Part D Rejected Claims Continue to be Important Monitoring for CMS
Rejected claim analysis is a year-round activity with special emphasis that should begin before January. Are you confident in your current process to review and identify non-compliant rejected claims?
As a Plan Sponsor, whether you delegate all or part of your Part D Drug Benefit set-up to your Pharmacy Benefit Manager (PBM), The Centers for Medicare & Medicaid Services (CMS) expects plans to demonstrate effective management of the CMS-approved formulary to ensure timely beneficiary access to clinically appropriate medications.
CMS expects Sponsors to understand regulatory requirements and to oversee the PBM to ensure the PBM is compliant with claim adjudication. Beneficiaries should be able to receive the Part D drugs they are entitled to, consistent with CMS guidance, from January 1st through December 31st of the plan year.
To accomplish this, it is essential to perform comprehensive testing of formulary file and system edits prior to going "live" in the adjudication system. In addition, it is required to perform a regular review of rejected point of sale (POS) pharmacy claims as well as to perform regular oversight of other delegated PBM functions.
You can reduce your compliance risk of transition non-compliance by testing transition fill look-back logic which must accurately identify transition eligible beneficiaries and drugs eligible for transition fills; maintaining formulary consistency for beneficiaries across years and during the year; ensuring formulary edits are effectively tested for accuracy prior to implementation; and by ensuring that the PBM does not administer the Part D benefit based on either Medicaid or commercial program requirements.
In a Formulary Administration Audit and Coverage Determination Audit, CMS seeks to determine how the Plan properly administers the CMS transition policy and its approved formulary by avoiding unapproved utilization management practices, prior authorizations, quantity limits, rejecting formulary medications as non-formulary, and maintaining beneficiary access to protected class drugs during transition and throughout the year. Failure to properly us approved formularies creates high audit risk, a possible civil monetary penalty, or even plan sanction.
Performing a comprehensive review of the formulary and utilization management system edits prior to going "live" in the adjudication system requires a robust, systematic process for comparing the CMS approved formulary benefit to a comprehensive claims universe in order to ensure that all covered drugs, tiering, and UM edits are consistently and accurately adjudicated.
Our Pharmacy experts can create and conduct an in-depth benefit administration test plan for your organization to validate that everything is working precisely as it should before the new plan year begins as well as on an ongoing basis throughout the year. We can ensure your PBM is processing claims consistent with your CMS-Approved Prescription Drug Benefit.
Resources:
We can help your MAPD or PDP develop and implement efficient and compliant internal operations and prepare effectively for CMS audits with professional services and unmatched compliance tools. Contact us to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Marketplaces — Your Stars are coming
The Centers for Medicare & Medicaid Services (CMS) has been aggressively working in the background to establish the Star Ratings program for the Marketplaces, thus consumers will have their first quality information by 2017. Selecting a Marketplace health plan will no longer be based only on price or provider. As such, quality ratings will have a bearing on market share.
Notably, CMS is also creating future Stars for hospitals, dialysis centers, home health with nursing homes and physicians. However, it's different for the Marketplaces.
The CMS plan starts with a beta test in 2015 by collecting both clinical data defined by HEDIS and consumer rating data collected via CAHPS. Clearly, neither of these is untested. CMS has extensive experience using both HEDIS and CAHPS to build Stars in the Medicare Advantage program; a process that has evolved over the last six years. CMS has honed its methods for conducting statistical analysis of each measure into a dynamic process that annually adds and removes measures to refine information provided to consumers. Notably, CMS is also paying rewards to higher performing plans. Even more significant for 2015, CMS has suspended its regulatory authority to terminate low performing plans. CMS is seeing the focus of these plans on improving Stars when faced with termination.
With the wealth of experience in running Stars in Medicare Advantage, this beta test is merely an assessment of collecting the information from Marketplace plans and validating data and statistical analysis methods. There will not be a long ramp up similar to what Medicare Advantage plans experienced before CMS put in Marketplace rewards and penalties.
If you haven't already, now's the time to put your team in place. Not just to respond to CMS setup requirements and contract with your HEDIS and CAHPS vendors, but to also begin establishing the Stars team as an operational component in your organization. It will be important to create a focus to find and monitor operations that affect Stars performance. Building the proper team and charging them with the responsibility to track and develop a Stars framework is necessary for a long-term commitment to achieving five-Star performance.
