Welcome to Another Year of Gridlock in DC
- Obama is narrowly re-elected and Democrats maintain leadership of the Senate: weakened President, weakened Democratic margins (Dems are defending 23 Senate seats this year vs. 10 for the GOP, so they'll certainly lose seats) = more gridlock.
- Obama is narrowly re-elected but Republicans win the Senate: badly weakened President with no control over legislature: worse gridlock. For the record, I 'm thinking this is the most likely outcome this year.
- Obama defeated and Republicans win the Senate: Democrats throw themselves on the partisan hand grenade to prevent GOP from undoing Obama's legacy like health reform -- worse gridlock. I consider this to be the least-likely outcome this year.
All of this argues that no matter what happens in November, the partisan divide in Washington is likely to widen -- and that signals this may be our "Lost Decade" like the Japanese suffered in the 90s, with a political class unwilling and unable to meet their legislative responsibilities as the country goes further into the economic ditch. That means Medicare and Medicaid continue to run amok as uncontrolled entitlements, further depressing US creditworthiness and pouring fuel on the national deficit fire. Not a pretty picture, no matter who's getting inaugurated a year and a week from now.
It seems the only safe bet these days is to count on Congress producing another goose egg in solutions to what ails our nation.
Your Risk Adjustment Road Map
Where are you going? And how quickly are you getting there?
The risk adjustment model is evolving rapidly because of RADV, EDPS, and your health plan competitors.
Health plans and medical groups are moving from a chart review model to the premier member knowledge & engagement model. Your transformation should look like this if you have PFFS, PPO, or HMO products:
• Early Model: 1.7 charts reviewed per member with no member evaluations
• Next Model: 0.65 charts reviewed per member with 5-15% member evaluations targeting
• Goal Model: 0.30 charts reviewed per member with 60-85% member evaluations targeting
• SNP Goal Model: 0.50 charts reviewed per member with 100% member evaluation targeting (we will blog more about SNPs soon, due to their unique nature)
This not only offers you more timely and accurate revenue but, more importantly, member information for a comprehensive plan of treatment which should reduce gaps in care and highlight care management needs for the patient population.
If you have questions or need to remodel your strategic plan or budget, we have a client roadmap module to transition your risk adjustment program without impacting accurate revenue or blowing your budget.
Berwick Redux? Recess Appointments Could Derail Tavenner Nomination at CMS
A Risk Adjustment Road Map
Where are you going? And how quickly are you getting there?
The risk adjustment model is evolving rapidly because of RADV, EDPS, and your health plan competitors. Health plans and medical groups are moving from a chart review model to the premier member knowledge & engagement model. Your transformation should look like this if you have PFFS, PPO, or HMO products:
• Early Model: 1.7 charts reviewed per member with no member evaluations
• Next Model: 0.65 charts reviewed per member with 5-15% member evaluations targeting
• Goal Model: 0.30 charts reviewed per member with 60-85% member evaluations targeting
• SNP Goal Model: 0.50 charts reviewed per member with 100% member evaluation targeting (we will blog more about SNPs soon, due to their unique nature)
This not only offers you accurate, more timely revenue but, more importantly, member information for a comprehensive plan of treatment which should reduce gaps in care and highlight care management needs for the patient population.
If you have questions or need to remodel your strategic plan or budget, we have a client roadmap module to transition your risk adjustment program without impacting accurate revenue or blowing your budget.
2012 has a lot in store
2012 will be a busy year for GHG and our clients. The first Legislative agenda item will be the Medicare physician Sustainable Growth Rate (SGR) fix. The 27 percent physician fee schedule cut has only been postponed for the first 2 months in 2012. The big question is how the Congress will choose to pay for the doc fix. Medicare Advantage cuts were on the table briefly as part of the House discussion, but the House ended up cutting Medicare payments to hospitals to cover their one year fix.
The Innovation Center has a lot of activities on the docket for 2012. 32 Accountable Care Organization (ACO) Pioneers are starting this month and organizations that are interested in the ACO Shared Savings model must submit their applications by January 20, 2012 for an April 1, 2012 start date or March 30 for a July 1, 2012 start date. Some of the applicants for the Shared Savings program will also be submitting an application for the Advanced Payment ACO model. Applications for the Health Care Innovation Challenge grants are due January 27 for the first round and if the $1 billion is not fully awarded there will be a second round of applications due in the summer. Due to the large provider response, CMS has extended the deadline until April 30, 2012 for applications for the Bundled Payments for Care Improvement program for models 2 — 4.
CMS will release the Advance Notice of MA and Part D Payment changes and the Call Letter around February 17 with final rates and the final Call Letter issued in April. We would also expect CMS to issue final regulations for MA and Part D Benefit Programs for CY 2013 in the first quarter of 2012.
Applications for new Medicare Advantage plans and service area expansions for CY 2013 are due February 23, 2012 followed by bids on June 4, 2012.
Work will continue on implementing meaningful use and the Medicare Advantage and provider value based purchasing initiatives that reward quality and penalize failure to meet targets.
On the Health Care Reform front the first six months of 2012 will focus on the Supreme Court review of the ACA. Oral arguments will begin March 26 and a decision is expected in late June. States will continue their work on developing the infrastructure for the Exchanges. CMS must certify that sates have made sufficient progress by January 2013. The Exchanges will go live in October 2013 for coverage and subsidies to begin January 1, 2014.
HHS will develop a back up federal Exchange for states that aren't certified. The federal government is also building a data hub to support the Exchanges that will link Social Security, IRS and Medicaid data to facilitate eligibility and subsidies.
CMS will have to issue final regulations and guidance on policies that will govern the Exchanges. While states will have flexibility on the Essential Benefits that plans must offer in the first two years, additional regulatory guidance is expected from HHS.
