Much Progress on Healthcare.gov, But "Back End" Fixes Will Determine Success
Of the many, many things I gave thanks for last week, there was Jeffrey Zients, the White House management guru brought in to sort out the mess that is the launch of ObamaCare, and for his geek squad working feverishly on the fixes. His long-awaited progress report was released on Sunday, and it's amazingly sanguine for a government document. Knowing big IT projects as we do, it's impressive how far the fix team has gotten in a matter of weeks, much of it in consumer-facing functionality on the "front end" of the website and the enrollment process. What remains to be seen is what can be done this month on the crucial "back end" functions that connect to insurance companies participating in the exchanges -- the functions for which ObamaCare will ultimately be judged when coverage kicks off on January 1, and the true test for Mr. Zients and his geeks.
"HealthCare.Gov on December 1 is night and day from where it was on October 1," Zients told reporters in his victory lap Sunday morning. "While we still have work to do, we've made significant progress with HealthCare.gov working for the vast majority of consumers." The administration released some geek speak to make its case. Response times, capacity, and system stability are markedly improved, and conventional wisdom is that the consumer-facing functionality -- the "B to C" part -- is in much better shape.
It's the "B to B" piece that's still a problem. The metrics Zients released Sunday focused almost exclusively on the front end of healthcare.gov -- there were precious few details on the back end, specifically on the all-important "834" transmissions to insurers that tell them who's signed up, and which have been problem-plagued since the launch. You'll recall that last month Henry Chao, who oversaw healthcare.gov's technical development, said 30-40% of the back end functions remained to be completed, including a system to send payments to insurers. Without timely and accurate 834s from the Federal data hub, coverage can't be effectuated, members can't get their insurance cards, insurers can't get paid, and claims can't start flowing through the system for the uninsured.
The omission was glaring, and the Administration jumped in to address it. White House spokesman Jay Carney said that 834 fixes were ongoing but that the problems were "vastly improved." "We believe that the majority of fixes to the 834 forms have been made, including significant ones over the weekend," Carney said. "We're going to continue to work with issuers to make sure that the remaining problems for issuers will be fixed."
"A number of the fixes that went into place this weekend in particular will significantly address some of the highest priority things that we know were a particular concern with those transaction forms," said Julie Bataille, spokeswoman for CMS.
But there's still clearly a very long way to go. Administration officials and a new "Payer Exchange Performance Team," made up of insurance industry leaders, in a meeting on Monday acknowledged that about one-third of completed applications since Oct. 1 contain errors generated by healthcare.gov. The errors included failure to notify insurers about new customers; duplicate enrollments or cancellation notices for the same person; incorrect information about family members; and miscalculated federal subsidies. It's still bad enough that yesterday CMS recommended that consumers who choose a health plan through HealthCare.gov contact the insurer afterward to make certain they are actually enrolled. "Consumers should absolutely call their selected plan and confirm that they have paid their first month's premium, and coverage will be available Jan. 1," Bataille said.
There is no margin for error this month. Deadlines for enrollment are coming up in less than 2 weeks for people to get insured by Jan. 1. If the 834s can't be fixed by then, and it appears likely they won't, the next big barrier to enrollment is the ACA's requirement that eligible exchange customers pay their first month premium before they receive coverage. Without clean 834s, susbidy verification and calculations given to the plans, no one knows what the first month's premium will be. That may be the next "audible" to be called on the field: the Administration will seek a way around the premium payment requirement, and then ask insurers to take a leap of faith, issue coverage, and hope that premiums and subsidies catch up later. And that's a real problem that strikes at cash flow for many of the smaller, regional players in the exchanges, and especially for start-ups, like the ACA's co-ops. Nobody set aside contingency funds for this kind of headache.
So Mr. Zients and his geeks can't let any grass grow under their feet, and we all ought to spill some Starbuck's or Red Bull for what lies ahead for them. But to also give some perspective, a hat tip to Dr. J. Mario Molina, CEO of Molina Healthcare: "A few people are going to have data that's not correct; but compared to the tens of millions of people who don't have coverage right now, that's a minor problem." He's thrilled with the progress made, and points out "We process a couple million patients through our system the last week of the month as it is."
