Reference Pricing Can Reduce Medical Outlays, Costs

| posted in Blog, Newsletter

In an effort to coax health plan participants to use price-shopping behavior when deciding on where to have a procedure, more insurers are starting to roll out a system known as “reference pricing.” With reference pricing, the health insurer imposes a limit on the amount it will pay for a particular procedure – a limit that is reasonable and allows access to care for patients. The price is usually a median or average price in the local market. When a health plan participant selects a provider that charges less than the cap, they will receive the standard coverage with little…
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Rating Bureau Recommends Benchmark Rate Decrease for California Employers

| posted in Blog

IN A SURPISE move, the Workers’ Compensation Insurance Rating Bureau of California has filed a recommendation to reduce average baseline rates on policies by 7.8% at the mid-year mark. The mid-year reduction to the baseline rate is largely the result of reforms that were introduced in 2013 that have sped up the settlement process for claims (including many long-term claims), in addition to reducing medical costs. Also, because of these reforms the cost of adjusting workers’ comp claims in California has dropped over the past few years. Insurance carriers use the benchmark rate – also known as the pure premium…
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Pre-existing Conditions Weight Heavily on Workers’ Comp Claims

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Your workers’ underlying health can greatly affect the amount of time they are off the job recovering from a workplace injury. A new study has found that workers with pre-existing health issues like hypertension, obesity and mental health spend 60% more time recovering from workplace injuries than healthy workers. And because those injured workers are collecting wage-replacement indemnity benefits during that time, the cost of a claim increases in kind. The findings illustrate the importance of trying to keep your workers healthy through wellness programs and access to health insurance. The findings in the study of more than 7,000 workers’…
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Agency Recommends Further Rate Cuts for California Employers

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The reforms that were ushered in by the state Legislature in 2012 seem to be paying off, with the Workers’ Compensation Insurance Rating Bureau of California recommending that benchmark rates be cut by an average of 5% in July. The Rating Bureau has forwarded its recommendation for a mid-year rate cut to the California Department of Insurance, and the insurance commissioner will hold a hearing on the filing likely in May. The filing was made in reaction to lower-than-expected medical cost development, as well as the cost of indemnity benefits per claim. The Rating Bureau is recommending that the average…
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Workers’ Comp Medical Costs Fall in Wake of Reforms

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The workers’ comp reforms in 2013 have generated surprising cost savings in treating injured workers in California, with overall medical costs per claim falling 8% over a three-year period. That’s in contrast to the years of inflation before the reforms, when the average medical costs per claim were increasing by an average of 6.5% a year. The new study by the Workers’ Compensation Insurance Rating Bureau of California dissected claims costs between July 2012 and June 2015, finding the medical cost savings were greater than originally anticipated. SB 863 increased benefits effective January 1, 2013 and January 1, 2014 and…
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Bureau Recommends 12.2% Rate Cut for 2016

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California’s workers’ compensation statistical agency will recommend that benchmark rates be reduced by an average of 12.2% for policies incepting at the start of next year. The rate filing is actually for a 0.8% reduction, but that comes after benchmark rates were cut 10.2% on July 1, so that’s why the average rate reduction for January policies is higher. The Workers’ Compensation Insurance Rating Bureau will file the recommendation with the state insurance commissioner, who has the final word on rates in California. He can either choose to approve or reject the rate, and if he does the latter he…
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Specialty Drugs Raising Concerns for Employers, Employees

| posted in Blog

While rapidly rising drug costs are starting to raise concern among employers, one major driver of health care costs is drug spending that’s not even part of the pharmacy benefits you offer your staff. Most health plans never anticipated including in their drug benefits packages specialty drugs – a new class of pharmaceuticals that are tailored to individuals based on their genetic makeup or other factors. The problem is that they typically have high price tags that can exceed $100,000 a year, and the costs are often difficult to detect since the cost is often listed as a medical billing,…
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