So, just start with a couple of easy questions.
So if I'm doing this, is that hidden?
Yes, sir.
Okay.
Yep.
It's from about here.
Oh.
Perfect.
So, just start with your name, title, and we'll go from there.
All right.
Mike Roach, Director of Business Development at the Alliance.
And can you tell me what the Alliance does?
So, the Alliance is a network.
So think of networks like Anthem, United Healthcare, Quartz, Dean, where we're a little different
is we're not-for-profit cooperative that believes the data that we collect from claims re-pricing
belongs to the employer.
Is that it?
Can you tell me a little bit about, I mean, your sub-head here is self-funding smarts.
Right.
So, we believe that one of the reasons that an employer will self-fund is to get access
to their data because you can't control what you can't manage.
And if you don't know where your money's going, how can you control it?
So when we re-price the claims, we gather all that information.
And when an employer or a consultant asks for it, we give it back to them so that they
can see where do we have all of our MRIs, where do we have all of our needs replaced,
and is there another provider that can do that same service for a better value, with
equal quality?
Can you describe what re-pricing a claim means?
So, we have contracts with 39,000 providers, I have to check that number.
So, if the provider charges $100 and we have a contract with them that says any alliance
member will only pay 50, we get the claim in, with the $100 on it, we re-price it based
on our contract of 50, and then we send that off to their third-party administrator to
be adjudicated based on their plan design, and then they'll send out an explanation
of benefits to the employee to let them know if they owe any of that to the provider based
on how their plan is set up.
And how do you interact with third-party administrators?
So, we work with about 42 different third-party administrators.
The connection we have with them is really two-fold, one, we get eligibility files from
them so that we can know if we get a claim in on Bob Smith from Nick's towing in Rockford,
is he an actual employee there?
If so, we re-price that claim, and then on a daily basis, we send those out electronically
for the most part to the TPA so that they can adjudicate them.
So, it's making sure that we work in conjunction with each other to make sure the claims are
getting re-priced just for the employees who are on the plan.
So, you are not providing plans per se, you are providing kind of a wrap-around service?
So, you are correct, we do not provide plans.
We provide the network, so when an employer sells funds, they get to make the decision
on how do all those pieces of the puzzle come together.
One of those pieces and a very important one is the network.
So, when employers look for a good network partner, they want someone who has a broad
network who allows them to put their plan together the way they want from a network
structuring perspective.
So, we need to make sure that we can work with as many different TPA's an employer may be
interested in.
So, describe a little bit between the difference between self-funding and fully insured.
This is my favorite one.
So, one of my favorite analogies to use is a puzzle.
So, both fully insured and self-funding have all the same pieces.
When you fully insure it, they come all put together.
You do not have to worry about your third-party administrator, your pharmacy benefit manager,
your network, your stop-loss vendor.
That's all encompassed in one easy package and you're ready to check every month and
you're ready to go.
You being the employer.
With self-funded and it's important to have a really good consultant when you do this,
you get to pick who all of those partners are.
So, you can find the network that fits your culture best.
I want to tier my benefits and help my employees find value.
I want a fully transparent PBM, my pharmacy benefit manager.
I want to understand where my rebates going and am I getting the best price on these prescription
drugs.
I want a stop-loss vendor that gives me credit for the things that I'm doing to help control
costs.
When I want a third-party administrator who is progressive and helps me control those
dollars, making sure that they are paying and when they say they are paying, they're taking
the money out of my account, just the things that should be paid.
Are you also helping work with alternative funders?
Alternative funders, like for prescription benefits.
So we do not.
So we've been around about 35 years and we recognize that being the best network we can
be is the biggest benefit to the now north of 500 employers that we work with.
The pharmacy benefit segment of that puzzle is incredibly complex.
If you look at the contract from a pharmacy benefit manager, even if you've been in the
self-funded arena for a long time, you may not understand it because they have their
own verbiage and their own nomenclature and acronyms and AWS and it is quite complicated.
And so again, that's one piece of the puzzle and you help consult on that.
So we will give a recommendation.
So if a consultant comes to me and says we have an employer in Janesville, they're looking
for a good-
Hold on one second.
That's okay.
Hold on, he's going to-
Yeah.
That's okay.
I don't want you to be giving an amazing answer and the team's message comes up and-
And then while we're paused, can you just do a quick pull?
