Deep Discounts on Transplant Program Fees

Deeply discounted transplant access fees are available through our new Platinum Rewards program, an enhanced OptumHealth Care Solutions (formerly United Resource Networks) program. This program is available only to Summit Re’s clients. Under our previous program, you received a 5% discount on network access fees, an additional 5% discount if you agreed only to use OptumHealth’s networks, and up to 10% based on Summit Re’s total volume of business with OptumHealth. The third discount was calculated retrospectively.

These three potential discounts are now bundled into one substantial discount. The program is easier to use and easier to understand. You will be able to realize the total savings we've negotiated “up front” through reduced access fees.

The savings from the Platinum Rewards program can be significant, as shown in the chart. Based on our historical case mix, the Platinum Rewards program represents an effective 27% discount off standard OptumHealth fees.

To be eligible for Platinum Rewards, you must agree only to use the OptumHealth networks for your transplants, although you can still “carve out” facilities with which you have your own contracts.

The new program is effective on January 1, 2008. You will need to execute a new Payer Access Agreement, selecting either the fees for the Platinum Rewards program or the standard access fees.

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Platinum Rewards Frequently Asked Questions

Which of the OptumHealth programs will be subject to the reduced fees?

The reduced fees apply to the Transplant Resource Services’ Centers of Excellence program and the Transplant Access Program for business that is reinsured through Summit Re. All other OptumHealth program fees remain unchanged.

Do the reduced fees apply to both adult and pediatric transplants?

Yes, the reduced fees apply to adult and pediatric transplants.

How will the Platinum Rewards program affect the OptumHealth transplant facility contracts and services?

The new program has the same facility contracts and services contained under the current OptumHealth programs.

Will I be able to “carve out” a specific facility from the OptumHealth contract and use my own contract at that OptumHealth facility?

You will still have the capability of carving out a facility or facilities from the OptumHealth agreement. Those facilities should be listed on Exhibit C of the Payer Access Agreement.

What happens if I want to use another transplant network in addition to OptumHealth?

You may use another network in addition to OptumHealth. However, if you do so, you will not be eligible for the reduced fees available through the Platinum Rewards program. You will pay OptumHealth’s standard access fees.

What do I need to do to initiate the new program?

If you are currently accessing OptumHealth through Summit Re, you will need to sign a new Payer Access Agreement. New Payer Access Agreements will be mailed to Summit Re clients. Be sure to indicate if you intend to use the OptumHealth network only or if you will use another network in addition to OptumHealth’s network.

Will I still receive this year’s discount based on Summit Re’s total volume of business with OptumHealth?

You will still be eligible for the discount for 2007 based on Summit Re’s total volume of business with OptumHealth, provided you are a Summit Re client at the time the refund is paid. OptumHealth has committed to paying this refund within 60 days after the end of the calendar year.

After the Claims are Paid

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. This case study addresses one of the latest developments in managed care—post-payment administration and claim recovery. Imagine the impact on your bottom line if you recovered 2 to 3 percent of claims, after all current internal processes were completed.

This service is available through Summit Re’s arrangement with Health Decisions, Inc., one of the most comprehensive and sophisticated post-payment administrators in the country. Independent benchmarking analyses have confirmed that its approach sets new standards for the use of data produced by claim payment, enrollment, and related systems. Through its services, you have access to postpayment support equivalent to that available to the largest payers— without development costs or lead time.

Potential recovery areas

The focus for recoveries occurs in the following areas:

• Other liable parties not correctly reported by enrollees for benefit coordination
• Medicare-as-primary payer (ESRD, retirees, disabled) to offset any Medicare-as secondary-payer demands
• Enrollment discrepancies, such as ineligible and terminated members, family status changes, etc.
• Provider billing errors, such as inappropriate service codes, unbundling, duplicate payments, discount avoidance, fee inflation, double billing, etc.
• “Not a covered benefit” enforcement at the procedure code level
• Judicial judgments, such as divorces, workers compensation, and subrogation

Services available

Existing data are combined with new data and converted to Microsoft® compatible files. This new data set has many applications, including supporting internal client management, maximizing claim recovery returns and processing efficiency, and supporting new client service offerings.

Claim Recovery Service

Identifies claims that should have been paid by others and pursues collection from other payers, such as Medicare or insurers, and providers.

Enrollment Support Service

Handles all the details of special (non-routine) employee/enrollee communications to compile, compare and reconcile internal and external data files across multiple payers.

Recovery Software

Use of Health Decisions, Inc.’s proprietary software on internal network systems.

Data Support Services

A full range of technical support permits translation of any documented file structure into Microsoft® compatible files for HIPAA compliant data analysis, reporting and warehousing.

