Health Insurance Exchanges | GHG Advisors

Where is Healthcare Now? The Long March to Value-Based Care.

"Why won't the Centers for Medicare & Medicaid Services (CMS) let health plans gather some health information at the point of sale?

How is CMS going to use the data they are collecting?

What is CMS going to do when the first round of Accountable Care Organizations (ACOs) comes to an end?"

At the Gorman Health Group 2016 Forum in Fort Worth, these and other questions were on the minds of our clients. It can be challenging to guess what the agency will do going forward in an election year when the water is choppy. But that forecast is a critical factor in your planning.

In "The March to Value-Based Payment," I described something that is a long march indeed. The Republican-driven Medicare Modernization Act of 2003 ushered in the attenuation of payments to hospitals, first for quality reporting and soon after for quality results. Then, the Affordable Care Act driven by the Democratic Obama Administration doubled down on this "good government" approach. The program was extended to more provider types, outcomes and efficiency were added to the measures, and we began to see downside risk associated with less-than-average performance.

Under the provisions of the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), physicians and other practitioners will face a Hobson's choice: live with a more aggressive risk-based adjustment to payments or join forces with an alternative delivery model, like an Accountable Care Organization (ACO), that is taking risk. The goal moving forward is to render unto Caesar what is Caesar's: the government is willing to bear the risk associated with each patient's demographic characteristics and health history. They will render unto providers the risks of inefficiency and poor performance. This could encourage more doctors to choose alternative payment models like ACOs or to affiliate with Medicare plans. Are you ready?

Resources

The Gorman Health Group 2016 Forum concluded last week with over 200 of our closest clients and partners. There was great news and rough news, so here are a few takeaways >>

Our distinguished team of experts collaborated to provide our interpretation of this announcement and the key features that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Download our full Summary & Analysis of the Final Rate Announcement & Final Call Letter >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Takeaways from the Gorman Health Group 2016 Client Forum

The Gorman Health Group 2016 Forum concluded last week with over 200 of our closest clients and partners. There was great news and rough news, so here are a few takeaways:

The playing field of government programs continues to expand rapidly, with improving revenue outlook across the board:
We're sticking by our projections of over 29 million Medicare Advantage (MA) enrollees by 2023, driven by more positive rate trends and a plan-friendly baby boomer tsunami underway.
Six to eight more states expand Medicaid — once President Obama leaves office.
Significant enrollment gains for dual eligibles as home and community-based services (HCBS) waivers and managed long-term services and supports (MLTSS) initiatives become the new normal. We expect dual eligible special needs plan (D-SNP) enrollment to double and exceed 4 million by 2019.
Rising ObamaCare enrollment, albeit slowing and below projections, as more difficult-to-reach populations remain outside coverage.
During the Forum, United announced its departures from most ObamaCare Marketplaces. We characterized the news as a nothingburger in terms of enrollment or market impact but huge symbolically and politically. We expect another two to three messy years sorting out the pricing and finances of the Marketplace business, with membership reconciliation and cleanup of membership discrepancies front of mind for issuers.
Risk Adjustment Data Validation (RADV) audits will begin to be conducted in MA — 2016-2018 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 & Medicaid Services (CMS) for unsubstantiated codes submitted for higher payments.
Clinical and pharmacy data integration and strong provider partnerships around person-centered care were clear priorities in medical management, Star Ratings improvement, and Pharmacy Benefit Manager (PBM) oversight.
The Star Ratings system of performance-based payment drives the payer and provider markets. This year will be the first year where plans below 3 stars are terminated. It's also when another 180+ MA plans will be scored for the first time, diluting ratings for existing plans, especially those at 4+ stars and denying many their bonuses and rebates in what promises to be an ugly "October Surprise."
The turbulent Presidential elections will likely be won by Hillary Clinton, promising continued gridlock with a likely weakened and more polarized Congress. This means CMS will increasingly fight out policy changes "below the waterline" in subregulatory guidance and enforcement, where politicians are less likely to intervene. That means more surprises for plans not paying attention.
Appeals and grievances and pharmacy benefit management vendor performance remain the #1, 2, and 3 regulatory infractions in MA 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

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by GHG Advisors

Issues to Watch in Government Health Programs in the Next Few Months

Last week was an exciting time for the policy world with the release of the Final Medicare Advantage (MA) Payment Rate and Call Letter. Here are some other notable stories we are watching develop in the next few weeks:

Part B Payment Model: On March 8, 2016, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule which aims to test a new alternative payment design to pay for drugs covered under Medicare Part B. While we will not see a final rule until end of May or June, CMS did already note they are considering certain exemptions to the model, such as practices already participating in the Oncology Model Demo. This proposal has already received a lot of criticism, with stakeholders arguing the model would decrease patient access to treatment while focusing too heavily on the financial picture.

