Re-Evaluating Your Plan's QI Evaluation and the Process Behind It.

This is the time of year when most plans have either completed, or are in the process of completing, their annual evaluation of their Quality Improvement (QI) Program Description and Work Plan for operating year 2014.  In the 12+ years I have worked for Gorman Health Group (GHG), I have seen a range of evaluations — from great evaluations to those that are just a couple of pages without content.  Let's examine some mistakes and discuss some industry happenings that are often missed in the overall QI world.  Before we go on to discuss, let's remind ourselves what the Centers for Medicare & Medicaid Services (CMS) is looking for in a QI Program Description, which is based upon the regulation 42 CFR § 422.152:

For each plan, a Medicare Advantage Organization must:

  1. Develop and implement a chronic care improvement program (CCIP) 42 CFR §422.152(c);
  2. Develop and implement a quality improvement project (QIP) 42 CFR §422.152(d);
  3. Develop and maintain a health information system (42 CFR §422.152(f)(1));
  4. Encourage providers to participate in CMS and HHS QI initiatives (42 CFR §422.152(a)(3));
  5. Implement a program review process for formal evaluation of the impact and effectiveness of the QI Program at least annually (42 CFR §422.152(f)(2));
  6. Correct all problems that come to its attention through internal surveillance, complaints, or other mechanisms (42 CFR §422.152(f)(3));
  7. Contract with an approved Medicare Consumer Assessment of Health Providers and Systems (CAHPS®) vendor to conduct the Medicare CAHPS® satisfaction survey of Medicare enrollees (42 CFR §422.152(b)(5)); and,
  8. Measure performance under the plan using standard measures required by CMS and report its performance to CMS (42 CFR §422.152(e)(i)).
  9. Develop, compile, evaluate, and report certain measures and other information to CMS, its enrollees, and the general public. Responsible for safeguarding the confidentiality of the doctor-patient relationship and report to CMS in the manner required cost of operations, patterns of utilizations of services, and availability, accessibility, and acceptability of Medicare-approved and covered services (42 CFR §422.516(a)).

Mistakes often seen:

Develop and maintain a health information system: Many plans have multiple platforms that make reporting — the validity and accuracy of — a nightmare! When a plan implements a new care management system, for example, the overall analysis of its performance is often not reported in the QI Work Plan or at the plan's QI Committee. Yet, this is a vital piece to overall operational and quality success.  Ask yourselves: Did your plan implement a new system or module upgrade in plan year 2014, and do we know if it has improved our overall reporting and impacted any quality measures or our providers?

Recommendation: As part of a system upgrade or new system implementation project plan, include overall success reporting to the QI Committee.  This can include major milestones success or failure during implementation as well as a narrative summary of changes the plan and/or providers will experience upon completion of the project. Will there be new requirements for claims submission? A new clearinghouse?  A new provider portal sign-in process? Don't forget all of your external and internal customers and the impact they may experience.

Plan goals for HEDIS: I often see goals set for middle-of-the-road success at or below the 50th percentile. While I am not encouraging setting unrealistic goals, many plans miss aligning their HEDIS goals with a 4 or 5 Star Rating corridor.  Now that CMS will be eliminating pre-determined benchmarks for plan year 2016, it will be even more important for HEDIS goals to be realigned with your plan's Star strategy.  I also see many plans not include an improvement process or overall data analytics in their QI Work Plan showing how HEDIS measures actually improve overall population outcomes.  We really don't want providers just checking a box that a test was completed — we want to understand if and how the HEDIS measures have possibly improved the overall health of our membership, and, if the outcomes are positive, how did this occur? Health plans often share data with providers regarding gaps in care but miss sharing any overall improved health outcomes so providers can see the successes of their efforts.

Recommendation: Consider adding true outcomes measures to specific HEDIS measures, especially those measures that affect your Medicare Advantage Prescription Drug (MA-PD) Plan or Special Needs Plan (SNP) population as a whole.  The goal of the evaluation is to effect improvement changes both in plan operations as well as clinical outcomes.

Correct all problems that come to its attention through internal surveillance, complaints, or other mechanisms: Many plans recognize they have multiple issues or problems which may come to their attention through internal monitoring and auditing, inter-rater reliability processes, or dashboard reporting.  These problems/issues, however, often do not make it to the QI process cycle.

Recommendation: Remember, when your plan discovers a risk area through internal monitoring or a high volume of complaints/Complaints Tracking Module complaints (CTMs) for a defined reason/category, it is the plan's responsibility to institute a process which identifies a root cause, implements a corrective action, and measures the success of the corrective action.  Clinical and non-clinical activities are part of the overall QI process.

