Value Based Pricing Gaining

dgb-valuebased-blogWhile plenty of folks talk about value based, or reference based, pricing as though it’s a fad that has come and gone, we’re finding more interest from employers all the time. This may be because many like to brand it as another form of disruption, but regardless of how you brand it, value based pricing is becoming a more important part of our value proposition all the time. It’s becoming more widespread because it enables a self-funded plan to limit costs to an extent that few other measures, if any, can match. This is primarily because by negotiating in advance with hospitals to accept a schedule of fixed payments for certain healthcare services, carrier-sponsored provider networks can be bypassed.

The fact is that while value based pricing may be considered disruptive by many hospitals, it works. It is a transparent approach that can save a lot of money for self-funded health plans and their members. And finding ways to help self-funded employer plans provide high quality, high value healthcare to their members is our most important job.

Considering a TPA to administer your health plan? Ask these 8 questions first

This article was published on August 7, 2018 on Employee Benefit News, written by Corte Larossi.

We all know that making changes to your health plan can have major consequences for your company. It can impact your medical costs and company bottom line, the health and welfare of your employees, employee satisfaction and performance, as well as your ability to hire and retain high performing staff. If your health plan is currently self-funded — or you are considering moving to a self-funded arrangement — the stakes can be even higher since you’re responsible for part or even all the medical costs, depending on the size of your company and risk tolerance.

One of the most critical functions is the administration of your medical claims. Your claims payer — whether a traditional insurance carrier or a third-party administrator — can help make or break the success of a self-funded plan. Many times, these entities also will provide other services directly, or through strategic partnerships including pharmacy benefits management, medical management, stop-loss, employee and provider portal access, voluntary products and telemedicine — just to name a few.

For many small to medium-size employers (25-1,000 employees), and even some larger companies, a TPA may be a good option. The advantage of the traditional carriers is often the medical claim discounts they offer along with nationwide access, which is clearly important, but they might not provide the flexibility smaller employers may need to meet their plan objectives. Additionally, some carriers do allow TPAs to access their networks, which can provide TPA clients deeper savings than may be available through rental PPOs.

medical-costs

Photo Source: Employee Benefit News

Here are eight important questions employers should ask when vetting TPA partners.

1. What is their claims administration platform?

This is one of the most critical issues when choosing a TPA. Do they have an older legacy system that may be less flexible, or are they using a platform that provides the ability to manage newer, more sophisticated products? Also, can they adjudicate a high volume of claims on an automated basis, or is the process more manual? This is not to say that manual processing isn’t necessary since there could be plan nuances and exceptions that need to be addressed outside of the standard adjudication process. But in general, the higher degree of automation, the more cost effective the process for both the TPA and the client.

Can they easily and accurately manage service/provider carve outs or additions? What is their process and commitment to meeting your objectives? Can they administer other types of services including, but not limited to dental, vision, HRAs, HSAs, COBRA, subrogation and COB? Continue reading

The Changing Definition of Wellness

wellness

After decades of preaching to workers about the importance of staying fit and physically healthy, the term worksite wellness is beginning to mean much more to employers and employees alike. Leading companies are expanding their workplace wellness initiatives to address mental health and financial security – key components of their employee’s overall well-being that go way beyond physical health.

The National Business Group on Health shows that a majority of employers are addressing emotional and mental health as well as financial security as part of their overall well-being strategy. Other initiatives, such as support for community involvement and social interaction, are pointing to a growing trend of focusing on the entire person and not just physical health or fitness. Research is showing that addressing physical health is only one way to improve the workplace experience and reduce employee turnover.

More Choice Means Greater Satisfaction

While traditional wellness programs have been more “one size fits all” and lacking in personal appeal, some employers are encouraging employees to do the things they like to do by giving employees a flat dollar amount to spend on a gym or pool membership, personal trainer or other self-defined activity they find rewarding. Volunteering to help with community causes or enrolling in educational classes are not out of the realm of possibilities, since these activities can do a lot to help an employee gain a healthier perspective on work and life.

When choices are made by individuals and not for them, better decisions often result. As people share their experiences with others, the impact on a company’s culture can be extremely positive. Better well-being becomes an important priority for everyone and not just those who like spending time on treadmills or yoga mats. From the employer’s perspective, objectives can expand beyond healthcare cost savings and increased productivity. As an example, offering health coaching is a great way to focus on the needs of individuals rather than the group as a whole. It can help companies address emotional and mental needs as well as physical needs.

If worksite wellness is a priority for your organization, this might be a good time to review the goals of your program and then to make sure the activities you are offering are in line with those objectives. There is a lot more to be gained from worksite wellness than lower medical claim costs and redefining wellness may be just what your organization needs.

