Hannover Re US Closes Aggregate Excess of Loss Transaction with Next Generation ACO

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- Hannover Life Reassurance Company of America "Hannover Re US" announces an aggregate excess of loss cover transaction for UT Southwestern, a Texas-based Accountable Care Organization (ACO) that participates in the Next Generation ACO Model (see also Hannover Re US).

The Next Generation ACO Model aligns with the Center for Medicare & Medicaid Innovation's broader strategy to move away from a healthcare system that compensates providers for the quantity of services rendered, to one that compensates them for the quality of health outcomes. Under this model, provider groups take on financial risk related to patient health results. When an ACO succeeds in both delivering high-quality care and spending health care dollars more efficiently, it will share in the savings it achieves for the Medicare program.

To measure success, ACOs are assigned a benchmark, which reflects the historical claims utilization of their member population. An ACO realizes shared savings, along with bonus incentives, when claims fall below the benchmark. When claims exceed the benchmark, they take downside risk and must cover the excess costs. Aggregate excess of loss protection for ACOs is designed to limit providers' exposure to financial loss related to downside risk under two-sided risk arrangements.

"Hannover Re is one of the nation's largest professional reinsurers of Medicare business, operating in this market segment for more than a decade," said Steve Najjar, Executive Vice President and General Counsel, Health and Special Risk, Hannover Re US. "As the healthcare paradigm shift risks to providers, we are proud to provide such innovative solutions so that health care providers can focus on what they do best - delivering quality patient care." About Hannover Re US Hannover Life Reassurance Company of America (Hannover Re US), which is licensed and/or accredited in all 50 states, the District of Columbia, Puerto Rico and Guam, is the North American life and health reinsurance subsidiary of the Hannover Re Group. Hannover Re, with gross premium of EUR 16.4 billion, is the third-largest reinsurer in the world. It transacts all lines of property & casualty and life & health reinsurance and is present on all continents with around 2,900 staff and a network of more than 100 subsidiaries, branches and representative offices. The rating agencies most relevant to the insurance industry have awarded Hannover Re very strong insurer financial strength ratings (Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior"). For more information, visit www.hannover-re.com. View source version on businesswire.com: http://www.businesswire.com/news/home/20171003005777/en/

Keywords for this news article include: Medicare, Health Policy, Hannover Re US, Investment and Finance.

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