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 >>
Wall Street Consensus: 2014 Will Be a Big Growth Year for Payers
Since returning from summer vacation I've been making the rounds with friends and spies on Wall Street to see what the nation's checkbook is thinking about the seismic changes coming to our health system starting on October 1. Usually these guys are like long-tailed cats in a roomful of rocking chairs about disruptive events like ObamaCare. But a consensus emerged: 2014 is going to be a big year for health insurers.
Generally speaking, Wall Street analysts and investor types see ObamaCare's health insurance exchanges and the 8 million uninsured expected to enroll next year as having relatively little influence on payer financial performance in 2014. Even with most red states resisting Medicaid expansion (especially those with the highest rates of uninsurance, like Texas), the money guys see Medicaid and the transition of Dual Eligibles to health plans being the real driver of coverage and margins. They see a tough reimbursement environment in Medicare Advantage, but not enough to derail growth in 2014, and covering an outsize portion of SG&A. So, overall, a big year is coming, and driven by government-sponsored programs.
Analysts agreed there are some clear signals that coordinated care is actually working to reduce utilization, especially in high-profile cohorts like readmissions. They point out medical loss ratio (MLR) trends for all product lines came in below expectations and consistent with continued volume weakness reported by hospitals, with most publicly-traded plans now guiding to a decrease in costs for 2013. No publicly-traded health insurer missed their estimates for Q2 2013, and all beat expectations by at least 20%.
Expecting further weakness in government securities due to another budget crack-up in Congress, some analysts anticipate plans will actually deploy capital in 2014 to achieve longer-term strategic goals more quickly, like acquisitions and investing in ACOs and medical homes. There was complete agreement on a continued long-term trend of payer consolidation, with WellCare's purchase of Windsor Health Plan last week the latest omen.
Our friends noted that in second quarter the average publicly-traded plan Medicare Advantage MLR was 85.5%, up slightly year over year. Medicaid health plan MLRs actually decreased slightly to 87.5%, and revenue, membership, MLR and earnings all came in better than expected.
At least in our little informal focus group, Wall Street was unanimous: 2014 is going to be a big year for health insurers, with Medicare Advantage covering an outsize amount of plan operating costs, and ObamaCare's Medicaid expansion and duals transition driving the growth.
Resources
Listen in as Gorman Health Group Senior Consultant Nilsa Lennig shares the three most common misconceptions regarding marketing to the Dual population.
We're standing by to help you make sense of the regulatory landscape and chart a sustainable course for success in your Medicare business, visit our website to learn more.
Join us on Oct. 1 and hear Gorman Health Group's Chief Sales and Marketing Officer, RaeAnn Grossman, outline the components of a successful risk-adjustment program.
The survey says...
In May, GHG conducted several marketplace surveys. The initial survey highlighted our clients' top priorities. Here is what the ranking showed as our clients' focal points:
- STARS
- Clinical & Financial Alignment
- Risk Adjustment
- MLR monitoring
We understand that in order to emerge as leaders or at least survivors of the rate reduction and complex regulatory world we live in, health plans, health systems, ACOs, and capitated medical groups have to identify business levers that impact the greatest improvement to the bottom line. This is exactly why we created the Alignment Innovation Suite - we take your data and create a driver and alert system for an interdisciplinary team to review and discuss. The Alignment reports clearly indicate where the problems are and where we can jointly create the road map to fix them.
The new Alignment engine couples medical cost and utilization while at the same time overlays benefit and network design. The reports display the areas in the greatest need of collaboration and redesign, i.e. where to spend your time and resources to get the best bang for your buck.
In recent GHG case studies, the Alignment engine, assessment and reports clearly depict the need to 1) redesign provider payment models, 2) completely restructure health services or medical management functions and criteria to impact population health management & patient engagement , 3) operational improvements; simple changes with huge financial impacts and 4) benefit remodeling to improve patient navigation of your healthcare ecosystem.
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GHG's Alignment Solution Suite assessment is backed by industry leading health care expertise and is managed by a team of veteran consultants who will help lead your organization to better financial alignment, product design and health care efficiency. Visit our website to find out more.
Join us on August 8 to get practical advice on the best ways of getting into the MA market from GHG Chief Development Officer, Aaron Eaton, Senior Vice President of Finance, William A. MacBain, and Senior Director of Compliance Solutions, Regan Pennypacker.
ACOs: Here to stay or gone tomorrow?
With the recent announcement by CMS that nine of the 32 Pioneers were dropping out of the program there has been much "Sturm und Drang" about the passing of ACOs into obscurity. A recent article in the Investor Business Daily has gone as far as to predict that not only are all ACOs going to fail, but while in existence they "will diminish the quality of care received" by Medicare patients.