MACRA: The proposed Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) Rule, a provision of the Medicare Access and CHIP Reauthorization Act (MACRA), is now at the Office of Management and Budget (OMB). MACRA repealed the Sustainable Growth Rate (SGR) formula and directed the Department of Health and Human Services (HHS) to create MIPS to replace existing physician quality programs such as the Physician Quality Reporting System (PQRS) and the Value-Based Modifier (VBM) beginning January 1, 2019. The rule will also lay out the definition of the types of APMs that will be considered bonus eligible. We should expect this regulation late April or May.

Covered California: California recently released major changes to its regulations by imposing new quality and cost standards in their contracts with insurers. The new plan will adopt a payment system for hospitals, similar to the one used by CMS, which will put 6% of reimbursement at risk or subject to a bonus payment based on quality over the next several years. Plans will also be required to identify providers and hospitals who are outliers in regards to cost or quality with these plans up for termination from the networks as early as 2019. While California is the first to issue this type of regulation, as John Gorman noted, "As goes California, so goes the world," and we can easily see similar efforts implemented across the nation.

UnitedHealthcare: In other Affordable Care Act (ACA) news, UnitedHealthcare is seemingly making good on its threat to exit the Marketplace by pulling out of markets in Arkansas and Georgia. As we previously noted, this move should not really come as a surprise and is not an effective measure of the health of the ACA program, as UnitedHealthcare is not a strong market participant in the ACA business and only cautiously dipped its toes in the water for the first time in 2014.

Mergers: The Anthem-CIGNA merger is currently undergoing some serious scrutiny in California. The California Department of Insurance (CDI) grilled the insurers last month, and there is potential for the merger to fail to receive approval from the state. If it is to pass, we will likely see significant divestment requirements and additional scrutiny from the Federal Trade Commission and Department of Justice in Quarter 3 or Quarter 4 of 2016.

Medicaid: The final Medicaid regulation is still under review at OMB, and we should expect to see its release any day now. Touted as "the mega-rule," this regulation will alter every part of the current Medicaid program. Most of the proposed changes by CMS align the Medicaid program with other programs such as MA and Qualified Health Plans (QHPs).

Resources

We are proud to announce a new session at the Gorman Health Group 2016 Forum featuring David Sayen, a former Centers for Medicare & Medicaid Services (CMS) Regional Administrator, who will provide a CMS update on "The March to Value-Based Payment." Register now to reserve your seat for next week!

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

What's Good for Obamacare Is Good for Medicare Advantage, and Vice Versa

I'm really excited to join Gorman Health Group (GHG) after more than 30 years at the Centers for Medicare & Medicaid Services (CMS), and I'm especially excited about the GHG Forum next week in Fort Worth. If you are sitting on the fence, now is a great time to jump in. Make no mistake — we are at the tipping point where public finance at the federal level is quickly becoming the dominant driver of change in the whole system. In 1966, Medicare was erected on the 30-year-old chassis that was the Blue Cross model. Now the tables are turned: Obamacare is determining the shape of new market entrants, often in a push-pull with Medicare Advantage (MA), and nowhere is that more evident than in my adopted homeland of the People's Republic of California.

Covered California is making the call about which hospitals health plans should work with. In the CMS world, the drive toward value-based purchasing and quality reporting is going precisely in the same direction across the spectrum of care. It used to be acceptable to have a provider who was within 30 miles or 30 minutes away. That's your father's MA model. The insistent drumbeat toward quality reporting and performance across the spectrum of services is only going to become more strident. You need to deliver consistent value across the whole supply chain that touches your member or attributed beneficiary.

