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NCAA News Archive - 2007
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Basic accident coverage based on four-part approach
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By Jack Copeland
The NCAA News
The NCAA News
After spending a few years deliberatively seeking a way to help member institutions control the cost of insuring against athletics injuries while providing proper care for student-athletes, administrators of a new NCAA basic accident insurance settled on an approach they believe will accomplish those goals for many years to come.
The NCAA Group Basic Accident Medical Program — after working with a small group of institutions in recent months to fine-tune its emphasis on promoting best practices for controlling costs while providing state-of-the-art claims management services — now is available to the entire membership.
“For the last several years, the NCAA has evaluated the feasibility of developing a group basic accident program,” said Juanita Sheely, NCAA travel and insurance manager. “We wanted to ensure that if we were to become involved, we would be able to provide a valuable resource with meaningful benefits.
“After much review and discussion with industry experts, we concluded not only that such a program was feasible, but that it was essential.”
Member institutions currently pay a combined estimated $75 million to $100 million annually for basic accident insurance — in most cases to purchase secondary insurance that covers injuries not already covered by student-athletes’ or parents’ insurance — but it has become tougher in recent years for athletics programs to independently obtain affordable, quality coverage.
Three years ago, an NCAA Risk Management Task Force discussed the possibility of establishing an Association-sponsored basic accident insurance program, but was unsure there was sufficient demand among member institutions to justify the effort.
Recent trends — including three increases in the NCAA Catastrophic Injury Insurance Program deductible since 1998 — have generated the demand.
“We know that escalating costs in intercollegiate athletics is a concern for our members,” Sheely said. “We also know that escalating costs to treat athletics injuries has posed an increasing challenge.
“As medical inflation has increased, it has driven the catastrophic-program deductible from its original level of $25,000 to its current level of $75,000. This has placed an increased responsibility on institutions to buy higher limits of basic accident insurance to cover the deductible.”
The NCAA has partnered with American Specialty Insurance and Risk Management Services, the NCAA’s longtime insurance and risk management administrator; Mutual of Omaha Insurance Company, which also has insured the catastrophic-injury insurance program for nine years; and Summit America Insurance Services, which already provided basic accident insurance for more than 100 NCAA member institutions before joining in the Association’s initiative. Together, they are basing the program on four components:
Insurance.
Cost containment.
Risk management.
Claims management services.
“Rather than just creating a vehicle to buy insurance, group programs must be built on the fundamental premise that managing costs and controlling losses is the key to long-term success,” said Marla Peters, American Specialty senior vice president for special programs.
“We believe we have created a platform through four ‘pillars of success’ to offer member institutions a solution that has all of the benefits of a group program as well as the critical components to position it for long-term success.”
Coverage
The first pillar is the insurance itself, and it’s Summit America’s role to work with member institutions to evaluate whether the program — including its best-practices approach to controlling costs — suits a school’s basic accident coverage needs, said Tom Wilson, the company’s president and chief executive officer.
“Because there are many different approaches to managing this layer of coverage, ranging from policies with zero deductibles to completely self-insured programs, it will be a long-term process to bring everyone under a common umbrella,” he said. “But we want every institution to have an opportunity to know about the program, consider the potential benefits and make an informed decision.”
Program administrators anticipate somewhere between 100 and 150 institutions will enroll in the program by its August 1 starting date for 2007-08, and in addition to forming a group whose managers can negotiate coverage rates and medical-service providers’ charges, those schools also will have considerable influence over their own actual insurance expenses from year to year.
The program will offer coverage per injury up to the $75,000 deductible of the catastrophic-insurance plan, and provide benefits both for student-athletes and for cheerleaders. Other features include a $10,000 accidental death benefit, as well as a variety of optional features such as coverage for athletics-related medical conditions not attributable to a specific injury, and coverage of bills that a student-athlete’s health maintenance organization or preferred provider organization refuses to pay because care was obtained from an “out-of-network” medical provider or was not preauthorized.
