This Is the Year to Get It Right
Five consecutive years of very similar audit protocol, continuous partnering with sponsors to identify improvements, and numerous best practice/common conditions memos. Where are you in audit readiness? Did you evaluate the items in the 2016 Readiness Checklist sent in November? I will get back to that! In the meantime, the Centers for Medicare & Medicaid Services (CMS) has started sending audit letters, so we are aware of sponsors and Pharmacy Benefit Managers (PBMs) alike who are prioritizing CMS' requests. Early bird catches the worm, am I right? Presumably these plans have larger enrollment, since they will only be required to provide rejected claims for the one month of January.
Some priorities have not changed: Formulary Administration, Compliance Program Effectiveness, Organization Determinations, Coverage Determinations, Grievances and Appeals, and Model of Care activities are all still part of the base protocol. CMS has committed to releasing pilot protocol to review Medication Therapy Management (MTM) as well as Part C Provider Network Adequacy. Why this additional focus?
- CMS' focus on the reduction of opioid use may be one aspect of piloting the MTM protocol.
- The additional focus on Medicare Advantage (MA) networks is critical. In the past, there was not a requirement to evaluate providers to determine if they were open to new patients or not. If they were contracted and credentialed, then they were used for network adequacy. That does little good for a new member who cannot access that provider.
If you haven't done so, it is time to circle the wagons. CMS is managing a continuous cycle of new audits, audit report finalization, corrective action plan (CAP) review, and validation requests for a variety of sponsors. You cannot change past data, but you can put in place changes that could make improvements for you going forward. Nothing is more important (arguably) than ensuring your Compliance Program is strong. If you have a robust (and documented!) system for auditing and monitoring, you have a greater chance of finding shortfalls before CMS does. Earlier, I mentioned the 2016 Readiness Checklist, which was released on November 20, 2015. This is the sentence that keeps me up at night:
Should you identify areas where your organization needs assistance or is not/will not be in compliance, your organization must report those problems to your Account Manager directly by email in a timely manner.
While this could be viewed as a requirement to notify CMS upon checklist review (which should have been done prior to 1/1), a conservative interpretation would state that at any time, should you identify areas where the organization won't be in compliance, the organization must report to the Account Manager. If you look at it that way, then anything on that checklist pertinent to the program audit areas and identified as non-compliant in your audit period best be indicated as disclosed and not self-identified. Otherwise, CMS might ask why they didn't know about it prior. If you have not received an audit notice yet, do yourself a favor and evaluate your recent disclosures. The list you send to CMS will encompass items from January 1, 2016, through the start of the audit notice.
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Risk Adjustment: Proposed Changes & New Regulations
At Gorman Health Group (GHG), we pride ourselves on having our fingers on the pulse of what continues to be a complex and volatile government programs environment. Whether it is fact or fiction, our clients and our peers look to us to interpret and filter through the official announcements, the breaking news, the propaganda, and the hype.
Being accountable for GHG's Risk Adjustment division keeps me and our team of consultants quite busy, and just when other departments get to breathe for the holidays, we are inevitably fielding questions and providing "home stretch" support to clients as they prepare for the final submission of risk adjustment data. (In case you missed it, CMS published this memo outlining extended deadlines for data submission.) See full memo here.
If you live in the risk adjustment world, you know this critical business function never really takes a holiday. The Centers Medicare & Medicaid Services (CMS) calendar for data collection and submissions leaves little room for vacations, especially knowing risk scores recalibrate annually and the work to ensure complete and accurate diagnostic data for Medicare Advantage (MA) beneficiaries requires a watchful eye at all times. The reality is, either your hair is on fire, or you just sent the guy in the cube next to you out to refill your propane tank.
Whether we are in the trenches with our clients, or supporting them from afar, GHG is always keeping an eye on what is coming next. So, while you were collecting charts and checking them twice, and making sure your In-Home Assessment vendors were sending information to your Case Management department, here is what has been coming across the wire…don't worry, we have been keeping tabs on all of the critical activity in the risk adjustment space:
October 28, 2015: CMS announces proposed changes to the CMS-HCC Risk Adjustment Model for Payment Year 2017 which would apply "improved predictive ratios" for full benefit and partial benefit dual-eligible beneficiaries.
November 4, 2015: CMS admits to having underpaid dual-eligible health plans and, in turn, overpays for beneficiaries with low medical costs, sparking concern not only about inequities in payment, but the potential for adverse selection.
