Key Components in Shared-Risk Pool Reporting
When a team works well together, the members collectively accomplish more than any of the individuals could have accomplished alone. Certainly we have proven that adage true in healthcare as can be seen with the success of integrated delivery systems, Independent Physician Associations (IPAs) and Accountable Care Organizations (ACOs), as well as providers teaming up with other providers on initiatives such as the bundled payment program. As health plans continue adapting to the growing influence of clinical/quality and value-based care and reimbursement, building an effective patient management workflow along with financial reporting systems between plans and providers engaged in risk arrangements has never been more important.
In order to effectively manage risk dollars we have to first manage our patients in real time. We need to continue to strive towards effectively managing where our patients are at a particular point in care, what services they are currently receiving and by whom, and what their next step is in the care continuum. It is a balancing act in juggling disparate electronic health records (EHRs), an outcropping of new vendors, and community-based services providers who are new to managed care. While we continue to put patient care first, against a backdrop that still has not found the perfect solution, we need to design and implement metrics that can be meaningful and measurable to ensure the care solutions we are implementing are working clinically while reducing the total cost of care over our population.
The key components to any successful risk-based or percentage of premium contract are transparency and timeliness in reporting. Without transparency, there can be no trust in the relationship, and without timely reporting, we are unable to elicit change in a meaningful time frame. Effective management reports prepared on a periodic basis should address provider budgets versus actual performance under risk-based agreements. Baseline items to review are:
- Allocation (Revenue)
- In-Network Claims
- Out-of-Network (OON) Claims
- Incurred But Not Reported (IBNR)
- Reinsurance and Stop Loss
- Per Member Per Month (PMPM) Budget
- Administrative Charges/Fees
In addition to the above, plans and providers should have a clear delineation of financial responsibility, contract terms, operational items such as authorization process, and all state and federal compliance requirements. As relationships develop and expand over various populations and lines of business, your reporting models should be consistent, scalable, and reduce the administrative burden on the providers. At the same time, with the continued issue of data integrity, shared risk is also a perfect time for providers to step up and support their health plan partners by providing current provider and practice information. The improved member satisfaction that comes with correct information will be a win-win for both sides.
At Gorman Health Group, we can provide the cross-functional expertise you need to help your health plan team and providers be exceptional.
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Bundled Payments Report Issued
Bundled payments capitate medical care at the episode level. It is one of the few “value-based” approaches the Centers for Medicare & Medicaid Services (CMS) and the Innovation Center have fielded that works. But it doesn’t work for the taxpayers, at least not yet. If you stop and think about it, the whole Prospective Payment System (PPS) is basically a bundle approach. It tied together a lot of individual hospital services that used to be separately billed and gave hospitals an incentive to be efficient. And were they ever: the average length of stay dropped 17%! The newer approach expands the bundle, in some cases to every part of the episode, including physicians, hospital, post-acute, and home health. Before the Affordable Care Act (ACA), CMS ran some demonstrations that proved the concept, yielding savings a bonus for doctors, and savings for the government and the patient, too, with reduced copayments. A further expansion under the ACA was promising, so the Obama Administration jumped ahead with a mandatory program for hip and knee replacement in 66 localities. The hospitals cried foul, but many had success and enjoyed bonuses. After the 2016 election when Tom Price became Health and Human Services (HHS) Secretary, he pared back that program just as results showed it was successful.
Keep in mind Medicare spends between $16,500 and $33,000 on knee or hip cases. Average charges in total approach $50,000 in the U.S. If you are mobile, you can get it done for less than $10,000 in India!
The Lewin Group delivered a report to CMS this week on the fifth year of the voluntary bundled payment initiative that was started under the ACA's Innovation Center in 2012. As in earlier years, the great majority of activity was in joint replacement episodes, and while there was little impact on quality for better or for worse, there were savings in spending on the services. Those savings were generated by reductions in post-acute care, both inpatient and home health. Unfortunately, the government didn't get any benefit, and the providers did because it was an upside-only risk approach. The newer “advanced” Bundled Payments for Care Improvement (BPCI) initiative, which is getting started now, will put providers at risk. Sophisticated providers are ready to play in this new space. This is where health reform is happening – initiatives that align providers’ incentives with the goals of public programs. Health plans and provider groups that stay focused on CMS’ strategy will be the winners going forward.
