Data Revolution: The Need for Accurate Data to Drive Quality Analytics
The Affordable Care Act (ACA) made a tremendous impact on the healthcare industry. What was once a free-flowing commercial market with very low requirements and data interaction has now transformed—it has morphed into a highly-regulated market heavily dependent on data to deliver quality outcomes for members and to remain financially sound. The processes set forth in the ACA mirror existing Medicare processes with adjustments in order to make the processes work for the Commercial population.
With the introduction of the ACA, data has had a staggering increase of importance and has become an integral part of the healthcare industry. The need to have refined data management processes to ensure data integrity and quality analytics is at an all-time high. Achieving this should be at the forefront of health plans' minds. Daily, health plans rely on the accuracy of their data for analytics which drive business decisions related to such things as rate setting, risk score calculations, federal and state data submission, and population health management. All too many health plans "assume" the information they are receiving from their membership, claims, and provider platforms into their data warehouse is accurate. This assumption is based on the fact these systems are considered to be "the source of truth." This terminology leads to false reassurance that just because it's the truth, it also means it's accurate. Always trust, but verify the data utilized. Inoperability between systems and software is a huge issue which increases your risk of losing data during transmission of information. Refined data management process and data governance are the links needed to bridge the data gaps.
When speaking about data and data management, the immediate correlation is to think of it as an IT department responsibility. With the growing regulations and oversight from the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS) around data, it has now also become a business responsibility. Long gone are the days when a business area could simply submit a change request and not be a part of the IT functions to implement the change. It is a critical piece now to have the business department working side by side with the IT department to ensure the changes or updates being implemented are accurate and within the regulations set forth by the regulators. As we all know, CMS and HHS can have last-minute changes and hard deadlines to which health plans must adhere. Knowing that working to meet these deadlines can be strenuous to achieve and realizing the IT infrastructure within your organization is increasingly complex, the business needs to be working with IT daily to notify them of any changes related to their work. Such items would include changes to the deadline, format, or field requirements, to name a few. It is a much more agile process than ever before. Having a business area who understands the technical components and effort needed to complete a desired change along with the required regulations leads to a much more successful engagement between IT and business.
There was a release on October 6, 2015, from HHS regarding rules to advance electronic health records with added simplicity and flexibility. HHS recognizes there is a need to make health information available quickly and easily to those who need it, as noted by the comment from Karen B. DeSalvo, M.D., M.P.H., M.Sc., national coordinator for health IT. She stated, "This rule is a key step forward in our work with the private sector to realize the shared goal of making actionable electronic health information available when and where it matters most to transform care and improve health for the individual, community and larger population. It will bring us closer to a world in which health care providers and consumers can readily, safely and securely exchange electronic health information." This is a huge advancement for HHS. Health plans need to establish and perfect their data infrastructure now so, as advancements occur within other areas of the industry, they are able to receive and store information utilized for analytics.
Here are some important questions to ask yourself when it comes to your organization:
- Does your organization have a solid data management process in place to account for CMS and HHS requirements which could withstand an audit?
- Has a clear understanding been established on the inoperabilities existing within the company and established ways to remedy any issues which may occur?
- Has data governance been established?
- Are integrated analytics established throughout the areas highly focused on member and provider engagement to support risk adjustment and Star Ratings?
- Is your organization able to analyze population health management information easily and effectively on a consistent basis?
If you answered "no" to any of these questions, you will want to evaluate your current structure to identify areas of opportunity. The data within your organization provides the knowledge you need to understand your organization, members you serve, and maintain your financial solvency. Clean data to drive quality analytics is something every health plan wants. You need to ensure you have the right processes in place to manage the data within your organization effectively to set yourself apart from your competitors.
Resources
Registration for the GHG 2016 Forum is now open! This year we are offering a tiered pricing schedule. Register between now and November 30 to receive the biggest savings at $795. Come December 1, the price increases to $1,095. Register today >>
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How to Partner with Key Health Systems in your Service Area to Optimize Benefit Plan Offerings
As we anticipate additional information this week on the Centers for Medicare & Medicaid Services (CMS) network adequacy (pilot) audit, we can't help but consider how CMS' rigorous access and availability standards hamper Medicare Advantage (MA) plans' ability to be on the cutting edge of innovative network design. The Affordable Care Act, in comparison, has allowed for Marketplace plans to offer narrow networks as long as the networks have sufficient numbers and types of providers to deliver services without "unreasonable delay," leaving states to define the meaning of "unreasonable." This difference in network adequacy standards has widened the gap in plan offerings.
