Big Push on the Super-Committee for a Permanent "Doc Fix"
Our industry needs to be watching the workings of the Congressional deficit Super-Committee for obvious reasons: Medicare is one of its biggest targets for reining in Federal spending. Hands-down the biggest issue facing Medicare Advantage is an indirect one: whether the "Supers" will address the Sustainable Growth Rate (SGR) methodology that determines reimbursement for physicians under traditional Medicare. Docs are facing a 29.5% cut to their payments in January 2012 unless the Congress intervenes. If they don't and the cut takes place, Medicare Advantage rates will fall by more than 7% in 2013, and that would be a disaster. Various interest groups and some influential Members of Congress are beginning to weigh in.
Rep. Allyson Schwartz (D-PA), the second highest ranking Democrat on the Budget Committee and a leader on healthcare issues, issued a "Dear Colleague" letter Wednesday morning asking her colleagues to demand a permanent fix to the SGR. Since 1997 the Congress has kicked this can down the road several times through short-term fixes, but doctors want a permanent fix to the payment formula. And so do MA plans.
But fixing the SGR comes with a daunting $300 billion price tag, which killed efforts to address it in the ACA. Leaving the law on the books, Schwartz wrote, would double the price tag to almost $600 billion over the next five years or force the Medicare program to slash payments to a level that would force thousands of physicians to leave the program.
Physician groups across the country are also demanding that the Super-Committee tackle the problem. Last week, dozens of state and national medical organizations signed on to a letter drafted by the American Medical Association demanding action.
"With a 30 percent across-the-board payment cut in physician services scheduled for January 1, 2012, the implications of continuing this practice of simply putting off cuts to future years are clear. Continued access to care for our nation's senior and disabled citizens is seriously threatened," the doctors' letter reads. "The fiscally responsible course is clear. This is the time to repeal the SGR so that new payment models can be adopted that promote high quality, cost effective care."
AHIP and other health plan trade organizations have been eerily quiet about the SGR -- and that's unconscionable given how much damage another punt on the doc fix could do to Medicare Advantage, not just in terms of payment cuts in 2013 and beyond, but also for what it would mean to beneficiary access to physicians. MA plan provider networks would look like swiss cheese with docs by the thousands refusing to accept Medicare assignment. It's time our industry weighed in and helped ensure the SGR goes the way of the dodo in the continuing budget debate -- doing a solid for our partners in the physician community while saving our own hides.
GHG Revenue Management Forum in Vegas Coming October 6-7
We've been saying since passage of the ACA that the next 3 years' survival in Medicare Advantage is all about revenue management. The rules have changed and MA plans need new processes and new solutions to avoid serious financial troubles these next several years. Clinical initiatives often take years to bear fruit. As rates come down due to the ACA cuts, and more pile on from the Congressional Super-Committee, MA plans must pull every revenue lever they have to offset those losses, stay competitive -- and finance the care coordination and complex case management infrastructure essential to securing our long-term future in government programs.
Our clients said, "how?" We're saying: "come to 'Lost Wages' and we'll show you." The venue couldn't be more appropriate for the subject matter. So please join me and GHG's top experts on revenue management October 6-7 at the fabulous Aria Hotel, for an exclusive event for MA health plan senior leadership with responsibilities for finance, revenue management, Star Ratings, and risk adjustment. We will share our state-of-the-art practical strategies for driving revenue in the new age of austerity and accountability.
This forum will offer actionable, tactical insight regarding:
• Performance optimization and efficiency
• Must-have investments in your STARS programs and where to focus to boost your rating
• A cutting-edge risk adjustment program that drives higher, more compliant revenue and better quality and service for members
• Understanding the various components of MA capitation and their implications for your bottom line
This program is designed for senior-level finance decision makers with leadership responsibilities for Medicare Advantage programs. This event will be advanced, but highly practical and action-oriented. As with our previous events, this program is open to health plans only. The cost of this event is $995; space is limited to 60 for this exclusive event. Pre-register now to secure your plan's attendance.
