Multi-million dollar medical claims soar

Self-insured employers saw a 68% increase in multi-million dollar claims from 2013 to 2016, according to a new Sun Life Financial report.

The removal of lifetime limits, per the Affordable Care Act, has contributed to the rise of multi-million dollar claims, and more self-insured employers are paying for catastrophic claims like cancer and specialty drugs.

“An unintended result of removing caps under employer plans has been a steady rise in the frequency of multi-million-dollar claims fueled by life-saving treatments and drugs,” says Dan Fishbein, president of Sun Life Financial U.S. “While this benefits all of us, the overall increase in healthcare costs underscores the need for self-insured employers to plan for and manage catastrophic, high-cost claims so they can continue offering affordable health benefits to their employees.”

A blood pressure monitor stands in the diagnostic imaging area at the Hong Kong Integrated Oncology Centre in Hong Kong, China, on Tuesday, Nov. 3, 2015. Equipped with biopsy facilities, body scanners, and quiet 'VIP' chemotherapy rooms, the Hong Kong Integrated Oncology Centre is the first of a string of such facilities that TE Asia Healthcare Partners, a portfolio company funded by TPG Capital, is planning in Asia. Photographer: Xaume Olleros/Bloomberg

Malignant neoplasms like breast cancer, diseases such as lymphoma and leukemia, and chronic/end stage renal disease made up the top three million dollar-plus claims, totaling $10.7 million in billed charges from 2013 to 2016 — 32% of total payments.

For breast cancer specifically, 16% of employers between 2012 and 2015 has at least one breast cancer claimant, according to the report.

While the average paid charge for breast cancer was $147,100, the average stop-loss claim reimbursement was only $50,300, according to the report.

Meanwhile, more than half (52%) of all catastrophic claims were top 10 conditions, including infection, respiratory failure and transplants, according to the “5th Annual 2017 Sun Life Stop-Loss Research Report.”

Most self-insured employers will get $150,000 of care, with stop-loss protection to reimburse them directly, Fishbein says.

To combat the increasing costs, he suggests employers work with their brokers or consultant adviser to come up with a strategy to prepare for increasing catastrophic claims.

Employers should also “ask the claims administrator if it reviews and identifies emerging high-cost claims prior to payment for potential intervention opportunities before the claim is processed; find out how the claims administrator handles managing common chronic, ongoing and high-cost conditions; ask your administrator and stop-loss carrier what types of vendors and resources they use to support cost containment and high-quality care; [and] consider using vendors that provide negotiation services for high-dollar claims,” according to the report.

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