What a Clinton Administration Could Mean for Government Health Programs
So the people spoke and we are heading for an epic cagematch smackdown general election between reality TV star Donald Trump and former Senator and Secretary of State Hillary Clinton. And you're asking, what's going to happen to Medicare, Medicaid and ObamaCare? The answer is plenty -- below the waterline and out in the states. Stakeholders will need to pay attention or get left behind.
First, the likely scenario is that Hillary is going to win this thing big. While other Republicans may have had a chance to capitalize on her high negatives with likely voters, nobody's negatives trump Trump's. He's the most unpopular major-party candidate since polling began. Most polls have him losing by double digits in November.
At this moment, Trump's likely to lose so bad that many down-ticket Republican Senate and House seats are now in play. So: Hillary in the White House, Democrats likely running the Senate again, and poor Speaker Paul Ryan trying to corral an even more radical, noisy and smaller Tea Party caucus in the House. The only people those guys hate more than President Obama are the Clintons. So betting on more gridlock is safe money. Little or nothing gets done in Congress except the bare minimum to keep government running.
That means most of what happens in Medicare, Medicaid and ObamaCare will occur "below the waterline" in Administrative policy, regulation, and guidance, or is driven by the states. Here's what that could look like:
- Medicare: the forced march to value-based payment across the program will continue. The recent MACRA rule makes it clear that a fundamental change to traditional Medicare is coming and that fee-for-service is dead. By the end of Hillary's term, a majority of Medicare dollars will be tied to provider performance. Medicare Advantage will continue its steady 5-7% annual growth and exceeding 25 million enrollees in 2020. But CMS raises the bar through a rapidly-maturing Star Ratings program and an aggressive compliance and auditing initiative carried over from Obama's last year in office. Regulations and guidance are pumped out in regular order, drafted by newly-emboldened career CMS staff and making the program a laboratory of continuing performance improvement with claws and teeth.
- Medicaid: on the heels of the biggest regulation in 12 years, Medicaid converges more than ever with Medicare Advantage and ObamaCare, but also goes down some very strange alleys. With Obama out of office, several more red states like OK and TN finally take the Medicaid expansion deal from the Affordable Care Act. But with it they insist on "conservative principles" like work requirements and drug testing that dampen coverage and introduce new complexities to the program. At the same time, blue and red states alike flood CMS with new home and community-based services waivers to force dual eligibles into health plans and implement managed long-term care programs.
- ObamaCare and health insurance exchanges: health plans in the public exchanges continue a market correction and shakeout for another two years. During that time, CMS issues even more regulations dove-tailing exchange operations with Medicare Advantage rules, and several states currently running their own marketplaces like CO revert to healthcare.gov.
Health plans and other stakeholders in these programs will need to pay more attention than ever to stay ahead as government solidifies its role as their biggest customer. These are changes that won't necessarily be splashed across major media, but rather in trade rags and expert blogs. The only thing that's certain: it won't be dull.
Resources:
The Centers for Medicare & Medicaid Services (CMS) issued the final Medicaid "mega-rule," a huge regulation that makes changes to every part of the current managed care rules. Read more >>
Under the provisions of the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), physicians and other practitioners will face a Hobson's choice: live with a more aggressive risk-based adjustment to payments or join forces with an alternative delivery model, like an Accountable Care Organization (ACO), that is taking risk. Read the full article >>
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An Important Component of MACRA: Quality Measures Development Plan
The Centers for Medicare & Medicaid Services (CMS) recently released a proposed regulation that will implement the payment incentives through the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). An important component of these new incentives is the Quality Measure Development Plan (MDP), which CMS finalized and posted this week. The purpose of the MDP is to create a strategic framework for the future of quality measure development to support MIPS and advanced APMs.
Under MIPS, clinicians will see a payment adjustment beginning in 2019 based on their performance score across four performance categories: quality, resource use, clinical practice improvement activities, and advancing the use of information technology. Under advanced APMs, payments must be tied to quality measures comparable to those quality measures used under MIPS. These quality measures will be developed by CMS by November 1, 2016, as required by MACRA, and CMS will utilize this new MDP to guide the development and implementation of these new measures. CMS currently has an ongoing solicitation to stakeholders to assist in finalizing the initial set of measures.
