Sample Company Report Discussion Points

1. Sample Company Report Discussion Points

2. This page identifies the information of the client’s current raw medical claims and explains how it is analyzed through the Decision Master claims analysis program. This program will show the high/ low utilization areas and then compared with normative benchmarks from the Kaiser Family Foundation HRET and Medstat. This page also states the time period, number of employees, single and family contracts and the total enrolled. Total enrolled is calculated as follows: Single + ((Single +1) x 2 ))+ (( Single + 2)*3)) + (Family *3.2). This calculation is used only when broker does not provide exact counts on Group Submission Form, as the Total Enrolled number can be over-ridden. The accuracy of this Total Enrolled is important because it gets used to calculate all the “per 1000” numbers for the normative comparisons.

3. This page illustrates the overall financial impact of the total health plan costs and compares it with the normative data provided by Kaiser Family Foundation/HRET based on size, industry and region selected in the GSF. KFF is used for the per employee per year norm, as Medstat doesn’t include any fixed cost or fees, purely claims data. This is the most common norm that employers often see in trade journals regarding plan costs. The Health Plan Cost Norm is being compared to whichever categories are selected from the following: -Region (4 US Census Regions: Northeast/Midwest/South and West) -Industry (Industrials/High Tech/Wholesale--Retail/Financials/Health Care/-Non Profit/Government) -Size (2-199 or 200+) The norm is a weighted average, based upon the single/family contracts entered on the GSF and shown on page 2.

4. Health Plan Costs are determined either with the client’s PAID premium (if fully insured) or Net PAID claims (Less Specific) plus administrative costs (if self funded). If self funded, the individual PAID claims above and beyond the specific stop loss deductible are not included in the plan cost listed here. [NOTE: SOME CARRIERS ONLY PROVIDE CLAIM CHARGES OR PAID, BUT NOT BOTH.] The monthly dollar totals can be viewed in the drill down cube under the Claims History cube. The Prescription Drug Cost line comes from the RX claims line in the GSF. If the Rx data is included in the medical claims file, the broker needs to get the total amount and include it in the GSF. It will be scrubbed out the the data file by the data analyst at Zywave. Any RX/PBM type costs that get entered on the group submission form under the RX plan costs will actually roll into the Administrative Costs/Premium line. Any TPA “handling” type fees to go here. NOTE: Charges vs. Paid should track pretty closely month by month. If you see a large discrepancy you may want to use drill down to determine if there is a large claim involved, other coverage or perhaps payment issue.

5. Medical claims Cost are just the claims data from the carrier; the premium or fixed costs displayed in the previous 2 exhibits are not included. This is also on a per member basis, whereas the previous 2 exhibits are on a per employee basis. This page and all norms going forward use the Medstat data. If Rx dollars are entered into the Annual Prescription Drug Cost line in the GSF, this actual and norm number will include Rx. If nothing is entered on this line in the GSF, it will be medical only for the actual and norm, and footnoted as such. If this norm is the reverse of the KFF norms on the previous pages, the admin/fixed costs and/or Rx could be the driver. Also if the group is fully insured, there loss ratio could be very low. This exhibit is age/gender adjusted if the census is provided.

6. This exhibit show the ee/spouse/dependent cost relationship to illustrate how the employer will monitor changes or shifts costs to the appropriate member. These numbers represent the actual paid claims for employees, spouses and dependents claimants and not the actual total enrolled members. Discussion Point: You should use this information over time to evaluate if dependent claims exceed the norm. This will help determine a need for further cost shifting discussions. (Suggest utilizing a Spousal Carveout plan design piece out of Broker Briefcase). This exhibit is NOT age/gender adjusted if the census is provided.

