Top Five Operational Resolutions for 2016
Did you know only 8% of people who make New Year's Resolutions achieve them? There are many reasons why resolutions are not accomplished. They may have been too aggressive or priorities changed. Sometimes it's because the goal is too vague or there are far too many and a person is unable to focus on them all.
When it comes to achieving resolutions, there are two keys to success: be specific and stay positive.
Here are our top five operational resolutions to consider for 2016:
- Re-evaluate your controls against current guidance. Are the standards still the same? Is your evaluation process adequate to ensure compliance?
- Fix your highest volume workaround. Every department has them. Some prevent rework, some are due to obsolete systems, some were set up for ease of users, but workarounds are hard to monitor, hard to explain in an audit, and are a risk with staff turnover. Fix it so you have one less thing to sidetrack processes.
- Set up redundancy in processes. We have all been in a place where a single individual knows a process. Your single source of success can easily turn into a single source of failure if that staff person wins the lottery and decides to travel the world.
- Evaluate and improve the highest priority item requiring rework. One client had a high volume of Medicare Secondary Payer (MSP) records which would be closed and then show up again every few months. The rework and premium loss and recovery were a continuous cycle. After evaluating the records, a root cause was identified, which was within the plan's control, and resulted in less MSP churn.
- Celebrate more successes. Does your staff know their compliance rates? Do they know if they are improving month over month? Do they know the compliance issue they reported resulted in better ongoing compliance and prevented harm to members? Celebrating successes not only ensures staff sees the part they play in the big picture but reinforces the requirements.
Gorman Health Group has experienced consultants who can assess and review the operational areas of your organization. We can review current processes and look for efficiencies to improve outcomes and better compliance. Make a resolution to improve your organization's operational areas — we can help make it happen in 2016.
For more information, please contact me directly at jbillman@ghgadvisors.com.
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Three Reasons Why Compliance Program Effectiveness Needs Evaluation Now
Happy New Year! It's a time when your organization may be evaluating whether or not to submit a new application or a service area expansion. This may be when annual training kicks off once again. You may be reviewing attestations to determine which vendors need to provide you with new documentation. And don't forget to ensure the Claims Department has updated systems to reflect the current prompt payment interest rate.
For those of you in Compliance, all of the above might be on your radar, in addition to the day-to-day. If you have not tested or evaluated the effectiveness of your Compliance Program lately, now is the time to do it. Here are three reasons why:
- Major pharmacies cited for repeat violations of privacy violations. Pharmacies arguably make up the largest group of downstream entities for Sponsors. Those contracted pharmacies have been subject to hundreds of Sponsor-specific general compliance and fraud, waste, and abuse (FWA) training in the past, as well as the trainings created by the pharmacy benefit managers (PBMs). (Starting this year, Sponsors must require first tier, downstream, and related entities (FDRs) to take the Centers for Medicare & Medicaid Services (CMS) training and accept the certificate of completion.) As you can see from the article, health information privacy complaints are on the rise. Sponsors should not simply check a box confirming a PBM attested that all pharmacies took training — this should be tested and sampled as part of auditing and monitoring. Furthermore, if and when a potential pattern of issues is identified, a deeper investigatory dive and escalation of corrective actions should be pursued.
- The new season of audits is approaching. At the end of October, CMS released their revised 2015/2016 protocols. Recently, CMS released a memo stating they continue to receive inquiries and concerns not only from Sponsors but also from FDRs regarding the difficulties encountered with adopting the new training requirement. While they have not delayed or retracted the requirement, CMS has decided to suspend their review of the FDR training certification aspect in their program audit protocol. Having this suspended in the audit protocol is by no means a free pass — it only highlights CMS' acknowledgement that implementing their guidance has been a challenge. Plan Sponsors still have the responsibility of ensuring those contracted to service their members understand their obligations, because it doesn't only take an audit for CMS to take action over FDR issues — it could be one call to a Regional Office or an escalated number of Complaints Tracking Module (CTM) cases that places your organization on CMS' radar.
