Million-dollar claims on the rise in self-insured employer plans: report

Million-dollar claims per million covered employees rose 15% in the past year and 45% from 2019 to 2022, according to a report by Sun Life, a life and disability insurance company.

The report, aimed at self-insured employers, also found that 20% of employers had at least one member with over $1 million in claims from 2018 through 2021. In addition, in 2021, the preterm birthrate rose 10.5% from the previous year, which the authors of the study call significant.

“Approximately one in nine employers (11%) experienced a birth-related stop-loss claim in the four-year benefit period of 2018 through 2021,” said the report, which focuses on high-cost claims and pricey injectable medications.

Newborn and infant care ranked No. 5 in 2022 and has one of the highest average coverage costs at about $371,000.

The report notes that preterm and sick infants often require specialty care at children’s hospitals. Though fewer members in employer self-insured plans make a claim in this area than, for instance, cancer and orthopedic musculoskeletal conditions, the cost of such pediatric care keeps it ranked high.

“To put this in greater perspective, the average cost of a birth that resulted in a stop-loss claim reimbursement for the single year 2022 was $370,900, and our highest cost claimant in newborn/infant care was $4.93 million,” the study said. “Current strategies for prevention of preterm birth include decreasing smoking during pregnancy, judicious use of fertility treatments, and the establishment of high-risk obstetric clinics.”

The data come from a review of claims from 2019 through 2022 in the Sun Life stop-loss book of business, representing more than 55,000 member claimants, over $5.5 billion in total reimbursements and over $12.2 billion in total costs.

The researchers found that 71% of all stop-loss claims came from the top 10 conditions which, over the four years, and in order of rank, were malignant neoplasm; leukemia, lymphoma, multiple myeloma; cardiovascular disease; orthopedics/musculoskeletal; newborn and infant care; respiratory; sepsis; neurological; gastrointestinal; and urinary or renal conditions.

Eleven of the top 20 high-cost injectable drugs are used to treat cancer, including the cancer drug Rylaze, which is new to the injectable drug list this year but has the highest average cost of over $808,000.

Cardiovascular disease rose one spot in 2022 to be the second largest driver of high-cost claims, “notably passing leukemia,” as the report states, with over $142 million in reimbursements for over 2,300 members.

The years being studied comprise the COVID-19 pandemic, for which the public health emergency in the U.S. ended last week.

The report noted that “recent U.S. research shows significant increases in ‘observed’ compared to ‘predicted’ rates of heart attack among working-age adults: 29.9% for ages 25-44; 19.6% for ages 45-64. COVID-19 appears to affect cardiac risk, potentially triggering or accelerating presentation of preexisting coronary artery disease."

"We have not yet seen a direct correlation between increases in CVD claims and COVID-19 specifically in our data, but continue to monitor given that current national research supports a connection between COVID-19 and increased risks of heart injury/disease," the researchers wrote.