CMS 2015 Spring Conference
Some important points came out of the Centers for Medicare & Medicaid Services' (CMS') Medicare Advantage Prescription Drug (MA-PD) Spring Conference & Webcast; the presentations and videos of the event can be found here in CMS' Event Archives. If you did not have a chance to attend or watch it live, please watch the videos for important changes pertaining to many aspects of the MA-PD program. Speakers addressed Part C and Part D call letter updates, policy and technical changes, Quality Improvement Project (QIP) and Chronic Care Improvement Program (CCIP) lessons learned and best practices, the new network management module, enrollment updates, and fraud, waste, and abuse (FWA).
From the Compliance perspective, we heard the following loud and clear:
- Enrollment in MA-PD is growing with the aging of baby boomers. CMS is taking a proactive stance to improve the program by stressing the need to work together with plans to provide care more efficiently and provide quality.
- Finalized program changes allow CMS to require MA organizations or Part D plan sponsors to hire an independent auditor to validate correction of CMS audit findings. The good news is − some of you are doing this today. Having another set of eyes on your correction efforts provides you with a level of assurance you may not be able to obtain by having internal staff performing validation. Ever hear that phrase, "There are three sides to every story: yours, mine, and the truth?" Getting an independent perspective is so important. While you might not agree with a reviewer's findings, the point is that it will hopefully bring you closer to the truth than validating yourself.
- CMS clarifies when it is appropriate for an MA plan to invoke an extension on organization determination and appeal requests. Based on what we see, most plan sponsors are invoking extension requests in rare circumstances and strive to meet the regulatory timeframes established without extension. Therefore, plan sponsors should be prepared to update procedures to ensure extensions are only taken when appropriate.
- Network adequacy — Not only is CMS requiring that provider directories be updated real time, they are adding network adequacy to program audit protocols (coming late summer or early fall, according to CMS). CMS is also implementing a way for plans to check their network adequacy by submitting their Health Service Delivery (HSD) tables in the Health Plan Management System (HPMS). Previously, this step was only available within HPMS when submitting an application for a new plan or a service area expansion (SAE). Plans could contract with a vendor or obtain software to check their own network adequacy. We anticipate that CMS' network adequacy protocol will require a plan to provide real-time data pertaining to whether or not their contracted providers have open panels. I'm aware of one 5-Star plan that has been doing ongoing network adequacy reviews for a while. Those plans that are used to pulling HSDs only at the time of application or (possibly) bid submission should plan now for the additional steps CMS may require of plans to tell the true story of adequacy. Keep your eyes on this blog for more information from my esteemed colleague, Ellie Martin, on network adequacy.
CMS' upcoming MA-PD Audit & Enforcement Conference & Webcast is taking place on June 16. Prioritize this event in your schedule, and attend either in person or via webinar.
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Gorman Health Group's Complaints Tracking Module (CTM), grievances, and appeals processes, provides a new way to ensure your cases come to a timely and compliant resolution. Created with CMS in mind, as it captures key information related to intake, processing, categorization, determinations and higher appeals or re-openings to process cases according to CMS' complex and detailed requirements. Contact us >>
The Imminent Medicaid Mega-Reg is Gonna be "Epic"
For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We're coming to call it the "mega-reg" here. Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting the term "epic" used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.
Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn't address long term care services and supports and managed long-term care, a major impetus for program reform at the state level. The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.
MACPAC's debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:
- Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard. CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard. The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
- Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit. Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers. The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
- Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services. CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
- Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance. CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
- Transparency — Medicaid health plans want transparency of state practices to develop capitation rates. CMS could require states to share data and assumptions and allow plans to comment during federal review.
- Baseline/Encounter Data — CMS could impose additional standards in addition to "appropriate data." CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
- New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.
Beyond payment issues in the mega-reg, the Commissioners discussed:
- Long Term Care -- CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
- Provider Networks -- the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans. Strengthened requirements for appeals and grievances may also be included. The proposed rule may also include enhanced quality data and reporting. It's expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.
We'll have scads of analysis of the Medicaid proposed rule as soon as it hits the street. It's gonna be huge.