MA plans, after meeting network adequacy standards, are able to offer tiered benefit plans to members ensuring members are still afforded access to the larger network if not all standards are met within the smaller subset. The tiered benefit designs leave MA plans with the question of which providers would be the best partners.
In evaluating provider partners for tiered benefit designs or co-branding opportunities, health plans need to determine the attractiveness of each prospective provider by asking questions such as: Does the potential provider system have a similar philosophy? Is the provider system large enough to meet network adequacy standards in a given market area on their own, or would fill-in providers be required? How would their participation or non-participation in our network affect our market strategy? Does the provider system do anything particularly well, do they have unique services, service area, or exclusive providers, and how can those services be packaged? Would these bundled services contribute to increased revenue and/or market share?
In turn, provider systems that may be contemplating offering their own provider-sponsored health plan could be asking themselves similar questions and determining if a payor partnership would be a good option. Providers should develop a plan/partner evaluation process concurrent with developing a marketing strategy in order to find the best available partnership.
As we see the Marketplace and Medicaid proposing similar network access and availability standards as MA plans, we easily foresee a change in how these two government-sponsored programs will need to re-evaluate their network design. By beginning to monitor their networks now, Medicaid and Marketplace plans will be able to identify some of the provider network challenges MA plans have faced. As CMS moves forward with decisions on network adequacy for all government-sponsored health plans, enhanced relationships between payors and providers will be key in developing the networks needed to support competitive benefit plans.
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Gorman Health Group evaluates the design and delivery of high quality collaborative care while achieving compliance and improving revenue cycle management. Our multidisciplinary team of experts will assess the alignment of your products, your current network and your market to translate your business strategies into practical, efficient and rigorous work processes with the highest degree of compliance and accountability. Visit our website to learn more >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Let's get started. Contact us today
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Government Sends Stark Reminders that Insurers' Biggest Customer is Still the Regulator
Since we opened our doors 19 years ago, we've preached to health insurers to think of the government as your business partner. This week, we got several reminders that insurers' biggest customers -- Medicare, Medicaid, and ObamaCare -- are still the regulator. As business conditions improve for health plans across these business lines, government expectations are rising, and scores are about to get settled, as they always are in the second term of a Democratic administration.
We see it in enforcement activity from the Centers for Medicare & Medicaid Services (CMS). We see it in a steadily-rising bar of Star Ratings and other performance measures for health plans for all three programs, the basis of looming contract terminations. And now the White House jumps in with an aggressive schedule of risk adjustment data audits, openly seeking repayments and dropping "f" bombs: fraud, that is.
They named a great film after a moment like this: "There Will Be Blood."
You can't argue with the numbers: 2015 remains the most punitive year in Medicare Advantage history. Look at the trend:
CMS is also being much more aggressive this year with data-driven oversight and enforcement. Communications to health plans who are "outliers" in various performance measures, especially in member communications and consumer protections, began recently. A pattern we are seeing play out is CMS chasing down all clients of noncompliant pharmacy benefit managers; where poor Part D performance is seen in one plan, the agency then begins auditing that vendor's other customers, assuming they'll get the same findings.
We know that Star Ratings and expanding reporting requirements in Medicare Advantage and Part D mean the bar is rising and establishes data-driven thresholds against which health plans can be penalized and terminated beginning in 2016. CMS announced sweeping new reporting requirements for both programs this week, which inevitably get picked up in Medicaid and ObamaCare rules in following years.
And now the White House is piling on. In Washington, we talk a lot about "setting the terms of debate." Our industry has lost the debate on risk adjustment coding and has allowed anti-managed care advocates to define payers' inaccurate diagnostic coding as fraud. A just-disclosed February 2015 letter from President Obama's Budget Director to Health Secretary Sylvia Matthews Burwell stated, "While some progress has been made on this front, we believe a more aggressive strategy can be implemented to reduce the level of improper payments we are currently seeing...we must continue to explore new and innovative ways to address the problem and attack this challenge with every tool at our disposal...the government estimate of $12.2 billion in these mistakes for fiscal year 2014 remains a concern." He extended his mandate beyond Medicare Advantage to over $3 billion in questionable payments from Medicaid. This means a spike in data validation audits for payers across both programs with the threat of improper payment clawbacks and even prosecution under the False Claims Act.
There has never been a more Golden Age of opportunity for health insurers in government programs. But the threats are escalating as well, and as my politics professor told me, "99% of political wounds are self-inflicted." Plans caught up in this dragnet will have gotten plenty of warnings.
Resources
The Part C and Part D Reporting Requirements and Supporting Regulations were posted in the PRA Listing on August 24th for review and 30-day comment. Since we are still in this window, this is a great opportunity for Compliance and Operations to review these together. Click here to review the Part C highlights that merit your attention in a blog posted by Regan Pennypacker, Senior Vice President of Compliance Solutions at Gorman Health Group (GHG).
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The Impact of CMS Changes on MA & FFM 2016 Agent Readiness
Preparing for the 2016 selling season means implementing a strategy that mitigates compliance risks for your organization and empowers your sales force to meet your enrollment targets. In our recent webinar regarding the impact of the Centers for Medicare & Medicaid Services (CMS) changes on Medicare Advantage (MA) and Federally-Facilitated Marketplace (FFM) 2016 Agent Readiness, I outlined key takeaways your organization needs to enforce in order to protect your health plan from compliance risks while also positioning it for sales success in 2016 and beyond.
1. MA/Part D Compliance and FWA Training for FDRs:
Beginning on January 1, 2016, every organization will need to ensure Compliance and Fraud, Waste, and Abuse (FWA) training requirements for first-tier, downstream, and related entities (FDRs) are fulfilled ONLY through CMS courses found on the Medicare Learning Network (MLN). This includes contracted Field Marketing Organizations (FMOs) and agents/brokers. This means the organization may now require these individuals to take custom training and must have mechanisms in place to accept completion of the CMS training. CMS also explicitly states plans will need to provide accurate reporting of this information.
Ways to fulfill requirement:
Note this requirement does not exempt organizations from ensuring all employees and FDRs are informed on how to report instances of fraud, waste, or abuse and other relevant information as described in Compliance Program requirements.
2. New Features for Health Insurance Marketplace Training
CMS is implementing changes to its process where vendors will be offering training. CMS has approved three vendors as "conditionally approved" (not approved until go-live in late summer 2015). GHG is a conditionally-approved vendor for Health Insurance Marketplace training. The number one takeaway from this is agents still begin and end on the CMS website. They cannot come to any vendor website to take their training; they must go directly to CMS and choose the party they would like to utilize.
Important to note:
- Vendors may use CMS' training or vendor-developed training approved by CMS.
- New! Vendor pricing varies: GHG's pricing is $29 for Individual and/or Small Business Health Options Program (SHOP), while AHIP is $125 for Individual or SHOP and $150 for both.
- Vendors offer Continuing Education (CE) units in 5 or more states (pricing varies by vendor).
For information on the requirements and process for completing Health Insurance Marketplace agent and broker registration and training for plan year 2016, please visit here.
Learn more about GHG Health Insurance Marketplace training at exchangebrokertraining.com.
3. Plan Benefit Training Is Important (but doesn't have to be long!)
The point of plan benefit training is not to communicate every detail of your benefits but to provide key information, such as:
- basic company information,
- plan types,
- service areas,
- premiums and deductibles,
- any changes from benefits last year,
- network restrictions and/or changes,
- highlights of drug benefits,
- description of value-added benefits,
- anything that makes you stand out from competitors, and
- most importantly, how and where to get more detailed information
Remember, every interaction your sales agents have with prospective enrollees should be viewed as a golden opportunity to educate the public about your organization. Ensure your staff is effectively trained to make every member touch count.
4. Licensure
CMS does not specify how or how often the organization checks licensure − just that they ensure the agent is licensed. GHG recommends the organization use primary-source verification through the state Department of Insurance (DOI) or National Insurance Producer Registry (NIPR). At a minimum, the organization should check annually and upon any expiration date. Quarterly checks are slightly more robust, and monthly checks the most rigorous.
5. OIG/GSA (Exclusion) Checks
Like compliance and FWA training, this is a compliance requirement that applies to all delegates (and employees) — not just agents. Every agent representing your plan needs to be checked against the federal exclusion lists every month. Plans need to work with their Compliance Department to ensure this requirement is met.
Whether you operate strictly in the MA market or are participating in the Health Insurance Marketplace, thorough and streamlined agent/broker training positions your plan to make the most of every opportunity and minimize compliance risks. Focus on better agents, not just more agents, to best serve your plan and your beneficiaries.