CMS will also incorporate the seven core measure sets recently released by the Core Quality Measures Collaborative, a partnership between America's Health Insurance Plans (AHIP), CMS, and other industry groups. The plan notes its focus on coordinating with federal agencies and other stakeholders in order to lessen the duplication of efforts within the industry and promote person-centered healthcare.
The MDP notes current known measurement and performance gaps and solutions to close these gaps through new quality measures. For the first measure set, the MDP posted the initial priorities for measure development in six quality domains: clinical care, safety, care coordination, patient and caregiver experience, population health and prevention, and affordable care. CMS will update the MDP as they identify new gaps in measurement and performance in order to develop additional quality measures annually.
In reviewing the recent MACRA legislation for potential changes, and putting together comments to CMS, organizations should also carefully review the new Quality MDP in order to ensure their comments are incorporated into the release of the first set of measures by November 1, 2016.
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CMS recently released the proposed rule that sets forth the replacement for the Sustainable Growth Rate (SGR) formula and creates the new payment system based on value rather than volume. Daniel Weinrieb, GHG's Senior Vice President of Healthcare Analytics & Risk Adjustment Solutions, along with our team of experts will provide a detailed analysis as well as industry recommendations. Stay tuned!
What Is Driving Growth in Your Plan?
It's May, so if you have not formalized your sales and marketing strategy for this Annual Election Period (AEP), now is the time. At our recent Gorman Health Group 2016 Forum, Carrie Barker-Settles and I had a very insightful discussion with Forum participants about what is driving growth in plans today.
First, membership data analysis. It is critical to understand your data in order to understand the following about your members:
- What are the geographic, demographic, and plan selection of new members in the last year, and which plan, marketing tactic, and sales distribution did they come from?
- You need the same information about voluntarily termed members and any additional data gleaned from survey data.
Next, it is important to conduct a market analysis to review the following:
- Medicare population and penetration
- Product and plan trends
- Benefit design analysis — looking for product and benefit innovation
- Multicultural diversity
- Competitive analysis and trends
With this information, you should have a strong idea of what your growth looks like — now you need to understand how to attract it going forward.
Whether or not you are currently attracting the aging in audience, you want it! Having a young Medicare beneficiary helps drive down costs. But Medicare beneficiaries are beginning to delay retirement, so developing strategies to capture these folks is probably the most cost-effective program you will have, and having a benefit design that is attractive to this market is critical.
When trying to attract the younger Medicare beneficiary, the Affordable Care Act (ACA) enrollees aging into Medicare will be a strong market — if you are in the ACA market segment. Plus, you have the opportunity to target enrollees with "like" plans and just enroll them without having them test the outside waters, if you do it correctly. In addition, this audience is much more attuned to social and online media. We have found there are online media tactics now entrenched in most media plans, but testing should be continuous since more members will begin to enroll online who have purchased their ACA healthcare online and will expect the same experience with Medicare.
"For continued growth in your plan, make sure you're leveraging a multi-channel strategy to achieve your sales goals," said Carrie Barker-Settles, Gorman Health Group's Director of Sales & Marketing Services. "Placing too much emphasis on one channel may result in unsavory consequence. Utilizing the right channel for the opportunity will enable you to reach prospects that don't respond to the standard marketing outlets and help achieve the stretch goal that the sales team is always faced with year after year."
When looking at the sales channel, this segment continues to diversify.
First, there are the Transition Managers or "Navigators" − Distribution of direct-to-consumer Medicare products to support commercial companies transitioning their members from group plans to defined contribution individual plans. We have seen this segment grow substantially in the last few years.
In addition, we are beginning to see some transition among plans regarding their sales distribution of contracted agents, captive agents, and employed agents, and mixtures of all of the above with telesales and online sales. Another segment we see gaining popularity is storefronts. Have you reviewed your strategies among those discussed here today? If not, make sure you understand from where your opportunity for growth for 2017 will come. Believe it or not, 2016 is coming to a close quicker than we think.
