Part D Benefit Administration Continues to be Important Monitoring for CMS
Your Pharmacy Benefit Manager (PBM) may have already provided to you their benefit testing pan for 2017. Based on many years of experience, that is not going to be enough. In the September 12, 2016, memo entitled "Contract Year 2016 Part D Formulary Administration Analysis (FAA)", the Centers for Medicare & Medicaid Services (CMS) reiterates their concern with the accuracy of formulary coding. In previous years' analysis, 9 out of 88 (10. %) Plan Sponsors were found to have failed FAA, meaning greater than 20% of the sampled rejects were determined to be inappropriate. The parameters for the 2016 FAA are:
- Sponsors are required to submit all point of sale (POS) rejected claims relating to the following four categories:
- Non-formulary status;
- Prior Authorization (PA);
- Step Therapy (ST); and
- Quantity Limits (QL).
As a Plan Sponsor, whether you delegate all or part of your Part D drug benefit set-up to your PBM, CMS expects Plan Sponsors to demonstrate effective management of the CMS-approved formulary to ensure timely beneficiary access to clinically appropriate medications.
CMS expects Plan Sponsors to understand regulatory requirements and to oversee their PBM to ensure the benefit administration by the PBM is compliant and accurate. Beneficiaries must be able to receive the Part D drugs to which they are entitled consistent with the plan's CMS-approved benefit from January 1 through December 31 of the plan year.
To accomplish this, it is essential to perform comprehensive benefit administration testing of formulary files and system edits prior to going "live" in the adjudication system. In addition, it is required to perform a regular review of rejected POS pharmacy claims as well as to perform regular oversight of other delegated PBM functions.
You can reduce your compliance risk of transition non-compliance by testing transition fill look-back logic, which must accurately identify transition eligible beneficiaries and drugs eligible for transition fills; maintaining formulary consistency for beneficiaries across years and during the year; ensuring formulary edits are effectively tested for accuracy prior to implementation; and by ensuring the PBM does not administer the Part D benefit based on either Medicaid or commercial program requirements.
In the likely event of a Compliance Program Audit, CMS seeks to determine how the Plan Sponsor properly administers the CMS transition policy and its approved formulary by avoiding unapproved utilization management (UM) practices, PAs, QLs, rejecting formulary medications as non-formulary, and maintaining beneficiary access to protected class drugs during transition and throughout the year. Failure to properly use approved formularies creates high audit risk, a possible civil monetary penalty (CMP), or even plan sanction.
Performing a comprehensive Benefit Administration Test review of the formulary and UM system edits prior to going "live" on January 1 of every new plan year requires a robust, systematic process for comparing the CMS-approved formulary benefit to a comprehensive claims universe in order to ensure all covered drugs, tiering, and UM edits are consistently and accurately adjudicated.
Our Pharmacy experts can create a plan and conduct in-depth benefit administration testing for your organization to validate everything is working precisely as it should before the new plan year begins. We can ensure your PBM is processing claims consistent with your CMS-approved prescription drug benefit.
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Hot Takes on Medicare Advantage and Part D in 2017
The Centers for Medicare & Medicaid Services (CMS) released its annual Medicare Advantage (MA) and Part D "landscape files" with data on plans and bids for 2017. It's a picture of programs that are rock-solid and driving insurers' revenues and earnings, offering better supplemental benefits for no increase in price for two-thirds of beneficiaries. Interestingly, CMS appears to be sandbagging its enrollment projections and assumed no growth for MA in 2017. We think we're heading to 4.2-4.5% enrollment growth, continuing a steady, winning drumbeat for the industry.
By the numbers, the landscape files showed the following:
- While the number of contracts with CMS dropped by 8%, the number of Plan Benefit Packages (PBPs) is virtually the same.
- The number of PBPs with $0 premium is virtually the same. Although the number of $0 premium Preferred Provider Organizations (PPOs) with prescription drugs has increased by 21 PBPs, the number of Health Maintenance Organizations (HMOs) with drugs has decreased.
- The number of PBPs with a $0 drug deductible has decreased 11% from last year.
- Approximately two-thirds of all beneficiaries on an enrollment-weighted basis will see no premium increase, and most will see additional supplemental benefits in 2017, such as vision, hearing, and dental care. The average enrollment-weighted premium is actually $1.19 less than 2016.