Click here to pre-register
Click here to view the preliminary agenda
If you're in Medicare Advantage these days you're a gambler, so come to Vegas and we'll show you how to win now that the rules have changed.
Part B versus Part D Drug Benefit Reform is Long Overdue
Injectable drug therapy administration is generally covered as a medical expense under Medicare Advantage Plans. The member typically goes to an outpatient facility or hospital to receive the drug treatment and pays the associated medical visit copayment or deductible as required by the member's plan, until he or she reaches the policy's out-of-pocket maximum. Once the individual has paid the maximum amount, the policy pays in full.
For those who take their drug therapy orally, either in tablet or liquid form, treatment is covered as a Part D prescription drug, not as a medical expense. The beneficiary must pay the related prescription drug copayment or deductible. Depending on the plan's terms, the amount an individual has to pay out of pocket for the oral chemotherapy can be higher than if it were treated as a medical expense.
However, there is a very grey middle ground for crossover drug therapies that have multiple uses such as methotrexate, which can be used to treat cancer or arthritis, or prednisone, which can be used to treat a wide range of dermatological issues, asthma, or be used as an anti-rejection drug in transplant patients. In the world of Medicare Advantage, these drugs are known as Part D versus Part B Drugs.
B vs. D Drugs have been problematic since the beginning of Part D in 2006. Generally, the patient must take the prescription for a B vs. D drug to the pharmacy where the pharmacist transmits an electronic claims to the PBM who denies payment for the drug because a B vs. D Determination. Coverage under Part D or Part B must be made determined by the plan sponsor or its delegated PBM based on the prescriber's intended use, the patient's treatment location (home, LTC, hospital, etc.), route of administration , and who administers the drug. CMS expects Plan Sponsors to do the due diligence in making such determinations. CMS Compliance Audits focus on the methodology and accuracy of the Part B versus Part D Coverage Determination process.
CMS has the opportunity to make a meaningful reform of a clumsy and costly regulation by eliminating the B vs. D Coverage Determination requirement. Drugs falling in this grey area should be moved into Part D or Part B. This would eliminate member confusion on cost-sharing, source of obtaining the drug, and the delay at the point of service caused by the due diligence process the Plan is required to make.
In 2010, Milliman, Inc, a health care actuarial firm, completed an analysis sponsored by GlaxoSmithKline on the cost of creating parity between injectable and oral therapies and leveling the cost-share playing field between paying as a medical or as a pharmacy benefit. The result indicated that for most plans, the cost would be well below $1 PMPM whereas the drug claims alone added as much a $300 PMPM to cost.
The inconvenience to the member, the added cost to the provider, and the decreased cost to the plan through eliminating the due diligence process of a Coverage Determination makes logical sense to reform the B versus D Policy. CMS could eliminate one complexity to an extremely complex benefit while improving member satisfaction and reducing overall cost. This is truly a win-win opportunity for Medicare.
Should Medicare premium information be shared with PPO providers?
CMS and the Center for Medicare and Medicaid Innovation (CMMI), in an effort to provide a more coordinated and satisfactory patient experience when it comes to the delivery of healthcare services, has placed much focus on improving Medicare program transparency around access to services, provider quality measures, clinical outcomes and fair pricing.
It is fair to ask whether or not providers - who are responsible for the delivery of clinical diagnosis and treatment to Medicare beneficiaries - should have knowledge about the beneficiaries' benefit plan and premium costs, including copayments and coinsurance. There is reasonable argument on both sides of this issue regarding patient privacy, the right to know or not know, as well as the opinion that a provider or supplier does not need to know a beneficiary's premium payments to price the service or item provided.
Those in favor of providing provider and suppliers with premium information might suggest that the information helps the provider find less expensive treatment alternatives when the benefit plan and related financial requirements would otherwise prove problematic. Others would opine that the provider's number one concern should be the patient's needs and hoped-for outcome.