December 2, 2015: CMS released an early preview of 2017 MA Ratebook Growth Rates, signaling a hopeful bump in MA plan payments due to a 3.1% increase in traditional Medicare spending in 2017. This is one variable in the equation. Risk adjustment calculation changes and other policy changes will complete the puzzle. More to come on February 22 when CMS releases the Advance Notice for 2017. Stay tuned.
http://www.modernhealthcare.com/article/20151202/NEWS/312029999
December 28: CMS released a Request for Information outlining the expansion of Medicare's Recovery Audit Program in an effort to identify instances where Medicare is overpaying.
http://www.modernhealthcare.com/article/20151228/NEWS/151229937
January 14, 2016: The Medicare Payment Advisory Commission (MedPAC) voted to pass recommendations which would change how MA plans are potentially paid, potentially saving CMS $5 billion and revealing its position on In-Home Assessments and Star Ratings Quality Bonus Payments.
http://www.modernhealthcare.com/article/20160114/NEWS/160119925
January 22, 2016: This one has a bit of a political spin to it, but we thought it was worth reporting. AHIP released a funded analysis conducted by Avalere Health, finding the risk adjustment model used by CMS "lowballs" the cost of treating chronic conditions such as depression, osteoarthritis, chronic pain, and rheumatoid arthritis by millions, and, in some cases, billions of dollars.
http://www.modernhealthcare.com/article/20160122/NEWS/160129948
Just like our consulting services and our analytics solutions, we assessed the current state of the Medicare risk adjustment industry, collected our findings, and delivered meaningful, actionable information which will keep our clients and readers informed and prepared for what lies ahead in 2017.
A more in-depth analysis and industry-leading commentary on the key announcements from CMS and MedPAC can be found in this recently created whitepaper.
For additional questions and inquiries about how GHG can support your organization's risk adjustment programs, please contact me directly at dweinrieb@ghgadvisors.com.
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Network Adequacy Top of Mind for CMS
The Centers for Medicare & Medicaid Services (CMS) continues to reinforce its focus on health plan provider networks with several recent announcements.
The release of the new Network Management Module (NMM) within the Health Plan Management System (HPMS) is the tool CMS will utilize for monitoring network adequacy. The NMM functionality allows both CMS and organizations to evaluate health services delivery (HSD) provider and facility networks separate from the annual application process. The NMM employs the same evaluation criteria and calculations currently used by the automated network review portion of the Medicare Advantage (MA) initial and Service Area Expansion (SAE) application process. Please note organizations can access the NMM functionality to submit their network tables for an "organization-initiated" automated review. Results generated for an "organization-initiated" review will only be available to your organization and not be viewable by CMS. Our subject matter experts at GHG are able to assist plans in utilizing this new functionality as part of an overall network audit and maintenance policy plans should adopt to continually assess how their network, as its largest asset, meets the goals of the organization.
Additionally, CMS released the Draft 2017 Letter to Issuers in the Federally-facilitated Marketplace (FFM) on December 23, 2015, and is proposing new policies on network adequacy and monitoring to provide more transparency and detail to be Qualified Health Plans (QHPs) in an FFM to fulfill the requirements to provide reasonable provider access to their members. Plans have the ability to review the draft letter and provide comments back to CMS by January 17, 2016. We have provided a link to the full draft letter, and, as with MA plans, Gorman Health Group (GHG) has the ability to manage your network adequacy reports and audit for all QHPs.
Lastly, on January 13, 2016, CMS provided training on the summary of changes to the 2017 MA applications. One of the key points addressed is the SAE application will require HSD Tables for the entire Medicare Advantage Organization (MAO) network at the contract level, not just the counties the application is proposing to expand into with the SAE request. The change comes as CMS has indicated plans should have tighter control on their existing provider networks to ensure adequacy is met over the life of the contract.
At GHG, we have experts who have worked directly with managing provider networks and adequacy for over 20 years, including detailed analytics such as specialty code mapping and software which is critical in building the infrastructure needed to fully support the quality and financial goals the network brings to your health plan. Please reach out if we can provide guidance regarding the rules and regulations for all government-sponsored health plan networks.
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Issues That Will Define Government Health Programs in 2016
The new year brings a slew of issues that will define government-sponsored health programs. Here's what we're watching closely, not necessarily in this order. Opportunities have never been greater in Medicare, Medicaid, and ObamaCare, but execution risk is rising fast. If this was an easy business, we'd be out of business.