- You may already know where your weaknesses are — evaluate the program and get those weaknesses and corrections documented. CMS has placed the onus on Sponsors to hire independent auditors to validate program audit corrections. If you are targeted this year, why not be as prepared as you possibly can be? Some things you cannot change — but it is of utmost importance you make time to conduct a Compliance Program Effectiveness (CPE) audit.
CMS has never said they are looking for a perfect audit. They expect to find things; therefore, you should also expect to find things in your own CPE audit. By virtue of regularly testing and evaluating the effectiveness, you make strides to strengthen your organization as a whole.
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United Healthcare Potential Exit
Last month, United Healthcare (UHC) made an announcement that shocked the industry — it may leave the Health Insurance Marketplace if it can't become profitable by 2017. The company stated it expects to lose $490 million next year due to its participation in the Affordable Care Act (ACA) market. Standing by its comments, UHC pointed to "structural" problems with the ACA as the factor behind its unprofitability. Adding to the deterrent of the Marketplace business, the company stated it will stop paying broker commissions for Marketplace policies as well as individual plans not sold on the Marketplace. UHC's announcement is troubling, especially with recent news of the failing co-ops — 12 of the 23 co-ops have already closed their doors, and even the most profitable, such as Maine's Community Health Options who announced profits in 2014, have lost money this year.
So what are the structural problems, and should plans and consumers on the Marketplace be worried?
One major issue is, of course, the risk adjustment and risk corridor programs under the ACA. With Congress unwilling to increase funds for the program, health plans faced a huge hit in 2015, recouping only 13% of requested funds through the risk corridor program. Congress remains firm on its decision not to further fund this part of the ACA, which means the Centers for Medicare & Medicaid Services (CMS) will have to find alternate means if it wishes to assist plans with their losses next year.
Another big change the ACA brought is the inability to initially properly price for the incoming consumers. Insurers set rates without any risk factors or data on the incoming policyholders and did not anticipate the sicker populations who would flood the market. This issue will likely linger — with 12 of the co-ops folding, the big question in 2016 is, where will these consumers who made the companies unprofitable sign up? At the same time, there is still a large population of healthy, young individuals unwilling to sign up for the health plans despite the mandate. It remains to be seen whether the tax penalty of 2016 will be enough to steer individuals during the next open enrollment period.
The lack of flexibility in benefit design is also a consideration of health plans. Many see the current rules as a pill too large to swallow all at once — the sudden requirement for plans to accept all consumers with pre-existing conditions, remove lifetime maximums, and pay no less than 60% of medical costs may have been more than plans could handle in altering their benefit designs. Another issue is the grandfathering of plans not compliant with the ACA due to the famous line, "If you like your plan, you can keep it." California chose not to comply with this grandfathering requirement, leading to a higher number of healthy and risk-averse people already covered on catastrophic plans to sign up under the ACA. Other states, on the other hand, gained only the people who could now sign up because there was a prohibition of pre-existing conditions, leaving people with catastrophic plans and their squeaky-clean claims history to the individual market.
At the same time, the flexible open enrollment periods also created a disincentive for healthy people to sign up, while allowing individuals who are suddenly faced with medical claims to quickly jump onto a plan through loopholes in the rules. CMS is dialing back on one of these enrollment period loopholes this year by announcing there will not be an open enrollment period extension during tax season for those who learn of the steep penalty when filing.
Do these problems and UHC's warning mean the demise of ACA?
