Strong Communication, Education Essential to Managing Catastrophic Costs
When you’re facing the challenges of a market that’s experiencing continued growth in medical and pharmaceutical costs, fueling the frequency of catastrophic claims exceeding the $1 million mark, you have to take a proactive approach to managing claims. At HM, we know that excellent medical management creates the foundation for successful cost containment for self-funded employers, and we encourage its use with our partners and clients through strong communication and education.
There are many tools and practices that can be implemented by administrators of self-funded groups for managing first-dollar claims, enabling them to potentially curtail expenses before they reach the deductible level. And should they get to that point, experience in managing costs helps minimize the financial impact on the reinsured portion.
Awareness of the tools and practices available for medical management at all points in the claim cycle can help create positive outcomes. When all of us – broker, TPA, Stop Loss carrier and policyholder – are dedicated to this approach, we can communicate and share resources that keep each other in the know with a mutual commitment to improving results.
Naturally, the stakes get higher when claim costs rise. At HM, we have found that being proactive in identifying areas where the highest costs can be managed allows us to evaluate situations early and apply insight to make certain that each claim gets proper attention. Once we complete our assessments, the right programs can be suggested to combine several resources that support continued success.
Many key elements that we have found to be successful in the practice of containing costs from a Stop Loss perspective are:
- Benefit plan language that allows employers to introduce cost effective alternatives
- Use of expert Excess Risk Managed Care Clinicians for proper review of claimant notices and detection of savings opportunities
- Commitment to thorough review and awareness of triggers that demonstrate a need for intervention that can impact health care delivery and price
- Required continuing education or training for team members to keep everyone well-informed of the most current clinical and/or cost containment practices
- Fostering strong TPA relationships for open communication and greater understanding of program details
- Well-vetted vendor selection tactics that include a testing period and performance tracking
- Thorough understanding of when to initiate potential third party recovery activity
As a complement to those practices, there are a number of tools we have found to be important in managing medical expenditures and containing costs, including out-of-network discount negotiations; hospital bill review on excessive charges; repricing services; Centers of Excellence for transplants; and claim management services in the areas of cancer, kidney disease, neonatal care and specialty pharmaceuticals.
We have seen how each of these has the potential to impact areas of cost variations and believe they should be deployed early in the claim cycle. When claims are managed properly from the onset, excellent results can be achieved, and policyholders may benefit from reduced loss ratios and limited rate increases at the time of renewal. Our experience has shown that when proper tools and vendors are in place, all parties can benefit from savings through positive medical management outcomes.