- Humana will offer the cheapest Prescription Drug Plan (PDP) in 22 of 34 regions. EnvisionRx, which was acquired by RiteAid last year, is the lowest bidder in 11 regions.
- WellCare and United showed improvement in Part D bidding and are now eligible for low-income auto-assigns in 8 and 27 regions, respectively.
- MA enrollment is up almost 60% since the passage of the Affordable Care Act (ACA) in 2010, smashing expectations of an exodus.
- Strangely, CMS implied in its announcement that MA growth would be flat in 2017. We're projecting year-over-year growth of 4.2-4.5% in 2017.
- Centene (which acquired Health Net), United, and Aetna expanded their service areas in several states.
By every measure, 2017 should be another good year for Medicare plans. Let's hope whoever wins this Presidential election doesn't screw it up.
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New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 — 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>
The MA marketplace is evolving — are you prepared? Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. Visit our website to learn more about how we can help you >>
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Sales Oversight — Essential Guidelines
All agents are expected to comply with the Centers for Medicare & Medicaid Services (CMS) regulations and guidelines, federal and state laws, and health plan rules, policies, and procedures. But what does that mean, and how can health plans enable their employed sales staff and contracted agents to stay compliant while achieving target goals and growth?
Some organizations may have sales management monitoring tools and processes to review the agent's compliance, quality, and performance thresholds. In most cases, sales management personnel are required to provide ongoing monitoring of agent sales activities and performance.
Below are a few key components to Medicare sales force and distribution channel management:
- Ensure all agents selling Medicare products complete and pass all required training
- Communicate all product and regulatory information
- Ensure agents participate in any required remedial training
- Communicate the results of all ride-along evaluations
- Document any complaints or corrective action plans in the agent's file, which should be held for a minimum of two years
- Ensure any corrective action plan is completed and reported back to the health plan
- Report terminations of any agents/brokers to the state and the reason(s) for the termination
Gorman Health Group (GHG) suggests implementing a variety of compliance monitoring programs to ensure all agents are conducting sales, marketing, and enrollment activities in accordance with federal, state, and health plan regulations, rules, and guidelines. With the Annual Election Period (AEP) just several weeks away, health plans should be finalizing their sales oversight and agent performance standards. Regan Pennypacker, GHG's Senior Vice President of Compliance Solutions, says: "We know it's not easy. These activities take a village. A solid partnership between the creative minds in Sales and the rules-minded Compliance staff is critical to success. A sponsor with a well-planned roadmap for AEP will be one step ahead of competitors that have not executed as well."
To promote compliant behavior, health plans, sales management, agency owners, and agents should take an active approach to compliant behavior — attend additional training, understand and follow the rules and regulations outlined in the Medicare Marketing Guidelines, and always lead by example.
For more information, please contact Carrie Barker-Settles at cbarkersettles@ghgadvisors.com.
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Sentinel Elite™ is a flexible, module-based software solution, built from the ground up, and designed to assist government managed care organizations onboard agents, provide training, manage ongoing oversight activities, and pay commissions effectively and compliantly. Request a demo today >>
The Medicare Advantage marketplace is evolving — are you prepared? Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. Visit our website to learn more about how we can help you >>
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Strive For Progress, Not Perfection, Because It Doesn't Exist
This week was a productive one for CMS and Compliance professionals. The 2015 Part C and Part D Program Audit and Enforcement Report was published on September 6, and the 2016 Fall Conference took place on September 8.
Highlights of the report include the publication of the most common conditions. CMS provided the frequency of the conditions from 2011 to present as well as the percentage of sponsors affected in 2015. Conditions which have been present six out of six years include the following:
- FA: Sponsor failed to properly administer its CMS-approved formulary by applying unapproved quantity limits
- FA: Sponsor failed to properly administer the CMS transition policy
- FA: Sponsor improperly effectuated prior authorizations or exception requests
- CDAG: Denial letters did not include adequate rationales, contained incorrect/incomplete information specific to denials, or were written in a manner not easily understandable to enrollees
- CDAG: Sponsor did not demonstrate sufficient outreach to prescribers or beneficiaries to obtain additional information necessary to make appropriate clinical decisions
"The repetition of these usual six only goes to show the complexity and ambiguity involved with ensuring beneficiary harm does not occur. The key is to identify and correct the issues before CMS makes a visit as well as having a long-range plan in place for continual improvement," says Charro Knight-Lilly, Senior Vice President of Client Relations. The report answers many commonly asked questions regarding methodology for sponsor selection, process improvement strategies, and enforcement actions. By having audited sponsors with such a large number of enrollees during the first year of the audit cycle, CMS hopes to cover 96% to 98% of beneficiaries enrolled.