Seriously? Is anyone buying this stuff? Think about it. The program, Pioneer and MSSP, has improved beneficiary access to services, and allowed better coordination of services. This is achieved by ensuring that patient information is shared among caregivers, which improves joint decision making between a care giver and the patient about treatment options. If it all goes according to plan, there should be a reduction in the cost trend because the elimination of unnecessary procedures or treatment results in less "stuff" to charge for. But even if savings do not materialize, isn't the prospect of earlier diagnosis and better treatment outcomes just as good of a result?
Interestingly enough, I do not recall any of the Pioneers who dropped out suggesting that they would stop their efforts at coordinating care or encouraging joint provider patient decision-making, etc.
What's the point you ask? The point is that the underpinnings of the Pioneer and MSSP programs, i.e. providing the right services in the right setting at the right time for the right price, will survive the ACO and will serve as the legacy for all who participated in the program --stay or leave.
Those of us in the healthcare industry committed to the improvement of clinical outcomes while curtailing costs see ACOs for what they are. ACOs are one small step for service delivery engineering, and one giant incentive for continued health care practice reform at the provider and payer level.
So let's stop wasting energy speculating whether, and or when ACOs disappear. The more important question is how do we build on the foundation that CMS has created with the Pioneer, MSSP and other demonstration programs designed to elicit service delivery and pricing innovations. Opportunity knocks.
Resources
If conceived and executed well, the ACO represents a unique opportunity for provider organizations to redefine their financial relationships with payers, beginning with Medicare. Read more on ACO opportunities in our white paper on the topic
Join us on August 8 to get practical advice on the best ways of getting into the MA market from GHG's Chief Development Officer, Aaron Eaton, Senior Vice President of Finance, William A. MacBain, and Senior Director of Compliance Solutions, Regan Pennypacker.
Our comprehensive management solutions provide ACOs in transition with the tools, processes, and expert guidance to drive overall performance through new models of finance, leadership, and clinical value. Visit our website to learn more.
Not a Narrow Network - A Smart Network
What we learned in Medicare + Choice is still true today, we don't need narrow provider networks; we need aligned provider networks, aka Smart Networks. We have also learned that narrow networks often cause ill-will with your health systems and uncontrolled leakage. A Smart Network builds a mini-healthcare community similar to an ACO in your healthcare delivery ecosystem. A Smart Network can focus on a health system and it's provider feeder system or it can better engage your Primary Care Physicians (PCP) and "rendering" PCP. Smart Networks typically are invisible to members; however some payers may differentiate copay to encourage Smart Network utilization.
What is a Smart Network?
It is provider community aware, educated, and contractually aligned with the health plan or payers objectives around member health status, medical cost, care delivery, and health outcomes.
What is needed to develop a successful Smart Network?
- DataWarehouse: Success is built on capturing and compiling claims, lab, pharmacy, provider, eligibility, benefit, risk adjustment, and premium files on a very timely basis. This datamart needs to issue reports clearly displaying the successful areas of performance excellence and areas for alert and in need redesign. This is the health plans early warning system and strategy monitoring instrument.
- Multidisciplinary teams: The payer needs to know and monitor the data, drivers, goals and objectives; plus the provider partner need a team to absorb, implement, and impact the drivers and objectives.
- Slow and Steady Deployment: Not everyone can be globally capitated; make certain your team have expertise in gain-sharing for cost reduction programs, bundling payment programs, episode of care models, and mixed payment innovation models so this new structure is a win-win. The reimbursement methodologies may need to include assurance around participation in data capture exercises, code specificity, closing gaps in care, and other outcome, STARS, or risk adjustment initiatives the payer may deploy. Design your methodology; forecast its impact, and internal redesign the workflows touched on both sides — payer and provider.
- Network Management Touch: Make certain you are paying claims timely and accurately today. Health system or providers don't like to partner with those with "high administrative burden." Thus, consider having the following Network Management structure: 1) telephonic claims & process efficiency liaisons 2) contract negotiations and 3) educator, communication, and report review liaisons.
- Joint clear objectives for the SmartNetwork: whether it is a health system, cardiology practice, oncology association, a group of dialysis centers, nephrologist, endocrinologists or an ancillary provider makes certain the teams, objectives, and monitoring reports clearly understand, agree on and represent the short term and long terms goals.
