Jan 29, 2015Knowledge at a Premium
Being well versed in health insurance issues can increase your value to your department. Here, an experienced and decorated athletic trainer offers his perspective on today’s insurance options.
By Dr. Rod Walters
Rod Walters, DA, ATC, is a sports medicine consultant and the former longtime Director for Sports Medicine at the University of South Carolina. A member of the NATA Hall of Fame and a former member of the associationís Board of Directors, he can be reached at: [email protected].
You’re sitting in your office late one night, filling out health insurance forms that have piled up over the past week. Three athletes suffered injuries and you referred two more for consultations with a specialist, and the result is a mountain of time-sensitive paperwork. Finally you stop, put down your pen, and sigh aloud: “This is not why I became an athletic trainer.”
Sound familiar? Negotiating the complex and sometimes aggravating world of insurance and the financial side of health care has become part of the job for many athletic trainers and administrators. Most view insurance issues as a burden, since every hour spent filling out claim forms is an hour you’re not providing care to athletes, organizing the athletic training room, or planning the future of the department.
It’s not a problem I can solve in this article–though I would if I could. But I can equip you to better handle the administrative side of your job by presenting an overview of the health insurance landscape as it relates to athletic departments, based on my experience as a college athletic trainer for more than 28 years. What follows is some of what I’ve learned about the health insurance industry, and what it means to those responsible for ensuring that athletes receive all the care they need and deserve.
Athletic programs have diverse needs and priorities when it comes to budgets, programming, and administrative philosophy. Athletic directors and other program leaders must deal with shrinking budgets in our current tough financial times, while constantly striving to “keep up with the Joneses” in terms of facilities, recruiting, academic support, and countless other areas.
On the health insurance front, potential liability for NCAA Division I schools increased in 2004 when the association removed existing limits on health care expenditures. Previously, these institutions could only cover “athletically related” accidents and injuries. Today, they may cover any accident or illness suffered by a student-athlete, whether or not it is related to sports activity. Many managed care plans limit the benefits available to physically active participants, especially those taking part in intercollegiate athletics, and thus the responsibility for medical expenses may fall on either the student-athlete’s family or the athletic department.
The amount and quality of coverage provided typically reflects a department’s available resources, and coverage levels should be consistent for all athletes within a program. Determining insurance coverage for student-athletes is an administrative issue and should not be the responsibility of the athletic training staff, but often, athletic trainers are given a share of the responsibility for handling paperwork and the administrative side of processing claims. Many also have a say in choosing a plan that will provide an adequate level of protection for the student-athletes.
After a typical injury or illness, an athletic department initially files a claim with the athlete’s primary insurance, which often comes from a parent’s employer or a university-wide plan for enrolled students. Any leftover balances are then filed under the supplemental insurance coverage purchased by the athletic department.
What about athletes who have insufficient primary insurance? While many colleges now require all students to have a minimal degree of coverage, it is possible to encounter athletes who are uninsured or whose primary coverage has a very large deductible. The athletic department assumes greater financial risk in these cases, and that may translate into higher premiums. Administrators typically take any uninsured or under-insured athletes into account when working with the insurance company to determine deductibles, premiums, and projected out-of-pocket expenses.
EVALUATING THE PRESENT
To judge the efficiency, effectiveness, and overall success of a health care delivery program, including the department’s insurance coverage, it’s important to look not only at costs but also the level of services provided to athletes. On the cost side, there are insurance premiums, out-of-pocket medical expenses, contracts for physicians, and medical pharmacy needs. Other specific costs vary by institution, and can include anything else not covered by the insurance company.
You should ask several questions when deciding whether these costs are acceptable to your program: Do they fit within the department’s budget, or do they seem to be constantly straining the bottom line? Are the costs predictable from one year and one season to the next, or do they fluctuate unpredictably? Do you feel the services received justify all the costs involved? And how does the total value of all services received by athletes compare to the actual out-of-pocket expenses paid by the athletic department in a given year?
The services side of an evaluation should focus on the care given to athletes. For instance, how often is it necessary for an athlete to go off campus or even out of town to receive services? To avoid this problem, some schools have found success having athletes designate the team physician as their primary care physician under their primary insurance plan. With this arrangement, urgent cases requiring specialized tests can be expedited, with less red tape from the insurance provider.
Here are some other key questions: If a special brace, an MRI, or another less common medical service is needed, is the authorization process lengthy and complicated? How satisfied are athletes with their non-athletic department health care providers? And what is the relationship like between athletes’ primary insurance plans (which can often vary quite substantially) and the supplemental insurance provided by the athletic department?
Then there are those in-between areas to be evaluated, which touch both the cost and benefit sides. For instance, many athletic departments take advantage of the high profile and cultural importance of college athletics by forming an affiliation with local health care providers. In exchange for promotional benefits and access to a group of healthy young athletes, physicians and hospitals may enter into agreements to provide free or reduced-price services.
These arrangements can be beneficial to both parties involved and often come with mutual goodwill, but that shouldn’t prevent an objective evaluation of the quality of services provided. Whenever one of these agreements is up for renewal, the athletic department–with the sports medicine staff taking the lead–should make an effort to compare the services received with other available options in the area.
Many segments of the health care industry are highly competitive, and clinics and doctor’s offices may compete with each other by adding new diagnostic and treatment equipment, improving facilities, or hiring specialists with in-demand skills. Because of your level of sports medicine knowledge and frequent interaction with the athletes who receive services, you are in an ideal position to advise athletic administrators on whether their existing local health care relationships are providing the best possible results.
