CMS Proposes New Part B Prescription Drug Payment Model
On March 8, 2016, the Centers for Medicare & Medicaid (CMS) released a proposed rule which aims to test a new alternative payment design to pay for drugs covered under Medicare Part B. Medicare Part B covers prescription drugs administered in a physician's office or hospital outpatient department. Currently, covered Part B drugs fall into three categories: drugs furnished incident to a physician's service, drugs administered via a covered item of durable medical equipment, and other drugs specified by statute.
CMS found Part B payments for separately-paid drugs in 2015 were $22 billion, amounting to an average annual increase of 8.6% since 2007. Additionally, a new report from ASPE found drug price increases and a shift to prescribing more expensive drugs account for 30% of prescription spending growth.
Currently, most Medicare Part B drugs are paid using the Average Sales Price (ASP) plus a statutorily mandated 6% add-on. This creates an incentive to prescribe more expensive drugs due to the higher payment amount. Under the new model, Medicare Part B would pay the ASP plus an add-on of 2.5% and a flat fee of $16 per drug per day. The lower add-on and inclusion of the flat fee would decrease the incentive to provide more expensive drugs as the revenue for the drugs would be more evenly distributed.
CMS is proposing to introduce the new reimbursement program in select geographic areas in the fall of 2016. CMS will then roll out the second part of the experiment in which they will test several other pricing methodologies currently utilized by commercial health plans and pharmacy benefit managers. Some of these tools are: discounting or eliminating cost-sharing, providing feedback on prescribing patterns and decision support tools, basing pricing on a drug's clinical effectiveness, and setting benchmarks for a group of therapeutically similar drug products.
The experiment will run for five years, with the Part 2 phase running the last three years. The evaluation will focus on whether the experiment reduces Part B drug spending, without limiting coverage or benefits, while maintaining or improving patient care.
Although all providers furnishing Part B drugs will be required to participate, some would be placed into control groups and will remain under the 6% add-on payment.
While CMS announced this new model would provide relief for certain providers, by relieving the pressure to provide higher cost drugs when they are not appropriate, the industry has already dealt out criticism for the new proposal, and CMS is bound to receive many comments on the new payment model. However, the private industry does already use "value-based pricing," and CMS is seeking to use a similar methodology to bring costs down while maintaining value. CMS is accepting comments on this proposal until May 9, 2016.
Resouruces
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
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Four Easy Ways to Lose Revenue
Times are busy. We are all doing more with less these days. Sometimes we don't put processes in place to make sure functions continue when our focus is elsewhere. Here are four easy ways you could be losing revenue:
- Member Experience and Claims Payment: Not storing all diagnostic codes for your provider and facility claims. Similar to working edits, if you have not reviewed your claims system to determine if it is accepting all diagnostic codes that come in on an electronic provider or facility claim, you don't know if you are capturing everything you need. If your system is dropping diagnostic codes, you could be dropping appropriate reimbursement for impacted members. John Gorman, Founder and Executive Chairman at Gorman Health Group (GHG), recently commented on the importance of the member experience in a new article stating, "Now more than ever, it's clear to us health plans and their stakeholders will thrive or die based on the member experience they provide."
- Reconciliation: Not working Prescription Drug Events (PDEs), enrollment edits, or risk adjustment and encounter data claims and enrollment edits. Payments for Part C and Part D are based on information from the services members receive. If you don't have a good process in place to ensure all edits are resolved, you are more than likely leaving money on the table.
- Hospice and Claims: Not having a tie between your claims system and hospice determinations. Hospice services are a carve-out for Medicare Advantage (MA). Typically, hospice providers don't bill for hospice-related services. Other providers may bill you for Medicare-covered non-hospice-related services. If your system is paying for those services, you are paying too much.
- Medicare Secondary Payer (MSP): Not managing your MSP members. MSP impacts both premium received and the payment of claims. If you don't have processes in place to validate each MSP designated member, and either correct discrepancies with the Coordination of Benefits Contractor (COBC) or set up your system to pay secondary, that mismatch is costing your plan money.
In busy times, it can be difficult to monitor everything. Establishing procedures and controls in order to manage these processes without interruption is critical to the success of your organization. Our multi-disciplinary team of consultants knows how to set up the right controls to keep your department running in an efficient, productive, and compliant manner.
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas.
During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth.
