In a recent discussion with employers, most knew they had Stop-Loss coverage for their self-funded medical plan. They further understood that it’s protection from a large loss. However, there was some confusion as to the role and relationship between the Claims Administrator (aka TPA) and Stop-Loss carrier. Often, employers assess the two entities as one and the same for the purposes of claims payment and reimbursement. While ideally, all parties work in concert with the employer’s interest, this article is intended to outline the demarcation and why it’s essential to evaluate the Stop-Loss carrier independently.
It is frequently believed that the Stop-Loss carrier will reimburse the TPA for paid amounts exceeding the deductible and/or aggregate limits. TPAs and Stop-Loss carriers will utilize medical bill review vendors (vendors) – largely for duplicate charges, out-of-network costs, especially for a catastrophic loss. Generally, vendors utilize a software program to analyze various medical codes to ensure that they align with the injury/illness. Often the Stop-Loss carrier relies upon the TPA audit for reimbursement purposes, therefore, may not conduct any further investigation. However, we believe with high-dollar claims that exceed the specific deductible, a more in-depth audit of the claim is necessary.
An in-depth audit will include a review of medical necessity, treatment errors, subrogation assessment, etc. While this may incur additional expenses, it may further reduce the claim costs and possibly lower the entire cost below the employer’s deductible. Why is the former important since it’s not the employer’s money? In short, it reflects their cost containment strategies; hence their future Stop-Loss premium as the carrier assesses the historical losses exceeding the deductible and/or aggregate to determine the employer’s insurability. For the latter, it’s direct dollars paid by the employer. Recently, we received a reimbursement request for $50,000 above the employer’s deductible. We assessed that much of the treatment was not medically necessary. We shared our evaluation with the TPA – saving the employer $150,000 below their deductible.
How does USBenefits achieve savings and success such as the above? We work in concert with all parties for the best outcome. Our formula is simple – whether in or out of network, we review each claim for medically necessary treatment and services, cost per day for in-patient hospitalization, negotiate directly with providers, and utilize legal counsel as necessary.
Our strategy is maximized when the TPA adheres to our claims notification process and does not pay beyond the deductible limit. We recognize that some situations may be delicate for the TPA (or broker) regarding the network/provider agreement. However, such agreements are independent of The Plan, which is the legal document that TPA and Stop Loss must abide by. We will work closely with the TPA to protect the network/provider relationship with mutually understood expectations.
Is USBenefits different from other Stop-Loss carriers? Yes! Our performance standards are much higher than our competitors. Therefore, you should evaluate the TPA and Stop-Loss carrier separately and compare the latter to USBenefits and how we can serve your best interest.
Our motto is “Your goal is our goal – to provide the best possible outcome for the employer.”