Drug Pricing: Prospects for a legal fix in Congress is questionable, and this will be a leading issue in the Presidential campaign. Expect administrative action, demonstration project solicitations from the Centers for Medicare & Medicaid Services (CMS), "comparative effectiveness research" by federal agencies on specialty drugs, and "collaborative pricing" initiatives between pharma manufacturers and payers on high-profile therapeutic classes. Health plan CEOs expect higher specialty drug cost trends to be the biggest driver of medical cost trend in 2016.
Medication Therapy Management (MTM): 2016 is the year MTM gets real. CMS will begin conducting widespread audits of Medicare Advantage (MA) and Part D plan medication reviews, and there is tremendous emphasis on MTM in the Star Ratings system. Making MTM real for your members will require extensive vendor contracting and Pharmacy Benefit Manager (PBM) coordination, so turn your plan's attention to this fast.
Antitrust/Mergers: Sometime in Q3 or Q4 of 2016, the Federal Trade Commission and the Department of Justice Antitrust Division will rule on proposed mergers for Aetna/Humana, Anthem/CIGNA, Walgreens/Rite-Aid, and Pfizer/Allergan. We expect all four deals to be approved but with strings attached; e.g., we expect Aetna/Humana will have to divest 250,000-450,000 lives to get a green light.
Star Ratings: Must be a central focus of all payers and providers in government programs. Star Ratings has transcended MA and Part D. Star Ratings data is already being collected by ObamaCare plans, and over a dozen state Medicaid programs are using CAHPS® and Star Ratings data in contracting with plans for dual-eligible and managed long-term care (LTC) initiatives. And while there aren't major changes to Star Ratings measures in 2016, scoring is the game-changer: 50% more plans will be scored for the first time this year, guaranteeing a shift right in the ratings bell curve and that many of 2015's 4-Star plans will go off the cliff. To maintain progress, plans must run Star Ratings as a program with dedicated leadership and execution spelled out at the workflow level.
Risk Adjustment: 2016 will usher in increased efforts to ensure payment accuracy through more stringent and expansive Risk Adjustment Data Validation (RADV) reviews, and so providers delegated for risk and sharing in a percent of premium will be in the spotlight. CMS is seeking to contract with third-party auditors on RADV, and risk adjustment is a top concern in the Department of Health and Human Services (HHS) Office of Inspector General (OIG) work plan.
Providers and Care Delivery: 2016 will be a transformative year with contracted providers in government programs. Narrow/preferred networks and value-based risk contracting will go mainstream this year, whether providers are ready or not. Huge penalties start this month on network adequacy and accuracy of provider directories, and NAIC's model guidance on provider networks will be a central document governing the issue. Star Ratings measures on access to care and the member experience put new heft and revenue behind network requirements. Provider-sponsored entities will provide a mini-surge of dozens of new plans into MA and Medicaid in 2016 and 2017, especially among Medicare Accountable Care Organizations (ACOs), so keep your friends close and your enemies closer. Home- and community-based services and alternatives to nursing homes will go mainstream in 2016. Retail pharmacies will become the second-most-important provider type for health plans. With crushing burdens of ICD-10 and meaningful use, small and mid-size practices will become overwhelmed and will underperform. Plans will need aggressive oversight, quality improvement, and directory management activities to stay ahead.
Exchange Payment: For the first time in two years, CMS is going to begin paying plans HIX 820s at the member level, which will shine a spotlight on enrollment reconciliation issues that have been lingering. The plans' readiness transition period is from January to March, then it gets real in April.
Medicaid and Dual Eligibles: Unexpected states like LA, SD, and IA are now considering Medicaid expansion. CMS is focusing on new Medicaid quality measures and will be depending heavily on NCQA quality measures to gauge health plans. This will impact payment and future membership for some lower-rated plans. Beneficiary opt-outs in excess of 75% are plaguing early dual-eligible demos, but many states remain in fiscal crisis and need to move ahead to balance budgets.
Compliance: 2015 was a near-record year in CMS enforcement actions, and scores always get settled with insurers in the second term of a Democratic administration. There will be a slew of rules coming from CMS this year as well as expanded audits from OIG. Both agencies' approaches indicate how critical documentation remains: CMS added a number of items to documentation requests for Compliance Program Effectiveness; Medicaid, dual-eligible, and LTC demos are still very documentation-heavy, and CMS found that approximately two-thirds of CMS-reviewed FFM issuer plan policies and procedures (P&Ps) were incomplete or had operational findings with their vendor contracts. So even though there is focus on data monitoring and passed/failed samples, P&Ps and documents are still the cornerstone.
