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Paying cash for healthcare services can often lead to lower bills compared to using insurance

High deductible plans may not always provide the best deal for consumers and their employees. Research shows that paying cash for healthcare services can often result in lower bills compared to using insurance. Insurance companies negotiate discounts off the retail price set by healthcare providers, but cash pay prices are even lower.

This discrepancy highlights the need for price transparency and better incentives to encourage people to explore lower-cost services.

The time is now. CLAIM YOUR 30 MINUTES WITH JOHN CLAY and get an option for your renewal instead of another year of increase…

 

In this episode, we discuss:

✅ Lowering Healthcare Prices with Instruments
✅ Insurance Discounts vs Cash Pay
✅ The Need for Price Transparency
✅ tDriving Transparent and Predictable Pricing

Learn how your healthcare plan can help you reach these goals in 2024

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023

 

Connected Planning and Healthcare (For The CFOs)

Increasingly, C-suite leaders are looking to connect their business plans across their finance, workforce, sales, and supply chain teams.

This approach, known as “connected planning,” provides deeper insight into data across the company so that business leaders can get a good view of the whole business plan and not just one piece of it.

Connected planning helps to improve decision-making and identify the right strategy for the business. More CFOs are now partnering with their C-suite counterparts (chief operating officers, sales leaders, etc.) to connect plans across lines of business and give executives better information company-wide.

Now, do you think CFOs should consider the second biggest operational expense in the organization, into their “connected planning” process? (crickets) – That was a rhetorical question.

There is no question about it.

This year, you’ll have to examine if your healthcare plan is part of a problem, or part of a solution to protect your organization from both internal and external threats of 2024.

The time is now. CLAIM YOUR 30 MINUTES WITH JOHN CLAY and get an option for your renewal instead of another year of increase…

 

The top 4 concerns of the CFOs in 2024 are:

✅ Cutting the right costs
✅ Budget planning
✅ Increasing profitability
✅ Attract and keep the right talent

Learn how your healthcare plan can help you reach these goals in 2024

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023

 

Awkward situation: Commercial Payers Delay Paying Out Claims To Providers

Data reveals that over three months passed without payment for thirty-one percent of inpatient claims submitted to commercial payers.

Situation

At the beginning of the year, hospitals and health systems held optimistic expectations regarding their financial performance, anticipating a rebound in revenue and profit margins following a challenging period. However, their financial situation has continued to face difficulties. A recent analysis conducted by Crowe places a significant portion of the blame on commercial payers, citing frequent initial claims denials and various obstacles hindering payments to hospitals.

Examining data from the first quarter of this year related to revenue cycle analytics, the statistics reveal that 31% of inpatient claims submitted to commercial payers remained unpaid for more than three months. In contrast, only 12% of claims submitted to traditional Medicare experienced such delays.

Similar figures emerged when assessing outpatient claims, with 32% of claims facing extended delays with commercial payers, as opposed to just 11% with Medicare.

One particularly striking metric was the rate of prior authorization and precertification denials – rejections based on the payer’s determination that a provider either did not obtain prior approval for treatment or that the treatment was not medically necessary based on the diagnosis. The incidence of these “medical necessity” denials has been on the rise for several years, and the trend persists. During the first three months of 2023, the rate of inpatient claim denials due to medical necessity reached 3.2%, in contrast to Medicare’s 0.2%. In 2021, the denial rate for such claims was 2.4%.

Although the increase may appear relatively minor, a denial based on prior authorization or precertification can trigger a significant battle to secure payment, as noted by Crowe. Providers who disagree with the denial must navigate a labor-intensive appeals process involving utilization management, nursing staff, physicians, and possibly the patient. This effort can be substantial in terms of costs, time, and complexity, often without a guarantee of full payment from the payer.

The time is now. CLAIM YOUR 30 MINUTES WITH JOHN CLAY and get an option for your renewal instead of another year of increase…

 

The Outcome

Within the realm of claim denials, the category of prior authorization and precertification denials forms a subset of a broader metric encompassing initial denials. In the first quarter of 2023, commercial payers initially rejected 15.1% of both inpatient and outpatient claims for various reasons, while the comparable figure for Medicare during the same period stood at 3.9%.

Although most claims initially denied by commercial payers eventually get resolved and paid, the administrative efforts required to turn an initial denial into a positive outcome impose substantial costs on providers, as confirmed by Crowe. This process necessitates active involvement from the provider to secure payment for the services rendered.

