will be little left by the end of the… [this] century. Thus, as
Herman Daly has written, natural capital is rapidly becoming the limiting factor to human
development, an event that will topple the wobbly supports of neoclassical economics. In the
face of this relentless loss of living systems fractious political conflicts over laws,
regulations, and business economics appear petty and small.” E.F. Schumacher
Our hope for the children and grandchildren
19. It is for our children and our grandchildren that we cry because they will suffer more and for
a longer time. Everything we know must be passed to them and not wasted on dead ideas
which have created this miasma. Gathering to care for each other and to teach each other how
suffering is relieved and how humans can persist and have hope is the beginning. Done well,
it may seem to overcome what nature shows at hand, but, if not, then hope resides in passing
the best of who we are to those who may survive.
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Listen to people
20. There are steps in creating a gathering of people who know what they want and need. To take
the first step is to listen to what people want and bring together those who want similar
things. In the case of health care, it is fair to assume that most people want some advice and
treatment when they get sick or injured. Ask that question of many people and then listen to
the descriptions of how they want to get advice and treatment. We are all preconditioned by
what we have experienced and by the limits of our knowledge. The how-to answers may not
vary much from the current business-of-medicine regardless of their ineffectiveness and cost.
Responses like, “It worked for me,” must lead to deeper discussions in which feelings of
“inadequate care” and “unwillingness to act together” can be overcome. People of the
“Gathering” can discover that advice and treatment is available from people who have
medical and surgical knowledge. The barriers to including the medical providers in their
“Gathering” are ideological, social and material.
Discuss wants and needs locally
21. In the neighborhood gatherings, when there is a consensus, when there is a sense that
everyone is included, a statement can be formulated: “We want to know, each of us, what
health care is, how we can include physicians and nurses and teachers of medicine in
our “Gathering,” and what we must pledge to get advice and treatment of the highest
quality.” There should be a sense of how big the “Gathering” should be to assure the desired
goals
Find the capacity to serve
22. A primary care physician, in the privileged position of mutual support from the “Gathering”
of patients, can advise and treat between 1,000 and 1,500 people per year. That is between
300 and 500 households in a community. This privileged physician will need the support of
nurses, specialists, and facilities to serve the wants of this size patient population. Whatever
representation of value is used in the community for exchange must be assured, collected and
distributed to the health care providers for their knowledge, labor, and material costs. It
should be more than physicians can get through the current exchanges that are based on the
six (dead) ideas. While compassion is a great force in the desire to help others, if helpers
begin to suffer materially, they often put aside spiritual goals even when joy is felt in their
achievements.
Have lower cost and better outcomes
23. Paradoxically, the support of the medical group by the “Gathering” of patients is
comparatively less costly than supporting current market-based insurance systems. This is
because those insurance systems waste 30 to 40 percent of the money on unnecessary
facilities, materials, and administration. Further, because the financial support of the medical
helpers is from those who have a desire to know about health care and have direct control
over the delivery of services the health outcomes are better.
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Create Trusteeship
24. In this “Gathering,” and in every other agreement about health care, the pivot point is
trusteeship. It has failed in the systems based on the six (dead) ideas. In the private system it
has not only failed but is by design corrupt. When a person or a group of people buy an
insurance policy as the means through which they pay for health care, they transfer
ownership and rights of distribution of services to the insurer. The money not spent for health
care belongs to the insurer. Sometimes, because of laws or for marketing reasons, a portion
of the unspent funds are returned to the buyers. In such a system, what should cost a few
cents instead cost a few dollars. It is another reason why the “Footman” snickers in the T.S.
Eliot poem.
“Gathering” is a Commonwealth or Cooperative
25. The Commonwealth or Cooperative created by the “Gathering” and the inclusion of the
health care providers is trusteeship in the best setting possible in which the aim is “…to
obtain the maximum of wellbeing with the minimum of consumption.”
Schumacher’s insight about Cooperatives
26. Schumacher said, “Cease to do evil; try to do good. As physical resources are everywhere
limited, people satisfying their needs by means of a modest use of resources are obviously
less likely to be at each other's throats than people depending upon a high rate of use.” [This
kind of environment creates permanence in a Commonwealth or Cooperative.]“We always
need both freedom and order. We need the freedom of lots and lots of small, autonomous
units, and, at the same time, the orderliness of large-scale, possibly global, unity and
coordination. When it comes to action, we obviously need small units, because action is a
highly personal affair, and one cannot be in touch with more than a very limited number of
persons at any one time. But when it comes to the world of ideas, to principles or to ethics, to
the indivisibility of peace and of ecology, we need to recognize the unity of mankind and base
our actions upon this recognition. Or to put it differently, it is true that all men are brothers,
but it is also true that in our active personal relationships we can, in fact, be brothers to only
a few of them, and we are called upon to show more brotherliness to them than we could
possibly show to the whole of mankind.”
27. Again, from Schumacher, “An entirely new system of thought is needed, a system based on
attention to people, and not primarily attention to goods-(the goods will look after
themselves!). It could be summed up in the phrase, "production by the masses, rather than
mass production." What was impossible, however, in the nineteenth century, is possible now.
And what was in fact-if not necessarily at least understandably neglected in the nineteenth
century is unbelievably urgent now. That is, the conscious utilization of our enormous
technological and scientific potential for the fight against misery and human degradation-a
fight in intimate contact with actual people, with individuals, families, small groups. rather
than states and other anonymous abstractions.”
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28. “If every member of a group puts something into a common pool on condition of taking
something out, they may still quarrel about the size of the shares ... but, if the total is known
and the claims are admitted, that is all they can quarrel about. ... But in industry the claims
are not all admitted, for those who put nothing in demand to take something out.
29. …So, the organization of society on the basis of functions, instead of on that of rights, implies
three things. It means, first, that proprietary rights shall be maintained when they are
accompanied by the performance of service and abolished when they are not. It means,
second, that the producers shall stand in a direct relation to the community for whom
production is carried on, so that their responsibility to it may be obvious and unmistakable,
not lost, as at present, through their immediate subordination to shareholders whose interest
is not service but gain. It means, in the third place, that the obligation for the maintenance of
the service shall rest upon the professional organizations of those who perform it, and that,
subject to the supervision and criticism of the consumer [Gatherers], those organizations
shall exercise so much voice in the government of [their] industry as may be needed to secure
that the obligation is discharged.”
Emanation
30. The motivation to have a commonwealth or cooperative through “Gatherings of Patients and
Health Care Providers” will come with the asking and listening and discussions which reveal
the ways in which trusteeship is established, responsibility is taken, and wanted care is made
available. It is a process called emanation, spiritually as from a god, materially as fragrance
from a flower.
Prudence and reality
31. Right View, seeing health care as it really is, gives prudence to the Gathering so that the
members actions are appropriate to real situations.
“This clear-eyed objectivity, however, cannot be achieved and prudence cannot be perfected
except by an attitude of "silent contemplation" of reality, during which the egocentric interests of
man are at least temporarily silenced…. Prudence implies a transformation of the knowledge of
truth into decisions corresponding to reality…. Everywhere people ask: ‘What can I actually
do?’ The answer is as simple as it is disconcerting: we can, each of us, work to put our own
inner house in order. The guidance we need for this work cannot be found in science or
technology, the value of which utterly depends on the ends they serve; but it can still be found in
the traditional wisdom of mankind.” E.F. Schumacher
Health care system is unnatural
32. The health care financing systems in the United States do not enable people and patients to
choose what they want, when they want it, and from whom they get advice, care and
treatments. These systems do not follow nature in having multiple pathways for
communication and protection. They were not born of the step-by-step building of a living
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system, but out of convenience for the U.S.A. economy that was under the stress of
depression followed by war. Development was built on the premise that adults had enough
information and education to make intelligent decisions about the values of the products and
services they chose. Further, the products and services were deemed to be affordable and
readily available, but the measure of that was the profit of the enterprise and not the health
outcomes of the patients. The consideration that these systems were about the preservation of
life, the complex interconnections between people, their labor, and their dedication to each
other was set aside in favor of monetary exchange. The consequence has been poor economy,
poor health, and unnecessary loss of life. While other nations have given health problems
more attention in the last five generations for reasons of economy, they have done only
slightly better in health outcomes. The main problem is about how to live and not about how
to trade representations of goods and services for health advice and treatment.
Top-down management has not worked
33. Regardless of the outcry about high cost and bad outcomes in health care from the most
knowledgeable people in our society, a top-down solution to the problems has not worked.
The solution, if there is to be one, may come from the bottom-up, from the patients, their
interconnections with each other and the inclusion of knowledgeable caregivers in guild
driven self-directed small communities. People will need to be nudged into organizations that
raise their level of understanding of medicine and leave them empowered to act in their best
interest and economy. Health care providers are the likely class of people in this kind of
guild/community to have a positive impact. However, these providers will be a subset of
physicians and other non-physician providers; those who deal with both health and disease,
acute and functional disorders and have a strong desire to teach medicine and health
maintenance to people in a comprehensive and reproducible way.
Life sustaining systems arise from direct participation
34. The organization of guilds and communities into life sustaining networks begins with the
providers of care and not with other agencies regardless of how well informed or well-
meaning these agencies may be. Enrolling patients into Medicare, Medicaid, or private
insurance plans does not solve health care delivery and cost problems. Good health is about
understanding health and health care problems and their solutions within a community of
other people who share similar knowledge and concerns, some of whom are expert advisors
and care givers. Paying for all of this is a commitment made by each individual drawing on
the resources they have available from their labor, their entitlements, and the gift circles to
which they belong. In the words of Abraham Lincoln, “labor is prior to, and independent of,
capital.” However, the main barrier is that labor is hard to organize.
The imposition of structure by government does not restore health
35. In most other industrialized nations, the organizational structures necessary are imposed by
law and the elite classes of administrators and medical care providers tend to have less
opportunity for financial gain, but the general population suffers less expense and seems to
26
have slightly better health outcomes. However, this top-down approach has not created a
medical knowledge base that would allow the patient population to win against the relentless
march of chronic illnesses that make people old before their times. We seem to be wholly
dependent on radical changes in the environment to get at the causes of our problems not
addressed by acute care medicine. The interconnections characteristic of living ecological
systems in which harmful elements are excluded and healthy nutrients created and supplied
are not in the current medical/financial systems. In the case of the current systems,
knowledge is not power but simply a fire alarm to which people have become accustomed to
ignoring.
Bottom-up organizational structure imitates nature and creates trust
36. It is time to take a step back and put into place through mutual help what is wanted and
needed as people and patients. The paradox is that the organizers and care givers are patients
too and can be properly empathic if empowered by their patients acting in concert. The nudge
to physicians to act as teams and to embrace the solutions to both good health care and cost
controls has been given through several programs from the government and the private
sector. The programs presume that the people and patients are already organized into plans of
insurance through which physicians must just become “accountable” by proper financial
incentives, positive and negative. The financial incentives that are positive seem only to
manifest about 20% of the time and only partially for the health care providers and not at all
for the patients. However, the “nudge” has made a window where there was a wall and the
possibility that the wall will fall as health care providers bring their patients through it. This
is the paradigm shift that was needed. Prohibitions against voluntary associations and mutual
support seem to be few, but there are barriers to overcome in shifting trusteeship (a needed
service within a cooperative) to new platforms.
Step by Step reorganization leads to open systems
37. Assume that the existing Physician Associations that contract with Medicare, Medicaid,
HMOs and Commercial Health Plans are open to contracts between providers and their
individual patients to carry the “nudge” physicians have gotten from government into the
marketplace. The physicians’ goals would be to: (1) to determine the health status and profile
of each patient and (2) to personalize care and treatment so that most of it can be managed by
the individual patients. The main barrier to that goal is: time spent between the patient and
the health care provider is compressed so much that the patient cannot learn, and the
provider cannot teach. The next barrier is that communications within the community are
restricted in silos that retard learning and stifle healing.
Financial and medical education of people are the keys to reform
38. As a comparison, people think that language and math literacy are benefits for the whole
population. A few hundred years ago that was not the case. Medical literacy must catch up
with language and math literacy and just paying for services does not accomplish that goal.
So, step one is to let the patient pay directly for their basic care so that the patient and
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their chosen provider can act freely in the quest to restore health. This idea does not rise
to the level of insurance or the pooling of resources because the amount of money needed to
have basic care is within the budgets of individual families and their close friends and
relatives. Physicians and patients are already enabled by the established practice of
“Concierge” medicine and medical saving accounts. We have not addressed the possibility
that a patient could fail financially in their agreement with the provider, but a gift circle
within the community is an easy remedy for that problem. It is done frequently in
catastrophes and there is no good reason why it cannot be done routinely in self-organized
groups.
The Accountable Care Act is a nudge to reform but is not a natural solution
39. Government assistance in an overall health care program in which the patient’s saving
account is driving their access to health care and in which there is price control and insurance
against large expenses is needed, but it is not the substance of the Accountable Care Act
and unlikely to be in any reform of that act. This type of national system, if a top down
approach were used, is like what was done in Singapore at ¼ of the cost of insurance in the
U.S.A. with better health outcomes. Perhaps, in Singapore, people see community
responsibilities as a prior condition for free enterprise. The U.S.A. is not yet controlled by
those types of people. However, we need not await political change to have a high
performing system; we can use the “nudges” we have gotten to “seize the day” and make our
own patient-centered system.
Primary Medical Care is the smallest part of the cost
40. In comparison to the high cost of health care in the U.S.A., the cost of primary care is a small
part of it. Consequently, an individual patient can pay a physician for primary care services,
laboratory, imaging, health education and care coordination for 6% of a minimum wage or
2% of an average wage. The Singapore model set their saving rate at 3% of wages. Perhaps
the difference between the 2% we need and the 3% they collect is a surplus to assure that all
the people in Singapore have basic health care. In the U.S.A. that surplus would be our gift
circles within individual cooperatives.
Paying a little more for labor stimulates changes for better health and economy
41. The peculiar thing about our proposal for the primary care physicians is that the “concierge
plan” pays the practice more than they usually collect from insurance of all types. This
includes the patients’ co-payments and deductibles the practice adds to the money from the
insurers. The concierge payment is 30% more that the Medicare rates. Yet, the access to care
issues are eliminated and so are the frequency of acute care episodes. The utilization of
hospitals and emergency facilities drops and so does the attendant costs.
Patient and physician friendships create medical homes
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42. The incentive for maintenance of the patient’s health works best when the patients know their
bill has been paid in advance and needed providers are ready and available to use. The
incentive for providers is the established patient relationship and the knowledge that the
patient regards them as his or her medical home. With these conditions in place any bonuses
earned by providers because of good care coordination and reduced spending on other
medical and hospital services is the seal for continued participation as a “concierge”
medical home.
State Regulations are imposed on natural systems
43. An organized patient–centered health care system requires an association of patients and
physicians that is approved by the various state departments of insurance as a purchasing
group. In some cases, the state laws require a license for these entities that they call,
Discount Medical Plan Organizations. One such group, Senior Patient Association, dba
Patient Physician Cooperatives (PPC) started in Texas in 2004. The members of PPC made
“concierge” payment agreements between individual patient members and individual or
group practice providers. Additionally, PPC, as a qualified Association, purchased group
health insurance for its members that was as limited or comprehensive as they required to
comply with the Accountable Care Act. The purpose of the group health policy was to fund
the specialty and hospital costs that were beyond the funds available in the “concierge”
payment plans with individual providers. The result for patients was to have all the resources
needed to get health care without exclusions and for a price that was below the usual market
charges. PPC has shown that people in small communities can create Cooperatives quickly
with few barriers and vary little money.
Existing insurance pools can use the natural system of cooperatives
44. Patients who are beneficiaries of Medicare, Medicaid, Employer Sponsored Trusts or private
insurance can combine the PPC Group Association Plans with the patients’ “concierge”
payment plans and the result is better access to care and lower medical loss ratios. Physician
Associations can also form their own Health Maintenance Organizations (HMOs) to contract
with Medicare, Medicaid, and Employer Sponsored Trusts to be plans through which the
patients will have coverage and service advantages. These service plans should be able to
have a lower administrative burden than the 15% usually charged by the currently competing
HMOs. At least, if there is an administrative profit margin it can be shared with the patients
and physicians.
Focus on education, trusteeship, and physician incentives to make improvements
45. The fundamental changes needed in the health care system are in the areas of education,
trusteeship, and proper incentives for physicians who advise and treat patients. An educated
patient’s point-of-view about his or her health care could be a desire for help when needed
and avoidance of harm at each encounter. The knowledge and skill of the physician is the
main concern even if their personality does not match well with that of the patient. Since
physicians are trained in many different types of practices, the patient, for reasons of
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economy, should pick a primary physician within the type of practice that suits the patient’s
wants and needs. Since the patient is paying directly for these services in a private agreement
with the physician, that choice has little or no impact on the financing through insurance of
the other types of care needed episodically. The way in which the system will maintain health
is by the diversity of its interconnections and the capacity of its members to share
information and labor. The costs of care for any group will be commensurate with their
needs. The greater the carrying capacity of the organization the more likely they will be to
maintain health and control their economy.
Rapid change is possible
46. Healthcare costs in the U.S.A. are double that of almost every other industrialized nation
because of patient ignorance, corporate greed, bad laws and regulatory policies. Oddly
enough, patients can fix these kinds of problems rather quickly by joining together locally
and teaching each other medicine, finance, and good trusteeship. As an example, should
an educated old person subject themselves to extreme medical care and surgeries in the last
few weeks of their life? And what guardians would allow that to happen. It is unfortunate
that sometimes the decisions about medical care are vested in those whose lives are not seen
in the context of their time and condition, but in the imaginary time of their care givers and
their younger relatives. The saying, “First do no harm” begs repeating. Yet, doing nothing is
contrary to nature, even when it is right. The record of more than 400,000 people per year
killed by medical care in hospitals is the mark of our wrong notions about the needs of
patients. People want to live a long life but in good health, free of pain, and independently.
So, good medical care is advice and treatment leading to those conditions. Measures of
quality from people other than patients are checks on the skills of the physicians by his or her
peers and they are important, but do not necessarily improve care for a particular patient,
they only measure it and educate the care givers.
Cooperation between the patients within a practice is the first step
47. Financing healthcare requires cooperation: first, between the physician and the patients who
regard him or her as their primary care provider; second, between the all the patients and
primary care physicians in a community. In the first case, the patients of a physician support
the practice and the physician makes time for all of them. This does not rise to the level of
needing to be shared in a larger population to be affordable to each patient. In the second
case, the patients need to pool their money to be able to pay catastrophic costs. They need a
qualified non-profit Association to purchase group insurance that would be all inclusive of
their needs. If their group were large enough, they could probably form their own company
for this insurance, but usually that is unnecessary and more expensive.
Restore trusteeship
48. Within cooperatives, trusteeship of the money is the central issue. The predominate system in
the U.S.A. is broken because the trusteeship is poorly structured and corrupted by a transfer
of ownership of the trust funds to third parties. This transfer allows the money that was
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intended for health care expenses to be converted into inflated administrative expenses or
corporate profits. The Medicare trust funds could be an exception to that transfer except the
payment system in Medicare is based on fee-for-services or derivatives of that, such as
bundled payments or capitation. The consequence of this faulty payment system is that the
trust funds are simply plundered by frequency of use of unnecessary services that are very
difficult to challenge by regulators. Also, the distribution of the Medicare funds is handled by
contractors who benefit from the volume of transactions they process.
Where trusteeship is lacking
49. So, the Medicare trust funds are not really in the hands of the trustees in a practical way. In
the case of premiums paid to commercial insurers by individuals, businesses, Medicare and
Medicaid, those funds become the property of the private company and what they have left
from the premiums belongs to that company as an underwriting profit. The health care law
(PPACA) has attempted to address the unfairness of this by limiting the Medical Loss Ratio
(MLR) to 85% of group business and 80% of individual business. It is not universally
applied, and it can be manipulated by the companies. 15%-20% is a large percentage of the
premium for administration and marketing when compared to other financial management,
especially when compared to the 2%-3% paid by self-insured large employer groups. The
solution is for the funds of the patients that can’t be budgeted and paid directly to their
providers to be pooled in a trust fund that pays the lowest of administrative fees and returns
the balances from claims to the Trust. Those funds can be returned to patients and shared
with their physicians as incentives to get better care and to not waste money on unnecessary
services and supplies.
Carpe Diem
50. This is the best of times for taking control of the healthcare system because it is inflated, and
the wasted money can be applied to correct both services and distribution of funds. There are
few if any barriers to correcting the payment and delivery systems when it is being done for
self-identified groups of patients and physicians. The shrinkage of the funds will affect
unneeded medical services and overpriced administration. The potential financial gain for the
patients and physicians is to substantially lower the cost for patients and to increase the
revenue for their chosen physicians.
Capital
51. A start-up Independent Physician Association (IPA) must support five people and an office
and equipment for about two years before earning enough income from administrative fees to
operate in the black. The burn is about $500,000 a year. If the IPAs are organized into five
teams, each team consisting of 30 primary care physicians and 30 specialists, and each
practice commits to $30,000 of capital in the form of a note payable over 60 months, the IPA
will have a stable capital balance that will allow it to contract favorably with Health Plans.
To think there are no contingencies and no need for this level of capital is an unrealistic
expectation.
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Letter of Credit
52. When the insurers required a “Letter-of Credit” deposited with their Health Plans to have a
contract in which they would share profits, the IPA will need about $1,000,000 to get off the
ground. Fortunately, times change and there are bargains in the current market. The
$1,800,000 notes from the participating practices will enable the Letter of Credit.
Commitment
53. Once the local IPA owners have committed their seed capital of the $1,800,000 without debt
and show that they can produce bonus income from global capitation agreements with CMS,
with HMOs and with commercial insurers, then substantial added capital can be raised from
Private Equity Funds. Selling 40% of the shares in the IPA management Company will raise
about $6 million dollars per IPA and give a return of 10%-15% per year to the investing
company. The basis for additional capital is the profit that the IPA can make in the future
from reductions in costs for the Payors which are by contract shared with the IPA. The fat in
the Medicare and Commercial insurance premiums that can be cut are from misuse of
facilities, drugs, diagnostic procedures and from uncoordinated care. IPAs have been able to
do that in Medicare Advantage programs over the last thirty years and can do it in other kinds
of shared saving agreements with CMS and Commercial Insurers. Sometimes the percentage
of saving that will be shared is restricted to ten percent of the gross premiums, but not
always. It is possible to contract for as much as 86% of the gross premiums for the
professional and hospital pool and to retain all the savings. You must take all the risk and
post all the reserves when you make those kinds of agreements, but the margins can be well
worth the risk. When 86% of the average gross premium is $9,500 per year per patient and
the fat portion of that is 15%, then the potential gross profit is $1,400. This kind of profit has
been made many times in the Medicare Advantage Plans. Half that amount is $700 and when
you raise capital selling 40% of your futures, then you could get six to ten times $280 per
patient because of the shared savings contract. At six times that would be $1,680 per patient.
Most IPAs could qualify about two-thirds of their patients for this kind of investment.
A Comparison
54. The idea behind this kind of capital infusion is to make each practice in the IPA capable of
employing the labor and technology required to achieve the savings. Their sacrifice is to
agree to let the IPA represent them exclusively in contracts with third-party payors. It is as if
they were professional football players and had gotten a signing bonus for agreeing to long
term contracts while playing the game to the best of their abilities, where those abilities were
well known to the owners. The professional football comparison is very interesting from a
financial perspective.
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Compare an NFL Franchise with a Local MSO Physician Team
NFL Local MSO
# of Players or Practices 53 53
Coaches 15 3
Administrative Staff 10 9
(In Millions)
Gross Revenue 600 800
Operating Income 250 265
Salaries, Bonuses, Overhead 150 120
Net Income 100 145
Market Value 1 Billion 1.45 Billion
When you compare numbers, it would seem investors would prefer a highly performing medical
group to an NFL franchise. There are certainly fewer barriers to entry with the medical group than
with the NFL franchise. Also, the selection of the medical group should probably be done using a
selection process as good as that used by the professional football teams. Pick the very best players
that can perform well as a team. Recruit them early and help them along as they are learning. Play
“Medicine-ball.”
Summary
Universal health care from Congress is unlikely
55. The politics involved in health care reform seem to be too contentious to get the kind of
program that would insure everyone and make any difference in health care outcomes.
PPACA is the law and it has survived the courts, so let us see how much it will help. It may
be changed but the problems it has tried to address will not disappear. The root causes of bad
health in America have more to do with public policy regarding agribusiness, oil,
industrialized food production, air quality, water quality, unemployment, pharmaceutical
plunder, and treating physicians as piece workers, than with the lack of access to health care
advice and treatment.
Reductions in cost are easy to find
56. Since health care costs are twice as much in this country as in other developed nations and
the outcomes are not as good, then any kind of fix must first start with removing that which
is not needed. If everyone were covered by the plan, then you would take away the sales and
marketing expenses, a 5% reduction. If the money for medical, hospital, drugs, and other
33
facilities were in one pool, then you would eliminate both the underwriting risk and the profit
taking from the health funds, a 10% reduction. If the claims processing were bid
competitively, then the cost from experience in self-insured large groups would be about
3.5% instead of the current rate of about 8.5%, another 5% reduction. Finally, if the
physicians and hospitals were organized into quality teams as has been suggested then the
way in which they could be compensated could be based on the types of problems they are
trying to solve for their patients, much like the hospitals are paid based on diagnosis. The
savings from converting the medical providers to a “quality first with matching compensation
model” would remove much of the waste in the current system by avoiding duplicate and
unnecessary services and procedures. Just these changes could fix our system, but they all
depend on universal coverage, and if not a single fund, then at least a regulated rate for the
medical, hospital, other facilities, and drug costs.
Grass roots organization of local cooperatives reduces cost
57. If you start at the grass roots with patient-physician cooperatives and IPAs and new clinics
and hospitals that fit the needs of the IPAs, you can make acute care and chronic care of
patients less expensive. If you control the enrollment of the patients in the Health Plans
through IPAs, you can squeeze the fat out of claims administration and accounting. If you
don’t do something about making food local, water and air pure, energy green and
employment full, then health care costs will continue to grow by treatment of diabetes, heart
disease, lung disease, kidney failure, war injuries, and all types of mental illness.
The $10,000,000 prize to fix health care is too small compared to the problem
58. There should be a prize for giving a straw man a brain, a lion courage, and a tin man a heart
instead of a clock. A $10,000,000 prize for fixing the health care system in the United States
in a competition is not enough. That is not even one’s month’s premium from Medicare for
10,000 patients who are going nowhere in the current system. If the goal of competition is to
cut the cost by 50% to make the final five, then you could do that on paper in one day by
dumping the profits, administrative and marketing loads, and the cheating that goes on with
coding and piece-work forms of compensation. You don’t need to see patients for three years
to prove you are number one if the standard is within the norms of health maintenance and
the personal disciplines of individual patients. This is really a political battle about how the
whole of society is going to become fair, moral, green and cooperative. The people at the
grass roots can get there. The people at the top of the current systems may have to find other
work.
Compromise gets the country started
59. Many people are too close to the pretend fights between capitalists and socialists to arrive at
a political solution for the health care delivery system and the unnatural causes of bad health
and poverty. If there are stakeholders in the game and there is a workable solution to
unnatural causes of bad health and the corrupting effects of the claims and medical records
reporting systems, then a compromise is possible:
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A. Separate the health fund pool that is used to pay health care providers from the third-
party claims-administration funds.
B. Let the private insurers bid on the administration of the plans and add their price to the
universal premium that makes up the health fund pool. The premium would be set by the
claims paid, but the rates would be age and sex related in ten-year brackets: (0-10, 11-20,
21-30, 31-40, 41-50, 51-60, 61-70, 71-80, 81+)
C. Patients could enroll through approved administrators with no underwriting risk and the
competition would be between the carriers based on their administrative charges.
D. The benefits would tract those of Medicare Advantage Plans and the Medicaid Plans for
the poor, and they would not be loaded with high deductibles and coinsurance which
creates a secondary market in extremely expensive supplemental insurance.
E. Pharmaceuticals would be subject to the same kind of price regulations as the physicians
and hospitals are now under.
F. All plans would pay into the universal health fund whether they are ERISA, Commercial,
Medicare or Medicaid. Claims would be paid by the administrators from the universal
fund.
Just do it
60. When the government doesn’t do this for the citizens, then they should gather to form
cooperatives, pick their own trustees and do it anyway because “Small is Beautiful.” Thank
G.K Chesterton and E.F. Schumacher for teaching us principles and economics they learned
from the teachings of Pope Pius XI and Pope Leo XIII.
Advocacy and The Cooperative
61. Improvements in our healthcare system stem from a broader understanding of the economic,
social, and environmental factors that determine health. We can change the system by
working in our own communities to identify and challenge policies that have profound
effects on individual health. For example, there is evidence that social determinants of health,
such as poverty, lack of education and school nutrition have a greater influence on health
than individual risk behaviors. Considering this, it may be possible with knowledgeable
leadership to eliminate some health risks altogether and to generally improve health care and
reduce its cost.
Patients and Physicians need to organize
62. Those people who know about the health care problems and the potential solutions need to add
their voices and labor to this cause. By organizing local Patient/Physician Cooperatives we can
identify ways that physicians and patients can become involved in influencing community
health policy. We can identify and describe the local economic, social, and environmental
determinants of health relevant to the area we want to develop. By organizing physicians and
patients around community health issues such as tobacco control, air pollution, food policy, or
advertising to children, we can become a voice for change and influence the public policies
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that influence health. By teaching health care to selected patients who live in the community
they will be enabled to organize their families, friends and neighbors to join cooperatives with
the support of both Eastern and Western trained physicians. The patients trained by these
physicians will make up a health committee that will:
A. Make the neighborhood secure so the physician and nurse can work freely and
comfortably in the area.
B. Accompany the physician or nurse on rounds to patient homes to show support and give
confidence to the provider and the patient.
C. Help collect and record all demographic and medical data.
D. Promote “comprehensive community medicine.”
E. Promote a culture of wellness.
F. Analyze data and identify major ailments in the patient population.
G. Help to fix the problems that are identified using the prescription of the primary care
physician.
H. Make the work real and the people involved accountable.
Teaching and measured learning
63. The teaching and evaluation activities precede any deliver and financing systems for health
care services. Once a primary care physician is in place and the community health worker
team has been trained and deployed the patient membership can be built in such a way that
the physician and the team know every patient on a first name basis and the medical
problems that these patients need help in solving. In that process the social determinants of
health care in the community will be well understood by the physician and the cooperative
members so that root causes of bad health can be systematically addressed.
Goals
64. Ultimately this development will allow the cooperatives to achieve goals and objectives not
possible in the traditional healthcare systems. These are those goals:
A. Put preventive care first.
B. Train health providers to promote comprehensive integration of family health care in
community life.
C. Increase the number of physicians per patient in the population until it is 1 for every 150
patients instead of 1 for 417 patients as it is now in the United States.
D. Reduce the cost of drugs by every means possible and introduce herbal medicines to
provide alternatives to patients that may not need patent medicines.
E. Place physicians in communities with the greatest needs.
F. Raise the awareness of public health issues to lower mortality and morbidity rates.
G. Have physicians live in the same service areas as their patients to learn first-hand the
sources of their illnesses.
H. Increase primary care and improve specialist skills by making primary care their starting
base.
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I. Start with “comprehensive general medicine” in neighborhood clinics and then form
“basic health teams.”
J. A team is a physician and a nurse and the volunteer health committee of ten patient
members (the physician trained community health workers) assisted by a specialist team
at the diagnostic clinics or specialty hospitals.
K. The local team serves 1,500 patients (about five 500 households). Specialty groups at
diagnostic clinics can serve patients from 20 of these teams.
L. The physician lives in the neighborhood he or she serves and is available 24/7.
M. The physician and the nurse treat patients both in the clinic and in the patient’s home.
N. These providers get all the vital medical information and record it in the Electronic
Medical Records system.
O. The health committee members and the providers teach preventive care to every patient
member.
P. Each specialty diagnostic center serves from 20,000 to 40,000 patients.
Q. Teams are thorough and attentive to each patient and know them all personally.
R. The patients that are hospitalized are accompanied to the hospital by his or her primary
care physician and the physician consults with the specialty team members that will care
for the patient while he or she is hospitalized.
S. Every specialist is also able to do primary care because they did that before becoming a
specialist.
T. Medicine in this setting is a science that is integrated with “real life” processes and is
aligned with the quantum physics now assumed to be the truth about our world and our
universe.
U. Identification of problems and interactive learning are used to increase cognitive
independence.
V. Epidemiology and Public Health are emphasized.
Continuous Process
65. This common-sense system and its goals cannot be defeated by adversity because it is a
continuous process of overcoming problems that are far more complex and closer to the
values of each person in the community than any general opposition that will arise because of
pride or greed.
Leadership and Support
66. Ultimately, we will build a system led by physicians as teachers and supported by patients
who know their health care providers and each other. The trustees of this system are within
the Cooperatives and the governments and businesses are sponsors that are supported by the
labors of the patients and the health care providers. Thus, Cooperatives will have contractors
like Medicare, Medicaid, Medicare Advantage, Employer Sponsored ERISA Trusts, and
individual insurance to serve the Patient Physician Cooperatives who are joined by
Accountable Care Organizations directed by physicians. These Cooperatives and ACOs will
then select, use and create facilities that are technologically advanced, safe and economical
enough to control costs. The result will be that they will not be last in health care and twice
as expensive, but first and correctly priced based on human values of health and life.
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Thirteen Declarations and Eight Propositions
67. I heartily accept the motto, — “That government is best which governs least;” and I should
like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to
this, which I also believe, — “That government is best which governs not at all;” and when
men are prepared for it, that will be the kind of government which they will have.
Government is at best but an expedient; but most governments are usually, and all
governments are sometimes, inexpedient.”—Thoreau, Civil Disobedience
We are still in that age when it is possible to dispense with the Nation-State and we should do it.
68. Further, we have little need for corporate identity nor representative rule. Elimination of
sociopaths among us by non-cooperation and elimination of the production of non-essential
goods and services will starve the beast about which Thoreau complains and under which we
still exist in an un-healthy condition. We must de-monetize as much as possible, localize and
cooperate with people near our homes. We must consume what we produce, produce what
we need, share what we know, and make no unreal substitutes for what we use and share.
You can't eat a virtual apple.
69. If we de-monetize then there will be less to render unto Caesar. It can't be traded and if it isn't
traded its worth is exposed. Fiat money isn’t, and art is. Violence is self-limiting and to last it
must be hidden and covered by lies. Peace abounds and gives rise to gifts and to abundance.
Work is what you do and those who force work upon others foster violence and have reached
the limits of their human expression and their being.
70. Government has not evolved since Thoreau explained it and disobedient of its laws which,
then and now, covet slavery. Big government has little meaning during an individual's life
nor in the life of a real community. Even the term anarchy has been twisted to label those
who do not embrace government or violence as the people who are violent and against good
order in the work they do. You give a dog a bad name so that you can kick it and feel
justified in front of your neighbors. So, in the past, after the time of Thoreau, those who were
labeled anarchists were jailed and killed so that those thinking they were rightly governed
could continue to pay their taxes and stratify their communities.
The thirteen declarations:
1. The individual person is made of the same stuff as in the whole universe.
2. Our conscientiousness is our identity.
3. Our cooperation is our livelihood.
4. Our rights are innate.
5. Our liberties are exposed, but when violated can be regained by non-cooperation and
by trade independence.
6. Communication need not be indirect and reliant on any mantle of authority.
7. Paper is a creature to be marked, painted and folded. It does not represent anything.
8. Gold is pavement.
9. Real exchanges emanate from private ownership, labor and mutual help.
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10. The representation of numbers in electronic displays has no meaning unless violently
imposed on individuals to control their labor and location.
11. That which “is” can be reformed and consumed but only so far as it is not hoarded or made
into poison.
12. Nothing done to sustain life needs the support of a non-working class.
13. Work requires no surplus that cannot be given back to restore natural capital to the earth from
which it came in an un-concentrated form.
The eight propositions:
1. Make what you need with other people cooperatively and share those things.
2. Let violence live alone.
3. Let the spirit be what it is and dance with it and be silent.
4. Reform what you have into what is beautiful and share it.
5. Don't trade the things you make and need for mere representations of real stuff, raw or refined.
6. Let the beast starve and let it try to survive on the electronic signals in the automatic clearing
house and on the paper in the vaults and the shiny metals in the locked boxes.
7. Live until the end and when the end comes laugh and become some of the elements in another
star.
8. Be patient because the transition from what has been experienced and what can be done better
is more than one lifetime.
Organization of the Physicians into Local Teams
71. In creating Local Independent Physician Associations (IPAs) it is imperative to find
physicians that other physicians trust and respect. They must be as intelligent, articulate, and
caring as the best teacher you ever knew. The primary goal of the team is to relieve suffering,
so the physician must be dedicated to that goal while having the attributes of a good teacher.
It is possible to find such physicians.
Honor knowledge and skill
72. Regardless of your experience and knowledge in the administration of IPAs or similar types
of organizations the job cannot be done without the help of physicians like those described.
Undervaluing the role of the physician is the road to the demise of the Local Physician Team.
However, this undervaluing of the physician’s role is the road most often taken by those in
power who want to organize a network of physicians to serve the budget of the Health Plan
and the pocketbooks of the key investors. Leadership based on top-down business models
often results in the failure of the health care system.
Our health care cost too much and it can be fixed
73. The clearest evidence of the failure of our current health care system is that it costs twice as
much as health care purchased in other developed countries. In the USA, most medical delivery
systems run by managers, hired nurses, and medical directors have as their un-avowed primary
goal the generation of money for elaborate business structures feeding corporate needs and
profits for capital investors. If, however, the main goal of an IPA is the alleviation of suffering,
(1) the persons in charge must have an in-depth knowledge of diagnosing and treating
39
sicknesses and injuries, (2) the managers must have a profound respect for peer relationships
and sound economics. [A lay organizer who is outside the medical team (the core of the IPA)
is a peer only in a nominal sense and will not necessarily have the respect of the medical group.]
Find your physician leaders
74. There have been great physician leaders directing IPAs over the last twenty years. Our
company has worked with many of them in managed care plans, in quality assurance
committees, and in the direct care of patients. There are still many such people available to
direct IPAs today. Find them in your groups.
Middle Management
75. Hierarchical structure in business is the usual operational model. In this model, leaders direct
and perform important roles. But that is not the practical model followed by most physicians
because they have small staffs and do not need middle managers. Consequently, when
physicians participate in a large organizational structure like an IPA they often overlook the
role of middle management and run their organization much like they run their practices; It is
often a struggle to build a practical structure around physician teams because it is counter-
intuitive to physician leaders.
Reform from the grassroots
76. Despite organizational difficulties, leaders of some IPAs have been able to reform the medical
delivery and finance system from the grassroots. Such leaders have been able to bring from
fifty to one hundred of their fellow physicians to form the IPAs, with 438 IPAs so far in the
United States. To win over the initial group, promoters followed-up with personal visits to each
of the physicians to explain the IPA, the plan for qualification, and the part of each doctor on
the medical team. It takes about six months to organize and about three years to produce an
operational team of providers. Pioneers in the formations of these teams remain convinced of
the pivotal nature of the physician leader’s role.
Truth and relief of suffering have built good teams
77. Past physician leaders that have spoken the truth and did their best to relieve the suffering of
everyone around them have built good teams. Sometimes they have incorrectly assumed that
the primary care physicians would be budget-watchers and gatekeepers in the use of specialty
and hospital services. They have also erred by assuming that the contracted specialists would
behave as a group in the care of patients. It has taken several years to finally realize that it is
not money that controls the costs or the quality of care—money is not even a real incentive in
patient care. The incentive seems to be pride and fear—pride in what physicians do and fear
that they will make mistakes. Therefore, the system for communicating what is
happening everyday with every patient that is referred to a hospital or to a diagnostic
facility is the controlling factor. The frequency of patient contact with the primary care
physicians and their management of chronic illnesses also has had dramatic impacts on
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outcomes and costs. When the primary care physicians see patients frequently and monitor
their care there are fewer crises and fewer hospitalizations.
Know everyone
78. Physician leaders must know all the team members, the roles they play, and how they practice
medicine. Furthermore, the team physician members must be reminded constantly that they
are in an IPA and not in a traditional practice. Some doctors are habituated to referring patients
to a very large circle of specialists—as many as fifty--whom they know from their contacts at
the hospitals and at medical gathering. This number is far too large for a team that serves a
small patient population. The reform of the present system must begin with a specific
population of patients served by a specific IPA. There can be as many IPAs as needed to serve
a whole community and patients can change teams periodically as needed, but open systems
and lone wolf physicians and patients will not contribute to any improvement in health care,
except to make it costly and less effective.
Limit team size
79. Some IPAs have been diligent in avoiding contracting with too many specialists and in
knowing that the team members must limit their referrals to team members only. Further, all
members of the IPA must get the point—they must take care of their patients as they would
take care of members of their own families.
Examples of organization of teams
80. There is an example of four physicians who put together IPAs with some ease. They all had a
clear idea of the nature of an IPA. Each recruited from 50 the 100 physicians in about sixty
days and then turned to the IPA management company to build the organization and get it into
the market.
Move patients to the contracted plans
81. What makes it possible to organize the IPA rapidly and what does it take to get business for
the IPA? If you want to slug it out with the big companies that control the health care funding,
including the government, you must have capital, and the IPA can’t scrimp on initial
investment monies. Most of the organizers have invested about $1 to $2 million in the
development of their IPA. Usually, the physicians own most of the interest in the business.
They recognize that there must be insured business for the IPA and there must be willingness
to move patients to the IPA’s contracted health plans.
ACOs
82. Medicare has entered this IPA arena and they assign patients to these IPA physician
organizations in ACO contracts. They contract to share savings with the IPA. They followed
the model of the Medicare Advantage Plans by sharing between 50% and 60% of the savings.
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The elements necessary for further development of successful IPAs are:
(1) physician leaders who are well-respected, articulate, and caring
(2) member physicians who put the patient first and treat her or him like “family”
(3) creation of the right-sized teams
(4) adequate capital for the operation
(5) patience
Contracts with The Medical Practices
How do the physicians organize their IPA and their medical teams?
83. The first step is having enough primary care physicians who are willing to influence their
patients to buy Health Plans that contract with the IPA they control.
Practice Size
84. A typical PCP practice has from 1500 to 2000 patients. (That patient load must be shared with
physician extenders who can attend to the health screening of well-people and the worried-
well people for the physician to have enough time to attend to acute and chronically ill
patients.) Over three years, it should be possible for a doctor to convince about 800 to 1,000
of his or her patients to move to the IPA contracted health plans. It is not possible, however,
for insurers to add new patients to his or her practice in such a way that it does not
simultaneously reduce the quality of care. The patient/physician relationship will be disrupted.
To get the enrollment numbers needed for the IPA to be profitable, the physicians need to
direct their patients to the IPA’s best contracted health plans. About 400 to 500 of potential
patients will be seniors who choose Medicare Advantage Plans (200-250) and Traditional
Medicare (200-250); The rest will choose commercial health plans through their employers or
associations. The IPA needs 30 Primary Care Practices to have a large enough population to
enlist the support of a specialist team and a local hospital.
Performance and budgets
85. If the current insurance system changes dramatically and IPAs, Medicare Advantage Plans,
and employer-based plans reduce payments, then the plans will still need to perform under
budget to earn “performance bonuses.” Care co-ordination, peer review, and quality assurance
must be done better than is being done and for less money. In a zero-sum-game it is a question
of who will get less, physicians or facilities?