There is no question that 2016 will be a banner year in government programs enrollment, and the long walk in the desert on payment rates in MA and Medicaid appears to be over. But execution risk and the enforcement environment have never been tougher. This year will be a "Darwinian moment:" it's not about being the biggest or even the smartest but being the most adaptable.
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New Hospice Policies Could Mean Big Changes for MA
Medicare's hospice care is garnering much attention and starting the evolution process this year. The Centers for Medicare & Medicaid Services (CMS) issued several new regulations changing hospice payments, and these regulations come with big implications for Medicare Advantage (MA) plans as well.
Last month, the Senate Committee released a policy options paper, discussing solutions for managing chronic illness. In the paper, the Committee proposed that MA plans be required to offer the hospice benefit currently provided under Medicare Part A. Such a change would mean changes to the MA payment system in order to include hospice reimbursement. It would also come with the inclusion of additional measures under the Star Ratings system.
These proposals have been floated around throughout the years, however, with the inclusion of the new end of life talks and the evaluation of the Care Choices Model, this proposal has more teeth and may become reality in the next several years.
Medicare will now also pay for Advance Care Planning talks. Most Medicare beneficiaries and their families state they would like to be involved in end of life planning, yet these talks are often avoided because of the sensitivity of the subject, prognostic uncertainty, and, most importantly, lack of training or pathways for physicians to facilitate these talks. A small number of beneficiaries currently have advanced care directives. This year is an important test for this new payment in assessing whether the talks will have an effect on the care patients choose to receive and whether this will result in more frequent and earlier hospice admission.
Although these payments are small, this is a great opportunity for plans to lead more physicians to discuss end of life care and put plans at an advantage if approached correctly. More patients electing hospice care could lead to better patient quality and experience. Hospice care is more person-centered and tends to improve outcomes such as pain and satisfaction. At the same time, although plans would lose the patient's premium from the shift to hospice, they would also shift the bad claims experience due to the highly expensive end of life palliative treatments and unnecessary hospital care. However, due to the sensitive nature of the discussions, plans should establish a careful framework in their approach in order to contain patient satisfaction and quality.
This year also marks the launch of the Medicare Care Choices Model (MCCM) from CMS. The five-year model allows some hospice-eligible patients to access hospice care without having to forego curative treatments, the way the system is currently set up, and allows for providers to receive payment for this care. The program has some significant limitations: hospice providers will only receive $400 per month or $200 per month for those enrolled for less than 15 days. This means in order to be financially appealing, patients will receive much lower benefits than normally received through hospice treatment. However, it may set up a basis for continued advanced care discussions and lead to more patients electing full hospice care. Despite the low payment, however, the model received significant provider interest and will see a high level of participation.
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Health Insurance Marketplace — What's Contributing to the 2016 Enrollment Growth?
On December 22, 2015, the Centers for Medicare & Medicaid Services (CMS) released a snapshot report of the Health Insurance Marketplace Open Enrollment, capturing Marketplace enrollment from the beginning of Open Enrollment (November 1) through December 19 (Week 7 of Open Enrollment) for consumers who signed up for health coverage through the Healthcare.gov platform. Not accounting for the millions more selecting plans through State-based Marketplaces (SBMs):
- More than 8.2 million consumers signed up for healthcare coverage — 28% more than enrollment a year prior.
- Approximately 29% (about 2.4 million) are new consumers, while 71% are consumers renewing coverage.
- New consumers are over one-third higher than the number of new consumers who signed up by the deadline for January 1 coverage last year.
- More than 4 million people made plan selections between December 13 and December 19, which represents almost 50% of the cumulative Open Enrollment plan selections through December 19, 2015.
So what is contributing to the positive enrollment growth in the 2016 Health Insurance Marketplace?
While it is normal to see higher consumer demands during the weeks leading up to the January 1 effective coverage deadline, there are some other factors which may be contributing to the enrollment trends.
- Automatic renewal process — As part of the Federally-facilitated Marketplace (FFM) auto-enrollment process, generally, if consumers do nothing, they will be auto-enrolled in the same plan with the same premium tax credit and other financial assistance, if applicable, as the prior plan year. This provides consumers with a simple, familiar process to renew their coverage.
