Fixed Costs
Preferred Provider Organizations
(PPO)
Managed Care
Claim Processing
Pharmacy Management Programs
Other Benefits Available
Over time, a traditional health insurance
company will charge premiums to its customers equal to the customers’ claim costs
plus the insurance company’s overhead, profit and state
tax liability. In choosing a self-funded health plan, employers
hope to manage claims more effectively, eliminate state tax
liability, reduce overhead and drop any profits to their own
bottom line.
A self-funded health plan consists of two cost components: fixed
costs and claim costs.
The fixed costs include the cost of both
specific and aggregate stop loss insurance, the administration
fee, PPO fees and any managed
care fees that are a part of your plan. Specific stop loss limits
the employers' liability for any individual plan member,
while aggregate coverage limits the entire group’s claim
liability.
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PPO's contract for fee reductions in exchange for employees being
directed to their participating providers. Typically, PPO's require
a coinsurance differential to incent patients to use their network.
This differential is usually no less than 10%, and requires a penalty
if a patient voluntarily opts out of the network. The fee for participating
in a PPO varies, but is usually based on a per employee per month
basis. Other PPO's are available that are known as "wrap-around" PPOs.
They are usually paid based on the size of the savings they
get.
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Employee education is often ignored by health plans, and can have
one of the most significant and important roles to play in reducing
your costs while improving your employees' understanding of the
benefits that you offer. By including managed care benefits in
your plan, you will achieve better results for the plan participants,
resulting in lower overall costs to you. Education before, during
and after the need for health care can be a real asset for you.
Before needing health care, your employees need to know what options
they have available to them in the event that they need care. This
initial education is done through enrollment meetings, quarterly
newsletters, the Healthwise Handbook and reminders on EOB's. As
an industry, we call this demand management. The goal of this part
of your managed care program is to make sure that your employees
are buying the care that they need. Inpatient and outpatient pre-certification, case management and
discharge planning are very effective educational opportunities
as well. During your employees' use of the health care system,
nurses can maintain contact with them and let them know that they
have options available to them. This can result in more appropriate
levels of care for the patient.
After the care has been provided, it is essential that you review
how your plan has been utilized. We will sit down with you at least
four times a year, and go over the results of your plan with you.
We will identify high cost and high frequency procedures, and recommend
a plan of action to you that will address current and potential
problem areas. The plan that we develop will show you how you can
begin taking control of these areas, improving the quality of your
plan while reducing costs both long and short term.
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Your claim administrator may be the most important component of
your health plan and have the biggest impact on cost savings. Butler
Benefit Service, Inc. (BBSI) takes the approach that your employees
are entitled to the benefits that you have outlined in your Summary
Plan Description (SPD), nothing more, but nothing less either.
BBSI will process claims according to your plan design. If there
are any questions about how you want benefits to be applied, we
will contact you for your interpretation. As the Plan Administrator,
only you have the authority to interpret the plan. In addition
to processing new claims, you may want us to handle run-in claims
from your prior administrator. Since these claims are usually difficult
to clean up and process, we must charge an additional fee to handle
them. This charge will be based on claims that the old processor
had in its office only, not claims that have been incurred, but
not reported.
BBSI will assign a team of dedicated claim service representatives
to your account. They will be familiar with your plan, and be available
to answer questions from you and your employees regarding your
benefits and claims. We also have the ability to generate employee
education materials to ease the transition to BBSI.
The major savings that we can project for you are in the area
of claim experience. With precise plan design and BBSI's exceptional
administration of your plan, we can predict that annual claims
should be well below those you have experienced in the past. BBSI's
diligence in claim review and coordination of benefits will significantly
lower your claim costs. We are very proud of our error ratio of
less than 1% of claims processed on a gross basis.
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BBSI has a unique approach to the handling of prescription drug
claims. Our program can mimic your current prescription card program,
or offer you a totally new and unique program. Claims are electronically
transmitted from the pharmacy to BBSI. Neither your employees nor
the pharmacies need to file paper claims. Your plan will realize
savings by accessing our contracted prescription pricing. BBSI
will be able to provide complete information to you relative to
drug utilization compliance and cost effectiveness of drug therapies.
There is also an excellent mail order component to the pharmacy
management program.
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In addition to processing the claims for your health plan, we are
able to provide the same service for your dental plan, vision plan,
flexible spending plan, both short and long term disability plans
and group life.
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