mom holding newborn baby

$245k savings on the birth of a newborn: How our claims review reduces student health insurance costs

Recently, a Wellfleet Student member welcomed their first baby, born via cesarean section. The baby experienced a few routine, mild complications after birth, including dehydration, high sodium levels, and low glucose levels.

Fortunately, the hospital staff resolved all of these issues, and the parents and baby were able to go home in three days, which is typical for cesarean delivery.

However, while on the surface, the delivery’s complications weren’t unordinary, the billing told another story.

How our team identified incorrect billing

When the Wellfleet Clinical team received the bill for this hospital stay, they noticed a few discrepancies. First, the diagnosis-related group, or DRG, for the child’s stay was “full-term neonate with major problems.” However, upon thorough review, the issues the baby experienced were minor and treated quickly at the hospital. So, in this case, it should have been coded as a “normal newborn.” None of the routine problems the newborn experienced justified the higher coding.

The original bill sent to our team was for $257,949, but after we corrected the billing error, the amended charge for the newborn’s hospital stay was $12,455, which translated to more than $245,000 in savings to the school plan and saving the student $3,400 in out-of-pocket expenses. Identifying savings of this magnitude is a big deal because it means the member’s plan will have a significantly reduced yearly spend.

How Wellfleet lowers cost of care

Our Clinical team and Chief Medical Officer go the extra mile to ensure the members of our student health plans are not overbilled for medical services. We thoroughly review each high-dollar claim, and we look for billing mistakes, such as upcoding, where the member is charged for a higher-grade code than necessary.

What are some other ways Wellfleet lowers costs for schools and students? Here are three strategies we use to save money.

When we notice billing errors, our team reviews the case details and corrects the coding to reflect the services our member received, and then we communicate with the provider to settle the claim. Taking the time and effort to diligently complete this review process can help save money for our plans.

That’s because each year, premium rates are adjusted based on the amount of healthcare costs incurred by the school in the prior year. By catching billing mistakes and thus reducing the cost of care, this can translate to savings on the next year’s premiums.

Interested in reading another case study? Learn about how our team saved $67k by fixing a billing mistake for a student with meningitis.

As a student health insurance carrier dedicated to providing high-quality, affordable healthcare to students, we know how important it is to keep low premiums for health insurance. Students deserve health insurance that fits within their budget, and that’s made possible in large part through the efforts of our Clinical team.

See how Wellfleet’s Cost of Care tool can result in cost savings for the member as well as easier budgeting and greater peace of mind.

Learn more about Wellfleet Student

To learn more about developing a tailored health insurance solution for your students, reach out to our Sales team.


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Wellfleet is the marketing name used to refer to the insurance and administrative operations of Wellfleet Insurance Company, Wellfleet New York Insurance Company, and Wellfleet Group, LLC. All insurance products are administered or managed by Wellfleet Group, LLC. Product availability is based upon business and/or regulatory approval and may differ among companies.