MLR: Don't Miss Your Target
As the ink dries on 2016 bids for Medicare Advantage (MA) plans, one important question remains…What to do with summer vacation? Drinks by the pool or a family trip to Disney?
Reality check!
The long hours spent on the bid submission included many spreadsheets with financial projections of loss ratios, per member per month (PMPM) trends, along with cost and utilization drivers. These projections required endless discussions on how to improve contracting and cost strategies as well as benefit designs and medical management programs. Executive assumptions were made to create a rosy picture that would result in an acceptable bid and optimistic market share!
However, the real agenda this summer is to take a hard look at those assumptions based on current trends for membership and utilization. An in-depth financial assessment of your medical and pharmacy claims over the most recent 24 months is an important step toward achieving financial success in the Medicare world.
Waiting two years for the Centers for Medicare & Medicaid Services (CMS) to respond to risk adjustment strategies and quality measures may be too late to ensure financial performance. Let Gorman Health Group (GHG) review your medical and pharmacy drivers across the operations. Our financial and subject matter expertise can help you determine long- and short-term strategies to maintain the required medical loss ratio (MLR) of 85% and build the operational infrastructure to support the bid proactively.
While CMS audits are time-consuming and threaten fines and lost productivity, the threat of missing your MLR target is just as real. If you underpriced your bid to get market share, the excess claims will bleed your bottom line. The MLR regulations require MA and Part D Plan Sponsors to spend at least 85% of combined Medicare contract revenue on clinical services, prescription drugs, quality improvement activities, and direct benefits to beneficiaries in the form of reduced Part B premiums. Plan Sponsors who fail to meet the 85% threshold must remit payment to CMS for the product of:
- The total revenue under the contract for the contract year, and
- The difference between 0.85 and the contract's MLR.
So an MLR including medical, pharmacy, and quality costs of 83% means returning 2% of the revenue back to CMS. It also means justifying the quality improvement activities.
The margins are thin as is the tolerance by CMS to balance quality and financial performance. If organizations are unable to meet the minimum MLR for three consecutive years, they will also be subject to enrollment sanctions and, for failure over five consecutive years, contract termination.
An assessment now will pay back in performance and visibility across the operations.
Unsure where to start? Contact us here.
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MLR requirements pose new challenges for payers. Gorman Health Group can help your organization interpret the drivers of MLR, and the tactical and strategic decisions a health plan should consider in managing to an MLR that is "just right." Contact us today >>
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Re-Evaluating Your Plan's QI Evaluation and the Process Behind It.
This is the time of year when most plans have either completed, or are in the process of completing, their annual evaluation of their Quality Improvement (QI) Program Description and Work Plan for operating year 2014. In the 12+ years I have worked for Gorman Health Group (GHG), I have seen a range of evaluations — from great evaluations to those that are just a couple of pages without content. Let's examine some mistakes and discuss some industry happenings that are often missed in the overall QI world. Before we go on to discuss, let's remind ourselves what the Centers for Medicare & Medicaid Services (CMS) is looking for in a QI Program Description, which is based upon the regulation 42 CFR § 422.152:
For each plan, a Medicare Advantage Organization must:
- Develop and implement a chronic care improvement program (CCIP) 42 CFR §422.152(c);
- Develop and implement a quality improvement project (QIP) 42 CFR §422.152(d);
- Develop and maintain a health information system (42 CFR §422.152(f)(1));
- Encourage providers to participate in CMS and HHS QI initiatives (42 CFR §422.152(a)(3));
- Implement a program review process for formal evaluation of the impact and effectiveness of the QI Program at least annually (42 CFR §422.152(f)(2));
- Correct all problems that come to its attention through internal surveillance, complaints, or other mechanisms (42 CFR §422.152(f)(3));
- Contract with an approved Medicare Consumer Assessment of Health Providers and Systems (CAHPS®) vendor to conduct the Medicare CAHPS® satisfaction survey of Medicare enrollees (42 CFR §422.152(b)(5)); and,
- Measure performance under the plan using standard measures required by CMS and report its performance to CMS (42 CFR §422.152(e)(i)).