Specifically, attendees can expect from my presentation practical strategies for combining productivity and compliance in your Operations Department while gaining real-world examples of the holistic management of compliant Operations departments.
The preferred room rate expires on Monday, March 28, 2016. Register now >>
Resources
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MA Plans' Must-Fix: the Member Experience
Now more than ever, it's clear to us health plans and their stakeholders will thrive or die based on the member experience they provide. The member experience, especially with drug benefits, now represents more than half of a health plan's Star Rating in Medicare Advantage (MA), with millions in bonuses and bid rebates hanging in the balance. It also drives member retention and thereby acquisition expense (now averaging $1,200 per/member, or more than an average month's premium), so how members are treated now determines both health plan revenues and costs.
Overall, the member experience in a Medicare plan is defined by an enrollee's ability to get timely appointments, care, and information, how well providers communicate, and whether member-facing health plan and provider staff are helpful, courteous, and respectful. It's driven by the company culture, its commitment to communication, and the empowerment of staff to solve problems. And despite two-thirds of plans saying the member experience is their top investment priority, we are losing ground.
In a few short years, the Star Ratings system has evolved from a crappy consumer information tool to a multi-billion dollar pay-for-performance (P4P) initiative investing in improved processes and outcomes of care in MA. In 2016, the scoring methodology for Star Ratings ensures the member experience measures, especially in Part D, count for more than half of a plan's rating. It also narrows the margin for error, so only a 10% deviation in performance on the critical Consumer Assessment of Healthcare Providers and Systems (CAHPS®) is the difference between a 2-Star Rating and a 4-Star Rating.
On an enrollment-weighted basis, MA averages a 4.03 rating, with 49% of contracts (179) and 71% of members in plans over 4 Stars. But on CAHPS®, the program dropped from 3.45 Stars in 2015 to 3.4 Stars this year. That's a big problem threatening to drag the program back below the all-important 4th Star and, taken in context of other recent data, gets downright scary.
Last week our friends at Deft Research released their latest Seniors Shopping survey on the 2016 open enrollment period. They found that for the first time in recent memory, far more seniors are leaving Medicare Advantage for Medigap than vice-versa.
On virtually every measure, they found declining loyalty to and retention with their health plan. That says a lot about the state of the member experience in MA despite the priority and focus. It says we're missing the point.
Meanwhile, Alegeus Technologies had some incredible findings in their annual health plan consumer survey presented at the recent AHIP conference. First, they found half of members (50%) do not want to "play an active role" in their healthcare. This argues plans' investments in "member engagement" may be backfiring with half their enrollees. And there was widespread confusion in what they're paying for, possibly delineating why appeals and grievances processing remains the top compliance challenge for plans:
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66% of members think they're not paying the right amount
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56% complain they don't know how much they are spending until after they receive services
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45% of members say they simply do not know much they spend even after getting a bill
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45% say they never know what is covered
All of this says the way we think of and invest in the "member experience" needs rethinking.
It reminds me of the seminal 2014 behavioral economics study that found that happiness is defined by expectations being exceeded a little bit on a regular basis. Because expectations are variable, everyone can be made happy. That begins during the marketing and sales process and continues throughout the member lifecycle.
Moving to proactive service models is only the beginning. Only half our members want to be involved — the rest are disappointed and confused enough to be leaving in growing numbers to join inferior and more expensive products. They need help navigating provider networks, better understanding of how to use their benefits, and what to expect in out-of-pocket spending in real time. They need in-plan service ninjas empowered to solve their problem on the first call. They need Pharmacy Benefit Managers to get it together and health plans to advocate and agitate for members with their vendors. They need constant improvement in the member experience to be the new normal in government programs.
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
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Another Health Plan Cuts Commissions — Is there a trend developing?
Is there a trend developing with health plans and their offerings under the Affordable Care Act (ACA)?
Raising rates, high-risk members, and cutting agent commissions continue to be challenges for all health insurance companies offering plans under the ACA. Some of the big plans still in the game say it's too early to bail out, and they see the ACA as a big opportunity. But late last year, one of the largest health plans announced they would be pulling out of the ACA business. Following this news, multiple non-profit Co-Ops announced their closure, and, most recently, another large health plan providing ACA products is following suit, announcing late February they would be cutting commission on sales of individual health plans. We can all agree changes in the structure of the individual market need to happen, but how fast can these changes be made and still accomplish profitable enrollment goals?
