Sales Force Oversight Ain't Easy
Selling season is nearly upon us, so with that in mind, here are some thoughts to help plans prepare. In this post, I'll detail some sales oversight and reporting best practices we've seen applied with success in a number of plans.
When creating an effective agent oversight program, keep in mind that agent oversight requires a program, not a process. There is really no single indicator that can identify all outliers. A successful agent oversight program requires a collection of metrics that - when combined - paint a clear and concise picture of an agent or group of agents' performance.
Some of the data we often see included in effective oversight programs includes:
- OEV Calls
- Secret Shopping
- SOA Audits
- Rapid Disenrollment
- Ride-alongs
- Sales Call Monitoring
One of the most challenging aspects of agent oversight is often that the data needed to execute powerful reports can originate from a number of different sources. For larger plans, this task is even more challenging because of divisions between departments. Therefore, don't try to reinvent the wheel when designing these reports; plans can create and track a number of different oversight metrics from data that is readily available from enrollment.
There are quite a few potent reports that can be developed to assess agent/broker risk, (at both the plan level and individual level). These can be created using just a monthly enrollment report (TRR & MMR) combined with various data points from the activities listed above that your sales management should be tracking. Keep in mind - whichever reports are developed — use them in unison: tracking by one data point must become a practice of the past.
Here are some simple best practice reports we suggest:
- Percentage of Direct Oversight activities not met (combined pass/fail from secret shops, OEV calls, SOA audits, etc.)
- Rapid Disenrollment Rate (set benchmarks)
- Complaints vs. Agent Assisted Enrollments (create acceptable thresholds)
Finally, once the oversight program is in place and agents are in the field actively selling, make an effort to run two self-perpetuating oversight processes. The first involves pulling a random selection of active oversight activities from the population to identify potential outliers. Then, once outliers are identified from either the random sampling process, or through adverse behavior, plans can administer more focused activities.
I hope these strategies were helpful. Stay tuned to the GHG blog for more tips for successful selling this season!
GOP Piling-on Begins on the Medicare Advantage Star Ratings Demo
House Republican Committee chairmen began to pile onto rising controversy around the $8.3 billion Medicare Advantage Star Ratings Demonstration this week, first brought to attention by the Government Accountability Office's study of the program commissioned by Senator Orrin Hatch (R-UT) in April.
In May, the American Action Forum — an influential conservative think tank here in DC — released a report authored by former Congressional Budget Office Chief Douglas Holtz-Eakin blasting the Stars Demo. "The system rewards beneficiaries for choosing those plans favored by the selected CMS criteria, rather than the plans that best meet their needs," said the report. It went on to say the program will actually serve to limit choice — and since counties with higher incomes will end up having higher-rated plans, it will have an adverse effect on low-income beneficiaries. "The goal of incentivizing quality health plans is legitimate and admirable; that goal will not be achieved by the rating structure currently being put into place," Holtz-Eakin wrote.
Last Friday House Ways and Means Committee Chairman Dave Camp (R-MI) weighed in with a nasty-gram to HHS Secretary Kathleen Sebelius demanding extensive additional information on the development of the Stars Demo. Camp wrote, "With its most recent report, GAO has determined HHS exceeded its legal authority to implement this demonstration, which calls into question all activities surrounding the development of the (Stars Demo)". Camp requested that Secretary Sebelius detail all communications with the "CMS Actuaries' office, the Office of Management and Budget, the White House, the Democratic National Committee, the Democratic Congressional Campaign Committee, the Democratic Senatorial Campaign Committee and" — wait for it — "Obama for America, which led the agency to take action related to the (Stars Demo)". Wait, wait — did he just say that? The Obama campaign directed CMS to launch this demo? Having worked in the agency I can tell you these guys are smoking something excluded from Part D coverage.
Join us Thursday for First in New Webinar series: Risk adjustment in the exchanges
On Thursday July 26th at 1pm ET we'll kick off our new webinar series, "Lessons from Medicare Advantage and Part D", a monthly webinar series around what we've learned in Medicare that can be applied to the exchanges and other aspects of health reform. We'll begin with a deep dive on risk adjustment in the exchanges.