- Develop, compile, evaluate, and report certain measures and other information to CMS, its enrollees, and the general public. Responsible for safeguarding the confidentiality of the doctor-patient relationship and report to CMS in the manner required cost of operations, patterns of utilizations of services, and availability, accessibility, and acceptability of Medicare-approved and covered services (42 CFR §422.516(a)).
Mistakes often seen:
Develop and maintain a health information system: Many plans have multiple platforms that make reporting — the validity and accuracy of — a nightmare! When a plan implements a new care management system, for example, the overall analysis of its performance is often not reported in the QI Work Plan or at the plan's QI Committee. Yet, this is a vital piece to overall operational and quality success. Ask yourselves: Did your plan implement a new system or module upgrade in plan year 2014, and do we know if it has improved our overall reporting and impacted any quality measures or our providers?
Recommendation: As part of a system upgrade or new system implementation project plan, include overall success reporting to the QI Committee. This can include major milestones success or failure during implementation as well as a narrative summary of changes the plan and/or providers will experience upon completion of the project. Will there be new requirements for claims submission? A new clearinghouse? A new provider portal sign-in process? Don't forget all of your external and internal customers and the impact they may experience.
Plan goals for HEDIS: I often see goals set for middle-of-the-road success at or below the 50th percentile. While I am not encouraging setting unrealistic goals, many plans miss aligning their HEDIS goals with a 4 or 5 Star Rating corridor. Now that CMS will be eliminating pre-determined benchmarks for plan year 2016, it will be even more important for HEDIS goals to be realigned with your plan's Star strategy. I also see many plans not include an improvement process or overall data analytics in their QI Work Plan showing how HEDIS measures actually improve overall population outcomes. We really don't want providers just checking a box that a test was completed — we want to understand if and how the HEDIS measures have possibly improved the overall health of our membership, and, if the outcomes are positive, how did this occur? Health plans often share data with providers regarding gaps in care but miss sharing any overall improved health outcomes so providers can see the successes of their efforts.
Recommendation: Consider adding true outcomes measures to specific HEDIS measures, especially those measures that affect your Medicare Advantage Prescription Drug (MA-PD) Plan or Special Needs Plan (SNP) population as a whole. The goal of the evaluation is to effect improvement changes both in plan operations as well as clinical outcomes.
Correct all problems that come to its attention through internal surveillance, complaints, or other mechanisms: Many plans recognize they have multiple issues or problems which may come to their attention through internal monitoring and auditing, inter-rater reliability processes, or dashboard reporting. These problems/issues, however, often do not make it to the QI process cycle.
Recommendation: Remember, when your plan discovers a risk area through internal monitoring or a high volume of complaints/Complaints Tracking Module complaints (CTMs) for a defined reason/category, it is the plan's responsibility to institute a process which identifies a root cause, implements a corrective action, and measures the success of the corrective action. Clinical and non-clinical activities are part of the overall QI process.
Lastly, let's discuss the pay for performance or provider incentive plan process. Many plans have instituted an incentive program designed to improve health outcomes, prevent acute readmissions, improve medication adherence, or improve preventive health services measures which reward physicians financially when goals are achieved. Yet, many of the goals within a provider incentive program do not align with the goals for Star Ratings, goals within a Model of Care (MOC) for SNPs, nor do these payments align with improved overall outcomes for a population.
Recommendation: Overlay the benchmarks from your current provider incentive program to be sure they align with desired goals defined within your QI Work Plan and your Star Rating strategy. Also evaluate your population health outcomes to determine if your incentive program is driving the results your plan desires.
If your plan is still an outlier in the completion of your program's annual evaluation, GHG is ready to assist!
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Medicaid Rule Imposes New Standards for Beneficiary Access
Per the announcement by CMS on Tuesday, the proposed Medicaid rule would require plans to implement an 85% medical loss ratio (MLR). Implementing an MLR for Medicaid would bring the programs in line with the private health insurance market and Medicare Advantage. However, as mentioned by GHG's Sunmi Janicek, it would not be without challenges. The compliance costs for Medicaid plans with the increase in diligence needed in identifying & documenting costs incurrent to improve quality could be high. Additionally, the CMS proposed rule would impose new standards for beneficiary access and availability to the MCOs provider network.
