The Impact of Transparency on Self-Funding of Medical Claims
As more groups consider self-funding their medical and prescription benefits for the first time or are looking for a better solution, transparency is key.
For many businesses, their largest expense is the salaries of their team. Often, the second largest expense a business has are the expenses related to their medical benefits. Business owners can run a payroll report and know exactly what each individual is earning, so it is easy to see where the money spent on salaries goes. When it comes to their medical benefits, many have no idea how to see where the money is going and whether or not the price they are paying is a fair one.
It is impossible to manage something that you can’t measure. For a Company (or its benefits broker) to help manage the cost of their benefits plan, they must first put themselves in a position to see the details of where their claim dollars are going and be able to ask questions.
Medical Spend Management
Some fully insured carriers, third party administrators (TPA’s) and pharmacy benefit managers (PBM’s) do not provide the level of detail necessary to truly manage medical and Rx claims. We suggest that the carrier, TPA and PBM you select for your Plan be able to provide the following:
- Pre-payment medical claims details that show
- Billed charge
- Net charge after discount
- Location of service (inpatient, outpatient or provider charge)
- In-network or Out-of Network
- Facility name
- Details on large bills to be provided upon request prior to payment
- Detail on whether or not ongoing large claimants are being managed to help them access quality care at a reasonable charge
There are other steps you can take to help a group manage their claim costs, but the items above are the foundation of any sound claim management plan.
While, some carriers or third-party administrators will resist giving out this information. These are group dollars being spent, we at Crumdale believe that groups are entitled to this information. At Crumdale, all our approved vendors provide this level of detail to all of our groups.
At Crumdale, we help brokers and groups focus on doing the simple things with our in-house experts to help you better understand your medical spend. Once a broker or group has a firm grip on the above, managing claims and understanding the year over year differences in medical claims is much easier to understand.
Crumdale helps brokers and their groups transition into these changes everyday. We find that this level of transparency help put brokers and their groups onto a more sustainable path and increases the predictability of the cost of a group’s medical expenses over time.
To learn more reach out today!