For what seems like forever, million dollar individual claims have been rare occurrences. Until recently, that is. Thanks to new, mega-cost technologies and a growing number of chronically ill, big claims have become far more common. Additional factors contributing to this trend are the elimination of preexisting conditions and coverage limits by ACA and the rapidly rising cost of specialty drugs.
While you might expect this to curb enthusiasm for self-funding, interest by small and mid-sized employer groups remains strong. We believe this is due to the availability of stop loss insurance and the risk management strategies that help keep stop loss premiums affordable. A few of these include:
Medical Cost Management: Nothing lowers health care costs like avoiding a claim altogether and identifying members at risk of chronic illness can often do just that. For the chronically ill, which the National Health Council estimates at 133 million Americans and growing, providing the required care in an efficient manner is what health and disease management programs are all about.
Utilization Review: A strong UR program, including hospital pre-certification, large case management and more, can have a dramatic impact on costs. Since large cases and a growing percentage of hospital admissions are associated with serious health conditions, the opportunity for savings is significant.
Worksite Wellness: Helping employer groups identify wellness strategies, evaluate incentives and develop positive employee communications can yield a significant return on investment for your organization and the employees it depends on.
Claims Management: Managing claims efficiently and being able to put the resulting data to use are critical today. Not only does claims management influence stop loss premiums, but access to timely information enables a self-funded plan to avoid overcharges and alter plan designs as needed.
Turn Variable Costs to Fixed Costs: Negotiating with providers in advance or using carve-out programs for high cost treatments such as transplants or dialysis can help contain costs. Pursuing these arrangements with centers of excellence can also assure quality, appropriate and efficient care.
As the frequency of large claims increases, managing health care risk requires robust capabilities in claims management, data analysis and plan performance. These are hallmarks of an experienced TPA and key ingredients for an effective self-funded plan.
In cooperation with NAEBA