As with our Medicare Advantage clients, GHG can assist plans by doing a deep dive into their MLR cost drivers, such as poor-performing providers within their participating network, while balancing the requirements for a robust, accessible provider network for beneficiaries. Once we have identified the key cost drivers, we can work with plans to do the following:
- Develop forward looking budget assumptions for benefit premiums, project clinical utilization and provider reimbursement budgets
- Develop clinical & financial performance metrics designed to bring performance in line with expectations
- Develop strategies around how to best impact provider practice patterns, access, treatments, referrals and coordination of care
- Design network modifications based on clinical & financial performance
- Develop performance based payments for provider reimbursements benchmarked to clinical & financial outcomes metrics
Reaching these goals will require the formation of great partnerships between the plan and providers. Plans will want to reach out to provider partners that share their same goals and incentives and secure strong leadership and physician champions to lead the charge. We know the transformation will not be easy. The shift from fee-for-service to value based reimbursement, facing the social services, behavioral health needs of the population, and developing the analytical capabilities to support these changes are challenges that Medicaid managed care plans will face under the proposed rule.
GHG is here to help navigate you through the steps.
Please reach out if we can assist you with any of the following:
- MLR Analysis
- Provider Integration strategies
- Reimbursement strategies
- Risk Assumption strategies
- Network Adequacy compliance
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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement.As states begin to increase oversight activities and implement more robust compliance and fraud waste and abuse practices, our expertise in compliance program development will be an asset to any organization. Contact us today >>
CMS Spotlight on Provider Directories & Network Adequacy
As we learned from the 2016 Call Letter, the Centers for Medicare & Medicaid Services (CMS) is placing a renewed focus on Medicare Advantage (MA) plans' provider network, with emphasis on both online provider directories and network adequacy.
CMS plans to monitor compliance of plans' adherence through direct monitoring with additional contract funds and through the development of a new network adequacy audit protocol to be tested in 2015 that will determine whether the provider network meets published CMS adequacy standards. The compliance and enforcement of the new protocols will include civil money penalties (CMPs) and enrollment closures.
Recent beneficiary complaints have brought into focus the accuracy, or lack thereof, with Medicare Advantage Organizations' (MAOs') online provider directories. Beneficiaries, and sometimes referring providers, have shown frustration in attempting to make an appointment, only to find the provider is no longer accepting new patients, has moved, or is no longer participating with the plan. CMS has supplemented their current guidance on provider directories and expects plans to:
- Establish and maintain a proactive and structured process by which to verify the availability of its contracted providers. This process will include outreach, on a monthly basis, to verify there has been no change in a provider's address, phone number, and office hours, and determine if the provider's panel is open or closed to new patients,
- Establish a policy to review and address beneficiary complaints when they are denied access to a provider(s), and
- Include a provision for real-time updates to the online directory.
Additionally, the Call Letter announced a new network adequacy protocol to be tested in 2015. During his presentation at the CMS Medicare Advantage Prescription Drug Plan (MA-PD) Spring Conference & Webcast, Greg Buglio provided insight concerning the upcoming audit protocol.
Mr. Buglio shared that the Network Management Module (NMM) is a standalone module, a version of which currently resides within the Health Plan Management System (HPMS), which may be utilized by MA plans to submit Health Services Delivery (HSD) provider and facility tables for evaluation against CMS HSD criteria.
CMS notes a robust version of the NMM will be released at the end of July 2015. According to CMS, the new version will be highly flexible and support a variety of reasons for HSD submission. The updated NMM will support CMS-initiated requests for submission of HSD tables and exception requests for various processes. Once released in late summer/early fall, the NMM will contain user guides, help screens, and templates for HSD submission.
The NMM will also permit plan-initiated submissions. It was noted plan-initiated submissions will not be viewable or evaluated by CMS. The goal is that plans will be encouraged to continuously self-evaluate their own network adequacy against CMS' criteria. Presently, CMS only reviews network adequacy with initial and service area expansion applications. We anticipate the self-evaluation will work similar to the network pre-checks available during the application process. It was noted the templates within the NMM would not be the same template used during the application process. The two templates will not be interchangeable.
