The Self-Insurer - September Issue 2022 by The Self-Insurer Magazine

The Broker and TPA Relationship— It’s Complicated A SIPC PUBLIC A TION SIPCONL I NE.N E T SEPTEMBER 2022

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24 CRACKING THE CODES PAYMENT-INTEGRITY SERVICES EVOLVE AS TOOL TO HELP SELF-INSURED HEALTH PLANS WEED OUT FRAUD, WASTE AND ABUSE FEATURES The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC). Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688 PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISOR Bruce Shutan, 2022 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary 4 THE BROKER AND TPA RELATIONSHIP— IT’S COMPLICATED 16 EMERGING TRENDS: CAPTIVE INSURANCE AND CYBER RISK BUSINESS OWNERS AND LEADERS MUST TAKE THESE TRENDS INTO ACCOUNT WHEN DEVELOPING A ROBUST CYBER RISK-MANAGEMENT STRATEGY. ARTICLES 53 NEWS FROM SIIA MEMBERS 30 STOP LOSING SLEEP STOP LOSS COMPANIES AND REINSURERS HELP EMPLOYERS TACKLE KEY MARKET CHALLENGES 48 SIIA ENDEAVORS

TABLE OF CONTENTS SEPTEMBERVOL2022167 WWW.SIPCONLINE.NET SEPTEMBER 2022 3

Written By Joanne Wojcik

4 THE SELF-INSURER

It’s Complicated

FEATURE

Although retail brokers and third-party administrators must work together to ensure the success of self-insured group benefit plans, the relationship is not always Thesympatico.roleof the broker is to advocate for their clients, making sure they are getting the most efficient and cost-effective services to support their self-insured health plans. And while the principal function of the TPA is to administer claims, most also provide health management services, access to provider networks and stop-loss coverage and other ancillary services, often on a as part of a package designed to optimize plan outcomes. But conflicts can arise if a broker seeks to unbundle some of the products and services included in a TPA contract, especially if such requests duplicate or replace existing services, or in some cases, violate the terms of agreements the TPA has with other service providers. and TPA Relationship—

The Broker

TPA

It all boils down to communication, she said. If the broker openly shares their clients’ goals and objectives, “we can be partners and collaborators that make each other better.” However, “if we’re not given all the information we need to be a good partner, it can be much more challenging,” she said.

SEPTEMBER 2022 5

Other clashes might stem from a retail broker’s lack of understanding of how TPAs operate, which differs based on whether it’s an independent TPA or an administrativeservices only (ASO) provider that is part of a large, national health insurance company.

Andcomplicated.theyneed us to administer a health plan that will give them flexibility. So there’s a reality that we need to work together to help our mutual clients achieve their objectives,”

“I’d rather have someone say, ‘here’s what we’re trying to solve for. Can we do it?’ rather than say ‘give me this piece of information’ without the opportunity to understand the big picture and what they’re trying to achieve,” Harris said. Such requests “eliminate our ability to be a partner. Instead, it relegates us to a service provider, which is not what we want to operate as,” she said.

The TPA-broker relationship is enhanced when the two parties meet each other in partnership, rather than as adversaries, suggests Paul Scaglione, Chief Growth Officer

at Trustmark Health Benefits Inc., a TPA based in Lake Forest, Ill. “There are obviously going to be times when we’ll be a little bit in conflict with each other, particularly as it relates to inforce business where we want to get in front of the client, and we want to show our value, but we get stopped by the broker wanting to control the messaging, and that creates some rub,” he said.

Broker

Lack of transparency regarding compensation and revenue-generating arrangements also can breed discord, while industry consolidation can sometimes put pressure on the TPA-broker relationship. Regardless of these challenges, industry experts feel that most conflicts can be resolved amicably through open communication and better education.

The and Relationship Lindsay Harris Paul Scaglione

“Whether we’re always friends or not, we need each other to be successful. We need brokers to play the important role that they play in helping buyers navigate complicated waters that are getting more

observed Lindsay Harris, President & CEO of Healthcare Management Administrators Inc., a Bellevue, Wash.-based TPA serving self-insured employers throughout the Pacific Northwest.

“I think the only reason there is any consternation or issue of combativeness between the two is really just structural because we face the fire of the retail side, which is small scale, 20-50 clients, and an administrator’s facing very scalable issues. They’re looking at wholesale distribution, we’re looking at retail, and I think the way those lenses change causes some miscommunication,” observed Christian Moreno, SVP at Lockton Companies Inc., an insurance brokerage headquartered In Kansas City, “YouMo. would be in denial if sometimes the relationship isn’t going to be a little adversarial or sometimes it can feel completely transactional. I also think there’s the flip side, when you have a true partnership where you understand

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SEPTEMBER 2022 7 the limitations and some restrictions that come with the TPAs,” said Morgan Matz, Account Executive at Seattle-based broker Parker, Smith & Feek Insurance LLC. “It can really be a successful and collaborative approach.” “I’ve had success over the course of my career identifying several tried-and-true TPAs where I trust they’re going to get the job done, am confident they will pay claims accordingly and timely, and that have strong in-house care management and customer services teams. They really become an extension of our team, with the shared goal of managing claims costs and ensuring employees and their families are supported during any and all healthcare needs,” she said.

BROKER KNOWLEDGE EASES

In addition, Harris has found that many of the prospective clients are very sophisticated and increasingly are initiating the conversation about exploring selffunding options. “Our buyers are diving in deep to understand everything we are doing on their behalf. They ask great questions of us and their broker on how we’re achieving results today and what we can do to move the needle for the future,” she said.

He said his relationships with TPAs have improved as his knowledge of the self-insurance industry has increased, which he attributed to his participation in educational programming provided by the Self-Insurance Institute of America, Inc.

“It’s definitely the case that knowledge varies dramatically” among brokers, agreed Harris. “From our perspective, one of the first things we have to do is to really try to assess the broker’s level of knowledge about self-funding. We spend a good amount of time on education to build our partners’ knowledge about how self-funding works and the benefits of working with a TPA to deliver an exceptional result for customers,” she explained.

The Broker and TPA Relationship Brian Olsen Morgan-Matz

One of the major causes of friction is when the broker doesn’t discern the difference between an independent TPA and an ASO administrator that is part of a large, national insurance company. “Ninety percent of brokers’ challenges with TPAs are due to a lack of understanding how TPAs operate,” said Brian Olsen, Employee Benefits Advisor at Sterling Seacrest Pritchard Inc, a broker based in Atlanta. “Disagreements often occur as a result of brokers overpromising to their clients and then challenging the TPAs’ established relationships, processes and procedures.” They need to “know when they can push the envelope with a TPA in a tactful way, understanding their landscape and the relationships they have with provider networks, PBMs, and so forth,” he said.

CONFLICT

Indeed, “It’s the clients who ask questions like ‘What is a check register? What is on my monthly admin invoice? How does this cost containment vendor integrate during the pre-cert process? Etc.’”, Olsen agreed.

“I think some of our best relationships with TPAs were after they somewhat interviewed us on ‘What do you know? Are you part of SIIA? Are you active on Canoe? (SIIA’s online learning platform.) Are you going to our webinars/ seminars?’” he said. TPA VS. ASO All too often, retail brokers erroneously think TPAs are all the same, but nothing could be further from the truth, especially when comparing independent TPAs to ASO contractors that are part of the large, national insurance carriers.

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Christian Moreno

“There are some brokers that have embraced the independent administrators. There are others who are more aligned with the ASO platforms,” Martel said. “We’re in the midst of a change. The use of independent administrators by brokers has increased from the low 20% to 30%.” Retail brokers that have a better understanding of how independent TPAs operate are better positioned to identify more creative solutions for their self-insured clients, many industry experts say.

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COLLABORATION

“From my perspective, the TPAs solve an enormous flexibility problem that is systemic throughout the healthcare system in the United States. They are one of the reasons we can execute on creativity,” Moreno “Thesaid. only reason consultants can articulate how to get creative, carve in or carve out, actually break apart the transaction, is because TPAs allow that innovation to occur and build systems that are flexible enough to do so for the vast majority of the employers that sit between 500 and 5,000 lives where otherwise creativity and the flexibility wouldn’t occur,” he added. “When we want to do something real and creative, it’s more than not solved through the TPA relationship.”

“It’s more a question of whether they are familiar with independent administrators. About half are, but the others haven’t really explored what a TPA can do vs. ASO (insurers). Bigger firms are asking us to educate their teams about the value of the independent TPA,” said Tom Martel, Chief Growth Officer at Health Comp Administrators Inc. in Fresno, Calif. It’s also less work for retail brokers to place self-insured business with carriers under ASO contracts that bundle claims administration, network, health management, and stop-loss coverage into a single package, both brokers and TPAs point out. But brokers that only work with ASO providers are missing out on the opportunity to design more creative solutions for their clients, according to Moreno of Lockton.

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“We(Android).essentially wear two hats: Broker and Consultant,” Matz explained. “Our job is to really get to know the client, and many times, even though they want to save money, going completely unbundled and carving out each component of the health plan might not be the right fit for that client. Perhaps the HR team is too lean to take on the additional administrative tasks.

But such flexibility might not be the best solution for every self-insured client. “Not everyone is a ready to be an Android buyer,” Harris acknowledged. That’s where the broker plays a key role: Helping the self-insured client determine if they are better suited to an ASO (iPhone) or to an independent TPA

Harris likened the difference between a TPA and ASO platform to that of an iPhone vs. an Android.

For instance, HMA has its own care management team, who “are very highly skilled in being able to support people with a variety of care conditions and work within the constraints of the network contracts that we access. If someone comes to us and says they want to pull that away, and in a way that violates the rules of the network we’re accessing, that’s a problem for us, both in terms of violating a contract but also because it duplicates a service that we are already providing to the customer,” she explained.

And even though some TPAs, like Trustmark, do access multiple provider networks, it still must work within the constraints of their network partners, and some are more flexible than others. “We have certain rules we have to follow,” said Scaglione. “The more we can express the value of the TPA, how the TPA works, what we can and can’t do, the level of flexibility we can bring, the more we can partner together, the less that friction, disruption happens.”

“With the ASO platform, you buy it off the shelf just like you would an iPhone. It’s the carrier’s product, just like an iPhone is Apple’s product. You can’t choose anything or customize it, and you often overpay. But it’s shiny and it looks nice,” she “Whensaid.you come to a TPA, it’s like buying an Android. It’s a platform that allows you to plug in whatever apps you want, use a variety of third-party hardware, and to customize to meet the needs of your people and your budget,” she added.

Maybe the stakeholders’ understanding of self-insurance is not sophisticated, nor do they want to get exposure into the granular details that come with utilizing Tom Martel

10 THE SELF-INSURER to customize its services to the self-insured employer’s needs, Martel said. “We’ll plug into the employer vs. vice-versa,” he said. “We have a conversation with the broker and client to find out their needs. One of the last decisions is the network. They like the benefits, platform, services. We have contracts with the Big 4, but also with two dozen regional networks. That’s where the broker plays a really important role in helping the client make the right Butdecisions.”unbundling sometimes creates issues for the TPA, according to Harris, such as when it results in the TPA violating network contracts or the duplication of certain core services that the TPA provides.

“There are certain things that are easy to plug in: wellness solutions, analytical partners, even third-party advocacy solutions. It’s much more challenging if we’re asked to connect with solutions that meaningfully change core administration processes.” Harris said. “This is where collaboration and conversation come in. In the best-case scenario, we can have a healthy dialogue with the broker about what we offer directly and the value we deliver and how that compares to the option they may be considering. When we believe that we can do something better because it’s fully integrated into our platform, we want to have that conversation,” she said.