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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>
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Five Critical Steps to Enhance Revenue & Maximize Growth Potential
Everybody's talking about revenue management and maximizing growth opportunities for health plans, but no one has laid out the steps for successful outcomes…until now. Gorman Health Group (GHG) is giving you our recipe for enhancing your premium revenue and maximizing your growth potential in the following five-step plan:
Step 1. Targeted Population/Demographics
Different populations have different needs. Understand the makeup of your membership and their healthcare needs, their provider preferences, and understand what they want to experience when interacting with your health plan. Is your health plan designed to meet the needs of your targeted population?
Step 2. Optimizing Revenue and Performance-Based Payments
Revenue management is best performed at the member level. Each member should be viewed as an investment needing optimizing. Revenues for members are based upon bids or other established "base" amounts. These base payments need to be optimized for each member. Optimizing member-level revenue begins with an effective member onboarding and retention program, whereby the following factors can be assigned to each member:
- Health Risk Assessment (HRA) to identify potential Hierarchical Condition Categories (HCCs)
- Medical management needs
- Member-level attributes included in Star Ratings measures denominator (e.g., diabetes, rheumatoid arthritis, high-risk medications, etc.)
- Special payment status for Medicaid, end-stage renal disease (ESRD), hospice, long-term institutional, and other health insurance (OHI)
- Continuous vigilance for status changes that could impact payments (e.g., actively monitoring claims for indications of circumstances warranting special payment statuses)
Focus on keeping members by enhancing the member experience through the entire organization. Member retention is the new "selling."
Step 3. Delivery System and Care Management Approach towards 85% Medical Loss Ratio (MLR)
It is imperative that health plans aggressively manage their medical costs as the most expensive component of healthcare operations. Employing the following programs can significantly impact MLR:
- Effective medical management
- Effective provider and network management
- Effective pharmacy management
- Effective Pharmacy Benefit Manager (PBM) contracting/re-contracting
- Effective claims processing and claims payment rules (Medicare vs. Commercial vs. Medicaid)
- Effective durable medical equipment (DME) management
- Effective hospice and end-of-life care
- Effective fraud, waste, and abuse (FWA) detection and prevention programs
- Effective payment responsibility/Coordination of Benefits (COB) processing
- Effective capitation leakage/correction processes
Health plans must spend at least 85% of premium dollars on healthcare. Effectively managing MLR to below 85% of premium revenue enables a health plan to offer more attractive benefits, lower cost-sharing, offer best-in-class providers, and reward top delivery system performers.
Step 4. Optimized Cost of Operations, Selling, and Administration
A well-run health plan should target cost of operations, selling, and administrative costs to a level at or below 10% of premium revenue. This involves knowing your operational strengths and weaknesses and outsourcing the appropriate functions to experts. This involves making brutally honest assessments of internal capabilities and a willingness to make tough decisions. It is often best to have these "no sacred cows" assessments performed by external experts having an independent viewpoint. In addition to the health plan core operational areas of Membership Accounting, Member Services, Claims Processing, and Appeals and Grievances, health plans must perform critical assessments to ensure:
- Effective financial management
- Effective benefit and premium design
- Effective sales and marketing
- Effective information technology
- Effective project management
The goal is to operate as efficiently and effectively as possible at a performance level that earns maximum quality bonus payments.
Step 5. Profit Margins for Reinvestment in Growth
That leaves a profit margin of 5% of premium revenue. This provides opportunity for strategic investments in:
- More staff and training
- Best practice processes (member onboarding, healthcare concierge, member/patient experience)
- Updated systems and analytics
These investments are key to serving your existing membership with best-in-class performance — all intended to place your organization heads and shoulders above your competitors. In the current competitive environment, growth means attracting members from other health plans. There will be winners and losers.
Winning!
GHG is comprised of some of our industries most experienced and proficient health plan subject matter experts. Our consultants can help your organization with a "whole house" assessment or targeted assessments, and we can help you fix the problems we identify. Contact us today to get started.
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GHG Operational Performance Group includes some of our industries most experienced and proficient claims subject matter experts. Our consultants can help your organization implement best practices in claims cost containment. Contact us today to get started >>
When it comes to financial reconciliation and overall membership data management, you must protect against leakage. Need help staying ahead of the CMS reconciliation process? GHG will access your member premium revenue, accounts receivable and CMS revenue reconciliation. Visit our website to learn more >>
19 Lessons from 19 Years
Nineteen years ago this week, I left the Health Care Financing Administration (HCFA), now the Centers for Medicare & Medicaid Services (CMS) and the Office of Managed Care, to launch what would become Gorman Health Group. Time has flown, the company has grown, and my backside sewn with hard lessons about our industry and government health programs. Here are 19 lessons I've learned in those 19 years.