Flexible payment arrangements

Health Decisions, Inc. can be compensated on a contingency basis, keeping 33% of recovered claim amounts. Health Decisions, Inc. is also willing to enter into a multiyear, fixed-fee software lease covering its Paperless Claim Recovery software suite and all related support services.

Client results

Client “A” used post-payment findings to pursue claim recovery and returned $15 per member per year to its bottom line.

Client “B” used post-payment findings as a continuous-quality improvement management tool to monitor internal performance improvements.

Client “C” used post-payment findings to pinpoint “problem” providers and to support provider contracting negotiations.

Health Decisions, Inc.

Health Decisions, Inc. is an established, reputable and successful post-payment administration and claim recovery vendor. In one yearalone, they processed almost two billion dollars of paid claims. In the area of claim recovery, nobody addresses more recovery areas (40+ review areas), offers a lower recovery threshold (all claims over $10) or recovers a greater amount of money per client (2-3 percent of claims).

Managing Capital Through Reinsurance

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. Summit Re works with London Life Reinsurance Company to provide reinsurance transactions that achieve risk-based capital (RBC) relief for qualified prospects.

Benefits

There are several potential benefits resulting from such reinsurance transactions:

• Proper capital and surplus management can improve debt and claim paying ratings.
• Reducing required capital requirements increases business line return on equity.
• Dividend capacity can be improved for entities with holding company structures.
• Individual plan or product line loss ratios can be stabilized for external understanding.
• New business can be more competitively priced.

These programs can be developed for single-site organizations as well as regional and national chains. They can be designed easily for entities that have affiliated domestic or offshore companies. However, they also can work with a nonowned, protected-cell approach. All programs are structured to meet applicable risk-transfer regulations. Solutions are customized to meet each company’s specific objectives and requirements.

Case Study

Here’s an example of one of our clients' capital management programs developed through its relationship with Summit Re:

ABC Health Plan is a regional health plan. Its business is ceded to London Life via a 100% quota share above the HMO’s retention level. London Life, in turn, retrocedes the business on the same terms to a captive affiliate of ABC Health Plan. The transaction is designed to meet all regulatory requirements for full risk transfer and credit for reinsurance. In addition, the transaction has been disclosed to the insurance department of the state of domicile of ABC Health Plan.

Regulators often prefer or require independent professional reinsurers as the conduits for such transactions to minimize the potential for improper related-party transactions. The state insurance department in this case relied on the financial strength of the licensed and authorized professional reinsurer to fulfill its reinsurance obligations to ABC Health Plan. ABC Health Plan’s holding company is free to establish appropriate GAAP reserves and equity consistent with sound actuarial principles and subject to the reserve and capital requirements of the domicile of the captive.

Health RBC Relief Structure in Brief

The typical structure is modified coinsurance or coinsurance with funds withheld to minimize asset transfer. The only cash flow is your payment of the risk fee.

Reserves are held in asset trust by the reinsured.

There is parental guaranty on the retrocession treaty, if retrocession is used.

All profits, net of risk fee, are returned to you through an experience refund.

There is monthly accounting.

The health risk-based capital relief structure has the following risk reducing features:

• Expense allowances set about equal to “marginal” expenses.
• Losses to reinsurer are carried in loss carryforward and repaid through future profits. Ceding company must repay any losses if it terminates agreement early.
• Loss to reinsurer usually limited by stop loss (typically 10% of premium).
• Reinsurer can terminate agreement with minimum notice (usually 3 months).
• Allows ceding company to release RBC requirement on business ceded.
• Designed to pass required level of risk to reinsurer to meet risk transfer regulations.
• Minimizes the cost of reinsurance to the ceding company (1% of premium or less).

Is Your Liability Coverage Adequate?

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. “I confess through my own fault, in my thoughts and in my words, in what I have done, and what I have failed to do.” Although these words are part of the Confiteor, a Catholic prayer in which persons saying the prayer confess their sins, it could be the start of a discussion of errors and omissions (E&O) and directors and officers (D&O) coverages.

Errors and Omissions

E&O insurance policies cover things a company does, things a company does not do, or things that simply do not turn out as a customer or other third party expected.

E&O for a managed care plan covers you for the vicarious liability assumed for the business processes that are part of a health care delivery system, such as credentialing, UR, and claims. An IPA can be sued for malpractice, since patients, through the IPA’s advertising, may assume that their physicians are under the IPA’s control and the IPA is liable for their actions. Another emerging area is security and privacy liability, including health care history and personal information.

Directors and Officers

D&O coverage is designed to protect the officers and directors of a company for liability associated with business decisions and certain employment practices. Liability can arise from decisions regarding merger and acquisition disputes, failure to perform fiduciary duties (such as signing contracts that harm the value of the company’s stock), actions that violate anti-trust regulations, and business interference, to give a few examples. Liability can also arise from employment practices, such as discrimination, harassment, or wrongful termination.

