Family Planning Rider

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. What do you do when your customers repeatedly request coverage which you are prevented from offering? This client turned to Summit Re for the solution.

The conflict

A large, regional HMO client had received repeated requests from its insured employer groups to provide coverage for family planning services. Because the health plan was owned by a Catholic hospital system, it was not able to accommodate these requests through its traditional HMO products. The health plan contacted Summit Re for assistance in solving this ongoing problem.

The resolution

Summit Re has a relationship with Advisors, LLC, a Michigan-based company that provides specialized group insurance consulting, product management, provider contracting, and network development services. Summit Re knew that Advisors, LLC had an arrangement with Unified Life Insurance Company (licensed in 45 states and the District of Columbia and rated B++ by A.M. Best) to provide independent, supplemental group insurance policies to selected Catholic-sponsored HMOs. Unified Life's Family Planning product and the Unified Life/HMO business arrangement are specifically designed to provide HMOs with an effective means to meet client demands for family planning services and still remain compliant with the ethical directives of the Catholic church and state insurance laws.

Flexible components

The flexible package of covered services operates with HMO, POS, or PPO plan designs. These services may be covered in any combination to meet individual employer group needs:

• Artificial insemination services
• Tubal ligations
• Vasectomies
• Pregnancy terminations
• Oral contraceptives
• Contraceptive devices

Direct administration

The Unified Life Family Planning product is issued directly to each employer group. As a consequence, the I.D. card of the Catholic sponsored HMO is not used at the pharmacy, claims for drugs and services are not the HMO's financial responsibility, provider services are provided through independent Unified Life provider contracts, and the HMO's filed certificate of coverage and rates can specifically exclude family planning services. Under the Unified Life approach, the HMO provides only limited cooperation by assisting the client with Unified Life set-up arrangements, providing monthly eligibility files and collecting premium. Often, the last service can be facilitated by a bank-trust arrangement.

All appropriate policies, benefit schedules, rates and forms are filed for each HMO arrangement with the state authorities by Unified Life. Each covered group is issued a Unified Life policy and all eligible members are given a benefit schedule and plan administrative information. Unified Life contracts independently of the HMO with a prescription benefit manager for contraceptive prescription services and medical providers for all other plan services.

Simple process

The Family Planning product operates very simply with no special actions required of employer groups and minimal member involvement. A brief summary of the product's operation follows:

• At the point of group installation, the HMO transmits the eligible membership data to Unified Life.
• Unified Life provides benefit notices to all covered members, which are delivered along with the HMO's standard member material. The benefit notice informs members of the benefit services available, the list of participating providers and Unified Life's toll-free telephone number to be used for all Family Planning benefit inquiries.
• Covered members are encouraged to use Unified Life's network of participating providers for the delivery of covered services. If members use other providers, Unified Life will pay the provider up to the level of Unified Life's fee schedule. No referral from the primary care physician or plan service authorization is needed by the member.
• Covered members using contraceptives for birth control purposes are given a special prescription drug ID card which operates like a standard ID card at the pharmacy, but only for contraceptives.
• Medical service providers directly bill Unified Life and are typically paid within two weeks of receipt.
• Unified Life delivers a group insurance policy to each employer group.
• Unified Life receives monthly electronic eligibility updates from the HMO.
• As a service to the employer group, the HMO collects a combined (HMO and Unified Life) premium from all covered groups and wire transfers the Family Planning product premium to Unified Life monthly. Some clients prefer to use their banks for premium receipt and dispersal functions.

Epilogue

Summit Re facilitated a meeting between the health plan and Advisors, LLC. The health plan and Advisors LLC worked out a plan that was specifically tailored for its marketplace. The program was implemented with ease and has been operating successfully.

Secure Extranet

It makes good business sense to save money and time by reducing the amount of paper you use and by reducing costs associated with mailing and faxing. It is also importantto safeguard Private Health Information according to HIPAA privacy rules.

We have addressed those issues by introducing our secure extranet. You are now able to send us claims, underwriting data, and any other confidential information via the secure extranet. We are also now sending our clients quarterly premium and claims reports this way. The extranet accepts any type of document, including .zip and .pdf files.

To use the secure extranet, go to our website, www.summit-re.com, and select “Extranet-Login” from the top right side of the home page. If you have a username and password, you can send files to us and receive files from us through this web portal.

If you do not have a username and password, contact Kris Lahey at klahey@summit-re.com or call her at 260-469-3017. She will set you up with a username and password, instruct you on its use, and answer any questions you may have.