Lastly, let's discuss the pay for performance or provider incentive plan process.  Many plans have instituted an incentive program designed to improve health outcomes, prevent acute readmissions, improve medication adherence, or improve preventive health services measures which reward physicians financially when goals are achieved.  Yet, many of the goals within a provider incentive program do not align with the goals for Star Ratings, goals within a Model of Care (MOC) for SNPs, nor do these payments align with improved overall outcomes for a population.

Recommendation: Overlay the benchmarks from your current provider incentive program to be sure they align with desired goals defined within your QI Work Plan and your Star Rating strategy.  Also evaluate your population health outcomes to determine if your incentive program is driving the results your plan desires.

If your plan is still an outlier in the completion of your program's annual evaluation, GHG is ready to assist!

 

Resources

GHG's clinical team of experts can assess your current quality program, and develop integrated strategies to build a new foundation focused on the areas that matter to you most: cost, quality and revenue. Visit our website to learn more >>

Stay connected. Subscribe to Gorman Health Group news and updates via our weekly newsletter.

by GHG Advisors

Medicaid Rule Imposes New Standards for Beneficiary Access

Per the announcement by CMS on Tuesday, the proposed Medicaid rule would require plans to implement an 85% medical loss ratio (MLR). Implementing an MLR for Medicaid would bring the programs in line with the private health insurance market and Medicare Advantage.  However, as mentioned by GHG's Sunmi Janicek, it would not be without challenges.  The compliance costs for Medicaid plans with the increase in diligence needed in identifying & documenting costs incurrent to improve quality could be high.  Additionally, the CMS proposed rule would impose new standards for beneficiary access and availability to the MCOs provider network.

As with our Medicare Advantage clients, GHG can assist plans by doing a deep dive into their MLR cost drivers, such as poor-performing providers within their participating network, while balancing the requirements for a robust, accessible provider network for beneficiaries.  Once we have identified the key cost drivers, we can work with plans to do the following:

  • Develop forward looking budget assumptions for benefit premiums, project clinical utilization and provider reimbursement budgets
  • Develop clinical & financial performance metrics designed to bring performance in line with expectations
  • Develop strategies around how to best impact provider practice patterns, access, treatments, referrals and coordination of care
  • Design network modifications based on clinical & financial performance
  • Develop performance based payments for provider reimbursements benchmarked to clinical & financial outcomes metrics

Reaching these goals will require the formation of great partnerships between the plan and providers.  Plans will want to reach out to provider partners that share their same goals and incentives and secure strong leadership and physician champions to lead the charge.  We know the transformation will not be easy. The shift from fee-for-service to value based reimbursement, facing the social services, behavioral health needs of the population, and developing the analytical capabilities to support these changes are challenges that Medicaid managed care plans will face under the proposed rule.

GHG is here to help navigate you through the steps.

Please reach out if we can assist you with any of the following:

  • MLR Analysis
  • Provider Integration strategies
  • Reimbursement strategies
  • Risk Assumption strategies
  • Network Adequacy compliance


Resources

Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement.As states begin to increase oversight activities and implement more robust compliance and fraud waste and abuse practices, our expertise in compliance program development will be an asset to any organization. Contact us today >>

by GHG Advisors

CMS 2015 Spring Conference

Some important points came out of the Centers for Medicare & Medicaid Services' (CMS') Medicare Advantage Prescription Drug (MA-PD) Spring Conference & Webcast; the presentations and videos of the event can be found here in CMS' Event Archives.  If you did not have a chance to attend or watch it live, please watch the videos for important changes pertaining to many aspects of the MA-PD program.  Speakers addressed Part C and Part D call letter updates, policy and technical changes, Quality Improvement Project (QIP) and Chronic Care Improvement Program (CCIP) lessons learned and best practices, the new network management module, enrollment updates, and fraud, waste, and abuse (FWA).

From the Compliance perspective, we heard the following loud and clear:

  • Enrollment in MA-PD is growing with the aging of baby boomers.  CMS is taking a proactive stance to improve the program by stressing the need to work together with plans to provide care more efficiently and provide quality.
  • Finalized program changes allow CMS to require MA organizations or Part D plan sponsors to hire an independent auditor to validate correction of CMS audit findings.  The good news is − some of you are doing this today.  Having another set of eyes on your correction efforts provides you with a level of assurance you may not be able to obtain by having internal staff performing validation.  Ever hear that phrase, "There are three sides to every story: yours, mine, and the truth?"  Getting an independent perspective is so important. While you might not agree with a reviewer's findings, the point is that it will hopefully bring you closer to the truth than validating yourself.
  • CMS clarifies when it is appropriate for an MA plan to invoke an extension on organization determination and appeal requests.  Based on what we see, most plan sponsors are invoking extension requests in rare circumstances and strive to meet the regulatory timeframes established without extension.  Therefore, plan sponsors should be prepared to update procedures to ensure extensions are only taken when appropriate.
  • Network adequacy — Not only is CMS requiring that provider directories be updated real time, they are adding network adequacy to program audit protocols (coming late summer or early fall, according to CMS).  CMS is also implementing a way for plans to check their network adequacy by submitting their Health Service Delivery (HSD) tables in the Health Plan Management System (HPMS).  Previously, this step was only available within HPMS when submitting an application for a new plan or a service area expansion (SAE).  Plans could contract with a vendor or obtain software to check their own network adequacy.  We anticipate that CMS' network adequacy protocol will require a plan to provide real-time data pertaining to whether or not their contracted providers have open panels.  I'm aware of one 5-Star plan that has been doing ongoing network adequacy reviews for a while.  Those plans that are used to pulling HSDs only at the time of application or (possibly) bid submission should plan now for the additional steps CMS may require of plans to tell the true story of adequacy.  Keep your eyes on this blog for more information from my esteemed colleague, Ellie Martin, on network adequacy.

