BHI Database Provides Insight Into Large Claim Diagnoses

Craig Irvine

In a review of the BHI data, BCS’s initial findings reveal the top ten high cost diagnoses. These top 10 diagnoses comprise about 40% of all large claims costs and represent about $9.2 billion in ground up claims. Large claims are defined as total paid claims over $500K per member per year. In addition to total claim dollars, the chart below includes the frequency rate per 100,000 members, average severity of each claim, and the highest cost single claim amount. Stay tuned for our next blog post that will examine the 10 most expensive claims incurred within a one year period.

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Agent E&O Coverage Integral to Risk Management Strategy

Craig Irvine

An Interview with Chuck Campbell

PPACA is changing our industry significantly. While healthcare reform can provide great economic opportunity for BCBS agents, it will likely increase the risk and frequency of issues and liability claims. For over 15 years, BCS has offered an Errors and Omissions program to BCBS independent agents. We recently interviewed Chuck Campbell, Vice President–Agency Sales, Blue Cross Blue Shield of South Carolina on the role Agent E&O plays in his risk management program.

BCS Financial:  Chuck, can you tell us how many years have you have been with BCBSSC and what your responsibilities are?
Chuck Campbell:  I have been with the Plan for 20 years. I’m responsible for all agent driven product sales and retention efforts for groups of 2-100 lives, plus all individual products including U65, Medicare Supplements, Medicare Advantage and Part D, and Short Term Health. Additionally, we market and sell a host of ancillary products to attach to our group offerings.

BCS:  I’m sure you’ve spent a good deal of time analyzing the risk impact of PPACA on your Plan, but it must also present new challenges for your agents.
CC:  Absolutely. It seems to me that the health insurance market has never before been faced with such complexity. Agents must deal with the challenges of navigating clients through this new world. Agents need to understand the regulations and help their customers make appropriate decisions. The Insurance Exchanges are new marketplaces for individuals and small businesses. Agents must be knowledgeable and have strong communication skills to help their customers understand their options.

BCS:  Tell us about your agent oversight in the changing healthcare world.
CC:  Well, we have always been diligent with agent oversight. All of our agents have background checks, vector one and go through the appropriate licensing procedures. We monitor them closely and if there are any DOI complaints, license issues or liability claims, we are typically notified. One of the most important features of our agent oversight is that we require all agents and agencies to maintain at least $1,000,000 in Errors and Omissions coverage. From our perspective Agent E&O coverage provides a layer of liability protection for all parties involved: our customers, our agents and the Plan.

BCS:  BCBSSC has sponsored BCS’s Agent E&O program for a number of years. Can you tell us the background?
CC:  This program started in 2006. It has been a very successful value added benefit for our agents. We are pleased that we can make a cost effective option that has quality coverage available to our agents. And we’re pleased to be one of the top Blue plans nationally in agent enrollment in the BCS program administered by MGA.

BCS:  Many carriers have the requirement but only confirm coverage at the time of original appointment. From what we hear, confirming coverage on an annual basis is an administrative headache.
CC:  Well, I can confirm that it does present an administrative challenge. But the good news is that we partner with the BCBS E&ampO plan administrator MGA Insurance Services to assist our annual enforcement. MGA manages the entire process from sending notifications 90 days ahead of the E&O renewal to collecting and confirming credible coverage. We work closely with them through a weekly web-based reporting process.

BCS:  Is the agent E&O requirement an outcome of healthcare reform or have you always had that requirement in your contracts?
CC:  We have strongly supported having an E&O insurance requirement for many years. BCBSSC distributes products through hundreds of independent agents. Because the agents are contractors, there is an inherent exposure to the Plan that is outside of the Plan’s control. If agents are negligent, they should be held accountable and the loss should be applied to the appropriate policy. And with all of the changes in healthcare and the movement to more independence among agents, I can’t imagine a Healthcare insurer not requiring E&O coverage.

BCS:  Do you see the role of agents as changing?
CC:  The role of agents appears to be changing from pure product salesperson to being more of an advisor/consultant. As I mentioned before, there has never more complexity to the sales process. We believe that Agent education and training is critically important. But as we move through 2014 and as agents assist clients with the decision making process, the agents will certainly have increased potential for issues that could lead to claims.

BCS:  Thank you, Chuck, for sharing your perspectives on Agent E&O insurance.

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Travel nightmare sheds light on the importance of quality travel insurance

Craig Irvine

As illustrated in this CBS news video, when problems arise, sometimes it’s just not enough to have travel insurance; you need the right travel insurance. Buying good, comprehensive health coverage from a reputable company is what makes all the difference.

Royal Caribbean in hot water over couple’s cruise medical ordeal | CBS News

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Medical Evacuation Coverage Deserves a Traveler’s Consideration

Craig Irvine

The U.S. Department of State posts medical information for Americans abroad on their website. This article discusses the fact that payment of hospital and other expenses while abroad are the responsibility of the traveler. In particular, they caution travelers to be aware of the large potential expense of medical evacuation saying, “Medical evacuation can easily cost $10,000 and up, depending on your location and medical condition.” GeoBlue offers Medical Evacuation insurance as part of their coverage options. Before heading overseas, make sure that your travel protection coverage includes this feature.

Medical Information for Americans Abroad | U.S. Department of State

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Standing Up to Myths on Self-Insurance

Craig Irvine

In the article, “The Case For Self Insurance: Overcoming Common Myths,” George J. Pantos, Esq., Executive Director of the Healthcare Performance Management Institute and former General Counsel, Self-Insurance Institute of America, discusses several common myths being disseminated by critics of self-insurance. With the ongoing implementation of the ACA, these myths are being propagated throughout the news on an almost daily basis. Stating each myth clearly, Pantos addresses them one by one within the larger context of federal preemption and the bounds of permissible state insurance regulation under ERISA. This article will be of interest to anyone involved in the underwriting or selling of self-insurance.

The Case for Self Insurance: Overcoming Common Myths | George J. Pantos

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Why Travel Insurance?

Craig Irvine

Greg Petit recounted his personal story of overseas health insurance in the article Tales from the Front. I wanted to follow up on his story by sharing a recent article written by the medical director of HTH. This does a great job of covering the basics of why purchasing travel insurance is so important.

Travel Medical Health Insurance Basics | HTH Travel Insurance

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Shifting Trends Drive New Market Opportunities

Craig Irvine

Join us inside this issue of Exchange to learn more about how Blue Cross and Blue Shield Plans capitalize on shifting trends by offering GeoBlue international healthcare products.

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