With fewer options, will agents still be a necessary resource for the prospect?
In the last year, we have seen several health plans pulling back on their marketing and reducing the number of choices for the consumer. It appears health plans are still trying to figure out how to price the products and if they should pay commission to agents or have the prospects use online tools to navigate their health care options. Meanwhile, agents are left with less in their pockets and wondering if there is still an opportunity for them in the ACA.
If agents generally sell plans within the Marketplace, and these continue to dwindle, where will that leave the agent? With the uncertainty of how big plans will navigate the complexity of the ACA, it is anticipated that agents will redirect focus to Medicare for 2016:
Reason #1 — No doubt the Medicare space offers unprecedented opportunity! With the growing number of Baby Boomers, health plans and agents continue to see limitless earning potential (nearly 10,000 people turn 65 every day).
Reason #2 — Commissions for Medicare Advantage (MA) are typically paid on application submission for some of the large plans and include lifetime renewals, which means agents and agencies get paid as soon as an application is submitted, and, after 13 months of enrollment, the agent and agency receive a prorated monthly commission for the life of the policy.
Reason #3 — Year-round selling opportunities. These days, it's not just about the open enrollment period — many agents find a great deal of opportunity with the dual-eligible (Medicare and Medicaid) population, as these individuals can enroll year-round.
Don't get distracted by the ACA crisis, focus your time and energy on building a sustainable business in Medicare. For more information about Medicare, Field Marketing Organizations (FMOs), and year-round selling opportunities, please contact:
Carrie Barker-Settles
Director, Sales & Marketing Services
Gorman Health Group
cbarkersettles@ghgadvisors.com
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Gorman Health Group's Sales Sentinel™ provides a platform for organizations to onboard their agents, adapt to any oversight program, as well as generate commission payments. To learn more about Sales Sentinel™ or to request a demo, visit our website >>
CMS' Recent Enforcement Actions Show Agency Means Business in 2017
As we predicted, the Centers for Medicare & Medicaid Services (CMS) is off to an aggressive start on the compliance front in the last year of this administration and shows no signs of slowing down with $832,250 worth of fines levied in the month of February alone. The list of enforcement actions released comes with even graver announcements of two immediate suspensions of enrollment and marketing for the year. These fines augment two huge penalties with which CMS closed out last year − $3.1 million and $1.3 million.
In recent news, CMS did announce it will revise its policy of automatically reducing the Star Rating of sanctioned contracts to 2.5 stars. Effective immediately, CMS will suspend this policy, and will re-examine its approach in the 2018 Call Letter. This is a bit of good news for plans currently suspended from marketing and enrollment activities.
From the Medicare Advantage (MA) Advance Notice and Call Letter, we glean further insight into CMS' agenda for 2016. CMS stressed its commitment to improving beneficiary protections for 2016. CMS stressed its plan to increase severity of compliance and enforcement actions in Parts C and D. Particularly, CMS pointed out their commitment to increase the severity of compliance and enforcement actions for Part D auto-forwarded cases, as they saw no significant reduction in the volume of Part D auto-forwarded coverage determinations and redeterminations in the past several years, despite continued warnings issued to organizations. CMS' warning also extends to audits and enforcement actions in network adequacy, provider directory adequacy, and medication therapy management programs.
Given this strong warning, it is no surprise most of the civil money penalties (CMPs) levied in February were due to audits of benefit administration in Part D which showed "inappropriate delays of Part D benefits and increased out-of-pocket costs." Several fines were also levied on Part C appeals and grievances and benefit administration.
Enhancing its theme of focusing on getting plans to tighten up their compliance programs, CMS will issue a memo of their interpretation of methodology for CMPs given the large amount of questions CMS receives related to CMP calculations, not so coincidentally, right before an audit.
CMS has also added a new avenue for enforcement actions — one-third financial audits. CMS is required to conduct these audits for 30% of MA plans each year and has announced they will move to include these in enforcement actions, including CMPs and sanctions, and not just corrective action plans.
If you think 2015 was bad with over $13 million in fines, 2016 is poised to be a record year for enforcement actions. If you're not ready yet, now is the time to cross your t's and dot your i's and get your compliance program in order and prepared for what is positioned to be a busy year.
