by Abigail Funk

Abigail Funk is an Assistant Editor at Athletic Management.

Dealing with student-athlete medical insurance has always come with some headaches. And it is increasingly being accompanied by questions. Are you offering your student-athletes sufficient coverage? Which doctors' offices in the area are in-network? Is a student's primary insurance or the school's secondary insurance responsible for this claim? Has that invoice been paid in part or in full? Why does our premium seem to be rising year after year?

If your athletic department is like most, your athletic trainer is responsible for answering these questions. And in addition to spending a lot of hours on insurance issues, he or she is probably swamped with insurance paperwork, all of which means less time for rehabbing athletes and covering practices. And that leads to the biggest question: Is there any way to lower the costs and time spent on student-athlete insurance coverage?

The NCAA believes there is, and began a pilot program this year aimed at easing the insurance burden and lowering the cost of secondary insurance coverage for its institutions. There are currently seven schools testing out the idea, but the hope is that this insurance option will eventually be available to every member school. In the meantime, the project is also uncovering a list of best practices that can help any school decrease its premium.

WHY & HOW
NCAA rules require all student-athletes to have proof of primary insurance, and the association provides catastrophic injury insurance when an athlete's medical expenses exceed $75,000. But there are a lot of potential medical costs in between.

Most institutions carry secondary insurance to cover those expenses. The problem, though, is that the price tag, plan options, and fluctuations for this coverage have become overwhelming. "The cost of insurance just keeps going up, and some schools are having a hard time getting decent coverage at a price they can afford," says Juanita Sheely, Travel and Insurance Manager for the NCAA. "There are also problems with stability in the market. Insurance companies will come in and sell a school a line of insurance, but the number or cost of the claims ends up being much greater than expected, and the company backs out.

"The goals of our new insurance program are two-fold," Sheely continues. "One is to offer schools an insurance plan they know will be around for a while and is financially stable. Two is to get coverage for student-athletes at a price institutions can afford."

Along with its insurance and risk management administrator, American Specialty Insurance and Risk Services, the NCAA has teamed up with Mutual of Omaha, its current provider of catastrophic injury insurance, to develop this new option for secondary coverage. With the three groups working in concert, the NCAA believes it can offer schools the stability and resources needed to make the most of their insurance dollars.

But the association is also being cautious, having only a handful of schools participate in the program's first year and requiring an application process for interested members. At the beginning of 2006, the NCAA asked interested institutions to fill out an "indication of interest" form to American Specialty. From there, the NCAA, American Specialty, and Mutual of Omaha selected schools of all sizes from all three divisions to participate in the program. Each school selected was quoted a premium price based on its past insurance practices and then had the option to buy into the plan for this school year.

"We're starting small, but we plan to grow," says Marla Peters, Senior Vice President of American Specialty. "We feel good about the response we've had, and we're currently working very closely with the schools that have signed on. The benefits will come into play when we can extend this to all of the member institutions that are buying secondary coverage right now."

In addition to providing stable coverage, a second aspect of the pilot program involves helping schools learn to control costs. Mutual of Omaha has come up with a blueprint for reducing risks and claims, dubbed "best practices," and schools involved in the program will need to follow the blueprint. "Finding the cheapest coverage shouldn't be the whole story when it comes to insurance," Peters says. "The decision should include thinking about the things you can do to control costs, which will ultimately lower your premium. That's the underlying principle of the NCAA-sponsored program."

"The plan is designed to take advantage of good risk management and claims management practices," adds Jim Nolan, a spokesperson for Mutual of Omaha. "In turn, Mutual of Omaha can offer a consistent and more affordable program for NCAA member institutions."

BETTER PRACTICES
Even if a school is not at all interested in joining the NCAA insurance program, it can still learn a lot from the association's research on how to employ best practices. "We have identified several areas where colleges and universities can control medical expenses related to athletic injuries," Peters says. "In each of the areas, we have spelled out best practice guidelines."

Monitor student-athletes' primary insurance. The NCAA requires every student-athlete to have primary insurance, but doesn't specify how comprehensive the coverage has to be. One reason your premiums may continue to rise is that a large number of student-athletes don't have very good primary insurance coverage, so many medical costs are falling to the school's secondary insurance.