7. This exhibit illustrates where the claims occurred on an inpatient or an outpatient basis. • Discussion Point: • In many cases, outpatient services tend to be less costly than inpatient. However, in certain parts of the country, some procedures may be less costly when performed inpatient. This permits the client to evaluate both where the patient is being directed, how much it cost s in that environment and where plan changes are required to “steer” patients to the appropriate environment for certain procedures (inpatient or outpatient). • The Inpatient and Outpatient Claims are annualized paid dollars based on the carrier codes. They may not match figures used elsewhere in the report because of this. • This exhibit is NOT age/gender adjusted if the census is provided.

8. This page portrays an overall picture of the location of healthcare claims occurred compared to the norm using the standard Centers for Medicare and Medicaid Services Place of Service coding. Discussion Points: • Drill down can be incorporated to help “dissect” claimant information. By selecting the Place of Service Summary from the Claims History Cube, you can discuss whether the employee or dependent is incurring the claim, and formulate proper education decisions directed either towards the employee or the dependent. • The Other category includes codes that don’t fall into other five main places of service categories such as ambulance, labs/x-rays and home health etc, or improper coding was associated with the claim and thus will typically be higher than the rest. • This chart is driven only by the carrier’s place of service codes. If no ER appears, either they do not have an emergency room place of service code or they are not using it. If there are no claims showing up on the ER category, they are usually included in the Outpatient Hospital category. • Top 6 categories appear on this graph. Focus on the top areas that vary from the norm and use Drill Down to find out what types of services are being rendered. The Office POS includes things like chiro, OPMH, PT or surgical procedures and will not match the Office Visit pages later in the report, as those are a subset of this POS exhibit. This exhibit is age/gender adjusted if a census is provided. It is not region, industry or plan type specific.

9. This page identifies the 10 high cost claimants, which are identified by a unique identifier. Primary diagnosis will be listed as the highest cost diagnosis and all other diagnosis are bundled in. You can view the other diagnosis for each claimant in the High Cost Claimant drill down cube. Discussion Points: The drill down component can be used to show details of the high cost claimants. • Should case management be addressed? • Is Stop Loss set an accurate level? You can check the specific level noted on the group submission form. You can see which claimants may have hit the specific stop loss by comparing the Total paid to the Liability at the bottom.

10. Paid claim distribution by claimant should be used with the following page. You can basically determine the “80/20” or “70/30” rule for the group by looking at the Actual Cumulative column for the number of claimants on this page, compared to the dollars paid for the same category on the next page. It helps identify the percentage of claimants that are driving the majority of cost to the plan. It can also be a starting point to discuss a consumer driven type plan, like an HRA or HSA plan design.

11. Paid claims Distribution by dollars See previous page description.

12. The Inpatient Analysis provides cost and utilization information for the plan and the comparison to norms. This includes both facility and professional claims provided at the Place of Service = inpatient. Admits/1000 – can be used to check over-utilization of the IP benefit. May want to check with the UM vendor if this is above the norm, and also use drill down to see what types of admission they are. Ave. Paid/admit – this may relate to the effectiveness of your health plan provider discounts or that the procedures are more of a high cost nature. Ave LOS – May want to work with the UM vendor on being more aggressive, or if the types of admissions tend to be more severe. The Inpatient Hospital drill down cube can be used to assess whether utilization or medical cost is driving your overall healthcare costs. If utilization is high, you might review your utilization review vendor. If average charges are high, you might review whether you are getting the proper “steerage” to network providers, or evaluate if the network discounts are good. The numbers on the bar graph and actual/norm admissions don’t match because the graph numbers are based on a “per 1000” basis. The definition of a per 1000 basis is the standard measurement of utilizing data and is the # of actual or norm admissions/charges divided by the total number of claimants times 1000. The actual numbers will be annualized if <12 months of data is provided. Review the IP copays in Alternative Modeling here. This exhibit is age/gender adjusted if census it provided.

13. Average days/1000 - Work with the UM vendor on the frequency of admit or the type of admit. Aver paid/day – Could be a result of poor network contracts or the type of services (more high cost) that the plan encountered. Use the IP drill down to get to the details and provide answers. This exhibit is age/gender adjusted if census is provided.

