It’s time to check your stoploss reimbursement

By Austin Johnson, Head of Customer Success​

Situation

Would your leadership team be upset to learn that stoploss reimbursement was underpaid? Would they be happy to know that it was your diligent review that identified gaps in payment, that you then recovered?

Well, it’s the end of the calendar year and many stoploss contracts are completing their terms. Many contracts will be underpaid because the claims data have not been properly processed.

Why does this happen? In short, claims are complex, and vendors process data for lots of clients. See below for a few of the root causes driving errors for over 1/3 of our clients.

Example Root Causes of Stoploss Underpayment

1. Medical and Rx claims aggregation errors. Standalone stoploss carriers are dependent on the medical claims administrator (TPA/ASO) and the Pharmacy Benefit Manager to send them all eligible claims. When you have two vendors acting independently, claims aggregation errors often occur.
2. Stoploss policies often include “run-out” claims that were incurred from a prior claims administrator. The prior carrier is not incentivized to send claims to stoploss for a It is not unusual for 6-month (or indefinite!) data lags for these “run-out” claims.
3. The seasonal increase in claims at year-end overwhelms claims administrators – stoploss-eligible claims incurred at year-end are often not processed in time to meet the stoploss reimbursement terms. Watchful plan sponsors can find missed reimbursement opportunities that were incurred and received by the TPA/ASO but were not paid until the next calendar year, when the stoploss deductible has been reset to zero.