The question is, how can you as an employer use this law to reduce healthcare costs and ensure that you’re getting the best coverage for the best rate. Before we do that, let’s explore what HB2015 is and how it works.
What is HB2015?
House Bill 2015 (HB2015) changes the Insurance Code to demand that health insurance issuers who receive a written request for a report from a group health plan must provide a claims report.
Inside this report, claims data must be included. However, certain restrictions apply. The requester must prove they have a right to access the information contained. Once the requestor receives the report, they can follow up for additional information if needed. Once a request is submitted, issuers must respond within 30 days.
Issuers who refuse to release this information to approved of individuals can be subject to administrative penalties. They cannot, however, be held liable for civil damages.
There are many laws that protect individuals from having their health history used against them. HB2015 is focused on gaining accurate information to make a health plan decision without violating individual privacy.
The claims data that the plan’s sponsor has requested must include this information:
- Total dollar amount of pendent claims
- Total monthly premiums
- Paid claims data per month
- Census data for employees
These reports are captured in either Tier 1 or Tier 2. Tier 1 includes large claims and tier 2 is large claims exceeding $15,000. If an individual claims report has paid claims worth more than $15,000 within 12 months, they must provide a separate sheet and description of those claims. Each claim over $15,000 must have a unique identifying number for the person who received them, the date of service, the amount paid, and procedure and diagnosis codes.
Armed with this information, employers can take steps to reduce healthcare costs and ensure their employees are well taken care of. Of course, it’s a bit more complicated than that. Here’s how claims data makes a huge difference in your costs.
Claims Data Makes a Difference
When health insurance broker’s like our team are looking to lower costs for employers, we try to avoid community rating proposals. One way we’re able to do this is through claims data. We maximize the data to help underwriters determine the appropriate risk for the group and pricing. Pricing that’s based on accurate claims information is a powerful way to keep costs under control.
Large claims data is equally important. Some groups may run over 100% in their previous year because of a one-off cost like a high-cost surgery. We call this a “shock claim.” These “shock claims” do not require follow up treatment and therefore shouldn’t be included in the underwriting process. By having cold hard data that shows how the group used their insurance in the previous year is the easiest way to determine what future costs will be. However, if you don’t have access to claims data you can’t argue to lower costs based on this alone.
The good news is, a carrier typically has 12-24 months of continuous claims data available to rate a group. You simply need to know to access it or work with someone who does. Failing to request a report could cost you big.
Claims data with additional information from other sources can provide a solid basis for developing lower-cost group plans. Another component is the cost and use of prescription medications. The first part of the process is using the drug utilization report.
What About the Drug Utilization Report?
Each year, states are required to record their state’s prescribing habits and cost savings generated from the Drug Utilization Review (DUR) programs. Employers and health plan providers use DUR programs and reports to increase the efficiency of health care resources.
Drug utilization reports enable the managed care pharmacist to identify group prescription trends for patients with conditions like high blood pressure, asthma, and diabetes. This, in turn, provides better care for the individuals in the group and reduces unnecessary costs for the employer.
The ultimate purpose of DURs is to improve patient care. And the better care individuals receive, the less likely they are to file claims, and the less likely they are to have high pharmaceutical expenditures. Reduced claims lead to lower costs for the holder.
Auditing claims data can seem inconsequential but the reality is it can greatly bring back your investment and then some. By improving the healthcare of the individuals on a group plan, you can increase their benefits by default.
The Primary Care Insurance Solutions team is determined to use tools like the drug utilization report to maintain affordable prices and higher quality care for sponsors and their beneficiaries.
How Your Business Can Benefit
For every service you receive as a business you know exactly what you’re getting. You sign contracts that clearly outline the services you’re getting or giving. It is not a guessing game. You know precisely what to expect—especially if you’re paying thousands of dollars. Why should healthcare be any different?
As a business, you likely pay out thousands, if not hundreds of thousands of dollars, in health insurance. It’s only logical that you’d want to know what the insurance company is paying out, for what, and to whom. Saving money on your plan and turning the cost curve downwards begins and ends with educating yourself about insurance payouts.
A simple critique of your company’s insurance costs can go a long way towards improving your health insurance costs. And thanks to state laws, companies in Houston, Texas can use HB2015 to request insurance records and claims data to make smarter decisions.
Once you have this information the next step is to use it for underwriting your proposal. That’s where we can help. The Primary Care Insurance Solutions team knows how to use often overlooked tools like claims data to reduce your healthcare costs.
For more information about claims data or HB2015 and how it might affect your business, please reach out to us. We can walk you through the process of gathering this information and can let you know how it translates into greater costs savings.
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