Opportunities for Growth in the New Administration
"Opportunities are like sunrises. If you wait too long, you miss them." ―William Arthur Ward
With the new administration coming into power this month, there is a lot of conjecture over what might happen. Overall consensus is the one business segment that is the most stable is Medicare Advantage. Trump is a supporter of Medicare Advantage, and so are Republicans, although long-term there is an opportunity to change the financing of premiums. The Marketplace (Obamacare) and Medicaid are in “limbo” until we get a better idea of what and when there will be changes and how drastic they will be for these programs. So if you are looking for growth in revenue and/or enrollment, Medicare Advantage can provide a good opportunity. The other good news is that in the past several years, the Medicare Advantage market has been stable, based on the metrics available, with few changes in average premiums, plan offerings, and insurer participation.
If you are looking at the opportunity to grow or expand, there are many parameters to consider. Whether you are a Medicare Advantage plan considering expanding either your service area or products, Medicaid plans looking to add either Medi-Medi plans or Special Needs Plans, or an Accountable Care Organization or Integrated Health System looking to jump into Medicare Advantage, now is the time to explore this opportunity. Many of our clients are finding the most prudent way to expand and grow is a strong, solid strategy and an implementation plan that begins with a feasibility study.
A feasibility study looks at the market, and that analysis helps to build a strategy going forward for three to five years. This analysis looks at the competitive, financial, and demographic factors of a market(s) to see what is the most viable. This leads to a feasibility model based on detailed financial projections, and Gorman Health Group’s feasibility study process utilizes an onsite strategy exploration to walk through the entire process of entering Medicare Advantage or expanding current products and service areas with an emphasis on risks and rewards. The next step is the development of product/network/benefit design and implementation phases to build a competitive and compliant organization with the proper financial and operational controls in place. Even existing plans need a new perspective to manage member retention, risk adjustment, and overall analytics to support an integrated care organization.
No matter what your situation, this opportunity could be your sunrise, so don’t wait and join us for our webinar on January 31, 2017 at 1:00 PM EST for an informative session on how to conduct a feasibility study and taking it to the next step. Register now >>
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2017 Readiness Checklist – Valuable Tool or an Exercise in Redundancy?
Some people are list makers and wholeheartedly embrace the value of checklists. They utilize lists to manage tasks, stay focused, and ensure high-quality results. A publication by the Institute of Health’s Committee on Quality of Health Care in America, titled “To Err is Human: Building a Safer Health System,” lays out the value of checklists in improving patient safety. We should view the Centers for Medicare & Medicaid Services (CMS) Readiness Checklist in that same view: it is a tool to allow health plans to improve the quality and compliance of their health plan and safety of their members.
As with all checklists, the process can be a “check the box” experience or a valuable tool to make sure everything is in place and nothing was forgotten. We all know to expect a CMS Readiness Checklist on an annual basis, but do we use this amazing tool to its fullest? Be sure you make this a serious exercise to evaluate your program and readiness for 2017. Some sections may be redundant year after year, but health plans find broken processes year after year, sometimes through negative member experience―don’t let that be your plan.
Every item on the Readiness Checklist should be reviewed and validated. Some items are new and may take more time and effort to validate. Here are four new items on the 2017 Readiness Checklist where you may want to invest additional time:
- Medicare-Medicaid Dual Eligibles Non-Discrimination and Cost Share Protection – The 2017 Readiness Checklist has a new emphasis on protecting the rights of lower income members, particularly Medicare and Medicaid dual eligibles and others eligible for the Low Income Subsidy (LIS). CMS also highlighted this topic in their conference in September. Plans are required to ensure dual eligible beneficiaries are not balance billed for deductibles, coinsurance, or copayments for which they are not responsible. CMS is requiring plans to verify they have procedures in place to ensure their providers do not discriminate against beneficiaries due to their dual eligible status or balance bill those members who receive assistance with Medicare cost-sharing from a state Medicaid program. It is a health plan’s responsibility to manage their provider network to prevent this type of abuse of Medicare and Medicaid full dual eligible individuals.
- Best Available Evidence (BAE) – CMS included additional guidance for plans to review their BAE process. CMS expects plans to have processes in place to allow BAE to be accepted at the point of sale. If health plans do not have scripts in place to assist their member services and pharmacy help desk staff, then they must be developed and put in place to support members requesting assistance with BAE-type issues.