The presidential election in November will underscore future changes that we can expect, especially in the area of Medicare reform and additional budget cuts. Most observers expect the big cuts to start in 2013. The conventional wisdom is that it won't be the 2 percent sequester for Medicare that was passed in the Budget Control Act of 2011 but substantially higher cuts to both the public and private Medicare plans.
Capitation in Accountable Care Organizations
If you don't already subscribe, we suggest you check out Accountable Care News, an online publication focused specifically on Accountable Care Organizations.
I published an article in the December 2011 Issue that covers capitation in accountable care organizations. A sample issue of the publication is here. For a full copy of the article, click here.
Enjoy!
New CMS HSD Guidance Issued - What's New?
In case you haven't studied the recent CMS HSD Guidance memo, let me save you some time (and pain). This is the first of my blogs on the new CMS changes that will impact all MA Plans filing this year for a 2013 product launch. Here's what caught my attention:
• County Designations Changed - This change could move a county from Major Metro to Metro; or the reverse. These changes may have an immediate impact on your network requirements. You may even want to revisit the counties you pulled last season and see if they now meet CMS standards. One Plan who examined the new standards found some of their CMS "Failed" counties now "Pass".
• Providers Dropped - CMS dropped Laboratory and Intestinal Transplant from the network requirements. Let's hope this trend continues next year. I'm sure, like me, you have a couple of specialties you'd like to see dropped.
• Physician's Assistants and Nurse Practitioners — Something is going on with CMS' view of these providers. In the guidance they now call contracting with these providers a "rare" occurrence and seem to narrow their use to rural areas where they can practice independently. We'll follow-up on this change for clarification.
• Geriatrics — CMS has clarified the specialty to those providers that have special knowledge and interest. No mention of a board specialty requirement.
• Cardiac and Thoracic Surgeons — CMS now appears to acknowledge that these specialties are governed by a single board academy. However both specialties continue to be required on the HSD Provider Table. I'm hoping what CMS has separated can be reunited next year.
• Hospital Based Providers — MA Plans are now officially relieved of contracting with Radiology, Anesthesiology, Pathology and Emergency Medicine providers. Plans must now only assure that members seeing these providers pay in-network co-pays.
We at Gorman are staying on top of these changes in CMS Network requirements so that we can assist you in making strategic decisions for MA expansion. Our Network development team is keeping abreast of specific market changes to maintain our edge on our market intel and give folks who work with us the latest impact knowledge.
Enjoy Some LOLZ with Jon Stewart's "Intervention 2012"
I love me some Daily Show and this week Jon Stewart offered up one of their best commentaries on the state of the Republican Presidential nomination. Having had the office next door to former House Speaker Newt Gingrich's when I worked for US Rep. John Conyers, I can heartily agree with the assessments of Senator Tom Coburn (R-OK), John Sununu, Susan Molinari, and Joe Scarborough herein. The rise of "The Gingrich" requires an Intervention. Enjoy.
If I want a Risk Adjustment Super Hero ....
Ask yourself: What would my 2012 member assessment strategy & timing look like if I want a Risk Adjustment Super Hero?
- Step 1: Compile data in February
- Step 2: Launch member evaluations in March
- Step 3: Complete 50% of your member evaluations by June 30th
- Step 4: Reduce dependence on chart review to .30 charts per member and increase member evaluations to 85% of the membership (for PFFS, PPO, and HMO plans)
- Step 5: Refine analytics and reduce zero HCC member evaluation percentage (should always be less than 30% but you want to push toward 15% if you are not reviewing your entire population)
- Step 6: Check year over year revenue increase Jan — June and July —December for member evaluations to ensure ROI and payment reconciliation
ACO: Change agent or fad?
Aetna recently published results of two studies suggesting that ACOs can indeed cut Medicare enrollee costs. The results came from two medical groups - one in Ohio and one in Florida. The Florida group reduced inpatient hospital days by 37% and hospital readmissions by 27%. The Ohio group reduced inpatient days by 30% and hospital readmissions by 27%. In each case the program started in 2009 - so not bad results for a 2 year program--right?
Recall that the goal of a Medicare ACO is to streamline care, reduce unnecessary care/procedures, focus more on patient health management than catastrophic treatment, thus leading to happier patients, more fulfilled providers and less medical cost per capita. So the concept seems to work and everybody is happy-right?
Well not everybody! The Aetna study shows that ACO success can be defined in terms of less procedures, inpatient days and use of resources for a defined population. And the results point to the intrinsic benefits that accompany better outcomes as well as healthier patients and less patient exposure (sometimes harmful) to unnecessary procedures. But that is just part of the story because the Hospital and the Physician--the ones who are doing less procedures than before and the hospital that is seeing its inpatient volume shrink -, they are dealing with the reality of revenue loss unless it can be replaced through seeing more patients, increasing unit cost, cost-shifting to non ACO managed populations or limiting access to ACO participating patients, etc. -- all those consequences that are an anathema to ACO believers.
Thus individual ACO enterprises may meet all the goals set out by CMS and the private health care sector but medical costs on a consolidated basis will still go up unless.....
Unless we as an industry, choose not to wait for the next health reform shoe to drop. Instead, let us shift our attention away from experimenting on different populations with multiple cost cutting initiatives. Let us focus on health care delivery and pricing solutions that cut across all populations and funding sources with the goal of extracting involuntary practitioner and consumer behavior changes with respect to health care delivery and individual responsibility for lifestyle choices. Said differently: if everyone is riding the same train at full speed it becomes difficult and potentially harmful to jump off.
That brings me back to ACOs, the topic for this blog. I happen to think that ACOs, or rather the philosophical tenets that define an ACO, are here to stay and should and can become the foundation for the wholesale change required to change our approach to accessing and funding health care. More about that later.