Have 2018 Health Plan Price Increase Sticker Shock?

For self-funded employers, the new year always brings the January sticker shock of ever larger monthly health plan premiums. It feels like what you pay for healthcare is totally out of your control as costs continue to skyrocket.

Even if your healthcare plan for 2018 is already determined, that doesn’t mean that there is nothing you can do to lower costs. In fact, we have a simple step-by-step plan that can save you approximately $600 per employee annually.

Here’s how it works:

All self-funded health plans are governed by federal ERISA laws – as are public companies under Sarbanes-Oxley law. Both require a fiduciary obligation of employers to ensure the prudent use of health plan assets.

The easiest way to ensure health care dollars are being spent efficiently is to look at itemized bills for all large hospital claims before the bill is paid. Common claims processing does not do this, so you likely overpay. At 40% to 50% of most plans annual cost, hospital fees represent the largest savings potential.

This is where AMPS comes in. Our Medical Bill Review service audits in and out-of-network claims for accuracy, insuring only valid charges are paid and waste, abuse, mistakes, and clinical errors are not paid. This saves the plan serious money and helps meet the fiduciary obligations required of employers by ERISA and Sarbanes-Oxley.

Sounds simple, right? Why isn’t every employer doing MBR?

Employers with an independent TPA and regional PPO can more easily do MBR. The vast majority of BUCA (Blue, United, Cigna, Aetna) ASO contracts have very restrictive “no audit” clauses in their administrative services agreement (ASA) with every employer. The ASA will typically not allow any outside independent claim auditing like MBR. The only way to know for sure is to look at the plan ASA. If your plan ASA has “no audit” clauses…

Here’s what to do:

After consulting with you to learn more about your needs, AMPS will provide you with:

  1. A draft demand letter telling your ASO or TPA that in order for your company to properly comply with ERISA laws (and Sarbanes Oxley if a public company), you have to be allowed to independently audit all claims over $20,000 (or a number you pick) before they are paid.
  2. A draft overriding amendment to your ASA agreement that includes sample:

“Right to Audit” provision, which allows the Plan to review claims for medical necessity and reimbursement consistent with the plan document.

Claims processing provision, which allows the Plan to conduct Medical Bill Review post adjudication and prepayment for both in-network and out-of-network claims that exceed $20,000 with an outside independent provider.

Claims Review Program, which permits the plan to audit or review claims.

Then, with the legal items, here’s the choreography that we’ve found has the best success in getting this accomplished:

By phone, let your daily contact at your ASO or TPA know this Amendment is coming as requested by your CEO, CFO, and General Counsel. Ask for name and email address of your insurance provider’s General Counsel and let them know s/he should be expecting this document.

Have your company’s General Counsel send the document to ensure the matter has the legal weight and urgency to avoid being stonewalled. The key is to make your healthcare provider feel as if they will lose your company’s business if they don’t allow these audits as required by ERISA (and Sarbanes Oxley if public).

Interested in learning more about ERISA risk? Click here to read the full chapter entitled “ERISA Fiduciary Risk is the Largest Undisclosed Risk I’ve Seen in my Career” from Dave Chase’s book, The CEO’s Guide to Restoring the American Dream.

Without outside MBR, all employers are overpaying for facility claims since they are being paid with no diligence and no itemized bill — using company and employee money governed by ERISA fiduciary law. There are mistakes, waste, overcharging abuse, and clinical errors on 95% of large hospital claims. Employers would never accept “No Audit” opaque pricing from other suppliers, yet this is the norm in hospital claims payment.

In 2017, AMPS saved our 550+ MBR client employers an average of 6.7% on their hospital claims. There could be hundreds of thousands or millions of dollars of savings in store for you in 2018.

Interested in learning more about overpriced medical care?

Why the U.S. Spends So Much on Health Care
New York Times
Studies point to a simple reason: the prices, not the amount of care. But lowering prices would upset a lot of people in the industry.

Embodiment of corruption: Your health insurance network
Secret network pricing helps render patients defenseless against price gouging. It’s as absurd as grocers being permitted to keep the price of milk secret…

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