Probe load calculation, show your own data

To avoid being overcharged on load premiums, you have to ask the right questions and provide the data showing why you deserve better than the typical load for your area.

Question the insurer's loading policies and formulations up front, advises George B. Breen, JD, an attorney with the law firm of Epstein Becker Green in New York City.

"Providers need to be asking carriers how their load premiums are calculated," Breen says. "What are the sources of the information the carrier uses to determine the load? How up to date is that information the carrier uses, and how is that information tested? They should, to the extent possible, be comparing carriers in this regard."

Providers should make an effort to be judged, from a premium perspective, based on their own claim statistics, rather than an artificial average of statistics that might not appropriately take into account what is going on at its hospital or its geographic region, he says. To that end, the hospital needs to be monitoring its claim history, looking at it over time and as part of its overall risk management program.

"The efforts the hospital makes in risk management can have a direct impact on its insurance costs, but the hospital needs to monitor what its exposure is and why and look for ways to reduce its risks in those areas it identifies," Breen says. "The risk manager also ought to be following litigation trends, including verdicts, in its location and contiguous locations, as he or she looks to evaluate the proposal carriers make."

Hospitals also need to be sure not to look at claims history in a vacuum, Breen cautions. Don't focus on one "good" year while ignoring two or three previous "challenging" ones. "The risk manager's goal is to protect the hospital, and it is critical that a realistic assessment is made so as accurate a projection as possible can be forecast," he says.