3 Easy Ways to Control Self-Funded Health Plan Costs for 2019
As self-funded employers with a calendar health insurance plan year start to examine their renewals (some of which come with more than just a hint of sticker shock), many are seeking ways to control seemingly out-of-control-spiral that is cost of the plan. Of course, higher deductibles, increased employee contributions, and other plan design factors can reduce cost, but often at the dismay of employees.
If you’ve exhausted your options as an employer and are searching for new methods, here are 3 relatively easy ways to control costs for those self-funded employers seeking relief in 2017:
1. Access & Advocacy Tools
There are two things that can play a big role in the driving of health care costs for self-funded plans—access to care, and advocacy for the healthcare consumer (i.e., the employee). Let’s talk about “access to care” first.
“Access to care”, as I see it, refers to the ability of an employee to get professional medical help when they need it at a price point that they can afford. So for example, even folks with great health insurance may seek treatment in an emergency room because it’s more convenient than waiting until Monday, when the doctor’s office is open. (Fun fact—almost two-thirds of ER visits are deemed unnecessary, meaning that the cost of the emergency room’s “convenience” comes at a ridiculously high price for self-insured plans.)
An employer can work to whittle down this high-dollar cost by paying for a telemedicine offering for employees that will allow them to seek treatment over phone or video. This VERY cost-effective strategy will not only minimize those high-dollar emergency room visits, but also keep people out of unnecessary urgent care treatment centers as well. Furthermore, the option of seeking treatment via telemedicine gives employees the flexibility to receive treatment faster and easier than they would by going to a doctor’s office—another big win in the way of access to care.
A perfect complement to this strategy is offering--and educating employees on how to use--advocacy tools. Advocacy tools are important because even the savviest of healthcare consumers still need help understanding the nuances of their plan and how to use it. According to an article by the Washington Post, only one-third of people with employer-sponsored insurance could correctly identify the concept of coinsurance.
By offering an advocacy tool to employees and taking care to ensure they understand how to use it, the employer can empower their employees to navigate the healthcare maze with a heightened awareness of what their plan covers, assistance in navigating networks, finding the lowest-cost service providers in a given area, and help translating bills and EOB’s for employees.
There are several players in both the telemedicine AND advocacy markets these days, but my personal favorite vendor for this combo solution of savings is freshbenies. If you don't know about this product, you should--and yes, offering freshbenies as a strategic part of your self-funded plan is VERY easy!
2. Month-to-month Eligibility Management
While most employers go through the pain-staking process of auditing their first bill after open enrollment to ensure changes were communicated correctly, it’s not uncommon for eligibility to fall stagnant just a few months into the plan. This can happen for a lot of reasons; maybe the EDI feeds in your electronic ben-admin system aren’t functioning properly, or perhaps terminated employees aren’t being diligently reported to carriers.
Whatever the case, it’s important to set up a process that includes careful overview of each month’s bill to make sure the plan isn’t paying for terminated employees or simply incorrect eligibility files. If you aren’t convinced that eligibility errors aren’t a contributing factor to cost, take for example the HUNDREDS OF MILLIONS that eligibility errors cost the state of Minnesota over the course of a single year. (OK, this is a state program and not an employer, yes-- but you get the picture.)
For example: a self-funded employer with 100+ employees on the plan, with the national average of 15% turnover in one year, could see $30K-$40K in excess cost due to poor eligibility management by the time you’ve missed a mere 5 or 6 terminations and a handful of inaccurate new hire EDI transfers. That’s enough money to pay someone part time to audit your healthcare bills each month and STILL save money. Hence the importance of a process to manage and audit eligibility—those little errors add up! Whether it’s with technology or a consistent and diligent set of human eyes, make eligibility management a priority and you are likely to see savings in 2017.
3. Bill Auditing Services
According to this article from the Scope, medical billing errors in the US may be on as high as 80% of all medical bills. That’s stunning, right? Hence the reason for the rising popularity of bill auditing services, available for employer engagement to control the claims cost of their self-funded plan.
What kind of errors are we talking about here? Well, I’ve heard of everything from the good old-fashioned double-charge (a singular charge appearing on the bill twice by mistake), to the erroneous charge of a pregnancy test on male patient bills, to the “un-bundling” of charges that should have been paid under a single bundled code at a lower rate. Here’s a great list from Nerdwallet.com that outlines several common medical billing errors.
Of course, without detailed knowledge of medical billing and coding practice, the common consumer’s eye isn’t going to catch these expensive inaccuracies—hence the reason a self-funded plan should engage with a bill auditing service whenever possible. These services normally charge a percentage of the actual amount the plan saved on each bill audit, so the cost of said service is usurped by the savings. Again, there are several vendors in the market that provide bill auditing services, and although the set up can take a little time, the relatively easy implementation for the savings is tough to beat.