If you need help in evaluating your marketing and sales strategies, let us know — we are here to help!
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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. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more about our services >>
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50/50 Just Won't Cut It — You Have to Commit 100%. The Top 5 Components for Successful, Compliant, Committed Operations
If you weren't able to make it to the Gorman Health Group 2016 Forum this year, you missed a dynamic time. More than just relevant topics, it included engaged participants who added a wealth of depth to our discussions. The topic garnering a lot of audience participation was "Can Operational Efficiencies and Compliance Co-Exist?" The struggle to align the two is real and takes constant, diligent effort, but the success it can create is priceless.
I told a story about a recent vacation involving a shark swimming in the surf. At one point it started swimming towards a father and son. Those of us on the pier were yelling to warn the man to leave the water, but he couldn't hear us. It wasn't until the people on the beach carried the message to the man that they got out of the water. Oftentimes we rely on the Compliance Department to carry the weight of maintaining compliance, but like the people on the pier, that message only goes so far. To be effective and make a real change, the message has to be embraced by everyone in order to make a real difference.
Here are the five critical points to ensure operations entwines compliance in its core:
- Don't Ignore the Human Factor — Our employees are the most critical factors in our department's productivity and compliance. Make sure our employees are well trained on not only the technical components of the job but on the critical compliance requirements as well. Employee engagement, like member engagement, is critical to success. Our employees want to do a good job, but sometimes they don't fully understand all that success entails.
- Know the "Why" behind an Action — What vision have you imparted to your staff? Are they just keying in applications, or are they setting up and welcoming members into your plan? Do your employees think compliance is an obstacle to be circumvented or a process to be embraced? Making that transition occurs by showing the "why" behind the action. How does what they do, both individually and as a department, impact our members? What is the logic behind why the Centers for Medicare & Medicaid Services (CMS) requires that activity? What they do is important, and making sure they understand all the reasons why makes your vision their vision.
- Have the Right Tools — Manual work-arounds and systems that have been duct taped to manage Medicare Advantage and Part D cause most of us the greatest headaches and compliance failures. There is no magic wand to resolve this—it takes diligence, documentation, and prioritization on a continual basis to raise up the next critical system needing to be resolved. Have your list of things needing to be fixed, the additional costs associated with the status quo, and the member impact ready and on the enhancement list.
- Provide Measurable Results of Success and Failure — Have a highly-visible way to measure individual and team success and failure. Successes should be celebrated. Share the successes and bring the feedback to your team. Failures should be evaluated—it isn't about the "who did it" but about the "why it happened." Everyone should be focused on mitigation. One of the items the audience discussed is ensuring you eliminate a culture of fear so staff is engaged in reporting non-compliance so it can be addressed. When non-compliance is identified, embrace it and thank those who raised the issue. Let them know how this positively impacted the department, company, and members.
- Manage Up — Sometimes we in management are the biggest barriers to compliant operations. We look at the production numbers and don't focus on the compliance measurements. We only give senior management what they ask for—it is our job to make sure the critical metrics and measurements go up to senior management. They often don't know the right questions to ask or measurements to review, and it is our job to bring this forward—it protects the company and our members.
We all have a part to play to ensure efficient, compliant operations are in place for our members. It takes 100% commitment to make sure the vision is carried forward. At Gorman Health Group, we know how important it is to link compliance and productivity. We are available to join with you to ensure that vision is firmly established in your organization. Please contact me directly at jbillman@ghgadvisors.com.
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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 >>
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3 Key Aspects from State of Compliance
They say people fear public speaking more than death. I can tell you from public speaking experience, it is far preferable than death (though if you could bring me back like the red witch did Jon Snow, that could be one heck of a ride). Having an audience of friendly faces is also a huge help when presenting. Today, I share highlights from a recent speaking engagement on the state of compliance. For the sake of time, I boiled it down to three key sections: audits, readiness initiatives, and compliance reviews.