There is, however, another reason that it might make sense to share premium information with providers and suppliers: Providers, like the patient, usually do not appreciate the financial relationship between the monthly dollar amount assigned to each patient for provision of medical care and the actual cost charged for providing that medical care. Knowing that relationship may have the desired effect of providers, suppliers and the patient agreeing on a treatment approach that is more judicious regarding the ordering of procedures, tests and supplies that may not be necessary in every case for the desired treatment outcomes.
At the end of the day there is a limit to the financial resources available for the funding of medical services. If everyone involved in the provison of medical services and supplies understands those limitations, then decisions on how those resources are expended may beome more measured without sacrificing service quality or treatment outcomes.
Pioneers Move Forward, But Medicare May Still Be Left Behind on ACOs
A CMS official announced Tuesday that final regulations for the Medicare Accountable Care Organization (ACO) Shared Savings Program are now expected mid-October. It looks like ACA's requirement that the SSP launch January 1 is now out of reach, and there's scuttlebutt here in DC that the launch date will be pushed to June or July 2012. These regs can't come fast enough -- and must be dramatically redrafted from the disastrous April draft -- or Medicare could be left behind as the ACO revolution surges just about everywhere else.
Sure, the Pioneer ACO Demonstration was some progress, especially on the beneficiary alignment provisions and the apparent willingness of CMS to consider our partial capitation proposals. All 6 of GHG's applicants for Pioneer made it to the finals this week, advancing both partial (Part B only) and global (Parts A and B capitated, excluding transplants and ESRD) capitation models. CMS intends to pick 25-30 Pioneer ACOs to launch on January 1 -- these are the advanced "already ACOs" that are ready to go given their significant integration and deep experience in Medicare Advantage -- and they'll give CMS some early wins to tout to a skeptical Congress. We are thrilled all of our Pioneers are moving forward -- with no arrows in their backs yet.
But it's the Shared Savings Program with its applicability to a much broader swath of providers that's significant here -- and that messy draft reg from last spring was like a cold shower from Medicare for most providers that might consider it. The irony is the draft regs forced many sophisticated provider systems and medical groups to recommit themselves to Medicare Advantage. CMS got over 1,200 comments on the NPRM and we're hopeful next month's final reg gets it right.
The ACO train is leaving the station in both the Medicaid and commercial markets, and Medicare must be on it if there's to be any hope of significant delivery system reform. Take for example the following initiatives being undertaken by the major payers:
- United Health Group has 1 ACO in Tucson and expects to expand to 9-13 this year
- Aetna is in more than 100 conversations about building ACOs and is actively marketing ACO back end operations functions to providers
- Centura is developing a strategy to market ACO development and operations support functions and is pursuing several ACO pilots in the commercial market
- Cigna has ACO experiments in 12 markets expanding to 30 by year end
- Humana is in discussions to develop ACOs in several of its markets, especially FL and AZ
- Wellpoint is partnering with major medical groups to establish ACOs
- Coventry is creating ACO models and may roll them out first in support of its Medicaid diversification strategy
- HealthSpring has committed to a major ACO development initiative with its major provider groups and clinics its acquired in the Bravo transaction
We're crossing our fingers that our friends in the CMS Innovation Center took those 1,200 comments to heart and that we'll see a viable final reg on ACOs next month. Broad participation in Medicare by ACOs would be another tremendous achievement to add to the legacy of Dr. Berwick.
It's Official: the Supremes Will Decide on the Mandate. Smack in the Middle of the Presidential Election.
On Monday the Department of Justice confirmed that it did not request a review of an appeals court's decision to overturn the ACA's individual mandate. The decision ensures the Supreme Court will rule on the mandate sometime in June of 2012: just months before the Presidential election.