Resources
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
High Value Network: Generation 4.0
When it comes to healthcare, two truism's are that medical costs are going up along with demand for healthcare services. And when it comes to organic growth of healthcare volume and expenses, government programs represent a major driver, particularly when considering that on a daily basis thousands of baby boomers age into Medicare. During the last several years CMS has published a number of demonstration programs which are intended to improve the quality of Medicare patient outcomes while promoting financial efficiency on a unity cost or per procedure basis.
Commonalities among the various demonstration programs include: providing financial incentives when providers and plans (through STAR ratings) achieve specific quality and financial metrics, that when properly implemented, result in improved patient outcomes at a reduced cost. Not surprisingly, the discussion among many health plans has started to focus on how to manipulate the size and inherent "quality" of provider networks to achieve performance gains.
The concept is not new, in that payer efforts at developing "Centers of excellence", proprietary physician networks, private label networks, etc., have been around for at least two decades. These efforts were driven by market considerations, provider availability and consolidation, expectations around consumer demand and use of services. Many times high cost hospitals were screened out and networks were defined by the plan offering, e.g.. PPO, HMO POS and the like. Provider price concessions were expected in return for volume. Provider performance, at least as defined by improved patient outcomes, was not a major consideration in the design of these networks.
At least not until now. Given the current climate of healthcare reform, shrinking payer margins, provider flight from Medicare, percentage declines in medical school enrollment and CMS initiatives to constrain medical expense through improved coordination of care and elimination of unnecessary procedures, Medicare Advantage, Medicaid, and commercial health plans are exploring how the design of networks, around performance, can lead to better patient outcomes and better managed financial costs. Thus, the approach to network design is shifting way from preferred pricing in exchange for volume to a network design strategy focused on horizontal and vertical integration, superior treatment outcomes, more efficient use of resources as well as a willingness to share in financial risk. Population management strategies, establishment of consensus clinical protocols and reimbursement strategies tied to CMS STAR ratings, as well as additional quality and financial metrics, dictate network performance and thus health plan sustainability.
Tracking the measurement and reporting on agreed to metrics require a level of analytical sophistication that was not apparent in the early days of network design. The development of high value networks suggests that payers and providers must share a common vision for network design and consensus agreement on expectations around network performance. In addition network design efforts will require unwavering leadership commitment to ensure long term sustainability.
In the final analysis high value network design is a partnership enterprise between the health plan, the provider and the patient. Contributing components include health services/medical management, provider contracting, actuarial services, finance, analytics/ decision support and management.
As a diversified health services consulting company the Gorman Health Group is well positioned to become a partner in this effort from start to finish including the development of the most appropriate network design strategy to development of performance payment models to the implementation of the final network including assurances that the final network meets CMS network adequacy requirements. When you are ready, give us a call.
Resources
On Friday, September 26, John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, discussed the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Access the recording here >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Does your current Model of Care coincide with the new requirements?
The Centers for Medicare and Medicaid Services (CMS) revised the Model of Care (MOC) requirements, reducing core clinical and non-clinical elements from 11 to 4. Subsequently, the National Committee for Quality Assurance (NCQA) revised their scoring guidelines and methodology, based on this change.
What does this mean for health plans that are scheduled to resubmit applications for their MOC renewal in 2015?
Plans that are seeking to continue authorization to manage a Special Needs Plan (SNP) during the upcoming year must submit a MOC narrative to CMS as part of their SNP application by February each year. The SNP approval process itself focuses solely on the MOC requirements. Plan submissions are designed to go through Health Plan Management System (HPMS). As in previous years, the MOCs are reviewed and scored by NCQA, utilizing a scoring method designed with CMS. All of the elements and factors are scored on a scale of 0-4, with a minimum score of 70 percent required for a plan to pass.
