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Blue @ Work

Know what you're paying for

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This article is primarily intended for self-funded, large groups in Iowa and South Dakota.

We’ve all been there before. After weeks of researching that vacation you’ve always wanted to go on, you see a price for an airline flight that appears almost too good to be true. And unfortunately, that’s exactly what it is.

Because after digging deeper into the fine print, you notice the base price doesn’t include a huge cost for baggage, the “privilege” of selecting your own seat, or other taxes and surcharges that quickly take that dream of a deal into a nightmare.

The same can be true when it comes to administrative fees with third party administrators.

Administrative fees and services can mean different things to different people. And so can the all-inclusivity and transparency on what a third party administrator provides as a part of their base administrative fee.

Take the information below for example.

Based on your business needs, which administrator will provide the best value?

Administrator A Base Fee: $40 PEPM. Included in base fee: Nurseline, Treatment Decision Support, Analytics Reporting, Emergency Room Decision Support, Readmission Support, Telemedicine.

Administrator B Base Fee: $30 PEMP. Not included in base fee: Nurseline, Treatment Decision Support, Analytics Reporting, Emergency Room Decision Support, Readmission Support, Telemedicine.

Am I still getting what I want for the price I want?

While the base price is often what gets advertised, you might end up paying a higher total amount depending upon which services you want or need.

In the example above, Administrator B has a much lower base fee. But services you or your members may find valuable aren’t covered, which could lead to Administrator A having the better value at the end of the day.

Why this is important

With health care spending exceeding $3 trillion a year in the U.S., both individuals and businesses are looking for ways to manage costs. And since some estimates indicate billed charges have doubled in the past decade, it’s important to examine exactly what you’re paying for.

Questions to ask

As you’re reviewing your current and prospective contracts — whether it’s by yourself or with a consultant or sales representative — consider the following questions:

  • What’s detailed in our contract?
  • What’s included in the administrative base fee?
  • What’s considered ala carte and what are those costs?
  • What services are we currently paying for and why?
  • What type of reporting, requests or services will we want our administrators to provide that may cost us more money in the future?
  • Are these common fees currently built-in with our claims and we just haven’t noticed?
    • Hospital bill review
    • Hospital bill
    • Audit of fraud and abuse
    • Overpayment recovery
  • What are our total dollars spent, and what services are we getting for it?

Some costs and fees are included for things you might not even see, such as share of savings costs, unless you look at each bank draft carefully or undergo a deep claims analysis. At the end of the day, examine what the services you anticipate needing will be and how they impact your total administrative costs.

Now you can be an even smarter administrator by digging into the fine print to know what you’re paying for and potentially lower your overall costs — while still getting all of the value you and your employees need.

Download or print our checklist PDF File of questions to ask that may help you discover hidden provisions in your contract. Or, reach out to your authorized Wellmark representative to learn what all is included in our administrative services.