The Market is Working in Part D (Just Like it Will in ObamaCare)
We've always maintained that Medicare Part D is one of the most successful market-based experiments this country has ever attempted, and that it provides the playbook for ObamaCare's health insurance exchanges. There's further evidence out today of the FACT that the government is capable of creating an insurance market from a green field, regulating the hell out of it, and achieving an enormously popular social good.
WaPo reported today that the average monthly premium for Medicare prescription drug plans will creep up by $1 next year, to $31. Average Part D premiums have held steady at around $30 a month for the past 3 years. We'd agree with CMS's assessment that the negligible increase means competition among drug plans is holding down costs, even as benefits have improved for seniors with high prescription bills. It's a dynamic that will become familiar in the exchanges in a few years.
But there's more: last year 7 out of the top 10 plans raised their 2013 premiums by double-digit percentages -- which means that by aggressively shopping, and by some 5,000-6,000 Baby Boomers aging into Medicare daily with low drug utilization, seniors helped keep the average premium from going up more than a buck. That speaks to the growing maturity of the Part D market now 7 years in operation (such as the shift coming in 2014 to "preferred" pharmacy networks), the availability of real consumer information to make good choices, and the improving sophistication of beneficiaries in making them.
Seniors have learned in these seven years some important but subtle tenets of plan selection, many of which are transferable to the exchanges. First is, the monthly premium isn't the whole story. Many seniors, especially those who take several drugs for chronic conditions, have learned that the best values for them often aren't the low-premium plans but rather those with drug formularies and benefit designs that don't penalize them for their health status in out-of-pocket costs.
Example:
- XYZ Health Plan offers a $20/month Part D program, but with a very tight "Tier 1" formulary with few drugs at lowest cost sharing (say, a $5 copay here) and the most common drugs for seniors on Tier 2 with a $25 copay.
- ABC Health Plan charges $40/month for its drug plan, but its Tier 1 covers most oral insulins, statins and cardiac therapies for a $5 copay.
- Therefore, the typical Medicare beneficiary taking one or more of those drugs gets a much better deal from ABC when total out-of-pocket costs are considered.
- Sure, XYZ plan's monthly premium is a fraction of ABC's ($240/year vs. $480/year), but that "savings" is wiped out by higher copays: three drugs on XYZ's Tier 2 gets you copays of $75/month or $900/year. At ABC, those same three drugs are $15/month or $180/year. So, interestingly, the 3-drug senior saves $480/year by joining the higher-premium plan.
I'm willing to bet that we're seeing mid-60's Boomers skew toward the low-premium plans as many aren't yet using multiple drug therapies and are unconcerned by tighter pharmacy networks; and older, sicker beneficiaries beginning to look to higher-premium plans with more generous formularies and cost-sharing. This kind of consumer sophistication takes a few years to take hold in a new insurance market. But it's exactly the kind of purchasing behavior we'll be seeing in the exchanges in 2014 and beyond.
The Part D experience shows how important it will be to bring the "bro's" and the "young invincibles" into the exchanges early to spread risk and help suppress premium growth, and how tight provider networks of high performers impact pricing. It also shows how wildly popular ObamaCare will be after what promises to be a rough first year of implementation and consumers finding their way through the confusion and white noise from the opposition.
Resources
In 2013, GHG Forum attendees went on a detailed walk-through of Part D rejected claims including frequency, sampling, data validation and documentation.
GHG Founder and Executive Chairman John Gorman addressed the critical issues issuers must address before the launch of the Exchanges at the 2013 GHG Forum. Click here to download the recording.
Join us on August 13 and hear GHG's Chief Development Officer, Aaron Eaton, and Independence Blue Cross' Senior Vice President of Health Care Reform Implementation, John Janney, walk through an operational readiness checklist to help make sure your health plan is ready to go live on October. 1.
Would the GOP Really Shut Down the Government Over ObamaCare?
As Congress begins its summer recess there's been some hand-wringing in Washington about whether Congressional Republicans will make good on their threat to shut down the Federal government in another game of chicken with President Obama over the Affordable Care Act this fall. Senior members of the GOP are threatening to hold up a continuing funding bill for government operations AND to hold the upcoming debt ceiling hostage unless ObamaCare is defunded. We hope that common sense will prevail, as a government shutdown would be a disaster for Republicans. So blind in their hatred for the President and his signature accomplishment, they have to be saved from themselves.