Risk adjustment is the defining health care finance issue of the decade, and MA and Part D represent the largest experiments in risk adjustment on the planet. MA and Part D's risk adjustment system is the blueprint for ACOs, the exchanges, and a growing number of state Medicaid programs as well. We'll explore the risk adjustment provisions in the ACA and the final regulation, and apply what we've learned in the last 7 years to the future of health plan payment, with our partner Dr. Jack McCallum, CEO of GHG sister firm CenseoHealth. Bring your CFO, Chief Strategy Officer, CMO,Chief Marketing Officer, and your actuaries for a geektastic discussion on how to follow the money post-2013. In the coming months we'll examine other reform topics where the Medicare, Part D and Medicaid Dual Eligible experience shines a light: In early September: Distribution In and Around the Exchanges: Lessons from MA and Part D. We'll explore how individuals with subsidies and small groups will be sold the "metal" plans, especially in the Exchanges through Navigators and other impartial facilitators, to the deployment of brokers and sales management. Our focus will be on the Federally-Facilitated Exchange, which could operate in as many as 40 states, with updates on specific states as applicable. In late September: we'll explore the Nuts and Bolts of the Federal Exchange: Lessons from MA and Part D. We'll focus on how the Federal Exchange will function from a 10,000-foot level perspective, where the plan interfaces are and the broad strokes of anticipated reporting requirements. In late October: Product Strategy in the Exchanges: Lessons from MA and Part D. How subsidies will work based on income determinations; a landscape view of where states are on accepting ACA Medicaid expansion dollars in the wake of the SCOTUS ruling. For Red States: what the new "near-Medicaid coverage gap" means in those states that refuse the ACA funds. We'll examine how to segment the market for Platinum, Gold, Silver, and Bronze plans, and the allowability of supplemental insurance products (like dental) in the exchanges. What existing commercial and government programs provider networks mean to product pricing and strategy. The imperative for a database of local individual claims to wargame product designs on. More to come. The scars on our collective backsides in Medicare the last 16 years provide some great "teachable moments" for the new world post-ACA. We look forward to the discussion.
Rising Chorus Urges CMS to Slow Down on Dual Eligibles
CMS and at least 20 states are moving hell-bent-for-leather toward enrolling as many as 3 million of the 9 million Dual Eligibles into health plans in the next two years, creating one of the biggest opportunities for payers in history. Now a rising chorus including the Medicare Payment Advisory Commission, the American Medical Association, some policy analysts and now at least one key Senator are urging CMS to hit the brakes. I tend to think the movement of duals into plans is like the movement of water: it can be slowed but not stopped.
Most agree that something has to change for the 9 million Americans who receive both Medicare and Medicaid. Duals typically have multiple chronic conditions, much higher prevalence of mental and behavioral health problems, polypharmacy issues, and much higher rates of institutionalization. They represent about 15% of Medicaid enrollees but account for almost 70% of program costs. Duals are the most vulnerable patients in the entire US health system, and they need the best of what health plans have to offer: better coordination, access to broader networks of providers, and better deployment of home and community-based services. 15 states are working with CMS on a pilot program to transition these folks to health plans in the next couple years, and at least another half-dozen states are moving forward on the same timetable but without CMS assistance.
But resistance to the effort is escalating:
- MedPAC recently raised a number of concerns over the size, scope and rapid pace of the program. "If all the state proposals are approved, then roughly 3 million dual eligible beneficiaries will be enrolled," MedPAC Chairman Glenn Hackbarth stated in an 11-page letter to CMS. "This would mean that approximately 40 percent of all full-benefit duals will be enrolled in the demonstration."
- Provider and advocacy groups warn that the size of the pilot programs under consideration represent the equivalent of a waiver or Medicaid program change. Last month, the AMA called for a delay of the program to give providers and patients more time to understand how it would run. Among the AMA concerns were disruption of established doctor-patient relationships, auto-enrollment of duals, and that pilots don't slash physician fees.
- Sen. Jay Rockefeller (D-W.Va.), who helped shape the effort in the Affordable Care Act (ACA), has called for its immediate suspension. In a letter released late last week, Rockefeller torched the pilot, asserting its design is more about savings for states and less about improving care. Rockefeller created the CMS Federal Coordinated Health Care Office in the ACA -- so this episode is a bit like Daddy taking his son to the woodshed.
I tend to think these concerns will result in CMS raising the bar on states and other stakeholders -- there will be plenty of strings attached to these pilots, especially for the plans -- but they won't stop the movement of duals into health plans. The state fiscal crisis is so severe that Governors and Legislatures need these initiatives to move forward just to balance their budgets -- duals are the #1 or #2 item in every state budget now. And the Feds are eager to help states with the right approach, especially in light of the drama on Medicaid expansion arising from the recent Supreme Court decision. So it may get noisy around the duals' transition to health plans, but it won't get slower.
GOP's "Reform Repeal Theatre" Costs Taxpayers $48 Million. WTF?
The House of Representatives again voted to repeal the Accountable Care Act (ACA) last Wednesday, marking the 33rd time Republicans have tried. All 32 previous attempts died in the Senate, as this one will. But the GOP's "Repeal Theatre" comes with a sick price tag: about $48 million and counting, according to a report by CBS News.
CBS reported last Wednesday that Republicans' many futile, utterly symbolic attempts at repealing the ACA have eaten up at least 80 hours of time on the House floor since 2010, amounting to two full work weeks. As the House, according to the Congressional Research Service, costs taxpayers $24 million a week to operate, those two weeks amounted to a total cost of approximately $48 million. I just threw up in my mouth a little.
And while all this drama and silliness is going on and a pile of taxpayer dough gets flushed, have the Republicans gotten it together enough to propose an alternative? The promise when the new House majority took over in 2011 was "Repeal and Replace." We've now seen 33 acts of repeal at a cost of almost $50 million, and not a word of dialogue on replace. Know why? There isn't one. The ACA was it.
Remember, this law's policy framework -- the individual mandate, subsidies, and exchanges -- was developed at the conservative Heritage Foundation, advanced by a conservative (Speaker Newt Gingrich, mid-90s), implemented by a conservative (MA Governor Mitt Romney), upheld by a conservative (Chief Justice John Roberts), and now denounced by conservatives. Most of what the GOP had in the "health reform toolbox" ended up in the ACA. All that's left is the same warmed-over stuff we've heard for years that still don't have the votes: selling insurance across state lines, tort reform, Medicaid block grants. They got nothin'. And 50 million uninsured Americans and the providers who would care for them need better than "Repeal Theatre".
Medicaid Mattered Most in the SCOTUS Decision
In all of the drama around the recent Supreme Court ruling on the Accountable Care Act (ACA) and the individual mandate, it was the Medicaid eligibility expansion ruling that mattered most. Hands-down, Medicaid was WAY more important: $1 TRILLION and 17 million Americans' access to health insurance is now at stake, potentially millions more when Medicaid maintenance of effort rules on states expire in 2014, and it's all red meat for Red State governors who will devour it at their own peril.
Red State governors will make a spectacle of throwing a middle finger at President Obama -- but it's the most vulnerable Americans and the most hardcore uninsured they're giving the shaft. Not to mention hospitals and other powerful provider organizations who would prefer Medicaid to bad debt. I'll say it here: the RedGovs' are bluffing for political gain and most of these jerks will fold before the election, ultimately taking the ACA expansion money in the face of an onslaught of local lobbying.
Why Medicaid mattered: SCOTUS essentially made it optional for a state to participate in ACA's $1 TRILLION Medicaid eligibility expansion to 133% of the poverty limit. The federal government is funding 100% of the expansion for the first three years, and will eventually scale back to match $9 to every $1 spent by states. According to the Center on Budget and Policy Priorities, the Feds would pay $931 billion of the cost of the Medicaid expansion through 2022 — while the states would be asked to chip in $73 billion, or about 7%. It's a great deal for cash-strapped Red States. If a state declines to participate in the coverage expansion, it will create a huge gap in coverage among the poor and near-poor, and will subject safety-net providers to more bad debt where there was supposed to be coverage.
The Republican governors of 5 states — Florida, Texas, Louisiana, Mississippi, and South Carolina — have declared they want nothing to do with the expansion. "The bottom line here is that Medicaid is a failed program," Texas Governor Rick Perry -- who claims 1.3 million long-term uninsured in his state -- said Monday on Fox News. "To expand this program is not unlike adding a thousand people to the Titanic."
Are we talking about the same Medicaid program? You know, the one that is the largest source of health insurance in Texas and the nation? Leaders of 6 other states are considering the same kamikaze mission. As of today, the scorecard looks like this:
Hell, No (5) -- FL, TX, LA, MS, SC
Probably Not (5) -- IA,MO, NE, NV, NJ, WI
Leaning Yes (3) -- AR, OR, RI
All-In (10) -- CA,CT, DE, DC, HI, IL, MD, MA, MN, VT, WA
Undecided (26) -- AL, AK, AZ, CO, GA, ID, IN, KS, KY, ME, MI, MT, NH, NM, NY, NC, ND, OH, OK, PA, SD, TN,
UT, VA, WV, WY
Publicly-traded health plans and hospitals and Wall Street itself are betting the RedGov's are chest-thumping too. WellPoint announced Monday it will spend almost $5 billion to purchase Amerigroup to buy a bigger stake in Medicaid expansion. "When you step back from all this, there are billions of dollars of federal money that are going to flow into the states. We think the states are going to need to take it," Amerigroup CEO James Carlson said following the announcement. Stocks for Amerigroup, Molina and Centene all jumped following the SCOTUS ruling, posting gains of 20+% this week.
Stocks for the largest chains of private, for-profit hospitals also shot up following SCOTUS, and the RedGovs' threats to withdraw from Medicaid have done little to drive them down. Hospitals expected to be another beneficiary of the Medicaid expansion -- in 2010, they paid out $39.3 billion — 5.8 percent of their total expenses — in uncompensated care.
I get the RedGovs' posturing but still hate them for it: rejecting the Medicaid expansion fits with their crusade to cut government, and a slam on Obama is catnip for their base. But the ringleader of the RedGovs, Florida Governor Rick Scott, is the former CEO of HCA, one of the biggest publicly-traded hospital chains in the nation. Texas' massive hospital districts and Louisiana's charity hospital system make for noisy, well-funded lobbying campaigns with intense turnout on the ground. The RedGovs will face the fury of a local lobbying campaign never before seen at the state level. Hospitals will say they're doomed to bad debt if RedGovs reject the coverage expansion. They'll remind the RedGovs that hospitals are among the biggest employers in most communities and will say that once-rock-solid jobs in their communities are now in peril. They will point out that without Medicaid expansion, many small safety-net and traditional providers of care to the underserved will cease to exist.
The Kaiser Family Foundation released a poll this week following the SCOTUS ruling, and it found 56% of Americans now say they would like to see the GOP stop their efforts to block the ACA's implementation and move on to other national problems. Solid majorities of voters of every political stripe say the decision won't impact whether or not they vote this November. That shows the RedGovs' politics on Medicaid expansion for what they are: opportunistic, fiscally irresponsible, cynical, and heartless. And they'll pay for it in November.
Medicare ACO's: Tool for Reducing Medicare costs or something more?
The June 18th blog by my colleague and friend William MacBain posed a valid question when he asked whether Medicare ACO's are a revolution in healthcare or a side show. My view--it's that and more. To the point that Medicare ACO's will probably have only a minor impact on overall Medicare expenditures, I totally agree but would argue that significantly reducing Medicare expenses is not the overriding goal of the CMS sponsored shared savings program. I believe the overriding goal is to stimulate provider change in how healhcare is priced, delivered and made accessible to those who need it.
To the question of whether Medicare ACO's are a sideshow, I would respond with yes but in a good way--meaning that ACO's, Medicare sponsored or not, have helped ramp up the level of dialogue and drawn attention to the reality that change is coming to the healthcare industry, that it will come in many forms and that ACO's are one model for implementing such change. ACo's are not the magic cure for what ails the healthcare industry but ACO's do begin to address some of the symptoms -- that is a good thing.
I don't understand. Why don't Republicans like ObamaCare?
During an interview with Judy Woodruff on the PBS News Hour, Sen. John Cornyn (R, TX) paused in his criticism of ObamaCare long enough to praise the Medicare drug program: "We have also seen in the Medicare program with the prescription drug program this has really been one of the few successes we have seen in a government program like Medicare, where we actually have competition and transparency, and providers compete based on price and the quality of service."
Apparently it is lost on the Senator that the Medicare drug program and the ObamaCare exchange-based health plans are strikingly similar. Both include government subsidies, government definition of basic benefit standards, government oversight of marketing and performance, and competition among private insurance plans. The exchanges differ by phasing out subsidies as income rises, and by devolving much of the regulation oversight to states, should states chose to exercise the oversight. It seems to this blogger that those two differences make ObamaCare more "Republican" than George Bush's drug plan.
Meanwhile, 17% of Americans are uninsured. Those folks will continue to get sick, and continue to get at least a modicum of care. Much of that care will be very expensive, reactive, urgent, dramatic, and avoidable had those uninsured patients been able to obtain preventive and maintenance care. Someone still pays for this care. But the subsidies are hidden in the costs the remaining 83% pay through premiums and taxes. The current approach to financing care for the 17% is not transparent, and there is no competitive market place. But ObamaCare, which is as transparent and competitive as the drug plan, and which seems at its core to be a very "Republican" approach, has one irreparable flaw in the eyes of its opponents: it was enacted by Democrats.
The Supremes Say the Mandate is Constitutional. But Voters Get the Final Word.
