Taking everything into account

ITIJ 201, Cost Containment Review, October 2017
Ian Jones explains how a more holistic approach to cost containment can result in better savings and happier providers
Cost containment is not just about negotiating down the cost of medical bills, although this is undoubtedly an important work stream. It should be viewed as a holistic exercise encompassing all aspects of the assessment and assistance process, beginning with the notification of loss, through directional care, network access, bill auditing, fraud screening, third party recoveries and contributions, then finally ending with post-settlement closed-file audits. At AXA, all aspects of cost containment are conducted in-house and this is achieved by having excellent, co-ordinated communication across the globally located teams. Make no mistake, though: none of this is easy and many challenges are faced on a daily basis, beginning with probably the most difficult aspect in which to achieve good cost containment – directional care.
Keeping it in the family
Over the years, AXA has developed a comprehensive global medical network supported by a dedicated team of regional and local network managers who ensure the clinical excellence of our network partners. So how, when dealing with visitors to foreign countries who often require emergency medical treatment, do we ensure that they are treated in a network facility? Considerable work has taken place to analyse where our customers are travelling to and in which locations they are receiving treatment. We have positioned the network effectively to ensure that in areas of high tourist traffic, over 90 per cent of customers are treated in network facilities.
Customers’ travelling patterns change, though, so it is essential to maintain annual reviews of network utilisation, but of equal importance is trying to pre-empt this change in behaviour. Utilising industry data and keeping abreast of geo-political situations, currency fluctuations and advanced booking information helps to give an indication of which new destinations, regions or even resorts are becoming more attractive. Having the details of our network at the fingertips of our agents is crucial, and with over 40,000 facilities outside the US alone, our network team has to work very hard to make sure the information is up to date and accurate.  
Communication with the customer at the time of purchase and prior to departure is hugely important in reminding them of the need to call us first. When they do this, we have the opportunity to triage the route of treatment they require, which can range from direction to a cashless outpatient centre, to a doctor visit, telemedicine consultation or referral to a network hospital.
If you don’t pay your bills in a timely fashion, all the talk and goodwill in the world will have very little effect
Showing the medical providers that you are able to direct your clients towards their institution greatly improves your negotiating position in respect of pricing. Volume is always king, but saving €10 on the bottom line is useless if the top line has gone up by €15.
On the paper trail
Cost containment or bill auditing carries with it a specific skillset, and to achieve the desired results it must be treated as a specific task, ideally outside of business-as-usual operational duties. A successful auditor must have awareness of medical practices – they do not necessarily have to be a doctor or a nurse, but they should be experienced enough to be able to identify anomalies in levels of reimbursement and over-treatment. They must be capable of conveying strong messages over the telephone and hold a certain entrepreneurial flair to recognise when a deal can be done. Holding a gun to the head of the provider is never a sound negotiating tactic. It might work once, but what happens when your next customer is admitted? Developing and building lasting relationships built on mutual trust and respect is what should be strived for, and this is where the skills and hard work of the network managers come to the fore. To support them in this task, there must be an efficient operations team. If you don’t pay your bills in a timely fashion, all the talk and goodwill in the world will have very little effect.
Holding a gun to the head of the provider is never a sound negotiating tactic
Cost negotiations must also be supported by having strong policy wordings that give the negotiators some teeth. Having policy wordings online so hospitals around the world are very familiar with their content – even their limitations and weaknesses – is beneficial. Strong wording around what you will and will not pay for, ability and flexibility to move patients to alternative facilities, and clearly defined benefits, are essential.
Thankfully, fraudulent activity amongst medical providers is comparatively rare, but it does exist. It is also important to differentiate between when a provider has attempted fraud, and when they are simply overstating charges. Some may say that a provider who knowingly inflates their medical bills, padding them out with excessive charges and treatments that have not been carried out, is committing fraud. We all have our own opinions on this, and the concept and interpretation can and will vary country by country, culture by culture.
Regional challenges
Regrettably, many of us are experiencing a worsening landscape of medical care in Mexico. Excessive charging, refusal to enter into meaningful negotiations, and the eagerness of US collection agencies is creating a situation that must be addressed.
Mexico is continuing to be a burgeoning tourist destination and this has not been lost on the medical supply chain. Private ambulances charging hundreds of dollars per mile are not uncommon. What is more concerning, though, is the increasing instances of ‘medical kidnapping’.