An institution can set up stricter requirements for its athletes' primary coverage, such as mandating that it will cover out-of-network medical care if the student isn't from the area, or setting a maximum deductible for acceptable primary insurance. "Having insurance and having insurance that pays are two different things," says Larry Stephens, Director of Risk Management at Indiana University. "A student-athlete may have insurance, but what if it's through an HMO that won't pay if they're out of state? Since it's up to individual institutions to cover athletes up to $75,000, it's also their responsibility to look at their students' primary coverage."

Another good idea is to set up a system to keep track of students' primary insurance while they're in your program. Has the athlete's coverage lapsed? Is the provider still financially stable? Has the coverage changed in some way? Schools should also be checking whether the doctors they use are still accepting their athletes' insurance plans. "Institutions have a responsibility to direct student-athletes toward offices that accept their insurance," Peters says.

Use on-site resources. Any time you can rehab athletes in-house or have your team physician see them instead of sending them off campus, you're saving your school money. "We do almost all of our rehabilitation in-house, so we have very few insurance claims relating to outside rehab services," says Kirk Brumels, Head Athletic Trainer at Hope College. "We also have very good health care providers in our community that accept most of our student-athletes' primary insurance plans."

If you have no choice but to refer a student-athlete off campus for medical attention, having good relationships with local doctors' offices may help. "In many cases, schools have agreements for lower rates with local doctors or service providers and direct students to them for care whenever possible," Peters says. "Other schools don't do that at all, which means they're passing up the potential for big savings."

Oversee your third-party administrator. Just because your institution's business office is located on the other side of campus doesn't mean your athletic trainer can't call to check on a claim result or question a charge the school paid in full when it may not have had to. Your athletic trainer is probably more knowledgeable on the details of a claim than anyone in the business office, so have him or her keep in touch with your financial officials.

"There are things that can be done on the claims management side that have an impact," Peters explains. "We want to see the people who process claims working closely with the people who treat the student-athletes. You want to make sure the claims management people don't just pay all the bills and realize later, 'Gee, we should have only been paying what wasn't paid by the other insurance.' It's all about opening lines of communication."

Use claims data to better understand insurance premiums. This involves taking a step back and looking at the big picture of how your school handles claims. For instance, follow a claim through the process--you may discover one reason your premium went up last year is that the local doctor's office that handles a lot of your rehab no longer accepts an insurance plan it used to. Or maybe a primary insurance company used by the majority of your athletes no longer covers MRIs or CT scans.

"Little things that add up to big savings," Sheely says. "Injuries are going to happen, but it's how you handle them, how you use your provider networks, and what kinds of discounts you have associated with those networks that make a difference."

UP & RUNNING
Pace University is one school that signed on for the new NCAA program this year, and Director of Athletics Joe O'Donnell is pleased so far. "We were very concerned about the continuing increase in insurance costs, and we felt we needed an alternative," he says. "As an athletic director, I was looking at three areas--the best coverage for my student-athletes, the least amount of hassle for the student-athlete and their parents in filing claims, and the cost. Every athletic director in the country has to look at the bottom line. But every athletic director in the country should also be looking for the best service with minimal hassle, and any program that can even begin to offer that is a plus."

Seven schools are participating in the program this year, a smaller number than the NCAA had initially planned. But Peters says the smaller group has allowed for smoother implementation, including getting the on-line component of the program ready and available for use.

"Enrolled schools identify individuals on campus they'd like authorized to access their information, and we assign a user name and password that allows them to access the online system," she says. "Terms and conditions, information on best practices, individual policy information, and ongoing claims are all there. An athletic trainer can log in and run a status report to see where each ongoing claim is in the process."

Sheely adds that the online component has gotten rave reviews from users. "One of the problems we've seen is that institutions never had an easy way to get their own claims information," she explains. "They were often dependent on their brokers who didn't necessarily have direct access to that information either. And when they finally got the information, it probably wasn't in an easy-to-understand format. We've solved both of those problems with the Web interface."

O'Donnell agrees. "My athletic trainer can tell a student-athlete or their parents exactly where their claim is in the process in a matter of minutes," he says. "In the past we may have had to call an agent who had to call another agent and so on--it may have taken three phone calls to find out if an invoice had been paid. Now we can go online anytime and find it ourselves."

THE PROCESS
McMurry University was also looking for a solution to insurance hassles when it asked to be accepted into the program this summer. "We're a small Division III school always looking for ways to lower our insurance costs," says Head Athletic Trainer Janet McMurray.