- What Medicare Advantage and Part D do, Medicaid and the commercial market, including the ObamaCare Exchanges, follow 3-5 years later.
- Every CMS staffer I've ever known is well-intentioned, many are downright brilliant, and all want to be good business partners to health plans. Their shortcoming is lack of business experience and how stuff works in the real world. There is a huge difference between policy/guidance and operations. That's where we come in.
- If government health programs were an easy business, we'd be out of business.
- Inspect what you expect. Or, as Reagan said, "Trust but verify."
- Star Ratings, like risk adjustment before it, is the biggest and most consistent experiment in performance-based payment on the planet, a total game-changer and the new fulcrum of competition. You don't excel at Stars by working on them off the side of your desk.
- Fish where the fishes is.
- Pick your vendors and partners like you pick your fruit.
- Capitation with performance-based payment is the only real hope for long-term viability of entitlement programs.
- Being a doctor is the worst job ever. Right after community hospital CEO and President of the United States.
- High-performing health plans are good at everything, especially those functions that are member- and/or provider-facing. It's about culture and execution.
- Health plans' days are numbered if they can't consistently provide value to CMS, their customer, and to providers, their partners. That value is about two things: making data actionable and moving money to contributors when quality and results improve.
- It's easier to increase revenue than it is to cut costs.
- Pharmacy benefit managers are a health plan's most important partner. They are also the ultimate B2B companies and most are struggling in the transition to B2C and true government accountability for results.
- Big data and high-tech is all the rage -- and all noise, unless it's actionable. What works is low-tech: clogs on the street; a house call; a medication consult.
- Doctors of the future are in multispecialty practice and leaders of a team of nurses, aides, social workers, and pharmacists. They are quarterbacks, not gods. They diagnose, and everybody else treats.
- So much of the future is about retail pharmacy. In short time, they will make more providing services than filling bottles.
- Ninety percent of the evil and waste in the system occurs at the tip of a doctor's pen.
- We are all going to retire thanks to government programs. Demographics is destiny.
- Five percent of members account for 60 percent of your spend. Put the love and focus on them, and you can pretty much leave everyone else alone.
It's been an incredible ride these last two decades, and especially the last five as health reform blossoms. We look forward to continuing the journey, older, wiser, and bigger. Stay tuned.
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Spring Fever Focus: Grievances and Appeals
Spring is here, showing us all different signs of renewal. It motivates us to clean out clutter, open those windows, and start the year fresh. Audit season is also upon us, and people are taking a close, hard look at internal processes that surround grievances and appeals processing. Findings in this area keep showing up, like that college grad that keeps popping in to visit his friends back on campus. Just leave already, you've had your time!
What is causing the frequent failures that the Centers for Medicare & Medicaid Services (CMS) describes? I spoke recently at the 2015 GHG Forum regarding this issue. We believe it is one of the following factors: people, processes, or technology. It's time to perform an assessment on this area. Ask yourself these questions:
- How much specialized training has this team received this year? How do I know our team leaders are up on the regulations and best practices? Is the Grievances and Appeals (G&A) Department a dumping ground for service issues that could have been handled in Member Services? With constant call center turnover, is G&A working closely with Member Services management to educate new staff?
- Are procedures for case processing overly complicated? Is staff empowered to effectuate change, or are they hampered by rigid workflows? Are the procedures even referenced anymore, or are they just a placeholder document for the intranet policy and procedure (P&P) library?
- Can I customize our case database to meet my changing reporting needs? Are the reports I am getting out of the system providing me with the information leadership needs to make decisions? Are there steps in place to ensure all aspects of the case were completed? Can it produce universes according to CMS audit specifications, or do I need to prep them manually?
These are tip-of-the-iceberg questions that we consider during an operational assessment of Complaints Tracking Module (CTM), grievances, and appeals processes. As one of the highest risk, beneficiary-facing areas of your plan, this is a great place to kick off spring cleaning. Create a checklist of your own to conduct an assessment of these processes. Chances are, you already know your pain points, and you just haven't documented and escalated as of yet. Don't wait until a CMS audit notice, as illustrated by a very truthful sentiment (thanks someecards!)
