Managing NICU Claims Before They Trigger a Stop-Loss

People have babies – that’s a fact of life. Some newborns require a few days in the NICU, while others escalate into million-dollar stop-loss claims.

Self-insured employers can resign themselves to NICU events as inevitable outliers. They might not realize that NICU claims should be actively managed to avoid reaching the stop-loss point when possible. Many employers have ongoing cases that are quietly escalating and accumulating unmanaged costs. Before cases reach the stop-loss threshold, payers need to offer their customers an extra set of experienced eyes and resources to manage their NICU spend.

What is Stop-Loss Insurance?

Self-funded employers use stop-loss health insurance to protect against massive losses from catastrophic medical claims, such as transplants, cancer, and neonatal complications.

Just like a homeowner’s policy that protects against storm damage, when a medical cost threshold is reached – for example, a million-dollar birth – the self-funded employer must also pay a deductible. This “co-pay” can be significant. The vast majority (96%) of self-funded employers with 500–1,000 employees have stop-loss insurance to cover catastrophic claims.¹

What Kinds of NICU Events Trigger Stop-Loss?

Premature infants with complications and micro-preemies (babies born before 26 weeks or weigh less than 1 pound, 12 ounces) drive most high-cost NICU events. According to one study, an infant born at 24 weeks generated an average six-month medical expenditure of $603,778.² Premature twins and triplets instantly multiply these NICU costs up to 300 percent.

Other newborn complications that drive costs include birth defects, birth injuries, breathing problems, drug addiction, failure to thrive, jaundice, rare skin conditions, and other complications.

Managing NICU Claims Before They Reach Stop-Loss

Visibility is a critical challenge in managing NICU costs. Unlike with transplants or cancer, NICU costs can get lumped into the bigger bucket of maternity costs. In this way, NICU expenses get treated as outliers instead of ongoing cost drivers. When NICU care is actively managed, employers can reap significant savings – including from NICU events that might trigger a stop-loss claim.

A third-party NICU specialist like ProgenyHealth serves as a safety net for the employer. ProgenyHealth ensures that all NICU procedures and claims are clinically appropriate. The ProgenyHealth utilization management team ensures that the infant receives the correct diagnosis, the appropriate level of care, and the right number of days in the NICU. Case managers also help keep infants out of the ER and avoid readmissions through their first year of life.

How Savings Levers Manage NICU Costs

Inappropriate length of stay offers a significant source of savings – a 10 percent or greater reduction.

A NICU event is the epitome of “complex care.” Infants admitted to a neonatal intensive care unit often have complex medical conditions requiring care from multiple subspecialists and prolonged hospitalizations. Adding to the complexity, neonatologists often rotate, and subspecialists face demands for their time. As a result, diminished collaboration and continuity of care can impact length of stay.

For these reasons, a specialized NICU care management platform is required to effectively manage the stream of clinical decisions, claims, and care needs in real-time. The ProgenyHealth care management platform employs NICU clinicians with years of experience, a NICU-dedicated technology infrastructure, and intelligent protocols drawn from nearly 100,000 NICU cases.

Utilization Management savings levers include:

• Length of stay – When we analyze the NICU spend, we routinely discover two-day lengths of stay – an indicator that healthy newborns were sent unnecessarily to the NICU. Inappropriate length of stay offers a significant source of savings – a 10 percent or greater reduction.
• Leveling of care – We review for “over-coding” to ensure that the level of service reported by the provider reflects the services performed.
• Appropriate diagnosis codes – Correct codes ensure that the appropriate DRG or severity of illness is employed.

Case Management savings levers include:

• ER visits – Our Case Management teams work to drive care to the appropriate setting. Educating moms to use the most effective healthcare resources avoids unnecessary ER visits.
• Readmissions – Up to 70% of readmissions occur 30+ days after discharge – and most ER visits result in admission. ProgenyHealth reduces readmission rates by up to 50%. In a study of 3,529 non-Progeny and 1,312 Progeny commercial NICU babies in the same market, our solution helped drive a 71% reduction in ER visits.³
• Social Determinants of Health – Our Case Management team engages with families and caregivers through the crucial first year of life. We help them solve social determinants of health like housing, safety, transportation, food insecurity, and more – all hard-to-manage issues that impede infant health.

Conclusion

Stop-loss claims are not inevitable. They are best managed by looking at the appropriate and necessary NICU care in its entirety. By leveraging specialized expertise, payers can implement a safety net for their employer customers that protects them from day one. Each catastrophic claim puts the employer on the hook for real dollars. Even worse, stop-loss carriers try to recoup as much as they can.

Stop-loss claims are not inevitable. They are best managed by looking at the appropriate and necessary NICU care in its entirety. By leveraging specialized expertise, payers can implement a safety net for their employer customers that protects them from day one. Each catastrophic claim puts the employer on the hook for real dollars. Even worse, stop-loss carriers try to recoup as much as they can.

The answer is to not leave money on the table by postponing the decision to outsource NICU care management. ProgenyHealth’s medical economists can analyze NICU spend to discover how much money self-funded employers are leaving on the table.

1. www.mercer.us/our-thinking/health/medical-healthcare-options-stop-loss-insurance.html
2. www.nature.com/articles/s41372-020-0635-z
3. ProgenyHealth study of NICU infants in the same commercial market