Districts with more than 100 employees
Public Act 106 requires that “a public employer that has 100 or more employees in a medical benefit plan shall be provided with claims utilization and cost information.” Therefore, a district needs to draft a request for this claim data information.
This is a contentious issue and one prominent carrier in the state seems to be strongly resisting this release of information on grounds that a) it will result in privacy concerns; b) it will ruin a current business model by allowing “cherry picking”; and c) the carrier is unable to query the data as specified in the Act because it has not been tracked in that manner. House Bill HB 5454 seeks to raise the number of enrolled employees from 100 to 250 due to this issue. MASA and MASB are working to ensure that this change is not made because it would prohibit many districts from getting their data.
Districts with fewer than 100 employees
School districts with fewer than 100 employees generally will not receive claims data for their individual district under any circumstances. Groups of this size are considered too volatile to make decisions based on past claims data due to the ever-present possibility of a catastrophic claim that could result in major fluctuation in costs. The larger the group, the less volatile the overall expense to the district.
However, schools under 100 may pool together under Public Act 106 and obtain their claim data as a combined group of 100 or more enrolled employees. For example, several smaller and medium-size districts in a county can group together with the “intent” (see below) to combine their employees into a self-insured risk pool or insurance purchasing consortium. Under this arrangement, they can approach carriers that cover at least 100 of the employees affected by this group of districts.
This requires that the schools sign a “Letter of Intent” to pool. To see a sample letter, click here. This letter is non-binding but describes the terms of the districts’ intent to pool. One commentator likened the letter of intent to getting engaged to be married. It is a serious step, but it is not yet an official partnership.
How do I request my data?
You can download a sample letter in Microsoft Word by clicking here. You will need to customize the letter and use your district’s letterhead. This letter uses the same language found in the Act to define the type and detail of data with which you should be supplied.
We have found that Blue Cross Blue Shield of Michigan has responded to at least one request by mailing a template authorization form to the school, which certifies that the school has proper controls in place to comply with the Health Insurance Privacy Accountability Act (HIPPA). Click here to view a copy of this document. Consider proactively sending this information with your original request to expedite obtaining claims data. This same form may or may not be acceptable to other carriers.
What if my carrier refuses to give me data?
As noted above, certain carriers are resisting this legislation and we predict that there will be legal challenges related to this issue.
Relative to privacy, the law specifically requires that all released data is de-identified per HIPAA and we believe that refusing to release data on grounds of privacy is an invalid premise. The vast majority of employers throughout the country routinely receive such data from their insurance providers; and Blue Cross Blue Shield of Michigan seems to have already established controls to ensure privacy compliance.
The concern that some carriers have about “cherry picking” and the impact this has on the business model of various carriers is valid. We believe that is why this legislative move is called “reform.” The state legislature and governor have agreed in this Act that the current system is not capable of fully addressing the financial crisis in schools—of which healthcare is a significant part—and have therefore put provisions in place to address the current model.
Public Act 106 allowed carriers 60 days to equip themselves to be able to compile data from their various sources in order to meet the requirements of the updated school code. In this age of database technology, with which SET SEG works on a daily basis, it is difficult to imaging why a carrier could not figure out how to compile this data over the course of two months.
For these reasons, we are frustrated—along with school districts— at the resistance over the claim data issue. We are aware that some districts are taking the position that any provider that does not release claim data will not be eligible to bid on that district’s medical insurance because releasing claim data is a requirement of PA 106.
Our advice to school districts at this point is to keep asking for data and keep in contact with MASA and MASB. Senator Wayne Kuipers (R-30th District) has expressed a desire to hear about districts’ experiences in this area. Districts experiencing frustration should consider sharing their experience with Senator Kuipers directly or through MASA and MASB.