What is a health plan or Accountable Care Organization (ACO) to do? The path is clear to me. Years ago I took the Deming seminar and drank the Kool Aid about developing long-term relationships with a small group of high-quality suppliers that could integrate and commit to your production model. Jumping up to 2017, I believe that is what MA plans and ACOs must do: orchestrate the players in their ecosphere to get great outcomes and kudos from patients and caregivers. When the stars are in alignment, we can all party like it's 1999.

Looking forward to working with our clients to achieve great things, and it starts in Fort Worth, so come on down!

Resources

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by GHG Advisors

Reconciliation just got more complicated

The time has arrived when health plans will start receiving a monthly automated Health Insurance Exchange (HIX) 820. For most health plans, this will occur in April 2016; others, who aren't fully ready yet, will transition in June 2016.

So all of the Finance departments throughout the U.S. should be rejoicing they do not have to populate an Excel spreadsheet on a monthly basis in order to receive payments from the Marketplace, right? Well, don't count your chickens before they hatch, because the reconciliation processes just got even more complicated than before.

For the health plans that were part of the Marketplace from the beginning, take a step back in time with me and reflect on the exorbitant amount of issues you experienced receiving accurate membership information via the 834. Now, introduce the HIX 820 into the mix. Granted, the membership issues have slowed down a bit, however, they are still quite evident and require constant attention and documentation to ensure they don't slip through the cracks. The HIX 820 impacts health plans that are part of the Federally-Facilitated Marketplace (FFM) and the State-Based Marketplace (SBM) since the HIX 820 handles payments for the Advance Premium Tax Credit (APTC), Cost Share Reduction (CSR), Risk Adjustment, Reinsurance, and Risk Corridor. Financial stability of organizations now relies on the accuracy of the reconciliations for the HIX 820 to make the member's payment whole.

What health plans should be prepared to handle:

Technology issues when translating the file to a usable format.
Health plans that are a part of the FFM will need to conduct reconciliation between the 834, HIX 820, and the member.
Health plans that are a part of an SBM will need to conduct reconciliation between the state enrollment information, HIX 820, and the member.

With changes in the front-end systems and operational processes, it's important not to lose sight of the impact this data has on downstream processes. It is imperative all adjustments, updates, discrepancies, and relative information are easily tracked and accessible for the reconciliation and reporting of APTC, CSR, medical loss ratio (MLR), and risk adjustment. Membership and their corresponding payments are the backbone of a health plan. You want to ensure accurate information is reflected to prevent erroneous materials from being sent to members or to the Centers for Medicare & Medicaid Services (CMS).

How can Gorman Health Group help?

With a best practice approach, the Gorman Health Group Reconciliation team can supplement your current staffing model with a focus on reducing your discrepancy volume enabling timely and accurate policy-based payment from the FFM and other positive, downstream impacts.
Review and build efficiencies with your current reconciliation process
Identify key gaps with enrollment processing and assess opportunities to reduce the volume of discrepancies (both enrollment and payment)
Bring transparency into key measurements Issuers must pay attention to.

Valencia™

Our premier reconciliation tool, Valencia™ is the tool of choice with approximately 11M lives under management. Specific to the Marketplace, Valencia™ reconciles 4M or 31% of the 12.7M members enrolled in the FFM and SBM marketplace.

The Gorman Health Group Reconciliation team utilizes the Valencia™ application to better understand a client's reconciliation health. The team will load the required files for comparison and summarize the discrepancy landscape. Valencia™ allows the team to work, resolve and measure productivity thereby reducing the volume of errors.

Resources

New Webinar! Join us TODAY from 1-2 pm ET for a hard-hitting analysis of the final rulings in the 2017 MA rate announcement and final Call Letter. We will outline the critical areas that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Register Now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Risk Adjustment Methodology: Reviewing Proposed and Current Model Improvements

On Thursday, March 24, 2016, the Centers for Medicare & Medicaid Services (CMS) released a white paper regarding the risk adjustment methodology. There has been a lot of criticism and discussion about the U.S. Department of Health & Human Services (HHS) risk adjustment program working appropriately. As indicated in the 2017 Notice of Benefit and Payment Parameters (NBPP), the white paper addresses the comments HHS has received regarding the risk adjustment methodology and serves as the basis for discussion for the Thursday, March 31, 2016, meeting. This document provides the story of the evolution of the HHS risk adjustment program, including a summary of historical information on how the HHS risk adjustment program was developed, changes made to the model thus far, and further discussions and considerations for enhancements in the future.