It is important to remember the Marketplace, as well as the individual market, is simply not the primary business of UHC. While several months ago UHC announced it may expand its Marketplace presence in more states, this announcement they may do the opposite and pull out of the Marketplace could mean the exit of co-ops and the imminent mergers have made UHC re-focus on its main bread and butter business instead — the group market. Most of UHC's profits come from group sales of employer-sponsored health plans. UHC started out its participation in the ACA in only a handful of states, with conservative premium offerings, and only cautiously increased their market last year. This approach means UHC has a small risk pool, and dipping their toes in the Marketplace water could have hurt them in the long run. At the same time, despite the cautious entrance into the Marketplace, start-up costs to create these new plan offerings were no doubt substantial, and the small population who did choose UHC likely did so for the brand recognition — in other words, consumers who knew they would incur more claims and needed better plans. At the same time, with the mergers going through next year, the Marketplace is not going to be UHC's game―their focus will be group plans, while Humana and Aetna will likely dominate the Medicare Advantage space; Cigna and Anthem and the blues, the individual market.
At the same time, CIGNA and Aetna, while acknowledging they also did not profit from the Marketplace, stated it's way too early to call for an exit from the Marketplace. And the program was not without its winners in 2014. Looking at companies who had to share their profits in the risk corridor program in 2014, for example, plans in California were big winners — namely Blue Shield of CA, Kaiser, and Anthem Blue Cross. This could be due in part to the number of young individuals in urban areas who did sign up for coverage in California, marking the success of the Covered California campaign, as well as not setting premiums as aggressively as possible in the past year.
What we do know is, this open enrollment period is crucial for CMS. While CMS already announced they anticipate low enrollment numbers, it is vital to the success of the ACA that these numbers include the healthier and younger individuals who have yet to sign up for a plan and are not deterred by the tax penalty.
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Agent Commission: Don't find yourself on the wrong end of the tipping point
Agent compensation for Medicare Advantage has changed drastically since the implementation of the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008. MIPPA included regulations, for the first time, around Agent/Broker Commission - among many other things. The goal of implementing commission requirements was to ensure there was a level playing field between plans by implementing the Fair Market Value (FMV) limits, thereby removing the incentive for agents/brokers to enroll a beneficiary into the top-paying plan or to churn beneficiaries from one plan to another. Rather, the goal was to ensure the beneficiary was enrolled in the plan that best fit his/her needs.
So, how did it work? Well, for the most part, we have seen the requirements implemented and The Centers for Medicare & Medicaid Services (CMS) prescribed processes followed. However, we've also seen an increasing amount of instances in which plans are trying to get around CMS requirements. For example, by paying exorbitant "override fees" to the Third-Party Marketing Organization (TMO) for little to no actual services in exchange or by not pro-rating commissions per CMS instructions, an issue which we saw addressed twice by CMS via Health Plan Management System (HPMS) memo this Annual Election Period (AEP). See HPMS memos titled, "Agent/Broker Compensation," released on October 30, 2015 and November 20, 2015.
The reality is that CMS has been focusing their Program Audits in recent years on those issues which have direct impact on beneficiary access to care and has not routinely audited agent commission requirements for several years. Have plans taken advantage of the fact CMS has been focusing efforts elsewhere? Yes, we believe so. However, it appears CMS is becoming aware of the non-compliance around agent commission that is pervasive and even standard in the industry, evidenced by the multiple HPMS memos released this AEP addressing issues of non-compliance.
We know that in the past several years, CMS has exercised its authority by handing down Enrollment Sanctions and Civil Money Penalties (CMPs) for non-compliance. In fact, we see the current year-to-date total CMP amount at $4,719,220 — up from $1,131,505 in 2013.
So, the question is not if CMS will take action to address non-compliance around agent commission, the question is when. More importantly, when CMS does take action, on which side of the tipping point will your Organization land?
If you're not sure where to start, here are some recommendations:
- Review your agent/broker and TMO contracts to ensure the contract language is in compliance with CMS requirements — pay particular attention to the "admin fees" being paid to the TMO.
- Review actual payments made to agents/brokers to ensure the payment system is calculating the accurate amount based on current compensation schedules on file with CMS.
- Review actual payments made to agents/brokers when the amount should have been pro-rated to ensure the payment system is calculating the amount accurately.
If you have questions or need clarification regarding any of the information listed above, contact us here and a team member will be in touch with you shortly.