- Online Enrollment Center (OEC) Application Receipt Date – One policy change this year is the way the receipt date is calculated for OEC applications. Plans need to calculate the receipt date to 11 hours earlier than the time and date stamp provided on the CMS file.
- Non-Discrimination and Alternate Language Tagline Language – CMS also raises the new requirement for Non-Discrimination and Alternate Language Tagline translation language plans are now required to distribute to their members. CMS is requiring plans to verify they have processes in place to satisfy these new requirements.
This year’s release is earlier than previous years, allowing plans more time to validate and implement all actions. Similar to last year, CMS has changed the attestation process for the 2017 Readiness Checklist to a strategic conversation between plans and their CMS Account Managers. Without that formal attestation process, don’t devalue the Readiness Checklist and required actions – utilize the tool as the valuable resource it is which will ultimately make your health plan better and your members safer. To err is human, and for that reason, redundant validation is a critical step to make sure your program is ready for 2017.
Our consultants have implemented items from the 2017 Readiness Checklist for health plans just like yours. If you need assistance verifying you are ready for 2017 or have questions on your processes, we can help. You can reach us through our website or by emailing me directly at jbillman@ghgadvisors.com.
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New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 to 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>
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Plan Now for Performance
As 2016 comes to a close, planning for next year should be well underway. Bids are in, and budgets for the current year are being evaluated against reality before next year's strategies are finalized. As the ACA continues to evolve, CMS has been busy with new programs and more oversight. A plan or provider has to be vigilant about identifying any weaknesses that could mean high costs or low expectations relative to budget. Parent companies have to be aware of line of business similarities and differences as Exchange and Medicaid business become more like Medicare Advantage in terms of programs and benchmarks. A recent article from Kaiser on retention makes great points about the line of business impact on retention and how it is a simple metric that encompasses many operational issues.
GHG is constantly improving its tools to identify outliers as well as relationships between different metrics that cross department lines. Finding root causes and quantifying them for the organization are more impactful than just handling them on an ad hoc basis. Just like compliance is everyone's responsibility, so is financial performance. Identifying weaknesses AND leveraging strengths combine to form a more complete business model for sustained growth.
GHG can prepare a tailored snapshot of your market and your company's performance. Contact us here.
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New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 — 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>
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Evolution or Extinction
"The Theory of Evolution has two main points," said Brian Richmond, curator of human origins at the American Museum of Natural History in New York City. "All life on Earth is connected and related to each other," and this diversity of life is a product of "modifications of populations by natural selection, where some traits were favored in an environment over others," he said.
This same theory can be applied to current healthcare. A health plan is the sum of various functions that deliver and monitor the beneficiary's care. The line between payers and providers is becoming more blurred as financial risks and quality measures are critical measures for all healthcare components.
The concept of evolution vs. extinction is quite real. Providers are looking at partnering with payers and taking on more financial risk to leverage the subsequent reward and help coordinate care. Payers are eager to have more control and visibility with providers as well as to follow beneficiaries through the continuity of care to manage shifts in income, demographics, and clinical needs over a beneficiary's lifetime.
As Medicare Advantage (MA) continues to cover almost one-third of the eligible population, new product trends are evolving.
Over the past four years, Health Maintenance Organizations (HMOs) dominate the marketplace with managed
care and tighter networks, but the recent duals demonstrations are recognizing demographic shifts as well as states moving to Medicaid expansion and better coordination.
Another predictor of the duals market is the Special Needs Plan's focus on duals as an at-risk beneficiary. A third driver is the stable Chronic Condition Special Needs Plan (C-SNP) market, which manages the clinical needs and provider partnerships. The Centers for Medicare & Medicaid Services (CMS) is expanding this concept further through the new Value-Based Insurance Design (VBID) demonstration starting in 2017.
Gorman Health Group has the tools and experience to help the healthcare community evolve and avoid extinction. Our feasibility model includes detailed financial projections and onsite strategy discussions to walk a plan through the entire process of entering MA or expanding current products and service areas with an emphasis on risks and rewards. We can then lead you through the product design and implementation phases to build a competitive and compliant organization with the proper financial and operational controls in place. Even existing plans need a new perspective to manage member retention, risk adjustment, and overall analytics to support an integrated care organization.
Let's build a more adaptable, efficient approach to healthcare! So standing still is simply not an option — the marketplace is moving due to changing competitors, regulations, and populations: evolve and adapt.
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In a recent case study, GHG examined a mid-sized managed care health plan who struggled with poor MLR and how a cost-efficient affordability review that utilized trend management conducted by out integrated team of experts generated targets of $4 million in expected improvements. Download the case study here >>
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Health Plans Need to Start Talking About Disparities in Care
On the heels of a recent groundbreaking RAND report on racial disparities in Medicare Advantage (MA), the US Department of Health & Human Services' Office of Civil Rights (OCR) issued a regulation that requires serious attention in health plans participating in MA, Part D, Medicaid, and ObamaCare. It's a game-changer in advancing health equity and reducing disparities.
The new regs, implementing Section 1557 (the nondiscrimination provision) of the Affordable Care Act, prohibit discrimination, marketing practices, or benefit designs that discriminate on the basis of race, color, national origin, sex, age, or disability. This will escalate disparities from simply being a "quality improvement need" to being a huge compliance issue. It goes without saying that an investigation of your plan by the civil rights cops splashed across local news would be devastating. As the Centers for Medicare & Medicaid Services (CMS) has begun more aggressively using their data to identify these disparities, health plans certainly should begin doing the same.
The final rule prohibits sex discrimination in healthcare, including by:
- Individuals cannot be denied healthcare or health coverage based on their sex, including their gender identity and sex stereotyping. These last two items are of particular importance given transgender policy enforcement is relatively new. OCR has prosecuted cases recently where transgender patients were discriminated against in hospital admissions and room assignments, denying mammograms to transgender females, denial of gender reassignment surgery as "cosmetic," and harassment by medical transport drivers.
- Women must be treated equally with men in the healthcare they receive and the insurance they obtain. OCR has prosecuted several cases recently where hospitals assigned male guarantors when a wife obtained services but not the other way around.
- Categorical coverage exclusions or limitations for all healthcare services related to gender transition are discriminatory.
- Individuals must be treated consistent with their gender identity, including in access to facilities.
- Sex-specific health programs or activities are permissible only if the entity can demonstrate an exceedingly persuasive justification.
The regs also include important protections for individuals with disabilities and those with limited English proficiency by:
- Requiring covered entities to take appropriate steps to ensure communications with individuals with disabilities are as effective as communication with others.
- Covered entities must post a notice of individuals' rights, providing information about communication assistance, among other information.
- Covered entities are required to make all programs and activities provided through electronic and information technology accessible to individuals with disabilities, unless doing so would impose undue financial or administrative burdens.
- Covered entities cannot use marketing practices or benefit designs that discriminate on the basis of disability.
- Covered entities must make reasonable changes to policies, practices, and procedures, where necessary, to provide equal access for individuals with disabilities.
- Requiring covered entities to make electronic information and newly constructed or altered facilities accessible to individuals with disabilities and to provide appropriate auxiliary aids and services for individuals with disabilities.
- Requiring covered entities to take reasonable steps to provide meaningful access to individuals with limited English proficiency. Covered entities are also encouraged to develop language access plans.
Resources
CMS recently announced the release of the 2017 Medicare Marketing Guidelines for Medicare Advantage Organizations and Part D Sponsors, which include added language, clarifications, and new requirements. Join Regan Pennypacker, GHG's Senior Vice President of Compliance Solutions, and Carrie Barker-Settles, Director of Sales and Marketing Services, on Tuesday, June 28, from 1-2 pm ET, to discuss what provisions in the final guidelines will have the greatest impact on your organization and how plan sponsors can prepare for the upcoming changes. Register now >>
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Why are the Dual Eligible Demos Such a Hot Mess?
There's no avoiding the steady stream of bad news facing the Centers for Medicare & Medicaid Services (CMS) financial alignment demonstrations for dually eligible beneficiaries. Enrollment is declining, beneficiaries are opting out at epic rates, and leading states like California are slowing their efforts despite crushing budget realities. Dozens of health plans have invested millions to participate in what's become a hot mess. Where do we go from here?
An early priority of the Affordable Care Act was to give states great flexibility in transitioning dual eligibles into health plans. Back in October 2013, over 60 participating health plans began enrolling dual eligibles through three-way capitated contracts with 13 states (VA, MA, IL, OH, CA, TX, SC, MI, NY, MN, CO, WA, RI) and CMS, representing a $40 billion annual revenue opportunity. After a strong start through the first half of 2015, the pilot programs for the most vulnerable patients in the U.S. health system started hemorrhaging. Net enrollment has declined for the last 4 months. Overall, only 30% of eligible beneficiaries are enrolled — way below expectations. The demos have been plagued by beneficiary opt-outs over 70% in some states, scared off by anti-managed care providers and advocacy groups. In some states, over one-third of eligibles "simply can't be found."
