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Problem

Solution

Claim Charges with “Outlier” Denied

Claims Reverted to an Outlier are Covered

A Provider Group had contracts at Facilities that used only DRGs as their payment basis; therefore, the Provider Excess Policy rates were based on these Hospital DRG rates. The PEL policy had a provision stating that “outliers” who were not listed on Exhibit A of the policy would not be eligible for reimbursement. However, during the end of the client’s contract year, reinsurer’s claims analyst noticed charges that when they reached a certain threshold had reverted from a DRG to percent of billed charges resulting. Because Outliers were not mentioned in the original hospital contracts, so the reinsurer denied these charges.

U.S. Advisors were not informed about some of these revised Hospital contracts that now included outliers. After reviewing the revised Hospital contract, we realized that several of the most utilized hospitals had included outliers. We informed the reinsurer’s actuarial staff of this situation and made them aware the potential loss of claims recovery. U.S. Advisors negotiated with the reinsurer’s staff to include outliers as eligible expenses but limited to an average per day for a small PMPM rate increase retroactive to the effective date of the revised hospitals. The results showed that the claims reimbursement far exceeded the premium increase.

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