- Early & Continued Dialogue: The initial dialogue will highlight if a provider may be a good SmartNetwork partner and the commitment of monthly or quarterly joint operation committee meetings will cement it. The original initiative may have a flaw in the development or implementation so this joint committee will need to review the impact and augment as needed.
Two closing thoughts:
- Remember bonus payments to providers are considered part of the medical cost in your MLR calculation.
- These Smart Network initiatives often need external support with design expertise, implementation experience, credible reporting design & product, and often a bit of mediation.
GHG is always eager to support the exploration and development of SmartNetworks. We have team members who have worked within PHOs, ACOs, IPAs, large health plans, and specialty medical providers; we are here to help if you need it.
Resources
Gorman Health Group's Senior Vice President of Public Policy,Jean LeMasurier discusses the recent CMS Medical Loss Ratio (MLR) regulation and its provisions.
GHG is helping many experienced plans by developing smart networks: accountable care, shadow capitation, and payment bundling within their current service areas and networks. Visit our website to see how we can help you too.
Health Plan's Role in Provider Alignment
Long gone are the days when the provider contracting functions, the medical economics function and the health services/medical management functions within a Health plan could operate in their own separate environment with limited interaction. Health plans today are pressured to provide improved member access to health services at reduced cost while striving for improved treatment outcomes for their members. Consequently, health plans are being asked to motivate their providers to adjust practice patterns in ways that support performance based outcomes and shifts emphasis from procedure based reimbursement to value based reimbursement. That can only be accomplished successfully if the dynamics between providers and Health Plans evolve from adversarial to one of shared interest, collaboration and shared decision making.
Give health plans and the provider community credit for recognizing such and having made significant strides in aligning their own interests, as well as their memberships interests, with those of the provider community. Witness collaborate efforts such as ACOs, patient centered medical homes, bundled payment initiatives and other innovative payment programs. Just today United announced an ambitious five year initiative to contract 50 billion dollars of commercial health insurance contracts with ACOs nationwide. Similarly, CMS is committed to publishing on an annual basis Hospital charges to demonstrate the huge disparities in hospital pricing for the same procedures across the country with the hope of eventually motivating hospitals to bring rationality to inpatient services pricing.
Resources:
At GHG we have a history of helping all stakeholder organizations engaged in providing better health outcomes efficiently and in the best possible setting. Come join us.
A rapidly growing number of provider organizations, especially those involved in accountable care organization (ACO)-type arrangements, are deciding to get into Medicare Advantage. Join us for a webinar on August 8 to get practical advice on the best ways of getting into the MA market.
Read more on ACO opportunities in our white paper on the topic.
Medicare Shared Savings Program Circa 2014
Anyone who has paid attention knows that since 2011 more than 200 Medicare ACO's have been operationalized. If you add in commercial ACO's, the number is closer to 400.
Still sitting on the fence wondering if ACO's will survive? Consider this, the underlying construct for a Medicare Shared Savings ACO is to promote accountability for care of Medicare Fee for Service (FFS) eligible beneficiaries, to improve coordination of care under Medicare Part A and B, and to encourage investment in infrastructure and redesign in care processes. Not a bad set of goals when it comes to patient care under any circumstance, right?
So why not seriously consider whether an ACO initiative is right for your organiztion?.
If you are interested in pursuing a Medicare Shared Savings ACO, the first step in that process is to file your Notice of Intent, (NOI). You can file that notice anytime between now and May 30th, 2013.Keep in mind that it is non-binding, but by doing so; you get a seat at the table. After you fill out the NOI, you will receive a confirmation notice from CMS containing your ACO ID number, which will be needed to complete the CMS user ID form required to submit an application. The due date for obtaining and submitting a User ID form is June 10th, 2013. It takes up to three weeks for CMS to process your User ID form so the form should be filed immediately after you file the NOI. In other words act early.
Once processed you can now begin to work on the actual application, which is due anytime between July 1st and July 31st, 2013.
Upon reading this blog, don't go out and look for the application on the CMS website because you won't find it. CMS has announced that it will post the application sometime in June of 2013. However, don't let that deter you from beginning to pull together content for the various application components.
Having helped multiple interested organizations in successfully filing ACO apllipcations during the last two years, and actually serving on the board of a currently operational ACO, we know what CMS is looking for in respect to application content. We also know what the challenges and lessons learned are with respect to ACO implementation.
If you are interested, contact us today. We know we can help you.
Resources
Attend the 2013 GHG Forum, June 13-14, in Washington, DC and hear from key decision makers at cutting edge ACOs across the country about lessons learned during their organizations' evolution — from conception to execution of varying ACO models.
Read more on ACO opportunities in our white paper on the topic.