Some of these issues, like difficulty in locating dual eligibles given their widespread transiency, come with the territory and call for a much more aggressive community-based outreach and education campaign by state officials prior to the launch of these demonstrations. High rates of opt-outs show that outreach also must include providers and advocacy groups, especially those for the disabled, who "defined the terms of the debate" with beneficiaries and talked them out of participating before launch. One advocate noted, "Seniors have many doctors because they have multiple chronic conditions. Even the thought of losing a physician … is enough not to sign up."
Last year, CMS conducted an independent analysis of the state demos, which found that states didn't realize how much it would cost to implement, especially in IT infrastructure. They found huge issues with enrollment, despite a phased approach, and found health plans had a hard time keeping up with basic reconciliation, coverage and payment transactions. With this came the issue of trying to find beneficiaries to complete their initial health assessments and to educate them on the benefits of the demo in the first 90 days of enrollment. Large-scale demos, such as in Los Angeles County, were plagued with problems, whereas less ambitious launches went more smoothly. This argues for more 1915(c) home and community-based services waivers on a smaller scale and less monster 1115 waiver projects.
But the fundamental issue remains — the enrollment process —and here is where policy must change. Focus groups show that more than 40% of opt-outs were unaware they had done so — this in a state where 89% of enrollees are satisfied with the program once they are in it. This argues that voluntary enrollment is counterproductive to the goal of enrolling dual eligibles in coordinated care. Massive community-level outreach to beneficiaries, advocates, and providers must be required and paid for, followed by passive and/or facilitated enrollment processes that automatically enroll beneficiaries into plans unless they affirmatively choose otherwise. Anything less only results in pilot projects that fail to thrive.
Resources:
Join us on Thursday, May 26, from 1-2 pm ET, for an in-depth webinar analysis of the key changes finalized in the new Medicaid regulation, how these changes will affect states and managed care plans, as well as how to adapt. Register now >>
More than 200 health plan clients and an additional broad range of other industry participants each year trust Gorman Health Group's team of professionals to deliver expert counsel and tools to help them meet their goals. We pride ourselves on having both day-to-day alignment with the latest CMS guidance and the long-term strategic vision to keep it all in perspective. Contact us today >>
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Latest Sherlock Benchmarks Confirm Medicare Advantage is a Miserable Beast to Manage
The geniuses at Sherlock Company, whose benchmarks on health plan administrative standards are considered the gold standard, have released their 2016 findings and the numbers paint a clear picture: Medicare Advantage (MA) is a miserable beast of a product. It's complicated and labor- and capital-intensive, requiring tremendous patience for executives and investors alike.
First: Sherlock's benchmarks confirm that MA requires nearly double the staff per 10,000 members as do commercial group products, and nearly triple that of Medicaid managed care. Much of this staffing is driven by unique requirements in the "Account and Membership Administration Cluster" (Enrollment / Membership / Billing, Claim and Encounter Capture and Adjudication, Customer Services, and Information Systems.)
Second, successful MA management requires big investments and, above all, patience. Sherlock found investments in Medical Management, Star Ratings and Sales/Marketing in Medicare takes at least a year, and often much longer, to show results.
Third, Sherlock demonstrates seniors are high utilizers of customer services relative to all other insured populations, and low costs are not optimal costs. Plans that spend little on service typically suffer worse member retention, membership growth, and customer satisfaction. MA members have longer service handle times, higher appeal rates, much higher rates of claims inquiries, and are less likely to utilize automated call systems.
The upshot? Once you master MA, all other lines of insurance business are a walk in the park in comparison. If this was an easy business, we'd be out of business.
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More than 200 health plan clients and an additional broad range of other industry participants each year trust Gorman Health Group's team of professionals to deliver expert counsel and tools to help them meet their goals. We pride ourselves on having both day-to-day alignment with the latest CMS guidance and the long-term strategic vision to keep it all in perspective. Contact us today >>
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. Read the full article >>
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What a Clinton Administration Could Mean for Government Health Programs
So the people spoke and we are heading for an epic cagematch smackdown general election between reality TV star Donald Trump and former Senator and Secretary of State Hillary Clinton. And you're asking, what's going to happen to Medicare, Medicaid and ObamaCare? The answer is plenty -- below the waterline and out in the states. Stakeholders will need to pay attention or get left behind.