The risk adjustment model is intended to work with the fair rating rules under the Affordable Care Act (ACA). These rules are in place to reimburse issuers that have riskier, costlier enrollees by issuers that carry lower risk, regardless of any other factors, such as being a new issuer or narrow network plan. To enhance the existing stabilization program, modifications have been applied to recalibrate the model for the 2017 benefit year. The white paper just released highlights the areas needing further refinement, such as methodology for inclusion of prescription drugs, partial year enrollments, and future year recalibrations.

History: When the HHS risk adjustment program was being developed, the primary goal in mind was to "compensate health insurance plans for differences in enrollee health mix." The intent was to allow differences in premium for plan design and benefits but not allow premium differences for any health conditions the prospective member may currently have. When developing how this goal would be accomplished, three specific areas were addressed:

New Population — During development, data was not available to analyze since this was uncharted territory. The risk adjustment program needed to include members enrolled into a plan that adhered to the ACA regulations, regardless of whether the member purchased the plan through the Marketplace or directly from the issuer. In lieu of not having specific data to utilize, HHS used a commercial dataset consisting of 2010 Truven MarketScan^® Commercial Claims and Encounter data.
Market Factors — This introduced the different plan actuarial values in comparison to a standard benefit level. This is an extremely complex portion of the risk adjustment methodology. HHS encountered challenges defining "how to preserve premium differences that reflect differences in generosity of plan coverage."
Balanced Transfers — Since issuers were no longer allowed to adjust premiums for enrollees based on health status, the risk adjustment transfer payment is the part of the risk adjustment program that will make the issuer whole from a financial perspective.

There are apparent similarities between the CMS and HHS risk adjustment programs. One of the outstanding questions during development was considering which disease classification grouping would be utilized for the commercial market. It was decided to use the CMS-Hierarchical Condition Category (HCC) grouping utilized for Medicare risk adjustment as the basis to develop a diagnosis clinical classification for commercial. The CMS-HCC grouping consists of 201 HCCs compared to the HHS-HCC grouping that has 264 HCCs. Only a subset of the 264 HCCs is utilized for risk adjustment. These HHCs are classified as "payment HHS-HCCs" since these are the categories that carry a factor weight to be part of the plan liability risk average score (PLRS) calculation. Many HCCs that are part of the Medicare model were split in the commercial model to better predict costs within disease groups, such as those in the metabolic, blood, psychiatric, andDepartment o injury hierarchies.

Model Improvements: There have been improvements to the risk adjustment payment model since the 2014 HHS risk adjustment process was finalized. Each year the commercial risk adjustment program has been enacted has brought enhancements, subtle at most, to improve the accuracy of the program.

Payment Year 2015 — Primary goal was to maintain stability. Utilized the same factors for cost-sharing reductions (CSR) plan variation in the corresponding Medicaid alternative plan variations.
Payment Year 2016 — First year the risk adjustment model was recalibrated. In order to maintain stability and avoid using a small sample size, an approach was utilized to average coefficients using separately solved models of 2011, 2012, and 2013 MarketScan^® data for 2016 benefit year risk adjustment. This was also the year in which HHS addressed two issues surrounding the classification and reporting for infants. The first issue surrounded infants, classified as age 0 who did not have any birth codes, an issue primarily driven by bundled mother/baby claims. The second issue addressed was for six transplant status HCC coefficients utilized in the child risk adjustment model.
Payment Year 2017 — Second year the risk adjustment model was recalibrated. A similar blended approach was utilized in the same manor that it was for the 2016 Payment Year. The dataset was updated to include the three most recent years of MarketScan^® data; 2012, 2013, and 2014. For this year, preventive services are included in the simulation process of calculating the plan liability. The 2017 NBPP requested comments regarding further discussion topics that will be addressed at the Thursday, March 31, 2016, CMS meeting.

