Jan 29, 2015Another Insurance Option?
If you’re feeling overwhelmed by the cost, choices, and fluctuations of secondary insurance coverage, you’re not alone. A new NCAA program hopes to help.
By Abigail Funk
Abigail Funk is an Assistant Editor at Training & Conditioning. She can be reached at: [email protected]
You’re covering a midseason men’s soccer game when your star midfielder falls to the ground with a scream, grabbing his knee. You immediately think it’s an ACL tear and begin an injury assessment. But there’s another thought popping into your head as your fingers probe his knee: This kid has out-of-state health insurance that won’t cover a surgical ACL repair and rehab program.
You flush the thought from your mind to better concentrate on the assessment and on calming the athlete. Your job is to treat people, not worry about insurance. Yet, you know that every time you tap into your school’s secondary insurance coverage, it adds up, with a higher premium waiting for you the following year.
But that’s how the system works and there’s nothing you can do about it. Or is there?
The above scenario is not atypical, and in response, the NCAA has started a pilot program aimed at lowering the cost of secondary insurance coverage for student-athletes at member schools. The program will eventually give every athletic department the option of buying NCAA-sponsored basic accident insurance for athletics-related injuries. The idea is that as more schools opt in, the risk will be spread out and premiums will go down. The program will also help schools lower their premiums by requiring them to follow a set of established risk-management protocols.
WHY & HOW
For any athletic trainer working in the college setting, part of the job includes dealing with insurance. All NCAA schools require their student-athletes to have proof of primary insurance and all athletes are covered by the NCAA’s catastrophic injury insurance, which comes into effect after an athlete has incurred $75,000 in medical expenses. But there are a lot of potential medical costs in between. Most institutions carry secondary insurance to cover those expenses, but many are finding that the price tag, options, and fluctuations in coverage have become overwhelming.
“The cost of insurance just keeps going up, and some schools are having a hard time getting decent coverage at a price they can afford,” says Juanita Sheely, NCAA Travel and Insurance Manager. “There are also problems with stability in the market. Insurance companies will come in and sell a school a line of insurance, but the number or cost of the claims ends up being much greater than the company expected, and they back out.
“The problems we’re trying to address through the new NCAA-sponsored insurance program are twofold,” Sheely continues. “One is to gain stability for schools so they can be confident the insurance company will be around for a while and is financially stable. Two is getting coverage for student-athletes at a price institutions can afford.”
Along with its insurance and risk management administrator, American Specialty Insurance and Risk Services, the NCAA has teamed up with Mutual of Omaha, its current provider of catastrophic injury insurance, to develop this option for secondary coverage. With the three groups working in concert, the NCAA feels it can offer its schools the stability and resources needed to make the most of their insurance dollars.
But the association is also being cautious by allowing only 30 to 35 schools to participate in the program’s first year and requiring an application process for interested members. At the beginning of the calendar year, the NCAA asked interested institutions to fill out and return an “indication of interest” form to American Specialty. From there, the NCAA, American Specialty, and Mutual of Omaha is selecting schools of all sizes from all three divisions to participate in the program. Each school selected will be quoted a premium price based on past practices and then have the option to buy into the plan for this school year.
“We’re starting small, but we plan to grow,” says Marla Peters, Senior Vice President of American Specialty. “The economies and benefits come into play when we can extend this to potentially all of the member institutions that are buying secondary coverage right now.
“We feel good about the response we’ve had, and we’re currently working very closely with the schools that have expressed an interest,” she continues. “This first group of schools has to be committed to controlling costs.”
By controlling costs, Peters is referring to a second part of the pilot program. Mutual of Omaha has come up with a blueprint for reducing risks and claims, dubbed “best practices,” and schools that want to be involved in the program will need to follow that blueprint.
“The plan is designed to take advantage of good risk management and claims management practices,” says Jim Nolan, Mutual of Omaha spokesperson. “In turn, Mutual of Omaha can offer a consistent and more affordable program for NCAA member institutions.”
“Where to find the cheapest coverage shouldn’t be the whole story when it comes to insurance,” Peters says. “It should include thinking about the things you can do to control costs, which will ultimately lower your premiums. That’s the underlying principle of the NCAA-sponsored program.”
As we write this article, the NCAA has not yet determined who will be in the first group of schools, but it has done a lot of work defining risk-management best practices. “We have identified several areas where colleges and universities have an opportunity to control medical expenses related to athletic injuries,” Peters says. “In each of the areas, we have spelled out best practices and are working with interested schools to understand how their current practices compare. We are helping them identify areas where they can make improvements.”
Whether or not your school signs up for the NCAA program, implementing these practices can help keep insurance premiums down:
Approach to student-athletes’ primary insurance. The NCAA requires every student-athlete to have primary insurance, but doesn’t specify how comprehensive the coverage has to be. One reason a school’s premiums continue to rise may be that a large number of its student-athletes don’t have very good coverage, so most of their medical costs are falling to the school’s secondary insurance.
An institution can set up stricter requirements for its athletes’ primary coverage, such as mandating that students’ primary insurance will cover out-of-network medical care if the student isn’t from the area, or setting a maximum deductible for acceptable primary insurance. “Having insurance and having insurance that pays are two different things,” says Larry Stephens, Director of Risk Management at Indiana University. “A student-athlete may have insurance, but what if it’s through an HMO that won’t pay if they’re out of state? Since it’s up to individual institutions to cover athletes up to $75,000, it’s also their responsibility to look at their students’ primary coverage.”
Another good idea is to set up a system to keep track of students’ primary insurance while they’re in your program. Has the athlete’s coverage lapsed? Is the provider still financially stable? Has the coverage changed in some way? Schools should also be checking whether doctors’ offices are still accepting their athletes’ type of insurance. “Institutions have a responsibility to at least direct student-athletes toward offices that accept their insurance,” Peters says.