The Broker and TPA Relationship

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“Years ago, TPAs would receive revenue from their admin PEPM fees, plus they’d get stop-loss revenue, plus we place the PBM, now that is being moved from the TPA to the broker. I think that’s where we see some monetary challenges between the TPA and the broker. It’s the revenue impact on us as a TPA,” he explained.

“The issue is more about where the revenue is going,” said Scaglione.

12 THE SELF-INSURER completely independent TPAs. They don’t have the risk appetite.” “It’s essentially the consultant’s job to be able to assess whether a client is ready to completely self-insure and go unbundled. Do they want the complete transparency, the flexibility, do they want to be able to carve out certain elements, do they want to use a new-tomarket population health management program?” she continued. “You want the buyer that seeks to get nitty-gritty details. Many clients don’t,” Matz said. “So I think it’s our job to be that safeguard and really measure if it’s going to be the right fit.” “What the employer ultimately expects of us is to distill into a 90-minute meeting the litany of issues involved in a health and welfare programs—and do so in a way that allows business leaders to make informed decisions. Ultimately, this is what we are paid to do: provide crisp and informed insights to inform the decisions,” said Moreno of Lockton.

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But as brokers assume responsibility for obtaining these other services, such as placement of stop-loss coverage, it is eroding TPA revenue generating opportunities.

Another issue that can cause friction in the TPA-broker relationship involves compensation. Brokers typically are paid commissions for placing fully insured business, but when they consult self-insured clients, they charge fees. TPAs generally charge a per-employee-per-month (PEPM) fee, but they also may charge fees for providing additional services.

OTHER CAUSES OF CONFLICTS

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14 THE SELF-INSURER Industry consolidation, especially in the retail brokerage sector, is causing some challenges for the TPA-broker relationship, according to Harris. “As we’ve seen more consolidation of brokerage firms, there’s been more moves towards using specified partners, and in some cases, offsetting E&O risk by picking up a partner, for example, using intermediaries for stop-loss. We don’t necessarily have an issue with that, but sometimes there are unintended consequences with it that I think are more of a challenge for us to work through,” she said.

Matz acknowledged that there is “a preferred reinsurance panel” that consultants at her firm will likely go to for stop-loss placement. “That means they’ve integrated with the TPAs that we work with to process and accurately adjudicate claims. There are usually good outcomes when we have some synergies and reliable partnerships,” she said.

“It’s really interesting that as we get to know each other at meetings like SIIA, this industry really clicks,” observed Martel. “It’s a group of individuals all trying to work together from different angles trying to do a good thing for self-insured employer.”

“The market is such that we often chase customers for years before an RFP/chance to engage comes along. This lengthy cycle comes with a large expense borne by the firm,” explained Moreno.

“The broker has invested a lot of time in winning the business in the first place. If we’re good partners, we can be helpful to them, delivering results and helping them show value,” said Harris. “Especially in a world where there’s such a talent war going on, it’s easier to change your broker than it is to change your TPA. TPA means the disruption of every member vs. broker change may only cause disruption for HR, or for CFOs. We want to help our partners be successful in keeping their customers.”

The Broker and TPA Relationship

“Stop-loss is the area of risk for all of us and most of all for the customer. It’s imperative that we make sure everything goes smoothly. It makes us nervous if we’re asked to work with solutions that disintermediate us from working directly with the stop-loss carrier to get reimbursement to the customer. Adding additional steps can create additional risk. It’s important to partner to mitigate that concern,” Harris added.

For more information about this and other sessions slated for this year’s annual conference program, visit SIIA’s conference website cfmhttps://www.siiaconferences.org/2022/conference_program_sessions.at.

Even so, she said the directive she has from her firm’s leadership is to “always do right by the client first and foremost.”

THE BENEFITS OF GETTING ALONG

Regardless of the conflicts that sometimes occur in the TPA-broker relationship, both parties will try their best to get along, recognizing that it’s in the best interests of their clients and the self-insurance industry as a whole.

The relationship of brokers and third-party administrators serving the self-insurance industry will be a topic of discussion during a breakout session at the Self-Insurance Institute of America’s annual conference in ThePhoenix.session, “TPAs & Brokers—It’s Complicated,” will feature all of the TPA and broker representatives interviewed for this story. Scheduled for 10:15 AM on Tuesday, Oct. 11, the discussion will address the myriad issues that brokers and TPAs face when dealing with each other, and how they can be resolved amicably--in the best interests of their selfinsured employer clients.

Though TPAs and brokers may not always get along, it is in their best interests to do so. This is especially true for brokers, for whom the investment in acquiring new business can be substantial.

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Cybercrime is another factor to add to this list of unforeseen risks, with 2022 expected to be a record-breaking year for this type of nefarious activity, according to the Identity Theft Research Center (ITRC).

With the difficulty and unpredictable nature of mitigating against unexpected cybersecurity risks, captive insurance is positioned as a lifesaver, with its ability to write broad coverage and fill gaps in coverage.

FEATURE I 16 THE SELF-INSURER

A cybersecurity breach can be decimating and costly for business, prompting more organizations to find ways to prevent business disruption. In this risk-laden environment, a growing number of companies will look to utilize their captives to cover cybercrime.

Emerging Trends: Captive Insurance and Cyber Risk

f the past two years have taught one thing, it's that the unexpected can and will happen: the onset and continuation of a global pandemic, the Russian invasion of Ukraine, and runaway inflation resulting from these and other market factors.

BUSINESS OWNERS AND LEADERS MUST TAKE THESE TRENDS INTO ACCOUNT WHEN DEVELOPING A ROBUST CYBER RISK-MANAGEMENT STRATEGY

As an example, in February of this year, a payment vendor was hit with a ransomware attack that may have exposed patient data from more than 600 healthcare providers and organizations. Professional Finance Company, an accounts receivable management company based in Greeley, Colorado, detected and stopped a sophisticated ransomware attack in which an unauthorized third party accessed and disabled some of PFC’s computer systems. The company said it immediately engaged third-party forensic specialists to secure the network environment and contacted law enforcement. During an ongoing investigation, it was determined that hackers accessed files containing certain individuals' personal information. The incident may have affected 657 of the company's healthcare provider clients.

Captive Insurance and Cyber Risk

LARGE AND SMALL BUSINESSES ARE AT RISK Industry experts advise that as cybercrime continues to become more sophisticated, attacks are forecasted to increase. Hackers appear to be getting more adept at their trade as they target even smaller businesses. Ransomware and cyberattacks have seen a significant increase in frequency and severity in the last few years, fueled in part by the workforce moving to a largely remote model during the pandemic. There’s also the possibility of political and diplomatic tensions with rogue nation states potentially increasing cyber-risk exposures.

The ransomware attack hit company computer systems that held data from clients such as Banner Health, Lifestance Health, Renown Health, DispatchHealth and hundreds of other provider customers.

SEPTEMBER 2022 17 Dana Sheppard, Associate Commissioner for Risk Finance, District of Columbia Department of Insurance, Securities and Banking gives some sage advice: “Captives are useful in insuring high severity, low frequency risks like cyber threats. Retaining a portion of this exposure in the organization’s captive not only reduces the overall cost of this coverage, it also focuses management’s attention on loss prevention and Mr.mitigation.”Sheppard states that ten captives in DC currently write cyber coverage and anticipates the number of captives that write this line of business will increase as organizations become more comfortable self-insuring these risks. “DC captive law allows organizations to create unincorporated cells, which are ideal for this type of coverage because it allows captive owners to segregate cyber-related risks into a separate entity.”

Jeff Ellington, CIC, senior vice president, Capterra Risk Solutions, LLC says that cybersecurity is an ever-evolving risk. “Anyone who has attended an insurance industry conference or seminar in the last few years has most likely been given the opportunity to attend a session on cyber risks and how best to address them,” explains Ellington. “And for those of us attending captive conferences, this theme has especially been true. One of the reasons for the predominance of concern with cyber risk is its unpredictable nature, which continues to expand in directions previously unseen or not anticipated.”

Source: https://advisorsmith.com/data/small-business-cybersecurity-statistics/

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A leading news magazine reported that the non-profit health care think tank ECRI recently listed cybersecurity attacks as the top health technology hazard for 2022.

Many point to the proliferation of digital tools, such as member and provider portals, coupled with increasing consumerism in healthcare, translate in to exponentially more entry points for attackers to exploit.

The investigation uncovered no evidence of misuse of patient data, but data theft and the Company said that misuse could not be ruled out. The types of information potentially accessed in the attack included names, addresses, accounts receivable balances, information regarding payments made to accounts and, for some individuals, birth dates, Social Security numbers, health insurance information and medical treatment information.

18 THE SELF-INSURER

Cyberattacks may, in fact, be winging their way from as far as Russia. America’s health care systems were put on the alert in March of 2022 when cybersecurity experts warned that attacks launched against Ukrainian institutions have the potential to spill over into America's health care systems, potentially endangering patients' Accordinglives.toreports, the cybersecurity program at the U.S. Department of Health and Human Services issued an analysis warning health care IT officials about two pieces of Russian malware that “could wipe out hospital data vital to patient care.” This cautionary advice followed a previous warning from the American Hospital Association about increased risk related to Russian Morecyberattacks.recently – and equally alarming -- the Health Information Management Systems Society reported that North Korea-sponsored hackers have been targeting the healthcare and public health sector in the U.S. for more than a year.

MOST COMMON CYBERATTACKS

Companies and institutions need to be almost hyper-aware of this threat and devise effective methods and measures to prevent or mitigate it. The healthcare sector is especially vulnerable as organizations attempt to thwart portal cyberattacks which ripple through entire ecosystem.

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COVID-19 has presented unprecedented challenges. To manage the pandemic and this extraordinary situation, the health sector has shifted its focus from the security of their systems and practices to their primary duty of delivering health care in order to save lives, placing themselves in a vulnerable situation. Recent cyberattacks have impacted health care organizations, including the US Department of Health and Human Services, the World Health Organization (WHO), Gilead Sciences, Inc and numerous hospitals and health systems.

Captives are well positioned to help the health sector and the companies that access services on behalf of their employees. Being prepared to counteract cyberattacks is key to protecting the availability of essential health care services as well as the confidentiality and integrity of health care Affirmativeinformation.and stand-alone policies with clear and definitive language, as well as coverage and exclusions/inclusions that are detailed and clearly defined are expected to minimize or avoid disputes and litigations when a claim is presented.

The use of third-party technology and forensic cyber consultants to help with underwriting complement regular monitoring of the parent’s cyber security policies, procedures and testing.

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An alert from the Cybersecurity and Infrastructure Security Agency (CISA), along with the FBI and the Department of the Treasury, included an advisory, “North Korean State-Sponsored Cyber Actors Use Maui Ransomware to Target the Healthcare and Public Health Sector.” The agencies allege that cyber actors have been using that novel strain of malware to target U.S. health systems since at least May 2021. Furthermore, they urge healthcare organizations to "examine their current cybersecurity posture and apply the recommended mitigations," including training employees to recognize and report phishing attempts; enabling and enforcing multifactor authentication; and installing and updating antivirus/antimalware software on all Additionally,hosts.

20 THE SELF-INSURER

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SUPERIOR POLICIES FOR PRACTICAL SOLUTIONS Specific Aggregate&Coverage UnderwritingFlexibility SolutionsCustomLimiting OneEmployerSelf-FundedRisk,PolicyataTime

Company leaders will want to become cybersecurity experts themselves. Advisor Smith points to these common attacks on small businesses: Phishing attack A phishing attack occurs when a cybercriminal poses as a trusted authority in order to gain personal information like passwords or credit card numbers.