Yeah.
I don't want you to look at that later and be like, okay, just start from the beginning
of that question.
What was the question?
Do you consult on the PBM part of the puzzle?
So we don't really consult on anything other than the network piece.
However, if a consultant comes to us and says we need a good PBM, we need a TPA that works
in the Chicago market, we'll give them two or three that we work with who do a really
good job for us and let them decide which is best for their situation.
We can come down to everything from the pricing to what's available for the extra
bolt-on services that may save them money in the long run, it may come down to a personality
of who do we think we'll work best with.
So we know what we don't know, so we want to give them an opportunity to make that decision
for themselves, but we'll definitely give them some options.
And so would you say self-funding is better than fully insured or just different?
Well, now I may be a little biased, but I'm going to say it's better.
So when we were formed 35 years ago, the companies that started us wanted a couple of things.
One, they wanted access to their information.
And two, they wanted to understand why they got the increases they got every year.
So what self-funding does is, one, it gives you access to all your information so that
when you look at your renewal every year, you can see exactly why you got the increase
or decrease that you received.
I think self-funding lets the employer take control of the second or third biggest light
item on their budget.
If you're not trying to manage it and you're fully insured, you're going to get an increase
probably every year, the last few years that's been a double-digit increase and it's getting
more and more difficult for employers to find a way to control that cost and then determine
how much are we going to pick up and how much are we going to pass along to the employees.
So I think self-funding gives you much more flexibility in how you put your plan together.
And if after the first year one of those pieces isn't working like you thought it would,
you can exchange it without having to upset the rest of it.
So what are one or multiple pieces, kind of the big advice that you give to employers
if they're looking at self-funding?
One, the word transparency should be asked as many times as you can.
And I think that's the thing that is setting the market apart now with all the laws that
have been passed on, hospital price transparency.
There's a number of really good PBMs out there that are fully transparent.
It's making sure that the employer understands where all those dollars go.
I mean, even things like the consultants have to report how much they made in a commission
from a vendor so that you know exactly what you're spending.
When I started doing this 35 years ago, there was none of that information available
to an employer.
You just took it on faith that your consultant and your network and your PBM were all doing
the right things for you.
And what do you think employees should know, especially when a lot of times they don't
even know self-funding is different from fully insured?
From an employee perspective and whether you're fully insured or self-funded, it's understanding
your plan and how you can make it work for you.
At the Alliance, we are big proponents of tiering networks.
So if we know that a provider is going to bring value, we will encourage an employer
to put them in a tier above the rest of the network.
And we use MRIs because it's easy and everybody knows what an MRI is.
There are a couple of vendors in the greater Madison market now that will do every MRI
they can, and that's all of them, for less than $1,000.
The same scan at a system will probably run you 2,200 or more.
So if I've got a high deductible plan and I can get the same service for $1,500 or $1,600
less, why wouldn't I do that?
You know, I think the other thing that they need to be aware of, that's what getting old
does for you, employees, what do they need to know?
Oh, well, if you're self-funded, what employees need to know is that your employer has now
become the insurance company because being self-funded, you pay the claims every month.
So if you as the employee are good stewards of the plan and seek value, that should have
a trickle-down effect so that the next year you don't see your part of that premium go
up, you may not have to change deductibles or coinsurances so you can get some stability
in your plan.
So knowing that you're self-funded and that there's value to be found for a number of
different procedures, seeking them out will help you in the long run as well.
So some of the patients that I have been speaking with have had issues with their medications
and these are kind of higher need patients so maybe some tier four or all tier four drugs aren't
covered and these are more expensive medications.
So cancer, Crohn's, Rheumatoid, Arthritis, MSHIB aren't covered under Plan X.
Even though those meds might be fully insured under a plan that's regulated by the ACA.
So what do you say to these employees or patients when then they're on the hook for 100% cost
so we really we don't have any to do with the pharmacy benefit and how that plan design is
structured. You know that's one of the things that I think an employer can make sure they find
in that PBM vendor is how are we going to address those things as you see more and more
biosimilar and gene therapies coming out this is going to be an even bigger question for the
employer. You know there's a couple of drugs coming out they're going to be three million
dollars a piece. How am I going to cover those and how does that trickle down to the humeras
and the stellars that folks need on a more regular basis but they're still you know thousands of
dollars a month. So it comes down to educating the employer and the employee about the risk.
