31. Alternative Reimbursement Strategies
UNDERWRITING
& ANALYTICS
CASE STUDY
CLIENT
BACKGROUND
A 675 employee ESOP
headquartered in Montana with
46 branch offices in Washington,
Nevada, Idaho, Utah, Wyoming,
South Dakota, North Dakota,
Colorado, Montana and
Alberta, Canada.
KEY CHALLENGES
The Company was self-insured
and experiencing double digit
trend year over year. Continual
cost shifting to employees was
no longer a viable strategy. As
an ESOP, every dollar spent on
healthcare is a dollar not spent
on contribution to employee
equity and wages.
A death spiral was beginning as
healthy employees were
dropping off of the plan due to
its lack of affordability.
USI SOLUTIONS OFFERED
QUANTIFIABLE BENEFIT TO THE COMPANY
▪ Implementation of the USI designed platform solution resulted in a fixed cost
reduction of $735,000 in year one beginning January 1, 2018
▪ Claim cost is projected to reduce an additional 15% from the current RBR claim
levels
▪ Over 3,500 direct contracts with providers have been established to
accommodate access to quality providers eliminating the potential of balance
billing
▪ Four direct contracts have been established with key health systems using the RBR
methodology as the basis of negotiations.
▪ Case rate and bundled payment arrangements have been established to
accommodate elective surgeries throughout the intermountain west.
▪ USI took over the consulting responsibilities from another broker due to their overall
lack of competence in managing the complexities of the RBR environment and a
lack of operational performance by the RBR services providers that was causing
extreme member disruption.
▪ USI Operational Risk Consulting obtained client data from the TPA and began to
study the fiscal and operational challenges being experienced.
▪ Upon identification of key issues, USI Operational Risk Consulting created a “second
generation” RBR solution that is designed to reduce or eliminate member disruption
while maintaining the fiscal integrity of the health plan.
▪ Plan Fiduciary exposure was also reduced by a complete re-write of all plan
documents and administrative service agreements that harmonize to the stop loss
contract.
32. Alternative Reimbursement Strategies
UNDERWRITING
& ANALYTICS
CASE STUDY
CLIENT
BACKGROUND
A 675 ESOP headquartered in
Great Falls, Montana with 46
branch offices in Washington,
Nevada, Idaho, Utah, Wyoming,
South Dakota, North Dakota,
Colorado, Montana and
Alberta, Canada.
KEY CHALLENGES
The Company was self-insured
and experiencing double digit
trend year over year. Continual
cost shifting to employees was
no longer a viable strategy. As
an ESOP, every dollar spent on
healthcare is a dollar not spent
on contribution to employee
equity and wages.
A death spiral was beginning as
healthy employees were
dropping off of the plan due to
its lack of affordability.
Illustration of RBR Claim Cost Impact – Per Employee Per Month Trend
Medical Claim Cost reduction of 46.1%
Update: Overall
spending
dropped from
$8M to <$4M
34. Alternative Reimbursement Strategies
UNDERWRITING
& ANALYTICS
CASE STUDY
CLIENT
BACKGROUND
A 675 ESOP headquartered in
Great Falls, Montana with 46
branch offices in Washington,
Nevada, Idaho, Utah, Wyoming,
South Dakota, North Dakota,
Colorado, Montana and
Alberta, Canada.
KEY CHALLENGES
The PBM program was being
managed by a PBM that was
allowed to utilize Average
Wholesale Pricing for generic
drugs. USI Pharmacy Consulting
re-engineered the PBM contract
terms and pricing to a unit cost
basis effective January 1, 2016
• Revised PBM contract
reduced the overall cost to
the plan in excess of $200,000
• Generic Utilization is 87.8%
• Specialty utilization continues
to drive overall cost
Illustration of Rx Claim Cost Impact – Per Employee Per Month Trend
Implementation of Unit Cost Pricing Structure
35. Alternative Reimbursement Strategies
UNDERWRITING
& ANALYTICS
CASE STUDY
CLIENT
BACKGROUND
A 675 ESOP headquartered in
Great Falls, Montana with 46
branch offices in Washington,
Nevada, Idaho, Utah, Wyoming,
South Dakota, North Dakota,
Colorado, Montana and
Alberta, Canada.
KEY CHALLENGES
The PBM program was being
managed by a PBM that was
allowed to utilize Average
Wholesale Pricing for generic
drugs. USI Pharmacy Consulting
re-engineered the PBM contract
terms and pricing to a unit cost
basis effective January 1, 2016
• Revised PBM contract
reduced the overall cost to
the plan in excess of $200,000
• Generic Utilization is 87.8%
• Specialty utilization continues
to drive overall cost
Illustration of Rx Claim Cost Impact – Per Employee Per Month Trend
Implementation of Unit Cost Pricing Structure