Resources
GHG's renowned team of experts collaborated to provide the key features and implications of the 2017 Advance notice and Draft Call Letter for your organization in 2017 and beyond. Download our full summary and analysis >>
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Provider Directory & Network Adequacy Highlights in the 2017 Draft Call Letter
The Centers for Medicare & Medicaid Services (CMS) has emphasized the wide-scale monitoring efforts underway with respect to network adequacy and provider directory monitoring and the direct impact it has on not only the plan's ability to provide timely and adequate access to care, but the impact it has on the decision-making ability of the beneficiary and/or their caregiver to select the plan that best meets their needs.
While the new release cycle will affect CMS' ability to have gathered enough feedback and information to finalize the 2017 Audit Protocols, the Provider Network Adequacy (PNA) pilot is still at the forefront for CMS according to the recent release of the 2017 Medicare Advantage (MA) Advance Notice of Methodological Changes and Call Letter. Plans have a key opportunity to do a deep-dive into their provider networks and the policies and procedures governing their network, such as provider terminations, and prepare a monitoring protocol that will not only meet compliance but also take steps towards the future of network management that includes ensuring data integrity for the plan and its members.
It was previously anticipated the PNA would drive the sample of providers used to evaluate directory compliance. The 2017 Draft Call Letter indicates the opposite, noting specifically the data collected during the monitoring process could drive additional reviews of network adequacy as well as future monitoring and/or audit-based activities. CMS has given plans the ability to develop innovative pathways to ensure directory accuracy. Plans will need to close the loop and ensure interoperability between all systems, including those such as Health Services Delivery (HSD) tables and programs used to formulate both online and printed directories, to have a true impact on the data integrity presented to CMS and to their members.
Additionally, CMS continues to move in the direction of a uniform evaluation for both PNA and provider directories across all government-sponsored health plans. Given the fact Medicare Advantage (MA) plans currently have the fewest data elements required for provider directories and the least restrictive reporting requirements for network adequacy, plans should anticipate the need to augment the information they collect on providers, and, as with the requirement to submit your entire network during a service area expansion, gear up for more stringent network review requirements.
At Gorman Health Group, we have experts who have worked directly with managing provider networks and adequacy for over 20 years, including detailed analytics such as specialty code mapping and software, which is critical in building the infrastructure needed to fully support the quality and financial goals the network brings to your health plan.
If you have questions regarding the recent regulations proposed in the 2017 Draft Call Letter for MA and Part D around provider and network adequacy, please contact me directly at emartin@ghgadvisors.com.
Resources
GHG's renowned team of experts collaborated to provide the key features and implications of the 2017 Advance notice and Draft Call Letter for your organization in 2017 and beyond. Download our full summary and analysis >>
Listen to John Gorman's recent podcast on his top line observations from the 2017 Draft Call Letter.
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
CMS gears up for major quality performance program overhaul for ACA program
The Centers for Medicare & Medicaid Services' (CMS') recent issuance of the 2017 Letter to Issuers in the Federally-facilitated Marketplaces and Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017 Final Rule affirms the agency's plans to elevate the importance and transparency of quality performance by Qualified Health Plans (QHPs). Despite the continued absence of financial incentives for high-quality QHP performance, CMS' approach to quality oversight for QHPs is looking much like the early years of the Star Ratings program within Medicare Advantage (MA).
Similar to the MA Star Ratings program, CMS will use a 5-star scale to assign a Quality Rating System (QRS) rating to each QHP based on validated clinical measurements and enrollee survey responses. This year marks the first year QHPs must display these quality ratings prominently to consumers on their websites during the open enrollment period. Public reporting of these clinical measurements and enrollee survey responses will not only offer both consumers and providers new insight into a QHP's clinical quality performance but will also spotlight the consumer's perception of the QHP's operations.
The Affordable Care Act requires QHPs to submit a Quality Improvement Strategy (QIS) for the 2017 plan year if they offered coverage through the Marketplace in 2014 and 2015 and meet certain additional criteria. CMS requirements for the QIS, which must be submitted during 2016 and implemented no later than January 2017, include implementation of:
- A payment structure that provides increased reimbursement or other incentives to providers or enrollees to improve quality and reduce costs by incentivizing high-value rather than volume-driven care, and
- At least one of the following:
- Activities for improving health outcomes;
- Activities to prevent hospital readmissions;
- Activities to improve patient safety and reduce medical errors;
- Wellness and health promotion activities; and/or
- Activities to reduce health and healthcare disparities.
