Shipowners should ensure they have proper medical plans in place for their crew and appoint a cost containment partner as the current global financial crisis could see medical healthcare insurance costs rise sharply, warns Indianapolis‐based medical cost management expert Health
“The maritime industry will not be isolated from this catastrophe as substantial claims and financial market volatility drive up P&I premiums,” said Althea Rollins, Maritime Programme Director at HSI. Considering the rising cost of healthcare and speculation that P&I clubs are likely to increase renewal premiums by between 13% to 16%, some shipping experts have estimated that this financial dilemma will not correct itself for at least two years.
“There are measures that ship owners can take to manage medical claims experience,” said Mrs Rollins, advising that ship owners and managers should “be proactive” and put a plan in place now to cope with rising costs and manage claims.
She added: “This process is crucial to the success or failure of the management of claims experience. Traditionally, the process has been left to the local port agent. This is the logical answer as they are the local ‘experts’ regarding what services are available in their communities. However, healthcare is not their first priority or area of expertise. Most often, the medical charges are paid directly by the port agent and billed to the owner. Once these charges are paid in full the opportunity is lost to have the bills reviewed by a cost containment professional to ensure that the appropriate care has been rendered at the best price.”
The process of putting a plan in place should address the following:
1. Have a system in place to review pre‐employment medical exams (PEME) before employment. The best claim is the one that never happens. One way to manage your loss experience is to have a medical service that will effectively review and disqualify candidates that are not medically qualified to perform the job.
2. Identify points of contact when an injury takes place. At a minimum, make sure that your crewing department and your medical cost containment partner, as well as your port agent, are aware of the needs of the injured or ill crewmember. It is also a good idea to employ an incident report form that can be used to document each report of injury or illness, treatment provided, and fitness for duty.
3. A cost containment partner should be appointed to make financial arrangements and review invoices for appropriateness of care and discount/negotiate final price. As previously discussed, all opportunity for review and discounting is lost when an invoice is settled at the time of service or paid in full by the agent. There are cost containment partners that can arrange medical appointments, arrange direct billing, review services rendered, and discount/negotiate final charges on behalf of the shipowner for a nominal fee. Ultimately, the shipowner can rest assured that the crewmember received the appropriate care at a reasonable price.
4. A regular review of claims experience and cost containment results. This is highly recommended. It is agreed that you cannot do anything about claims that have happened. However, the information that is received can be used to identify deficiencies in safety training, evaluation/use of PEMEs, and handling of maintenance issues. A cost containment partner has a primary function to co‐ordinate quality medical care for injured or ill crewmembers at a reasonable price, believes Mrs Rollins. “This partner should ideally have the capability to work with an owner to manage the claim and costs from onset to cure. These services should not be confused with services that only offer line‐byline
bill review or medical service companies that operate in various ports.” A true cost containment partnership should include, but is not limited to, the following services:
• Making financial arrangements for direct billing on your behalf
• Assisting with identification of an appropriate pre‐contracted medical provider or facility and care co‐ordination for treatment of crew illness/injury
• Providing medical case management
• Ensuring access to a network of providers and facilities that offer a wide range of care
• Ensuring low cost drug benefit management (PBM)
• Providing bill review and discounted rates
• Giving regular reports regarding its performance
• Providing ‘back office’ administrative support such as claims payment options, federal tax filings (w‐9 and 1099 forms for US shipowners), online claims tracking and direct claims mailing.
Mrs Rollins added: “Once the new cost containment partner and process is in place, owners should communicate their plans and goals throughout their organisation and to port agents. To be successful it is imperative to make sure that everybody knows their roles and works together to accomplish the company’s goals.”