Post on 12-Nov-2014
description
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Medical Cost Management
Managing the Drivers of Medical Expenses
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Medical Cost Management Discipline
Create a multi-disciplinary medical cost review team
Understand the cost drivers: unit cost, utilization, benefits, and claims processing
Analyze information Develop and implement
action plans for improvement
Measure results
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Unit Cost Drivers
Underlying provider contract structures (payment terms)
New technology and services
Provider billing practices
Provider cost increases
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Utilization Drivers
New technology and services
Expanded health benefits Membership growth Changes in membership
demographics (age, sex, medical condition)
Seasonal variations Unnecessary services
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Managing Unit Cost
Re-negotiate troublesome contract provisions
– Stop loss– Automatic escalators– Provider charge master changes
Manage provider rate changes– Reasonable cost changes– Set benchmark rates
Seek out alternative providers– Lower cost setting– Competition for business volume– Single source vendor for select
services Employ different payment terms
– Capitation (full or partial)– Fixed case rates or per diems– Fee schedules tied to benchmarks– Pay for Performance provisions
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Managing Utilization
Pre-certification requirements for select services, provider types and settings
Concurrent review process for inpatient admissions and continued stays based upon acceptable standards (i.e. Interqual®)
Discharge planning in concert with affected providers and member
Post-hospitalization follow up management for at-risk population and chronic conditions
Disease management programs for select conditions (e.g. CHF, Diabetes, Asthma, COPD, etc.)
Proactive member health care counseling and education for at-risk population
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Medical Cost Review Process
Assemble Medical Review Team (CEO/COO, medical director, health services, provider contracting, provider relations, quality management, member, services, claim management, financial analyst)- meet at least quarterly
Retrieve and analyze medical cost data from paid claims
Highlight costs and trends of concern Determine factors influencing trends Brainstorm medical cost
reduction/management actions to employ along with cost-benefit analysis
Assign responsibility, timeframes and expected outcome measurement
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Monitoring and Measuring Outcomes
Create Medical Cost Action Plan (MCAP) project document
Assign primary ownership for tracking activity & outcomes
Establish cost savings value for each action plan
Consider the MCAP as “living document”
– Quarterly results measured and reported on current initiatives
– New initiatives added when other trends of concern have surfaced
– Incorporate other business plans into MCAP if applicable (i.e. re-contracting business plan, network development or expansion plans, operational and quality improvement plans)
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Contact Us For Detailed Consulting
Eagle Run Managed Care, LLC– http://www.eaglerunmcc.com– 937-350-5457
25 years managed care experience
Medical cost action plans are usually more detailed than described in the foregoing slides.Review of all cost drivers requires a discipline in data analysis and interpretation. The Medical Cost Review Team should be well versed in this process.