With inflation at 40-year highs for almost a year now, and the Federal Reserve raising interest rates to combat inflation, there are predictions of a recession in 2023/2024. What can a Self-Insured Plan do to keep medical costs down to retain employees during the uncertain economy and inflation-induced high medical claim costs?
As the old adage goes, 80% of the consequences come from 20% of causes. In medical insurance terms, we know that a small number of large claims can have the biggest impact on the Plan. Even with stop-loss coverage, these high costs claims will have a major impact on the Plan’s medical costs. So, what can be done to keep these high-cost claims from adversely affecting the Plan?
First and foremost, high-dollar claims need to be identified early as possible by the Claim Payer. Whether through pre-certification or claim submissions, these high dollar claims need to get the attention they require to mitigate costs. While there is always pressure from the provider to get paid as quickly as possible, the Claim Payer must take the time necessary to gather all documentation, including itemized bills and medical notes, if necessary. While the provider may resist – if not challenge – providing this detailed information, the bottom line is the Plan has every right to review claims in a manner to ensure the claim is paid according to the Plan document.
At USBenefits, we have found over the last several years that inpatient hospital bills not only have billing errors, but also have medical necessity issues that the Plan is not required to pay. For example, a provider was discarding a portion of the chemotherapy drug each time the patient received treatment. This resulted in savings of over $185,000 for the Plan. As you may have seen in our claim success stories, these are happening quite frequently. At USBenefits, we utilize cost containment vendors that analyze an itemized bill and identify medical treatment that does not follow the standard protocol for the specific treatment. Once these issues are identified, and a report is sent to the provider, our vendors have a very high success rate in negotiating and reducing these high-dollar claims. For example, our vendor is currently negotiation with a large hospital in California that charged for services that were not appropriate for the care of a premature baby. After the PPO discount, the claim was reduced by over $1.1 million, and the vendor sent their detailed report citing current medical literature to the provider for review/response.
Our practices are intended to serve the employer’s interest. In concert with the employer, broker and TPA, we all can prevent paying unnecessary claim costs to which the employer may utilize the savings towards their operation during the economic roller coaster.
Is your current stop-loss provider spending the time and money to review all claims to ensure the claims are as low as possible? If not, we invite you to chat with us about our objectives and practices where we understand that keeping medical costs low has a major impact on the company’s bottom line. After all, our motto is… “Your goal is our goal – to provide the best possible outcome for the employer.”
