Health insurance coverage has become a heavily regulated environment that while it has made life complicated for health insurers has made great strides to protect the consumer. Still, a business owner needs to be careful about selecting the right health insurance provider to make sure that the health care coverage is the right fit for the business and its employees.
“Despite it being a heavily regulated environment, a business owner should not throw caution to the wind when selecting a provider,” says Lisa Davies, senior director of corporate compliance for AvMed Health Plans of Gainesville.
Smart Business spoke with Davies about the key issues facing health care at the moment, and the steps a business owner can take in selecting the right health care provider.
Could you name the key issues facing health insurance companies and how they affect businesses?
From my perspective, there are significant challenges related to staying in compliance with state and federal rules, laws and regulations.
In Florida, both the AHCA (Agency for Healthcare Administration) and the DFS OIR (Department of Financial Services Office of Insurance Regulations) receive regular reports from health plans and also perform routine audits of those plans.
On the federal side, insurers who hold Medicare Advantage and Part D contracts are subject to oversight by HHS OIG (Health and Human Services Office of the Inspector General), CMS (Centers for Medicare and Medicaid Services) and its contractors.
Additionally, since Florida insurers must be accredited by an external quality organization (such as National Committee Quality Assurance), health insurance companies need to meet or exceed standards for excellence in operations and support processes and procedures of the plan.
What kind of impact do all these regulations have on the consumer?
They have a very positive impact, as they benefit from having a partner whose operations and performance are closely monitored by any number of external parties.
How can a business go about choosing an insurance company in this environment?
Businesses should either have a strong internal component of their operations or engage a knowledgeable partner, such as a broker or consultant, to assist them with the process of making a selection. Additionally, they should either meet with prospective partners or be active participants in the broker or consultant review and selection.
That said, there is at least one caveat about selecting a broker, particularly for small businesses that need to rely on brokers to buy their insurance products. There have been significant problems in this state with unlicensed brokers. Therefore, business owners need to make sure that the broker they are using is reputable and agency licensed. Do this before you get into a relationship with a broker and find out too late that a business is not covered adequately.
How can a business make sure that a health insurance company complies with all the rules?
As we discussed, health insurance companies function in a very heavily regulated environment. Deficiencies of companies that fall short of meeting their regulatory or accreditation requirements will appear in publicly available reports and plan rankings.
Plans that continue to be poor performers are subject to sanctions, and penalties such as suspension of enrollment, and administrative supervision or plan closure for extreme cases. This is something that can’t be hidden from public view since all of these reports are publicly available. If a plan is not meeting regulatory requirements, the first thing that happens is that agencies will suspend enrollment.
Should a business perform due diligence before selecting an insurance company?
Here are three critical steps.
- Develop a questionnaire that may be used in the pre-selection process. Ask for supporting documentation from the plans. Include in your request the health insurers Code of Conduct; description of the Compliance plan and program; and the formal Notice of Privacy Practices and Confidentiality procedures.
- Look to financial performance rating companies such as AM Best or Weiss for their evaluations of stability and financial strength.
- Visit public and professional sites where information is made publicly available. In Florida, we have several excellent sources for this type of objective data. These include www.floridacomparecare.gov, which provides information on quality of care, member satisfaction, coverage areas, accreditation status and more.
LISA DAVIES is the senior director of corporate compliance for Santa Fe HealthCare and AvMed Health Plans (www.avmed.org) based in Gainesville. Reach Davies at Lisa.firstname.lastname@example.org or (352) 337-8782.