Factors such as a school’s deductible or whether student-athletes are required to provide primary insurance coverage will partly determine the premium that an institution will pay year to year for the insurance. In addition, institutions that participate will benefit from the NCAA’s success in negotiating commissions at or below industry standards and limits on profits retained by insurers.
Best practices
However, active efforts by institutions to ensure that student-athletes primarily obtain care from in-network providers of medical services and that charges are billed to other insurance sources whenever appropriate also will benefit program participants over time.
“There are three practices that we believe will help drive medical expenses in the right direction,” Peters said. “These are maximizing discounts, using primary insurance and implementing best practices through the concerted efforts of a (campus-based) injury management team.”
In fact, establishing such a team is itself a key best practice that is being encouraged through the NCAA program.
“Many institutions may have an informal version of this in place already,” Peters said. “However, we believe this is important enough to make this an official group of individuals who come together periodically and as circumstances warrant for the purpose of identifying methods to control costs.”
Campus-based efforts to control costs and manage risk — two more of the “pillars of success” Peters referred to — may result not only in lower premiums and bills at each institution, but also cumulatively may benefit the program as a whole.
“Under this program, the NCAA has implemented an approach designed to put more of the premium dollar toward the payment of claims and less toward program expenses,” Summit America’s Wilson said. “This was accomplished by negotiating lower commissions and setting a limit on insurer profit, which means that participating institutions could directly benefit from the steps they take to control losses.
“If the group performs well as a whole, the surplus that normally would be retained by the insurance company as higher profits is returned to the institutions. A portion of the surplus would be allocated toward a fund to offset future losses and maintain program stability. The remainder is returned to participating institutions in the form of a dividend or a premium credit.”
Technology
Negotiated expenses aren’t the only program feature that will help keep costs down.
The program also will provide administrative tools for on-campus use — as well as compile and circulate useful risk-management ideas from participating institutions — to further aid in cost-containment efforts. In addition to collecting ideas, the program also offers an opportunity for the NCAA to compile data on injuries and costs that may be useful in future negotiations for insurance rates and medical providers’ fees.
Probably the most noteworthy tool is a customized online management system created by American Specialty that will, Peters says, “empower” participating institutions to do everything from filing and tracking claims to obtaining best-practices information.
Called the NCAA Basic Accident Virtual Risk Manager, the system “will provide the institution with secure online access to all the information about the basic accident program, including online incident reporting, the ability to view claims online and access loss reports, ability to view insurance policy information, and access to all the best practices tools,” she said.
The Virtual Risk Manager also is a key component of what Peters said is the program’s fourth “pillar of success” — claims management services.
Kenneth Dinslage, Mutual of Omaha first vice president for special risk services, said the Virtual Risk Manager helps control costs by streamlining the reporting of injuries and management of bills — though he adds that the insurer is devoting significant “human resources” to program administration, too.
“When an institution joins the program, Mutual of Omaha will assign a dedicated claims management specialist,” he said. “Our staff members individually have an average of more than 22 years of experience managing basic accident medical claims. In addition to our experience paying bills to medical providers, all representatives are aware of the bigger picture with the NCAA basic accident program.”
Pointing to Mutual of Omaha’s lengthy relationship with the NCAA through the catastrophic-injury program, Dinslage said the company also provides another attribute that should help ensure the program’s success: stability.
“As a show of confidence in this program, we have committed to a long-term, formal agreement with the NCAA, which will provide continuity and stability for the program,” he said.
That makes Mutual of Omaha — along with American Specialty and Summit America — the “right partners” for providing the program, Sheely said.
“The potential goals and benefits of the program are clear,” she added.
“Those are to provide a long-term, stable basic accident insurance resource; create an approach that educates member institutions on ways to control costs and rewards institutions that perform well; ensure quality, consistent claims management and administrative service; enable participating institutions to report incidents, view claim status and claims management reports, and access coverage information online; control program expenses by negotiating with providers and capping insurance company profits; and create a reliable centralized database of claims information that will empower the NCAA in its negotiations with insurers on both the basic accident and catastrophic-injury insurance programs.”
