Speaker 1: 0:00

What is post-claim adjudication? Why does it matter and how much savings can it generate? We'll find out on this episode of Shift Shapers.

Speaker 2: 0:12

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry shifts. And now here's your host, david Saltzman.

Speaker 1: 0:34

On this episode of Shift Shapers. We're speaking with Jordan Hirsch. Jordan is the Vice President of Enterprise Solutions at Valence. Now we've talked a lot especially in this era of increased interest in self-funded plans about deconstructing plans and all of the little bits and pieces that happen. That used to just be kind of packaged up in one nice package for which you paid way too much money and got oftentimes arguably way too little. But there's a whole world of stuff that most advisors don't see, that goes on behind all of that, and as a former TPA I saw some of how that sausage was made. And that's where Jordan's company works. They kind of are trying to figure out ways to do things after claims hit and some stuff before claims hit, but it's mostly behind the scenes stuff. It's not stuff that might be obvious to a client. So with that long-winded introduction, welcome Jordan.

Speaker 3: 1:26

Thank you, david, I appreciate it. Thanks for having me.

Speaker 1: 1:29

My pleasure. So how much work actually does go on post-claim? I mean? A lot of people think, well, I go to the doctor, they circle a little code on their pad, the insurance company gets the bill, I pay my portion, they pay their portion. Life is good.

Speaker 3: 1:42

Right, yeah, I mean, and really there's a lot. There's a lot that happens behind the scenes, like you mentioned in introduction. Everything needs to go on with really understanding, you know, the best network to even choose from. You know, I think from an advisor perspective as well, about how to make the best decision for that, for that self funded plan. So you know there's a lot of work that goes into really before the TPA or the administrator needs to, you know, receive that claim to adjudicate and pay it. And that's really where our organization, valence, comes in and really provides a lot of value.

Speaker 1: 2:13

So a lot of people have talked about reference-based pricing. I mean, I think they would fit that into this bucket, and the questions that I always get is A is reference-based pricing a sledgehammer when you need a scalpel? And B is it sustainable? Is it a sustainable model? What's your position on those things?

Speaker 3: 2:29

Yeah, I think in the right regions, reference-based pricing can be a sustainable model and the right fit for a self-funded plant. The route that we've taken we've seen a lot of adoption in the self-funding community has been, instead of really taking that reference-based pricing approach and going full bore with it let's understand if we can achieve strong and advantageous reimbursement amounts at a percent of Medicare or at a reference-based price, but that's agreed to with specific health systems and really build those client-centric networks that are agreed upon and really members aren't putting any type of harms away when it comes to the payment and reimbursement.

Speaker 1: 3:10

You know it's funny. If you talk to proponents of RBP they say well, that hardly ever happens. Patients almost never get calls for balanced bills, but I tend to hear about it more often than not. Do you think that they're minimizing that problem or that it's still a real problem?

Speaker 3: 3:24

Again, not to be political, but I do think it's regional in nature. I think Northern California, let's say Monterey County, the amount of provider appeals based on a reference-based rate compared to, let's say, Houston, Texas, I do think there is a significant delta between that. But from what I've seen as well, David, I would agree with you that what I've seen in practice usually is there's more volume of appeals and balance bills than some of the data suggests coming out from some vendors.

Speaker 1: 3:54

That's interesting. So another technique that a lot of people play around with is either narrow networks or high performance networks. Some people conflate the two of those. I think they're different things. Can you give us some background on those two things? Yeah, I think from a of those. I think they're different things. Can you give us some background on those two things?

Speaker 3: 4:06

Yeah, I think you know from a high performance, I think narrow network, the connotation for me is more again, just a narrow or concise panel of providers that you know, without really looking at quality. I think quality is kind of the big X factor there, and when we look at high performance networks it's really combining both cost in the reimbursement piece and also the quality aspect as well. And so how can we route, steer and incentivize, using the plan in account and making sure that when people do stay in network or go to the panel of those high-performance network partners, they're getting top-tier coverage and top-tier care?

Speaker 1: 4:54

How often are people wowed by the fact, or amazed by the fact, that you and I have known, and a lot of other practitioners know, that there's this inverse relationship in medical care between cost and quality? And you know you sell them quality and then they all of a sudden realize, holy cow, it's actually cheaper.

Speaker 3: 5:10

Yeah, yeah, all the time and I think probably a lot you know you and maybe a lot of listeners you know saw the RAND study that came out a week or two ago. It also came, it had that was one of part of their executive summary. It said that there is really no correlation between cost and quality. And I think there's. You know, from the data we see and how we, you know, build and empower some of these high performance networks, there are some what we would consider low quality facilities with some great and high performing physicians and providers there and vice versa. There's, you know, some really high, high characteristic facilities out there with some very low, low performing providers there too. So you're going to get a mix regardless of where you go seek care. But again, from what we've seen, I think from what other sources have seen, there's really no correlation between cost and quality out there.

Speaker 1: 5:58

Are you seeing any let up in the medical groups trying to stop the creation of specialty hospitals? I think if we had had specialty hospitals and generalist hospitals a long time ago, this notion of cost and quality might have been settled. But I know that a lot of the big hospitals, especially the chains, don't really want the specialty hospitals because they feel that they're taking away their one and dones.

