2018 Proposed Notice of Benefit and Payment Parameters (NBPP) Summary
This year, some of the biggest industry leaders such as Aetna and UnitedHealthcare have exited the Affordable Care Act (ACA) marketplace. The outlook for the longevity of Obamacare looked grim without some drastic changes coming down from the Department of Health and Human Services (HHS) to balance the deficits seen by health plans as they navigate this new world of healthcare.
There is some light on the horizon for the health plans that are offering ACA plans on and off of the Exchange. The struggles and concerns expressed from health plans across the country are being heard and acted upon at HHS, which is evident in the 2018 Notice of Benefit and Payment Parameters (NBPP) that was released on August 29, 2016. The 2018 NBPP displays an array of proposed changes and updates that provides clarification, detailed rules, and specific changes to address the nuances associated with the commercial market. Such proposed changes and updates include the following:
- New Standardized Plan options and requirements
- Adjustments to user fees, cost share reduction (CSR) values, and coefficients
- Eligibility, enrollment, and benefit changes that impact special enrollment periods (SEPs), direct enrollment, and binder payments
- Recalibration of the risk adjustment model to address partial year enrollments, high-cost risk pool, and pharmacy utilization
- Risk Adjustment Data Validation (RADV) process changes and addition of new auditing requirements
- Actuarial Value (AV) calculator and rating adjustments
The healthcare industry has been eager to influence the structure of Obamacare. HHS has responded to what they are hearing, but the question is, are you ready to operationalize the technical processes and business support outlined in the NBPP to be successful? The ball is in the health plan's court now to take and run with. The approach to address the ACA is not your typical Medicare Advantage strategy. The commercial market has gotten much more complex and strategic. Being able to understand how each organizational decision impacts processes to promote a cross-functional organization and support rate setting, risk adjustment, data management, and EDGE server submissions are just a few pieces of the puzzle that should be considered.
Gorman Health Group (GHG) has a unique set of ACA expertise to assist those in the industry impacted by the ACA and the changes proposed in the 2018 NBPP navigate this new highly regulated world. Here is just a glimpse at what the industry has been asking GHG and the type of support GHG has been bringing to clients across the country:
- What are the key ACA processes health plans should be watching closely?
- Can health plans be successful with the current ACA regulations set forth?
- What impact do these proposed changes have on how plans partner with their Pharmacy Benefit Managers (PBMS's)?
- How critical is it to apply stringent processes for data management and submissions?
- What is the best way to approach all of the core functions associated with risk adjustment from an ACA perspective?
The more precise HHS gets, the more precise health plans need to be. Having the right technical infrastructure and membership platform in place is a great start. Look for a detailed GHG analysis around the proposed 2018 NBPP industry impact in the coming weeks
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This new industry brings about greater challenges than we've ever known in government programs while also providing immeasurable opportunities for health plans that prioritize high quality, clinical care, as well as proper coding and documentation and highly functioning enrollment and reconciliation functions. GHG has first-hand knowledge of vital plan operations and provides comprehensive strategies across a full spectrum of business needs. Visit our website to learn more >>
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Star Ratings: Medication Management Is Not Just for D Ratings Anymore!
As a pharmacist and Star Ratings Senior Consultant for Gorman Health Group, whenever I am asked to provide insight on how to achieve or maintain Star Ratings success, the conversation has been limited to the "D" part of the metrics, and the folks involved with Medicare Advantage (MA) and Healthcare Effectiveness Data and Information Set (HEDIS®) kind of glaze over and mumble something like, "That's for the Pharmacy folks to deal with." That attitude has always been somewhat befuddling to me considering the historical and ever-increasing impact of appropriate clinical management of medications on many HEDIS® measures and the quality conversation in general. Equally confusing to me has been the willingness of many pharmacists to relinquish the ownership of the medication-related HEDIS® measures to Quality, Case Management, or other teams.
The team approach, with the patient at the center of the team, is vital to delivering high-quality care. At many health plans, the Star Ratings teams historically have been "siloed" into medical Care/Case Management on one team and Pharmacy on the other. While we at the health plans were all focused on Star Ratings for the past several years, something happened outside of MA that will have a huge impact on the whole spectrum of healthcare. That event was MACRA — the Medicare Access and CHIP Reauthorization Act of 2015 — the latest and most sweeping healthcare reform law from Congress. MACRA will fundamentally change how healthcare providers are paid. Under value-based payment, the foundation of the reward system will be quality. Out of this change will come huge shifts in alignments and the creation of new partnerships requiring "outside-the-box" thinking. At the center of many of these new partnerships will be the critical role of the pharmacist and medication management.