It all started last week when as many as 15 Senate Republicans, including the #2 and #3 members of the Senate GOP leadership, threatened to vote against any continuing resolution to fund government operations if there was a single penny of ObamaCare funding included -- the current funding resolution expires September 30. A parallel effort began in the House as well. Talk included holding the debt ceiling bill hostage again if needed to defund ObamaCare. The extremists know this is their last chance to derail the ACA before the exchanges and subsidies go live for millions of uninsured Americans -- most of whom, in a supreme bit of irony, live in the red states represented by the partisans.
House Republicans and Senate Democrats remain more than $90 billion apart on 2014 discretionary spending, with prospects for a House-Senate conference on the budget dwindling daily. Obama has issued veto threats for two spending bills already approved by the House. So both sides are already preparing for a continuing resolution to fund the government into next year, and that's where the threat from the right comes in.
For thre record, many began to concede a shutdown just ain't gonna happen over ObamaCare. Late last week, Sen. Rand Paul (R-KY) laughed out loud when Sean Hannity of Fox News asked if the GOP has the "courage" to stand tough against legislation that funds Obamacare. "Frankly, probably not," Paul chuckled. The reality is, what they lack the votes they'll overcompensate for with noise.
Senator Ted Cruz (R-TX), one of the right-wing-ringleaders, said yesterday, "The problem right now is we don't have Republicans willing to stand up and do this. We need 41 Republicans in the Senate or 218 Republicans in the House, to stand together, to join me, to join Mike Lee, to join Marco Rubio, all of whom have said, we will not vote for a single continuing resolution that funds even a penny of ObamaCare."
Don't these guys get that they LOST the election? And that the last debt ceiling battle was a disaster that spiked our national credit rating and resulted in the dreaded budgetary meat-axe called the sequester?
There are some cool heads prevailing thus far, folks who remember the disaster that ensued in 1995 when then-House Speaker Newt Gingrich forced a government shutdown on President Clinton -- and watched the backlash sweep him and many GOP colleagues right out of office. To the point, Senate Majority Leader Harry Reid said today "If Republicans force us to the brink of another government shutdown for ideological reasons, the economy will suffer. I would suggest to any of my Republican colleagues that has this idea: Give a call to Newt Gingrich. He'll return your phone calls. Ask him how it worked. It was disastrous for Newt Gingrich, the Republicans and the country."
Senior Republicans are deriding the plan as "dumb," "silly" and a "temper tantrum," warning that it will fail and damage the party's prospects in the upcoming 2014 elections. There's more. "I think I want to challenge Obamacare on all fronts, but that's a bridge too far for me," Sen. Lindsey Graham (R-SC) told Talking Points Memo (TPM), a liberal blog, on Tuesday. "As much as I want to replace Obamacare I'm not going to deny Social Security payments, funding of the military and the FBI at a time of great national security concerns. I think that's a bridge too far."
Sen. Richard Shelby (R-AL) told TPM, "I hope we wouldn't shut down the government, but I'd like to shut out Obamacare." Sen. Saxby Chambliss (R-GA) told TPM that "Obamacare is not working" and "needs to be fixed." But when pressed on whether it's worth risking a government shutdown over, he demurred: "I'm not going to get that far."
House Deputy Whip Tom Cole (R-OK) said yesterdaythat "Shutting down the government is a suicidal political tactic. Eventually it will be reopened, but the president will not have capitulated and you will have discredited yourself and along the way you will have hurt the American people," Cole said on MSNBC.
TPM points out that:
"Even so, the base isn't officially giving up. A letter signed by more than 50 influential conservatives — including heavyweights like Heritage Action, Club For Growth and FreedomWorks and Grover Norquist's Americans for Tax Reform — calls on House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) "to include language fully defunding Obamacare when they consider their upcoming legislation to fund the government."
The divisions reflect the GOP's catch-22 over Obamacare. After riling up their base and repeatedly promising to spare no effort to thwart the health care law, they face the wrath of conservatives for refusing to put themselves on the line in service of the cause, despite daunting political odds. Some conservative activists say they feel played by the GOP for regularly invoking Obamacare to raise money but failing to fight it when it counts. Now that the ploy seems hopeless, it frees bomb-throwers like Cruz, Rand and Rubio to pontificate further on defunding to further work the base -- and will only intensify the betrayal felt by the hard-right activists.
Conservative blogger Ramesh Ponnuru exhorted fellow Republicans this way:
"The chance that Democrats would go along — would give up on their signature legislative initiative of the last decade soon after having won the presidential election and gained Senate and House seats — approaches zero percent. So if Republicans stay firm in this demand, the result will be either a government shutdown or a partial shutdown combined with a debt default. Either would be highly unpopular, and each party would blame the other. The public, however, would almost certainly blame Republicans, for five reasons.