Speaker 3: 6:22

Agreed, agreed. I mean, we're seeing that, we see, you know, we partner, I guess, transparently with some of the larger health systems out there as well. But I'll agree with you, david, I think for them having kind of your more general acute care facilities out there in the market, that it makes things a little bit more ambiguous, and if we had more specialty facilities we would be able to probably derive, you know, at least have a better shot at saying cost and quality. There's a, there's a stronger correlation.

Speaker 1: 6:53

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Speaker 1: 7:29

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Speaker 3: 8:34

Yeah, no good question.

Speaker 3: 8:36

So yeah, I mean really depending on the primary network, the primary PPO network, regardless of it's a broad network or a network in stice nature, there's going to be out of network medical claims and that can cost plans, self-funded plans, a lot of money if it's not managed correctly and there's not the right cost containment pieces in place.

Speaker 3: 8:55

And so that's something we've been doing for a while and typically we see, maybe, depending on your standard plan, maybe 10 to 15% of medical claims do fall in that out-of-network bucket. So really what the flow would be is to really understand the claims would flow into an organization and they'd be deemed out-of-net network and then it would be really using bill review tactics, even some supplemental medical networks that can achieve a discount, or through negotiation to be able to achieve a discount on those medical claims and that's not only benefiting the plan but it's also benefiting the member as well when it comes to having a better economic outcome to those claims. So you know, not either paying some plans we've seen pay out of network claims at full bill charges Some take like a usual customer approach. Having a much more direct and aggressive approach can really be a game changer for self-funded plans and materially impacted bottom line.

Speaker 1: 9:51

Well for advisors to understand, though, what's the incentive for the provider or the facility in actually granting a lower rate?

Speaker 3: 9:58

Yeah, that's a good question. I mean, a lot of the times they're looking for a cell phone and plan to actually utilize something that's in place, so that could be using a supplemental network discount. They're looking to actually being paid and many of the facilities that we deal with or providers that are at a network, when they're at a network, they know that a large portion of the payment may fall back on the member, so a large member responsibility. Or they're curious about when they'll actually get paid by the self-funded plan via their administrator, so being able to achieve a discount that can also assure them that they're going to be paid and have a little bit more clarity on how the member responsibility can be split up. Oftentimes we see self-funded plans offering some type of incentive in terms of either the timely payment or the breakdown on payment from the plan to the member, based on if they will negotiate and accept a discount.

Speaker 1: 10:52

That's interesting. So as you start looking or a TPA with your help you start looking at these. This bushel of out of network claims is 10 to 15%. How do you select those claims to go after? Is it solely dollar value based or are there other considerations like condition or other?

Speaker 3: 11:11

selectors. Yeah, I mean you know, I think you know, for a self-funded plan, typically they look at the dollar base. There's some other factors that we take in, but I think from a peer to be able to prioritize, be able to achieve the best type of discount. The plan obviously has the most liability for those larger dollar claims. So those kind of come to the front of the queue to be able to negotiate again, use clinicians to be able to evaluate how the medical claim was billed, look at supplemental notes about exactly what happened with that episode of care. We do also, and others out there, look at what exactly occurred. So CPT codes the other type of diagnosis codes to be able to prioritize that. But transparently from a plan perspective, they want to do the best they can to minimize their liability. So typically we prioritize that, typically by bill charges.

Speaker 1: 12:03

And does the plan set a dollar threshold?

Speaker 3: 12:06

Typically no, I mean typically when plans come to us and other folks out in the market, they look to see hey, if you can't do anything to an added network medical claim, we're probably going to again use your own customer amount or maybe even pay the claim at full bill charges. So really the expectation for many of our clients are saying hey, how many a big KPI or big metric they look at is saying how many claims can you achieve a discount on? You send you 100 claims. Can you achieve 95% of those claims we sent to you you achieved a discount that were on the out-of-network claim. So really, at the end of the day, the expectation, what they're looking for, is us to again prioritize and spend most of the time on those larger dollar claims. But if they send us a $250 dermatologist bill, the hope is that we can at least achieve a discount on that and save the plan some money.

Speaker 1: 13:00

So from what you said, I would assume, then, that plans are looking at this as a long-term proposition rather than a holy cow. We just got a $400,000 facility bill.

Speaker 3: 13:04

Absolutely. I mean, I think again it's you know, we want to do the best we can to steer out incentivized members to stay in network. But again, if they do go out of network and it will happen regardless of the plan, regardless of where the location is the plan wants to be able to achieve a discount on those medical claims and I think that's again a long-term view and a really really important cost containment strategy to make sure that the plan can be sustainable in the long term.

Speaker 1: 13:32

Does any of this repricing ever? I mean, it must get messaged to the member. And how do you? How do you message that? And do they just find it totally confusing?

