Insurers error driving costs up

Advisors and plan sponsors are bearing the brunt of increased costs as insurers are misusing a government drug program.

Insurers error driving costs up
Ontario’s Trillium Drug Program (TDP) could go a long way to reducing some of the strain drug costs are placing on plan sponsors.

Too bad insurers aren’t using it correctly.

The program is designed to help households that have high drug costs in relation to their household income that don’t have 100 per cent coverage through their private insurance plan.

Once the household’s deductible is met, which is about 4 per cent of household income, the TDP program can pick up 100 per cent of the cost of the eligible drug.

“Once they’ve reached their out of pocket deductible there should be nothing more going to the private insurer until the next quarter,” said Rob Campbell, Director of the Exceptional Access Program Branch at Ontario Ministry of Health and Long-Term at a CGIB seminar.

But that isn’t happening in Ontario.                                

“Trillium is set to handle claims today but it’s not being adjudicated properly,” says Dave Patriarche, President of Mainstay Insurance. He warned that he’s heard of clients across the province saying they’re going to put caps on drug spending so Trillium can handle all of their claims.

“I don’t want anyone to cap a client,” he said. “I believe in insurance. I want my clients to have coverage. I believe that’s really important. But it’s getting bigger and bigger. The snowball is going downhill so fast now that it gets hard to stop.”

While the TDP is there to help, the infrastructure isn’t in place at the moment to allow insurers to know when a plan member has hit their deductible and the claim should be passed on to Trillium.   

But Barb Martinez, Great-West Life Benefits Solutions Practice Leader, challenged the perception that insurers are not adjudicating claims properly.

“It’s really difficult for the carriers to be able to coordinate,” said Martinez. "There is a perception that we are not paying claims correctly but the reality is we don’t have the information necessary to coordinate with the Ontario public plan. We’d like to. We don’t know that trigger point of when that deductible changes over.”

The main issue is the public and private systems aren’t integrated in Ontario, unlike the systems in Manitoba, B.C. and Saskatchewan, where the two sector’s plans can speak to each other.

“It’s easy because the private and public systems are integrated, so if the pharmacist sends the claim to one payer and it’s the wrong payer, it’s automatically directed to the second payer,” she said. “With the Trillium program, our systems don’t talk to each other. It’s a real challenge.”

Another big challenge for insurers revolves around the criteria that different plans use. For example, a plan member may be eligible under the Ontario Drug Benefit program, but after six months on a rheumatoid arthritis drug they have to submit tests to show there has been improvement and the drug is working.

“All of a sudden because that information isn’t submitted to the government plan, then the claim is denied and it falls on our plan,” she said. “So we have different criteria, spousal plans involved, other insurers involved and it’s really difficult to coordinate them all.

“It is not that we are not paying claims correctly, it is that we can’t force claims to a payer when we don’t know if or what that payer pays. We need to be able to turn the claim over at the right time so that the plan member is not caught in the middle with nobody paying their claim.”