Donlon & Associates, Inc.

Client Experience

Below are brief descriptions of a few of D&A's client projects for public sector clients, employers, insurers, providers and data collection firms.

Public Sector Clients

• D&A developed an actuarial cost-assessment model used in a public sector project for a U.S. State. The State's workgroups developed numerous proposals to reduce the number of uninsured individuals in that state. D&A used the model to measure the costs of these workgroup proposals. The model measured the cost the proposals including Medicaid expansions, SCHIP waiver programs, employer subsidized programs, limited benefit (primary care) programs and State employee benefit program extensions.
• D&A assisted in the refinement of the prescription drug portion of a community-based program that provides coordinated coverage for indigent and low-income individuals in the County. This program became operational in 1998 and is already serving over 10,000 persons who did not previously have health coverage.

Employers

• D&A works with numerous large employers in the design, pricing and funding of their health care benefit plans. For one such client, D&A estimates what the cost of the PPO, POS and HMO plan designs will be each year. D&A also measures the impact of managed care plan provisions, plan design changes and acquisitions. In addition, D&A consults with numerous self-insured employers, providing estimates of their claims liability, the cost impact of plan design changes and assistance in negotiating with vendors.
• D&A determines FAS 106 and FAS 112 liabilities, prepares actuarial valuation reports and disclosures for a number of employers.

Insurers

• D&A works with a provider-owned insurer of small groups in the State of Illinois. This company began accepting small group business in 2000. D&A designed and priced the initial set of plan options, provided advice about underwriting provisions, set trend factors as part of the rating process, anticipated adverse selection cost in our pricing process and prepared statutory rate filings. The statutory rate filings included an actuarial memorandum certifying that this insurer complies with the small employer health care reform provisions instituted in the State of Illinois. The company now has more than 5,000 enrollees.
• D&A works with a small group health carrier in the State of Michigan. D&A has previously certified compliance with small group rate legislation for the insurance company and measured the premium and reserve adequacy for this same block of business. In addition, D&A is developing a new rating model.
• D&A functions as the chief actuary for various health insurance companies. For example, D&A provides a significant amount of advice to an insurance company owned by one of the largest PPO/EPO networks in the country. D&A assists this insurer in developing pricing and underwriting models for health care benefit plans, measuring trend rates of their book of business, training their underwriting staff on various industry developments, evaluating the competitiveness of their provider financial arrangements, measuring the impact of managed care initiatives, and providing special advice on the design and pricing of their client's benefit plans.
• In addition, this insurer provides specific and aggregate stop loss products for health insurance plans. D&A's duties include setting claim reserve liability requirements, assessing premium adequacy, pricing plan design changes, and advising underwriting provisions in order to avoid the effects of adverse selection. D&A also prepared statutory rate filings for all of their health and disability products.
• D&A has been assisting a South Dakota HMO, wholly owned by a hospital and physician organization, in the development of an individual Medicare Supplement product for local residents. D&A's responsibilities are to prepare the actuarial memorandum of rate certification to the state authorities, develop financial proformas that measure the financial viability of the product, measure the cost of adverse selection that is expected due to the eligibility requirements stipulated by federal statute, and set up a rating procedure for all new prospects.
• D&A measures the claim reserve liabilities, prices out plan designs, prepares statutory reports and measures claim experience and loss ratios for a large dental insurer. Recently, D&A has analyzed claim experience to set usual and customary profiles for reimbursing dentists.

Providers

• D&A works with various provider groups including physician groups, hospital groups and other associations of health care professionals. With one such client, D&A has performed marketing studies, developed and priced global hospital products (maternity, mental health, substance abuse, bone marrow transplant, open heart procedures, and urgent care), set capitation rates, negotiated with HMOs, developed fee schedules, and projected plan costs and liabilities for its employee benefit plan.

Data Collection Firms

• One of the most prominent private sector health care data collection firms in the country hired D&A to design a computerized actuarial pricing model that establishes the actuarial value of benefit variations. The firm provided D&A with all of their claims data, eligibility information, and client plan design information to perform this task. D&A received about $5 billion dollars of claims data covering about 2,000,000 individuals. D&A designed the model input and output screens, developed baseline assumptions using the claims experience, developed computer code for the model and tested and verified the results. Once the model was completed, D&A conducted training sessions with the firm's internal consultants concerning the use and application of the model.