We anticipate further guidance surrounding the network adequacy protocol to be presented during CMS' upcoming MA-PD Audit & Enforcement Conference & Webcast taking place on June 16. Prioritize this event, and attend either in person or via webinar.
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Medical Loss Ratio Concern in CMS Proposed Medicaid Rule
The much anticipated Medicaid regulation from the Centers for Medicare & Medicaid Services (CMS) has been released, which aims at helping align regulations for managed care plans, creating a dynamic shift in how the Medicaid business will be handled moving forward.
One example of the new change is the proposed implementation of the 85% minimum Medical Loss Ratio (MLR) for the Medicaid program. This is to ensure adequate funds are being spent on coverage for Medicaid members appropriately. MLR thresholds are currently being used by the private health insurance plans, as well as, Medicare Advantage plans for projections of future medical costs and covered services. This could pose a problem for Medicaid Managed Care Organizations (MCOs). While Medicaid MCOs don't have the high sales and marketing costs of individual commercial plans, since sales are handled by the states, compliance costs could be high, making the 85% figure a cause for concern. "Medicaid MCOs will have to be diligent in identifying and documenting costs incurred to improve quality, to drive up their MLRs, said my colleague, Bill MacBain, Senior Vice President of Strategy.
With the soaring number of newly enrolled members joining Medicaid, Avalere estimated that by the end of this year, 73% of Medicaid members will be receiving some type of service through a managed care plan. The regulation aims to look at delivering a structured approach to supporting delivery systems, enhancing health outcomes and most importantly, improving the beneficiary experiences. These new regulations seeks to align CMS' Medicaid regulations to reflect today's changes in delivery systems, increase measures in managing care coordination, and promote quality of care using analytic data to oversee Medicaid managed care.
Additional proposed changes include:
1. Appeals and Grievances — The proposed rule makes a few updates to the appeals and grievances process to align to MA plans. For example, the rule seeks to shorten the time frame that Managed Care Organizations (MCOs) and Prepaid Inpatient Health Plan (PIHPs) have to make a decision about a standard appeal from 45 days to 30 days, same as MA plans. The expedited appeal time frame would be shortened from three days to 72 hours, also same as MA.
2. Beneficiary Protections — Under current regulations, coordination and continuity of care focus on primary and acute medical care. The proposed rules aim to reduce coordination issues beneficiaries with chronic and complex conditions face. The proposed rule also seeks to align enrollment practices between Medicaid fee-for-service (FFS), Medicaid managed care, and Marketplace coverage.
3. Network Adequacy Requirement - The rule would impose new standards to ensure beneficiaries have adequate provider networks and ensure beneficiaries are receiving accurate network information.
4. Medicaid Managed Care Quality Rating System (QRS) — Align with existing MA and Marketplace rating systems. Standardize quality metrics among states and plans.
5. Long-term Care - As expected, the rule also includes a section on managed Medicaid long-term care. The proposed rule could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
The proposed rule will be posted in the Federal Register on June 1. The deadline to submit comments is July 27.
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Gorman Health Group is dedicated to assisting Medicaid managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with your Medicaid needs >>
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Stand Tall Amongst Competition: Key to Success in Medicaid is Clear
Health plans diligently strive to be the best and first choice for delivering excellent healthcare services. Many seek accreditation with various organizations such as the National Committee for Quality Assurance (NCQA), the Utilization Review Accreditation Commission (URAC), and, most recently, the Malcolm Baldrige National Quality Award (MBNQA) as confirmation they provide their members with the utmost quality healthcare services.
Currently, the managed healthcare industry widely uses the Healthcare Effectiveness Data and Information Set (HEDIS®) and Consumer Assessment of Healthcare Providers and Systems (CAHPS®) to measure performance. Over 90% of America's health plans use HEDIS, and over 500 health plans use CAHPS, to measure performance and monitor how well consumers are satisfied with the care and service they receive.
