2015-2016 CMS Program Audit Protocols Update
It's Christmas in October (and Hanukkah, too) if you've been waiting for the revised 2015-2016 Program Audit process and protocols. Let's get right down to it!
You'll want to review all 20 documents (made up of the memo, data requests, supplemental questions, templates, and impact analysis layouts) for their significant enhancements and make necessary changes in your own oversight programs. What are some significant changes, and what do they mean for you?
Overall Process
- If the Sponsor fails to provide "accurate and timely" universe submissions twice, it will be cited as an observation in an audit report. After the third failed attempt, the Centers for Medicare & Medicaid Services (CMS) will classify this as an Invalid Data Submission, or IDS. There is NO reason a universe should be submitted late. Some of our Sponsor partners have required additional time for certain submissions, and they requested that time from CMS and got it. Nothing should irk senior leadership more than a universe being submitted a few minutes late, especially considering data issues in program audits directly impact Star Ratings.
- CMS Account Managers will be playing a greater role in the validation of pre-audit issue summaries, which are made up of disclosed and self-identified issues. CMS also clarifies if CMS identified an issue during the course of routine monitoring and brought it to the Sponsor's attention, it would be classified as a self-identified issue. There are specific timing issues CMS will consider in determining whether an issue is corrected or uncorrected. It is best practice for Compliance departments to incorporate a log similar to what CMS has provided in the management of disclosed and self-identified issues.
CPE
- Reduction of employee interviews, with addition of interview(s) of those responsible for managing accountability for FDR oversight. Not a surprise seeing as this has been a consistent finding for CMS throughout 2015 and previous years. Sponsors should coordinate and start mock interviews now with those who are responsible. CMS is seeing gaps in FDR oversight compliance whether or not you have three FDRs or three dozen.
- By the numbers:
- Tracer templates narrowed down from 2 to 1;
- Tracer samples increasing from 5 to 6, all to be conducted in week 2, so Compliance staff can participate in week 1 activities;
- There are 3 options for providing supporting documentation for tracers: embed into your Tracer, upload via SFTP, or have it immediately available onsite.
- CMS has incorporated a documentation request list to help them review the effectiveness of a compliance program. These documents will need to be submitted along with the 5 universes for this audit area. CMS has also provided a template for the Sponsor to demonstrate organizational structure and governance. This template includes a number of questions and data requests, and should help auditors compare apples to apples.
CDAG and ODAG
- Coverage Determinations, Appeals, and Grievances (CDAG) and Organization Determinations, Appeals, and Grievances (ODAG) universe time periods will be determined by the Sponsor's enrollment size. In addition to numerous data layout clarifications and updates, CMS also details which universes may be combined with others to determine effectuation and notification scores.
- As previously announced in 2016, Part C and Part D grievances should be submitted based on date of resolution notification. They include a reminder not to include Complaints Tracking Module (CTM) cases in grievance universes. (Who is still including CTM cases in grievance universes? Please call us, whoever you are, and let us help!)
Formulary Administration (FA) and Special Needs Plan Model of Care (SNP-MOC)
- Thankfully, there were no significant changes noted in the core processes for these audit areas. Plans will note CMS has added the Cardholder ID to the SNP Enrollees (SNPE) record layout, and, more importantly, they request separate record layouts be submitted for each unique MOC rather than per contract.
Pilot Protocols
CMS commits to releasing the pilot protocols for Medication Therapy Management (MTM) and Provider Network Adequacy later this year.
- They describe one of their objectives for the MTM review to "initiate enforcement actions and/or identify possible performance measures for sponsors to implement." Technically, CMS can refer a Sponsor for enforcement action for any aspect of the audit. Why highlight it in MTM? Get busy making sure your program is in order.
- No surprises in network adequacy — CMS has emphasized they will be evaluating networks for adequacy by also evaluating whether or not participating providers' practices are open to treat enrollees. Some of our partner clients have already started their own internal evaluations to ensure this important beneficiary protection is met.
This year's audit season was a whirlwind of many things. For Sponsors and auditors alike, it's fair to say the industry struggled with the earlier-published protocol. Now that this document set has been released for 2015 and 2016, this should allow some breathing room for all to start implementing changes in tools, reports, and monitoring efforts. Unfortunately, that breathing room overlaps the upcoming holiday season, so perseverance is key! There is truly no rest for the weary.
Resources
In addition to monitoring your operations and auditing the organization's performance, CMS also audits the compliance function. In recent years many CMS sanctions have been issued as the result of a Compliance Program that was determined to be ineffective. Let us help you create a culture of compliance. Contact us today to get started >>
If your organization is interested in a mock audit utilizing the latest protocols. We can help! The Online Monitoring Tool™ is our compliance software designed to help organizations operating in Medicare, Medicaid and the Health Insurance Marketplace track the compliance of their operations. Learn more >>
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Considering Network Expansion? The Role Network Adequacy, Risk Adjustment, and Star Ratings Play
The leaves are changing colors, pumpkins are out on every front stoop, and the brisk weather signifies fall is in full swing. It also means we are in the midst of application season for health plans wanting to expand their geographic footprint. The Centers for Medicare & Medicaid Services (CMS) has put provider networks front and center under the bright spotlight, and Medicare Advantage (MA) plans need to be even more vigilant in managing their largest asset. Regardless of the size and scope of the organization, your plan's network adequacy and accessibility is a cornerstone of any new initiative.