CMS' upcoming MA-PD Audit & Enforcement Conference & Webcast is taking place on June 16.  Prioritize this event in your schedule, and attend either in person or via webinar.

 

Resources

Stay connected. Subscribe to Gorman Health Group news and updates via our weekly newsletter.

Check out Regan's previous blog post about assessing your organization's people, processes and technology, and the importance of focusing on your organizations grievances and appeals process here >>

Gorman Health Group's Complaints Tracking Module (CTM), grievances, and appeals processes, provides a new way to ensure your cases come to a timely and compliant resolution. Created with CMS in mind, as it captures key information related to intake, processing, categorization, determinations and higher appeals or re-openings to process cases according to CMS' complex and detailed requirements. Contact us >>

by GHG Advisors

The Imminent Medicaid Mega-Reg is Gonna be "Epic"

For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We're coming to call it the "mega-reg" here.  Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting  the term "epic" used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.

Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn't address long term care services and supports and managed long-term care, a major impetus for program reform at the state level.  The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.

MACPAC's debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:

  • Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard.   CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard.  The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
  • Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit.  Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers.  The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
  • Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services.  CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
  • Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance.  CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
  • Transparency — Medicaid health plans want transparency of state practices to develop capitation rates.  CMS could require states to share data and assumptions and allow plans to comment during federal review.
  • Baseline/Encounter Data — CMS could impose additional standards in addition to "appropriate data."  CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
  • New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.

Beyond payment issues in the mega-reg, the Commissioners discussed:

  • Long Term Care -- CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
  • Provider Networks -- the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans.  Strengthened requirements for appeals and grievances may also be included.  The proposed rule may also include enhanced quality data and reporting.  It's expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.

We'll have scads of analysis of the Medicaid proposed rule as soon as it hits the street.  It's gonna be huge.

 

Resources

Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>

Stay connected. Subscribe to Gorman Health Group news and updates via our weekly newsletter.

by GHG Advisors

19 Lessons from 19 Years

Nineteen years ago this week, I left the Health Care Financing Administration (HCFA), now the Centers for Medicare & Medicaid Services (CMS) and the Office of Managed Care, to launch what would become Gorman Health Group.  Time has flown, the company has grown, and my backside sewn with hard lessons about our industry and government health programs.  Here are 19 lessons I've learned in those 19 years.

  1. What Medicare Advantage and Part D do, Medicaid and the commercial market, including the ObamaCare Exchanges, follow 3-5 years later.
  2. Every CMS staffer I've ever known is well-intentioned, many are downright brilliant, and all want to be good business partners to health plans.  Their shortcoming is lack of business experience and how stuff works in the real world.  There is a huge difference between policy/guidance and operations.  That's where we come in.
  3. If government health programs were an easy business, we'd be out of business.
  4. Inspect what you expect.  Or, as Reagan said, "Trust but verify."
  5. Star Ratings, like risk adjustment before it, is the biggest and most consistent experiment in performance-based payment on the planet, a total game-changer and the new fulcrum of competition. You don't excel at Stars by working on them off the side of your desk.
  6. Fish where the fishes is.
  7. Pick your vendors and partners like you pick your fruit.
  8. Capitation with performance-based payment is the only real hope for long-term viability of entitlement programs.
  9. Being a doctor is the worst job ever.  Right after community hospital CEO and President of the United States.
  10. High-performing health plans are good at everything, especially those functions that are member- and/or provider-facing.  It's about culture and execution.
  11. Health plans' days are numbered if they can't consistently provide value to CMS, their customer, and to providers, their partners.  That value is about two things: making data actionable and moving money to contributors when quality and results improve.
  12. It's easier to increase revenue than it is to cut costs.
  13. Pharmacy benefit managers are a health plan's most important partner.  They are also the ultimate B2B companies and most are struggling in the transition to B2C and true government accountability for results.
  14. Big data and high-tech is all the rage -- and all noise, unless it's actionable.  What works is low-tech: clogs on the street; a house call; a medication consult.
  15. Doctors of the future are in multispecialty practice and leaders of a team of nurses, aides, social workers, and pharmacists. They are quarterbacks, not gods.  They diagnose, and everybody else treats.
  16. So much of the future is about retail pharmacy.  In short time, they will make more providing services than filling bottles.
  17. Ninety percent of the evil and waste in the system occurs at the tip of a doctor's pen.
  18. We are all going to retire thanks to government programs.  Demographics is destiny.
  19. Five percent of members account for 60 percent of your spend.  Put the love and focus on them, and you can pretty much leave everyone else alone.