Washington's best-kept secret since JFK and Marilyn Monroe came out today: the Supreme Court upheld the individual mandate in the ACA in a 5-4 decision made by Chief Justice John Roberts. The President ducked a bullet in the ruling and comes out strong heading into the election on this issue; the decision will galvanize the right and embolden the left; and Chief Roberts finessed the issue by calling the mandate a tax, avoiding new precedent and getting the Supremes out of the nastiest domestic squabble since Bush v. Gore. But the Supremes didn't get the last word on the ACA: that rests with the voters in November. Making Obama a one-termer is now the GOP's only hope to stop health reform.
The Supremes' decision means reform moves forward without delay. That means most of the 26 Red States that brought the case to the Court, and a handful of others, are now WAY behind in implementation and will likely have the Federal Exchange jammed down their throats in January 2014 for their intransigence. That's the Supreme irony of the case: for all their bitching about a government takeover, that's exactly what those states will get for having done nothing while the case worked its way through the Courts.
The decision also means there is no impact whatsoever to Medicare. The cuts to Medicare Advantage (MA) remain and will continue to be phased in. The Star Ratings bonuses and rebates remain untouched. The new Part D coverage expansions -- the "jelly" in the donut hole -- are as sweet as ever. Accountable Care Organizations (ACOs) move forward. Minimum medical loss ratios (MLRs) take effect in Medicare Advantage in 2014. The coding intensity adjustment in MA remains. The Retiree Drug Subsidy (RDS) continues to phase down by 2016, compelling more employers to push their retirees into MA and Prescription Drug-only Plans. Insurer and provider taxes stay put. And 9 Million Dual Eligibles continue their march into health plans. It's as if the case never happened. And that means, as we've said many times here, it's still all about Star Ratings, Risk Adjustment, and chronic care management as keys to survival in Medicare this decade.
Now the only thing standing in the way of ACA implementation in January 2014 is if Obama is deposed in November and the GOP can get enough votes for "repeal and replace". Republican nominee Mitt Romney -- the original baby-daddy of the individual mandate in Massachusetts -- said he raised over $1M in campaign contributions in the first two hours after the decision came down. Obama will use the decision to try to reboot his health reform message. And the election becomes a referendum on the ACA.
Strap on your crash helmet and hold onto your butt -- the next 4 months will be the nastiest campaign cycle this country has ever seen. But for now, the ACA lives. And if you're in health care, you should be turning cartwheels today.
Supreme Court upholds Romneycare
As you have likely heard, Romneycare no, Obamacare, no, the ACA has been upheld by the Supreme Court, with Chief Justice Roberts casting the deciding vote with the liberal block. Health policy implications aside, there are some truly delicious politics here:
Obama did not support the mandate in the ‘08 primary. In fact, he was the one Democrat to oppose single-payer or mandated health insurance (for which he took much heat from the left). He got behind the model, famously developed by the conservative Heritage Foundation, when it became clear that it was the model with the best chance of passing Congress. But, remember how absent he was from that legislative action (for which he took much heat from the left). But one thing he made it clear in the run up to the fight: don't call the mandate a tax! Then, the last two years happened….
Today, we learned that Chief Justice John Roberts (appointed by noted left wing activist George W. Bush) disagrees with that. He called the mandate penalty a tax, and on that basis voted with the liberal block to uphold. No one questions the Government's power to tax. Well, except this guy.
The significance of his vote is that it expands the Government's power, in functional terms, to tax. That's pretty darn important. However, my friend who clerked for the Chief a few years back noted in a call this morning that Roberts tends to give with one hand and take with the other in big decisions--- perhaps reflective of the instinct towards balance and conservatism. In this case, it should be noted that five justices ruled that the Government did NOT have this power under the commerce clause--- which is a big victory for conservatism.
Mitt Romney, on whose Massachusetts model the law is clearly based, has some extraordinary days of spin ahead, particularly given that it was the staunchly conservative Roberts (and not the fence-riding Kennedy) who cast the deciding vote. Romney's job is made harder by stuff like this. So here's a tip from a "Washington Insider:" look at how much money Mitt raises online in next 48 hours. If it's more than $10MM, then we'll have a great race this fall. If less, it means serious problems for the campaign.
But the GOP should not be too dejected. If the mandate penalties are indeed a tax, then it only takes 51 votes to overturn. If you thought the mid-term elections were distressingly nasty… get ready to lose your innocence for good this fall when the GOP aims its sights at the Senate. Truly.