Why it matters that insurers are paying more claims than ever

  • Share:
  • Facebook
  • Twitter
  • Print
  • Email
  • Text Size

wealth-benenfits-pills-syringeWell, it’s great news for employees and insurers.

In the past insurers used reasonable and customary (R&C) tables to ensure that claims were paid in a reasonable and customary manner. The intent was to ensure that practitioners where charging a fair and reasonable price for their services compared to others practicing in the same field and the same province.

This helped to avoid abuses caused by overcharging and were instituted to help control irregular claims. In areas that experienced faster-than-normal claims growth, such as professional services (chiropractic, massage, physiotherapy etc.), these limits were instrumental in controlling costs.

An example of this process might be an employee obtaining the services of a Registered Massage Therapist (RMT). An industry norm might state that a standard treatment is 50 minutes and in the province of Ontario the R&C limit might be $90. If an employee decided to have an RMT come to their home and provide an 80-minute massage and charged $150, the claim would be adjudicated to the standard 50-minute treatment and $90 would be paid.

The end result is that the benefit would be paid at a reasonable cost and the employer would know that anything beyond the R&C would be declined.

Over the past few years, several insurers have changed their internal R&C tables in a variety of ways including; changes in treatment times, as well as the annual increases to the eligible amounts. This was done at the same time that these tables were removed from the insurer public sites and kept private from employers.

The biggest change comes from some insurers starting to use R&C amounts per hour rather than per treatment. Using the example above, this would mean that the same treatment for an 80-minute massage would now pay out $135 (1.5 times the R&C). This would make the employee happy, but the employer would likely see an increase in their costs they were not expecting.

Why is this of particular concern? Paramedical services continue to be a huge problem with one of the highest incident rates of fraud. So as we see the fraud continue to rise, insurers are allowing more of the employer’s funds to be misused and placed at risk. As a broker you should be checking to see what your providers use and ask them to revert to standard treatment rates to protect your clients.

If you’d like to learn more about fraud, waste and abuse in health care, Canadian Group Insurance Brokers is holding a seminar on October 5th. Details are available at www.cgib.ca

Transcontinental Media G.P.