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Specialty Types
86. The second step is to recruit two specialists in each of the following fifteen categories:
Cardiology Diagnostic Radiology Gastroenterology
General Surgery Hospitalist Nephrology
Neurology Ob/Gyn Orthopedic Surgery
Ophthalmology Otolaryngology Pediatrics
Podiatry Pulmonology Urology
87. Cardiovascular Surgery, Neurosurgery, Oncology and other sub-specialists are special teams
in themselves and are usually available in only a few tertiary hospitals. They form their own
teams and IPAs contract with them to be more effective in the of care critically ill and
chronically ill patients.
Referral Patterns
88. Part of this second step is in knowing the referral patterns of PCPs as they exist currently and
then changing those patterns to enable the group to operate as a team. Referral patterns are
chaotic in groups that are not purposefully organized to direct patients to specific specialists
and facilities in which these specialists are well practiced and supported. Disorder in the
existing system is apparent and it leads to higher cost and lower quality care.
Contracting between the IPA and physicians
89. The third step is contracting. Contracts between an IPA and a physician are long and written
in technical language. Over the years contracts have gotten longer because of new laws and
regulations governing commercial insurance, Medicare and Medicaid.
90. Some states have introduced a standardized “Physician Credentialing Application.” This has
helped by saving physicians the need to complete a different form for every insurer. The
standardized applications are about twenty pages long and require twelve additional
documents:
1. current resume, including work history (no gaps)
2. list of continuing medical education credits
3. copy of State Medical License
4. copy of current DEA certificate
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5. copy of current liability insurance face sheet
6. copy of current liability claims history
7. copy of medical board certification or eligibility
8. copy of medical school diploma
9. copy of residency certificate
10. copy of ECFME (if applicable)
11. copy of CLIA (if applicable)
12. completed and signed W-9 Form
91. Most physicians keep an electronic version of their completed standardized application and the
thirteen supporting documents on file so that they can easily respond to new contracts. This
process makes the job of IPAs much easier when they are required to verify each physician’s
credentials for the contracted insurers.
92. The cost to each insurance company or hospital to collect the information and to verify the
credentials is approximately $250 per year per physician. Sometimes insurers transfer this cost
to the physicians or to the IPA.
93. The contract between the Physician and the IPA can be made easier to read and credentialing
easier to complete.
Standardize the agreement in booklet and electronic forms
94. The full agreement, including the required attachments, can be put into booklet form and
distributed electronically in PDF format. It is the same for every member. The physician keeps
the booklet for his or her files and returns to the IPA only the signed declarations page, the
standardized application, and the thirteen supporting documents. This can also be done
electronically. Changes to the agreement with individual physicians never happen. If it were
otherwise, then the IPAs would be unable to easily get agreements with health plans.
Insurers enforce their financial goals
95. If a practice has a hundred or more patients from an insurance company, then that insurer will
expect to spend less than 80% of the premium for hospital and professional services. If more
is spent, the insurer will consider that practice a loss and will decide that either the patient
population is too sick, or the physician is the cause of the overuse of services. If a problem is
not solved in a few months, the insurer sometimes terminates the agreement with the practice.
The physician is afforded some protection from this action by the IPA, but if the situation is
the same with most of the IPA member physicians then the plan will terminate the IPA. The
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consequence of termination of a physician is the patient might not move to another new
provider and will drop the Plan. Or, if the problem is the physician, then moving the patients
to a new physician that has a “good” bottom line will accomplish even more for a profit-driven
insurer.
IPAs can avoid cancellations
96. IPAs that are completely independent from Health Plans and from hospitals stand the best
chance of avoiding cancellations. A reformed health care system must eliminate this insurance
company practice and perhaps can do this by judging the physician within his or her team based
on patient outcomes and not just the bottom line. Sometimes patient populations are unhealthy,
and the premium does not match the real costs. There is currently enough fat in the non-
professional portions of the Medicare Advantage Health Plans and Medicare to offset most of
the possible losses until real solutions are worked out. Under the new health care law, PPACA,
the plans must pay 80% to 85% for the medical and hospital services or rebate to the patients.
This means that the IPA should be able to increase provider reimbursement and performance
bonuses.
Organization of the Physicians within the IPA
97. Having made a roster of medical teams, IPA organizers could think that the IPA is in good
shape. However, they will not know the true condition until sick patients show up in the
utilization reports. It is only then that the physician and nurse reviewers discover who did or
did not do what was needed for the patients. The organizers may think they have picked the
right Hospitalists, but the hospital system may have put patients into the care of someone not
on the IPA team. Even if the IPA team has extensive experience controlling hospital
admissions, the team must develop enough activity to correct the admission errors that are
likely.
Do the work without interference that is driven by money
98. Teams from the past may do their work without interference from the hospital’s case managers,
who are often motivated to maximize the hospital’s revenue. The IPA’s Hospitalist should see
the patient to determine what is wrong before an admission. They absolutely must not admit a
patient to the hospital unless there is no other alternative because of the risk of disease and
injury in any hospital setting.
Hospitalists
99. IPA Hospitalists must have good relationships with the ER doctors. They must have their
consultants on the spot within hours, especially for Cardiology, Neurology, Gastroenterology,
and Orthopedics. The Hospitalists should not admit patients to ICU who will not survive; such
preemptive transfer places an unnecessary financial burden on the hospital when Hospice is
the viable alternative. They should continue to observe the patients to improve and update
diagnosis. When they do admit a patient, they should keep him or her until the problems are
resolved and hospitalization is no longer required. The Hospitalist should prefer a Skilled
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Nursing Facility (SNF), in most cases, instead of the Long-Term Acute Care facility (LTAC).
The Hospitalist must plan the discharge of the patients and get them back to their Primary Care
Physician as soon as possible. Team physicians cannot have a financial interest in a facility or
tool company they may use, especially the hospital, the SNF, or the LTAC.
Attention to detail
100. The key to the team having good outcomes is attention to detail and a profound respect for
team members who are helping the patient. The work is about mitigation of suffering in others.
It is not a performance seeking an award.
Proper motives
101. Some IPA teams have shown an extraordinary sense of responsibility in the care of their
patients. This is a primary characteristic of people who mean to relieve suffering. Remember
that the word patient means a person who suffers. Outside motivations in caring for patients,
like money and fame, are bad character traits. The physicians who are “all about the money”
or “all about recognition” should not be on any teams. They destroy the team and everyone on
the team knows it as soon as you try to include them.
A little advice
102. An insight into the right understanding of the practice of medicine has been written by Dr.
Nassir Ghaemi, MD, who said the following about himself and his peers:
“We doctors are not gods. Nor should we wish to be. The concept of medical godhead reflects a
mistaken notion of medicine, in my view; I call it Galenic, because it stems from the medical theory
of Galen, which has seeped into our profession and our culture after two millenniums of wide
acceptance. This is the view that nature causes disease, and that the doctor fights nature to cure
the disease. The doctor provides the cure: only a step is left to godhead.
The other view, long lost but deeply correct, I think, is the Hippocratic view of medicine: The idea
here is that nature heals disease, as well as causes it, and the role of the doctor is to help nature
in the healing process. The doctor is the not the central hero, but the handmaiden to nature. This
does not mean that cure does not occur, but it occurs less than we think, and nature deserves the
credit, not any human being. There is no room for doctor as god, and our purposes are more
humble: To cure sometimes, to heal often, to console always.
Medicine is a complex affair; we frequently do not do justice to what our patients suffer and what
they need. Pretending to know more than we do only makes matters worse. But being honest about
what we do not know is not a sign of weakness….”
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Becoming a team
103. The IPA can find physicians that understand the true nature of their practice and they can
become a team. It is to serve the needs of patients and to operate within a budget dictated by
government, businesses and patient associations.
Contracting with the Insurance Companies
104. Most major insurance companies contract directly with individual practices to provide
medical services for their policyholders. They have “Preferred Provider Plans,” or “HMO
Plans” and very few “open access indemnity plans.” They expect to spend 80% to 85% of
premiums on hospital and medical services, 10% on overhead, and 5% to 10% for their
shareholders or for dividends for their policyholders if they are a mutual company. Many times,
they fail to reach their budget goals, but in the last five years under the Medicare and Medicaid
Plans, many plans have been able to match the targeted percentages in each category. Under
the new law, they will have to reduce marketing and sales costs and profits to reach their 80%
to 85% medical loss ratios. Reducing or holding the line on payments to the health care
providers will not give them more profits but will lower the prices to the government and to
the patients.
105. Contracting with individual practices is the safe way for insurance companies to limit the
fees they will pay to physicians and to retain any of the surpluses they might accumulate. The
companies fix fees by using Medicare-approved rates as a basis, paying some percentage above
or below the Medicare rate. The range is from 80% of Medicare for diagnostic and surgical
specialties to as much as 130% of Medicare for primary care.
106. The large employer plans and the Medicare and Medicaid Plans cannot exclude individual
patient members but can limit coverage through higher deductibles and coinsurance. If these
deductibles and coinsurance amounts are high enough, they can transfer bad debt to the
practices too. However, insurance companies usually manage financial risk by terminating
physicians who have high risk patients or who are not taking part in the “utilization
management” program of the company.
Direct Contracts with insurance companies are not physician friendly
107. Having an individual contract between an insurance company and a medical practice is not
physician friendly. In fact, many physicians have overcome this obstacle for years by forming
associations to do the contracting. This practice has worked to the advantage of the physicians
in some cases but not in others. When an Association is very large and connected to a hospital
system, or inspired by a medical association, it looks very much like a union to the insurance
companies and to the Federal Trade Commission. Since “big insurance” influences
government, the “union-looking” Associations have had many days in court for de facto price
fixing. These Associations have usually lost in courts and been told that they must be “at risk”
with the insurance company; therefore, fees are not fixed but vary as utilization rises and falls.
Usually, large Associations do not operate well as teams. To work well they would have to be
broken up into in small groups that would exclude many of the member physicians from some
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plans. In large-group mode, the providers have their fees reduced, withholds retained, and
administrative costs increased.
What has worked
108. What works is a physician team serving a specific patient population that is no greater than
the team can manage at one or two hospitals. Some IPAs have decided that this is the kind of
organization they want and have made contracts with insurance companies that are fair to both
parties.
Temptation
109. There is a temptation for physician IPAs to want to be a capital stock insurance company
and “have it all.” This has been tried by some large group medical practices already, but
seldom, if ever, by an IPA. The capital requirements of operating even a modest HMO health
plan are astronomical. As an example, the IPA incorporating 40 PCPs, each of them having
250 Medicare Patients would have 10,000 Medicare Patients:
Average premium; $120,000,000 a year
Reserve required; $30,000,000
Development Cost; $2,000,000
Minimum Capital and Surplus; $2,000,000
110. This means that a group needs at least $34,000,000 to get into the game in a meaningful
way. Missing the target budget by more than 5% may impair the IPA and lead to asking
shareholders for a bailout or closing its doors.
A better strategy
111. A better strategy is for the well-organized medical team to contract to share the profits with
the insurance company. The insurance company should be well-capitalized and willing to
manage the IPA’s financial risk. Such an insurance company needs the IPA’s help to make
profits for their shareholders.
112. The costs mentioned are not peculiar to the health insurance business; they are typical of
other types of casualty insurance. The target margins for marketing, sales, administration and
profits are from 25% to 40% of the premiums. The contract must call for full disclosure of the
income and expenses in detail at every level. Individual physicians rarely get to see that detail;
thus, most associations of physicians, large and small, don’t get to look at the 15% to 20% that
is taken from the top of the premiums and called “administration and marketing expenses.”
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Enrollment of Patients
113. Much misinformation surrounds the enrollment of patients into Medical Advantage Plans,
(MAPs). Despite benefits for enrollment in MAPs being greater than those in Medicare or
supplementary insurance alone, the Center for Medicare and Medicaid Services (CMS)
restricts the time for enrollment in MAPs. CMS also scares both physicians and agents from
telling eligible patients about alternative plans. The open enrollment period is currently three
months less than allowed by past rules (exceptions: individuals just becoming eligible for
Medicare, those enrolling in CMS-rated five-star plans, those in special needs programs, and
those who are also eligible for Medicaid). Ninety percent (90%) of the eligible population has
only the “open enrollment” during which to change to MAPs.
114. The private insurance industry that sells prescription drug plans and Medicare supplement
plans is protected through non-exposure. Most MAPs are HMO’s that have the freedom to
choose any doctor or hospital that accepts Medicare within their restricted HMO-contracted
networks.
115. A way to expose the differences between the MAPs and the Medicare plus a Medicare
Supplement and PD Plans is to embed trained staff as patient advocates in the practices. Such
staff could be taught to read and to understand contracts between physicians and insurance
companies. The same staff could learn “right speech” and “right actions” in relationships
between physicians, insurance company representatives, and patients. They would also know
and be able to teach operators to use Electronic Medical Record, Medical Billing and
Appointment, and Internet Communications Systems.
116. Finally, that same staff member could also learn the IPA Plan from Medicare, the Medicare
Advantage Plans, and the Commercial Insurance Plans to connect patients to the licensed
representatives of selected companies that the physician wants to have under contract. Then,
this carefully-selected, fully-trained individual could become the consultant—a
Patient/Physician Advocate—for several physician’s offices. He or she would spend one day
a week in each physician’s office handling all contracts with insurance companies, all contacts
with their provider relations and sales representatives, and all training for the EMR, Medical
Billing, and Internet Communications system. Each physician would commit to paying a
portion of the consultant’s salary per month, but whatever the consultant earned from the IPA
administrative fees would be credited against the guaranteed payment. If physicians were truly
committed to having patients in the contracted plans, the cost to the physician for the consultant
would be zero dollars.
117. Such a system could yield 250 patient enrollments per year per physician, or 1,250
enrollments linked to the consultant’s services and influence. It also has the advantage of
leading to a better plan for patient care. The assumption here is that the Patient/Physician
Advocate will help the physician to contract with the best plans for both the physician and his
or her patients.
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No expectations of Congress or the Administration
118. I have no expectation that the present and future Congresses and Administrations will do
much to change the way people are insured or not insured. Payments for medical services under
Medicare or Medicare Advantage Plans will not increase more than the rate of inflation.
Congress is paralyzed by its relationship to big financial institutions whether they are failures
or successes. The game is to protect the activities that make money and transfer the losses to
the government.
The agency system
119. Patients and physicians need to enroll into managed care plans if the health care delivery
system is to work. The agency system used to enroll patients into managed care plans has not
worked very well. Sales agents who are not known to the patients nor to the physicians sell a
host of different policies to people they contact through every way they can imagine.
Sometimes, the companies they represent send them lead cards gotten through advertising.
120. Regardless of the way contacts are made, the productivity is on the average, very low;
About one sale a day for those agents who make a living selling insurance. This is bad news
for the health care system because the patients and the agents must discover whether the
patient’s physician is with a plan that has the best benefits for the patient and the best
commission for the agent and is available when the parties meet. The probability of that
happening is very low, so sales aren’t made, and patients get plans that have the best
commissions but must change doctors. Alternatively, patients end up getting enrolled in bad
plans because that is where their doctor has a contract.
121. As expected, these agents must have a license, professional liability insurance, appointment
with each company they represent, and must complete continuing education classes each year.
Yet, if they sell Medicare Advantage Plans, they must take added examinations, must be
retrained on each plan each year. They may not contact potential enrollees through door to
door sales, nor by mass calling, nor by means that is not a direct referral from someone both
parties know. They can respond to written requests from the potential enrollees who attend an
advertised meeting or from literature displayed in the physician’s office. Physicians are
prohibited from selling the Plans in their offices and from sharing patient information with
either the companies or the agents. However, physicians can tell patients they have contracted
with an MA plan as well as how to reach an agent. Additionally, the practitioner can get
permission from that patient to have the agent contact them by phone. Physicians have little or
no motivation to help in marketing in any way.
122. Since agents can sell all other types of insurance, including Medicare Supplements and PD
Plans without this long list of contact rules, it is easy to see why productivity is low for the
Medicare Advantage product. There are thousands of agents in every city, yet not many are
willing to go through extra nonsense to get a better deal for seniors and their physicians. So, I
think that the usual agency system is not the best way to enroll people in Medicare Advantage
Plans or any kind of reformed health care system. The embedded Patient-Physician Advocate
is a better solution to the problem if the managed care system is to be used effectively.
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PPACA’s different approach to enrollments
123. The PPACA has taken a different approach to the enrollments. The regulators reached out
to all agents and almost anyone who will go through a day of training to get as many people
enrolled as possible. Suddenly, it is no longer important that agents be educated, trained and
retrained as in Medicare Advantage. In fact, they don’t even have to be licensed agents, just
warm bodies who can say; “… please, sign here, there’s a subsidy. It’s almost free. You won’t
be fined. Oh, if you are wrong about your subsidy, you won’t be fined until later.”
Employer driven systems
124. All of this is a problem because it is an employer driven and mismanaged non-health care
system that a large percentage of the people cannot use even if they wanted to use it. All that
ever happens when I think about this mess is the Ricky Nelson song lyric plays in my head
over and again; “You can’t please everyone you just have to please yourself.” Consequently,
solutions are limited to natural networks of providers and voluntary associations of patients.
Medicare Advantage
125. When Medicare Advantage Plans began, some physicians told their patients they were not
going to take Medicare. If the patient wanted to continue to be seen, he or she had to join a
Medicare Advantage Plan that contracted with the practice. (Kelsey-Seybold Clinic in Houston
formed their own HMO MA-PD Plan in 2008 and they use this tactic now.) It was and still is
a very effective enrollment method. Often, the HMO does not use agents, but enrolls patients
using salaried staff.
126. When the numbers of physicians were few, and there was a risk-sharing agreement between
the plan and the physician, the programs worked okay. As the ambitions of the Health Plans
and the physicians grew, the numbers of physicians listed for the plans became huge and the
costs grew both administratively and medically. The bigger the network the looser the controls
on administrative, hospital and diagnostic costs.
127. The plans tried to solve this utilization control problem by more automation and more
detailed reporting of encounters between patients and medical and hospital providers. The
doctors that moved their patients wholesale into a plan found that instead of making a profit
they were paying the Health Plan for hospital and specialist costs beyond any network or
facility they personally would have approved. All of this was before the 2003 rate increases
and the change in reimbursement based on morbidity, but the experience among physicians
was widespread and negative. Now, it is almost impossible to get one of those physicians to
move his or her patients to a plan and take the risk of paying for the care.
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Tuning Medicare Advantage
128. Both CMS payment amounts and risk bearing agreements have changed. Risk has been
spread among more physicians, financed by the Health Plans and budgeted over longer time
frames with stronger reserves set aside for potentially large claims. Also, risk taking is not
done unless there is a whole team of physicians working for a patient population and the
patient’s services can be kept within the team.
129. The intention is about caring for patients. This requires resources that match tasks. People
should avoid needless help in the delivery of health care, in the enrollment of patients, and in
the use of equipment and facilities. It is communication from a trained staff to physicians and
their patients that sets up the member enrollments.
Home visits with each of the patients
130. Suppose patients enroll in plans that are economical and beneficial for both the patients
and the physicians. Further suppose that the people in your organization get to know patients
well and really want to relieve suffering and stress. You can’t get to this idyllic relationship
solely through mail or phone. You can’t sit quietly at your computer and crank out memos to
members with full-color pamphlets that have generalizations about the most common chronic
diseases. The most likely scenario for developing a good doctor/patient/staff rapport will be
through a comprehensive physical exam—after which the patient can get the advice and care
they seek. For the 20% of the population who don’t go to the doctor, the in-office visit is “not
the best medicine.” The office visit does not relieve suffering and stress to the same extent as
does a home visit.
A positive experience with home health care
131. A home visit by a nurse did not seem very important until our company contracted with
XLHealth for our IPAs in Texas. XLHealth was a special needs program that was assigned
15,000 Medicare patients who had one or more of the following chronic diseases: diabetes,
COPD, heart disease, or end stage renal disease. Their program was designed to see if frequent
contact with such patients and close attention to their care and instructions would make a
difference in the cost of their care and medical outcomes. Since CMS changed the way Plans
were reimbursed to a morbidity model, XLHealth decided to form an HMO called “Care
Improvement Plus,” and to become a Special Needs Medicare Advantage Plan. They
contracted with our IPAs for physician services, and in October of 2006 they began contracting
with agents to enroll patients into their new plan.
132. XLHealth had a list of 15,000 patients from their pilot project to convert to their Medicare
Advantage Plan. I had the opportunity to go with three agents on sixty of these patient
conversion visits. The patients were very happy to see a nurse in their homes several times
during the prior year, and they still had continued to go to their doctors’ offices routinely for
examinations and treatments. The agents signed up more people for the new Special Needs
Plan than were on the list of XLHealth. The spouse or other family members would also join
as soon as they realized they could get the same care as their family member had been getting
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under the pilot program. The nurse’s home visit and the attention of the company to the
patient’s problem was more important to them than their relationship with their primary care
doctors. Patients were willing to join the program even if their specific doctors were not listed
in the directory of the Plan.
133. XLHealth was so confident of their own medical delivery system that they did not pay
much attention to which doctor the patient consulted. They still have an open panel approach
to their delivery system, but they have now outgrown their ability to see every patient at home
several times a year. They are becoming an insurance company instead of a medical care
provider. However, the start for them showed that personal contact with the patient in the home
does something positive that no other kind of contact can do. Relieving suffering, stress, and
loneliness seems to help people to get well.
A summary of the Nurse Home Visit Program:
I. Goals
a. Get in front of the hospitalizations with every patient
b. Determine who is at risk
c. What the risk is
d. What the PCP and consultants have done so far
e. What the PCPs and consultants want to do
f. How the company can use its medical and administrative capacities to assist the PCPs
and consultants
g. Contact every patient in the home to get baseline information about her own health and
family support systems and do a comprehensive physical examination.
h. Get the information gathered back to the PCPs, Consultants, and Health Plan in a pure
form with as much relevant medical data and professional analysis as possible to assure
that all coding of medical history is completed and up to date. The completed medical
record and encounter data is sent electronically to the Health Plan, the PCP, and
consultants. Anyone unable to receive the data electronically will get it in a standard printed
format.
i. Connect the PCP’s staff to this project for positive feedback and support.
j Eliminate the social and economic barriers that are discovered that may negatively impact
health outcomes.
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II. Structure and Process
a. Use the Nurse as a field contact with both patients and PCPs and Consultants.
b. Support the Nurse with the Medical Director in the field and in the Clinic office to get
expert guidance on the patient care and the proper analysis of the data gathered from
patients and physicians.
Our company has only used NPs in this program while other programs (like the one done by
XLHealth) have employed both RNs and LVNs in home visits. In our case, the Health Plans
wanted a higher level of care and wanted to be able to use the diagnostic information gathered by
the NPs in their reports.
Delivery of Health Care Services
134. In the countries where access to medical and hospital services is easy, the population is
healthier and lives longer. Since America is not yet among those countries in which patients
have easy access to health care, we rank low in the first world in health and longevity. That is
a bitter pill for a proud people. However, these statistics include the whole population—not
only those who are fully insured. Physicians may or may not be willing to serve people who
are uninsured; in fact, they are often not willing to serve people who are insured by Medicaid.
This problem seems to stem from class prejudice, but it may also derive from difficulties in
verifying eligibility or receiving payment for services. Of the 520 physicians in our IPAs, about
350 are willing to accept Medicaid contracts; far fewer will take the uninsured on any terms
other than cash for full billed charges. Some physicians are always open to everyone regardless
of the ability to pay. Frequently, patients who can’t pay are difficult to serve and physicians
get discouraged.
Patient relationships
135. The problem in the delivery of health care services for a new organization is the
establishment of relationships between the physicians on newly formed teams and the patients’
desire to seek care and advice from the professional team members. Relationship-building
begins with the home visit program because it gives the patient a sense of trust in people and
specific directions about physician contacts. The patients over age 65 should see the physician
an average of five times a year. Younger patients need to be seen fewer times. These statistics
are based on current practices in Europe, Japan, and the United States.
First, do no harm
136. In seeking medical care, there is some risk that patients will be hurt rather than helped.
That risk is greater if the patient receives invasive procedures or is hospitalized. The statistics
on this are appalling and reporting of them is avoided as much as possible in the press.
However, physicians and medical researchers have reported it in detail. It was even reported
in USA Today in October of 2011. Gary Null, Ph.D., Carolyn Dean, M.D. N.D., Martin
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Feldman, M.D., Debora Rasio, M.D., and Dorothy Smith, Ph.D. had this to say in an essay
about the American medical system:
A definitive review and close reading of medical peer-review journals and
Government health statistics shows that American medicine frequently
causes more harm than good. The number of people having in-hospital
adverse drug reactions (ADR) to prescribed Medicine is 2.2 million.
Dr. Richard Besser, of the CDC, in 1995 said the number of unnecessary antibiotics
prescribed annually for viral infections was 20 million.
Dr. Besser, in 2003, now refers to tens of millions of unnecessary antibiotics.
The number of unnecessary medical and surgical procedures performed
annually is 7.5 million. The number of people exposed to unnecessary
hospitalization annually is 8.9 million. The total number of iatrogenic
[induced inadvertently by a physician or surgeon or by medical
treatment or diagnostic procedures] deaths are 783,936.
The 2001 heart disease annual death rate is 699,697; the annual cancer
Death rate is 553,251. It is evident that the American system is the
leading cause of death and injury in the United States.
Historic cooperatives
137. Several model health care delivery systems have been developed in the United States and
they have inspired laws such as the HMO Act in 1973 (PL93-222) and the current PPACA
which everyone loves to call “Obamacare.” The largest of these models is the Kaiser-
Permanente (KP) that now serves 10.1 million members. It is a non-profit organization in
which Kaiser is the health plan and Permanente are multi-specialty physician medical groups
for the delivery of care. They have five-star ratings in both senior and commercial health plans.
They are prepaid by their clients for the health care of the beneficiaries and the cost is well
below the national average and the quality of care is superior to their competitors.
KP reported in their annual statement:
KP by the numbers in 2013
$53.1 billion operating revenue
$1.8 billion operating income
$2.7 billion net income
9.1 million members
174,415 employees
17,425 physicians
48,285 nurses
38 hospitals
608 medical offices and other facilities
93,675 babies delivered
4.4 million members using My Health Manager
34.4 million lab test results viewed online
14.7 million secure emails sent
3.6 million online requests for appointments
455,512 Kaiser Permanente mobile app downloads 14.8 million online prescription refills
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36.5 million doctor office visits
221,660 inpatient surgeries
962,852 mammograms
1.7 million colorectal cancer screenings
Community Investments
Approximately $1.9 billion invested in our community
$175.4 million in grants and donations
$49.8 million to safety-net clinics, hospitals and health departments
$29.6 million invested in medical research development
558,461 children and adults enrolled in care and coverage programs
4,184 studies undertaken by Kaiser Permanente
1,169 articles published in peer-reviewed journals
970,994 people reached by Educational Theatre Program
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Results of KP
138. When KP results are compared with the performance reported by Medicare and
Commercial Insurance KP is far better. Their charges per person per year averaged $5,835
when the average in the U.S. was $9,100. KP also gave back $209 of their premiums to improve
the community health programs. Their system has not reached the lower levels of expenses
reported from other countries but is it so far ahead of every other plan in this county that it can
be a proper model.
Reporting Health Care Encounters
139. Reporting health care encounters might seem to infringe on a patient’s liberty; however,
there are others who regard such cooperation as necessary to proper treatment of patients. For
example, such detailed record-keeping enabled Dr. Paul Farmer in Haiti to help relieve the
suffering of others. The run-of-the-mill practice of encounter reporting required to be paid by
the insurance company can be corrupting. A doctor cannot codify diagnosis and treatments
without reducing the information discovered even if the ICDA10 codes are used. Further,
reports made based on payment can be tainted by greed or sloth. In sum, records can be
unwittingly corrupted, and the greater the number of these reports, the more corrupt the
collection becomes. A simple test is to ask a doctor who needs to see the medical records of a
patient if the encounter reports submitted to the insurance companies for claims will do. He or
she will most likely just laugh at the question.
140. Disconnect compensation from reporting, as in Dr. Farmer’s case, and you could get
valuable information to an epidemiologist. That is exactly what must be done in an IPA—real
medical records recorded in a real medical records system. While codification makes the record
easier to sort and compare, it does not improve it. Since most of the new electronic medical
records and billing systems enable the physician to know exactly which diagnosis and
procedure codes will be paid by the insurers at the highest rates, the physician can use a pick
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list to improve presentation of the patient’s problems and the coded services. Such a system
tends to corruption.
141. There are thousands of medical records systems, and so far, only hospitals and large group
practices have been able to make sharing and maintenance of records somewhat useful and
practical. This move forward has been very slow and done at great expense. It is unlikely that
IPAs—unless rebuilt on a group practice model—will be able to harness the beast.
Nevertheless, they should make the attempt.
142. Lately, there has been a push to Open Source Systems that include Open EMR and Libre
EMR. Open EMR is a robust system that was certified in 2011 and again in 2015. It is free
only in the sense that a person does not pay a proprietor a license fee to use it. However, you
must learn it, and most of us must pay someone to install, support it, and train other people to
use it. The hope of the thousands of doctors and geeks who use such a system is that it will
become a standard—like Linux. If it does, then our physicians in the IPA might be well-served.
143. Because the record-keeping side of medicine is understood and managed dynamically, it is
difficult to convert people to a wholly computerized system. Our physician organizations have
had computerized record-keeping systems since the late 1960’s, and the only thing that has
lasted over that fifty-year period has been the printed copies of the records—and not even all
of them. At the level of operation of a physician’s office, the maintenance and storage of the
medical records electronically is very risky. Natural catastrophes happen frequently, and they
do damage to machine support systems. Just being without electricity for a week suspends
these systems and you are left with hand recorded paper records. Even the NSA is not able to
keep its system up all the time. The saving grace in medicine is that the human body is a record
of its health and a physician can recreate a copy of that record for a patient by physical
examination and questioning. Sometimes what has been recorded in the past is not so helpful
and not as important as people think.
Payment systems drive the need for automation
144. It is not the medical record per se that drives the perceived need for automation. It is the
third-party payer system that drives it. There are no physicians or patients who would not
survive a complete melt down of the electronic records - medical or claims. But there are no
insurers that can make cost predictions and policy determinations without a claims database
supported by medical records. This would be true even if the data collected was not true, which
is the case in all the current claims databases, and the records were either up-coded or down-
coded. Corrupt or not it is tied to the money and the budget and the policies, so, for the sake of
the insurers, they think it must not melt down. A reformed health care system would dump all
past histories from those corrupted databases and start clean and not connect the medical
records to payments.
145. A strong desire to see “the world as it is” should keep the IPA and its members from
becoming delusional and following the instinctual path of regarding encounter reports as a bit
of a joke. Some physicians have picked a few codes and a few basic charges and that is all they
report. To them it is an uncomplicated way to report claims and get paid. About ten years ago
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Medicare decided to pay the Health Plans based on the morbidity of their patients. To establish
morbidity, one must report all the diagnosis and procedures done and re-establish diagnosis
every year.
146. At first, it seemed that CMS had a perverse sense of humor. It must have known that a large
percentage of the physicians would not go to so much trouble in reporting their claims to the
Health Plans and other insurers. I assume someone thought the reimbursements would fall
because of lack of reporting. Eventually the joke was on CMS because the Health Plans and
the physicians went to school about this, and the reporting became more robust than the real
lives of their patients. As mentioned in an earlier example, physicians will buy computer
software systems that make up-coding much easier and harder to detect. It took about a year
for that to happen in our community. HCC coding raised the profits about 30% for the dominate
health plans.
147. There may be a point in time when medical records are recorded perfectly and stored
electronically to be shared quickly with all the providers needed to attend a patient. However,
providers must be able to report exactly what is discovered in the encounter with the patient.
There can be no understatement or overstatement. It must be done in a timely manner and
through the channels available for those communications. Using EMRs and electronic claims
transmissions will make it easier to report the findings.
Advance payment is better
148. However, payments based on the posting of medical records and codification of the
services is too complex to be practical. A better payment method for medical and surgical care
is to pay in advance of the care and treatment. The worst way to pay for it is by claims which
are made based on assignment of benefits to providers from patients to their insurers. That is
not to say that insurance is not useful to a patient, but like other kinds of insurance it works
best as a reimbursement or indemnity claimed by the patient after the patient has proven the
cost of the claim. The reason it cannot be used as currency is because the contracts between
the insurer and the patients vary greatly and there is no way for the service provider to
determine the value of any policy in cases at any given time.
149. If the payment in advance took the form of a retainer agreement between the patient and
his or her medical care provider, then the cost of providing the care would drop dramatically
and the complexity of the financial transactions would be eliminated. The notion that insurance
is a prerequisite to getting and paying for health care is horse manure. The only reason that
people hold such opinions about the relationship between insurance and access to health care
is that they have not examined the nature of the financial transactions involved.
150. First, consider what has been done in setting prices for health care. We can use Medicare
as an example even though the Resource Based Relative Value System (RBRVS) they use to
determine prices has been adopted universally with only a variation in the fees, lower and
higher. The core problem with the RBRVS is that the fee schedules generated from it are
expressed in over 20,000 codes, which makes it impossible for a patient to know how much
his or her medical or surgical care will cost. It is as if you went to a restaurant and they had no
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prices on the menu and the menu was three inches thick and you would not be able to settle
your bill until it was examined by an outside accounting firm sometime in the next 120 days.
Further, without your knowing it the final bill for the meal included food delivery charges, a
portion of the electric bill of the restaurant, and the waste management company’s separation
and safe disposal of your leftovers and napkins.
151. If you are not screaming yet, it is because you have not really been sick or hurt and had to
deal with the current system. All patients want is care and treatment and to know what it will
cost and when to pay for it. All doctors want is to take care of the patients and be paid for it.
So, here is the proper answer: Simplify the pricing so that transactions can be closed before
the services are rendered. It is a piece of cake. We know what doctors and hospitals earn now
from patients they have been seeing. Oddly, there is very little variation between similar
practices in the revenue they produce and the numbers of patient encounters and procedures
they do. As an example, primary care practices produce between $400,000 and $600,000 in
annual collected income from all sources. If the PCP sees a patient every 20 minutes for eight
hours a day for 240 days a year, he or she would have 6,000 encounters and serve a population
of 1,500 patients. The current average collected fee per encounter is $85. If 200 of the
encounters are procedures and 5800 are exams, then a gross revenue of $540,000 would result
from $493,000 collected for exams and $47,000 from procedures. Each procedure would then
average $235. So, the PCP could charge patients $85 per encounter and $235 for any procedure
and both the doctor and the patient would know in advance exactly how much it cost. They
could go one step further and make a retainer agreement to pay the doctor $30 a month and not
even worry about billing. Do the math: $30 times 1,500 patients times 12 equals $540,000, the
amount the doctor expected to earn and the amount the patient knew had to be paid. Suddenly,
you realize that many people are removed from the claims verification and processing services
and from the nightmare of insurance reconciliation accounting. The practice will find that
overhead drops $100,000.
152. This system of price setting for services and direct collection from patients is applicable to
surgical and diagnostic specialties as well as it is for PCPs. Most surgeons have about 400
procedures per year and 3,600 encounters. If their exams average $85 then their procedures
would average $1,072 for a gross income of $700,000. That is the level of income for most
surgeons. They could have a two-price system and advance payment too.
153. This system does not stop the patients from using insurance for reimbursement, but the
practices must give the patients a standard claim form to file for their reimbursements.
Production of this would be a minor expense and a by-product maintaining the medical records.
What about the poor?
154. Ah, but what about the poor? They need money. Their friends and family, the community
and the government must give it to them. It’s called moral responsibility. We should not make
giving money to the poor to pay for health care into a maze followed by a gauntlet. Neither
should we say that we must be assured the poor are deserving of help beyond the fact of their
poverty. As family, friends, community and government we cannot de-facto require charity of
only one segment of our society. “Ask not for whom the bell tolls, it tolls for thee.”
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Reports to the IPA from the Insurance Companies
155. Enrollment and claims data are about the only information the insurance companies report
to the IPAs. Financial data that shows the details of administrative costs are usually only
available in the reports to the state and it is general rather than specific to the IPA. In the IPA
reports administrative and marketing costs are assumed to be 15% to 20%. There may be equity
in that assumed percentage. When compared with the public reports our company found that
about 1/3 of the assumed cost (5% to 7%) was equity. Sometimes the insurance companies will
form a separate claims and administrative company and the equity in the assumed
administrative charge will disappear into that black hole.
156. There are some advocates of the single payer system that say the administrative load should
be about 3% to 5%, but in those instances, they are only focused on the claims processing and
accounting services. The cost of enrollments, medical utilization management and
administration of the medical groups and investor profits are not included and are assumed to
be unnecessary. Those are real elements in the whole health care system, and I think their cost
may add another 3% to 5% to the costs, ignoring profits in the private systems. If it is a public
system, they could automatically enroll everyone and avoid the marketing and sales costs
altogether, but it is likely they will have some complex enrollment system like they do for
Medicaid.
157. Communications about hospital and emergency room encounters are kept in note files at
the Utilization Review Department level and are shared daily with the IPA. Companies that do
not do this are not depending on the IPA’s Hospitalists and Medical Director to control costs.
Consequently, they usually don’t control costs but depend on the nurse communications
between their staff and the hospital’s case managers.
The details
158. The reports that are produced by the companies show the (1) enrollments, (2) premium
income, (3) assumed administrative expenses, (4) incurred but not reported claims (declining
percentage based on the age of the enrollments), (5) hospital claims, (6) other facilities claims,
(7) professional claims, (8) capitation for other medical services such as mental health, dental
and vision, pharmacy claims, and transportation. These reports can be sorted from the level of
the individual patient to the primary care provider, to the local IPA, to the regional IPA, to the
company. You can also sort the data by diagnosis, procedure, and location. These sort options
allow you to see what variations there are in the practices of the individual providers.
Physicians who code more elaborately and those who code moderately stand out from the mean
average. The prevalence of certain diseases becomes apparent.
159. Despite comments previously about the corruption of the underlying data because it is
driven by billing and collections it is still interesting from a financial perspective. No physician
would depend on the data in these reports to treat a patient. The patient and his or her real
medical record would be needed to make valid judgments about a medical problem. But, in
general, the medical conditions and their costs which are derived from these database sorts
point the Medical Directors to the physicians and patients they should question. Of course, the
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more accurate the claims reporting when compared to the medical record, the better the system
will work.
160. If the companies give the raw claims data to the IPA in a flat file, then other kinds of reports
can be produced which further define what is happening between the physicians and patients.
An example would be a report that showed how many unique patients were seen by each
physician both in the IPA and outside of it and how many times they were seen and how much
money was paid per patient and per encounter. That kind of information is important in the
distribution of performance bonuses. It causes you to distribute the surplus money based on
labor rather than just ownership.
161. There is sometimes an assumption that the IPA organizers, Medical Directors and
Hospitalists have more to do with the creation of surpluses than the care given through routine
encounters with patients. It is not true. The more you report from the raw data, the more
democratic the organization looks. Routine work by PCPs is about equal to the specialist’s
contributions to surpluses in the acute encounters they have with patients.
Performance Bonuses
162. “A performance bonus” is Orwellian for, “The workers should have some of the profits,
but selectively, of course, so that they do not attack the established order.” The fight between
the payers and the IPAs is about who will make the distribution decisions. IPAs can win that
fight but must prove that they will not violate CMS’s or Insurer’s rules about “performance
bonuses.”
Capitalist republican democracy
163. Naturally, in what is assumed to be a capitalist republican democracy, everyone concedes
that the investors get “first-count.” Investors often use borrowed money to create IPAs and
must pay it back at usurious rates of interest. Their share is not a “performance bonus,” but a
return on investment. Those selected for bonuses are the providers of care, usually Primary
Care Physicians and some key Specialty Groups. The general rule from CMS is that the bonus
should not exceed 1/3 of their compensation during the year. Further, bonuses should be tied
to some preventive measures that are thought to be useful in maintaining good health, such as:
annual physical examinations, cancer screening, flu shots, prescriptions that control blood
pressure, cholesterol levels, heart disease, diabetes, and glaucoma. It is possible to glean this
information from the claims database and use the report to support your distribution of bonuses
to the selected providers of care.
164. Medical Groups, by necessity in this culture, operate within an economic system that
requires capital to function at the most basic level. Certain members of the group and their
managers invest that needed capital. In most cases, the investments come from borrowed
money or from savings and, over time, have an interest cost as well as a requirement to pay
back the principle. Our IPAs, which are a network of three local groups, have invested
$2,000,000 in capital during their development phases. Our company had to organize the
individual practices into teams, contract with insurance companies for enrollment of patients,
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and establish our general administration, legal and accounting services. Debt service and
restoration of the capital cost of our owners and managers is $15,000 per month and the only
source of repayment is from the bonuses paid by our contracted insurers. Our company has
received as much as $4,000,000 per year in bonuses on a population of 6,000 patients so that
restoration of capital and distribution of incentive money to member providers was easy. IPAs
in many cases have similar levels of attributed patients but getting Shared Savings from the
CMS programs has been impossible for 80% of the IPAs and slow to collect for the other 20%.
It is not like the Medicare Advantage plans that pay a global capitation which includes
administrative fees. It is more like a rigged roulette wheel guarded by the casino’s police.
165. Consequently, the IPA cannot afford to depend only on attributed patients from CMS to
survive financially. So, many who did rely on just the Shared Savings bonus quit when they
did not receive it and ran out of capital.
The right solution
166. The right solution for an IPA is to use the IPA program as stimulus to influence patients to
be part of better programs in which health care is first, but in which the financial arrangements
are acceptable to both the provider and the patient. The IPA becomes the contracting agency
for the practices for the health plans their patients use. The practice and their total patient
population becomes a bargaining group to create a system in which health care is first, is paid
for fairly, there are no wasted services or supplies and the third-party administration is minimal
and cheap.
167. This is the Gathering we spoke of in the first part of this book. The capital requirement still
exists but it is helped by the patient contributions and is not governed by the investors who
may not participants in the delivery system and will still be part of the six ideas form the 19th
century.
Rate setting
168. The amount paid for medical services is dictated by the rates set by CMS whether paid fee-
for-service or capitation. Capitation is just a derivative of fee-for-service experience that is
adjusted at the annual budget cycle. The medical group usually agrees to capitation if the
amount paid is slightly more than they would have received on a fee-for-service basis. The
CMS rate is not viewed as adequate compared to commercial insurer’s reimbursement rates
and direct payments from patients, so the bonus system is a needed participation incentive. It
is probably not an incentive for patient care or coordination of that care, but it is necessary,
unless you change to a non-profit public system in which the government pays fairly and has
popular support, whatever that means.
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Better outcomes
169. Special attention to hospitalizations, preventive care by the PCPs, and treatment of chronic
medical conditions are the activities that result in better outcomes and lower costs. Physicians
do these things if they are working together as a team and have the information about the
patients in a timely manner, usually without any idea about the bonus money.
170. Since the budget established by CMS in their prescribed rate structure was built on an
uncoordinated system of care, a coordinated system of care results in lower costs and better
outcomes. The savings creates a surplus from which the Health Plan can pay bonuses. The
budget most often used by the Health Plan is to assign 85% of the premiums to the Hospital,
Pharmacy, and Medical Pools. Based on audited reports, the 15% assigned to the Health Plan
has about one-third surplus. The 85% hospital, pharmacy and professional pool portion may
have a surplus that can be used to fund bonuses for the provider groups.
