Why Unions Should Review High-Dollar Claims Before They Pay (A Q&A with Maria Inman)

Maria Inman is the Assistant Vice President of Group Life & Health Claims, for The Union Labor Life Insurance Company. With over 35 years of experience in the industry, she is an expert on self-funded group health plans.

In this Q&A with Ullico, Inman talks about the rising cost of health care, the role of stop loss insurance in group plans, and the need for collaboration among service providers.

What are the biggest issues that your union medical stop loss clients face right now?

We have seen a surge of high-dollar claims, mostly from medical facilities, driven by accelerated FDA-approvals on specialty drugs, along with the rise of the gene and CAR-T cell therapies that have come to market.

These are very high dollar therapies — we know of a few that actually have price tags in the millions of dollars. The technology is good. The science is good. The progress we see in treatment is good, but the commercial insurance market is seeing this surge of higher costs, and higher costs result in higher premiums.

And there are other drivers of cost alongside these new therapies and drugs. Everything combined adds up. There is a rise in the cost of the medical care overall.

When plans receive a high claim, one that causes their medical stop loss insurance to kick in, what happens next?

We are a huge proponent of cost containment. We encourage our clients’ administrators to ensure that what they pay is justified and the services received are appropriate. They should audit the claim, to make sure there is no upcoding or unbundling. They should review the bills in their entirety, to make sure they are accurate.

What can unions and their administrators do to make the claims process go more smoothly?

We want to make sure from the very beginning that we have a relationship with all the players involved — the trustees, the brokers, the claim administrators, and the pharmacy benefit managers. When a claim comes in, we tell them, if it’s a high-dollar amount, please don’t just pay it without reviewing the documentation.

As a stop loss carrier, we look to work collaboratively with administrators, to review high dollar claims together before they are paid. When a bill gets to the stop loss level, we conduct our due diligence. If the bill has already been paid, it’s hard to tell a client, “Your administrator paid $1 million, but they should only have paid $700,000 for this type of service.”
When that happens, the fund is on the hook. In the end, their premiums are higher. When they hit the stop loss threshold, it means they have a financial burden. The last thing we want is to say, “I know you are financially burdened, but I cannot reimburse you because the claim is not covered by your policy.”

It sounds like claims administrators have a big responsibility, to protect their clients’ financial security. Is that true?

The funds do not specialize in the ins-and-outs of the claims, which is why they hire administrators to handle them. The administrators have a fiduciary responsibility toward the plan. In effect, they are saying that they will protect the plan’s assets. To me, trust is vital in that relationship.
Can you give an example of what it means to collaborate with all the providers serving a group funded health plan?

We’ve had claim administrators come to us and say “We got this high bill. This might not be a stop loss claim, but can you help us?” They’ll come to us for guidance. They’ll ask, “What is a reasonable amount to pay for this treatment?” Or they will come to us and say, “We have this high dollar bill. Can you tell us if this is a good candidate for an audit?” Or they’ll ask us to help negotiate a contested bill.

And you’re willing and able to help with those requests?

Absolutely. We have strong cost containment initiatives. We don’t personally have to conduct an audit or negotiate a bill. We have agreements with different specialized vendors who can provide those services.

In other words, we have bill negotiators. We have bill auditors. We have medical review directors. We’re able to lend perspective on what is the usual, customary, and reasonable cost of a procedure or treatment, based on our claims processing data and our overall expertise in the market.

We make those tools and relationships available to our clients, in part for our protection, and more importantly because it’s our company’s mission to protect unions, their funds, and the labor movement at large.

What can trustees do to guarantee collaboration among their vendors?

If trustees are too hands-off, they might have a TPA who gets a million dollar claim and pays it without conducting a thorough review. When the TPA submits it to us, we are going to ask for additional documents, such as medical records, universal bills, or itemized bills. If the TPA says they don’t have those bills, or that they don’t have the necessary medical records, we’re going to have a problem. If we don’t know what they paid for, it would be hard for us to pay the stop loss claim.

To avoid these sorts of problems, a fund could instruct their TPAs on the front end. They could say, “Before you pay any claims over a certain dollar amount, collect the information needed to fully review the claim.” Or they could direct them to consult the stop loss carrier.

Some TPA’s resist sharing information. They should be reminded that the fund owns their members’ information and that it is in everyone’s best interest to share that information and to collaborate with each other. At the end, we are all working towards a common goal — to protect our common client, the fund.

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This interview has been edited and condensed for clarity.