To Everything There Is a Season: Marketing Materials

There is a season for every activity within your organization: one for bids, one for applications, one for data validation.  We are soon to come upon marketing material season, when a flurry of activity usually gets underway in Marketing Communications and Compliance Departments nationwide.  Here are three reasons to ramp up:

  1. Now more than ever, we have seen a growing trend towards high-quality service and retention.  How does this affect marketing materials?  In our estimation, submitting the bare minimum, core materials is no longer good enough if an organization wants to be leader of the pack.  Sponsors are getting creative with benefits, maintaining robust networks, doing their best to keep premiums low — and while those factors are key in member retention, so is service.  If an organization wants to work on maintaining relationships (through retention) rather than establishing only (through the sale), we expect to see additional, more personalized materials coming through Compliance Departments.  While each piece may not require CMS submission, all member- and beneficiary-facing materials must be reviewed by Compliance.
  2. CMS clarified in their draft guidance that while designations of "approved" or "accepted" do not have an expiration date, the status remains valid so long as the material is still compliant with the most current version of the marketing material guidelines.  Therefore, if this was not occurring in the past, organizations should be reconciling their past approved and accepted materials to ensure they are still compliant.  We anticipate a flurry of questions to roll into Compliance Departments about whether or not an update needs to be submitted (because, remember, some changes do not require resubmission!)
  3. The reach of the Duals Demonstration continues to stretch across the nation, and with that comes a significant amount of required coordination.  This also includes the review of materials.  Timing is everything, and unless one agency (CMS or the state) chooses to defer to the other for the review and approval of materials, an additional party is added to the process.  This should certainly light a fire under every business owner responsible for updating their materials.  The sooner the process begins, the better it will be for the review, printing, and distribution processes.

Compliance might feel the pinch this year of business owners asking for more assistance and guidance in the wake of sub-regulatory changes. Consider that beneficiaries, too, are asking health plans to be something more than a claims processor.  We find in all aspects of a successful organization, the bare minimum is not enough.  Therefore, instead waiting until someone starts asking for more, think about proactive ways you can deliver more before they even ask.

Resources

Let's face it: the marketing staff is at a disadvantage with the shortened period between bid submission and the start of the annual enrollment period. We can develop or review your sales collateral and creative by product type to help ensure your high-impact messaging is both targeted and compliant. Visit our website to learn more >>

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!

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

by GHG Advisors

Engaging Providers in Quality

According to a recent study by researchers from Weill Cornell Medical College, and as recently reported in Health Affairs, medical practices in four common specialties (cardiology, orthopedics, primary care, and multi specialty practices) spend an average of 785 hours per physician and $15.4 billion annually reporting quality measures to Medicare, Medicaid, and private payers.

As the transition to value-based care, alternative payment models, and quality-related financial incentives continues, the number of quality measures and complexity of both measures and payment methodologies will also continue to expand in the coming years. To best preserve and strengthen the provider partnerships we've worked hard to create within Medicare Advantage (MA), we must consider the effectiveness of our provider engagement and support strategies in our pursuit of success within quality measurement programs such as Star Ratings within MA and the Quality Ratings System (QRS) within the Health Insurance Marketplace.

Although many providers have established robust quality programs with expert resources to build workflows, streamline care pathways, and coordinate care across their patients' clinical and social realms, many more are still adapting to this new reality of quality measurement, and some are struggling to develop workflows that meet the wide array of their various payers' requests. In order to successfully impact the Triple Aim, payers and providers will have to continue actively collaborating and coordinating care across differing specialties, differing clinical settings, and with their patients' pharmacies and pharmacists. Similar to a Customer Experience strategy, which a health plan may develop to support members' needs, a health plan should similarly develop a Provider Engagement strategy to support providers' needs during this evolutionary period. While such strategies are often built around a foundation of quality-related financial incentives, many plans are finding success using other incentives that more closely align with a practice's needs, such as staff support, member engagement and outreach support, and enhanced care coordination efforts.