• Coverage Flexibility – Captives provide the ability to tailor coverages and limits to meet the needs of both large and small organizations where standardization in the traditional market is lacking; and • Pricing Stability and Pricing Inequity –The crisis in the cyber insurance market, discussed above, saw the top 25% of companies cyber insurance rate increase an astounding 97.1% in the fourth quarter of 2021, while the median rate increase for all sizes of business was 50.2%.

Source: https://advisorsmith.com/data/small-business-cybersecurity-statistics/

An A.M. Best report examining trends in the universe of Best-rated captives noted that cyber risk has become a profitable line of coverage for captive insurance companies.

To thoroughly understand the risks begins with awareness of the most common types of cyberattacks and how they impact the organization.

Denial of service (DoS) attack. A denial of service attack is meant to take down a victim’s network or system through a flood of malicious traffic.

According to the report cited above, “Given their flexibility, captive insurers can customize policies to mitigate the growing threat of ransomware attacks, aggregation risks and social engineering scams. This allows parent companies to more quickly assess the damage and devise a plan of action toward recovery. Captives are being utilized as a strategic tool to provide cyber coverage, owing to proximity to the parent company — physically, culturally and Inenterprise-wide.”its2021report, Aon noted that the frequency of ransomware attacks increased nearly 500 percent from the first quarter of 2018 to the fourth quarter of 2020. Along with the frequency have come growing costs and damages, with insured losses expected to reach $20 billion this year.

COMMON TYPES OF CYBERATTACKS

Captives can mitigate the extreme swings in the costs of coverages to support more consistent pricing.

SEPTEMBER 2022 21 Kirsten Bay, CEO, Cysurance, explains, “Alternative risk financing programs for cyber are more frequently being contemplated by companies to broaden their risk financing capabilities at a reasonable cost while enhancing underwriting capacity.” She says that cyber captives are able to provide numerous options, including:

Malware attack. A malware attack is executed by malicious software.

• Availability of Coverage – Cyber insurance is becoming harder for companies to find as markets have hardened and capital is scarce for this line of coverage and, it’s likely going to get harder;

CAPTIVES TAKE CHARGE OF CYBERSECURITY

Ransomware attack. A ransomware attack occurs when a cybercriminal gains access to your business device and locks down the system or blocks certain resources until your business pays a ransom. These attacks are becoming increasingly common, particularly as ransomware-as-a-service (RaaS) has emerged, allowing even those without technical expertise to execute ransomware attacks by paying for the service.

Captive Insurance and Cyber Risk

Businesses are increasingly seeing more phishing attempts, particularly spear phishing attacks, which target specific employees and generally see a higher success rate. Data breach. A data breach occurs when your business’s private or confidential data is accessed by an unauthorized party.

Given the mounting risks, they predict that cyber-insurance coverage will continue to grow, citing a 75 per cent increase in direct premiums in 2021. Cyber risk represents one of the fastest-growing lines for captives that is generating "exceptional results" for the alternative-risk transfer vehicles.

Jeff Ellington sums it up, pointing out that whereas most insurance companies now cover cyber exposure, any policies still contain significant exclusions or sub-limits which might not provide necessary protection.

“This is where a captive can prove itself to be the best solution to adequately cover a business’s cyber exposure,” says Ellington. “With the ability in most cases to offer broader coverage with less exclusions, and with the flexibility to complement policies through the standard market by providing coverage for a primary layer or excess layer, captives continue to be a viable alternative for business owners navigating the ever-evolving risks to their companies from cyberattacks.”

Captive Insurance and Cyber Risk

Laura Carabello holds a degree in Journalism from the Newhouse School of Communications at Syracuse University, is a recognized expert in medical travel, and is a widely published writer on healthcare issues. She is a Principal at CPR Strategic Marketing Communications. www.cpronline.com

Sources: premiumshttps://www.captive.com/news/as-cyber-risks-grow-so-do-captive-insurance-cyber-risk-https://www.nasdaq.com/articles/cybercrime-predictions-for-2022https://advisorsmith.com/data/small-business-cybersecurity-statistics/https://www.entrepreneur.com/article/281002https://www.entrepreneur.com/article/415842id=8001&navigationaction=industrynews&newssection=industryhttps://www.captiveinsurancetimes.com/captiveinsurancenews/industryarticle.php?article_https://www.entrepreneur.com/article/416093attack-during-covid-19-responsehttps://www.bloomberg.com/news/articles/2020-03-16/u-s-health-agency-suffers-cyber-2022/?sh=67556df87d7bhttps://www.forbes.com/sites/bernardmarr/2022/03/18/the-biggest-cyber-security-risks-in-says-aon-4866https://www.captiveinternational.com/news/captives-still-learning-when-it-comes-to-cyber-healthcare-organizationshttps://www.healthcareitnews.com/news/feds-warn-north-korean-ransomware-threat-cripple-u-s-health-care-systemshttps://www.usnews.com/news/health-news/articles/2022-03-11/could-russian-hackers-

22 THE SELF-INSURER In response, they note that the number of captive insurance companies writing cyber coverage could grow by 34 percent by 2024, pointing out that captives still remain underutilized in addressing cyber risks, despite more than a six-fold increase in retained cyber premium. There's other evidence of organizations increasingly looking to captive insurance companies as they try to address their cyber-risk exposures. Bermuda captives’ gross written premiums for cyber risks increased 42% for the year ending 2020, according to the Bermuda Monetary TheAuthority.number of captives writing affirmative coverage, meanwhile, was up from 20 in 2019 to 24 by the end of 2020, with more growth expected to come. Captives are continuing to “serve their purpose as a risk management tool for companies seeking to manage their own cyber risk exposures.” As cyber risks grow and securing affordable or adequate cyber coverage in the commercial markets becomes more difficult, captive insurance is playing a growing role in organizations' cyberinsurance programs. As organizations get a better understanding of the extent of their exposures and the need to protect against them, it appears the role of captive insurance in addressing the exposure will continue to grow as well. As it has with other difficult-to-cover risks, captive insurance is being used more and more often to provide part of the cyber-risk financing solution. A captive insurance company provides an added risk-financing option to organizations that realize that cyber events can have a significant bottomline impact. Among the many risks, ransomware attacks are one of the areas experiencing significant increases, drawing insurers' attention.

As cyber-insurance deductibles reach a point where they're more difficult for some organizations to manage, industry thought leaders say that captives are even funding deductibles. In this situation, the captive insurance company's surplus provides a deductible reimbursement program from the captive for the commercial cyberinsurance policy.

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In response to all these activities, self-insured employers, along with their brokers, third-party administrators and other partners, have turned to so-called paymentintegrity (PI) solutions designed to end substantial leakages in such transactions and ensure that health care claims are correctly paid.

CRACKING THE CODES services evolve as tool to help self-insured health plans weed out fraud, waste and abuse

Payment-integrity

Written By Bruce Shutan

24 THE SELF-INSURER

t’s almost hard to fathom that an estimated 25% of $4.1 trillion in U.S. health care spending has been traced to fraud, waste and abuse. In some cases, overcharging for medical services represent egregious attempts to capitalize on a woeful lack of transparency and misaligned incentives that the Consolidated Appropriations Act (CAA) seeks to correct. Other instances involve revenue-cycle management at its most creative or honest medical-coding errors.

Although industry observers say the approach has been around for years, it appears to be gaining traction as a complement to claims adjudication with the help of

PI started to become more sophisticated during those years when edits would be built into systems to prevent specific issues from recuring, recalls Mary Catherine Person, president of Blue General Partners, LLC, who was running a large TPA at the Clinicaltime. editing software then got faster at flagging questionable charges, which she says is why it made more sense to buy some of those products “because you couldn’t stay ahead of some of the bad actors out there.”

billing errors from a clinical lens prior to payment offers the highest level of savings within the PI spectrum, according to Brant. Whereas PI solutions such as DRG validation, hospital bill audit and data mining can produce savings in the single-digit range, she says a clean claim review can be as high as 10% to Having20%. worked as a neonatal intensive care unit nurse for about seven years, she’s able to leverage her background.

Just as the U.S. Department of Labor years ago cracked down on fiduciary breaches involving 401(k) plan administration, the CAA has extended that enforcement to health and welfare plans. And with this game-changing legislation comes deeper obligations alongside greater opportunities, PI being one of them, notes Stephen Carrabba, co-founder and president of ClaimInformatics, which provides PI services.

“Nurses understand what should be included in an ICU room and board vs. a med-surg setting,” she explains, “or what should be included in a ventilator vs. setting up a CPAP machine. And so, it’s that type of detail that we get into in the review that made it imperative that we had nurses performing it.”

“There’s no such thing as propriety anymore,” he says. “There’s no such thing as confidentiality anymore. All billed amounts need to be disclosed. The CAA represents a pivotal moment to bring transparency to U.S. health care in a way that that never has been seen before.”

SEPTEMBER 2022 25 powerful new technologies that are helping pass along savings to health plan members and raise the bar on talent management. Another driving factor is the growing emphasis on prepayment rather than post-payment review to head off questionable billing practices in the first place. PI actually dates back at least 50 years with what is known today as editing systems, says Cherise Skeba, SVP of analytics and client services at MultiPlan, which offers these services through a company it acquired and acts as the wrap network that self-insured employers use for their out-of-network providers. In recent years, she has seen the emergence of multiple stacked solutions. Semantics have certainly changed as the industry evolved. Until about five or 10 years ago, for instance, PI was described for the longest time as simply fraud, waste and abuse, observes Brian Atkinson, chief operating officer of Imagine360, another player in this space.

Brian Atkinson Cherise Skeba

In the face of greater federal government oversight, the marketplace is changing in a way that emphasizes operational efficiency over labor-intensive scrubbing of claims. PI is shifting from the pay-and-chase model of paying full bill charges and then reviewing those claims on the back end, notes Katy Brant, president of 6 Degrees Health, which focuses on high-dollar inpatient “clean” claim PI reviews. That result was always a long tail of negotiating with providers and clawing back overpayments. Nowadays, she says the industry has wised up to front-loading such efforts to save both time and money. It also is trickling down market. “Payment integrity has evolved as a separate function in large health plans where the emphasis is on identifying improper payments,” explains Raghav Pawar, cofounder of CoverSelf, estimating savings for this service to be in the 2% to 8% Scanningrange.

HIGH TECH TO HIGH TOUCH

“If you have to launch any product nowadays in a particular cloud, it takes only 10 to 15 minutes,” Pawar observes. “How can you respond fast if your technology is very old?”

As the industry becomes increasingly sophisticated, highly advanced and nimble technology continue to shape the PI space. CoverSelf’s domain-specific PI platform, for instance, was built in the cloud. That makes it much quicker to implement, as well as easier to use and more adaptable, than legacy systems.

Nearly every claim adjudication system has the ability to create built-in PI rules, Skeba notes. But since there are thousands of rules that have become an industry standard, she says it’s difficult for claims adjudicators to keep up with all this information. That’s why more claims processing houses have purchased an outside vendor system to be their editor.

Katy Brant Raghav Pawar

And this is where the business of health care violates the sanctity of doctor-patient relations, bringing to mind the need for integrity in payments. “Providers are hiring revenue cycle experts to come in and help monetize their billing practices,” Atkinson reports. “It’s almost like an arms race. You have people on front end who are helping provider offices bill creatively so that they get paid more money without doing more Butwork.”employers are battling back with PI partners whose sole responsibility is to weed out malfeasance. An ongoing challenge for employers is tracking all the CPT code sets and reimbursement policies that are constantly changing, according to Pawar. Take testing and procedures related to COVID-19, which he notes, initially weren’t covered during the early days of the pandemic. “Everybody had to ensure that all the reimbursement policies were actually up and running,” he recalls, adding that the PI vertical brings a laser focus to this area.

