Self Funded Platform: Controlling Costs at Renewal
The Situation
Virginia 376 Employees
One of our broker partners successfully built a block of business
by transitioning clients and prospects to a self-funded
consortium.
The prior program lacked carrier and network transparency,
claims management and cost containment features, leading to
significant increases in medical stop-loss premiums for these
groups, making self-funding unstable.
Crumdale worked to understand the current suite of vendors
serving the group of accounts to identify improvements that
could be implemented.
Goals
Client:
Long-term strategy to control costs and stabilize the self-funded consortium.
Broker:
Stabilize the self-funded consortium and achieve cost savings for the block.
$1.7 Million +
Increased surplus retained from $0 to $1.7 million in one year
47%
Reduced claims spend by 47% over one year
$350k +
Saved more than
$350,000 in claims through med & Rx intervention
Before & After
| Before | After | |
| Program Structure | Level Funded (12 equal payments at annual max cost) |
Level Funded (12 equal payments at annual max cost) |
| Third-Party Administrator (TPA) | Hospital Owned TPA | Independent TPA |
| Network | Local TPA and Hospital Network |
National Network |
| Pharmacy Benefit Manager (PBM) | TPA Provided | Transparent PBM Contract |
| Medical Stop Loss | Spread between different carriers |
Resolute Underwriting Strategies |
| Surplus | None | 100% Retained By Group |
| Claim Review & Monitoring | None | Franklin Health |
| Pharmacy Oversight | None | Franklin Health |
| Data Analytics | None | Franklin Health |
| Patient Assistance Programs (RX) | None | Franklin Health |
| Patient Advocacy / Engagement | None | Franklin Health |
| Plan Document Review | None | Franklin Health |
| ERISA Guidance & Support | None | Franklin Health |
| Compliance Review | None | Franklin Health |
| Data Analytics | None | Franklin Health |
The Results
| 12 Months Before Crumdale Partners | 12 Months With Crumdale Partners | |
| # of Employees | 376 | 361 |
| Aggregate Claims | $2,789,041 | $1,413,071 |
| Claims, PEPY | $7,418 | $3,912 |
| Surplus / (Deficit) | ($5,847) | $1,779,250 |
These groups received $1.7 Million + in surplus.
These groups increased the surplus they retained from $0 to $1,779,250 in just 1 year a 47% reduction in claims spend.
How We Did It
The hospital-owned network and TPa previously in place were not properly aligned with the needs of each employer group or the block itself.
- The network was aligned with the TPA’s
owner, not the underlying employer groups - A PBM contract with zero transparency
towards prescription drug pricing - No claims management
- Carrier retained all PBM rebates
- No clinical integration
- Little broker or client control
Crumdale partners’ dynamic solutions enabled the broker to stabilize the self-funded platform, while saving the block $1.7m, offering transparency, and maintaining flexibility. Some of the major changes made included:
- Implemented coalition/block pricing across program vendors.
- Assigned an independent TPA with no ties to the network or hospital systems.
- Implemented Crumdale’s Fiduciary Shield
program to closely monitor prior authorizations for medical services and prescription drugs. - Analyzed case management notes to engage high-cost claims early in the process.
- Created a well-designed and managed health plan partnered with a stop-loss carrier to expertly manage risk.
- Identified an issue with a high-cost drug before the group had to pay for the first prescription fill and secured the brand name drug at zero cost to the group and member without delay through a manufacturer’s assistance program.
- Implemented immediate claims review before payment by each group to assure that payments were appropriate for the services provided.
- Implemented a coalition-level PBM contract with alternative sourcing for high-cost specialty drug support integrated within the contract.
- Provided a member-level concierge service to help employees find the best doctors at the most cost-effective price.
- Managed the details involved in moving a block of this size, such as member enrollment, ID cards, network disruption, vendor integration, plan document creation, and on-boarding.
- Identified a processed claim that was scheduled to be paid at charges of $49,000 with no discount through a TPA error. After review, the claim was re-priced to approximately $6,000, a group savings of $43,000.