Health plan Star Ratings teams would do well to pay attention to these profound trends outside of MA and understand the huge impact on how care will be delivered in order to respond to these changing incentives. Wasn't the Star Ratings system one of the early forms of value-based payment? Certainly if metric success is not achieved, there is a huge financial impact that will be incurred. A cornerstone of value-based payment is preventing hospital admissions impacted by many aspects of care but notably including a huge focus on medication reconciliation, medication management, and medication adherence. Sound familiar?
So how do we take these shifting sands and turn them into something tangible? The first step is collaboration. Star Ratings teams need to prepare themselves for a global value-based system by no longer segregating their teams into "C" and "D." And even if teams meet in an integrated way, the pharmacy members need to take the lead on metrics that extend beyond adherence and Medication Therapy Management (MTM) Comprehensive Medication Review (CMR) rates. Pharmacists should be taking the lead on new metric challenges like medication reconciliation even though they are a HEDIS® measure. A strong medication reconciliation program not only impacts the "checking of the box" that it was done but, if done right, has been shown to actually have an impact on reducing hospital readmissions (another Star Ratings measure). So this is good for Star Ratings, good for the plan, and, most importantly, good for the patient.
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Every organization in the healthcare industry will be impacted by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Gorman Health Group's Senior Vice President of Healthcare Analytics & Risk Adjustment Solutions, Dan Weinrieb, provided insight into the various options Providers will have if the legislation moves forward in a previous blog post on the subject >>
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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How to Efficiently Conduct an Audit
Audits from regulatory bodies swarm around an organization like bees. And like a bee, upon first sight we do not think of the value they bring, but instead we first think of the sting that is to come.
A key aspect of an effective compliance program is to ensure there is an effective system for routine auditing and monitoring along with a system to identify compliance risks. You've established what you believe to be a solid audit plan for the year, but other things just seem to get in the way. First, you're tasked with researching the requirements for a new plan type. Then you have a fire to put out with a delegate. One of your staff gets a job offer she can't pass up, and before you know it, your audit schedule for the year is derailed. You'll get to them, right? Let's just hope you don't receive an audit letter in the meantime. With every passing Monday you hold your breath, all the while wondering how much time it will be before the inevitable occurs.
Sometimes an extra set of hands is all that's needed to get your audit activities back on track, but you do not have the budget for another full-time employee. Think of the following member-impactful audits that can be accomplished while you handle other responsibilities:
- Part C and Part D Grievances and Appeals
- Member Enrollment and Disenrollment
- Marketing
- Coordination of Benefits
All audit plans should include not only aspects included in CMS' protocol but also include audits of other self-identified areas of risk. Any operations that touch member service or payment might be considered higher risk on your assessment. Are they? And are you able to accomplish them all with the resources you have? Does your staff have the right skillset for the audits? From a CMS Q&A:
The safeguarding of beneficiary rights and protections is arguably the most important responsibility of a sponsor. Demonstrating you have the resources to detect, correct, and prevent occurrences of non-compliance is a struggle when a department lacks things like the time, resources, or skill to perform certain audits. Contact us for ideas on how we can partner with you to efficiently conduct some of your audits, providing you with some much needed 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 >>
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 >>
Evolution Through Strategy: Pinpointing Growth Opportunities
My last article explained the choice of Medicare Advantage (MA) health plans to evolve or disappear. Evolution is certainly the preferable choice, so let's examine the steps needed to do so.
As with any company, you need to identify your target customer. State of the Art Membership accounting helps an existing determine strategies around expansion through a) new members (new to a company and new to Medicare) as well as b) the art of retention through pricing, quality and customer service. Both efforts are necessary to maintain a steady growth pattern. This is more sustainable than a membership spike up or down that will cause operational havoc and financial uncertainty.
Risk adjustment Adaptation follows the member through every clinical encounter. If not fully documented, inadequate risk adjustment practices mean money left on the table, which is not an option. Diligence and good provider relations with proper analytic tools are critical to support risk adjustment.