Distribution after final accounting
%
Health Plan Administration and Marketing (includes equity) 15
Hospital, Pharmacy, and Medical Professional Pools 85
Expected Pool Expenses
Hospital 40
Pharmacy 5
Medical Professional 30
Potential Surplus 10
Division of the Surplus
Withhold for reserves 5
IBNR 5
Plan profits 15
IPA Management 10
Capital restoration for IPA 20
Specialists 20
Hospitalists 5
PCPs 20
171. The division among the member providers is based on patient contacts, records of
preventive care, and management of chronic care cases.
Business as usual ended in 2015
172. In 2003 Congress began increasing reimbursement to Medicare Advantage Plans to pass
on more benefits to patients in the forms of prescription drugs and lower out of pocket costs.
At the same time, Congress also passed many more profits to the participating insurers. The
benefits of the former rate increases began to end in 2010 as a 2% decrease was followed by
3.5% for the next four years. These decreases took away the administrative surplus and any
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other fat that may have been in the MA system. As a result, IPAs in the MA plans that survived
needed hospital admission rates of 250 per 1000 people per year or less, and the management
of chronic diseases had to vastly improve. Business as usual was over.
173. Bonuses must be earned the hard way by eliminating unnecessary administration costs
while improving patient outcomes. Under the new law, PPACA, the plan’s profits in the
example above must come from its administrative share (15%) and not from the Medical and
Hospital pools (85%). The latter must be distributed to the medical care providers as fees and
bonuses or returned to the government or patients. Because the IPAs no longer bear the
marketing and sales costs, they may have gained an advantage over the MA plans. If an IPA
can maintain hospital admission rates below the 250 target it can make better bonuses because
it does not have the higher marketing, sales and administrative loads.
Accounting within the IPA
174. In the seventies, eighties and early nineties many IPAs had contracts to do delegated claims
and delegated credentialing. They were the administrative offices of the insurers with which
they held contracts. They bought computer systems that tracked eligibility and claims and the
data from that fed their general accounting programs. In the nineties there were many failures
of these types of IPAs and the insurers stopped delegating claims. They did not like paying the
IPA a lump sum of 85% of the premium and then having to pay the hospitals and physician
again after the IPA failed. The transfer of risk did not work very well. The realization by the
insurers and their regulators that claims were going to have to be handled by the insurer meant
the IPA contracting and accounting was going to become less complex and less risky.
175. As expected, greed is usually why systems collapse under stress. Insurers entered into risk
agreements and delegated claims to the IPAs because they did not want to get into details of
how an “at risk” medical group must operate as compared with an indemnity insurer. They
reasoned that if the IPA put up a substantial letter of credit, had a claims payment system, and
accepted a gross capitation payment for provision of medical and hospital services, the insurer
could have a profit regardless of the losses the IPA might suffer. (This is the same kind of
thinking that is manifest by CMS in the ACO programs in which they push risk contracts.)
That was greed and it did not work. You might say that it was stupid as well, but the people
who were doing it were not stupid and had made substantial profits in the same kinds of
contracts in the past. It is a little like our current banking mortgage failures; Greed followed
by relaxation of standard underwriting, followed by business changes focused on more profits
and not on the service that supported the enterprise. A distributist’s approach to this problem
would have management of services and funds on a much smaller scale with more eyes on the
processes which is why Schumacher uses the phrase, “Small is beautiful.”
Legal Support for the IPA
176. It is possible to do other businesses without the advice and support of a lawyer however a
lawyer is indispensable to an IPA. IPAs contract with corporations and physicians that are
much stronger financially than the IPAs. The weakest party at the table must have good legal
advice and support. Will Durant once said, “Animals consume each other without qualm,
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human beings do it through due process of law.” The amounts of money involved in funding
an IPA can bring out the vultures in times of stress.
177. There are many complex documents needed to conduct this kind of business. All the
documents we have seen have been written and rewritten several times by lawyers working for
very large insurance companies and IPAs. Further, the contents must be reviewed and approved
by both CMS and the insurance departments of the states in which the companies operate. Even
though your lawyer must be the wordsmith, participants cannot be passive about what needs
to be explained and whether it is necessary. Too many patients and physicians simply give up
when they read detailed contracts, yet some team leaders must have a thorough grasp of the
contracts. The contracts are the full expression of the business the group intends to undertake
and which the IPA might need to defend.
178. Fear that an attorney will charge too much is the same as the fear that a doctor or a CPA
will charge too much. All such professionals require about $200 to $300 per hour to pay
themselves and their overhead. They don’t always get that much, but it is a common rate.
Doctors arrive at their rates through piecework billing (the CPT codes), but lawyers and CPAs
automate their time tracking and bill you for the time they are awake and thinking about the
job. An alternative way to pay both lawyers and CPAs is “capitation.” Several years ago, a
large law firm we know in Austin, Texas contracted with a dental HMO. The firm accepted
$1.00 per member per month. Over time, as the plan grew in membership. The $1.00 was far
more than the hourly rate for their routine work. Our company contracted with a law firm for
$.75 per member per month and it worked to the advantage of the IPA in several ways. Over a
twelve-year period of caring for 4,000 - 10,000 members with various companies we
experienced four cases where the companies left the market or failed, putting our deposits or
accounts receivable at risk of being lost. Having an attorney who was on retainer and who had
a vested interest in preserving our income saved us more money than our company ever paid
him. In cases where the companies went out of business, the attorney reduced our settlement
with one company by $100,000. From another company he was able to get a judgment in
bankruptcy court for $150,000 when one of the officers of the company failed in a fiduciary
accounting role with us. The officer knowingly approved a payment from reserves that was not
due from us. In cases involving companies that had left the market, our attorney got new
contracts done and approved with new carriers so that a patient base of 4,000 senior lives was
retained. Ultimately, the move of those 4,000 patients earned more than $6,000,000 in the
subsequent four years.
179. Engaging the lawyer in a novel way is the same as finding a medical team that sees itself
as an intimate part of an IPA and the care of patients as a priority. Contracting with a lawyer
places someone on your team who has no motives for promoting litigation and who can talk
with other lawyers in a factual and confidential way.
Affinity Groups
180. Each time a group of people come together in associations or work groups the thought of
using group purchasing power to reduce personal and business expenses is promoted by the
members and by outside vendors. In the case of IPAs, the most common attempts to use their
purchasing power are in areas of professional liability insurance, medical insurance, property
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insurance, medical supplies and equipment, and staff leasing services. Large physician
associations that are sponsored by hospitals have been in the forefront of this “Affinity
Products and Services” offer for many years. Consequently, it is very difficult for a small IPA
to offer such products and services in competition with those offered through the larger
associations.
Co-op Clinics
181. Individually, many physicians willingly and unwillingly provide free care to many patients.
When indigent patients come through the emergency room of a hospital, physicians are
sometimes reimbursed at Medicaid rates by the hospital. Religious based hospitals in some
areas have some compensation policies regarding physician reimbursements, but most
hospitals have no payment policy. Since there is a very large percentage of the population that
has no insurance and can’t pay large medical bills when the bills come unexpectedly, there is
much bad debt accrued. Private employers think they are paying for doctor’s and hospital’s
bad debts through higher premiums, and the government thinks it is paying through Medicare
and Medicaid programs. Doctors think they are just getting hammered for no good reason. It
is a peculiar system that looks very much like “taxation without representation” in that there
are laws against refusing people emergency medical care but no laws about payment for the
services. This failure of payment could be interpreted as a form of taxation of the population
that is licensed to deliver medical care.
182. Historically, there has been a failure to provide a reasonable means to pay for care. Some
limited thought has been given to reform. The payment problems addressed through PPACA,
the new health insurance law, are still wrong and reform of this law is blocked. The true nature
of the problem is not understood at all by the medical care providers or by the money handlers.
Solutions are outside of our systems
183. Solutions to health care reform and payment are outside of our system of government and
outside of the economic models that leaders understand. The correction could be in the hands
of the people who suffer most from the problems, patients. It is likely that the economic system
that would address the problem is Parecon (participatory economics). Parecon, in this case,
would mean that patients form and govern cooperatives through which they hire or contract
for appropriate medical services. Effectively, doing for themselves what they want government
to do for them. The sayings from Peter Maurin in his “Easy Essays” are now true, “That people
in the past said of the Christians that they took care of themselves at a personal sacrifice, but
now they pass the buck to the government.” Of course, Peter Maurin was living through the
depression and helping feed people in soup kitchens in New York and did not see much positive
in what governments had done in his lifetime. The difference between Peter and most of us in
this time is that Peter did something every day at a personal sacrifice about the problems he
saw.
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Cooperatives
184. Patient/Physician Cooperatives can be created in which everyone gets care. It would not
seem so easy if the amount of money for primary medical care were not such a small percentage
of the insurance dollar (less than 10%). It means that people who thought they could not have
access to health care because they did not have health insurance can afford to pay for primary
health care using a few hours of minimum wage labor per week. Even the folks with the signs
who stand on the corners in our cities can get enough money to “participate.”
185. Organizing cooperatives is not as difficult as grass roots political organization.
Cooperatives are based on common wants and needs of members for better access to health
care. Since no economist, state, or federal government has yet addressed this access problem
well enough to solve it for all citizens, no competing system has been created to limit the
formation of community-based cooperatives. Such entities can become insurance companies
as has happened in the past with farm co-operatives and fraternal organizations, but until they
want to pool their money and buy health care services from multiple types of medical care
providers, specialists and hospitals, then the complexity of insurance organization can be
avoided. They may want to be a purchasing group for those kinds of services that go beyond a
simple payment agreement between each member and their primary care physician.
Concierge Medicine
186. About ten years ago, physicians in many areas of the country started dropping out of
insurance plans and offering their patients a monthly payment agreement for their medical
services. They called this “Concierge Medicine.” The motives of the physicians seemed elitist;
reports were that doctors wanted patients to pay them substantial monthly fees for special
attention in addition to using their insurance. The advertised concierge rates were more than
$100 per month or about five times as much as the health plans pay for primary care services.
The fact that an individual can pay a physician a monthly fee for medical services that are not
part of the insurance system is empowering to both the patient and the physician. A system of
care and payment can be constructed, however without the overtones of elitism. Such as system
could be the backbone of a patient/physician cooperative.
Community Support
187. How one cooperative got started:
Members of a non-profit Christian organization in Houston incorporated a Non-Profit Association
in 2005 to provide members with health care services. The sponsoring non-profit organization’s
income producing work had been the management of contracts between of physician groups and
Health Plans, mostly Medicare Advantage Plans. A consequence of that work was the organization
had very detailed information about the cost and quality of health care in the Houston area and
was able to create a Patient Association that was both economical and supported by many
qualified physicians and nurses.
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The Association they created gave the cooperative proper governance and helped it recruit about
2000 individual members.
The cost of primary health care services at the clinic was set at $30 per month per person on
average. These fees covered the cost of the physician, staff and overhead and no additional fees
were charged for services at the clinic.
People who had Medicare and Medicaid could join a plan that contracted with the clinics and
receive complete and comprehensive health care services including prescription drug coverage
for no premium. Employers could also buy a plan that contracted with the clinics and had
comprehensive health care services at a reduced cost to the patient.
Individuals without Medicare, Medicaid, or employer sponsored Health Plans could join the
clinics for primary health care services and use their health insurance to cover the specialty and
hospital services that were required at other locations.
The clinics also saw people who needed medical services whether they could pay the monthly dues
or not.
188. In time this first Cooperative grew by inclusion of many individual primary care practices
and addition of payment plans with Imaging Centers, Labs, and Telemedicine and discounts
from Dental, Vision, DME and Hospital and Specialist nationwide. It has become the
foundation for a “Complete Medical Care System.” It is designed by the people who use it and
serve as the care givers, Patients and Physicians.
189. This is a description of the cooperative as it now operates:
Value Based Health Care
The Cooperatives
The organizers find physicians who support the idea of a patient association in which physicians
can help and serve patients and mutually improve their health and well-being.
Community Organizers
The organizers and physicians find people in the service areas of their practices who know their
neighbors and who like to talk with them and help them. The physicians and nurses teach these
people to be community health workers and teach them key skills in health care and public health
so that these workers can then teach others and thereby build membership in the Cooperatives.
Members
People join the Cooperatives to get quality health care from selected providers at fair and
reasonable prices—pre-paid by retainer plans and fee-for-service.
Benefits
1. Medical Care in the neighborhood 24/7/365
2. Patient advocacy to solve problems of access, cost and quality
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3. Monthly payment plans (Concierge Medicine)
Primary Care
Lab Tests
Diagnostic Imaging (CTs, MRIs, PETS, X-rays, Ultrasound)
Telemedicine 24/7/365
Roadside Assistance
4. Discount Plans
Dental
Vision
Pharmacy
Durable Medical Equipment
Specialists
Hospitals
Cooperative's Prices
Ages 0-17 18-64 65+
$80 $109 $115
Monthly fees paid by:
Bank Draft, Credit Card or Debit Card
Steps in building the Value Based Health Care System
1. Have a Comprehensive Health Care Plan the providers can use and that patients can afford.
2. Have Physician Teams led by Primary Care Physicians that have a stake in the operation of the
Health Plans.
3. Have Patient-Physician Cooperatives through which patients and physicians can have
purchasing power and personal involvement in every aspect of the health care delivery system.
4. Grow the Cooperatives in each targeted neighborhood.
5. Have the Physicians and Nurses teach Community Health Workers (CHWs) about preventive
health care and medicine so that they can spread that knowledge to each patient in the
Cooperative.
6. Have the CHWs serve as paid “Patient Physician Advocates” at a ratio of 1 to 600 households.
7. Train the Medical Team in Care Coordination and Quality Assurance and define the population
they will serve and in which facilities.
8. Use the safest medical facilities possible considering them in this order:
A. Patient’s Home
B. Primary Care Physician’s Office
C. Urgent Care Clinic
D. Diagnostic Center
E. Ambulatory Surgery Center
F. Local Acute Care Hospital
G. Specialty Hospital
9. Improve the Medical Facilities by better designs and construction to make them safer.
10. Use technology that will make care easier and more natural for the patient and the physician
while creating a medical record that is true.
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11. Partner with organizations that share this vision and are willing to help build the Cooperatives,
the safer facilities, and invest their time and money in the programs.
The Accountable Care Organizations
IPAs are physician medical care organizations which have a triple aim:
Better health for the populations where they serve
Better care for their individual patients
Fair and reasonable prices that will be better than in the open markets
Primary Care Physicians
Those who are trained to diagnose, treat and coordinate the care of most patients:
Family Practitioners
Internists
General Practitioners
Naturopaths
Masters and Doctors of Eastern Medicine and Acupuncture
Nurse Practitioners
Pediatricians
Specialists (30 Types)
Monthly payment plans for patients (Retainer Payment Agreements)
Fee-for-service at fair and reasonable rates
Bundled payments from health plans that are the equivalent of #1 and #2 above
Performance bonuses for providers based on 50% to 10% of the cost savings compared to market
rates for professional, hospital and ancillary costs of medical care
Medicare bonuses paid annually
Commercial health plan bonuses paid quarterly
Quality Measures
Equal to or better than the professional standards
Medical outcomes better than the community averages
Electronic medical records are kept and the encounters, services, diagnosis are coded correctly
Patients have access to and can easily share their medical records
Patients are satisfied with the advice, care and treatments from the physician and his or her staff
members and the staff members at the facilities to which they are referred
Credentials are in order and up to date
GAP Health Care Plans
Most health care encounters do not require insurance but can be handled between the patients and
their physicians more efficiently and less expensively, as in our monthly payment plans. However,
if there is a major medical problem that requires multiple providers and hospitalization then
insurance or cost sharing pools are very helpful. There are three examples of plans used by PPC
members
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Indemnity Plans
1. Reimburses for professional services at fair and reasonable rates based on a published fee
schedule like the Medicare fees used by the government
2. Reimburses $1,000 per day for outpatient services
3. Reimburses $2,000 per day for up to 20 days for inpatient services.
ERISA Trusts
Employer Sponsored ERISA Trusts use the Benefits of the Patient Physician Cooperative in
conjunction with Stop Loss Insurance and Contributions from the employer and the employees to
pay for professional and hospital services at Medicare Rates. The plan design we recommend is to
prepay for Primary Care, Lab and Imaging so that they have no copayments or deductibles. The
have a $500 per day copayment for hospital services. Stop Loss coverage begins at $50,000 and
pays 90% of the cost up to $5,000,000. The usual monthly cost per month is:
Employee Employee & Spouse Employee and Children Family
$414 $528 $834 $1,395
Charity
Membership dues also provide funds to help members pay for their health care benefits when they
are having financial problems. It is the duty of us all to help one another to survive and to prosper.
It is the duty of the individual to cooperate and to participate in the recovery of both their physical
and their financial well-being.
Health Insurance Exchanges
1. Gold, Silver, and Bronze plans are offered
2. Premium subsides are paid by the government based on family income levels up to four times
the poverty rate
3. Gold Plans pay about 90%, Silver 80%, and Bronze 60%
4. Prices vary from $0 if you are poor to between $500 to $600 per person per month if you do
not qualify for a subsidy
5. There is an open enrollment period once a year
Administration of the IPA
190. An IPA having less than 100 primary care physicians and 30,000 patient members requires
about 20 employees to manage its contracts and provider relations. It takes about five
employees to start the IPA, contract with the physicians, and complete the credentialing. You
will then need an added employee for every 750 patients assigned to the IPA through its
contracts with Health Plans.
191. An IPA of this size will likely have five teams of PCPs and Specialists and each team will
have a QA committee and Medical Director. Five of the employees will be administrative
coordinators for these teams. Ten of the employees will be assigned to PCP offices and their
assigned patient populations as care coordination specialists. That leaves you with your CEO,
accountant, two credentialing specialists, and a secretary - the beginning staff.
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192. The administration is not there to guard an office, answer the phone, and pass the buck to
the Health Plan or back to the physician, though it would be very easy to fall into such a trap.
It is field organization that is in constant contact with physician’s offices and with patient
members. It is all about relationships and having your ears to the ground about the medical
needs of the patients and the support requirements of the physicians in terms of facilities and
patient outcomes.
193. The logistical problem of this kind of administration is the continuous contact with the
patients and with the physician offices. Twenty people cannot see 30,000 people very often,
but one hundred physicians, plus twenty consultants, plus twenty nurses can see the 30,000
people several times a year. When everyone is in the game, then the contacts have great benefits
in terms of health outcomes. Simple things, like having the correct contact information for each
member and each physician and each of their staff, can be maintained through this continuous
activity. The way you know it is not happening in the present systems is from the massive
numbers of errors in their databases, both on-line and in printed directories.
194. You cannot appreciate this until you are trying to call patients who have reported problems,
or you are trying to make a referral to a consultant, and you are depending on information from
the published directories. In the last week our nurses were given the names of one-hundred
fifty patients who had to be seen for problems within sixty days. The “unable to contact”
because of bad numbers or addresses was thirty percent. The nurses corrected most of the bad
information, but not all of it. They made the system better, but not perfect. They relieved some
suffering, but not all. Had this “continuous contact” not been done, then the owners of the data
would have been trapped in the delusion of their world, “not as it is.” These are simple things,
but errors are found in complicated things, in medical records, in family support systems, in
the environment in which people live. If you become just a bean counter, a paper shuffler, and
a phone call forwarding agency, you have missed the whole point of IPA administration. You
are either dynamic or you are dead.
195. If you need incentives other than the job itself, ordinary wages, benefits, and mutual
support to do this administration then you have the same problem as in the selection of the
medical teams. If the administration seems more powerful and more aggrandizing than the
medical team or the Health Plan, then it all will become a competition instead of a service. The
goal is still the relief of suffering through the health maintenance of the members. Agencies
that find people jobs in which they are placed based on the usual compensation for the skill
category the applicant represents sounds perfectly reasonable, but often these placements just
transfer whatever is wrong in the whole community to your company. Consideration for the
job should be based on need, circumstances and the compensation of the whole administrative
team. The material maintenance of the team members should not be on their minds in
relationship to this job. There should be such a commitment to what is being done for others
that mentioning job offers from anyone else would seem shameful. The company attends to
the health of its members: patients, physicians, and staff. This includes physical, mental, and
financial.
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Infrastructure and Automation
Tony McCormick, Author Tony McCormick founded Medical Information Integration in 2008 with the desire to help reduce the high cost of medical services by providing efficient, easy to use software based on the Free Open Source Software model. He is an accomplished developer , maintainer and steering committee member for LibreHealth.io EHR and longtime contributor to the OpenEMR project. As the President of the OEMR 501c(3) Board, he led the community through fund-raising, certification, development, and eco-system development activities, along with support for both remote and in-person clinics. Medical Information Integration, LLC currently hosts its own customized variants of OpenEMR as well as fully unique web applications for various health care related industries on Google Cloud Platform. Senior Solution Architect with over thirty years of experience as an active open source community integrator and open source developer.
Technologies
196. The IPA, to compete with others, will require a solid information infrastructure.
Infrastructure means that you must possess the ability to communicate effectively with your
customers, employees, providers, insurance carriers and business partners. This can be
accomplished by using a mixture of formal and informal tools, starting with the basic telephone
and ending with the software applications that are needed to manage all activities. This process
of implementation can be a daunting task and requires the support of a well-qualified and
creative technologist and the presence of some employees who have, at least, computer
operator skills.
197. By the time you read this book it is inevitable that new technologies, tools, languages and
cloud services will be available that do not now exist. In fact, since the first versions of this
paper came out almost all of the technological solutions we were using have been subsumed
by better, faster and less expensive solutions. So, the most important tool in your kit must be
a forward-thinking CIO or CTO that is fully engaged in technology and able to determine the
best (not the coolest) solutions and how to leverage them. Do not rely on the “big brand
software” shops to be able to provide cost effective or even working solutions for your specific
needs. It is better to select a group of tools, whether they Software as a Service (SAAS) or in-
house managed applications that fit your needs and can be used to export and import data. This
prevents being locked into a single vendor that may not meet your needs or may go away
unexpectedly and leave you in a bad place.
198. Recent requirements by Centers for Medicare and Medicaid Services (CMS) that require
data transparency, interoperability and patient access have produced a few good data exchange
formats that are being widely adopted, such as Fast Healthcare Interoperability Resources
(FHIR), pronounced FIRE, at http://wiki.hl7.org/index.php?title=FHIR.
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Communication
199. The Health Plan’s patient members must be able to reach the support staff to answer
questions about their plans and benefits; or to find their PCP and, in some cases, pay their bill.
Members will call you because they are unable to negotiate the insurance company's voice
messaging system or their doctor's reception staff will not be able to answer questions. If you
don't have a traditional “brick and mortar” office, your staff will need to use cell phones during
business hours. Your providers, as well as other business partners, will have similar needs and
should have ready access to the IPA staff. Personal cells phone are the easiest method, but be
sure to require that the staff use good security, logins/pin codes as well as encryption on their
device or you could be in violation of HIPAA rules.
200. You must also have a mobile responsive web site that represents the IPA, however, do not
be surprised if it is not accessed often. However, if your website is missing information or what
is presented is wildly out of date, this could hurt you in the future when providers and business
partners search there. To that end, you should keep your site simple and up to date. I
recommend implementing a web-based tool that will allow a non-technical person to update
the contents, do announcements, introduce new products and update or add physician
information. There are numerous options for website hosting that are inexpensive and provide
sites that are easy to setup and maintain by only moderately technical staff such as WordPress,
SquareSpace and Wix.
201. To be effective and stay on top of the IPA's priorities and business activities, your
employees will need be in constant communication with each other. There are several effective
tools for accomplishing this.
202. The first of these tools is using email. If you want a consistent corporate identity, you will
need to have an email service. This is best handled inexpensively through a Google Business
Gmail service as they have a HIPAA program and will agree to a BAA. If you have registered
a domain name specific to your business for your website, gmail.com can be your email service,
but use your domain as the email address, i.e.: [email protected]. You also
can use creative names such as [email protected].
203. The second tool for use is called “groupware” by the technical industry. Groupware
consists of a set of tools that are shared by everyone to allow the sharing of common
documents, messages, “to do” lists and company information, without duplication. There are
a number of tools that can be used that come with the Google business account, including
document storage, chat and video. Other options include Slack for group chat, Box.com for
document sharing (HIPAA option) and ZOOM or GoToMeeting for collaboration both within
your team and with customers.
204. Your choice should be based on how easy it is to use or your employees simply won't
access it. Another such tool which is provided is a web-based service produced by
37Signals.com. They offer a simple service called Backpack that allows for the creation of
shared calendars, “to do” lists, FAQ pages, attached documents, messaging and collaborative
writing tools. They also have a more advanced service called Basecamp that includes project
management and time-tracking tools. Both services are very inexpensive and are delivered
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over secure, encrypted Internet, behind password-protected logins. Other options for project
management include Trello, as super simple to use post-it note like team task manager.
Data Management
205. There are several types of data that the IPA will need to acquire, manage and maintain.
These include membership and provider demographics, claims data, including raw
transactional and diagnostic information as well as data about hospitalizations. Other obvious
accounting data, such as information for employee payroll, A/R and A/P, can be handled as
needed either by a designated employee or by an outside accounting firm. This data is typically
delivered by the insurance company and the providers.
206. It is important that this data be formatted in a way that can be easily loaded into a tool for
processing and analyzing, such as in a spreadsheet or database form. Automating the regular
retrieval and delivery of this type of data is a must. Because acquisition and delivery of data
should be handled in a HIPAA-compliant manner, data should not be sent in free text as an
unencrypted attachment via email.
207. Because insurance companies are willing to provide data in their own formats, but will, in
some cases, provide it in a format that you prefer. Some companies provide a secure web mail
account for your staff members to use and others may provide a data share that is usually
accessible by FTP or similar protocol.
208. It is more difficult to get the data in a format that is usable with providers in your network.
The providers may or may not have a computerized system for management of patient records.
For those that do, many different systems exist. There is no guarantee that the provider’s
software will support any of the defined, recommended, data exchange formats such as HL7
or FHIR, nor will the provider be willing to pay for customization when their software doesn't
support the data exchange. The best solution may be to get their raw claims data. Claims are
sent in a standard format called X12 for billing to clearing houses and are typically kept around
for archive reasons. There are several tools and services that can convert X12 into a standard
spreadsheet format and will give you a great deal of options for how to use and manage that
data. By the time you read this, we hope that CMS has prevailed and finally forced the EMR
and other data sources to support FHIR interop or the use of Health Information Exchanges
which makes that process as easy as using a Clearinghouse to send claims for payment.
Application Software
209. The IPA will require various kinds of software for processing and management of the
necessary data. Our experience is that such software exists in three distinct forms, as follows:
The first form is the expected, proprietary model that is from a vendor of medical/health
information software. These systems usually are very expensive and don't always deliver
exactly what is needed without the added expense of custom work. The second form is
personally developed. This method can be successful if requirements are rigorously defined
and an excellent development staff is hired and supplied with the proper tools for the job. The
positive aspect of this process is to get exactly what is specified. The negative aspect is it takes
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longer to implement than might be planned for the IPA. A third option to consider is Free Open
Source Software (FOSS). This form is a hybrid of the first two mentioned. Start with finding
an open source software system that meets as many of your identified requirements as possible.
Customize it for your specific needs. This approach is the best of both worlds: first, by starting
with a working system supported by a wide community of developers, development time is
saved, and many mistakes are avoided. Usually, many of the experienced developers in the
supporting community will help to customize the programs to fit the desired specifications.
The rule in FOSS is to share the requested changes and improvements with the rest of the
community.
210. Most of those same developers are now using the open source tools that are being provided
through very reliable cloud service providers like Google Cloud Platform (GCP), Amazon Web
Services (AWS) and Microsoft Azure Cloud. All of these have extensive options that make it
unnecessary to ever have you own server room full of instantly outdated computers to maintain
and grow (and shrink) as your needs change.
Free Open Source Software (FOSS)
211. The scope of this document cannot include a full discussion of FOSS, but references to
more complete explanations and the history of its development are in the appendix. The term
“free” in this context does not mean “free of cost.” Software licensed with a FOSS licensing
model can be downloaded from the INTERNET, but some money will be spent to get it
installed, running, and to get employees trained to use it just as required with proprietary
software. “Free” means the freedom to modify the programs to suit specific needs and to share
the application in almost any way that is fitting.
212. There is a large community of developers that create and support FOSS software. These
communities are, typically, very technical but also willing to be hired to help you navigate the
waters. For healthcare industry tools consider the following sources: LibreHealth.io, Open-
EMR.org, OSEHRA.org. OpenHealthNews.com is a good source of information and articles
about these communities and the vendors that support them.
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Medical Facilities
Blair Korndorffer, Author Thirty+ years’ experience as lead design professional in Health Care, Resort, Hospitality, Residential and Industrial Projects throughout the World. Managing Partner of a Multi-tiered development group that specializes in Medical, Resort and Hospitality development with projects in Texas, South and Central America and West Africa. Completed over 2000 projects representing $2.8 Billion in Project Cost. Most of these projects are in health care and resort/hospitality facilities. In addition to these projects, we have designed over $30 Billion in master planned developments, including continued care retirement communities (CCRC), Resort, Residential and Town Center Developments. See our web site at diamonddevelopmentgroup.com.
Clinic Buildings for Participating Medical Practices
213. In 1977, in the Annual Medical Supplement to the Encyclopedia Britannica, there was an
article about HMOs. It stated that HMOs were the future because they addressed the issues of
cost and quality of care. It also stated that the public and the insurance companies would rail
against them because of patient freedom to choose any physician or hospital. The article
focused on group practice and staff model HMOs as the only ones that made practical sense in
the achievement of the dual goals of lowering costs and increasing quality in health care. Most
of what was written in that article has come true, so that even the indemnity insurance plans
have copied features of these HMO models in outward appearance. They have adopted
“managed care” practices, like “pre-admission” authorization, “pre-approval” for specialist’s
referrals and diagnostic testing, and assignment of patients to Primary Care Physicians for
coordination of care. Such adaptations are more economical than an open system like Medicare
but still far short of the outcomes that can be achieved in Group and Staff Model HMOs. It
takes no special wisdom to understand why, and of course there are stories about HMO
members not getting the care they needed because the HMO owners were greedy (listen to
Nixon’s comments about Kaiser’s profit motives from the Watergate tapes).
214. An evolution of the IPA into a group practice model of care is coming. That could happen
easily because the facilities being used by the primary care and specialist physicians change
over short time frames as the owners are attracted to new medical office locations and
buildings. If the IPA membership grows and the amount of money from that source of business
becomes more important to the participating physicians than their other revenue the IPA will
construct facilities to exactly meet the needs of the practices within a group setting.
215. This idea of group facilities for IPAs has developed into the complete design of such
facilities and the pricing of their manufacture and construction and equipping. There are three
types of clinics in the designs: (1) those that can be manufactured and put onto the site in about
sixty days and (2) “big box” stores that can be converted into multi-specialty clinics, diagnostic
centers and surgery centers. The “big box” conversions are the most economical and will
enhance the IPA's ability to keep most of the medical care in the local neighborhood where it
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can be delivered quickly and safely, and (3) Specialty Centers for new sites that are iconic in
design, machine-like in functions, built with high quality material, safer for patient care, long
lasting and economical.
216. The new clinics are more attractive for the physicians to buy or lease than the usual medical
office buildings. They are distinctive buildings that will be easily identified by patients as
special places in which they can get quality health care.
Description of the Medical Services Organization and the Facilities Projects
217. The patient populations served by the primary care physicians of a local Medical Services
Organization is about 30,000 lives. About 6,000 thousand of these lives will have Medicare or
Medicare Advantage health plans and as many as 2000 may be covered by Medicaid and the
remainder will be in private health plans. Providers are engaged in diagnosing, treating and
teaching patients medicine and health maintenance and in providing care coordination. These
services are currently provided based on fee for service agreements with as many as sixty to
seventy insurers. However, since the passage of the Patient Protection and Accountable Care
Act (PPACA) there has been a shift by CMS and private insurers to risk contracts, as done in
the past with HMOs. Health insurance has become a Zero-Sum Game in which providers of
care that make profits will do so from other providers in the game and not from increases in
premiums and taxes. The most likely targets for reduced income are hospitals and the private
insurer’s administrative service companies. Specialists are the third target for reductions. The
only way physicians can win at this game is by being in a Medical Services Organization
(MSO) that can manage, coordinate, and facilitate the care that their patients need.
218. MSOs function best when they serve a defined population of at least 150,000 in a specific
geographical area. The physicians must act as teams in the delivery of care. Since they are paid
a capitation for their services they will only be rewarded for performance by savings on
facilities and insurer charges. The medical teams do this by reducing admissions to hospitals
and other high cost facilities. Experience with HMOs has shown that such medical teams can
do that job well and cut costs by 15% to 20%. Average medical costs in the United States are
twice as much as needed when compared with other industrialized countries. Therefore,
savings of 15% to 20% are rather easy to reach.
219. A team consists of thirty primary care physicians and fifteen specialty groups for a total of
about 60 providers. It will require a Medical Director, Chief Operating Officer, and Chief
Financial Officer, an Accountant, an IT specialist, two Secretaries and ten Patient-
Physician Advocates who work in the offices of the primary care physicians to help with
training and care coordination.
220. Fortunately, over the last twenty years many of these teams have been organized and need
only to be joined into Medical Service Organizations for contracting with the Insurers and
CMS for the best capitation rates and the lowest risk exposure. The Medical Services
Organizations have been developed already as well as a Non-Profit Physician Association
approved by the State Medical Board and empowered by the State to contract with CMS and
Insurers in risk agreements. Further, the managing partner of this Association is a corporation
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that provides the access to funding, general accounting, contracting and legal services for all
the local MSOs and for the Association. The staff of this entity includes a Medical Director,
a CEO, a CFO, two Secretaries, 5 Liaisons, one for each of the local MSOs. It also needs
contractors for IT Systems, Data Analysis, Planning, Marketing, Design and Building of
Facilities, Capital Raises, and sales of health plans to patients and their employer sponsors.
221. The first step in the creation of the Health Care System is a Capital Raise. Given the
feasibility of the project the start-up capital for five local MSOs in one Region will be
$30,000,000. Facilities which will be leased to these practices will cost $210,000,000.
222. After the local MSOs are established, equipped and trained and the payer contracts
obtained, and the patient populations are attributed the next steps are improvements in
communication systems and population management.
223. Specialty Centers are a logical step toward making health care easier to access for the
patient and their primary care physician. The medical organizations that are charged with
budget responsibilities soon discover that staying within that budget without some local control
over consults, final diagnosis, and prompt treatment is very difficult. Our company will build
our specialty centers that serve defined patient populations located close to the patient’s homes
and the office locations of their primary care physicians.
Community Hospitals for Local Support of IPA’s Patients
224. Finding a Community Hospital with a passing grade from the Leap Frog organization is a
daunting task. They count reported deaths and injuries first, then they look at the experience
of the staff in doing serious operations and procedures. There are five rating categories and
grades of A through F. Nobody has gotten all As. In fact, in Texas, in the “Great Medical
Centers,” there was only three As in one category, Cardiovascular Care, and that was not in
the Texas Medical Center’s famous hospitals, but in Scott and White Clinic (the big group
practice HMO), West Houston Medical Center, and UTMB in Galveston. The other grades
were C and below. Since this report from Leapfrog, several of the larger hospital systems in
Houston have improved their grades, proving that people do want to avoid negative reporting.
So, physicians whose ethics are “to first do no harm” will try very hard to not use hospitals
unless there is no other choice.
225. The hospital problem can be solved and there are two ways to approach it. Remember, the
solutions are not for the whole community but just for the patients enrolled with the IPA.
Consequently, it does not take a very large hospital to handle almost all the hospital care for a
population of 150,000 patients. The admission rate for a senior population is 250-275 per
thousand per year and for a 1-64 age population is 100 per thousand. The length of stay is six
days for the seniors and two days for the under 65 group. Therefore, the number of beds needed
is 80. Ten of those beds will be in level three hospitals so that your chosen community hospital
will need only 70 beds to serve your patient’s needs. The physicians could pick one hospital
where they can influence the quality of care and drive away the natural desire of administrators
and owners to perform only “wallet-ectomies.” Or, the physicians and patient members of the
community could build a new hospital that fit their needs, was based on a better design, and
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had no entangling alliances with others that would put the administration into the wallet
picking business, rather than the patient caring business.
226. A new hospital would address the issue of how the current facility designs contribute to
the injuries and deaths of so many people. Most of the injuries and deaths come from bacterial
diseases caught in the hospital, from medication mistakes, and from surgeries. When this
problem was presented to our medical architects, they saw it as a traffic management problem,
a communication problem and a plug and play design issue. Observations of hospitals in which
disease control problems are chronic showed that the building allowed a flow of patients,
visitors, suppliers, and medical staffs in all areas except the surgical suites. Just that flow meant
it would be impossible to prevent bacterial diseases from spreading in the hospital and into the
community as well.
227. One Architect, Blair Korndorffer, designed a two-corridor bed wing connected to core
surgical and diagnostic suites with no public access to the suites. Visitors to the hospital were
identified at the entrance and only allowed access to the patient’s room that they had the right
to see and only through the public corridor. Walking past all the nurses, physicians, other
patients and visitors to see your relative or friend is not allowed. The communications would
track medicines and patients directly from the pharmacy to the patient without mixing anyone
or dispensing the wrong kind or amount of the medications. Several of these systems are in use
now in Texas hospitals like the Harris System in Ft. Worth.
228. A hospital is not really a building, it is more like a big computerized machine. When it is
thought of as a building and when its property becomes a precious asset, it is no longer a
hospital. It is an anchor that will sink the medical care system. It is a museum in which the
donors display their art and their golden name plates. The public is sometimes impressed with
this opulence and some among them may be inspired to want a golden name plate as well.
When you see it as a machine, then you design it to use for its main purpose: the safe care of a
patient. Let donors, visitors, physicians, staff, and suppliers socialize and conduct their
businesses elsewhere. Don’t put anyone in harm’s way.
229. The machine has a core with surgical and procedure suites. It then has plug-in diagnostic
units, MRI, PET, CT, Nuclear Medicine, Lab, and Pharmacy. There will be up-grades and new
kinds of plug-ins. You will not have to put the hospital into the deconstruction and
reconstruction modes to make technical improvements. You will merely unplug the old unit
and plug in the new one. The plug and plays are made in factories where the quality control
can be better assured. Even the bed wings are plug and plays and can be made elsewhere.
230. Another aspect of this idea is that the hospital need not become larger on the site where it
is located, but another “Core Surgery-Double Corridor Bed Wings- Plug and Play” hospital
can be located near the population it serves. Even a town of 40,000 could support a facility like
this with only 24 beds. Big facilities do not serve physicians or patients any better than small
facilities, especially if the small facilities are better machines.
231. The hospital designs proposed by Blair Korndorffer, AIA, are included in the Supporting
Documents. Also, there is a summary presentation of his other major works which show his
talent, ability, and experience.
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Capital for Development and Ownership of Medical Teams
232. Initially, IPAs must support five people and an office and equipment for about two years
before you can get enough income from administrative fees to operate in the black. The burn
is about $500,000 a year. If the IPAs are organized into five teams and each team consisting
of 30 PCPs and 30 Specialists commits to $30,000 capital in the form of a note payable over
60 months, you will have a stable capital balance that will allow you to contract favorably with
the Health Plans. If you think there are no contingencies and no need for this level of capital,
then take the money to Vegas and play dice, at least when you lose you will not have had any
unrealistic expectations.
233. When the insurers required a “Letter-of Credit” deposited with their Health Plans to have
a contract in which they would share profits, you needed about $3,000,000 to get off the
ground. Fortunately, times change and there are bargains in the current market.
234. Once the local IPA owners have committed their seed capital of the $1,800,000 without
debt and show that they can produce bonus income from global capitation agreements with
CMS, with HMOs and with commercial insurers, then substantial added capital can be raised
from Private Equity Funds. Selling 40% of the shares in the IPA management Company will
raise about $6 million dollars per IPA and give a return of 15% per year to the investing
company.
235. The basis for additional capital is the profit that the IPA can make in the future from
reductions in costs for the Payors which are by contract shared with the IPA. The fat in the
Medicare and Commercial insurance premiums that can be cut are from misuse of facilities,
drugs, diagnostic procedures and from uncoordinated care. IPAs have been able to do that in
Medicare Advantage programs over the last twenty years and can do it in other kinds of shared
saving agreements with CMS and Commercial Insurers. Sometimes the percentage of saving
that will be shared is restricted to ten percent of the gross premiums, but not always. It is
possible to contract for as much as 87% of the gross premiums for the professional and hospital
pool and to retain all the savings. You must take all the risk and post all the reserves when you
make those kinds of agreements, but the margins can be well worth the risk. When 85% of the
average gross premium is $7,225 per year per patient and the fat portion of that is 15%, then
the potential gross profit is $1,000. This kind of profit has been made many times in the
Medicare Advantage Plans. Half that amount is $500 and when you raise capital selling 40%
of your futures, then you could get six to ten times $250 per patient in a shared savings contract.
At six times that would be $1,410 per patient. Most practices could qualify about half of their
patients for this kind of investment.
236. The idea behind this kind of capital infusion is to make each practice capable of employing
the labor and technology required to achieve the savings. Their sacrifice is to agree to let the
MSO represent them exclusively in contracts with all the third-party payors.
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Medical Economics and Health Care System Development By Don McCormick
Addendums
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Medical Economics and Health Care System
Development By Don McCormick
Addendums
A. PPC Directory of Benefits
B. Health Plan Explanations, Questions and Answers
C. Employer Sponsored Health: Plan Employee Retirement Income Security
Act Trust
D. Employee Benefit Trust
E. Coop Development Slide Presentation
F. PPC Brochure
G. Clinic Buildings for Medical Practices
H. Complete Health Care System and Facilities Development
I. PanaMed Indemnity Policy
J. Group Lump Sum Cancer Insurance
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Addendum A - Patient/Physician Cooperative (PPC)
Directory of Benefits
Patient Association (PPC) Membership
This is a Healthcare Cooperative between patients and physicians that includes guaranteed
pricing for healthcare at fair and reasonable prices for members, using the cooperative member
physicians, contracted networks, and participating facilities.
Organization History
In 2005, members of Tomorrow’s Bread Today, or TBT, a non-profit tax-exempt organization in
Houston, Texas, formed a non-profit association called Senior Patient Association. The
purpose of the association was to provide members with access to basic healthcare services.
Senior Patient Association (that does business as Patient/ Physician Cooperatives) has been
able to make healthcare economical and gain the support of many highly qualified physicians,
nurses, and alternative care providers.
Patient /Physician Cooperatives (PPC) gives the local medical cooperative proper governance
and helps it recruit the individual patient and physician members. PPC contracts with physicians
in Accountable Care Organizations (ACOs) and Independent Practice Associations (IPAs).
These groups each have hundreds of physicians as members in primary care practices and in
specialty practices.
In a pilot study before the first local cooperative was established, PPC treated 4,000 patients and
surveyed them about their abilities to pay monthly for primary healthcare services. Based on the
survey, PPC found that patients said they could pay between $30 and $50 per month for primary
healthcare services. The participating physicians in the ACOs and IPAs found that level of
monthly pay was adequate to care for an individual patient provided they would pay the fee each
month for a year. These fees covered the cost of the physician, his or her staff, and overhead.
The fees were established as a direct payment agreement between the physician and his or her
patient, which PPC named “Concierge and Concierge Plus.” The difference in the retainer
amounts of $30 and $50 is the level of services provided by the different clinics.
Senior Patient Association (Patient Physician Cooperatives)
Discount Healthcare Program Operator Registration # 1721390
Disclosures
None of the listed benefits of the Senior Patient Association (DBA–Patient Physician
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Cooperatives) are insurance, except for an Association Group Hospital Indemnity Policy
and Group Stop Loss Reinsurance issued to the Association by Authorized Insurers.