Another important component is supporting reviews through provider disputes or appeals after having long been blocked by audit language. Providers have become adept at controlling their exposure with audits, Brant notes. “The hospitals know that as long as they have good documentation they will pass an audit and their claims will be payable,” she explains. “But that doesn’t mean that they don’t have creative billing practices which generate errors on claims. It just means that they’re protected against a certain type of review.”

One issue that has long been ignored is whether providers correctly bill for their services, opines Keith McNeil, a partner with Arrow Benefits Group, a division of Patriot Growth Insurance Services, who recommends PI to his employer clients. “Unfortunately, there are efforts in the medical community to enhance revenue by playing games with the billing,” he says.

CoverSelf is one of a handful of recent market entrants that bring newer, more user-friendly PI services downstream to health plans as well as upstream to providers. The startup’s open and transparent design allows anyone access to the technology, representing a significant leap forward in health care PI architecture.

26 THE SELF-INSURER

This is where PI solutions seek to demonstrate that sometimes the emperor has no clothes.

kitchenbutMEMBERPARTNERSHIP.TRANSPARENCY.INTEGRATION.EverythingEXPERIENCE.thesink. We know the current health benefits system is broken. At Homestead Smart Health Plans, we don’t just spend time talking about the problem—we deliver the products and services that fix it, all under one roof. companyreference-basedadministrationThird-partyserviceproprietarypricingandauditingsystemaninsurancebearingrisk Don’t settle for a traditional health benefits plan info@homesteadplans.com • homesteadplans.com What are you waiting for?

“Well, they can’t be applied to the patient at the same time,” she says. “On top of that, they’re billing for 24 hours of oxygen, which is an integral component of both modalities. You can’t actually run those machines without oxygen. So what it amounts to is 72 hours of respiratory support being billed on a single date of service.”

QUESTIONABLE CLAIMS

Over the past 15 years, some of the most questionable claims Brant has seen involve the operating room. For example, scalpels, sutures, gloves and gowns are typically billed on top of the base OR charge, which can range from $25,000 to $50,000.

Since claims are processed in silos, ClaimInformatics built sophisticated algorithms that identify billing improprieties and analyze questionable claims in a holistic manner. “We take all those pieces of the disparate puzzle, if you will, and put them back together,” Carrabba explains. One client’s health plan member who required an amputation shows how those puzzle pieces just didn’t fit during a PI investigation. While the physician billed for a big-toe amputation, which was the procedure that was actually done, the radiologist billed for a right foot X-ray and then the hospital billed for a right leg Givenamputation.theenormous volume of medical claims, Skeba says PI is ripe to benefit from machine learning and artificial intelligence. But technology can only go so far. “We still need human expertise,” she observes. “You need physicians. You need nurses. You need medical coders who are really smart at looking at an abnormal situation and researching in a very efficient manner.” While PI players easily can develop their own proprietary edits, Atkinson says most of the abuse is still of a brute-force nature that requires an expert coder or health care professional to review and identify the real error. “They can skirt around the algorithms,” he adds.

“Anything that’s required to open and close a patient should necessarily be included in the base charge for the surgery,” she says. “It’s kind of the equivalent of if you went to a restaurant and ordered a cheeseburger, and there’s a charge on your bill for a cheeseburger, and then there’s a charge for cheese and a hamburger patty, lettuce and Anothertomatoes.”example would be very ill patients who have been weaned from a ventilator to CPAP within 24 hours, but charged a full day for both pieces of equipment on the same date of service.

Mary Catherine Person Stephen Carrabba

One example that he just learned about involved double billing the payer at $35,000 for removing a kidney. The facility charged an additional $9,000 for the use of a mobile unit. “But because we got the ID and were able to look at the supplies, they in essence were getting rid of the kidneys twice,” he says. PI firms will no doubt make their mark by hiring the best and brightest coders, though they appear to be in short supply on the provider and payer side. There are plenty of bad coders handling medical claims, Person points out.

28 THE SELF-INSURER Other advantages include better security and privacy safeguards, as well as an ability to launch a solution anywhere without having to move servers.

People who code claims represent some of the lowest-paid employees in the health care chain, and often may have the least amount of experience. Given this phenomenon, she believes PI must be a high priority “just because there’s so much bad billing out there, whether it’s meant to be or not meant to be. You have to do something to manage it.”

SEPTEMBER 2022 29

No Guarantee of Results – Outcomes depend upon many factors and no attorney can guarantee a particular outcome or similar positive result in any particular case.

Protecting plans and patients across the U.S.

A single claim that is run through PI can produce dramatic savings. Skeba says it’s not uncommon for, say, a $1 million claim to be cut in half following an investigation. Scores of both intentional and unintentional errors came to light during the pandemic. For example, she noticed that a number of laboratories ran large panels of expensive respiratory, genetic and infectious disease testing from COVID-19 screenings. What made those charges difficult to find was that the labs would bill the government for the COVID test and then bill the patient’s insurance company for everything else that they were doing. Skeba also referenced an oncology physician in Florida whose buoyant telemedicine activity generated 15 to 35 hours of daily billing, seven days a week for an 18-month stretch. Some TPAs are assessing fees that should never be billed, according to Carrabba. His firm worked with a client with 3,700-plus in-network claims that were repriced to land an out-of-network negotiation fee. The ancillary fees were north of $45 per member per month on top of the cost to administer the plan, which was outlined in the agreement.

In another case he encountered, a male in Arizona in his early 30s was billed for three circumcisions in a matter of two and a half weeks. “We find constant abuses,” Carrabba reports, noting that modifiers are appended to specific claims that will allow for additional reimbursement. Two men who his firm encountered were actually indicted on fraud charges by the U.S. Department of Justice last December. Predicting that PI will become an essential service for self-insured health plans, Pawar believes that educating the marketplace will be the key to arriving at that point in time. “Unless we educate employers and brokers about the importance of payment integrity, I think it will be very tough to reduce health care costs in the self-insured market,” he says. Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.

On average, aequum r esolves c laims within 297 days of p lacement aequum generatedhasa savings of 97.2% off disputed c harges f or s elf-funded pl ans aequum ha s ha ndled claims in all 50 states 297 97.2% 50

1111 Superior Avenue East Suite 2500 Cleveland, OH 44114 P 2 16-539-9370 www.aequumhealth. com Keith McNeil

ticker-Shock is the best way to describe employer reactions to the high cost of healthcare products and services, with many losing sleep wondering how they are going to maintain a robust menu of healthcare benefits within budget. This situation is now heightened by the general malaise over inflation and supply chain problems. Collectively, these issues and current market forces now account in large part for the accelerated adoption of self-funded health benefits to address the volatility of health care costs. As escalating high-cost claims of $1 million or more show no signs of abating, this environment creates an even greater reliance upon stop loss coverage.

30 THE SELF-INSURER STOP

Stop Loss companies and reinsurers help employers tackle key market challenges S

Written By Laura Carabello LOSING SLEEP

A recent report from The Kaiser Family Foundation states that in 2021, sixty-four percent of covered workers were in a plan that is self-funded.

Ongoing challenges to meet client expectations persist. Thanks to the feedback from member companies of SIIA that provide stop loss or reinsurance coverage, we have a bird’s eye view of the types of claims and other issues that lead to these cost over-runs and payouts by the stop-loss carriers or reinsurers. These companies have an overarching goal to enhance sustainability by controlling costs, ensuring the financial well-being of a self-insured plan by paying constant attention to controlling costs without sacrificing service quality.

This is critical since industry observers affirm that 0.6% of a clients’ claims drive 35% of their self-insured medical and pharmacy spend each year.

Today, most self-insured companies purchase reinsurance to protect against unexpectedly high claims and protect themselves in the event of a single very large claim or total costs that exceed their actuarial projections.

Jay Ritchie

While catastrophic claims have always existed from either injury, accident, or a major medical condition, Jay Ritchie, president & CEO, Tokio Marine HCC – Stop Loss Group, says, “What has changed is our perspective on what is catastrophic. There was a time where $500K in annual spend on an individual was considered catastrophic, then it was $1M. Now the frequency of $1M claims has become fairly consistent over a large book of medical stop loss (MSL) and $2M seems to be the new catastrophic point. This is not to say that any of these are insignificant, but that the definition of catastrophic has to trend along with claim costs.”

Source: https://www.leadersedge.com/healthcare/headed-for-catastrophe

The use of technology is evident across-the-board, as automated systems and experienced stop loss analysts utilize the latest automated technologies and algorithms to flag potential catastrophic claims, allowing for early interventions to mitigate negative impacts on the self-funded plan.

So what are the most painful claim conditions? See the chart below:

CLOSER LOOK CATASTROPHICATCLAIMS

SEPTEMBER 2022 31

She describes a recent high dollar sepsis case reviewed by their payment integrity team which identified $255K (26%) of overall contract payable charges of $984K incurred from preventable sepsis after cardiac surgery. Based upon the claim payment integrity review, the facility agreed these charges are not payable.

that transparency and management of large claims by a good administrator in partnership with the employer while keeping the carrier/MGU informed is critical. “While the carrier cannot make plan decisions, there are opportunities available to impact the best possible solution.”

Early notification and involvement by the TPA with the specialty vendors who address large claims and sometimes difficult claims are essential to create the best Heoutcome.”maintains

Jakki Lynch Mark Lawrence

PERSIST Stop loss companies are actively monitoring the changing situation related to COVID-19 claims. According to Mark Lawrence, president, HM Insurance Group, “We’ve seen numerous claims greater than $1 million where COVID-19 is the primary diagnosis. There’s been a higher incidence of aggregate claims, as well.

According to the Joint Commission Center for Transforming Healthcare, sepsis treatment costs approximately $17 billion dollars each year.”

“Preventable hospital-acquired conditions continue to have a high financial burden on the health care system and contribute significantly to inpatient morbidity and mortality,” she explains. “Sepsis -- a life-threatening organ dysfunction caused by a dysregulated host response to infection -- is a leading cause of in-hospital mortality and one of the most expensive preventable conditions treated in hospitals.

In addition to our “normal” business, where the frequency and severity of high-cost claims continues to rise, we’ve also seen significant changes in claims development patterns – primarily driven by a lull of claims for most of 2020 and part of 2021, followed by an increase in claims thus far in 2022. This creates challenges in reserve setting.”

COVID AND PANDEMIC ISSUES

32 THE SELF-INSURER

The post COVID inflationary environment is going to create a period of higherthan-normal medical trend for catastrophic claims defined as those greater than $500K.

Lynch makes it clear that treatment for sepsis often involves a prolonged stay in the intensive care unit and costly complex therapies, adding, “Although health plans may have payment policies that address these issues, many do not have processes to identify them and adjust claim payments. Charges incurred for sepsis should not be paid and hospitals will remove them if presented with adequate clinical record support by payment integrity specialists.”

“Plans can successfully implement a comprehensive payment integrity program to mitigate significant charges associated with unexpected hospital acquired conditions,” she continues.

Jakki Lynch RN, CCM, CMAS CCFA, director cost containment. Sequoia Reinsurance Services points out that admission to the hospital usually means someone is trying to recover from illness and no one ever expects to get sicker as a result of their stay.

While there are many approaches to addressing these types of unexpected costs, here is some overall guidance from Thomas Power, managing member, Phoenix Excess Risk Underwriters, LLC who says, “As a Managing General Underwriter (MGU), it is important to work together with the Third Party Administrator (TPA.)

22 REGISTRATION NOW OPEN SIIA.ORG

“Staying on top of speculative pandemic conditions, new variants and surges in different regions remains a challenge, making it difficult to accurately forecast exposures,” says Schaefer.