House Passes Two Bills to Expand HSA Coverage

United States Capitol Building

Yesterday, the House passed two bills that would expand HSA coverage:

The Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018 (HR 6199)

This Act would:

  • Allow plans flexibility in providing first dollar coverage up to $250 for a single and $500 for a family for additional services, such as those related to treatment of chronic conditions and telehealth services.
  • It would also make certain OTC drugs a qualified medical expense.
  • Allow HSA funds to pay for direct primary care up to $150 per month for an individual and $300 per month for a family.
  • Expand HSAs to allow physical activity, fitness and exercise related services (i.e., gym memberships, sports equipment) to be qualified medical expenses (up to $500 for an individual and $1,000 for a family).
  • It would also loosen some of the contribution restrictions on spouses who have a flexible spending account (FSA) at their employer.
  • Allow employees, at the employer’s discretion, to convert their FSA and HRA balances into an HSA contribution upon enrolling in a high deductible health plan with an HSA. The conversion amount is capped at $2,650 for an individual and $5,300 for family coverage.

Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 (HR 6311)

This Act would:

  • Increase the maximum contribution to health savings accounts (HSAs) to $6,650 for an individual and $13,300 for a family.
  • Allow both spouses to make catch-up contributions to the same health savings account. Under current law, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts for their respective “catch-up” contributions.  This provision would allow both spouses to deposit their catch-up contributions into one account.
  • Allow working seniors enrolled in Medicare Part A to contribute to an HSA.
  • Allow individuals in a bronze or catastrophic health plan to contribute to an HSA.
  • Allow balances on flexible savings accounts to be carried over.
  • Allow HSAs opened within 60 days after gaining coverage under a HDHP as having been opened on the same day as the HDHP. This would give a grace period between the time coverage begins through an HDHP and the establishment of an HSA.  Currently, HSA funds can only be used for qualified expenses after the HSA has been established.
  • It would also delay the Affordable Care Act’s health insurance tax for another two years to 2021.

There are a handful of other healthcare related bills yet to be taken up by the House. It is unclear if they will act prior to the August break (beginning July 30th). Both of the above Acts will most likely be taken up by the Senate after the break.

Diversified Group will be following the progress of these bills closely and will provide updates as they are received.

why-diversified-group

Who Owns Your Claims Data?

stats on ipad

You Can’t Manage What You Don’t Measure!

With a self-funded healthcare plan and a good, independent TPA, access to claims data is standard operating procedure. Even more important, a good TPA like Diversified Group has the expertise to convert your data into intelligent, actionable strategies to manage your plan, monitor performance and modify plan design to control costs.

In contrast, employers with fully insured health plans seldom see their claims data. Even self-funded plans managed by large carrier-owned ASO divisions are often unable to receive claims data on a regular basis.

Analyzing claims data with state-of-the-art tools helps identify, analyze and manage potentially high dollar claims. This capability alone saves many of our clients more than 20% annually. Hospital stays can be monitored, claim costs can be unbundled to detect fraud and abuse and discounts can be negotiated without compromising the quality of care received. Even the rising cost of specialty (bio-tech) pharmaceuticals can be managed when risks are identified early on.

If you’re not receiving claims data and analysis, you’re operating in the dark and it’s time you had a conversation with your broker or TPA. After self-funding your health plan, we consider analyzing claims data to be “Cost Control 101”!

Tell Us How You Feel!

dg-healthcare-uncensored

Million-dollar medical claims increase by 87 percent

This article was published on July 18, 2018 on Employee Benefit News, written by Cort Olsen. Photo Source: Employee Benefit News.

The number of million-dollar medical claims has nearly doubled, with cancer care remaining the most costly health condition, according to a new Sun Life Financial report.

Cancer made up $798.7 million in reimbursements to self-funded employers from 2014 to 2017, followed by metabolic disorder and hemophilia disorder, according to Sun Life’s 2018 High-Cost Claims Report.

The report, based on analysis of Sun Life’s database of over 62,000 medical stop-loss claimants, shows that high-cost conditions totaled $6.9 billion in paid charges over the four-year period.

The number of patients with million dollar claims rose 87%, to 194 in 2017 from 104 in 2014, with most charges ranging from $1 million to $1.5 million, and totaling over $935 million in charges.

cubing costs stats

The growth in million-dollar claims can be expected to expand further due to new life-saving treatment options coming to market, along with existing treatments getting approved for expanded use.

“This means better care and outcomes for patients,” says Dan Fishbein, president of Sun Life Financial, who notes that the trend is an important consideration for employers who self-fund their medical plans. “We partner with our clients to protect them from the financial risks of these high-dollar claims, but also to work with them to identify opportunities for cost savings that may improve patient care as well.”

Other analysis from the report showed that rare conditions hit highest dollars. The two highest claims for a patient in a single policy year were for metabolic disorder in 2016, with a total of $6.7 million in treatment costs, followed by hemophilia disorder with a total treatment cost of $5 million in 2017.

Million-dollar cases left a big footprint. Patients with claims of more than $1 million represented only 2% of the total number of stop-loss claims from 2014 to 2017, but roughly 20%, or nearly $600 million, of the total $3 billion in stop-loss reimbursement.

The impact of injectable drugs peaked in 2017 with four of the five costliest injectable drugs, used to treat cancer or related conditions, accounting for approximately $45 million, or 24% of the total $186.3 million spent that year.

Employers had an 85% chance of seeing a high-dollar claim in any given policy, according to the report. Those who self-insure their health plans use a stop-loss coverage to protect themselves from excessive financial losses from high-dollar claims.

why-diversified-group