Healthcare costs can be overwhelming for employers, especially when managing stop loss insurance. XO Health’s innovative Alternative Payment Model (APM) aims to tackle this challenge by introducing a value-based approach that promotes cost efficiency and higher quality care. Through its open access network, XO Health partners with providers who are incentivized to offer affordable, high-quality care under fixed-price contracts. This model not only helps employers save on claims but also reduces the impact of high-cost episodes on stop loss insurance policies.
A key feature of the APM is its “Risk Corridor Cap,” which limits how much employers pay for care episodes. Costs are initially covered at the “XO Market Price,” set 10-12% below market averages. If an episode’s cost exceeds this cap, any extra charges are billed on a fee-for-service basis. This structure creates predictable savings, particularly for large claims, making it easier for employers to manage healthcare costs. Providers in XO Health’s Tier 1 network are carefully chosen for their ability to deliver high-quality care efficiently, further boosting savings for employers.
The impact on stop loss insurance is significant. With APMs, claims must surpass the Risk Corridor Cap before reaching the deductible, resulting in lower payouts from insurers. Employers adopting APMs at high rates can expect up to 17% savings on stop loss claims. Additionally, Tier 1 providers contribute to cost reduction by ensuring better outcomes and avoiding unnecessary expenses for both APM-covered and other claims.
Overall, XO Health’s model combines fixed pricing, provider accountability, and strategic cost management to create substantial savings. Employers utilizing this model can achieve up to 20% overall cost reductions, thanks to a blend of APM savings and exceptional provider performance. By aligning financial incentives with care quality, XO Health is redefining how healthcare costs are managed, benefiting both employers and employees alike.