The plan (not including the Group Hospital Indemnity Policy and Stop Loss Policy) provides
discounts at certain healthcare providers of medical services. The plan member is obligated to
pay for all healthcare services but will receive a discount from those healthcare providers who
have contracted with the discount plan organization.
In several states, primary care services, lab and diagnostic are paid for through the
Concierge or Concierge Plus Monthly Retainer Payment Agreements directly between
provider and patient member. In other locations, the lab and imaging services are based on fee-
for-service at discounted rates, payable at the time of service.
The discount card program is purchased by PPC from Doc Wellbee, Inc. It contains a 30-day
cancellation period. Members shall receive a full refund of membership fees, excluding
registration fee, if membership is canceled within the first 30 days after the effective date.
Discount Plan Organization
Senior Patient Association (DBA– Patient/Physician Cooperatives) is a Discount Healthcare
Program Operator with Texas Registration # 1721390, 900 Rockmead Drive Suite 147
Kingwood, Texas 77339. For further information, go to www.PatientPhysicianCoop.com. The
Discount Plan for Dental is licensed to Doc Wellbee.
Teladoc Disclosures
Teladoc does not replace the primary care physician. Teladoc does not guarantee that a
prescription will be written and operates subject to state regulations. Teladoc does not prescribe
DEA controlled substances. Teladoc physicians reserve the right to deny care for potential
misuse of services. Teladoc, Inc. © 2002-2018.
Pharmacy discounts are not insurance and are not intended as a substitute for insurance. The
discount is only available at participating pharmacies.
What is PPC and how is it different from an insurance plan?
Patient/Physician Cooperatives (PPC), established in 2005, is a non-profit organization of
patients, physicians, and member representatives. PPC is not an insurance product; it is a group
of physicians who have joined together to give their patients, who are members of PPC, access to
affordable, basic healthcare through mutual support.
Membership Agreement with Doc Wellbee
This Membership Contract Agreement and the membership card constitutes the entire agreement.
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Plan Type: Association
Plan Name: Patient/Physician Cooperatives
Family plan membership includes all legal dependents.
Disclosures and limitations:
▪ The advertised plan is not a health insurance policy.
▪ The advertised plan provides discounts at certain healthcare providers for medical services.
▪ The advertised plan does not make payments directly to the providers of medical services.
▪ The advertised plan member is obligated to pay for all healthcare services but will receive a
discount from those healthcare providers who have contracted with the discount plan
organization.
▪ The Discount Medical Plan Organization is Doc Wellbee, Inc, located at 3957 Pleasantdale
Rd. Suite 102, Atlanta, GA 30340.
Please visit the Doc Wellbee website: www.docwellbee.com for a current fee schedule and listing
of Dental Providers located near you.
The contract effective date is the date of the individual PPC membership and shall remain in
effect until terminated.
Termination of membership: Doc Wellbee requires a written notice from PPC for the member a
minimum of 30 days prior to desired cancellation date. If the member cancels his or her
membership with Doc Wellbee within the first 30 days after the effective date of enrollment in
the plan, the member shall receive a reimbursement within 30 days of all periodic charges upon
return of the discount cards to PPC.
For questions, complaints, or concerns regarding membership or plan benefits, please call Doc
Wellbee Monday through Friday (8:30 a.m. - 5:30 p.m. EST) to speak with a representative.
Benefit Types for Each Plan Being Offered
Discounted Healthcare Rates for cash-at-time-of-service (based on prices set near Medicare
Rates – these average 66% less than the usual rates). Discounts come from contracts with
Accountable Care Organizations that are members of National Association of Physician ACOs
and from MultiPlan PHCS networks.
A. Basic Membership in the Cooperative
B. Concierge, Concierge Plus, and Concierge Elite Medical Care ($0 Copay at selected
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providers)
C. Lab Tests ($0 Copay from Selected Labs)
D. Diagnostic Imaging ($0 Copay from Selected Clinics)
E. Teladoc - Consult via Phone ($0 Copay)
F. Dental Care Discounts
G. Vision Care Discounts
H. Prescription Drug Discounts
I. Hearing Care & Hearing Aid Discounts
J. 7/24/365 Roadside Assistance Services
K. Patient Advocacy
L. Group Hospital Indemnity Insurance
M. Group Lump Sum Cancer Insurance
N. Stop Loss Insurance
O. Employer-Sponsored Health Plans that use the PPC benefits in conjunction with their
ERISA Trusts. These plans are for groups offering a qualified plan to their employees
and dependents, which plan includes the PPC benefits, indemnity insurance, and stop
loss reinsurance.
P. Health Club Membership (Houston Only)
Q. Simple Save RX PBM
R. HRA Debit card
S. Specialist Network
Type of Benefits in each Plan
Basic A, C, E, F, G, H, I, J, K & P (Discounts + Lab)
Concierge A, B, C, E, F, G, H, I, J, K & P (Basic + PCP retainer or R)
Concierge Plus A, B, C, D, E, F, G, H, I, J, K, & P (Concierge+Imaging retainer or R)
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Concierge Elite A, B, C, D, E, F, G, H, I, J, K, & P (Concierge+Imaging retainer or R
& Specialist Network S)
Members with any of membership plans the above may purchase the association group
insurance policies issued by the applicable insurance company.
Hospital indemnity Coverage: Policy # 98210-02 benefits summary is available upon
request (L)
Group Lump Sum Cancer Coverage: Through Pan American (M)
Stop-Loss reinsurance: Policy # 11835 the benefits summary is available upon request (N)
MEC A, B, C, E, F, G, H, I, J, K & P (Basic+PCP retainer or R)
MEC PLUS A, B, C, D, E, F, G, H, I, J, K, & P (Concierge+Imaging retainer or R)
MEC Elite A, B, C, D, E, F, G, H, I, J, K, & P (Concierge+Imaging retainer or R
& Specialist Network S)
MVP 500 A, B, C, D, E, F, G, I, J, K, N, O, P, and Q (Group Indemnity
Insurance and Group Lump Sum Cancer (if applicable) + Stop Loss in an ERISA Plan)
(HRA Card may be used in place of PCP and Imaging Retainers)
MultiPlan
(Applies to the MVP 500 Plans)
Founded in 1980, MultiPlan is the industry’s most comprehensive provider of healthcare cost
management solutions.
900,000 healthcare providers under contract, an estimated 68 million consumers accessing our
network products, and 40 million claims reduced through our network and non-network
solutions each year.
The only company that can offer access to the leading independent national primary PPO as well
as our complementary network, and negotiation and medical reimbursement services through
a single electronic submission.
MultiPlan has the know-how and creativity to offer more choices and more value for today's
healthcare payers and providers.
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Founded in 1980, MultiPlan is the industry’s most comprehensive provider of healthcare cost
management solutions.
900,000 healthcare providers under contract, an estimated 68 million consumers accessing our
network products, and 40 million claims reduced through our network and non-network
solutions each year.
The only company that can offer access to the leading independent national primary PPO as well
as our complementary network, and negotiation and medical reimbursement services through
a single electronic submission.
MultiPlan has the know-how and creativity to offer more choices and more value for today's
healthcare payers and providers.
Plan Benefits Summaries
Basic Membership in the Association (A)
Services from PPC medical providers that are not covered by group insurance as in types (L),
(M), and (N) or are not based on a monthly payment plan. Whereas types (B), (C) and (D) are
paid for with cash, check or credit card at the time of service based on discounted prices which
average from 50% to 70% less than the usual charges. Each person in the Association has this
benefit and each adult member is entitled to a vote at the annual meeting.
Concierge, Concierge Plus, Concierge Elite Medical Care (B)
Primary medical care services are provided to members with no co-payment and no health
qualifications. Members choose their primary care physician (PCP) from the PPC Provider
Directory, from among listed Family Practitioners, Internists, General Practitioners, Masters or
Doctors of Eastern Medicine, and Naturopaths. Each member signs a monthly payment plan
agreement with his or her chosen PCP. This payment entitles the member to $360 up to $600 of
services per year from the PCP based on discounted prices. If during the year the $360 or $600
has been used, then additional services are paid for at $30 per visit. Typically, members do not
exceed the $360 or $600 limit. If they have the MVP 500 then the $30 payment is included as
part of the ERISA Group premium. The Plus plan adds Imaging services at contracted centers.
The Elite plan adds a contracted Specialist Provider Network at $0 copay.
Lab Tests (C)
Each member in all plans have lab services available with no copayment from Clinical
Pathology Laboratories (CPL) or Quest. In some cases, the choice of Primary Care
Physician may drive lab selection.
A simple blood test is necessary for the prevention or early detection of diseases. The earlier a
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problem is identified, the easier and more likely it is to be treated.
Diagnostic Imaging (D)
Selected freestanding imaging centers in several cities offer PPC members a monthly payment
plan in which there is $0 copayment at the time of service. This service is included in the
Concierge, MEC, and MVP 500 Plans
These centers are listed in the PPC Provider Directory. The Basic includes discounted imaging
services through PPC.
Teladoc (E) (800-835-2362)
Telemedicine is comprised of a national network of U.S. board-certified physicians who use
electronic health records, telephone consultations and online video consultations to diagnose,
recommend treatment and write short-term, non-DEA controlled prescriptions, when appropriate.
Physicians are available 24 hours a day, 365 days a year. This allows PPC members of any age to
conveniently access quality care from their home, work or on the go as opposed to more
expensive and time-consuming alternatives like the doctor’s office or emergency room.
To ensure high-quality physicians, credentials for physicians are conducted every two years.
They are also subject to a 10% random audit, which exceed NCQA standards.
When Do You Use Telemedicine?
- When your physician is not available
- After hours or whenever you need non-emergency care - On vacation, or on a business trip
- If you are considering a trip to the emergency room or urgent care center
for non-emergency treatment
What conditions would you use Telemedicine for? (Not an inclusive list)
- For non-emergency care such as cold or flu
- Sinus infection
- Allergies
- Respiratory infection
- Bronchitis
- Pink eye
- Urinary tract infections
- Poison ivy
- Some skin disorders
Dental Care Discounts (F) (800-290-0523)
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Members may take advantage of savings offered by an industry leader in dental care, from Doc
Wellbee. Doc Wellbee has a recognized professional dental network that of over 100,000 dental
access points.
Dental Plan Features
▪ 20% to 50% savings on most dental procedures including routine oral exams, and major
work such as dentures, root canals, and crowns.
▪ Unlimited cleanings.
▪ 20% savings on orthodontics including braces and retainers for children and adults.
▪ 20% reduction on specialist’s normal fees. Specialties include Endodontics, Oral Surgery,
Pediatric Dentistry, Periodontics, and Prosthodontics where available.
▪ Cosmetic dentistry such as bonding and veneers also included.
▪ All dentists must meet highly selective credentialing standards based on education,
background, license standing and other requirements.
▪ Members may visit any participating dentist on the plan and change providers at any time.
*See the Doc Wellbee wage page at https://docwellbee.com/index.php/dental-plan for the most
current plan rates and savings.
Vision Care (G)
Eyewear
▪ Members save 20% to 40% off the retail price of eyewear with the EyeMed Vision Care
Access Plan D discount program through the Access network. Members are eligible for
discounts on exams, eyeglasses and contact lenses from more than 65,000 providers
nationwide including independent optometrists, ophthalmologists, opticians, and leading
optical retailers such as LensCrafters®, Sears Optical® Target Optical®, JCPenney®
Optical, and most Pearle Vision® locations.
▪ Replacement Contact Lenses by Mail - EyeMed members may order replacement contact
lenses via the Internet and have them mailed directly to the member’s home. This service is
for replacement contact lenses only, and the EyeMed discount does not apply. The member’s
initial pair of contact lenses must still be purchased from their eye care provider to ensure
proper fit and follow-up.
Qualsight Lasik
Serving you with choice, quality, and savings.
▪ Members will receive savings of 40% to 50% off the overall national average cost for
traditional LASIK surgery through QualSight or receive significant savings on newer
procedures like Custom Bladeless (all laser) LASIK.
▪ QualSight has more than 750 locations, so members can choose the provider and the LASIK
procedure that meets their vision care needs.
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▪ QualSight is contracted with credentialed and experienced physicians who have collectively
performed over 4 million procedures.
The QualSight program is not an insured program.
Prescription Drugs (H)
Save 10% to 85% off prescription drugs from more the 60,000 pharmacies nationwide. All the
major pharmacies have access via their computers to the pricing for your drugs based on your
health plan. Your RX Bin Number, your Group Number, and your Plan Code are printed on your
health ID card. There is also a helpline number for your pharmacist if there are any questions
about the plan or prices.
Hearing (I)
Save 40% off diagnostic services from the HearPO program, including hearing exams and
significant discounts on the price of hearing aids at over 3,200 provider locations nationwide.
Includes one year of free batteries (80 cell per hearing aid).
Lowest Price Guarantee*: If you should find a lower price at another local provider, we’ll gladly
beat that price by 5%.
*Competitor coupon required for verification of price and model. Limited to manufacturers
offered through the HearPO program. Local Provider quotes only will be matched.
Roadside Assistance (J)
Towing - When a member’s automobile is disabled as a result of a covered breakdown, we will
arrange to have it towed home or to the nearest qualified service facility.
Flat Tire - If the member’s vehicle has an operable spare tire, it will be installed to replace a flat
tire. If the vehicle has two or more flat tires or it does not have an operable spare, the vehicle will
be towed in accordance with the towing benefit.
Fuel, Oil, and Fluid Delivery Service - If the vehicle runs out of fuel or fluids, we will provide
for the delivery of fuel or other fluids needed at the disablement site. Specific brands or octane
ratings cannot be ensured (Does not cover the cost of fuel or fluids).
Battery Service - When a member’s vehicle experiences battery failure, we will provide a jump-
start.
Lock-out Assistance - When a member loses their key or locks them in their vehicle, service will
be sent to gain entry (Does not cover costs to reproduce keys).
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Winching/Vehicle Extraction - - Customer vehicle will be winched if stuck in a ditch, mud or
snow as long as it is accessible from a normally traveled roadway.
PPC believes this service has an important place in healthcare because it may prevent accidents
and injuries by keeping members from attempting to perform these repairs on the road and in
traffic.
Patient Advocacy (K)
PPC helps members deal with important matters related to receiving healthcare services and
resolving healthcare paperwork hassles and red tape. Having a professional patient advocate in
settling bills and expenses in and outside the PPC network of providers helps give members
peace of mind.
Group Hospital Indemnity Insurance (L)
Hospital confinement indemnity coverage is designed to provide members with a fixed daily
benefit during periods of hospital confinement resulting from a covered injury or sickness.
Group Lump Sum Cancer Insurance (M)
Lump Sum Cancer policy that pays a fixed amount of 25k for a cancer diagnosis that occurs post
enrollment.
Stop Loss Insurance (N)
A policy that covers 90% of the hospital cost above 50k up to 5 million dollars.
Employer-Sponsored ERISA Trusts (O)
Employers that establish a health plan for the benefit for their employees and their dependents
can use the medical services of the physician members of PPC and the Group Indemnity
Insurance and Stop Loss to create a plan that will conform to the Accountable Care Act. The plan
has no deductibles but has $25 copayments for professional services and $500 per day
copayment for hospitalizations. It has a maximum fees schedule for all claims based on Medicare
rates.
There is a maximum out of pocket expense for individuals of $6,350 per year and $12,700 for a
family per year not including charges that are above the maximum fees listed in the plan
document.
Health Club Membership (P)
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Physical fitness and exercise are an important part of health and wellness. PPC has made
arrangements with various private clubs in its service areas to use their facilities for our
members.
Simple Save Rx (Q)
When it comes to cost no one has lower pharmaceutical costs than Simple Save Rx. Simple
Save Rx negotiates your costs with every pharmacy and then passes those same savings to our
Members. Our Pass-through Pricing, transparency, and competition amongst pharmacies all
benefit you in lowering prescription costs. Compare your prices from SSRx against any other
in America and you’ll see for yourself. SSRx offers the best prices period!
HRA Debit Card (R)
Health Reimbursement Arrangement; Transition to consumer-driven healthcare by giving
employees and their families a simple way to save for, manage, and spend employer-provided
healthcare funds. With an HRA, your company employees can set aside a certain amount of
dollars per month in an account to pay for hundreds of eligible healthcare expenses.
Specialist Network (S)
This option includes a Specialist Network of providers that cover most of the major specialty
needs for routine medical care. The network is provided at $0 copay for Elite Plan Participants
and covers office visits, examinations and any procedures. The monthly payment is a retainer.
Provider Directories
The listing of medical practices can be found on the PPC website at:
www.patientphysiciancoop.com
For assistance in finding a physician in your area, you may also call our helpline at: 866-549-
4199
If you have a personal physician who is not in our cooperative and you want to nominate him or
her to be part of the medical team, we will be glad to invite him or her to become a member.
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Membership Agreements,
Retainer Agreements,
Annual Dues and Fees.
95
PPC Membership By-laws, PCP Payment Agreement, Imaging Facility Payment
Agreement, Lab Payment Agreement, Group Health Election, Declarations and Signature
Pages (5 Sections)
Section 1: BY-LAWS OF SENIOR PATIENT ASSOCIATION, LLC d/b/a Patient/Physician
Cooperatives (PPC)
The Association intends to enter into contracts on behalf of its members with healthcare
providers to assure the quality and availability of services to its membership.
Annual Meeting. Second Tuesday of November at 1:00 P.M. Central time
Place of Meeting. PPC location listed on the enrollment application
Members' List for Meeting. The Association shall prepare an alphabetical list of the names of
all Members prior to meetings.
Quorum. Members present in person or by proxy that represent at least 5% of the total paid
membership entitled to cast votes on a matter shall constitute a quorum. Persons not in
attendance in person or by proxy are deemed to have abstained from voting.
Voting. Each Member age 18 or above shall be entitled to one (1) vote.
Proxies. Each Member may vote in person or by proxy. Upon notification of the annual meeting
either by mail or electronic means a receipt of the meeting notification “read receipt” if
electronic shall serve as a proxy vote assigned to the Secretary unless superseded by a written
proxy or in person attendance at the meeting.
Voting by Persons other than Members. Only members may vote either in person or by proxy
assigned to another member or to the Secretary (as noted above).
Manager’s powers shall be exercised under the authority of, and the direction of the Managers
as elected by the members. The Managers shall initially consist of the persons named in the
articles of the Association. Thereafter, the managers shall be elected from time to time by the
Members. Each Manager shall hold office for six years until (i) the next annual meeting of the
Members after the expiration of the six-year term and until that Manager's successor is elected
and qualified, or (ii) the earlier death, resignation, removal, or disqualification of a Manager.
Vacancies. Any vacancy occurring on the Manager Office for any reason may be filled by the
affirmative vote of a majority of the members. A Manager elected to fill a vacancy shall be
elected for the unexpired term of the Manager's predecessor in office.
Removal. The Manager may be removed, with or without cause, at a special meeting of
Members called for that purpose, by a vote of the majority entitled to vote at an election of the
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Manager.
Organization. Meetings of the Manager and staff shall be presided over by the Manager, or in
the Manager's absence by the next ranking officer. The Secretary shall act as secretary of the
meeting, but in the absence of the secretary, the person presiding at the meeting may appoint any
person to act as secretary of the meeting.
Compensation. Pursuant to membership resolution, Managers, as such, may receive such fees
and other compensation for their services as managers, including without limitation, their
services as members of committees of the Managers and staff.
Executive Committee. The Managers, by resolution adopted by a majority of the members, may
designate one or more of its office staff to constitute an executive committee or any other
committee. Each committee shall have one or more members, who serve at the pleasure of the
Manager. If the Managers appoint an executive committee, the executive committee shall have
and may exercise all of the authority of the Manager when the Manager and staff officers are not
in session.
Limits on Authority of Committees. No committee, including the executive committee, may do
any of the following:
▪ Authorize or approve distributions;
▪ Approve or propose to Members actions that are required by law to be approved by
Members;
▪ Fill vacancies on the Manager or on any of its committees;
▪ Amend articles of Organization;
Adopt, amend, or repeal By-laws; and
▪ Approve a plan of merger that requires Member approval
Officers. The Manager shall appoint a president and a secretary/treasurer.
The Chief Executive Officer shall be the president and shall have the powers:
▪ To act as the general manager and, subject to the control of the Managers, to have general
supervision, direction, and control of the business and affairs of the Association;
▪ To preside at all meetings of the Members and to preside at meetings of the Managers and
staff;
▪ To call meetings of the Members to be held at such times and, subject to the limitations
prescribed by law or by these Bylaws, at such places as the chief executive officer shall
deem proper;
▪ To see that all orders and resolutions of the Managers are carried into effect;
▪ To maintain records of and, whenever necessary, certify all proceedings of the Managers and
the Members;
▪ To affix the signature of the Association to all deeds, conveyances, mortgages, guarantees,
leases, obligations, bonds, certificates and other papers and instruments in writing which
have been authorized by the Manager or which, in the judgment of the chief executive
officer, should be executed on behalf of the Association;
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▪ To sign certificates for the Association's shares; and,
▪ subject to the direction of the Manager, to have general charge of the property of the
Association and to supervise and control all officers, agents, and employees of the
Association.
The Chief Financial Officer shall be the Secretary-Treasurer and the powers and duties shall be:
▪ To keep accurate financial records for the Association;
▪ To deposit all money, drafts, and checks in the name of and to the credit of the Association
in the banks and depositories designed by the Managers;
▪ To endorse for deposit all notes, checks, drafts received by the Association as ordered by the
Manager, making proper vouchers therefor;
▪ To disburse corporate funds and issue checks and drafts in the name of the Association, as
ordered by the Managers; and
▪ To render to the chief executive officer and the Managers, whenever requested, an account
of all transactions by the chief financial officer and the financial condition of the
Association.
A Manager or officer of the Association shall not be disqualified by the Manager's office from
dealing or contracting with the Association either as a vendor, purchaser, or otherwise. The fact
that any Manager or officer, or any firm of which any Manager or officer of the Association is a
Member, officer or Manager, is in any way interested in any transaction of the Association shall
not make such transaction void or require such Manager or officer of the Association to account
to the Association for any profits therefrom, provided that (a) the material facts of such
transaction and the Manager's interest are disclosed to, or known by, the Managers or committee
of the Managers at the time that the Manager or committee authorizes, ratifies, or approves the
transaction; (b) the material facts of such transaction and the Manager's interest are disclosed to
or known.
Minimum monthly dues for each adult 18+ years in a household are equal to the current rates for
the basic plan as advertised on the PPC web page: https://www. cooperativeplus.org/. These dues
are for the new and renewal years. Dues may be adjusted by the Manager with a majority
approval of the membership and yearly thereafter. There is a one-time registration fee of $20 per
household.
Limited Guarantees. The Association contracts with participating member physicians of
Accountable Care Organizations and Individual Practice Associations which have certain
availability and service obligations. Each member head of household is a limited guarantor
of those obligations up to $360 for the Concierge Plan. If the member resigns his or her
membership or defaults on payment of his or her dues, then the guarantee amount of $360
becomes due and is payable monthly at a rate of $30 per month over a period of 12 months.
The guaranteed amount will be higher (equal to the plans embedded retainer cost for
services) if the Concierge Plus or another higher-level plan is chosen at enrollment.
ACTIONS AGAINST OFFICERS AND MANAGERS. The Association shall indemnify to
the fullest extent permitted by the Texas Non-Profit Association Act any person who has been
made, or is threatened to be made, a party to an action, suit or proceeding, whether civil,
criminal, administrative, investigative, or otherwise (including an action, suit, or proceeding by
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or in the right of the Association), by reason of the fact that the person is or was a Manager,
officer or agent of the Association, or a fiduciary within the meaning of the Employee
Retirement Income Security Act of 1974 with respect to an employee benefit plan of the
Association, or serves or served at the request of the Association as a Manager or as an officer, or
as a fiduciary of an employee benefit plan, of another corporation, Association, partnership, joint
venture, trust or other enterprise.
I, Donald Harold McCormick, as manager of SENIOR PATIENT ASSOCIATION, hereby certify
that the foregoing constitutes the By-laws of this Association as adopted and in full force and
effect on this 15th day of January 2017.
(Signatures on file from the declarations and signature page which is attached hereto this
document)
Section 2: AGREEMENT FOR PRIMARY CARE PHYSICIAN SERVICES PAYMENT
PLAN, called Concierge and Concierge Plus
This Agreement for Primary Care Physician Services (hereinafter referred to as the "Agreement")
is made and entered into on the date the application was signed, by and between the named
applicant and the named primary care provider.
PURPOSES OF THE PLAN
WHEREAS Patient wishes to be billed a preferred rate for the Physician's services; WHEREAS
Physician wishes to have a predictable source of monthly income; WHEREAS Physician
currently pays overhead for the submission of claims for payment and for efforts to collect
payments not received at the time of service; WHEREAS physicians have traditionally accepted
fees for parties who pay under preferred terms such as insurance and managed care companies;
Therefore, premises considered, the parties agree as follows:
PHYSICIAN SERVICES PAYMENT PLAN (THE "PLAN")The patient will pay a yearly fee on
an annual or monthly basis to be a member of the Plan. As a member, Patient is entitled to be
billed according to the Plan's fee schedule (which is attached hereto) and to receive benefits
listed upon the fee schedule without further charge.
AMENDMENTS & OPTING OUT
The fee schedule may need to be amended at a future date because it is based on the usual
services and fees charged and services rendered to a patient by the physician on an annual basis.
Patient agrees that after notice of such amendment, Patient will be bound by such amendment
under the following terms. Physician agrees to notify Patient of any amendments to the fee
schedule by mail at Patient's last known address. Patient understands and accepts that it is their
responsibility to inquire as to the most current fee schedule before services are rendered. The
acceptance of services by Patient constitutes notice and acceptance of the current fee schedule.
Upon notice of any amendments to the fee schedule, Patient may send notice in writing to
Physician that Patient is opting out of the new fee schedule. When a Patient opts out of the new
fee schedule, they will continue to be a member only until the end of the current term of the
Agreement and will be charged for services in accordance with the fee schedule in effect prior to
the amendment. This Agreement is NOT INSURANCE. This Agreement DOES NOT PAY
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FOR HOSPITALIZATION nor any other service performed by anyone other than Physician or
Physician's staff, nor for any service performed any place other than at Physician's office or
personally performed by Physician at another facility. This Agreement only affects the price at
which this Physician's services are offered to this Patient while this Patient is a member of this
Physician’s Payment Plan.
WARRANTIES AND LIMITATIONS
Physician will provide professional medical services for the Patient in a timely manner (which
services include diagnosis, treatment, drug prescription which is on the Physician's formulary,
well-person examination and tests at the Physician's facilities that are within the scope of the
Physician's training and experience and which are usually performed in the Physician's private
practice. In this agreement, "Physician" means a licensed healthcare provider who is an MD, DO,
DC, Naturopath, Nurse-Practitioner, Master of Oriental Medicine and Acupuncture, and or other
practitioner recognized by the state as a Primary Care Physician, and the person specifically
named in the application. The patient will maintain sufficient funds on account and notify
Physician's agent of any change in banking information and will indemnify Physician for any
and all banking charges for rejected drafts, debits or any other charges resulting from insufficient
funds being available in the designated account. If for any reason this Agreement violates any
statute or law, or in the event the law changes in such a way as to make this Agreement illegal or
subject to additional regulation, either party may terminate this Agreement upon written notice.
Should this Agreement be terminated for any reason, Patient understands that any damages for
any liability that Physician may have to Patient or Patient's estate under this Agreement will be
limited to the number of membership fees paid during the current term of the Agreement. For
any damages owed to Patient under this Agreement, Physician will be entitled to offset any such
damages with the difference between fees for services charged at the preferred rate and the
Physician's customary rate for such services.
TERM AND RENEWAL
The term of this Agreement is one (1) year and it will automatically renew each year unless
either party gives written notice by U.S. certified mail return receipt requested, before the end of
the current term. Either party may terminate this Agreement at will with proper written notice at
any time. If this Agreement is terminated by the Physician, the outstanding balance of the yearly
fee for the current term will be waived unless the Physician is terminating for the failure of
Patient to pay fees or charges owing under this agreement. If this Agreement is terminated by
Patient, the outstanding balance of the yearly fee for the current term will continue to be owed.
NO WAIVER
No provision of this Agreement will be deemed waived by either party unless expressly waived
in writing signed by the waiving party. No waiver shall be implied by delay or any other act or
omission of either party. Physician's consent respecting any action by Patient shall not constitute
a waiver of the requirement for obtaining Physician's consent respecting any subsequent action.
ATTORNEY'S FEES, COUNTERCLAIMS, AND VENUE
If Physician or any of its officers, directors, trustees, beneficiaries, partners, agents, affiliates or
employees, shall be made a party to any litigation commenced by or against Patient and are not
found to be at fault, Patient shall pay all costs, expenses and reasonable attorney's fees incurred
by Physician or any such party in connection with such litigation. The patient shall also pay all
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costs, expenses and reasonable attorney's fees that may be incurred by Physician in successfully
enforcing this Agreement or in attempting to collect payment due under this Agreement. Any
action or proceeding brought by either party against the other for any matter arising out of or in
any way relating to this Agreement shall be heard, at Physician's option, in the County where the
Agreement was executed by the Physician.
NOTICES
Any notice which either party may, or is required to give, shall be given by mailing the same,
postage prepaid, to Patient at his residence listed on this document, or Physician at Physician's
office address, or at such other places as may be designated by the parties from time to time.
Notices by also be delivered by electronic means (email) where such means include proof of a
read receipt so such noticed can be tracked as delivered.
SURVIVAL OF OBLIGATIONS
All obligations (including indemnity obligations) or rights of either party arising during or
attributable to the period prior to expiration or earlier termination of this Agreement shall survive
such expiration or earlier termination.
HEIRS, ASSIGNS, SUCCESSORS
This Agreement is binding upon and inure to the benefit of the heirs, assigns and successors in
interest to the parties.
LEGAL CONSTRUCTION
This Agreement shall be construed in accordance with the laws of the State and County in which
the Agreement was executed by Physician.
ENTIRE AGREEMENT
This Agreement contains all the terms and provisions between Physician and Patient relating to
the matters set forth herein and no prior or contemporaneous Agreement or understanding
pertaining to the same shall be of any force or effect. The signatures below or on the
Declarations Page of the agreement attest to the fact that all provisions have been read and fully
understood by the parties prior to the signing of this Agreement.
CAPTIONS AND SEVERABILITY
The captions of the Articles and Paragraphs of this Agreement are for convenience of reference
only and shall not be considered or referred to in resolving questions of interpretation. If any
term or provision of this Agreement or portion thereof shall be found invalid, void, illegal, or
unenforceable generally or with respect to any particular party, by a court of competent
jurisdiction, it shall not affect, impair or invalidate any other terms or provisions or the remaining
portion thereof, or its enforceability with respect to any other party.
MODIFICATION
Neither this Agreement nor any term, provision, paragraph or article referenced above may be
modified, except in writing by both parties as stated in the “Notices” paragraph above.
Acknowledge may be through signature or through electronic means such as DocuSign.
PAYMENT TERMS
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Patient agrees to pay a yearly membership fee on an annual or a monthly basis as shown on the
attached fee schedule or in accordance with the promissory note and invoices for re-priced fees
attached to this agreement until this Agreement terminates and fails to be renewed. Each yearly
fee becomes fully owing at the beginning of the term. Patient agrees to make monthly
membership fee payments by payroll deduction or by direct deposit as follows:
Patient authorizes Physician or its designated attorney-in-fact, Senior Patient Association DBA
Patient Physician Cooperatives to electronically draft my account or charge my debit or credit
card for my fees. The name of my bank or credit card company, its transit number and my
account number are printed on the Declarations Page and I have attached a copy of a voided
check as proof of my account and its proper numbers. I instruct the bank that I have named
below to honor checks drawn in the name of Physician or its designated agent acting as attorney
in fact for Physician. And as a convenience to me to charge my account and to pay their account
the amount stated in the checks. This authorization is to remain in effect until revoked by me in
writing and until you, the bank, actually receive notice, I agree that you shall be fully protected
in honoring any such check or electronic debit. I agree that the bank's treatment of each such
check or debit shall be the same as if it were personally signed by me. I further agree that if any
such check or debit is dishonored, whether with or without cause, the bank shall be under no
liability. The physician or its designated agent is instructed to forward this authorization to you,
the bank named on the voided check provided by patient:
EVENTS UPON SIGNING OF AGREEMENT
Upon the signing of this Agreement, Patient must pay Physician the initial monthly fee specified
above and must supply all information required on the application that is with this document.
(Signatures on file from the declarations and signature page which is attached hereto this
document)
Laboratory and diagnostic tests done by outside reference labs and facilities are not
covered by this agreement and the cost of those tests are to be paid directly to the Physician
for payment to the lab based on the Lab’s fee agreement with the Physician’s clinic, unless
the Patient has a direct payment agreement with the reference laboratory.
Section 3: AGREEMENT FOR DIAGNOSTIC FACILITY PHYSICIAN SERVICES
PAYMENT PLAN
This Agreement for Diagnostic Facility Physician Services (hereinafter referred to as the
"Agreement") is made and entered into on the date the application was signed, by and between
the named applicant and the named primary care provider.
PURPOSES OF THE PLAN
WHEREAS Patient wishes to be billed a preferred rate for the Physician's services; WHEREAS
Physician wishes to have a predictable source of monthly income; WHEREAS Physician
currently pays overhead for the submission of claims for
payment and for efforts to collect payments not received at the time of service; WHEREAS
physicians have traditionally accepted fees for parties who pay under preferred terms such as
insurance and managed care companies; Therefore, premises considered, the parties agree as
follows:
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PHYSICIAN SERVICES PAYMENT PLAN (THE "PLAN")
The patient will pay a yearly fee on an annual or monthly basis to be a member of the Plan. As a
member, Patient is entitled to be billed according to the Plan's fee schedule (which is attached
hereto) and to receive benefits listed upon the fee schedule without further charge.
AMENDMENTS & OPTING OUT
The fee schedule may need to be amended at a future date because it is based on the usual
services and fees charged and services rendered to a patient by the physician on an annual basis.
Patient agrees that after notice of such amendment, Patient will be bound by such amendment
under the following terms. Physician agrees to notify Patient of any amendments to the fee
schedule by mail at Patient's last known address. Patient understands and accepts that it is their
responsibility to inquire as to the most current fee schedule before services are rendered. The
acceptance of services by Patient constitutes notice and acceptance of the current fee schedule.
Upon notice of any amendments to the fee schedule, Patient may send notice in writing to
Physician that Patient is opting out of the new fee schedule. When a Patient opts out of the new
fee schedule, they will continue to be a member only until the end of the current term of the
Agreement and will be charged for services in accordance with the fee schedule in effect prior to
the amendment. This Agreement is NOT INSURANCE. This Agreement DOES NOT PAY
FOR HOSPITALIZATION nor any other service performed by anyone other than Physician or
Physician's staff, nor for any service performed any place other than at Physician's office or
personally performed by Physician at another facility. This Agreement only affects the price at
which this Physician's services are offered to this Patient while this Patient is a member of this
Physician’s Payment Plan.
WARRANTIES AND LIMITATIONS The physician will provide professional diagnostic
imaging medical services for the Patient in a timely manner that are within the scope of the
Physician's training and experience and which are usually performed in the Physician's private
practice. In this Agreement, "Physician" means a licensed health care provider or facility
recognized by the state as a Physician or imaging facility, and the person specifically named in
the application. The patient will maintain sufficient Acupuncture, and or other practitioner
recognized by the state as a Primary Care Physician, and the person specifically named in the
application. The patient will maintain sufficient funds on account and notify Physician's agent of
any change in banking information and will indemnify Physician for any and all banking charges
for rejected drafts, debits or any other charges resulting from insufficient funds being available in
the designated account. If for any reason this Agreement violates any statute or law, or in the
event the law changes in such a way as to make this Agreement illegal or subject to additional
regulation, either party may terminate this Agreement upon written notice. Should this
Agreement be terminated for any reason, Patient understands that any damages for any liability
that Physician may have to Patient or Patient's estate under this Agreement will be limited to the
number of membership fees paid during the current term of the Agreement. For any damages
owed to Patient under this Agreement, Physician will be entitled to offset any such damages with
the difference between fees for services charged at the preferred rate and the Physician's
customary rate for such services.
TERM AND RENEWAL
The term of this Agreement is one (1) year and it will automatically renew each year unless
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either party gives written notice by U.S. certified mail return receipt requested, before the end of
the current term. Either party may terminate this Agreement at will with proper written notice at
any time. If this Agreement is terminated by Physician, the outstanding balance of the yearly fee
for the current term will be waived unless the Physician is terminating for the failure of Patient to
pay fees or charges owing under this agreement. If this Agreement is terminated by Patient, the
outstanding balance of the yearly fee for the current term will continue to be owed.
NO WAIVER
No provision of this Agreement will be deemed waived by either party unless expressly waived
in writing signed by the waiving party. No waiver shall be implied by delay or any other act or
omission of either party. Physician's consent respecting any action by Patient shall not constitute
a waiver of the requirement for obtaining Physician's consent respecting any subsequent action.
ATTORNEY'S FEES, COUNTERCLAIMS, AND VENUE
If Physician or any of its officers, directors, trustees, beneficiaries, partners, agents, affiliates or
employees, shall be made a party to any litigation commenced by or against Patient and are not
found to be at fault, Patient shall pay all costs, expenses and reasonable attorney's fees incurred
by Physician or any such party in connection with such litigation. The patient shall also pay all
costs, expenses and reasonable attorney's fees that may be incurred by Physician in successfully
enforcing this Agreement or in attempting to collect payment due under this Agreement. Any
action or proceeding brought by either party against the other for any matter arising out of or in
any way relating to this Agreement shall be heard, at Physician's option, in the County where the
Agreement was executed by the Physician.
NOTICES
Any notice which either party may, or is required to give, shall be given by mailing the same,
postage prepaid, to Patient at his residence listed on this document, or Physician at Physician's
office address, or at such other places as may be designated by the parties from time to time.
Notices by also be delivered by electronic means (email) where such means include proof of a
read receipt so such noticed can be tracked as delivered.
SURVIVAL OF OBLIGATIONS
All obligations (including indemnity obligations) or rights of either party arising during or
attributable to the period prior to expiration or earlier termination of this Agreement shall survive
such expiration or earlier termination.
HEIRS, ASSIGNS, SUCCESSORS
This Agreement is binding upon and inure to the benefit of the heirs, assigns and successors in
interest to the parties.
LEGAL CONSTRUCTION
This Agreement shall be construed in accordance with the laws of the State and County in which
the Agreement was executed by Physician.
ENTIRE AGREEMENT
This Agreement contains all the terms and provisions between Physician and Patient relating to
the matters set forth herein and no prior or contemporaneous Agreement or understanding
104
pertaining to the same shall be of any force or effect. The signatures below or on the
Declarations Page of the agreement attest to the fact that all provisions have been read and fully
understood by the parties prior to the signing of this Agreement.
CAPTIONS AND SEVERABILITY
The captions of the Articles and Paragraphs of this Agreement are for convenience of reference
only and shall not be considered or referred to in resolving questions of interpretation. If any
term or provision of this Agreement or portion thereof shall be found invalid, void, illegal, or
unenforceable generally or with respect to any
particular party, by a court of competent jurisdiction, it shall not affect, impair or invalidate any
other terms or provisions or the remaining portion thereof, or its enforceability with respect to
any other party.
MODIFICATION
Neither this Agreement, nor any term, provision, paragraph or article referenced above may be
modified, except in writing signed by both parties.
PAYMENT TERMS
Patient agrees to pay a yearly membership fee on an annual or a monthly basis as shown on the
attached fee schedule or in accordance with the promissory note and invoices for re-priced fees
attached to this agreement until this Agreement terminates and fails to be renewed. Each yearly
fee becomes fully owing at the beginning of the term. Patient agrees to make monthly
membership fee payments by payroll deduction or by direct deposit as follows:
Patient authorizes Physician or its designated attorney-in-fact, Senior Patient Association DBA
Patient Physician Cooperatives to electronically draft my account or charge my debit or credit
card for my fees. The name of my bank or credit card company, its transit number and my
account number are printed on the Declarations Page and I have attached a copy of a voided
check as proof of my account and its proper numbers. I instruct the bank that I have named
below to honor checks drawn in the name of Physician or its designated agent acting as attorney
in fact for Physician. And as a convenience to me to charge my account and to pay their account
the amount stated in the checks. This authorization is to remain in effect until revoked by me in
writing and until you, the bank, actually receive notice, I agree that you shall be fully protected
in honoring any such check or electronic debit. I agree that the bank's treatment of each such
check or debit shall be the same as if it were personally signed by me. I further agree that if any
such check or debit is dishonored, whether with or without cause, the bank shall be under no
liability. The physician or its designated agent is instructed to forward this authorization to you,
the bank named on the voided check provided by patient:
EVENTS UPON SIGNING OF AGREEMENT
Upon the signing of this Agreement, Patient must pay Physician the initial monthly fee specified
above and must supply all information required on the application that is with this document.
(Signatures on file from the declarations and signature page which is attached hereto this
document)
Laboratory and diagnostic tests done by outside reference labs and facilities are not
covered by this agreement and the cost of those tests are to be paid directly to the Physician
105
for payment to the lab based on the Lab’s fee agreement with the Physician’s clinic, unless
the Patient has a direct payment agreement with the reference laboratory.
Section 4: AGREEMENT FOR PRIMARY CARE & Specialty PHYSICIAN SERVICES
PAYMENT PLAN, called Concierge Elite
This Agreement for Primary & Specialty Care Physician Services (hereinafter referred to as the
"Agreement") is made and entered into on the date the application was signed, by and between
the named applicant and the named primary care provider.
PURPOSES OF THE PLAN
WHEREAS Patient wishes to be billed a preferred rate for the Physician's services; WHEREAS
Physician wishes to have a predictable source of monthly income; WHEREAS Physician
currently pays overhead for the submission of claims for payment and for efforts to collect
payments not received at the time of service; WHEREAS physicians have traditionally accepted
fees for parties who pay under preferred terms such as insurance and managed care companies;
Therefore, premises considered, the parties agree as follows:
PHYSICIAN SERVICES PAYMENT PLAN (THE "PLAN")The patient will pay a yearly fee on
an annual or monthly basis to be a member of the Plan. As a member, Patient is entitled to be
billed according to the Plan's fee schedule (which is attached hereto) and to receive benefits
listed upon the fee schedule without further charge.
AMENDMENTS & OPTING OUT
The fee schedule may need to be amended at a future date because it is based on the usual
services and fees charged and services rendered to a patient by the physician on an annual basis.
Patient agrees that after notice of such amendment, Patient will be bound by such amendment
under the following terms. Physician agrees to notify Patient of any amendments to the fee
schedule by mail at Patient's last known address. Patient understands and accepts that it is their
responsibility to inquire as to the most current fee schedule before services are rendered. The
acceptance of services by Patient constitutes notice and acceptance of the current fee schedule.
Upon notice of any amendments to the fee schedule, Patient may send notice in writing to
Physician that Patient is opting out of the new fee schedule. When a Patient opts out of the new
fee schedule, they will continue to be a member only until the end of the current term of the
Agreement and will be charged for services in accordance with the fee schedule in effect prior to
the amendment. This Agreement is NOT INSURANCE. This Agreement DOES NOT PAY
FOR HOSPITALIZATION nor any other service performed by anyone other than Physician or
Physician's staff, nor for any service performed any place other than at Physician's office or
personally performed by Physician at another facility. This Agreement only affects the price at
which this Physician's services are offered to this Patient while this Patient is a member of this
Physician’s Payment Plan.
