When evaluating your workers’ compensation insurance, it’s essential to uncover hidden fees that may be quietly impacting your bottom line. One such fee that often goes unnoticed in the traditional workers’ compensation market is the managed care fee.
What Are Managed Care Fees?
Managed care fees are charges imposed by traditional insurance carriers for reducing medical bill spend on workers’ compensation claims. Essentially, carriers apply these fees as a percentage of the savings they achieve on medical bills. Depending on your contractual agreement with the carrier, these fees can range from 20% to 30% of the savings. While the savings are beneficial, the fees tied to them can quickly add up, eating into the financial advantages.
The Group Captive Difference
A significant benefit of group captive insurance is how it addresses managed care fees. Instead of charging a percentage of the savings, the third-party administrator (TPA) in a group captive arrangement typically charges a per-bill fee for these services. This approach eliminates the proportional fee structure, potentially leading to substantial cost savings.
Why Does This Matter?
For organizations with significant workers’ compensation claims, the difference in fee structures can result in hundreds of thousands of dollars in annual savings. By transitioning to a group captive, you’re not only gaining greater control over your insurance program but also reducing unnecessary expenses that can impact your profitability.
Explore the Benefits of Group Captives
Managed care fees are just one of the hidden costs that group captives can help mitigate. Beyond this, group captives offer a host of other advantages, including improved transparency, enhanced risk management, and long-term financial benefits.