"First, Republicans are less popular than the Democrats and thus all else equal will lose partisan finger-pointing contests. Second, the executive has natural advantages over a group of legislators in a crisis atmosphere. Third, people will be naturally inclined to assume that the more anti-government party must be responsible. Fourth, some Republicans will say that government shutdowns or defaults are just what the country needs, and those quotes will affect the image of all Republicans. And fifth, the news media will surely side with the Democrats."
I'd be lying if I didn't say there's a part of me that's just dying to see the Lee/Cruz/Rubio faction push this tactic, just to be able to watch President Obama pull a Clinton on these obstructionists and crush this nonsense once and for all. I do believe the more rational governance-minded Republicans left in Congress will prevail and there won't be a shutdown, but I've been overly optimistic about the Obama-haters before.
If they don't desist, it's going to force House Speaker John Boehner (R-OH) to hold his nose and cobble together a Democrat/moderate GOP coalition with Nancy Pelosi to keep the government's doors open, which will mean the end of his speakership and more disarray in the House. That would be a great outcome in the worst partisan environment I've ever seen in 23 years here in DC. And argues why "establishment" Republicans like Boehner won't let this charade go on much further.
Resources
GHG's Founder and Executive Chairman John Gorman addresses the critical issues issuers must address before the launch of the Exchanges in this recording from the 2013 GHG Forum, June 13-14 in Washington, DC.
Jean LeMasurier provides an overview of key takeaways from CMS' proposed rule CMS-9957- P-Patient Protection and Affordable Care Act; Program Integrity; Exchange, SHOP, Premium Stabilization Programs, and Market Standards.
Join us on August 8 to get practical advice on the best ways of getting into the MA market from GHG's Chief Development Officer, Aaron Eaton, Senior Vice President of Finance, William A. MacBain, and Senior Director of Compliance Solutions, Regan Pennypacker.
A Good Script Doesn't Sound Scripted
American film director Steven Spielberg once admitted that the only thing that gets him back to directing is good scripts. Good scripts help give a film structure, purpose and clarity. Good scripts are important in the insurance call center industry, too!
A well developed script should do more than comply with the rigors of regulatory compliance, however. A good script should engage callers, encourage rapport, capture key data and provide a path for closing sales or retaining members. So how does a call center successfully do all that?
- Explore the uniqueness of a company's products and processes prior to developing a script. Once identified, use those features as the cornerstone of the script and help direct the caller to the desired conclusion.
- Close collaboration is Key Collaboration is an important skill requiring effort from all parties, especially when communicating the complexities of health care choice. Collaboration with a proven script writing partner whose stable of experienced sales agents help execute the script is a big step towards a successful partnership. Additionally, ensuring all call center teams speak with the same voice is essential.
- Flexibility during the script writing process is essential Needs and demands often change during a sales and marketing campaign. It is important that all participants remain open to change as the process unfolds and different departments vet the script. Make sure you are using a script that allows for campaign flexibility while still meeting regulatory requirements and best practices. This is particularly important to all in the healthcare industry on the advent of the Affordable Care Act (ACA).
Remember, a successful script creates caller interest, provides the capturing of important data and offers a clear route to closing the sale. In short, a good script doesn't sound…scripted.
Resources
The Bloom Call Center is licensed in 48 contiguous states and offers marketing, call center and technology solutions to the health care industry. Since 2007, Bloom has participated in over 55 million conversations about insurance products, submitted over 200,000 applications for insurance, and set over 150,000 appointments for seniors to meet with Licensed Agents. Bloom is a proud partner of Gorman Health Group. Click here to learn more.
Cost Sharing in Medicare
The Alliance for Health Reform held a meeting on "Streamlining Cost Sharing in Medicare: The Impact on Beneficiaries" on July 22, 2013 which focused on a number of proposals to modernize Medicare benefits. The Medicare benefit package has not been updated since 1965 and it needs streamlining and improving. Medicare Advantage has already updated many cost sharing features, for example charging co-payments rather than coinsurance for many services and charging a single predictable premium that covers Medicare cost sharing for Parts A, B, and D and supplemental coverage. Medicare Advantage plans also have an out of pocket maximum that protects beneficiaries from catastrophic costs. My colleague Bill McBain recently discussed "Medicare Essential" which was developed by the Commonwealth Fund and would combine Medicare Parts A, B and D into a single premium plan run by the government unlike Medicare Advantage which is offered by private plans. The Bipartisan Policy Center (BPC) has developed its own proposal to modernize Medicare Fee For Service benefits beginning in 2016. The BPC proposal would build on some of the reforms already offered by MA plans and recommended by CBO and MedPAC including a unified Part A and B deductible and an out of pocket spending cap. The BPC proposal includes a catastrophic cap of $5,300, a single $500 deductible and a simplified copayment structure. To provide incentives for primary care, the BPC proposal would not apply the deductible to physician office visits. The BPC proposal would also provide new federal subsidies for beneficiaries between 100 — 150 percent of the FPL. The BPC plan would prohibit all supplemental plans including Medigap, employer coverage, FEHBP and Tricare for Life from providing first dollar coverage.
All of the proposals under discussion would cause major restructuring in the Medigap industry. The impact on Medicare Advantage would depend on the details. MA plans have successfully competed against high cost Medigap policies because beneficiaries realize significant cost savings and have greater protection from catastrophic costs. The BPC proposal is not that different from the cost sharing structures that many MA plans offer today. It is hard to imagine that the BPC's proposed new subsidies for low income beneficiaries would not be extended to low income beneficiaries enrolled in MA plans. MA's value proposition compared to Medigap might not be as strong if the expensive first dollar coverage Medigap policies were eliminated but MA delivery system reforms should continue to give MA plans a competitive advantage.
Resources
Join us on August 8 to get practical advice on the best ways of getting into the MA market from GHG's Chief Development Officer, Aaron Eaton, Senior Vice President of Finance, William A. MacBain, and Senior Director of Compliance Solutions, Regan Pennypacker.
On June 14th at the 2013 GHG Forum, William MacBain presented on the future of Medicare and ways to combat its projected increase in per capita spending in the next two decades. View the recording here.
End-of-Life Shows Signs of Life in Congress
End-of-life care and planning is something we're passionate about here at GHG, and I've gotten in some trouble over the last couple years in arguing Sarah Palin's "death panels" distortion set the debate back a decade. I may have been too pessimistic, or over-estimated the former half-term Alaska governor's influence: end-of-life planning is showing signs of life in Congress. Politico had a great story out profiling Rep. Earl Blumenauer (D-OR) and his bipartisan crusade on the issue, reprinted in full below.
The ‘death panel' bill lives
By Joanne Kenen | 7/21/13 4:00 PM EDT
Rep. Earl Blumenauer wants Congress to talk about death.
Much of Congress would rather walk over hot coals.
The bow-tied, bike-riding Oregon liberal was the author of the 2009 bill aimed at encouraging doctors and physicians to talk to patients about what kind of care they want near the end of life. It notoriously became known as the "death panel."
The bill is back. Or rather, it's never gone away.
Each Congress, Blumenauer reintroduces it. He's even added a few new elements, for instance to make sure that care preferences are incorporated into electronic medical records, not stuffed in someone's bedside table. He's picked up 15 co-sponsors, including a few Republicans. Among them is Rep. Phil Roe (R-Tenn.), an outspoken member of the conservative House GOP doctors caucus, which helps drive an unwavering opposition to Obamacare.
Since the heated "death panel" days, Blumenauer's "made it less radioactive," Jon Keyserling, senior vice president and health policy director of the National Hospice and Palliative Care Organization, said of the congressman's persistence.
But "less radioactive" isn't a glide path to passage, particularly not in a highly partisan Congress with Obamacare still rolling out amidst charges and countercharges about rationing, care quality and Big Government intrusion.
Blumenauer talked to POLITICO about his bill this spring and allowed a reporter to listen this month as he addressed critical care physicians who deal with life-and-death situations all the time — and who too often face ambiguity or dissension within families about what their loved one would have wanted.
He says he's convinced his measure calling for doctors to get compensated for these voluntary conversations could "pass pretty comfortably" — if it were to reach the floor. That's a big "if." The hangover of 2009 has not totally dissipated. A lot of people still don't want to go anywhere near the volatile issue four years after the "death panel" summer.
The ongoing conflict over health care reform adds to the difficulty. "There are some people so invested in repealing Obamacare that they don't want distractions," Blumenauer said.
That frustrates him.
"We have allowed people with ideological or political agendas to play this out," Blumenauer said. "We've really obscured the fact that this is all about making an informed decision that is respected. "
Roe doesn't see eye-to-eye with Blumenauer about Obamacare; he's voted to repeal all or part of it repeatedly and would do so again.
But he's been reaching out to colleagues, trying to explain that this end-of-life medical consult legislation isn't Obamacare. It's about getting people the care they want and helping document their wishes, which may change over time. Both lawmakers noted that an advanced directive doesn't mean a do-not-resuscitate order. People can and do opt for very aggressive do-everything care.