WARRANTIES AND LIMITATIONS
Physician will provide professional medical services for the Patient in a timely manner (which
services include diagnosis, treatment, drug prescription which is on the Physician's formulary,
well-person examination and tests at the Physician's facilities that are within the scope of the
Physician's training and experience and which are usually performed in the Physician's private
106
practice. In this agreement, "Physician" means a licensed healthcare provider who is an MD, DO,
DC, Naturopath, Nurse-Practitioner, Master of Oriental Medicine and Acupuncture, and or other
practitioner recognized by the state as a Primary Care or Specialist Physician, and the person
specifically named in the application. The patient will maintain sufficient funds on account and
notify Physician's agent of any change in banking information and will indemnify Physician for
any and all banking charges for rejected drafts, debits or any other charges resulting from
insufficient funds being available in the designated account. If for any reason this Agreement
violates any statute or law, or in the event the law changes in such a way as to make this
Agreement illegal or subject to additional regulation, either party may terminate this Agreement
upon written notice. Should this Agreement be terminated for any reason, Patient understands
that any damages for any liability that Physician may have to Patient or Patient's estate under this
Agreement will be limited to the number of membership fees paid during the current term of the
Agreement. For any damages owed to Patient under this Agreement, Physician will be entitled to
offset any such damages with the difference between fees for services charged at the preferred
rate and the Physician's customary rate for such services.
TERM AND RENEWAL
The term of this Agreement is one (1) year and it will automatically renew each year unless
either party gives written notice by U.S. certified mail return receipt requested, before the end of
the current term. Either party may terminate this Agreement at will with proper written notice at
any time. If this Agreement is terminated by the Physician, the outstanding balance of the yearly
fee for the current term will be waived unless the Physician is terminating for the failure of
Patient to pay fees or charges owing under this agreement. If this Agreement is terminated by
Patient, the outstanding balance of the yearly fee for the current term will continue to be owed.
NO WAIVER
No provision of this Agreement will be deemed waived by either party unless expressly waived
in writing signed by the waiving party. No waiver shall be implied by delay or any other act or
omission of either party. Physician's consent respecting any action by Patient shall not constitute
a waiver of the requirement for obtaining Physician's consent respecting any subsequent action.
ATTORNEY'S FEES, COUNTERCLAIMS, AND VENUE
If Physician or any of its officers, directors, trustees, beneficiaries, partners, agents, affiliates or
employees, shall be made a party to any litigation commenced by or against Patient and are not
found to be at fault, Patient shall pay all costs, expenses and reasonable attorney's fees incurred
by Physician or any such party in connection with such litigation. The patient shall also pay all
costs, expenses and reasonable attorney's fees that may be incurred by Physician in successfully
enforcing this Agreement or in attempting to collect payment due under this Agreement. Any
action or proceeding brought by either party against the other for any matter arising out of or in
any way relating to this Agreement shall be heard, at Physician's option, in the County where the
Agreement was executed by the Physician.
NOTICES
Any notice which either party may, or is required to give, shall be given by mailing the same,
postage prepaid, to Patient at his residence listed on this document, or Physician at Physician's
office address, or at such other places as may be designated by the parties from time to time.
Notices by also be delivered by electronic means (email) where such means include proof of a
107
read receipt so such noticed can be tracked as delivered.
SURVIVAL OF OBLIGATIONS
All obligations (including indemnity obligations) or rights of either party arising during or
attributable to the period prior to expiration or earlier termination of this Agreement shall survive
such expiration or earlier termination.
HEIRS, ASSIGNS, SUCCESSORS
This Agreement is binding upon and inure to the benefit of the heirs, assigns and successors in
interest to the parties.
LEGAL CONSTRUCTION
This Agreement shall be construed in accordance with the laws of the State and County in which
the Agreement was executed by Physician.
ENTIRE AGREEMENT
This Agreement contains all the terms and provisions between Physician and Patient relating to
the matters set forth herein and no prior or contemporaneous Agreement or understanding
pertaining to the same shall be of any force or effect. The signatures below or on the
Declarations Page of the agreement attest to the fact that all provisions have been read and fully
understood by the parties prior to the signing of this Agreement.
CAPTIONS AND SEVERABILITY
The captions of the Articles and Paragraphs of this Agreement are for convenience of reference
only and shall not be considered or referred to in resolving questions of interpretation. If any
term or provision of this Agreement or portion thereof shall be found invalid, void, illegal, or
unenforceable generally or with respect to any particular party, by a court of competent
jurisdiction, it shall not affect, impair or invalidate any other terms or provisions or the remaining
portion thereof, or its enforceability with respect to any other party.
MODIFICATION
Neither this Agreement nor any term, provision, paragraph or article referenced above may be
modified, except in writing by both parties as stated in the “Notices” paragraph above.
Acknowledge may be through signature or through electronic means such as DocuSign.
PAYMENT TERMS
Patient agrees to pay a yearly membership fee on an annual or a monthly basis as shown on the
attached fee schedule or in accordance with the promissory note and invoices for re-priced fees
attached to this agreement until this Agreement terminates and fails to be renewed. Each yearly
fee becomes fully owing at the beginning of the term. Patient agrees to make monthly
membership fee payments by payroll deduction or by direct deposit as follows:
Patient authorizes Physician or its designated attorney-in-fact, Senior Patient Association DBA
Patient Physician Cooperatives to electronically draft my account or charge my debit or credit
card for my fees. The name of my bank or credit card company, its transit number and my
account number are printed on the Declarations Page and I have attached a copy of a voided
108
check as proof of my account and its proper numbers. I instruct the bank that I have named
below to honor checks drawn in the name of Physician or its designated agent acting as attorney
in fact for Physician. And as a convenience to me to charge my account and to pay their account
the amount stated in the checks. This authorization is to remain in effect until revoked by me in
writing and until you, the bank, actually receive notice, I agree that you shall be fully protected
in honoring any such check or electronic debit. I agree that the bank's treatment of each such
check or debit shall be the same as if it were personally signed by me. I further agree that if any
such check or debit is dishonored, whether with or without cause, the bank shall be under no
liability. The physician or its designated agent is instructed to forward this authorization to you,
the bank named on the voided check provided by patient:
EVENTS UPON SIGNING OF AGREEMENT
Upon the signing of this Agreement, Patient must pay Physician the initial monthly fee specified
above and must supply all information required on the application that is with this document.
(Signatures on file from the declarations and signature page which is attached hereto this
document)
Laboratory and diagnostic tests done by outside reference labs and facilities are not
covered by this agreement and the cost of those tests are to be paid directly to the Physician
for payment to the lab based on the Lab’s fee agreement with the Physician’s clinic, unless
the Patient has a direct payment agreement with the reference laboratory.
Section 5: AGREEMENT FOR LAB SERVICES PAYMENT PLAN
This Agreement for Laboratory Services (hereinafter referred to as the "Agreement") is made and
entered into on the date the application was signed, by and between the named applicant and the
Medical Laboratory named on the Declarations Page.
PURPOSES OF THE PLAN WHEREAS Patient wishes to be billed a preferred rate for the
Medical Laboratory; WHEREAS Medical Laboratory wishes to have a predictable source of
monthly income; WHEREAS Medical Laboratory currently pays overhead for the submission of
claims for payment and for efforts to collect payments not received at the time of service;
WHEREAS Medical Laboratories have traditionally accepted fees for parties who pay under
preferred terms such as insurance and managed care companies; Therefore, premises considered,
the parties agree as follows:
PHYSICIAN SERVICES PAYMENT PLAN (THE "PLAN")The patient will pay a yearly fee on
an annual or monthly basis to be a member of the Plan. As a member, Patient is entitled to be
billed according to the Plan's fee schedule (which is attached hereto) and to receive benefits
listed upon the fee schedule without further charge.
AMENDMENTS & OPTING OUT
The fee schedule may need to be amended at a future date because it is based on the usual
services and fees charged and services rendered to a patient by the physician on an annual basis.
Patient agrees that after notice of such amendment, Patient will be bound by such amendment
under the following terms. Physician agrees to notify Patient of any amendments to the fee
schedule by mail at Patient's last known address. Patient understands and accepts that it is their
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responsibility to inquire as to the most current fee schedule before services are rendered. The
acceptance of services by Patient constitutes notice and acceptance of the current fee schedule.
Upon notice of any amendments to the fee schedule, Patient may send notice in writing to
Physician that Patient is opting out of the new fee schedule. When a Patient opts out of the new
fee schedule, they will continue to be a member only until the end of the current term of the
Agreement and will be charged for services in accordance with the fee schedule in effect prior to
the amendment. This Agreement is NOT INSURANCE. This Agreement DOES NOT PAY
FOR HOSPITALIZATION nor any other service performed by anyone other than Physician or
Physician's staff, nor for any service performed any place other than at Physician's office or
personally performed by Physician at another facility. This Agreement only affects the price at
which this Physician's services are offered to this Patient while this Patient is a member of this
Physician’s Payment Plan.
WARRANTIES AND LIMITATIONS Medical Laboratory will provide Medical Laboratory
services for the Patient in a timely manner that is within the scope of the Medical Laboratory's
training and experience and which are usually performed in the Medical Laboratory practice. In
this agreement “Medical Laboratory” means a licensed health care provider or facility
recognized by the state as a Medical Laboratory facility, and the person specifically named in the
application. The patient will maintain sufficient funds on account and notify Medical Laboratory
s agent of any change in banking information and will indemnify Medical Laboratory for any
and all banking charges for dishonored drafts, debits or any other charges resulting from
insufficient funds being available in the designated account. If for any reason this Agreement
violates any statute or law, or in the event the law changes in such a way as to make this
Agreement illegal or subject to additional regulation, either party may terminate this Agreement
upon written notice. Should this Agreement be terminated for any reason, Patient understands
that any damages for any liability that Medical Laboratory may have to Patient or Patient's estate
under this Agreement, will be limited to the number of membership fees paid during the current
term of the Agreement. For any damages owed to Patient under this Agreement, Medical
Laboratory will be entitled to offset any such damages with the difference between fees for
services charged at the preferred rate and the Physician's customary rate for such services.
TERM AND RENEWAL
The term of this Agreement is one (1) year and it will automatically renew each year unless
either party gives written notice by U.S. certified mail return receipt requested, before the end of
the current term. Either party may terminate this Agreement at will with proper written notice at
any time. If this Agreement is terminated by Medical Laboratory, the outstanding balance of the
yearly fee for the current term will be waived unless the Medical Laboratory is terminating for
the failure of the Patient to pay fees or charges owing under this agreement. If this Agreement is
terminated by the Patient, the outstanding balance of the yearly fee for the current term will
continue to be owed.
NO WAIVER
No provision of this Agreement will be deemed waived by either party unless expressly waived
in writing signed by the waiving party. No waiver shall be implied by delay or any other act or
omission of either party. Physician's consent respecting any action by Patient shall not constitute
a waiver of the requirement for obtaining Medical Laboratory’s consent respecting any
subsequent action.
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ATTORNEY'S FEES, COUNTERCLAIMS, AND VENUE
If Medical Laboratory or any of its officers, directors, trustees, beneficiaries, partners, agents,
affiliates or employees, shall be made a party to any litigation commenced by or against Patient
and are not found to be at fault, Patient shall pay all costs, expenses and reasonable attorney's
fees incurred by Medical Laboratory or any such party in connection with such litigation. The
patient shall also pay all costs, expenses and reasonable attorney's fees that may be incurred by
Medical Laboratory in successfully enforcing this Agreement or in attempting to collect payment
due under this Agreement. Any action or proceeding brought by either party against the other for
any matter arising out of or in any way relating to this Agreement shall be heard, at Physician's
option, in the County where the Agreement was executed by the Medical Laboratory.
NOTICES
Any notice which either party may, or is required to give, shall be given by mailing the same,
postage prepaid, to Patient at his residence listed on this document, or Physician at Physician's
office address, or at such other places as may be designated by the parties from time to time.
Notices by also be delivered by electronic means (email) where such means include proof of a
read receipt so such noticed can be tracked as delivered.
SURVIVAL OF OBLIGATIONS
All obligations (including indemnity obligations) or rights of either party arising during or
attributable to the period prior to expiration or earlier termination of this Agreement shall survive
such expiration or earlier termination.
HEIRS, ASSIGNS, SUCCESSORS
This Agreement is binding upon and inure to the benefit of the heirs, assigns and successors in
interest to the parties.
LEGAL CONSTRUCTION
This Agreement shall be construed in accordance with the laws of the State and County in which
the Agreement was executed by Medical Laboratory.
ENTIRE AGREEMENT This Agreement contains all the terms and provisions between the
Medical Laboratory and the Patient relating to the matters set forth herein and no prior or
contemporaneous
Agreement or understanding pertaining to the same shall be of any force or effect. The
signatures below attest to the fact that all provisions have been read and fully understood by the
parties prior to the signing of this Agreement.
CAPTIONS AND SEVERABILITY The captions of the Articles and Paragraphs of this
Agreement are for convenience of
reference only and shall not be considered or referred to in resolving questions of interpretation.
If any term or provision of this Agreement or portion thereof shall be found invalid, void, illegal,
or unenforceable generally or with respect to any particular party, by a court of competent
jurisdiction, it shall not affect, impair or invalidate any other terms or provisions or the remaining
portion thereof, or its enforceability with respect to any other party.
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MODIFICATION
Neither this Agreement, nor any term, provision, paragraph or article referenced above may be
modified, except in writing signed by both parties.
PAYMENT TERMS
Patient agrees to pay a yearly membership fee on an annual or a monthly basis as shown on the
attached fee schedule or in accordance with the promissory note and invoices for re-priced fees
attached to this agreement until this Agreement terminates and fails to be renewed. Each yearly
fee becomes fully owing at the beginning of the term. Patient agrees to make monthly
membership fee payments by payroll deduction or by direct deposit as follows:
Patient authorizes Medical Laboratory or its designated attorney-in-fact, Senior Patient
Association DBA Patient Physician Cooperatives to electronically draft my account or charge my
debit or credit card for my fees. The name of my bank or credit card company, its transit number
and my account number are printed on the Declarations Page and I have attached a copy of a
voided check as proof of my account and its proper numbers. I instruct the bank that I have
named below to honor checks drawn in the name of Physician or its designated agent acting as
attorney in fact for Physician. And as a convenience to me to charge my account and to pay their
account the amount stated in the checks. This authorization is to remain in effect until revoked by
me in writing and until you, the bank, actually receive notice, I agree that you shall be fully
protected in honoring any such check or electronic debit. I agree that the bank's treatment of each
such check or debit shall be the same as if it were personally signed by me. I further agree that if
any such check or debit is dishonored, whether with or without cause, the bank shall be under no
liability. The physician or its designated agent is instructed to forward this authorization to you,
the bank named on the voided check provided by patient:
EVENTS UPON SIGNING OF AGREEMENT
Upon the signing of this Agreement, Patient must pay Medical Laboratory the initial monthly fee
specified above and must supply all information required on the application that is with this
document. (Signatures on file from the declarations and signature page which is attached hereto
this document)
Laboratory and diagnostic tests done by outside facilities are not covered by this agreement
and the cost of those services are to be paid directly to the Medical Laboratory for payment
to the outside facility based on the facility’s fee agreement with the Medical Laboratory,
unless the Patient has a direct agreement with the outside facility.
DECLARATIONS AND SIGNATURES RELATED
TO MEMBERSHIP AGREEMENTS PRECEDING THIS PAGE
I choose to participate in the following list of plans sponsored by the Association (PPC) for
each household member as I have listed them in the application for each applicable plan:
Marked As shown in the Application
_____ MEMBERSHIP in PPC, Teladoc and Lab
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_____ DISCOUNT MEDICAL AND DENTAL AND PRESCRIPTION DRUG CARD
_____ AGREEMENT FOR PRIMARY CARE PHYSICIAN SERVICES PAYMENT PLAN
* Concierge
_____ AGREEMENT FOR DIAGNOSTIC FACILITY PHYSICIAN SERVICES PAYMENT
PLAN
* Concierge Plus
_____ AGREEMENT FOR PCP- SPECIALTY PHYSICIAN SERVICES PAYMENT PLAN
* Concierge Elite
_____ LAB SERVICES PAYMENT PLAN
_____ ASSOCIATION GROUP HOSPITAIL INDEMNITY INSURANCE
_____ ASSOCIATION GROUP LUMP SUM CANCER INSURANCE
_____ ASSOCIATION GROUP STOP LOSS INSURANCE
Part 1: SENIOR PATIENT ASSOCIATION DBA PATIENT/PHYSICIAN
COOPERATIVES (PPC) BY- LAWS
I agree to be a member of the Senior Patient Association Dba Patient Physicians Cooperatives
(PPC) in order to have access to the benefits and privileges of the Association and its members,
Co-op Medical clinic programs, and group health insurance plans. I, therefore, approve of the
By-laws that have been reported in this paper and to all of the terms and conditions stated herein.
Printed name as shown in the Application
________________________________________________
Signature as shown in the Application
________________________________________________
Date as shown in the Application
________________________________________________
Signature on File
Part 2: AGREEMENT FOR PRIMARY CARE PHYSICIAN SERVICES PAYMENT
PLAN
Printed name as shown in the Application
_________________________________________________
Signature as shown in the Application
_________________________________________________
Date as shown in the Application
________________________________________________
Name of PCP as shown in the Application
_________________________________________________
Signature on File
Part 3: AGREEMENT FOR DIAGNOSTIC FACILITY PHYSICIAN SERVICES
PAYMENT PLAN
Printed name as shown in the Application
_________________________________________________
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Signature as shown in the Application
_________________________________________________
Date as shown in the Application
_________________________________________________
Name of Facility as shown in the Application
________________________________________________
Signature on File
Part 4: AGREEMENT FOR PCP- SPECIALTY PHYSICIAN SERVICES PAYMENT
PLAN
Printed name as shown in the Application
_________________________________________________
Signature as shown in the Application
_________________________________________________
Date as shown in the Application
________________________________________________
Name of Medical Group as shown in the Application
_________________________________________________
Signature on File
Part 5: AGREEMENT FOR LAB SERVICES PAYMENT PLAN
Printed name as shown in the Application
_________________________________________________
Signature as shown in the Application
_________________________________________________
Date as shown in the Application
_________________________________________________
Name of Laboratory as shown in the Application
________________________________________________
Signature on File
Part 6: HOSPITAL INDEMNITY INSURANCE
I hereby apply for HOSPITAL INDEMNITY INSURANCE. I understand that if accepted by
the Insurance Company, the insurance will become effective on the Effective Date shown in the
Schedule of Benefits of the Certificate to be issued to me by the Insurance Company. I declare
that, to the best of my knowledge and belief, all of the information contained in this Enrollment
Form, is true and correct, and that no material information has been withheld or omitted. The
Group Hospital Indemnity Plan Certificate is available here or can be obtained by calling 1-866-
549-4199.
WARNING: Any person who knowingly and with intent to injure, defraud, or deceive any
insurer files a statement of claim or an application/enrollment form containing any false,
incomplete, or misleading information, may be guilty of a crime and may be subject to fines and
confinement in prison.
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Printed name as shown in the Application
_________________________________________________
Signature as shown in the Application
________________________________________________
Date as shown in the Application
________________________________________________
I certify that I have given an outline of coverage for the policy applied for to the applicant.
Printed agent name as shown in the Application
_________________________________________________
Agent Signature as shown in the Application
________________________________________________
Signature on File
Agent Tax ID No. as shown in the Application
________________________________________________
Part 7: Stop Loss INSURANCE
I hereby apply for Association Group Stop Loss Insurance. I understand that if accepted by the
Insurance Company, the insurance will become effective on the Effective Date shown in the
Schedule of Benefits of the Certificate to be issued to me by the Insurance Company. I declare
that, to the best of my knowledge and belief, all of the information contained in this Enrollment
Form, is true and correct, and that no material information has been withheld or omitted. The
Group Stop Loss Plan Certificate is available here or can be obtained by calling 1-866-549-4199.
WARNING: Any person who knowingly and with intent to injure, defraud, or deceive any
insurer files a statement of claim or an application/enrollment form containing any false,
incomplete, or misleading information, may be guilty of a crime and may be subject to fines and
confinement in prison.
Printed name as shown in the Application
_______________________________________________
Signature as shown in the Application
_________________________________________________
Date as shown in the Application
_______________________________________________
I certify that I have given an outline of coverage for the policy applied for to the applicant.
Printed agent name as shown in the Application
________________________________________________
Agent Signature as shown in the Application
________________________________________________
Signature on File
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* Benefits are subject to change without notice. Benefits may be added or removed and do not
affect the status of your membership in the Plan.
Information About Becoming a Member:
Website: www.patientphysiciancoop.com
Phone: 866-549-4199
Fax Number: 866-234-8707
Mailing address:
Patient/Physician Cooperatives 900 Rockmead Drive Suite 147, Kingwood Texas 77339
PPC is a DBA for Senior Patient Association This is a discount medical benefits plan under the
license of Senior Patient Association. (Texas License # 1721390)
This is not an insurance plan even when the member purchases the Group Indemnity Insurance
Policy issued to Senior Patient Association by an Insurance Company or PPC is included in an
Employer-Sponsored ERISA Health Plan. It is a discount plan and the Association is a purchaser
of group health insurance for the benefit of its members.
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Addendum B – Health Plan Explanations, Questions and Answers
The Employee Benefit Trust
This is an outline of the health plan that is available to our employees and their dependents.
We sponsor it and have established a trust fund under the authority of Employee Retirement
and Income Security Act, regulated by the Department of Labor, and jointly funded by
contributions from our company and the participating employees. Please request a copy of
the “Employee Contribution Worksheet” from your worksite supervisor for information
regarding the benefits, cost and availability of the plan.
After you have read and reviewed The Summary Plan Document and the health plans
explanations, questions and answers, select the coverage options that are right for you using
the enrollment forms attached to this paper.
Introduction
Your company wants to provide you and your eligible dependents with a health care plan in which you and your selected medical care providers are able to achieve the best medical outcomes and the highest quality health care possible. In order to do that, it requires our contributions and your contributions to an employee trust fund established under the Employee Retirement Income Security Act (ERISA) and the purchase of reinsurance and other insurance that will protect our funds and secure the payment of benefits to the medical care providers and to the facilities that they and you agree are best to use for your care and treatments. However, neither Trust Funds nor Insurance is “health care” and having “good health care” is a cooperative effort between patients and their chosen providers and advisors. As an employer sponsor of this Plan we are trying to make the cooperation easier and the burden of financing the care less onerous.
Your employer assumes that all employees will familiarize themselves with the provisions of our plan. Be advised that the information contained in The Summary Plan Document at the end of these explanations is only an outline of the health benefits. More detailed information can be found in the applicable Complete Plan Document (CPD), which should be requested from the Plan Administrator. In case there is a discrepancy between this document and the applicable CPD, the CPD always governs coverage. Booklet sized copies of the complete plan document (CPD) are available now.
Who Is Eligible?
You must meet all of the following criteria to be eligible to participate in the Health Plan:
❑ You must be actively at work on a full-time basis. A full-time employee is one who works an average of 30 hours per week per month based on the current definition in The Accountable Care Act.
❑ You must be a permanent employee. Temporary employees are not eligible.
Eligible employees may also elect to cover their eligible dependents. A dependent is defined by the plan as:
❑ A lawful spouse as defined by applicable state law (unless legally separated). ❑ Partners who are part of a domestic partnership, civil union, same-sex marriage, or other
formal relationship similar to marriage recognized by the laws of the employee’s domicile state.
❑ Your biological or adopted child, stepchildren and/or any other child you support who
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lives with you in a parent-child relationship can be covered to a maximum age that may vary based on resident state and plan selection.
The following dependent age schedules apply:
Until the end of the calendar year in which a dependent turns 26 years of age.
Additional Eligibility Requirements
May live in your household or elsewhere. No student status requirements apply. Must be unmarried and without dependents of their own. Must not be entitled to Medicare, Medicaid or covered by another group or individual health
plan.
Please be advised that in circumstances where an employee submits an eligible application requesting coverage for a dependent who has a different last name than the employee, the Plan Administrator will require documentation that proves the dependent is qualified to be covered by the plan. Examples of required documentation include a copy of a marriage certificate, birth certificate or adoption or placement agreement. Enrollments will not be processed until all required documentation has been received, at which time eligible employees and their eligible dependents will be enrolled back to their original effective date, and back premiums will be collected from the employee in a lump sum.
When Can I Join the Plan?
Eligible employees may elect coverage as soon as they are hired or within 30 days of becoming eligible. Employees who are hired on or before the health plan’s effective date with the employer are eligible as of that date regardless of how long they have been employed. The first effective date for the plan is the first day of the month following completion of enrollments. The waiting period is waived for all employees on the original health care effective date with the employer.
For employees hired after is first effective on the health plan, benefits will become effective on the first day of the month following 90 days of regular, active, full-time employment. The decision to elect or waive coverage should be weighed carefully because employees cannot change their election until the plan’s annual open enrollment period unless they experience a qualifying event.
Once a year the plan holds an “Open Enrollment Period” during which an eligible individual may apply for or adjust coverage with the health plan. The open enrollment period takes place annually, from forty-five days before the first month effective date for the next thirty days ending at least 15 days before the next plan effective date, unless the employer waives this rule and makes it effective sooner. If an enrolled employee does not submit a change form during open enrollment, their plan benefits selection and coverage level will not change.
What Is an Accountable Care Organization (ACO)?
Our health plan requires selection of a Primary Care Physician (PCP). If the PCP selected by the patient is not a member of one of our contracted ACOs then the patient’s chosen physician will be invited to participate as a fully credentialed provider under the same payment terms and fees schedule as the other ACO physician participants. If the chosen
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PCP fails to pass the credentialing requirements or does not accept the Plan’s approved fee schedule, then the patient may have to pay out-of-pocket for the services of that provider if that cost is more than allowed under the approved fee schedule. This process also applies to specialists and facilities that may be chosen by the patient member. There is an added preferred provider network that is contracted to provide services nationwide for our plan, but when these providers are used copayments will apply to the services at the time of the patient and physician encounter. That network has more than 900,000 participating physicians, most of the major hospitals and outpatient facilities, including Urgent Care Centers. The network is called Multi-Plan PHCS and is available through our agreement with the National Association of Physician ACOs.
Qualifying Events/Status Changes
In order to offer our plan on a pre-tax basis, the employer must comply with the IRS Section 125 guidelines. This means that we must limit the circumstances under which an employee can join or leave our plan. Once an employee has elected to participate in the plan, he or she cannot change benefits or terminate the plan except during Open Enrollment. Employees who waive coverage cannot change their minds and join the plan until Open Enrollment. Employees who decide to join the plan after Open Enrollment will be considered late enrollees.
There are some important exceptions to this restriction. The law does allow for people to make changes to their elections if the change is due to a qualified “family status change” or “life event.” Qualifying events include the following:
❑ the employee’s marriage, divorce or legal separation ❑ the birth or adoption or legal guardianship of the employee’s child ❑ death of an employee’s Health Plan eligible and federally recognized dependent ❑ a court order is issued to provide or discontinue coverage ❑ there is a significant change in the employee’s or his/her spouse’s cost of health coverage ❑ there is a significant change in the benefits offered by the employee’s or spouse’s employer ❑ a change in the employee’s or spouse’s employment status ❑ gain or loss of other coverage including coverage under a Children’s Health Insurance Program (CHIP)
When a participant experiences a qualifying event only certain enrollment changes are allowed. Generally speaking, allowable changes are only those that are consistent with your change in status. In other words, you may only change your election if a change in status causes you or your Health Plan eligible and federally recognized dependent to gain or lose eligibility for coverage under this or another similar plan. The election change must correspond with the effect on coverage. While many of the qualifying events listed above will allow an eligible employee to change coverage level (i.e., employee only to family or family to employee only), cancel coverage or join the plan, not all qualifying events allow the same enrollment changes.
Regardless of the type of qualifying event experienced, an employee who elects a change must notify The Plan Supervisor within 30 days of the event (or 60 days in the case of gain or loss of CHIP coverage) by submitting a completed Benefits Change Form to The Plan Supervisor. Documentation proving that a qualifying event has occurred MUST accompany the Health Plan Change Form. Any eligible forms received after an employee’s qualifying event will cause a retroactive change to coverage and any applicable change in premiums will be deducted in a lump sum on your next paycheck.
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How Do I Locate Participating Providers?
Medical Plan Providers You can determine if your provider participates with the ACO by a visit to the PPC website at patientphysiciancoop.com
How Do I Check on the Status of a Claim?
In order to obtain status on a claim, call the member services number referenced on you ID card or in your Benefits Booklet. You will need to provide the representative with the following information:
❑ the insured member’s Plan ID or Social Security Number ❑ the patient’s name ❑ the provider’s name ❑ the date of service ❑ the kind of claim filed
Once your claim has been processed, you will receive an explanation of benefits (EOB) in the mail. This is a statement showing you how benefits were paid on your claim. If you have any questions about your EOB, or feel your claim was handled incorrectly, please contact the Plan Supervisor at the Member Services number listed on your ID Card.
What Services Must Be Pre-Certified?
The Plan has established various Utilization Management and Utilization Review Programs, including Admission Certification, Concurrent Review, Discharge Planning and Case Management. These programs help the administrators facilitate the management and review of coverage and benefits provided under the Complete Plan Document.
The Admission Certification Program helps determine, for coverage and payment purposes only, whether an admission is medically necessary as defined by the Plan. Under the Admission Certification Program, some outpatient surgeries, all MRI/CAT/PET scans and all inpatient admissions must be certified by The Plan Supervisor in order for the insured to receive full benefits. FAILURE TO PRE-CERTIFY MAY RESULT IN REDUCED BENEFITS. Please refer to your Complete Plan Document for more information.
Notice of Rights to Reconstructive Surgery Following Mastectomy
All employees who are eligible to participate in the Health Plan are advised that on January 1, 1999, a federal law, The Women’s Health and Cancer Rights Act of 1998, became effective for our group health plan. This law requires group health plans that provide coverage for mastectomies, as ours does, to also provide coverage for reconstructive surgery and prostheses following mastectomies. As required under the law, we are notifying you of this to inform you about these available benefits.
The law mandates that a participant or eligible beneficiary who is receiving benefits on or after the law’s effective date for a covered mastectomy and who elects breast reconstruction in connection with the mastectomy, will also receive coverage for:
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❑ reconstruction of the breast on which the mastectomy has been performed; ❑ surgery and reconstruction of the other breast to produce a symmetrical appearance; and ❑ prostheses and treatment of physical complications of all states of mastectomy, including lymphedemas
This coverage will be provided in consultation with the patient and the patient’s attending physician and will be subject to the same fee limitations, annual deductible, co-insurance and/or co-payment provisions otherwise applicable under the Plan.
If you have any questions about coverage for mastectomies and post-operative reconstructive surgery, please contact Plan Supervisor at the member service numbers previously provided.
Notice of Children’s Health Insurance Program (CHIP)
Medicaid and the Children’s Health Insurance Program (CHIP) Offer Free or Low-Cost Health Coverage to Children and Families - If you are eligible for health coverage from your employer, but are unable to afford the premiums, some States have premium assistance programs that can help pay for coverage. These States use funds from their Medicaid or CHIP programs to help people who are eligible for employer-sponsored health coverage but need assistance in paying their health premiums.
If you or your dependents are already enrolled in Medicaid or CHIP and you live in a State listed on the .gov web site, you can contact your State Medicaid or CHIP office to find out if premium assistance is available.
If you or your dependents are NOT currently enrolled in Medicaid or CHIP, and you think you or any of your dependents might be eligible for either of these programs, you can contact your State Medicaid or CHIP office or dial 1-877-KIDS NOW or www.insurekidsnow.gov to find out how to apply. If you qualify, you can ask the State if it has a program that might help you pay the premiums for an employer-sponsored plan.
Once it is determined that you or your dependents are eligible for premium assistance under Medicaid or CHIP, your employer’s health plan is required to permit you and your dependents to enroll in the plan – as long as you and your dependents are eligible, but not already enrolled in the employer’s plan. This is called a “special enrollment” opportunity, and you must request coverage within 60 days of being determined eligible for premium assistance.
To see if any more States have added a premium assistance program since July 31, 2011, or for more information on special enrollment rights, you can contact either:
U.S. Department of Labor U.S. Department of HHS
Employee Benefits Security Administration www.dol.gov/ebsa
Centers for Medicare & Medicaid Services www.cms.hhs.gov
1-866-444-EBSA (3272) 1-877-267-2323, Ext. 61565
Frequently Asked Questions
These are the answers to some questions you may have regarding the Health Plan. If your questions are not answered here, please contact our Member Services at 866-549-4199.
1) Do I have to change medical providers? Not necessarily. The ACO is open to providers
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nominated by their patients. Our network is therefore the size needed to take care of the patients
who are members and actively cooperate in their care arrangements.
2) Do I have to select a Primary Care Physician (PCP)? Yes. If a PCP is not selected at
the time of application, members may contact Member Services as of their enrollment date and
select a PCP.
3) Where should I send claim forms? One of the advantages of a visit to an ACO or PPC
provider is that the provider will submit the claim to the plan on your behalf. Visits to providers
outside the network will require submission of a claim form. If you provide them with the
Claims submission shown on your benefits booklet or Identification Card, they will likely submit
your claim either on the right paper form or electronically. Please be advised that some out-of-
network providers expect payment when services are rendered and may make claim submission
your responsibility. In the event you need to submit a claim form, you should ask the out-of-
network provider to give you the properly completed form in exchange for your payment and not
only a receipt which would not be enough to make claim for reimbursement. Providers who
would not provide you with a claim form for their services are the exception and not the rule.
You might want to re-examine that relationship.
4) Will I get a new health plan ID card? Yes. Upon initial enrollment you will receive a
new Health Plan ID card with your plan and other pertinent information including co-payment
information and the plan in which you have been enrolled. When you receive the card, please
carefully review it to ensure your name, plan selection and other data are correct. Please report
any necessary corrections to Member Services at
5) How many health plan ID cards will I receive? Plan members will receive one card for
employee only or employee plus children coverage and two cards for employee plus spouse or
employee plus family coverage. In addition to your Health Plan Card all Members will receive
cards from The Patient Physician Cooperative (PPC) that identity them for nationwide
discount medical benefits such as dental, vision, lab, imaging, prescription drugs, roadside
service, Teladoc, health risk assessment, and patient advocacy benefits.
6) What if I don’t receive an ID card? Member Services electronically transmits
enrollment information to Plan Supervisor several times a week. Once transmitted, it takes at
least 48 hours to upload into their system and once the upload is complete it takes another 48
hours to generate ID cards. Cards are sent out via regular US mail and depending upon an
employee’s address, cards can take an additional seven to ten business days to arrive at an
employee’s home. Therefore, from the time enrollment information is entered into Benefits
system, cards can take two to three weeks to arrive at an employee’s home. However, after a
member’s setup is complete, care CAN be accessed before a card is generated by contacting
Member Services directly.
7) What if I need to change my address? Change of address information must be submitted
in writing to Member Services. An address change form can be accessed on the website at
pateintphysiciancoop.com under the Forms Section.
8) When will deductions for coverage begin? Deductions will begin on your first paycheck
of the month in which your coverage begins or the first paycheck after the date we process your
eligible enrollment form if the form is submitted after your effective date. If an eligible
enrollment form is received after your effective date, your coverage will be set-up retroactively
and any missed premiums will be deducted from your next paycheck in a lump sum.
9) Where should I submit my enrollment forms? If this information is being presented to
you as part of an enrollment meeting, please return your enrollment applications to the person
conducting your meeting. Otherwise, please mail completed applications back to Member
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Services at the following address:
PPC TPA ERISA Plans Member Services
900 Rockmead Drive Suite 147, Kingwood Texas 77339
10) When can I elect to make changes to my coverage? The Health Plan is administered
under the guidelines of Section 125 of the IRS code, which allows deductions for federally
recognized dependents to be taken on a pre-tax basis, but also limits changes to the plan to an
annual Open Enrollment period.
11) What is a “qualifying event”? The IRS outlines a list of life events that are qualified to
allow employees to make changes to their pre-tax plans. Please refer to the “Qualifying
Events/Status Changes” section of this booklet for more information about these events. Please
be advised that the IRS does not provide a qualifying event for inability to afford premiums
unless there is a significant change in the premiums charged to employees. This means that once
an employee elects the plan, if premiums remain unchanged, coverage cannot be dropped unless
it is during Open Enrollment or due to a qualifying event.
12) How do I prove that I had a qualifying event? All enrollment changes due to a
qualifying event must be accompanied by proof of the qualifying event. All qualifying event
documentation must include pertinent information about the event including the date of the event
and the employee’s name. Some examples of required documentation include:
• Birth Certificate • Adoption Certificate
• Divorce or Legal Separation • HIPAA Certificate
• Court Order for Dependent Coverage • Marriage Certificate
• Certificate of Creditable Coverage • Death Certificate
13) Will I receive a Summary Plan Document (SPD)? SPDs are reissued if there is a
change in benefits or terms and conditions of the agreements within 90 days after such a change.
You will receive a copy of SPD from Member Services.
14) What if I am in an active course of treatment with an out-of-network doctor when I
enroll in the plan? Our plan has a transition of coverage program for members who are in an
active course of treatment and whose treating provider is not an ACO or PPC provider.
15) What if I enroll in a medical plan mid-year and have already met some or all of my
deductible under a prior plan? The plan will provide deductible credit for amounts met during
the same contract year while a member was covered by a previous plan. In order for deductible
credit to be applied, employees MUST submit proof of prior deductible to the Plan Supervisor
for processing. An Explanation of Benefits (EOB) from the prior carrier or a deductible credit
report, outlining the deductibles met within the current calendar year, is the best way to report
this information.
16) Are there limits on prescription medications? Our pharmacy plans include pre-
certification and quantity limit provisions. Programs like pre-certification encourage the safe,
cost-effective use of prescription medications. Pre-certification allows coverage of certain
medications only when certain conditions are met and usually applies to medications that are
likely to be taken inappropriately for too long of a period, should only be prescribed for certain
conditions or tend to be more expensive than other medications proven to be just as effective.
17) Are there any limits on routine examination coverage? Yes. The Plan covers routine
adult and well child physical exams according to the medical needs of the patient as determined
in cooperation with their selected ACO or PPC primary care provider (including routine tests and
related lab fees). Routine digital rectal exams/PSA tests are covered for males age 40 and over
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and colorectal cancer screening is covered for members ages 50 and over.
18) Does the Health Plan have a coordination of benefits provision? Yes. If this plan is
secondary coverage to another health plan, it may make additional payment for covered expenses
after any applicable deductible is met. This additional payment is made only to bring the total
payment by the combined plans to the amount that this plan would have paid if it were the only
coverage. Therefore, dual enrollment in two plans that cover the same types of benefits (i.e. two
medical plans or two dental plans) should be considered carefully as the benefits may not
outweigh the costs.
19) When will my active Health Plan coverage end? Active coverage in the Health Plan
will terminate on the date that your active employment or eligibility for the health plan ends (for
example, the date you move from full-time to part-time employment).
20) Can I continue coverage after I am no longer eligible for group coverage? If you lose
coverage under the Plan for certain reasons, such as a reduction in the hours you work, death of a
spouse, or divorce, you may be entitled to obtain continued coverage under COBRA or a similar
applicable state mandated law. Please refer to your CPD for more details on coverage extension
options. However, please note that if your worksite group ceases participation in the Health Plan,
COBRA or similar coverage extension will also terminate at that time. If your worksite employer
ceases participation in the plan you may be able to continue coverage under any replacement
plan applicable to your worksite group.
21) How are services covered when I travel? If you are seen by a non-participating provider
in or outside the United States, your plan will not provide coverage beyond the approved fee
schedule in the Complete Plan Document. Participants who are treated by a nonparticipating
provider may be required to pay at the time of service and may be subject to balance billing as
services may be billed at a rate higher than allowable by the plan.
22) Does the Plan meet the Minimum Creditable Coverage (MCC) requirements of the
PPAACA? Yes.
Plan Availability
We encourage you to read through the following plan summary. In case there is a discrepancy
between the information contained in this document and the Complete Plan Document (CPD),
the CPD governs. This document does not describe the plan limitations and exclusions that can
be found in the CPD. If you would like more detailed information on the plans, please refer to
the CPD.
Plan Limitations:
The Plan Document includes a maximum fee schedule which the participating ACO and PPC
physicians and clinics have accepted. Non-participating clinics and facilities may have charges
that are greater than the maximum fee schedule and the difference in those charges are the out-
of-pocket expense of the patient up to the maximum limits stated above under the Calendar Year
Payment Limit Clause.
Added Benefits through PPC patient membership and contracts is included in the Plan. They
include a discounted dental, vision, hearing, Teladoc 7/24/365, Road Service, & Patient
Advocacy
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Employer contribution is ___ % of the employee cost and ___% of Dependent Cost
The Employer Sponsored determines the percentages of their contributions but it is not less than
50% of the Employee Cost.
Dependent costs are paid by payroll deduction on a weekly or biweekly basis from the
employee’s salary pre-tax.
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Addendum C – Employer Sponsored Health Plan in an Employee Retirement
Income Security Act Trust
Complete Plan Document
SECTION 1 - DEFINITIONS AND EXCEPTIONS
The terms set out below, wherever used in this document, shall be construed as follows:
A. "ACCIDENTAL INJURY" means an injury happening unexpectedly and taking place not in
the usual course of events (for example, a motor vehicle accident). Accidental Injury does not
include any damage caused by chewing or biting on any object.
B. "ACTIVE SERVICE." A covered person will be considered in Active Service on a day
which is a scheduled work day if he is performing in the customary manner all of the duties of
his employment on a full-time basis of thirty (30) hours per week either at his customary place of
employment or some location at which that employment requires him to travel, or if he is absent
from work solely by reason of paid vacation and at the time his coverage would otherwise
become effective he has not been absent from work for a period of more than three consecutive
weeks. A covered person will be considered in Active Service on a day which is not a scheduled
workday only if he was performing in the customary manner all the regular duties of his
employment on the last preceding scheduled workday. A dependent will be considered in Active
Service on any day if he is then engaging in all the normal activities of a person in good health of
the same age and sex, he is not confined in a medical facility, and if he is a student, he is
attending school. This paragraph will not apply to a newborn child.
C. "CHRONIC" means any diagnosed condition for which a Member receives ongoing care,
treatment or medication.
D. "CONTRACT YEAR" means from January 1 through December 31 of each year.
E. "CONSULTATION" means services rendered by a physician whose opinion or advice is
requested by another physician in the evaluation and/or treatment of a patient's sickness or
injury. When and if a consulting physician assumes the continuing care of the patient, any
subsequent services rendered by him will no longer be a Consultation. Services of a consulting
physician may include a limited or extensive examination, a diagnostic history work-up or
preparation of a special report in or out of a hospital.
F. "COPAYMENT" means the amount of payment indicated in the Schedule of Copayments
which is due and payable by the Member to a provider of care.
G. "COVERED DEPENDENT" means a member or members of the Subscriber’s family who
meet the eligibility requirements of this Plan Document, have been enrolled by the Subscriber in
accordance with the terms of this Plan, and for whom Employer Sponsor of the Plan or the Plan
Supervisor has received applicable contribution payments.
H. "COVERED SERVICE(S)" means those medically necessary health services and benefits to
which Members are entitled under the terms of this Plan Document.
