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.”
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.