Stop Loss in Provider Incentive Plans

In the context of Physician Incentive Plans, any health plan that has entered into a risk contract with a provider or provider group is required to ensure that either aggregate or per-patient stop-loss protection is in place and conforms with the deductible limits prescribed by CMS.

In practice, to meet this requirement, each year plans should survey all risk-bearing entities and require that each attest to being covered through a policy written by a third party or by electing to participate in a plan-provided Stop Loss program for the upcoming year. Surveys conducted in the fourth quarter of the preceding year allow the plan to prepare for properly calculating incentive payments in January.

Plans commonly accept proof of third party coverage as an attestation letter accompanied by a policy declarations page. It is typically not necessary for the provider to disclose the rate sheet, but the declarations must follow the CMS provisions (42 CFR 422.208 section f).

Stop Loss in Provider Incentive Plans

When reinsurance is purchased from a third party, administration and cash flow must be managed carefully. The provider is chiefly responsible for identifying high-cost cases and reporting them to their reinsurance carrier. Policy choice is important because on some occasions, the provisions for reimbursement may not be met despite the magnitude of the expense incurred. Careful utilization pla