The Future of Medicare Advantage
The Alliance for Health Reform and the Kaiser Family Foundation (KFF) sponsored a meeting on the Future of Medicare Advantage (MA) on the day that KFF reported that MA enrollment had reached a historic 28 percent of the Medicare population. A major theme of the conference was whether MA enrollment could be sustained or increased in the face of substantial ACA budget cuts in the next few years. The discussion took place against the backdrop of substantially revised Congressional Budget Office (CBO) projections in their May 2013 Medicare baseline that modified a prediction that MA enrollment would decline to 11 million by 2017 to a new assumption that MA enrollment would increase to 21 million by 2023. CBO did not explain their shifting opinion and the panelists had no inside information on the CBO assumptions.
Most of the discussion was optimistic that MA enrollment could be sustained if not increased even in the light of budget cuts. MA plans are projecting enrollment increases of 9-10 percent for 2014. Mark Miller of MedPAC cited analysis that MA bids have come down in recent years (e.g. MA plan bids are 96 percent of FFS costs on average and HMO bids are 92 percent) suggesting that MA plans could continue to successfully compete against Medicare FFS even in areas that will be paid at 95 percent of FFS. Carl McDonald cited 2010 as a historical precedent when MA plans were able to manage large program cuts by lowering costs. He also noted research shows that current Medicare enrollees are very loyal and do not leave their plans even when premiums are increased or benefits reduced. Alissa Fox from the Blue Cross and Blue Shield Association argued that plans will have a hard time absorbing all of the upcoming cuts and that their Association is lobbying for Congress to repeal the upcoming $100 billion tax on insurers. George Strumpf of Emblem Health says he was pessimistic about future MA enrollment and reminded the audience of the experience in the late 1990s when budget cuts drove half of the Medicare managed care plans from the market.
I was at CMS when the Medicare managed care market practically collapsed and I hope that will never happen again. The environment is very different now and will be in the future. For example, demographics have changed and baby boomers who are experienced with managed care can be expected to choose a private plan when value can be demonstrated. MA plans have more of an incentive to stay in the program since governmental spending is now a significant and growing part of their business. Even if some plans leave the program because they are unable to manage the cuts, there are a large number of plans available in the market so beneficiaries will not have to return to FFS Medicare. But more importantly, for the foreseeable future, the FFS program is expected to remain unmanaged and inefficient and thus most MA plans, even if they have to raise premiums and reduce extra benefits, will be able to successfully compete with FFS and its unpredictable high out of pocket costs or FFS with high priced Medigap supplemental policies
Resources
Visit our website to learn more about how Gorman Health Group can help support your Medicare Advantage goals.
No matter what delivery system arrangement you currently have, or what course you intend to pursue, GHG can help. Visit our website to learn more.
New in our Reality Check Webinar Series!
Complimentary Webinar June 25: "How Medicare ACOs and Other Risk-bearing Provider Organizations can Transition to Medicare Advantage"
Drugs and Patient Safety - the Disconnect
The recent Washington Post piece published May 11, 2013, on the prescription drug dangers for Medicare patients raises some interesting points about the current prescribing habits of some outlier physicians/prescribers, as well as the lack of a coordinated effort to exclude those same prescribers from participating in Medicare.
The use of atypical antipsychotics (identified by CMS as protected class drugs) in the elderly is particularly troubling in light of numerous studies and a FDA Black Box Warning which states in part "Elderly patients with dementia-related psychosis treated with atypical antipsychotic drugs are at an increased risk of death compared to placebo. Although the causes of death were varied in clinical trials, most of the deaths appeared to be either cardiovascular (e.g. heart failure, sudden death) or infectious (e.g. pneumonia) in nature." Those with family in Long Term Care facilities or those working in LTC settings know that the staffing model is dependent on quiet, non-disruptive patients—unfortunately atypical antipsychotic medications are often used to ensure that scenario.
The High Risk Medication list or revised Beers criteria is one of the Part D performance or Star measures. Part D sponsors have been fairly successful in the past couple of years at deleting these drugs from the formulary or adding a CMS approved prior authorization edit for > 65 years old. Has this completely eradicated the use of drugs like carisoprodol (Soma) or cyclobenzaprine (Flexeril)? No, but physicians do have to provide a medical necessity explanation or describe why the benefit of using the drug outweighs the risk.
