CMS Validation Process: The Silver Lining
We've seen quite a few changes over the past few years in the way that the Centers for Medicare & Medicaid Services (CMS) is approaching the program audit and audit validation process. The most notable trend this year is continued push back of responsibility onto the Organization. In recent sanction reports, CMS states that it will require the Organization "to hire an independent auditor to conduct validation in all operation areas cited in this notice and to provide a validation report to CMS." In addition, CMS presenters at the CMS Fall Conference, which took place on September 11, 2014, stated that "The onus of correction overall is on the sponsor. Therefore, CMS this year will not request universes to conduct sample testing unless the sponsor is unable to demonstrate through its presentation and from the responses to CMS questions, that it has not corrected the findings."
CMS is sending a clear message here. They expect the Organization, and not CMS, to do the work in the validation process. So, is there a silver lining? Why of course there is.
While it's clear that CMS is tightening the reins, they are also providing an opportunity - the opportunity to get it right the first time, and not go through the full CMS validation audit process. If you don't know the best way to proceed, in order to avoid a validation re-audit, we have the roadmap. Contact us today to get started.
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While it may be difficult (too much so, for our tastes) for many compliance officers to effectuate the necessary change in the business units, it is not impossible. Let us help you create a culture of compliance. Visit our website to learn more >>
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The Good, the Bad and the Ugly in Medicare Advantage
In the last two weeks there's been good, bad and ugly news for Medicare Advantage (MA) plans. On one hand, the program has never been stronger and quality metrics are surging in the right direction; on the other, the industry is sucking it up on following the rules of its biggest customer, the Centers for Medicare and Medicaid Services (CMS).
First, the good: CMS did its annual data dump on Medicare Advantage and Part D bids and showed the program continuing its robust growth, with higher-than-ever enrollment approaching 17 million, and plans holding premiums and benefits steady during the worst rate environment in decades. Then, CMS released the MA Star Ratings database for 2015, showing MA quality continues to improve. The enrollment-weighted Average Star Rating for the industry stands at 3.91 out of 5. 40% of MA contracts were awarded 4+ Stars for 2015, but 60% of enrollees are members of those plans, showing a 30% increase since 2012 and demonstrating the competitive advantage high-performing plans now enjoy. The 2015 ratings show stable or improved performance in almost 70% of the 46 Part C & D Star measures, 7 of which improved by more than one-half star from 2014 to 2015, and 13 of which earned average ratings above 4 stars in 2015. There was even an 85% decline in plans receiving the low-quality performance badge of shame.
But then the bad: it's clear plans have eaten low-hanging Star fruit and are starting to struggle on more complex and outcomes measures, such as managing chronic conditions, managing mental health to improve outcomes, or increasing physical activity and reducing fall risk. The longitudinal Health of Seniors survey scores are below 3 Stars, and 135 plans remain on the Quality Bonus Payment bubble at 3.5 stars in 2015, meaning almost half of MA plans are circling the financial toilet bowl. Not good.
And then the ugly: last week's blistering New York Times story on rampant noncompliance among MA plans. The Times combed through months of compliance action reports and found widespread failures by plans in administering the program, including some common and potentially life-threatening stumbles:
- In more than half of all audits, "beneficiaries and providers did not receive an adequate or accurate rationale for the denial" of coverage when insurers refused to provide or pay for care.
- When making decisions, insurers often failed to consider clinical information provided by doctors and failed to inform patients of their appeal rights.
- In 61% of audits, insurers "inappropriately rejected claims" for prescription drugs. Insurers enforced "unapproved quantity limits" and required patients to get permission before filling prescriptions when such "prior authorization" was not allowed.
- MA plans frequently missed deadlines for making decisions about coverage of medical care, drugs and devices requested by doctors and patients.
CMS officials expressed frustration that they were seeing the same deficiencies year after year. That these boneheaded infractions are often being repeated makes the news all the more depressing. It's important to remember if an MA plan with a Star Rating over 3.5 gets sanctioned by CMS for noncompliance, it automatically knocks its rating down to 2.5. That's a kiss of death for an otherwise quality company.
What the Stars and compliance data show us is that the plans are doing great on strategy, pricing their benefit designs, selling to Baby Boomers, and managing straightforward quality process measures. But looking closer, it also shows our industry has a serious execution problem. We are lagging on performance measures with multiple clinical moving parts, and embarrassing ourselves and endangering our companies and beneficiaries with "101-level" compliance errors.
With both Federal and state governments increasingly relying on MA plans to manage the most complex and expensive patients in the US health system, we can and must do better.