I. "CRISIS INTERVENTION" means medically necessary care rendered during that period of
time an individual exhibits symptom which could result in harm to that individual or to others in
his environment.
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J. "DEPENDENT" includes the following:
1. an employee's spouse who is living with employee.
2. an employee's child who meets all the following criteria:
a. is unmarried or married,
b. is a natural child, stepchild, legally adopted child, foster child, or a child for whom the
employee claims an exemption on his/her federal income tax return who is living with the
employee in a normal parent/child relationship;
c. is a natural child living with one natural parent, but whose medical care is by law or by
decree the responsibility of the other natural parent, the employee;
d. is less than 26 years old;
e. who may or may not be mentally or physically handicapped, incapable of self-
sustaining employment and is chiefly dependent upon the employee for support and
maintenance. Proof of incapacity must be furnished to Plan Supervisor within thirty-one
(31) days of the date when dependent coverage would otherwise have been terminated;
upon acceptance of proof and payment of applicable Contribution, the Plan Sponsor will
continue coverage for such child so long as employee's coverage remains in force and
such incapacity continues.
K. "DETOXIFICATION" means services rendered during the time interval necessary to achieve
medical stabilization necessitated by the physiological effects produced by the withdrawal from
drugs of abuse, including alcohol.
L. "DURABLE MEDICAL EQUIPMENT means equipment which:
1. Can withstand repeated use;
2. Is primarily and customarily used to serve a medical purpose;
3. Generally is not useful to a person in the absence of illness or injury; and
4. Is appropriate for use in the home.
M. "ELIGIBLE CHARGES" means those charges incurred by a covered person for any injury or
sickness, subject to the following criteria:
1. They are necessary for the care and treatment of the injury or sickness and are incurred on
the recommendation and while under the continuous care and regular attendance of a
physician.
2. They are not excess of charges listed in the fee schedule shown in Attachment A of this
Plan Document for the services performed or the materials furnished.
3. They are not excluded charges as hereinafter defined.
4. They are incurred for one or more of the services or materials specified under the Schedule
of Benefits contained herein.
N. "EMERGENCY MEDICAL CONDITION" means a sudden or unexpected onset of an acute
condition requiring medical or surgical care and in the absence of such care the Member could
reasonably be expected to suffer serious physical impairment or death. Heart attack, severe chest
pain, stroke, hemorrhaging, poisoning, major bums, loss of consciousness, serious breathing
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difficulty, spinal injury, shock, and other acute conditions as Supervisor shall determine are
Emergency Medical Conditions.
0. "EMERGENCY SERVICES" means services to treat Emergency Medical Conditions as
described more fully in 'Basic Covered Services" of this Plan Document.
P. "EMPLOYEE" An Employee shall be a person who works at least thirty (30) hours a week
for the Employer specifically excluding part-time and temporary employees.
Q. "EMPLOYER' means Employer Sponsor, the plan sponsor of this Employee Welfare Benefit
Plan.
R. "EXCLUDED CHARGES" The term "Excluded Charges" means those charges which do not
meet the definition of Eligible Charges as defined herein.
S. "EXTENDED CARE FACILITY" The term "Extended Care Facility" means an institution,
or distinct part thereof, which meets the following criteria:
1. It is duly licensed pursuant to state or local law.
2. It is operated primarily for providing skilled nursing care and treatment for persons
convalescing from injury or sickness as an inpatient; and
a. has organized facilities for medical treatment and provides twenty-four-hour nursing
service under the full-time supervision of a physician or a graduate registered nurse;
b. maintains daily clinical records on each patient and has available the services of a
physician under an established agreement;
c. provides appropriate methods of dispensing and administering drugs and medicines;
d. has transfer arrangements with one or more hospitals;
e. has a utilization review plan in effect and operational policies developed with the
advice of, and reviewed by, a professional group including at least one physician;
f. excludes any institution which is other than incidentally a rest home, a home for the
aged, or a place for the treatment of mental disease, drug addiction or alcoholism.
3. It is qualified to participate and is eligible to receive payments under and in accordance
with the provisions of Medicare, Title XVIII, of the Social Security Act, as enacted and
amended.
T. "GRACE PERIOD" means a period of ten (10) days after the last day of the month preceding
the month of coverage during which period Contributions may be paid to Employer Sponsor or
the Plan Supervisor without lapse of coverage.
U. "GRIEVANCE PROCEDURE" means the process for resolving problems and disputes set
forth in this Plan Document.
V. "GROUP OPEN ENROLLMENT PERIOD" means those periods of time (at least 30
working days but not less than that required by applicable law) established by Employer from
time to time but no less frequently than once in any 12 consecutive months during which Eligible
Employees who have not previously enrolled in the Employee Welfare Benefit Plan may do so.
W. “HOME HEALTH AGENCY" means an organization licensed by the State which has an
agreement with the Plan Administrator or Plan Supervisor to render home health services to
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Members and has been approved as a participating Home Health Agency under the federal
Medicare program.
X. “HOSPICE” means a facility or agency primarily engaged in providing skilled nursing
services and other therapeutic services for terminally ill patients and:
1. Is licensed in accordance with State law (where such licensing is provided); and
2. Is certified by Medicare as a provider of Hospice Care; and
3. Is approved by the applicable State Medical Foundation as a Hospice.
Y. "HOSPITAL" means an institution which meets the following criteria:
1. It operates in accordance with the law of the jurisdiction in which it is located.
2. It is primarily engaged in providing diagnosis, care and treatment of injured or sick
persons for compensation from on an inpatient basis.
3. It continuously provides 24-hour nursing service by registered nurses.
4. It is under the supervision of a staff of physicians or surgeons, one or more of which is
available at all times.
5. It is not primarily a clinic and it is not, other than incidentally, a place for rest,
convalescents, alcoholics, and drug addicts, mentally ill or tubercular patients.
6. It is accredited by the American Hospital Association.
7. If it is a Psychiatric hospital, then as defined by Medicare.
Z. "HOSPITAL CONFINEMENT" means the time during which a person is admitted as a
patient upon the recommendation of a physician and is confined as a bed-paying patient and is
charged for room and board in a hospital as defined herein.
AA. "HOSPITAL SERVICES" means those acute-care services furnished and billed by a
Hospital which are authorized by a Participating Physician.
AB. "INITIAL ACQUISITION" means the first purchase whether obtained while a participant
of this Employee Welfare Benefit Plan or prior to enrollment in this Employee Welfare Benefit
Plan.
AC. 'INJURY' means bodily injury caused solely by and resulting solely from a non-
occupational accident sustained while the injured person is covered by the plan.
AD. "INTENSIVE CARE UNIT" means a section, ward, or wing within the hospital which is
separated from other hospital facilities and
1. is operated exclusively for providing professional medical treatment for critically ill
patients;
2. has special supplies and equipment necessary for such medical treatment available on a
standby basis for immediate use;
3. provides constant observation and treatment by registered nurses or other specially
trained hospital personnel.
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AE. "MAXIMUM FEE SCHEDULE" means a schedule of fees shown in Attachment A of
this Plan Document established by Employer Sponsor for payment to providers for Covered
Services, and which may be less than actual charges billed by the providers.
AF. "MEDICAL DIRECTOR" means a Physician designated by Employer Sponsor and the
Plan Supervisor to monitor and review the provision of Covered Services to Members or such
person or persons as the Medical Director shall designate.
AG. "MEDICALLY NECESSARY" means services or supplies provided by a Hospital,
Skilled Nursing Facility, Home Health Agency, Physician or other health care provider which
are determined by the Plan's Medical Director or its utilization review committee to be:
1. Consistent with the symptoms or diagnosis and treatment of the Member's condition,
disease, ailment or injury;
2. Appropriate by the standards of good medical practice;
3. Not solely for the convenience of the Member, his or her Physician, Hospital, or other
health care provider; and
4. The most appropriate supply or level of service which can be provided to the Member.
For inpatient services and supplies, it further means that the Member's medical symptoms or
condition requires that the diagnosis or treatment cannot be safely provided to the Member as an
outpatient.
AN. "MEDICARE" means Title XVIII of the Social Security Act and all amendments thereto.
Al. "MEMBER" means any person enrolled in this Employee Welfare Benefit Plan as a
Subscriber or Covered Dependent.
AJ. "MENTAL CONDITION" means any mental, emotional, or behavioral condition,
disorder, or disease, including mental retardation or deficiency.
AK. "MIDWIFE" means a person certified to practice as a nurse-midwife and fulfills these
requirements:
1. A person licensed by a board of nursing as a registered nurse.
2. A person who has completed a program approved by the state for the preparation of
nurse-midwives.
AL. "NURSE" The term "nurse" means a Registered Graduate Nurse (RN), a Licensed
Vocational Nurse (LVN), or a Licensed Practical Nurse (LPN) not related to or residing with the
Covered Individual being attended or treated.
AM. "ONE CONTINUOUS PERIOD OF HOSPITAL CONFINEMENT means a time during
which an insured individual is confined in a hospital as a registered bed patient. Successive
periods of Hospital Confinement due to the same or related cause or causes will be considered
one period of hospital confinement unless they are separated by:
1. (With respect to an employee) two or more weeks of continuous employment with the
Employer on an active full-time basis, or
2. (With respect to a Covered Dependent) a period of three or more months during which
the Covered Dependent has not been hospital confined due to the same or related cause or
causes.
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AN. "OUTPATIENT SURGICAL FACILITY" means a legally operated institution which is
primarily operated to provide facilities for performing surgery, and which has:
1. Permanent operating rooms, a recovery room and all medical equipment necessary for
surgery;
2. A medical staff including registered nurses for patient care;
3. A contract with a hospital for immediate acceptance of patients requiring post-
operative confinement. It does not include a private office or clinic of one or more
doctors.
AO. "OUT OF AREA SERVICES" means those services provided outside the Service Area
defined for this Employee Welfare Benefit Plan. Covered “Out of Area Services” are more fully
described in "Basic Covered Services.”
AP. "PARTICIPATING PHYSICIAN" means a Physician who, at the time of providing or
authorizing services to a Member, is under contract with Employer Sponsor and the Plan
Supervisor through an Association or Accountable Care Organization to provide Professional
Services to Members.
AQ. "PARTICIPATING PROVIDER" means a Participating Physician, a Participating
Specialist, a Hospital, Skilled Nursing Facility, Home Health Agency or any other duly licensed
institution or health professional under contract with Employer Sponsor and the Plan Supervisor
through an Association or an Accountable Care Organization to provide Professional Services,
Hospital Services or other Covered Services to Members. A list of Participating Providers is
available to each Subscriber upon enrollment. Such list shall be revised by the Plan Supervisor
from time to time as deemed necessary by Employer Sponsor and the Plan Supervisor.
AR. "PARTICIPATING SPECIALIST" means a Participating Physician who, at the time of
providing or authorizing services to a Member, practices a particular medical specialty and is
under contract with Employer Sponsor and the Plan Supervisor through an Association or
Accountable Care Organization to provide services to Members as a Participating Specialist.
AS. "PHYSICIAN" means a duly licensed Doctor of Medicine (MD), Osteopath (DO),
Podiatrist (DPM), Chiropractor, Master of Oriental Medicine and Acupuncture (MAOM,LAc),
or Clinical Psychologist, Dentist or any other practitioner providing a Covered Service and
acting within the scope of his or her license who is required to be recognized as such by an
applicable State code.
AT. "PLAN" means the employee welfare benefit plan which has been established by
Employer Sponsor and through which benefits are provided, in whole or in part, through this
Plan Document.
AU. "PLAN ADMINISTRATOR" is Employer Sponsor, which has ultimate responsibility for
management of the Plan, and for performing, or having performed, such tasks as maintaining
contributions on deposit for claim payments, paying claims as they come due, preparing claim
reports and other necessary data for the Plan, and preparing any necessary government reports.
The Plan Administrator is not responsible, in any manner, for the guarantee of claim payments
for which there are no contributions or funds. The Plan Administrator may employ persons or
firms to process claims and perform other Plan-connected services.
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AV. "PLAN SPONSOR" is Employer Sponsor, the entity responsible for the establishment of
the Plan.
AW. "PLAN SUPERVISOR" means a company or entity engaged by the Plan Administrator
for the purposes of billing, accounting, payments of claims and expenses and other such duties as
may be specified by the Plan Administrator.
AX. "PRIMARY CARE PHYSICIAN" means a Participating Physician (M.D., D.O., N.P.,
MAOM, Lac), chosen by a Member to provide Professional Services and coordinate health care
services for the Member.
AY. "PROFESSIONAL SERVICES" means services performed by Physicians and health
professionals which are Medically Necessary, generally recognized as appropriate care within
the Service Area, and which are performed, prescribed, directed, or authorized by a Participating
Physician.
AZ. "PROTHESIS" means an artificial device which replaces a missing part of the body.
BA. "PRONOUNS." Masculine pronouns used in this document shall apply to both sexes.
BB. "REASONABLE AND CUSTOMARY" means the charge made by an individual, group,
or other entity rendering or furnishing services, treatment, or materials not exceeding the
schedule of fees included in this plan document as Attachment A for services, treatments, or
materials in which treatment is provided for injuries and sicknesses treated.
BC. "SERVICE AREA" means those counties in states where Employer Sponsor, the Plan
Supervisor, and any insurers, health maintenance organizations, Accountable Care
Organizations, and service providers from whom the Plan purchases coverage are authorized to
operate.
BD. "SICKNESS" means a bodily disorder, a disease, or mental infirmity, pregnancy and
complications thereof. A recurrent sickness shall be considered as one sickness. Concurrent
sicknesses shall be deemed to be one sickness unless they are totally unrelated or separated by a
period of six weeks.
BE. "SIGNIFICANT IMPROVEMENT" means substantial ongoing positive changes in the
condition of the patient as determined by the Plan's Medical Director.
BF. "SKILLED NURSING CARE" means care provided by a registered nurse (R.N.) or a
licensed practical nurse (L.P.N.) under the supervision of an R.N. if all the following conditions
are met:
1. The services are required on an intermittent or part-time basis.
2. The services must require the skills of a R.N. or L.P.N. under the supervision of an R.N.
3. The services must be reasonable and necessary to the treatment of an illness or injury.
BG. "SKILLED NURSING FACILITY" means an institution which is licensed by the State in
which it is situated to provide skilled nursing services, and which has been approved as a
participating Skilled Nursing Facility under the Medicare program.
BH. "SOUND NATURAL TEETH" means teeth free from active or chronic clinical decay,
having at least fifty percent (50%) bony support and having not been weakened by multiple
dental procedures.
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BI. "SUBSCRIBER" means a person who meets all applicable eligibility requirements of this
Plan Document, whose enrollment form has been accepted by the Plan Administrator and Plan
Supervisor in accordance with the Plan, and for whom the Plan Supervisor has received
Contribution payments for the applicable period of coverage.
BJ. "TOTAL DISABILITY" means a state of incapacity due to a bodily injury or sickness
which requires the regular and personal attendance of a physician and prevents the individual
from performing or engaging in any gainful occupation for which he is reasonably fitted by
education, training, or experience, and is not performing work of any kind for wage or profit. A
Covered Dependent will be considered totally disabled if, because of a non-occupational injury
or disease, he is prevented from engaging in all the normal activities of a person of the same age
and sex who is in good health. If he is a student, he will not be considered disabled if he is
attending school.
SECTION 2 - ELIGIBILITY
A. EMPLOYEE
1. A person eligible for coverage under this Plan shall:
a. Be an employee of Employer Sponsor who is employed on a permanent, full-
time basis for at least thirty (30) hours per one week pay period;
b. Be actively at work at the customary place of employment with Employer
Sponsor and in performance of regular duties on the day coverage is to be
effective;
c. Submit satisfactory evidence of insurability in the form of a health statement at
his or her own expense if application is not made within 31 days after
satisfaction of the waiting period;
d. Authorize contributions for coverage where appropriate.
2. EFFECTIVE DATE: Coverage for an eligible employee becomes effective on:
a. The first of the month coincident with or next following 1 month of active full-
time employment if evidence of insurability is not required; or
b. The first of the month coincident with or next following approval of application
and health statement; or
c. The first of the month coincident with or next following authorization of
necessary contributions;
d. However, if on the day the employee's coverage would otherwise become
effective, the employee were by reason of injury or sickness unable to perform
active work on a full-time basis, whether or not that employee were scheduled to
work on such day, coverage would not become effective until such time as the
employee returned to active work on a full-time basis.
e. Reinstatement of coverage:
(1) Coverage terminated with respect to a person formerly covered under
this Plan may be reinstated by written consent of the Plan Administrator
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and Plan Supervisor within 6 months after the date of termination.
Coverage reinstated accordingly, shall be treated as if coverage first
became effective on the first day of the month following his return to work
unless the agreement explicitly stipulates otherwise.
(2) Provisions for reinstatement of an individual whose coverage
terminated more than 6 months prior to the written request for
reinstatement will be the same as those required of a new applicant.
3. TERMINATION DATE: Coverage for an employee shall terminate automatically
on the earliest of the following dates, except as provided in COBRA or Extension
of Benefits provisions herein:
a. The end of the month following date employment is terminated;
(1) Cessation of Active Service shall be deemed termination of
employment;
(2) Coverage for an employee who ceases to be actively at work on a full-
time basis by reason of an injury or sickness which renders the employee
totally disabled may be continued by the Employer, on a basis precluding
individual selection, by continuing Contribution payments for a period of
not more than twelve months.
(3) Coverage for an employee who ceases to be actively at work on a full-
time basis by reason of a temporary layoff or approved leave of absence
may be continued by the Employer, on a basis precluding individual
selection, by continuing Contribution payments for a period no longer than
three months beyond the date coverage would otherwise have been
terminated.
b. The date employee ceases to be an eligible employee as defined herein;
c. The date the Plan is terminated;
d. The date the Employer terminates employee coverage;
e. The date the employee dies.
B. DEPENDENT SPOUSE:
a. A spouse and any unmarried children of an eligible employee not otherwise
enrolled for benefits under this Plan and who satisfy the qualifications as defined
in SECTION 1 shall be eligible for coverage under this Plan.
b. Notwithstanding anything to the contrary, coverage is also extended to a
newborn child of a covered employee from the moment of birth with the proviso
that written notice of the birth is received by the Plan Supervisor within 31 days
from the moment of birth.
4. EFFECTIVE DATE:
a. Coverage for an eligible dependent will be effective on the date the employee
becomes eligible for coverage:
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(1) if the employee applies for dependent coverage at the time of original
enrollment in the Plan,
(2) if the dependent is not disabled on the date coverage would otherwise
become effective.
b. In the event a child is born to a covered employee already having enrolled
dependents, that newborn child will automatically become a Covered Dependent
beginning with the moment of birth. Written notice of such birth must be made to
the Plan Supervisor within thirty-one (31) days after the date of birth.
c. If on the effective date of coverage, the employee did not have a dependent and
later acquires one or more dependents, the employee may enroll the dependent(s)
in this Plan by written notice to the Plan Supervisor within thirty-one (31) days
after acquiring that dependent. Coverage for that dependent becomes effective on
the date the dependent was acquired provided required contributions are made.
d. An employee who does not apply for dependent coverage within thirty-one (31)
days of the date he acquires a dependent but who applies for coverage at a
subsequent date:
(1) Must submit satisfactory evidence of good health to the Plan
Supervisor for each and every dependent he has who would be eligible for
coverage by terms of SECTION 1 herein.
(2) Coverage for that dependent becomes effective on the first day of the
month coincident with or next following approval of evidence of good
health.
e. If a dependent (other than a newborn child) is disabled on the date coverage
would otherwise be effective, that dependent's coverage would not be effective
until the earlier of
(1) the date immediately following the completion of a period of thirty-
one (31) consecutive days during which that dependent was not disabled,
or
(2) the date twelve (12) months after the date he would have been eligible
if he were not disabled.
5. TERMINATION DATE: Dependent coverage with respect to all dependents of a
covered employee shall terminate automatically on the earliest of the following dates
except for the COBRA provisions as described hereinafter:
a. the date the employee requests that dependent coverage be terminated;
b. the date the dependent is no longer eligible for dependent coverage under the
terms of this Plan;
c. the date the dependent enters the armed forces of any country;
d. the date of termination of this Plan;
e. the date the employee's coverage terminates;
f. the date the employee dies;
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g. the date employee fails to make any required contribution for coverage.
SECTION 3 - BASIC COVERED SERVICES
A. Professional and Hospital Services
1. Professional Services Performed Within the Service Area
a. Physician Services. The following are Covered Services when provided by the
Member’s Primary Care Physician. These services are also covered when
furnished by a Participating Specialist (upon proper referral by the Primary Care
Physician) or by a non-participating Specialist (upon proper referral by the
Primary Care Physician with pre-authorization by the Plan's Medical Director.
Services are furnished at the Physician's office, Hospital, Skilled Nursing Facility,
or at the Members home (when the Member’s health so requires and as authorized
by the Members Primary Care Physician):
(1) diagnosis and treatment of illness or injury;
(2) physical examinations, including routine examinations and pap smears,
as determined to be Medically Necessary by a Participating Physician;
(3) usual and customary pediatric and adult immunizations in accordance
with accepted medical practice;
(4) pre- and post-operative care;
(5) prenatal care, delivery and postnatal care of mother;
(6) consultant and referral services;
(7) pediatric care, including newborn care (if the child has been enrolled
as required);
(8) family planning services (including the provision of intrauterine
devices), except for subcutaneous implants for contraception;
(9) examinations to determine the need for hearing correction.
b. Surgery and Anesthesia. These services include surgical services performed at
inpatient and outpatient surgical facilities that are Participating Providers and
anesthesia administered in conjunction with such surgery. Some limitations apply
to transplants (refer to "Limitations").
c. Laboratory Procedures and X-ray Examinations. Diagnostic and therapeutic
radiology services; diagnostic laboratory services in support of other basic
services prescribed by the Primary Care Physician or the Participating Physician
to whom the patient was referred by the Primary Care Physician.
d. Home Health Care. The services include:
(1) Medically Necessary short-term Skilled Nursing Care provided at a
Member's home through a Home Health Agency by a Registered Nurse or
Licensed Practical Nurse duly licensed by the applicable state. Coverage is
limited to sixty (60) consecutive days per illness per lifetime; prior
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authorization must be obtained from the Primary Care Physician and the
Plan's Medical Director certifying that Significant Improvement is
expected in a relatively limited and predictable period of time. During the
course of treatment, documentation of continuing Significant
Improvement is required in order for benefits to be provided for the full
60-day period; and
(2) Medically Necessary short-term rehabilitation services upon referral
from the Primary Care Physician or a Participating Physician and with
prior approval of the Medical Director. Coverage is limited to sixty (60)
consecutive days per illness per lifetime; prior authorization must be
obtained from the Primary Care Physician and the Plan's Medical Director
certifying that Significant Improvement is expected in a relatively limited
and predictable period of time. During the course of treatment,
documentation of continuing Significant Improvement is required in order
for benefits to be provided for the full 60-day period. Short-term
rehabilitation services are limited to those set forth in Limitations and are
counted against the sixty (60) day treatment period contained therein.
e. Hospice Services. When a Member is diagnosed with a covered illness, and
therapeutic intervention directed toward the cure of the covered illness is no
longer appropriate, and the Member's medical prognosis is one in which there is a
life expectancy of six months or less as a direct result of the covered illness, the
Plan will pay for services and supplies for hospice care prescribed by a
Participating Physician and provided by a licensed hospice agency, organization
or unit. The maximum lifetime benefit is as shown in the Schedule of Benefits.
This benefit does not cover non-terminally ill patients who may be confined in: a
convalescent home, rest home or nursing facility; a Skilled Nursing Facility; a
rehabilitation unit or a facility that provides treatment for persons suffering from
mental disease or disorders, or care for the aged, drug addicts, or alcoholics. For
this benefit to be payable, the Plan Administrator must be furnished with a written
statement from the attending Participating Physician that the Member is
terminally ill within the terms of this benefit and a written statement from the
hospice certifying the days on which services were provided.
f. Care of Newborns. Care of newborn child of Subscriber or Subscriber's spouse
will be provided by the newborn's Primary Care Physician if the following
conditions are met:
(1) Subscriber paying single coverage or couple coverage Contribution:
The newborn child of a Subscriber paying single coverage or couple
coverage Contributions will be covered at birth only if the Subscriber has
pre-enrolled the newborn prior to birth. Pre-enrollment shall mean that the
Subscriber has submitted written proof of intent to enroll newborn in this
Plan, which has been received by the Plan Administrator or Plan
Supervisor or post-marked prior to newborn's date of birth. In addition to
Pre-enrollment, the Subscriber must formally enroll the newborn within
thirty-one days after birth. The newborn who is not enrolled prior to birth
must wait until the next Group Open Enrollment Period. Increased
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Contributions will be payable according to the Employer's agreement for
Contribution rates with dependent coverage.
(2) Subscriber paying family coverage or Subscriber and child(ren)
coverage Contributions: Pre-enrollment is not required if family coverage
Contributions including the contributions for the newborn are being paid
at the time of the birth. Subscriber is required to formally enroll the
newborn within sixty (60) days after birth.
(3) The care provided under this benefit includes preventive health care
services as well as coverage of injury or sickness, including the necessary
care and treatment of medically diagnosed congenital defects and birth
abnormalities and, within the limits of coverage described in "Basic
Covered Services", Part 5, necessary transportation costs from the place of
birth to the nearest specialized treatment center.
(4) All services related to care of a newborn or child of a Covered
Dependent other than Subscriber or Subscriber's spouse are excluded
unless the Subscriber or Subscriber's spouse has adopted the child or is
the court-appointed legal guardian of the child.
g. Services for Infertility. Diagnostic services, counseling and developing a plan
of treatment for infertility are Covered Services when determined to be Medically
Necessary by Member's Primary Care Physician. Diagnostic procedures are
limited to one of each of the following: semen analysis, pelvic ultrasound,
hormone levels, hysterosalpingogram, post coital test, and endometrial biopsy.
Treatment for infertility is not a Covered Service.
h. Care of Alcohol and Drug Abuse Conditions. Detoxification for alcoholism or
drug abuse on either an outpatient or inpatient basis when determined by the
Plan's Mental Health Coordinator (a qualified mental health provider appointed
by the Plan’s Medical Director) to be Medically Necessary and appropriate are
covered the same as Mental Health Services. "Detoxification" means services
rendered during the time interval necessary to achieve medical stabilization
necessitated by the physiological effects produced by the withdrawal from drugs
of abuse, including alcohol. Detoxification services shall be limited to seventy-
two (72) hours or as otherwise approved by the Plan's Mental Health Coordinator.
i. Oral Surgery. Only the following procedures are covered:
(1) surgical removal of partial or bony impacted teeth;
(2) removal of tumors;
(3) cysts of the jaws, cheeks, lip, tongue and roof of the mouth;
(4) treatment of fractured facial bones;
(5) external and internal incision and drainage;
(6) cutting of salivary glands or ducts;
(7) frenectomy, and
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(8) treatment of non-dental birth defects (such as cleft lip or cleft palate)
which have resulted in a severe functional impairment.
j. Extraction and Replacement of Teeth. Extraction and replacement of Sound
Natural Teeth are covered if due to Accidental Injury which occurred while a
Member of the Plan. "Accidental Injury" does not include any damage caused by
chewing or biting on any object. In order to be covered, treatment must begin
within ninety (90) days after the accident and must be completed by six (6)
months from date of injury.
2. Hospital Services. All Hospital Services, except in the case of Emergency Services,
must be provided in a Participating Hospital, must be Medically Necessary, and the
admitting provider must obtain pre-certification authorization from the Plan
Administrator or Plan Supervisor prior to the admission. Failure to obtain pre-
certification authorization shall result in a reduction of benefits available under the Plan.
a. Inpatient Services.
(1) semi-private room, if available (private room only if Medically
Necessary and authorized by the Members Primary Care Physician and the
Plan's Medical Director);
(2) general nursing care; special-duty nursing (when Medically Necessary
and authorized by the Members Primary Care Physician and the Plan's
Medical Director);
(3) meals (special diets when Medically Necessary);
(4) use of operating room and related facilities;
(5) use of Intensive Care Unit or Cardiac Care Unit and related services;
(6) diagnostic and therapeutic x-ray;
(7) laboratory;
(8) other diagnostic testing;
(9) drugs, medications, biologicals, anesthesia, and oxygen services;
(10) physical therapy;
(11) speech therapy;
(12) radiation therapy;
(13) occupational therapy;
(14) chemotherapy;
(15) inhalation therapy;
(16) administration of whole blood and blood derivatives (but not the
whole blood itself);
(17) hospital social services;
(18) detoxification for substance abuse, as limited in "Basic Covered
Services"; and
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(19) rehabilitation services during a hospital stay in an acute facility
(except for alcohol and substance abuse) with the prior approval of the
Plan's Medical Director.
b. Outpatient Services. When authorized by Member's Primary Care Physician,
outpatient services shall include diagnostic services, radio- and chemotherapy and
x-ray services which can be provided in a non-hospital-based health care facility
or at a Hospital outpatient department for Members who are ambulatory.
3. Extended Care Facility and Skilled Nursing Facility Services. Skilled Nursing Facility
services are covered up to a maximum of 100 days per illness per lifetime of a Member,
(including semi-private room, board and general skilled nursing care) at a Skilled
Nursing Facility approved by the Plan Administrator or Plan Supervisor if the primary
purpose of such institutionalization is care by health professionals for the medical
condition(s) requiring such Skilled Nursing Facility care. In all instances, care must be
Medically Necessary, ordered by the Member's Primary Care Physician, and have prior
approval by the Plan's Medical Director.
B. Emergency Services
1. Emergency medical care, including hospital emergency room services and emergency
ambulance services will be covered twenty-four (24) hours per day, seven (7) days per
week, if provided by an appropriate health professional whether in or out of the Service
Area if the following conditions exist:
a. the Member has an Emergency Medical Condition; and
b. treatment is Medically Necessary; and
c. treatment is sought immediately after the onset of symptoms (within twenty-
four (24) hours of occurrence); OR referral to a hospital emergency room is made
by Member's Primary Care Physician.
d. There is a Deductible for each Emergency room visit as specified in the
Schedule of Benefits.
2. Notification to the Plan Administrator. Member must notify the Plan Administrator or
Plan Supervisor as soon as possible, but in no event later than twenty-four (24) hours
after the provision of Emergency Services. If the Member is unable to contact the Plan
Administrator or Plan Supervisor within twenty-four (24) hours due to shock or
unconsciousness, the Member must, at the earliest time reasonably possible, contact the
Plan Administrator or Plan Supervisor to receive authorization for care.
3. Payment to Non-participating Providers. Payment for services of Non-participating
Providers shall be limited to expenses for such care required before the Member can,
without medically harmful or injurious consequences, utilize the services of a
Participating Provider and shall be limited to the fee schedule in Attachment A of this
plan document.
4. Follow-up Care. Follow-up care must be provided by a participating Physician, unless
otherwise authorized by Member's Primary Care Physician or the Plan's Medical
Director. Benefits for continuing or follow-up treatment are otherwise provided only in
the Service Area, subject to all provisions of the Plan Document.
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C. Ambulance Services
Medically Necessary ambulance service or appropriate emergency transportation to or from a
hospital for treatment of Emergency Medical Conditions or between hospitals. Transport
between hospitals requires the approval of a Participating Physician. Air ambulance
transportation will be provided and covered in the continental United States when authorized and
arranged in advance by the Primary Care Physician and the Plan's Medical Director or his/her
designee.
D. Durable Medical Equipment and Prosthetics
The following benefits are provided if Medically Necessary and approved by the Members
Primary Care Physician and the Plan Administrator Medical Director PRIOR to acquisition:
1. The cost of Initial Acquisition or rental (whichever is the most cost effective as
determined by the Medical Director) from approved providers of the following Durable Medical
Equipment subject to Copayments and/or limitations defined in your Schedule of Copayments:
a. Hospital type beds
b. Manual wheelchairs
c. Crutches/walkers, canes
d. Braces (limb or back only)
e. Traction devices
f. Infant apnea monitors
g. Blood glucose monitors for insulin dependent diabetics
h. C-PAP (if documented obstructive sleep apnea)
i. Nebulizers
2. Initial Acquisition of Prostheses after Accidental Injury or surgical removal which
occurred while a Member of this Plan. Replacement of a Prostheses is a Covered Service
only when the body's growth necessitates the replacement. All maintenance,
replacements and repairs of Durable Medical Equipment and Prostheses are the
responsibility of the Member.
Dental Services listed are subject to fee limitations as shown in Paragraph M below
E. Preventive Dental Services
1. (Non Orthodontic) Prophylaxis (one treatment per six months) including examination,
scaling, polishing and topical application of fluoride.
2. Space maintainers (limited to persons under age 16 and initial appliance only)
including all adjustments in the first six months after installation.
3. Diagnostic services including examination and diagnosis X-rays - full mouth (limited
to once in each 36-month period.
4. Bitewing films (limited to four films in any consecutive six-month period.
5. Other intraoral periapical or occlusal films - single films.
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6. Extra oral superior or inferior maxillary film.
7. Panoramic film, maxilla and mandible (limited to once in any 36 consecutive month
period).
8. Office visits and examinations (limited to one examination in any six-consecutive
month period)
9. Emergency palliative treatment and other non-routine, unscheduled visits.
F. Basic Dental Services (Non-Orthodontic)
1. Office visits and Examinations
2. Diagnostic services diagnostic casts
3. Biopsy and examination of oral tissue
G. Restorative Dental Services
1. Amalgam, Synthetic (silicate cement, acrylic or plastic, composite resin)
2. Crowns (acrylic or plastic, without metal, stainless steel)
3. Pins (pin retention, exclusive of restorative material)
4. Recementation (inlay or onlay, crown, bridge)
5. Endodontic services - (pulp capping-direct, remineralization, vital pulpotomy,
apexification)
6. Root Canal therapy of non-vital teeth- (traditional therapy, medicated paste therapy,
N2 Sargenti)
7. Apicoectomy, as a separate procedure or in conjunction with other endodontic
procedures
H. Periodontic Services
1. Gingivectomy or gingivoplasty, per quadrant, Gingivectomy, per tooth (fewer than six)
2. Subgingival curettage and root planing, per quadrant (limited to a maximum of four
quadrants in any 12 consecutive month period)
3. Pedicle or free soft tissue grafts including donor sites
4. Osseous surgery including flap entry and closure per quadrant
5. Osseous grafts including flap entry closure and donor sites
6. Muco-gingival surgery
7. Occlusal adjustment not involving restorations and done in conjunction with
periodontic surgery per quadrant and limited to a maximum of four quadrants in any
consecutive 12-month period
I. Oral Surgery
Extractions and other surgical procedures - alveolectomy, stomatoplasty, excision of pericoronal
gingiva, removal of palatal torus, removal of mandibular tort excision of hyperplastic tissue,
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removal of cyst or tumor, incision and drainage of abscess, closure of oral fistula of maxillary
sinus, reimplantation of tooth, frenectomy, suture of soft tissue injury, sialolithotomy for removal
of salivary calculus, closure of salivary fistula, dilation of salivary duct, sequestrectomy for
osteomyelitis or bone abscess - superficial, maxillary sinusotomy for removal of tooth fragment
or foreign body.
J. Prosthodontic Services
1. Denture repair, acrylic and metal Denture duplication jump case (limited to one
denture in 36 consecutive month period)
2. Denture reline (limited to once per denture in any 12-month consecutive period)
3. Tissue conditioning (limited to two treatments per arch in any 12-month consecutive
period)
4. Adding teeth to partial dentures to replace extracted natural teeth, repairs to crowns
and bridges.
K. Other Services
1. General anesthesia in conjunction with surgical procedures only
2. Injectable antibiotics needed solely for treatment of a dental condition.
L. Major Dental Services
1. Restorative services (cast restorations and crowns only when needed because of decay
or injury and only when the tooth cannot be restored with routine filing material)
2. Inlays
3. Onlays (in addition to inlay allowance)
4. Crowns and Posts (acrylic with metal, porcelain, porcelain with metal, full cast metal
other than stainless steel, 3/4 cast metal other than stainless steel, cast post and core in
addition to crown but not a thimble coping, steel post and composite or amalgam core in
addition to crown, cast dowel pin one-piece cast with crown)
5. Prosthodontic Services - (specialized techniques and characterizations are not covered)
6. Fixed bridges (each abutment and each pontic makes up a unit in a bridge)
7. Bridge Abutments
8. Bridge Pontics (cast metal, plastic, porcelain with metal, slotted facing, slotted pontic)
9. Simple stress breakers
10. Removable bridges (unilateral partial, one-piece chrome casting, clasp attachment
including pontics
11. Dentures (allowance includes all adjustments done by dentist furnishing denture in
the first six months after installation)
12. Full dentures upper and lower, partial dentures (allowance includes base, all clasps,
rests and teeth).
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M. Fee Limitation Schedule
The above stated dental services (Paragraphs E. – N.) are paid by the patient based on a
discounted fee schedule gotten by the Patient Physician Cooperatives of which the participants of
this Trust Plan are members.
N. Vision Care
Routine refractions by a participating ophthalmologist or optometrist once every twenty-four
(24) months are covered, and referral from the Primary Care Physician is not required. Other
visits require referral from the Primary Care Physician. Glasses or contact lenses are available at
the discounted rate specified in Schedule of Copayments when purchased from participating
optometrists and participating optical suppliers that are members of the Patient Physician
Cooperatives.
O. Mental Health Services
1. Outpatient Mental Health Services, including Professional Services, are provided for
short-term evaluation or Crisis Intervention when care is Medically Necessary and
authorized by the Plan's Mental Health Coordinator. Coverage is subject to a graduated
copayment schedule.
2. Inpatient Mental Health Services. Medically Necessary inpatient mental health
services, including Professional Services, appropriate for short-term evaluation or Crisis
Intervention for up to a maximum of $10,000 per Contract Year will be provided when
authorized by the Plan's Mental Health Coordinator.
3. Mental health services required by a court order are specifically excluded from
coverage.
4. Care of Alcohol and Drug Abuse Conditions - Detoxification for alcoholism or drug
abuse on either an outpatient or inpatient basis when determined by the Plan's Mental
Health Coordinator to be Medically Necessary and appropriate are covered as a Mental
Health Service.
P. Limitations
1. SERVICES AND TREATMENTS OTHERWISE COVERED MAY BE LIMITED
OR MODIFIED UNDER CERTAIN CONDITIONS:
a. Major Disaster or Epidemic. If a major disaster or epidemic occurs, physicians
and hospitals will render medical services (and arrange for extended care services
and home health services) as is practical according to their best medical judgment,
within the limitation of available facilities and personnel. Neither the Plan, the
Plan Administrator, the Plan Supervisor nor any Participating Physician or
Provider has any liability or obligation for delay or failure to provide or arrange
any such services to the extent the disaster or epidemic causes unavailability of
facilities or personnel.
b. Circumstances Beyond the Plan's Control. Services and other covered benefits
could be delayed or made impractical by circumstances not reasonably within the
144
control of the Plan, the Plan Administrator, or the Plan Supervisor such as:
complete or partial destruction of facilities, war, civil insurrection, labor disputes,
and disability of a significant part of hospital or medical group personnel, or
similar causes. If so, participating Physicians and Providers will make a good
faith effort to provide services and other benefits covered hereunder. But neither
the Plan, the Plan Administrator, the Plan Supervisor nor any Provider shall have
any other liability or obligation on account of such delay or such failure to
provide services or other benefits.
c. Refusal to Accept Treatment. Certain members may, for personal reasons,
refuse to accept procedures or treatment recommended by physicians. In such
case, neither the Plan, the Plan Administrator, the Plan Supervisor nor any
Member Physician or Provider shall have any further responsibility to provide
care for the condition under treatment, unless the member at some future time
shall recant the refusal and agree to follow the recommended treatment or
procedure.
2. SPECIFIC LIMITATIONS ON CERTAIN SERVICES:
a. Accident Benefits. When a covered employee or his eligible dependents
sustains an injury as a result of a non-occupational accident and receives
treatment therefor commencing within 72 hours after the accident occurs, the Plan
will pay those covered expenses defined in the Plan. However, no Accident
Benefits are provided for:
(1) treatment rendered more than ninety (90) days following the date of
the accident;
(2) an accident occurring prior to the time coverage is effective under this
Plan;
(3) expenses incurred after the date that coverage terminates.
3. EXTENSION OF MAJOR MEDICAL BENEFITS PROVISION. If accidental bodily
injury is sustained or sickness commences while these major medical benefits are in force
as to the covered person, covered expenses otherwise payable under this Plan will be paid
for any such expenses incurred as the result of such injury or sickness after the
termination of coverage of a covered person if from the date of such termination of
coverage to the date such expenses are incurred the covered person is wholly and
continuously disabled by reason of such accidental bodily injury or sickness. Such
benefits shall be payable only during the continuance of such disability, but not beyond
the earliest of the following dates:
a. Three months from the date the coverage of the covered person terminated;
b. The date on which the Plan is terminated, either voluntarily or involuntarily;
c. On the date the covered person becomes covered or insured under any other
group policy (whether issued by the sponsor or any insurer) or any group service
or pre-payment plan.
d. The date on which the Plan changes reinsurance carriers.
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4. Physical, and Speech Therapy; Inpatient Rehabilitation in a Rehabilitation Facility:
Inpatient rehabilitation in a rehabilitation facility or outpatient short-term services for
treatment of those conditions which, in the judgment of the attending physician, are
expected to show Significant Improvement from relatively short-term (less than sixty
(60) days) therapy. Length of coverage up to sixty (60) days is contingent upon
documentation of Significant Improvement. The sixty (60) day treatment period begins
on the first day any rehabilitative services are provided.
a. Inpatient rehabilitation must be upon referral by the Primary Care Physician
and requires PRIOR approval by the Plan's Medical Director.
b. Outpatient physical therapy and occupational therapy must be authorized by the
Primary Care Physician, and more than ten (10) visits require the approval of the
Plan's Medical Director.
c. Outpatient speech therapy is limited to the treatment of significant speech
dysfunction of sudden onset, caused by an illness (such as stroke, meningitis),
trauma, or which results from a surgical procedure. Referral from the Primary
Care Physician and PRIOR approval by the Plan's Medical Director is required.
5. Treatment for manual manipulation of subluxations and all related services such as lab
and x- ray is limited to the Maximum Fee Schedule and visits are limited to six (6) visits
per illness Per Contract Year for an acute episode.
6. Plastic/Reconstructive Surgery. Plastic/Reconstructive surgery will be covered if
Medically Necessary and with the prior approval of the Plan's Medical Director only if:
a. Surgery is incidental to treatment of disease (such as breast reconstruction
following mastectomy if reconstruction is a planned second Stage procedure); or
b. Surgery is necessary to correct a congenital disease or defect which causes a
severe FUNCTIONAL IMPAIRMENT; or
c. Treatment follows surgery which results from Accidental Injury which
occurred while a Member of this Plan.
7. Transplants. The transplant benefit is subject to a maximum allowable amount as set
forth in the Schedule of Fees and Copayments. Authorized medical hospital expenses of a
recipient and a donor (or prospective donor) are covered only when the recipient is a
Member and when the services are authorized by the Members Primary Care Physician
and the Plan's Medical Director. If the donor is not a Member, Covered Services for the
donor are limited to those services and supplies directly related to the transplant
procedure itself and are covered only to the extent that those services are not covered by
other health insurance. If the recipient is not a Member, no donor expenses are covered.
Living donor transportation costs are not covered even when the donor is a Member.
Cadaver organ transportation costs are covered even when the donor is not a Member.
