GHG hosting Revenue Forum Oct 6-7 in Las Vegas
Your payment is coming down. Your blood pressure is going up.
• How are you planning to mitigate the coming payment reductions?
• Can we make the difference up through efficiencies alone or do we need to look to top-line solutions, too?
• What strategy have you developed to integrate revenue management into operations?
• When will we know if what we're doing is working?
Join Gorman Health Group Oct 6-7 in Las Vegas, for an exclusive event for MA health plan senior leadership, with responsibilities for finance, revenue management, and risk adjustment. We will share the best ideas we've heard from around the industry as well as our own thoughts for practical strategies for driving revenue.
This forum will offer actionable insight regarding:
• Performance optimization and efficiency
• Must-have investments in your STARS programs (that are often overlooked)
• A redesigned risk adjustment program that drivers higher, more compliant revenue
• A moving target: The components of capitation
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 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
America's Hospital Patient Safety Problem in 1 Awesome Graphic
The graphics geniuses at MedicalBillingandCodingCertification.net have come out with another of their charticles examining the American health-care system. The quick takeaway? "The United States ranks dead last out of 19 developed nations in preventable deaths at hospitals." The problem is preventable and the solutions pretty straightforward. The charticle is fascinating and scary. Enjoy.
Consolidation in Medicare Advantage and Prospects for Regional/Local Plans
In the past 12 months three health insurers have each acquired a Medicare Advantage HMO: HealthSpring (Bravo), WellPoint (CareMore), and Humana (Arcadian). Large plans are finding that acquisitions make more sense than investments in organic growth in certain markets, and that enrollment will be driven by millions of plan-friendly Baby Boomers and employers seeking to transfer risk for retirees to Medicare. Investors that sat on the sidelines the last couple years during the financial crisis now need to invest, many large players are sitting on piles of cash, and there are many opportunities in the fragmented MA market. So consolidation will intensify -- what does that mean to regional or local MA plans?
First, there's plenty of room in MA's pantheon for regional and local plans. It doesn't take much enrollment to make the Top 25 in Medicare Advantage given revenues for MA members typically run 4-6x what commercial members pay -- take Independence Blue Cross in Philadelphia. They have about 85,000 members and they're among that hallowed group. 10,000-12,000 members is generally thought to be the "magic number" in MA, where a plan achieves actuarial stability with an enrolled pool big enough to weather the inevitable million-dollar babies at end-stage.
If you're above that number today, you can likely endure and thrive through the next several years of ACA transition and consolidation by following some specific best practices, especially around risk adjustment and Star Ratings management. If you're not there yet, this is going to be a very challenging couple of years ahead.
The best ways for local/regional plans to offset the rate cuts in ACA is on the revenue side. Risk adjustment and Star Ratings management best practices are the keys to survival for local and regional plans, and the methodologies of each actually favor these organizations. The new state of the art in risk adjustment is the advanced prospective evaluation -- a health risk assessment on steroids, conducted in the beneficiary's home by a trained physician (see the many posts by my colleagues Dr. Jack McCallum and RaeAnn Grossman on this subject). It's a complex process, arranging the scheduling, executing the visits, reporting the data to CMS -- but one managed more easily by local/regional plans with assets on the ground than large nationals.
Star Ratings quality bonuses from CMS actually favor local/regional plans as they're calculated at the contract ("H-number") level. Large national insurers typically have sprawling MA service areas: United in California, for example, has an MA contract for the entire state, requiring United to coordinate with literally dozens of physician groups to improve their Star Ratings. By contrast, tiny GEMCare Health Plan in Bakersfield, with a 5-county service area and only a handful of provider groups, is far better positioned to secure its Star bonus than United.
On the downside, minimum Medical Loss Ratio (MLR) regulations can be harder for local/regional plans to contend with. Beginning this year the ACA requires health plans to spend 80% to 85% of premium revenue on reimbursements for clinical services and activities that improve health care quality. Further, costs associated with conversion to ICD-10 coding, EMRs and e-prescribing are harder for smaller firms to absorb. But harder doesn't mean impossible, especially with effective planning and local leadership.