Proposed Model Improvements: CMS is hearing the concerns coming from the health plans and is actively engaging them for comments in regards to issues. This interaction allows for an avenue of different perspectives to enhance the risk adjustment program with solutions that will further advance the model. There is no specific avenue HHS is taking in regards to the below improvements at this time. Rather, they are gathering all of the feedback they have received thus far and opening it up for discussion to determine the next best step to take.

Partial Year Enrollment — Health plans are concerned about the adverse effect partial year enrollments is having on their risk adjustment payment transfer outcome. The industry is seeing enrollees with 6 months or less enrollment with high Medical Loss Ratio (MLR). This type of membership "flip flop" has been a concern of health plans since the onset of the ACA. This is where an individual elects an ACA plan on a temporary basis to only handle a current condition and not to maintain health insurance coverage long-term. In turn, health plans experience high claims cost, minimal revenue, and subpar balance to the risk they are carrying for these individuals. With the commercial demographic, the majority of conditions are considered acute as opposed to chronic conditions. This statement is the exact opposite of what you would see in the Medicare space.
Proposed Drug Modeling — The use of pharmacy claims is an important analytical element used to validate a member's diagnosis and to proactively research for potential undocumented chronic conditions. HHS is talking about introducing a hybrid risk adjustment model that would use prescription drug utilization as risk indicators for the HHS-HCC model. The framework and operational impact to maintain a model like this is up for discussion but certainly is a step in the right direction.
Use of a Concurrent Model — There is discussion around if utilizing a prospective model, rather than a concurrent model, will be more beneficial for the HHS risk adjustment program. A concurrent model predicts costs within the current year. This type of model tends to address more acute costs, whereas a prospective model allows greater time to review prior encounters to better predict the future costs. This allows a greater time lag for encounters to be analyzed and submitted, allowing time to capture more advanced acute and chronic conditions.

CMS clarifies the program is functioning as it was intended to, with which I would agree. The operational complexities, concurrent model, and mediocre data management practices established by health plans is leading to incomplete data submissions and, therefore, inaccurately reflecting the risk of the organization. The established model and demographic understanding will evolve over time by utilizing more accurate data to stabilize the factors used in the calculation when it becomes available. Until then, it is important for health plans to work on what they can directly impact by refining the risk adjustment processes they have in place, establish analytics and reporting practices, and ensure a thorough extraction process is conducted for the EDGE server submission inclusive of controls, pre-validation checks, and error resolution processes.

Resources

GHG can help you streamline the execution of your risk adjustment approach, and build a roadmap to ensure you're keeping pace with CMS and/or HHS expectations in both compliance and health care outcomes. Contact us today to learn more >>

For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. The hotel room block expires on April 4 so register now to reserve your seat!

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

2017 ACA Applicants and Network Transparency

The National Association of Insurance Commissioners (NAIC) completed their review of provider network rules and published a draft of a new Model Rule. This is the first update of network rules in over 20 years. NAIC convened a committee of regulators, health plans, and consumers to provide input to the development of the draft document. The drive to develop the new rules came from the realization narrow networks used in Marketplace plans were the basis of increases in consumer complaints. Throughout the draft, NAIC recognizes the differences that exist between regulations in various states and the proposed changes, so any state can choose to follow the draft or construct its own rules. It has a three-year timeline.

At the same time in December, the Centers for Medicare & Medicaid Services (CMS) proposed network regulations for Qualified Health Plans (QHPs). The final regulation published in February, however, recognized the three-year NAIC timeline, sort of.

First, the draft NAIC rule takes on some of the changes prompted by the Affordable Care Act (ACA) in several ways. NAIC revises definitions for emergency services and conditions, emergency service stabilization, primary care and specialty providers, telehealth, as well as tiered networks. With new definitions throughout the document, the impact of the changes becomes more evident. Draft NAIC rules incorporate final ACA rules that specify in greater detail what health plans must do when they fail to have a provider for a covered benefit. These include payment, notice to persons who need the benefit, and a process for requesting services from a non-participating provider.

Second, the most significant section discusses network adequacy. This section adds many of the ACA requirements related to underserved individuals, children, tiered networks, as well as access. Alternatively, it also recognizes some states use time, distance, and waiting standards. To avoid potential state/federal conflicts, CMS proposed new network rules that would have required CMS to approve state network rules. If CMS did not approve the state method, a federal default based on time and distance would have applied. CMS decided not to finalize this rule, stating they would monitor the states' adoption of the NAIC standard over a three-year period before making any new federal regulation. But, in the end, CMS said they would still apply time and distance standards anyway. It's likely this will be the case for the foreseeable future — not just 2017.