Need help? GHG's fully-automated Sales Sentinel™ can take your agents from zero to ready-to-sell in as little as one week, ensuring agents are not only trained but contracted, licensed, and appointed per CMS requirements. Sales Sentinel™ can also assist your organization with administrative onboarding functions such as form collection and writing code assignment.
If you have questions, please contact me directly at afleming@ghgadvisors.com.
Resources
Gorman Health Group is one of three conditionally approved for exchange marketplace training, is accepted by all carriers in federal exchange states and provides CE credits available in most states. To learn more visit exchangebrokertraining.com >>
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Medicare at 50: Past, Present & Future
Since its inception on July 30,1965, millions of elderly and disabled Americans have been able to obtain medical care through Medicare. Before Medicare, almost half of all Americans 65 and older had no health insurance. Today that number has dropped to a staggering 2 percent.
The accomplishments for Medicare have been noteworthy.
These include increased access to health insurance coverage and healthcare, decreased disparities in access by race leading to desegregation of hospital staff and facilities, as well as payment and delivery system reforms such as prospective payment, capitation, and shared savings — all of which have been adopted by private payers. Karen Davis from Johns Hopkins and former President of the Commonwealth Fund noted the success of Medicare's insurance Marketplace which offers beneficiaries a choice of traditional Medicare and Medicare Advantage plans with a 4-5 Star program that is driving plans and enrollment to higher quality. Medicare spending per capita has grown more slowly than overall health spending per capita and is currently at historically low rates.
The challenges are many.
Disjointed coverage (Parts A, B, D) is confusing to beneficiaries and results in high administrative costs and overpayments. Out-of-pocket costs for premiums, cost-sharing, and uncovered services remain high, and Medicare has no out-of-pocket maximum. Medicare does not cover long-term care services or home- and community-based services. Provider payment still remains largely fee-for-service, resulting in incentives for volume and provider not patient-centered care.
The Future
The future involves many different directions. The first is moving from an acute care model to a program that can effectively care for beneficiaries with complex chronic conditions. Provider payment reform needs to move to value-based payment that rewards efficiency and quality. The focus needs to shift to patient-centered care rather than provider-centric care. Care coordination and team care needs to be a focus. Program fragmentation and high out-of-pocket costs, particularly for high service users, needs to be addressed.
As Charles Darwin pointed out, evolution isn't about being the biggest or the smartest, but the most adaptable. Government programs have become the biggest opportunity for payers. Rates will be positive especially in Medicare Advantage, but the compliance environment will be brutal throughout the rest of the Obama administration. Star Ratings and the member experience are now driving the market — 30 plus states are now using some form of Star Ratings for performance-based payment, many states have adopted quality ratings for Medicaid managed care plans, but there is no national standard….yet, and the Health Insurance Marketplace will begin publishing quality ratings in 2016.
What have we learned?
John Gorman, Founder and Executive Chairman at Gorman Health Group, recently provided lessons learned in the 19 years we have partnered with health plans operating in Medicare, Medicaid and now the Health Insurance Marketplaces. He discusses the current industry environment and what's important moving forward. Read more >>
About 81M will be enrolled in Medicare by 2030. Is your organization prepared?
Resources
Gorman Health Group evaluates the design and delivery of high quality collaborative care while achieving compliance and improving revenue cycle management. Our multidisciplinary team of experts will assess the alignment of your products, your current network and your market to translate your business strategies into practical, efficient and rigorous work processes with the highest degree of compliance and accountability. Visit our website to learn more >>
GHG 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. We can help you identify clinical, operational, and networking opportunities to increase your score for 2016 and beyond. Contact us to learn more >>
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Obamacare Reinsurance and Risk Adjustment, Year One.
The much-anticipated "Summary Report on Transitional Reinsurance Payments and Permanent Risk Adjustment Transfers for the 2014 Benefit Year" has been released by the Centers for Medicare & Medicaid Services (CMS). A staggering 99.7% of Issuers were able to successfully submit data. The remaining 0.3% either did not set up an EDGE server or submitted data CMS could not use for risk adjustment calculations. Considering the aggressive timeline Issuers were given, this completion percentage is quite remarkable. Those who failed to submit compliant risk adjustment data were slapped with a non-compliance fee, which was distributed to other Issuers in the state.
