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Claim Settlement and Cost Containment Expenses

In recent years there has been a general consensus in the stop loss industry to allow non-traditional cost containment expenses under the specific and aggregate excess loss coverage. We are therefore including guidance on some of the more common expenses that may or may not be considered eligible charges under the the Insurance Carrier's Policy. Our philosophy in general terms is that charges directly resulting in cost savings beneficial to the Plan and Excess Loss Carrier will be considered eligible towards satisfaction of the Individual and Aggregate Attachment Points. The following identifies and outlines our position on some of the more common claim settlement and cost containment charges:

PPO/Repricing Fees

% Of Savings:

PPO/Re-pricing fees (from an outside vendor not related to the TPA) structured as a % of savings (to a 25% maximum) are eligible under the Specific coverage provided:

a) Claim payments plus PPO fees exceed the Specific Attachment Point, or
b) SLG Benefits has negotiated a discount which requires payment to a PPO network. In this case, reimbursement of these fees would be made even if the claimant had not exceeded the Specific Attachment Point.

PPO/Re-pricing fees (from an outside vendor not related to the TPA) structured as a % of savings (25% maximum) are eligible under the Aggregate coverage provided:

a) SLG Benefits has documentation these fees were included in the previous claims experience at the time of initial Underwriting, and
b) The Underwriter acknowledged inclusion of this coverage in the Policyholder's Application/Schedule of Insurance.

Capitated Rate: PPO fees billed at a flat rate per employee per month (capitated) are not eligible under the Specific or Aggregate coverage.

Large Case Management (LCM) Fees

Large Case Management fees are payable under the Specific coverage provided:

1) Claim payments plus LCM fees exceed the Specific Attachment Point, or

2) SLG Benefits requested LCM implementation. If requested by SLG Benefits, reimbursement of these fees would be made even if the claimant had not exceeded the Specific Attachment Point. (Note: If SLG Benefits on behalf of the Carrier pays these fees, we must receive copies of the reports.)

Large Case Management fees (only those not previously paid as outlined in number 1 & 2 above) are payable under the Aggregate coverage.

Drug Card Administrative Fees

Administrative fees for Drug Card programs (similar to PCS) are not eligible for reimbursement under the Specific or Aggregate coverage.

State Surcharges

Certain states levy surcharges on in-patient and outpatient hospital bills for uncompensated care pools, training, etc. SLG Benefits on behalf of the insurance carrier will allow certain state surcharges (i.e. NY, MA) where the courts have ruled that ERISA does not prevent the imposition of the state surcharge. Please consult your SLG Benefits Underwriter for more updated information.