Cover transplants from first dollar

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. A typical HMO excess coverage provides risk protection for all catastrophic events—traumas, transplants, neonatal cases, and other complex medical claims. Some plans, however, prefer to "carve out" certain risks from their medical excess coverage and have specific coverage for the given risk on a first dollar basis. Organ and bone marrow transplant carve-out coverage is such an example.

The need

ABC Health Plan is a public hospital board authorized by statute to operate a hospital service plan in its state. Because the plan desired predictability and the plan's hospital owner is not a major tertiary provider for organ transplants (excluding kidneys), the plan was interested in having organ transplants carved out from its risk.

The solution

Summit Re provided ABC Health Plan an organ transplant carve-out through United HealthCare Insurance Company, part of OptumHealth Care Solutions’ (formerly United Resource Networks) family of transplant programs. Summit Re still provides the medical excess coverage to ABC Health Plan in excess of its $90,000 deductible with an appropriate credit for the organ transplant carve-out now reinsured by United.

The result

ABC Health Plan has renewed the program for several years with predictable renewals and has access to excellent organ transplant case management and provider contracts. A typical premium for this type of coverage is $2.00-$4.00 per member per month, depending on the parameters of the risk.

Coverage details

Covered organ transplant procedures include liver, kidney, heart, lung, heart/lung, double lung, pancreas or simultaneous pancreas/kidney. Digestive transplants are covered only when performed by a facility that participates in the transplant network. Coinsurance is higher for services provided by non-network facilities.

Transplant services include all medically necessary services resulting from and/or directly related to an organ or bone marrow transplant procedure, including:

• Services provided by the transplant facility
• Hospital or skilled nursing facility services
• Physician services
• Nursing services
• Outpatient treatment and follow-up
• Speech, physical and occupational therapy
• Anesthesia and anesthesia services
• Radiology
• Laboratory services
• Oxygen
• Durable medical equipment
• Blood and blood products
• Dressings
• Harvesting and acquisition expense
• Transportation, lodging and meals for transplant candidate and one companion

Typical services NOT covered include:

• Services received before or after the benefit period, other than services for bone marrow harvesting, transplant evaluation, living donor organ procurement, air ambulance or transportation, lodging or meals related to the covered transplant procedure
• Organ or tissue transplants performed prior to the member’s effective date
• Services not related to the covered transplant procedure
• Services unrelated to the diagnosis or treatment of the transplant procedure
• Drugs that are investigational or have not been approved for general sale by the FDA
• Items which are not medically necessary

Extend Your Product Line With Ancillary Benefits

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. Although our primary focus is protecting your company’s balance sheet through excess of loss reinsurance coverage, we also help you accomplish your strategic objectives with a broad array of other products and services.

This case study addresses adding ancillary benefits to your group medical plans, such as group term life, disability, dental and vision coverage. Summit Re provides these ancillary programs through Companion Life Insurance Company, rated A+ (superior) by A.M. Best. Companion Life offers competitive benefit programs which can be customized to fit your market needs.

Why Ancillary Benefits?

Most employers prefer the simplicity of one source for all their employee benefits, if possible. Agents appreciate the reduction in paperwork associated with working with one entity and are pleased when told that their ancillary sales through the health plan qualifies for the same bonuses as any other sale.

Customized Programs

Here are a few examples of ways the program can be customized:

• Separate or combined billing
• Propriety benefit and rate options
• Proprietary brochure with your branding, e.g. logo, colors, typeface.
• Flexible sales compensation, bonus and incentive trip options
• Rating ability in your sales office

Companion Life has the experienced personnel to help you successfully market these products, including dedicated sales specialists in these product lines.

One Company’s Story

ABC Health Plan previously worked with a major HMO excess reinsurer with ancillary product capabilities in these product lines. However, the company was sold and service deteriorated. The new owner put less emphasis on ancillary products.

This health plan in the past was very successful at marketing these programs and had even assumed risk through a captive arrangement. Over time, they decided they prefer the non-risk approach where they’re strictly a distributor of the products and have no ongoing administrative role or underwriting risk.

As service issues persisted, they put their ancillary products out to bid. Summit Re assisted the client in development of the RFP, which was then used as a template to evaluate carrier bids. Companion Life’s bid included not only a formal response to the RFP, but also on-site presentations to personally address all product and service options, issues and concerns.

ABC Health Plan moved all of its ancillary product business (life, dental, and disability) to Companion Life Insurance Company. The relationship has “worked well” and ABC Health Plan is “very happy” with Companion Life.