In the end, I think we're probably looking at one-third fewer contracts in MA by 2016 -- 671 today, down to about 400 by then, driven by acquisitions and a hard-nosed CMS pushing weak performers out of the program. That leaves plenty of room for local/regional plans -- if they can execute as well or better than the big dogs, especially on the revenue side of the ledger.
I'll be speaking on this and related topics at AHIP's Medicare conference here in DC on September 13, and again September 26-27 at the Opal Events 3rd Annual Medicare Advantage Strategic Business Symposium. For more information, click here. Hope to see you there.
United Acquisition of Monarch Healthcare (CA): Marx Meets Managed Care, Again
The Wall Street Journal reported this morning that United Healthcare is acquiring our longtime client, Monarch Healthcare in Irvine, CA. The transaction is further evidence that Marx (Karl, not Groucho) has met managed care: a payer controlling the means of production in an intensely competitive market.
There have been several other payer/provider deals in the last few months confirming the trend: WellPoint recently closed its acquisition of provider-owned Medicare Advantage plan CareMore; in June, Highmark bought West Penn Allegheny Health System; last December, Humana bought Concentra.
Expect to see many more of these kinds of deals, for clear strategic reasons: with greater emphasis on performance-based risk contracting arrangements in the future of healthcare financing, and an emerging focus on the patient's experience of care, in many markets it just makes sense for payers to own their supply chain -- and the day-to-day faces of the health plan with its members.
PBM merging pharmacy and medical claims: The time is right
Pharmacy claims exist in a health plan in two distinct silos. Medical pharmacy claims are billed to the medical benefit using a professional claim format such as a CMS 1500. Claims are coded with HCPCs rather than NDCs and are generally much higher cost pharmaceuticals than their retail counterparts. Medical claims are generated by physician practices, home infusion suppliers, specialty pharmacies, outpatient clinics, and hospitals.
Retail pharmacy claims are processed, adjudicated, and paid by a PBM contracted by a health plan. These claims are processed in real-time at the point of service which is usually a retail pharmacy. Health plans receive adjudicated claims data for these retail claims from the PBM and are stored in data warehouse obscurity.
For most plans, the two data bases are not combined beyond the highest level of totals for the combined drug spend. Consequently, there is lost opportunity for plans to achieve comprehensive medication management and integrated case management. Pharmaceutical outcomes for most diseases are not independent of medical treatment. Without combining the data for both pharmacy claims and medical claims, it is impossible to monitor total drug therapy utilization and to evaluate the true cost of therapy.
By combining pharmacy and medical claims, the plan can evaluate opportunities for optimizing pharmaceutical care, for example before a patient is moved to a more expensive biological agent dispensed by a specialty pharmacy. The member may be receiving both retail and medical claims for the same condition. With medical and pharmacy claims data combined, current therapy can be matched up with nationally recognized treatment guidelines and recommendations can be made to providers. Health plans can better achieve clinical quality goals with a combined data set.
In addition, once the data are combined, both types of data can be reviewed for fraud, waste, and abuse. Outliers can be identified and sent to validation. Recovery of excess payments can occur. Trending and other opportunities can be identified such as finding duplicate billing both from the pharmacy and a physician's office, duplicate claims from a single provider, or other aberrant provider reimbursement patterns.
For many plans, particularly the smaller ones, the technical resources required for merging the two data sources often are not available. Combining medical and pharmacy claims is a service by which a PBM can bring added value to the plan.
The current PBM model of focusing solely on pharmacy claims needs to evolve into a more robust, comprehensive tool for plans to achieve better control of pharmaceutical outcomes. PBM platforms have the capability to fit the role. The time is right for the PBM industry to step up to the challenge of helping plans manage both improved outcomes and lower costs.
Medicare Advantage and PDP Plans Continue Robust Growth
The August enrollment numbers are in from CMS. 61,000 new MA members in August and 544,000 year-to-date. MA and PDP plans continued their robust growth on pace to exceed 2010's enrollment gains. Year to date it appears Boomer "age-ins" are continuing to choose MA at a higher rate than their forebears -- more than 40% for the last two years. With major MA/PDP sponsors like Aetna and HealthNet now relieved of marketing and sales sanctions from CMS, MA enrollment growth may exceed 7% for the year.