NEW & EXISTING OPTIONS
Turning our focus back toward insurance, itís important to understand there are currently two standard options available to athletic departments. Each has its advantages and drawbacks depending on a programís needs and resources. I’ll briefly explain them below, and then discuss a couple of trends I have recently observed in the insurance marketplace.
Traditional supplemental plans offer coverage on a per-injury basis up to a pre-set policy limit, in exchange for an agreed upon premium. The policyholder (in this case the institution or athletic department) pays the premiums and may also cover any deductible applied over the coverage period. Deductibles play an important role in setting premiums, because they determine who assumes the risk for most low-cost health care services that will be needed over the course of a given year. Essentially, lower deductibles typically mean higher premiums, and higher deductibles mean lower premiums.
Aggregate deductible plans, sometimes referred to as self-insurance, typically feature a high deductible and lower premiums. An institution that chooses this option assumes greater risk of loss because the coverage doesn’t kick in until many expenses have accrued. Aggregate deductible plans are very popular with programs that contract directly with health care providers to control their costs.
With an aggregate program, the athletic department can pool resources into an account from which claims are paid, and the unused amount is refunded to the department annually. This way, the institution is rewarded for cost containment and limiting the number of claims it files in a given year.
If your athletic department uses a higher-deductible plan, there are usually significant savings on premiums in exchange for the higher out-of-pocket costs. Another cost-saving measure, especially for programs with students who have no primary insurance, is the use of a third-party administrator (TPA), who will subrogate claims based on established global contracts. In plain speak, that means a TPA can negotiate discounts for client institutions to maximize savings.
Most TPAs can also help clients manage and project their costs from year to year to avoid financial difficulty due to a “surge”–for instance an unusually high injury rate over a semester or academic year. The TPA can even help uninsured student-athletes obtain group discounts on their own coverage.
For either type of insurance plan, but especially with the aggregate policies, a major goal for the institution when setting a deductible is to minimize out-of-pocket expenses through contracts with health care providers. Using this strategy, athletic departments can improve the level of care and services provided to student-athletes while controlling their spending. Itís also important to remember that athletes’ primary insurance plans will share a large part of the health care cost burden, so collecting and evaluating insurance information from each athlete in the program is essential to planning the departmentís own insurance and projecting expenses.
One more important aspect to understand is that some insurance plans come with network requirements. This means that in order to receive benefits, an athlete must use a health care provider who has signed on as a member of an insurerís network. Many consider this to be among the most troublesome aspects of health insurance today, but insurance companies see the use of networks as one of the keys to controlling their own costs. They would argue it allows them to improve the quality of coverage they provide to all their members. If an athlete’s primary health insurance uses a strict network model, the athletic departmentís supplemental insurance may be called upon to cover a greater number of medical expenses.
An important recent trend among college athletic departments is the increased use of some form of an aggregate insurance policy. Essentially, an agreement is signed between the insured institution and the provider of coverage, and a set amount is paid to the insurance company. A portion of that money covers the actual insurance premium, and the balance is put into a reserve account to pay claims once they have been adjusted by third-party administrators. Claims are paid from the reserve only after all adjustments have been made and primary insurance has been exhausted. This way, all claims are adjusted to the maximum, and the institution receives the most health care for its financial investment.
How can all this information help in your own setting? When working with administrators to evaluate the quality of care provided under your current insurance program, I believe it can assist in setting priorities.
For example, almost all athletic trainers agree there is a sense of urgency when it comes to evaluating injuries and screening athletes for medical problems. Special testing such as MRIs, cardiovascular screenings, and other special radiographic tests are important for maintaining athletes’ health and safety. Insurance plans of any type that seem to ìunderstandî the importance of these tools by including them as covered services can be most advantageous to athletic programs. As members of the athletic health care team, we want all decisions to be made based on whatís best for the athlete–never on whether a certain test or procedure will hurt the department’s bottom line. The right insurance plan can help us in this regard.
Let’s be honest: Health insurance is not one of the more fun or fascinating aspects of an athletic trainer’s job. But increasingly, itís an area where we must maintain an up-to-date understanding to help our athletic departments make the best decisions. And ultimately, that allows us to do what we really care aboutóensure the well-being of our athletes.
Sidebar: HEALTH INSURANCE GLOSSARY
Below is a list of some important terms to know when dealing with health insurance in an athletic setting.
Aggregate Deductible: The total amount an insured party is responsible to retain for the sum of all losses up to a specified deductible during a policy period.
Disappearing Deductible: A deductible that decreases as the cost of a medical service increases, so that small claims are not covered at all but large claims are paid in full.
Flat Deductible: A set amount that is the responsibility of the insurance policyholder for each claim.
In-Network/Out-of-Network Benefits: In-network providers have pre-arranged fee schedules for certain services provided to policyholders. Out-of-network providers do not have any such agreements, and as a result, some insurance plans will not cover their services, or cover them only at a reduced percentage.
Loss Run: A report of claims and actual payments.
Notification of Injury Form: A communication device used between a policyholder and an insurance company to establish pertinent injury and demographic information.
Out-of-Pocket Expenses: Payments made by a policyholder for costs not covered by the insurance plan, such as per-claim deductibles. When calculating out-of-pocket costs, institutions may include policy premiums as well.