Goal: Reduce Inpatient Admissions

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. You may be aware of Summit ReSources' consultative case management and managed care programs, but what you might not know is that our Managed Care Specialist is available to perform an in-depth assessment of your own medical management practices and procedures. This helps you ensure that your medical management is effective and efficient, not only for the benefit of your bottom line, but it also may ensure optimal outcomes for your members.

Goal: Reduce Admissions

ABC Health Plan recently contracted with Summit ReSources’ Managed Care Specialist to perform an evaluation of its medical management department. The overall goal of the health plan was to shift away from intense inpatient utilization management and focus on outpatient case management. In other words, the health plan recognized the importance of implementing steps to prevent the inpatient admissions in the first place.

On-site Evaluation

An on-site evaluation included staff interviews and assessments of policies, procedures, processes, and computer systems. Some of the issues addressed included:

• Are the health plan’s policies and procedures consistent with the NCQA standards?
• Are staffing patterns consistent with national benchmarks?
• What is the most cost-effective way to perform utilization management?
• What are appropriate outcome measures for medical management?
• What key features should be included in a disease management program?
• Which members should be referred for disease and case management?
• What are appropriate measures for return on investment for disease management and case management?
• What key features should be included in a predictive model?

Recommendations

Recommendations were made related to maintaining only the utilization management process that would provide the greatest clinical and financial value to the organization.

Since ABC Health Plan did not have a well-developed case management program, specific recommendations for the development of such a program were provided, including but not limited to, examples of case management referral triggers, screening tools, acuity measures, and return-on-investment documentation.

Post evaluation, there were several additional phone conferences regarding implementation of the recommendations.

The feedback from ABC Health Plan was that the assessment and recommendations were “crucial” and “most helpful” in moving the process forward to meet the overall goals of the organization.

Summit ReSources is available to provide an evaluation of your medical management program. Whether you are a small or large managed care organization, eliciting an outside evaluation of your medical management efforts can be beneficial. Summit Re works with efficient, cost-effective health plans, but most understand the need for continual improvements in medical management given the rapid changes in health care.

Managing NICU Costs

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. Neonatal intensive care unit (NICU) costs, especially for managed Medicaid populations, are one of the top drivers of overall healthcare costs for health plans. The major reasons for the high NICU costs are a significant variability in NICU care patterns, continuous advances in NICU care which is often reflected by higher cost of care, and longer lengths of stay as premature infants are born younger and surviving, albeit with more complex care needs. So what is a health plan to do?

Summit ReSources, the Summit Re managed care department, works closely with The Assist Group, an NICU management company that provides care management, forensic hospital bill audits and a new service called EvalAssist.

Situation: Increase in NICU costs 

One of our clients, ABC Health Plan, experienced a significant increase in NICU costs over the last 2 years without a corresponding increase in membership. Summit ReSources recommended that ABC Health Plan consider contracting with The Assist Group for EvalAssist. After an initial conversation with The Assist Group, ABC Health Plan decided to move forward with EvalAssist.

On-site assessment

The Assist Group provided an on-site assessment of ABC Health Plan's NICU medical management processes and staffing, NICU facility and professional contracts, and claims submission and payment processes. The Assist Group also provided care management services to several cases referred to The Assist Group by ABC Health Plan.

Over the course of several months, the staff of The Assist Group worked closely with ABC Health Plan to analyze claims data for the past two years and compare the billing patterns to the facility and provider contracts. The Assist Group neonatologists worked directly with the attending neonatologists to discuss the optimal treatment plans for cases referred to The Assist Group for care management oversight. The Assist Group also provided benchmark data regarding lengths of stay based on gestational age and birth weight.

Recommendations

After approximately 3 months, The Assist Group revisited ABC Health Plan to discuss the comprehensive assessment and provide recommendations to maintain or improve the NICU management while decreasing overall cost of care. The overall increase in cost that ABC Health Plan experienced over the last two years was determined to be related to several factors. The Assist Group identified each factor and made recommendations to improve financial outcomes while maintaining quality of care.

Changes

After the key factors for rising overall costs were identified, ABC Health Plan implemented the recommended changes. The Assist Group met with the attending neonatologists to discuss standards of NICU care, worked with ABC Health Plan’s provider contracting department to revise contracts as needed, and assisted the claims department in development of a forensic claims review process prior to payment of the claims.

NICU management has become costly and complex. If you are experiencing rising NICU costs and want to understand the reasons, it is sometimes cost effective to have an outside consultant, who is experienced in all aspects of NICU care, review your processes and possibly identify some factors that would make a difference in your bottom line.