- Broker guidance and training— CMS is providing more guidance and instructional tips to brokers on how to engage consumers and simplify the consumer enrollment experience. This can been seen in:
- the numerous broker training sessions CMS hosted going into Open Enrollment,
- CMS provided enrollment tools such as the "Marketplace Application Checklist" brokers can use to help consumers prepare to complete their applications on Healthcare.gov,
- a new "For Agents and Brokers" link has been added at Healthcare.gov, making it easier for agents and brokers to get to the Agents and Brokers Resources webpage (http://go.cms.gov/CCIIOAB),
- and consumer research shared with brokers showing what drives consumers to take action.
- Customer awareness — The first Health Insurance Marketplace Open Enrollment period was longer than in future years in order to give consumers a chance to understand their options and make a selection (in addition to allowing further opportunity to beneficiaries impacted by hiccups in FFM enrollment functionality to complete enrollment). As we enter the 2016 plan year, enrollment processes and functionality are not only tighter, renewing beneficiaries are now more familiar with how to research coverage options and avenues in which they can enroll.
With Open Enrollment coming closer to the end, extremely high traffic is anticipated on Healthcare.gov specifically on the January 15 cut-off date.
CMS will continue to release snapshot reports for the Healthcare.gov platform throughout Open Enrollment. It is anticipated more detailed reports which look at plan selections across the FFM and SBM will be released by the Department of Health and Human Services (HHS) later in the Open Enrollment period.
For more Open Enrollment Trends:
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-12-22.html
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United Healthcare Potential Exit
Last month, United Healthcare (UHC) made an announcement that shocked the industry — it may leave the Health Insurance Marketplace if it can't become profitable by 2017. The company stated it expects to lose $490 million next year due to its participation in the Affordable Care Act (ACA) market. Standing by its comments, UHC pointed to "structural" problems with the ACA as the factor behind its unprofitability. Adding to the deterrent of the Marketplace business, the company stated it will stop paying broker commissions for Marketplace policies as well as individual plans not sold on the Marketplace. UHC's announcement is troubling, especially with recent news of the failing co-ops — 12 of the 23 co-ops have already closed their doors, and even the most profitable, such as Maine's Community Health Options who announced profits in 2014, have lost money this year.
So what are the structural problems, and should plans and consumers on the Marketplace be worried?
One major issue is, of course, the risk adjustment and risk corridor programs under the ACA. With Congress unwilling to increase funds for the program, health plans faced a huge hit in 2015, recouping only 13% of requested funds through the risk corridor program. Congress remains firm on its decision not to further fund this part of the ACA, which means the Centers for Medicare & Medicaid Services (CMS) will have to find alternate means if it wishes to assist plans with their losses next year.
Another big change the ACA brought is the inability to initially properly price for the incoming consumers. Insurers set rates without any risk factors or data on the incoming policyholders and did not anticipate the sicker populations who would flood the market. This issue will likely linger — with 12 of the co-ops folding, the big question in 2016 is, where will these consumers who made the companies unprofitable sign up? At the same time, there is still a large population of healthy, young individuals unwilling to sign up for the health plans despite the mandate. It remains to be seen whether the tax penalty of 2016 will be enough to steer individuals during the next open enrollment period.
The lack of flexibility in benefit design is also a consideration of health plans. Many see the current rules as a pill too large to swallow all at once — the sudden requirement for plans to accept all consumers with pre-existing conditions, remove lifetime maximums, and pay no less than 60% of medical costs may have been more than plans could handle in altering their benefit designs. Another issue is the grandfathering of plans not compliant with the ACA due to the famous line, "If you like your plan, you can keep it." California chose not to comply with this grandfathering requirement, leading to a higher number of healthy and risk-averse people already covered on catastrophic plans to sign up under the ACA. Other states, on the other hand, gained only the people who could now sign up because there was a prohibition of pre-existing conditions, leaving people with catastrophic plans and their squeaky-clean claims history to the individual market.
At the same time, the flexible open enrollment periods also created a disincentive for healthy people to sign up, while allowing individuals who are suddenly faced with medical claims to quickly jump onto a plan through loopholes in the rules. CMS is dialing back on one of these enrollment period loopholes this year by announcing there will not be an open enrollment period extension during tax season for those who learn of the steep penalty when filing.
Do these problems and UHC's warning mean the demise of ACA?
