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Transplant Carve Out Insurance for Self-Funded Groups

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									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



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