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Network Development in the Era of Relaxed Supplemental Benefit Regulations
As we saw in this year’s Centers for Medicare & Medicaid Services (CMS) regulations, Medicare Advantage (MA) plans are gaining greater flexibility to design and offer new types of benefits to service their members. While the information was provided after many plans had already put significant time into their Contract Year (CY) 2019 bids, we anticipate in CY 2020 to see MA plans branching out and offering more variation and specialized benefits geared towards their population.
When MA plans begin to formulate their sales and marketing strategy and determine the impact a variety of benefits could have based on addressing the particular social determinates of health that most impact their geographic area and member population, we begin to see a vast gap in the playing field from plans staying close to the basics with meals and non-emergent transport to plans willing to take more risk, having unexpected cost and the willingness to invest in innovative benefit options without knowing the exact return on investment the benefit will have on patient outcomes or financial upside/downside cost. We may see an upswing in partnerships with transitional assisted living to skilled nursing facilities, vendors offering adaptive aids to keep patients in their homes longer, meal or grocery delivery services, as well as an expansion on transportation services.
From a Provider Network perspective, the move forward with new partnerships will likely present a few stumbling blocks along the way and offer a ramp-up period we do not see with traditional MA providers. We encourage you to start early and break down the silos by having group discussions to include Sales & Marketing, Medical Management, Star Ratings, Operations, and Provider Network. The new providers are likely going to be dipping their toes in the same deep end of the pool, and extra lead time and planning will serve you well.
We would encourage all MA plans to have:
- Planned education sessions/town hall meetings to educate and get to know the new vendors/providers and hear what their needs are
- Plan for a more lengthy contracting process
- Plan for additional onboarding and training with the new vendors
- Allow for additional member education time
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How to Avoid Network Development & Expansion Pitfalls
Network management, directory accuracy, service area expansions (SAEs), and the new triennial review process have placed many Medicare Advantage (MA) plans in flux and exposed serious issues – from policy to process to staffing and technology. As we move into the countdown for network development and expansion for 2020, a review of lessons learned will be helpful in planning and avoiding some of the pitfalls from 2019.
- In previous years, plans submitted their Health Service Delivery (HSD) tables with their applications, and, by the end of April, there was clear insight into which counties the Centers for Medicare & Medicaid Services (CMS) deemed to have an adequate network. This year provided a new challenge with bids being submitted prior to HSD tables being uploaded and reviewed by CMS.
As multiple new regulations on network adequacy and directory accuracy have been implemented, a lesson learned by many is there can never be too much communication and oversight in managing provider network contracting and credentialing data.
- Overall project management and poor communication between outside vendors during an expansion can lead to stressful situations and put the plan at risk for compliance actions. Planning ahead and including oversight and transition plans at the start of any project can lessen the risks down the road.
Here at Gorman Health Group, we have been brought in and have identified situations described and have outlined extensive work plans to include policy and procedure (P&P) changes, technology updates, network development plans, compliance solutions, and assisted plans in working through the corrective action needed.
We can’t stress enough how the cost of prevention and planning on the front end becomes even more cost effective when faced with correcting on the back end.
Summer is the best time to be proactive and start planning your next SAE or even your first step into the MA world. Alternatively, perhaps, summer offers just the right amount of downtime to start planning for updated oversight policies.
As you start your initial or expansion planning process and set new network monitoring processes in place to ensure preparedness, consider this: Gorman Health Group has a long history of providing the following:
- Leveraging long-standing relationships and nationwide experience coupled with a cost-effective team of Senior Consultants and Network Analysts to effectively stand up a contracted provider network
- Designing and developing a network strategy and product strategy that take into account the quality, financial, risk adjustment, and Star Ratings goals for success within the competitive landscape of your market(s)
- Developing the oversight and monitoring P&Ps needed to address the new network and directory requirements
- Preparing plans’ HSD tables for a CMS filing or bid submission as well as preparing network exceptions to include all the required elements.
Let us know how we can work together now to support your plan’s goals for the future. We’ve been there, fixed that, and will ensure your success. Contact me directly at emartin@ghgadvisors.com.
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