WHAT DISCOUNT NETWORKS/METHODS ARE YOU USING TO REDUCE YOUR PAID CLAIMS?
If a student-athlete is injured and does not have sufficient primary insurance, your institution will be left holding the bill for the majority of the surgery. Your secondary insurance will cover those charges, but the goal is to pay the least amount possible. A good insurance partner will work to reduce the total billed amount in order to save your institution money in the long run while always remaining mindful of the fragile relationships with your local providers.
This can be done by accessing established discounts through a number of national medical discounting networks. Among those companies are Global Excel Management, Multiplan, First Health, PHX, OccuNet and Global Claim Resources to name a few. Most of these companies operate by charging a percentage of the amount that they save on any given bill. Upon receipt of a claim, your secondary insurance company or claims payer will send it to their preferred network to run through their discount system and then the claims payer will send the discounted amount as payment of the bill to the provider. In most cases, the claims payer will have several networks to choose from and will access the best possible discount for that particular claim.
Alternatively, most strategic claims payers will work hard to acquire discounts and savings for you by reaching out to the providers directly and therefore bypass the discount networks completely. Think about it, if you send 80% of your athletes to the same hospital, it makes sense to reach out to them directly and establish a set discount percentage or a flat fee for specific services. Most providers are happy to do this as they appreciate the business that you send their way and are likely to be supporters of your university in some form already. The claims payers will typically arrange this free of charge as they have a vested interest in keeping your claims totals down as well.
A competent partner will be able to produce reports and summaries that reflect this information at any point in time. The reporting capabilities of your insurance claims payer can be a great benefit to you. Many institutions will utilize the savings data as leverage in negotiations with local medical providers to increase their level of contribution to the University either through fiscal support or by way of increased direct savings. This will lead to reduced claims and ideally reduced insurance premiums in the future. The amounts (either percentage of the total billed or as a dollar figure) can vary widely depending on your specific region as well as the dynamic between local hospitals and universities.
HOW MUCH HAVE YOU SAVED US THIS YEAR? LAST YEAR? TOTAL?
A competent partner will be able to produce reports and summaries that reflect this information at any point in time. The reporting capabilities of your insurance claims payer can be a great benefit to you. Many institutions will utilize the savings data as leverage in negotiations with local medical providers to increase their level of contribution to the University either through fiscal support or by way of increased direct savings. This will lead to reduced claims and ideally reduced insurance premiums in the future. The amounts (either percentage of the total billed or as a dollar figure) can vary widely depending on your specific region as well as the dynamic between local hospitals and universities.
Your insurance partner should be forthcoming with these savings reports as it can be very detrimental to your program if there are little to no savings being obtained by the TPA.
ARE THERE DISCOUNT NETWORK FEES ASSOCIATE WITH OUR SAVINGS?
The discounting of medical bills is a profitable business. There are many companies that a given claims payer will access in order to find the deepest discount on a specific claim. These companies are typically paid as a percentage of savings. Example: If the discounting company took the bill for a $30,000 surgery and they are able to reduce it down to $10,000, your secondary insurance would pay the $10,000 PLUS the percentage (20% is common) of the savings or $4,000. Therefore, your secondary insurance would reflect a $14,000 payment for this scenario)). Even though paying $4,000 as a fee may seem high, you are paying $16,000 LESS than what you would have paid without utilizing any discounts at all. Further, if the discounting company could not obtain any discounts on a given claim, they would not be paid anything. However, most claims payers will query several discounting companies until they find one that can obtain a favorable discount.
ARE WE ON THE RIGHT PLAN DESIGN OR WOULD WE BENEFIT FROM MOVING TO A PARTIALLY SELF-INSURED PLAN?
Secondary athletic insurance programs can be categorized into one of three categories: Fully insured, aggregate deductible and completely self-insured.
A fully insured athletic insurance plan has been the industry standard for many years. The plan has a premium that you pay upfront each year and the insurance carrier pays all claims throughout the year, even if you have a really bad year and claims exceed the amount of premium paid. These plans may have a specific (per injury) deductible but most are on a zero deductible and the secondary will kick in immediately after primary insurance has paid its share. This secondary plan design can even pay for an individual’s primary insurance deductible as well as any copays or coinsurances that are incurred along the way. These plans offer the highest level of budget-ability as it is simply an annual premium and you know exactly what you will pay that specific year.
On the other end of the spectrum is complete self-insurance. This means that an institution does not buy any insurance protection and will pay for all medical costs out of their pocket. In addition to the HUGE amount of risk that accompanies this method, there is also extreme volatility. You could have a great year with very few claims and come out ahead but at the same time you may have a challenging year with many large, uninsured, surgeries and be faced with a substantial amount of bills. Additionally, unless your self-insured program is tied to a university health system, it will be difficult to obtain network discounts on your own. Many institutions that self-insure will still utilize a third party administrator to handle all paperwork and take advantage of any discounts available through the specific claims payer. This can be done for an additional flat fee or as a percentage of the claims total which correlates with the workload involved.
A plan that lands right in the middle of the two plans designs referenced above is the aggregate deductible plan or sometimes known as a self-insured retention (SIR) plan. This plan has gained tremendous popularity over the years and is a great plan for institutions that have fluctuating claims totals. The design is as follows: There is an aggregate deductible (or ceiling so to speak) placed on the plan. This represents the maximum amount of money that you would self-insure before the insurance company steps in and begins to pay 100% of the claims. Explained; your institution will be paying for each and every claim out of pocket (with the help of a third party administrator) until the total claims (aggregate) meets the set aggregate deductible or attachment point as it is sometimes referred to. Once the attachment point has been met, the insurance carrier will begin to pay each and every claim from there on out for the remainder of the policy. Even in this plan design, the insurance carrier still has some risk (you exceeding the attachment point) and therefor they have to receive a small premium for that risk. That premium and the administrative costs of having the TPA manage the plan and pay all the claims are considered the hard/fixed costs of this plan. In addition, this allows the athletic department to budget for athletic insurance with confidence. Outside of the hard costs, if you have a great year with very few claims, YOU can reap the rewards of that hard work as opposed to the fully insured model where the insurance carrier will not refund premium in the event of a good claims year.
HOW MANY ATHLETIC INSURANCE COMPANIES DO YOU GET QUOTES FROM TO REVIEW FOR US EACH YEAR?
If you are working with an insurance broker (like Dissinger Reed), you should be seeing quotes from multiple insurance carriers on an annual basis. The specific carriers may change from year to year but asking for and receiving 3-8 unique options is well within reason to ask of your broker. This will allow you and your staff to truly evaluate what the marketplace deems as a reasonable and responsible annual premium for your program given your lost history and plan design. Instead of just considering the premium itself, it is important to evaluate (with broker expertise) the level of service that you will receive from the proposed claims payer, the network/discounts they can attain as well as the long term stability of the partnership.
If your partner is only showing you one renewal option from your existing carrier, you need to be sure to reach out to us and ensure that you are paying a reasonable premium. While loyalty is extremely important to us as well, we encourage you to be certain that you carefully review the fiscal savings opportunities, program risk and most importantly, the care of your student-athletes.