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Are You Paying Twice?
Each month, health plans receive files and premium reductions for members deemed to have secondary coverage, which the Centers for Medicare & Medicaid Services (CMS) calls Medicare Secondary Payer (MSP). MSP shifts the burden from Medicare to commercial insurance companies. CMS receives information from a multitude of sources identifying beneficiaries who have other coverage appearing to be primary to Medicare. When a member is identified as MSP, CMS reduces the payment for those members to 17.3% of the full premium.
When the MSP record is valid, that premium payment is sufficient for the health plan to pay services on a secondary basis. If the MSP record is obsolete, and the plan is paying on a primary basis, the plan is paying twice: paying primary for the service and paying through reduced premiums from CMS. This can be a huge premium loss for a health plan of typically around $700 per member per month for every beneficiary incorrectly classified as MSP.
As with all things involving CMS, accuracy is critical.
Reviewing each MSP-identified individual and validating the information is the only way to ensure the member is set up correctly and the premium and claims payments are accurate. MSP validation is not a one-and-done process―information can change, be inaccurate, or be out of date. Outreach validation requires diligence and persistence. Electronic Correspondence Referral System (ECRS) submissions need to be monitored for non-responses and records under development. Other coverage information and system flags need to be updated for claims reprocessing and recoveries from other insurers for claims paid as primary in error.
Do you know the status of each of your MSP members? Are you revalidating information on a regular basis? Are you sure you are not paying twice? If you aren't sure, Gorman Health Group (GHG) has delivered exceptional outcomes for our clients by recouping millions of dollars in MSP recoveries. We can help you evaluate your process and your existing MSP records to ensure you are only paying once.
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Because They Can
The United States Senate conducted the first day of hearings Wednesday, December 9, on the high price of pharmaceuticals. The Special Committee on Aging is investigating the soaring prices of old drugs, including the overnight price hike of Turing's Daraprim from $18 to $750. Every day there is another press release about the egregious increase in pricing of a generic drug or a newly-released-to-market medication. U.S. drug prices are the highest of any in the industrialized world.
Drug prices and the strategies used to determine them are shrouded in secrecy. A recent Wall Street Journal article compared U.S. prices to Norway and several other countries. Pharma and biotech companies in the S&P 1500 average a net profit margin of 16% compared with an average of about 7% for all the other companies. Their rationale is usually they need that profit margin to support Research & Development (R&D) costs. That argument obviously doesn't apply for generic drugs. Pricing has nothing to do with recouping costs—it is a decision based on market research, competitor products, and shareholder value.
What's the answer? Doctors, insurance companies, hospitals, and Pharmacy Benefit Managers (PBMs) are all struggling to figure it out. Many healthcare policy experts are advocating for Congress to pass legislation which would allow the government to negotiate pricing especially for Medicare. Since there are more pharmaceutical company lobbyists in Washington, DC, than there are members of Congress, this could be an epic struggle.
These breakthrough treatments are invaluable to patients, but the costs for the patient and insurers can be exorbitant. What programs have you put in place to help your members adhere to treatments, minimize side effects, and empower them to understand their disease, and the drugs to help treat it?
Doctors are publishing and participating in dialogues about what the true value of a cancer drug is based on effectiveness and increased patient longevity. What is the true cost of a medication? If patients actually knew, could they make informed decisions about their options?
The Turing CEO may have just opened the can of worms that Pharma did not want to ever be seen. Greed and arrogance may be the catalyst Congress needs to implement meaningful changes. One thing we all know now―pharmaceutical and biotech manufacturers charge what they do…because they can.
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Gorman Health Group can help your organization transform the delivery, payment, and care coordination efforts necessary to provide positive outcomes for your challenging patient population. If you are interested in more information, contact us here.
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Senate passes bill repealing major provisions of Affordable Care Act
Last week, the Senate passed an Affordable Care Act (ACA) repeal bill, with a vote of 52-47. Although largely symbolic, this marks the first time the Senate has been able to pass such a bill.