Managing Risk with Summit ReView

Managing risks effectively is critical to the financial health of your company. It starts with accurate risk analysis and ends with cost-effective risk management strategies. This is a complex task, but it is now easier since we have introduced Summit ReView. Summit ReView is a package of consulting services designed to provide detailed analysis of risk exposure as well as recommendations to mitigate those risks. Some of the services included in Summit ReView include:

• Our proprietary InSight analysis, which helps you determine if you should purchase reinsurance coverage and, if so, the appropriate deductible levels and average daily maximum limitations given your claim history, contracted arrangements with network facilities and referral patterns. (See Insights into large claims.)
• A detailed evaluation of your medical management department’s structure, policies and procedures, with comparisons to nationally recognized benchmarks and recommendations for improving program efficiencies and effectiveness.
• Our reinsurance “Report Card,” an objective measure for comparing reinsurance options.
• A comparison of material contractual provisions contained in the excess loss agreements issued by current leaders in the health plan reinsurance marketplace.
• A high-level assessment of the financial competitiveness of your pharmacy benefits management program.
• An assessment of your directors and officers/errors and omissions policy.
• Referrals to consultants who can serve as interim executives and assist with strategic planning.
• An analysis of your investment and cash management strategies and recommendations for improvements.

These services may be “unbundled” and pricing depends on the options selected.

With our experienced, talented people who grew up with pricing, underwriting, and administering medical excess products and our “bird’s eye view” of the marketplace, we can offer you additional perspectives that often prove invaluable in helping you develop on-target risk management strategies.

Employer Stop Loss—can we really do that?

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. Offering your provider networks and care management programs to self-funded employers may be a key area of expansion and one that builds on your core competencies.

We have a long history of working with HMOs that contract with TPAs or establish their own ASO capabilities for the employer stop loss business. Our background in the managed care reinsurance market allows us to understand the challenges our clients face and present a wide array of solutions.

In fact, we are so committed to this effort, we explicitly mention providing employer stop loss products and services in our Founding Principles.

Range of services

In most instances, HMOs look to us for competitive stop loss quotes that reflect the savings associated with accessing their networks and care management programs. In some instances, however, HMOs have a properly licensed insurance company and are interested in becoming risk takers. They would like to offer employers a complete stop loss platform, including administration, provider networks, care management programs and stop loss coverage. Since most HMOs do not have the stop loss coverage expertise on staff, Summit is able to act as a managing underwriter—performing pricing, underwriting, policy issuance and claim functions.

Case study background

Company ABC is a very successful HMO operating in two locations. The company historically used a handful of stop loss carriers to offer specific and aggregate coverage to its self-funded groups. During one of our visits, we asked a simple question: “Why don’t you consider writing employer stop loss coverage through your insurance company, rather than somebody else’s?”

They called us back the next day and said, “Did you really mean it? Can we really do that?” We said yes, and the rest is history.

Taking control

This HMO moved the majority of its business from its previous carriers to the HMO’s insurance company. Company ABC staff members have the flexibility and control to meet marketplace conditions with respect to pricing and underwriting, including the setting of appropriate rates, lasers, and binding limits prior to the effective date of coverage. While Summit Re makes recommendations on pricing and underwriting guidelines, Company ABC ultimately decides what terms and conditions it chooses to offer employer groups, since the health plan’s insurance company affiliate is assuming the risk. Even though Summit Re does the actual underwriting, policy issuance and claims adjudication for this client, the client retains the authority to make all final decisions.

In addition to our day-to-day involvement with Company ABC, Summit Re lined up excess-of-loss protection for its employer stop loss portfolio after Company ABC absorbs a corridor of risk.

Results

The deal has worked out just as the HMO and its affiliates had envisioned: the marketplace reaction was favorable.

• Clients knew the HMO had been in the marketplace for over 25 years and its B+ rating was more than acceptable (Weiss).
• The HMO brought strong provider contracts and case management capabilities to the employer stop loss product.
• The plan had good relationships with brokers, agents and customers in the marketplace.
• It could now offer a fully branded product including its provider contracts and network management capabilities, its TPA services and its employer stop loss policy.

In the words of Company ABC, “Summit Re met all of my service requirements. Things are great from our perspective. We look forward to a long relationship with Summit Re on this product line.”

Although this client didn’t need it, Summit Re was available to provide sales and marketing training to HMOs who are new to this self-funded marketplace. Summit Re is also in a position to recommend consultants who assist HMOs in setting up their own administrative shops and in getting their stop loss policy forms and rates filed with departments of insurance.

This approach won’t fit everybody,but is it right for you?

