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Fund: We’re paying lower fee for Aetna
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Posted on Nov 10 2006
The NMI Retirement Fund said it is paying its new third party administrator, Aetna Global, an average of less than $100,000 a month, or about 80 percent less than its usual billing with previous administrator Hawaii Pacific Medical Referral.
Fund administrator Mark Aguon said he himself was surprised to learn about the huge difference.
“We’re starting to wonder ourselves. I’m surprised. We didn’t know that we can save this much,” said Aguon in an interview.
The Fund used to pay HPMR some $500,000 a month for four years ending on June 30 this year.
A few months ago, the Fund expressed fear that the billing might double with the entry of Aetna citing its increased fees.
In early August this year, then administrator Karl T. Reyes cited that for administrative fee alone, Aetna charges $134 per member, or some $804,000 if computed with 6,000 members.
He said that HPMR used to charge $8.75 per person, with members and dependents totaling about 10,000.
Aguon said he would clarify this matter during a meeting with an Aetna representative this month.
“I will know the reason behind it. I just know that our billing went down dramatically and we like that a lot. CHC is getting paid. Providers are getting paid. It seems that the program is handled efficiently by Aetna,” said Aguon.
As TPA, Aetna handles the processing of medical claims and is able to negotiate for lower rates with health providers.
Aetna also handles the program’s prescription drug benefit management services, which was initially to be given to another company, Pharmacare.
The Fund’s negotiations with Pharmacare had failed.
As the winning proposer, Aetna received a three-year contract with the Fund to administer its group health insurance program including prescription drugs services, beginning July 1, 2006.