It's been an incredible ride these last two decades, and especially the last five as health reform blossoms.  We look forward to continuing the journey, older, wiser, and bigger. Stay tuned.

 

Resources

Stay connected. Subscribe to Gorman Health Group news and updates via our weekly newsletter.

 

by GHG Advisors

Gorman Health Group Client Forum Takeaways: Government Programs are Booming, Bar is Rising

We just wrapped our best-ever Gorman Health Group 2015 Client Forum at National Harbor with over 200 of our closest clients and partners.  There was both great and tough news, so here's a few takeaways, including a couple stunners:

  • For the first time, a prominent Wall Street analyst said he could see a path to 100% Medicare Advantage penetration.  Barclay's eminent health care observer, Josh Raskin, stunned our audience with projections of over 29 million Medicare Advantage enrollees by 2023, a penetration rate of over 42%, with the potential to go all the way with Ryan Plan-like legislation now feasible this decade.
  • 47 states now hold Section 1915(c) home and community-based services waivers for Medicaid, which will unleash a new flood of dual eligibles into health plans.  Special Needs Plans (SNPs) for duals are now on a path to permanent reauthorization, and over 30 states now use D-SNPs to enroll over 1.6 million beneficiaries.  That number will more than double in the next 2 years.
  • While year 2 of open enrollment for ObamaCare was dramatically improved from its messy launch, problems persist, especially with membership reconciliation and issues related to the interim process to auto-enroll most members staying in their plans. Cleanup of membership discrepancies will likely take another year or even longer.
  • Risk Adjustment Data Validation (RADV) audits will become the new normal in Medicare Advantage.  2015 will be the first time we see plans prosecuted under the False Claims Act and hundreds of millions clawed back by the Centers for Medicare and Medicaid Services for unsubstantiated codes submitted for higher payments.
  • Maximizing data, strong provider partnerships, documentation and ICD-10 preparedness are keys to audit proofing your Risk Adjustment program.
  • The Star Ratings system of performance-based payment is the new cornerstone of competition among health plans.  Stars has expanded into more than a dozen state Medicaid programs, and to ObamaCare's issuers as well, and the bar is rising.  Technical changes to several measures mandate much higher performance to stay ahead of the curve and avoid falling below 4 Stars, where bonus payments and bid rebates vanish. 2015 will be the first year where plans below 3 Stars are terminated.
  • Medicare Advantage plans won several lobbying victories in this year's "Call Letter", the rate and policy announcement for 2016, including an average 1.25% benchmark increase from a cut in the February draft. This signals a new era of influence muscle for the industry, where CMS will increasingly fight out policy changes "below the waterline" in subregulatory guidance and enforcement, where politicians are less likely to intervene.
  • Appeals and grievances and pharmacy benefit management vendor performance remain the #1, 2 and 3 regulatory infractions in Medicare Advantage, and integration of long-term care and supports and services the leading challenge facing Medicaid health plans.
  • CMS is on pace for its most aggressive enforcement year ever, with over a dozen actions taken against plans this year already.

As we've said since the passage of the Affordable Care Act, we are now in the Golden Age of government-sponsored health programs, and the opportunities and challenges that come with this shift have never been greater.  Our clients went home with a clear grasp of both, and we are thrilled so many joined us this year.

 

Resources:

Join John Gorman, GHG's Founder & Executive Chairman, as well as Bill MacBain, GHG's Senior Vice President of Strategy on April 14 as they provide a hard-hitting analysis of critical areas addressed and finalized in the document from 1-2pm ET. Register now >>

GHG's Senior Vice President, Healthcare Analytics & Risk Adjustment Solutions, Dan Weinrieb, recaps the Risk Adjustment rulings in the Final Call Letter and provides keys to success in an article on the GHG blog. Read more here >>

by GHG Advisors

The Medicare "Doc Fix"

The "doc fix," as just passed by the House of Representatives, would fix the annual sustainable growth rate (SGR) calculation by eliminating it.  The SRG was enacted nearly 18 years ago as a way to tie physician compensation under Medicare to the growth in the national economy.  It has never worked well, and Congress has had to override it 17 times to prevent sizeable cuts to Medicare's physician payment rates.  The current SGR cut is about 21% and will take effect March 31 of this year.