Despite growing efforts to align measures and measure criteria across federal programs, measure developers will likely continue adding measurements associated with more complex clinical conditions. For example, the Centers for Medicare & Medicaid Services (CMS) is considering the addition of measurements of Medication Reconciliation Post Discharge and Hospitalizations for Potentially Preventable Conditions to the 2018 Star Ratings program and Statin Therapy (both in Part C and Part D), Asthma medication management (Part C), and Depression (Part C) to the 2019 Star Ratings program. Because more than 25% of the 2018 Star Ratings Healthcare Effectiveness Data and Information Set (HEDIS®) measurement year has now passed, many plans are already opening a new dialog with providers to broaden quality improvement efforts into more intensive, higher return on investment, member-centric engagements that will address these important clinical areas.

As many plans begin delivering their initial 2016 Gaps in Care reports to providers, this may be an ideal time to evaluate your provider engagement strategy. Following are some important elements to be considered in an effective provider engagement strategy:

  •  How closely is your provider profiling aligned and prioritized with the full scope of Star Ratings and/or QRS quality measurement needs? Have you evaluated your providers' historical performance across the entire spectrum of cost, quality, risk, and utilization to help manage current year expectations and risks?
  • How effectively are field personnel (Provider Relations, Quality, Contracting, etc.) identifying the "ask" for each provider among all quality measures (including HEDIS®, Consumer Assessment of Healthcare Providers and Systems (CAHPS®), Health Outcomes Survey (HOS), and Prescription Drug Event (PDE) measures) and communicating the right "call to action" to your high-need providers based on your contract's highest priority measure gaps?
  • How effectively are various field teams (including those across product lines, including MA, Medicaid, and commercial plans) collaborating and partnering to deliver seamless, unified service to your providers? How effectively are field personnel identifying each provider's barriers to success and sharing examples of proven industry best practices that have proven to be successful within similar practices?
  • Are your provider compensation programs strategically designed in ways that minimize risk and optimize provider engagement and performance?
  • Has your provider engagement strategy been designed to evolve naturally and contextually throughout the year? Do all field personnel understand which clinical areas, quality measures, and resources to focus on each month? How effectively have CAHPS® needs been woven into the strategy?
  • Do you know which providers need your support and expertise and are open to your help? Do you know which providers need improvement but are not open to help?
  • Are your reports and data comprehensive and actionable for providers? Can providers easily access and use your data-related tools and resources?
  • Do your providers understand how to support their patients' social and lifestyle needs after a clinical visit? Do they have adequate resources to meet such needs in a way that accomplishes your goals?
  • How effectively are plan-driven activities, such as case and disease management, health and wellness coaching, etc., coordinated with providers?

We often assume our providers will rapidly move with us to a more proactive, more coordinated model of care. The reality is, many providers are still struggling to adapt their practices to meet day-to-day operational demands while trying their best to meet as many payer needs as possible. Because the quality bonus payments to MA plans for strong Star Ratings performance expedited the pace of learning and adaption within MA plans, MA personnel now have a unique opportunity to participate in the industry evolution by educating and supporting their providers.

The industry's transition to proactive care coordination is just the beginning. This is an ideal time to truly expand our provider partnerships with high-value, mutually-beneficial resources, support, and tools to help our providers redirect some of their valuable resources from quality measurement reporting to caring for our members.

___________________________________________________________________________

Whether your organization is developing a provider engagement strategy, honing provider engagement tools and tactics, or looking for targeted improvement opportunities, we can help.  For additional questions and inquiries about how Gorman Health Group can support your organization's provider engagement efforts, please contact me directly at msmith@ghgadvisors.com.

 

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." The hotel room block was extended to April 4 so register now  to reserve your seat!

