Medical Banking Rx (MBRx)  Claim Circumvention Problems

Claim Circumvention Problems

When health care providers circumvent the adjudication process, pricing is only one of five significant problems that are experienced under High Deductible Health Plans (HDHPs) and Consumer Directed Health Plans (CDHPs), the fastest growing segment of health care coverage - growing annually at double digits. The six (6) problems experienced when the claims adjudication process is circumvented are:

1. Consumers paying more than the contracted, discount rates for their products and services.

2. Claims not being counted toward consumers’ deductibles when applicable.

4. Claims not being included in medical profiles limits the ability to manage patient care. For example, consumers can not receive concurrent Drug Utilization Review (DUR), when applicable, on all prescriptions, thereby making them susceptible to drug therapy related problems that otherwise could have been avoided. Concurrent DUR decreases the potential for meeting consumer deductibles, thereby minimizing the underwriting risk.

5. Data required for accurate actuarial and clinical analysis, risk prediction, projected outcomes and optimal provider compensation under pay-for-performance (P4P), or value-based purchasing models are incomplete. Consequently, any results derived from available data would be inaccurate.

6. PBMs lose revenue when claims under both Cash Discount Cards and HDHPs/CDHPs.

The magnitude of the problem in the pharmacy benefits sector alone is illustrated by the fact that it is not uncommon for cash discount programs to experience reversal rates ranging from twenty percent (20%) to fifty percent (50%). Those reversal rates range from four (4) to ten (10) times that experienced under traditional, fully funded pharmacy benefit plans when consumers’ (cost-sharing) copays alone are approximately the same amount as the average prescription cost under cash discount programs. Therefore, the cost of the prescription is NOT the reason for the increase in claim reversals under pharmacy cash discount programs. Under traditional prescription drug plans that utilize a cost-sharing copay structure, provider self-serving claim circumvention is not possible because plans (insurers) are responsible for a share of the cost. Experience in 100% copay situations in other segments of the health care industry is perceived to be comparable.

3. Deductibles, if applicable, not being tracked at the point of service. This means, if consumers would hit their deductible with the service or product then being provided, they would not receive the benefit of a reduction in their financial responsibility at that time, with their third party picking up the difference.

Once the significance of the problem is recognized,

there is reason to believe the following question will become a minimum criterion in every Request for Proposal:

RFP Minimum Criterion:

“Please explain the real-time, quality control measure that you can provide to prevent health care providers from either circumventing the adjudication process or reversing claims without the patient’s consent or knowledge when the patient bears the full financial responsibility for the cost of the product or service.”

(MBRx grants permission for any reader to use this question in any RFP/RFI)

How would you answer this question?

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