Another category of claim denials contributing to payment delays from commercial payers pertains to requests for information (RFI). RFI denials occur when a payer chooses not to process a claim due to the absence of essential documentation, such as an attachment, signature, or a copy of the medical record.

In terms of numbers, commercial payers exhibit a denial rate that is 12 times higher than that of Medicare. In the first quarter of 2023, the RFI denial rate for inpatient and outpatient claims submitted to commercial payers by providers was 4.8%, in contrast to Medicare’s 0.4%. Crowe notes that an RFI denial can prolong payment by at least 45 days, impacting cash flow and accounts receivable performance adversely.

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023

 

Business Lexington – July, 2023 – John Clay, BetterSourceBenefits

Breaking Through The Benefits Status Quo

Download the full article here >>

In the 1990s, while working as a benefi ts advisor for Blue Cross Blue Shield of Kentucky, John Clay realized he could do more to help his customers. Over the course of the decade, Blue Cross Blue Shield of Kentucky eventually transformed to become Anthem Blue Cross Blue Shield, transitioning from a mutual company owned by policyholders to a publicly traded company owned by stockholders. 

This change didn’t sit well with Clay. Feeling unsatisfied with simply working out renewal programs with a limited number of insurance companies, Clay joined a “mastermind group” of advisors from across the country who were dedicated to making a difference in the lives of employers and employees.

 
“I already had a background in inventory control and material management. So, we started managing the healthcare supply chain,” Clay said. “We put our custom-designed plans that were in the best interest of employers and their employees in a fiduciary or legal and ethical way.” 

In 2000, Clay, who graduated from the University of Kentucky Gatton College of Business with a degree in supply chain management, founded Better Source Benefits, a boutique healthcare benefits agency based in Somerset. Better Source Benefits operates throughout Kentucky, Ohio, Tennessee, and New York. His clients range from companies with as few as 100 employees to those with as many as 5,000 employees. 

Clay primarily serves the construction, energy, and manufacturing industries, as well as nonprofit organizations such as city and county governments. 

Clay prefers to be known as a strategy expert rather than a consultant, believing that companies need targeted strategies to break free from the status quo of rising premiums and diluted healthcare options found in many employee benefit plans. 

“Better healthcare outcomes with less risk and lower prices are what companies need,” Clay said. 

Three insurance companies dominate Kentucky’s healthcare benefit marketplace: Anthem, United Healthcare, and Humana. Recently, Humana announced its withdrawal from the Employer Group Commercial Medical Products business in the state. Clay urges CEOs and CFOs to take a more active role in selecting employee benefit plans rather than leaving it solely to the human resources director. He highlights this scenario in his book, “Breaking Through The Status Quo.” 

According to Clay, the average business owner is often uninvolved in benefit sales conversations. And while the CFOs focus on the profit and loss statement, they rarely discuss the strategic aspects of benefits plans with the HR director. As a result, the cost of available plans continues to rise, but the CFO may not recognize opportunities for improvement. 

Clay refers to this situation as the Status Quo scenario. 

In “Breaking Through The Status Quo,” author John Clay outlines alternatives to the rising premiums and diluted healthcare options found in many employee benefit plans. 

Clay said that inflation is also among the greatest challenges facing the employee benefits market in 2023. Healthcare inflation has consistently outpaced general inflation over the past 50 years, making it difficult for the employers to meet the growing demands of employees seeking more robust benefits packages, he said. 

Additionally, the employee benefits marketplace faces challenges related to the lingering economic effects of COVID-19, increased usage of prescription drugs, mental health and substance abuse issues, and advancements in medical treatments and technology. 

All of these factors lead to higher cost and diminished benefits for employees, Clay said. 

“The term Affordable Care Act is a misnomer because it is anything but,” he said. “Look at the minimum wage for some people. It may be $15 an hour or about $31,000 a year. If their insurance deductible is $3,000, that’s about 10% of their gross wages and their out-of-pocket could be $5,500 to $8,000. Then they are functionally uninsured with many of the “off the shelf” ACA plans unless they have subsidies.”

Clay cites a recent survey that found more than half of the respondents said they could not afford a $400 emergency room charge or any other kind of financial emergency. Few could afford a catastrophic event. 

“You have a huge percentage of the population with medical debt.” Clay said. “Better Source Benefits is focused on reducing or eliminating medical debt through employee plan design and solid supply chain management.” BL

 

 

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023