My Talk at AHIP's Medicare Conference

I had the pleasure of addressing a standing-room-only crowd at the AHIP Medicare conference yesterday, sponsored by our friends at TMG Health, our 4th year together there.  That speech always keeps me on my toes, especially this year -- a tough, smart audience that demands a tough, smart message on how to survive in the new Age of American Austerity.  Here are the main points of what I said:

  • Volatility and Accountability will define the sext several years in Medicare.  Volatility: rates, the Medicaid dual eligible explosion, the Congressional "Super-Committee", industry consolidation, and the 2012 elections.  Accountability: it's already here.  Star Ratings bonuses, minimum MLR regulations, compliance, rate reviews, RADV audits, and Accountable Care Organizations. 
  • The State of the Union in Medicare Advantage (MA) and Part D is strong.  All predictions of the demise of the program following health reform were wildly premature.  MA will grow about 7% this year, and over 40% of beneficiaries aging into Medicare have chosen MA in the last two years.  Local PPOs with the drug benefit integrated remain the product of the future in MA, as do Special Needs Plans given the tsunami of dual eligibles -- a $300 Billion market alone.  We think MA will pass 15 million members by the end of 2015.
  • Medicaid managed care is risky (BIG) business. We've already seen major awards this year in TX, LA and KY.  CA is prepping the biggest RFP in US history: 150,000 duals in plans by end of 2012; all duals in plans by end of 2015: a $21 Billion opportunity. WA, FL, NH, NE, MI and HI are all preparing to move duals into plans. 
  • Volatility: many of us thought we "gave at the office" in health reform when the ACA whacked over $120 Billion from MA rates over a 7-year period.  There's more austerity to come from the Congressional "Super-Committee" on the debt.  Best case scenario? The Super-Committee fails, sequestration occurs, and we get hit with a 2% cut in 2013, 2014 and 2015, compounded.  And what about the "doc fix"? If they don't fix the SGR and docs take a 29.5% cut in Medicare reimbursement in 2012, MA gets hit by about 7% in 2013, and the beneficiaries take it in the shorts.  Bar the exits! Consolidation is intensifying in both payer-payer transactions, and payer-provider deals like United/Monarch (CA).  And then there's the elections.  My money as of today is that Obama gets re-elected by the narrowest of margins, Democrats lose the Senate, and we have another 4 years of economic doldrums with the HUGE exception of the ACA's implementation in 2014. 
  • Accountability: it's already here, a cornerstone of the ACA.  It's embodied throughout, in Star Ratings bonuses, Accountable Care Organizations, with growing incentives for chronic care improvement, member satisfaction, and compliance.  The cornerstone is transparent data reporting.  Berwick's legacy will be his embedding the "Triple Aim" in the DNA of CMS.  And CMS says it will terminate MA plans with less than 3 stars for 3 years running.  A "good" star rating is not a hedge against the rate cut: it is an existential issue -- and a management revolution.
  •   What to Do?
    • Aggressive revenue management in the near term.  Master risk adjustment and audit-proof the function by embedding it where it belongs in Medical Management, move from claims extracts and chart reviews to Prospective in-home Evaluations, and be a Star Czar.
    • Care coordination and chronic care management over the mid-term (3 years).  It will take years to see results, but this is what it's all about in the mid-to-long-term.  High-touch with the frequent flyers. 
    • Commit to a Culture of Compliance.  The regulator is the purchaser, and you keep this account happy by following their rules.  To. The. Letter.
    • Revisit the service model and move from reactive to proactive.  Health care is still a service business and Boomers are tough customers.
    • Establish and Invest in Medical Homes, Accountable Care Organizations, and Exclusive Provider Organizations.  In the end, it's all about the docs.

Questions? You can always reach our team at

 PS Join me for another talk September 25-26 in Arlington at the Opal Events MA Strategic Business Symposium. Complimentary passes are still available today.

America's Hospital Patient Safety Problem in 1 Awesome Graphic

The graphics geniuses at have come out with another of their charticles examining the American health-care system. The quick takeaway? "The United States ranks dead last out of 19 developed nations in preventable deaths at hospitals."  The problem is preventable and the solutions pretty straightforward.  The charticle is fascinating and scary.  Enjoy. 


And the Survey Says... Claims based submissions are scary

During our September 1st webinar, Risk Adjustment: Vulnerabilities in Claim Based HCC Codes, we asked our health plan attendees a few questions about claims-based HCC codes.  Here are the answers.