So, what will be the effect of this new model rule? First, nothing defines "without unreasonable delay." Notably, over the past three years, CMS has cited this same regulatory language as frustrated applicants sought to fix networks CMS rejected. The CMS approach to unreasonable delay appeared to be "we'll know it when we see it."

In an attempt at transparency, CMS has finally provided a set of time and distance metrics. Notably, for many years in Medicare, CMS has used software based on time and distance standards and, no doubt, has been using it for QHPs. The magic of the software is it provides a view of what CMS may see in an applicant's network. Using software quickly provides targets and assists in developing justifications needed to address gaps. GHG conducts network access reviews using this same software to ensure QHPs meet access rules before submission to CMS. So, with increasing pressure to build narrow networks, QHPs can have access to solid support tools on what meets access without unreasonable delay.

Resources

For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. The hotel room block expires on March 28 so register now to reserve your seat!

The application process for Medicare Advantage and Part D, the Health Insurance Marketplace, and ACOs is an arduous one. Completing the application requires the cooperation from your entire organization.Don't let the application process get in the way of your day-to-day operations. Contact us today to ensure a smooth, compliant process.

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Is the Honeymoon Over? Issuers Begin Receiving Direct Payment from the FFM System of Record

Although the financial hit may have been delayed a few months, it is still inevitable. Issuers will be moving from the driver's seat when it comes to being paid for their members within the Federally-Facilitated Marketplace (FFM). Beginning in April 2016, FFM Issuers will feel the financial impact of being out of synch with the Marketplace for the first time.

Since the launch of the Marketplace, Issuers have been invoicing the FFM directly at a plan level versus a policy level (subscriber) in order to be paid Advanced Premium Tax Credits (APTCs), Cost Sharing Reductions (CSRs), and User Fee (UF) charges. Now, the Centers for Medicare & Medicaid Services (CMS) will make monthly payments directly to Issuers based on effectuated enrollees within the federal system, not the Issuer system. By shifting the direction of Issuer payment and the data source that derives the payment calculation, Issuers are in store for a turbulent and unpredictable ride if not prepared.

As planned in 2016, CMS sent payment files directly to Issuers representing the FFM-calculated payment. While on the surface it appeared the implementation moved into motion, there was a catchâ€”all FFM Issuers, whether or not they were deemed "ready" to receive payment files (in the form of a Preliminary Payment Report (PPR) and HIX 820) directly from CMS, were still being paid from the Issuer's system of record for the first three months of the year. This delay was established as a transitional step for Issuers to become comfortable with the new payment files and allowed more time for all Issuers to be certified. As we approach the April payment month, CMS has offered another temporary adjustment for three additional months in cases where the FFM calculation and the Issuer's calculation is greater than a 25% variance. In these cases, CMS will cap the difference between the FFM and the Issuer by applying a manual adjustment to bring the variance to the 25% mark. After June, all temporary transitions cease, and Issuers will be paid based on the FFM system of record.

With CMS building transitions and seeing variances with Issuer data at 10%, 25%, or greater, this should be an indication there is a looming payment issue at hand. To oversimplify, if an Issuer is out of synch with the FFM for the month of January, and a January adjustment doesn't occur in subsequent payment months and compounds as discrepancies age and member updates occur month over month, the payment dilemma is exponentially hitting the bottom line of your organization in real dollars. Your organization's operational health impacts payment. The sooner you prepare for this reality, the better.