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Gorman Health Group's Complaints Tracking Module (CTM), grievances, and appeals processes, provides a new way to ensure your cases come to a timely and compliant resolution. Created with CMS in mind, as it captures key information related to intake, processing, categorization, determinations and higher appeals or re-openings to process cases according to CMS' complex and detailed requirements. Contact us >>
Gorman Health Group Client Forum Takeaways: Government Programs are Booming, Bar is Rising
We just wrapped our best-ever Gorman Health Group 2015 Client Forum at National Harbor with over 200 of our closest clients and partners. There was both great and tough news, so here's a few takeaways, including a couple stunners:
- For the first time, a prominent Wall Street analyst said he could see a path to 100% Medicare Advantage penetration. Barclay's eminent health care observer, Josh Raskin, stunned our audience with projections of over 29 million Medicare Advantage enrollees by 2023, a penetration rate of over 42%, with the potential to go all the way with Ryan Plan-like legislation now feasible this decade.
- 47 states now hold Section 1915(c) home and community-based services waivers for Medicaid, which will unleash a new flood of dual eligibles into health plans. Special Needs Plans (SNPs) for duals are now on a path to permanent reauthorization, and over 30 states now use D-SNPs to enroll over 1.6 million beneficiaries. That number will more than double in the next 2 years.
- While year 2 of open enrollment for ObamaCare was dramatically improved from its messy launch, problems persist, especially with membership reconciliation and issues related to the interim process to auto-enroll most members staying in their plans. Cleanup of membership discrepancies will likely take another year or even longer.
- Risk Adjustment Data Validation (RADV) audits will become the new normal in Medicare Advantage. 2015 will be the first time we see plans prosecuted under the False Claims Act and hundreds of millions clawed back by the Centers for Medicare and Medicaid Services for unsubstantiated codes submitted for higher payments.
- Maximizing data, strong provider partnerships, documentation and ICD-10 preparedness are keys to audit proofing your Risk Adjustment program.
- The Star Ratings system of performance-based payment is the new cornerstone of competition among health plans. Stars has expanded into more than a dozen state Medicaid programs, and to ObamaCare's issuers as well, and the bar is rising. Technical changes to several measures mandate much higher performance to stay ahead of the curve and avoid falling below 4 Stars, where bonus payments and bid rebates vanish. 2015 will be the first year where plans below 3 Stars are terminated.
- Medicare Advantage plans won several lobbying victories in this year's "Call Letter", the rate and policy announcement for 2016, including an average 1.25% benchmark increase from a cut in the February draft. This signals a new era of influence muscle for the industry, where CMS will increasingly fight out policy changes "below the waterline" in subregulatory guidance and enforcement, where politicians are less likely to intervene.
- Appeals and grievances and pharmacy benefit management vendor performance remain the #1, 2 and 3 regulatory infractions in Medicare Advantage, and integration of long-term care and supports and services the leading challenge facing Medicaid health plans.
- CMS is on pace for its most aggressive enforcement year ever, with over a dozen actions taken against plans this year already.
As we've said since the passage of the Affordable Care Act, we are now in the Golden Age of government-sponsored health programs, and the opportunities and challenges that come with this shift have never been greater. Our clients went home with a clear grasp of both, and we are thrilled so many joined us this year.
Resources:
Join John Gorman, GHG's Founder & Executive Chairman, as well as Bill MacBain, GHG's Senior Vice President of Strategy on April 14 as they provide a hard-hitting analysis of critical areas addressed and finalized in the document from 1-2pm ET. Register now >>
GHG's Senior Vice President, Healthcare Analytics & Risk Adjustment Solutions, Dan Weinrieb, recaps the Risk Adjustment rulings in the Final Call Letter and provides keys to success in an article on the GHG blog. Read more here >>
The Risk in DIY: CMS Mandated Material
"Do It Yourself", or DIY, has been the rave for years now. From social media sites like Pinterest to television networks like HGTV, Americans have become fond of this philosophy. Now, I am a big believer in being self-sufficient and must say that I have been sucked into marathon viewings of DIY shows often (Nicole Curtis of Rehab Addict is no joke!). And, while I have seen my share of success stories, more often than not, I see DIY projects result in complete frustration from those attempting to DIY and very costly mistakes.