More troubling and potentially in most need of action is the inability to exclude those "prescription mill" physicians/prescribers from participating in Medicare. The data available to plan sponsors listing the highest volume opiate prescribers is actionable information. Where documented, proven and egregious prescribing behavior is found, State Board, Medicaid and Medicare exclusion should be a logical outcome and the best route to enhanced patient safety.
Resources:
Senior Consultant, Pharmacy Services, Roxanne Spalding dives deep into the barriers to medication adherence, for both providers and health systems, and outlines varied multi-faceted strategies to overcome them in this white paper.
Learn how GHG can help your MAPD or PDP develop and implement efficient and compliant internal operations and prepare effectively for CMS audits with professional services and unmatched compliance tools.
Gorman Health Group can help you develop unique and adaptable management programs for use across the many departments managing components of your Star Rating, visit our website to learn how.
Proposed Benefits Manual Changes
On April 25, 2013 CMS issued a proposed update to the Benefits and Beneficiary Protections Chapter (Chapter 4) of the Medicare Managed Care Manual. The CMS cover letter provides a good summary of the changes that they are proposing to make. Most of the changes are clarifications to existing policy, for example, providing Medicare Advantage plans (MA) with the option of charging beneficiaries higher cost sharing for non-emergency out-of-network services and prohibiting MA plans from imposing policies that prevent enrollees from accessing a Part B drug administered in a physician's office. CMS is removing the example of how total beneficiary cost-sharing (TBC) is calculated and instead stating that TBC requirements will be included in the Call Letter, as they did for 2014.
CMS is adding several items to the list of services that are not eligible to be approved as a supplemental benefit: electronic medical records and electronic data storage devices; loaner DME when rented or owned DME is being repaired since this is required under Medicare Part B; rewards and incentives used as marketing tools; brain training and memory fitness services since these services are not clinically accepted; and case management and care coordination services since these are required in all coordinated care plans.
CMS is adding two rules to ensure coordinated care that could result in new documentation requirements for some plans: (1) enrollees are informed of specific health care needs that require follow up and receive information to support and promote their own health and (2) systems are employed to identify and address barriers to enrollee compliance with prescribed treatments or regiments.
CMS is adding a definition of prior authorization and referral including a clarification that a coordinated care plan cannot require a gatekeeper referral for out-of-network dialysis. CMS is also clarifying renewal policies to allow a non-segmented plan to renew as a segmented plan or to consolidate into a segmented plan and ask to transition current enrollees to plan segments.
CMS is clarifying benefits during disasters so that CMS may use waiver authority to authorize Medicare Administrative Contractors to pay for Part C services and have the Contractors seek reimbursement from MA plans retrospectively.
Resources:
Get access to the same tools and analysis our consultants use to stay on top of their game, get the Point today.
Attend the 2013 GHG Forum and hear from the experts about the integrated strategies you must implement to ensure success across government health care programs.
Sign up for the Point and get direct access to more regulatory summaries from Jean LeMasurier.
Medicare Essential — Is this the future of Medicare?
According to The Hill's Elise Viebeck President Obama is receptive to combining Medicare Part A (in-patient hospital) and Part B (outpatient and doctor) deductibles, into a single deductible just like every other insurance scheme in the US. Predictably those to his left complained, maybe because Virginia's Eric Cantor also likes the idea. The impact would raise the deductible for people who use only physician services, lower it for anyone who is hospitalized, and, net, save Medicare money by shifting more costs to beneficiaries. However, some of the savings would also be used to add an annual out-of-pocket cap on what beneficiaries would have to spend. This is good insurance logic: don't cover relatively low cost, predictable expenses. Focus coverage on protecting beneficiaries from catastrophic loss.
The combined deductible idea is echoed in a recent article in Health Affairs that proposes unification of Parts A and B, and Part D drug benefits. The Health Affairs article also proposes reducing beneficiary cost sharing to levels comparable to Medicare Advantage plans, eliminating the need for Medicare Supplemental coverage. The new Medicare plan, called Medicare Essential, would become the default for people who qualify for Medicare for the first time. New Medicare beneficiaries could opt out and take old traditional Medicare, and go buy their own Part D and Medicare Supplement plans, or they could buy Medicare Advantage plans. Medicare Essential would have a much higher premium than Medicare Part B, but the authors of the article claim that the overall cost would be less than Part B plus Part D plus the full-coverage Medicare Supplement Plan F that most seniors select. So proponents could argue that the added cost of the increased premium is a bargain and that people could always opt out and avoid the higher cost if they wanted to. Medicare Essentials could show significant savings by avoiding the broker commissions that add to the cost of Medicare Supplemental and Medicare Advantage plans. Whether the new program would be able to achieve the supposed 2% administrative cost ratio sometimes claimed for Medicare is highly suspect, but elimination of the need to re-process claims to pay Supplement benefits, along with simplification of coverage rules overall, would probably yield some further efficiencies.
This proposal could significantly change the dynamics of the Medicare market place. For starters, Medicare Supplemental plans would be in trouble. Who would opt to pay more for similar coverage when you are already enrolled in a less expensive plan? Also, it's not clear whether Part D plans would survive for long if Medicare Essential provides the same drug coverage. The effect on Medicare Advantage is less obvious, but Essential would certainly put pressure on Advantage premiums, since the benefits would be comparable.
For those who want to speculate further, imagine a competitive marketplace along the lines of Paul Ryan's plan, but with Medicare Advantage plans competing with Medicare Essential. In the competitive market, the federal subsidy would equal the premium of the second cheapest plan in each market, and the current benchmark approach would go away. Beneficiaries choosing a more expensive product, whether Medicare Advantage or Medicare Essential, would pay the difference. People who pick the cheapest plan get a check for the difference.
Oh, and one more thing. Medicare Essential benefits would be more generous for services provided by preferred providers, just like a PPO benefit design.
This is something to watch. The Health Affairs article, available to subscribers, or to others for a fee, is titled "Medicare Essential: An Option to Promote Better Care and Curb Spending Growth," in the May 2013 edition.
Resources
Attend the 2013 GHG Forum June 13-14 in Washington, DC to hear more about Medicare's Future and what it means for Medicare Advantage.
Visit our website to learn how Gorman Health Group can help support your Medicare Advantage goals.
Medicare Shared Savings Program Circa 2014
Anyone who has paid attention knows that since 2011 more than 200 Medicare ACO's have been operationalized. If you add in commercial ACO's, the number is closer to 400.
Still sitting on the fence wondering if ACO's will survive? Consider this, the underlying construct for a Medicare Shared Savings ACO is to promote accountability for care of Medicare Fee for Service (FFS) eligible beneficiaries, to improve coordination of care under Medicare Part A and B, and to encourage investment in infrastructure and redesign in care processes. Not a bad set of goals when it comes to patient care under any circumstance, right?
So why not seriously consider whether an ACO initiative is right for your organiztion?.
If you are interested in pursuing a Medicare Shared Savings ACO, the first step in that process is to file your Notice of Intent, (NOI). You can file that notice anytime between now and May 30th, 2013.Keep in mind that it is non-binding, but by doing so; you get a seat at the table. After you fill out the NOI, you will receive a confirmation notice from CMS containing your ACO ID number, which will be needed to complete the CMS user ID form required to submit an application. The due date for obtaining and submitting a User ID form is June 10th, 2013. It takes up to three weeks for CMS to process your User ID form so the form should be filed immediately after you file the NOI. In other words act early.
Once processed you can now begin to work on the actual application, which is due anytime between July 1st and July 31st, 2013.
Upon reading this blog, don't go out and look for the application on the CMS website because you won't find it. CMS has announced that it will post the application sometime in June of 2013. However, don't let that deter you from beginning to pull together content for the various application components.
Having helped multiple interested organizations in successfully filing ACO apllipcations during the last two years, and actually serving on the board of a currently operational ACO, we know what CMS is looking for in respect to application content. We also know what the challenges and lessons learned are with respect to ACO implementation.
If you are interested, contact us today. We know we can help you.
Resources
Attend the 2013 GHG Forum, June 13-14, in Washington, DC and hear from key decision makers at cutting edge ACOs across the country about lessons learned during their organizations' evolution — from conception to execution of varying ACO models.
Read more on ACO opportunities in our white paper on the topic.
Read about how three Gorman Health Group clients were approved by CMS to become Operating Accountable Care Organizations.
QHP Submission Reprieve
OK, so maybe reprieve is not the right word, since according to Google it is defined as "a cancellation or postponement of a punishment". If you consider a deadline a punishment, then I suppose this is a reprieve, but I digress.
HHS sent out an email Thursday night informing the industry that those issuers who have begun the QHP application process as of 8 pm, will be considered as having met the deadline. This was subtly inserted at the start of the third paragraph so look again if you missed it. This doesn't mean you should rest on your laurels; they expect everyone to attempt to correct and submit all required pieces by 8pm tonight.
Issuers who have completed submissions and would like to submit a petition requesting a Limited Corrections Window must do so by 9pm EDT (formerly 5pm EDT) on Friday, May 3rd by sending a signed letter to CMS_Issuer_Communications@cms.hhs.gov with the subject line "QHP Data Correction Request" and specific HIOS Issuer ID(s), as outlined in the instructions distributed on Monday, April 29th.
If you are trying to decide if you need to submit a petition, CMS states that if you are simply having technical issues with the uploading and the physical acceptance of your documents, then you do not need to do a petition, but instead you have a new window of this coming Monday until 11:59PM Eastern in order to try to get the system to accept your documents. (Remember, HIOS is down this weekend for maintenance.) According to how CMS is responding to Issuer questions on their Open Q&A call, it sounds like they want the petition process reserved for non-technical corrections on completed submissions, such as last minute content changes, or if you just received clarifying guidance and now need to change something that has already been submitted.
Issuers are asking "Well what if we still have technical problems on Monday and didn't submit a petition?" and "Will you have an Open Q&A call on Monday?" At this point, CMS is taking the "We'll-Cross-That-Bridge" stance, so stay tuned.
Resources
Don't let the application process get in the way of your organization's goals. Learn how Gorman Health Group can help ensure you have a smooth and compliant process.
So You Want to File a QHP Application
This will be the title of my instructional pamphlet that I envision sitting in a doctor's office, among other great pamphlets such as "Talking to Your Kids about Drugs" and "Depression: Not Just a Hole in the Ground".
Many of you reading this may also be in the midst of QHP uploading, on the receiving end of such terms as Error, Failure, Pending, and Invalid. Not what you'd call a walk in the park. I had a dream last week that President Obama himself told me personally that the QHP submission deadline would be extended. Anyone else required to eat, sleep and breathe this submission knows what I'm talking about. The message I'd like to send to anyone reading at CMS is this: we are trying. The industry is trying. We would be dismayed to see consumer choices limited due to trivialities such as technical errors.
That being said, my team is grateful for the additional days that CMS granted for the FFM submissions. If your organization falls short due to one of the reasons outlined in CMS' memo, make sure that you submit a detailed petition to CMS by 5:00 PM Eastern Time on Friday, May 3. It must be signed by an officer of the company and include:
- The specific data elements that need correcting
- The HIOS issuer ID(s) in question
- The reason why the data elements must be corrected
- Evidence that documents the issuer made timely and good faith attempt to address the issue at least 48 hours prior to the new deadline, that is, as of May 1, 8:00 PM Eastern Time. Help desk ticket numbers, screen shots, send it all.
Anyone willing to share their battle stories once you are on the other side of the deadline (Friday May 3 at 8:00 PM Eastern Time), feel free to email me. There's satisfaction in knowing you are not alone in Navigating this maze. (Yeah, you see what I did there.)
Resources
Don't let the application process get in the way of your organization's goals. Learn how Gorman Health Group can help ensure you have a smooth and compliant process.
Health Insurance Premium Guessing Game
Health insurance issuers are generating enough fodder for a good guessing game. Will Obamacare increase rates for individual insurance or not? And if so, will the increase be modest or catastrophic. Writing in the April 25 edition of the Washington Post, Ezra Klein reports that the Blues plan that serves the national capital area is warning of big increases in individual premiums. The cause? More sick people are going to get health insurance, now that the pre-existing condition limitations have been removed by the Affordable Care Act. But is that the whole story? Klein also reports that insurance companies in Vermont and Rhode Island are projecting a more modest impact in announcing their proposed 2014 rates. But in Massachusetts, where "Obamneycare" has been in place since 2006, individual premiums are the highest in the nation.
The individual mandate, which gives people the choice of either getting insurance or paying a tax, is supposed to stimulate enrollment of healthy people who might otherwise go without coverage until they get sick. Why not, since they can't be denied due to preexisting conditions? But the tax is less than the premium, so its anybody's guess how effective the mandate will be in bringing low risk people into the insurance market.
Until we see how enrollment pans out this fall, and how many healthy people dive into the risk pool, there's no way to know how big an impact the sick will have on premiums.
One thing Klein overlooked is that individual insurance will be sold both in the new health insurance exchanges (which the Feds are now calling "marketplaces," a terminology change the rest of us are ignoring), and in the open market. Klein rightly points out that the impact of higher premiums will be ameliorated for many people by the subsidies that they get through the exchanges. But those who don't qualify for the subsidies, whether they buy through exchanges or in the marketplace outside, will bear the full brunt of any premium increase. These are the folks who, if they are healthy, may well prefer to pay the tax and go without.
The Administration is gearing up for a major public relations campaign to publicize how health insurance will work for individual purchasers in 2014. We hope they will include a strong message about the importance of buying health insurance, even if you are healthy. While you may not be denied due to a preexisting condition, lack of insurance still leaves you open to catastrophic costs due to accident or unforeseen acute illness.
Health insurance: It's not just a good idea, it's the law!
Resources
Gorman Health Group policy expert Jean LeMasurier provides a summary of proposed rules from the Department of Treasury, IRS and OPM regarding the implementation of health reform.
The Exchanges will create a large risk pool that will allow risk to be managed more effectively with reduced administrative costs, read this white paper for estimates from the Congressional Budget Office (CBO) and more.
To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.
Attend the GHG Forum, June 13-14 in DC, and hear from the nation's recognized leaders in health reform implementation and ongoing development of exchanges about the challenges facing both the government and private partners pre-launch, plus what lies before us in 2014 and beyond.
Uneven Funding Provides Opportunity for Agent and Brokers in Federal Exchanges
It seemed like everyone in Washington last week was discussing the upcoming outreach and enrollment prospects for the federal and state exchanges. Kaiser Family Foundation held a forum on Consumer Assistance that emphasized the uneven funding among states in the first year and the need for coordination among the various types of assistance programs. Several Congressional hearings and news articles also focused on the large discrepancy in funds for Navigators and In-person Assisters that will be available in state-based Exchanges and Consumer Partnership Exchanges compared to the Federal Exchange (FFE). HHS announced the availability of $54 million for Navigator grants for the 33 Federally operated and State Partnership exchanges. The Navigator grants range from $600,000 per state to over $8 million based on a formula that considers the size of a state and the number of uninsured. There will be no funds available for In-person assistance programs in the FFEs. In contrast, State-based Exchanges can use federal Exchange grant funding for their Navigator and In-person assistance programs. California expects to spend $43 million, New York will spend $27 million and Maryland will spend $25 million on outreach, and enrollment and application assistance for Navigators and In—person assisters. Ohio with 1.5 million uninsured will receive a $2.2 million Navigator grant and will not have a consumer assistance program.
The gap in Navigator and consumer assistance funding in Federal Exchanges offers an opportunity for agents and brokers to serve a more critical role in helping the uninsured understand their options and enroll in Exchange products.
Resources
To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.
Gorman Health Group SVP of Public Policy, Jean LeMasurier, summarizes the proposed CMS regulation CMS-9955-P- Patient Protection and Affordable Care Act; Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel.
To get more information on how Gorman Health Group helps onboad sales agents in one easy step, visit our website.
Employer Health Coverage Post Recession
A new report on employer sponsored health insurance issued by the Robert Wood Johnson Foundation shows some interesting trends in coverage post-recession. "State-Level Trends in Employer-Sponsored Health Insurance"
The overall trend in employer health insurance coverage has been on a downward slide for several decades and that trend is continuing. In 2000, almost 70 percent of non-elderly workers got their health coverage from employer plans but by 2011 the percent fell to 60 percent. Interestingly, it wasn't just because the number of employers offering coverage declined by 6 percent, but also because 5 percent fewer workers who were offered coverage actually enrolled. It seems that the intersection of the recession and the cost of health insurance created a perfect storm. The report found that premiums for family coverage increased by 125 percent over the last decade, and even though the employee share remained fairly constant, the net impact on worker's out-of pocket costs was dramatic, increasing from $1,526 to $3, 842. The decline occurred in 47 states but the impact varied dramatically by state. Michigan, which was hard hit by the problems in the auto industry and other economic woes, led the way with a decline in employer sponsored coverage of over 15 percent. The study found that while employer coverage declined for all income groups, the impact on the lower income groups was disproportionately greater.
These trends will be interesting to watch with the launch of the Exchanges in 2014. The report raises an interesting question about whether small employers will increasingly shift to self-insured plans rather than offer insured plans through the SHOP Exchanges. If that is the case, there could be possible adverse selection for employers who use the SHOP plans.
Resources
To learn how Gorman Health Group can help your organization get involved in the Exchanges or other government programs, visit our website.