Top Strategies for Preparing for the Future:

Move back to the driver's seat and understand your discrepancy rate. This includes:
- Subscribers not found on the FFM's system but on Issuer's system per month
- Subscribers not found on the Issuer's system but on the FFM's system per month
- APTC differences per month
- CSR differences per month
- Total Premium differences per month to aid UF calculation errors
- Measuring a discrepancy rate should summarize not only discrepant subscribers but also discrepant member months. For example, the Issuer and FFM may be in synch the first three coverage months but not equal the remaining nine months of the coverage year such as FFM 1/1/2016 - 12/31/2016 versus Issuer 1/1/2016 - 3/31/2016. This logic applies to all discrepancies whether related to a coverage period discrepancy or the data elements within a coverage period, such as an APTC overpayment. All scenarios are financially impacting to the Issuer.
- Based on the above, calculate the financial impact of those very discrepancies. In other words, if resolved, the prospective HIX 820 will pay $A and adjust $B retrospectively.
- Understand passive reconciliation may have carried you this far but is futile for the future. Only you can influence the predictability of your monthly payment. Being reactive to the HIX 820 will be a major disadvantage for your organization. Would you allow another party to dip into your checking account and wait until your monthly statement to view deposits and debits? Understand transactional data can be predictive.

Issuers Must Focus on Key Operational Processes:

Process all incoming 834 transactions (in all forms) and resolve all errors.
Submit timely IC834s and resolve/resubmit all errors.
Submit timely and accurate membership snapshots to CMS each month for reconciling purposes.
- Update your enrollment system, as needed.
- Audit the FFM RCNO file to ensure the FFM is taking action on their updates as well.
- Most importantly, calculate an Expected Total Payment each month and continue to submit your Issuer plan-level calculation to CMS for as long as they will accept it.

There has been an abundant amount of discussion surrounding the source of truth regarding Marketplace enrollment data. Building processes around enrollment transactions with essential checks and balances continues to be an important part of this landscape. Roadmap initiatives are underway with more emphasis on Marketplace compliance audits. It goes without sayingâ€”you never want CMS to identify you are being paid for non-members or not being paid for members consuming the benefit. With all the aches and pains that come with launching a government business, your organization must control the processes it can and have an audit trail for FFM defects impacting your payment as well. Documentation, substantiation, and a paper trail are all key components for audit readiness.

Resources

To learn more about the Gorman Health Group reconciliation solution, Valencia™, and how it supports Enrollment and Payment Reconciliation for Issuers, please contact ghg@ghgadvisors.com or Diane Fischer at dfischer@ghgadvisors.com.

Gorman Health Grouop's Valencia™ creates the workflows organizations like yours need for critical operational functions. With Valencia™, you'll always know where your membership and premium-related data is out of sync, thus eliminating missed revenue and inappropriate claims payments. Contact us today to set up a demo >>

For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. The hotel room block expires on March 28 so register now to reserve your seat!

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

MA Plans' Must-Fix: the Member Experience

Now more than ever, it's clear to us health plans and their stakeholders will thrive or die based on the member experience they provide. The member experience, especially with drug benefits, now represents more than half of a health plan's Star Rating in Medicare Advantage (MA), with millions in bonuses and bid rebates hanging in the balance. It also drives member retention and thereby acquisition expense (now averaging $1,200 per/member, or more than an average month's premium), so how members are treated now determines both health plan revenues and costs.

Overall, the member experience in a Medicare plan is defined by an enrollee's ability to get timely appointments, care, and information, how well providers communicate, and whether member-facing health plan and provider staff are helpful, courteous, and respectful. It's driven by the company culture, its commitment to communication, and the empowerment of staff to solve problems. And despite two-thirds of plans saying the member experience is their top investment priority, we are losing ground.

In a few short years, the Star Ratings system has evolved from a crappy consumer information tool to a multi-billion dollar pay-for-performance (P4P) initiative investing in improved processes and outcomes of care in MA. In 2016, the scoring methodology for Star Ratings ensures the member experience measures, especially in Part D, count for more than half of a plan's rating. It also narrows the margin for error, so only a 10% deviation in performance on the critical Consumer Assessment of Healthcare Providers and Systems (CAHPS®) is the difference between a 2-Star Rating and a 4-Star Rating.

On an enrollment-weighted basis, MA averages a 4.03 rating, with 49% of contracts (179) and 71% of members in plans over 4 Stars. But on CAHPS®, the program dropped from 3.45 Stars in 2015 to 3.4 Stars this year. That's a big problem threatening to drag the program back below the all-important 4th Star and, taken in context of other recent data, gets downright scary.

Last week our friends at Deft Research released their latest Seniors Shopping survey on the 2016 open enrollment period. They found that for the first time in recent memory, far more seniors are leaving Medicare Advantage for Medigap than vice-versa.