The HEDIS tool measures performance across five dimensions related to care and service: Effectiveness of Care; Access/Availability of Care Member; Experience of Care Member; Utilization and Relative Resource Use; and Health Plan Descriptive Information. There are 81 specific measures for which the plan must collect data in order to be compared with other health plans. A feature of HEDIS is the tool allows for the cross-comparison between health plans to be relatively equal, on an "apples-to-apples" basis. Subsequently, health plans are also encouraged to use Quality Compass, the largest database of comparative health plan performance information to conduct competitor analysis, examine quality improvement, and benchmark plan performance. In turn, it can be an effective tool in developing a more focused quality improvement plan.
While member experience may often correlate to member satisfaction, it is not always so. Member satisfaction can be influenced by a number of factors in and outside the control of the health plan. In turn, members may have similar experiences but different expectations and report having different levels of satisfaction. The CAHPS survey is an initiative of the U.S. Department of Health and Human Services (HHS) for Healthcare Research and Quality and refers to a family of standardized and scientific surveys that ask consumers and members to report on their experiences with certain aspects of care such as: Getting Needed Care; Getting Care Quickly; How Well Doctors Communicate; Customer Service; Claims Processing; Rating Personal Doctor; Rating Specialist; Rating Health Care; and Rating Health Plan. Health plans and providers can use CAHPS questions about specific aspects of care to identify areas of care that are strong as well as those that need improvement. Asking respondents to provide both ratings and reports about their care experiences enables survey users to learn how specific experiences influence general ratings.
Overall, it's important to recognize that health plans are rigorously competing for each and every healthcare dollar. Quality, more than ever, is the key to stand tall amongst the competition.
Source: https://cahps.ahrq.gov/apps/FAQ.aspx?category=82
http://www.ncqa.org/HEDISQualityMeasurement/WhatisHEDIS.aspx
http://hfmanj.org/images/downloads/Presentation/hedis_star_presentation_7.16.14_final.vs_2.pdf
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CMS is poised to release in the coming weeks what stakeholders and advocates are calling an "epic rule" that will completely overhaul the Medicaid managed care marketplace. John Gorman discusses here >>
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The $64,000 Question in Star Ratings
As we wrap up the 2nd quarter, health plan leaders across the country are beginning to ask their Star Leaders the $64,000 question: "Are we on track to achieve a 4-Star Rating this year?"
This is, perhaps, one of the most challenging questions that can be posed to any Star Leader at this point in the year. But with up to 5% of a health plan's revenue driven by Star Ratings, the question is unavoidable, and the answer is vital.Though there is no simple answer to this question for a few more months, this is an opportune time to pause and reflect on 2015 Star Ratings progress against your plan's strategic and tactical strategy to raise ratings.
It is often not easy for Star Leader's to quickly describe the potential impact of the many changes we are awaiting in the 2016 Star Ratings: removal of the predetermined 4-Star thresholds, changes to the specifications for many measures, and removal and addition of yet more measures. Because the window is closed for us to impact our 2016 Star Ratings, we now sit in the uneasy waiting period while the Centers for Medicare & Medicaid Services (CMS) finalizes the 2016 Star Ratings and measures. CMS is also finalizing the 2016 display measures and reaching preliminary conclusions as to which 2016 display measures may be included in the 2017 ratings. These potential new display measures are being impacted by the services we are delivering this year — and in many cases, may not even be on the radar screen of our staff and provider networks.
So what can we do while we wait?
- Evaluate your plan's performance against national benchmarks to begin assessing your relative performance within the industry. Use this information to help set expectations while we await the 2016 ratings.
- Review your 2015 work plan, and current progress against the work plan, to ensure that your 2015 Star Ratings weaknesses are being adequately addressed and you will not repeat tactics that do not work in plan year 2016. Objectively evaluate how effectively customer service, case management, disease management, and pharmacy teams are coordinating care and services for your members by evaluating measurable outcomes.
- Review your quality program's year-end evaluation, the Chronic Care Improvement Program (CCIP) and Quality Improvement Project (QIP) data to identify changes which may be required as new information is released by CMS, and consider proactive expansion of quality activities into the areas under consideration by CMS.
- For Special Needs Plans (SNPs), review your Model of Care (MOC) evaluation for improved strategy opportunities related to the measures.