Proactive Member Service means caring about the member experience to set the stage for high level of care and high quality ratings. It helps with retention while ensuring maximum quality of care to the member as well as enhanced revenue from CMS to reward good service. The payback is healthier members who want to stay: a win — win situation!
Collaborative Accountable Providers represent a key partnership for the sake of the members. It is not always a natural alliance — different resources and priorities often conflict, but the health of the member through appropriate care management should be a common objective for both payer and provider. Various partnerships with providers to help with risk sharing is a new element that will offer advantages to both sides.
Make it Work Care Management focuses on the member's health as the single objective that requires proper and necessary medical care and ensures proper resources for the health plan to manage. The product design that attracts your membership base must also be managed to ensure a balance of quality for the member at the right price for the payer.
Finally, the partnership with providers is an integral part of the overall Mastery of Quality Ratings to maximize the outcomes as well as the member experience. CMS is serious about quality — it impacts enrollment opportunities, care management and member outcomes as well as financial performance through critical revenue bonuses and rebate opportunities.
Gorman Health Group has the expertise in all aspects of health plan operations to lead you through best practices but also how to leverage these steps into financial stability. With a proprietary pro forma model designed to quantify these areas based on an in-depth knowledge of MA best practices, we are able to lead management through the different strategic decisions and analysis to customize what works in your marketplace and how to leverage your own strengths. The goal is not just to survive MA but to evolve into something that will improve the community's health.
Join us next month to discuss how analytics can help manage these levers going forward to ensure success.
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 >>
In a recent case study, GHG examined a mid-sized managed care health plan who struggled with poor MLR and how a cost-efficient affordability review that utilized trend management conducted by out integrated team of experts generated targets of $4 million in expected improvements. Download the case study here >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Challenges in Network Development
The sun is shining, kids are heading back to school, and fall will be here before we know it. Now is the perfect time to start planning for your network expansion needs. Plans need to be even more vigilant in managing their largest asset. Regardless of the size and scope of the organization, your plan's network adequacy and accessibility is a cornerstone of any new initiative.
Screech…insert brakes squealing sound effect here… For those of us who have been in the Medicare Advantage (MA) field, this starts to sound like a broken record, right? The numbers guys tell us the best new areas to expand, the network folks build their strategy―you know, the one where we pull a list of all available Medicare providers in the area and pray the providers will accept 100% of Medicare or at least a rate that will keep us in business and meet the Centers for Medicare & Medicaid Services (CMS) network adequacy requirements. Network departments are now feeling the pressure to perform not only to meet their annual goals but to ensure other functional areas of the health plan, such as member satisfaction, Star Ratings, clinical, and risk adjustment, can meet their goals as well.
In today's marketplace, it is no longer acceptable to meet the bare minimum Health Service Delivery (HSD) requirement. Consumers, and CMS, are demanding plans to be able to offer choices that include quality and cost efficiency. With consumer-savvy, newly aged in Medicare beneficiaries, there is also a shift in patient expectations and what is available for their healthcare dollar. The new beneficiary is aging in from a world of patient engagement and incentives and rewards programs and will expect the same level of service. Health plans need to find ways to evaluate their existing provider networks and newly expanded networks to meet these clinical and financial goals and to be forward-thinking on how to best wrap risk adjustment and Star Ratings into the mix.
For beneficiaries and their caregivers, a top priority in the selection of an MA plan is the inclusion and availability of their physician and most commonly used facilities. MA directories have required the least amount of informative elements as compared to their counterparts, such as Qualified Health Plans (QHPs) and Medicaid Managed Care Organizations, and CMS is pushing hard to have uniformity across all government-sponsored health plans. We know the belt is tightening with day-to-day network directory management. Plans must reach out to their providers on a quarterly basis to confirm demographics and open/closed panel availability of their providers, ensure the information is updated in real-time with online directories, and close the loop between the providers submitted on the HSD tables versus those in the directory. CMS has begun the process of the pilot directory accuracy audits, and it will be interesting to see which plans have done their due diligence and what methods have proven to be the most successful.
Additionally, a recent investigation by the Government Accountability Office (GAO)[1] identified serious deficiencies in CMS' oversight and enforcement of MA network requirements and recommended greater scrutiny of plans' networks. The GAO found CMS reviews less than 1% of all networks and does little to assess the accuracy of the network data submitted by plans. It was found CMS relies primarily upon complaints from beneficiaries to identify problems with networks and does not assess whether plans are renewing their current contracts to continue to meet network requirements.