The Senate voted on a bill previously passed by the House, however, because of the large number of amendments made by the Senate, the legislation now goes back to the House, where it is all but certain to pass. The White House already stated the President will veto any ACA repeal legislation, and because the Republicans do not have enough votes to override such a veto, this will be the end of the movement. Nonetheless, the Republicans will see this as a major step in their attempt to repeal the ACA, as it is the first time Congress will be able to get such a bill to the President's desk.
What's more interesting is the parts of the bill which gained some bipartisan support. For example, the "Cadillac tax" repeal amendment was overwhelmingly approved with a vote of 90-10. Although this amendment will not become law this time around, its repeal is already scheduled in talks in tax packages expected to be voted on before the end of the year. It is also unclear how the anticipated funding expected from the Cadillac tax would be replaced. It is estimated such a repeal would remove about $90 billion from the ACA over 10 years, however, the Senate's tax repeal would not go into effect until 2015.
The passage of the bill also gives a glimpse into the Republican's ACA repeal agenda should they win the White House bid next year. Some of the major provisions include:
- Defunding of Planned Parenthood
- Repeal of the Medicaid expansion
- Elimination of reinsurance, risk corridors, and risk adjustment programs set up under ACA
- Repeal of Cadillac tax
- End premium subsidies for insurance purchased through the Marketplace and small business tax credits
- Repeal of individual and employer mandates by lowering the penalties for non-compliance to $0
- End of healthcare.gov
Despite the Republican Party's fulfillment of the promise to get an ACA repeal to the White House, conservatives have yet to offer a replacement plan. The vote on the Medicaid repeal could also create some problems for senators up for re-election in states that have expanded Medicaid, such as Pennsylvania, Illinois, and Wisconsin. At the same time, Medicaid expansion continues to gain more interest from the remaining states yet to expand. Louisiana's new governor vowed to expand Medicaid on his first day in office. Virginia Hospital and Healthcare Association recently announced their change in position to support a bed tax, which would allow the state to expand Medicaid under ACA without any additional state funding. Utah and Wyoming continue talks to come up with a plan to expand Medicaid in the next year. And although Idaho remains opposed to expanding, the legislature is discussing a plan for the state to cover basic primary care for those who do not qualify for Medicaid but earn too little for subsidies under healthcare.gov, at a cost of $32 per month.
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CMS Clarifies Key Audit Terminology
Immediate Corrective Action Required (ICAR), Corrective Action Required (CAR), and Observation. These terms have become part of the vocabulary for Compliance specialists, auditors, analysts, managers, directors, and Compliance Officers who so often field questions from Operations. Let's consider the following scenario: Compliance has just completed an internal audit of Claims Operations and has identified findings. This leads the Ops team to ask, "Are these findings CARs or ICARs?"
Last week, the Centers for Medicare & Medicaid Services (CMS) issued a memo clarifying certain definitions which apply to their Program Audit process. This clarification was released in response to Sponsors who have provided feedback stating they feel the process for determining CARs, ICARs and Observations is not transparent, and they lack the ability to determine how audit conditions will ultimately be classified. CMS has posted clarified definitions for these terms, as well as the term Invalid Data Submission (IDS) here on their CMS Program Audit website. While I will not re-write the memo, CMS hopes these key term definitions provide the industry with the transparency it sought. In short:
- ICAR: These are items CMS identifies during an audit as systemic deficiencies so severe they require immediate correction. CMS cites lack of access to medication and/or services as well as immediate threats to enrollee health and safety. ICARs count as two points in the scoring methodology.
- CAR: These are items CMS identifies during an audit as systemic and requiring correction, but the correction can wait until the audit report is issued. (This does not mean wait until the audit report is issued!) CMS clarifies that CARs may affect beneficiaries but not in a way immediately impacting their health and safety, and count as one point in the scoring.
- Observation: These are non-systemic, typically one-off issues of non-compliance identified during the audit. No points are assigned in the scoring methodology for Observations.
