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Benefits Outsourcing B12 > Module 4 Negotiating and Finalizing The Service Provider Contract Group insurance > Flashcards

Module 4 Negotiating and Finalizing The Service Provider Contract Group insurance Flashcards

1
Q

Who is sent the letter of intent?

A

The letter of intent is sent to the winning bidder for mutual sign off

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2
Q

How many copies of the letter of intent should be sent to the selected service provider?

A

At least two - with two signed and returned

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3
Q

What are the 5 things accomplished by sending letter of intent?

A
  • informs the service provider of selection
  • Documents the service to be provided
  • Documents the conversion and service dates
  • States the date for contract completion
  • Names the primary plan sponsor contact
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4
Q

What are 4 key drivers for contract Negotiation Power?

A
  • Organizations size
  • Organization name or reputation
  • Competition
  • Common Fee level in market (knowing what others are paying)
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5
Q

What are the 4 steps in negotiating and finalizing the service provider contract?

A
  • identify final negotiation items
  • Clarify Conditions for Cancelation
  • Summarize and communicate final terms
  • Hold meeting to discuss requirements
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6
Q

What other terms may be used to define “ the contract”?

A

Service agreement

Trust agreement 

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7
Q

What are typical content areas included in a contract

A

Contract and duration

Parties to the contract

Services to be performed

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8
Q

Contracts should include performance measures - defined the acronym SMART regarding smart guidelines

A

Specific

Measurable

Attainable

Relevant

Time bound

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9
Q

What are three examples of health plan performance measures?

Associated with provider, net work management

A

Percentage of board-certified physicians

Physician turnover rate

Appointment wait time

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10
Q

What are three examples of health plan performance measures?

Associated with clinical indicators

A

Admissions per thousand members

Average length of stay

Emergency room cases per thousand members

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11
Q

What are the retirement plan Performance measures for defined benefit services?

A

95% of all confirmation statements of benefits will be mailed within three days of request

95% of all confirmation statements of benefits will be mailed within five days of indication of separation from service and all required paperwork

100% of all benefit estimates and calculations will be accurate

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12
Q

What are the primary retirement plan performance measures for direct contribution services?

A

Quarterly participant statements will be delivered by the 20th of each month

Quarterly ADP/ACP tests will be completed within 15 business days of request

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13
Q

What’s the purpose of a hold harmless statement?

A

The hold, harmless statement, indemnifies the service provider from certain actions and the liabilities that may result from those actions

Most service providers require this statement

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14
Q

What are five basic billing provisions that should be included in the contract regarding fees?

A

Billing process

Handling disputes

Ad HOK Services

General and administrative percentage

Negotiating a reduction in fees, if measures are not met

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15
Q

Regarding group insurance policies, in addition to price what is it important to check carefully?

A

It’s important to check, disclaimers and exclusions

Too many exclusions can leave the benefit with little to no value to the employee

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16
Q

What is a contract termination statement?

A

a formal letter, informing one party in a contract of the intention to cancel, or terminate their business agreement or an ongoing business relationship

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17
Q

What are four areas typically contained in a contract termination statement

A

Early termination, by who, how, and why

Reports and data to be returned to the client organization

Staff to assist in transition

Confidentialities agreement

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18
Q

What is a binder?

A

Serves as a contract of temporary or interim insurance, until a formal policy is issued

Upfront money, or working capital for the service provider to pay on the organizations behalf

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19
Q

What is the part of a contract that absolve an individual or enterprise from being liable to damages or other liabilities out of the contract?

A

Hold harmless statement

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20
Q

What part of the contract dictates the terms, under which an agreement can end, and when an already established contract ends

A

Contract termination statement

21
Q

What serves as a contract of temporary or interim insurance until a formal policy is issued

A

A binder request

22
Q

A contract should address data security. What are important aspects of data security to be included?

A

Defined the data platform and how it is secured

Limit to accessing the platform except for contracted functions

Address confidentiality needs (HIPAA)

Secure transfer of data (encryption)

23
Q

Contingency plans should be included in a contract regarding data security.

What are four typical contingency plans included in the contract

A

Action if call-center is out of service

Back up locations

Back up of data

Action if service provider experiences an emergency or loss

24
Q

Audit information should be included in a contract.

What are five things are typically included in the contract regarding audits

A

Who will conduct the audits?

Who has access to the service providers information

Include an audit on demand statement

Specified data to be available from service providers for the company to do it’s own audit

25
Q

Which statement is most accurate regarding the letter of intent?

It is sent at the same time as the RFP

It is sent all bitters as a way of finalizing the bidding process

It designates a period of time to finalize and implement the final contract.

A

It designates a period of time to finalize and implement the final contract

26
Q

If the primary service provider will be utilizing subcontractors to provide the service, what should the client company include in the contract?

The binder request be required

That they have the right to approve or disapprove any subcontractors

That the primary service provider establishes and monitors the performance measures

A

That they have the right to approve or disapprove any subcontractors

27
Q

What is considered to be the most critical aspect of the contract?

Contingency plans

Communication review

Performance measures

A

Performance measures

28
Q

Which statement is most accurate regarding the final review of the contract?