Whether you're a glass half-empty or full type of person, I think we can all agree we are looking at one wild and hairy enrollment reconciliation process in Q1 and 2 of 2014, so grab your shovels. There's a pony in here somewhere.
Resources
Join us December 11 from 2:00 — 3:30 pm ET for a lively session with Gorman Health Group strategy and data analysis experts who will discuss actual case studies that show how plans can mine data for precious insight that can help improve performance. Register >>
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Consultant Assessment in the Headlines
Consultants were in the news this week; that doesn't happen often. In this scenario which I will not deeply dive into, a private consulting team was brought on to independently assess the status of a certain federal health insurance enrollment system. Their assessment, after reviewing hundreds of documents and conducting scores of interviews, includes a number of risks with some detailed root cause drivers.
A risk assessment conducted well in advance of any initiative helps leadership and stakeholders understand what potential failures or gaps exist within a system or process. Most readers who have compliance responsibilities are aware of the requirement to conduct a formal baseline assessment, and then to periodically re-evaluate the accuracy of that baseline assessment. The reality is that with all the day-to-day responsibilities that compliance needs to handle, the baseline assessment or the re-evaluation often takes a back-burner.
It is recommended that an organization seek an external resource to conduct these evaluations. With our experience working with plan sponsors nationwide, our Senior Consultants and Clinical teams can take care of that assessment for you, leaving you with a report of gaps, risks, and recommendations on how to correct. Don't have the time? We can help you correct the deficiencies. Ask yourself when the last time a comprehensive risk assessment was performed; determine if you have time to conduct it on your own, and then contact us to discuss how we can help.
Resources
The annual risk assessment is an essential part of the ongoing risk management process that assigns priorities for mitigation plans. Learn more about how Gorman Health Group can help you identify and remediate inefficiencies >>
Join us December 11 from 2:00 — 3:30 pm ET for a lively session with Gorman Health Group strategy and data analysis experts who will discuss actual case studies that show how plans can mine data for precious insight that can help improve performance. Click here to register >>
Medicare Advantage Showcased as the Model for Medicare Reform
The National Coalition on Health Care (a nonprofit organization representing 80 organizations who support comprehensive health system change) and the Partnership for the Future of Medicare (a bipartisan organization supporting the long-term security of Medicare) have a new lobbying message — don't kill the golden goose. Recognizing the upcoming budget battles this year and next, these organizations presented their lobbying strategy which will feature Medicare Advantage plans as the model for a sustainable Medicare program. John Rother from the National Coalition, Lanhee Chen from Stanford University, and Ken Thorpe from Emory University highlighted the innovations in Medicare Advantage plans that should serve as the model for reforming Medicare fee-for-service. These innovative programs focus on beneficiaries with multiple chronic conditions that drive Medicare costs and include care coordination, disease management, team-based care, transitional care, medication management, prevention, health coaching, and evidence based lifestyle programs. They argued that Medicare Advantage plans are already facing a 6.7 percent payment reduction in 2014 and that any further cuts will lead to threats to these innovative initiatives that should be encouraged and not penalized. They discussed research studies showing that MA plans had higher quality scores in 9 of 11 HEDIS measures compared to FFS, 13 — 20 percent lower readmission rates, lower hospital costs including a spillover effect to the overall health system in areas with high MA enrollment, and lower mortality rates.
Dr. Ken Thorpe and Senators Ron Wyden and John Isakson discussed their upcoming initiatives to pursue introducing successful MA innovations in FFS Medicare. Dr. Thorpe is supporting a program he calls "Medicare Integrate" that would build prevention and care coordination into original Medicare. Under this program, CMS would contract with health plans, home health agencies and other entities to provide to provide team-based diabetes prevention services, care coordination services and pharmacotherapy services to FFS Medicare beneficiaries. These services would be provided at no cost to beneficiaries. The bipartisan chronic disease legislation being developed by Senators Wyden and Isakson would also authorize Medicare to pay for teams to provide care coordination services for FFS beneficiaries with chronic conditions.
Although Senator Wyden estimates that his proposal will result in 5 — 10 percent savings to Medicare in the current budgetary climate, it will be difficult to enact a new Medicare benefit without a structure such as an ACO or medical home to produce offsetting savings. While some demonstration projects adding care coordination services to FFS Medicare have achieved savings, other demonstrations have not achieved savings and resulted in CBO scores of higher costs to Medicare.
