4 Steps to Maintain a Healthy Self-Insurance Plan

More employers are self-insuring their medical plans than ever before. Whether your organization is new to self-insuring or an experienced expert, an annual self-insurance check-up is crucial to your workforce’s health and well-being.

Here are some important questions as organizations head into the annual benefits renewal season: Have there been unexpected high-dollar claims this year? Is the organization’s data pointing us in the right direction? Are we tapping into all of the cost-containment resources that are available?

Taking the time to evaluate a self-funded plan can help an organization get the most out of it. Here are four steps for a healthy self-insured plan.

1. Review and update your medical plan. Start with a thorough assessment of the plan document so you know exactly what is covered, what cost-containment programs are in place, whether the plan complies with federal laws, and whether the plan has clear discretionary authority language and appropriate definitions and exclusions. A variety of factors, from federal and state regulations to changes in your business and new benefits, can create a need for a plan review each year.

Do your medical plans have an active utilization management program that steers your members toward the right in-network providers to maximize discount opportunities? Often patients who have (or know they will) hit their out-of-pocket maximum can wind up visiting  physicians or specialists that are out of network without realizing the impact, particularly when it comes to tests like MRIs. Make sure your plan addresses authorization for certain out-of-network procedures or testing, and request reporting to show your plan utilization trends.

Also, review your plan for provisions that encourage and reward wellness programs and maximize those benefits wherever you can.

2. Analyze your high-cost claims and take action. Have you tracked your high-cost claims for specific trends and are you using your data to its full potential? Consider who your employees are, where they are based, the type of work they do, and other employee and dependent demographics to anticipate future risks.

Ask your claims administrator to monitor the costliest claims codes according to the International Classification of Diseases, 10th Edition, also known as ICD-10, trigger diagnoses codes. Take a look at which conditions on the list you see in your workforce so you can monitor and develop a systematic cost-containment approach toward high-dollar claims.

It’s helpful to have this information as high-cost claims begin to emerge, but before you reach the 50 percent deductible mark on your specific stop-loss coverage. The high-cost trend could be indicated by a diagnosis, or actual dollar amount. From case management to dialysis vendors and specialty prescription vendors, your administrators and stop-loss provider can provide resources for added cost-containment opportunities. For example, intravenous medications, which are used to treat a range of diseases from cancer to hemophilia, can result in millions in claims necessitating stop-loss reimbursements. According to Sun Life’s 2016 Catastrophic Claims Report (Editor’s note: the author is employed by Sun Life), intravenous medications represented $54.5 million, or 7.6 percent, of the total reimbursements for 2012-15. And if diabetes is a prevalent condition in your workforce, as it is in the greater U.S. population, where nearly 30 million people have the disease, access to dialysis vendors and Centers of Excellence facilities for kidney transplants can help curtail costs and support improved patient outcomes.

If you examine and implement case management and cost-containment programs at the case level early, you could not only positively impact that individual’s path of treatment and clinical outcome but also reduce subsequent claims costs, and you may potentially see this reflected in your premiums upon renewal.

3. Be proactive with your partners. Develop proactive plans with your various health partners — broker, claims administrator, stop-loss provider, and independent vendors — to address all aspects of cost containment. To get the conversations started, ask if you’re utilizing all the resources available, if there are network gaps, if better discounts are available, and if your health plan costs are competitive in your geographic area.

Remember that you can utilize one of your health partners to take negotiation actions on your behalf. These actions include:

• Performing a medical bill review (paying attention to billing and coding accuracy).
• Performing a diagnosis-related review (if the diagnosis is in question).
• Determining if Usual, Customary, Reasonable (UCR) language about treatment costs applies.
• Comparing price to both the average wholesale price (which usually applies only to medications and durable medical equipment) and to Medicare Plus pricing.
• Ensuring that out-of-network providers that accept a negotiated charge don’t “balance bill” the claimant with the difference.

4. Review your stop-loss plan. Analyze the group demographics along with your risk tolerance, claims experience, and industry benchmarks and trends to decide if you want to change your stop-loss deductible, modify your policy, or add/remove certain features. Look into options for buy downs in deductibles or coverage of access fees, which could be added benefits provided by your stop-loss partner.

Your stop-loss carrier can be a dedicated partner in helping you verify that your medical and stop-loss plans complement each other and provide high-quality and cost-effective care to plan members.

Employers turn to self-funding for cost savings, to take control of their benefits plan design, and for opportunities to tailor their health management programs. It’s worth giving your self-funded strategy an annual check-up to see how you can work with your health partners to make an even greater impact on your company’s bottom line and the health and productivity of your employees.

Lisa M. Hundertmark is senior manager of claims services and clinical resources at Sun Life. She oversees the daily operations of the clinical nursing staff and is responsible for monitoring the medical landscape to ensure that Sun Life and its groups are prepared with information, knowledge and new resources when changes occur.