Joint Session on 80th Percentile and Premium Setting

Last week Premera Blue Cross Blue Shield of Alaska hosted a joint session for producers and employers reviewing the cost of healthcare in Alaska, impacts of the 80th Percentile, and how we set premiums.

If you were not able to attend the session, you can access the recording here.

Here’s the answers to your questions from the session:

1. Can HMO plans really manage cost more effectively and have a positive impact on future renewal increases? For Washington small group, the highest average increase filed with the Office of the Insurance Commissioner for 2024, by far, is the Kaiser Permanente HMO platform.

Premera has never had an HMO in Alaska due to regulatory restrictions. HMOs have been proven effective in other markets in reducing costs. A typical HMO doesn’t include out-of-network benefits, the member’s network is somewhat more narrow which can reduce unit cost, and a member is often assigned a primary care provider at enrollment and that primary care provider can help steer and manage utilization of healthcare services.

2. What does Premera do to help manage cost of care in the long term? Case management, claims management programs, etc.

Our National Committee for Quality Assurance (NCQA) accredited Utilization Management (UM) program ensures that members quickly receive the care they need and avoid unnecessary care that can lead to harm and waste. Our program uses prior authorization, prospective medical necessity review, post-service review (also called retrospective review), and concurrent review of inpatient services to assure that members’ care is safe and of the highest quality.

UM activities are conducted by qualified employees with appropriate expertise and credentials. Member clinical information is received from providers and used in the clinical review process. Individuals engaged in UM program activities maintain confidentiality of all member information. Only physicians and pharmacists have the authority to deny authorization, coverage or payment for treatments or services based on medical necessity. Medical necessity reviews use nationally recognized clinical guidelines and Premera medical and pharmacy policies, which are updated and adopted at least annually.

Premera provides open online access to our Medical and Pharmacy Policies and invites feedback about them at Medical Policy Search | Provider | Premera Blue Cross.

Premera provides Personal Health Support services to members who have complex physical and behavioral health conditions. We start by engaging members in services, identifying their barriers, and working with the member, their caregivers and providers to address.

For example, we work with members who are admitted into inpatient care, assisting the discharge planner in addressing barriers to a safe and timely discharge plan and with the member or caregivers post discharge to reduce readmissions.

We conduct outreach to members with care gaps and avoidable emergency department visits to assist them in accessing primary care. We also address the members’ social determinants of health (for example, financial constraints) that impact their ability to follow their provider’s treatment plan.

3. How can we offset the high cost of medical services when remote locations are considered out of network?

80% of providers in Alaska are in-network with Premera. When we look at those providers that are out of network, or not contracted with Premera, over 50% of those providers are based in the Anchorage area.

To date, Premera has invested over $11M with impact reaching across 18 boroughs in Alaska focusing on Behavioral Health, Homelessness, Health Equity and Rural Healthcare. These funds are meant to address the inadequate number of physicians, primary and mental healthcare providers and facilities in many of Alaska’s communities.