14. This page shows the details of the number of admits, total paid and the percent of total paid for the Top 10 providers related to Inpatient Hospital. Duplicates may appear if paid as both in-network and out of network, but they will be listed separately. Discussion Points: • This will allow you to show the effectiveness of how the current plan directs people in-network. If a client has a PPO network, but the participation in the network is low, client might want to evaluate their hospital networks or plan design. • Additionally, the client may need to do more employee communication to help steer clients to the PPO network providers, by analyzing the network dimension in drill down. Use BB to provide EE education materials. • Payment could also reflect non-PPO due to utilization management determinations. • Any provider with “0” admits is a professional provider. The IP norms include both professional and facility claims, so we want to capture the paid dollars on this exhibit. We’ve distinguished between professional and facility by attaching the admit only to the facility claims. “Others” are all the other providers below the Top 10. See drill down for the complete list. NOTE: This is a great Drill Down feature to graph.

15. This exhibit shows the top 10 surgical procedures by claims and total paid dollars as well as average paid procedure. Discussion Points: • The Inpatient Surgery drill down cube can be utilized to help assess which providers are being utilized. • Use of wellness materials from Broker Briefcase is appropriate here – pre-natal care, cancer materials, smoking cessation, etc. This exhibit include the professional (usually surgeon) fee only.

16. Outpatient Surgeries/1000 – if this is high you can use the drill down cube to see who is using the services and which providers they are using. An OP surgery copay may be appropriate – you can model this in the Alternative Modeling section. If the Average Paid/procedure is above the norm, you it may be due to the network discounts or the types of services being utilized. Drill down on the Outpatient surgery cube to see the details. The amount paid is for the surgeon’s fees only; it doesn’t include the facility or anesthesiologist.

17. Outpatient Surgery by procedure give you an overview of the top 10 procedures by the paid amount. This can assist in plan design options and also which providers are being utilized.

18. ER Visits per 1000 – to determine the cause of visits over the norm, use the ER cube in drill down to view the ICD9 name, relationship and network indicators. An ER copay may be in order, as well as an educational campaign to promote urgent care centers in the network and the cost of an ER visit versus and office visit (usually 3 times the amount).

19. This exhibit illustrates the plan’s overall office visit utilization and costs and compares it with the normative data. Discussion Points: • Utilize the advanced drill down component to assess the high/low utilization and cost areas. • Incorporate Broker Briefcase education communication pieces to help reduce the actual number of office visits. • Suggest adding a nurse-line • Suggest changing office visit copays in the Alternative Modeling component to show overall illustration of potential plan savings and employee disruption. • If the report is based on a capitated HMO, this office visit page may not be included in the report, if the payment process doesn’t capture the necessary data elements.. The range of codes include in office visit claims are 99201-99215, 99241-99245. These are the new and established patient, brief and extended visit, and office consult codes. This page will not match the Place of Service exhibit earlier in the report, as it is a subset. This page could include chiro visits, if they are billed as consults in the range of codes above, vs. a manipulation. The exhibit is age/gender adjusted if census is provided.

20. This page shows the details of the number of visits, total paid and percent of total paid for the Top 10 providers. Duplicates will also appear in this exhibit as well if the providers were paid as network and non-network. Discussion Points: • You can show how effective the current plan directs people toward in-network and to once again conduct a network evaluation of their providers and clinics. • Go to Drill down and us the pie chart to provide a high impact graph. “Others” includes all other providers below the Top 10. See drill down for a complete list of providers.

21. This page identifies the inpatient mental health utilization and costs. Discussion Points: • If either utilization or average paid is high, the client might want to consider evaluating their mental health/utilization management / EAP /programs. • Other ideas would be to incorporate Broker Briefcase EAP Plan Design and Mental Health brochures to help reduce costs and provide overall employee well being. Some example of the brochures are: Mental Health News: Depression You Are Not Alone; Anxiety and Panic Attacks, Get your Life Back; Substance Abuse and your Employee Assistance Program. • IPMH admits are usually fairly low, so there may not be a lot of data to work with, especially if the group is small. IPMH providers often use “cycle billing”. For longer admits, like 30 days, they may bill weekly to begin getting paid before the discharge date. Consequently the claims data may appear to have more frequent admits and lower average paid/admits. Just be aware of this when reviewing this page. The exhibit is age/gender adjusted if census is provided.

