FAIR Health Data Serve Stop-Loss Insurance Carriers

March 21, 2024

Stop-loss insurance, coverage for self-insured employee health plans, often relies on data to support policy development. Also known as excess insurance, stop-loss works to protect the company in the event of a large or unpredictable health claim by one or more of its employees. Stop-loss policies have a pre-established dollar amount threshold, over which a company’s medical claims will be paid by the stop-loss insurance, thus preventing excessive financial losses. Policies can be specific, i.e., cover any single individual whose healthcare expenses break the threshold, or aggregate, i.e., cover all employee claims up to a combined threshold. In order to underwrite their policies and recommend appropriate thresholds, stop-loss carriers model various healthcare trends to project costs for the health plan’s healthcare services covered in the policy. FAIR Health’s ever-expanding data repository, now totaling over 46 billion private healthcare claim records, can help stop-loss carriers evaluate risk and predict future medical costs to meet the needs of their clients while managing their own negotiated risks.

FH® Benchmarks Provide Stop-Loss Carriers with Medical Costs
FAIR Health uses the private claims data in its FH NPIC® (National Private Insurance Claims) repository to generate benchmarks by procedure code and percentile, reflecting the distribution of billed charges and allowed amounts across all 50 states; Washington, DC; Puerto Rico; and the US Virgin Islands.

Stop-loss carriers seeking to understand their risk proposition can determine medical costs per individual service or costs per package of services from our benchmark products. Our benchmarks provide a distribution, including the mean and median values, for medical procedures that are commonly performed in 493 geographic markets. Insurance companies have utilized our benchmark products in this way to quantify costs for the full panoply of medical and dental services, including those that might lead to high medical costs.

FH® Custom Analytics Provide Stop-Loss Carriers with Personalized Solutions
Stop-loss carriers can also take advantage of our custom analytics. Like our FH Benchmarks, a custom benchmark arrays charges or allowed amounts for procedure codes by percentile. However, custom benchmarks and analytics offerings allow clients to select a custom range of procedure or diagnosis codes, as well as study percentiles and regions (e.g., states, urban/rural) not offered in the standard modules.

In addition, our rich longitudinal data collection can be used to provide aggregated results of calculated probabilities of medical claim records that exceed any prespecified dollar amount, and the diseases and conditions associated with such claim records. Stop-loss carriers can determine disease prevalence and total average costs for a specific disease by age and gender bands, as well as determine state-specific characteristics, if desired. These data can then be used to calculate potential and relevant risks, populate actuarial tables and ultimately help inform premium rates and thresholds for both specific and aggregate stop-loss policies for a diverse array of clients.

FAIR Health President Robin Gelburd stated: “FAIR Health is pleased to offer stop-loss carriers data to assist in predicting and monitoring healthcare costs. This is another example of how our extensive dataset can be used to advance and inform stakeholder interests.”

For more information on FAIR Health’s data repository and its uses, contact us by email at info@fairhealth.org or call us at 855-301-FAIR (3247), Monday through Friday, 9 am to 6 pm ET.