Good to Know
Usually CMS leaves us wondering about the benchmark that they have in mind for plans to achieve. But the latest 2013 Draft Call Letter left little to the imagination.
It states, "We expected more Part D beneficiaries would be eligible for MTM following changes to the eligibility criteria requirements in 2010. However, the eligibility rate has remained at 10 to 13% since 2006. We are concerned that the Part D sponsors are restricting their MTM eligibility criteria to limit the number and percent of beneficiaries who qualify for these programs and are required to be offered CMRs."
By reading the tea leaves, one can surmise that CMS thinks a ten to thirteen percent (10%-13%) MTM eligibility rate is not high enough. CMS is further adding the percentage of Comprehensive Medication Reviews as a Part D star measure and adding Alzheimer's and End Stage Renal Disease with dialysis as chronic conditions. There is a required MTM format now and increased emphasis on increased contact with members to get them to agree to a Comprehensive Medication Review.
When considering Medication Therapy Management program criteria to be submitted (due May 7, 2012), organizations should consider expanding the program criteria so that more members are eligible and requiring their MTM vendor or their internal staff providers to get the Comprehensive Medication Review numbers way up. This time CMS has given us a good look at where the bar is.
Careful: You might get what you wish for
My friend Will Wilkinson has a nice post over at the Economist regarding the politics of the ACA being overturned by the SCOTUS next week. Increasingly, the legal community thinks the law will be upheld, and that it will be the Chief himself who casts the swing vote. Who knows. As many have noted over the last few weeks, few expected the case to make it to the Court in the first place. Will's most interesting point is an ironic one: that the repeal of Obamacare, which famously implements a GOP-designed system piloted in a GOP-led state, may lead to a more successful case for a single-payer system.
I am not a good constitutional scholar but I am a scholar with a good constitution, and I've been reading everything I can on legal blogs supporting both the overturn and uphold perspectives. As has been widely reported, the core constitutional argument against the mandate is that the Government can't regulate the inactivity of not buying insurance, to which the retort is that the Government can regulate interstate commerce and so it has not exceeded its authority. A fringe idea is that the penalties levied by the Feds against those who don't buy is really a tax by another name--- and the Government sure can do that.
A more interesting question to me is whether one can be "inactive" at all in a health market. We all use these services eventually, even those who are not insured by choice. And is anyone actually uninsured by choice, the same way I wear adidas by choice or chose a salad for lunch today? They're uninsured because they can't afford it. It's a little like saying that your 5-star hotel is open to everyone. Who can pay.
Some choice.
If You're Not on the Government Programs Bus, You'll Soon Be Under It
The March enrollment numbers are out from CMS and provides some stark evidence that if you're not in government programs, you're not going to be in health care for much longer. Medicare and Medicaid health plan enrollment continues to grow steadily, and is set to explode later this year as several major states begin to move their dual eligibles into managed care.
CMS's March data for Medicare Advantage (MA) showed a gain of 45,000 new members in March following a strong open enrollment season that added almost 700,000 lives in January and February. All of the major players showed steady sequential organic growth. Medicare Prescription Drug-only Plans (PDPs) grew 62,000 lives this month, following a surprising 810,000 new members during open enrollment. The trends in MA and PDPs confirm our suspicions: Baby Boomers are a much more plan-friendly bunch than the World War II generation, providing a nice tailwind for the sector.
The big story that's emerging, of course, is Medicaid. We know we're on the verge of the biggest premium opportunity health plans have seen since the launch of Medicare Part D in the migration of dual eligibles -- estimated to be around $300B over the next decade, more than half of that in the next 5 years. The surge is beginning in states like Texas (monthly enrollment up over 650,000) and New York (up 35,000 in March). The fun really begins in April when the Michigan and California duals RFPs hit the street -- both rumored to be north of $8B, making them the biggest non-defense RFPs in US history -- and almost a dozen more states releasing theirs in September.
We know commercial health plan enrollment has been stagnant to declining since the before the recession hit in 2009, and that's not expected to improve. Health reform and its promise of coverage expansion doesn't begin until 2014, assuming the ACA survives the Supreme Court and President Obama survives reelection. Remember that Medicaid eligibility expansion accounts for half of ACA's coverage gains (16M), with the remainder coming through Federal subsidies and health insurance exchanges. Neither of those opportunities even comes close to what migration of dual eligibles represent to health plans.
What the March numbers and a crystal ball for the RFP calendar tell us is that if you're not on the government programs bus, you'll soon be under it.
A Day in the life of the Medicare Compliance Officer
You have so many requirements to follow. You are charged with the interpretation and distribution of the ever-present stream of HPMS memoranda. Operational leadership does not always understand that you can give them the requirements, interpret the requirements, but it's up to them to implement for success. Implementation takes time, often leaving employees performing manual, error-prone tasks until something can be automated. And of course, without automation, the documentation is difficult to find upon CMS request.
So begins another day in the life of the Medicare Compliance Officer: ever-changing, often thankless, and never boring. Sound familiar? In my last post, I mentioned the SCCE/HCCA joint survey on stress, compliance and ethics --take a look. The results should not be too surprising to those in the day-to-day.
Compliance Officers (and their staff) hear so many reasons for not fulfilling compliance obligations:
• We don't agree with your interpretation
• We've never been cited for it before
• Our competitors do it so why can't we
• It's not in our budget
Talk about stress! Many Medicare Compliance Officers that I have worked with find themselves at one of two ends of a spectrum: so embedded in operational decisions that their role is often blurred, or completely carved out of the loop — isolated as demonstrated in the survey results. It is no small task to cultivate and maintain the relationships with operations to fall right in the middle.
For those who find themselves over-involved in operations, a line must be drawn. Often times, the Medicare Compliance Officer is party to decision-making in favor of non-compliant practices. To request concurrence from him or her on something which results in non-compliance is a major stressor to anyone charged with maintaining the relationship between the organization and the CMS account manager. The fact is, a blessing from the Medicare Compliance Officer does not make a wrong a right, so break the cycle if it exists in your organization.
IPAB is a four letter word
The House is taking up a bill to remove Medicare's independent payment advisory board (IPAB) from the Affordable Care Act. Opponents of IPAB call it a death panel and claim it will ration care. That's nonesense, and flies in the face of the legislation that created the IPAB, which prohitits it from ratioining anything. In fact, the law goes so far to anticiate critics' concerns, real and imagined, that the board is prohibited from almost anything. It can't change benefits, increase the eligibility age for Medicare, increase beneficiary premiums or cost sharing, tamper with eligibility rules, raise revenues in any way, or reduce payments to hsoitpals and hospices until fiscal 2020. What's left is to recommend pay cuts for doctors, other providers, Medicare Advantage and Part D drug plans. The IPAB requirement to recommend cost reductions is triggered when Medicare costs exceed a pre-set limit. IPAB preserves what we love most about the sustainable growth rate formula (SGR), the automitic trigger that imposes physician fee cuts, but extends the reach to more providers and to Medicare health plans. It is unreasonable to expect that IPAB recommendatioins will meet a better fate than the SGR. While the ACA ostensibly makes IPAB cuts automatic unless Congress finds a better way to make the same cuts, in practice Congress can always vote to suspend the IPAB recommendation just as it suspends the SGR cuts.
Of course, the ACA didn't eliminate the SGR, so now we have the SGR plus the IPAB. When Congress suspends an SGR cut, it increases the likelihood that it will be facing an IPAB mandate. So it will get to repeat the SGR drama twice each year.
The IPAB exists because Congress doesn't trust itself to make rational decisions where Medicare is concerned. IPAB is often compared to the base realignment and closing (BRAC) process, which isolates individual members of Congress from accountability for military base closings that hurt their own districs. But BRAC recommendations only touch a few districts, and there are winners as well as losers among the districts affected. IPAB will adversly affect seniors and providers in all districts. So suspending IPAB recommendations will likely become must-pass legislation, even more so that suspending the SGR cuts. And must-pass legislation becomes the vehicle for more bickering, posturing, brinksmanship, and all the things that have earned Congress such contempt.
For its own good, Congress should repeal the IPAB. Not becasue it's going to ration care, but because it will inevitably confront Congress with yet another policy on auto-pilot. An auto-pilot that, by design, will keep trying to fly Medicare into a cliff.
Don't waste your travel budget
We're less than three months from the GHG Forum. This is NOT your usual conference. We've developed a unique educational retreat for management teams working in government programs. I'm thrilled at the presentations our faculty are preparing: we're putting our senior consultants on the stage to deliver case studies, war stories and tales of best practices. But just as importantly, we're building in time for you to react to these sessions with your team--- to develop questions for your track faculty, compare notes, discuss implementing the best practices you've learned about.
We know it's a new concept in an industry that's become accustomed to sales people masquerading as subject matter experts. But we think that's it's badly needed. Many management teams we work with bemoan the lack of time and space to learn, collaborate and plan for success. In this environment, it's easy to simply react. But no one has ever reacted their way to excellence.
No doubt, if you send one to two people they will benefit individually. But isn't the isolation of our departments from each other central to our basic challenge of reforming our plans? We invite you to join other plans (some are sending as many as a dozen attendees) in making the GHG Forum your travel investment for the year. Send a team. We'll show you around.
Right-Wing Senators Offer Competing Medicare Reform Plan
Things are getting more and more curious on the Hill as various factions line up to offer their Medicare reform proposals to kick off budget season. Four far-right Senators -- Rand Paul of Kentucky, Mike Lee of Utah and South Carolina's Lindsey Graham and Jim DeMint -- will unveil a plan Thursday that would transition Medicare beneficiaries into the same health care program offered to federal employees, while gradually increasing the eligibility age and means testing. The proposal arrives less than a week before House Budget Chairman Paul Ryan, R-WI, is expected to release his own Medicare overhaul plan in a fiscal 2013 budget proposal.
The plan would allow seniors to enroll in the Federal Employees Health Benefits Program (FEHBP) beginning in 2014. Everyone in FEHBP pays the same premium, and plans must accept all comers. The proposal would literally phase out the existing Medicare program over an unspecified time period. Instead, seniors would be able to choose from the same options that federal employees (and Members of Congress) have. The proposal "provides Medicare patients with the best health care in America and will forever protect seniors' interests by aligning them with self-interested politicians," a fact sheet said.
Under the senators' bill, the federal government would subsidize three-quarters of the cost of the average plan for enrollees. To prevent health care plans from selecting only the healthiest patients, the government would pay plans 90 percent of the total costs for treating the top 5 percent of their most expensive enrollees. The plan would gradually shift the eligibility age for seniors by three months annually until it reaches 70 in 2034. Wealthier seniors would pay a greater percentage of the costs, and Medicaid would provide assistance to low-income seniors. Republican staffers estimated that the plan would reduce the deficit by $1 trillion over 10 years and reduce Medicare's gap between the cost of promised benefits and its revenue from taxes and premiums by almost $16 trillion over a 75-year window. They also said the bill would save individual enrollees $1,500 per year in out-of-pocket costs.
While from a policy standpoint this isn't a bad concept, in reality this thing doesn't seem to stand a chance in hell. Just giving credence to Democrats' "MediScare" talking points that the GOP wants to "kill Medicare as we know it" -- as it does -- seems a kiss of death, especially in an election year with most 65+ voters more nervous than a long-tailed cat in a roomful of rocking chairs. But it's the timetable of their proposal that also provides a stiff headwind: it would go into effect in 2014, when most other proposals have delayed changes into the next decade so seniors currently enrolled in the program would not be affected.
In his fiscal 2012 budget proposal, Ryan proposed transforming Medicare into a system under which seniors receive government payments to purchase private health insurance plans beginning in 2022. Supporters compared the system to the federal employees' health plan, but Democrats derided it for ending traditional Medicare, saying it would endanger guaranteed health care coverage for seniors.
Ryan will introduce his plan next week with new wingman Sen. Ron Wyden, D-OR, which would create a new competitive insurance marketplace in 2022. Ryan/Wyden would allow seniors to choose between approved private plans in the marketplace and the traditional fee-for-service Medicare model. It would control costs by giving seniors an annual federal subsidy to help pay for the approved private plans or traditional Medicare.
Wyden said this week that he was encouraged by North Dakota Democrat Kent Conrad's enthusiasm for the proposal during a recent hearing of the Senate Budget Committee, which Conrad chairs. Wyden said he would spend the rest of the year trying to build bipartisan consensus for addressing Medicare. With the Senate's most conservative members laying down their own marker, the elusiveness of election-year consensus may be compounded.
Stressed? Tell me about it
The Society of Corporate Compliance and Ethics and the Health Care Compliance Association conducted a survey and released their results in a report entitled Stress, Compliance, and Ethics. The survey results address leading causes of stress among compliance and ethics officers. When three of every five respondents agree that they have considered leaving their job, and over half consider their relationship with colleagues to be adversarial or isolated, it is a strong message to take action.
There exists a small pool of Medicare Advantage and Part D Compliance professionals in the country. Of those charged with the responsibilities of the Medicare Compliance Officer, they know full well what CMS has focused on over the past few years: compliance program effectiveness and performance reviews based on data.
CMS expects plans to demonstrate the effectiveness of the Medicare Compliance Officer by way of communication efforts, transparency throughout the organization, and effective training programs, among other things. We know total effectiveness is near impossible when you are not a true partner in the C-suite. Common barriers to compliance program success include:
• Barriers to leadership: Communication becomes a game of "Operator" when the chain is Compliance Officer to Director to Assistant Vice President to Executive Vice President to General Counsel to Audit Committee to CEO… surely the original message got through;
• Insufficient resources: Compliance divisions often do not have the trained staff or the right tools in order to perform the tasks of a well-oiled compliance machine; lots of manual processes, too little automation;
• Operational pushback: Delay, resistance or refusal to maintain compliance standards will have you seeing stars, and not in a good way.
As a true officer of the company, it is CMS' expectation that your role is meaningful and effective. When the title of Medicare Compliance Officer is given to someone without a seat at the table, the effectiveness of the compliance program is at risk. Next week we'll talk some real-life examples that make up a day in the life of these compliance warriors.
Oregon Leads the Way on End-of-Life Planning
Kaiser Health News is out with a terrific story today on Oregon's progress with end-of-life planning for its seniors. The secret to its success has been a simpler-than-expected solution that a number of states have already adopted or are considering, and it's one of the most encouraging signs of progress in the field since the dark days of "Death Panels" during the 2008 campaign.
Oregon has been in the forefront of trying to make sure a person has as much control over the end of his or her life as possible. The state pioneered a form known as a POLST, for Physician Orders for Life-Sustaining Treatment, that has been adopted by 14 states and is being considered in 20 more. The form offers many more detailed options than a simple "do not resuscitate" directive.
The Oregon legislature set up a database several years ago to deal with the problem of inaccessible POLST forms.Now EMTs and doctors can access the state database to see if someone wants to be resuscitated. That database is beginning to generate some interesting facts about the medical interventions people want as they die, according to Dr. Susan Tolle of the Oregon Center for Ethics in Health Care. "We have really learned that this is not a black and white process," Tolle says. "Less than 10 percent of people wanted to refuse all treatment. A majority want some things and not other things." Tolle avoids the topic of whether these detailed end-of-life instructions save money; she is wary of starting another "death panels" debate. But the database has allowed the state to quantify the policy by some measures.
"What we found was that if people marked 'comfort measures only' and 'do not resuscitate' and did not want to go back to the hospital...there was a 67 percent reduction in life sustaining treatments, primarily hospitalization and emergency room visits," says Tolle.
As we've long said, there can be no hope of long-term Medicare solvency without more rational policy and assistance to seniors as they decide how they want to die -- not when Medicare spends 1 in 4 dollars today on care in the last 6 months of life. The POLST solution -- a standardized document with physician support and an accessible database -- is cheap, effective, and should be encouraged by CMS and the Administration. And it's heartening that Senator Ron Wyden is from Oregon and deeply enmeshed in these issues -- Oregon's approach should be embodied in his work with Rep. Paul Ryan on Medicare reform next year.
Word for the day: Volatile
Volatile. n. Fickle, inconsistent, easily vaporized.
Thanks to the Affordable Care Act, Medicare Advantage finances are going to be volatile. Unwary actuaries may be easily vaporized.
The new benchmarks, the "specified amount" under the ACA, are based on which quartile a given county is in. Quartiles are defined by average FFS costs. ACA benchmarks range from 95% to 115% of local anticipated Medicare FFS spending in the county, depending on which quartile a county is in. Every time CMS rebases the FFS calculations, a county can change quartiles. The preliminary list of quartile-jumpers for 2013 moves 27% of all US counties, with about 27% of MA beneficiaries, from one quartile to another. Depending on which quartile you start in and where you end up, that's a change in payment of 5% to 7.5% -- or more in the few counties that move more than one quartile. That's a lot of money to have to cut, if you go the wrong direction. Or a lot to have to quickly absorb in new benefits if you go the other way -- since, with the 85% loss ratio floor coming up in 2014, a plan can't simply stash the extra cash in profit.
We won't have the final list of the new quartiles until April 2. And bids are due June 4! That's a scant 2 months to figure out how to either (a) cut 5% or more out of your bid, or (b) add new benefits to absorb the windfall.
When adding benefits, plans will need to keep in mind that the process can reverse with the next rebasing -- in 3 years or less. Added benefits need to be planned like chess moves. What can we add that will help us now, but which won't hurt too much if we have to withdraw them later?
Plans should be doing some serious contingency planing, so they are ready when the rates and quartiles get recalculated. For 2013, the time to start planning is immediately after reading this blog. The preliminary list of county quartiles is a start, but remember that it's subject to change. Any plan with a significant number of members in counties close to the bubble between quartiles should be getting ready now, in case they have to make some quick decisions when preparing their bids.
To add to the fun, double bonus counties can change, too, based on their newly re-based FFS costs relative to the national average. For some plans that qualified for a double bonus in 2012, the rebasing of FFS could make half the bonus disappear in 2013 in some counties. Or, your bonus could double in 2013 in counties that newly qualify for the double bonus. That's more chaos in the bid building process.
The more i think about the quartile system, the more I'm beginning to like competitive bidding as an alternative. Works for part D, after all.