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Provider Excess Insurance Overview for Health Managed Care Providers: Risk Management Solutions

This seminar covers the importance of Provider Excess Insurance for capitated hospitals and physicians to mitigate individual catastrophic claims. Topics include premium distribution, coverage sources, claims adjudication, underwriting issues, underwriting process, risk variables, and other stop loss programs.

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Provider Excess Insurance Overview for Health Managed Care Providers: Risk Management Solutions

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  1. 1999 CAS Seminar on Health and Managed CareProvider Excess Insurance Overview Presented By: Riggs Stephenson Aon Risk Services Franklin, Tn October 18, 1999

  2. Definition/Description • Provider Excess Insurance protects capitated hospitals and physicians against the cost of individual catastrophic claims

  3. Premium Distribution in Typical Full Risk Model Employer $120 per enrollee 17% Reinsurance Administration Contracting UM/QA Marketing $4 6% $7.20 Administrative Direct/MedReins Profit HMO 5% $6.00 6% $7.20 11% $100 83% $10 - $12 Capitated PHO ER Facility Outpatient Surgery Other Outpatient Inpatient Services ER Professional Primary Physicians Referral Physicians

  4. COVERAGE SOURCES • Health Plan • Commercial Provider Excess Insurer

  5. SPECIFIC STOP LOSS • Per member, Per Policy Period • Protects against large, catastrophic, individual cases * Neonates * Burns * Transplants * Cardio * Traumas, etc.

  6. COVERAGE FEATURES • Deductible (per member per year) • Coinsurance (excess of deductible) • Limit of Liability • Maximum Allowable Charges • Covered Eligible Expenses • Hospital and/or Physician Expenses

  7. CLAIM ADJUDICATION

  8. UNDERWRITING ISSUES • Completed Questionnaire/Application • Utilization Management Issues • Claims Experience Availability • Projected Enrollment • Start-up Risk Contracts

  9. UNDERWRITING PROCESS • Start-Up Opportunity * No Claims Experience; Manual Rate • Large Membership (i.e.50,000 members, low deductible, etc.) * Claims Experience Available; Experience Rated • Smaller Opportunity * Claims Experience Available * Too Small for Experience Rating; Blended Rate

  10. Location Membership type Covered services List of services not provided In-Network Tertiary referral contracted rates Inpatient days/1,000 Excess experience Coverage Structure Average inpatient billed charge per day RISK VARIABLES

  11. TYPES OF MEMBERS • Commercial • Medicare • Medicaid

  12. OTHER STOP LOSS PROGRAMS • Aggregate Stop Loss • Carve Outs

  13. QUESTIONS?

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