A prime example of this within the MA industry is the DIY approach to creating CMS mandated material. Year after year, I see organizations attempt to produce upcoming plan year material in-house with the intention of saving budget dollars, but ending up with a costly mess due to lack of subject matter expertise and lack of adequate resources. When you think about the overall importance that is placed on CMS mandated material and the level at which these materials are scrutinized by CMS, it begs the question, "Is the risk in DIY really worth it?"
Picture this: your organization decides to use existing staff to prepare mandated material for the upcoming plan year. Initially, the approach seems feasible and the cost savings looks attractive. Although the process is very time intensive, your organization completes the undertaking, or so you think. It turns out that the amount of time it took to review materials before HPMS submission could not be supported by your Medicare Compliance Department due to lack of resources. That results in functional areas being made accountable for not only the development of respective mandated material, but also the compliance review. With business-as-usual responsibilities not changing, the Enrollment department, which was tasked with creating ANOC/EOCs did not factor in a review for accuracy of information and compliance. Although your organization met the CMS distribution deadline, it is discovered that many of ANOC/EOCs contain cost-sharing errors and do not follow the CMS model templates and allowances. This discovery impacts about half of your membership and must be reported to CMS. CMS initially requires your organization to create errata for these documents, but when it is identified that the errors are so significant and high in volume, CMS requires your organization to recreate the affected ANOC/EOCs in their entirety and slaps on a civil monetary penalty. With a clear understanding of what led to inaccuracies in the first place, your organization seeks outside help from subject matter experts to limit the risk of non-compliance errors. It is later identified that an original version of an ANOC/EOC is still being sent to members upon request for a particular plan benefit package because a process for document version control was non-existent. In the end, this is a DIY project gone horribly wrong. The intention to save money by DIY resulted in something exponentially more expensive between CMPs and the exorbitant cost to reproduce materials. Most important of all, your beneficiaries were impacted by these inaccuracies.
I know we would all like to think that DIY is always a contending option, which it is, when you have the necessary resources and expertise to do so. But just as I will never claim to be an expert in building houses just because I've performed some wall patchwork here and there, organizations need to face the reality of the risks in DIY. Take the time to seriously consider how well-equipped your organization is to handle the development of CMS mandated materials as the season rapidly approaches. Is it time to bring in the experts?
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For questions regarding consulting services for CMS mandated materials, contact me directly at rpennypacker@ghgadvisors.com
The Gorman Health Group 2015 Forum is April-7-9! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for the Gorman Health Group 2015 Forum today!
Go-to-Market — No Department Left Behind
Although the next Annual Election Period (AEP) is a ways off, now is the time to start thinking about product development and overall strategy. In most organizations, the start of the "Go-to-Market" (GTM) strategy discussions begins with the C-Suite, Product Development, and Sales and Marketing. This keen group of professionals works sequestered and siloed for a period of time and then, voilà , they emerge with the lifeline of the health plan's benefits and strategy in their hands.
In order to launch a successful set of products (as well as strategies for selling these products), one of the most important and initial steps must be the creation of a fully integrated GTM governance structure to enable the organization to manage more effectively between strategy implementation, optimization, compliance requirements, and results tracking of an integrated marketing strategy. This will require the involvement of multiple functional areas, even those that aren't traditionally thought of (e.g., Medical Management, Pharmacy, Compliance, Member Services, Provider Relations, etc.), which means no department can be left behind.
"The failure to include Compliance as part of GTM initiatives is a prime reason for some of the regulatory pitfalls that arise and are discovered way too late," says Regan Pennypacker, Vice President, Compliance Solutions. "Whether your organization deals in Medicare, Medicaid, or a combination of these lines of business, the overall guiding principles will be the same. A culture of compliance starts at the top and is effectively integrated when each area of the organization takes ownership of compliance requirements and expectations respective to each functional area."
Execution and management of this initiative is no easy task. A successful GTM strategy brings Compliance and operational stakeholders to the table. Assigning the right accountable parties at the onset is critical to ensuring regulatory requirements are implemented and overall strategy is executed. For suggestions and solutions on how to build your GTM strategy and team, contact me directly, cknight-lilly@ghgadvisors.com.