Employers and stop-loss providers are definitely losing sleep about the emerging, super-expensive specialty pharmaceuticals and gene and cell therapies. Toiling away in laboratories worldwide, scientists are drawing on breakthrough research to be able to manipulate the genes of people with certain diseases to significantly improve Mark Schaefer

34 THE SELF-INSURER Ritchie says the COVID hush is being following by the COVID crush: “The Crush comes in 3 forms, 1) delayed care, 2) greater severity of the untreated condition and 3) higher costs to provide such care. This will now be combined with other supply and demand inflationary costs.”

initial COVID-19 claims were expected to run either below $50,000 or around $400,000 to $700,000, Don McCully, Medical Captive Underwriters LLC points out, “To date, the largest individual claim exceeds $4 million paid. The initial impact continues to evolve and now includes ‘Long Tail’ COVID. Reports of indirect side effects such as reduced energy and lung function, as well as seemingly unrelated medical issues are increasing.”

HIGH-COSTS: EMERGING GENE AND CELL THERAPIES AND SPECIALTY DRUGS

Source: surroundingisStrategicTheandTailpromptingCalifornia,https://morningconsult.com/2022/04/18/long-covid-data-demographics/forexample,classedallCOVIDclaimsunderWorkersCompinitially,McCullytorespond,“Thequestionis:inwhichclaimcategorydoesLongactuallyCOVIDfit?LongTailCOVIDislikelytoadverselyimpacthealthinsuranceworkerscompensation.”stoplossmarkethatesunpredictabilityasMikeSchaefer,vicepresident,Partnerships,AmalgamatedLifeInsuranceCompany,shares,“COVID-19themostunpredictablemedicalconditionofourlifetimeduetotheuncertaintiestheactualcostofcareandlong-termparticularsofpatientcareand

He states that the medical trend has been consistent for the past decade and while not directly tied to the Consumer Price Index, it will be impacted like every other industry, warning, “Everyone in our industry must be prepared for this rapid increase through effective cost management and a quicker reaction to the overall market Observingconditions.”that

associated costs. This disease is masked in many ways; increasing its Heunpredictability.”counselsthe industry that what may present as the flu or bronchitis may actually be COVID-19, or vice versa.

Corporate

Solutions

Insurance products underwritten by Westport Insurance Corporations and North American Specialty Insurance Company. © Swiss Re 2020. All rights reserved. Employer Stop Loss: Limit Health Care Exposure. Advancing Self-funding Together. You want unparalleled customer service. Employers need the right stop loss coverage. At Swiss Re Corporate Solutions, we deliver both. We combine cutting-edge risk knowledge with tech-driven solutions and a commitment to put our customers first. We make it easy to do business with us and relentlessly go above and beyond to make stop loss simpler, smarter, faster and better. We’re addressing industry inefficiencies and customer pain points, moving the industry forward – rethinking employer stop loss coverage with you in mind. corporatesolutions.swissre.com/esl

Source: advancementsAmandareport.aspxhttps://asgct.org/global/documents/asgct-pharma-intelligence-q1-2022-Christel,Orionnavigatornurseconsultant,StarlineGroup,maintainsthatingenomicmedicineremainattheforefrontofemergingtherapies for a wide range of serious medical conditions, “…offering a glimmer of hope for patients living with these complex diseases.” From a payer perspective, she says the sticker shock for many of these therapies presents a new set of challenges in the stop loss space, adding, “What is needed is well-defined policies combined with early identification and triaging of these claims that helps to ensure a smooth process from the time the claim is received until it is paid. Additionally, leveraging vendors, such as Emerging Therapy Solutions, is essential in terms of strategy for cost containment.”

36 THE SELF-INSURER their condition or even cure them. While this sounds like the basis for a science fiction (or sci-fi) novel or movie, this premise is becoming a reality as pharmaceutical products promise that they can actually accomplish these feats. Known as gene and cell therapies, these novel products offer new hope for many individuals, representing a potential cure for previously incurable diseases. The caveat: they also carry extraordinarily high price tags.

His question points to the issue of whether or not these therapies are actually curative or simply a temporary treatment that has to be re-administered in 3-5 years. “If every 3-5 years, then it is just a modification of our current treatment programs, and the cost is not justified,” he argues. “It is difficult to balance costs vs procedure and then measure in 3-5 year returns when the average employee tenure is less than the lifespan of the treatment. How does a self-insured employer who financed the gene therapy deal with this? This becomes even more difficult when existing treatment plans already exist.”

Ritchie advises that if gene therapy becomes what we believe it could be, it will be game changing for the industry, noting, “This is not a negative since the ability to have curative procedures versus our current model of an elongated treatment regimen for a condition is good for our industry. The costs are the real question with value because what are the costs for curative treatments?”

Amanda Christel

Schaefer declares that emerging gene therapies may be the single most challenging cost and care driver facing plan sponsors and stop loss carriers.

“The prevalence of these claims are so infrequent that it is nearly impossible to reserve appropriately,” he says. “The costs of these therapies can range from $750,000 to over $4,000,000 and the outcomes are still speculative. Emerging reinsurance and carve-out programs are still in their infancy stage -- which is comparable to Organ and Tissue Transplant programs of the 1980’s when they were first launched. Now a mature market, these programs were widely popular at the time for similar reasons -unpredictable costs and outcomes."

908-813-3440Customizationinfo@hi-techhealth.comcapabilitieswellbeyond other systems Industry leading features and functionality with optimal performance Real time modiﬁcation Ease of conﬁguration Secure cloud based software - no upfront hardware costs Serving Third Party Administrators, Insurance Carriers, Insurtech Health Plans, Provider Sponsored Plans, Medicare Advantage Plans Best in class artpoweredAdministrationClaimsSystembystateofthetechnology.

38 THE SELF-INSURER Source: https://asgct.org/global/documents/asgct-pharma-intelligence-q1-2022-report.aspx Despite all questions around these therapies, Mercer reports the gene and cell therapy pipeline is growing rapidly: in 2018 alone, the number of products in development rose by 25%, from 289 to 362. By 2025, the FDA estimates it will be approving 10 to 20 gene and cell therapy products per year.

Proud to be a Diamond Member and Title Sponsor of the 2022 National Conference ENGAGE, COLLABORATE, OPTIMIZE. As the proud Title Sponsor of the SIIA 2022 National Conference and Expo, Vālenz® looks forward to seeing you Oct. 9-11 in our hometown of Phoenix! We are excited to ENGAGE with you about how our dynamic Healthcare Ecosystem Optimization Platform ensures alignment of the member, payer and provider to simplify the complexities of self-insurance for employers, their members and their partners. Experience the benefits of the Valenz ecosystem: • Engage employees early and often • Improve provider credentialing and compliance • Lower costs and improve access • Provide deep data transparency • Assure accuracy of claims Visit us in Booth 502/601 to to start charting your course to smarter, better, faster healthcare! 23048 N 15th Ave., Phoenix, AZ 85027 (866) 762-4455 • valenzhealth.com

40 THE SELF-INSURER

Karen Cunningham, director-Clinical Services, Medical Risk Managers, Inc., cites the highly anticipated launch for Roctavian, BioMarin’s gene therapy to treat severe hemophilia A, which may come to fruition in 2023 if FDA approval is achieved by the end of 2022.

Cunningham counsels, “Approval delays in the US & Europe occurred as both the FDA & European Medicines Agency (EMA) required additional clinical trial data for an extended time period due to concerns about drug effectiveness noted in earlier trials. Although this therapy is expected to eliminate costly factor replacement as well as prevent common bleeding complications, careful consideration must be maintained since gene therapy is still a relatively new treatment that does involve genetic alteration with no prior or current data can that can predict if unintended consequences may result.”

Many wonder when and if there will be a tipping point where self-insured employers simply can’t afford to include these in a their benefits plans.

Many employers turn to Pharmacy Benefit Managers (PBMs) that use several tools to help control the crushing cost of specialty medications. Mary Ann Carlisle, Chief Revenue Officer & COO, ELMCRx Solutions, LLC says one of the most common and typically the first line in helping to manage these drugs is the Prior Authorizaton, whereby the PBM reviews specialty medications to ensure they are clinically appropriate (reviewed against the PBM’s criteria and FDA approval) and are appropriate for the approved diagnosis.

One infusion of Zolgensma costs about $2.1 million. A treatment of Luxturna costs $850,000.

Many, if not most, of these and other specialty drugs will be delivered in a clinical setting, ranging from hospitals and physician offices to freestanding clinics. This means that employers need to look at their prescription drug benefit on an integrated basis, with strategies focused on medical benefit management as well as the specialty drug pipeline. Industry observers say these pharmaceuticals are so expensive because of the technology it takes to create them, particularly gene therapies. Also, many of the conditions they treat are relatively rare.Afew of the top prescriptions concerning insurers are Zolgensma, for young children with spinal muscular atrophy, and Luxturna, a gene therapy used for treating vision loss in children.

Karen Cunningham

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Self-funded health plan administration

At AmeriHealth Administrators, we have a proven history of working with employer and payer clients to address their challenges and have the vision, technology, and people to meet the needs of our customers and partners.

The speed of change in the health care industry is expanding the definition of health care and redefining roles for traditional players. New and emerging technologies led by single point solution vendors, rising health care costs, regulation, and non-traditional market entrants have many payers and health systems evaluating their options.

EXPENSIVE SPECIALTY DRUGS AND TREATMENTS

“A PBM’s Clinical PA team normally reviews the clinical information provided by the prescriber’s office and determines whether the drug is clinically approved or not for a given diagnosis,” she explains. “But they do not necessarily review whether the quantity or dosing that the prescriber requests is appropriate for the diagnosis that they approved. As a result, a clinical PA review by the PBM is one part of the process in managing specialty medications.”

Apart from gene therapy, the cost of specialty drugs is also interrupting the sleep patterns of employers. These are defined highcost prescription medications used to treat complex, chronic conditions like cancer, rheumatoid arthritis, and multiple sclerosis. They sometimes require special handling and administration (typically injection or infusion), and patients using a specialty drug may need careful oversight from a health care provider who can watch for side effects and ensure that the medication is working as

AccordingSource:intended.https://asgct.org/global/documents/asgct-pharma-intelligence-q1-2022-report.aspxtoCunningham,specialtydrugcostsareexorbitantwhenconsideringthatonly2% of the patient population uses specialty drugs yet these costs account for 51% of total drug spend in the USA.

This can lead to errors in the quantity dispensed of an approved drug submitted. “For example, Stelara is usually billed per mL (milliliter),” she says. “But in a recent case, a quantity of "1" was accidentally entered for one Stelara 45 mg/0.5 mL syringe... instead of 0.5 mL This led to the pharmacy dispensing TWO $12,700 syringes, instead of one. If no one questioned the submitted quantity, the drug would have processed as a paid claim since the drug itself has already been approved through a clinical prior authorization.”

42 THE SELF-INSURER

She continues, “Pharmacies receive prescriptions for approved medications from a prescriber with instructions to dispense the drug. The pharmacy does not always know the diagnosis to verify that the strength, quantity, and day supply is appropriate for the specific diagnosis. Or the pharmacy system may include the diagnosis but there may not always be a check within the pharmacy's software to see if the dose and quantity are appropriate for that diagnosis.”

“Consequently, all aspects of plan costs have seen an increase disproportionate to normal trends, especially pertaining to stop loss coverage,” says Schaefer.

• Vertex: 4.9% on Trikafta, a cystic fibrosis medication that has no competitors and already had a list price of more than $311,000 per year

Ritchie shares this perspective, saying, “Sure, drug costs from manufacturers are going up, but the increase in the distribution layers and the opaqueness around those layers is causing additional concern. Distribution between manufacturer and consumer must be lean and clear. As this gets more and more blurry, the ability to disrupt becomes more significant along with the desire of the consumer to seek change.”