First, the likely scenario is that Hillary is going to win this thing big. While other Republicans may have had a chance to capitalize on her high negatives with likely voters, nobody's negatives trump Trump's. He's the most unpopular major-party candidate since polling began. Most polls have him losing by double digits in November.
At this moment, Trump's likely to lose so bad that many down-ticket Republican Senate and House seats are now in play. So: Hillary in the White House, Democrats likely running the Senate again, and poor Speaker Paul Ryan trying to corral an even more radical, noisy and smaller Tea Party caucus in the House. The only people those guys hate more than President Obama are the Clintons. So betting on more gridlock is safe money. Little or nothing gets done in Congress except the bare minimum to keep government running.
That means most of what happens in Medicare, Medicaid and ObamaCare will occur "below the waterline" in Administrative policy, regulation, and guidance, or is driven by the states. Here's what that could look like:
- Medicare: the forced march to value-based payment across the program will continue. The recent MACRA rule makes it clear that a fundamental change to traditional Medicare is coming and that fee-for-service is dead. By the end of Hillary's term, a majority of Medicare dollars will be tied to provider performance. Medicare Advantage will continue its steady 5-7% annual growth and exceeding 25 million enrollees in 2020. But CMS raises the bar through a rapidly-maturing Star Ratings program and an aggressive compliance and auditing initiative carried over from Obama's last year in office. Regulations and guidance are pumped out in regular order, drafted by newly-emboldened career CMS staff and making the program a laboratory of continuing performance improvement with claws and teeth.
- Medicaid: on the heels of the biggest regulation in 12 years, Medicaid converges more than ever with Medicare Advantage and ObamaCare, but also goes down some very strange alleys. With Obama out of office, several more red states like OK and TN finally take the Medicaid expansion deal from the Affordable Care Act. But with it they insist on "conservative principles" like work requirements and drug testing that dampen coverage and introduce new complexities to the program. At the same time, blue and red states alike flood CMS with new home and community-based services waivers to force dual eligibles into health plans and implement managed long-term care programs.
- ObamaCare and health insurance exchanges: health plans in the public exchanges continue a market correction and shakeout for another two years. During that time, CMS issues even more regulations dove-tailing exchange operations with Medicare Advantage rules, and several states currently running their own marketplaces like CO revert to healthcare.gov.
Health plans and other stakeholders in these programs will need to pay more attention than ever to stay ahead as government solidifies its role as their biggest customer. These are changes that won't necessarily be splashed across major media, but rather in trade rags and expert blogs. The only thing that's certain: it won't be dull.
Resources:
The Centers for Medicare & Medicaid Services (CMS) issued the final Medicaid "mega-rule," a huge regulation that makes changes to every part of the current managed care rules. Read more >>
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. Read the full article >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Medicaid Final Rule Aligns the Program with MA and Exchange Regulations
The Centers for Medicare & Medicaid Services (CMS) issued the final Medicaid "mega-rule," a huge regulation that makes changes to every part of the current managed care rules. Although the final rule makes some tweaks based on the comments received from the industry, it largely adopts the proposals released last May. The new changes will be phased in over the course of three years, with some provisions going into effect starting July 1, 2017.
The new regulation, in essence, brings Medicaid managed care into the 21st century. Many of the new changes align the Medicaid program with Medicare Advantage (MA) and Exchange regulations currently in place. The rule encourages efficient, realistic use of limited resources, creating more incentives to improve clinical outcomes, reduce cost, and improve benefit coverage. Below is a synopsis of the major changes in the final regulation:
Medical Loss Ratio (MLR)
The final rule directs states to comply with a federal MLR standard of a minimum 85%, with a one-year reporting year. The new MLR requirement begins with contracts starting on or after July 1, 2017. This does not prevent states from setting loss ratios higher than 85%, however. Several states already impose MLR standard on plans, and many plans are already in compliance or close to an 85% MLR, so the impact of this new regulation is uncertain. Time will tell if the imposed 85% MLR will be effective as a way to standardize the varying state rules. CMS estimates the federal government would collect from $7 to $9 billion over a span of two year from plans failing to meet the ratio.
While the calculation details largely align with MA, CMS did make some slight variations in order to account for program differences between Medicaid/Children's Health Insurance Program (CHIP) and MA. The proposed rule also originally suggested fraud prevention activities would be included in the MLR calculation, however, decided since MA and the private insurance industry have yet to adopt this, the new regulation would read that Medicaid will adopt fraud prevention activities when the private market does.