This was an issue that had largely gone away and has not been subject to discussion for a number of years, but in the last 18 months cases are becoming more and more frequent. Coercing customers to hand over credit cards and passports, sign blank forms in Spanish and so on is definitely on the rise. This whole experience is frightening for the patient and their family, and in turn heaps a huge amount of pressure on the assistance co-ordinators.
We have even had cases where the customers required urgent transfer for life-saving treatment to better-equipped facilities but this process was blocked, delayed and hampered by the first facility until guarantees were in place to pay the ridiculous medical charges. The British Embassy and the Mexican Ministry for Health are now engaged in challenging one facility that is engaging in this practice.
Mexico shouldn’t take all of this inglorious limelight though. Many of its neighbours in the Caribbean and South and Central America are also making hay while the sun shines. On some of the smaller Caribbean islands, local clinics are cashing in and have been obstructive in discharging patients requiring urgent transfer, unless the exorbitant charges are agreed and paid. We have even had patients in their sick beds threatened with arrest by the medical staff if they do not pay before they leave.
The customer’s health is, sadly, a long way down the list of priorities for these facilities. Thankfully, there are many dedicated, highly skilled and professional medical staff in these regions that will still go the extra mile for our customers, and although negative and troubling experiences are becoming more commonplace, they remain exceptions to the rule.
As our customers travel to more remote and poorer parts of the world, we will continue to be faced with the challenges of travellers and their insurance policies being viewed as golden eggs. The proliferation of helicopter rescue companies in Nepal in recent years is a prime example of this. A relatively sophisticated supply chain has been created encompassing the tour agents, guides, helicopter companies and hospitals. Commonality among the companies in reporting flying hours, billing, diagnosis and a lack of accurate recording of the number of passengers flying all point to the fact that this is organised and co-ordinated abuse. 
Drawing together the experience of internal medical support, network managers, bill auditors and operations agents is key to identifying those facilities that are abusing the trust placed in them. These facilities are then black marked in the system so that the agents can be made aware of them.
It is also important to differentiate between when a provider has attempted fraud, and when they are simply overstating charges
We are all striving to make our operations more efficient, trying to pay low level bills faster with less touches and removing many of the historic checks we would have conducted in the past. This has not gone unnoticed by some providers. Through the consistent and co-ordinated auditing of closed files and random service calls to customers we have identified providers who will receive a genuine patient, but then also proceed to submit claims for the rest of the family. The family may or may not receive inducement in these instances. We have also been made aware of tourists in some resorts being approached to sell their travel insurance details.
Careful analysis of claims management information can give excellent insights to help identify sudden spikes of activity out of sync with historic claim patterns from a particular provider, although complete fabrication of an inpatient admission is, thankfully, rare. This is simply because there are so many people involved in the process. In most instances, the companies will be in regular communication with the insured, and treating doctors will be talking to medical staff from the assistance company.
A two-pronged approach
Much has been written over the years about the best methods of cost containment in the US and the complications faced in achieving reasonable levels of billing. We at AXA face the same challenges, but have had great success in containing the costs of our medical bills through two channels. Firstly, we have partnered with companies, allowing unlimited and unrestricted access to the largest medical networks in the US. This now provides network penetration in excess of 92 per cent of our cases.
Secondly, a great deal of time and care has been paid to the development and nurturing of relations with a select number of facilities that understand the needs of travel insurers. This is of particular relevance for cases needing to be transferred into the US from neighbouring regions – rather than carrying out the usual barrage of expensive diagnostic tests utilising every one of their new shiny expensive machines, they will instead simply prepare the customer for repatriation back to their home country. Of course, this is always dependent on the medical condition. This level of co-operation is uncommon, but we are extremely appreciative of the principal
doctors’ understanding of our requirements, and as a result we are able to specifically direct customers to these hospitals. n


Ian Jones joined the insurance industry in 1985 and has held a number of senior management positions with large insurers, developing considerable expertise in technical claims management, cost containment, counter-fraud solutions, debt recovery and catastrophe management. Currently, he holds the role of global head of cost containment at AXA Partners, focusing on travel insurance, and with responsibilities for large loss management and cost containment.


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