SEPTEMBER 2022 43

• Pfizer: 6.9% on breast cancer drug Ibrance, 6.9% on the Prevnar vaccine for pneumonia, and 4.4% on the heart drugs Vyndamax and Vyndaqel

• Gilead: 5.6% on HIV drugs named Biktarvy and Descovy

“Plan sponsors are exploring creative strategies to finance these drugs and keep their plans solvent. Many pharmaceutical companies support programs and nonprofits offer drug assistance programs (PAPs) which provide free or low-cost medicines.

“Should insulin’s cost qualify as Heexpensive?”describes the situation, explaining that Eli Lilly manufactures its patented brand insulin, Humalog and its generic brand Lispro on the same production line. Patented insulin retails for about $1,470, with an after-rebate net cost of approximately $1,375. Lispro retails for $797, with no rebate. That’s a $6,900 higher annual cost overall. Fully Insured carriers buy Humalog.

This has created a cottage industry of companies assisting plan sponsors and their members to secure financing for these Finally,drugs."McCully poses this question:

The specialty drug trend has been outpacing medical trend for several years and the issue at hand is not the pure costs but the opaqueness of the actual costs.

Industry analysts across the board advise that it may be prudent to consider alternative risk financing strategies, including stop loss or reinsurance solutions, installation payments and outcomes-based reimbursement that soften the impact of these high-priced Schaefertherapies.

observes that with the pharmaceutical industry in lock step with the development of high cost specialty drugs, the burden of financing them has been reverted back to the consumers, more specifically plan sponsors.

With the start of the new year 2022, drug companies raised prices on hundreds of medications with most prices up 5% on average. According to STAT News, prices went up on 460 drugs, which tracks in line with recent years. Several major drugs were included in this batch of 2022 price increases:

“Approximately 65% of specialty drugs are available through pharmacy benefit managers (PBMs) and typically covered under the individual’s drug benefit,” she explains. “These costs can be managed by selection of a formulary of approved drugs and use of biosimilars when available. However, most drugs that require infusion such as chemotherapy, immunotherapy or enzyme replacement therapy are usually covered under medical benefits. In addition, these infusions are typically administered in physician offices, hospital infusion clinics or during inpatient admission.”

• Purdue: 5% on opioid drug OxyContin

Throughout the industry, many underwriters rely on historical experience to help predict future expected loss costs. However, Theresa Galizia, SVP and Chief Underwriting Officer, Berkley Accident and Health attests that the health care market is dynamic and changing rapidly. com www

amps com

McCully clarifies that ERISA empowers employers to own their medical and pharmacy claims information, advising that partial self-funding is the mechanism to obtain this intent and reality are separated by a wide gulf,” he cautions. “National carrier networks, non-profit and for-profit hospitals collude to restrict access and hide behind made up rules. Stop-loss group captives are not directly impacted by the transparency rules, but voluntary transparency by publishing sources of revenue streams allows differentiation from fully insured carriers. Fully insured carriers do not publish pharmacy rebate revenue and are now adopting $0 coppays in some cases. It’s an excellent transparency smoke screen that is good for their stock price.”

Trust 16+ Years of Cost Containment Experience sales@amps

IMPACT OF TRANSPARENCY RULES

“ERISA’sdata.

Many stop loss carriers now identify transparency rules as one of the largest issues for the Ritchieindustry.says that disclosure of hospital pricing, drug costs and additional data leads to a better-informed consumer, which includes stop loss carriers. “In an age of big data, the smokescreen around expected vs actual costs is as murky as ever. The ability to apply data analytics and logic to transparent data would be a significant benefit to all in the self-insured marketplace. However, we can’t be just the ones receiving the data, we need to offer the data on ourselves to impact true change.”

44 THE SELF-INSURER “Rebates are paid within the same parent company, without violating or impacting the medical loss ratio,” says McCully. “Members who choose Lispro are charged more for picking a prescription not on the formulary.”

Simple. Secure. Smart. Because Service Matters (S3) is our latest initiative and the foundation of our new service model for TPAs and brokers. This partnership allows us to collect first-dollar medical and Rx claims data on all claimants from participating TPA partners, eliminating the claim filing for them and their broker partners. The goal of S3 is to help reduce the friction in stop loss interactions between Tokio Marine HCC - Stop Loss Group, TPAs, and the producers who rely on quick and efficient processes for their clients. Our purpose is to be prepared for what tomorrow brings. Contact us for all your medical stop loss, captive, Taft-Hartley and organ transplant needs.

Visit us online at tmhcc.com/life Tokio Marine HCC - Stop Loss Group A member of the Tokio Marine HCC Group of Companies TMHCC1171 - 08/2022 HCC Life Insurance Company operating as Tokio Marine HCC - Stop Loss Group TM

We continually search for fresh approaches, respond proactively to market changes, and bring additional flexibility to our products. Our clients have benefited from our expertise for over 45 years.

TM TM TM

46 THE SELF-INSURER

Sources: https://www.kff.org/report-section/ehbs-2021-section-10-plan-funding/annual-report-on-self-insured-group-health-plans-2022.pdfhttps://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bulletins/things-you-should-know-about-Stop-Loss-Insurancehttps://www.healthsmart.com/Resource-Center/Blog/HealthSmart-Blog/March-2021/6-and-wellness-planninghttps://www.imercer.com/articleinsights/six-strategic-considerations-for-your-2023-health-challenges-for-employers/https://www.benefitspro.com/2020/02/17/how-changes-from-stop-loss-carriers-are-creating-https://sunlife.showpad.com/share/PLcOKngFE0mMV21fGAPlihtmlhttps://www.mercer.us/our-thinking/health/medical-healthcare-options-stop-loss-insurance.dollar-drug-treatments.htmlhttps://www.mercer.us/our-thinking/healthcare/gene-and-cell-therapy-the-rise-of-million-https://www.leadersedge.com/healthcare/headed-for-catastrophehttps://www.healthinsurance.org/glossary/specialty-drug/price-hikes-on-hundreds-of-medicines/https://www.statnews.com/pharmalot/2022/01/03/drug-makers-ring-in-the-new-year-with-5Theresa Galizia

“Our recent history is skewed by the impact of COVID-19. And the current inflationary environment, coupled with advancements in cell and gene therapies, is only adding to the uncertainty, making our jobs as underwriters even more challenging. An informed view of how these exposures will impact the rate environment is essential,” says Galizia. She offers praise to SIIA, saying that the organization provides a forum for these thoughtful types of discussions, and she “…is delighted to help facilitate one such discussion on cell and gene therapy at SIIA’s National Conference this October.”

Line!YourIncreaseTop It’s StepSimple!Intothe Ring! Ringmaster Technologies will help you get there by utilizing our transformative technology built exclusively for Stop-Loss. Our cloud-based Stop-Loss software products include: Ringmaster Technologies is a cloud-based, healthcare software provider. We build our products exclusively to simplify, enhance and drastically reduce the complexity and time necessary for Stop-Loss quoting, contracting, and policy administration. Connect with us today to learn how our suite of products will increase your top line. 330.648.3700 • rmtsales@ringmastertech.com • www.ringmastertech.com Market Bind Administer Renew Built exclusively for Stop-Loss

This year’s biggest self-insurance event is approaching quickly, and attendees are already scheduling meetings to connect on-site.

S S

This year’s SIIA conference will provide more ways to engage with colleagues and friends. The Exhibit Hall has more than 100 companies showcasing products/services for self-insured health plans and captive insurance companies.

We should note that SIIA produces this event for the benefit of registered attendees. To ensure this exclusive value, access to most of the host hotel space, including the lobby bar, will be restricted to registered attendees during conference hours…another important reason to sign up now if you have not already done so. 22

This will advertise your participation to others and get you into the meeting scheduling mix in the coming weeks. The list will be updated regularly from this date forward.

The current attendee list along with the final conference program can be accessed at Pleasewww.siiaconferences.orgregisternowifyou have not already done so, so you can be added to the list.

ENDEAVORSSIIA

IIA’s 42nd National Educational Conference & EXPO will be October 9-11th at the JW Marriott Desert Ridge Resort & Spa in Phoenix, AZ.

48 THE SELF-INSURER

“With EmCap, our company has been able to control pricing volatility that we would have faced with traditional Stop Loss.”

- HR Executive, Group Captive Member Company

- President, Group Captive Member Company “EmCap has allowed us to take far more control of our health insurance costs than can be done in the fully insured market.”

“You have become a key partner in our company’s attempt to fix what’s broken in our healthcare system.”

- President, Group Captive Member Company

- CFO, Commercial Construction Company “Our clients have grown accustomed to Berkley’s high level of customer service.”

People are talking about Medical Stop Loss Group Captive solutions from Berkley Accident and Health. Our innovative EmCap® program can help employers with self-funded employee health plans to enjoy greater transparency, control, and stability.

Let’s discuss how we can help your clients reach their goals. This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.

“TheBroker most advancementsignificantregarding true cost containment we’ve seen in years.”

Immerse yourself in a funky, relaxed Bohemian atmosphere (think Coachella), dance to a killer band with a great vibe, or just chill around a huge fire pit. There might even be a few surprises along the way. We'll serve up light snacks and a cash bar so come ready to engage with SIIA members. It’s not a party…it’s a WeHULLABALOO!!lookforward to seeing you in Phoenix! For more information, including registration, please visit www.siia.org

Future Leaders will set aside their knowledge of self-insurance for a night to focus on competing in SIIA’s Inaugural Future Leaders Cornhole Tournament. The compe tition will be center stage during the opening night reception on Sage Court located outside the lobby bar from 8pm to 10pm. Teams of two will square off for trophies and bragging rights as SIIA 22 Cornhole Champions! Make sure to stay Tuesday night for the legendary SIIA National Conference party. This year This year's National Conference Party is going to be a HULLABALOO!

ENDEAVORS Networking Opportunities

50 THE SELF-INSURER Scan to learn more and get started with a complimentary, no-obligation risk evaluation. Renalogic.com 1,480,000 DiagnosedPopulationwithCKD 37,000,000 Estimated True PopulationwithCKD.It’s Not a Matter of If CKD Will Strike Your Health Plan, But When. People Diagnosed with Chronic Kidney Disease (CKD) Are Only the Tip of the Iceberg. Don’t Let Chronic Kidney Disease Sink Your Health Plan.

Highlights

The Blue Eagle Lounge is back! The Lounge is a comfortable and stylish lounge area that will be open for the duration of the conference. Just like old times, the famous SIIA cocktail receptions are back in person…see and be seen!

Meet the TPA that puts members ﬁrst. Everything we do is to create the healthiest member population for your health plan budget. Using AI and big data, we proactively engage members to access the right high quality care at the right time and steer clear of excessive utilization, unnecessary costs and avoidable events like ER visits - so they stay on the best health journey. Marpai Cares means we take care of your memberswhich takes care of your bottom line - all for the standard admin fee.

Every organization struggles to manage its Specialty Drug spend. ELMCRx Solutions understands the complexity of specialty drug management. By combining powerful clinical management with real-time oversight to control costs and prevent unnecessary payments, our unbiased program helps deliver the best outcome for the plan sponsor and the member. We partner with employers, health care coalitions, health plans, insurance captives, TPAs and Taft-Hartley Trusts. Cost Containment Solutions and superior clinical outcomes are achievable. ELMCRx Solutions is the partner to help you achieve them.