The NCAA Group Basic Accident Medical Program — after working with a small group of institutions in recent months to fine-tune its emphasis on promoting best practices for controlling costs while providing state-of-the-art claims management services — now is available to the entire membership.
“For the last several years, the NCAA has evaluated the feasibility of developing a group basic accident program,” said Juanita Sheely, NCAA travel and insurance manager. “We wanted to ensure that if we were to become involved, we would be able to provide a valuable resource with meaningful benefits.
“After much review and discussion with industry experts, we concluded not only that such a program was feasible, but that it was essential.”
Member institutions currently pay a combined estimated $75 million to $100 million annually for basic accident insurance — in most cases to purchase secondary insurance that covers injuries not already covered by student-athletes’ or parents’ insurance — but it has become tougher in recent years for athletics programs to independently obtain affordable, quality coverage.
Three years ago, an NCAA Risk Management Task Force discussed the possibility of establishing an Association-sponsored basic accident insurance program, but was unsure there was sufficient demand among member institutions to justify the effort.
Recent trends — including three increases in the NCAA Catastrophic Injury Insurance Program deductible since 1998 — have generated the demand.
“We know that escalating costs in intercollegiate athletics is a concern for our members,” Sheely said. “We also know that escalating costs to treat athletics injuries has posed an increasing challenge.
“As medical inflation has increased, it has driven the catastrophic-program deductible from its original level of $25,000 to its current level of $75,000. This has placed an increased responsibility on institutions to buy higher limits of basic accident insurance to cover the deductible.”
The NCAA has partnered with American Specialty Insurance and Risk Management Services, the NCAA’s longtime insurance and risk management administrator; Mutual of Omaha Insurance Company, which also has insured the catastrophic-injury insurance program for nine years; and Summit America Insurance Services, which already provided basic accident insurance for more than 100 NCAA member institutions before joining in the Association’s initiative. Together, they are basing the program on four components:
Insurance.
Cost containment.
Risk management.
Claims management services.
“Rather than just creating a vehicle to buy insurance, group programs must be built on the fundamental premise that managing costs and controlling losses is the key to long-term success,” said Marla Peters, American Specialty senior vice president for special programs.
“We believe we have created a platform through four ‘pillars of success’ to offer member institutions a solution that has all of the benefits of a group program as well as the critical components to position it for long-term success.”
Coverage
The first pillar is the insurance itself, and it’s Summit America’s role to work with member institutions to evaluate whether the program — including its best-practices approach to controlling costs — suits a school’s basic accident coverage needs, said Tom Wilson, the company’s president and chief executive officer.
“Because there are many different approaches to managing this layer of coverage, ranging from policies with zero deductibles to completely self-insured programs, it will be a long-term process to bring everyone under a common umbrella,” he said. “But we want every institution to have an opportunity to know about the program, consider the potential benefits and make an informed decision.”
Program administrators anticipate somewhere between 100 and 150 institutions will enroll in the program by its August 1 starting date for 2007-08, and in addition to forming a group whose managers can negotiate coverage rates and medical-service providers’ charges, those schools also will have considerable influence over their own actual insurance expenses from year to year.
The program will offer coverage per injury up to the $75,000 deductible of the catastrophic-insurance plan, and provide benefits both for student-athletes and for cheerleaders. Other features include a $10,000 accidental death benefit, as well as a variety of optional features such as coverage for athletics-related medical conditions not attributable to a specific injury, and coverage of bills that a student-athlete’s health maintenance organization or preferred provider organization refuses to pay because care was obtained from an “out-of-network” medical provider or was not preauthorized.
Factors such as a school’s deductible or whether student-athletes are required to provide primary insurance coverage will partly determine the premium that an institution will pay year to year for the insurance. In addition, institutions that participate will benefit from the NCAA’s success in negotiating commissions at or below industry standards and limits on profits retained by insurers.
