In 2012, with the advent of the Affordable Care Act (ACA), the Ute Tribe both added more people onto their plan and increased benefits as required by ACA. The combined increase in costs was potentially disasterous. They needed a solution to reduce the cost of healthcare for the group, and fast.
The tribe began looking for a solution that would cut their costs without reducing the quaity of care for their employees. Through their TPA, they connected with ELAP, who presented a solution to attack the root of the problem: heavily inflated billed charges levied by providers.
With ELAP. the Ute tribe instituted a system where they paid claims based on the actual cost of service to the provider. This strategy enabled the Tribe to bring the same fiscal discipline they have in all other areas of their governance to the healthcare space. ELAP audited all Provider claims, line by line, and adjusted the claim accordingly to the actual cost of service for the provider plus a reasonable profit.
The Ute Tribe implemented the ELAP solution three months into their plan year. Even with the late implementation, they were able to reduce the medical claims costs by 20% in the first year, with audited savings that amounted to nearly $427 per employee per month. In year two of their plan they were able to reduce the medical claims paid an additional 23%, with audited savings which amounted to nearly $550 per employee per month.
The reductions were so dramatic that the actual claims dollar spent per person per month was lower in 2014 than they were in 2008. The net gain to this solution has yet to be truly felt. In the 2015 plan year, stop loss quoted a reduction of over 1 million dollars to their total maximum plan liability.