It is important to remember the Marketplace, as well as the individual market, is simply not the primary business of UHC. While several months ago UHC announced it may expand its Marketplace presence in more states, this announcement they may do the opposite and pull out of the Marketplace could mean the exit of co-ops and the imminent mergers have made UHC re-focus on its main bread and butter business instead — the group market. Most of UHC's profits come from group sales of employer-sponsored health plans. UHC started out its participation in the ACA in only a handful of states, with conservative premium offerings, and only cautiously increased their market last year. This approach means UHC has a small risk pool, and dipping their toes in the Marketplace water could have hurt them in the long run. At the same time, despite the cautious entrance into the Marketplace, start-up costs to create these new plan offerings were no doubt substantial, and the small population who did choose UHC likely did so for the brand recognition — in other words, consumers who knew they would incur more claims and needed better plans. At the same time, with the mergers going through next year, the Marketplace is not going to be UHC's game―their focus will be group plans, while Humana and Aetna will likely dominate the Medicare Advantage space; Cigna and Anthem and the blues, the individual market.
At the same time, CIGNA and Aetna, while acknowledging they also did not profit from the Marketplace, stated it's way too early to call for an exit from the Marketplace. And the program was not without its winners in 2014. Looking at companies who had to share their profits in the risk corridor program in 2014, for example, plans in California were big winners — namely Blue Shield of CA, Kaiser, and Anthem Blue Cross. This could be due in part to the number of young individuals in urban areas who did sign up for coverage in California, marking the success of the Covered California campaign, as well as not setting premiums as aggressively as possible in the past year.
What we do know is, this open enrollment period is crucial for CMS. While CMS already announced they anticipate low enrollment numbers, it is vital to the success of the ACA that these numbers include the healthier and younger individuals who have yet to sign up for a plan and are not deterred by the tax penalty.
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Agent Commission: Don't find yourself on the wrong end of the tipping point
Agent compensation for Medicare Advantage has changed drastically since the implementation of the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008. MIPPA included regulations, for the first time, around Agent/Broker Commission - among many other things. The goal of implementing commission requirements was to ensure there was a level playing field between plans by implementing the Fair Market Value (FMV) limits, thereby removing the incentive for agents/brokers to enroll a beneficiary into the top-paying plan or to churn beneficiaries from one plan to another. Rather, the goal was to ensure the beneficiary was enrolled in the plan that best fit his/her needs.
So, how did it work? Well, for the most part, we have seen the requirements implemented and The Centers for Medicare & Medicaid Services (CMS) prescribed processes followed. However, we've also seen an increasing amount of instances in which plans are trying to get around CMS requirements. For example, by paying exorbitant "override fees" to the Third-Party Marketing Organization (TMO) for little to no actual services in exchange or by not pro-rating commissions per CMS instructions, an issue which we saw addressed twice by CMS via Health Plan Management System (HPMS) memo this Annual Election Period (AEP). See HPMS memos titled, "Agent/Broker Compensation," released on October 30, 2015 and November 20, 2015.
The reality is that CMS has been focusing their Program Audits in recent years on those issues which have direct impact on beneficiary access to care and has not routinely audited agent commission requirements for several years. Have plans taken advantage of the fact CMS has been focusing efforts elsewhere? Yes, we believe so. However, it appears CMS is becoming aware of the non-compliance around agent commission that is pervasive and even standard in the industry, evidenced by the multiple HPMS memos released this AEP addressing issues of non-compliance.
We know that in the past several years, CMS has exercised its authority by handing down Enrollment Sanctions and Civil Money Penalties (CMPs) for non-compliance. In fact, we see the current year-to-date total CMP amount at $4,719,220 — up from $1,131,505 in 2013.
So, the question is not if CMS will take action to address non-compliance around agent commission, the question is when. More importantly, when CMS does take action, on which side of the tipping point will your Organization land?
If you're not sure where to start, here are some recommendations:
- Review your agent/broker and TMO contracts to ensure the contract language is in compliance with CMS requirements — pay particular attention to the "admin fees" being paid to the TMO.
- Review actual payments made to agents/brokers to ensure the payment system is calculating the accurate amount based on current compensation schedules on file with CMS.
- Review actual payments made to agents/brokers when the amount should have been pro-rated to ensure the payment system is calculating the amount accurately.
If you have questions or need clarification regarding any of the information listed above, contact us here and a team member will be in touch with you shortly.
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Because They Can
The United States Senate conducted the first day of hearings Wednesday, December 9, on the high price of pharmaceuticals. The Special Committee on Aging is investigating the soaring prices of old drugs, including the overnight price hike of Turing's Daraprim from $18 to $750. Every day there is another press release about the egregious increase in pricing of a generic drug or a newly-released-to-market medication. U.S. drug prices are the highest of any in the industrialized world.
Drug prices and the strategies used to determine them are shrouded in secrecy. A recent Wall Street Journal article compared U.S. prices to Norway and several other countries. Pharma and biotech companies in the S&P 1500 average a net profit margin of 16% compared with an average of about 7% for all the other companies. Their rationale is usually they need that profit margin to support Research & Development (R&D) costs. That argument obviously doesn't apply for generic drugs. Pricing has nothing to do with recouping costs—it is a decision based on market research, competitor products, and shareholder value.
What's the answer? Doctors, insurance companies, hospitals, and Pharmacy Benefit Managers (PBMs) are all struggling to figure it out. Many healthcare policy experts are advocating for Congress to pass legislation which would allow the government to negotiate pricing especially for Medicare. Since there are more pharmaceutical company lobbyists in Washington, DC, than there are members of Congress, this could be an epic struggle.
These breakthrough treatments are invaluable to patients, but the costs for the patient and insurers can be exorbitant. What programs have you put in place to help your members adhere to treatments, minimize side effects, and empower them to understand their disease, and the drugs to help treat it?
Doctors are publishing and participating in dialogues about what the true value of a cancer drug is based on effectiveness and increased patient longevity. What is the true cost of a medication? If patients actually knew, could they make informed decisions about their options?
The Turing CEO may have just opened the can of worms that Pharma did not want to ever be seen. Greed and arrogance may be the catalyst Congress needs to implement meaningful changes. One thing we all know now―pharmaceutical and biotech manufacturers charge what they do…because they can.
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Senate passes bill repealing major provisions of Affordable Care Act
Last week, the Senate passed an Affordable Care Act (ACA) repeal bill, with a vote of 52-47. Although largely symbolic, this marks the first time the Senate has been able to pass such a bill.
The Senate voted on a bill previously passed by the House, however, because of the large number of amendments made by the Senate, the legislation now goes back to the House, where it is all but certain to pass. The White House already stated the President will veto any ACA repeal legislation, and because the Republicans do not have enough votes to override such a veto, this will be the end of the movement. Nonetheless, the Republicans will see this as a major step in their attempt to repeal the ACA, as it is the first time Congress will be able to get such a bill to the President's desk.
What's more interesting is the parts of the bill which gained some bipartisan support. For example, the "Cadillac tax" repeal amendment was overwhelmingly approved with a vote of 90-10. Although this amendment will not become law this time around, its repeal is already scheduled in talks in tax packages expected to be voted on before the end of the year. It is also unclear how the anticipated funding expected from the Cadillac tax would be replaced. It is estimated such a repeal would remove about $90 billion from the ACA over 10 years, however, the Senate's tax repeal would not go into effect until 2015.
The passage of the bill also gives a glimpse into the Republican's ACA repeal agenda should they win the White House bid next year. Some of the major provisions include:
- Defunding of Planned Parenthood
- Repeal of the Medicaid expansion
- Elimination of reinsurance, risk corridors, and risk adjustment programs set up under ACA
- Repeal of Cadillac tax
- End premium subsidies for insurance purchased through the Marketplace and small business tax credits
- Repeal of individual and employer mandates by lowering the penalties for non-compliance to $0
- End of healthcare.gov
Despite the Republican Party's fulfillment of the promise to get an ACA repeal to the White House, conservatives have yet to offer a replacement plan. The vote on the Medicaid repeal could also create some problems for senators up for re-election in states that have expanded Medicaid, such as Pennsylvania, Illinois, and Wisconsin. At the same time, Medicaid expansion continues to gain more interest from the remaining states yet to expand. Louisiana's new governor vowed to expand Medicaid on his first day in office. Virginia Hospital and Healthcare Association recently announced their change in position to support a bed tax, which would allow the state to expand Medicaid under ACA without any additional state funding. Utah and Wyoming continue talks to come up with a plan to expand Medicaid in the next year. And although Idaho remains opposed to expanding, the legislature is discussing a plan for the state to cover basic primary care for those who do not qualify for Medicaid but earn too little for subsidies under healthcare.gov, at a cost of $32 per month.
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