I don't know if it's the risk I think what a good consultant will do is mirror the plan. So if
the plan that we had covered all those prescriptions and the new one say it isn't going to cover
humera. Digging into the claims file finding out who's on humera and helping them find an
alternative before it jumps up and is a surprise to someone.
So I asked about alternative funders. So one patient advocate that we spoke with
you know said like in any kind of job or field there's good actors and bad actors.
So some plans are better than others. Some you know brokers or third party administrators
are better than others. So how do you ensure that self-funded plans are working for employees
and you can trust what your broker is saying. Yep and that goes to what we talked about earlier
when someone says to me who's a who who's a good TPA? I'm never going to give them one because
you know I know who I think does a really good job. That's one of the upsides of being self-funded.
Like I said earlier you can take those pieces and move them about every year if you find that
one of them isn't working well or somebody new comes into the market that is just head and shoulders
better. The other thing about being self-funded you've got a network of reprices a claim. You've
got a TPA that looks at the claims. You've got a stop loss vendor that looks at the claim. So
it's kind of a checks and balances. If I tell a group we think that using our network will save
you 45% on your total claim spend they don't have to take my word for it at the end of the year.
The stop loss vendor will tell them the third party administrator will tell them same with the PBM.
So there's there's some checks and balances in place and at the the head of all this is the
consultant and that's their job is to make sure that they're gathering all that information and
making sure it all checks out. If an employee really does need something that isn't covered let's say
it's a tier four drug should they consider going to the marketplace because their
self-funded plan is going to leave them with a six-digit bill.
So that's a tough question. It gets outside of my expertise on what is allowed because
you think with technology they can just put that bad boy up there for an hour and a half.
So should someone who is looking at having a five or six-digit bill move to the exchange?
You know again that's what a good consultant will help you with. Part of it's going to depend on
what kind of coverage is offered through your employer. What do you have access to
and what can the the exchange do for you?
So is it difficult for human resources departments to take this on because all of the sudden it becomes
its own field of expertise and you have human resources people
you know answering to claims for employees it seems like a lot.
So you've heard me say this I'm going to guess eight times. If you have a good consultant
self-funded is no more work than fully insured. They will be there to help with the claims questions.
Doing all of the analysis to make sure that the pieces of the puzzle that you choose are going to
fit together well work in a manner that isn't going to cause you more headaches because you know
when we look at the HR teams that are some of our clients it may be two people in HR for a 200 life
group. They need to know that the moving from fully insured to self-funded isn't going to be
any more work because they just don't have the capacity and that's why having a good broker
is key to making the whole self-funded plan work.
So if an employee is having difficulty like
appealing a denial is that something that they would then go to the alliance for or
is that something they can you know theoretically work with you on?
So in that case they'd go to the TPA because we get the claim we reprice it whether if it's
in that work and we send it off the TPA. What the third party administrator does is adjudicate
that claim based on their summary plan description which is you know about that thick.
They're the ones who make the determination to process as in you know in accordance with the plan
or you know this isn't covered. So if that happens they work with the one I'd work start
with the broker and have them help you figure out how to appeal that with the TPA.
And so like you said the plan documents can be this thick is it difficult to have employees
understand what's in a plan because I mean it's really dense and it's really complicated.
Yeah and you know whether you're fully insured or self-funded that plan doc is the same.
I think as long as an employee understands the high level pieces of their plan design,
deductibles, coinsurances, what's on their formulary list from their PBM,
who's in network from a doctor and hospital standpoint. That's going to cover 95 to 98 percent of
everything they do during the year. Once in a while you may run into something in that summary
plan description that is a rarity but again there it goes back to the working with your consultant
and the TPA. So another patient advocate said that elevating a complaint for a claim denial to
the Department of Labor takes a lot of bravery from the employee because they are kind of going
up against their employer and there might be a fear of retaliation. What's your response to that?