Because strong quality performance is necessary for long-term viability, QHP leaders will likely set new quality-related performance goals and evaluate whether current operations may need to be adjusted to meet those goals. Achieving such goals amidst the ongoing industry evolution, within the competitive environment, and within budgetary constraints will require innovation and creativity. Fortunately, many QHPs can lean into their own organization's Star Ratings experiences, expertise, and successes to help with these efforts.
An increased focus on quality, enrollee experience, and outcomes within a QHP will likely require new, short-term resource investments. Investments may be needed in areas such as population health management tools and analytics; member outreach, support, and education; and provider education, support, and engagement. By collaborating with their MA colleagues, QHP leaders may be able to leverage and expand MA tools, tactics, and expertise to simultaneously avoid the "learning curve," minimize provider abrasion, and optimize outcomes through such investments. With careful planning and strategic deployment of resources, a QHP can leverage its short-term investments for long-term return on investment.
Whether your organization is developing a QIS for your QHP, seeking insight to help align your QIS with successful Star Ratings strategies and tactics, or needs help interpreting the quality data recently provided by CMS, we can help. For additional questions and inquiries about how Gorman Health Group can support your QHP quality programs, please contact me directly at msmith@ghgadvisors.com.
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
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Star Ratings: Moving the Needle
Now more than ever before, plans must streamline their Star Ratings programs to meet member expectations while encompassing all aspects of care delivery and breaking down internal silos. This requires innovation amidst a backdrop of the ever-changing Centers for Medicare & Medicaid Services (CMS) landscape. CMS continues to treat Star Ratings as an ever-evolving, dynamic measurement program that is consistently expanding to include challenging new clinical areas, the impact of socio-economic status on Star Ratings, and operational evolution within the risk assessment processes.
As CMS continues to introduce more medication-related measures into Star Ratings, as both Part C and Part D ratings, and evolves Medication Therapy Management from its current status as a process measure to a more impactful outcomes measure, highly-rated plans will continue to set a high bar for seamless, integrated, and holistic care management and coordination. Earning 4 stars will become more difficult without fully breaking down organizational and data-related silos and effectively communicating and engaging with providers.
Join my colleague, Lisa Erwin, and me at our annual Gorman Health Group Forum next month as we share best practices around optimizing the relationship of medication management (either in-house or via Pharmacy Benefit Manager delegation) with the "medical side of the house" for a more holistic approach to achieving Star Ratings success.
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Operations Mistakes Will Be Costly — Highlights of the 2017 Draft Call Letter
There was a time when operational areas were shooting for 98% accuracy as the "golden" number. In today's age of data and focused audits, even 99% may not be enough. The Call Letter doesn't have many surprising new risk areas for Operations. No new crazy regulations to ponder how we can possibly implement them. Instead, they have something worse: the addition of teeth to the new regulations. Why is this worse? Because the focus is on areas Operations and plans often struggle with and eventually accept status quo as good enough. How many times have you heard or possibly said, "What are our peers doing?" and used them as the measuring stick.
Some of the key focuses to keep operational eyes on are:
- One-Third Financial Audit Results — Don't skip this section thinking this is Finance and doesn't involve Operations. One-third financial audits are full of operational reviews with direct member impact. The Draft Call Letter is indicating, beginning with 2017, one-third financial audits for plan year 2015 will have potential enforcement action like civil money penalties (CMPs) assessed for findings with adverse beneficiary impact. The Centers for Medicare & Medicaid Services (CMS) specifically calls out increased or incorrect cost-sharing or copayments as items of concern. Reviewing your benefit setup and claims processing to ensure controls are in place for adequate application of copays is a fundamental process but one in which CMS is seeing discrepancies year after year. Plans should review their controls or Medicare Secondary Payer (MSP) processes, their provider fee schedule process, and their benefit setup processes to ensure beneficiaries are protected and benefit designs are operationalized each year as filed with CMS.
- Timely Processing of Coverage Determinations and Redeterminations — Your plan may delegate coverage determinations and possibly redeterminations, but whether delegated or processed in house, the plan is responsible. CMS is seeing a continued high volume of auto-forwards of coverage determinations and redeterminations to the Independent Review Entity (IRE) when these functions are not processed within required time frames. CMS is indicating they will be taking action against plans with high volumes—no waiting for an audit and a review of the results. CMS has the data to know there is a problem. Have you looked at your numbers? Do you know your auto-forward volumes? Better yet, do you know the root causes and mitigations to ensure there are no auto-forwards and no negative beneficiary impact?