My thinking up until today was that health reform wouldn't play a prominent role in the election; it's all about jobs and the economy. But a decision coming in the heat of the campaign could escalate the issue for voters. The ACA is one of the most contentious and visible ways the President differs from his Republican rivals. A decision by the Supremes either way — that the law is a valid exercise of Congress's power or an unconstitutional overreach — could have political effects neither side can predict.
I remain convinced the Supremes will uphold the mandate -- legal precedent is well-established that the Congress can tax interstate commerce and even "inactivity" like refusing to buy health insurance. And if it's struck down, there are several other mechanisms by which Congressional Democrats can achieve the same effect of getting the maximum number of uninsured Americans into the insurance pool of the exchanges, like "auto-enrollment" with an opt-out and penalties for late enrollment like we have in Medicare Part D.
Either way, the Republican field must be thrilled about the timing, and the President's spin team will use the decision as an opening to tout reform's successes to date -- like 2.3 million twentysomethings already allowed to stay on their parents' insurance until age 26 -- and the promise of coverage for 32 million uninsured in 2014.
The individual mandate doesn't get a lot of love. It polls horribly, is thought by many to be unconstitutional and, from a policy perspective, is tagged as too weak to push Americans into buying coverage. But let's remember that last month there was new evidence that the mandate could work: 76% of the uninsured say they would rather purchase insurance than pay the law's penalty. That would reduce the number of people without insurance to 5% of the population and have 25 million Americans purchasing through the exchanges, just slightly higher than the 24 million that the CBO projected.
This is surprising - and it isn't. On the one hand, health reform's penalty for not purchasing health insurance - which will rise to $695 by 2016 - is a lot less than the cost of buying health insurance coverage. But on the other, Massachusetts - the only state that has implemented an individual mandate - has seen high uptake.
One other interesting finding to point out here: those with the lowest incomes turned out to be the most likely to comply with the mandate. That bodes well for a sop to Obama's base when the Supremes make their call next summer. But again, it's impossible to predict the effect the Supremes will have on the 2012 elections, so hold onto your backside next summer.
CMS Pioneer ACO Demonstration Program: Update
The CMS Pioneer Demonstration program is in stage two of the application process -- meaning that certain applicants have been invited by CMS to proceed to the next level, which is to defend/expand their submitted application in front of a CMS interview panel.
Those interviews are currently in process and it is satisfying to know that all of our client/applicants were invited by CMS to proceed to the interview stage. We of course contiue to support our clients, as well as other oranizations by preparing them for the interview process and the anticipated implementation phase.
Although CMS has not released a specific time frame for the follow up steps to the CMS interviews, we anticpate that by mid-October CMS will issue a communication announcing:
a) those organizations successful in passing the interview process;
b) announcing the much anticipated alternative payment methodologies for the Pioneer ACO initiative; and
c) announcing the time frame for negotiating the contract between CMS and those organizations that are invited to implement a Pioneer ACO franchise.
Look for further updates on the Pioneer program in future blogs as information becomes available.
Repairing Medicare
Last week the President outlined his proposal for salvaging Medicare. He suggested cutting $248 billion in expenditures over the next ten years. Significantly, that is only 4% of the $6.3 trillion estimated to be spent on the program in that decade. The money is to come from two places: The majority (90%) is from decreased reimbursement to providers and drug companies. The rest ($24 billion) is to come from charging beneficiaries more. What struck me was the deafening silence about spending smarter.
The Kaisers and the Mayo Clinics of this world have repeatedly demonstrated that good care is cheaper than bad care. It is worth thinking for a minute about the economics of good and not so good medicine. The plans are being urged—well, forced—to consider quality, but mostly from the point of view of HEDIS indicators that are heavily weighted toward preventive care and maintenance care in chronic illness. There is no question that those measures can improve quality of life, but the evidence that they will save money in an aging population is less compelling. There is, however, some evidence that good case management can save money, especially measures that decrease repeat and unnecessary hospitalizations and that cut down on complications of medical care.
