Taking Action Against High Cost Claims
There’s nothing more exciting than a big challenge, right? Well, the Stop Loss industry seems to be a rousing one these days. Claim incidences and expenses are on the rise (with no end in sight) – and we have to figure out how to contain the costs to protect everyone’s bottom line. Our sleeves are rolled up at HM. Who else is in? This is going to take a pretty big effort from all of us if we are to minimize the risk.
We do feel pretty relieved to be working with so many experienced TPAs, producers and partners who have been around Stop Loss for a while and know that there are always ups and downs in the industry. By pooling all of our experience, we can develop and implement the right solutions for improving outcomes for self-funded groups as they face the challenges of the current healthcare market.
What we really need to do is work together to control claim costs from the start, both first-dollar and catastrophic. The first step in that process is ensuring that the group’s plan document addresses areas where coverage could be contested and/or where the highest costs are recurring. It’s our goal to work with our partners to help groups continue to make informed decisions when designing their health benefits programs, enabling them to offer access to quality care and promote healthier populations while protecting their financial stability in the event of unforeseen, high-dollar claim costs.
It’s important to be proactive. A good place to start is eligibility. Who is eligible to be covered under the plan? This should be well-defined in order to prevent the employer from being liable for the claims of a person they didn’t even realize they were covering. Addressing the work hours required and waiting periods for all classes of employees, as well as retirees, dependents and covered individuals who are not employees (i.e., board members, elected officials and contractors) is an important part of this process. It seems simple enough, but when the language in the policy doesn’t include clear definitions, the plan can face a variety of challenges – and unforeseen costs.
It’s also wise to address prescription drugs since the costs of pharmaceuticals are now accounting for significant portions of high-dollar claims. Plans can use a tiered pharmacy approach to require the use of less expensive generic alternatives when available. They also can require prior authorization for the use of specialty drugs in order to direct the member to a specialty pharmacy vendor that has more competitive pricing. Using a specialty pharmacy vendor allows the group to carve out the pharmacy benefit from the plan to focus on better cost management through services designed to help control costs.
We’ve identified a number of key areas of plan design that we believe should be considered for cost containment purposes. Naturally, it is to be used only as a guide, but we have seen the importance of a strong plan document for groups seeking high-quality care over high-cost care. Download Plan Design: Cost Containment Practices to find out more.
Let’s work together to gain better control of claim outcomes. Just being aware of trends, informed of tactics and willing to implement successful practices can go a long way in protecting self-funded groups as claims rise. At HM, we’re hard at work managing risk and mitigating costs through smart business decisions – and we want our efforts and results to deliver confidence in the protection we are providing to our clients in these challenging times. We also want to feel confident that our partners, producers and clients are on board too. Each of us has an important role to play in managing the impact of the current claim trends. Let’s get down to business.