No companion legislation has yet been introduced in the Senate, but Sens. Mark Warner (D-Va.) and Johnny Isakson (R-Ga.) are working on a separate bill addressing several aspects of advanced care planning as well as care for people with life-threatening illness. The bill, which could be introduced soon, won't be identical to the House version, which could prove another impediment to passage.
The heart of the Blumenauer bill is simple: Doctors and patients should talk about aging and about how a disease is likely to progress so that the patient can make clear and informed choices and the doctor can understand and respect them. Those conversations can and should take time.
Doctors get well-paid for doing procedures, Blumenauer said. They should also be paid for the time they talk to a patient about something this important. The bill calls for Medicare to reimburse the physician for one such conversation with the patient every five years, more frequently if the patient's health deteriorates.
Blumenauer notes that Medicare will pay doctors, hospitals and rehab centers tens of thousands of dollars for a terminally ill 90-year-old to get a hip replacement. But it won't pay a couple hundred bucks for a conversation about other dimensions of that terminal illness.
That's not how the legislation got framed in the summer of 2009. Rather than being about finding out what granny wants, it became about throwing granny off the cliff. The measure stayed in the House health care reform bill — but didn't make it into the Senate legislation, which eventually became the law.
"We had over 400 experts and professional organizations come forward and say this is silly, there are no death panels," Blumenauer recalled. "It's simple common sense." That message didn't get through. It fueled the tea party, nearly derailed the health law and left large swathes of the public convinced that death panels exist, that a group of government bureaucrats will say who lives and whose time is up.
Roe knows a lot of that death panel rhetoric came from within his own party — and as much as he dislikes Obamacare, he finds this vein of attack disturbing. The political discussion is so far removed from what people — Democrats and Republicans, lay people and doctors — experience in their own families, he says. He's gone through hard conversations and hard choices himself, he says, both in his own family and as a physician.
Many Oregon lawmakers have taken an interest in end-of-life care as the state pioneered legalization of physician-assisted suicide. That, Blumenauer stresses, is not part of his bill.
He says he really got engaged with the issues during the Terri Schiavo case — or the Terri Schiavo "debacle," as he calls it.
"It was one family's tragedy turned into a national political spectacle," he said. "It could have been avoided if she had documented her wishes."
That made him think about policy steps that could encourage making advanced care planning simpler and more routine. "It struck me as perfect alignment of policy, politics and personal empowerment," he said. "And nothing that I've seen since suggest that it isn't."
Blumenauer doesn't describe his mission as quixotic. It's like any other bill, he says. Building support is a process. Just keep plugging away, one vote at time. He's set a goal of talking personally to every single House member, all 435 of them, in the coming months.
He sees some signs that society may be hitting the tipping point. A lot more books and memoirs are being written about aging, caregiving and death. Millions of Americans are helping care for elderly relatives and finding themselves thrust into wrenching choices, wishing they had more guideposts. No family, Democratic or Republican — or even member of Congress — is immune.
Roe shares that belief, and he joins Blumenauer for strange bedfellow presentations to health and medical groups. But he's less sanguine about how much the winds have changed in Congress.
The bill will pass someday, he said. Asked when that may be, he replied with a joke: "Maybe after I retire."
Resources
Gorman health group can help position you for the challenges—and opportunities—posed by health reform, designing a strategy that takes into account your service area, market environment, core competencies, and vision of the future, click here to find out how.
Join us on August 8 to get practical advice on the best ways of getting into the MA market from GHG's Chief Development Officer, Aaron Eaton, Senior Vice President of Finance, William A. MacBain, and Senior Director of Compliance Solutions, Regan Pennypacker.
GHG's Software Sales Sentinel™ Achieves 97% Renewal
Gorman Health Group (GHG), is proud to announce that its software, Sales Sentinel™ has achieved a 97% renewal rate, never having lost a client due to performance or dissatisfaction.
Sales Sentinel™ supports more than 30 health plan clients across the U.S. and trains more than 30,000 agents each year. Already in 2014, Sales Sentinel™ has 33 clients on board, four of which are among the top 10 largest health care carriers in the US.
This software facilitates sales agent onboarding, credentialing and ongoing oversight, and it eliminates the labor-intensive agent onboarding process for both your Exchange and Medicare Advantage businesses.
To learn more about the software and its benefits, listen as Senior Director of Product Operations at Gorman Health Group, Alex Keltner discusses GHG's software solution to train, credential and onboard your sales force in a podcast on the Point.
Resources:
Learn more about GHG's software, Sales Sentinel™ in a free download available now on the Point >>
Simplfiy sales agent oversight with Gorman Health Group's software solution designed for health care organizations operating in regulated government markets. View a short video of the software tool available now.
Ensure you are audit ready, all the time. Learn the benefits of Sales Sentinel here >>
GHG named the Blue Cross and Blue Shield Association's national sourcing partner for onboarding, credentialing and conducting ongoing oversight for your sales force. Read more here >>
Leavitt's Take on ObamaCare Mirroring Medicare Part D
Former UT Governor and Bush HHS Secretary Mike Leavitt had a terrific op-ed recently in the Washington Post examining similarities and differences between the launch of ObamaCare's health insurance exchanges and implementation of Medicare Part D in 2006. As always, Mike's insights are on-point and a rare constructive voice from the right on how to actually improve the program's takeoff.
Leavitt says at one point, "I'm not hoping for a wreck. That outcome would hurt ordinary people, not just politicians." That's a bold statement from a GOPer these days. When was the last time you heard an elected Republican official say anything other than "wreck and repeal" about ObamaCare? To the point, the Post had another piece on how many House Republicans, like Reps. Tim Huelskamp and Jason Chaffetz, have said flatly they will deny any assistance to constituents who call their offices looking for assistance with the law. So from that standpoint Mike offers a fresh perspective that will hopefully change some minds in the lower chamber and maybe a few statehouses.
Mike points out the extensive parallels between ObamaCare and the launch of Part D. Both were the result of fierce fights on the Hill and involved the creation of a heavily-regulated insurance market from a green field. Both suffer from an uninformed public and heavy opposition. Both involve data exchange on eligibility and enrollment that are enormously complex. The team writing the ObamaCare regulations are mostly folks from the Medicare Advantage and Part D offices of CMS, and they're building a system based on that experience. But the similarities end there, and Leavitt offers some insights into how the Administration can avoid the "train wreck" we've been hearing about is coming.
Leavitt is right that the challenge of a misinformed public and insufficient education and outreach is enormous: "With the ACA's initial enrollment period three months away, 78 percent of Americans lack awareness about the law and the changes it will bring. Four in 10 don't even know the law is set to take effect." He then details the PR effort he engaged in on Part D as HHS Secretary. But he's understating things here. The education push on ObamaCare will be hampered by unprecedented political opposition at both state and Federal levels:
- At the Federal level, Congress barely appropriated 10% of the Administration's request for Navigators, the impartial enrollment counselors, and are fighting all agencies who intend to help -- like the Education Department distributing brochures through libraries. The kinds of PR activities Mike engaged in as Secretary to support the Part D rollout would earn Secretary Kathleen Sebelius a Congressional subpoena today.
- At the state level, remember, the states were bought in on Part D as it shifted their Medicaid drug spend for dual eligibles to Medicare with only a maintenance of effort. Roughly half the states have rejected the ObamaCare Medicaid expansion and refused to build their own health insurance exchanges. Many of those states are actively resisting any participation in outreach or education.
So from the standpoint of public awareness, this is a huge difference between ObamaCare and Part D and it has a lot to do with the blind opposition of Leavitt's own party.
Next, Leavitt speaks to technology breakdowns and subsidy errors, pointing out rightly that the successful launch of ObamaCare is dependent in part on the "data hub" that will connect and transfer eligibility and enrollment data among health plans and several Federal and state agencies. He's correct on this point, too, but again, doesn't go far enough in illustrating the challenge.
CMS's own data systems to manage Part D and their interaction with the plans' systems created a hot mess that persisted through much of 2006. It was the seemingly-simple-but-insanely-complex task of getting "the pig through the python" of health plan enrollment shops, where people and processes got overwhelmed and applications piled up or got pushed through with human errors. The result was months of confusion and work-arounds as seniors arrived at pharmacies and couldn't access their benefits. This was after a year's worth of training camp in 2005 we called the Medicare discount drug card that served as a bridge to the "real" Part D.
ObamaCare's launch will be much more complex and therefore more prone to benefit-denying errors. There's no training camp for the exchanges. The eligibility and enrollment process is much more complex than Part D given the income tests that determine the amount of your subsidy and the number of agencies involved. And remember: Part D is a benefit; you qualify, pick a plan, get a member card, and most seniors opted to have their premiums deducted from their Social Security checks. The exchanges are all about the subsidy, which determines which plan you can afford. If CMS gets the subsidy wrong, it's a confidence-sucking hassle, and they couldn't try to claw that money back from low-income beneficiaries. And the workaround for those who don't have bank accounts to push the subsidy into makes your head spin. Every quandary will have a human story -- and right-wing media and social outlets like Twitter barely registered in 2006. In 2014 the news cycle and online vitriol will make each tragic story seem pervasive -- and the resulting "white noise" will get in the way of the outreach and education effort.
Finally Leavitt closes with advising ObamaCare policymakers to assume full responsibility for the mess to come. He recalled a briefing he gave to Senate Finance members on status of the Part D rollout. He spoke candidly about challenges and the Administration's plans to fix them, by when -- "candor bought us time," he says. This time around, candor will buy you a subpoena and endless finger-wagging from the talking heads.
Mike Leavitt is one of my favorite Republicans, but my friend dropped a whopper at the conclusion of his otherwise excellent op-ed: "The ACA reflects the belief that government should play a much bigger role in making our health-care decisions, while the drafters and implementers of Part D held the view that government's role in health care should be limited to organizing a system of competition, where consumers are empowered to make choices and are protected from unfair treatment."
Sorry, Mike, but the exchanges emerged from the conservative Heritage Foundation as just that: a system of regulated competition, modeled after Part D. I don't see a much bigger role for the government in making our healthcare decisions in ObamaCare, just a much bigger undertaking with a Presidency at stake.
Resources
The rapid changes to Part D regulations make the tracking and implementation of these CMS requirements exceptionally difficult. Visit our website to find out how GHG can help.
GHG's Founder and Executive Chairman John Gorman addresses the critical issues issuers must address before the launch of the Exchanges in this recording from the 2013 GHG Forum, June 13-14 in Washington, DC.
Join us on August 13 and hear GHG's Chief Development Officer, Aaron Eaton, and Independence Blue Cross' Senior Vice President of Health Care Reform Implementation, John Janney, walk through an operational readiness checklist to help make sure your health plan is ready to go live on October. 1.
The Human Cost of Red States' Middle Finger to Medicaid Expansion
The Kaiser Commission on Medicaid and the Uninsured is out with a new study illustrating the sickening human cost of the Red States throwing a middle finger to President Obama on the Affordable Care Act's (ACA) Medicaid expansion. Twenty-one states are not expanding Medicaid coverage under Obamacare and would gain considerably more than the 23 states that are expanding eligiblity. Partisans like Texas Governor Rick Perry and Kansas Governor Sam Brownback govern states with the highest rates of uninsured -- and millions of their own citizens won't get health insurance so they can score cheap political points.
In states that are expanding Medicaid under the ACA, the average percentage reduction in the number of people without health insurance is 40.9 percent. But in the states not expanding Medicaid, the average reduction of uninsured would have been 52.5 percent. The debate over Medicaid expansion continues in six states. The average rate of reduction in those states would be 54.1 percent.
Kansas is a great example of the dereliction of duty to the public good Red State governors and legislatures are engaged in, solely for "principled" resistance to the President's signature accomplishment. The number of uninsured people in Kansas would be reduced by almost half, or 47.6 percent, by accepting the Medicaid expansion funds in ObamaCare. But state legislators and Governor Brownback earlier this year chose to go against expansion, citing concerns about future costs.
Currently, the federal government covers about 60% of Kansas Medicaid costs. You'll recall that under the ACA, the Feds initially would cover 100% of the costs for newly eligible enrollees, and no less than 90% of those costs over the long term. So the cost argument tossed up by so many Red States is a farce, a sop to fiscal conservatives with no basis in fact. What they're really thinking is that those eligible for the expansion will skew Democratic in the voting booth, so why do anything for them? Kansas legislators actually passed a law barring the Governor from expanding Medicaid without "express approval" from the Legislature, which won't meet again until January.
Kaiser's report shows that expanding Medicaid in Kansas would cover an estimated 144,000 additional Kansans, and cost the state about $525 million over the first 10 years of the expansion. If Kansas does not expand Medicaid, the state won't receive about $5.3 billion in additional federal Medicaid funds 2013-2022, and Kansas hospitals would receive about $2.3 billion less in state and federal Medicaid funds for uncompensated care over the same period. So we're talking a huge net gain for the state in Medicaid funding if they expand, and a huge cost, both in state coffers and the human toll of not expanding. This makes the Red State cost argument baseless, and shows the raw, awful politics of ObamaCare at the hands of right-wing partisans.
The shameful thing about the unprecedented resistance to ObamaCare in Red States is that all those elected officials, from Brownback to Perry to the Florida State Senators who thwarted expansion, all took oaths of office to protect and serve their constituents, regardless of their party affiliation or insurance status. They're showing their true motivation, which is only to support laws of the land that benefit people who look and vote like them.
I, for one, hope they reap the whirlwind when those constituents figure out they didn't get something as vital as health insurance so their elected officials can have a punchline for a campaign ad.
Resources
Medicaid is undergoing its greatest change in a generation and the opportunity for health plans has never been greater. A unique model of care must be developed and then executed upon. Visit our website to find out how we an help.