Resources
Join us December 11 from 2:00 — 3:30 pm ET for a lively session with Gorman Health Group strategy and data analysis experts who will discuss actual case studies that show how plans can mine data for precious insight that can help improve performance. Click here to register >>
What's next for the ACA
Here we are on November 15th one day after President Obama unexpectedly delayed a key provision of the Affordable Care Act, which allows insurance companies to continue, for one year, offering health care plans that fall short of the requirements as outlined in the ACA . The next day our "stewards of national well being" elected to pass a bill in the House of Representatives which is intended to allow insurance companies to sell individual health coverage to anyone who wants it, irrespective of any required standards in the ACA. As expected, the vote was justified on the grounds that the House is concerned that people will be left without health insurance under the current law, no consideration at all, wink wink , was given to 2014 reelection concerns.
Although the measure is expected to fail in the Senate, the underlying issue remains - that partisanship continues to prevent any attempts to take a more reasoned approach to bolster what is good about the ACA and to work out solutions on what is not working.
I think most of us already agree that the ACA or ObamaCare will be a major election topic as it was in 2012. In the meantime we will continue to see repeated efforts to roll back any and all provisions of the law.
What gets lost in all of the machinations by Congress and our Executive Branch is that not much has changed. We still have 40 plus million people uninsured, we still have the elderly making choices between buying food or prescriptions, and we still have lots of false or misleading information published on a daily basis about the intended impact of the ACA.
Personally, I believe the effort was flawed from the beginning but what's done is done and although I may be a lone voice in the wind, I believe it is the responsibility of Congress, consumers and health professionals to stop sniping and start working on how we make the ACA as successful as can be. If that requires changes along the way so be it. What we don't need is continued political posturing. In many respects our future is at stake depending on how we move forward..
Resources
Gorman Health Group Senior Vice President of Public Policy Jean LeMasurier, summarizes the final rule that sets standards for refunds when a Marketplace or QHP improperly applies federal subsidies or incorrectly assigns an enrollee to a plan. Download the summary here >>
Pay me now or pay me later: Things to keep in mind when you set your 2014 budget
Back in the '80's Fram Oil Filters had an advertising campaign that featured an actor dressed as a mechanic, admonishing viewers to get their oil changed and get a new oil filter, to prevent costly engine damage. "Pay me now or pay me later," he said.
When it comes to some key Medicare Advantage functions, the "pay me later" scenario can be perilous indeed.
Take data reconciliation, for instance. MA plans, especially those with drug coverage, need to reconcile at least a dozen different types of data with CMS: Enrollment data; Transaction reply reports; Retro processing contractor; Beneficiary churn ; Capitation payments; Premium data; Out-of-area residence; Subsidy payments; Medicare as secondary payer; Prescription claim (PDE) data resolution; Part D coordination of benefits (COB); Enrollment data validation; Compliance & reporting; Medicaid state roster and best available evidence of Medicaid enrollment.
The sheer volume of data and transactions dictates use of automated processes and controls to manage the reconciliation workflow. Spreadsheets won't cut it, and quasi-manual processes rapidly fall behind the need for daily data import and analysis. Failure to reconcile results in incorrect claim and capitation payments, premium collection issues, enrollment and benefit errors, reduced quality scores, and the potential for excess repayment under drug plan risk corridor reconciliations. Even for small plans, there can be millions of dollars at stake.
Compliance is another area where failure to invest in automated systems now can cause a bad "pay me later" outcome. The cost of a bad CMS compliance audit isn't just the staff time to correct problems. Most compliance problems are directly linked to member satisfaction issues, and a "bad" audit is symptom of deeper problems that lead to high member services call volume and disenrollment rates. Not only does CMS expect plans to be audit ready all the time, members expect things to go right all the time. We have found that the best approach is to use information technology tools to continually monitor compliance at the department level, to maintain complete and organized documentation, and to identify areas where compliance is lagging — where management intervention is warranted. Compliance programs need to be documented, regimented and sustainable. Compliance doesn't wait to happen. It takes an organized and on-going campaign, supported by automated tools to remind, track, document, and spotlight problems.