- We are bearing witness to CMS' continual changes to Program Audit layouts and processes. We know more clarifications are to come, and it is our role to keep our clients armed with the most up-to-date knowledge based on our individual experiences and interactions. We shared some common conditions as seen by Gorman Health Group as well as some ideas for addressing low-hanging fruit. For example, audit prep goes a long way with putting your best foot forward when presenting data. This is where penny-wise, pound foolish comes in. If you do not invest the time now to prepare, you could pay for it in the long run. Another recommendation is to evaluate member letters for comprehension. If you have a member advisory panel, show them some denial rationales and get real feedback. If they don't know their next step to getting their drug or service reviewed again, it's a problem. I raise this because, in my experience, this has been an issue for over a decade.
- There are a number of non-audit activities CMS so kindly makes available to the industry, and they come in the form of readiness assessments, reviews, and checklists. CMS may evaluate applicants new to the market for their preparedness to determine how far along they are in supporting all those Part C and Part D attestations submitted with an application. Under the financial alignment initiative, a readiness review is performed on each and every Medicare-Medicaid Plan that comes to market. Finally, all Sponsors are on the receiving end of CMS' annual readiness checklist. CMS gives you the tools; we are always enlightened when we see what folks do with them.
- Finally, we focused on compliance review results of issuers in the Federally-Facilitated Marketplace. CMS shared these findings via report, and the results were not kind. Policies, agent training, notice errors, and contract issues plagued the results. And with the good faith policy ending at the close of 2015, this means civil money penalties can be leveraged this year, and past performance will be taken into account.
It's a struggle to boil down valuable industry insight for a presentation, since I risk leaving no time for audience questions, and it's even harder to pare down a blog post. Luckily, I can take questions at any time. I won't close with Game of Thrones' most popular Stark family tagline but instead with a sentiment from Ser Davos: "Loyal service means telling hard truths." We share our perspective of those hard truths in the service of our clients, who in turn are in the service of beneficiaries, the people who matter most. Email me at rpennypacker@ghgadvisors.com.
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Medicaid Final Rule Aligns the Program with MA and Exchange Regulations
The Centers for Medicare & Medicaid Services (CMS) issued the final Medicaid "mega-rule," a huge regulation that makes changes to every part of the current managed care rules. Although the final rule makes some tweaks based on the comments received from the industry, it largely adopts the proposals released last May. The new changes will be phased in over the course of three years, with some provisions going into effect starting July 1, 2017.
The new regulation, in essence, brings Medicaid managed care into the 21st century. Many of the new changes align the Medicaid program with Medicare Advantage (MA) and Exchange regulations currently in place. The rule encourages efficient, realistic use of limited resources, creating more incentives to improve clinical outcomes, reduce cost, and improve benefit coverage. Below is a synopsis of the major changes in the final regulation:
Medical Loss Ratio (MLR)
The final rule directs states to comply with a federal MLR standard of a minimum 85%, with a one-year reporting year. The new MLR requirement begins with contracts starting on or after July 1, 2017. This does not prevent states from setting loss ratios higher than 85%, however. Several states already impose MLR standard on plans, and many plans are already in compliance or close to an 85% MLR, so the impact of this new regulation is uncertain. Time will tell if the imposed 85% MLR will be effective as a way to standardize the varying state rules. CMS estimates the federal government would collect from $7 to $9 billion over a span of two year from plans failing to meet the ratio.
While the calculation details largely align with MA, CMS did make some slight variations in order to account for program differences between Medicaid/Children's Health Insurance Program (CHIP) and MA. The proposed rule also originally suggested fraud prevention activities would be included in the MLR calculation, however, decided since MA and the private insurance industry have yet to adopt this, the new regulation would read that Medicaid will adopt fraud prevention activities when the private market does.
In addition to the development of the MLR, CMS is requiring more transparency and fairness between health plans and States in the rate setting process — this will mean a closer look into how health plans and States are utilizing government funds.
Quality Rating System (QRS)
CMS plans to develop a Medicaid and CHIP QRS, similar to the one currently being implemented in the Exchanges. The new system will align with Exchange indicators but will retain flexibility to use different measures in order to reflect the differences in populations served by Medicaid/CHIP. CMS will expand on the methodology it plans to use in a forthcoming proposed regulation and expects to implement the QRS over the next five years. Overall, the major quality provisions of the rule all work to increase plan transparency of quality information, making it more available to the consumers and to facilitate identification of high risk members with special health care needs. States will also have the option of waiving out of the federal QRS and establishing their own, as long as it is substantially similar.