Resources
Listen as John Gorman provides several takeaways from our first review of the terabytes of CMS data and understand why he believes this data shows the triumph of government-sponsored programs. Access the podcast here >>
Gorman Health Group can evaluate your Star Ratings approach and identify tactics you can begin implementing immediately to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. Visit our website to learn more >>
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NY Times article reiterates compliance trends in Medicare Advantage
As many of you have already read, the NY Times ran a scathing article on October 12th titled "U.S. Finds Many Errors in Medicare Health Plans" shining a light on serious Compliance issues we've all been aware of over the past several years. Is the continued lack of non-compliance really news to anyone in the industry? Most certainly not — we have all been tracking the continued issues of non-compliance, increased CMS Compliance actions, and have read the audit reports posted on the CMS website. What the NY Times article did was remind us that the compliance trends in Medicare Advantage are a serious matter which should not be taken lightly.
The fact is, Medicare beneficiaries have not had access to their care; both Medical care and Prescription drugs.This is simply not acceptable — period. That being said, I have personally worked on the Plan side, on the consulting side, and as a CMS sub-contractor, and I know, firsthand, the challenges we face in the implementation of the thousands of Compliance requirements. This is no easy task, and anyone who thinks it is, simply doesn't understand plan operations. By and large, what we find is that Organizations want to be compliant; but they don't have the tools or resources to implement and manage this highly regulated program. So, what do you do next? Here is what we recommend:
- If you haven't done so already, go through the exercise of a Mock CMS audit - find your deficiencies now, both for the sake of the beneficiary, and for the sake of your CMS contract.
- Focus first on those issues that have the most beneficiary impact — ensure that your members have access to care as your number one priority.
- Document your remediation efforts and measure outcomes — issues aren't resolved overnight, but ensuring that your remediation plan is working is the key to success.
If you're not sure where to start, we can help. Please find here a description of our Mock CMS Audit Service, or contact us directly.
Resources
On Friday, Sept, 12 a GHG team member provided GHG's perspective on trends relating to CMPs, the CMS audit findings and oversight activities that have taken place in the last six to 12 months, as well as tips on how to avoid and remediate CMS findings. Become a member of the Point to access the webinar recording >>
All Medicare Advantage and Prescription Drug Plans must ensure that they are audit-ready all the time so that each CMS audit is routine. Save the fire drills for fires, and receive standing ovations for the organization's final performance. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
They Still Don't Like It
In the October 8, 2014 memo entitled "Contract Year 2014 Part D Formulary Administration Analysis (FAA)", CMS reiterates their concern with the accuracy of formulary coding. For the April 2013 analysis, 9 out of 88 (10.2 %) plan sponsors were found to have failed FAA, meaning that greater than 20% of the sampled rejects were determined to be inappropriate. The parameters for the 2014 FAA are:
- Sponsors will be required to submit all point-of-sale (POS) rejected claims relating to the following 4 categories: 1) non-formulary status; 2) Prior Authorization (PA); 3) Step Therapy (ST); and 4) Quantity Limits (QL).
- Larger plans (≥ 20,000 enrollees) should submit rejected claims data for service dates of June 1, 2014 through June 14, 2014 and smaller plans (< 20,000 enrollees) should submit rejected claims data for service dates of June 1, 2014 through June 30, 2014.
If you were one of the plans selected for the FAA, you were required to upload files to the Acumen site between October 16 and October 22. CMS will then select a sampling of the rejected claims for review. Those plan sponsors who meet or exceed the failure threshold will receive a notice of non-compliance and depending on how badly the plan sponsor exceeds the failure threshold, additional sampling and compliance actions may result.
Not to beat a dead horse, but this should again remind us of the importance of formulary benefit administration testing---rigorous and extensive at the beginning of the plan year and at every point during the plan year when formulary changes are made. You can't afford NOT to.
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Beneficiaries should be able to receive the Part D drugs they are entitled to, consistent with CMS guidance, from January 1st through December 31st of the plan year.
We can help your MAPD or PDP develop and implement efficient and compliant internal operations and prepare effectively for CMS audits with professional services and unmatched compliance tools. Contact us to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Another Flood of Good News for Medicare Advantage
Last week the Centers for Medicare and Medicaid Services (CMS) did its annual data dump for the 2015 Medicare Advantage (MA) and Prescription Drug Plan (PDP) bids. Even with MA plans sailing into the worst rate environment in over 15 years, the data offered another flood of good news for the industry.
