using data analytics to change the network paradigm - enhance benefits & reduce costs ·...

Using Data Analytics To Change

The Network Paradigm

- Enhance Benefits & Reduce Costs -

Crawford Advisors Webinar Series | June 2016

Presented by: Scott Mayer, Director of Data Analytics

About The Webinar

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Scott Mayer, Director of Data Analytics

Scott focuses on helping employer groups use the vast amount of healthcare data at their disposal to identify and stratify the risk within their employee population, and develop programs and strategies aimed at controlling and containing said risk. Scott is very active in the healthcare community, having served on numerous boards and committees such as:

• Executive board of the Baltimore Association of Health Underwriters

• The Navigator Advisory Committee for the Maryland Health Connection,

• The NAIFA-MAHU Joint Legislative Committee.

His legislative efforts have garnered awards and recognition at both the state and national level. Scott holds a degree in math and physics from Cornell University, and loves the challenges of working with big data sets to develop meaningful analytics, predictive outcomes, and statistical projections for his clients.

About Our Speaker

• Overview - Using Data Analytics To Change

The Network Paradigm

• Why and how network discounts can be an

inefficient metric

• How quality, as well as cost, can factor in to

unit-cost spending

• Sites of service and impacts on unit-costs

• Diagnosis codes and impacts on unit-costs

• Pharmacy language and Medicare Part B

Pricing

Agenda

Service NETWORK A Avg.

Discount NETWORK B Avg.

Discount

Emergency Room 52% 50%

IP Hospital Room 56% 49%

MRI 55% 52%

Office Visit… 60% 54%

TOTALS 58% 53%

All Things Being Equal, Which Insurance

Network Do You Pick?

In Love With Your Discounts?

Service

Network A Network B

Avg. Billed

Avg. Allowed

Avg. Discount

Avg. Billed

Avg. Allowed

Avg. Discount

Emergency Room $1500 $780 52% $1200 $600 50%

IP Hospital Room $2500 $1400 56% $2000 $980 49%

MRI $1750 $963 55% $1400 $728 52%

Office Visit… $180 $108 60% $120 $65 54%

TOTALS 58% 53%

Want to Change Your Mind?

In Love With Your Discounts?

• Fine Tuned/Narrow Networks

• Higher Quality – Lower Cost https://www.medicare.gov/hospitalcompare/search.html

Discounts Can Be Misleading

https://www.medicare.gov/hospitalcompare/search.html

Top Procedure Groups

*Crawford Advisors Book of Business April 2015 through March 2016

Where Is The Money?

CPT Code 70553


Radiology – MRI

CPT Code 74177


Radiology – CT Scan

CPT Code 74177


Radiology – CT Scan - Diagnosis

How Providers Negotiate Allowed Amounts for

Non-PBM Pharmacy Services

*Source: MagellanRx Pharmacy Trend Report 2015

Non – PBM Pharmacy


*Point of Reference: Medicare Part B Reimbursement = ASP +6%

Physician Office: ASP Plus

Benchmarking PBM Office Claims to Medicare

Note: Two Providers… One is ASP +2% and the other is ASP +5%

Medicare Reimbursement for 70 Units:

$81.596 per Unit * 70 Units = $5,711.72

Medicare = ASP + 6%... Therefore ASP = $5,388.41

Medicare Reimbursement for 70 Units:

$81.596 per Unit * 70 Units = $5,711.72

Note: This hospital is receiving ASP +134%, even though their “discount” may appear to be a high number

Medicare = ASP + 6%... Therefore ASP = $5,388.41

Benchmarking PBM Hospital Claims to Medicare


*Note: There is no benchmark or basis for the Original Charge… Only the Discount Matters

Outpatient Hospital: Percent of Charges

Medicare = $5,676.80

Medicare = $7,805.60

Highest Cost Conditions Include:

• Cancer

• Krohns/GERD

• Multiple Sclerosis

• Coagulation Disorders

• RA/Plaque Psoriasis

• Congenital Disorders

Other Examples

Specialty pharmacy in some cases can offer more favorable

pricing over Physician Offices and/or Home Infusions.


Office/Home Infusion vs. Specialty Pharmacy (PBM)

Medicare Payment = $3,186.68…

Home Infusion Cost

Here is ASP +6.7%

Different PBMs and Different Contract Arrangements

ESI = ASP - 2%

BCBS = ASP -1.4%

NCPDP = ASP -3.2%

CIGNA = ASP -33.0%

Office/Home Infusion vs. Specialty Pharmacy (PBM)

If you have any further questions about the information discussed in this

webinar please feel free to contact us at:

Crawford Advisors, LLC

• HQ: 200 International Circle | Suite 4500 | Hunt Valley, MD 21031

• 1813 Sweetbay Drive | Suite 10 | Salisbury, MD 21804

• 201 King of Prussia Road | Suite 650 | Radnor, PA 19087

• 280 Granite Run Drive | Suite 250 | Lancaster, PA 17601

• 2975 W. Executive Parkway | Lehi, UT 84043

(800) 451-8519 | www.crawfordadvisors.com

Data Analytics – (443) 212-1622

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using data analytics to change the network paradigm - enhance benefits & reduce costs ·...

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