Take Charge of your Claims Experience!
by Althea Rollins, Director of Client Relations/Business Development for Health Systems International, LLC
Companies and their executives are looking for ways to operate more efficiently and cut operating costs. One expense that is often overlooked is the medical costs associated with treating their crewmembers. These matters have traditionally been left to the port agent or their representative. In turn, these expenses, usually paid at full cost, are submitted to their P&I Club or insurer for reimbursement. A claim experience unchecked can mean higher P&I premiums and payment of potential unnecessary and/or may not be billable. There are measures that you, the shipowner, can take to avoid unnecessary costs and manage your medical claims experience. Here are a few suggestions:
1. Be Proactive- When I ask some shipowners about how they manage their injuries, I am surprised by the popular response “My P&I Club handles that! I don’t get involved.” While this statement is not entirely incorrect, it is still concerning. Your particular loss record is a significant factor when your club calculates your premiums. It’s not only a record of your past claims history, it is also used to forecast your potential exposure. Bad or good, your loss record follows you for five years. Whether before or after deductible experience, it is ultimately your money!
2. Put a plan in place- This process is crucial to the success or failure of the management of your claims experience. Traditionally, the process has been left to the local port agent. This is a logical answer as they are the local “experts” regarding what services are available in their communities. However, healthcare is not their first priority or area of expertise. Most often, the medical charges are paid directly by the port agent and billed to the owner. Once these charges are paid in full, the opportunity is lost to have the bills reviewed by a Cost Containment Professional to ensure that the appropriate care has been rendered and best price.
This process should address the following:
a. Have a system in place to review Pre-Employment Medical Exams (PEME) before employment. The best claim is the one that never happens. One way to manage your loss experience is to have a Medical Service that will effectively review and disqualify candidates that are not medically qualified to perform the job.
b. Identify points of contact when an injury takes place. At a minimum, make sure that your crewing department and your Medical Cost Containment Partner as well as your port agent are aware of the needs of the injured or ill crewmember. It is also a good idea to employ an Incident Report form that can be used to document each report of injury or illness, treatment provided, and fitness for duty.
c. A Cost Containment Partner should be appointed to make financial arrangements and review invoice for appropriateness of care and discount/negotiate final price. As previously discussed, all opportunity for review and discounting is lost when an invoice is settled at the time of service or paid in full by the agent. There are Cost Containment Partners which can arrange medical appointments, arrange direct billing, review services rendered, and discount/negotiate final charges on behalf of the shipowner for a nominal fee. Ultimately, the shipowner can rest assured that the crewmember received the appropriate care at a reasonable price.
d. A regular review of claims experience and cost containment results. This is highly recommended. It is agreed that you can’t do anything about claims that have happened. However, the information that is received can be used to identify deficiencies in safety training, evaluation/use of PEMEs, and handling of maintenance issues.
3. Appointment of a qualified Cost Containment Partner- A cost containment partner has a primary function to coordinate quality medical care for injured or ill crewmembers at a reasonable price. This partner should ideally have the capability to work with you to manage your claim and costs from onset to cure. These services should not be confused with services that only offer line-by-line bill review or medical service companies that operate in various ports. A true cost containment partnership should include, but is not limited to the following services:
- Making financial arrangements for direct billing on your behalf
- Assist with identification of an appropriate pre-contracted medical provider or facility and care coordination for treatment of crew illness/injury
- Provide Medical Case Management
- Access to a network of providers and facilities that offer a wide range of care
- Low cost drug benefit management (PBM)
- Provide bill review and discounted rates
- Regular reports regarding their performance
Provide support “back office” administrative support such as claims payment options, federal tax filings (W-9 and 1099 forms for US shipowners), online claims tracking, and direct claims mailing.
When choosing a partner, it is wise to check with your P&I Club to see who they may use or prefer to use. When you have identified some prospects, you want to make sure to ask about any fees they might charge for their services as well as the extent of their networks. When you have elected your Cost Containment Partner, work with your partner to incorporate your desired protocol into a smooth, functioning process.
4.Communicate and Monitor- Once you have your new Cost Containment Partner and process in place, communicate your plans and goals throughout your organization and to your port agents. In order to be successful, it is imperative to make sure that everybody knows their roles and work together to accomplish your company’s goals. I would suggest that you have regular status calls with your Cost Containment Partner to discuss your progress and identify any deficiencies in the process. After your process has been in place for a predetermined period of time, continue to monitor your results periodically to ensure that all is working well and you are achieving the desired results.
In closing, this process does take some time and effort to complete. However, I guarantee that the results will be well worth the efforts that it took to accomplish them!
Health Systems International, LLC