A risk management company in Pennsylvania is setting the standard for controlling catastrophic claims. Specialty Care Management provides an à la carte solution to self-funded health plans, with offerings ranging from outpatient dialysis to oncology.
While the company offers three different product service lines, President and CEO Craig Clemente says its bread and butter is outpatient dialysis risk management.
Within its unique approach, the company offers two options: Dialysis Plus and Prime. Plus is a full administrative and legal carveout of the benefit, allowing the plan sponsor more autonomy and freedom. Prime is a more traditional setup with a TPA-based vendor relationship.
Other offerings include cancer management and transplants. But SCM’s plans don’t start and end with purely medical coverage. It also provides clinical underwriting consulting and negotiation services. Whether one or all its offerings apply is up to each plan sponsor and its risk management strategy.
As an organization, SCM’s mission is to minimize these types of claim costs.
“One of the things we look to do is identify and manage emerging risk upstream as much as possible,” Clemente says.
SCM’s various solutions, including chronic kidney disease case management, provide care and support throughout the entire process — not just at the beginning of dialysis treatment. The company takes this approach because its plans involve conditions that require treatment. Dialysis is not an elective service and typically involves a lifelong treatment plan.
“Our programs look to remove out-of-pocket expenses for members, so there is no copay, coinsurance, or associated deductibles for the benefit of outpatient dialysis,” he says. “While we enhance value for members, the employers are getting charged a flat, fixed-cost rate.”
Municipalities, government agencies, and unions are some of the most common partnerships.
Last Dollar Down
Specialty Care Management has been providing innovative catastrophic claim coverage for two decades. Its mission has stayed the same in that time: managing risk from the last dollar spent down.
What does this mean? Typical cost containment companies tackle risk from a first dollar up approach, meaning the emphasis is on what discount is being achieved. Instead, SCM focuses on the comprehensive nature of financial risk.
“We don’t classify ourselves as cost containment, as that is from a first-dollar approach,” Clemente says. “We’re looking to provide something with a larger scope and more tangible value by managing claims with a cost-up approach in pricing strategy.”
Aside from its approach to coverage, SCM differentiates itself with a flat rate and fixed costs. The goal of SCM isn’t just to make health care more affordable for members; it also wants the plan to be affordable for employers.
“Any product or service that is based in nuance is going to have values that pile up to create a truly unique value proposition, and that’s how SCM has been built since day one,” Clemente says. “We want to make sure we’re providing a true risk management tool through predictable, quantifiable costs.”
SCM’s plans apply to the entire spectrum of self-funded health plans, from more traditional insurance networks to small out-of-network companies. The only other requirement is a minimum of four members in the plan. Although its plans apply to all self-funded insurances, its niche offerings create some challenges.
“Our No. 1 challenge is the rarity of the risk,” Clemente says. “Dialysis outpatient care is not something that every plan experiences, which is actually a good thing for the market. But our biggest obstacle to overcome is finding where those risks are happening.”
The other, Clemente says, is the amount of time and effort that goes into customized solutions. “Our plans are tailor-made solutions, which is part of the expertise we bring, but it takes a lot of review and analysis on our end.”
When it comes to success, SCM takes a bilateral approach. The main measurement is whether the health plans can preserve funds in a way they weren’t able to do before. And ideally, those funds can be allocated in a more impactful and meaningful way. The quantifiable measurement, though, is the volume in which that value is provided.
“As we’re able to provide that value on a larger spectrum across someone’s block of business, we maximize results every time on first dollar and the final payment process,” Clemente says. “It’s really special when we have an opportunity to provide that over time and across multiple beneficiaries. That’s the exciting part for us — knowing what we’ve built really provides value through a sustainable risk solution.”
Dialysis, in particular, is in the worst quadrant of risk for self-funded health plans because of its cost, volatility, and ongoing nature. SCM’s dialysis plan includes 33 months of exposure for financial risk.
A partner of SCM with a member undergoing dialysis recently saved 89% of costs associated with that member’s care. Before enrolling in SCM’s dialysis plan, the member’s treatment was running about $2.4 million annually; this was trimmed to around $264,700 through SCM’s Renal Re-Pricing Program.
Looking ahead, SCM might expand into other niche health coverage plans. In March 2022, Argosy Healthcare Partners purchased a majority of SCM, paving the way for greater resources moving forward.
“We’re looking at expanding both inside of our outpatient risk management dialysis market and different ways to deliver that to market and assume risk,” Clemente says. “But outside of that, we want to diversify our top line through some existing programs like data analytics and oncology — and perhaps other verticals.”