22. This page shows the number of visits and average paid compared with normative data. Discussion Points: • The Outpatient Mental Health drill down cube can be used to analyze the utilization and cost details of this category. • Suggest changing outpatient mental health copays and maximum number of visits to help reduce costs in the Alternative Modeling component. • Suggest installing an EAP program and utilize the broker briefcase pieces to help explain to your client. If the number for actual visits is low, an EAP program may carve out some of the visits from the medical claims. You may suppress this page in the management report by using the Advanced Report capabilities. This exhibit is age/gender adjusted if census is provided.

23. This chart illustrates the 24 major diagnostic categories and lists the total paid and percent of total paid. This information is then being sorted by the variance to the normative data to show the high / low cost medical areas. Discussion Points: • Use the Claims History to determine what factors are driving up the utilization and total charges, by filtering on highest MDC’s and then ICD9 name, etc. • This information can be very useful for determining the appropriate form of management intervention and wellness programs; prenatal services, cancer screenings etc. are in place. • The norm percentages are applied against the actual paid claims by the plan to populate the norm paid column. This exhibit is age/gender adjusted if census is provided.

24. This page illustrates certain claims that are identified as lifestyle related. Certain illnesses/accidents can be related to choices people make. Discussion Points: • Theoretically, lifestyle related claims could be eliminated through a healthier lifestyle. By reviewing this exhibit, the client can address those areas where education, training, etc. can help the participants become more health conscious and enable the plan to install design and cost management strategies. • Some people ask how breast cancer or diabetes, for example, can be lifestyle related. Part of an individual’s lifestyle is regular checkups/examinations and proper administration of regulating medications. Regular checkups would promote early detection and proper medication would regulate an existing disease, both of which would reduce claims associated with these categories. • Incorporate Broker Briefcase Live Well/Work Well brochures can be used to help with employee education. • Lifestyle behaviors contribute up to 50% of an individual's health status, followed by environment (20%), genetics (20%) and access to care (10%). Source: Institute for the Future and the Centers for Disease Control and Prevention.

25. Disease Management & Intervention Opportunities • Meant to set the stage for the DM section. • Mercer 2004 study shows that 58% of employer sponsored health plans are using Disease Management as a saving strategy. • Medicare is launching a DM study of 20,000 patients to review the effectiveness and of these programs. • These graphs on this page are not the group’s data, but a Medstat data portraying the employer cost associated with diseases above the health plan costs.

26. DM suggestions: Arthritis has a large disability component. Seek out DM opportunities.

27. Try to keep the chronic asthmatics out of the hospital. Work on patient compliance and education to control these diseases

28. Use Drill Down to locate the specific cancers that are affecting this group. Utilize wellness screenings for specific high frequency cancers, or utilized other health educational opportunities based on the outcome of the details of the high cost cancers affecting the group.

29. Utilize the mental health pages to determine how this disease state compares with their overall mental health claims. Utilize an EAP service or local providers to provide programming and materials on depression.

30. Utilize Drill Down to determine who is driving these costs. Utilize DM vendors to assist with educational materials and compliance on this disease state.

31. Use Drill Down to determine which types of heart disease categories are driving the costs. As noted in the text, the following heart diseases are included in this section: Ischemic heart disease (also called coronary artery disease), hypertension (high blood pressure), myocardial infarction (heart attack), cholesterol management and congestive heart failure

32. This is a great page to consider cross-selling opportunities with P&C. If some of these claims are being driven by worksite situations, Workers’ Comp, safety or ergonomics could all play a role.