A third opportunity for trouble is in how sales agents are trained, vetted, and monitored. CMS requires annual training, which is best done using computer-based learning systems. Embedded testing provides documentation of comprehension. On-going supervision requires diligent tracking of complaints and allegations to confirm, respond, and assess improvement. As with other complex tasks, an automated solution reduces opportunities for errors and omissions.
At a time when every dollar counts, it's a good idea to consider budgeting for an investment in software solutions that solve these problems. Gorman Health Group has built software that supports our own consultants as they work with health plans on these issues, and these tools are available for health plans to use in their own operations. The GHG software is unique in that all of these applications are Web-based, fully hosted solutions that present no strain to IT resources. And GHG's subject matter expertise drives each product's unique functionality.
I invite you to contact my colleague RaeAnn Grossman, to start a conversation about your goals, the risks you face, and your available resources and budget for the 2014 year.
RaeAnn Grossman
Chief Sales and Marketing Officer
Rgrossman@ghgadvisors.com
Resources
Decision-makers from Health Plans and Provider Organizations are invited to join GHG for a free webinar on November 19th: "The future of the Government sponsored health care." Register for this free event now >>
The Online Monitoring ToolTM (OMTTM) is a complete compliance toolkit designed to help organizations track the compliance of their operations. Visit our website to learn more about how the OMT can help your organization >>
The way in which you onboard, train and conduct ongoing oversight on your sales agents is critical. GHG created Sales Sentinel™ specifically to meet the needs of health care organizations operating in regulated government markets. Learn more here >>
Every health care organization is looking for improved outcomes, better compliance and enhanced process efficiency when it comes to managing membership and premium payments. GHG's Valencia was designed specifically to meet those needs.
There is no cheat sheet for 2014.
Now is the time of year when we all have 12 things to do in the next 30 minutes, plus we are budgeting and we need to write our strategic approach for 2014. We have to learn how to prioritize and focus on what is truly important to our success. Unfortunately, there is no cheat sheet, no best practices for all things healthcare, and we cannot succeed if we have too many strategies. Let's compare five areas:
- Administrative excellence and compliance
- Clinical innovations around case, disease, and utilization management
- Provider Engagement
- Risk Adjustment
- High-risk member management
Recently, Gorman Health Group asked the attendees of Medicaid Health Plan Association, "What are the most important strategies in 2014?" The answers and ranking are below:
- High-risk member management
- Provider engagement and innovative reimbursement models
- Risk Adjustment
I imagine that this may be that cheat sheet for all of us.
Although Michael Porter shares, "strategy is about making choices, trade-offs; it's about deliberately choosing to be different." There are some strategies that every business has to do well to survive, and we all need to be ready to succeed at those mentioned above in 2014.
Resources:
Decision-makers from Health Plans and Provider Organizations are invited to join GHG for a free webinar on November 19th: "The future of the Government sponsored health care." Register for this free event now >>
Medicaid health plans must be able to navigate through State and Federal regulations and work well with State agencies.
GHG solutions-based consulting drives results to your Medicaid health plan, visit our website to learn how >>
Reading the Stars in Medicare in 2014-2015
Whatever you may think of healthcare.gov, CMS is killing it on the Medicare Star Ratings Quality Demonstration.
As we move into the final year of CMS's historic and controversial $8.5 Billion Quality Demonstration, we see clear evidence that quality incentives are working, plans are making major investments to improve their ratings, and quality is improving across the industry. One thing we can be sure of in uncertain times: proven performance-based payment systems like MA Star Ratings will spread to Medicaid, the exchanges, and commercial accounts in the next 3-4 years under banners of transparency and accountability. $8.5 Billion in a $3 Trillion industry seems infinitesimal, but Stars are moving the industry in ways outsize to their impact.
Many industry experts giggled at the Affordable Care Act ‘s (ACA) provision allowing MA plans to earn up to 5% additional reimbursement from the government for quality metrics based on the CMS star system, and 10% in double bonus (mostly rural) counties. The Star ratings system was, at the time, a laughable ranking barely 2% of beneficiaries paid any attention to. Not anymore. In 3 years, CMS has evolved Stars to an increasingly sophisticated carrot and stick for quality improvement, with massive financial implications for payers.
