Are your healthcare programs delivering on your vendors’ promises? Just as importantly, how can you hold vendors accountable if you’re not getting what you paid for?  Vendor scorecards are a tool that can help you measure plan performance with greater precision – and identify specific areas that need improvement. Best of all, any company can adopt the technique.

Choose specific rating areas

Companies that’ve successfully adopted the scorecard system typically grade vendors on five to 10 measurable areas, like:

• Claims processing. Are employees’ medical claims turned around in a timely fashion? Are you hearing complaints that the explanations of benefits (EOBs) are slow to arrive or hard to understand?
• Disputed claims. Do employee questions and complaints about denied or still-pending claims get answered quickly and thoroughly? How often are you forced to go to bat for employees?
• Rep accessibility. Are the vendor’s plan reps quick to answer phone calls from your HR/Benefits department? Do they attend regularly scheduled meetings?
• Reports. Does the vendor provide timely – and user-friendly — claim and utilization reports?
• Open enrollment. Does your staff receive effective support preparing for and conducting open enrollment events?
• Employee education. Do your employees find the written and/or one-on-one services provided through the plan helpful in answering questions about managing specific chronic conditions (such as diabetes or depression)? Do you receive enough help educating people to make healthy lifestyle choices, such as smoking cessation?

Choose a workable rating scale

There are two schools of thought when it comes to picking a rating method: subjective or objective.
Many plan sponsors– especially smaller employers – use a simple pass/fail or 1 to 5 score to rate their satisfaction.

Others develop more statistic-based ratings. One method: take the vendor’s guarantees (e.g., addressing disputed claims within 3-5 business days) and then measure by percentage how often these objectives are met. These rating data can be obtained through quarterly performance reports, employee surveys, issue and complaint files and, for larger plans, external audits.

Tracking costs

State and federal legislators have been trying to put some teeth into another element in measuring vendor performance– making sure the insurer followed through on your fee agreement. 

Healthcare insurers could face stiff penalties for failure to accurately disclose plan fees and broker commissions to their client companies.

Feedback triggers improvement

It’s good practice to share your scorecard system with the vendor before meeting to review the results. Reason: This lets you iron out any vendor questions about the review categories and scoring system. Once that’s settled, you can meet to go over the numbers and prioritize the areas that need improvement.

Many firms then add a new scorecard category – vendor’s followup. While scorecards won’t bring healthcare costs down by themselves, they’ll at least help make sure your company – and employees – get everything you’re paying for.