Have you ever noticed that insurance companies sometimes seem to operate under the cloak of mystery and lack of transparency? Or perhaps while they may not have told you something that is inaccurate, they simply may not have told you the entire story – and then all of a sudden you get surprised when something does or doesn’t happen? You say to them “you never told me that!”
Here are three things that insurance companies don’t want you to know.
Prescription rebates. Insurance companies allow their Pharmacy Benefit Managers (PBM) to negotiate with drug manufacturers among other things, the cost of the drugs they will provide, as well as whether or not those drugs are going be offered as a Preferred (formulary) drug, Non Preferred, or Generic. Along with that negotiation is also a related rebate associated with those particular drugs. Some rebates are paid by PBMs only on Preferred drugs, while other PBM’s have negotiated rebates on all drugs. What the insurance companies don’t want you to know is that they keep either all or a significant portion of the rebates. Rebates can range from a few dollars per prescription to $10s of dollars per drug prescribed. Obviously depending upon the size your group this can amount to a large amount of money! We recently did a study on rebates for a 350-life group and the guaranteed annual rebates amounted to >$166,500. The question is who’s keeping it – the PBM, the insurance company, your broker? Who?
PPO discounts. Another mystery that insurance companies don’t want you to know about is their Preferred Provider Organization (PPO) discounts with providers. They say it’s proprietary. They all say that they have bigger discounts than their competitors, but how do you know for sure? They won’t tell you the amount of the discounts, and more importantly they fail to mention that the discounts are diluted every time a hospital raises their prices. It’s a proverbial this “discount off of what?” And, in the case of Anthem Blue Cross Blue Shield, the discounts are further diluted if a member goes to a non-Anthem state with Blue Cross Blue Shield (BCBS). Under the Blue Card program, Anthem pays the resident BCBS company a fee and/or a percentage of the discounted savings.
No Hospital Audits. The third item that insurance companies don’t want you to know is their inability to audit a claim. Would you ever purchase a service and not know whether you ever received it? Would you ever order a brand-new vehicle with all the bells and whistles on it, pay top dollar, and not know whether you actually have all those features in the car? When insurance companies negotiate discounts with hospitals, the only way they get those discounts is to agree not to audit the claim! Would you go to a restaurant and never look to see if only what you ordered was on the bill? Of course not! Believe it or not, that is what is happening every day with your health insurance.
If you want to get transparency and remove the cloak of mystery, you have to change some of the ways you’ve historically worked with healthcare and health insurance. If you’d like to learn more about what opportunities that are available to you, please contact me at [email protected] or call me at 970-349-7707.