Use of on-site resources. Any time you can rehab athletes in-house or have your team physician see them instead of sending them off campus, you’re saving your school money. “We do almost all of our rehabilitation in-house, so we have very few insurance claims from injuries relating to outside rehab services,” says Kirk Brumels, PhD, ATC, Head Athletic Trainer at Hope College. “We also have very good health care providers in our community and several places I can send a student to get into their network.”
If you have no choice but to refer a student-athlete off campus for medical attention, having good relationships with local doctors’ offices may help. “In many cases, schools have agreements with local doctors or service providers and direct students to them for care whenever possible,” Peters says. “Other schools don’t do that at all, which means they’re passing up the potential for big savings.”
Oversight of your third-party administrator. Just because your institution’s business office is located on the other side of campus doesn’t mean you can’t call to check on a claim result or question a charge the school paid in full when you think it shouldn’t have had to. As an athletic trainer who initially files claims, you’re most likely more knowledgeable on the details of a claim than anyone in the business office.
“There are things that can be done on the claims management side that have an impact,” Peters explains. “We want to see the people who process claims working closely with the people who treat the student-athletes. You want to make sure the claims management people don’t just pay all the bills and realize later, ‘Gee, we should have only been paying what wasn’t paid by the other insurance.’ It’s all about opening lines of communication.”
Using claims data to better understand insurance premiums. This involves taking a step back and looking at the big picture of how your school handles claims. For instance, follow a claim through the process—you may discover one reason your premium went up last year is that a local doctor’s office that handles a lot of your rehab no longer accepts an insurance plan it used to. Or maybe a primary insurance company used by the majority of your athletes no longer covers MRIs or CT scans.
“There are some little things that add up to big savings,” Sheely says. “Injuries are going to happen, but it’s how you handle them, how you use your provider networks, and what kinds of discounts you have associated with those networks that make a difference. You must commit to and be willing to follow these kinds of best practices to be in this program.”
IS IT FOR YOU?
Janet McMurray, LAT, ATC, Head Athletic Trainer at McMurry University, filled out an initial indication of interest survey for the new plan and is currently going through the approval process. “We’re a small Division III school always looking for ways to lower our insurance costs, but they still keep rising,” she says. “The larger the group is, the smaller the percentage each member is going to have to pick up, so the NCAA plan sounds great.
“But every university is different in the way their insurance is set up, so I’m wondering, what will we have to change?” she continues. “What do I have to do as an athletic trainer to get best practices set up? Will it be difficult to alter our setup to conform to the NCAA and American Specialty requirements? The NCAA must be seeing something in terms of trends, but is the new plan going to be feasible?”
Brumels agrees that the plan sounds great in theory, yet Hope did not send in an application this year. “What we’re most concerned about are the individual year-to-year spikes,” he says. “If the NCAA and American Specialty have come up with a way to help even those out, I’m all ears. But my question is, if the cost is spread out among every school in the form of the premium, will spreading it out be cheaper than what Hope is currently paying? My school paying for another school’s inability to do in-house rehab due to staffing or facility issues is our big concern.”
Although the program holds great promise for reducing insurance costs, it may not be the right fit for everyone. Every member school needs to decide for itself whether to try out the program, and realize that it does require some legwork.
In McMurry’s case, administrators figured there was no harm in expressing an interest, and if it turns out that the university is quoted a good premium, the work will have been worth it. “After we filled out the interest survey, the NCAA and American Specialty came back with a best practices questionnaire,” McMurray says. “It asked how our insurance was set up with the student-athletes, whether we currently provided secondary coverage, deductible costs, and so on. Did we have orthopedists on staff or relationships with local doctors? Did any local doctors discount services for us? Did they come on campus? Do we do most of our rehab in-house? There were lots of questions concerning medical costs and how we tried to keep those in line.”
McMurray, who is responsible for filing claims at the university, then participated in a conference call with American Specialty and the university business office, which went over the survey in detail. If accepted into the program, the university will be quoted a premium price and given the option of participating this year, granted that McMurray and her staff implement the risk management practices detailed above.
The surveys were quite in depth, McMurray says, but she’s happy to try to find a better insurance plan for her school. “The questionnaire was fairly detailed, and I had to turn some parts over to our business administration, but it didn’t take long to get all the information together,” she says. “So if there’s somebody out there looking to do it next year, they should know that it really was not that painful.
“Even if we don’t get into the program,” she continues, “I’d like to implement some of the best practices, and that way, next year, we’ll already be one step ahead.”
Sidebar: ONE PRICE?
A question athletic trainers have asked about the NCAA-sponsored insurance plan is whether one premium will apply to every institution that participates. Mutual of Omaha, which will provide the coverage, says no—the premiums will vary based on how schools fared in dealing with insurance details in the past. Each school’s premium will initially depend on past practices, and as schools start to show that they’ve implemented better practices, premiums will decrease.
“We couldn’t just come up with one rate for everybody,” says Juanita Sheely, NCAA Travel and Insurance Manager. “Some schools sponsor football, and others don’t. Some have five sports, some have 30. So each school will get its own individual quote based on the number of sports, the risk of those sports, the number of student-athletes participating, and their history in dealing with insurance.”
Jim Nolan, Mutual of Omaha spokesperson, likens figuring out your school’s basic athletic insurance premium to the way your car insurance is quoted. “It’s the same basic underwriting principle,” he says. “We assess what the school’s risk is and then price it based on the risk. When you purchase car insurance, you’re asked, ‘How many miles do you drive in a year? Have you had any tickets? Any accidents? What kind of car do you drive?’ Those are all indicators of risk, just like which sports your school offers, how many athletes are competing and at what level, and so on.”