Gorman Health Group policy expert Jean LeMasurier summarizes three new proposed regulations implementing provisions in the Affordable Care Act.
Listen as GHG's Executive Vice President, Steve Balcerzak, discusses the unbanked and the implications this population will have on the ACA.
Not a Narrow Network - A Smart Network
What we learned in Medicare + Choice is still true today, we don't need narrow provider networks; we need aligned provider networks, aka Smart Networks. We have also learned that narrow networks often cause ill-will with your health systems and uncontrolled leakage. A Smart Network builds a mini-healthcare community similar to an ACO in your healthcare delivery ecosystem. A Smart Network can focus on a health system and it's provider feeder system or it can better engage your Primary Care Physicians (PCP) and "rendering" PCP. Smart Networks typically are invisible to members; however some payers may differentiate copay to encourage Smart Network utilization.
What is a Smart Network?
It is provider community aware, educated, and contractually aligned with the health plan or payers objectives around member health status, medical cost, care delivery, and health outcomes.
What is needed to develop a successful Smart Network?
- DataWarehouse: Success is built on capturing and compiling claims, lab, pharmacy, provider, eligibility, benefit, risk adjustment, and premium files on a very timely basis. This datamart needs to issue reports clearly displaying the successful areas of performance excellence and areas for alert and in need redesign. This is the health plans early warning system and strategy monitoring instrument.
- Multidisciplinary teams: The payer needs to know and monitor the data, drivers, goals and objectives; plus the provider partner need a team to absorb, implement, and impact the drivers and objectives.
- Slow and Steady Deployment: Not everyone can be globally capitated; make certain your team have expertise in gain-sharing for cost reduction programs, bundling payment programs, episode of care models, and mixed payment innovation models so this new structure is a win-win. The reimbursement methodologies may need to include assurance around participation in data capture exercises, code specificity, closing gaps in care, and other outcome, STARS, or risk adjustment initiatives the payer may deploy. Design your methodology; forecast its impact, and internal redesign the workflows touched on both sides — payer and provider.
- Network Management Touch: Make certain you are paying claims timely and accurately today. Health system or providers don't like to partner with those with "high administrative burden." Thus, consider having the following Network Management structure: 1) telephonic claims & process efficiency liaisons 2) contract negotiations and 3) educator, communication, and report review liaisons.
- Joint clear objectives for the SmartNetwork: whether it is a health system, cardiology practice, oncology association, a group of dialysis centers, nephrologist, endocrinologists or an ancillary provider makes certain the teams, objectives, and monitoring reports clearly understand, agree on and represent the short term and long terms goals.
- Early & Continued Dialogue: The initial dialogue will highlight if a provider may be a good SmartNetwork partner and the commitment of monthly or quarterly joint operation committee meetings will cement it. The original initiative may have a flaw in the development or implementation so this joint committee will need to review the impact and augment as needed.
Two closing thoughts:
- Remember bonus payments to providers are considered part of the medical cost in your MLR calculation.
- These Smart Network initiatives often need external support with design expertise, implementation experience, credible reporting design & product, and often a bit of mediation.
GHG is always eager to support the exploration and development of SmartNetworks. We have team members who have worked within PHOs, ACOs, IPAs, large health plans, and specialty medical providers; we are here to help if you need it.
Resources
Gorman Health Group's Senior Vice President of Public Policy,Jean LeMasurier discusses the recent CMS Medical Loss Ratio (MLR) regulation and its provisions.
GHG is helping many experienced plans by developing smart networks: accountable care, shadow capitation, and payment bundling within their current service areas and networks. Visit our website to see how we can help you too.
GHG Announces New Partnership With BCBSA
Gorman Health Group (GHG), is proud to have been selected as a National Partner with the Blue Cross and Blue Shield Association (BCBSA) for its software, Sales Sentinel™. This software facilitates sales agent onboarding, credentialing and ongoing oversight, and it eliminates the labor-intensive agent onboarding process for both your Exchange and Medicare Advantage businesses.
Learn more about the partnership in our latest podcast on the Point recorded by Whitney St. Jean , Chief Administrative Officer at Gorman Health Group. In this podcast Whitney discusses what particular areas and benefits will be included in our relationship as national partner with BCBSA.
Download the free podcast here >>
Resources:
Gain more information on the nature of the BCBSA partnership for GHG's software, Sales Sentinel™ in a free download available on the Point now >>
Simplfiy sales agent oversight with Gorman Health Group's software solution designed for health care organizations operating in regulated government markets. View a short video of the software tool available now.