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Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
Is This Condition For Real? CMS Compliance Program Audit Findings Tied to FDR Oversight
There is no shortage of concern when it comes to awareness of first tier, downstream and related entity (FDR) oversight. In fact, during a recent webinar hosted by John Gorman, Executive Chairman at GHG, on "The Top 10 Things Killing Your Organization", we shared survey results showing the number one Compliance Program risk, from a health plan's perspective, is FDR oversight.
A number of compliance specialists recently asked us about a CMS condition that either they have received as part of a program audit, or have heard about others receiving. Specifically, the condition pertains to the failure to provide evidence that a Plan Sponsor's FDR employees received fraud, waste and abuse (FWA) training within 90 days of hiring or contracting and annually thereafter.
The citations previously referenced in this condition include 42 CFR § 422.503(b)(4)(vi)(C) and 42 CFR § 423.504(b)(4)(vi)(C), as well as the Compliance Program Guidelines, Section 50.3.2 (dated 1/1/2013). In summation, the CFR required MA organizations to establish and implement effective training and education, and the sub-regulatory guidance supported the regulation, also stating that:
- Sponsors may choose to tailor the training;
- Sponsors must provide the FWA training directly or provide FWA training materials to their FDRs; and
- Sponsors may have FDRs access CMS' standardized FWA training and education module
It is important that all Plan Sponsors are aware of the regulation change made effective as part of the Final Rule released May 24, 2014. In summary, 42 CFR § 422.503(b)(4)(vi)(C)(3) now states as follows: "A MA organization must require all of its first tier, downstream, and related entities to take the CMS training and accept the certificate of completion of the CMS training as satisfaction of this requirement. MA organizations are prohibited from developing and implementing their own training or providing supplemental training materials to fulfill this requirement." The corresponding update was also made to Part 423 for Part D.
For some organizations, this is business as usual. However, for those organizations that were providing their own training and delivering to their FDRs, this is no longer permissible as of 1/1/2016.Therefore, it is recommended that organizations implement this new requirement now. Make sure that any policies and procedures documenting this process are updated, especially since the Compliance Program Guidelines require update. For reference, the Medicare Learning Network is here and the link to the web based training courses is near the end of the page.
Have Questions? Contact me directly at rpennypacker@ghgadvisors.com
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Gorman Health Group's solution, the Online Monitoring Tool (OMT™), streamlines vital compliance activities, such as the implementation of new requirements and corrective actions. Read our recent White paper to learn more.
The external audit program process is fully customizable according to your organization's needs and can encompass both internal and delegated functions, CMS audit protocol, as well as the inclusion of other audit elements that are not part of the current protocol (e.g. enrollment, credentialing, member services). Don't let CMS be the first to tell you where your deficiencies are. Visit our website to learn more >>
Gorman Health Group's Summary and Analysis of the 2016 Draft Call Letter and the Medicare Advantage (MA) Advance Notice is now available. Download it today >>
Industry Ducks Bullets in 2016 Medicare Advantage Rate Proposal
Friday, February 20th after close of business, the Centers for Medicare and Medicaid Services (CMS), released its 2016 Advance Notice of Medicare Advantage Payment, known affectionately as "the call letter."
This one was the most anticipated in years, and the industry unexpectedly ducks bullets in it, in risk adjustment, Star Ratings, and elsewhere. It's got a few unicorn farts in it, and a couple puffs of Chanel No. 5 as well.
The lack of any shockers is the bigger positive for the industry, a turning point really. CMS is saying it won't settle its scores with payers through policy, but through enforcement, where the facts are often too tough for politicians to stick their necks out.
Last fall's surprise positive announcement that MA benchmarks were tracking to increase 2.02% next year started this year's dance. Now comes the draft call letter, and on April 6, the final, all of which will be different as CMS winds through its process and the full fury of industry lobbying is brought to bear. It's worth noting that this year a first-time majority of 53 Senators signed the annual "don't hurt Medicare Advantage (MA)" letter to CMS, vs. only 40 last year. The increased Congressional pressure and the fact that MA now represents one out of three beneficiaries is driving this call letter.
