This top ten list of coverage features that can limit a health plan's reinsurance recoveries is based on our experience in managed care reinsurance and reflected in InSight, our coverage analysis tool.
- Limited coverage for high-cost inpatient tertiary care referrals. Where are the high costs-per-day problems: in network or out-of-network?
- Artificial per diems, case rates or fee schedules that do not reflect actual plan costs.
- Reinsurance deductibles chosen at a level too low, producing too many reinsurance claims with the reinsurers margin built in.
- Inpatient per day coverage limits not mirroring plan underlying average daily costs for high cost claims.
- Purchasing reinsurance on budgetable claims such as professional services versus hospital inpatient-only coverage.
- Reinsuring chronic cases. Again, the reinsurer will build in its margin on a budgetable claim.
- Covering outpatient facility benefits which may have limited value for catastrophic reinsurance.
- Variable coinsurance and its potential for lowering coverage on high-cost out-of-network hospital confinements. Alternatively, coinsurance may vary by inpatient costs per day.
- Reinsurer definitions If the treaty has separate definitions for acute care, medically necessary or experimental treatments, the reinsurer may exclude certain claims that you have paid because of its ability to use its own definitions that may not match your health plans certificate of coverage.
- Alternate funding programs These complex programs are another way for a reinsurer to protect its downside risk without giving the plan real risk protection.
To avoid reinsurance coverage errors, contact us today to arrange for a demonstration of the coverage analysis tool. Current clients have a coverage analysis done as a routine part of our annual renewal process.