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BtB Webinar

Date post: 25-Jul-2015
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“If at first the idea is not absurd, there is no hope for it.” ………Albert Einstein Better Than BUCA Using Reference Based Pricing and Self Funding to lower healthcare costs
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Page 1: BtB Webinar

“If at first the idea is not absurd, there is no hope for it.”

………Albert Einstein

Better Than BUCAUsing Reference Based Pricing and Self Funding

to lower healthcare costs

Page 2: BtB Webinar

Economists agree that employee benefits are simply wages otherwise taken. While there may be tax preferences, at the end of the day benefits are simply part of Total Compensation.

The problem is that the uncontrolled cost of health care and the attendant premiums are crowding out the actual take home pay of most American workers – that more and more of the Total Compensation people make is in the form of benefits rather than wages.

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When you add the questionable value of excessive health insurance premiums for most employees to the lack of pricing transparency that is a key part of any managed care network, you create a real opportunity for “consumer arbitrage” – a very real Consumer Driven Healthcare Solution.

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And to all of this let us add the sanctity of the patient/doctor relationship – something forgotten in today’s world of managed care and various government programs – and we have created the best of all possible worlds.

More affordable care with the providers of your choice!

Page 5: BtB Webinar

ERISA plans are the funding foundation. Smaller plans with 25 to 100 employees will typically use aggregate only funding. Larger plans with more than 100 employees will typically use traditional specific and aggregate funding. Currently under PPACA, self funded plans offer significant advantages over insured plans.

There will be no networks. The plan document will provide for claims to be paid at “Medicare Plus” – payments ranging between 100 and 150 percent of Medicare. Providers are paid “cash” – typically within 15 days of service.

Percentage payments may be different based upon the type of provider: primary care physician; specialist; and facility.

The base plan will be a High Deductible Health Plan that will qualify as a Bronze or Silver level plan, but other plans may be offered.

Balance billing disputes will be handled by using the Farley Patient Advocacy program.

The Key Ingredients for BTB

Page 6: BtB Webinar

So…….how does all of this work?

First, we use Reference Based Pricing – RBP – based upon a Medicare payment schedule plus something between 100 and 150 percent of base payment depending upon the type of provider (Primary Care, Specialist, and Hospital).

The agent and client jointly decide on this reimbursement level and it becomes part of the plan document.

To this we add the services of Compass PHS. They provide the pricing transparency needed for the employee to know prior to the visit whether or not there will be a balance bill. For each and every procedure the employee receives 3 prices from providers for each CPT code. The employee is then free to choose which provider that will accept the reimbursement as payment in full.

In addition, Compass provides a true “concierge service” for employees including quality ratings for providers, assistance in choosing specialists, setting up appointments with providers, and following a claim through to completion. They also review the Explanation of Benefits to assist in making sure that all claim costs are legitimate. In short, Compass helps the employee navigate the complicated healthcare system we have in place today.

We also add the services of BidRx for pharmacy claims. While acute medications are competitively priced, the savings on maintenance medication is truly astounding.

Finally, we provide a number of Consumer Tools for the employee such as CADRplus, Medi-bid, Digital Labs and Medical Travel. These services are offered on a voluntary basis for the employees.

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The underlying benefit plan is a High Deductible plan for the employee with 100% reimbursement after the deductible is met. Plans that have either a Bronze or Silver Actuarial Valuation are the most common. The goal is to get pricing for the administration and catastrophic coverage to the point where the employer can afford to pay all of the premiums – or at least a significant portion.

We want the employee to have a real incentive to become a shopper for medical care since the huge majority of care is for non emergency circumstances. This is a critical to keeping the overall costs down and allowing more of total compensation for most employees to be in the form of wages.

While balance billing disputes are few and far between in the existing plans in place, one must assume that they will happen occasionally. The overall national reimbursement rate for hospitals is between 130 and 140 percent of Medicare, so even the potentially huge claims are likely to fall within the plan document parameters and avoid balance billing. In any case, we have legal assistance “baked into the program” to challenge the providers if needed.

This is a “sea change” for most people – initial and continuing education for employees and their dependents will be key for real ongoing success.

For cases with less than 50 lives we will need medical questionnaires completed. For cases over 100 lives we will need claims experience. For groups with no claims experience (no matter what size), it would be wise to have all employees complete medical histories.

Important things to know

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If at first the idea is not absurd, there is no hope for it. Albert Einstein


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