What percentage of your HCC submissions comes from claims?

  • 25% of the health plans answered 45-60%
  • 21% of the health plans answered 61-80%
  • 44% of the health plans answered 81-100%

Studies indicate that between 60-80% of all HCCs comes from claims submissions. However, we also know that between 17-44% of all claims-based HCCs fail a CMS RADV audit.  We must verify the validity and accuracy of health plans' claims-based submissions.  How can we do that?

CenseoHealth's CareCurrent provides continuous data analysis, reporting and production management designed to mitigate HCC risk.  This analysis not only supports a health plan in determining the confidence levels of the ICD-9s that trigger HCCs; the service also indicates how to remediate high-risk codes with chart review or a member evaluation.

Next we asked —

Do you filter your claims based HCCs?

  • 50% answered yes and 50% answered no

That is a little scary and the health plan's next RADV audit may be even scarier.  Scrubbing your claims based HCCs is a critical part of the mock RADV audit process and the foundation of RADV "proofing" your risk adjustment program.

Finally we asked —

How frequently would you or should you scrub your claims based HCCs?

  • 55% of the health plans answered monthly
  • 45% of the health plans answered quarterly

Both are good answers.  We recommend running a claims based filter in late September so you can resolve any low confidence codes with chart review or member evaluations prior to the end of the calendar year.  We also suggest running a claims based code analysis at the end of December to ensure the health plan deletes any unsubstantiated codes before the January 2012 sweeps.

Data Security & Compliance: The Dwayne Johnson of Risk Adjustment

These days, Risk adjustment is a lot like WrestleMania these.  I am not sure if that makes CMS John Cena…but I am certain health plans should be prepared for that folding chair to the head move. 

Health plans need a new training regime and a new foundation. Security and compliance is the cornerstone on which a health plan's risk adjustment strategies should be built, and it must be supported not only by all health plan departments, but also health plan vendors.

As stated in the CMS call letter, you need to know your business, which also applies to your vendor processes and procedures.  In a poll during our August 18 webinar, our audience of health plans shared that they only conduct onsite vendor audits twenty five percent of the time when they outsource risk adjustment servics.   Gorman Health Group can help you create the data security checklist, but health plans have to get in the routine of going onsite.  Get in the ring!

The health plan IT liaison needs to see the server room, understand the data back-up plan, notification process, and especially how the vendor handles data day-to-day. Is it sitting out on desks?  In employees' car?  Scary things happen when you don't ask questions. 

Even scarier was this poll result: only 55% of health plans read their vendor's compliance plan.  You need to know not only what the vendor is doing on your behalf but also how.  With PHI fees and RADV extrapolation, make sure your vendor has a compliance plan and that you know what it says. 

Download a copy of last week's webinar here.

How's their security and compliance? Your vendor oversight checklist

Yesterday Gorman Health Group Executive VP Steve Balcerzak and CenseoHealth's Director of Techology Archie Block joined me for one of our Flash Webinars, which covered the security and compliance points every health plan should review with their vendors.

We'll follow up later today with a recap of the event's live polls and surveys, as well as a final PDF of the webinar materials.  Stay tuned!

We're offering 30 minute Flash Webinars every week this summer and invite you to join us.  The next event is Wednesday, August 24 at 3 pm EDT: What's so important about prospective analytics anyway?  Health plans can register by clicking here.

CMS Oversight Goes into Hyperdrive

In recent weeks, CMS has sent word to plans of two extraordinary changes in their audit practices.
The first is a notice to certain low-rated (plans with contracts <  3 stars) indicating that they expect the plans to develop a corrective action plan to address the low rating: "CMS is requesting that your organization develop and implement a corrective action plan designed to ensure that it will achieve at least a "good" plan rating."
They do so with the following rationale: "CMS considers a low Part C or D Summary Plan Rating to be evidence that the sponsor has in place insufficient administrative and management arrangements to meet its obligations as a Medicare plan sponsor."  CMS is also taking care to mention that organizations with a < 3 star rating for three consecutive years may also have its contract terminated, a statement it made first in this year's Call Letter.
Second, in an extraordinary development, it has come to our attention that certain Regional Offices are initiating monitoring reviews of health plans, independent of Central Office activity. While the reasons for this can only been speculated, it certainly will add to the already challenging environment for plans, particularly those that are already at risk for a bad audit.
It is absolutely critical that plans ensure that they 1) have a plan of action for their star ratings and 2) ensure that they are audit-ready at a moment's notice.