33. This category will be important to watch. As obesity has been billed an ‘epidemic’ in the US, there is a lot of focus on this area. Some payors or plan sponsors are already excluding bariatric surgeries, which would fall into this category. However, this has a huge impact on other disease states if the coding is listed as secondary or not at all (traditionally many providers have coded these claims under another disease, so they may be under-reported). Also, Medicare as recently announced a study project of over 20,000 patients on this topic, to determine if and when Medicare would pay for certain procedures. The outcome could impact private pay insurance. Obesity for our purposes is based on the ICD9: 278.00 - A BMI of 30 or more is considered obese (body mass index) 278.01 - A BMI of 39 or more or 50-100% or 100 pounds above their ideal body weight - Morbid Obesity A BMI between 25 to 29.9 is considered overweight and not included in this category

34. This summary page discusses the favorable and/unfavorable areas of the current health plan to help with the analysis of healthcare costs. Note that even in the standard report, the following areas are listed, which allow you to go back and build those pages if they are unfavorable: maternity, chiro, PT, Radiology. A common differential between charges and paid is 40 – 50%. This varies by plan design, discount, non-covered services, subrogation and COB. Use the Total Claim Payment figure in Alternative Modeling to get a more accurate figure for estimating plan savings. Use the Total Claim Payment multiplied by the percentage differential of the alternative plan. The Total Claim Payment includes the claims paid over the specific, in a self-funded group.

35. Notes and Questions • Project assumptions • When making comparisons between Zywave’s Health Plan Analysis and a Carrier Report you will find that there will be differences in paid claims amounts and total charge amounts that can be attributed but not limited to the following exclusions in the program: • A. Over age 65 (The norms do not include claimants over 65). • B. Dental/RX Claims • C. Pended claims • D. Adjustments • E. Recoups • F. Any other exclusions (by group, location, etc.) requested by broker on group submission form • G. Specific stop loss attachment points • H. Remit cycle (Carrier & remit report not run on same day). We ask for purely paid data; carrier may limit the incurred dates within the paid time period. • What time frame is the report based on? • The report is on 12 months of data (Exhibits with norms will annualize if less than 12 months of data to compare the group to the benchmarks). In v4.0, only projects date 1/1/2002 and forward can be run as those are the norm dates available. • Is there a minimum and maximum charge for a report? • The minimum charge for a report is 100 lives or $480 if at $.40. The maximum for 2000 – 4999 is $9600. 5000+ is a special quote by the Zywave sales person. • How does the client gain access to the report on their Mywave page? • The partner must release to the individual Mywave users they want to access the report. An icon will appear on their Mywave page near their greeting. The project must be approved to release to the client. • When DMW annualizes utilization and charges for projects with less than 12 months of claims, is it based on the months entered in the GSF or the actual number of months claims were paid? • Months with paid claims.

36. Notes and Questions • Management Report • Will the customized management report automatically reset after the person logs out? • The report will not reset itself. Once it has been customized it saves that information until the report is customized again. • Can I change the Management report? Like adding or deleting certain exhibits? • Yes, if you create an Advanced report in the administration area, that will be come the standard report when it gets built by you or the client. • Can the Normative Data be changed for a specific report? • No, the norms can’t be changed. However is member census data is provided, the norms for cost/utilization using Medstat will be age/gender adjusted in many exhibits. • If the report runs over 2 calendar years, the norm year with the most number of months will be used (ex: 10/02 – 9/03 will use 2003). If it is 6 months of each year, the first year will be used. (7/02 – 6/03 will use 2002.) • What can we do if we are having problems printing the actual management report? • Check with your printer drivers to make sure your driver is updated with the latest version. You can obtain the latest driver by contacting your printer’s website. Also, try and increase the DPI to 600 on their printers (dots per inch), as we have a higher resolution on DMW. • Also, make sure their browser has DMW listed as a trusted site. Go to the browser, internet options, security and add www.dmwarehouse.com as a trusted site. • What is a CPT and ICD9 code? • Current Procedural Terminology is the code used to bill for a professional procedure. • International Classification of Diseases 9th edition – is the diagnosis code the patient is being treated for.