Quality Incentives
CMS also included several avenues in which states can now develop quality incentive systems in order to move forward with delivery reform and the movement toward value-based care, similar to the MA and Exchange spaces. States can now enter contractual agreements with plans in which plans agree to work on delivery system reform and performance improvement activities. This will be especially helpful in managing members in need of long term services and support and/or have special health care needs. States can also include value-based purchasing agreements that would tie provider reimbursement to performance on quality measures. Finally, states can develop other incentive and penalty arrangements to reward plans meeting quality or performance.
Marketing
CMS is updating the marketing standards in order to provide more beneficiary protections due to both the creation of Qualified Health Plans (QHPs) and the changes in managed care delivery systems in the past decade. For example, the new regulation updates rules on the use of mail, email, and websites. The final rule also requires plans to regularly update provider directories and drug formularies and make these readily available. The final rules also codify accessibility and anti-discrimination rules. The new rules greatly align with MA and the Exchange.
Appeals and Grievances
This is yet another area in which CMS streamlines the process with MA and the Exchange. The new regulation sets clear timelines, definitions, and guidelines for the appeals and grievances process and sets an expedited appeals process. Plans will need to ensure completion of the new required turnaround times for requests for external review; availability of case file medical records, and other documents used to conduct coverage determinations to the member; and documentation of notices and recordkeeping. Enrollees will now also be required to use the new internal process before utilizing state fair hearings.
Network Adequacy
Though CMS leaves network adequacy details up to the states, it does direct states to establish time and distance standards for primary and specialty care, behavioral health, OB/GYN, pediatric dental, hospital, pharmacy providers, and Managed Long Term Services and Supports (MLTSS). States will be required to certify the adequacy of the network at least annually or if there is a substantial change in the program design.
Actuarial Soundness and Rate Setting
CMS established and updated its rate setting procedures in order to bring clarity and ease to setting and reviewing Medicaid managed care payment rates. Currently, rates must simply be "actuarially sound." The new regulation defines actuarially sound rates as "rates that are projected to provide for all reasonable, appropriate and attainable costs under the terms of the contract and for the time period and population covered under the contract." CMS also set standards that capitation rates must meet and that CMS will apply in the review and approval of actuarially sound capitation rates.
Fraud Prevention
CMS also updates procedures to prevent, monitor, and identify fraud, including internal monitoring, audits, and mandatory reporting to CMS. The new rules include procedures for suspending providers when fraud has been alleged. The rule leaves some rulemaking to the states, however, states will need to submit a plan to CMS on how they intend to recover discovered fraud, waste, and abuse.
As previously noted, the final regulation makes changes to virtually every part of Medicaid Managed Care regulations and makes many more updates than we have gone into here. However, the big takeaway is many of these new regulations bring the Medicaid program up to date by borrowing from the successes and lessons learned from the MA and Exchange spaces. Plans would be well served to educate themselves on successful MA and Exchange plan compliance strategies and operations going forward in order to prepare themselves for the upcoming changes.
Resources
Let the team of experts at Gorman Health Group (GHG) help you prepare for the upcoming changes that could impact your organization. GHG's risk adjustment experts can help analyze the financial impact, develop feasibility models to help with meeting the new MLR requirements, and provide guidance on streamlining operations. GHG's Compliance Solutions can assist in the development and monitoring of these new contract requirements, and our clinical team can assist with reviewing and developing integrated care models to provide quality initiatives that are effective and efficiently managed to get optimal results.
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The ABCs of Member Satisfaction
Member satisfaction. Customer centricity. Member retention. Consumer experience. Regardless of the term used, the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) survey measures continue to be the common denominator by which the Centers for Medicare & Medicaid Services (CMS) measures a health plan's success, creating a positive member experience. CAHPS® survey responses now represent 16% of a Medicare Advantage (MA) plan's overall Star Rating, and an additional 33% is comprised of member-reported health outcomes and administrative measurements of member access and experience. With approximately 50% of the overall Star Rating now driven by some element of the member's experience, many health plan leaders now better appreciate the value of consistently providing members with excellent service and a positive experience.
