Coalition America, Inc.

After the great Clinton health reform initiative died in the early 1990s, business executives thought they had driven a stake through the heart of massive federal involvement in health care. However, reformers have proven more persistent and resilient than most ever expected.

The latest effort to reform and regulate America’s health care system - the Patients’ Bill of Rights - has kept American businesses on edge. The prospect that employees can sue them over medical decisions and visions of spiraling premium costs is forcing corporations to rethink whether medical insurance remains a viable employee benefit.

The Patients’ Bill of Rights is primarily a legislative reaction to the complaints by an assortment of doctors, hospitals and patients over measures employed by some managed care companies to control costs.

Nevertheless, the legislation has required managed care organizations to take a fresh look at their operations, hoping to avoid a massive federal intrusion into health care. Thus, new alliances are emerging between managed care or self-insured organizations and a new breed of health care cost containment specialists with an innovative approach to reducing corporate health care outlays.

Cost-containment companies save money by offering self-insured organizations and local or regional managed care companies three types of service: 1) developing primary PPO management programs across multiple locations; 2) offering access to lower-cost supplemental networks for managing out-of-network costs; and 3) direct negotiations with health care providers where no PPO contract exists.

Many cost-containment companies have contracts with hundreds of PPO networks nation-wide. Through these relationships, they can develop either primary or supplemental networks for true national coverage at much lower costs.

In addition, some cost-containment companies have other ways to lower costs. For example, if it lacks in-network access to certain providers, they will negotiate directly with the doctor or hospital on behalf of the PPO or corporate self-insurer to obtain a reasonable discount.

Even if an insurer does not need a true national network, they can still benefit by having a cost containment company reprice their out-of-network claims. Working through a cost-containment company, insurers can use supplemental networks to lower their out-of-network claims or they can obtain retrospective discounts after the claim is submitted through a process called "claims repricing."

Today, the repricing process can be automated, so that clients of cost-containment companies like Coalition America can go on line to access PPO networks and capitalize on a broad range of pre-negotiated discounts.

Claims sent by Internet, EDI, fax or mail are computer matched to the network delivering the best results under existing contracts. If no network match is found, the claim is automatically routed for negotiation.

Once the new prices are obtained, they are immediately transferred back to the payer for disbursement.

This Internet approach provides immediate discounting results and allows the customer to control the discounting process. It also provides for faster PPO repricing and negotiation. Internet access also solves other problems. When dealing with thousands of paper claims, some inevitably drop through the cracks.

Through the Internet, the likelihood that claims will be lost or misplaced during transfer are practically eliminated. In addition, Internet systems allow the client to control the repricing process, eliminate delays and reduce the amount of rekeying required to process a claim.

Finally, once a claim is in the Internet system and if no network alternative exists, all the information the cost-containment company needs to negotiate the claim is instantly available on line.

The best cost-containment companies also offer unbiased analysis of networks so that self-insured companies or PPOs obtain the widest health care access at the lowest possible cost.

"Unbiased analysis" is the operative word when it comes to network selection. PPOs may rely on their own or affiliated networks when handling out-of-network claims. However, those networks may or may not offer the best results.

An unbiased approach means the cost-containment company selects the PPO network from the hundreds in its portfolio that offer the best results for a particular situation or need.

Further PPO contracts are constantly changing. Since cost-containment companies are always updating their own network data, they can provide access to the best coverage at all times.

These broad-based networks not only save money, but make life easier for employees. Having access to broad provider and network choices minimizes disruption, keeping employees happier and moral higher.

Cost containment clients who choose a directional PPO program can benefit from increased savings, while maintaining a wider choice of providers.

Clients who choose directional programs, such as SolutionsPlus! from Coalition America, receive a medical card similar to other managed care programs. These cards steer them to providers, while generating fewer administration problems and less paper work for those employees who choose in-network care.

Other employee-oriented services include information on available PPOs, an Internet provider look up and on-line provider listings, an automated patient referral line and paper directory, where needed.

Because the need to reduce health care costs is so great, PPOs and self-insurers are now turning even their small claims over to cost-containment firms for repricing or negotiation. In high-volume situations, significant savings are possible by better managing even small dollar claims.

While these processes have helped keep a lid on health care costs, there are still challenges faced by cost-containment firms that must be resolved. For example, while cost-containment firms can help expedite the payments of insurers in return for negotiated discounts, they have little control over when patients pay their share.

Many users think their PPO picks up the cost, so collecting the patient’s share remains a challenge for providers. This requires an education effort by both providers and payers to ensure patients understand their obligations.

There is also the problem of lagging data, where providers drop out or fall off a particular network. It is often difficult to track provider changes within one or two networks, so cost-containment firms tracking hundreds will always have some gaps.

Finally, there is some concern that cost-containment companies may push up the cost of health care. Some wonder whether providers, realizing that ultimately they must discount their services, may be engaging in premium pricing for their services to offset the anticipated rebate. However, there is little evidence of that accusation.

Through it all, corporations, government policy makers, health care providers and managed care organizations all are working to control costs without sacrificing the quality of health care. The emergence of specialized cost-containment companies is providing a new partner in that process.

Meanwhile, most companies are looking for alternatives that will: 1) protect a benefit that is almost as important to their employees as their paychecks, 2) remove them from the ‘line of fire’ in the health care wars, and 3) give them stable, realistic, controllable medical coverage costs.

There is nothing like rising costs and the prospect of more governmental intervention to spur innovation in any market.

Using the new approaches developed by cost containment companies, managed care organizations, self-insurers and others involved in paying for employees medical benefits are finding new ways to make managed care work better, while giving employees more flexibility and control over the most important asset they have - their health.

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