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Why Aetna’s billing is lower
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Posted on Nov 23 2006
Aetna Global’s “clean” entry as third party administrator for the government’s group health insurance plan is the reason why the NMI Retirement Fund ends up paying it at a much lower amount compared with previous TPA, Hawaii Pacific Medical Referral.
Fund administrator Mark Aguon said in an interview Wednesday that unlike Aetna Global, which began its service on July 1 this year, HPMR had inherited an old mess—the processing of claims covering 1996 to the time it became the TPA in August 2001.
“We had asked HPMR to settle the old accounts or outstanding claims, and they agreed. As a result they demanded money that’s more than we could afford. It’s the reason why we got into trouble in terms of payment. We saw how it went downhill so we didn’t burden Aetna with that,” said Aguon.
Prior to 1996, the group health insurance program was being handled by the Personnel Management Office.
Meantime, Aguon said that Aetna bills the Fund based only on the current claims.
“They’re not burdened by having to deal with the old claims,” he said.
The Fund used to pay HPMR some $500,000 a month.
With Aetna, the monthly billing went down to an average of $100,000 since July, Aguon said.
On Wednesday, Aguon said Aetna’s billing went up to $300,000.
“That’s the amount that I was told—$300,000,” he said.
A few months ago, a Fund official had projected that Aetna billing might double than that of HPMR, citing the new TPAs’ increased fees.
In early August this year, then administrator Karl T. Reyes cited that for administrative fee alone, Aetna charges $134 per member while HPMR used to charge $8.75 per person—members and their dependents.
The program has over 3,000 members, excluding their beneficiaries.
An ATPA handles the processing of medical claims submitted by on-island and off-island health providers.
Its service is expected to result in savings for the program because of its ability to negotiate for discounted rates with providers.
A TPA also examines each claim whether it is excessive for a member’s insurance plan or if the claim belongs to a member or not.
The Fund said the program receives claims that do not belong to its members.