Sunday, October 9, 2022 8:00 a.m. - 12:30 p.m. SIEF Golf Tournament 3:00 p.m. - 5:00 p.m. SIPAC Reception & Networking 4:00 p.m. - 7:00 p.m. On-site Conference Registration 5:00 p.m. - 7:00 p.m. Welcome Reception in Exhibit Hall 8:00 p.m. - 10:00 p.m. SIIA Future Leaders Networking

Better manage your specialty drug spend, through powerful clinical management combined with real-time oversight.

CONTACT US TODAY John Adler jadler@elmcgroup.com | 262 707.1076 Mary Ann Carlisle mcarlisle@elmcgroup.com | 484 433.1412 elmcgroup.com

ENDEAVORS

Schedule-At-A-Glance:

Monday, October 10, 2022 7:30 a.m. - 6:30 p.m. On-site Conference Registration 7:30 a.m. - 8:30 a.m. Networking Continental Breakfast 8:30 a.m. - 10:00 a.m. Welcome Remarks & Keynote Address 10:15 a.m. – 11:30 a.m. Breakout Sessions 11:30 a.m. – 1:30 p.m. Luncheon & Exhibit Viewing 1:30 p.m. - 2:45 p.m. Breakout Sessions

7:30 p.m. - 10:00 p.m. SIIA National Conference Party *All times are listed in Mountain Time.

**All times are listed in Mountain Time. Tuesday, October 11, 2022 7:30 a.m. - 5:00 p.m. On-site Conference Registration 7:00 a.m. - 8:00 a.m. Networking Continental Breakfast 8:30 a.m. - 10:00 a.m. Keynote Address 10:15 a.m. – 11:30 a.m. Breakout Sessions 11:30 a.m. – 1:30 p.m. Luncheon & Exhibit Viewing 1:30 p.m. - 2:45 p.m. Breakout Sessions 3:15 p.m. - 4:30 p.m. Breakout Sessions

An ELMC Risk Solutions Company

3:15 p.m. - 4:30 p.m. Breakout Sessions 4:30 p.m. – 6:30 p.m. Reception in Exhibit Hall

*AllEventtimes are listed in Mountain Time.

52 THE SELF-INSURER

SEPTEMBER 2022 53 NEWS

SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/ captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to membernews@siia.org.

2022 SEPTEMBER MEMBER NEWS

All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org.

If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and jivy@siia.org.

FROMNEWSSIIAMEMBERS

HM also offers managed care solutions, including Provider Excess Loss insurance and Health Plan Reinsurance.

Restoring Rationality to Healthcare Pricing

HM Life Insurance Company, HM Life Insurance Company of New York and Highmark Casualty Insurance Company are all rated “A” (Excellent) by AM Best Company. Through its insurance companies, HM Insurance Group holds insurance licenses in 50 states and the District of Columbia and maintains sales offices across the country. Visit www.hmig.com

NEWS

Dan Cloyd, regional sales vice president, central region, at HM Insurance Group (HM), recently shared that Matt Taylor, regional sales director, accepted an expanded role that includes management of a new sales consultant and the oversight of both HM’s Houston and Dallas Regional Sales Offices and Stop Loss territories including Texas, Louisiana, Oklahoma and Arkansas. Taylor is joined by Lucas Hogan, who will serve as a sales consultant for Houston Regional Sales, working to grow and maintain the HM Stop Loss book of business in the Houston market. Hogan is based out of Dallas, Texas. He comes to HM from QBE stop loss where he served as an assistant vice president, lead business development. He also has experience as a senior account executive at Lockton and an account manager at UnitedHealthCare. In addition, he brings experience from several industry-leading insurance brokerages and consulting firms.

DIAMOND MEMBERS

CONTACT US Payer Compass is the innovator in cost control We tackle healthcare's most challenging problems rising costs and a lack of price transparency.

HM INSURANCE GROUP SHARES UPDATES TO TEXAS SALES TEAM

54 THE SELF-INSURER

WWW.PAYERCOMPASS.COM INFO@PAYERCOMPASS.COM 833.MY.PAYER

We offer the best in defensible claim repricing, Reference Based Pricing, ACA/NSA/TIC compliant transparency solutions, and a high touch Member Advocacy and Care Coordination experience. Contact us today to learn more!

About us

About HM Insurance Group H M Insurance Group (HM) provides insurance and reinsurance coverage to protect businesses from the financial risk associated with catastrophic health care costs. A recognized leader in Employer Stop Loss, the company delivers protection for a range of group sizes.

Ask your Sun Life Stop-Loss Specialist about what is new at Sun Life or click here to learn more!

The content on this page is not approved for use in New Mexico. For current financial ratings of underwriting companies by independent rating agencies, visit our corporate website at www.sunlife.com. For more information about Sun Life products, visit www.sunlife.com/us. Stop-Loss policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York, under Policy Form Series 07-SL REV 7-12. In New York, Stop-Loss policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations.

© 2022 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life and the globe symbol are trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us. BRAD-6503-u SLPC 29427 01/22 (exp. 01/24)

For nearly 40 years, self-funded employers have trusted Sun Life to quickly reimburse their stop-loss claims and be their second set of eyes, looking for savings opportunities. But we are ready to do more to help members in the moments that matter. We now offer care navigation and health advocacy services to help your employees and their families get the right care at the right time – and achieve better health outcomes. Let us support you with innovative health and risk solutions that benefit you and your medical plan members. It is time to rethink what you expect from your stop-loss partner.

Depend on Sun Life to help you manage risk and help your members live healthier lives

Behind every claim is a person facing a health challenge. By supporting members in the moments that matter, we can improve health outcomes and help employers manage costs.

SPECTRUM – A DIVISION OF COMPANION LIFE INSURANCE COMPANY -- WELCOMES MICHAEL GATES AS REGIONAL SALES DIRECTOR OF BROKER MARKETS Indianapolis, IN – Spectrum is pleased to announce the addition of Michael Gates as Regional Sales Director, Broker Markets for the 13-state territory of AL, FL, GA, IN, KY, MI, MS, NC, OH, SC, TN, VA & WV. He will service brokers and benefits advisors from his office in Tampa, MichaelFL.brings over 15 years of stop loss, brokerage and plan management experience to Spectrum, including a seven-year stint with a major stop loss carrier and the last five years as a partner in a General Agency. He has vast street-level experience with self-funding and has developed solid relationships with employers, brokers, and TPAs.

56 THE SELF-INSURER NEWS withYourSuperchargeGrowthIntegratedPayorSolutions Get access to the industry’s most powerful, flexible and secure platform and stand-alone transparency solution with Integrated Payor Solutions. No additional IT youtoScalableSalesforceBuiltsolutiontechnologyFull-stackinvestmentongrowasgrow EasyandCompliantsecuretouseLowbarriertoentry Works Simply, Simply Works for You Learn More and Request a Demo Today www.integratedpayorsolutions.com

About Spectrum Spectrum, founded in 1990 and acquired by Companion in 2016, is an industry-leading provider of medical stop loss insurance for employers as small as 15 employees. Spectrum’s broad product portfolio includes specific and aggregate stop loss with specific advance, aggregate accommodation, terminal liability, and no-laser renewal options, as well as its innovative Integrated Stop Loss, a bridge product designed to ease an employer’s transition from fullyinsured coverage to true self-funding. Spectrum is headquartered in Indianapolis, IN. Visit www.spectrumhq.com

Michael has a B.S. Degree in Psychology with a minor in Mathematics from the University of North Florida. He can be reached via email at m.gates@spectrumhq. com or by phone at 317-692-3285 x287.

Kurt Ridder, Spectrum’s President, commented, “Another solid addition to our Sales Team, Michael, brings the necessary groundlevel sales experience Spectrum needs for continued success in the broker and benefits advisor space. His direct involvement in managing self-funded plans will prove extremely helpful to brokers pursuing the selffunded space.”

“We’re delighted to continue the expansion of our EmCap business. Jeff’s knowledge of the health care marketplace, our customers’ needs, and the financial aspects of self-funding make him an outstanding addition to our team,” said Brad Nieland, President and CEO of Berkley Accident and Health.

NEWS SEPTEMBER 2022 57

Hamilton Square, New Jersey – Berkley Accident and Health, a Berkley Company, has appointed Jeff Utoft as Regional Sales Manager for its EmCap® Group Captive segment. In his new role, Jeff will be responsible for contributing to the company’s growth initiatives, as well as developing group captive program business in Minnesota, Wisconsin, North Dakota, and South Dakota.

BERKLEY ACCIDENT AND HEALTH APPOINTS JEFF UTOFT AS REGIONAL SALES MANAGER

About Companion Life Headquartered in Columbia, Companion Life has specialized in employee benefits since 1971. The company markets life, dental, disability, accident, specialty health — including medical stop-loss, limited benefit health plans and group supplemental retiree prescription drug plans — as well as other insurance programs, through a network of independent agents and brokers, general agents and managing general underwriters. Companion Life is licensed in 49 states and the District of Columbia. It holds an AM Best Rating of A+ (Superior). Visit www.companionlife.com.

Berkley Accident and Health is a member company of W. R. Berkley Corporation, a Fortune 500® company. Berkley Accident and Health provides an innovative portfolio of accident and health insurance products. It offers four categories of products: Employer Stop Loss, Group Captives, Managed Care (including HMO Reinsurance and Provider Excess), and Specialty Accident. The company underwrites Stop Loss coverage through Berkley Life and Health Insurance Company, rated A+ (Superior) by A.M. Best. For more information, please visit www.BerkleyAH.com

PHOENIX, AZ —Valenz® announced it has acquired Medical Cost Management Corporation, d.b.a. MCM Solutions for Better Health and its subsidiary, MedCare Management, Inc., (MCM), a leading provider of managed care and population health management programs spanning the entire continuum of care for selffunded plans. In May, Valenz announced the acquisition of VerifPoint, a credential verification organization today recognized as VPoint™.

Jeff joins Berkley Accident and Health with extensive experience in stop loss, claims, and account management. Jeff holds a degree in Finance from Minnesota State University and currently resides with his family in the Minneapolis/St. Paul area.

58 THE SELF-INSURER NEWS For product information, contact: marketing@amalgamatedbene ts.com Amalgamated Life Insurance Company Medical Stop Loss Insurance — The Essential, Excess Insurance Amalgamated Family of Companies Amalgamated Life ▲ Amalgamated Employee Benefits Administrators ▲ Amalgamated Medical Care Management ▲ Amalgamated Agency ▲ AliGraphics Group • Stop Loss • Voluntary Amalgamated Life Insurance Company 333 Westchester Avenue, White Plains, NY 10604 914.367.5000 • www.amalgamatedbenefits.com866.975.4089 As a direct writer of Stop Loss Insurance, we have the Expertise, Resources and Contract Flexibility to meet your Organization’s Stop Loss needs. Amalgamated Life offers: VOLUNTARY SOLUTIONS—KEEPING PACE WITH TODAY’S NEEDS • Accident • AD&D • Critical Illness • ID Theft • Legal• Dental • Disability • Hearing • Portable Term Life • Whole Life Insurance • Specialty Rx Savings Programs and Discounts • “A” (Excellent) Rating from A.M. Best Company for 46 Consecutive Years • Licensed in all 50 States and the District of Columbia • Flexible Contract Terms • Excellent Claims Management Performance • Specific and Aggregate Stop Loss Options • Participating, Rate Cap and NNL Contract Terms Available Policy Form ALSLP-2020* *Features & form numbers may vary by state. A M BEST S A Exce en Financ a St g h Ra ng

“Clients in the Upper Midwest will appreciate the level of service and attention to detail that Jeff brings to the table.”