The Fall Conference included a range of topics such as application updates, network adequacy, and anti-discrimination rules (the implementation of which continues to confound the industry). In my experience, some of the most valuable feedback comes directly from plan sponsor staff, and that was no exception on Thursday. Jenny O'Brien described UnitedHealthcare's shift from reactive and responsive to proactive, strategic, and innovative. Her words resonated about the need for Compliance staff to be this way. In all honesty, readers shopping around for a motto for a Compliance Awareness campaign should use those three words and call and thank her.
Based on Gorman Health Group's observations of 2016 activities, CMS is continuing with their audit schedule full steam ahead, but the science has still not been perfected — and it will never be. As much as CMS is working to refine audit processes to improve consistency and accuracy, that's what responsible sponsors do every day. Continue to share your feedback with CMS regarding their processes, and, as always, you can reach out to us for insight and assistance.
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The Centers for Medicare & Medicaid Services (CMS) audit practices have undergone a few changes in recent years, but the core focus remains the same: beneficiary protections. From a gap analysis to a comprehensive, deep-diving Part C and D audit, our team can help you minimize your compliance risk and maximize your time and resources. Visit our website to learn more about our audit services >>
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Double Your Value: Three Critical Ways CMS Audit Readiness and the Member Experience Program Intersect
What do the Centers for Medicare & Medicaid Services (CMS) program audits and member experience programs have in common? At their core, both activities are looking out for and protecting Medicare health plan members. CMS, in their oversight role, is responsible for ensuring Medicare Advantage (MA) and Prescription Drug Plan (PDP) members receive all the rights and benefits of original Medicare as well as the additional services agreed to in contracts with MA plans and PDPs. Operations has to own compliance with CMS as well as how operational functions touch and impact our members' experiences. "The cornerstone of an effective member experience is cross-functional alignment, placing the member at the center of the health plan's initiatives and core business functions" says Carrie Barker-Settles, Gorman Health Group's (GHG's) Director of Sales & Marketing Services. In days of shrinking payments, plans need to be even more efficient as they provide services to their Medicare members but without cutting corners that result in non-compliance or driving members away from our plans. We can each make a difference in the areas of compliance and member experience efficiently as the goals are so aligned.
Here are three critical ways you can increase your member experience program's operational components and drive audit readiness.
- Denials in Claims Payment and Appeals: One of the most negative things a member will experience with his or her insurance is having something be denied that he or she thought would be covered. This is reality with any health plan, but how a denial is handled can make things so much worse. Claims denials often include standard templated denial reason codes. Appeal upholds may be more customized, but not always. It is important to review member denial language in claims and appeals to make sure the language is clear and understandable to your members. Are they able to understand the next steps they should take if they disagree with the decision? This is a common audit finding and a big driver of dissatisfaction.
- Claims and Appeals Development: Another action that should occur prior to denial of services is to completely develop the claims and appeals prior to the decision. Many plans experience trouble obtaining additional information from their contracted providers. When this occurs, what is the process to escalate that lack of response? Establishing a systematic process to obtain needed information to correctly determine approval or denial of service is critical to appropriate management, member satisfaction, and compliance.
- Appeals and Grievances: Root cause analysis on your appeals and grievances and then taking action on what is identified is an important step to close out cases. Often only provider information is tracked and trended, or overall appeals and grievances reports are provided to the Quality Committee. Programs need to ask how complaint information is being used to improve the plan. A plan can enhance a member's experience through analysis of what happened and what can be done to prevent that from happening again. CMS expects to see thorough and complete investigations and resolutions when complaints are received, as do we all when we submit a complaint. Root cause analysis and follow-through will not only benefit all your members but support your need to demonstrate quality complaint processing to CMS.