For Medicare Advantage plans that need to modify their MOCs to accommodate the new core requirements, Gorman Health Group is ready and available to assist in that transition to help you reach a goal of obtaining higher MOC scores. We will guide your medical management staff to provide clear and concise responses to the multiple factors within each element, and also work with you to submit complete and detailed narrative responses to the following required elements:
1. Description of the SNP Population;
2. Care Coordination;
3. Provider Network; and
4. MOC Quality Measurement & Performance Improvement.
Insure you have a successful submission and approval process. Contact us today >>
Resources
The effective use of health information technology, or medical economics, can be one of the best assets for a health plan in controlling costs and service levels, especially when there may be an increase in plan membership. Learn important strategies for a plan's medical management team. Read more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Reasonableness — The Last Chance
After four tries, some Marketplace health plan applicants have still failed to meet CMS reasonableness standards for 2015. Some of these applicants complained that they did everything they were told to do but were again rejected. Others are still asking for definition and written standards. Unfortunately, most understand that nothing in writing exists beyond the regulation.
In response, CMS encouraged them to call and discuss their issues next week when the subject matter expert is available. Their appeal is limited to a phone conversation with this lone CMS interpreter of reasonableness. These applicants need to have definitive data about available providers, population and time and distance to convince this reviewer. Demonstrating the use of a deliberative process may be the lesson for 2016 applicants but for 2015, time has run out.
Resources
We've assisted scores of organizations through every step of the application process, from gathering the right data, completing the application, submitting, and responding to follow-up questions. Learn more about how GHG can help you tackle the application process >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
It's a Marathon - Not a Sprint
Plans will shortly be receiving the Readiness Checklist from CMS. At first glance it looks like just a bunch of boxes to check off and answering yes and no questions. Here's the rub:
Starting to figure out whether or not you have 30 boxes of non-readiness to report to your Account Manager is not a good way to roll into 2015. The previous year's readiness checklist should inform your priorities for the year's operations. Your relevant questions are: Who and what department owns this? Do we have policies and procedures, business processes and reports for this? Have we had any CMS outlier notifications about this? Did we audit this? Anything that you answer as "not ready" is automatically a priority.
You can't start being ready when the checklist arrives. Plans should be preparing to "be ready" all year long. For instance, here's what has to be done for Coordination of Benefits readiness:
CMS expects health plans to establish/maintain systems and procedures for at least weekly COB data report/file processing by not only receiving COB information from various sources, but also applying the COB information to claim payment system(s). Health plans may not understand how to interpret the CMS COB file and use internal sources, such as enrollment forms, claims, provider services, and member services to identify other health information for COB. Health plans need to be able to clearly categorize the various types of records and perform distinct validation, outreach and processing for group coverage, non-group coverage, third party liability, federal/state programs, as well as charities.
The important step of validating the other health information from CMS and other internal sources is often overlooked and a critical step to maintaining COB information in CMS systems. Without this step, information is outdated causing incorrect claim processing, member abrasion and escalated issues. CMS expects that organizations utilize the Electronic Correspondence Referral System (ECRS) to send COB updates to CMS timely and accurately, but health plans often fail to work the ECRS response file rejections and update internal claim system COB flags or other coverage information. Readiness planning should include the final, most often overlooked, yet most vital step: Reconciliation. An effective reconciliation process will work all COB related reports including TrOOP Balance Transfer exception reports, COB error reports, reconcile enrollment, claim and pharmacy systems, as well as monitor claim payment accuracy and recovery of other liabilities.
Resources
The biggest risk health plans face in government programs is managing membership and financial data. With Gorman Health Group's Valencia, you'll always know where your membership and premium-related data is out of sync, thus eliminating missed revenue and inappropriate claims payments.. Learn more about how Valencia can help you >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Important strategies for a plan's medical management team
It wasn't too long ago that the clinical staff and practitioners in the medical management arena of health plans only focused on the quality and continuity of care with their members. These objectives were very important, and should continue to be the focus of any medical management team. However, in more recent times, it has become just as important for the clinical areas of health plans to become aware of the costs of care they incur and to become involved in the control of those costs.
The Patient Protection and Affordable Care Act of 2010 mandates that health insurers report plan costs for the purpose of calculating their medical loss ratio (MLR), which is defined as the percentage of insurance premium dollars spent on reimbursement for clinical services and activities to improve health care quality. Large group insurers must spend at least 85 percent of premium dollars on claims and activities to improve health care quality, while individual and small group insurers must spend at least 80 percent of premium dollars to improve health care quality. If insurers fail to meet these minimum MLRs in a given year, they are required to provide a rebate to their members.