That's a tough one. You know I think if the employee thinks they're there in the right
and has exhausted all other avenues through the TPA and the broker,
you know that may be the last opportunity they have but I think you're right I think that would
could be a little intimidating. Have you had to deal with the Department of Labor as you help
employers work through plans and potential denials and appeals? Knock on something that looks like
wood. We have not. So I've been here 10 years and we've never had to escalate anything to that
level. Really? Wow. So a recent WMC survey I'm sure you know. So the top concern for employers
is health care costs. Our self-funded plans, just a necessity in this world as health care
prices go up. Again I'm biased. I think so. If you're a group that has more than a hundred
people on your plan and that number has come down significantly, we have groups, I'll take the
alliance for example, we have I think 40 people on our plan we're self-funded. Now we're a bit of
a unicorn because this is where we live every day but even if you're a group of 75 on the plan,
you can start to look at self-funding and again it goes back to the ability to measure,
understand and control your plan. You know we have a number of groups
that have gone six, seven, eight years. No plan design changes, no increases in premiums
because they are able to look at the plan and structure it in a way that helps the employee
save money, helps the employer save money as well and controls that you know that cost that
continues to skyrocket. So do you, I guess after this, do you have data you might be able to share
to the best of your ability that maybe like shows like premiums compared to fully insured plans
or anything? Do we have any that would be like direct, I mean we have stuff in the chair like
so you're looking for like a one-to-one or like a phone. I know that's difficult so I guess
any kind of kind of fact sheet you have that maybe shows a little bit of like cost savings or
something. Because the idea is that like you said earlier if the employee is a good steward of the
plan the employer saves money but it also keeps costs down for employees is that correct?
So just curious you know as you said data anytime we can like show what that means in numbers it
can be helpful. Yep absolutely. Yeah anything you can think of just let me know. Yeah I mean there's
and there's a lot of like interesting stories like by employer by employer you know like you
can look at one employer because they like like this employer saved like who were giving like
Amber Johnson like yep you know they saved like a million dollars by going self-funded I think it
was and they've just reinvested that into like their facility and like their employee benefits and
like that so I mean we can tell it from a one-to-one you know or a broad way. I don't know what it
would be helpful I need to send you as much. Okay you know and but what Philip's done is you know we
talked about how we let employers mold our network he's identified with our help a list of providers
that we call them preferred value providers because we know that they're going to give you a great
value a great service and and almost more importantly these days quicker access so he has
those in a tier and if employees use them doesn't cost them a dime use direct primary care
independent direct primary care which is becoming almost corner to corner in the state something
that's available you know three years ago in Madison I don't think we had any I think we're up to
eight ten um and they're they can really help quarterback that if you need an MRI here's where
your employer thinks there's value or knows their value and that's where they think they'd like you
to go and if the employer does a good job of explaining to the employees we are now the
insurance company and we have a directive we can't have a direct effect on our premiums next year
you know it's it's amazing what folks will do when they know that if I do these three things
next year when I go to my open enrollment meeting I don't have to hold my mind during go please less
than a five percent increase um have you know these large fortune 500 insurance companies
been a contributor do you think to increase health care costs oh I think there are all kinds of
folks who have helped increase health care costs um I would say there's a sole reason um but
oh see it saved me let me let me think of a good answer
of course I'm out there saying that they are looking out for your best insurance anyway
every day so you know and I think
you know I think a lot of it comes back to transparency
um you know we are I think sometimes transparent to a fault all right are we ready
um so I don't think you can pin the increasing cost of health care solely on on the the
fortune 500 folks um but I think their lack of transparency contributes to it um you know if
they were willing to share all their prices um and help employers find value it would go a long
way to to helping control that um you know I think the the medical field and the the increases
in the technology have contributed to it we talked earlier about um three million dollar
pharmaceuticals I think it all contributes to it um what do you want to add that I haven't asked
um you know I think if in a I guess I did an employer has 75 or more employees on their plan
ask your consultant about self-funding is it right for you even if it's not start to learn
about what it is and how it works and how it can be effective because then you've always got
that option ready to go if you get an increase from your fully insured carry that you don't agree with
no I mean do you want to talk about just like the general interest and self-funding has kind
of increased a little bit like in the last couple years I don't know if you've seen that
no I don't talk about that no um yeah so I think that I've been here 10 years um in the last three
years we have seen more consultants start to come to us and ask questions about self-funding
who's it right for because I think they wrestle with the same things that employers wrestle with
we're a mid-sized company we got another 19% increase from our fully insured vendor we're in a pool
with a bunch of other companies and we had a really good year but we still got an increase
how can we address it so the number of of companies that have sent us an RFP just to see what it