To date, each half-star rating equated to roughly $50 per member per month in bonus payments. For 2014, we estimate the enrollment weighted-average increase to plan paymentst from Star bonuses is approximately 4.75% and 3.3% in 2015. Anything below 4 Stars in 2015 means no bonus and a major financial headwind for plans. With MA plans seeing roughly 5% margins, 2014 being the worst year of MA reimbursement cuts from the ACA, and 2015 meaning the end of bonuses for plans below 4 Stars, plans are making significant investments to improve their ratings.
There was clear evidence that Stars incentives are working: 52% of MA plans are now at 4 Stars, up from around 37% of all MA plans. The average member weighted ranking for 2013 is 3.86, up from 3.7 in 2012. The biggest chunk of MA enrollment is now in 3.5 Star-rated plans: 30% or 4.4 million. There are now 16 5-Star rated plans up from 3 this year.
While tremendous progress is being made on Stars, GHG's analysis of the data also shows what a long, hard journey these performance metrics present to health plans. We have much improving to do in managing conditions like osteoporosis and mental health, where most plans scored badly. And the data shows a need to continually improve the service model, like providing interpreters, managing member complaints and coverage disputes.
MA plans in qualifying counties, mostly rural, can receive a "double bonus," the payment impact of which is significant. There are about 4 million MA members in double bonus counties, roughly 27% of the total MA population. Double bonus counties add about 100 basis points to payments across the entire MA program.
5-Star rated MA and Prescription Drug-only plans can enroll members year-round in 2014, rather than just during the annual enrollment period. This is a major strategic advantage for Star leaders, but one that few have taken full advantage of yet — and that's about to change. With big nationals finally attaining the honor, they'll be ready and hustling all year.
CMS has been very clear that it reserves the right to terminate MA contracts that are below 3 Stars for 3 consecutive years, citing its authority in an April 2012 final rule which became effective this year. About a half-million Medicare beneficiaries are enrolled in plans with less than 3 stars.
Resources:
Interested in seeing how your Plan's performance compares to others in your market? Download GHG's Star Ratings Database that combines the CMS-issued 2014 Star Ratings with those over the program's history from 2008 on.
Hear from GHG Stars expert Jane Scott on October 29th. GHG and AISHealth team up to present a 90 minute webinar: "Inside the 2014 Star Ratings for MA and Part D: Trends and their implications." Register now >>
Want to hear more from John? Decision-makers from Health Plans and Provider Organizations are invited to join GHG for a free webinar on November 19th: "The future of the Government sponsored health care." Register for this free event now >>
Live Connects + Motivated Buyers = Better Sales
Converting active leads to instant appointments is vital in today's insurance market. Whether you are working in this fall's first open enrollment period outlined in the Affordable Care Act or Medicare's annual open enrollment period, the company that converts immediate leads has an excellent advantage over its competition.
Agent Connect is a tool that helps shorten that sales cycle by connecting field agents and callers at the exact moment callers are ready to talk. All facets of the sales process — a caller inquiry responding to a marketing piece, a convenient 3-way conference introducing field agents to interested callers, helping agents set the required scope of appointment and the appointment date - are all handled in real time using mobile devices.
Imagine the pleasure of a caller that dislikes following automated instructions on their phone or leaving voicemails. Instead, they are expertly pre-qualified by a professionally trained call agent and are then immediately transferred to a local field agent that is literally at their beck and call. Talk about exceeding expectations!
Using Agent Connect, field agents with time between scheduled appointments indicate their availability for real-time leads via mobile device. Meanwhile, callers responding to a marketing campaign are pre-qualified by a carrier's call center. If the caller wants to meet with an agent, the call center matches them with an available agent nearby and instantly connects them via a 3-way conference. This instant communication allows agents to build an immediate rapport with callers, also shortening the sales cycle.
In this way, Agent Connect provides a seamless "hand-off" of a warm lead to agents that have signaled their availability. Companies using Agent Connect can dispense leads in any number of ways: by top performers, round-robin or random selection.
Agent Connect is an exciting collaboration between agents, insurance carriers and call centers that significantly reduces the sales cycle and is redefining the term "insurance lead."