Best practices
However, active efforts by institutions to ensure that student-athletes primarily obtain care from in-network providers of medical services and that charges are billed to other insurance sources whenever appropriate also will benefit program participants over time.
“There are three practices that we believe will help drive medical expenses in the right direction,” Peters said. “These are maximizing discounts, using primary insurance and implementing best practices through the concerted efforts of a (campus-based) injury management team.”
In fact, establishing such a team is itself a key best practice that is being encouraged through the NCAA program.
“Many institutions may have an informal version of this in place already,” Peters said. “However, we believe this is important enough to make this an official group of individuals who come together periodically and as circumstances warrant for the purpose of identifying methods to control costs.”
Campus-based efforts to control costs and manage risk — two more of the “pillars of success” Peters referred to — may result not only in lower premiums and bills at each institution, but also cumulatively may benefit the program as a whole.
“Under this program, the NCAA has implemented an approach designed to put more of the premium dollar toward the payment of claims and less toward program expenses,” Summit America’s Wilson said. “This was accomplished by negotiating lower commissions and setting a limit on insurer profit, which means that participating institutions could directly benefit from the steps they take to control losses.
“If the group performs well as a whole, the surplus that normally would be retained by the insurance company as higher profits is returned to the institutions. A portion of the surplus would be allocated toward a fund to offset future losses and maintain program stability. The remainder is returned to participating institutions in the form of a dividend or a premium credit.”
Technology
Negotiated expenses aren’t the only program feature that will help keep costs down.
The program also will provide administrative tools for on-campus use — as well as compile and circulate useful risk-management ideas from participating institutions — to further aid in cost-containment efforts. In addition to collecting ideas, the program also offers an opportunity for the NCAA to compile data on injuries and costs that may be useful in future negotiations for insurance rates and medical providers’ fees.
Probably the most noteworthy tool is a customized online management system created by American Specialty that will, Peters says, “empower” participating institutions to do everything from filing and tracking claims to obtaining best-practices information.
Called the NCAA Basic Accident Virtual Risk Manager, the system “will provide the institution with secure online access to all the information about the basic accident program, including online incident reporting, the ability to view claims online and access loss reports, ability to view insurance policy information, and access to all the best practices tools,” she said.
The Virtual Risk Manager also is a key component of what Peters said is the program’s fourth “pillar of success” — claims management services.
Kenneth Dinslage, Mutual of Omaha first vice president for special risk services, said the Virtual Risk Manager helps control costs by streamlining the reporting of injuries and management of bills — though he adds that the insurer is devoting significant “human resources” to program administration, too.
“When an institution joins the program, Mutual of Omaha will assign a dedicated claims management specialist,” he said. “Our staff members individually have an average of more than 22 years of experience managing basic accident medical claims. In addition to our experience paying bills to medical providers, all representatives are aware of the bigger picture with the NCAA basic accident program.”
Pointing to Mutual of Omaha’s lengthy relationship with the NCAA through the catastrophic-injury program, Dinslage said the company also provides another attribute that should help ensure the program’s success: stability.
“As a show of confidence in this program, we have committed to a long-term, formal agreement with the NCAA, which will provide continuity and stability for the program,” he said.
That makes Mutual of Omaha — along with American Specialty and Summit America — the “right partners” for providing the program, Sheely said.
“The potential goals and benefits of the program are clear,” she added.
“Those are to provide a long-term, stable basic accident insurance resource; create an approach that educates member institutions on ways to control costs and rewards institutions that perform well; ensure quality, consistent claims management and administrative service; enable participating institutions to report incidents, view claim status and claims management reports, and access coverage information online; control program expenses by negotiating with providers and capping insurance company profits; and create a reliable centralized database of claims information that will empower the NCAA in its negotiations with insurers on both the basic accident and catastrophic-injury insurance programs.”
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