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Blog & News

7 Considerations Self-Funded Groups Should Address Post COVID19

With every crisis there comes opportunity, and the current pandemic our world is enduring is no different. The Corona crisis has provided every steward of health with a growing list of opportune lessons from which to learn. In particular, self-funded groups have found that health plan implementation and group benefit design amidst a global pandemic are ripe with lessons of uncertainty and volatility. Their ability to proactively prepare for and respond to a pandemic crisis has been tested through grueling weeks of unprecedented uncertainty. Today, more than ever, it is important for those self-funded groups to assess various considerations as they relate to COVID19 and its effects on the health insurance system.

“What could go wrong as we emerge from COVID-19? In a word, everything.”

Now that we have stated the obvious let us discuss some top of mind considerations, potential issues, and related recommendations. Depending on how things develop over the next 4-6 weeks we should be able to set a reasonable timetable for when to expect the latent demand for medical and pharmaceutical services to emerge. As the nation slowly reopens and health plan questions and concerns regarding COVID19 pile up, it will be critical for self-funded groups to review and address the following seven considerations.

1. How many lives are being covered under my plan? – active, furloughed, COBRA, and other.

Consider: Knowing the corporate strategy of alignment between revenue and reinstatement of employees will be essential in managing 2020 and the 2021 benefit design considerations, premiums, reserves, and reinsurance.

Recommendation:

  • Work with your health plan management team, advisor/broker and actuary on several models that will provide senior management with an understanding of the variables at play in safely and efficiently managing a fluid and dynamic work environment.
  • Consider adding employee benefits needs to your SBA Paycheck Protection Program loan request as part of your payroll costs. The benefit costs appear to qualify for the forgiveness component of the loan.
  • The workforce and their families have been through a COVID Tsunami and many need EAP services or enhanced mental health support to handle the anxiety, depression, family problems and substance abuse arising from fears of unstable work, inability to pay bills and uncertainty about having essential life supplies, medicines and food. Expect behavioral health and social services costs to increase dramatically.

2. Postponement of Elective Procedures

In the short term, there will be lower inpatient hospital admissions, procedures, and anesthesia costs due to postponement of elective (not immediately necessary/life threatening) procedures. Do not be lulled to sleep by lower costs of medical and pharmacy claims through January-June 2020, because there is a pent-up demand for elective and routine health care as well as the testing that people have delayed. Some of these services will reveal larger health issues that require expensive medical and surgical treatment, because non-emergent care and new symptoms have been largely ignored during the Covid-19 outbreak.

Consider: with the postponement of elective surgeries, routine health care and testing, each person is working to make sure they are scheduled at the earliest date, even if the date is in pencil and may be rescheduled two or three times. Think tsunami of procedures and claims. Be ready!

Recommendation: 

  • Work with your health plan management team and actuary to understand the impact for the balance of 2020 and expectations for 2021
  • Know how your care manager is managing the flow of requests and that medical necessity determination is enforced (trust but verify until appointments are confirmed)

3. Emergency Department (ED)

Emergency Department (ED) visits are predicted to increase, especially in out-of-network, free-standing EDs that are catering to non-COVID-19 cases.

Consider: is your administrator enforcing the benefit design related to ED services?

Recommendation: 

  • Work with your health plan management team and actuary to understand the impact for the balance of 2020 and expectations for 2021
  • Educate Plan members on when and how to use telehealth and other alternatives when acute healthcare services are needed, but are not truly emergent

4. Telehealth

Telehealth visits are sky-rocketing, with governmental mandates to cover telehealth services during the COVID-19 crisis and individuals at home and needing care. Also, mandates related to mental health services may be forthcoming. 

Consider: are diagnosis codes being captured along with prescribed services whether outpatient, in-home, and pharmacy? This data is critical for trending analysis and understanding magnitude of utilization.

Recommendation:

  • Along with your adviser/broker discuss how to best leverage and expand this less expensive mode of medical engagement for the future. Set a specific plan with attainable objectives
  • Many providers are using the office visit codes with a GT modifier to signal telemedicine visits. They may also do so by indicating place of service or using other telehealth codes that are now available

5. Laboratory Costs

Laboratory costs are expected to increase with COVID-19 diagnostic and antibody testing and governmental mandate to cover these services at 100%.

Consider: who pays and is there going to be Federal support and subsidies?

Recommendation:

  • Ensure your health plan management team, advisor/broker is ready to prepare or assist in the documentation required
  • Consider rewarding your members for “shopping” non-emergent testing, procedures and medical care to get high quality at the most reasonable costs. The costs for outpatient surgeries, radiology tests (MRIs, diagnostic tests) and laboratory testing vary greatly depending on where they are performed

6. Vaccination Costs

Vaccination costs will sky-rocket in the next 12 -18 months, with childhood vaccinations delayed and potential costs associated with the governmental mandate to cover COVID-19 vaccination/immunizations at 100% when approved.

Consider: who pays and is there going to be Federal support and subsidies?

Recommendation:

  • Ensure your advisor/broker is ready to prepare or assist in the documentation required

7. Prescription Drug Costs

Consider: prescription drug costs are expected to increase significantly due to:

  1. Stockpiling of drugs by patients/individuals in anticipation of shortages and desire to have excess days’ supply on hand 
  2. Substitution of brand name drugs versus lower cost generic alternatives, due to shortages of generic drugs
  3. Increased utilization/prescriptions for anti-anxiety and anti-depression medications due to uncertainty of the economy and health threats
  4. Possible increase in prescriptions for opioid medications due to limited accessibility of physical therapy and other conservative modalities for treatment of pain

Recommendation:

  • Have your PBM outline the specific operational plan that they will put into place to manage the potential over-usage and misusage of all pharmacy components. Ask for metric objectives for each component and monitor achieved results

Now is the time when all your healthcare partners – advisor/broker, claim administrator, care manager, PBM, EAP, reinsurers, etc. – should come together to assist with specific plan considerations and recommendations that will bring your plan out on top through this pandemic crisis. Their recommendations should be specific, measurable, attainable, and compatible with your overall health plan strategy.

Poindexter identifies utilization trends, including newly mandated services, based on diagnoses, providers, services rendered, and place of service (including telehealth). Poindexter also identifies at-risk individuals so I Am! nurses can provide additional education related to the disease and address any issues/concerns they may have. Poindexter and its I Am! nurses can track, coach and support Plan members with COVID concerns or illness, as well as those with various co-morbid health conditions who also have COVID-19. Caveat: High risk members will still be susceptible to critical illness and death from serious infections, even after Covid-19 is better controlled. The key is to get in front of the trend by engaging vulnerable Plan members to improve lifestyles, optimize health and best manage chronic health conditions to delay or avoid catastrophic illness. Goal: APH is focused on achieving bottom-line results clinically and financially, which improves lives and productivity. Contact us to learn more.

The I Am! Nurse Advocacy Program provides only administrative, strategic and analytical services and functions and does not make medical diagnosis, provide medical advice or prescribe medical treatments or options.

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