Transplant Carve Out Insurance for Self-Funded Groups What is a Transplant Carve Out? A stand-alone, fully-insured (first dollar) product that is designed specifically for self-insured groups. Works in conjunction with a self-funded plan by “carving out” the transplant benefit and insuring it separately from the plan document. Protects the employer from catastrophic expenses of transplant exposures more completely than the plan document. Can attach to any plan document, regardless of the stop loss carrier. 2 AVG. Billed Charges Per Transplant* Intestine $473,900 $813,600 BMT - Allogeneic Unrelated $293,100 $481,900 BMT - Allogeneic Related $232,600 $386,300 BMT - Autologous $144,500 2000 $219,300 Kidney-Pancreas $138,300 2005 $293,100 Pancreas $113,700 $270,800 Kidney $111,400 $210,000 Liver $244,600 $392,800 Heart-Lung $301,800 $640,800 Lung $257,800 $299,900 $303,400 Heart $478,900 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 * includes evaluation, procurement, hospital, physician, follow-up and drugs (Milliman USA research report 2005) 3 Number of Transplants per Year Bone Marrow 16,890 Kidney 16,149 Liver 5,979 Heart 1,960 Kidney / Pancreas 885 Lung 674 Pancreas 569 Intestine 58 TOTAL 43,164 Waiting List Candidates 89,187 (Milliman 2005 US Organ and Tissue Cost Estimates Report) 4 Average Waiting Times for Transplants* Heart 206 days Lung 704 days Heart / Lung 889 days Liver 517 days Kidney 1,099 days Pancreas 179 days Kidney / Pancreas 442 days Intestine 285 days *United Network of Organ Sharing data 5 Transplant Probability by Group Size and Year NO. OF EES 1 YEAR 3 YEARS 5 YEARS 100 8% 21% 32% 200 14% 37% 54% 300 21% 50% 69% 400 27% 61% 79% 500 32% 69% 86% 750 44% 83% 95% 1000 54% 90% 98% 1500 69% 97% 100% 2000 79% 99% 100% 6 Policy Benefits $1 million maximum ($2M available). Benefit period starts at evaluation and extends 365 days post transplant. Covers ALL major transplant types-- heart, lung, heart/lung, kidney, pancreas, kidney/pancreas, liver, bone marrow, small bowel. Pays 100% of transplant-related costs when in network. Pays 80% up to scheduled amount per transplant when out-of-network. Travel benefit of $10,000/yr. for patient and companion. Access to our major transplant facilities and case management. HIPAA compliant. 7 How the Program is Underwritten (cont’d) Disclosure encompasses any employee that has had a transplant or been recommended, evaluated, or listed as needing a transplant 24 months prior to effective date. Run-out Expenses (365 days post transplant) are covered automatically IF the transplant procedure occurs during the contract period, regardless whether the group renews. Re-transplants are covered and considered as separate benefit periods if separated by 90 days from the last transplant, otherwise the benefit period is based on date of the first transplant. 8 Transplant Medical Management Identification and Referral Medical Review Care Coordination Transplant Network Claims Management 9 Pooling Concept Program usually requires 500-1000 employee lives. Pooling allows minimums to drop down to 50 employee lives to protect the smaller employer. Pooling allows for block underwriting across several groups to help stabilize rates despite exposures in one or two groups. Pooling allows both big and small groups an even playing field rate-wise, as opposed to underwriting each group individually. 10 Benefits of Carve Out Insurance Stop Loss Insurance may not protect against transplant exposures (tendency to jump over contract years and thus be a target for lasers). A problem-solver to 40% or more of imposed lasers on self-funded groups. Offers integrated management of a very difficult medical exposure, saves Administrator’s resources. Direct payment to providers eases cash flow. 11 Benefits of Carve Out Insurance, cont’d Policy addresses Experimental / Investigational issues (coverage for Adult NCI Phase Trial III and above, all phases for pediatrics). Pre-ex’d individuals will be covered in 12 months (no pre-ex’s on renals, hepatitis, mylomas, etc.) Patient has no co-insurance or deductible out-of-pocket expenses. Nor does the employer. Avg. 10% discount on Spec Premium 12 Benefits (cont'd) Offers a more focused approach to managing the patient and improving outcomes by access to best facilities and experienced care. Provides an opportunity to upgrade a benefit within the plan document to help attract and retain employees – usually much more beneficial than coverage in the plan document. 13 Irrefutable Value Proposition Of Transplant Carve Outs SAMPLE CASE Spec Deduct. Est. SL Premium Transplant Premium 250 EE’s $50,000 $170,000 $21,000 Internally funded transplant exposure $16.66 pepm $7.00 pepm Probable Laser $200,000 7% discount off ($12,000) -($21,000 minus $12,000) = $9,000 Now funded $66.66 pepm… ……….. ……Vs. …………… …$3.00 pepm Internally at………… Transplant occurs year 1, saves = $191,000 ...if no transplant until year 2, saves = $181,000 …if no transplant until year 3, saves = $172,000 Number of years necessary to go without a transplant exposure for the program to be a negative financial value .. 23 years 14
"Transplant Carve Out Insurance for Self-Funded Groups"