boxsolid
The De-Evolution of the PPO Model (continued from page 11)
stances of the bill, providers are will- time maximum, which could spell percentage of Medicare). More often
ing to work with payers directly financial catastrophe for the partici- than not, the market is producing
towards settlement on in-network pant. Payers need to have processes contracts that add value for providers,
claims, and would prefer a frank and in place to review high-dollar claims but not for PPO payers. If left
professional discussion versus a short where there is a percentage off con- unchallenged, payers that rely only on
payment through a “bill review.” This tract. High-dollar claims have a major PPOs for savings will not remain com-
process can be effective, but is seen impact on overall claim dollars. We petitive in this market.
by and large as intrusive from the routinely see 20% of claims
provider community, and should ($5,000.00+) representing 50%-75% Jason Davis is a Research and
therefore be used sparingly. Many of claim dollars. Development Specialist for Global Excel
providers recognize that the market is Management, Inc. (Global Excel).
broken, that PPOs represent the new As we have shown, the PPO evolved
retail, and that charges are just the quickly, but a lack of cost controls, Mr. Davis is highly active in Global
artifice created to support “no-strings- weak steerage mechanisms, and poor Excel’s market analysis and business
attached” discounts. In response, payer/provider accountability has con- development. He is an expert on cost
providers are extending discounts tributed to the commoditization of the containment and claims negotiation
beyond the PPO contract on high-dol- PPO model. Until more satisfactory strategies, and he has authored numer-
lar claims to ensure that PPO payers quality versus cost paradigm models ous articles on these topics. Mr. Davis
have a fair chance of competing in become the norm, payers must be currently resides with his wife Kimberly
this market. Providers also under- cautious with their dollars, and may and his two children Aleithea and
stand that inordinately high claims have to introduce more tangible bene- Kairus in Sherbrooke, Quebec, Canada.
can deplete a plan participant's life- fit limitations to their policies (i.e.,
TPAs, MGUs and Carriers to be in
Charleston, SC for SIIA Conference
ecember 7, 2009 – The Leading direct stop-loss writers dis- Stop-Loss/MGU executive roundtable
D
brochure for SIIA’s 2010 cuss what catastrophic trends they are discussion forum
TPA/MGU Excess Insurer seeing and what they are doing to
Executive Forum will be in the mail contain costs. A representative from a well-known
later this month, but you don’t need investment banking firm will provide
to wait to register for this popular “Best in class” TPA back office structures an insider’s view on how to beat the
SIIA event, nor reserve your exhibit odds when buying or selling a TPA.
space and/or sponsorship. The event An underwriter, actuary, reinsurance bro-
is scheduled for April 6-8, 2010 at ker and TPA executive share their per- You can register today on-line at
the beautiful Charleston Place spectives on stop-loss market conditions. www.siia.org. For exhibit/sponsor-
Hotel in Charleston, South ship information, please contact
Carolina. Educational program TPA executive roundtable discussion Justin Miller at 800/851-7789, or via
highlights are as follows: forum e-mail at jmiller@siia.org.
A well-established TPA and their data We look forward to seeing you in
partner will discuss how to use your Charleston.
data to powerfully compete on lower
overall costs.
12 • The Self-Insurer
©
/ January 2010
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