Insights into large claims

This article is part of a series of case studies—real stories of how managed care companies increased profits by using Summit Re’s resources to increase sales, decrease expenses, and manage claims. An insight is the act or result of comprehending the inner nature of things or seeing intuitively (Webster’s dictionary). This is a good description of what takes place in a Summit Re InSight analysis.

We often have a better perspective for viewing this inner nature of a large claim, since we only deal with coverage for large claims. Your staff must spend a majority of their efforts in areas that involve smaller and much more frequent claim events. This case study is an example of how an InSight analysis conducted by Summit Re helped a plan gain a better view of the inner nature of its catastrophic claims.

Situation: An increase in large claims

ABC health plan, located in a large metropolitan area, focuses on Medicaid members, specifically AFDC/TANF eligible members. AFDC/TANF membership is primarily composed of mothers and their children, and the majority of the large claims for this population involve premature infants or other infants with significant problems at birth. For this reason, the large claims from these situations are primarily from inpatient hospital confinements at facilities equipped to treat infants who are severely premature or have other critical problems. ABC health plan was seeing an increase in large claims from this population.

Cause: Reimbursement structure

ABC health plan utilized strong DRG contracts for most facilities in its state. The exception to this was for facilities classified as children’s hospitals. These facilities were considered in a unique category by the state for its Medicaid reimbursement methodology, and the plan was simply following the state’s lead for reimbursement. These types of facilities were paid on a percentage of billed charges determined by the state.

The state’s intention was to recognize these facilities as unique, and the state therefore concluded that the DRG reimbursement was not appropriate given the level and type of services the children’s hospitals were providing. What that meant for ABC health plan was that its most severe and highest cost claims were often being reimbursed at a percentage of billed charges. In this instance, the plan had little ability to contractually modify this reimbursement, although that was certainly an option for the plan to explore.

The reinsurance implication

How did these circumstances translate to the health plan’s needs for catastrophic medical excess reinsurance coverage? The plan had been purchasing coverage with a relatively low average daily maximum limitation for inpatient hospital services because of a mistaken perception that the strong DRG reimbursements at many facilities and deep discounts at children’s facilities were protecting it from all risk except for the exceptionally long hospital stays. In reality, the facilities being reimbursed at a percentage of charges had been rapidly raising their rates and, despite the presence of deep discounts, the plan was experiencing average per-day charges on many large claims well in excess of its average daily maximum limitation for inpatient hospital services. This meant that the plan was absorbing a great deal of variability from large claims due to payments at very high costs per day.

Options

Now that the plan recognized the circumstances under which it was operating for many large claims, it could now consider the options for managing the risk. Re-contracting with children’s hospitals in its service area at more favorable terms would, of course, be a wonderful solution since it could be structured to significantly reduce the plan’s overall risk. In this instance, however, the plan was not in a position to implement such a provider contracting change. This course of action could certainly be considered in the future.

What could be restructured easily was the reinsurance coverage so that it would provide more coverage for high cost days. The best and most immediate solution for this plan was a higher average daily maximum limitation for inpatient hospital services, coupled with a slightly higher deductible. This allowed the plan to exchange reinsurance premium dollars for better reinsurance reimbursement for both long-stay and high cost-per-day hospital risk.

Although these changes may seem obvious to the party reviewing large claims day in and day out, they were not at all intuitive to the plan’s management staff, who had been spending a majority of their time and effort managing the everyday activities and finances of a health plan. It is, in fact, the purpose of the InSight analysis to bring these circumstances to the forefront when they otherwise would remain hidden in the day-to-day activities of the plan.

“No Floors” Transplant Network

The most important consideration when choosing a transplant network should always be the quality of care delivered. A secondary but important consideration is the cost effectiveness of the network. Contracts for the U.R.N. Transplant Centers of Excellence network and Transplant Access Program (TAP) are structured in a variety of ways, allowing Summit Re customers referral options based on their desire for cost predictability. In order to assist in the contract selection process, U.R.N. has identified a subset of network contracts without floors and aggregated them into a “No Floors” network.

The U.R.N. "No Floors" network consists of programs with transplant contracts that eliminate the possibility of a transplant being paid at a percent of billed charges. This network consists of 51 centers and 237 transplant programs and increases the transparency of network providers without minimum payment provisions. This provides you with greater transplant cost predictability when using a “No Floors” network facility.

Information regarding the “No Floors” network, including a listing of the facilities, can be found on the U.R.N. website (www.urnweb.com) or you can contact Debbie Stubbs, RN, MS, CCM at 260-407-3979 or at dstubbs@summit-re.com.