TPAs Developing Innovative Strategies To Control Health Care Costs

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KGA has identified providers that offer transparent, greatly-reduced, all-inclusive cash prices. These providers allow KGA to utilize this pricing because the claims are paid quickly and at 100%. Plan participants utilizing a Kempton Premier Provider for a covered medical procedure benefit by incurring no out-of-pocket costs and the plan receives substantial savings. It’s a “win-win” for all parties involved.

SOURCE: HCC LIFE INSURANCE COMPANY

TPAs developing innovative strategies to help control healthcare costs

For anyone who has ever picked up a newspaper or watched a political debate, it is no secret that health spending is at an all-time high. In fact, in just the last 30 years, health spending has increased by more than 10 times according to the Centers for Medicare and Medicaid Services. Looking to ease the growing burden incurred by plan sponsors, many third party administrators (TPAs) within the self-funded industry are taking matters into their own hands when it comes to the ever-rising costs that plague the healthcare industry. These innovative organizations have created program offerings that help employer-sponsored plans control costs.

Oklahoma City-based The Kempton Group Administrators (KGA), is one TPA that has joined in the effort to bring innovative cost containment strategies to clients. The company’s Kempton Premier Providers program has resulted in up to 70% cost reduction for certain procedures. These results are accomplished because KGA has identified providers that offer transparent, greatly-reduced, all-inclusive cash prices. These providers allow KGA to utilize this pricing because the claims are paid quickly and at 100%. Plan participants utilizing a Kempton Premier Provider for a covered medical procedure benefit by incurring no out-of-pocket costs and the plan receives substantial savings. It’s a “win-win” for all parties involved.

For example, potential cost savings with a Kempton Premier Provider is evident with a Bilateral/Multiple joint knee replacement surgery. With the all-inclusive case rate secured with KGA, a joint knee replacement surgery would cost the plan only $26,071.31. A comparison of bills from other providers shows one example where the provider charged $205,444.44 for the same procedure with a PPO allowable of $154,083.33. This example alone shows a savings to the plan of $128,012.02, and the Premier Provider receives 100% hassle-free payment.

“Most people don’t realize that for many procedures and treatments, there can be up to a 400% variance in cost between providers of healthcare, regardless of the quality of that care,” said Jay Kempton, President & CEO of The Kempton Group Administrators. “Being aware of these differences and consciously making better healthcare purchasing decisions is one of the most important steps towards bending the cost curve.”

HCC Life is often asked what new trends and approaches are in the marketplace for cost containment. We are encouraged by the results from proactive TPAs who think outside the box. Some examples of these efforts are contracting directly with their clients’ local providers, using methods other than a PPO for determining the level of benefit, patient steerage to cost-efficient, excellence-based providers at the point of precertification and scrubbing claims for coding accuracy prior to network repricing.

The HCC Life PCU department is available to assist administrators with finding solutions to control costs. Please contact the PCU Manager Jennifer Hill at (800) 447-0460 for additional information.

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