Health Care Cost Containment: A CPA's Value-added Service

By Barbara C. Oberman, MAM

With the continuing increases in health care benefits costs,many companies are seeking more effective and innovative strategies to keep costs in check. And they’ll be turning to their CPAs for help.

Key trends reported by health care consulting firm WatsonWyatt Worldwide could provide valuable insights when seeking long-range, cost-containment solutions to share with your clients:

“Full coverage” for preventive care benefits: Preventive medical care is being included in PPO plans and not subject to a deductible. Included in these fully paid benefits are vaccinations, exams and screenings for early diagnosis and intervention in breast, colon and cervical cancers.
Health coaches/on-site health centers: A growing number of employers offer access to health coaches, nurse hotlines and health advocates. Individualized advice is provided to workers on personal health care needs to educate employees about the best care and what questions to ask their providers. Many health insurance carriers’ websites provide extensive online tools to support healthy lifestyles and change behavior.
Health savings accounts/fewer plan options: Consumer-driven health plans continue to grow in popularity, especially in areas with heavy PPO participation. Health savings accounts and health reimbursement accounts continue to grow in popularity.
Voluntary benefits (paid by the employee) to meet individual needs: These benefits include homeowners dues, automobile, long-term care insurance, supplemental life, pet insurance and Sec. 529 programs, among others.
Web-based personal health care management: Employers are providing online tools to help employees evaluate and estimate their health care expenses and needs.

Common Sense Saving Tips

More employers are auditing their health plans and requiring their employees to prove (via marriage and birth certificates) dependent eligibility. Here are a few examples of what to look for:

Recommend employee eligibility is checked: Employers should regularly analyze their medical invoices to make sure they are only paying for eligible employees and their dependents. At any given time, 10 percent of dependent members are ineligible, according to HR Best Practices, a third-party administrator that works with employers to control health care costs.

Secondary eligibility: A common-sense check of employee enrollment applications may reveal clues. For example, dependents with birthdates less than nine months apart, or deceased retirees and their spouses on the retiree medical plan may be discovered.
Non-subscriber eligibility: Non-subscriber eligibility refers to family members receiving benefits they are not paying for. For example, non-subscriber eligibility audits compare coverage to the relationship code. These audits reveal ineligible spouses and dependent children. Until the recent spike in health premiums, few employers considered conducting audits. Subscriber eligibility audits are very time consuming, and few employers can dedicate staff time to remove ineligible dependents from their health care rolls. Audits are typically outsourced to a third-party administrator and, in some cases, the company’s health-insurance broker. Employers are uncovering thousands, and even millions, of dollars in savings, however.

Go generic: Encourage generic prescription drug utilization instead of brand name drugs when appropriate.

Educate employees about convenient 24-hour nurse help lines:The helpline can be useful to determine if a visit to the emergency room or even the primary care doctor is necessary, thus cutting medical utilization.

Recommend clients keep on top of claims and charges by conducting regular audits of the bill: A third-party administrator is typically secured to review claims.

Injured? Go to the industrial medical center: Make sure clients direct employees who are injured on the job to the industrial medical center or occupational care center for treatment rather than to their primarycare physician. The industrial medical clinic understands claims management and the process associated between the state, the employer and the doctor.

In today’s business environment, CPAs have a responsibility to help their clients manage their health-insurance costs and the opportunity to enhance their value to their client. By sharing new and innovative cost-containment methods, you can feel confident you are doing everything possibleto help your clients contain health care costs and increase their profitability.

Barbara C. Oberman is the founder and CEO of Barbara C.Oberman Insurance Services, Inc. in Calabasas. You can reach her at barbara@bobermaninsurance.com.