Just as compliance is everyone's job, so, too, is ensuring members have the most positive experience possible every time they interact with a plan. Regan Pennypacker, GHG's Senior Vice President of Compliance Solutions, says it best, "I'm often asked what is the cost of non-compliance, or how much is the fine if we don't do X-Y-Z? A final rule was released on September 6, 2016, which adjusts maximum civil monetary penalty (CMP) amounts allowed for all agencies within the Department of Health and Human Services (HHS). This, along with CMS' recent memo on the 2017 CMP methodology, should demonstrate to the industry that the agency is prioritizing this aspect of enforcement for good reason. Denials, appeals, and access to care should be under constant evaluation by Operations and Compliance in order to identify opportunities for improvement." She goes on to say, "Audit readiness aside, ask yourself if you are truly beneficiary ready."
When we in Operations expect CMS compliance to be managed by the Compliance area or member experience to be managed by the Sales & Marketing area, we do ourselves a disservice and lose out on some of our most valuable benefits to our health plan. Implementing these steps will change the dynamics of our department by making our teams more member centric, promoting ownership, and making a live CMS audit easier.
GHG's Operational Performance practice area consultants have been in your shoes. We have faced the multiple priorities and pressures to meet production goals and maintain team satisfaction at the same time. If you need assistance in setting up an audit-ready department or improving your support of member engagement, we can help.
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At Gorman Health Group, we maintain the country's largest staff of senior operations consultants. Our team assists dozens of health plans every year in scrubbing their member data and can translate your business strategies into practical, efficient and rigorous work processes with the highest degree of compliance and accountability. Visit our website to learn more about how we can help you >>
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MACRA Flexibility Proposal
As we enter the last stretch of the year, many questions remain on what to expect from the Quality Payment Program as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) come January 1, 2017. With the final rule due in November, much of the industry is quick to point out the difficulty in preparing for a brand new reporting program in just a month. Reporting in 2017 will affect payments in 2019.
The Centers for Medicare & Medicaid Services (CMS) recently attempted to alleviate these concerns with a new flexibility proposal, effectively allowing those who choose to do so to put off fully jumping into the Quality Payment Program for the first year. There are four options under the proposal:
- Quality Program "Testing" — Practices can submit some data to the Quality Payment Program, including data from after January 1, 2017, in order to avoid a negative payment adjustment. CMS is providing this as a way to test that systems are working to allow for successful participation in 2018 and 2019.
- Partial Year Participation — This option allows for participation for a reduced number of days. Because practices would submit quality measures, technology use, and improvement activities, they could potentially qualify for a small positive payment adjustment under this option.
- Full Year Participation — Practices whose systems are ready on January 1 can jump in fully in order to reap a bigger positive payment adjustment than Option 2.
Advanced Alternative Payment Model (APM) — Practices can, of course, still choose to participate in the Quality Payment Program through an APM such as Shared Savings Track Program 2 or 3. This option would qualify for a 5 percent incentive payment in 2019.
This new flexibility proposal gives some leeway and buys time for practices that are not prepared to fully comply with the Quality Payment Program, however, there is still a lot of work to be done before now, January 1st, and during the first reporting year.
This new flexibility announcement affirms CMS expects to move forward January 1, 2017. It also means we should all brace for a steep learning curve and speed bumps the first year and will likely see much more guidance and interim regulations as both the industry and CMS come across these. Despite these new flexibility options, the need to prepare for the new payment model is pressing, and those who prepare the soonest will see the greatest success under MACRA.
Gorman Health Group's experienced team is currently working with the provider, health system, and health plan communities in determining the best approach to influence more efficient care delivery models that support clinicians and hospitals as they change the way they practice medicine and adapt to new payment and risk arrangements.
Our experts can review current operations to identify risks and opportunities, increase integration within clinical and pharmacy programs, design well-coordinated activities across multiple healthcare programs, and ensure your organization's infrastructure and tools are prepared for MACRA's impact on your bottom-line. From in-depth analytics and tactical support to strategic planning and implementation. We can help >>
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Star Ratings Plan Preview #2: 2017 Trends to Improve 2018 Scores
With the Centers for Medicare & Medicaid Services (CMS) release of 2017 2nd Plan Preview Star Ratings and updated 2017 Technical Notes, the Star Ratings "busy season" is officially in high gear.