One area that gets less attention, but one that I think would have the greatest financial impact, is to quit paying for care that has not been shown to be of benefit. Examples include very expensive chemotherapeutic agents that have not been proven to prolong life significantly, stents for completed MI's and strokes, or complex back surgeries for elderly patients with degenerative disease of the spine. The list is much longer than that, but I would venture to guess that just those three would produce more savings than the President's plan.
Become a Star: What MA-PD Plans can learn from Mickey Mouse
The Five Star Quality Rating System for Medicare Advantage Plans is run by CMS, and was put in place as part of an effort to help educate consumers on quality, and to make quality data more transparent.
Universal assets of a successful business are the links in Disney's "Chain of Excellence":
- Leadership excellence,
- people management,
- quality service,
- brand loyalty and
- inspiring creativity
are lessons which have been carefully developed by the Disney organization in its never-ending pursuit of excellence.
For 2012, the Stars consist of 50 measures hailing from 5 different rating systems: HEDIS, CAHPS, CMS, HOS, and IRE. Data to support these Star ratings come from surveys, empirical observation, administrative (claims) data, and medical records. CMS Star ratings are published annually and are available for viewing by all Medicare members prior to Open Enrollment and MAS-PD plan reimbursement are substantially tied to Star Rating scores.
Health plans have become adept at harvesting the "low-hanging fruit" consisting of clinical metrics as seen with HEDIS-like measures; however, attested by only three 5-Star plans for 2011, most MA-PD plans struggle with managing the CAHPS and HOS related measures. These are direct measures of customer satisfaction based on member surveys.
The struggle for MA-PD plans is how to move the needle for customer satisfaction. Health Plans are uniquely positioned to take many Disney concepts and adapt for inclusion. A couple of examples: healthcare has a strong, obvious common purpose that can be leveraged to align employees around improving the patient experience.
At Disney, the chain of excellence starts with leadership, moves into how you take care of your people, how your people then take care of your customers. And the loyalty and the financial results, for us, is not the goal, but rather it's the reward for doing something else really well, and that's that guest experience.
Corporate culture needs to be deliberate, by design, not by accident. Measureable goals then align to that. For example, crucial to Disney's strategy was the atmosphere, and Walt wasn't above picking up trash on Main Street since it was important to him. For Disney, "wow" experiences aren't the big things, but instead are all the little things. These are low cost additions that are sustainable. Paying attention to every detail of the delivery, and repeating it successfully, all add up to "wow!"
Companies can be proactive or reactive. To achieve excellence in customer satisfaction, Medicare Advantage plans must evaluate what within the existing business model works and what is missing the mark.
Satisfied members are loyal. Loyalty is really the reward for continually delivering on the brand's promise: a promise of magical experiences, experiences that exceed expectations. At the Gorman Health Group, we help our clients' laser focus on creating, nurturing and reinforcing life-long relationships at every touch point.
Insourcing: So you are thinking about internalizing risk adjustment . . .
We talk to health plans everyday that want to internalize risk adjustment. Bottom line: It is a good idea.
Taking control and building an expert, internal risk adjustment team is one of the best tactics a health plan can take. Here, we share an initial checklist of those areas needed for "in-sourcing":
 Claims based HCC filtering
 RAPS filtering and submission
 EDPS compilation and submission
 Medical record suspect generation
 Medical record retrieval
 Medical record coding
 Chart warehouse
 Hospital outreach for electronic encounter compilation
 Member evaluation suspect generation
 Evaluation development
 Member evaluation provider network
 Member evaluation findings integration
 Tracking & closing gaps in care with member outreach
 Member care report cards
 Primary care physician medical home
 Metrics, benchmarks, ROI, reports, and performance monitoring
Much of this you can internalize cost effectively, but you still need to be diligent. We've helped several health plans analyze their programs and vendors to determine what to pull in-house. Strategy, discipline, compliance and an engaged multi-disciplinary team willing to make decisions and push forward are critical elements for success.