About Berkley Accident and Health

VĀLENZ® ACQUIRES MCM, EXPANDS CARE MANAGEMENT AND POPULATION HEALTH SOLUTIONS

We offer a broader range of services compared with other TPAs and administer solutions that seamlessly integrate with your vendors. What Pinnacle

Seamless Integration

Self-Funded Employers

We’re a leading third party administrator for self-funded employers of all sizes, in all industries. Driven by the unique needs of our employers and brokers, our proprietary technology systems enable us to administer cost-effective plan designs that match the needs of your organization.

Full Suite of Solutions

In addition to claims and beneﬁ ts administration, we offer pharmacy beneﬁ t management, health management and wellness programs, stop-loss insurance, and print and payment solutions.

Can Do For You

Scalable Solutions for

Quotes@pinnacleTPA.com866.930.PCMI

See

www.PinnacleTPA.com

From day one, StarLine’s differentiator has always been its people. Now, decades later, we are at a position of strength because of our people. Our team goes above and beyond to create and sustain solutions to match today’s constantly evolving needs. There is no part of our process that is not underscored by a dedicated, collaborative, and approachable group — powered to propel you forward to achieve your goals.

STOP LOSS | CAPTIVE | PAYOR | PROVIDER | GROUP ACCIDENT

NEWS

As a Valenz company, the combined MCM and Med-Care subsidiary which have served the multi-employer labor space for more than 35 years, will adopt the trade name Valenz Care. Valenz Care offers member and clinical advocacy through concierge navigation and triple URAC-accredited services for care management, disease management and utilization review. The acquisition accelerates the collective ability to deliver data-driven medical cost management and population health management to labor and public entities, as well as commercial customers. “Valenz continually explores new ways to deliver on our core promise to engage early and often for smarter, better, faster healthcare, and we are thrilled to now deliver that promise to MCM customers and their members,” said Rob Gelb, Chief Executive Officer of Valenz. “The addition of MCM solutions clearly aligns with the Valenz commitment to deliver care optimized solutions that influence member choices prior to costly healthcare decisions being made. Together, we will prospectively – and continually – address member care needs for improved outcomes and cost containment throughout the member’s healthcare journey.”

starlinegroup.com | (508) 809-3179

MCM, a physician-directed company, is URAC accredited in health utilization management and is licensed in all states with requirements. Its solution portfolio also includes chronic disease management, catastrophic care management, a comprehensive health and wellness program, health risk assessments, predictive modeling, and data reporting.

SEPTEMBER 2022 61 NEWS

“We look forward to introducing our customers to the highly innovative Valenz ecosystem and expanding opportunities to provide cost-efficient and comprehensive care management across the health continuum,” said Thomas J. O’Connor, President of MCM. “Our companies share a dedication to serving the self-insured industry, advocating for plan members, and ensuring high quality, cost- effective care, making our partnership a natural fit.”

The partnership with MCM further fortifies the Valenz Healthcare Ecosystem Optimization Platform, an end-to-end, fully integrated suite of solutions that drives value and assures alignment of the member, payer and provider to enable better decision-making, starting long before care is provided and continuing long after a claim is paid.

About MCM A pioneer in medical management, Medical Cost Management Corporation, dba MCM Solutions for Better Health, was founded by Michael O’Connor in 1986 to meet the population health management needs of self-funded plans, Taft-Hartley Trusts, associations and claim payers. MCM and its subsidiary Med-Care Management, Inc., provide services to more than 550 plans representing over 600,000 members nationwide. Visit www.medicalcost.com

SIMPLE.SAFE.SMART.

62 THE SELF-INSURER NEWS forstandardsetsCANARXthesafety and savings, making us the smart choice for self-funded health plans and their members, who get maintenance medications at zero copay. CONTACT US TODAY FOR YOUR FREE SAVINGS ASSESSMENT canarx.com | 1-888-739-2718

About Valenz Valenz® simplifies the complexities of self-insurance by offering an end-to-end Healthcare Ecosystem Optimization Platform that manages the cost and quality of care for employers and their members. To balance the relationship between healthcare quality, advocacy and cost, the Valenz enterprise-level solution suite aligns the member, provider and payer. Supported by a dynamic, innovation-first culture and a steadfast commitment to data transparency and decision enablement, Valenz leverages its technology infrastructure and enterprise data warehouse to drive value across clinical and member advocacy, network development and the validation, integrity and accuracy (VIA) of claims. Visit valenzhealth.com Valenz is backed by Great Point Partners.

Voya Health Solutions* is pleased to announce their continued expansion into the mid-market beginning with quoting on July 1, 2022. This includes groups of 150-500 lives, Enhancedfeaturing:aggregate and individual excess risk discounts

SEPTEMBER

THE MID-MARKET

Do you aspire to be a published Weauthor?wouldlike to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world.

The Self-Insurer also has advertising opportunties available. Please contact Shane Byars at sbyars@ sipconline.net for advertising information. 2022

Enhanced step-down deductible standards for groups under 500 lives

The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since Articles1984. or guideline inquires can be submitted to Editor Gretchen Grote at ggrote@ sipconline.net

VOYA HEALTH SOLUTIONS* EXPANDS STOP LOSS PRESENCE IN

“Our sales representatives are excited to introduce the Stop Loss expansion to the mid-market to all of our producer relationships,” said Bill Barrera, vice president of Stop Loss Distribution & Strategic Relationships, Voya Financial®. “Producers will continue to work directly with their assigned sales reps who have a strong knowledge of not just self-funding, but other products, as well. This includes group life, disability, leave management, supplemental health insurance and our Health Account Solutions portfolio.”

Enhanced Specific Advanced Funding for TPA administered business Monthly aggregate accommodation available “As a growing number of middle market customers are looking for ways to mitigate risk and control health care spend more than ever, we have expanded our capabilities to serve an extended customer base,” said Ben Dewar, vice president of Group Underwriting, Voya Financial®.

Repricing of Reference Based Pricing Vendor discounts

Please contact your sales representative for more information. About Voya For more than 90 years, Voya has offered group benefits that help employees prepare for unexpected life events. We offer a comprehensive and highly flexible portfolio of stop loss, life, disability, voluntary insurance products, and health savings and spending accounts to businesses covering over 6.6 million individuals through the workplace. Visit www.voya.com. *Also referred to as Voya Employee Benefits Excess Risk Insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Both are members of the Voya® family of companies. Product availability and specific provisions may vary by state.

64 THE SELF-INSURER NEWS Focused on Clients. Dedicated to Results. Our Complex Claim Consulting Practice is committed to making your business better. www.lockton.com We have a team of Clinicians and risk managers working to simplify your most complex claims In s u ran ce • R isk Manag e m e n t • S u re ty Ex p ert i s e 2100 Ross Ave. Suite 1200 W E L I V E SE RV I C E ! Dallas, TX 75201 • 214.969.6100

CHAIRWOMAN ELECT* Elizabeth

President

Director SEPTEMBER 2022 65

TREASURER AND CORPORATE SECRETARY* John

Belding ProfessionalPresident Reinsurance

Ocala,

Emerging Markets AmeriHealth Administrators,

DIRECTORS Thomas

SELF INSURANCE INSTITUTE OF AMERICA, INC. 2022 BOARD OF DIRECTORS

CHAIRWOMAN L. JD, SPHR IL Midtlien President, Inc. MN Capasso & CEO LLC NJ R. Mktg. Svcs. OK Operating (CONT.) Hirsch Carrollton,AitherCo-CEOHealthTX Deborah Hodges President & CEO Health Plans, Inc. Westborough, MA Lisa Moody Board of Directors Chair Phoenix,RenalogicAZ Shaun L. Peterson VP, Stop Loss Voya Minneapolis,FinancialMN

Officer Vā Phoenix,lenz AZ DIRECTORS

Niblack,

Laura

OF THE BOARD* Kari

BlackwellPresident Captive Solutions Chicago,

SIEF BOARD OF DIRECTORS CHAIRMAN Nigel Wallbank Leadenhall,Preisdent LLC FL PRESIDENT Daniél C. Kimlinger, Ph.D. MINESCEO and Associates Littleton, CO DIRECTORS Freda Bacon Comp Birmingham,Fund AL Les Boughner AdvantageChairman Insurance Management (USA) Charleston,LLC SC Alex Giordano

ALAdministratorSelf-Insured Workers'

Amy Gasbarro Chief

Chief Executive Officer Hudson Atlantic Benefits Bellmore, NY Virginia Johnson Strategic Account Director Verisk/ISO Claims Partners Charlotte, NC Also serves as

Marlton,

Captive Planning Associates,

Edmond,

Vice

Bloomington,

SIIA NEW MEMBERS SEPTEMBER 2022 Helping employers across the country support their greatest asset—their employees • Scalable, customized plans • Guided performance analysis and consultation • In-house teams for seamless support— implementation through renewal • Personalized, high-touch attention • Full suite of a la carte programs, from utilization management to specialty case management • Member advocacy solutions Innovative solutions built around you. At HPI, we’re proud to be the oldest “start-up” in the business—advancing from a local TPA to a nationally known organization. We love what we do. That’s the HPI difference. hpiTPA.com Sturdy,operationsfoundational Flexible with a passion for innovation Welcoming clients of various sizes, locations, and industries Average client retention rate of 97% for over 40 years REGULAR CORPORATE MEMBERS Toni Case Vice President National Sales FortCERiSWorth, TX Vinoth Dallas,OptMyCareElangoTX Elisabeth ProdegiCEO/OwnerWassonCorporate Benefit Services Laramie, WY Tim StonePresidentJohnsonMountain Risk Norwalk, IA 66 THE SELF-INSURER NEWS

Pay

This groundbreaking research from the Aite-Novarica Group establishes the current state of healthcare payment modalities and identifies practical and prescriptive ways to align your business around the optimal healthcare financial experience for all. Get your copy of the report to gain insights like these: for care, with care. Download the report at qrco.de/harmonization or call 888.311.3505 to find out how Zelis can help harmonize payments. as

healthcare

zelis.com We

Ever

important to a personalized member experience

Announcing The HarmonizationPaymentIndex2022 The Business Case for Harmonizing the Healthcare Payment Experience. Why payment integrity requires workflow automation How maintaining up-to-date provider directories improves relationships Why electronic remittances are important for provider satisfaction What the industry views

Amy didn’t think she’d spend her maternity leave with her baby in the NICU. Neither did her self-funded employer. MTG-3438 (5/22) *Cost estimate based on HM Insurance Group historical Stop Loss data and additional industry observations, May 2022. In all states except New York, coverage may be underwritten by HM Life Insurance Company, Pittsburgh, PA, or Highmark Casualty Insurance Company, Pittsburgh, PA. In New York, coverage is underwritten by HM Life Insurance Company of New York, New York, NY. The coverage or service requested may not be available in all states and is subject to individual state approval. SECURE FINANCIAL PROTECTION WITH OUR INSURANCE AND REINSURANCE OPTIONS: Employer Stop Loss: Traditional Protection • Small Group Solutions • Coverage Over Reference-Based Pricing Managed Care Reinsurance: Provider Excess Loss • Health Plan Reinsurance Life Is Not Without Risk. Catastrophic claims can arise unexpectedly. If the plan has the right Stop Loss protection in place, focus can remain on achieving business goals and welcoming Amy back when it’s time. When you work with the experts at HM Insurance Group, you can have confidence that the claims will be paid. Find more on hmig.com An infant with a 60-day NICU stay could exceed $1 million in costs.*

The Self-Insurer - September Issue 2022

Articles inside

EMERGING TRENDS: CAPTIVE INSURANCE AND CYBER RISK

CRACKING THE CODES

NEWS FROM SIIA MEMBERS

SIIA ENDEAVORS

THE BROKER AND TPA RELATIONSHIP IT’S COMPLICATED