37. Notes and Questions • Drill Down • In Drill Down, Office Visit cube, what is an encounters? • Encounters are grouped by Date of Service, so there could be more that 1 claim generated on the same date, and it would count as 1 encounter. • Can a client include client location code in Drill Down? • Yes, if the carrier can provide it, it will names “Codelocation” as one of the categories. • Will we be charged for a sample report? • If a partner wants to re-run one of their projects as a sample they can do that without being charged. Most partners run it under the ABC Company MyWave. You must obtain the client and/or carrier’s release. Contact your Partner Consultant for details. • Will we be charged to run a Roll-up report? • You can also run a roll-up report when you are already running/paying for other divisions of a company. An example would be PPO Plan (250 ee’s) and POS Plan (150 ee’s) and then an all company of 400 employees wouldn’t be charged. You need to complete a Group Submission Form for the roll-up and let us know what to combine in the Comments tab. • Claims History Cube vs. IP Hosp cube Tip: • The Place of Service "Inpatient Hospital" in the Claims History cube is broadly defined as any claim coded with an "Inpatient" Place of Service as defined by the carrier's logic. A charge may be professional or facility and may be of any amount. • The Inpatient Hospital cube is much more strictly defined. A claim must meet the following criteria to be included in the Inpatient Hospital cube: • The claim must be defined as "Inpatient" as defined by the carrier's logic. • This refers to hospitalizations, but may also include testing or other procedures traditionally done in an inpatient setting on an outpatient basis. There are also certain types of facilities that we consider to be inpatient, such as nursing homes or skilled care facilities. • We are reporting exactly what we receive from the carrier or TPA in form of their coding so if a claim is coded as inpatient hospital that is how it is reported, even if there is no stay associated. That is one of the reasons that there is a floor associated with a claim's charge amount. • OP Hospital Cube: • The Outpatient Hospital cube does not require that a claim be coded "Outpatient Hospital," but may also include Places of Service such as "Ambulatory Surgery Center" and "Emergency Room." Our logic dictates that the claim must only be considered not Inpatient and are facility charges. If you include "Surgery Center" and "Emergency Room" in the filter on Place of Service in the claims history cube then you will see that the totals of people, claims, charges, and paid are higher than the totals in the Outpatient Hospital cube.

38. Notes and Questions • Alternative Modeling • What do I do if I receive an error message when entering in a new plan design in the alternative modeling component? • You need to make sure that they set up the current plan design. • How does the in- and out-of-network calculation work: • □ Amount paid towards In-Network are applied to In-Network and Out-of-Network.      Amounts paid towards Out-of-Network are applied to In-Network and Out-of-Network.□ Amounts paid towards In-Network are only applied to In-Network.      Amounts paid towards Out-Network are only applied to Out-of-Network. • The first option, in- and out-of-network claims total together to meet the deductible and out-of-pocket max. The second option, they need to be met independently. • Utilization Adjustment Factors - Factors are available for the following benefit categories: office visit, outpatient mental health and chiropractic from $5 to $25; emergency room visits from $25 to $150. If no factor is available, “NA” will display. This allows modeling to determine is services would have been avoided by increasing the copay amounts. The number of visits with and without the factors will be displayed at the bottom of the comparison. • Reduction in liability: This figure is calculated on charges, to ensure that the patient responsibility doesn’t get considered twice. In order to calculate a more realistic savings for the plan, multiply the percentage of reduction in liability by the Total Claim Payment on the At-A-Glance page of the report.

39. Lifestyle-Related Claims are from Hewitt & Associates recommendations. Lifestyle Codes are identified based on ICD9 codes shown below:

41. States in each Census Region (KFF uses the 4 regions; Medstat uses 9 divisions)