- IDS: This is cited when a Sponsor fails to produce an accurate universe within three attempts. This will be cited in 2016 for each element which cannot be tested, and counts as one point in the scoring.
CMS directs plans to send any questions to their mailbox at part_c_part_d_audit@cms.hhs.gov. Take it from me, the CMS team is responsive to posed questions. An informed and more prepared industry will hopefully make for a smooth 2016 audit season for CMS and for Sponsors.
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Government Shutdown Deadline Nears
Less than a week remains for Congress to agree on a $1.1 trillion funding bill in order to avert the threat of yet another government shutdown. The deadline to pass this bill is December 11, 2015, although Congress could technically use a stopgap measure to buy an extra week, pushing the deadline to December 18. As previously reported, a shutdown would have significant consequences for all government agencies, including the Department of Health & Human Services (HHS). Although most Medicare and Medicaid services are considered necessary to the public welfare and would thus escape much of the repercussions of a shutdown, operations at the Centers for Medicare & Medicaid Services (CMS) would nonetheless be affected.
So what is the likelihood of a shutdown occurring?
The House Democrats rejected the Republican's offered funding bill on Monday and are planning an alternative package in response. The Democrats cite more than 30 policy riders making the package unacceptable to their side. The aggressive response from the left wing suggests they won't easily back down this go-round, however, the possibility of a shutdown is less likely than estimated during the stand-off a few months ago.
For one, unlike a few months ago, Planned Parenthood funding has not been as much of a battle this month. This time, the Syrian refugee crisis, terrorist attacks, and immigration policies bear the brunt of the debate. Congressman McCarthy also hinted on Monday he did not predict the Planned Parenthood tension to hinder the passage of a funding bill this year. The new Speaker, Paul Ryan, also has a lot riding on averting a government shutdown, as such an event six weeks into the job would be disconcerting to the party. And, unlike earlier in the year, with key members of both parties unwilling to use the threat of a shutdown to further their agendas, the likelihood a funding bill will pass is very good.
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AEP Is Winding Down, But Your Work Is Not Over!
As the Annual Election Period (AEP) begins to wind down, you have a pretty good idea of where you will end up this AEP. Whether you knocked the socks off your competition or missed your goals, now is the best time to assess your marketing and sales strategies in preparation for 2017!
Typically, we all have to perform an analysis for senior management showing where the leads and sales came from and what the costs per lead and sale were. Based on that information, we want to understand what changes need to be made or tested for next AEP to increase lead generation and decrease the cost per lead or sale.
But that shouldn't be the end of the analysis — now is the time to do the following:
- Conduct an AEP Process Analysis — From an operational perspective, what went right and what didn't go as well as expected? Were there reprints? What were the call center stats — were they better or worse than last year? From an operational perspective, what would we like to change from this year to the next? What do we have to do internally/externally to accomplish that?
- Vendor Assessment — What vendors over-performed or performed as expected? Do vendors need to be replaced? If so, the Request for Proposal (RFP) process should probably be completed by the end of the first quarter.
- Review Competitive Creative — There is nothing wrong with understanding what competitors are doing and seeing where you might need to strengthen your own creative in the next year.
- Review the sales distribution strategy to understand where the sales opportunities may have been missed and where they were most successful.
- Deep-dive Evaluation of Lead Generation to Member Onboarding — Since now is the time when we really remember all of the pain points and accomplishments, we want to document them to ensure we make changes where needed and expand the successes.
- Look back at the work plan/tactical execution plan to understand where more time is needed next year for a better execution come AEP.
Based on our experience, now is the time to conduct the assessment — before everyone has forgotten what needs to change and before the frustration of a missed date or opportunity becomes a distant memory. Gorman Health Group (GHG) has helped several organizations with this type of assessment — to provide that outside-in perspective which is honest and non-partisan.
Have questions? Contact GHG at ghg@ghgadvisors.com.
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