As we saw last year with CMS network requirement changes, many plans were unprepared to submit their entire network footprint in their service area expansion applications. The result was a scramble to fill gaps and re-evaluate if previously approved exceptions were, in fact, still valid. This requirement further supports the CMS commitment to monitor network adequacy for MA plans much more closely. It is time to set new network monitoring processes in place which ensure your CMS network submissions mirror your provider directories and that you are prepared to address directory complaints and ensure you are following the new directory requirements.
The Kaiser Family Foundation recently completed a study on MA hospital networks and how much they vary.[2] The study was attempting to answer three questions:
- What share of MA plans have broad, medium, or narrow hospital networks, based on the share of hospitals and hospital beds included in the plan network, and to what extent does this vary across counties?
- Do MA plans typically include Academic Medical Centers and National Cancer Institute (NCI)-Designated Cancer Centers when one is located in the county?
- What is the relationship between network size and other plan features, including premiums, quality Star Ratings, per capita Medicare spending, parent organization, and plan tax status?
Some of the most interesting results found were:
- MA plans include about half (51%) of area hospitals in their network.
- Most plans (80%) include an academic medical center, but one in five did not.
- Two in five plans in areas with an NCI-Designated Cancer Center did not include the center in network.
- In 2015, 23% of MA plans in the study had broad hospital networks, while about 16% had narrow or ultra-narrow networks.
- Among Health Maintenance Organizations (HMOs), broad and narrow network plans had similar average premiums ($37/month vs. $36/month) and similar quality ratings (3.8 vs. 4.1 stars).
With hospitals having much more publicly available data with which to examine, as we move into the era of the Medicare Access & CHIP Reauthorization Act (MACRA), plans will need to use all available quantifiable data and work with providers more closely to ensure the provider networks we build are risk ready. As one of the only industries where technology has seemed to send us backwards rather than forward, we will need to ask ourselves, "Do we have a functional and connected ecosystem of providers, including hospital and ancillary providers, that are risk ready, AND are we ready to support them with real-time, transparent reporting to ensure healthy relationships with our providers?" "Do we have physician champions in the community, and does our internal leadership understand the importance of the new level of provider engagement that is required?"
Providers are scared and voicing their concerns. We are going beyond requesting providers follow up on gaps in care, HEDIS®, and Star Ratings measures. We are requiring coding accuracy and enforcing with audits to ensure we are on track with risk adjustment scores. We are going beyond pay for performance to paying for outcomes. As MACRA enters full swing, we know most providers will start out with the Merit-Based Incentive Payment System (MIPS) rather than the Advanced Alternative Payment Models (APMs), and yet there is still concern a small, single physician office will be able to survive.
In an election year where crazy things happen and we seem be more divided than unified, I, for one, would love to see all of these changes be the catalyst for plans and providers to come together―for providers to share their needs and concerns, for plans to offer tailored education programs that fit both the small office and the large integrated delivery systems, and for patient-centric care to truly mean the patient comes first.
How do we get there? I would have to say healthcare is still local, and we — plans and providers — need to meet on Main Street, USA, and start talking.
At Gorman Health Group, we have a long history of providing direct contracting assistance for plans, the ability do a deep-dive and ensure your specialty mapping meets CMS definitions for each category, to run multiple network adequacy and availability scenarios, and prepare your plan's HSD, state, or Request for Proposal network tables. We also have the bench strength to help you develop a strong network strategy and provider engagement architecture that takes into consideration the quality, financial, Star Ratings, and risk adjustment goals you need to reach in the competitive landscape of healthcare. Let us know how we can work and plan together now and build strategic network operations to support your plan's goals for growth. Planning now will allow us to ease into fall knowing we are prepared for the new season and new changes!
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Gorman Health Group evaluates the design and delivery of high quality collaborative care while achieving compliance and improving revenue cycle management. Our multidisciplinary team of experts will assess the alignment of your products, your current network and your market to 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 >>
CMS Announces Expansion of the Medicare Advantage Value-Based Insurance Design Model
The Centers for Medicare & Medicaid Services (CMS) announced plans to expand the Medicare Advantage (MA) Value-Based Insurance Design (VBID) model to more states and more conditions in 2018 without the experience of the first year's launch, which begins in January 2017. The schedule underlines the Administration's goal of rapidly expanding the use of innovative payment and delivery models that emphasize quality and good outcomes rather than volume of services. VBID models have been used in the private sector to better manage the costs and care of persons with high healthcare needs and the Medicare population, which has the largest number of persons with chronic care conditions, and offers the potential to see even better results for more people.