Educate and Activate. There is plenty of time remaining to shore up operations and infrastructure to achieve Stars success. As we continue to await release of the long-anticipated Medicaid managed care proposed rule, we are closely watching to see whether CMS will include value-based payments, new MOCs, and quality-based payment and oversight programs within yet another government health program. These potentially transformational changes in the Medicaid quality management infrastructure, combined with the Quality Rating System (QRS) program currently being beta tested within the Marketplace, continue to reinforce CMS' current and future emphasis on quality.
Our success in quality programs will require us to embrace CMS' expanding vision for healthcare quality and translate that vision to empathetic, outcomes-focused engagement with patients who need, and will be responsive to, help from their care team.
By improving clinical quality performance, we can improve health outcomes and reduce the cost of care. Find out how in our new White Paper now available..
Don't know where to start? Contact me today at jscott@ghgadvisors.com.
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CMS 2015 Spring Conference
Some important points came out of the Centers for Medicare & Medicaid Services' (CMS') Medicare Advantage Prescription Drug (MA-PD) Spring Conference & Webcast; the presentations and videos of the event can be found here in CMS' Event Archives. If you did not have a chance to attend or watch it live, please watch the videos for important changes pertaining to many aspects of the MA-PD program. Speakers addressed Part C and Part D call letter updates, policy and technical changes, Quality Improvement Project (QIP) and Chronic Care Improvement Program (CCIP) lessons learned and best practices, the new network management module, enrollment updates, and fraud, waste, and abuse (FWA).
From the Compliance perspective, we heard the following loud and clear:
- Enrollment in MA-PD is growing with the aging of baby boomers. CMS is taking a proactive stance to improve the program by stressing the need to work together with plans to provide care more efficiently and provide quality.
- Finalized program changes allow CMS to require MA organizations or Part D plan sponsors to hire an independent auditor to validate correction of CMS audit findings. The good news is − some of you are doing this today. Having another set of eyes on your correction efforts provides you with a level of assurance you may not be able to obtain by having internal staff performing validation. Ever hear that phrase, "There are three sides to every story: yours, mine, and the truth?" Getting an independent perspective is so important. While you might not agree with a reviewer's findings, the point is that it will hopefully bring you closer to the truth than validating yourself.
- CMS clarifies when it is appropriate for an MA plan to invoke an extension on organization determination and appeal requests. Based on what we see, most plan sponsors are invoking extension requests in rare circumstances and strive to meet the regulatory timeframes established without extension. Therefore, plan sponsors should be prepared to update procedures to ensure extensions are only taken when appropriate.
- Network adequacy — Not only is CMS requiring that provider directories be updated real time, they are adding network adequacy to program audit protocols (coming late summer or early fall, according to CMS). CMS is also implementing a way for plans to check their network adequacy by submitting their Health Service Delivery (HSD) tables in the Health Plan Management System (HPMS). Previously, this step was only available within HPMS when submitting an application for a new plan or a service area expansion (SAE). Plans could contract with a vendor or obtain software to check their own network adequacy. We anticipate that CMS' network adequacy protocol will require a plan to provide real-time data pertaining to whether or not their contracted providers have open panels. I'm aware of one 5-Star plan that has been doing ongoing network adequacy reviews for a while. Those plans that are used to pulling HSDs only at the time of application or (possibly) bid submission should plan now for the additional steps CMS may require of plans to tell the true story of adequacy. Keep your eyes on this blog for more information from my esteemed colleague, Ellie Martin, on network adequacy.
CMS' upcoming MA-PD Audit & Enforcement Conference & Webcast is taking place on June 16. Prioritize this event in your schedule, and attend either in person or via webinar.
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The Imminent Medicaid Mega-Reg is Gonna be "Epic"
For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We're coming to call it the "mega-reg" here. Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting the term "epic" used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.
Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn't address long term care services and supports and managed long-term care, a major impetus for program reform at the state level. The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.
MACPAC's debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:
- Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard. CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard. The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
- Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit. Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers. The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
- Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services. CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
- Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance. CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
- Transparency — Medicaid health plans want transparency of state practices to develop capitation rates. CMS could require states to share data and assumptions and allow plans to comment during federal review.