8. Temporomandibular Joint Disorders. Non-surgical and surgical management of
temporomandibular joint (TMG) disorders, including office visits, and adjustments to the
orthopedic appliance, physical therapy, joint splint, all hospital related services (including
but not limited to room and board, general anesthesia and outpatient surgery services) are
subject to a lifetime maximum dollar amount as set for in the Schedule of Fees and
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Copayments. All surgical services must have pre-certification authorization from the Plan
Administrator or Plan Supervisor prior to the surgical procedure.
9. Mental Retardation is not covered, other than to make the primary diagnosis.
10. Chronic physical health problems which have also produced psychological problems,
the mental health services will be limited to consulting on inpatient and outpatient
services.
11. Eating disorders, gambling and stress management rehabilitation are not covered
benefits under Hospital Inpatient Services. These disorders may be treated under sub-
acute care or outpatient care when pre-authorized by the Plan's Mental Health
Coordinator.
12. Experimental or nontraditional use of medication unless pre-authorized by the Plan's
Mental Health Coordinator.
13. When parent(s) or guardian(s) are not actively involved in a dependent child's course
of treatment for mental or nervous disorders/substance abuse, benefits will be reduced
from those shown in the Basic Covered Services in the following way: (a) Hospital
Inpatient Services shall be limited to 50% of contracting provider charges up to a
maximum benefit of $3,000 per calendar year (b) Outpatient Care Services shall be
limited to 50% of contracting provider charges up to a maximum of $25 per visit and a
calendar year maximum of $500; (c) Sub Acute Care shall not be covered. Active
participation will be determined within the concurrent review part of the utilization
review program. Parents active involvement in the course of treatment will vary
according to the particular patient or treatment plan. In each case the parent or guardian
will be presented with the recommended participation, their participation will be
discussed, explained, and negotiated with them. Active participation may include
attending family sessions at the program that is treating the dependent child, attending
self-help groups and participating in individual conjoint or family therapy. The treatment
plan for parents or guardians will be presented to parents or guardians for their signature.
Refusal to follow the treatment plan for parents or guardians shall result in the reduction
in benefits as detailed above.
14. Biofeedback is not covered unless pre-authorized by the Plan's Mental Health
Coordinator.
15. Court-ordered inpatient treatment is not a covered benefit. Court ordered Outpatient
treatment will require, if approved, a copayment of $40 per visit for all outpatient,
conjoint or day treatment and is limited to the fee schedule in attachment A.
16. Inpatient MD (Psychiatrist/Additionologist) professional services will be paid at 80%
of allowed charges as listed in Attachment A.
17. Emergency Mental Health Hospitalization is not a covered benefit unless there is
eminent danger of homicide or suicide necessitating a legal hold (as may be applicable).
Maximum benefit under these conditions after copayment is $500 per day for hospital
and $75 per day for attending physician. The yearly maximum for all charges under these
conditions is $3,000 total for non-participating hospitals and non-participating attending
physicians.
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Q. Exclusions
Like most other health plans, there are SOME SERVICES THE PLAN DOES NOT COVER
under the basic benefits. Services which are not covered include but are not limited to:
1. CARE WHICH IS NOT MEDICALLY NECESSARY:
a. Any service not reasonably and medically necessary in accordance with
accepted standards of medical, surgical, or psychiatric practice;
b. Provision for personal convenience items or services (e.g., telephone or TV
charged to your hospital bill or housekeeping services charged as part of home
health care);
c. Physical examinations required by Employer, insurer, licensing agent or other
third party or required by school or summer camp;
d. Expenses for medical report preparation and presentation when not required by
Participating Physicians;
e. Travel and transportation to receive consultation or treatment, except for
approved emergency ambulance service;
f. Transsexual related services, supplies, surgery or therapy; and
g. Cosmetic surgery for enhancement of features.
2. CARE WHICH IS NOT AUTHORIZED:
a. Any inpatient or outpatient service or supply not properly referred by the
Primary Care Physician and properly pre-certified by or otherwise authorized by
the Plan Administrator or Plan Supervisor in accordance with its regular policies
and procedures, except for Emergency Services.
b. Services rendered outside the Service Area, the need for which could have been
reasonably foreseen by the Member prior to leaving the Service Area, except for
Emergency Services or except as approved by the Plan Administrator or Plan
Supervisor.
c. Health and benefit expenses incurred prior to membership in the Plan or
services rendered after the Plan coverage or eligibility terminates.
d. Care for conditions which state or local law require to be treated in a public
facility, care for military service-connected disabilities for which the Member is
entitled to service and for which facilities are reasonably available to the Member.
e. Service for pregnancy and/or delivery outside the Service Area except in case
of an Emergency Medical Condition.
f. All charges associated with non-covered services.
g. Any other services and/or supplies that are not specifically included in the Plan
Document or otherwise required by State or Federal statute or regulation.
h. Mental health services (including substance abuse services) which are not
specifically pre-authorized by the Plan's Mental Health Coordinator.
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i. Mental health services (including substance abuse services) of any kind
provided by non-contracting providers.
j. Mental health services (including substance abuse services) with participating
providers in excess of the services authorized by the Plan's Mental Health
Coordinator.
k. Services or treatment paid for by other group health insurance.
l. Psychotherapy used as professional training.
m. Conditions of an insured for which there is no reasonable hope of
improvement as determined by the Plan's Mental Health Coordinator.
n. Chronic Schizophrenia
o. Aversion therapy
p. Tutoring and educational therapy for children performing poorly in school.
q. Emergency room medical charges for a suicide attempt or drug overdose are
not a covered benefit.
3. CERTAIN TYPES OF CARE IN SPECIFIC SETTINGS:
a. Custodial, domiciliary, or convalescent care not requiring Skilled Nursing Care.
b. Alcohol and/or substance abuse rehabilitative services in a specialized inpatient
or residential facility unless such services have been preauthorized by the Plan's
Mental Health Coordinator.
4. TREATMENTS AND SERVICES SPECIFICALLY EXCLUDED
a. Any admission to an inpatient facility resulting in Members being discharged
against medical advice. The Member will be responsible for all charges associated
with the admission.
b. Organ donor treatment or services where a Member serves as the organ donor,
but recipient is not a Member of the Plan.
c. Dental examination, including the care, treatment, filling, or removal or
replacement of teeth or structures or tissue directly supporting teeth; dental or oral
surgery, except as specified in "Basic Covered Services." Any hospitalization
related to any form of dentistry is excluded.
d. Orthodontic treatment.
e. Experimental medical, surgical or psychiatric procedures, and pharmaceutical
regimes, elective abortion, holistic medicine, cytotoxin testing;
f. Special-duty nursing (except when Medically Necessary and authorized by the
Members Primary Care Physician and the Plan's Medical Director);
g. Plastic or cosmetic surgery, except as provided in the section entitled
"Limitations."
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h. Therapy for learning disability and communication delay, perceptual disorders,
mental retardation, behavioral disorders, marriage counseling and Attention
Deficit Disorder.
i. All services or expenses of any kind, including complications, related to the
pregnancy of any Dependent other than the Subscriber's spouse.
j. All infertility treatment, such as:
(1) Fertility drugs and substances, and supra-ovulatory cycling;
(2) Artificial insemination;
(3) Reversal of voluntary surgical sterilization procedures;
(4) Tuboplasty;
(5) In vitro fertilization; and
(6) Gamete Intrafallopian Transfer (GIFT) programs.
k. Mental health services required by a court order, and all other mental health
services except as specifically set forth in "Basic Covered Services."
l. Surgery for weight control, weight control programs and weight control
medications except for counseling by a Primary Care Physician.
m. Hypnotherapy.
n. Subcutaneous implants for contraception.
o. Sleep apnea studies except infant apnea and severe respiratory obstruction in
adults which presents, in the opinion of the Primary Care Physician and the Plan's
Medical Director, an urgent or life-threatening situation.
p. Unless otherwise covered in the Plan Document, procedures involving the teeth
or areas surrounding the teeth are not covered, including shortening of the
mandible or maxillae, or correction of malocclusion;
q. Allergy treatment and allergy serum.
r. Experimental or investigational drugs (drugs which have not been approved as
safe and effective for their intended use by the U.S. Food and Drug
Administration). Immunization for travel abroad. Drugs not listed on the Plan’s
formulary.
s. The following rehabilitation programs, regardless of duration:
(1) Cardiac rehabilitation;
(2) Pulmonary rehabilitation;
(3) Mitral valve prolapse programs;
(4) Pain management programs;
(5) PMS programs;
(6) Work hardening programs; and
(7) Vocation rehabilitation.
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t. Radial keratotomy and any other surgical procedure for the improvement of
vision when vision care can be made adequate through the use of glasses or
contact lens.
u. Oral medications dispensed in a Physician's office.
v. Outpatient prescriptions dispensed at a pharmacy (Pharmacy Benefits are
available on a discounted fee basis through membership in Patient Physician
Cooperatives).
w. Services or expenses for routine foot care including but not limited to trimming
of corns, calluses, and nails.
5. DEVICES, EQUIPMENT AND SUPPLIES EXCLUDED
a. Wigs or prosthetic hair.
b. Corrective shoes and shoe inserts.
c. Equipment and appliances considered dispensable or convenient for use in the
home, such as:
(1) dressings
(2) ostomy supplies
(3) disposable cervical collars
(4) urological supplies and
(5) supplies necessary to monitor glucose levels
d. All Durable Medical Equipment which is not listed as covered in “Basic
Covered Services" hereof Partial listing of excluded items is as follows:
(1) corset/girdles
(2) support garments (such as Jobst stockings)
(3) restraints/safety equipment (i.e. belts, harnesses, etc.)
(4) overbed tables
(5) toilet rails & seats
(6) vibration/massage units or chairs
(7) seat lift chairs and similar apparatus
(8) whirlpool
(9) urinals/bed pans
(10) stools/chairs
(11) shower bench
(12) intercom systems
(13) oxygen cylinder racks
(14) pulmonaids
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(15) air filtering units
(16) vacuum systems
(17) vacuum devices for impotence
(18) blood pressure cuffs stethoscopes
(19) TENs units
(20) exercise equipment
(21) motorized wheelchairs
(22) orthotics
(23) shoe inserts not a permanent part of shoes
(24) hearing aids
(25) pacemaker monitors
(26) contact lens or fitting of lens or eyeglasses except for first pair
following cataract surgery
(27) aphakic lens
(28) bandage lens
(29) insulin pumps
SECTION 4 - CLAIMS PROCEDURES
A. NOTICE OF CLAIM
1. Written notice of a claim must be given to the Plan Supervisor within 90 days after the
occurrence or commencement of any loss covered by this Plan, or as soon thereafter as is
reasonably possible unless adequate reason can be shown for the delay.
2. Written notice of a claim must be given to the Plan Supervisor within 30 days after the
date of termination with respect to claims incurred on the part of a covered individual
whose coverage terminates for any reason.
3. A covered person eligible for receiving reimbursement from a loss covered as a benefit
under this Plan must obtain a claim form from the Employer, complete the form, attach
any required proofs of loss such as doctors' bills or hospital bills, and return it to the Plan
Supervisor.
4. After verifying the covered person's eligibility, the Plan Supervisor will process the
claim form and attachments thereto for payment.
5. Subsequent medical expenses relating to that sickness or injury may be submitted
directly to the Plan Supervisor.
B. PAYMENT OF CLAIMS
1. Benefits which are eligible for payment under this Plan because of an injury or
sickness of a covered person shall be paid to the employee.
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2. Upon written direction, the employee may assign all or a portion of any benefit
payments to be made directly to the provider of the services for which claims were made.
3. If the employee dies before all benefits have been paid, the remaining benefits may be
paid to any relative of the employee or to any person or corporation appearing to the Plan
Supervisor to be entitled to payment. Any payment made by the Plan Supervisor in good
faith pursuant to this provision shall fully discharge the Plan, the Plan Administrator,
and the Plan Supervisor from liability to the extent of such payment.
4. Benefits will be paid as they occur, upon receipt of due written proof of loss. If
sufficient information has not been provided to process the claim, the covered person will
be notified in writing of the additional information which is required and why it is needed
before the claim can be processed and payment made.
C. CLAIM DENIAL
In the event a claim is denied, the covered person will be advised in writing of the following:
1. The reason for denial;
2. Special reference to Plan provisions on which the denial was based;
3. Any additional material or information necessary for further review of the claim;
4. An explanation of the Plan's review procedure.
D. REVIEW OF DENIED CLAIM
1. The claimant or an authorized representative may submit a written request for review
of a denied claim to the Plan Administrator or Plan Supervisor within 60 days after
receipt of the denial.
2. The claimant or an authorized representative may submit issues and comments in
writing and review pertinent documents.
3. The Plan Administrator will review the evidence received, and if in its judgment there
is just cause for a further review by the Plan Supervisor, the request will be forwarded to
the Plan Supervisor.
4. The Plan Supervisor will then perform the review based upon the evidence submitted
and render its written decision within 60 days, or within 120 days under special
circumstances, after receipt of the request from the Plan Administrator. The written
decision will include specific reasons for the decision and specific reference to the Plan
provisions on which it is based.
5. No legal action against the Plan for the recovery of any claim shall be commenced
within sixty (60) days or after three (3) years from the expiration of the time in which
proof of claim is required.
E. ARBITRATION
Should an irreconcilable difference of opinion arise between the Plan Administrator and a
claimant regarding any claim arising under the Plan, such difference shall be submitted to
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arbitration upon written request of either the Plan Administrator or the claimant. The procedure
for such arbitration shall be in accordance with the Employee Benefit Plan Claims Arbitration
Rules of the American Arbitration Association, incorporated by reference herein. The decision of
the arbitrator shall be final and binding and judgment upon the award may be entered in any
court having jurisdiction thereof. Completion of the arbitration is a condition precedent to any
right of action by a claimant.
SECTION 5 - COORDINATION OF BENEFITS
If a covered person is entitled as a result of sickness or bodily injury to receive similar benefits
simultaneously under this Plan and any other benefit plan (as defined below), benefits payable
under this Plan will be coordinated with any benefits payable for the same disability under such
other plan to the extent that the total amount paid will not exceed 100% of the incurred Eligible
Charges. When a plan provides benefits in the form of services rather than cash payments, the
reasonable cash value of each service rendered shall be deemed to be both an allowable expense
and a benefit paid.
A. BENEFITS SUBJECT TO THIS PROVISION:
All the benefits provided under this Plan are subject to this provision.
B. DEFINITIONS SUBJECT TO THIS PROVISION:
1. "Plan" shall mean any policy, contract or other arrangement for group, blanket, no-
fault motor vehicle, or franchise insurance, including any arrangement for such insurance
under any hospital, medical or dental service organization plan, any other service or
prepayment plan, which is made through an employer, union, trustee, employee benefits
professional, or U.S. Medicare. This includes automobile and homeowner medical
liability coverage. Such term shall be construed separately with respect to each such
policy, contract or other arrangement, and separately with respect to that portion of each
such policy, contract or other arrangement which does reserve the right to take the
benefits of other plans into consideration in the determination of benefits and that portion
which does not.
2. "Allowable Expense" shall mean any necessary, reasonable, and customary item of
expense actually charged to the covered person for whom claim is made under this Plan,
at least a portion of which is a covered expense under at least one other Plan under which
the covered person is entitled to receive benefits.
3. "Claim Determination Period" shall mean calendar year.
C. ORDER OF BENEFIT DETERMINATION:
If a covered person is entitled to receive benefits from this Plan as a result of sickness or injury,
and is entitled simultaneously to receive benefits under any other plan which provides similar
benefits, payment of benefits for such covered person shall be resolved in accordance with the
following order of benefit determination:
1. Benefits of automobile and/or homeowners liability insurance shall be determined
prior to determination of the benefits of this Plan.
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2. Benefits of a plan, other than this Plan, which does not contain a provision for reducing
its benefits by coordination with other plans shall be determined prior to determination of
the benefits of this Plan.
3. Benefits of a plan, other than this Plan, which does contain a provision for reducing its
benefits by coordination with other plans shall be coordinated with the benefits of this
Plan with priority given, in the order listed, to the plan under which the covered person is
entitled to receive benefits
a. other than as a dependent,
b. as a dependent of the parent whose birthday is the closest to the first of the
calendar year if the eligible child is covered as a dependent on more than one
Plan,
c. in the case of a person for whom claim is made as a dependent child,
(1) when the parents are separated or divorced and the parent with custody
of the child has not remarried, the benefits of a plan which covers the child
as a dependent of the parent with custody will be determined before the
benefits of the plan which covers the child as a dependent of the parent
without custody,
(2) when the parents are separated or divorced and the parent with custody
of the child has remained, the benefits of the plan which covers the child
as a dependent of the parent with custody shall be determined before the
benefits of a plan which covers that child as a dependent of the stepparent,
and the benefits of a plan which covers the child as a dependent of the
stepparent will be determined before the benefits of a plan which covers
that child as a dependent of the parent without custody,
(3) if there is a court decree placing financial responsibility for health care,
the benefits of the plan of the person named in the decree will be
determined before benefits of any other plan covering the child, and if
priority is not thereby readily established, benefits of such other plan shall
be coordinated with the benefits of this Plan with priority given to the plan
under which the covered person has been covered continuously for the
longer period of time.
4. Benefits of a plan, other than this Plan, which cover the member for medical and/or
hospital expenses which result from an accidental injury.
D. COORDINATION OF BENEFITS WITH MEDICARE
1. A covered individual who has attained the age at which U.S. Medicare Benefits are
available shall be deemed to be enrolled under Parts A and B, whether or not actually so
enrolled for such benefits.
2. For types of benefits covered by both this Plan and Medicare, benefits shall be
administered in accordance with Federal Government regulations, but in no event shall
benefits paid exceed 100% of eligible expenses.
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E. AMOUNT OF BENEFITS
The amount of benefits payable under this Plan by the terms of this provision for allowable
expenses incurred by the covered person during any claim determination period:
1. shall not exceed the amount which would be payable under this Plan in the absence of
this provision, and
2. shall be reduced to the extent that the sum of such reduced benefits and benefits
payable under all other plans shall not exceed the total of such allowable expenses.
BENEFITS PAYABLE UNDER ANY OTHER PLAN SHALL INCLUDE BENEFITS WHICH
WOULD BE PAYABLE IF CLAIM WERE DULY MADE.
F. FACILITY OF ADMINISTRATION
For the purposes of determining the applicability and implementing the terms of this provision or
of any other provision of similar purpose contained in any other plan,
1. the Plan Supervisor, without the consent of any person, may release to or obtain from
any other source any information required for such purposes, and any covered person
claiming benefits under this Plan shall supply to the Plan Supervisor any information
required for such purposes;
2. the Plan Supervisor shall have the right to pay to any other plan making payments
which should have been made under this Plan by the terms of this provision such
amounts as the Plan Supervisor shall determine to be warranted to satisfy the intent of
this provision, and any amounts so paid shall be considered to be benefits paid under the
Plan and shall discharge the Plan from all liability to the extent of such payments; and
3. the Plan Supervisor shall have the right to recover payments made for allowable
expenses under this Plan in excess of the maximum amount of payment necessary to
satisfy the intent of this provision to the extent of such excess from one or more of any
individuals to, or for, or with respect to, whom such payments were made, any other
plans, or any other organizations.
SECTION 6 - CONTINUATION OF BENEFITS UNDER THE CONSOLIDATED
OMNIBUS BUDGET RECONCILIATION ACT OF 1985 (COBRA)
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, Public Law 99-272,
Title X) applies to employers with twenty or more employees covered under an employer-
sponsored medical benefit Plan. COBRA provides temporary extension of health coverage, the
same benefits provided under the existing Policy, (called "Continuation Coverage") where
coverage would otherwise end, subject to the following called "qualifying events":
A. COVERED EMPLOYEE - has the option of continuing coverage for themselves and their
Covered Dependents for eighteen (18) months if he/she is no longer an Eligible Employee due to
the reduction of working hours or terminated from employment for other than gross misconduct
on the Employee's part.
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B. COVERED DEPENDENT - have the option to continue coverage for themselves for thirty-
six (36) months if benefits under this Plan would otherwise terminate for the following reasons:
1. Death of the Employee; or
2. Divorce or legal separation of the Employee and Spouse; or
3. Employee becomes eligible for Medicare; or
4. A Dependent Child reaches the maximum age for benefits under this Plan.
5. COBRA covers only those Dependents who were covered on the Plan on the day
before the qualifying event.
C. ELECTION OF CONTINUATION COVERAGE
1. The Covered Person has the responsibility of informing the Employer within sixty (60)
of the qualifying event.
2. The Employer must notify the Plan Supervisor immediately of the Covered Person's
intent to continue coverage on a form provided for such purpose.
3. Contribution must be paid by the Covered Person at 102% of the Contribution
effective for the Actively at Work Eligible Employee and their Covered Dependents no
later than 30 days following the election and every month thereafter for the period of
continued coverage.
4. If Employee or Dependent does not elect continuation coverage, his/her health
coverage will terminate according to terms of Section 2 of this Plan Document.
D. TERMINATION OF CONTINUATION COVERAGE
Continuation coverage may be cut short for any of the following reasons:
1. The Employer no longer provides group health coverage for any employees; or
2. RIGHT TO RECEIVE AND RELEASE NECESSARY INFORMATION
For the purpose of determining the applicability of and implementing the terms of this Plan, or to
determine acceptability of any applicant for participation in this Plan, the Plan Supervisor may
release or obtain any necessary information. In so acting, the Plan Supervisor shall be free from
any liability that may arise with regard to such action. Any person claiming benefits under this
Plan shall furnish to the Plan Supervisor such information as may be necessary to implement this
provision.
E. SUBROGATION
In the event benefits are paid under this Plan for charges incurred by a covered person as a result
of accidental bodily injury or sickness, and if the covered person makes a recovery (whether by
settlement, judgment, or otherwise) from any person or organization responsible for causing such
injury or sickness, or under any no-fault automobile insurance statute, then the Plan shall have a
lien upon any recovery. The covered person shall reimburse the Plan to the extent of such benefit
paid, but in no event shall the covered person be required to make reimbursement in an amount
exceeding the recovery made by the covered person.
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F. TERMINATION OF PLAN
This Plan shall continue in effect until terminated by the Plan Sponsor. The Plan Sponsor may
terminate the Plan at any time by giving written notice to all participating members at least 30
days prior to the date of termination.
G. WORKER'S COMPENSATION
This Plan is not in lieu of and does not affect any requirements or elections for coverage by
Worker's Compensation Insurance either on a mandatory or a voluntary basis. Additionally, any
care or treatment which would have been covered under a policy of Worker's Compensation
Insurance on a mandatory or a voluntary basis will not be covered under this Plan. Even if the
Employer has taken the option not to carry Worker's Compensation Insurance on a voluntary
basis, as is allowed in some states, such Employer will be deemed self-insured or alternatively
insured for those risks and not covered under this Plan.
H. MISCELLANEOUS
1. Except for assignments of reimbursements payable for coverage for hospital, surgical
or medical charges, no assignment of any rights or benefits hereunder shall be effective.
2. To the full extent permitted by law, all rights and benefits accruing under this Plan
shall be exempt from execution, attachment, garnishment, or other legal or equitable
process, for the debts or liabilities of any member or employee of any member.
3. Section titles are for reference only and are not to be considered in the interpretation of
this Plan.
4. Any provision of the Plan which is in conflict with the law of the state or other
jurisdiction which governs this Plan shall be deemed amended to conform with the
minimum requirements of the law. No provision herein is intended, however, to alter the
preemption of state law relating to this Plan by ERISA.
5. A failure to enforce any provisions of this Plan shall not affect any right thereafter to
enforce any such provision, nor shall such failure affect any right to enforce any other
provision of this Plan.
6. The covered person shall have the sole right to select a physician, surgeon, or hospital
from whom or which to obtain the benefits available hereunder, and to maintain a
physician/patient relationship.
7. Employer Sponsor shall have the right and the Plan Document shall incorporate other
health and life insurance benefits which the trust may purchase from insurers and
reinsurers, which benefits are defined in the policies issued to the members by those
insurers and reinsurers, including reinsuring 100% of the risks represented by the benefits
described in this Plan Document.
SECTION 7 - GENERAL PROVISIONS
A. CHANGE IN BENEFITS
The Plan Administrator may from time to time alter, amend, or modify the provisions of this
Plan Document and the benefits available hereunder in any manner, by written notice to the
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employees. Any change in benefits subject to the terms of this Plan occasioned by a change in a
covered employee's classification shall become effective automatically on the first of the month
following the effective date of such change, except:
1. If on the day an employee's benefits were scheduled to be changed the employee were
by reason of injury or sickness unable to perform active work on a full-time basis, no
change in benefits would be effective until such time as the employee returns to active
work on a full-time basis.
2. Any change in benefits with respect to a Covered Dependent who is totally disabled on
the day such change would otherwise become effective shall not become effective until
the day such dependent resumes the normal activities of a person of like age and sex.
B. NO PRE-EXISTING CONDITION LIMITATION
C. RIGHT OF RECOVERY
If, for any reason, amounts in excess of those due for any benefits under this Plan have been
paid, the Plan Supervisor shall have the right to recover such amounts from any person, plan or
organization.
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Attachment A
MEDICAL AND HOSPITAL FEE SCHEDULES
PER DEFINITION IN THIS PLAN OF USUAL AND CUSTOMARY
Current Medicare RBRVS Fee Schedule and DRG Schedule for Medicare
in County and State in which the Plan Sponsor Resides
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Attachment B
Minimum Essential Coverage (MEC)
Employer sponsor offers all employees and their eligible dependents the Maximum Value health
plan (MVP) described in this Complete Plan Document. However, employees who do not choose
to participate in the MVP can enroll in an MEC that includes membership in the Patient
Physician Cooperative (PPC) and a choice of Plans 2, 3, 4, or 5 and/or Indemnity Insurance
and/or Stop loss Insurance as described in PPC Directory of Benefits. The benefits of those plans
meet the requirement for an MEC and in cases where a beneficiary has not chosen a Primary
Care Physician (PCP) the charges for office visits from a PCP as defined in this document are
covered by the Trust based on the fee schedule in Attachment A less a $25 copayment.
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Addendum D – Agreement and Declaration of Trust
This Agreement and Declaration of Trust is made on this [ Date ] , by and between (Name of
Company Sponsor}, (hereinafter referred to as "Trustor or "Employer), and Greg Neuman
(hereinafter referred to as "Trustee").
RECITALS:
WHEREAS, by this written Agreement and Declaration of Trust, the trust known as the (Name
of Company Sponsor} EMPLOYEE BENEFIT TRUST ("Trust") is hereby created in order to
provide and furnish health care services and benefits, and/or other benefits for the exclusive
benefit of the employees, and the dependents and beneficiaries of employees of Employer; and
WHEREAS, the Employee Retirement Income Security Act of 1974, as amended, (ERISA)
authorizes the establishment of a trust by employers for the purpose of providing various
accident, health, and death benefits to their employees; and
WHEREAS, the Parties hereto desire to establish and maintain this Trust in accordance with the
terms, conditions and provisions hereof, for the benefit of the employees of Employer and their
eligible dependents, through participation in the benefit plan or plans established hereunder in
accordance with the terms and conditions of this Agreement, including amendments hereto and
such requirements as may from time to time be made to apply to participating in the Trust and
coverage under any welfare benefit plan or plans; and
WHEREAS, the Parties recognize that, in pursuance of the foregoing objectives, funds and other
assets, if any, may from time to time, be contributed by employees and held by the Trustee or his
designee, all pursuant to the Trust hereby created; and
WHEREAS, the Trustor intends that this Trust when taken together with any Employee Welfare
Benefit Plan will constitute a Trust and Employee Welfare Benefit Plan established under the
provisions of ERISA; and
WHEREAS, the Trustor will administer any and all Employee Welfare Benefit Plans developed
pursuant to this Trust and all claims made under such plans; and
WHEREAS, contributions by employees collected by the Trustor, or paid directly by Trustor,
and held in the name of the Trust will constitute a Trust Fund ("Trust Fund") to be held for the
benefit of employees and their eligible dependents; and
WHEREAS, the Parties hereto have agreed to the terms and conditions of this Trust.
NOW THEREFORE, in consideration of the promises and of the mutual covenants herein
contained, the Trustor and Trustee agree as follows:
ARTICLE 1
ESTABLISHMENT OF TRUST
1.01 The Trust is hereby established pursuant to this Agreement and Declaration of Trust.
1.02 Employer, as the Trustor, agrees to be bound by the terms and conditions herein set forth.
1.03 A Trust Fund may be established exclusively for the purposes authorized by this
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Agreement for the Trust. Any monies in such Trust Fund shall be held in trust by the Trustee or
his designee and shall be used to carry out the purposes of this Trust.
ARTICLE 2
PURPOSE OF TRUST
2.01 This Trust is established for the purpose of enabling the Employer to provide health care
services and benefits, disability benefits, death benefits, and accident benefits for those persons
who, from time to time, are determined, in accordance with the provisions of the Benefit Plan, to
be eligible employees or beneficiaries or dependents of eligible employees. The Trust will be
utilized for the exclusive benefit of the Employer, its employees, and the dependents and
beneficiaries of such employees. No part of the net earnings of the Trust, if any, may inure to the
benefit of any private shareholder or individual, or other person, firm, corporation, or other entity
other than by payments of the benefits described in the Benefit Plan.
ARTICLE 3
DEFINITIONS
3.01 Unless the context or subject matter otherwise requires, the following definitions shall
govern in this Agreement and Declaration of Trust:
(a) ACTUARY - an individual who is a member of the American Academy of Actuaries, a
fellow in the Society of Actuaries or the firm including one or more persons who are such
members, retained by the Trustor to provide actuarial services.
(b) ADMINISTRATOR or PLAN ADMINISTRATOR – (Name of Company Sponsor}.
shall be the entity responsible for administration of this Trust and any employee welfare
benefit plan adopted pursuant to this Trust;
(c) AGREEMENT AND DECLARATION OF TRUST - the Agreement and Declaration of
Trust effective the day of first shown on page 1 of this agreement;
(d) BENEFITS - the benefits provided to eligible persons pursuant to the terms of the
Employee Welfare Benefit Plan or Plans;
(e) ELIGIBLE PERSONS - all employees of the Employer, including such person's
dependents, who are eligible to receive benefits under the terms of any Employee Welfare
Benefit Plan or Plans;
(f) EMPLOYEE - any person, including such person's dependents, employed by the
Employer;
(g) EMPLOYEE WELFARE BENEFIT PLAN - any written plan document adopted by the
Trustor and/or Trust, hereunder, providing accident, health, and death benefits whether self-
funded or funded through a Group Master Policy of life, accident or health insurance or
through the Group Master Policy of an Association of Beneficiaries or by direct payment
agreements with providers of health care services who are members of an Accountable Care
Organization contracting with physicians who are members of a 501a non-profit Association
approved to accept risk in contracts with trusts or insurers by the Texas Medical Board ;
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(h) EMPLOYER - Trustor, which subscribes to this Agreement or any other instrument
binding it to the provisions hereof and satisfies the requirements for participation established
by this Agreement and Declaration of Trust;
(i) PROVIDERS - Any organization, including this Trust Fund, which insures, underwrites,
funds or otherwise provides for any of the benefits offered under the Benefit Plan;
(j) TRUST - the Trust established under the terms of this Agreement;
(k) TRUST FUND - all property and monies held pursuant to this Agreement, including
contract rights and records;
(l) TRUSTEE - the Trustee as initially designated together with any successor Trustee as
designated in the manner provided herein; and
(m) TRUSTOR - THE COMPANY as the Employer.
ARTICLE 4
DECLARATION OF TRUSTEE,
4.01 The Trustee declares that it will hold, invest and disperse the Trust Fund, if any, in
accordance with this Agreement.
ARTICLE 5
TRUSTEE
5.01 The Trustee shall consist of a duly qualified individual. In accordance therewith, Greg
Neuman, is hereby appointed as the Trustee of this Trust and by said Trustee's signature on this
Agreement hereby accepts such appointment and all of the provisions of this Trust.
5.02 The Trustee shall continue to serve during the continuation of this Trust, until death,
incapacity, dissolution, resignation or removal as any of the same shall apply.
5.03 The Trustee may be removed for cause at any time by the Trustor.
5.04 The Trustee may at any time resign and thereby become and remain fully discharged
from all further duty and responsibility upon the giving of thirty (30) days' written notice to the
Trustor stating a day after the expiration of which notice when such resignation shall become
effective. Such resignation shall be effective as of said date unless a successor has been
appointed by the Trustor to replace the resigning Trustee prior to the effective date of the
resignation tendered, in which event the resignation will take effect immediately upon the
appointment by the Trustor of such successor.
5.05 In the event the Trusteeship of the Trust becomes vacant, a successor shall be appointed
to fill the vacancy by the Trustor.
5.06 Upon termination of the Trustee, for any reason, such Trustee or the Trustee's designee
shall deliver to the successor Trustee or, if no successor has been appointed, to the representative
of the Trustor, all books, records, accounts, files, checks, receipts, paper and materials, without
limitation, if any, relating to this Trust and any Employee Welfare Benefit Plan or group plan of
life, accident and health insurance issued to fund such Employee Welfare Benefit Plan pursuant
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to this Trust.
5.07 Following the termination of any Trustee hereof, for any reason, the said Trustee shall
forward a final statement of account to the Trustor.
5.08 Each Trustee hereof, initial or successor, shall execute an instrument in writing indicating
acceptance of the rights and responsibilities hereunder. The initial Trustee's signature on this
Trust instrument constitutes written acceptance of the rights and responsibilities hereunder.
5.09 Each Trustee hereof, initial or successor, shall execute an instrument in writing indicating
acceptance of the rights and responsibilities hereunder. The initial Trustee's signature on this
Trust instrument constitutes written acceptance of the rights and responsibilities hereunder.
ARTICLE 6
POWERS AND DUTIES OF TRUST
6.01 The Trustee shall, during the Trustee's appointment, possess nominal legal title to the
Trust Funds, if any. Actual possession and control of the Trust Funds shall rest with the Trust
Entity for the benefit of the members.
6.02 The Trustee may, as authorized by the Trustor, apply for one or more group insurance or
"stop-loss" policies of life, accident and health insurance from an insurer or insurers authorized
to transact a life, accident and health insurance business in the state of Texas for the purpose of
funding any Employee Welfare Benefit Plan adopted by the Trustor. The Trustee may also
contract with any Accountable Care Organization and any discount benefits Association for the
provisions of health care services and health care and other cost savings for its members. It is
the initial intention of the Trustor to self-fund all benefits provided pursuant to this Trust and
purchase association group insurance, direct provider services from providers who have "stop-
loss" coverage applicable to the medical and hospital benefits they provide in agreement with
this Trust.
6.03 The Trustee shall hold and invest all funds, if any, received by it in cash or in bank
deposits in the banking institution insured by the Federal Deposit Insurance Corporation, and
shall not be liable for interest thereon unless actually earned and collected.
6.04 The Trustee shall be charged with responsibilities hereunder only as to the funds actually
collected by him, if any, in cash of the United States. The Trustee shall have no duty to collect or
enforce
payment of any premiums, contributions, assessments, fees or any other charges of any kind for
(1) any Employee Welfare Benefit Plan or insurance provided pursuant to this Trust or (2)
administration of this Trust. The Trustee shall be under no liability to anyone in case any of such
payments are not made, nor for the result of any failure of such payments to be made.
6.05 The Trustee shall not be required to determine the accuracy of any sum or payment
received by the Trustee, directly or indirectly, but shall receive such sums, if any, as are tendered
to the Trustee and shall disburse such sums as the Trustee shall be duly instructed to disperse by
the Trustor. The Trustee may fully rely upon any certificate or other statement signed by an
officer of the Employer or Provider for the truth of the matter stated therein, and in such reliance,
shall be fully protected irrespective of whether the person making the statement had actual
authority to make such statement.
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6.06 The Trustee shall keep accurate records of the Trust Fund accounts, if any, which shall
show the Trustee's receipt and disbursements. The Trustor may, at any reasonable time, inspect
the Trustee's or the Trustee's designee's books and records as respects this Trust. Except as may
otherwise be required by law, however, no Eligible Person shall have any right to inspect the
Trustee's or the Trustee's designee's books and records.
6.07 The Trustee or the Trustee's designee shall lend cooperation and assistance in any audit
of the Trust Fund or funds performed at the instance of the Trustor or any appropriate
governmental regulatory authority.
6.08 The Trustee or Trustee's designee shall lend reasonable cooperation and assistance to the
Trustor so as to facilitate the preparation and filing of any governmentally required reports
relating to Employee Welfare Benefit Plans or the group or "stop-loss" insurance plans or direct
medical care provider or discount association agreements adopted hereunder.
6.09 In the event any tax or assessment is levied upon the Trust Fund or funds, any portion
thereof, or upon the Trustee by reason of the existence of this Trust, the Trustor shall be required
to pay such tax or assessment.
6.10 Except as hereinbefore provided, however, the Trustee shall be under no duty to take any
action except as he shall agree in writing to take, nor shall he be under any duty to prosecute or
defend any suit or claims without the Trustor's consent and unless he shall have been fully
indemnified by the Trust or Trustor against all expenses and losses that may occur in connection
therewith, including reasonable attorney's fees and court costs. The Trustee shall have no duty or
responsibility whatever in connection with the administration or interpretation of any Employee
Welfare Benefit Plan or any policy or group plan of insurance utilized to fund such plan but shall
refer all such matters to the Trustor.
6.11 The Trustee shall not be liable to anyone except in case of gross negligence or willful
breach of this Trust. The Trustee shall not be liable to anyone in any manner, for any reason, for
any omission occurring while Trustee is in good faith compliance with this Trust, including
amendments hereof. The Trustee shall have no duties, obligations, powers, authority or
responsibilities in connection with this Trust or the Employee Welfare Benefit Plans or "stop-
loss" or group plans of insurance except as this Agreement shall provide. At any time, the
Trustee may consult with and rely upon the advice of legal counsel, actuaries, and other
appropriate professionals, and the Trustee shall have no liability to anyone or any action taken,
suffered or omitted in good faith pursuant to the opinion of such legal counsel, actuary, or
appropriate professional, the cost of which, if any, shall be borne by the Trustor or Trust Fund.
The Employer agrees to indemnify the Trust Fund and the Trustee from any liability, including
reasonable attorney's fees and court costs, if any, incurred by the said Trust Fund, or the Trustee
where the Trustee has fully complied with the Trustee's responsibilities hereunder; to the extent
relevant to such
liability.
6.12 The Trustee shall be vested with all rights, powers and prerogatives vested in the Trustee
by
the laws of the State of Texas or by this Trust. The Trustee does hereby delegate and transfer to
the Trustor any power, prerogative, duty or responsibility conferred upon the Trustee hereunder
or pursuant
to the laws of the State of Texas, including the power to:
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(a) Demand, collect, receive and hold contributions to the Trust Fund, and take steps,
including the institution of prosecution of, or the intervention in, any proceeding at law or in
equity, or in bankruptcy, as may be necessary or desirable to effectuate collection of Trust
Fund contributions;
(b) Deposit any monies received by the Trustee in such bank or banks or savings and loan
institutions as the Trustee may designate for that purpose;
(c) Hold from time to time any and all of the Trust Fund in cash, and invest it in accordance
with guidelines adopted by the Trustor;
(d) Compromise, arbitrate, settle, adjust or release any suit or legal proceeding, claim, debt,
damage or undertaking due or owing from or to the Trust on such terms and conditions as the
Trustee or Trustor deems advisable;
(e) Obtain if appropriate and maintain the tax-exempt status of the Trust under Section 501
of the Internal Revenue Code;
(f) Adopt appropriate investment policies or guidelines;
(g) Do all other acts, and take any and all other actions, whether or not expressly authorized
herein which the Trustee or Trustor deems necessary and proper for the protection and
administration of any property held hereunder.
6.13 The Trustee may delegate any power, duty, right or responsibility conferred hereunder to
any person, firm, or corporation, at the Trustee's sole discretion. Any such delegation made
outside this Agreement and Declaration of Trust shall be evidenced by written agreement
executed by the Trustee and the person, firm, or corporation to whom such delegation is made.
By execution of this Agreement the Trustee and Trustor evidence, acknowledge, and accept the
delegation made hereunder by the Trustee to the Trustor.
ARTICLE 7
PLAN ADMINISTRATOR
7.01 (Name of Company Sponsor}. shall serve as the Plan Administrator. The Administrator
is specifically designated a fiduciary of the Trust.
7.02 The Administrator will serve until resignation.
7.03 The Administrator will receive no compensation.
7.04 The Trust Fund may be charged with all reasonable expenses incident to establishment,
execution and operation of the Trust, including but not limited to cost of securing and
implementing one or more suitable benefit plans, administering benefits, obtaining actuarial,
investment, bookkeeping, accounting, auditing, and legal services, or premiums for any bonds
required under any federal, state or local law.
ARTICLE 8
POWERS AND DUTIES OF THE ADMINISTRATOR
8.01 Without limitation, the Administrator may:
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(a) Develop and administer Employee Welfare Benefit Plans;
(b) Enter into any and all contracts and agreements required or authorized under any
adopted Employee Welfare Benefit Plan;
(c) Compromise, settle, arbitrate, and release benefit claim demands in favor of or against
the Trust Fund on such terms and conditions as the Administrator deems advisable;
(d) Develop procedures for accumulating as part of the Trust Fund a reserve or reserves
adequate in the opinion of the actuary to carry out the purposes of any Employee Welfare
Benefit Plan adopted pursuant to this Trust;
(e) Receive contributions or payments from any source whatsoever to the extent permitted
by law;
(f) Open bank accounts in the name of the Trust or any Employee Welfare Benefit Plan
pursuant to the Trust;
(g) Receive and accept service of any legal process for or on behalf of the Trust Fund
and/or any Employee Welfare Benefit Plan hereunder administered by the Administrator;
(h) Pay out of the fund all real and personal property taxes, income taxes and other taxes, or
any kind and all kinds levied or assessed under existing laws upon or in respect of the fund or
any money, property or securities forming a part thereof;
(i) Make appropriate allocation of common administrative expenses and disbursements
shared or to be shared with any other plan or fund;
(j) Lease or purchase premises, materials, supplies and equipment and hire legal counsel,
administrative, accounting, actuarial and other assistance or employees as the Administrator
in its discretion finds necessary or appropriate in the performance of the Administrator's
duties;
(k) Contract with service providers to carry out any specific duty conferred upon the
Administrator, including, but not limited to, claims administration and contribution
collection;
(l) Do all acts, whether or not expressly authorized herein, which may be legally performed
and are necessary to accomplish the general objectives of enabling the employees to obtain
benefits in the most efficient and economical manner; and
ARTICLE 9
RESPONSIBILITIES OF FIDUCIARIES
9.01 In carrying out the terms of this Agreement the Trustee and all other fiduciaries shall
carry out their respective responsibilities in the interest of the Employer, its employees, and the
beneficiaries and dependents of the employees:
(a) With the care, skill, prudence and diligence under the circumstances then prevailing that
a
prudent man acting in a like capacity and familiar with such matters would use in the conduct
of an enterprise of like character and with like aim;
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(b) For the exclusive purpose of providing benefits and defraying reasonable expenses; and
(c) By diversifying investments to minimize the risks or losses, unless under the
circumstances it is clearly prudent not to do so.
ARTICLE 10
SIGNATURE OF TRUSTOR
10.01 The Trustor is authorized to execute any notice or other instrument in writing and all
persons may rely upon such notice or instrument as duly authorized and binding on the Trust and
Trustee.
ARTICLE 11
COLLECTION OF CONTRIBUTIONS
11.01 The Employer shall collect from employees of Employer contributions, if any, to pay
charges required to provide benefits to dependents of its employees.