Under the demonstration, the requirement that the MA benefit package be uniform for all enrollees will be waived. The uniformity provision was adopted many years ago to ensure health plans did not use benefit design to exclude persons with conditions and disabilities requiring the use of many services and prescription drugs. Fortunately, over time, policymakers and plans have seen the value of programs that better manage the conditions of persons with chronic conditions, such as disease management programs, although participation has been lower than expected. The VBID model will allow MA plans to lower cost sharing, add services, and target providers considered "high value" for the selected chronic condition. MA and Part D plans will still be required to offer uniform benefits under the new model for all plan members with the target condition. As a beneficiary protection, participants in the VBID program can never pay more than other MA enrollees for their services or receive fewer benefits.
For 2018, the new states eligible to participate will include Texas, Michigan, and Alabama. Seven states and seven chronic conditions were selected for the first year of the demonstration. Participating plans will be announced in September 2016. The additional chronic conditions that will be available for VBID participants include rheumatoid arthritis and dementia. The second year model test program will allow MA organizations with at least one plan or a parent organization with one plan with 2,000 or more enrollees to offer VBID enrollment to other Plan Benefit Packages (PBPs) with at least 500 enrollees, thus expanding the number of participating plans and VBID participants.
CMS will conduct a webinar of the second year changes on August 24, 2016, at 2:00 pm EST. Participants may register at https://innovation.cms.gov/resources/vbid-2018changes.html.
CMS plans to issue a Request for Applications for the second year VBID model test program in the fall of 2016. Information on how to apply can be found at http://innovation.cms.gov/initiatives/VBID.
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From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Contact us today to get started >>
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Lessons on the Audit Front
The regulatory scrutiny continues. The Centers for Medicare & Medicaid Services (CMS) 2016 Compliance and Program Audits are in full swing, and it is readily apparent plan sponsors must be "audit ready." CMS' intent to hold plan sponsors accountable to comply with Medicare standards and ensuring beneficiary protection is evident. Plan sponsors must be ready to take the test.
It all starts with the data…make sure you get it right! The invalid data submission (IDS) was a condition added to the 2016 scoring methodology. CMS has emphasized the need for plan sponsors to validate all data submission before they are uploaded. The "Three Strike Rule" applies. If the sponsor fails to provide "accurate and timely" universe submissions twice, it will be cited as an observation in the audit report. After the third failed attempt, or if an accurate universe cannot be produced in fewer than three attempts due to missing or unavailable data, an IDS may be cited.
Speaking of audit scoring methodology, confusion appears to remain regarding the audit scoring method. Samples are no longer given a pass/fail score with a specified passing score of 95%. Issues are now identified as conditions. One condition may apply to multiple samples. CMS will evaluate the condition by the potential impact on the beneficiary as either an observation, Corrective Action Required (CAR), or Immediate Corrective Action Required (ICAR). The audit score is generated based on the number of non-compliant conditions discovered; the maximum audit score is unlimited.
Thus far in 2016, the most common conditions cited by CMS are ones we have seen before. Plan sponsors' failure to properly administer its CMS-approved formulary, usually due to a coding error by the Pharmacy Benefit Manager (PBM), remains a risk area. It is critical for plan sponsors to have an adequate oversight monitoring program to identify and remediate issues expeditiously.
Coverage Determinations, Appeals, and Grievances (CDAG) continue to be a low performer in 2016 CMS Program Audits. It is important for plan sponsors to connect the dots with end-to-end case preparation, and remember — nothing is off-limits. CMS can open any can of worms that is identified as a risk. Coverage determination notification letters remain a targeted area. Plan sponsors must have the necessary quality checks and/or oversight to ensure notification letters are specific to the enrollee's case, accurate, and provide the information needed to approve coverage in the case of a denial. This is a recurrent finding from prior years which CMS has cited in Best Practice Memos, so there is a low tolerance for inadequate denial letters.
