Current Contraints
Health care has become increasingly costly and complex. At the same time, it has become less transparent, often making it impossible for self-funded plan sponsors to understand where their health care dollars are being spent.
There are several constraints that plan sponsors face when analyzing claims data to support decision-making and fulfill fiduciary obligations to plan members:
1. Large daily clinical and financial claims volume – Even a medium-sized plan of 10,000 beneficiaries can generate up to 450 individual service lines of claims per day. This volume can only be handled through automated systems that must be customized for the data aggregation needs of an individual plan.
2. Non standardized data formats – Carriers, Third Party Administrators (TPAs), and Pharmacy Benefits Managers (PBMs) use proprietary formatting for the claims data they provide to plan sponsors. Even though accompanying “Data Dictionaries” aid in the process of data aggregation and normalization, these dictionaries are often incomplete, or fields are masked to protect confidential business information (such as contracted network rates). Formatting differences between the various data sources can hinder creation of a common data model from which meaningful insights can be gained.
3. Multiple data sources – Medical and Pharmacy data are aggregated from different sources, making joint analysis difficult for individual beneficiaries or populations. Consequently, this analysis can be human-labor intensive, and slow. Joint analysis is also difficult when cross-referencing Medical and Pharmacy data with other plan data, such as Enrollment, Eligibility, and Benefits Design.
4. HIPAA compliance – When accessing granular claims data, plan sponsors risk exposure to protected health information. This risk is magnified in small plans where even de-identified data can inadvertently be re-associated with an individual beneficiary.
5. Lack of reporting timeliness – Plan sponsors receive only quarterly or yearly reports from their administrators or consultants. While this periodic reporting may suffice for strategic planning such as plan design changes, more time-sensitive interventions are not supported, particularly with respect to patient engagement, disease management, or complex episodes of care.
6. Fiduciary liability – The plan sponsor is a fiduciary with respect to the health benefits of plan members, and must assure that all plan assets are spent appropriately, according to benefits design and proper claim adjudication. Unfortunately, TPA/Carriers have error rates of 3-6%, without a fiduciary obligation to correct ineligible payments or overpayments. In addition, legal cases have shown that TPA/Carriers can and do pass on undisclosed administrative fees as additional claims liabilities to sponsors. Identifying this practice, when it occurs, is not possible when claims data is aggregated exclusively from the TPA/Carrier. Sponsors must have an independent means of verifying claims accuracy.
Our Team
PforP Health is a collaboration between professionals from across the healthcare sector including population health and regulatory compliance experts, data scientists, healthcare economists, benefit managers, hospital and insurance executives, and multi-specialty physicians, each possessing over 15 years of industry experience.