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Medical Insurance

Question: What does it mean to be self-funded or self-insured?

Answer: In New York, approximately 78 percent of the businesses, with over 300 covered lives, self-fund their employee healthcare benefit program. Businesses like self-insured plans because they are exempt from some state regulation, premium taxes and reserve requirements. A self-funded or self-insured health plan is one in which the employer assumes some or all of the financial risk for providing healthcare benefits to their employees. An employer funds a self-insured plan through cash deposits into a special tax-free trust. Companies realize the actuarial benefits over time and may cut costs by directly paying employee healthcare claims versus purchasing insurance. Since most employers do not have the resources to administer the program, a percentage of the fund is utilized to contract out administrative services.

Question: What does it mean to direct contract?

Answer: Direct contracting is the creation of a contractual relationship between a health benefit plan, operated by a self-insured employer, and a healthcare provider organization. Under a direct contracting arrangement, the participating healthcare providers agree to deliver services to the self-insured business and the plan beneficiaries. By removing the insurance company from the equation, as well as the associated expense, accountability and communication is directly established between businesses (payer), the healthcare organization (providers of service) and the employees (patients) and products (Crepe Erase).

Question: What is HealthBest Direct?

Answer: HealthBest Direct is a regional, not-for-profit physician-directed organization. It is not an insurer, an indemnifier or a third party administrator (TPA). HealthBest Direct has the expertise and the infrastructure to bring employers and healthcare providers together for the purpose of creating a medical plan that is:

  • Cost effective
  • Quality driven
  • Flexible in benefit design
  • Accountable for utilization

Question: Why HealthBest Direct?

Answer: HealthBest Direct presents an healthcare benefit plan alternative, that may be customized by businesses to meet their individual requirements. As a physician-driven organization doing direct contracting with employers, it is unique in Central New York. The model for HealthBest Direct, however, has been successfully implemented in communities throughout the country, including Rochester, New York and in Northeast Pennsylvania.
Many of these employers can realize a 10-20 percent savings over their current healthcare benefit plan costs. Over the past few years, employers and patients alike, have become disillusioned with the expense and inconsistencies associated with insurers and managed care plans promising to alleviate large premium increases and problems accessing care. It has been a long-standing desire on the part of employers and physicians to engage directly in a business relationship to ensure value and quality for their respective employees and patients.

Question: What differentiates HealthBest Direct from a Third Party Administrator (TPA)?

Answer: HealthBest Direct employs a TPA's strength by utilizing their administrative services as one component in the complete delivery system. HealthBest Direct distinguishes itself from a TPA by being a physician-directed organization of providers that emphasizes quality and utilization standards. HealthBest Direct offers employers the following services:

  • Credentialing and biannually recredentialing all its' physicians, according to the NCQA standards.
  • Ongoing peer, quality and utilization review of the provider panel.
  • Moderate to high medical management (as defined by the Milliman and Roberts' guidelines) that is suitably aggressive, flexible and creative, as tailored by the employer.
  • Lowered costs with a competitive physician fee schedule.
  • A comprehensive healthcare delivery system with a highly managed mental health organization and pharmacy benefit manager that offering employers a one-stop shopping or an al-a-carte menu of services.
  • Ordinarily a TPA can perform the following services for a self-funded employer:
  • Administrative (Claims adjudication, re-pricing, record keeping, COBRA compliance assistance, SPD booklets, plan documents and employee health benefit ID cards)
  • Medical management ("Loosely managed" as defined by the Milliman and Roberts' guidelines)
  • Provider organization

Question: What other essential components make HealthBest Direct unique?

Answer: Employers tell us that they define a successful healthcare benefit program as being one that will control costs and provide, monitor and substantiate the quality of services being provided to their employees and families. Being a physician directed and driven organization, HealthBest Direct is committed to meeting or exceeding the regulatory and industry standards for quality management through:

  • Physician Credentialing and Re-credentialing
  • Physician Peer Review
  • Resource Allocation (Utilization/Medical Management)
  • Risk Management
  • Medical Record Review
  • Member Access to Services
  • Quality Care/Clinical Care Monitoring
  • Clinical Practice Guidelines
  • Quality Improvement Performance Measures
  • Health Education and Wellness Programs
  • And more!

      Question: How do I know if my company is a candidate for direct contracting through HealthBest Direct?

      Answer: At no charge, our staff of professionals from managed care, actuarial and underwriting fields will conduct an analysis of your claims experience over the past 2 to 3 years to calculate a premium equivalent to compare with your current cost and benefit structure. Because the accuracy of forecasting the annual claims cost is also driven by the number of covered lives, HealthBest Direct will generally offer this opportunity to businesses who provide healthcare benefits to approximately a 100 employees or more.

      Question: What does it mean to be "Experienced Rated" versus "Community Rated"?

      Answer: Unlike self-funded plans, insurance and manage care companies must base their premiums on "Community Rating," or the entirety of their insured population. In the State of New York, it is illegal for an insurer or a managed care organization to charge an employer a higher or lower premium based on how much their workers' utilize the healthcare system. Through HealthBest Direct, the annual claim cost to the employer is "Experienced Rated." It is based on actual usage and projections specific to their workforce. HealthBest situates businesses to realize both the financial and personal benefit of a healthy workforce through health education and disease prevention programs, as well as the appropriate utilization of healthcare services.

      Question: What are the financial risks for employers?

      Answer: Businesses sign-up with HealthBest Direct to find a flexible and affordable way to offer their workers healthcare. Over the long term, businesses throughout the country have experienced significant cost savings and control of their benefit offering through direct contracting. HealthBest will assist your benefit personnel in performing their fiscal responsibilities, including calculating claim reserves, analyzing stop-loss insurance needs and evaluating carriers. Employers participating in direct contracting need to be financially prepared for the occasional year when employee healthcare service claims could be higher than anticipated. The gap between the expected amount of claims and the stop-loss coverage is where an employer takes risk. Stop-loss insurance is available in a number of scenarios, but is typically purchased at 15-25 percent above the anticipated annual claims.

      Question: My company pays for administrative services only (ASO) through a health plan. What's the difference?

      Answer: There are two significant differences that ultimately impact the bottom line.
      First, there is generally a flat charge for businesses who self-fund and utilize an insurance or managed care company for ASO services. Employers have little or no opportunity to de-compartmentalize this expense to evaluate and negotiate the various components. HealthBest Direct serves the employer's best interest by costing out at "best price" the various components. HealthBest Direct will also work to incorporate a trusted relationship of a current self-funded employers', into the Plan's design.
      Second, employers complain that they really don't know if they are getting what they're paying for. Are their employees accessing timely and appropriate care? Is the employer group's utilization and quality of services being monitored? Do the standards of care demonstrate favorable outcomes for employees? Would specific health education and prevention programs benefit the health outcomes for this group of workers? Reporting and communicating with employers on the status of their investment in this very important benefit is integral to HealthBest Direct core values.

      Question: What happens if an employee, their spouse or dependent is out of the area and needs medical care?

      Answer: HealthBest Direct can subcontract with national preferred provider organizations and a TPA for out-of-region medical care and treatment. Our medical management nurses may also directly negotiate fees with the out of area providers.

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