The school went through the application process and was accepted into the program, but then declined to participate. McMurry had recently hired a new athletic director who wasn't yet comfortable with making an insurance provider change. However, McMurray feels the time invested was still worthwhile. "Even though we didn't go with the program, it helped me review my practices, question them, and change some things," she says.

McMurray filled out the initial interest survey, and the NCAA and American Specialty sent her a best practices questionnaire. "The questionnaire asked how our insurance was set up with the student-athletes, whether we currently provided secondary coverage, deductible costs, and so on," McMurray explains. "Did we have orthopedists on staff or relationships with local doctors? Did any local doctors discount services for us? Did they come to campus? Do we do most of our rehab in-house? There were lots of questions concerning medical costs and how we tried to keep those in line."

McMurray says the questionnaire was fairly detailed, and that she had to disperse sections to the business administration office, but in the end, it didn't take long to get all the information together. "If there's somebody out there looking to do it next year, they should know that it really was not that painful," she says.

"The best part about the application process is that it really opened my eyes," she continues. "First of all, it made me realize our coverage wasn't sufficient. It was limited to in-season sports teams. Off-season workouts and overuse injuries weren't covered at all. We also weren't utilizing our secondary insurance at times when we could have. And I just wasn't spending enough time figuring out each injured athlete's network and where we could send them for the best care at the best price. I now spend more time verifying coverage and trying to be more cognizant of how to be more cost efficient."

The NCAA hopes to expand the number of institutions in the program next year. American Specialty is continuing to streamline the online component of the program, and has recently partnered with Summit America, a broker with over 130 institutions involved in their own insurance program, to help explain what the program is all about. "American Specialty will be able to focus more on the best practices side, while Summit will focus more on the technical side, getting quotes out and signing schools onto the program," Peters says. "Our goal is to continue growing and encourage schools to look at their insurance choices in a new light."

Sidebar: HELPING OUT
One of the first steps to lowering costs associated with insurance is to recognize that your athletic trainer is most likely dealing with the brunt of insurance issues. Janet McMurray, Head Athletic Trainer at McMurry University, says she spends at least some part of every day handling insurance claims.

"Athletic directors don't always realize how much time we spend on insurance matters," she says. "It takes away from my job of treating and rehabbing and taking care of our student-athletes."

How can athletic directors better support athletic trainers? "One of the most important parts of cost-effective coverage is for schools to make arrangements with local medical providers," says Marla Peters, Senior Vice President of American Specialty Insurance and Risk Services, the NCAA's insurance and risk management administrator. "Some schools have a physician who volunteers his or her services once a week to provide routine care. That's a great way for the school to control costs, and usually for that doctor, it's a good affiliation. But it shouldn't be an athletic trainer's role to establish that type of relationship initially--it should be an athletic director or athletic department administrator who represents the department as a whole."

Make sure your coaches understand the situation as well. "Coaches see a hurt athlete and say, 'Just send them to the doctor. That's easy enough.'" McMurray says. "But when you have primary and secondary insurance and some of the area orthopedic offices aren't in the primary insurance's network, you run into a problem.

"This is exactly why we ask that every injured athlete go through the athletic training room--so we can figure out ahead of time where to send them so they will be covered," McMurray continues. "Somebody is ultimately going to be responsible for an invoice, and if you don't jump through the hoops the insurance company tells you to, it'll be you."

Sidebar: SET PRICE?
One question that's been asked about the NCAA-sponsored insurance plan is whether one premium will apply to every institution that participates. Mutual of Omaha, which is providing the coverage, says no--the premiums will vary based on each athletic department's make-up, previous claims history, and past practices. And as schools start to show that they've implemented better practices, premiums will decrease.

"We couldn't just come up with one rate for everybody," says Juanita Sheely, Travel and Insurance Manager for the NCAA. "Some schools sponsor football, and others don't. Some have five sports, some have 30. So each school will get its own quote based on its number of sports, the risk of those sports, the number of student-athletes participating, and their history in dealing with insurance."

Jim Nolan, Mutual of Omaha spokesperson, likens figuring out your school's basic athletic insurance premium to the way your car insurance is quoted. "It's the same basic underwriting principle," he says. "We assess what the school's risk is and then price it based on the risk. When you purchase car insurance, you're asked, 'How many miles do you drive in a year? Have you had any tickets? Any accidents? What kind of car do you drive?' Those are all indicators of risk, just like which sports your school offers, how many athletes are competing and at what level, and so on."