Thoughts, real-world observations, and anonymous examples – good and bad – regarding the use of Web/Social/Mobile technology in the insurance industry. Follow Mike Wise, President WebWisedom LLC, for the latest in Social Technologies.
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“In case anyone is interested, there is a CMS-hosted weekly conference call every Wednesday at 3:30pm Eastern. Here is the registration page:
Unfortunately, there are no archived minutes for previous calls. There are also no notes of these calls distributed. I will do my best to attend these calls, capture notes, and post them to this Blog.
Also, I received this email from CMS on 04/21/2005 regarding online enrollments:
“We will be allowing on-line enrollments and will provide further information about the requirements in our upcoming guidance on enrollment for PDPs. We are working on this now and plan to release it at some point in May.
“As far as your website, I believe that website content must be approved under the same process as other marketing material, but I would defer to those responsible for PDP marketing, also copied on this e-mail.
“I am not aware of specific rules for collecting premium payments.”
From a Web development timeframe standpoint, assuming CMS issues the guidance on schedule, IdeaStar is looking at client project kick-offs by the end of May. This means site design could be done by the end of June and launched by the end of August, leaving plenty of room for CMS testing prior to the 11/15 launch date.
Hope this helps. If you have any questions or comments to share, feel free to Comment on this post or call or write.
“Featured this month in Insurance & Technology Magazine, a magazine that is on point and really hits home for me, is Negotiating Success, an article that looks at the challenges facing effective relationships between insurers and technology suppliers.
The article touches on something which has become all too common in the industry…Failed negotiations between insurance carriers and technology vendors where Carrier executives want to “win” negotiations by getting some kind of “deal,” and technology providers feel pushed to the breaking point.
The article references an insurance executive who “insisted on all kinds of financial discounts and performance guarantees… He was going to squeeze every dime out of that vendor… Eventually the contract just fell apart because there was no way the vendor could fulfill its obligations. In the end, both lost money and the carrier had to start all over.” Problems arise when insurance executives treat vendors as adversaries rather than partners in a win-win situation. This is especially true when the executive is representing a big industry “name” or an important account for the vendor from a PR standpoint.
My perspective is that the spirit and intent of this article is right on target. I have had many relationships with executives, some good and some not so good. The best were with executives who knew and understood the strategic importance of their relationship with IdeaStar. They were also realistic and appreciative with regard to their project and its footprint within our environment. No doubt these individuals were motivated by good financial outcomes, but they did not allow that to become the primary motivation in the negotiation. Instead, they strove to create an environment where both parties liked and respected one another, and the goals, roles, and processes were all clearly understood. Then they left their project in the hands of an experienced project manager and a capable team.
The adversarial-style executive has also come up from time to time, and, looking back every project but one has failed when I negotiated with an executive like the one in the article. As it says, failures are caused by three main things:
Clearly it takes a while to build trust between client and vendor, and you can’t rush that process. However, after a commitment to a vendor has been made, the attitude must shift to a cooperative approach as quickly as possible. This “partnership” transition becomes vital to project success. If the vendor then proves untrustworthy, then reaction is warranted.
On that note, I would encourage executives, especially health insurance executives, to read a technology book (Net Ready by Amir Hartman), go to an Insurance technology conference (A.M. Best EFusion 2005), or subscribe to a magazine (e.g. Insurance & Technology Magazine). By actively improving their technology I.Q., negotiations with technology providers will go much more smoothly.
Here’s an analogy: My ’96 Maxima has 220,000 miles (OK, I like to drive my cars into the grave!), and is seen a couple times a year by my mechanic. When I review the estimate to fix “that noise coming from the right-front somewhere,” I know just enough about cars to ensure a fair deal. Every now and then I do question the estimate, but I do it with respect and honesty because the mechanic is the expert, and I’m not. Because I respect him, he gives me consistently honest and fair quotes and I don’t feel like I’m getting ripped-off like a lot of my friends often say about car repairs – and my car stays in peak shape and doesn’t leave me hangin’ when I need it most. See the correlation?
I’m doing some research for a client on Medicare Part D, the new outpatient prescription drug benefit which goes into effect January 1, 2006. I’ve also been in touch with the Center for Medicare Services in Washington regarding enrollment guidelines. It’s going to be quite an undertaking for individuals as well as insurance providers.
Created by the Medicare Prescription Drug, Improvement, and Modernization Act (MMA), the new program is designed to ease the cost of prescription drugs for America’s seniors. Under the plan, beneficiaries must pay monthly estimated premiums of $35 in addition to premiums for Medicare Part B. The standard benefit includes a $250 annual deductible, with 75 percent coverage of the next $2,000 in prescription costs.
Then there is a “doughnut hole”…. Once a beneficiary goes over $2,250 in drug costs year-to-date (YTD), they must pay the full prescription cost until they’ve accumulated $5,100 in YTD prescription costs. After that, Medicare will pay 95 percent of the remaining YTD prescription costs. So to get to the 95 percent level, a beneficiary has to pay $3,600 out–of–pocket plus the average $35 per month in premium, according to CMS.
Enrollment begins in November. You might be interested to know:
So that’s some of the high points of Part D. Clearly, healthy seniors may not want to enroll in Part D, but they will be assuming a risk of higher Part D premiums later when they do need the benefit. And if they do enroll in Part D and are currently using Plans H, I & J, the will need to choose a different Part B Plan — once again a complicated decision.
From a Web-assistance standpoint, online education and decision counseling of beneficiaries will be critical to effective decision–making and smooth transitions to the new drug benefits. Creating an enrollment process for all that choose to enroll that includes an online, paperless option (with a tight development timeline) will present a big challenge for insurance companies. Needless to say, it would be smart to get started now and avoid under–estimating the scope of the project. In our mind, developing an effective Web site for this situation should take IdeaStar about four months from start to finish.
If a company wants to do this project in-house, development of the Web component will be longer. You have May, June, July, August and September to get ready — with one month for CMS testing before enrollment begins in November. Wouldn’t it be great to give members an Internet tool to make their enrollment easy? Or better yet, how about including a calculator that will help the insured keep track of their YTD prescription drug situation? Make this a priority project today.