In addition to the development of the MLR, CMS is requiring more transparency and fairness between health plans and States in the rate setting process — this will mean a closer look into how health plans and States are utilizing government funds.
Quality Rating System (QRS)
CMS plans to develop a Medicaid and CHIP QRS, similar to the one currently being implemented in the Exchanges. The new system will align with Exchange indicators but will retain flexibility to use different measures in order to reflect the differences in populations served by Medicaid/CHIP. CMS will expand on the methodology it plans to use in a forthcoming proposed regulation and expects to implement the QRS over the next five years. Overall, the major quality provisions of the rule all work to increase plan transparency of quality information, making it more available to the consumers and to facilitate identification of high risk members with special health care needs. States will also have the option of waiving out of the federal QRS and establishing their own, as long as it is substantially similar.
Quality Incentives
CMS also included several avenues in which states can now develop quality incentive systems in order to move forward with delivery reform and the movement toward value-based care, similar to the MA and Exchange spaces. States can now enter contractual agreements with plans in which plans agree to work on delivery system reform and performance improvement activities. This will be especially helpful in managing members in need of long term services and support and/or have special health care needs. States can also include value-based purchasing agreements that would tie provider reimbursement to performance on quality measures. Finally, states can develop other incentive and penalty arrangements to reward plans meeting quality or performance.
Marketing
CMS is updating the marketing standards in order to provide more beneficiary protections due to both the creation of Qualified Health Plans (QHPs) and the changes in managed care delivery systems in the past decade. For example, the new regulation updates rules on the use of mail, email, and websites. The final rule also requires plans to regularly update provider directories and drug formularies and make these readily available. The final rules also codify accessibility and anti-discrimination rules. The new rules greatly align with MA and the Exchange.
Appeals and Grievances
This is yet another area in which CMS streamlines the process with MA and the Exchange. The new regulation sets clear timelines, definitions, and guidelines for the appeals and grievances process and sets an expedited appeals process. Plans will need to ensure completion of the new required turnaround times for requests for external review; availability of case file medical records, and other documents used to conduct coverage determinations to the member; and documentation of notices and recordkeeping. Enrollees will now also be required to use the new internal process before utilizing state fair hearings.
Network Adequacy
Though CMS leaves network adequacy details up to the states, it does direct states to establish time and distance standards for primary and specialty care, behavioral health, OB/GYN, pediatric dental, hospital, pharmacy providers, and Managed Long Term Services and Supports (MLTSS). States will be required to certify the adequacy of the network at least annually or if there is a substantial change in the program design.
Actuarial Soundness and Rate Setting
CMS established and updated its rate setting procedures in order to bring clarity and ease to setting and reviewing Medicaid managed care payment rates. Currently, rates must simply be "actuarially sound." The new regulation defines actuarially sound rates as "rates that are projected to provide for all reasonable, appropriate and attainable costs under the terms of the contract and for the time period and population covered under the contract." CMS also set standards that capitation rates must meet and that CMS will apply in the review and approval of actuarially sound capitation rates.
Fraud Prevention
CMS also updates procedures to prevent, monitor, and identify fraud, including internal monitoring, audits, and mandatory reporting to CMS. The new rules include procedures for suspending providers when fraud has been alleged. The rule leaves some rulemaking to the states, however, states will need to submit a plan to CMS on how they intend to recover discovered fraud, waste, and abuse.
As previously noted, the final regulation makes changes to virtually every part of Medicaid Managed Care regulations and makes many more updates than we have gone into here. However, the big takeaway is many of these new regulations bring the Medicaid program up to date by borrowing from the successes and lessons learned from the MA and Exchange spaces. Plans would be well served to educate themselves on successful MA and Exchange plan compliance strategies and operations going forward in order to prepare themselves for the upcoming changes.
Resources
Let the team of experts at Gorman Health Group (GHG) help you prepare for the upcoming changes that could impact your organization. GHG's risk adjustment experts can help analyze the financial impact, develop feasibility models to help with meeting the new MLR requirements, and provide guidance on streamlining operations. GHG's Compliance Solutions can assist in the development and monitoring of these new contract requirements, and our clinical team can assist with reviewing and developing integrated care models to provide quality initiatives that are effective and efficiently managed to get optimal results.
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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
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 >>
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