Analysis of the client’s benefits program resulted in significant medical, pharmacy savings opportunities

Client

Indiana commercial property development, investment and management company with 350 employees

Challenge

The client was unsatisfied with the customer service and level of innovation provided by their benefits advisor. Apex was engaged to complete a Peer Review to identify immediate and future plan savings with minimal disruption to plan members.

Without involving the company’s broker, Apex was given permission to confidentially review the company’s benefits program and claims history.

Applying their practical knowledge from years of experience working in the insurance, benefits, pharmaceutical and healthcare industries, the team uncovered many opportunities for medical, pharmacy and service fee cost savings.

Solution

Apex’s benefits strategists and its Kinetiq Health team of financial and clinical strategists analyzed the organization’s plan and historical claims. Applying their practical knowledge from years of experience working in the insurance, benefits, pharmaceutical and healthcare industries, the team uncovered many opportunities for medical, pharmacy and service fee cost savings.

Results

Medical Savings: The client had historically taken a conservative approach to managing their risk through stop loss coverage, which had been paying off for them. However, they were paying an inordinately high amount in comparison to their overall plan costs. Long term, this strategy would water down the potential financial reward of being a self-funded company.

Potential Savings: $420,000

Also, the company did not have a clinical resource to leverage in their current broker relationship. Apex clients with a clinical strategist assigned to their account have seen a 8.8% PEPM reduction over three years.

Potential Savings: $150,000

Ancillary benefit plans also were reviewed. The company was overpaying on its life and disability premiums and could save on dental by moving to a self-insured plan.

Potential Savings: $50,000

Pharmacy Savings: Their pharmacy benefit management (PBM) contract was not optimized which warranted further exploration of options to reduce overall plan costs through improved pharmacy terms. For example the Kinetiq Health pharmacist discovered that 26% of annual claims were coming from drug costs. Upon further investigation, nearly $200,000 in savings was identified by targeting reductions in specialty drug costs through strategies such as copayment maximization, getting plan members enrolled in financial assistance programs and exploring new reinsurance partnerships.

Potential Savings: $325,000

Service Fees: The percentage of premium compensation structure with their current broker represented a conflict of interest; savings were identified.

Potential Savings $28,000

Net Potential Savings: $973,000

Case Study

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