By our calculations, the 0.95% reduction in MA benchmarks claimed by CMS is really negative 1.76% all-in. This is the unicorn fart. The final number quoted by CMS, 1.1% positive, is in part because CMS is taking credit for a 2.0% improvement in risk scores as plans continue to improve their risk adjustment management skills. Kinda cheeky. Our read on the underlying trend is +1.53%, frankly, better than we anticipated.
On risk adjustment, anticipation was that CMS would take a lethal shot at prospective in-home evaluations, a tough fee-for-service normalization factor, and an increase in the coding intensity adjustment, but NONE of those happened.
On home visits, despite a hailstorm of bad press and advocacy group investigations, CMS isn't even dealing anymore, just laying out "best practices" and saying "we're watching you." The regulators laid out 8 criteria that would make the prospective evaluation more like a risk assessment conducted by a Special Needs Plan, including:
- Evaluation performed by a physician or qualified non-physician practitioner
- Includes all components of the wellness visit including health risk assessment
- Medication review and reconciliation
- Scheduling appointments and referrals with appropriate providers and community resources
- Environmental scan of the home for safety risks and need for adaptive equipment
- Verifies that the information obtained during the assessment is furnished to appropriate plan staff and providers
- Provides enrollees with a summary of the information collected
- Enrolls the beneficiary in disease management or care management programs.
Taking these steps and embedding risk adjustment management inside a health plan's Medical Management department would effectively audit-proof the company from the dreaded data validation audits expected to intensify this year.
Another shocker: CMS did the absolute bare-minimum on the coding intensity adjustment, and then heaved up a dangerous proposal to recalculate it starting in 2017. If implemented, CMS would cut payments to all MA plans by enough so that total payments would be no greater than under the pre-HCC, pre-PIP-DCG, pre-2000 AAPCC demographic model. This would make risk adjustment a zero sum game, in which individual plans could win or lose, but in which CMS would never pay out more than under the old AAPCC model. That would settle the score on home visits once and for all, and indelibly damage risk adjustment as a healthcare financing innovation.
A final surprise: CMS acknowledges it has a problem on Star Ratings for health plans serving dual eligibles and the low-income. The agency is cutting the weight of several Stars measures where vulnerable members score poorly, by a whopping 50% in 2016. This buys time for CMS and several plans overweight with low-income members and highly exposed to Stars underperformance to conduct additional research and take steps against what is driving the correlation.
It was, in the end, a surprisingly favorable call letter for health plans and other stakeholders, particularly capitated provider organizations. But we're still a long way from the Final Notice on April 6. How plans should react:
- First, write comment letters. Deadline is March 6 at 5 pm EST.
- The proposal to cap total MA payments at the same level as would have been paid under the pre-2000 demographic-only risk adjustment system is dangerous. Plans need to point out how the Congress, in the 1997 Balanced Budget Act, mandated a health-based risk adjustment system because the demographic adjustments were inadequate. We are not aware of any authority in that, or any other law, to allow CMS to set a cap on total MA payments.
- Take the guidance on home risk assessments seriously, and implement CMS' suggestions before they become mandates. Plans must hard-wire their risk adjustment program into their care management program, so they are actively managing the risks they identify.
- Don't rely on averages: the impact of CMS rates and other changes will vary from county to county, market by market. Let us help you examine the impact on your service area.
- Continued rate pressure means plans have to continue to get better and better at the key components of their business: risk adjustment, care management, Stars, and enrollment data reconciliation.
- Focus on the Stars metrics with the greatest weights, especially the intermediate outcomes measures and the plan-wide quality improvement measures. Determine if the reweighting of seven metrics will have a positive or negative impact on your plan, and react to offset any negative effects, by emphasizing other metrics where there is room for improvement.
It's going to be an interesting 45 days to the Final Notice, but one thing is sure in this call letter: CMS is conceding that Medicare Advantage has gone mainstream, and that its support in Congress can no longer be tangled with. CMS is showing its preference to impact industry behavior through its boot rather than its pen.
Resources
Join John Gorman, GHG Executive Chairman, and colleague, Bill MacBain, GHG's Senior Vice President of Strategy and former health plan CFO, as they provide a hard-hitting analysis of critical areas addressed in the document, including a look at the various components that make up the trend factor, a proposed change to how risk scores are determined, health risk assessments, and Star Rating measures on March 3, 2015. Register Now >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!