CMS also announced plans would receive full payment under the reinsurance program. The reinsurance coinsurance rate has been increased from the provisionally announced 80% to 100% since the funds collected by CMS exceeded the requests for reinsurance payments. The information provided in this report further confirms risk adjustment will be an integral part of an Issuer's financial standing. It demonstrates risk adjustment payment transfers equate to anywhere between 2% of the total premium for merged plans to 21% of the total premium for catastrophic plans. So overall, from the highest view point, the processes for risk adjustment and reinsurance have shown to be a success. That perspective does not necessarily stand true when looking at the Issuers at a more granular level.
Yes, 99.7% of Issuers were able to successfully meet the submission requirements and get their data onto the server. That does not mean the data were complete and accurate to truly reflect the risk of the company. It just means, out of the 758 issuers eligible to participate in the risk adjustment payment transfer, 99.7% of them were able to send some sort of data to the server in the format CMS required and, therefore, were able to avoid receiving the default non-compliance charge. Issuers' completion percentages increased with each submission that got closer and closer to the April 30, 2015, deadline. The increase may not have been because Issuers were correcting errors; rather, it was CMS relaxing edits, allowing more data to be accepted onto the EDGE server. It would not have been beneficial for neither the Issuers nor CMS to have low completion percentages.
The commercial risk adjustment model is a zero-sum approach, meaning it collects funds from lower-risk Issuers then redistributes those funds to higher-risk Issuers. In order to determine how one company compares against another, state averages are calculated. An average is calculated for the monthly premium, risk score, rating area, and actuarial value for each risk pool category. These averages are then used in combination with the Issuers' actual calculations to determine the amount an Issuer is required to pay or will be receiving for risk adjustment. In looking at the Issuer-specific information, you're able to see the "winners" and "losers" for each state.
When evaluating how your company compared against internal projections and against your competitors in the market, here are a few things to consider:
- Approximately 20%-30% of your commercial individual and small group population will have a diagnosis correlating to a Hierarchical Condition Category (HCC) risk adjustment category. A missing diagnosis code for commercial risk adjustment could be the difference between receiving a payment or making a payment. What is your company's end-to-end reconciliation process for member and claims EDGE server data submission?
- There were unique claims circumstances CMS wanted handled a specific way, such as bundled claims and interim claims. These types of claims typically carry a lot of diagnosis information and claim cost. Were these claims handled appropriately to ensure demographic and diagnosis information was fully captured?
- Commercial risk adjustment is not just a process but rather a company strategy needing to be embedded throughout various departments in the organization. Is the strategy for your organization clear and understood by the areas involved in knowing how they impact risk adjustment?
It seems like it has taken forever for the 2014 risk adjustment payment transfer and reinsurance payment information to be released. Whether your results were stellar or not, don't get too hung up on the actual payments. What's done is done. Spend the time evaluating the full 2014 end-to-end process. What went well? What needs to improve? Act quickly and set your plan in place to impact your 2015 results—April 30, 2016, will be here before you know it. And invest wisely in people and systems to avoid subsidizing your competition due to inadequate or incomplete diagnosis data.
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The Reality of the 2014 Commercial Risk Adjustment Payment Transfer: Forecasted vs. Actual
The signing of the Affordable Care Act (ACA) into law threw health insurers into a whirlwind of changes. The guaranteed issue law made it so no enrollee in the individual or small group commercial market would be denied coverage due to their health status. In addition, the rate for all members now had to stay the same for all enrollees, with fluctuations only allowed for a few factors such as tobacco status. That key process, known as underwriting, could no longer serve as the method to evaluate risk and either deny coverage or set the enrollee's premium accordingly. With that shift came the introduction of risk adjustment, reinsurance, and risk corridor ("3 Rs") into the commercial market.
When the implementation of the ACA regulations were in process, a lot of plans took the "here and now" approach―meaning, they primarily focused on what the immediate pressing issue was, not contemplating what the downstream impact could possibly be. Project dollars were being spent on over-engineering enrollment processes and developing automated tools that, in the end, were not as useful as anticipated. It's human nature to want to tackle obstacles right in front of you, but when implementing ACA changes and introducing a new sales channel, like the Marketplace, a holistic approach needs to be taken. Developing a solid risk adjustment strategy was not part of the upfront planning for a lot of health insurers―it was a new process with a lot of grey area and unknown requirements.