11.02 The Employer is responsible for payments of all expenses incurred on behalf of the
Employee Welfare Benefit Plan.
ARTICLE 12
LIABILITY FOR BENEFITS IF PAYMENTS LATE
12.01 If an employee fails to pay the required contribution, if any, to the Employer within the
time specified, and if for such reason a person is deprived of benefits, the Employer shall be
financially responsible at law to the persons deprived of benefits as a result of such failure to pay
the required contribution or assessment.
ARTICLE 13
RECORDS OF THE TRUSTEE
13.01 Unless delegated, the Trustee shall keep accurate records of account which shall show all
receipts and expenditures and complete records, if any, of the operation of the Trust for which he
is responsible. The Trustor upon reasonable notice, may demand of the Trustee an accounting
with respect to any accounts and at any reasonable time may inspect the books of the Trustee. No
eligible person has any right to an accounting or to inspect the books and records of the Trust,
except as may be required by law.
ARTICLE 14
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INDEMNIFICATION
14.01 The Employer shall indemnify the Trustee for any liability incurred by the Trustee where
the Trustee has fully complied with the provisions of this Agreement.
ARTICLE 15
LIABILITY OF TRUSTEE
15.01 The Trustee shall be under no obligation or liability to pay any premiums, dues,
assessments or other charges which may become due and payable on any contract, nor to see that
payments are made by an employee. The Trustee shall be under no liability to anyone in case any
such premiums, or other charges are not paid, nor for any result of the failure of such payments
to be made. The Trustee shall be responsible solely for funds when, as and if received from
employees, and shall not be liable to anyone if for any reason whatsoever a Benefit Plan lapses
or becomes otherwise uncollectible or insolvent.
ARTICLE 16
DUTY TO ACT
16.01 The Trustee is under no duty to take any action, except as specifically provided for in this
Agreement and except as he shall hereinafter agree in writing to take, nor shall he be under any
duty to prosecute or defend any action at law or the proceeding without the appropriate consent
and unless and until he shall be first indemnified to his satisfaction against all loss and expense
that may arise in connection therewith.
ARTICLE 17
FILING WITH PUBLIC AUTHORITIES
17.01 The Trustee shall make or cause to be made such reports, and file such information, with
appropriate public authorities as may be required by applicable laws.
ARTICLE 18
RIGHTS OF EMPLOYER
18.01 The Employer may terminate this Trust and/or withdraw all of its eligible persons from
participation in the Trust by giving written notice of such termination or withdrawal to the
Trustee. Such withdrawal will be effective 60 days after receipt of such notice, unless the terms
of the Employee Welfare Benefit Plan provide for a later date. After the effective date of
withdrawal, the Employer shall have no obligation to the Trust except that which accrued during
the time of the Employer's participation in the Trust. Upon withdrawal, the Employer and all of
its eligible persons shall cease to have any rights whatsoever in the Trust Fund or any coverage
or payments available thereunder except as may otherwise be provided in the Employee Welfare
Benefit Plan covering such eligible persons.
18.02 This Trust serves only the direct purpose of administering the benefits of the Trust Fund;
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neither the Employer nor any employee of the Employer, nor any eligible person, nor any
dependent or beneficiary of any of the foregoing, shall have any individual or collective right,
title or interest in the Trust Fund. Any benefit derived under this Agreement shall accrue to a
person only by virtue of becoming and continuing to be covered under an Employee Welfare
Benefit Plan provided through the Trust. No person shall have the right, privilege or option to
receive any cash or other consideration from the Trust Fund in lieu of benefits under an
Employee Welfare Benefit Plan made available by the Trust.
18.03 No part of the Trust Fund, nor any benefits payable in accordance with any Employee
Welfare Benefit Plan, shall be subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge by any person, save and except for the purpose of securing any
loan made to maintain the financial integrity of any Plan adopted hereunder. Notwithstanding the
above, nothing herein shall preclude the assignment of Plan benefits to a Provider.
18.04 The books, records and accounts of the Employer which are, in any manner, applicable to
the contracts of any providers or the Employer's participation in the Trust shall at all reasonable
times be
open to inspection and audit by the Trustee during the Employer's period of participation in the
Trust and for a reasonable time thereafter.
18.05 Any successor of the Employer shall succeed to all powers, rights, obligations, and duties
of the original Employer.
ARTICLE 19
COMPENSATION AND EXPENSES OF TRUSTEE
19.01 The Trustee shall be reimbursed for all taxes, assessments, counsel fees, charges and any
other expenses incurred in connection with this Trust.
ARTICLE 20
ACCOUNTS AND RECORDS OF TRUSTEE
20.01 The Trustee shall keep true and accurate books of accounts and records, if any, of all its
transactions. The above-mentioned books and records shall be available for inspection at
reasonable times by the Trustor.
20.02 The Trustee shall present to the Trustor, upon request, a report showing transactions
during the and indicating the balance of the portion of the funds held by the Trustee.
20.03 After the Trustee has submitted a statement of account to the Trustor, such account shall
be deemed approved and the Trustee shall be released and discharged as to all matters set forth in
such statement of account as if said statement of account had been settled and allowed by decree
of a court of competent jurisdiction upon the earlier of the following:
(a) Receipt by the Trustee of the written approval of the said statement of account from the
Trustor; or
(b) The passage of sixty (60) days from the date the said statement of account was received
by the Trustor without written objections thereto having been delivered to the Trustee.
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ARTICLE 21
GENERAL TERMS
21.01 If the Trustee vacates the Trustee position hereunder the Trustor shall appoint a successor
Trustee and such successor Trustee, shall forthwith become the successor Trustee hereunder and
shall succeed to all title of the Trustee of the Trust Fund and all powers, rights, discretion,
obligations and immunities of the Trustee hereunder, with the same effect as though such
successor were originally named herein as Trustee.
21.02 This Agreement and Declaration of Trust may be amended by the Trustor. The Trustee
may propose amendments to the Trustor for adoption.
21.03 The Trustor may, per Section 18.01 of this Agreement, terminate this Trust. In the event
the Trust should terminate, the Trustee shall apply the funds, if any, then remaining in the Trust
Fund as follows:
(a) The payment of costs and expenses of the Trust to the extent allowable by this
Agreement and Declaration of Trust;
(b) To the application of the purposes of this Trust, which may be toward keeping in force
the Benefit Plan or Plans held at termination for such period as the Fund shall serve or such
other purposes as in the opinion of the Trustor shall be consistent with the purposes of this
Trust.
c) Upon the expiration of a 6-month run out period, after the effective date of withdrawal or
termination, any remaining Trust funds shall be returned to the Trustor.
Unless sooner terminated, this Trust shall in any event terminate upon the death of the last
survivor of such persons who were living at the time of the creation of this Trust and who are
entitled to receive benefits hereunder; provided, however, that if, as and when this Trust without
the benefit of this provision shall not violate the rules against perpetuity, then this provision shall
be of no force or effect, and this Trust shall continue in perpetuity unless otherwise terminated.
21.04 No Provider shall for any purpose be deemed a party to this Trust or be responsible for its
validity or sufficiency. The obligations of a Provider, if any, shall be measured and determined
solely by the terms and conditions of the contract or contracts it may issue, and there shall be no
obligation to any person whatsoever other than as stated in such contract. The Provider shall
have no duty to see to the application of any monies that they may pay to, or pursuant to the
direction of the Trust. The Provider shall not be required to take cognizance of the provisions of
this Trust; therefore, the providers may take or allow to fail to take or allow any action solely
upon the faith of any application, waiver, request, direction or other instrument, without
exception, executed by the Trustee or pursuant to its direction.
21.05 The use of a masculine, feminine or neuter pronoun herein shall be extended to include
other forms whenever appropriate to the context; the use of the term "person" shall include any
form of a business entity as well as a natural person.
21.06 This Agreement may be extended by the Parties in multiple counterparts and all such
counterparts so executed shall collectively constitute this one agreement.
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IN WITNESS WHEREOF, the parties affix their signatures this [ Date ].
ACCEPTED BY TRUSTOR: ACCEPTED BY TRUSTEE:
By: By: _________________________________
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Addendum E – Coop Development Slide Presentation
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Addendum F – PPC Brochure
Association Membership Benefits
Prescription Drug Discount Save from 15%-80% on prescription drugs through Drexi PBM. Accepted at over
60,000 pharmacies.
Lab Tests PPC partners exclusively with Clinical Pathology Laboratories (CPL) or Quest depending on the
member’s choice. The payment plan from these laboratories covers 100% of costs. Their retainer is included in the
basic membership services.
Patient Advocacy PPC will allow you peace of mind by providing Patient Advocacy to properly guide you through
the system by mediating and negotiating reduced medical bills and expenses on your behalf.
Indemnity and Stop Loss Insurance Provided to Association Members the Physician Association that contracts
with PPC purchases a stop loss agreement from Partner’s Re that covers 90% medical and hospital expenses excess
of $50,000 up to a maximum of $5,000,000. PPC members may elect to be covered under that policy. Also, an
indemnity policy from Pan American Life is included to cover hospital expenses, medical accident, accidental death
and life insurance from 0 to $50,000. The details of the policy are in the Pan American state approved brochure.
Health Club Membership Assistance The Downtown Club and the Met are included for access to fitness and
exercise programs. Both clubs are part of a national network owned by Club Corp which includes over 200 clubs in
the United States. PPC members have an option to upgrade to a O.N.E. membership with Club Corp for access to
their national network for golf, tennis, dining and extensive travel benefits. These are among the best clubs in the
world. You may also join Planet Fitness or Snap 24/7 as their cost is included in plans 2-5.
Concierge Primary Care PPC will establish a monthly payment plan with your selected primary care provider and
imaging clinic so that there are no added charges when you use their services.
Diagnostic Imaging (CT, MRI, PET, Ultra Sound and X-rays) on a monthly payment plan.
Specialist Retainer Services PPC will establish a monthly payment plan with up to eleven specialties that the
member may need to see on a frequent basis because of certain health conditions: Cardiology. Gastroenterology,
Hospitalist, Neurologist, Ophthalmology, Physical Therapy, Podiatry, Pulmonology, General Surgery, Orthopedic
Surgery, and Urology.
Many additional benefits are included in the Plans:
Dental, Vision, Hearing, Durable Medical Equipment discounts nationwide
24/7/365 Teladoc nationwide
24/7/365 Road Service nationwide
Contact: 832-599-8449
Web Sites: tbt.org and PPC-website.org
Patient/Physician Cooperatives (PPC), established in 2005, is a non-profit association. The Association gets fair prices
for its members on health services and products. It is not insurance. Health Care and Fitness Providers work together
to give PPC members access to affordable, basic health care and health club services through cooperation and mutual
support. Health Care and Association Group Insurance are all included.
Addendum F PPC Local Cooperative
Organizing for a
Better Community
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Teladoc (no consulting fee) Teladoc is a national network of U.S. board-certified
physicians who use electronic health records, telephone
consultations and online video consultations to
diagnose, recommend treatment and write short-term, non-DEA controlled prescriptions, when appropriate.
Teladoc physicians are available 24 hours a day, 365
days a year. To be used for conditions such as:
Sinus Infections
Respiratory Infections
Urinary Tract Infections
Allergies
Bronchitis
Cold or Flu
PPC Multi-Specialty group has extended hour primary care clinics in addition to the wide range of
specialties. You can choose a TBT Coop Clinic for
primary care and their PCP will see your either at your home or their clinic whichever location you prefer.
Visits are by appointment, but you can be seen within
two days. If you have only a basic membership the fee
per visit is $100 in home and $75 in clinic. Specialist consults for patients with the basic membership are
priced at Medicare plus 30% and are in the offices of
the Specialist. Plans 3, 4, and 5 which are based on a direct monthly retainer payment do not require
copayments at the time of visits.
Plan Options (This is not Insurance) 1. Basic Membership in PPC Includes:
PPC Provider Network Teladoc: Telemedicine services Quest or Clinical Pathology Laboratories CPL): Lab tests Cost: Primary Member Spouse or Partner Child
Annually $68 $48 $48
2. Discount Medical Services Plan: The Basic Membership plus
Patient Advocacy Charity Support Health Club
Dental, Vision, DME, Towing, Pharmacy
Medical and Hospital at fair and reasonable rates
Cost: Primary Member Spouse or Partner Child
Monthly $58 $45 $9
3. Concierge Plan: Plans 1 & 2 above Plus Primary Care Provider at $0 copay. Cost: Primary Member Spouse or Partner Child
Monthly $108 $96 $59
4. Concierge Plus Plan: Plans 1,2&3 above Plus
Diagnostic Imaging from selected clinics at $0 copay
Cost: Primary Member Spouse or Partner Child
Monthly $133 $120 $76
5. Concierge Elite Plan: Plans 1,2,3, &4 Plus Multi-Specialty Group Coverage at $0 copay Cost: Primary Member Spouse or Partner Child
Monthly $198 $187 $105
**All Plans are for a one-year terms. The rates reflect monthly
payments based on the annual Dues and Fees. Zero copay benefits are
with designated participating providers only Buy-up options can be added to Basic, Discount Services, Concierge,
Concierge Plus, or Concierge Elite plans. The buy-up options below are
association group insurance products that can be purchased in addition
to the PPC membership options.
Association Group Insurance
6. Indemnity Coverage + Lump Sum Cancer Policy Number 98210-02 Inpatient first 20 Days $2,000 each day Intensive care up to 10 Days $4,000 each day Substance Abuse up to 10 Days $1,000 each day
Mental Illness up to 20 Days $1,000 each day Skilled Nursing up to 17 days $1,000 each day Inpatient Major Surgical Benefit $3,000 Inpatient Anesthesia Benefit $750 Outpatient Surgical Benefit $1,500 Outpatient Anesthesia $375 Outpatient Surgical Facility up to 2 days $500 each day Outpatient Lab $25 for 3 days
Outpatient XRay $70 for 2 days Outpatient Advanced Studies $300 for 2 days Emergency Room Sickness $200 for 1 day Medical Accident with $100 deductible up to $2,500 Group Term Life Member $5,000 Spouse $2,500 Children $1,250 Infant $200
Accidental Death or Dismemberment $10,000 Lump Sum Cancer Coverage Guaranteed up to $25,000 With a Benefit Face Amount of up to $50,000
Cost: Monthly: $96 per person Or $288 for 3 or more Family Members
7. Stop Loss Coverage Policy Number 11835 Deductible $50,000 per year Coinsurance 10%
Maximum Benefit $5,000,000 per year Cost: Monthly: $42 per person
Health Club & Sports
Membership
Fitness, exercise, and social activities improve the
health of members and reduce the overall cost of
health care. PPC has established a program with
several national health care facilities at affordable
rates that are included in the monthly fees of plans
2 through 5.
Plan 5, Concierge Elite Plan, is served by PPC
Multi-Specialty Group and includes Primary
Care Services in the Patient’s home or in the
clinic whichever location the member chooses.
Healthcare Debit Card (HDC) is a healthcare
saving account into which you may choose to
deposit money to pay out of pocket health care
expenses pretax so that if you use services from
providers not in the Network you will have money
in hand to pay for them.
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Addendum G – Clinic Buildings for Medical Practices
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Addendum H – Complete Health Care System and Facilities Development
Executive Summary
A Complete Health Care System will include (1) large numbers of enrolled members, (2)
enrollment agents (3) administrative managers (4) physician practices in all areas of specialty,
and (5) safe and ultra-modern facilities and equipment. A Unit of such a System would have
150,000 member patients managed by 5 teams of physicians with 30 primary care practices and
fifteen types of specialty practices in which each team was responsible for 30,000 members.
Each team would have a specialty medical center, one of which would also be an acute care
hospital. This Unit is called a Complete Healthcare Unit or (CHU). It is a model for delivery of
health care which will result in healthier members and lower overall medical costs. The savings
created through lower cost of medical services is a gain by members patients and physicians
within each CHU.
The Complete Health Care Unit is managed by a Medical Service Organization (MSO). The
MSO acts as the conduit for advantageous insurance contracts through both public and private
vendors. These are favorable contracts across a range of choices that benefit both patients and
physicians.
The Provider Organization District (POD) which we have called a team is the smallest building
block of the CHU. Using PODs as the baseline for the CHU model, gives the MSO the ability to
scale operations to a fully developed CHU.
The operational service staff in each Pod of the CHU is illustrated below:
Each POD provides service to 30,000 members who are enrolled in the insurance products
provided through the MSO. Within the POD, each Primary Care Physician (PCP) provides care
for approximately 1,000 members. The typical breakdown of members per 1,000 by insurance
coverage is as follows:
● 150 members with Medicare or Medicare Advantage health plans
● 50 covered by Medicaid
● 800 covered by in private health plans
30
30
26
CHU POD
Primary Care Physicians Speciality Physicians Support Staff
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Membership enrollment for each CHU is driven by a General Agency that is licensed in all lines
of insurance and owned by the MSO. Captive Agents within the operational structure directly
contribute to MSO’s ability to meet enrollment goals for patients contracted with health plans.
Additionally, MSO is assisted by a Physician Association. This physician organization is
approved by the State Medical Board to make medical decisions and accept risk agreements.
Understanding the operation of each POD in the CHU and the insurance policy of each member
paves the way for demonstrating the source of funds based on the products sold.
As referenced above, the health plans are shared-risk agreements and pay into service funds, a
share of their gross premiums which are distributed as illustrated below:
Health Plans: ACO T1 ACO T3 MA 1 MA 2 ERISA Trusts PPC
Insurer 100% 100% 100% 100% 100% 100%
Shared Saving 50% 75% 50%
Premium Share: - - 85% 85% 100% 100%
Alliance Healthcare15% 15% 15% 15% - -
PPC 10% 10% 10% 10% 15% 15%
Local MSO 75% 75% 75% 75% 75% -
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The plans referenced above are derived from PPC which is a licensed Discount Medical Plan
Organization and a State approved Patient Association that is empowered to buy group health
insurance for its members at discounted rates (regardless of pre-existing conditions/exclusions).
Within Accountable Care Organization (ACO) agreements, physicians are paid either fee-for-
service or global capitation that, due to favorable contracting through the PPC, rewards the
physician’s labor and reduces overhead costs via savings on facilities, specialty services, and
insurer charges. By working within the team, physicians reduce admissions to hospitals and
reduce the need for third-party claims processing and medical administration. Past and current
PPC experience with Health Maintenance Organizations (HMOs) has shown that such physician
team’s job performance is superior and cut costs approximately 15% to 20%. The shared savings
are passed directly back to the physicians and PPC in the form of shared savings bonuses and
results in lower cost or more and better health care services for member patients.
Additionally, income from each of the contracted plans for the CHU is earned monthly through
waivers negotiated by the ACO on ancillary services such as Lab and Home Health. Income
from these waivers are projected to be more than the administrative cap currently paid by
commercial plans and therefore provides added income throughout the year to the PODs through
their association with the ACO.
The chart below illustrates the difference in the average cost of health care per person in the
United States and the cost of health care per person within an MSO directed CHU.
Source for Average US Cost to Deliver Health Care: Kaiser Family Foundation analysis from “OECD Health Data: Health
expenditure and financing: Health expenditure indicators.” OECD Health Statistics (database) (Accessed on March 19, 2017).
As evidenced by the chart above the incentive for the physicians to perform and work within the
network established by PPC and the ACO is directly tied to the cost difference between the
average USA cost and the experience of MSO’s. When the physician groups respond favorably,
the savings are shared within their group, and with the MSO.
Expanding the focus to a fully operational CHU with 150 PCPs and 150,000 members, the
annual projected medical services revenue from the patient population would approximate $1.1+
billion. The projected savings that would be realized from this revenue should approximate
$240,000,000 of which $33,000,000 would be surplus income for the owners of the CHU
approximating 15% of the gross earnings annually.
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The organizational structure for PPC provides the performance required to achieve the results
desired. This organizational structure directly responds to the needs of the doctors, patients,
insurance carriers, and investors. The organizational structure for the PPC team is illustrated in
the chart below:
The organization is staffed with a highly experienced executive team that is prepared to lead the
execution of the CHU projects from day one.
The Executive Team
Joel Hodge, MBA (CEO)
Joel Hodge has 25 years in medical and dental managed care and group health plan experience
Aetna & Prudential Healthcare in the areas of profit and loss, network development, cost care
management, strategy, product management, utilization management, sales/sales support,
compliance and quality improvement. He was most recently the Executive Director of Dental
National Network Operations, the Head of Dental Network Operations & Clinical Services, and
the Vice President of Dental Operations and a Regional Manager for Aetna Dental spanning an
18-year time frame. Prior to these roles, he held numerous other senior leadership positions over
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an eight-year period for Prudential Healthcare. Those roles included developing and operating a
variety of different PPO and HMO health plans and networks in both Texas and California. Joel
holds an MBA in Finance from the University of St. Thomas and a B. S., Mathematics from
North Georgia College.
John McCormick, Ed. D. (COO)
Dr. John McCormick is a recognized expert in Leadership, Management, and Quality
implementation. One of only ten people to be awarded special experience identifiers from the
Department of Defense (DOD) as a Quality Advisor, Facilitator, and Instructor. Dr. McCormick
has implemented the Lean management approach to running organizations that have spanned the
Globe. His leadership has resulted in several turn around operations, taking organizations from
failing to award-winning at the local, national, and international level. Dr. McCormick has led
local organizations ranging from as little as 15 personnel to national and international
organizations as large as 1,500 personnel servicing over 55,000 customers per year. Dr.
McCormick is a Master Instructor, and award-winning speaker, who has launched organizations
from the ground up by developing all the policies, procedures, and training materials needed to
bring in new employees and make them proficient in their role. As the COO of MRSB, Dr.
McCormick increased physician participation from 120 doctors to 550 doctors in under two
years. He also negotiated favorable contracts with insurance carriers bringing the number of
active contracts from one to nine in the same time frame. Dr. McCormick has an Ed.D., in
Leadership and Management from St. Thomas University, FL, a M. A., in Education
Administration from Sam Houston University, TX, a B. S., in Criminal Justice from Park
University, MO and two A.A.S., degrees, one as an Instructor of Technology and Military
Science and the other in Security Administration from the Community College of the Air Force.
Donald H. McCormick B.A., A.A.M.A. (Executive Director)
Don McCormick was born in Houston, Texas on October 1, 1941, and Graduated from the
University of St. Thomas in June of 1967 with a BA degree. He attended University of Houston
and Mills College for graduate work in Insurance and HMOs several times between 1967-1975.
Licensed as a General Lines Insurance Agent in 1967 and operated an independent agency until
1975 when he became the Marketing Director for New Communities Service Corporation HMO.
In 1977 he became Executive Director of Texas Health Plans HMO. Then in 1980, he became
President of Computech (Medical Accounting Software Company). Between 1984 and 1995 he
was the President of National Association of Preferred Providers. In 1996 he became the
Executive Director of SEMNet IPA. He was the founder of Senior Patient Association AKA
Patient Physician Cooperatives. He is a Trustee for TBT, a 501c3 organization that organizes
Patient Physician Cooperatives. He served as President of Physicians ACO 2012-2013 and is the
current President of Texas Physicians ACO.
Mark B. Blick, D.O. (Medical Director)
Dr. Mark Blick is an Internal Medicine Specialist in Bellaire, Texas. He graduated with honors
from medical school in 1977. Having more than 41 years of diverse experiences, especially in
Internal Medicine, Dr. Blick affiliates with many hospitals including Memorial Hermann Texas
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Medical Center, Memorial Hermann Hospital System, Memorial Hermann Sugar Land Hospital,
and cooperates with other doctors and specialists in the Bellaire Medical Group. Dr. Blick is
Chairman of the Board of USPCPs that is the Medical Provider Group for Patient Physician
Cooperatives and TP ACO.
Blair Korndorffer, A.I.A. (Director of Facility Development)
Blair Korndorffer is the Co-Founder of Matador Acquisition Corp. and has been the Executive
Vice President of Architecture & Planning since August 2007. He served as a Founding Principal
of Hawthorne Architects from 1983 to 2007. He has developed a great working knowledge of
architecture, architectural structure design, and construction. He has been involved in the award-
winning design and construction of multiple high-rise structures, hospitals, hotels,
condominiums, and residential properties. These structures represent over 2 billion in
construction and millions of square feet. He is also the co-developer of the StruchTech rapid
construction system. He is a Registered Architect and Interior Designer in Texas. He received his
Bachelor of Science in Architectural Engineering in 1980 and his Profession Degree in
Architecture in 1981 from the University of Texas at Austin.
Mike McDermott (Director of Field Marketing Organizations)
Mike McDermott has a BA in Business Administration from the University of North Texas and
has been in the field of sales and marketing since 1983. As a fully licensed Securities Dealer,
Real Estate, Life & Health insurance agent, Mike is directly responsible for building a statewide
sales organization that has produced millions of dollars in revenue for the General Agency and
the insurance carriers he represents. As the Director of the Insurance Division for Dillon Gage
Securities Mike brought an account of 20,000 members to the company. During his time as a
Corporate Health Insurance agent Mike was recognized as one of the Top Producers in the
country by Well Point Health Care Systems producing well over $3 Million annually in premium
income. As the Vice President of Marketing with Leasing Services Mike personally produced
$20 Million in employee leasing volume.
Tanner Touchstone (Marketing Director)
Tanner Touchstone is a sales and training professional who currently works with physicians and
physician groups, company executives, human resource professionals, and licensed insurance
brokers. In 2015 Tanner moved into network development and healthcare sales industry where
he has achieved superior results bringing millions of dollars in revenue and producing thousands
of sales. Since his move to the healthcare industry Tanner has been successful in implementing
and developing the customer service processes for individual and group health care plans and
onboarding medical groups into core network contracts. Additionally, he has been assisting
brokers in selling out-of-the-box healthcare solutions for companies over large geographical
areas and various industries. Tanner is also the current team leader in the collaborative effort to
develop new geographical markets for physician recruitment and healthcare plan sales.
Previously Tanner had spent 15 years honing his leadership skills opening restaurants and
overseeing trainers and training programs to facilitate these openings. Tanner carries all the
proper state licenses and federal certifications to sell commercial and federal health care plans.
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Charles A. Garcia, M.D. (Board Member)
Dr. Charles A. Garcia is a board certified and internationally recognized researcher and clinician.
As a graduate of Tulane University, he completed his residency and internship at The University
of Texas Medical School at Houston. His post-residency fellowship in Cornea and External
Disease was completed under Dr. Dan B. Jones at Baylor College of Medicine in 1970.
As a specialist, his clinical practice focuses on the diagnosis of various vitreo-retinal diseases,
and he has worked throughout his career on finding a treatment for Retinitis Pigmentosa and
Retinal Dystrophies. Dr. Garcia has written extensively on his retina research and published
more than 175 articles, written three books in English and Spanish as well as published
numerous articles in association with the National Institutes of Health. He has presented in
numerous ophthalmic societies both in the US and internationally and has been active in training
more than 100 post-doctoral fellows from 22 countries including the United States since 1974.
As former President of the American Diabetes Association, Dr. Garcia has worked with local
community organizations to educate the public about diseases of the eye and diabetes. He
participated in more than 15 clinical studies with the National Institutes of Health and the
National Eye Institute investigating the progression of diabetic retinopathy since 2004. Dr.
Garcia has had a continued commitment to community service and has participated in numerous
events including the "Feria De Salud" presented in association with the American Diabetes
Association. He is a lifetime member of the American Academy of Ophthalmology, The Retina
Society & American Society of Retina Specialists, and is affiliated with numerous hospitals
including Memorial Hermann, The Methodist Hospital at St. John Clear Lake, and the oldest
hospital in Houston, St. Joseph Medical Center.
Bao T. Pham, M.D. (Board Member)
Dr. Bao T. Pham is a practicing Family Practitioner in Houston, TX. Dr. Pham graduated from
Louisiana State University School of Medicine Shreveport in 2003 and has been in practice for
15 years. He completed a residency at Memorial Hermann Hospital System. He currently
practices at Pham Medical Clinic PA and is affiliated with West Houston Medical Center and
Healthbridge Children's Hospital of Houston. Dr. Pham accepts multiple insurance plans
including Aetna, Medicare, and Humana. Dr. Pham is board certified in Family Medicine. In
addition to English, Dr. Pham's practice supports these languages: Spanish and Vietnamese.
The executive team represents over 252 years of combined experience in health care, insurance,
leadership, and medical development and construction. This powerful combination of talents is a
cornerstone that ensures the investment in PPC is on solid footing.
In addition to the talent above, management of the ACO and Medicare Advantage Programs is
performed by John Woods who is the CEO of Alliance Healthcare and Verat, LLC. This
multimillion-dollar organization has a proven track record of over 30 years negotiating favorable
contracts for John Woods’ medical groups and has contracted with PPC for the management of
this function.
The projections shown on this page and the following represent the statement of operations for
this project.
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The CHU model includes a total of five PODs each with a capacity for 60 Physicians and
30,000-member patients. The “Executive Pod” represents the management company PPC and
the first group of physicians and members. As other Pods are added to the model, as shown
above in “Support Pod 1”, the operating expenses drop off dramatically as there is no repetitive
costs within the executive team that manages all five Pods. Should all five of the Support Pods
begin operations in the first-year, surpluses would be realized sooner.
The following page reflects the summary of the operational expenses isolating a single Support
Pod and then expanding to include all four Support Pods.
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PPC recognizes that to achieve this level of production, it is imperative to have the functional
plans and teams in-place on the start date of the project. Training and the equipping of our
existing staff with the knowledge and tools required to be ready to start all five Pods is the first
step.
Rapid recruitment of physicians and members to plans offered through PPC assures success.
These actions occur simultaneously and are complimentary in reaching the goal of 150,000
members and 150 PCP’s.
Membership recruitment is conducted through four channels:
1. Recruitment of fully licensed agents who are known producers.
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2. Acquisition of licensed agencies with an eligible book of medical insurance business that
can be converted to PPC products.
3. Clinics staffed by our Clinic Operations Teams that act as a hub for community outreach and
in directing patients to the PPC medical products that suit their needs.
4. Recruitment and training of new captive agents that sell only PPC products.
The marketing department has a combination of demonstrated performance. Mike McDermott’s
efforts are focused on the first two channels of membership generation. First, the recruitment of
known producers who are licensed agents to sell PPC products. Mike has an extensive network
of the top producing agents in the region and has begun contracting to bring proven agents onto
the PPC team.
The acquisition of existing agencies is the second channel to increase membership in PPC
products. The criteria are as follows:
• Agency has members (at least 4,000) enrolled in medical plans suitable to convert to PPC
products. Conversion to PPC products are at a rate of 333 members per month over a 12-
month period.
• Agency business (other than medical) is of such value that it can be sold off to other agencies
in those markets for instant return on investment
• Commissions currently earned by agencies are at or below 4% making the PPC product
commission of 8% more favorable. This approach has the added benefit of adding the Agents
within the agency (to the producing agent pool above) thus improving the reported numbers.
The expectation is to purchase two agencies that meet these criteria per year. Time from
identification of a potential agency through the vetting and purchase timeline, is approximately
six months. The expected membership from this endeavor is illustrated on the next page:
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Don McCormick is heading up the third channel of member recruitment, the opening of and
administration of screening clinics serves PPC goals. Those goals include community outreach,
providing high quality health care, identifying and recruiting potential members requiring
insurance coverage best suited to meet their needs. Historical experiences with clinics operated
by PPC and administered by Don McCormick have resulted in an average of 180 new members
monthly being directed to various insurance products sold by PPC. Membership enrollments
produced by clinic operations are one of the ways sales leads are given directly to agents. One
clinic can support up to nine producing agents. PPC’s plan is to open 5 such clinics within the
first 12 months of operation.
Tanner Touchstone is directing the fourth channel of member enrollment; the recruitment and
training of new agents. This process will incorporate a 10-day training program which begins
with recruiting 10 potential agents per week. Six of the ten new recruits will earn their insurance
license. Those six licensed agents are then trained, tested, and qualified on the products sold by
PPC. Once an agent is trained, they are assisted by the field training agents through their first
series of sales and through their assignment in a PPC clinic. The recruitment and training of new
agent’s results in approximately two producing agents per ten recruited. This process may seem
to be a high-cost method of qualifying and bringing agents into the organization, however,
recruiting agents directly into the organization keeps them focused on our products and our
physicians. This channel is illustrated on chart on the next page.
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The second element is physician recruitment. This is accomplished through our team of provider
relations, community organizers, and community relations staff. The team will approach and
recruit physicians by comprehensively explaining and demonstrating the benefits physicians gain
by joining one of the Pods. PPC currently holds contracts with over 650 physicians. The CHU is
staffed by those contracted physicians that have been identified as high performing for both
medical and financial outcomes.
Member sales and physician recruitment align with the facility construction delivery schedule to
ensure that PPC meets the goals set forth in this proposal. As illustrated below:
Numbers reflect percentage of goal achieved by the end of each year.
0
20
40
60
80
100
120
140
160
180
200
Year 1 Year 2 Year 3 Year 4 Year 5
CHU Development Time Line
Physician Recruitment Goal (150)
Member Recruitment Goal (150,000)
Facility Construction (Goal 100% Complete by Month 20)
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The final step in making this process a success is the investment of capital. Given the feasibility
of the project, the startup capital required for five Pods and the executive Pod is $60,000,000.
Upon completion of construction of each POD facility, PPC guarantees the lease of each facility.
The total cost of construction for the entire CHU model is projected to approximate
$199,419,223. Therefore, the total Capital Raise equates to $259,419,223 for all entities,
supporting contracts, infrastructure, and facilities. The capital investment will represent the
following;
● patient population goal of 150,000
● of which 30,000 will be Medicare or Medicare Advantage Patients
● and 120,000 will be commercially insured
The return on investment is notated on page ten.
The CHU model offers better health plans, lower costs, safer, more attractive and technologically
superior facilities making the CHU model the market choice.
Acronyms and Definitions Page
1. ACO: Accountable Care Organization – The name used CMS to describe a hospital and
physician organization.
2. ACOPMA: ACO Physician Medical Advisors – Name of the non-profit 501A.
3. CHU: Complete Health Care Unit – The complete model representing 150 primary care
physicians, 150,000 patients, and the accompanying supervisory and administrative
support staff.
4. CMS: Centers for Medicare and Medicaid Services.
5. HMO: Health Maintenance Organization – Various payers of health benefits.
6. IUGA: International Universal General Agency – Licensed cooperate general agency
appointed by insurance companies to represent their products.
7. MSO: Medical Service Organization – Generic name for management companies that
service physician groups.
8. PCP: Primary Care Physician – A physician that is usually the first contact with a patient
entering the health care system.
9. PPC: Patient Physician Cooperative Alliance– The management company and a qualified
Association for the purposes of buying insurance products and negotiated prices.
10. POD: Provider Organization District - The word used to represent the basic unit of a
CHU which is: 60 physicians, 30,000 patients, and the accompanying supervisory and
administrative support staff.
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Addendum I – PanaMed Indemnity Policy for Senior Patient Association
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Addendum J – Group Lump Sum Cancer Insurance for Senior Patient
Association
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Addendum K – BY-LAWS OF SENIOR PATIENT ASSOCIATION, LLC
d/b/a Patient/Physician Cooperatives (PPC)
1. The Association intends to enter into contracts on behalf of its members with healthcare
providers to assure the quality and availability of services to its membership.
2. Annual Meeting. Second Tuesday of November at 1:00 P.M. Central time
3. Place of Meeting. PPC location listed on the enrollment application
4. Members' List for Meeting. The Association shall prepare an alphabetical list of the
names of all Members prior to meetings.
5. Quorum. Members present in person or by proxy that represent at least 5% of the total
paid membership entitled to cast votes on a matter shall constitute a quorum. Persons not
in attendance in person or by proxy are deemed to have abstained from voting.
6. Voting. Each Member age 18 or above shall be entitled to one (1) vote.
7. Proxies. Each Member may vote in person or by proxy. Upon notification of the annual
meeting either by mail or electronic means a receipt of the meeting notification “read
receipt” if electronic shall serve as a proxy vote assigned to the Secretary unless
superseded by a written proxy or in person attendance at the meeting.
8. Voting by Persons other than Members. Only members may vote either in person or by
proxy assigned to another member or to the Secretary (as noted above).
9. Manager’s powers shall be exercised under the authority of, and the direction of the
Manager as elected by the members. The Manager shall initially consist of the persons
named in the articles of the Association. Thereafter, the manager shall be elected from
time to time by the Members. Each Manager shall hold office for six years until (i) the
next annual meeting of the Members after the expiration of the six-year term and until
that Manager's successor is elected and qualified, or (ii) the earlier death, resignation,
removal, or disqualification of a Manager.
10. Vacancies. Any vacancy occurring on the Manager Office for any reason may be filled
by the affirmative vote of a majority of the members. A Manager elected to fill a vacancy
shall be elected for the unexpired term of the Manager's predecessor in office.
11. Removal. The Manager may be removed, with or without cause, at a special meeting of
Members called for that purpose, by a vote of the majority entitled to vote at an election
of the Manager.
12. Organization. Meetings of the Manager and staff shall be presided over by the Manager,
or in the Manager's absence by the next ranking officer. The Secretary shall act as
secretary of the meeting, but in the absence of the secretary, the person presiding at the
meeting may appoint any person to act as secretary of the meeting.
13. Compensation. Pursuant to membership resolution, Managers, as such, may receive such
fees and other compensation for their services as managers, including without limitation,
their services as members of committees of the Managers and staff.
14. Executive Committee. The Managers, by resolution adopted by a majority of the
members, may designate one or more of its office staff to constitute an executive
committee or any other committee. Each committee shall have one or more members,
who serve at the pleasure of the Manager. If the Managers appoint an executive
committee, the executive committee shall have and may exercise all of the authority of
the Manager when the Manager and staff officers are not in session.
15. Limits on Authority of Committees. No committee, including the executive committee,
may do any of the following:
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▪ Authorize or approve distributions;
▪ Approve or propose to Members actions that are required by law to be approved by
Members;
▪ Fill vacancies on the Manager or on any of its committees;
▪ Amend articles of Organization;
Adopt, amend, or repeal By-laws; and
▪ Approve a plan of merger that requires Member approval
16. Officers. The Manager shall appoint a president and a secretary/treasurer.
The Chief Executive Officer shall be the president and shall have the powers:
▪ To act as the general manager and, subject to the control of the Managers, to have general
supervision, direction, and control of the business and affairs of the Association;
▪ To preside at all meetings of the Members and to preside at meetings of the Managers and
staff;
▪ To call meetings of the Members to be held at such times and, subject to the limitations
prescribed by law or by these Bylaws, at such places as the chief executive officer shall
deem proper;
▪ To see that all orders and resolutions of the Managers are carried into effect;
▪ To maintain records of and, whenever necessary, certify all proceedings of the Managers and
the Members;
▪ To affix the signature of the Association to all deeds, conveyances, mortgages, guarantees,
leases, obligations, bonds, certificates and other papers and instruments in writing which
have been authorized by the Manager or which, in the judgment of the chief executive
officer, should be executed on behalf of the Association;
▪ To sign certificates for the Association's shares; and,
▪ subject to the direction of the Manager, to have general charge of the property of the
Association and to supervise and control all officers, agents, and employees of the
Association.
The Chief Financial Officer shall be the Secretary-Treasurer and the powers and duties shall be:
▪ To keep accurate financial records for the Association;
▪ To deposit all money, drafts, and checks in the name of and to the credit of the Association
in the banks and depositories designed by the Managers;
▪ To endorse for deposit all notes, checks, drafts received by the Association as ordered by the
Manager, making proper vouchers therefor;
▪ To disburse corporate funds and issue checks and drafts in the name of the Association, as
ordered by the Managers; and
▪ To render to the chief executive officer and the Managers, whenever requested, an account
of all transactions by the chief financial officer and the financial condition of the
Association.
17. A Manager or officer of the Association shall not be disqualified by the Manager's office
from dealing or contracting with the Association either as a vendor, purchaser, or
otherwise. The fact that any Manager or officer, or any firm of which any Manager or
officer of the Association is a Member, officer or Manager, is in any way interested in any
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transaction of the Association shall not make such transaction void or require such
Manager or officer of the Association to account to the Association for any profits
therefrom, provided that (a) the material facts of such transaction and the Manager's
interest are disclosed to, or known by, the Managers or committee of the Managers at the
time that the Manager or committee authorizes, ratifies, or approves the transaction; (b)
the material facts of such transaction and the Manager's interest are disclosed to or
known.
18. Minimum monthly dues for each adult 18+ years in a household are equal to the current
rates for the basic plan as advertised on the PPC web page: https://www.
cooperativeplus.org/. These dues are for the new and renewal years. Dues may be
adjusted by the Manager with a majority approval of the membership and yearly
thereafter. There is a one-time registration fee of $20 per household.
19. Limited Guarantees. The Association contracts with participating member
physicians of Accountable Care Organizations and Individual Practice Associations
which have certain availability and service obligations. Each member head of
household is a limited guarantor of those obligations up to $360 for the Concierge
Plan. If the member resigns his or her membership or defaults on payment of his or
her dues, then the guarantee amount of $360 becomes due and is payable monthly at
a rate of $30 per month over a period of 12 months. The guaranteed amount will be
higher (equal to the plans embedded retainer cost for services) if the Concierge Plus
or another higher-level plan is chosen at enrollment.
20. ACTIONS AGAINST OFFICERS AND MANAGERS. The Association shall
indemnify to the fullest extent permitted by the Texas Non-Profit Association Act any
person who has been made, or is threatened to be made, a party to an action, suit or
proceeding, whether civil, criminal, administrative, investigative, or otherwise (including
an action, suit, or proceeding by or in the right of the Association), by reason of the fact
that the person is or was a Manager, officer or agent of the Association, or a fiduciary
within the meaning of the Employee Retirement Income Security Act of 1974 with
respect to an employee benefit plan of the Association, or serves or served at the request
of the Association as a Manager or as an officer, or as a fiduciary of an employee benefit
plan, of another corporation, Association, partnership, joint venture, trust or other
enterprise.
21. I, Donald Harold McCormick, as manager of SENIOR PATIENT ASSOCIATION,
hereby certify that the foregoing constitutes the By-laws of this Association as adopted
and in full force and effect on this 15th day of January 2017.
Amendments Proposed for 2020 and thereafter
1. Members are any individual age 18 years or older who purchases benefits of any kind
offered by the Association and who has paid membership dues in the past and is current
in payment of such dues.
2. Dues are set by the manager and approved by a majority vote of the members at the
annual meeting.
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3. Dues are separate from fees paid for services and benefits and group insurance and are
the sole property of the Association and are controlled and reported to the members by
the manager and the appointed officers of the Association.
4. Fees are paid for contracted administration of the health plans offered by the Association
and for medical and hospital services and group health insurance purchased for the
members and for marketing and sales of new memberships.
5. The fees are determined by financial analysis done by the contracted administrator and
approved by the manager.
6. The recommended dues and fees comprise the budget of the Association which may be
amended on a quarterly basis.
Annual Meeting of the members: Propositions for approval
1. Amendment numbered 1 through 6 approved
2. Contract for administration with PPC Alliance approved
3. Dues of $3 per member per month which amount is included with the fees charge
for any benefit plan offered by the Association approved
4. Manager’s appointment of the membership development committee approved that
includes the following individuals:
a. Don McCormick, Manager and Chairman
b. Bret Schulte, J.D., Secretary-Treasurer
c. Michael McDermott, Americare FMO
d. Henry Ospitia, Membership Development Director
e. J. Robert Day, Hospital Services Advisor
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If Goats can do this, humans can fix health care and health insurance