Several takeaways from our first review of the terabytes of CMS data:
- 2015 will look a lot like 2014, with slightly fewer plan options. The average MA premium will rise $2.94/month, or $1.30/month on an enrollment-weighted basis, and 61% of MA enrollees will see no premium increase. Having said that, zero-premium options are down 18% in 2015, following a 14% decline this year as previously-free plans institute modest monthly fees to offset payment rate cuts in the Affordable Care Act (ACA). It speaks to how well the market is working as plans compete intensely for share.
- The number of MA plan bids were down 4.3%, but most of the reduction was attributable to non-renewing Private Fee-for-Service plans, and good riddance -- PFFS remains the worst policy fart in Medicare. PFFS products are down 31% next year following a 61% year-over-year decline in 2014. Network-based plans like HMOs and PPOs were only down 0.9%, showing tremendous commitment to this line of business across the country as MA membership surges past one-third of all Medicare enrollment.
- PDP bids were down around 7%, mostly attributable to consolidation among Pharmacy Benefit Management companies. Humana remains the cheapest PDP in 33 out of 34 regions. Aetna will get auto-assignment of low-income beneficiaries in 10 new regions, while WellCare lost auto-assigns in 10 regions.
- CMS implied MA membership in 2015 at 16.9 million, or growth of just 2.7%. That's very conservative -- we expect 5-8% growth in 2015, following 10% growth in 2014. CMS suggested that MA enrollment is up 42% over 2010 levels -- stunning growth that defies the funeral dirge played for the private Medicare option the year the ACA passed.
- Most of the major publicly-traded MA sponsors are keeping or expanding their service areas in 2015. Eminent analyst Josh Raskin of Barclay's points out that publicly-traded companies' enrollment growth in 2014 is up 9% year-to-date, while all others are at 8%.
- Humana continues to account for 25% of all MA/Special Needs Plan offerings nationally.
"Since the Affordable Care Act was enacted, enrollment in Medicare Advantage plans is now at an all-time high, and premiums have fallen," said CMS Administrator Marilyn Tavenner. "Seniors and people with disabilities are benefiting from a transparent and competitive marketplace for Medicare health and drug plans."
The good news didn't end there. MA quality continues to improve as the Star Ratings performance-based payment system continues to punch WAY above its weight. 40% of MA contracts were awarded 4+ Stars for 2015, but 60% of enrollees are members of those plans, showing a 30% increase since 2012 and demonstrating the competitive advantage high-performing plans now enjoy. Beneficiaries are now choosing higher-quality plan options in far greater numbers, and ALL of the roughly 200 plans we work with have made Stars their top priority for focus and investment. Stars has proven to be a game-changer in MA and a model all other government-sponsored programs from Medicaid to ObamaCare's marketplaces are beginning to follow. NCQA's 2015 health plan rankings show California-based Kaiser once again leading the pack among Medicare plans.
To me, the CMS data shows the triumph of government-sponsored, highly-regulated insurance markets. Medicare Advantage is one of the few examples of government getting it mostly right in partnering with private-sector companies to accomplish a tremendous public good, and continues to be a beacon of hope as ObamaCare enters what promises to be an even tougher second season.
For more updates, follow me on twitter @JohnGorman18
Resources
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register today >>
Bombshells from MedPAC on Medicare Advantage Retention
The Medicare Payment Advisory Commission (MedPAC ), the nonpartisan blue-chip Congressional uber-nerds on our favorite entitlement program, met this week and the staff report presented a couple bombshells on retention rates in Medicare Advantage (MA).
In the aggregate, the commission noted that in 2012 the voluntary disenrollment rate from plans was slightly below 10%. The vast majority of individuals who disenrolled -- 80% -- switched to another MA plan, with the remaining 20% going back to traditional Medicare. Bombshell #1: we're seeing an overall MA retention rate of roughly 98%, and speaks to the tremendous popularity of the program vs. "old school" coverage.
The commission also noted:
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When beneficiaries changed plans, a large majority picked another plan with a lower premium.
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Beneficiaries who elected to switch back to traditional Medicare from MA had higher average cost per beneficiary vs. those who stayed in MA. Does this indicate that sicker beneficiaries feel they'll get less hassles and/or better care in unmanaged fee-for-service Medicare? I doubt it. More likely: once back in unmanaged Medicare they go on a wild utilization binge. Why? Because...
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Older MA enrollees are less likely to disenroll than younger ones. This is puzzling, given the finding above and the direct correlation between income, age and health status in the elderly. Older beneficiaries are, on average, poorer and sicker than younger ones.
