Blue Cross Subsidiary Touts Cost Plus Insurance

acs-cost-plus-sheet

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ACS Benefit Services Inc. , a wholly owned subsidiary of BCBS of North Carolina, is a third party administrator active in marketing and administration of Referenced Based Pricing, Cost Plus Insurance plans.

“How does ACS Benefit Services Cost Plus pricing compare to BCBS North Carolina’s PPO pricing?” – Molly Mulebriar

Creativity is the name of the game in 2014 as Health Care Plan sponsors attempt to halt continually rising health care costs. Past initiatives focusing on increasing contributions, decreasing benefits or switching to a different PPO Network for “better discounts” have had little effect.

Introducing ACS CostPlus – a plan design built utilizing Reference Based Pricing. The largest purchaser of health care in the United States is the Federal Government. They have gathered data for decades on the costs of services and base their Medicare payments on these findings. While these government reimbursements might not be as profitable to providers, it is a baseline that establishes what the cost should be.

See: http://www.dol.gov/ebsa/pdf/faq-xix-0008.pdf

ACS CostPlus uses Medicare allowable amounts as a basis of cost and adds a multiple to establish a reasonable level of reimbursement for all hospitals and other providers. In fact, 20% or more of Primary Care Physicians already bill at or below this reasonable level. This method of establishing reimbursement levels results in a substantial cost savings to employers.

To illustrate how this works, check out this example of pricing for knee surgery:

MS-DRG = 470:  Major joint replacement or reattachment of lower extremity w/o MC

Retail billed charges: $43,150

Medicare reimbursement: $13,398

ACS CostPlus reimbursement: $18,758  (What would BCBS NC pay?)

Traditional PPO payment of 40% discount: $25,890

In this instance, ACS CostPlus provides a savings of over $7,132, on this one claim alone. There is a substantial savings on every claim paid. (Is BCBS NC PPO reimbursement rates better than ACS Cost Plus?)

How does it work?

Members have no Network list of doctors and hospitals. Full freedom of choice in providers is theirs. Hospitals and doctors do not contract with the Plan.

Clients who have implemented ACS CostPlus have had major successes as well as some challenges. Success comes immediately with substantial cost savings with every claim.

Challenges arise when an employee seeks services from a provider who is not willing to accept the reimbursement and expects to receive the amount billed. To assist in such instances, ACS makes available a Patient Advocate to handle the occasional balance bill.

In addition to saving money for employers, reference based pricing plans deliver an important message to the health care market. It drives home the point to hospitals and providers that it is reasonable for them to make a profit, but puts a cap on what they can receive for specific services.

NOTE: BCBS of North Carolina is a non-stock, nonprofit hospital and medical service corporation domiciled in the State of North Carolina and licensed under NCGS § 58-65. It was incorporated in 1968 and commenced business in the same year. The Company has four wholly owned subsidiaries, Saegis Benefits, LLC (Saegis) (renamed Mosaic Group Services, LLC (Mosaic) as of8/31/2012), Corium, LLC (Corium), ACS Benefit Services, Inc. (ACS), and NobleHealth, Inc. (Noble). Saegis functions as an insurance agency selling third-party life and disability, death and dismemberment, and property and casualty products and is licensed as a third-party administrator. Corium owns, operates, and manages certain office buildings of the Company. 4ACS provides self-funded plans with complete third-party administration services for group medical, dental and disability benefits. Noble participates in various other ventures.

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