I recently had the pleasure of listening to a group of members from a variety of MA plans share their health plan experiences with industry leaders. Though health plan discussions regarding member experience are often abstract and very general in nature, listening to the experiences of actual members is always a refreshing way to remind ourselves not only what a privilege it is to service the healthcare needs of Medicare beneficiaries but also how emotionally our "routine hiccups" impact members. Not surprisingly, this group of MA members shared stories that illustrate we've still got room for improvement in our quest to create a 5-star customer experience. The experiences of these members spotlight some of the ABCs for a successful member experience:
Access — When members discover providers with closed panels, struggle to make timely appointments with physicians, experience arduous referral or service authorization requirements, or are unable (even if only temporarily) to obtain medications at the retail pharmacy, we reduce the likelihood of the member reporting positive experiences with our plan on their CAHPS® survey. Because many problems have multiple and/or multi-layered root causes, use of a technique such as the "5 Whys" can efficiently and effectively support root cause analysis of issues so impactful improvements can be rapidly deployed.
Better Communication — Many plans struggle to effectively communicate with members and often compensate by over-communicating to members, particularly via low-cost channels such as mail and IVR. By carefully crafting outreach strategies, letters, mailings, and scripts and using each member's preferred communication channel(s), plans can improve the effectiveness of their communications and demonstrate customer-centricity to members.
Coordination and Clinical Context — During the early years of Star Ratings, many plans deployed measure-specific tactics and interventions which were often conducted by disparate teams. In many cases, such tactics were implemented without anyone "connecting the dots" to ensure such strategies passed the "common sense" test from the member's perspective or that such tactics were appropriate within the clinical context of the member's overall health status. By strategically planning and developing outreach scripts and workflows, leveraging Health Risk Assessment (HRA) and claims data, and developing effective business rules through which to identify member interventions, plans can identify the right intervention for the right member at the right time.
Determination and Decision-making — Organizations with a sustained, strong customer experience are intensely focused on consistently making decisions that deliver value to their customers and meet customer expectations. This requires persistent determination, particularly as problems arise which necessitate process improvements or additional resources to resolve. Transforming a health plan into a consumer-focused organization with strong CAHPS® measure performance often requires a new or refreshed consumer focus within each operational area (from benefit design to care management to customer service to sales/marketing) supported by an effective customer experience leader and customer experience governance structure.
The member experience will continue to be a necessary core competency as the industry evolves over the next few years. Gorman Health Group (GHG) understands this can be challenging, both logistically and politically.
Whether your plan needs help establishing an effective member experience or member communication strategy, cataloging and evaluating existing member communications, or identifying opportunities to streamline and strengthen the return on investment from existing materials, tactics, or interventions, we can help. For additional questions and inquiries about how GHG can support your organization's member experience efforts, please contact me directly at msmith@ghgadvisors.com.
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Today you need to identify opportunities to increase your score for next year, 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 >>
Our distinguished team of experts collaborated to provide our interpretation of this announcement and the key features that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Download our full Summary & Analysis of the Final Rate Announcement & Final Call Letter >>
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Where is Healthcare Now? The Long March to Value-Based Care.
"Why won't the Centers for Medicare & Medicaid Services (CMS) let health plans gather some health information at the point of sale?
How is CMS going to use the data they are collecting?
What is CMS going to do when the first round of Accountable Care Organizations (ACOs) comes to an end?"
At the Gorman Health Group 2016 Forum in Fort Worth, these and other questions were on the minds of our clients. It can be challenging to guess what the agency will do going forward in an election year when the water is choppy. But that forecast is a critical factor in your planning.
In "The March to Value-Based Payment," I described something that is a long march indeed. The Republican-driven Medicare Modernization Act of 2003 ushered in the attenuation of payments to hospitals, first for quality reporting and soon after for quality results. Then, the Affordable Care Act driven by the Democratic Obama Administration doubled down on this "good government" approach. The program was extended to more provider types, outcomes and efficiency were added to the measures, and we began to see downside risk associated with less-than-average performance.