Thus, as a barometer of a health plan's solvency, management of the MLR is an important strategy for the plan's medical management arena. For example, the effective use of health information technology, or medical economics, can be one of the best assets for a health plan in controlling costs and service levels, especially when there may be an increase in plan membership. In addition, investing in quality improvements, such as electronic health records for the plan's provider network, or a web portal for the exchange of health care information can indirectly help to improve the health plan's MLR by reducing administrative costs. Reviewing the utilization data of the health plan's services to determine areas of over or under utilization, and monitoring the process for the authorization of member services are two additional important means for medical management to identify unnecessary costs that may be occurring.
Although there are multiple ways to look for an optimal MLR for health plans through medical management functions, the ultimate goal should be to monitor and take action to improve key indicators affecting MLR, such as the management of complex / high cost members, network contracts with providers and ancillary groups, inpatient performance, and pharmacy utilization, all of which can help to improve a health plan's overall financial performance.
Resources
On Friday, September 26 Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register today >>
On Tuesday, August 19, GHG's Senior Vice President, Bill MacBain and Senior Vice President of Healthcare Innovations, John Nimsky, explored the drivers and trends in cost and revenue which affect your MLR. Access the webinar recording here >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Another Flood of Good News for Medicare Advantage
Last week the Centers for Medicare and Medicaid Services (CMS) did its annual data dump for the 2015 Medicare Advantage (MA) and Prescription Drug Plan (PDP) bids. Even with MA plans sailing into the worst rate environment in over 15 years, the data offered another flood of good news for the industry.
Several takeaways from our first review of the terabytes of CMS data:
- 2015 will look a lot like 2014, with slightly fewer plan options. The average MA premium will rise $2.94/month, or $1.30/month on an enrollment-weighted basis, and 61% of MA enrollees will see no premium increase. Having said that, zero-premium options are down 18% in 2015, following a 14% decline this year as previously-free plans institute modest monthly fees to offset payment rate cuts in the Affordable Care Act (ACA). It speaks to how well the market is working as plans compete intensely for share.
- The number of MA plan bids were down 4.3%, but most of the reduction was attributable to non-renewing Private Fee-for-Service plans, and good riddance -- PFFS remains the worst policy fart in Medicare. PFFS products are down 31% next year following a 61% year-over-year decline in 2014. Network-based plans like HMOs and PPOs were only down 0.9%, showing tremendous commitment to this line of business across the country as MA membership surges past one-third of all Medicare enrollment.
- PDP bids were down around 7%, mostly attributable to consolidation among Pharmacy Benefit Management companies. Humana remains the cheapest PDP in 33 out of 34 regions. Aetna will get auto-assignment of low-income beneficiaries in 10 new regions, while WellCare lost auto-assigns in 10 regions.
- CMS implied MA membership in 2015 at 16.9 million, or growth of just 2.7%. That's very conservative -- we expect 5-8% growth in 2015, following 10% growth in 2014. CMS suggested that MA enrollment is up 42% over 2010 levels -- stunning growth that defies the funeral dirge played for the private Medicare option the year the ACA passed.
- Most of the major publicly-traded MA sponsors are keeping or expanding their service areas in 2015. Eminent analyst Josh Raskin of Barclay's points out that publicly-traded companies' enrollment growth in 2014 is up 9% year-to-date, while all others are at 8%.
- Humana continues to account for 25% of all MA/Special Needs Plan offerings nationally.
"Since the Affordable Care Act was enacted, enrollment in Medicare Advantage plans is now at an all-time high, and premiums have fallen," said CMS Administrator Marilyn Tavenner. "Seniors and people with disabilities are benefiting from a transparent and competitive marketplace for Medicare health and drug plans."
The good news didn't end there. MA quality continues to improve as the Star Ratings performance-based payment system continues to punch WAY above its weight. 40% of MA contracts were awarded 4+ Stars for 2015, but 60% of enrollees are members of those plans, showing a 30% increase since 2012 and demonstrating the competitive advantage high-performing plans now enjoy. Beneficiaries are now choosing higher-quality plan options in far greater numbers, and ALL of the roughly 200 plans we work with have made Stars their top priority for focus and investment. Stars has proven to be a game-changer in MA and a model all other government-sponsored programs from Medicaid to ObamaCare's marketplaces are beginning to follow. NCQA's 2015 health plan rankings show California-based Kaiser once again leading the pack among Medicare plans.