Read about how three Gorman Health Group clients were approved by CMS to become Operating Accountable Care Organizations.
Pioneer ACOs: Who will stay and who will go?
Thirty-two Pioneer ACOs sent a correspondence to CMMI in late February, suggesting that they would exit the Pioneer ACO program if CMS did not accept their recommendations for changes to the quality measures employed to determine pay for performance in the Pioneer program. As a group, the Pioneer ACOs suggested to CMMI that because of their collective experience with performance based contracts and performance reporting on quality measures, they -- not CMMI -- know what works and what doesn't when it comes to benchmarking quality to reimbursment.
The Pioneer ACOs argued in their correspondence that the benchmarks set by CMMI were more rigorous than those typically adhered to in the commercial and Medicaid programs. They also argued that the data CMS was using for benchmarking was the Medicare Advantage data, which was not typical of a non-managed care population such as that attributed to the ACOs.
Bottom line: the Pioneers were asking to work with CMMI to come up with a different approach to benchmarking or they would leave the program.
CMS has responded by giving the Pioneer ACOs until May 1 to decide whether to stay or go. What is not clear: Whether CMMI/CMS is willing to compromise and modify the current approach to benchmarking and whether the Pioneer ACOs will leave the program en masse if their wishes are not met.
Note that the the non-Pioneer ACOs are also subject to the same performance based benchmarking approach. So... will a Pioneer exit from the program result in a similar flight from the MSSP ACO program? If that were to occur CMMI/CMS would be faced with a public relations nightmare, one that I would think could be easily avoided by taking another look at the benchmarking issue.
Just saying!!
Resources
Read more on ACO opportunities in our white paper on the topic.
Read about how three Gorman Health Group clients were approved by CMS to become Operating Accountable Care Organizations.
Size Does Matter for Medicare Shared Savings ACOs
A recent article in CMS's journal, Medicare and Medicaid Research Review, reinforces our concerns about the prospects for small Accountable Care Organizations (ACOs) in the Medicare Shared Savings Program (MSSP). It appears that size does matter for these provider systems, and that small ACOs are extremely vulnerable to flaws in CMS's gainsharing methodology.
According to the article by Rutgers Unviersity researchers, an ACO with 5,000 assigned beneficiaries, and which makes no change in efficiency (neither loses nor gains money), faces a 50% chance that CMS will get it wrong and either reward them inappropriately or send them a bill for inefficiencies that were not real. As real savings grow, the probability that small ACOs will get at least some recognition grows, but the risk of error remains high.
The law of large numbers is a crucial consideration, according to the article. ACOs with 20,000, or better 50,000, beneficiaries, are much less likely to be graded inappropriately due to randomness. This analysis did not look at the impact of randomness in the quality measures, but it's probably as great a factor in causing even more payment error for smaller ACOs.
All of which points to an exodus of small ACOs from the MSSP in 2-3 years when the first round of the demonstrations conclude. Nobody wants to see "grand opening, grand closing" of these important experiments in evolving provider systems -- especially CMS. The agency needs to consider methodological findings like this one to ensure it doesn't cut small ACOs off at the knees, just as they're beginning to walk.
Resources
Visit our website to learn how Gorman Health Group can help you implement new models of finance, leadership and clinical values as systems adapt to health reform.
A Half-Trillion from Medicare/Medicaid in Fiscal Cliff Deal?
In a recent webinar we predicted that we would see $300-500 Billion in savings from Medicare and Medicaid in a deal to avoid the fiscal cliff. The shapes in the fog are becoming clearer and we'll stand by it: Senate Majority Whip Dick Durbin said this morning on MSNBC's "Morning Joe" that he'd like to see around $400 Billion in cuts from Medicare as lawmakers negotiate a deal to avoid the fiscal cliff.
"I think that's something we should start working with, I think that's a good indication of where we could go. But when we sit down with revenue on one side and entitlements on the other, that's when we get specific."
Durbin suggested a few ways to help achieve those cuts: more means testing, possibly a separate prescription drug program with a low-cost option (?) and encouraging the development of ACOs. Later, during a speech to the Center for American Progress, Durbin, a member of the 2010 Simpson-Bowles Commission, discussed raising the Medicare eligibility age. He's got plenty of "savers and raisers" up his sleeve: "There were some 20 options that were given to us, and I supported a number of them."
Durbin took a welcome poke at some of his Democratic colleagues who oppose reforming Medicare and Medicaid: "Some say don't touch entitlements, I don't think that's a responsible approach," Durbin said. "Untouched, unchanged, Medicare runs out of money in 12 years — 12 years."