Ask.
If you’re an organization with a shared-risk Medicare Advantage contract, check your reinsurance costs. You might be surprised by how high they are.
And you also might be surprised by how effectively you can negotiate them down.
We found this out the hard way.
Like almost all of you, we purchased re-insurance on a per-member-per-month basis from our Medicare Advantage insurer as part of our contract.
After several years of excellent performance, we discovered our success wasn’t being reflected in the insurance rate. It stayed the same, despite their risk of payout being provably decreased.
So we asked for a new rate.
And we got one.
It was more than $1m additional revenue that just dropped from the sky.
After another year of great performance, we asked again.
And again, they dropped our rates. It wasn’t huge this time, but it was still significant.
Year after year, as our performance stayed strong, we kept asking for our rates to drop.
Until they finally said no.
Then we started our own re-insurance company—and kept all the revenue for ourselves.
If you’re performance has been good, if you haven’t had substantial aggregate losses in a while, ask your insurer to rebid them.
They actually might.
If they can reduce the overall cost of the contract, more benefits will flow to them as well—as you.
The worse they can say is “no”.
The best they can say is “yes”.
And you will prosper.