Though our clients are already reaching out to us to understand how to enhance existing programs and best leverage staff to improve their 2018 Star Ratings during the remainder of 2016, we think it's important all Medicare Advantage (MA) plans do so within the context of the trends and issues emerging from the 2017 ratings. A few highlights from the 2nd Plan Preview:
- The triple-weighted Plan All-Cause Readmissions measure has an average (draft) Star Rating of 2.5 (down from an all-time high of 3.5 in 2014);
- The triple-weighted Improving or Maintaining Physical Health measure has an average (draft) Star Rating of 2.6 (down from an all-time high of 4.6 in 2015);
- The Reducing the Risk of Falls measure fell for the 3rd year in a row to 2.4 (down from an all-time high of 3.4 in 2014);
- The MTM Program Completion Rate for CMR measure illustrates health plan struggles for a 2nd year with an average (draft) 2017 rating of 2.4.
These three Part C measures have now eclipsed the Osteoporosis Management in Women who had a Fracture measure (with a draft 2017 rating of 2.7) as the poorest performing Part C Star measure. These measures require strategic provider support to help members through well-managed transitions of care, consistent and persistent integration of medication management and pharmacy data into clinical workflows, and member education and coaching regarding non-clinical issues such as exercise and safety. In addition, the struggles with the MTM Program Completion Rate for CMR measure likely foreshadow the type of performance health plans can expect on the Medication Reconciliation Post Discharge measure, which CMS has indicated will be introduced in the 2018 Star Ratings.
With CMS' planned addition of numerous medication-related Star Ratings measures and ongoing development of measures to codify and quantify Care Coordination through new Star Ratings measures, a strategic approach to improving Star Ratings performance has never been more important. With this in mind, a plan's response to improve performance on an individual measure or group of measures must incorporate the following:
- Care Coordination and Care Management activities that extend beyond the traditional definition of case management and integrate medication management firmly into care, case, and disease management activities;
- High-quality care delivered throughout the provider network, with enhanced contracting, engagement, and coordination that support a patient's experiences, diagnoses, and clinical care needs across all clinical settings, including the primary care physician (PCP), specialists, pharmacies, inpatient/outpatient facilities, and emergency rooms/urgent care settings;
- Risk Adjustment activities and interventions that simultaneously meet health plan needs across Star Ratings, Quality Improvement, and Risk Adjustment while seamlessly supporting and enhancing the care received in the clinical setting;
- Expanded responses to address social determinants of health, such as food insecurity, unstable housing, loneliness, decreased cognitive function, etc.
Star Ratings reflect not only the effectiveness and outcomes of the policies, procedures, and business decisions made inside the plan but also the effectiveness and outcomes of external parties' performance. A strong Star Rating reflects the summative measurement of all actions and decisions of all parties involved in the healthcare experience, including the vast array of providers, vendors, pharmacies, and caregivers involved in delivering care and medications to a member and supporting that member's lifestyle choices and needs.
The 2017 ratings make it clear CMS will continue using the Star Ratings program as an important vehicle through which to test innovation experiments that will ultimately serve as the foundation for Health Insurance Marketplace care delivery and management and the Quality Payment Program.
If you achieved 4 stars this year: There is "no rest for the weary." Many of our clients are new entrants to the MA space — they understand what it takes to achieve 4 stars and are counting on the Quality Bonus Payments associated with >4 star performance. The work may feel relentless, but keep it up!
If you did not achieve 4 stars this year: Now is not the time to panic. You still have time to influence your 2018 Star Ratings. With a carefully planned 4th quarter strategy backed by data and executed to perfection, you may be able to attain (or regain) your all-important 4th star. You'll need to carefully evaluate your current performance and use your time and resources wisely to hit 4 stars.
Whether you need help developing or finalizing your 4th quarter Star Ratings strategy or adapting to the innovations needed for longer-term Star Ratings success, Gorman Health Group (GHG) can help. For additional questions and inquiries about how GHG can support your Star Ratings efforts, please contact me directly at msmith@ghgadvisors.com.