To me, the CMS data shows the triumph of government-sponsored, highly-regulated insurance markets. Medicare Advantage is one of the few examples of government getting it mostly right in partnering with private-sector companies to accomplish a tremendous public good, and continues to be a beacon of hope as ObamaCare enters what promises to be an even tougher second season.
For more updates, follow me on twitter @JohnGorman18
Resources
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register today >>
Gearing up for 2016 — Look Ahead, Plan Ahead
As if you are not busy enough, now is the time to start looking towards both 2016 and the future, to ensure you have the correct products in your marketplace as well as determine whether it is time to either increase or decrease the size of your market. Understanding and really knowing your current membership, plus why your members enroll/disenroll, is the first step. Some of the questions that have to be answered are:
- What does your member look like by product and where do they live?
- What age did they purchase your product?
- How long have they been with your organization?
- When do members tend to disenroll and why?
- Are there any usage patterns that are helpful in understanding benefit design opportunities?
- Do you know how they purchased your product (online, by mail, phone or with agent)? Understanding where your dollars were spent to acquire the membership allows you to adjust and adapt during the shortened annual election period (AEP).
Do not forget to understand your service area/marketplace as a whole.
- When was the last time you did a detailed competitive analysis?
- Have you included a detailed network analysis?
- Enrollment trends and product distribution by competitor?
- Is there a possibility to have a service area expansion?
Even if you are just thinking of entering the marketplace, now is the time for forward thinking initiatives.
If you missed my webinar on September 10, join the Point and you will be able to listen to "Look Ahead — Plan Ahead, Key Insights To Market Share & Growth" webinar.
Resources
Smart benefit design is a dynamic process that begins with an examination of intended markets with consideration given to strengths in member retention and medical management, and is executed with specific enrollment and financial targets in mind. Whether your organization is just entering the government programs space or is already well-established, our team is standing by to assist. Contact us today >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register today >>
Bombshells from MedPAC on Medicare Advantage Retention
The Medicare Payment Advisory Commission (MedPAC ), the nonpartisan blue-chip Congressional uber-nerds on our favorite entitlement program, met this week and the staff report presented a couple bombshells on retention rates in Medicare Advantage (MA).
In the aggregate, the commission noted that in 2012 the voluntary disenrollment rate from plans was slightly below 10%. The vast majority of individuals who disenrolled -- 80% -- switched to another MA plan, with the remaining 20% going back to traditional Medicare. Bombshell #1: we're seeing an overall MA retention rate of roughly 98%, and speaks to the tremendous popularity of the program vs. "old school" coverage.
The commission also noted:
-
When beneficiaries changed plans, a large majority picked another plan with a lower premium.
-
Beneficiaries who elected to switch back to traditional Medicare from MA had higher average cost per beneficiary vs. those who stayed in MA. Does this indicate that sicker beneficiaries feel they'll get less hassles and/or better care in unmanaged fee-for-service Medicare? I doubt it. More likely: once back in unmanaged Medicare they go on a wild utilization binge. Why? Because...
-
Older MA enrollees are less likely to disenroll than younger ones. This is puzzling, given the finding above and the direct correlation between income, age and health status in the elderly. Older beneficiaries are, on average, poorer and sicker than younger ones.
On a plan-specific basis, Star ratings also correlate positively with member retention. Bombshell #2: MA plans with 2 or less Stars experienced a 17% disenrollment rate, while plans with 4 Stars or higher had a disenrollment rate of 4.9%. That's an incredible statistic, showing the rapid effectiveness of Stars impacting the member experience at the plan level in just a couple years. Stars has truly become a game-changing indicator of quality across health plan functions.
All of this speaks to the fundamental triumph of Medicare Advantage: for those who know, it's the far superior option for senior care. And once they're in, they don't leave.
Resources
Join GHG for an in-depth discussion on the end-to-end management of data from noting identified gaps in data processing, concerns regarding data completeness and accuracy. Register now >>
To succeed in Medicare Advantage, plans must achieve higher quality and Star Ratings, surmount CMS and medical loss ratio (MLR) requirements, and develop member onboarding and retention capabilities, all while operating in a highly competitive market. Learn how GHG can help ensure your MA plan is positioned to make the most of the program's opportunity.
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>