We have partnered with EvisitMyDr.com (EVMD), an asynchronous virtual platform that will transform how physicians and care teams deliver and coordinate care across the continuum in a digital world. We're really excited about what EVMD can do for our clients in offering members a convenient alternative to a regular office visit while increasing practice productivity and revenue streams. Read our full press release.

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 catch—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 saying—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

2016 Annual Election Period (AEP) Medicare Advantage (MA) Enrollment Growth Slows Compared to 2015

The number and share of Medicare beneficiaries enrolling in MA plans continue to increase, but the pace of growth is beginning to decline. Currently, there are nearly 18 million Medicare beneficiaries enrolled in MA health plans across the country. This includes all individual and group plan enrollment.

Approximately 32% of Medicare beneficiaries are now in MA plans, but we are starting to see the MA penetration begin to flatten out (Figure 1).

Figure 1 — Total Medicare Private Health Plan Enrollment, 2012-Feb 2016

The following chart shows the dramatic growth of Medicare beneficiaries enrolled in MA plans as of February 2016 (Figure 2), but the percentage growth of enrollment is declining. Since 2012, MA enrollment has grown 32% to nearly 18 million.

Figure 2 Total Medicare Private Health Plan Enrollment, 2012-Feb 2016

Note: Includes Medicare Medical Savings Account (MSA) plans, Cost plans, demonstration plans, and Special Needs Plans (SNPs), as well as other MA plans (individual and group).

Gorman Health Group (GHG) analyzed the 2016 AEP and saw the following when analyzing national and state-level enrollment trends:

  • MA enrollment has continued to grow and increase in virtually all states in the 2016 AEP.
  • MA enrollment is highly concentrated among large organizations.
  • Most enrollees continue to be in Health Maintenance Organizations (HMOs). (Enrollees in HMOs typically pay lower premiums and have lower limits on out-of-pocket expenses.)

But we also saw a real decrease in the MA percentage of growth from the 2015 AEP to the 2016 AEP. The following tables show the total enrollment from December to February of each year.*

2015 AEP VS. 2016 AEP

While the 2015 AEP saw an overall growth of nearly 650,000 beneficiaries enrolled in MA health plans, the 2016 AEP saw an overall growth of 445,245 beneficiaries enrolled in MA health plans — this is nearly a 31% decrease in enrollment from 2015 AEP to 2016 AEP. This is attributable to the lack of growth in the Medicare-Medicaid Plan (MMP) product, which had an almost 160,000 increase in growth last AEP but only increased approximately 15,000 in the 2016 AEP. In addition there were losses in enrollment in the HMO-SNP enrollment as well as in Preferred Provider Organization (PPO) plans. The enrollment in HMOs continues to see growth, although the growth was not enough to compensate for the other losses or decreased gains from last year.

*AEP is measured by looking at February MA enrollment since the total AEP enrollment is not captured in January enrollment numbers.

For more information on enrollment trends or other Sales, Marketing, and Strategy consulting services through GHG, email ghg@ghgadvisors.com or contact me directly at dhollie@ghgadvisors.com.

Also, read about "MA Plans' Must-Fix: The Member Experience" in a blog by John Gorman.

 

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 Medicare Advantage marketplace is evolving — are you prepared? Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>

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

 

by GHG Advisors

CMS Proposes New Part B Prescription Drug Payment Model

On March 8, 2016, the Centers for Medicare & Medicaid (CMS) released a proposed rule which aims to test a new alternative payment design to pay for drugs covered under Medicare Part B. Medicare Part B covers prescription drugs administered in a physician's office or hospital outpatient department. Currently, covered Part B drugs fall into three categories: drugs furnished incident to a physician's service, drugs administered via a covered item of durable medical equipment, and other drugs specified by statute.

CMS found Part B payments for separately-paid drugs in 2015 were $22 billion, amounting to an average annual increase of 8.6% since 2007. Additionally, a new report from ASPE found drug price increases and a shift to prescribing more expensive drugs account for 30% of prescription spending growth.

Currently, most Medicare Part B drugs are paid using the Average Sales Price (ASP) plus a statutorily mandated 6% add-on. This creates an incentive to prescribe more expensive drugs due to the higher payment amount. Under the new model, Medicare Part B would pay the ASP plus an add-on of 2.5% and a flat fee of $16 per drug per day. The lower add-on and inclusion of the flat fee would decrease the incentive to provide more expensive drugs as the revenue for the drugs would be more evenly distributed.

CMS is proposing to introduce the new reimbursement program in select geographic areas in the fall of 2016. CMS will then roll out the second part of the experiment in which they will test several other pricing methodologies currently utilized by commercial health plans and pharmacy benefit managers. Some of these tools are: discounting or eliminating cost-sharing, providing feedback on prescribing patterns and decision support tools, basing pricing on a drug's clinical effectiveness, and setting benchmarks for a group of therapeutically similar drug products.

The experiment will run for five years, with the Part 2 phase running the last three years. The evaluation will focus on whether the experiment reduces Part B drug spending, without limiting coverage or benefits, while maintaining or improving patient care.

Although all providers furnishing Part B drugs will be required to participate, some would be placed into control groups and will remain under the 6% add-on payment.

While CMS announced this new model would provide relief for certain providers, by relieving the pressure to provide higher cost drugs when they are not appropriate, the industry has already dealt out criticism for the new proposal, and CMS is bound to receive many comments on the new payment model. However, the private industry does already use "value-based pricing," and CMS is seeking to use a similar methodology to bring costs down while maintaining value. CMS is accepting comments on this proposal until May 9, 2016.

 

Resouruces

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. 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

Four Easy Ways to Lose Revenue

Times are busy. We are all doing more with less these days. Sometimes we don't put processes in place to make sure functions continue when our focus is elsewhere.  Here are four easy ways you could be losing revenue:

  1. Member Experience and Claims Payment: Not storing all diagnostic codes for your provider and facility claims. Similar to working edits, if you have not reviewed your claims system to determine if it is accepting all diagnostic codes that come in on an electronic provider or facility claim, you don't know if you are capturing everything you need. If your system is dropping diagnostic codes, you could be dropping appropriate reimbursement for impacted members. John Gorman, Founder and Executive Chairman at Gorman Health Group (GHG), recently commented on the importance of the member experience in a new article stating, "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."
  2. Reconciliation: Not working Prescription Drug Events (PDEs), enrollment edits, or risk adjustment and encounter data claims and enrollment edits. Payments for Part C and Part D are based on information from the services members receive. If you don't have a good process in place to ensure all edits are resolved, you are more than likely leaving money on the table.
  3. Hospice and Claims: Not having a tie between your claims system and hospice determinations. Hospice services are a carve-out for Medicare Advantage (MA).  Typically, hospice providers don't bill for hospice-related services. Other providers may bill you for Medicare-covered non-hospice-related services. If your system is paying for those services, you are paying too much.
  4. Medicare Secondary Payer (MSP): Not managing your MSP members. MSP impacts both premium received and the payment of claims. If you don't have processes in place to validate each MSP designated member, and either correct discrepancies with the Coordination of Benefits Contractor (COBC) or set up your system to pay secondary, that mismatch is costing your plan money.

In busy times, it can be difficult to monitor everything. Establishing procedures and controls in order to manage these processes without interruption is critical to the success of your organization. Our multi-disciplinary team of consultants knows how to set up the right controls to keep your department running in an efficient, productive, and compliant manner.

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.

Specifically, attendees can expect from my presentation practical strategies for combining productivity and compliance in your Operations Department while gaining real-world examples of the holistic management of compliant Operations departments.

The preferred room rate expires on Monday, March 28, 2016. Register now >>

 

Resources

If you haven't had the chance to review all of the sessions we have slotted for the Gorman Health Group 2016 Forum, download the conference brochure >>

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.

 

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. 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

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

 

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. Register now >>

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

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