Guide To evaluating health plans

Employer’s Guide to Evaluating Quality Health Plans...from the Employer Quality Partnership. (The Business Roundtable, Association of Private Pension and Welfare Plans, The ERISA Industry Committee, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Federation of Independent Business, & U.S. Chamber of Commerce )

Choosing which health plan (s) to offer your employees is a complicated process. As an employer, you face decisions about plan costs, benefit levels, and the ways employees will access care. What’s more, the U.S. Department of Labor says employers have a fiduciary responsibility to consider quality, not just cost, when selecting a health plan.

The Basics—Tips for Evaluating All Types of Plans

Just as doctors use a variety of methods to treat patients, every health plan has its own unique features and focus. Before you choose which plan(s) to offer, consider the types of plans that might be appropriate for your employees —and for your organization. As you consider e a c h type, think about its main features and identify how well the plan performs these functions.

	Indemnity plans offer traditional health b e n e fits and open access to doctors. Administration focuses on processing and paying claims. Because there is no formal "management" of care, these plans tend to be priced higher than other options.
	Preferred Provider Organizations (PPOs) control costs by steering patients into more affordable medical settings. They do this by negotiating provider discounts, encouraging preventive measures, implementing Utilization Management programs, and d e v e l o p i n g networks of doctors and hospitals. Patients may choose to see either a network doctor or, for a higher price, any non-network doctor he or she wishes.
	Health Maintenance Organizations (HMOs), and other managed care plans, look for ways to manage how medical care is delivered, such as establishing medical protocols and contracting with doctors and hospitals to provide care. While typical HMOs require patients to seek care from network providers, Point of Service plans (POS) function like HMOs but allow patients the opportunity to seek care outside the plan’s network of doctors. When evaluating plans of each type, try to find out how well they perform these functions and how satisfied current members are with their services . Top Ten Evaluation Basics Here are some important "basics" to consider when evaluating all health care plans. 1. Financial stability To manage risk appropriately, health plans must have enough resources to maintain solvency. Ask the plan to demonstrate its financial health. They can do this by providing state insurance filings and reports from rating agencies like A.M. Best, Duff and Phelps, and Standard and Poor’s. 2. The outlook for change Mergers and acquisitions among health care organizations are common today. These can radically change a plan’s network of doctors and its administrative structure. Ask if the plan anticipates a merger or acquisition. If it does, how will the plan minimize disruption to you and your employees? 3. Plan features, limitations, and exclusions What a plan doesn’t cover can be just as important as what it does cover. Ask the plan to provide specific details on what it does and does not cover and how it handles experimental procedures, transplants, durable medical equipment, infertility treatments, mental health, and drug therapies. Also, what are the plan’s deductible, co-payment, annual maximum and lifetime maximum benefit features? 4. Emergency standards Ask whether the plan uses the "any prudent lay-person" standard to pay for emergency room services. This standard allows employees to use their own reasonable judgment of what is a medical emergency. 5. Administrative services If the plan requires employees to file claims, getting claims paid on time and accurately will be very important. Ask the plan to document its claim payment accuracy and turn-around time goals and whether it has met these goals in the location that will process your employees’ claims. It is also important to make sure the plan can handle all of your administrative and customer service requirements, such as processing your eligibility data and administering your plan design. 6. Member satisfaction First check with your state insurance commissioner’s office or Better Business Bureau to see if any formal complaints have been filed against the plan. Then ask for the plan’s latest member satisfaction survey results. Independent surveys from external organizations as well as health insurance brokers or agents can all be useful resources for determining member satisfaction. 7. Disenrollment rates Ask the plan how many members have left the plan in the past year, and in the last few years. Turnover rates of more than ten per-cent may indicate a problem in the plan’s network or services. 8. Grievance and appeals process Federal law requires all health plans to set up and follow a formal process for grievances and appeals. Some plans use an independent or external process; others handle them internally. Some plans rely on third-party arbitration to resolve difficult problems. Ask the plan to explain its process and tell you the average length of time it takes to resolve an individual’s appeal or grievance. 9. References Ask for the names of several employers your size who currently use the plan, and call them. Also, ask the plan for at least one or two similar-size employers who have left the plan in the past year or two and call them. They may be able to provide insight into problem areas. 10. Level of Comfort Once you select a plan, you will have to interact with account representatives on a regular basis. That’s why it’s important to make sure you like and trust the people with whom you will be working. Will they be responsive to your needs? Will they return your telephone calls and be able to handle your problems? Ask the plan’s references what their experiences have been.

Top Ten Evaluation Basics