A Tool Box of Tips
Reid Cawston offers his take on the most important tools an insurer can use to help control the cost of claims
Reid Cawston offers his take on the most important tools an insurer can use to help control the cost of claims
For travel insurers, the risk landscape essentially breaks down into two regions – the US and the rest of the world. Yes, there are pockets of high-cost, risky or volatile travel destinations around the globe that require active management, however, the bean counters at travel insurers with a global portfolio pay most of their attention to their US exposure. It’s not that costs change unpredictably in the US; on the contrary, facility by facility charges can be expected to increase at a steady, annual rate of between seven and 10 per cent. It’s not that the US is prone to outbreaks of man-made or natural disasters either – in fact, it’s amongst the safest places in the world to holiday. The risk that cannot be controlled for is the travel patterns of the insured. All it takes is for one significant political incident, terrorist act (or even threat) or a natural catastrophe and the travellers will turn to the perceived ‘safe destination’ for that year’s vacation; this, in many cases, means Disneyworld, Disneyland, the beaches in Florida, the slopes in Colorado or the surf off California.
Being unable to control this exposure (unless you have differential pricing for the US, or exclusion of US benefits) requires that you have a strong cost containment programme. This programme does not simply refer to just a discount applied or negotiated after the episode. Of course, significant expenses can be reduced with the application of the discount to the medical costs; however, averting these costs before they are incurred is always the best strategy.
There are four key steps to mitigate risk, which can be economically implemented. The success of these actions will depend on the insurer’s ability to interact with the traveller at important milestones during the life of the policy.
STEP ONE
Education: From the point of purchase, the traveller needs to be aware of potential risks that they may face when travelling. Not everyone is a frequent flyer and simple things like staying properly hydrated during a flight can avoid expensive treatment or even life-threatening issues like DVT. Vaccinations, sufficient medication supplies and allergen awareness are also areas of frequent medical claims. Many travel and assistance companies now provide websites or apps that can deliver this type of health information to a traveller.
STEP TWO
Concurrent travel assistance: Having the right assistance co-ordinator with good local knowledge is invaluable. Reaching out to a traveller to make them aware of an impending risk is a service that is getting more and more common. Once only a benefit for high-priced expats or travelling dignitaries, it is now possible to push out security and health threat alerts to any traveller with a cell phone. These alerts can warn travellers about looming demonstrations, strikes or violent clashes, as well as imminent severe weather, or escalating disease epidemics.
STEP THREE
Emergency medical assistance: Once there is a medical crisis, there is really no substitute for an experienced medical case manager taking care of the traveller.
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Knowing the local healthcare providers and their capabilities is key to getting the right care at the right cost. Anyone can tell the traveller to go to the nearest emergency room, but experienced medical case managers will identify the acuteness of the situation and then be able to direct the traveller to the most appropriate provider to receive care.
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Given the previous scenario of a traveller feeling unwell due to dehydration – I have seen the cost of treatment for this condition reach $50,000 when the traveller has a hotel doctor provide 24-hour care administering IV fluids for 48 hours; $20,000 when the traveller is admitted through an ER for the same treatment, and $1,500 for similar, shorter-term treatment at an urgent care centre. That 40-per-cent discount on the $50,000 doesn’t look quite as positive when compared to averting unnecessary costs from the outset.
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Monitoring and managing the delivery of care is essential even after the traveller has received initial treatment. Creating a discharge plan to get the traveller out of the treating facility and safely back to their holiday or on a flight back home can create significant savings. US medical providers by and large are not trained to treat and release patients. Depending on the nature of the illness or injury, the medical provider may plan for rehabilitation or movement to a step-down facility, unless the assistance company is managing the case with them to have the traveller returned home or moved to an appropriate level of care facility nearby.
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Transportation of the traveller back home, when required, can be a significant cost for the insurer. Understanding the traveller’s condition and the needs of the traveller during the trip home can allow for less expensive transportation to be co-ordinated using a commercial flight with or without a medical escort. Even the rates charged for an air ambulance can be managed by implementing competitive pressures such as a Request For Quote process, identification of cost-saving opportunities (empty legs) and working with reputable suppliers.
A thorough and proper review of the bill, particularly on high-cost cases, is a must
STEP FOUR
Managing the claim: This is something that needs to be prepared for well in advance of the claim being incurred.
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Having a recognised network partner (in the US, it will be a PPO or HMO) clearly indicated on the member’s identification is a key step to ensuring the process runs smoothly. Often, the traveller presents at a healthcare provider without the correct identification card or policy document, and it is at this point where the assistance personnel can make another significant impact on the financial outcome. Sending a virtual card to the traveller’s smartphone, speaking with the provider or even faxing a letter of authorisation gives the provider the information required to identify the network being accessed and the co-ordinates for sending the bill to the insurer or TPA.
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A thorough and proper review of the bill, particularly on high-cost cases, is a must. There are practices that healthcare providers or their revenue management companies may employ to maximise the charges.
i.Reviewing large claims to ensure procedures and treatments were medically necessary and consistent with the clinical notes.
ii.Up-coding is still a problem – this is where the code entered on the bill for a procedure is not appropriate (codes drive the billing software to reference the correlated charge). For example, two bills are received for surgical services on the same patient coding the same procedures but by different practitioners. By reviewing the clinical notes, it can be determined which of those practitioners was the ‘assistant surgeon’ and therefore eligible for a lesser reimbursement, usually 20 per cent of the lead surgeon’s cost.
iii.Up-coding for consultations is also a frequent error. This is where a practitioner’s bill indicates a high level consultation, CPT-99233, for subsequent, inpatient, routine, consultations that should be coded as CPT-99231. This can only be confirmed with careful review of the clinical notes and the support of medical case management notes.
c.Timely processing, adjudication and payment of the claim will also impact the financial outcome. Late payment may invalidate the discount that was applied by the network. Some states may also impose late-payment penalties, potentially exposing the insurer to costs that could exceed 100 per cent of the billed charges.
If there is a moral to this story, it would be work with quality people. It is frequently said that no-one leaves the international travel health insurance industry. Loyalty to people and companies that take your risk seriously and demonstrate that they are looking out for you and your business are always the best partners. By and large, our colleagues in this industry are here because they have a passion for helping, an adventurous spirit and wisdom gained through personal travel; and that’s really what a traveller needs when they’re in trouble.
Author:
Reid Cawston is the vice-president of sales, responsible for business development in North America, UK, Middle East, Africa and Asia, for Europ Assistance. Reid joined Europ Assistance, GCS, as the executive director of account management in August 2009. With over a 20 years of healthcare experience obtained in both the insurance and healthcare delivery fields, Reid brings a strong consultative, customer centric approach to relationship and business development background to CMN.