The House bill eliminates the SGR.  The estimated 10-year cost of eliminating these cuts to physician fees is in the neighborhood of $175 billion.  After adding the cost of extending the Children's Health Insurance Program (CHIP) and funding for community health centers, the total price tag over 10 years is $210 billion.

The doc fix has no direct impact on payments to Medicare Advantage (MA) plans.  For many years, CMS would calculate the Medicare Fee-for-Service (FFS) per capita cost trends it used to set MA benchmarks by assuming that the SGR cuts would happen.  Year after year, the cuts were rescinded, requiring CMS to add a sizeable correction to the next year's trend to compensate.  But that was offset by the following year's SGR impact, leaving the trends chronically depressed.  CMS finally fixed this with the 2014 benchmarks, which were calculated using trends that assumed that Congress would again rescind the SGR cuts.  This policy was repeated in calculating the 2015 benchmarks.  For both years, CMS assumed a 0% trend for physician fees.

However, the "doc fix" may still have a small indirect impact on MA.  If the final bill looks like the House bill, physicians will receive 0.5% annual increases in fees through 2019.  This 0.5% trend will be incorporated into the trend used to set the benchmarks.  Since CMS has been using a 0% trend for physician fees, the doc fix will elevate the trends for 2016 and following years, at least through 2019.  The impact will probably be in the range of positive 0.2%, or 20 basis points, more or less.  The House's doc fix would also tie physician compensation to pay-for-performance scores after 2019.  We will need to wait and see whether CMS interprets this as generating an increase or decrease in physician fees when they calculate the 2020 benchmarks.

The House bill would also reduce the trend applied to payments to post-acute providers, relative to prior year trends, and make a small reduction in hospital payments relative to current law.  This may have a very small negative impact on the benchmark trend since it is based on projected trends in total FFS per capita costs.  But the overall impact for MA benchmarks will still be slightly positive because of the positive physician trend.

A greater impact in future years may be the impact on physician claims payment.  In the near term, physician contracts that are tied to Medicare-allowable fees will experience a 0.5% increase as the fees rise.  Since prior years' annual SGR corrections have included similar nominal increases, it is probable that most MA plans have already incorporated a rise of similar magnitude into their bids and budgets, meaning that the pending doc fix may have no noticeable impact.  Looking at the longer term, the performance-based payment program that CMS devises to calculate payments after 2019 may have a greater impact.  MA plans should be watching this closely, since any physician contracts that are tied to Medicare allowable fees will automatically incorporate this same performance-based calculation.  This may also be an opportunity for plans to develop new and better value-based payment models of their own.

For now, it's time to watch what happens in the Senate, to see if this thing passes.  It won't come up for a vote until the Senate gets back from Spring Break in mid-April.  By then, the SGR cut of 21% will have officially taken effect.  In the past when Congress dawdled on the SGR, CMS has found temporary ways to avoid cutting doctor payments, and we expect they will be able to engage in the same sleight of hand this year.

Update as of 4/1/15. Note that the 21% cut went into effect April 1, since the Senate didn't pass the bill before it went on a two-week recess.  CMS can hold claim payment a couple of weeks to allow the Senate to get its act together and pass the bill.  However, the Senate will need to act quickly when it returns from recess. The current estimate is that the bill will be introduced on April 13.  While leadership of both parties say everyone is on board in the Senate, that clearly was not the case in the hours leading up to the spring recess, since the bill never came up for a vote. This indicates that there may be some unresolved issues. Stay tuned! There may be some interesting maneuvering in the next few weeks.

Resources

Gorman Health Group's Summary and Analysis of the 2016 Draft Call Letter and the Medicare Advantage (MA) Advance Notice is now available. Download it today >>

The Gorman Health Group 2015 Forum is April-7-9! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!

 

by GHG Advisors

Industry Ducks Bullets in 2016 Medicare Advantage Rate Proposal

Friday, February 20th after close of business, the Centers for Medicare and Medicaid Services (CMS), released its 2016 Advance Notice of Medicare Advantage Payment, known affectionately as "the call letter."

This one was the most anticipated in years, and the industry unexpectedly ducks bullets in it, in risk adjustment, Star Ratings, and elsewhere. It's got a few unicorn farts in it, and a couple puffs of Chanel No. 5 as well.

The lack of any shockers is the bigger positive for the industry, a turning point really.  CMS is saying it won't settle its scores with payers through policy, but through enforcement, where the facts are often too tough for politicians to stick their necks out.