D&O insurance policies provide protection for a company’s directors and officers whose personal financial assets can be put at risk in the event of a lawsuit regarding their decisions. It’s difficult enough to lose company financial resources because of inadequate or inappropriate insurance coverage; imagine how it would be if your own personal assets were at risk as well.

Coverage characteristics

There are no standard E&O and D&O policies. Each insurer drafts its own policy forms and some fail to provide coverage in key areas for health plan exposures. A recent study showed that over 50% of directors and officers requested changes in their insurance coverage when they learned what was NOT covered under their current program.

Premiums are a function of the case size, liability and retention and can range from $10,000 to $100,000. Coverage, not price, is key because potential liabilities are so large.

Free coverage analysis

A free analysis of your current coverage is available to see if it’s possible to access better coverage at better rates. To give health plans access to better E&O and D&O policies, Summit Re has an arrangement with a national firm that specializes in property and casualty insurance products specifically designed for the health care industry.

We’ve offered this analysis of E&O and D&O coverage to several clients and they have appreciated the additional options presented as a result. We can do the same for you. To get started, please send us a copy of your current E&O and D&O policies. Typical insurer markets that provide these types of coverage include Lexington, Darwin Professional, Lloyd's of London and OneBeacon. Our program manager has access to all of these markets. We are happy to disclose all commissions and service fee arrangements.

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.

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.

Case studies from The Assist Group

The Assist Group specializes in solutions for catastrophic claims management and high-risk premature infants. Current products include CareAssist, a unique, physician-driven neonatal care management program, and ClinAssist, a powerful forensic audit and claims resolution service. The Assist Group has a proven track record for delivering financial value to clients. For more information about these products and services, please visit the company's website, www.assistgroup.com, or contact Debbie Stubbs, RN, MS, CCM at Summit Re, 260-407-3979.

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CareAssist Success Story: 32 % Reduction in Length of Stay and $163,693 Savings

This twin boy was born at 25 weeks, weighing one pound, eight ounces. His mother used multiple illicit drugs throughout her pregnancy and on the day of delivery. He was on mechanical ventilation and in critical condition when referred to CareAssist on day of life (DOL) 17. This infant was not expected to survive due to his prenatal history, the circumstances of his birth, and extreme prematurity. The CareAssist neonatologist recommended an ethics committee consultation to discuss quality of life issues when it became evident on DOL 30 that he would survive. By then, this infant had the severest form of intraventricular hemorrhage, along with hydrocephaly and porencephaly. He also had severe chronic lung disease (CLD) and remained on mechanical ventilation well past his first month of life. His long-term prognosis was poor.

His final discharge disposition further complicated his clinical status as his mother continued to struggle with polydrug abuse and was considered unsuitable to care for him after discharge. CareAssist consistently recommended early discharge planning to allow a foster family to be trained to care for this infant upon discharge. This timely intervention allowed this baby boy to be discharged appropriately and safely.

Multiple oxygen weaning recommendations were made by the CareAssist neonatologist. This infant was eventually weaned to nasal cannula oxygen on DOL 59 and was discharged on low flow nasal cannula oxygen. This infant’s nutritional status was complicated by his CLD and tendency to tire during feedings secondary to his compromised pulmonary status. The steroids used to help wean him from supplemental oxygen also compromised his ability to gain weight. The CareAssist neonatologist emphasized to the treating team the importance of using high calorie formula and advised early developmental interventions through the use of non-nutritive sucking and OT/PT involvement in nipple training. As a result of these interventions, the infant was nippling all of his feedings at a corrected age of just 35 weeks.

The weekly care oversight by CareAssist for nearly three months ensured consistency in the implementation of this infant’s treatment plan. Due to CareAssist’s oversight, this infant was discharged safely to foster care 39 days earlier than originally anticipated. This resulted in a 32% savings of $163,693.

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ClinAssist Success Story: $321,757 Savings

A 110-day confinement at a children’s hospital resulted in total billed charges of $1,287,027. ClinAssist reviewed approximately 10,600 line items of detailed charges. Utilizing the clinical expertise of ClinAssist’s neonatologists and nurses, ClinAssist performed a forensic review of the charges and identified the following exceptions:

• Room and board charges billed at incorrect levels of acuity
• Experimental pharmaceutical therapies
• Supplies and services incorrectly unbundled from the room and board charges

ClinAssist successfully achieved a $321,757 reduction in billed charges after the audit exceptions were presented to the facility. The account balance was adjusted to reflect the facility’s written agreement that the exceptions identified by ClinAssist were not payable charges.