New to the 2016 audit cycle is the Medication Therapy Management (MTM) Program Pilot Audit, which is conducted virtually in the second week. Despite the fact results of this pilot are not included in the plan sponsor's final report, CMS is not taking this audit casually. "The goal of this audit is to evaluate the implementation of the plan sponsor's adherence to its CMS-approved MTM Program," said a subject matter expert on our Pharmacy Solutions team. Be sure you are ready to tell the case story. "CMS has been particularly interested in looking at the continuity of care across plan years for members who received a Comprehensive Medication Review (CMR) in the previous year. This is one area which appears to be especially disconnected if plans may have had multiple MTM vendors or changed PBMs," continued Miller. "Coordination of information flow, especially for enrollee's year-over-year tracking, is essential." Plan sponsors that incorporate strategies for a ready state for CMS audit will be more successful. The conduction of an MTM Program mock audit is an effective way to identify shortfalls and issues in your data collection, accuracy, and overall readiness — before you are presented with a CMS audit engagement letter.
Another challenge noted in the 2016 audit front is, despite CMS process enhancements, auditor inconsistency. This presents a challenge in what a plan sponsor can expect. In order to be prepared for a program audit, plan sponsors should prepare by exceeding CMS' expectations, not just meeting them.
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Our highly structured mock CMS audit services are designed to replicate the latest CMS audit processes. Our team of industry veterans is ready to help your organization practice and learn the new CMS audit protocols; new universes and many more data fields, interviews via a webinar, and of course the CMS protocol documents. Visit our website to learn more about our CMS Mock Audit services >>
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Evolution or Extinction
"The Theory of Evolution has two main points," said Brian Richmond, curator of human origins at the American Museum of Natural History in New York City. "All life on Earth is connected and related to each other," and this diversity of life is a product of "modifications of populations by natural selection, where some traits were favored in an environment over others," he said.
This same theory can be applied to current healthcare. A health plan is the sum of various functions that deliver and monitor the beneficiary's care. The line between payers and providers is becoming more blurred as financial risks and quality measures are critical measures for all healthcare components.
The concept of evolution vs. extinction is quite real. Providers are looking at partnering with payers and taking on more financial risk to leverage the subsequent reward and help coordinate care. Payers are eager to have more control and visibility with providers as well as to follow beneficiaries through the continuity of care to manage shifts in income, demographics, and clinical needs over a beneficiary's lifetime.
As Medicare Advantage (MA) continues to cover almost one-third of the eligible population, new product trends are evolving.
Over the past four years, Health Maintenance Organizations (HMOs) dominate the marketplace with managed
care and tighter networks, but the recent duals demonstrations are recognizing demographic shifts as well as states moving to Medicaid expansion and better coordination.
Another predictor of the duals market is the Special Needs Plan's focus on duals as an at-risk beneficiary. A third driver is the stable Chronic Condition Special Needs Plan (C-SNP) market, which manages the clinical needs and provider partnerships. The Centers for Medicare & Medicaid Services (CMS) is expanding this concept further through the new Value-Based Insurance Design (VBID) demonstration starting in 2017.
Gorman Health Group has the tools and experience to help the healthcare community evolve and avoid extinction. Our feasibility model includes detailed financial projections and onsite strategy discussions to walk a plan through the entire process of entering MA or expanding current products and service areas with an emphasis on risks and rewards. We can then lead you through the product design and implementation phases to build a competitive and compliant organization with the proper financial and operational controls in place. Even existing plans need a new perspective to manage member retention, risk adjustment, and overall analytics to support an integrated care organization.
Let's build a more adaptable, efficient approach to healthcare! So standing still is simply not an option — the marketplace is moving due to changing competitors, regulations, and populations: evolve and adapt.
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In a recent case study, GHG examined a mid-sized managed care health plan who struggled with poor MLR and how a cost-efficient affordability review that utilized trend management conducted by out integrated team of experts generated targets of $4 million in expected improvements. Download the case study here >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
First Plan Preview of 2017 Star Ratings Data
It's official — the Star Ratings busy season is officially underway. The Centers for Medicare & Medicaid Services (CMS) recently notified plans of the first preview period for the 2017 Star Ratings data.
Although CMS did not introduce any surprises or unexpected measure changes as part of the first plan preview, plans have only a very short window to review their data for accuracy, with feedback due to CMS by August 18, 2016. Inevitably, some plans identify data issues or inaccuracies during this plan preview, so great care should be taken to validate each measure score and data element provided for review.