So here we are now in the final stages of the first full year operating under the ACA. All health insurers are fully aware of the immense amount of work it takes to submit data to the EDGE server. With this data, CMS can calculate reinsurance dollars owed to health plans and calculate risk scores to support the risk adjustment process. They are also learning just because you can submit data to the EDGE server does not mean the overall risk for the company is reflected accurately. As each day passes, more information is becoming known about the transfer of risk adjustment payments. A limited number of health plans are being assigned a default risk score and are not eligible to receive reinsurance dollars due to not submitting adequate data to the EDGE server. In speaking with plans across the country throughout the evolution of the commercial risk adjustment operational process, the majority of health insurers were very optimistic they would be receiving risk adjustment transfer dollars, many of which will soon face the harsh reality that the forecasted risk adjustment receivable anticipated has turned into a payable.
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HRADV: What you don't know could cost you millions. Read the full article >>
Takeaways from Accountable Physician Groups' Annual Summit
Twice a year I get the honor of speaking to the California Association of Physician Groups' (CAPG) annual summit and DC policy meeting. CAPG represents accountable, capitated physician groups, and now has members in 39 states. They're always among my favorite speeches given how sophisticated the audiences are. Here's a few takeaways from my talk last week on "The Future of Government Programs":
- Forevermore, physician group revenues and earnings will be dominated by Medicare Advantage, Medicaid and dual eligible health plans, and the ObamaCare plans, most likely in that order.
- Everything that Medicare Advantage (MA) does, the Medicaid, ObamaCare, and commercial markets follow 3-5 years later. Nobody knows this better than the CAPG members from CA, which the rest of the nation lags. Want to still be attending CAPG meetings in 2020? Master Star Ratings and risk adjustment. They'll apply to all lines of business if they don't already, and they are the keys to survival already in MA.
- Value-based contracting is in its infancy but will soon define all health plan contracts with physician groups. Fee-for-service is dead. Performance-based capitation is the only future. To master it a physician group needs a range of capabilities, including eligibility verification, interoperability, actionable clinical intelligence in real time, standardized care processes, and chronic care management, across all business lines.
- Most Accountable Care Organizations (ACOs), especially the 424 in Medicare, will not see a return on their investment. They will have spent millions to participate in these experiments and around 80% won't see a payoff. 2016 and 2017, when Medicare Advantage benchmark rates turn into a tailwind, present the perfect opportunity for ACOs to "move up the food chain" to become health plans.
- Dual eligibles are the biggest opportunity of our lifetimes, and there is no question that Special Needs Plans designed to serve them can be profitable. SNPs are a principal mechanism for states to shift long-term care risk into the private sector, and will be a central product for ACOs converting into Medicare Advantage. But they require a range of capabilities most physician groups lack today, such as enabling and social services that duals must have from their insurer.
- In all government programs, the "5/60 Rule" governs. 5% of members often account for 60% of costs. Any physician group that aspires to bear risk must be able to identify and intervene with their 5 percenters or they won't be risk-bearing for long.
- The biggest vulnerabilities for MA plans are consumer protections like appeals and grievances and complaint management, and who they have selected as their pharmacy benefit manager (PBM). Most PBMs are frankly terrible at Medicare Part D administration, and Star Ratings now count far more in Part D than in Medicare Advantage to a health plan's overall score. Physician groups typically have little or no experience with either PBMs or consumer protections.
- Retail pharmacies and the home are the most underutilized sources of care to government programs beneficiaries. Any successful physician group evolution will involve better integration of both sites for the chronically ill.
- Most at-risk physician groups are directly involved in coding and reporting for risk adjustment. Federal agencies are paying unprecedented attention to upcoding in Medicare Advantage with an eye to hundreds of millions of dollars in clawbacks and recoveries. The emphasis at physician groups involved in risk adjustment must move from chart reviews and claims extracts to more holistic member evaluations, and from a culture of "what can we get?" to "how do we stay out of trouble?"
Evolution is a messy business. Nowhere is that more the case than in physician groups evolving from fee-for-service to value-based contracting and becoming insurance companies. If it was an easy business, we'd be out of business.
Resources
Don't miss Gorman Health Group's Chief Consulting Officer, with colleagues Jane Scott, Senior Vice President of Clinical Innovations and Regan Pennypacker, Vice President of Compliance Solutions, as they discuss your member experience and the factors that influence success and failure, as well as prominent compliance and service issues plaguing the industry. Register now >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Let's get started. Contact us today.
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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.
Resources
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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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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