Under the provisions of the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), physicians and other practitioners will face a Hobson's choice: live with a more aggressive risk-based adjustment to payments or join forces with an alternative delivery model, like an Accountable Care Organization (ACO), that is taking risk. The goal moving forward is to render unto Caesar what is Caesar's: the government is willing to bear the risk associated with each patient's demographic characteristics and health history. They will render unto providers the risks of inefficiency and poor performance. This could encourage more doctors to choose alternative payment models like ACOs or to affiliate with Medicare plans. Are you ready?
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The Gorman Health Group 2016 Forum concluded last week with over 200 of our closest clients and partners. There was great news and rough news, so here are a few takeaways >>
Our distinguished team of experts collaborated to provide our interpretation of this announcement and the key features that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Download our full Summary & Analysis of the Final Rate Announcement & Final Call Letter >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Takeaways from the Gorman Health Group 2016 Client Forum
The Gorman Health Group 2016 Forum concluded last week with over 200 of our closest clients and partners. There was great news and rough news, so here are a few takeaways:
- The playing field of government programs continues to expand rapidly, with improving revenue outlook across the board:
- We're sticking by our projections of over 29 million Medicare Advantage (MA) enrollees by 2023, driven by more positive rate trends and a plan-friendly baby boomer tsunami underway.
- Six to eight more states expand Medicaid — once President Obama leaves office.
- Significant enrollment gains for dual eligibles as home and community-based services (HCBS) waivers and managed long-term services and supports (MLTSS) initiatives become the new normal. We expect dual eligible special needs plan (D-SNP) enrollment to double and exceed 4 million by 2019.
- Rising ObamaCare enrollment, albeit slowing and below projections, as more difficult-to-reach populations remain outside coverage.
- During the Forum, United announced its departures from most ObamaCare Marketplaces. We characterized the news as a nothingburger in terms of enrollment or market impact but huge symbolically and politically. We expect another two to three messy years sorting out the pricing and finances of the Marketplace business, with membership reconciliation and cleanup of membership discrepancies front of mind for issuers.
- Risk Adjustment Data Validation (RADV) audits will begin to be conducted in MA — 2016-2018 will be the first time we see plans prosecuted under the False Claims Act and hundreds of millions clawed back by the Centers for Medicare & Medicaid Services (CMS) for unsubstantiated codes submitted for higher payments.
- Clinical and pharmacy data integration and strong provider partnerships around person-centered care were clear priorities in medical management, Star Ratings improvement, and Pharmacy Benefit Manager (PBM) oversight.
- The Star Ratings system of performance-based payment drives the payer and provider markets. This year will be the first year where plans below 3 stars are terminated. It's also when another 180+ MA plans will be scored for the first time, diluting ratings for existing plans, especially those at 4+ stars and denying many their bonuses and rebates in what promises to be an ugly "October Surprise."
- The turbulent Presidential elections will likely be won by Hillary Clinton, promising continued gridlock with a likely weakened and more polarized Congress. This means CMS will increasingly fight out policy changes "below the waterline" in subregulatory guidance and enforcement, where politicians are less likely to intervene. That means more surprises for plans not paying attention.
- Appeals and grievances and pharmacy benefit management vendor performance remain the #1, 2, and 3 regulatory infractions in MA and integration of long-term care and supports and services the leading challenge facing Medicaid health plans.
- CMS is on pace for its most aggressive enforcement year ever, with over a dozen actions taken against plans this year already.
As we've said since the passage of the Affordable Care Act, we are now in the Golden Age of government-sponsored health programs, and the opportunities and challenges that come with this shift have never been greater. Our clients went home with a clear grasp of both, and we are thrilled so many joined us this year.
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Our distinguished team of experts collaborated to provide our interpretation of this announcement and the key features that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Download our full Summary & Analysis of the Final Rate Announcement & Final Call Letter >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
CMS Addresses Risk Adjustment Methodology
It was great to see so many people attend the HHS-Operated Risk Adjustment Methodology Meeting in person last week at the Centers for Medicare & Medicaid Services (CMS) headquarters in Baltimore, MD. My blog from the end of March, which can be accessed here, addressed many key points from the HHS-Operated Risk Adjustment Methodology white paper CMS published on March 24, 2016, in preparation for the March 31, 2016, meeting. The intent of the meeting was to discuss the white paper and for CMS to receive initial feedback from the public regarding it. As stated by CMS, "Today is the beginning of the discussion, not the end."