On a plan-specific basis, Star ratings also correlate positively with member retention. Bombshell #2: MA plans with 2 or less Stars experienced a 17% disenrollment rate, while plans with 4 Stars or higher had a disenrollment rate of 4.9%. That's an incredible statistic, showing the rapid effectiveness of Stars impacting the member experience at the plan level in just a couple years. Stars has truly become a game-changing indicator of quality across health plan functions.
All of this speaks to the fundamental triumph of Medicare Advantage: for those who know, it's the far superior option for senior care. And once they're in, they don't leave.
Resources
Join GHG for an in-depth discussion on the end-to-end management of data from noting identified gaps in data processing, concerns regarding data completeness and accuracy. Register now >>
To succeed in Medicare Advantage, plans must achieve higher quality and Star Ratings, surmount CMS and medical loss ratio (MLR) requirements, and develop member onboarding and retention capabilities, all while operating in a highly competitive market. Learn how GHG can help ensure your MA plan is positioned to make the most of the program's opportunity.
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CMS's Star Ratings Firing Squad Gets Squirt Guns
Last week, in a surprise move, the Centers for Medicare and Medicaid Services (CMS) reversed its threat to terminate all Medicare Advantage and Part D health plans with 3 or fewer Stars for more than 3 consecutive years. Roughly a dozen health plans were lined up in front of the firing squad as an example to the industry for months -- and then CMS issued squirt guns to the executioners.
It's a one-year stay of execution, with the one year of course being an election year. Importantly, CMS said it will terminate contracts if plans do not achieve at least a 3-star rating by 2016. Our favorite agency maintains the authority to deny applications submitted by poor performers, and to deny an application if it has terminated an MA or PDP contract within the past 38 months. There is a 14 month "grace period" for new plans to comply.
CMS Medicare Chief Sean Cavanaugh made the surprise announcement (beginning at 20:30 on the YouTube video) Thursday along with a September 8 policy letter that went to a handful of media outlets, but strangely isn't posted on the CMS website or communicated to Medicare plans via the Health Plan Management System. The memo noted:
"In delaying the terminations of these low performing contracts, CMS expects all contracts that have for at least three years received...a Rating of less than 3 stars to concentrate on improving the quality of care provided to their enrollees. These contracts must focus on the overall health care needs of their individual enrollees, including improving enrollee experiences and ensuring that their enrollees receive needed clinical care. These efforts should improve CAHPS, HEDIS, HOS, patient safety, and adherence scores. Organizations and sponsors should focus on all areas where the contract has received less than 3 stars. Organizations and sponsors must take into account their enrollee populations and target any interventions to improve quality to the specific needs of their enrollees. In many cases, a one-size-fits-all approach for interventions will not work.
"CMS may be following up with contracts designated as having a low performing icon (LPI) to discuss their performance and will determine whether enforcement or compliance measures other than contract termination pursuant to §§ 422.510(a)(4)(xi) and 423.509(a)(4)(x) should be utilized to ensure that the contract comes into compliance with CMS' requirements."
Barclay's eminent analyst Josh Raskin pointed out that "WellCare is the biggest beneficiary of this change with 9.5% of its total Medicare Advantage members enrolled in plans with consistently (i.e., three consecutive years) less than 3-stars." Raskin looked at how publicly-traded Medicare Advantage plans' 2.5 and 2.0 star enrollment trended over the past two years. He concluded over 200,000 Medicare Advantage lives are at risk when the stay of execution is over next year. "Among the companies with the greatest risk, Centene is most exposed, with roughly 19% of its membership in plans below three stars, followed by Universal American with 16% and WellCare with roughly 12% of its membership in plans below three stars," he said.
On the positive side, Raskin noted Humana continues to makes strides with the company's "at risk" enrollment declining from roughly 550K lives in 2011 to 25K last year, and that Molina has also made progress, improving the rating of its sole 2.5-star plan above the 3.0-star threshold last year. All of UnitedHealth's sub 3-star plans increased to a 3-star plan last year, leaving the company with very little "high risk" enrollment.
So, we'll have to wait another year for a public hanging in Star Ratings Square. But all of this serves as further evidence of what a game-changer Star Ratings have become in government programs, from the crappy consumer information tool they were just 4 years ago.