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There is no time to delay. Your organization needs to identify opportunities to increase your Star Rating, implement an enterprise-level strategy, and carefully monitor your progress over the next plan year. We can help you every step of the way with our full portfolio of GHG practices, products and services. Visit our website to learn more about our Star Ratings Services >>
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An "October Surprise" in Medicare Advantage Star Ratings
Each year, one of the most anticipated announcements in the Medicare Advantage (MA) industry is the Star Ratings and program technical guidance for the coming year from the Centers for Medicare & Medicaid Services (CMS). This year's includes an "October Surprise:" a little-known methodological change that could force dozens of 4- to 5-Star-rated plans to lose their hard-fought bonuses and rebates.
Roughly 370 MA plans are currently scored under the Star Ratings system, which we all know by now is graded on a curve. Plans above 4 Stars get substantial bonus payments and bid rebates from CMS and above 5 Stars can market and sell their products year-round. In this sense, plans below 4 Stars are circling the toilet bowl as there is only so long they can compete against the better benefits of 4+ Star plans. The Star Ratings for 2017 will likely knock many 4+ Star plans off their pedestals. Here's why: for 2017, for the first time, 188 new plans could be scored under Star Ratings.
- 64 of the 188 are Medicare-Medicaid Plans (MMPs), which CMS announced in June will be moved into their own separate Star Ratings program this fall. This is a bit of bad news for most MA plans, since their inclusion in the MA Star Ratings program would likely have helped fill the lowest end of the curve.
- The 124 that are left still represent enough mathematical volume that their performance will shift the bell curve. Most will likely earn an overall rating of 3 or 3.5 stars, which will cause rating dilution for those at 4+ Stars. If those plans have the same level of performance as the previous year, they will likely dip below 4 Stars. This is a looming disaster for those companies because they've already booked the bonus money and predicated their benefit designs and 2017 campaigns on receiving the rebate.
- Regarding the 6 "dead men walking" plans below 3 Stars for 3+ years and slated for termination: a "hospital improvement" bill, which passed the House and is still in the Senate, includes a provision to delay CMS' authority to terminate MA contracts based on poor Star Ratings for 3 years. It's possible these 6 plans may continue to fill the very lowest end of the Star Ratings bell curve, thus helping other low-performing plans by padding the lowest end of the bell curve.
Many plans are going to get a nasty shock when they dig into CMS' latest news. It's another stark reminder Star Ratings management is a constant campaign, and plans cannot afford to get comfortable when it comes to their quality performance.
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CMS recently notified plans of the first preview period for the 2017 initial Star Ratings data. It is critical for plans to begin the annual re-evaluation of Star Ratings performance now to pinpoint new problem areas, implement tactical actions, and identify improvement opportunities to raise ratings. Read full analysis >>
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Keep the End in Mind as 2017 Readiness Approaches
According to Author Stephen Covey, in his book The Seven Habits of Highly Effective People, you should "begin with the end in mind." This means to start with a clear understanding of your destination so you know where you're going and understanding where you are now so the steps you take are always in the right direction.
Many department leaders have said, "I wasn't trained to be a compliance manager. I was just a good individual contributor managing my practice area, and someone asked me to take on this role." A powerful first step in becoming successful in a new role is to understand your organization's "End in Mind," which is usually described in the mission statement.
As Medicare Part D plan sponsors approach the 2017 Readiness season, this advice would be well taken. The Centers for Medicare & Medicaid Services (CMS) has intensified its program audit schedule, making it much more likely for a plan to receive the dreaded audit notice from CMS in 2017. Working from the point of view your plan will be one of those receiving an audit notice next year, you should approach the 2017 Readiness process as compliance audit preparation. In other words, the end in mind requires a critical review of the processes downstream from the Readiness Attestation.
Are your policies current with the latest regulatory requirements and guidance? Do your procedures match the actual processes in place? Can you demonstrate you comply with your stated processes? This is the approach CMS will take in a Compliance Program Audit. By attesting to the end point in the Readiness Checklist, you are in effect stating the processes on which the end is predicated are also functional and compliant.