Last fall's surprise positive announcement that MA benchmarks were tracking to increase 2.02% next year started this year's dance.  Now comes the draft call letter, and on April 6, the final, all of which will be different as CMS winds through its process and the full fury of industry lobbying is brought to bear.  It's worth noting that this year a first-time majority of 53 Senators signed the annual "don't hurt Medicare Advantage (MA)" letter to CMS, vs. only 40 last year.  The increased Congressional pressure and the fact that MA now represents one out of three beneficiaries is driving this call letter.

By our calculations, the 0.95% reduction in MA benchmarks claimed by CMS is really negative 1.76% all-in.  This is the unicorn fart. The final number quoted by CMS, 1.1% positive, is in part because CMS is taking credit for a 2.0% improvement in risk scores as plans continue to improve their risk adjustment management skills.  Kinda cheeky.  Our read on the underlying trend is +1.53%, frankly, better than we anticipated.

On risk adjustment, anticipation was that CMS would take a lethal shot at prospective in-home evaluations, a tough fee-for-service normalization factor, and an increase in the coding intensity adjustment, but NONE of those happened.

On home visits, despite a hailstorm of bad press and advocacy group investigations, CMS isn't even dealing anymore, just laying out "best practices" and saying "we're watching you."  The regulators laid out 8 criteria that would make the prospective evaluation more like a risk assessment conducted by a Special Needs Plan, including:

  • Evaluation performed by a physician or qualified non-physician practitioner
  • Includes all components of the wellness visit including health risk assessment
  • Medication review and reconciliation
  • Scheduling appointments and referrals with appropriate providers and community resources
  • Environmental scan of the home for safety risks and need for adaptive equipment
  • Verifies that the information obtained during the assessment is furnished to appropriate plan staff and providers
  • Provides enrollees with a summary of the information collected
  • Enrolls the beneficiary in disease management or care management programs.

Taking these steps and embedding risk adjustment management inside a health plan's Medical Management department would effectively audit-proof the company from the dreaded data validation audits expected to intensify this year.

Another shocker: CMS did the absolute bare-minimum on the coding intensity adjustment, and then heaved up a dangerous proposal to recalculate it starting in 2017.  If implemented, CMS would cut payments to all MA plans by enough so that total payments would be no greater than under the pre-HCC, pre-PIP-DCG, pre-2000 AAPCC demographic model.   This would make risk adjustment a zero sum game, in which individual plans could win or lose, but in which CMS would never pay out more than under the old AAPCC model.  That would settle the score on home visits once and for all, and indelibly damage risk adjustment as a healthcare financing innovation.

A final surprise: CMS acknowledges it has a problem on Star Ratings for health plans serving dual eligibles and the low-income.  The agency is cutting the weight of several Stars measures where vulnerable members score poorly, by a whopping 50% in 2016. This buys time for CMS and several plans overweight with low-income members and highly exposed to Stars underperformance to conduct additional research and take steps against what is driving the correlation.

It was, in the end, a surprisingly favorable call letter for health plans and other stakeholders, particularly capitated provider organizations.  But we're still a long way from the Final Notice on April 6. How plans should react:

  • First, write comment letters. Deadline is March 6 at 5 pm EST.
  • The proposal to cap total MA payments at the same level as would have been paid under the pre-2000 demographic-only risk adjustment system is dangerous.  Plans need to point out how the Congress, in the 1997 Balanced Budget Act, mandated a health-based risk adjustment system because the demographic adjustments were inadequate.  We are not aware of any authority in that, or any other law, to allow CMS to set a cap on total MA payments.
  • Take the guidance on home risk assessments seriously, and implement CMS' suggestions before they become mandates.  Plans must hard-wire their risk adjustment program into their care management program, so they are actively managing the risks they identify.
  • Don't rely on averages:  the impact of CMS rates and other changes will vary from county to county, market by market.  Let us help you examine the impact on your service area.
  • Continued rate pressure means plans have to continue to get better and better at the key components of their business:  risk adjustment, care management, Stars, and enrollment data reconciliation.
  • Focus on the Stars metrics with the greatest weights, especially the intermediate outcomes measures and the plan-wide quality improvement measures.  Determine if the reweighting of seven metrics will have a positive or negative impact on your plan, and react to offset any negative effects, by emphasizing other metrics where there is room for improvement.

It's going to be an interesting 45 days to the Final Notice, but one thing is sure in this call letter: CMS is conceding that Medicare Advantage has gone mainstream, and that its support in Congress can no longer be tangled with.  CMS is showing its preference to impact industry behavior through its boot rather than its pen.