The story behind the numbers is clear: MA plans are adjusting just fine to the "new normal" post-ACA. Benefit designs have held relatively steady, and plans are making big investments in better revenue management, like mastering risk adjustment and the new Star Ratings bonuses, to offset the ACA's cuts. Many are revisiting their entire service model in response to Stars, recognizing that keeping members is the new selling.
At the pace we are on, MA will hit 15 million beneficiaries sometime in 2016. But that of course assumes Congress and the debt reduction "supercommittee":
- don't require another pound of flesh from the plans in whatever deal they hatch up in November
- get the Medicare physician pay fix enacted permanently. There's an enormous price tag of over $300 billion over 10 years for this, but without it, MA rates could be cut another 7% in 2013 and beyond. This is the single largest threat facing the program in the next several years.
Let's hope the noble experiments in creating insurance markets that are MA and Part D are allowed to continue when Congress reconvenes in September.
Blowing up the "Health Insurance" Service Model
In the 15 months since ACA passed, MA plans have scrambled to improve their Star Rating. Nothing motivates like the promise of a 5% premium bump in an era otherwise marked by dramatic payment decline. Also motivating: CMS appears to be making initial steps towards delivering on intimations that low-rated plans will have their contracts terminated.
Early efforts in the Stars focused on HEDIS scores and for good reason. Much of domains I and II are process and outcome-based HEDIS measures. But with C and D ratings taken together, less than 20% of the ratings are actually driven by these clinical targets. So where's the beef?
It's the service model. HEDIS aside, fully half the measures can be traced directly back to the service model--- and we're not talking call center hold times. The reliance on subjective survey measures for much of the Star scoring and the role of the service center in driving member compliance with clinical activities point to the increasing value of the relationship members have with the plan--- for better or worse.
This week, noted power point gurus Accenture released the results of a consumer survey regarding health insurance. The report shows that nearly half of insurance customers would be willing to pay more for health insurance that caters to their needs. Two specific items stood out to me:
- 85 percent of those surveyed rated interaction with knowledgeable employees as highly important, yet fewer than 50 percent were satisfied with current experience;
- More than 80 percent said dealing with one contact to resolve issues was important, but 60 percent said they currently were transferred to multiple contacts to resolve issues.
This sounds like the best very best rationale for the "Concierge" customer service model we've put in place at a few plans over the years. In the Concierge model, every member is paneled to a specific Rep, who also is tasked with making frequent, targeted and data-driven outreach to their panel. In other words, don't wait until the customers are unhappy until you talk to them. And while Concierge programs have proven to be no more expensive than traditional inbound models, this survey implies that your members would even pay more for it.
This is what Dumb Looks Like
The poster tells the story behind the photo: "This is a printout of a patient's medical record, sent from one office to another as the patient was changing primary care providers. An EHR was in place in both offices. Additionally, the EHR in both offices was created by the same vendor (a major vendor); each health organization had a customized version. Without base standards the systems are incompatible. Instead, the printouts had to be scanned into the new record, making them less searchable and less useful."
The tech world calls this "digitizing paper processes." The Army calls this FUBAR. Regardless of your preferred observation, it's clear that EMR/EHRs are not yet delivering on their promise. In our Star Ratings practice, we have seen plans and providers struggle with creating Atul Gawande-style checklists that can be tied to a patient record as a paper list might be paper-clipped to a physical record ("Advise on smoking cessation? Check. Flu shot given? Check.). And while we're not going back to paper, the undelivered-promise almost makes one nostalgic for paper itself, one of humankind's top 5* inventions: It's cheap, it doesn't need to be upgraded, it doesn't crash and it best facilitates open, creative thinking by allowing the user to move seamlessly between writing and drawing.
*My other 4 are the wheel, the drum, clean running water and fermented beverages. Fire doesn't count because it was a discovery, as was electricity.