While the Healthcare Effectiveness Data and Information Set (HEDIS®), prescription drug event (PDE), and administrative measure scores likely contained no surprises for health plan leaders, the first plan preview data for the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) and Health Outcomes Survey (HOS) measures may contain some surprises. Improving performance on CAHPS® and HOS measures generally requires carefully planned engagement with both providers and members over a sustained period of time. With almost half of the annual member survey cycle already behind us, it is critical for plans to re-evaluate their current Star Ratings status to pinpoint high-risk CAHPS® and HOS problem areas in order to ensure the right activities are in place with the right members and providers to achieve desired improvements.
During the first plan preview, particular attention should also be paid to validating the Categorical Adjustment Index factor data, which will be used for the first time this year to account for the impact of socio-economic factors and disability status on quality measure performance.
Need assistance making sure your fourth quarter action plan is aligned with your highest risks or interested in assistance preparing for 2017? We can help. For questions or inquiries about how Gorman Health Group can support your Star Ratings program, please contact me directly at msmith@ghgadvisors.com.
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GHG's Star Rating team has been working on the critical factors that drive your Stars score for more than 15 years. Since the inception of the Star Bonus Program, we have supported dozens of clients, including small regional plans, multi-market players, and multiple Special Needs Plans (SNPs). We know what works and what doesn't, and we see where MA health plans continue to miss real opportunities to greatly impact their Star score. Visit our website to learn how we can help you with your Star Ratings program >>
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Medicare Advantage Pays Hospitals Less than Medicare
Researchers at Stanford University conducted a study of hospital payments by Medicare Advantage (MA) plans, Fee-for-Service (FFS) Medicare, and commercial insurers in 2009 and 2012 and found MA plans pay lower prices than FFS for most (but not all) types of admissions and in most (but not all) geographic areas. The study found:
- MA plans paid 8 percent less than FFS after adjusting for diagnostic-related group (DRG) and geographic area differences between MA and FFS.
- If differences in hospital networks are also taken into account, MA plans paid 5.6 percent less than traditional Medicare. Thus, about one-third of the 8 percent difference in MA and FFS prices is attributable to narrower MA networks.
- MA plans in areas with the highest FFS spending paid lower hospital prices than MA plans in areas with the lowest FFS spending.
- MA plans with the highest enrollment penetration rates paid lower hospital prices compared with MA plans in areas with lower MA penetration rates.
- MA plans pay less for admissions with short lengths of stay.
Commercial insurer rates were much higher than either MA or Medicare FFS rates. Commercial plans pay higher prices than FFS for almost all types of admissions in almost all geographic areas. Higher FFS spending was associated with lower commercial prices.
The researchers (Laurence C. Baker, M. Kate Bundorf, M. Devlin, and Daniel P. Kessler) undertook the study because the literature provides no systematic analysis of the unit prices MA plans pay relative to FFS payments and whether lower MA costs are due to lower quantities of services per patient, lower prices per treatment, or both. According to the researchers, the conventional wisdom is MA plans save costs by lowering the quantity of services, and MA plans pay more to providers because they lack the FFS monopsony purchasing power. The study concludes at least part of the cost advantage of MA plans is due to lower prices and not lower quantities than FFS.
The researchers recommended Medicare consider the market environment more broadly than the level of FFS spending when setting MA payments. The researchers also recommended FFS payments to hospitals be adjusted across geographic differences and DRGs to better reflect the market.
The study used the Centers for Medicare & Medicaid Services (CMS) FFS data on all hospital payments and claims data for patients from the Health Care Cost Institute (HCCI), which represents 27 percent of the non-elderly population and 31 percent of the elderly MA population. The actual hospital prices negotiated with plans were not available since they are considered proprietary.
The study methodology used the average price per admission across metropolitan areas adjusted for differences in hospital networks, geographic areas, and case mix. To account for case mix, the researchers used only the DRG pairs that were common to MA and FFS. The researchers noted several limitations to their study findings, for example, HCCI claims data are not identical to the national distribution of MA and commercial enrollees and do not capture unobserved differences in patient severity across insurers, e.g., MA and commercial hospital admissions may be more severe than FFS admissions due to prior admission and prescreening.
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