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Our Value of Directed Discounts vs. Passive Discounts with PPO Networks

DEFINITIONS

Directed-level discount:  provides the deepest discount available by accessing PPO networks that are either local, regional or national and require compliance to network steerage.  Steerage is present if a Payer complies to business rules established between providers and a network as obligated in their access agreement.  Examples of steerage include:

• Benefit plan differential (10% or greater)
• Claim payment at either the in-network level or at the out-of-network level
• PPO Network logo identification
• Medical referral or prior Provider Service Notification (PSN)

Supplemental-level discount:  provides a reasonable discount by accessing national-based PPO networks with lower requirements to access.  Examples of access requirement include:

• Benefit plan differential (10% or less)
• PPO network named on the Explanation of Benefit / Explanation of Payment

SITUATION:

• Client:      Insurance Carrier
• Scope:     National
• Market:    Student Athletes – University & Colleges
• Product:   Non-primary claims access &  re-pricing via supplemental  network

ISSUES:

• How to better contain costs of medical care for student athletes who are injured whenever participating in any athletic-related event?
• How to proactively steer athletes to the most appropriate provider for greater discounts?
• How to identify providers/student athletes in who are participating in the program in real-time?
• How to secure access with greatest discounts?
• How to secure access to preferred providers associated to any institution?

SOLUTION:

• GlobalCare introduced to Client our directed PPO model to secure greater access with deeper discounts
  • Designed a custom PPO hierarchy per institution
  • Acquired a listing of preferred providers by institution
  • Issued Provider Service Notification Identification Cards to each institution that provided required and helpful information about the Payer, Carrier, PPO network and where to send claims.
• GlobalCare invented a web-based program to do Provider Lookups with on-demand Provider Service Notification to optimize network selection for savings
• GlobalCare administered each Provider Service Notification with the provider and appropriate PPO network

RESULTS

• 2008 Year-to-Date performance

1  With the Directed Only vs. Passive Only a 41.2% performance improvement in Average Discount is realized
2 Savings Rate is calculation of Hit Rate on Claim Dollars * Average Discount Rate (I.e. 94% * 34%); Savings Rate indicates what the expected return for every claim dollar will be in savings.  For instance, for a $100.00 claim you could expect to realize $18.72 under the Passive Only model and $31.96 under the Directed Only model. 
The performance improvement in Total Savings would be 70.7% using the Directed Model [($31.96 - $18.72) / $18.72]