Navigation Links
Leader in Health Plan Cost Containment Cites Three Economy-Driven Reasons Why Self-Insured Health Plans Should Brace for Claim Increases and Fund Reserves Accordingly
Date:3/18/2009

KING OF PRUSSIA, Pa., March 18 /PRNewswire/ -- Healthcare Data Management, Inc. (HDM), a leading, independent provider of health plan analytics for public corporations, Taft-Hartley plans and government agencies, sees storm clouds ahead for self-insured plans. "If CFOs are not taking today's economy into account in anticipating medical expenses and reserves, employers can be placed in the desperate position of unexpectedly having to come up with millions of dollars in cash," explained David McSweeney, COO of the King of Prussia, Pennsylvania-based HDM.

The reserve is the amount accrued by a self-insured employer in anticipation of paying claims.

McSweeney, a veteran of many years of C-level leadership in the health insurance industry, working with HDM's nationally-known consulting actuary, Barbara Niehus, F.S.A., M.A.A.A., have identified three factors brought on by the nation's economic crisis that are likely to put upward pressure on claim costs.

"The first factor is the increasing financial pressure being placed on healthcare providers," Niehus explained. "Payors will see more uncollectable debts. Hospitals and other institutions have seen their endowments shrink. All of this creates pressure to bill more to insurance plans, ultimately resulting in higher claim payments than anticipated," Niehus continued.

Niehus, an actuary with over 30 years of experience in group benefits and insurance, emphasized that now, more than ever, plan sponsors need to be diligent about getting the full value of administrator discounts and protecting against unnecessary charges and medical coding errors such as up coding and unbundling.

"The second factor is that employees who are stressed financially and in fear of losing their jobs can have more medical issues," McSweeney explained. "Moreover, employees who think they're going to lose their jobs tend to focus on medical needs for themselves and their dependents that might otherwise be postponed or ignored," he added.

"The third reason why claim costs for thousands of self-insured employers might be unexpectedly high is a COBRA provision in the new Federal Stimulus," Niehus said. "As part of the Stimulus, the Federal Government will provide a temporary 65% subsidy for COBRA continuation premiums for up to nine months for workers (and their families) who fall within certain income thresholds and who have been or will be involuntarily terminated on or after September 1, 2008 and before January 1, 2010. COBRA premiums are permitted to be set at 102% of plan costs and can be changed once a year," she added.

Niehus went on to explain that it is possible that average costs for COBRA participants can exceed the plan average, particularly if participants who elect COBRA coverage have significant medical concerns. In that event, the self-insured plan may have to subsidize COBRA members, resulting in increased costs.

Niehus urges plan sponsors to get sound actuarial advice in setting COBRA rates, and to consider all factors affecting average costs, including those listed above.

Putting the need to monitor costs in perspective, McSweeney offered the illustration of a company with 2,000 covered people, a15 percent increase in claim expense in 2009 and an underfunded reserve. "The additional expense could reach into in the millions of dollars," he explained.

"Today, the only 100 percent effective way to set or adjust claim budgets and reserve requirements is to analyze claims from a financial versus clinical perspective on a rolling, quarter-to-quarter basis, so you can catch a problem in its early stages," McSweeney concluded.

www.hdminc.com


'/>"/>
SOURCE Healthcare Data Management, Inc.
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Des Moines-Area Optometrists Partner With Sens. Harkin and Grassley; U.S. House Leaders in Improving Infant Eye and Vision Care
2. MorseLife Launches Learning Institute to Teach Best Practices in Leadership, Healthcare and Kosher Culinary
3. Leader in Ear Care Health Category Expands Product Line
4. No Bailout Needed: Long Term Care Insurance Leader Declares Dividend, Plans Strong 2009 Growth
5. Access MediQuip Launches New Brand to Reflect Companys Leadership and Innovation in Healthcare
6. Faith Leaders Call on Iowa Members of Congress to Support Legislation to Protect Kids from Tobacco
7. Englewood Hospital Marks 15 Years of Leadership in Improving Patient Outcomes Through Bloodless Medicine and Surgery
8. Global Leader in Information Technology Services and Business Solutions Signs Long-Term Agreement with PureWellness
9. University of Maryland Business School Continues Executive Education Leadership With Maryland State Medical Society Partnership
10. BancTec Provides Thought Leadership at 7th Annual Medical Banking Institute
11. HEROES Grants, Education Guide Support Youth Leaders Addressing Childhood Obesity Epidemic
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:2/8/2016)... ... February 08, 2016 , ... If you are feeling that ... you are not alone. According to the Center for Disease Control and Prevention (CDC), ... 2 diabetes and certain types of cancer, some of the leading causes of preventable ...
(Date:2/8/2016)... Francisco, CA (PRWEB) , ... February 08, 2016 , ... ... raise $792,000 to help combat pancreatic cancer. , Gary D. Radine, who recently retired ... also was the American Cancer Society’s 2015 CEO of the Year , helped ...
(Date:2/8/2016)... ... , ... Discover the Rocky Mountain region’s longest running and impressive garden and ... also get to see the most incredible gardens and home improvement experts that attend ... Colorado Convention Center - 700 14th St. Denver CO, is an exciting event that ...
(Date:2/8/2016)... ... February 08, 2016 , ... Guruji Mahendra Kumar Trivedi is ... 11th, 2016 in honor of his birthday on February 10th. During this time, ... Trivedi is known by over 250,000 people from over 40 different countries as an ...
(Date:2/7/2016)... ... February 07, 2016 , ... HealthSmart Holdings, Inc. announced today ... the tools and information to lower the costs, and increase the impact of ... providing employee healthcare benefits by as much as 22%:, + Price and ...
Breaking Medicine News(10 mins):
(Date:2/8/2016)... Feb.8, 2016 Alzheimer Diagnostic Tests - ... Medical Devices sector report , "Alzheimer Diagnostic ... an overview of Alzheimer Diagnostic Tests currently in ... on the pipeline products with comparative analysis of ... report reviews major players involved in the pipeline ...
(Date:2/8/2016)... 2016 Cardiovascular Surgery Devices - Medical ... Medical Devices sector report, "Cardiovascular Surgery Devices - ... of Cardiovascular Surgery Devices currently in pipeline stage. ... The report provides comprehensive information on the pipeline ... various stages of development. The report reviews major ...
(Date:2/8/2016)... NEW YORK , Feb. 8, 2016 /PRNewswire/ ... market, today announces its first male sexual enhancement ... enhancement, EnduramenT combines proven ethnobotanicals with a patented ... of nitric oxide, the chemical compound responsible for ... Forgoing the ...
Breaking Medicine Technology: