What is provider stop loss?
Provider stop loss coverage is insurance that provider groups and/or facilities purchase in order to transfer their risk for catastrophic patient expenses to an insurance company. It is accomplished by purchasing a pre-determined stop loss deductible from an insurance company. Example: a $50,000 specific stop loss deductible is purchased by the Provider/Facility from Insurance Company ABC. If they have a claim that exceeds $50,000 for any patient, then they can submit the excess claims and be reimbursed by ABC.
Who needs provider stop loss?
Any entity that receives capitation from a payer to assume partial or full risk for patient population medical expenses needs provider stop loss coverage.
Why is this coverage necessary?
No risk-bearing entity who is prudent assumes total risk, as it can be potentially greater than the risk-taker’s ability to pay. This is why even the largest insurers in the world have similar coverage themselves and transfer risk to other insurers.
What are some factors to look out for when purchasing a policy?
First, ask the broker how long he/she has personally been placing provider stop loss coverage. Then find out how many clients they handle, and what the tenures of those clients are.
Who you work with is paramount, as there are many things that can go wrong with placing and designing provider stop loss coverage. You want a professional who works with this coverage weekly.
Other tips for purchasing provider stop loss insurance:
- Make sure you give the insurer your updated DOFRs throughout the year, as this is the basis of what is covered.
- Do not think raising your deductibles saves you money. It will lower your price, but not your cost. Cost is what you pay in premium, minus claims paid. The higher deductibles eliminate most claims, therefore the coverage becomes prohibitively expensive.
- Make sure the coverage is only covering the true costs within your panel and make sure it covers non-panel claims adequately.
- Do not have your broker submit claims; they can help educate you on how to submit them by arranging for the insurer to meet with you. However, insurance brokers are not claims experts and they do not have E&O that will cover them if they make an error with your claims submission.
- Keep in mind the deadlines in your policy for submitting claims.
What is the role of the division of financial responsibility (DOFR)?
This is the basis of what is covered or not by the stop loss policy. Always make sure the insurer has the correct, up-to-date version.
Broker vs Insurer for Provider Stop Loss:
If you choose the right broker, they will be experts on obtaining the data needed to obtain a quote, design the coverage, shop it to find the best deal, and provide excellent ongoing customer service.
HCP National is the Provider Stop Loss industry expert.
- No brokerage with its original owners has been offering provider stop loss longer than HCP National.
- The average tenure of HCP National’s provider stop loss team is the longest in the industry.
- HCP National has placed over $700M in stop loss premiums.
- Many of HCP National’s clients have been clients for over two decades. There is no brokerage better.
- We were are one of the pioneers of this coverage.
- No other broker will offer you better pricing, service or depth of knowledge.
Contact HCP National today to request a quote on your provider stop loss insurance policy.
Click here and fill in the quote form, or feel free to call 1-888-478-6756.