- Baseline/Encounter Data — CMS could impose additional standards in addition to "appropriate data." CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
- New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.
Beyond payment issues in the mega-reg, the Commissioners discussed:
- Long Term Care -- CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
- Provider Networks -- the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans. Strengthened requirements for appeals and grievances may also be included. The proposed rule may also include enhanced quality data and reporting. It's expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.
We'll have scads of analysis of the Medicaid proposed rule as soon as it hits the street. It's gonna be huge.
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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>
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You're Doing it Wrong in Care Management
An important paper recently released in the American Journal of Managed Care shattered the notion that care management can save money on high utilizers. The article reviewed recent studies of the effectiveness of health plan care management programs and found that, while many studies show significant savings, more rigorous studies concluded that savings were "limited or nonexistent." Mind. Blown.
We're all familiar with the "80/20 rule" of the commercial health insurance market: 20% of members account for 80% of expenditures. In government programs, Medicaid, Medicare, and now ObamaCare, it's the "5/60" rule: 5% of members account for 60% of spending. The AJMC article showed that across all payers in 2012, it's "5/50". 95% of the population accounted for just half of health spending, while the other half of spending was towards care for 5% of the population. The 5% of people needing to spend the most on health care spend an average of around $43,000 annually; people in the top 1% have average spending of almost $98,000. At the other end of the spectrum, the 50% of the population with the lowest spending accounted for less than 3% of all total health spending; the average spending for this group was $234.
The article then explored multiple studies on effectiveness of care management, concluding it's mostly pointless. It gave several reasons for why this might occur:
- Many high-utilizers only stay in this category for a short period of time. Conditions causing them to need intensive care may resolve quickly, reducing costs, but a study lacking a control group may inappropriately attribute this savings to the care management program.
- High utilizers suffer from a wide range of conditions and require a wide range of interventions, making it difficult for care management programs to tailor teams meeting each patient's needs.
- Providers working with a care management team may better identify conditions that were previously going untreated, leading to better outcomes, but also higher costs for additional services and therapies.
The author concluded that "for care management programs focusing on high-utilizing patients, it is crucial to select patients with long-term utilization patterns that are driven by the factors most conducive to change. Given the very limited direct evidence suggesting how to accomplish this, care management programs are best served by being kept small and focused on the highest-need patients, who may not necessarily be current high utilizers."
This finding calls for a rethinking across our industry about care management. For one thing, most health plans in our 19 years' experience are still doing 1990s-style managed care: preauthorizations, referrals, concurrent review -- what we refer to as "make work" medical management. It's look busy, high head-count work that does little to improve quality or reduce unnecessary spending.
Many GHG clients have been working with us to modernize this approach into data-driven care coordination "pods" providing a holistic model of care focused on high utilizers and those about to become them. This study means we need to recommit to data analytics identifying and directing the work of care managers toward those beneficiaries with long-term needs that can be impacted. This means greater emphasis on preventable episodes of care, and on end-of-life care preferences, advance directives and care plans. If you take the top 5% of the membership that is incurring the most cost and provide complex care management, including a higher level of home care, hospital diversion, medication therapy management, nutrition counseling, and wound care, plans and their provider organizations will see a reduction in avoidable medical expenses.
Savings can also be realized if that membership is appropriately placed in the right plan with the right network. Care Management might not be the answer but applicable coverage is a strategy. That's where plan and benefit design is so important. Innovative plans are working with specialists to design products that reflect risk and chronic conditions of their members. Our work with a prominent dialysis and kidney care provider is a perfect example: design a benefit and align a network that is tailored to patients with varying levels of chronic kidney disease, preventing disease progression and/or avoidable costs traditionally seen if CKD is not managed along the disease state continuum. Progressive conditions like CKD, Alzheimer's, and many cancers lend themselves well to "smart management" that spans clinical staff and benefit design alike.
The one thing you know about government beneficiaries is that if they're not sick today, they're gonna be. The game has always been finding the ones who need extraordinary care before they need it, and ensuring they get it in the right place, at the right time, from the right provider. That hasn't changed. This study underscores the point. "Make work" care management must give way to "make it work".
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