Episode 150 - Talking RBP with ClaimDOC, Live From Des Moines!

This video provides an in-depth exploration of Reference-Based Pricing (RBP) and the concept of "network replacement" in self-funded healthcare plans, featuring a panel discussion with the leadership team of ClaimDOC: Bruce Hansen (Executive Vice President), Amy Pellegrin (Senior Vice President and Chief Legal Officer), and Brad Hansen (Vice President of Provider Relations). The discussion, hosted by Spencer on the "Self-Funded" podcast, delves into ClaimDOC's unique approach to health plan administration, emphasizing a member-centric philosophy, fiduciary responsibilities, and proactive management of provider relationships and balance billing. The conversation highlights the evolution of RBP from a simple repricing mechanism to a comprehensive network replacement strategy, driven by a commitment to transparency, cost savings, and superior member experience.

The panel begins by defining RBP as fundamentally removing a traditional network from the health plan equation, a concept they now prefer to call "network replacement." They critique the traditional network model, arguing that it often fails to provide true access, leads to market consolidation, and creates misaligned incentives between payers and plan sponsors. ClaimDOC positions itself as a co-fiduciary, explicitly taking on liability and responsibility to prudently act on behalf of both the plan sponsor and its members. This fiduciary role underpins their entire operational design, ensuring that all services, from claims payment decisions to member advocacy and balance bill support, are aligned with the best interests of the plan and its participants.

A significant portion of the discussion focuses on ClaimDOC's member-centric approach, which they identify as their "Northstar." They emphasize the importance of human interaction and advocacy, contrasting it with impersonal app-based solutions. This philosophy, instilled by their CEO, prioritizes taking care of the member, even extending to gestures like ordering pizza for families in the hospital. The conversation also addresses common objections to RBP, particularly concerning balance bills and adversarial provider relationships. ClaimDOC asserts that balance bills are a reality across all health plans, not just RBP, and their program is designed to proactively manage and resolve them through dedicated member advocates and strategic provider outreach, aiming for partnerships rather than scorched-earth tactics. Looking to the future, ClaimDOC plans to integrate AI into their call centers to enhance efficiency for member advocates, rather than replace human interaction, and continuously develop proprietary tools to improve their service delivery.

Key Takeaways:

• Evolution of Reference-Based Pricing (RBP): RBP has evolved beyond mere "repricing" to a comprehensive "network replacement" strategy, fundamentally removing traditional networks from health plans to address issues of access and cost.
• Critique of Traditional Networks: Traditional health plan networks are often criticized for not guaranteeing true access, fostering market consolidation that reduces competition, and creating misaligned incentives where providers or large insurers may not prioritize the plan sponsor's best interests.
• ClaimDOC's Co-Fiduciary Role: ClaimDOC explicitly acts as a co-fiduciary, taking on liability and responsibility to ensure prudent action on behalf of both the plan sponsor and its members, which drives their comprehensive service design and negotiation strategies.
• Member-Centric Philosophy: A core tenet is to "take care of the member," emphasizing human touch and dedicated member advocates who guide individuals through the complex healthcare system, offering reassurance and support beyond just processing claims.
• Proactive Balance Bill Management: Balance bills are an inherent reality in healthcare, regardless of the plan type. ClaimDOC's program is built on proactively addressing these, providing advocates to dispute and defend allowable charges, and protecting members from financial burden.
• Strategic Provider Relations: ClaimDOC aims for partnerships with providers through proactive outreach and negotiation, rather than purely adversarial relationships. They seek fair and reasonable pricing while ensuring members maintain access to quality care.
• Technology as an Enabler, Not a Replacement: While committed to human interaction, ClaimDOC is actively investing in technology, including infusing AI into call centers to enhance the efficiency of member advocates and developing proprietary tools to improve service delivery.
• Importance of "Why" for Plan Sponsors: Network replacement is not suitable for every employer. Successful adoption requires a clear "why" from the plan sponsor, such as a strong desire for cost savings, competitive wages, or an ideological shift towards a more progressive health plan model.
• Impact on Participant Finances: Beyond employer savings, RBP programs like ClaimDOC's also aim to improve the financial experiences of individual participants, reducing their out-of-pocket costs and providing advocacy during billing disputes.
• "Access is Not a Contract": A key analogy suggests that access to healthcare is not solely dependent on a traditional network contract; alternative models can provide effective access and support.
• Leadership Mindset for Success: Implementing network replacement requires a specific leadership mindset within the client company – one that is ready to navigate challenges and trust experts to solve problems, rather than expecting a completely smooth ride.
• Risk Management: The concept that "risk doesn't leave, it just changes hands" applies to health plan management, meaning that while traditional risks may be mitigated, new challenges (like balance bills) require a robust plan to address them.
• Motivated Partnerships: It's crucial to partner with vendors and companies that possess proper motivations, a high level of engagement, and pride in their work, ensuring a collaborative and client-focused relationship.

Tools/Resources Mentioned:

• ClaimDOC's Internal CRM: A proprietary Customer Relationship Management system used by member advocates to manage member relationships.
• Proprietary Tools: Internally developed software and tools designed to enhance the efficiency and effectiveness of ClaimDOC's operations and member advocacy.
• Internal Programmers: ClaimDOC maintains a team of in-house programmers to develop and continuously improve their proprietary systems.
• AI Integration: Plans to infuse AI into call centers to make member advocates more efficient by providing real-time feedback and guidance based on member conversations.

Key Concepts:

• Reference-Based Pricing (RBP): A healthcare payment model where the amount paid for medical services is based on a reference point, such as Medicare rates, rather than negotiated network discounts off inflated charges.
• Network Replacement: ClaimDOC's preferred term for RBP, emphasizing the comprehensive nature of replacing a traditional health insurance network with an alternative model that includes pricing, member advocacy, and provider relations.
• Co-Fiduciary: A vendor (like ClaimDOC) that shares fiduciary responsibility and liability with the plan sponsor, ensuring actions are taken in the best interest of the plan and its participants under ERISA.
• Balance Billing: When a healthcare provider bills a patient for the difference between the provider's charge and the amount allowed by the health plan. This is a key concern in RBP and is actively managed by ClaimDOC.
• Member Advocacy: The service of supporting and guiding plan members through their healthcare journey, including understanding benefits, finding providers, and resolving billing issues.
• ERISA (Employee Retirement Income Security Act): A federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Examples/Case Studies:

• Pizza for Hospitalized Members: An anecdote about ClaimDOC's CEO encouraging staff to order pizza for members or their families in the hospital, illustrating their deep commitment to member care beyond just claims processing.
• HR Manager's Experience: A former HR manager, now a ClaimDOC employee, shared how he could do nothing for employees under a traditional Blue Cross plan when they received large bills, but with ClaimDOC, he could confidently tell them, "Don't worry, we've got your back."
• Cynthia Swanson's Recruitment: The story of Cynthia Swanson, ClaimDOC's Senior Audit Manager, who was initially contacted for referrals but became so fascinated by ClaimDOC's mission that she eventually joined the company, highlighting the compelling nature of their approach.