Insurance Management Partnership Program
Introduction: The Collegiate Sports Medicine Foundation in conjunction with Trustway TEAM Services have developed a program aimed at reducing the overall medical expenses of a college or universities by combining the best possible insurance products (primary and secondary insurance) as well as full and complete claims management. While providing this program to schools based on their past total medical expenses (Primary, if applicable; Secondary and All “Out of Pocket”) Trustway will also provide the best possible claims management services by eliminating much of the work that has been traditionally performed by staff athletic trainers. In summary, not only will the university save money but they will also gain the athletic trainer’s hours back as they will now be able to attend to the needs and services of the student-athletes. This program is a partnership in which in consultation with your university, Trustway will select the necessary insurance programs to best fit your universities needs and situation and then manage those claims throughout the course of the year. At the conclusion of the fiscal year, the remaining monies not utilized will then be divided 50/50 between the university and Trustway. Trustway only gets paid for these services in the event that the university saves money on their entire medical expense budget.
Establishing the Starting Point / Target Amount: The target amount is used to determine the amount saved on any given year and thus will be the benchmark to determine the success of the program and the amount of savings provided to the university. It is determined by adding all of the insurance products plus any out of pocket (OOP) medical expenses for a year (2006-07) and then adding 15% to that amount to account for the 2007-08 anticipated expenses based upon inflation and rising medical cost.
Example 1:
ABC University has a Secondary Insurance Premium of $125,000 with a $1000 deductible. Throughout the course of the year the school pays an additional $70,000 in Out of Pocket (OOP) to meet the $1000 deductible per injury thus the total medical expenses for the 2006 – 07 school year for School ABC is equal to $195,000. In order to reflect the anticipated expenses for 2007 – 08 a 15% inflation is added to the 2006 – 07 amount for a total of $224,250. The $224,250 is now the target or benchmark to judge the success of the 2007 – 08 Insurance Management Partnership Program. Note: In the event that a school had purchased any primary insurance that amount would be added into the 2006 – 07 expenses to determine the target amount.
In the event that the 2006 – 07 fiscal year may have been a poor example of the school’s overall history the number from the 2005 – 06 school year could be utilized for comparison. In the event that the 2005 – 06 numbers would be utilized then the 15% would be added twice to determine the 2007 – 08 target amount.
The 2007 – 08 target amount would then be placed in a trust that could be reviewed and accessed by both parties (Trustway and ABC University).
Making the Difference: This is where the real work begins. Trustway, Collegiate Sports Medicine Foundation and the university decide upon the types of insurance products to best fit the needs and goals of the program in an effort to save the most amount of money. This could include primary insurance, aggregate and traditional secondary plans. Trustway would work to provide the university the best possible and diversified quotes to ensure the most efficient health care for the universities student athletes.
Hypothetically the new insurance policy for 2007 – 08 may be as follows:
$100,000 Aggregate Deductible with a $55,000 Premium (For a description of “Aggregate Deductible” programs please review the information at the end of this program) Essentially the university (or the trust in this case) would be responsible for the first $100,000 as a whole that the student athlete’s primary doesn’t cover and then the excess would be covered by the secondary insurance. The maximum expenses by the university in this model is equal to $155,000. Frontline Insurance in conjunction with the university may suggest providing primary insurance for those uninsured student athletes as well, in an effort to decrease the amount of claims that apply to the secondary program thus allowing for a long term decrease in total cost.
Based upon this example, $224,250 were placed into a trust of which potentially $155,000 were utilized for medical expenses (money spend to cover the $100,000 deductible and $55,000 for the premium). Therefore there was a total savings of $69,250 which would then be split between Trustway and ABC University ($34,625 per institution). ABC University based upon previous history would have been expecting to spend $224,250 but due to the interventions of Trustway the actual expenses were equal to $189,625.
In addition: The most important piece to ensure long term savings in managing the cost of insurance is not the program / policies to be utilized but implementing a series of strategies such as collecting, managing and utilizing the student athletes primary insurance to its maximum. In order to accomplish this, which may include but not limited to verification of insurance and benefits, pre-authorization for services, negotiating with providers, adjusting the primary care physician to your team physician, following up with primary carriers, obtaining EOBs, and processing secondary claims is a very time consuming and delicate task which in many cases is handled by an athletic trainer at the university. In an effort to maximize the savings to be obtained,Trustway would provide this service as a component to the Insurance Management Partnership Program.
Summary: In summary ABC University would pay $189,625 for their total athletic health care cost when they would have spent $224, 250 plus they received the benefit of having a third party process and manage claims that would have taken the time and resources of university personnel in the past.
Subsequent Years: Due to the confidence that Trustway has in managing the claim process, they feel they can continue to save the university money in years to come. For subsequent year the target or benchmark amount would be the same for three subsequent years when actually without the intervention of the Insurance Management Partnership Program the university would continue to see a 15% increase per year. Based upon the example given for ABC University, they could expect to have a total medical expense of $296,570.63 for the year 2009-10 but with this program our target / goal amount would remain $224,250 and the university would receive 50% of every dollar saved under that target. It is the ultimate goal of Trustway to continue to decrease the actual cost of the universities medical expenses and thus provide a continued savings compared to what the anticipated cost would be without the services of Trustway.
Insurance Management Partnership Program participation status would depend upon the university to allow Trustway to serve as their agent for their insurance products and the establishment of a trust / account to be utilized for the payment of insurance premiums and other medical expenses to be paid on behalf of the student athlete. The university may choose to leave the program following any year as savings would be divided prior to the closing of the trust / account and Trustway would no longer process claims on behalf of the university.
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This program is being offered to a select number of schools as it is our goal to concentrate on providing top quality, Full and Complete Claims Management. For a description of the claims management process please look at Appendix A below.
If you would be interested in seeing what this program could do for you please complete the information below. This will be on a first come first serve basis.
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