Resources
Join John Gorman, GHG's Executive Chairman together with colleagues, Glenn Ellerbe, Executive Vice President, Dr. Paul Alexander, Senior Clinical Consultant, and Mae Regalado, Senior Director, for an in-depth discussion on the end-to-end management of data from noting identified gaps in data processing, concerns regarding data completeness and accuracy." Register now >>
Now is the time to analyze your HEDIS data for gaps and identify interventions for your health plans, providers and members. On July 17 GHG experts spoke about HEDIS reporting, the new measures and what's next. Access the recording here >>
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Groundhog Day: CMS Issues Best Practice Memo Related to Common Audit Findings
Is it Groundhog Day or does this memo say the same thing as last year? Nope you're not imagining things - In CMS' Memo titled "Common Conditions, Improvement Strategies, and Best Practices based on 2013 Program Audit Reviews" that was released on August 27th, CMS outlines again the industry pitfalls and best practices around common areas of noncompliance identified as a result of CMS Program Audits. You may be saying to yourself "some of this looks familiar" well — you're right.
In fact, it appears that CMS is getting weary of repeating themselves year over year and they've included some language with teeth in this most recent memo. CMS makes two key statements in the 2014 memo — the first is that due to the number of repeat findings year over year, it has been determined that Organizations are not using this memo as CMS intended. The second, and more pointed statement is that Conditions noted in one or more memo will be considered "aggravating circumstance" during an audit and this may adversely affect the overall audit score.
So — what does this mean to your Organization? It means that if you haven't yet done so, now is the time to review each best practice memo provided by CMS and ensure that the recommended process is in place. If not, it's time to create and implement a corrective action plan for each best practice mentioned by CMS that would apply to your Organization. Remember, CMS understands that Organizations aren't perfect, but demonstrating that you're able to identify issues and put a plan in place to remediate those issues is always required.
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GHG's team of experts can help you minimize your compliance risk and maximize your time and resources. Contact us today to learn how we can help ensure you are audit ready all the time >>
On September 10, join us for an exploration of why assessing your current position and developing new strategies to drive profitable market share growth is crucial for continued success. Register now >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Passing Marketplace Reasonableness — One More Chance
September 4th was final submission day for Marketplace plans but some worried health plans were asking "what ifs" about their last submission for network access. These plans have re-submitted network updates after two CMS rejections that required correction for failing reasonable access. They have three consecutive wrong guesses on whatever standards CMS believes they have not met. They want to know what happens if CMS doesn't approve their network access plan. Of course, they are still asking what standards need to be met.
Rest assured, CMS says they will have another bite to justify reasonable access. However, time periods shrink. The window opens on September 23 when CMS notifies health plans about needed corrections and responses are due on September 25.
CMS is well aware that failure to get a pass has unwanted consequences for everyone. Service areas will need to be reduced with compounding changes to plan packages that necessitate more CMS re-review and approval. So, everyone wants a good justification but CMS is not backing off given the potential for political backlash. Failure is an option. Health plans worried about their last re-submission can't count on CMS reviewer fatigue. Health plans asking these "what if " questions need to prepare a contingency narrative by either finding and fixing any weaknesses or documenting metrics that demonstrate access. Waiting to correct over a two-day window, is not sufficient time to prepare the last chance narrative justification for reasonable access.
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Gorman Health Group's network evaluation service deploys an automated software solution that uses metrics based on population, provider ratios and time/distance standard. Learn more >>
Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register now >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Sales Allegations — What is the best practice?
It's just about that time of year again. Yes, you've got it — Sales Allegation time. During AEP, Organizations receive an influx of complaints of alleged sales misconduct "Sales Allegations". And, every year we receive some of the same questions around how these allegations "should" be investigated and closed. The rub is, CMS is all but silent on the specific requirements around investigation and closure of Sales Allegations. So, here are a few critical pieces to keep in mind:
- All Sales Allegations must be thoroughly investigated, even if it seems like a straight forward case.
- All documentation such as a member interview and agent statement must be maintained by the Organization.
- All cases must have a determination (e.g. Founded, Unfounded, Undetermined, Withdrawn).
- The disciplinary action process must be different depending on the offence. For example, an issue of Fraud would not receive the same action as a less than comprehensive explanation of the fitness benefit.
- All outcomes should be tracked and trended in order to identify issues with individual agents, as well as knowledge gaps throughout the entire Sales force.
Remember, you can't prevent Sales Misconduct or Sales Allegations. But, ensuring that complaints are investigated and closed properly will reduce your Compliance risk and will impact the beneficiary's experience in a positive way.
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Now is the time to ensure your Plan - and your agents - are ready to sell while remaining compliant. We invite you to learn how the Sales Sentinel™ suite of agent oversight tools can help demonstrate your organization's commitment to compliance.
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
On September 10, join us for an exploration of why assessing your current position and developing new strategies to drive profitable market share growth is crucial for continued success. Register now >>