- Data Integrity — Once again a misleading title that has big operational impacts. CMS is raising concerns CMS program audits are identifying issues that may impact Star Ratings data used for Star Ratings. CMS is indicating they are looking at tying audit findings to data submitted for Part C and Part D reporting and Star Ratings where the audit may have raised concerns. CMS is indicating finding issues within other reviews, such as program audits, may result in review of submitted data for Star Ratings. They are right—it is a holistic approach health plans should be using to get ahead of this curve. If during an internal audit at the health plan a finding occurred indicating grievances were under-reported, is there follow-through to reconcile that under-reporting and revise Part C and Part D grievance reports? In our often-siloed departments and processes, that type of follow through doesn't often occur.
We are all busy. Few of us in Operations have the luxury of focusing on one product or function. We are all trying to keep multiple balls in the air. But if we don't take time to evaluate, stabilize, and set up good controls, we won't survive unscathed. The last thing any of us want is an enforcement action that will take time and energy to resolve and will ultimately impact our members, resulting in most or all of the balls crashing down. Our multi-disciplinary team of consultants has been in your shoes—we have juggled the same balls and are ready to partner with you. Contact us to get started >>
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Final Rule: The Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017
The anticipation is finally over — the "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017 Final Rule" has arrived. This annual document provides health plan issuers the rules and requirements to develop plans and operational processes for the upcoming year. Since the Affordable Care Act (ACA) was enacted, health plans have been feeling the pressure regarding the premiums allocated to the Marketplace plans, coupled with staggering losses for this line of business with the elimination of the underwriting process, health plans have been receiving negative feedback from all angles. Now to layer onto that pressure, for 2017, two of the three stabilization programs — reinsurance and risk corridor — will no longer be included to provide health plans financial relief since the applicable timing for these programs has expired. To enhance the existing stabilization program, the risk adjustment model will be recalibrated using more recent data to reflect more closely with the commercial market risks experienced.
Some of the high-level changes reflected in the Final Rule are the following:
- Open Enrollment Period for 2017 and 2018 will continue to have the same dates as 2016, which is November 1 through January 31 of the following year. Starting in 2019, the open enrollment period will be shortened to start on November 1 and end on December 15 of the same year.
- Standardized plans have been introduced as an option for 2017. Issuers are not required at this point to utilize these standardized plans and are allowed to offer non-standardized plans if they choose, however, it is encouraged that issuers offer the standardized silver plans. Standardized plans are preferred by the Centers for Medicare & Medicaid Services (CMS) to allow the enrollee to have a better shopping experience on the Marketplace. It allows for a more apples-to-apples comparison of the plans offered. Therefore, because of the ease to enrollees, the Marketplace will arrange the plans to be found more easily. There are 6 standardized plans available to choose from. One for each metal level with the exclusion of platinum. The standard or "base" silver plan also has benefits aligned for each of the actuarial value (AV) plans that are utilized for the members that are eligible for the cost sharing subsidy. In total the silver plan ends up with 4 standardized plans and then 1 plan each for gold and bronze.
Each plan has a fixed deductible, fixed annual limitation on cost-sharing, and fixed copayment or coinsurance for the Essential Health Benefits (EHBs) that are a part of the actuarial value (AV) calculator, with the addition of urgent care. These benefits represent a large percentage of the total allowable costs for an average enrollee.
- Cost-sharing maximum out-of-pocket limit has increased from $6,500 to $7,150 for an individual and from $13,000 to $14,300 for a family.
- Network Adequacy proposed requirements were partially accepted in the final rule. Probably the biggest requirement that was not accepted was the time and distance standard.
- "Surprise Bills" are a concern of members, which has been addressed in this notice.
- Federally-Facilitated Marketplace (FFM) user fees will stay at 3.5% for issuers utilizing the (FFM). Issuers who are part of a State-Based Marketplace (SBM) that utilized the FFM platform will see some relief with a reduction in their user fee for 2017, from 3% to 1.5% of premium.
- Medical Loss Ratio (MLR) will not be allowed to include fraud prevention expenses as part of the numerator as proposed in the Notice of Proposed Rulemaking (NPRM).
A detailed analysis of the Final Rule including health plan impacts, will be provided in the coming week.
Resources
Register your team for the 2016 GHG Forum! For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>.
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>