At the March 31 meeting, the presentations and discussions throughout the day were engaging and welcoming to new ideas coming from participants. It was a forum that allowed for open dialogue and questions, which is exactly what the Health and Human Services (HHS) risk adjustment process needs at this point. CMS answered questions submitted from in-person and remote participants. All questions and answers from the session will be posted on REGTAP in the coming weeks. The questions asked spanned the spectrum from how CMS is going to ensure issuers cannot game the system to algorithm calculation adjustments. It was an insightful and interactive discussion between all participants. Donald Trump was even brought into the discussion at one point throughout the Q&A session.
The stabilization of the commercial market without the use of the underwriting process has been quite the struggle. CMS addressed the 2014 transfer payments that occurred and reconfirmed, as they did in the white paper, the risk adjustment process, inclusive of calculation and transfer payments, worked as it was intended. From this point forward, CMS is focused on ensuring the methodology utilized increasingly gets smarter each year. Pretty much, the age-old idiom "practice makes perfect" stands true. CMS is using the data available to refine and "practice" new modeling methodologies to ensure a "perfect" process is in place to stabilize the commercial market. There were some fantastic modeling methodologies discussed. The discussion around creating two different risk adjustment models, one for the individual market and one for the small group market, was one of the best options proposed. It became very evident from the 2014 results that the small group market thought process about purchasing health insurance is different than the individual market, and thus requires certain adjustments. For instance, the contract periods for a small group do not follow the same January 1 - December 31 time period as the individual market. Because of this different modeling, methodologies may need to be applied to account for the shorter time period. A lot of health plans conducted "early renewal" in 2013 for their small groups. In turn, the small group market experienced having risk-adjusted members the last quarter of 2014, which is not a good representation of the experience. The year 2015 will provide more accurate results in which to give a better perspective of the market.
The option to have the commercial market function on a prospective risk adjustment model is not a viable option due to the timing lag. It would inadvertently make the market less stable than it is now. The concurrent model currently used is the best option. The data utilized to create the normalization factors and coefficients will continue to get smarter as the years progress.
There is overwhelming support to include prescription drugs into the analytics and calculation for risk adjustment. Just as much support as this topic is receiving, there is also just as much concern, and rightfully so. It's logical to have prescription drugs included in the risk adjustment model, but in reality, what does that really mean? It means, for certain prescription drugs, CMS will be able to relate that drug to a chronic condition, and, thus, that chronic condition Hierarchical Condition Category (HCC) factor can then be included into the plan-level risk score (PLRS) calculation. Again, makes complete sense. It's a way to "close a gap" so many health plans strive to do on daily basis. Now think about the operational adjustments and questions that need answered in order for something like this to work:
- What chronic conditions are going to be included?
- Is there a clear definition for prescription drugs?
- How will the HHS Risk Adjustment Data Validation (H-RADV) audit have to change to account for prescription drug validations?
With further research and analysis, this is a process that, I believe, will come in time. CMS has already planted the seed they would start to introduce prescription drugs into the risk adjustment calculation slowly, starting with a relatively small drug class focusing on adults only. CMS has not begun looking at the child and infant risk adjustment models to understand the impact.
Risk adjustment is a hot topic in the industry. It's an extremely complex process with a lot of hidden nuances that need to be taken into consideration. Those in the healthcare industry today get to experience the great paradigm shift that has occurred. We are living and breathing it every day. Whether you are a health plan, Pharmacy Benefit Manager (PBM), physician, certified professional coder, or even a member, you are impacting the process of transforming the healthcare operations of the past to pave the way for a better healthcare experience in the future. It's an exciting time in healthcare, and I, for one, am grateful to be able to assist clients through this difficult transformation of establishing operational processes embedded with risk adjustment best practices.
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