 

Resources

Join John Gorman, GHG Executive Chairman, and colleague, Bill MacBain, GHG's Senior Vice President of Strategy and former health plan CFO,  as they provide a hard-hitting analysis of critical areas addressed in the document, including a look at the various components that make up the trend factor, a proposed change to how risk scores are determined, health risk assessments, and Star Rating measures on March 3, 2015. Register Now >>

Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!

by GHG Advisors

Value-Based Care: HHS Sets Timeline for Transition

The Health & Human Services Department (HHS) recently announced an accelerated time frame with regards to its efforts to transition the Medicare Fee-for-Service (FFS) payment system over to alternative reimbursement models. Not to be outdone and following on the heels of the HHS announcement where a private coalition of some of the nation's largest healthcare systems and payers announced an initiative to move from FFS payments to so-called value-based payment by 2020. This coalition, called the Health Care Transformation Task Force, was proposed by Richard Gilfallin, a former Medicare official and Chief Executive of Trinity Health, a Catholic system that operates in 21 states.

While there is widespread agreement amongst healthcare leaders and policy makers that the U.S. healthcare system needs to see a significant shift away from volume-based reimbursement to one that incentivizes providers for meeting quality measures, clinical outcomes, and financial savings, the announcement can also leave us shaking our collective heads and wondering how to meet a goal when, to date, it has been so randomly undefined. As stated by Dr. Timothy G. Ferris, who is leading the effort on behalf of Partners Healthcare, "It is really easy to agree on the big-picture stuff, but it gets more complicated when you get into the details." And therein lies the challenge. To repeat a well-worn phrase, the devil is in the detail.

Providers have been willing participants in the various CMS and CMMI initiatives; some willing, some dragged kicking and screaming, have stepped up to the plate to join the bandwagon. While we have made progress, we have fallen short of expectations. Roughly, 3%, 220 of approximately 6,690, of entities that were approved to participate in bundled payments moved forward to implement the new payments. Medicare Shared Savings Program (MSSP) participants have shown some quality improvements and saved Medicare approximately $417 million year one with the first 220 Accountable Care Organizations (ACOs); but this number is under 1% of the Medicare's FFS budget. Several of the original Pioneer ACOs have dropped out to pursue programs, such as MSSP, that offer less risk. A red flag in the new time line, and one that has affected the above initiatives, is poorly defined quality indicators and what truly constitutes value. With an accelerated time line to achieve a shift to volume-based payments, we should focus on lessons learned and steps needed to provide a roadmap to success.

Presently, alternative payment models account for approximately 20% of Medicare payments, and HHS expects to see that percentage rise to 30% by 2016 and to 50% by 2018. This same shift is already taking place within our commercial counterparts. The Blue Cross trade association reported last summer that 20% of their providers had contracts that prioritized quality over quantity, and Aetna reports that 28% of its reimbursements are now in value-based agreements and expects that number to rise to 75% by 2020. What steps do Medicare providers need to start thinking about to promote a similar shift?

  1. Partnerships: Some of the greatest partnerships in history, Batman & Robin, Abbot & Costello, Laverne & Shirley, have achieved much more together than on their own. As we look around for partners for ACOs, bundled payments, etc., we want to find providers that share our philosophy, geography, goals, and ideas. We need to do our due diligence and ensure we have established, clear-cut terms, methodologies in care, investments, and cost-savings; we also need to establish accountability up front.
  2. Consistent focus on the value of the opportunity: Involves understanding the change is not the flavor-of-the-month strategy, there will be expenses, and that collaboration is required to succeed.
  3. Strong leadership and governance: The shift to value-based reimbursement is dependent upon fostering a cultural change from the top down. Culture has its roots in the governance and leadership of the organization. There must be a unified approach around transparency, accountability, and effective outcomes. The key is to balance the upfront expenses and short-term impact to reach long-term success.

Furthermore, much speculation has been given on the change being provider-driven in order to meet the goals. With consumer savvy, newly aged-in Medicare beneficiaries, there is also a shift in patient expectations and what is available for their health care dollar. The new beneficiary is aging in from a world of patient engagement, incentive, and rewards programs, and will expect the same level of service. As HHS promotes "Better Care, Smarter Spending. Healthier People. Why It Matters?", an idealist would say it matters because we are all in this together….a realist would say, "Thanks HHS…but what are the quality measures, and how soon can I have them?" Additionally, the realist will also operate from the belief that there is no one perfect model but that different payment models apply to different treatment pricing scenarios.


Resources

Here at Gorman Health Group, we can help you decide what payment models are appropriate to your unique circumstance and support your implementation efforts. Contact us today.

Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!

by GHG Advisors

CMS Releases Part D Drugs and Formulary Requirements

The long awaited revision to the Prescription Drug Benefit Manual Chapter 6 is hot off the press. Many of the changes have been published previously by CMS in Best Practice guidance or communicated in the course of CMS compliance audits. The changes include additions to the sections on Medically Accepted Indications, drugs purchased in another country, drugs covered under Medicare Part A or B, policy regarding formulary changes, updates to the description of covered commercially available combination products, and updates to existing policies with respect to utilization management

The most pertinent changes include:

  • Part D plans have to apply the Part B definition of a medically-accepted indication to chemotherapy drugs that aren't covered by Part B (therefore Part D covered drugs). "Part D sponsors will be required to thoroughly understand and apply Part B's definition of an anti-cancer chemotherapeutic regimen, utilize Part B compendia, and consider peer reviewed medical literature when necessary."
  • Part D plans should use prior authorization (PA) for those drugs with the highest likelihood of non-Part D covered uses and if a medication is discovered to have been utilized for a non-Part D indication upon retrospective review, the PDE has to be deleted and the accumulators adjusted.
  • To determine the appropriate Medicare A or B or D coverage "bucket" health plans may apply prior authorization, even if the beneficiary is currently taking the drug, and even if a protected class drug is involved.
    • CMS expects Part D sponsors to work aggressively to eliminate any interruptions of current therapy
  • Unless a prior authorization criteria is submitted to CMS and approved at a dosage level, the plan must honor prescription requests for PA approved drugs for all strengths
  • Any QLs below the FDA-approved maximum dose or below the days' supply entered in the Part D benefit package (PBP) must be submitted and approved by CMS.
  • High cost edits should be above the usual and customary price of drugs to ensure that beneficiaries with valid claims for drugs are not subject to the edit.
  • Concurrent DUR edits of doses at or above FDA maximum approved dosing do not have to have prior approval from CMS. The labeling should clearly identify the dispensing as unsafe or contraindicated not just a precaution in the labeling.
  • For transition, CMS is defining non-formulary Part D drugs to mean both: (1) Part D drugs that are not on a sponsor's formulary, and (2) Part D drugs that are on a sponsor's formulary but require prior authorization or step therapy, "since a formulary drug whose access is restricted via utilization management requirements is essentially equivalent to a non-formulary Part D drug to the extent that the relevant UM requirements are not met for a particular enrollee."
  • If a plan reduces a quantity limit (e.g. 2 tablets daily to 1 tablet daily), this change would require the plan to provide a transition fill if requested.
  • For transition, a new enrollee is one whose ongoing drug therapy (whether the health plan is able to determine ongoing therapy or not) could be potentially interrupted by a drug being non- formulary.
    • So an enrollee who stays with the same contract number but changes PBPs is a new enrollee eligible for a transition supply because his or her ongoing drug therapy could potentially be interrupted. However, an enrollee who moves from one PBP to another may not be eligible for transition if the formulary is the same for both PBPs.
  • CMS is mandating a minimum 108 day look-back period to determine if a member has ongoing medication therapy or not
  • For retail transition, if the smallest available marketed package size is in excess of a 30 day supply, the plan must offer a transition supply when required.
  • CMS is requiring up to a 91- to 98-day transition supply given that many LTC pharmacies and facilities must dispense brand medications in 14-day or less increments.
  • For LTC members, plan sponsors do not have to provide more than one emergency supply fill for a drug
  • Transition benefits accrue to beneficiaries at "network" pharmacies..
  • Beneficiary opioid point of sale edits can be applied during transition. However, for non-formulary opioid medications and formulary opioid medication subject to prior authorization or step therapy under a new plan's utilization management rules, a temporary supply must be provided during transition.
  • The cost sharing for LIS members for transition fills cannot be higher than the maximum copayments in statute; for non-LIS members non-formulary drugs filled in transition would have the same copayment as non-formulary drugs approved through the exception process and formulary drugs with utilization management edits would have the same copayment during transition that they would have once the um requirement has been met.
  • For a medication that has multiple refills in transition, only one member and provider transition notice is required.
  • Medically Accepted Indication for purposes of Part D is an FDA labeled indication or an indication supported by citation in either the American Hospital Formulary System (AHFS), USP-DI (or its successor publications), or DRUGDEX®.

Three particular requirements of note are practices that we have been recommending to plans for the past five years:

  • thoroughly test the adjudication of the approved formularies in advance of and during the plan year to help identify errors
  • routinely review rejected claims at POS so that discrepancies are discovered timely
  • implement a continuity of care policy

Our Pharmacy experts can create and conduct an in-depth benefit administration test plan for your organization to validate that everything is working precisely as it should on an ongoing basis throughout the year. We can ensure your PBM is processing claims consistent with your CMS-Approved Prescription Drug Benefit.

 

Resources

The rapid changes to Part D regulations make the tracking and implementation of these CMS requirements exceptionally difficult — to say nothing of actually managing to them. Our Part D services are designed with your staff in mind, ensuring that with a mix of counsel and DIY tools your staff will have access to actionable information — faster. Contact us today to learn more >>

Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!

by GHG Advisors