Many self-insured employers are reviewing annual agreements for 2013 benefits. While not exhaustive, this quick checklist can serve as a handy reference before you sign on the dotted line.
1. Price and performance guarantees. Try to negotiate rates upfront for two or three years. Service, clinical, pharmacy, and network discount savings should be on the line. If your provider isn't evaluating its own performance, how can you?
2. Claim audits. Some carriers restrict the number of claims you can look at, the frequency of audits, and even the specific providers to conduc the audits. Request a separate contract from the administrative- services-only agreement. You can always hammer out these details later.
3. Carve-out pricing. Find out in advance how much it will cost if you carve out services like disease management, case management, pharmacy benefits, stop loss, transplant networks, and more. You'll be surprised how these small amounts can add up.
4. Implementation and data transmission. If you're switching to a new carrier, how will the data be transferred? Can you load historical claims data from your current carrier? Will it cost an arm and a leg to get the data? Will the new carrier charge you to load this information?
5. Eligibility. Will the data load be manual or use an electronic data interface file? If an EDI file is used, what type of support and testing will the carrier provide? Will there be notifications of missing files and comprehensive activity reports after the loads? Who will build and test the EDI file? These costs can soar into the thousands of dollars, yet these questions are usually forgotten during finalist presentations.
6. Pharmacy. Ask for a transparent pharmacy model. This allows the pharmacy benefit manager to pass full rebates to you, in exchange for a higher administrative fee. If the transparent model isn't feasible, then definitely negotiate for the rebates and get it all in writing.
7. Network. Have you adequately reviewed the provider networks against your claims? Are large hospital systems excluded in your coverage areas? Nothing breaks the bank more than out-of-network ER visits billed at rack rate.
8. Capitation. Ask in advance what types of capitation claim programs exist. These are similar to membership agreements and can result in full claims replacement. Depending on utilization, this can save a ton, but for some plans it can cost more. Ask for a full analysis and a claims comparison if you can get it.
9. Disease, case management and nurse access. Whether it's your carrier or a carve-out provider, be sure to not only review fees, but also the type of guarantees and reporting offered. Explore how the claimants will be engaged in the program and what type of data they need for outreach - some carriers don't even load updated phone numbers.
10. Transplant networks. Most carriers use centers of excellence for transplants. These not only save the plan, but the member, too. The cost savings will astound you.
11. Subrogation and shared savings. Who are the third-party vendors? How will claims be referred for recovery? Are there dollar thresholds or minimums before they will pursue a claim? How often will they sweep claims for late termination data submission? Most providers don't offer detailed reporting unless you ask.
12. Explanation of benefits delivery. This is a pet peeve of mine. How can I help my members be good consumers if the carrier doesn't mail EOBs every time a claim is processed? Online access is convenient, but an EOB in the mail packs a punch.
13. Wellness. Help with wellness programs should be standard by now. If your carrier proposes a projected savings for a buy-in for their programs, ask for an offset of funds to be used towards your wellness program.
14. Monthly invoices and claims funding. How will the administrative fees be billed? Will you be allowed to pay your bills in arrears to capture your workforce changes? What fees will funnel through the claims account versus the monthly statements? Will the carrier require you to use its banking arrangement for claims funding? If so, are there fees and/or minimum deposits?
15. Stop-loss. Try to get a mirror clause to protect your plan from any excluded claims, especially for any carve-out arrangements. Review the contract with your legal team - you never know what is hiding in the lingo until a large or unusual claim hits the bank. Surprise exclusions in your stop-loss policy are like ants at a picnic - they are never welcome.
16. Reporting fees. If you request detailed reporting, the price tag can be an unwelcome surprise. It irks me to ask for data only to discover the fulfillment comes with a high price tag. Find out the average costs in advance if possible.
Karrie Andes, SPHR, CBP, is the senior benefits manager for PGi. She can be reached at