Since most plan sponsors rely on first-tier, downstream, and related entities (FDRs) to help meet the operational and compliance requirements, it is also time to evaluate their performance. An FDR audit for delegation oversight is a critical part of the compliance plan for all plan sponsors. Any delegated function performed by an FDR is ultimately the responsibility of the plan sponsor. In the event of an audit, one of the greatest risks to a plan sponsor is from its FDRs. Since the Pharmacy Benefit Manager (PBM) is usually the largest, most impactful FDR, close attention should be paid particularly to regulatory changes that have been made in 2016 and need to be implemented in 2017.
Strategies that will ultimately improve the Compliance Readiness for 2017:
- PBM delegation oversight audits
- Mock program compliance audits
- Targeted audits (coverage determinations, formulary administration)
- Operational gap assessments
- Benefit administration testing
These represent key methodologies that can be used to discover deficiencies in functionality which translate to audit deficiencies Gorman Health Group can assist plan sponsors with as we approach the 2017 plan year.
Resources
The Centers for Medicare & Medicaid Services (CMS) audit practices have radically changed in recent years. Now with only days to prepare for CMS audits, organizations must become proactive in creating a culture of compliance. From a gap analysis to a comprehensive, deep-diving Part C and D audit, our team can help you minimize your compliance risk and maximize your time and resources. Visit our website to learn more about our audit services >>
On Tuesday, September 13, 2016, from 1:00 — 2:00 pm ET, join colleagues Diane Hollie, Senior Director of Sales & Marketing Services, and Carrie Barker-Settles, Director of Sales & Marketing Services, as they outline the keys to building an integrated member experience program that will deliver a significant and positive impact on health plan enrollment, retention, and revenue generation. Register now >>
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Making Order from Chaos
"Big data" is often described in terms of colorful dashboards and a roomful of SQL programmers. Gorman Health Group (GHG) thinks of it as a symphony of moving parts that all play a role in managing quality healthcare.
The year 2014 was the first time since 2005 that saw an increase in Medicare Advantage (MA) plans explode on the market, largely due to the Medicaid-Medicare Dual Expansion program, but sheer volume of Health Maintenance Organizations (HMOs) increased as well.
To attract new plans to the MA market, the Centers for Medicare & Medicaid Services (CMS) allows a 3.5% new plan bonus for the first three years. This includes a 65% rebate for supplemental benefits and is applicable to the double bonus counties.
However, at the end of the three years, these new plans must sink or swim. If they do not achieve 4 stars and get 5% bonus and 65% or more rebate, then they lose ALL of the bonus, and rebates level out to 50%. This Quality Bonus Program does not apply to dual eligibles or Programs of All-Inclusive Care for the Elderly (PACE), but a financial trend analysis is still appropriate.
So an operational priority for new plans is to focus on Star Ratings, but what about the rest of the operation and the financial bottom line? The high penetration of HMOs means best practices and diligence to manage networks and utilization. Recent increased demand for Preferred Provider Organizations (PPOs) with more consumer choice means managing the out-of-network costs. A financial checkup can review trends as well as point-in-time variance reports for medical and pharmacy claims as well as revenue projections based on demographics and risk adjustment.
Big data can help quantify this organizational dilemma. Without real-life experience, the dashboards can be just a set of graphics.
Right now is the ideal time to leverage this data into action. Bids are in, and Marketing is fine-tuning its message and demographics for open enrollment. A perfect complement to budgeting and year-end reconciliation of incurred but not reported (IBNR) and risk adjustment is to determine benchmark metrics for achieving the budget!
Dashboards supplemented with trend analysis and cross-functional discussion about outlier operational areas (referral patterns, emergency room usage, readmissions, high utilizers, pharmacy spend, etc.) is the real answer — not just an algorithm. Then the comparisons of real to benchmarks (and budget) become meaningful.
In recent blogs, we talked about evolution. A financial checkup by GHG gives you the tools and insight to evolve and succeed.
Resources
On Tuesday, September 13, 2016, from 1:00 — 2:00 pm ET, join colleagues Diane Hollie, Senior Director of Sales & Marketing Services, and Carrie Barker-Settles, Director of Sales & Marketing Services, as they outline the keys to building an integrated member experience program that will deliver a significant and positive impact on health plan enrollment, retention, and revenue generation. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>