Resources
The Bloom Call Center is licensed in 48 contiguous states and offers marketing, call center and technology solutions to the health care industry. Since 2007, Bloom has participated in over 55 million conversations about insurance products, submitted over 200,000 applications for insurance, and set over 150,000 appointments for seniors to meet with Licensed Agents. Bloom is a proud partner of Gorman Health Group. Click here to learn more.
Crisis Averted for Medicare and Medicaid. Not So for ObamaCare.
So, just hours from national debt default last night, a deal was struck to reopen the government and raise the debt ceiling. Our long national nightmare is over...at least until January 15, when this entire calamity could be repeated by battered ObamaCare dead-enders. It's a crisis averted for Medicare and Medicaid, but not so for ObamaCare.
As hundreds of thousands of Feds returned to work here in DC this morning, the overwhelming question on the street was, "Wait, what the hell was this for anyway?" (And, "is the PandaCam back on yet?")
You'll recall this episode was caused by Congressional right-wingers led by Senator Ted Cruz (R-TX) forcing a shutdown to defund ObamaCare. Didn't happen, never could have happened. Anyone who's watched the famous "School House Rock" episode "I'm Just a Bill" knew that. In the end, the anti-ObamaCare fanatics got nothing. Not one concession. Instead, the Cruzers managed to distract the entire country and the press from the colossal mess that is the launch of the health insurance exchanges. Oh, wait, his 21-hour filibuster and shutdown antics actually did some good: Cruz himself raised over $800,000 in campaign contributions in the third quarter alone. While conservatives promised not to repeat the economic hostage-taking in January when government funding next expires, that kind of cash-for-obstructionism pays and we'll have to see. It will coincide with the now-all-important effective date of ObamaCare coverage on January 1, and may be too much for the Cruz faction to pass up. In the meantime, the ObamaCare Funhouse is open!
With the shutdown in the rearview mirror it's time for oversight hearing Palooza -- and a press refocused on the messy launch of the exchanges. Every House committee with any healthcare jurisdiction is already calling for hearings. Some of the best reporting I've seen in years is happening as a rolling whodunit of finger-pointing. If Health and Human Services Secretary Kathleen Sebelius keeps her job in the face of this epic mess she's going to need her own parking space on the House side. Despite calls for her sacrifice, I think she'll keep her job, as will CMS Administrator Marilyn Tavenner. If for no other reason, the White House knows they'd never get replacements through Senate confirmation hearings in this environment.
To date, healthcare.gov has had some 15 million visitors, but it appears some 150,000, less than 1%, have been able to enroll given persistent technological snags. Indications this week are that the consumer experience with ObamaCare is improving as CMS and its array of contractors work around the clock debugging and finding workarounds. But the fixes aren't coming fast enough to avoid a whirlwind of scrutiny in the weeks ahead from restive Republicans looking for blood and the ultimate "afflict the comfortable and comfort the afflicted" story for journalists. Four major areas will be probed in the coming weeks:
- The Technological Meltdown: the GOP is already calling the ObamaCare exchange launch a "$400 million disaster" and the technological shortcomings have been well-reported. As consumers manage to establish accounts, the next wave to hit ObamaCare will be harder: subsidy eligibility determination. Health plans participating in the exchanges are seeing a trickle of "834" enrollment transactions come through. It's a small sample but thus far the quality of the data is as questionable as the rest of the launch. This is now a footrace to December 15, the cutoff for January 1 effective enrollment; if widespread problems persist, it will become a serious liability for the Administration.
- The Traffic: healthcare.gov has had 15 million visitors thus far. Last week it was learned that HHS estimated on September 5 that 500,000 would be signed up by October 31, and they're clearly way, way behind. But the stunner was the revelation that HHS built the website to handle 50,000 visitors an hour -- in the face of 50 million uninsured Americans, sorry, but that's like 1-800-FLOWERS being unprepared for Valentine's Day. The fanatics will have a field day with this one. Democrats will push back that no one anticipated 36 states revolting and forcing the Federally-Facilitated Exchange to pick up the slack, and predictably, every time the Administration asked for more money, Congress refused.
- Fraud. Republicans were already making hay of hacking and fraud concerns before the government even reopened. It's a simple enough question: "if the rest of ObamaCare's functionality is so third world, how can consumers know their sensitive personal health information is safe?"
