Mercer Short Duration Fixed Income Fund Class Y-3 · NASDAQ:MSDYX
Mercer Short Duration Fixed Income Fund Class Y-3 — Mercer — Investor Presentation (2020)
26 slides from Mercer Short Duration Fixed Income Fund Class Y-3's investor presentation, 2020
Slide 1: Why all the buzz around reference based pricing?
why all the buzz around reference based pricing? Copyright 2020 Mercer LLC. All rights reserved. welcome to brighter
Slide 2: Speakers
Speakers Andrew Halpert Tyler Harshey Wade Symons Clinical Innovation Leader US H&B Actuarial Practice Leader National Leader of Mercer’s Regulatory Resources Group Copyright 2020 Mercer LLC. All rights reserved.
Slide 3: Overview
overview ¢ “MERCER
Slide 4: Cost mitigation strategies: a continuum
Cost mitigation strategies A continuum High Reference Based Pricing Narrow/tiered networks Centers of excellence Direct contacting Bundled payments Onsite/near site clinics Advanced primary care* Telemedicine Low Broad PPO *e.g. PCP assignment/selection, specialist referral requirements, etc. Copyri
Slide 5: Comparing unit cost options
Comparing unit cost options Summary comparison Broad PPO Telemed Advance Onsite/ Bundled Direct COEs Narrow RBP primary care near-site payments contacting networks Cost savings potential Impact on quality Employee experience Implementation effort National applicability Legend Much lower Lower About
Slide 6: Reference Based Pricing Basics
Reference Based Pricing Basics Why What How Who Concerns • Unit cost escalation • Setting the • RBP Vendors apply • Select Vendors • Member experience and variation reimbursement rate at the RBP formula • HST • Balance billing • Considerable cost a fixed amount and • If a provider balance • ELAP exp
Slide 7: What is Reference Based Pricing?
What is Reference Based Pricing? Reference Based Pricing (reimbursement) vs Reference Based Benefits Reference Based Pricing (RBP) (also called Reference Based Reimbursement) • Employer partners with a 3rd party vendor to establish a reimbursement rate that providers will receive for a service (e.g.
Slide 8: Can RBP save money?
Can RBP save money? Commercial rates expressed as a % of Medicare, 2017 301% 310% 275% 278% 280% 270% 240% 245% 249% 228% 227% 230% 233% 236% 236% 220% 223% 224% 225% 226% 210% 173% 176% 180% 155% MI PA NY KY TN VT KS MO IL MA FL NM NC LA NH WA OH GA TX CO MT WI ME WY IN Employers paid, on average,
Slide 9: Two approaches to Reference Based Pricing
Two approaches to Reference Based Pricing Reference based pricing can be applied to select services only or used as a full replacement to an existing medical plan. Replacement for select services Full replacement • Only for a subset of procedures which are elective and • Replacement of all services
Slide 10: Vendor market refresh: process and key findings
Vendor market refresh Process & key findings Process Overview: • Prevalent vendors in the RBP space were issued an RFI - Vendors included: AMPS, ELAP Services, HST, 6 Degrees, & Sidecar Health • Questions focused on common employer concerns including market experience, structure, services covered, &
Slide 11: Vendor market refresh: results summary
Vendor market refresh Results summary AMPS ELAP Services HST 6 Degrees Sidecar Health Average client size 714 members 667 members 1,200 members 175 members N/A Structure • 150% Medicare • Higher of: • Facility: ~140% Medicare • % of Medicare • Fixed indemnity • Discretionary threshold to • facility
Slide 12: Financial considerations
financial considerations
Slide 13: Financial context of RBP
Financial context of RBP 27% 22% • As of today, the national carriers to not offer a RBP solution • To adopt a RBP approach, a separate TPA is required to process claims and they work with the RBP vendor for a Pharmacy claims specific subset of claims (i.e. facility Stop loss premium claims) Vendor
Slide 14: Sample RBP financial summary
SAMPLE Sample RBP financial summary • Exhibit above is an example of a RBP- $189,000 based RFP financial analysis for a 1,500 $180,000 $900,000 $720,000 $90,000 EE self-funded group $900,000 $2,160,000 $810,000 $450,000 $1,800,000 $1,710,000 $1,800,000 • A detailed claims repricing was used to $3,96
Slide 15: Compliance considerations
compliance considerations @ “ MERCER
Slide 16: Compliance considerations: issues from recent lawsuits
Compliance considerations Issues arising out of recent lawsuits Implied contract and Hospitals have argued that the plan created a contract with the hospital when services were provided, and enjoyed the unjust enrichment benefit of the services, and therefore would be unjustly enriched by paying les
Slide 17: Compliance considerations: state law issues
Compliance considerations State law issues States may have laws which State case law may provide that a Additional state law restrictions require hospitals to have rates patient’s admission form is an on plans should be mostly limited regulated/approved by the state express agreement to pay the beca
Slide 18: ACA considerations: avoiding accumulation towards OOP maximum
ACA considerations Avoiding accumulation towards OOP maximum Type of service Reasonable access Quality standards Exceptions process Disclosure Use of reference prices must An adequate number of Procedures should ensure an An easily accessible Information about be limited to nonemergency providers mu
Slide 19: ACA considerations: three questions to ask
ACA considerations Three questions to ask Can RBP models with “no network” Can plans with these designs Given that RBP vendors often base comply with the ACA’s maximum meet the 60% minimum their fees on a percentage of billed out-of-pocket expenses rule? And value requirement for charges, how does a
Slide 20: Client stories
client stories @ “ MERCER
Slide 21: Mercer case study – Spokane
Mercer case study – Spokane A Mid-Sized Mercer client and how they used Referenced Based Pricing to dramatically reduce costs. Problem Solution Results Obstacles • Employer with 150 • Moved to a RBP solution Kept in place for 3 years • The three local hospitals employees with AMPS and a TPA Saving F
Slide 22: Mercer case study – Chicago
Mercer case study – Chicago A Mid-Sized Mercer client and how they used Referenced Based Pricing to dramatically reduce costs. Problem Solution Results Obstacles • Employer with 2,000 • Moved to a RBP solution Year 1: 15% reduction in paid costs YOY • Physician network was smaller than anticipated e
Slide 23: Mercer's Point of View
Mercer’s Point of View • Reference Based Pricing is a unit cost strategy that can potentially achieve savings. It is one of many cost / network strategies employers can implement • Challenges can include balance billing, collections and/or legal action directed at the member as well as other complia
Slide 24: Conclusion and next steps
Conclusion and next steps If you are interested in learning more, please contact your Mercer consultant. • Strategy development • Market insight • Financial cost modeling • Vendor selection/RFP process • Program implementation • Member communication • Ongoing monitoring and assessment Copyright 2020
Slide 25: Questions & answers
questions & answers ?* MERCER
Slide 26: Thank you
thank you ?* MERCER