Speaker 3: 13:43

It is confusing. I mean I think you know everything we probably and I'm sure in past interviews and conversations a lot of this is confusing in terms of how it's communicated to the member. You know that that's something we work typically with the administrator on is passing the right type of EOB messages across the administrator so members when they get the actual EOB they're able to understand that the claim was out of network but also that Valens or whatever organization is achieving an out-of-network discount on the claim applied, you know, a 50% off-bill charges or 175% of Medicare type of reimbursement structure to the medical claim. But typically, again, what self-funded plans you know usually do, you know do apply much leaner benefits if they do stray from the primary network.

Speaker 1: 14:31

So do you advise employers to do any communication of this fact to members up front, or would doing that lead them to be more lax about whether they stay in or out of network?

Speaker 3: 14:41

So we do advise that they do communicate by saying if you do go out of network one, you'll have benefits and two, we do work with an organization to be able to achieve a discount or work on your behalf to get an ASL on out-of-network claim. But I think again, between using plan design, it's a very, very strong incentivizer to ensure that members become healthcare consumers and do stay in network. So it is communicated as a benefit to the member. But again, during open enrollment meetings, during ongoing communication, education sessions, it's strongly. There's a big answer to the why you want to stay in the primary network or in that high performance network.

Speaker 1: 15:23

I mean, have you seen a significant effort at transparency? I mean, you know we all hear the phrase that medical care is one of the few things in life that you always get before you know what the price is. Because you know, especially if somebody gets a dread diagnosis they go where the doctor tells them to go. They don't really think about whether it's in network or out of network. Oftentimes it's a dire situation. Are there any efforts of transparency that are helping that? Either transparency on cost or on quality.

Speaker 3: 15:50

Yeah, I mean we, we try both. I mean with with our high performance networks, when I'm seeing it more and more in the market, you know you, you see tools cast light, house out there, um, and many other transparency tools. But what we try to especially again with with our high performance networks is allow you know, through some of our program when it's NaviCare, it's more kind of care concierge allow our members to interact directly with those folks and understand what type of reimbursement, if I'm going to go in and I'm going to have a colonoscopy in Northern California, what are my you know, in-network options and then also based on, you know, derivative of Medicare and those types of reimbursement models, what should I expect for being the total allowable and how that would affect me as a member. So I think from a cost perspective it's absolutely crucial and something that we're going to see more and more of as an industry, from a transparency perspective and then also on quality, I mean same thing again, like I spoke about earlier.

Speaker 3: 16:49

You know some very, very high quality facilities and surgery centers do have some low performing physicians. So we try to dive a little bit deeper to through some of the tools that we have about saying not only are we doing going to want to route you to a high quality facility, but we also want to ensure that surgeon is a high performing surgeon on there. So we dive a little bit deeper than just routing someone to a facility that gets well marks. We want to ensure that their physician or their surgeon also is very well performing.

Speaker 1: 17:18

Are you seeing any plans mandate interaction with a care coordinator for certain conditions?

Speaker 3: 17:23

I guess out of our book of business. I haven't seen any plans mandate that. I've seen incentives though. I've seen plans incentivize through additional contribution, through it could be just even external gift cards if there's interaction with that care coordinator or with that care navigator. So what again? It can really ensure that not only are they going to an in-network provider and help coordinate that visit, but also it's ensuring that they're going to and getting quality care from a high-performance surgeon. So I haven't seen any mandate, but I have seen a decent amount of plans actually provide incentives to be able to utilize this benefit that they offer of a concierge or a navigator.

Speaker 1: 18:08

And do you have any idea what kind of engagement that gets?

Speaker 3: 18:12

Not off the top of my head, you know, just a swag or just off the you know, I guess would be about maybe 50-50 of members for either in or outpatient type of care engaging with a navigator, but I haven't actually run those numbers.

Speaker 1: 18:26

In terms of peer engagement, so we've got just about a minute or two left, and I wonder if we were to wrap all of this up. If a plan were to employ all of these methodologies, what might their average savings be in a plan year and a treaty year?

Speaker 3: 18:42

Yeah, I mean, from what we've seen, especially also when you combine the high performance network with the added network type of containment and also you put a strong care management solution on the front end. We've seen a lot of stop-loss cares, also rate and evaluate networks that are high-performance in scope and be able to pass that savings on the self-funded plan. So what we're seeing is, you know, really 15 to sometimes 25% yield when it comes to better overall healthcare spend. So, you know, playing with a medical spend of a million dollars, implementing these types of tools and the right education, training to the members, we'll see, you know, what could reduce their overall medical spend about 25%.

Speaker 1: 19:25

Well, that's a tidy sum and it's something that everybody ought to think about. Medical spend about 25% Well, that's a tidy sum and it's something that everybody ought to think about, especially those advisors who are working with clients, who are in this arena. Great time to end our interview. Jordan Hirsch, vice President of Enterprise Solutions at Valens, jordan, thank you so much for sharing your expertise with our audience.

Speaker 3: 19:39

Yeah, thanks, David. Thanks for having me.

Speaker 2: 19:42

Shout out to the crew at Grand River Agency for their awesome post-production. This Shift Shapers podcast is copyrighted content and may not be reproduced in whole or in part without the express written permission of Shift Shapers Solutions LLC. Copyright 2024.