- The Guys Who Farted and Are Pointing at the Dog. Lead healthcare.gov contractors like CGI Federal and QSSI are going to get Cruzified in the both hearings rooms and news stories in the weeks ahead.
So ObamaCare drama will intensify, just as Medicare and Medicaid temporarily ducked a bullet. A shutdown of over 30 days -- or worse, a debt-ceiling breach -- could have been big trouble for our favorite health programs. With CMS staffers back on the job, claims and payments will flow again, at least until January 15. But the deal included establishment of a budget conference committee that's supposed to look at the big picture of reining in entitlement programs, the biggest contributors to the national debt. The consensus in town is that panel is DOA, on a road to nowhere, just like the Super-Committee of the last budget debacle, given the worsening political rift in DC. And that means major reforms to Medicare and Medicaid are unlikely in the near future. Some relief as the dust clears here in Dysfunction Central.
Resources:
Hear more of John's predictions and analysis on how the political landscape impacts decision makers for Government-sponsored health care's private partners. Register for his complimentary November 19th Webinar
Podcast from John Gorman: What does the deal to re-open the government mean for Obamacare, Medicare and Medicaid? Listen now
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What ObamaCare's Glitches Mean for Health Plan Operations
It's been a rough couple weeks for the launch of ObamaCare. The only thing that's kept the Federal exchange's woes off Page 1 this week has been the continuing dysfunction on the Hill. Healthcare.gov traffic will wane, bugs can be recoded and dysfunctional processes redesigned pretty quickly, so we haven't seen anything fatal thus far, unless we're still having these problems a week away from the now-all-important effective date of January 1. But the sheer volume of Weeks 1 and 2, with CMS working on a shoestring with a night-shift staff in the middle of a government shutdown, and the hardest part of ObamaCare enrollment to come, has major implications for health plan operations in just a matter of weeks.
Here's what's keeping us up at night. All those back-end glitches in the Federal Exchange have yet to be identified, because the back end also includes the next phase of ObamaCare enrollment: subsidy eligibility verification. The key difference between ObamaCare and Medicare Advantage or Part D is the subsidy eligibility maze, and that there are several major steps to effectuate an enrollment that will hit plans in waves, not as a trickle.
ObamaCare is only open to American citizens and documented immigrants, so all applicants' status must be electronically verified with the Social Security Administration and the Department of Homeland Security. The exchanges also have to confirm that applicants are not already enrolled in another government health insurance program, like the Veterans Health Administration, the Department of Defense, the Office of Personnel Management, and the Peace Corps. Then the exchange has to check with the applicant's Medicaid/SCHIP program to see if they're already enrolled. Then the applicant has to apply for the subsidy based on their income, which has to be determined by IRS.
Finally, subsidy in hand, the applicant picks a plan. The exchange must then provide her information to the health plan she has chosen, which then has to reconcile all of that data with the exchange. In Medicare Advantage or Part D, the plan receives the application; in the exchanges, the plan flies blind and doesn't know who its members are until the exchange provides the members' coordinates. And then remember, applicants aren't official until they make their first premium payment, which could come in the form of a cashier's or personal check, cash, credit card or even a prepaid debit card. Only then is an enrollment effective, and all these steps mean big headaches for payers in the weeks ahead.
Think of it this way: 9 million-plus hit Healthcare.gov in its first week; most will return to apply for subsidies and have their eligibility confirmed and calculated; and then all of those folks will pick a plan. Those completed transactions ("834's") will hit the plans, in waves similar to those of the last two weeks. Things get really exciting starting the last week of January 2014, and then the last week of each month thereafter, as the plans must clean up all this data in the runup to the monthly payment. We have about 30 days before the waves start to hit — call it a "shopping lag" or a "glitch lag". We think those waves will look like this, as a function of enrollments and transaction volume for the plans over time:
Our conclusion: "crunch time" for the plans arrives in early December and goes through the end of February, and COOs and executive teams need to plan accordingly. And, oh, by the way: this crunch will happen as plans are trying to close their books for 2013 to make financial reporting deadlines, so grumpy CFOs will abound with their operations colleagues.
Yes it's been a messy launch, but the real mess has yet to arrive.