On virtually every measure, they found declining loyalty to and retention with their health plan. That says a lot about the state of the member experience in MA despite the priority and focus. It says we're missing the point.

Meanwhile, Alegeus Technologies had some incredible findings in their annual health plan consumer survey presented at the recent AHIP conference. First, they found half of members (50%) do not want to "play an active role" in their healthcare. This argues plans' investments in "member engagement" may be backfiring with half their enrollees. And there was widespread confusion in what they're paying for, possibly delineating why appeals and grievances processing remains the top compliance challenge for plans:

66% of members think they're not paying the right amount
56% complain they don't know how much they are spending until after they receive services
45% of members say they simply do not know much they spend even after getting a bill
45% say they never know what is covered

All of this says the way we think of and invest in the "member experience" needs rethinking.

It reminds me of the seminal 2014 behavioral economics study that found that happiness is defined by expectations being exceeded a little bit on a regular basis. Because expectations are variable, everyone can be made happy. That begins during the marketing and sales process and continues throughout the member lifecycle.

Moving to proactive service models is only the beginning. Only half our members want to be involved — the rest are disappointed and confused enough to be leaving in growing numbers to join inferior and more expensive products. They need help navigating provider networks, better understanding of how to use their benefits, and what to expect in out-of-pocket spending in real time. They need in-plan service ninjas empowered to solve their problem on the first call. They need Pharmacy Benefit Managers to get it together and health plans to advocate and agitate for members with their vendors. They need constant improvement in the member experience to be the new normal in government programs.

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by GHG Advisors

Another Health Plan Cuts Commissions — Is there a trend developing?

Is there a trend developing with health plans and their offerings under the Affordable Care Act (ACA)?

Raising rates, high-risk members, and cutting agent commissions continue to be challenges for all health insurance companies offering plans under the ACA. Some of the big plans still in the game say it's too early to bail out, and they see the ACA as a big opportunity. But late last year, one of the largest health plans announced they would be pulling out of the ACA business. Following this news, multiple non-profit Co-Ops announced their closure, and, most recently, another large health plan providing ACA products is following suit, announcing late February they would be cutting commission on sales of individual health plans. We can all agree changes in the structure of the individual market need to happen, but how fast can these changes be made and still accomplish profitable enrollment goals?

With fewer options, will agents still be a necessary resource for the prospect?

In the last year, we have seen several health plans pulling back on their marketing and reducing the number of choices for the consumer. It appears health plans are still trying to figure out how to price the products and if they should pay commission to agents or have the prospects use online tools to navigate their health care options. Meanwhile, agents are left with less in their pockets and wondering if there is still an opportunity for them in the ACA.

If agents generally sell plans within the Marketplace, and these continue to dwindle, where will that leave the agent? With the uncertainty of how big plans will navigate the complexity of the ACA, it is anticipated that agents will redirect focus to Medicare for 2016:

Reason #1 — No doubt the Medicare space offers unprecedented opportunity! With the growing number of Baby Boomers, health plans and agents continue to see limitless earning potential (nearly 10,000 people turn 65 every day).

Reason #2 — Commissions for Medicare Advantage (MA) are typically paid on application submission for some of the large plans and include lifetime renewals, which means agents and agencies get paid as soon as an application is submitted, and, after 13 months of enrollment, the agent and agency receive a prorated monthly commission for the life of the policy.

Reason #3 — Year-round selling opportunities. These days, it's not just about the open enrollment period — many agents find a great deal of opportunity with the dual-eligible (Medicare and Medicaid) population, as these individuals can enroll year-round.

Don't get distracted by the ACA crisis, focus your time and energy on building a sustainable business in Medicare. For more information about Medicare, Field Marketing Organizations (FMOs), and year-round selling opportunities, please contact:

Carrie Barker-Settles
Director, Sales & Marketing Services
Gorman Health Group
cbarkersettles@ghgadvisors.com

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Gorman Health Group's Sales Sentinel™ provides a platform for organizations to onboard their agents, adapt to any oversight program, as well as generate commission payments. To learn more about Sales Sentinel™ or to request a demo, visit our website >>

by GHG Advisors