All appropriate parties at the client organization, who will be affected by the contract should review it

Legal is only included at the service provider makes that request

It is not necessary to include procedures for amending the agreement

A

Are all appropriate parties at the client organization who will be affected by the contract should review it

29
Q

What are four primary factors to consider when making the transition to a new service provider?

A

Logistical issues

Health and welfare plan issues

Terminating current contracts

Communication

30
Q

When implementing a change from an HR function to an outsourced function, who should be involved in the implementation team

A

Similar to the provider selection team

Staff from all levels of the organization

Requires knowledge of day-to-day operation

People on the team, most affected by the change

31
Q

During a transition of a service from HR to outsourcing documenting, the transition is important.

What items will the implementation team document or record?

A

Issues that are raised

Decisions on how issues will be handled and the responsible parties

When issues will be resolved

How issues were resolved?

32
Q

When a typical HR function is now performed by a service provider. What is one of the primary goals of the HR department?

To deliver seamless, uninterrupted service to the employees

To allow the service provider to control the transition

To ensure all departments are affected by the transition

A

To deliver seamless, uninterrupted service employees

33
Q

Which statement is most accurate regarding the members of the implementation team?

Only the staff should be a part of the team

Members must be in Management roller higher

All levels of the organization should be included on the team

A

All levels in the organization should be included on the team

34
Q

Why might an organization choose to include on the implementation team, those individuals whose job may be most affected by the change to the service provider?

To minimize the effect of potential layoffs

To allow for teambuilding to help overcome resistance

To gauge the level of resistance for the project

A

To allow for teambuilding to help overcome resistance

35
Q

If the changes caused by the transition to a new service provider or complex, what is the best approach for communicating the information?

Communicate the information in small pieces of information

Disseminate information via email only

Communicate the senior management, and allow them to determine the communication strategy

A

Communicate the information in small pieces

36
Q

In what manner should the HR team communicate with family members when changes will affect the them?

Directly

Indirectly

No communication is necessary

A

Directly

37
Q

A service provider is someone who provides subscribers access to various types of services.

Name six types of service providers

A

Supplier

Consultant

Insurance organization

Broker

Benefits advisor

Attorney

38
Q

What are the five primary steps to managing the service provider relationship?

A

Understand what things to look for a service provider and team

Take steps to insure an effective two way partnership

Monitor accountability

Leverage across your service provider

Know when to manage changes to the team and escalate issues

39
Q

Once the service team for an account has been assigned, the client should first do which of the following?

Introduced all members of the service team to senior management

Clarify, the roles and responsibilities of all members of the service team

Instruct all members of the service team, to review the particulars of the contract

A

Clarify, the roles and responsibilities of all members of the service team

40
Q

Who will most likely take more of the lead in initial meetings between the client and the service team?

The service provider

The client

The HR Director

A

The service provider

41
Q

When monitoring service providers performance, what would the client expect the service provider to include the typical performance report?

The performance standards and obstacles to achieving optimal performance

The performance standard projected performance and additional benefits, not included in the contract

The performance standard, the actual performance, and the variance from the standard

A

The performance, standard, the actual performance, and the variance from the standard

42
Q

What is a common outcome of a merger regarding service provider functions?

A merger may create redundancy in services performed by partners

A merger will cause all existing service provider contracts to become invalid

A merger will cause service providers to increase the agreed-upon fees

A

A merger may create redundancy in services performed by partners

43
Q

When conflicts arise between the client and the service provider, how are they best resolved?

Unilaterally, with the client resolving the dispute

Unilaterally, with the service provider, resolving the dispute

Jointly, with the service provider and client resolving the dispute

A

Jointly, with the service provider and client resolving the dispute

44
Q

At the end of the contract period, the organization must make a decision regarding next steps. What are the four basic options?

A

Internalize the function

Renew

Renegotiate

Rebid

45
Q

Why might an organization decide to Insource a function rather than continue the relationship with the current service provider?

Outsourcing did not provide anticipated return on investment

The service provider met expectations, but did not exceed expectations

Outsourcing caused a reduction in the organizations HR staff

A

Outsourcing did not provide the anticipated return on investment

46
Q

The client is basically satisfied with the relationship with the current service provider. The client, however, would like to add additional responsibilities to the current agreement. What would you recommend the client do in the situation?

Insource the project

Renegotiate the contract

Rebuild the contract

A

Renegotiate the contract

47
Q

When re-bidding an ongoing project, what is one strategy that may help to streamline the process?

Re-interview the top two or three prospects from the original search

Resend request for information to the companies identified in the original search

Create a new selection team, and begin with a fresh start

A

Re-interview the top two or three prospects from the original search

48
Q

What is one of the most effective strategies for transitioning from one service provider to another?

Allow the account managers from both service providers to discuss the positive aspects and negative aspects of servicing this particular contract

Ensure that the existing service provider will work with the client long enough until the new service provider is able to take over

Discourage interaction and communication between the two service providers

A

Ensure that the existing service provider will work with the client long enough until the new service providers able to take over

Benefits Outsourcing B12 (3 decks)

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