Fee Structure — You Have a Better Idea?
Now that ClaimDOC has established itself as the gold standard for full-service RBP with veteran brokers, the bulk of sales come down to getting good rates. When competing for business with brokers new to the space, we still get a lot of questions on our fee structure. CEO and Founder Ben Krambeck doesn’t have a lot of patience for a team member who is uncomfortable with the question. He’ll go into a long dialogue with technical analysis explaining the fees and how all-in clients pay less and get more. He expects everyone to understand we are a platform that drives lower TOTAL SPEND and provides premium services.
I get not everyone’s brain is built like Ben’s or Andrew Soha’s — thank goodness — so I want to explain our fee structure from a different angle. Although we are fully transparent on the construction of the fee, we haven’t shared much around the thought process. There are many opinions on fee structure for RBP vendors. I don’t think there is a perfect answer, but I’m hoping this article can help you understand our mindset.
Our strategy on fees is to charge clients the appropriate amount so we can support our full-service model with the ability to invest in the systems and people to meet high expectations. Our fee on a single claim is rarely spot on with the value of that specific service. Using a percentage of billed charge on a subset of claims is the best mechanism for us to capture a client’s share of the expense to operate our company. That structure aligns with utilization, the amount of work created by a client and the amount of risk we take on defending fair allowables for that client.
In 2023, we processed over 180,000 physician claims that we repriced and defended for FREE. Members receive full Pave the Way services and full balance bill support related to those claims, and we don’t charge a penny. I find it interesting when brokers take an idealistic position against our fee structure without having a deep understanding of our program.
Think of it as a partnership model. Brokers and plan sponsors who want to take control of claim spend with the highest level of attention dedicated to making it a good experience for members are comfortable with the ClaimDOC fee. Our clients don’t just want savings. They want us by their side navigating all the nuances it takes to be successful without a network. We have no interest in short-term relationships, and our brokers understand our fee structure aligns with giving clients access to the highest level of firepower during challenging situations. If you join a golf club that isn’t charging enough to maintain the course, it’s fair to expect the course will suck when weather conditions get tough. We believe you need a club that consistently delivers and, most importantly, steps up during tough conditions. That’s ClaimDOC.
PEPM Models
With our model, you are buying full-service network replacement. With a PEPM model you are buying a claim repricer with discount services. You will absolutely pay more for our services, however, our solution drives a lower total spend even with higher fees included in the total spend. Look at the stop-loss rates. Carriers that know our model peg the expected claim spend lower than any of our PEPM competitors; that’s with our fees built into the spec and aggregate. For posterity, let’s say rates are dead even. With the PEPM model, you then still have to pay the fixed cost to the RBP vendor, plus fixed cost for concierge service, plus expense for a bill review company, plus the cost of outside legal support. It’s simple math. Even with paying more for our services, the overall spend will be less.
I have not met a broker who can articulate why it makes sense to pay more and get less service with a disjointed PEPM model. I’ve met a few who said they use PEPM because they don’t think it’s right to use billed charge as part the fee structure. We have a mechanism targeted to capture an appropriate aggregate cost for the full suite of services delivered. If a broker wants to hold on to a virtue at the expense of their client receiving a better value, we can’t do anything about that.
Imagine 360
Elap/Imagine360 — which is up for sale again — is the only other vendor with a history of offering a full-service model, however, they charge significantly more and do significantly less for members. Now that it’s well known ClaimDOC delivers on its service commitment, we’ve had no trouble beating them head-to-head with any broker who isn’t on their revenue share program because:
- Our fee structure doesn’t have upcharges.
- Our fee structure has per claim fee caps.
- We don’t charge on physician claims under $2,000.
- We audit every claim other than physician claims under $2,000. They keep increasing their audit thresholds.
- We provide Pave the Way at no additional charge.
- All elements of the program are delivered by staff under one roof, collaborating daily.
I’ve battled this since I started four years ago thinking I could solve it. We’ve tinkered around with other pricing models over the years, but ours is now dialed in to allow for optimal service and optimal value. Percentage of savings is great in concept, but it leverages billed charge and it has flaws when defending the allowable in court. Stop-loss markets know exactly how to price us. Brokers know exactly what they are buying and what their clients can expect. We understand it has imperfections and we are flexible; we just haven’t found a better way. If you think you know a better way or you are dead set on the PEPM concept, reach out to me. I love to learn, and I want our company to be pushing forward with the best solution on the market.