In today's marketplace, it is no longer acceptable to meet the bare minimum health service delivery (HSD) requirements. Consumers, and CMS, are demanding plans be able to offer choices including quality and cost efficiency. With consumer-savvy, newly aged-in Medicare beneficiaries, there is also a shift in patient expectations and what is available for their healthcare dollar. The new beneficiary is aging in from a world of patient engagement and incentive and rewards programs and will expect the same level of service. Health plans need to find ways to evaluate their existing provider networks and newly expanded networks to meet these clinical and financial goals and be forward-thinking on how to best wrap risk adjustment and Star Ratings into the mix.
Additionally, the belt is tightening with day-to-day network management, and plans must reach out to their providers on a monthly basis to confirm demographics and availability of their providers to ensure the information is updated in real-time with online directories and close the loop between the providers submitted on the HSD tables versus those in the directory. We will also delve into network adequacy becoming part of the overall audit protocol pilot for 2015.
In an upcoming white paper, Gorman Health Group's (GHG's) Senior Vice President, Regan Pennypacker, will provide compliance insight on the draft application. A key network component in the draft is that plans will be required to submit their HSD tables for their entire network, not just the counties the plan is proposing to enter with the service area expansion request. This requirement further supports the CMS commitment to monitor network adequacy for MA plans much more closely.
Given that applications will be due in a few short months, GHG is here to help. We have a long history of providing direct contracting assistance for plans, the ability to run multiple network adequacy and availability scenarios, and prepare your plan's HSD tables for submission. We also have the bench strength to help you develop a true network strategy taking into consideration the quality, financial, Star Ratings, and risk adjustment goals you need to reach in the competitive landscape of healthcare. Let us know how we can work together and build strategic network operations to support your plan goals.
Important key dates for application submission:
Resources
GHG can assist your organization in developing and executing a networking strategy, from contracting targets to model contract terms, to payment terms that match your budgets and the capabilities of your claim payment systems. Let's get started. Contact us today
Registration for the GHG 2016 Forum is now open! This year we are offering a tiered pricing schedule. Register between now and November 30 to receive the biggest savings at $795. Come December 1, the price increases to $1,095. Register today >>
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The 2016 Star Ratings: Finding Calm in the Chaos
All great changes are preceded by chaos, and the Centers for Medicare & Medicaid Services (CMS) release last week of the 2016 Star Ratings certainly introduced a great deal of chaos for Star Ratings teams throughout the industry. With approximately 5% of additional reimbursement tied to ≥4-Star performance, health plan leaders are either taking a deep breath this week (if they earned ≥4 Stars and qualified for Quality Bonus Payments) or doing their best to quell the inevitable panic if the 4th Star eluded them.
CMS continues to leverage Star Ratings to support improvements in member perceptions and longer-term, sustainable improvements in health plan performance and health outcomes. CMS continues to make rapid, continuous changes among measures, cut points, and program criteria. The speed and extent of change reinforces the need for a seasoned, dedicated Star Ratings leadership team which embraces and manages Star Ratings as a holistic, silo-busting program. It's vital for health plans to simultaneously excel not only in their clinical and pharmacy quality functions but also in every other health plan function. This includes everything from care coordination, network operations, member experience, risk adjustment, appeals and grievances, and compliance, to claims and encounter data and analytics, marketing, and every other department in the organization.
As we adapt to the first Star Ratings cycle with no predetermined thresholds, it's clear there is very little low-hanging fruit left in the Star Ratings program. It's time for us to climb the tree.
With budget season upon us, it is an ideal time to evaluate Star Ratings strategies and work plans to ensure 2017 investments are wisely made. Now that the 2016 Star Ratings are out, take an objective look at your Star Ratings programs to ask:
- Are we investing adequately in the areas where we need the most Star Ratings lift?
- Will our Star Ratings initiatives achieve our goals?
- Are we conducting the right interventions, with the right members, at the right time?
- Are we adequately integrating medication management and behavioral health into our Star Ratings programs?
- Are we adequately coordinating provider and member engagement activities?
- Are our provider contracts and pay-for-quality programs designed adequately to sustain success in the new Star Ratings environment?
If your plan achieved 4 Stars this year, this is no time to rest. The 178 plans at 3 or 3.5 Stars in 2016 are working hard to achieve 4 Stars this year, and with CMS' bell curve, this means some of the current 4-Star plans will drop in 2017. And don't forget — there are another 188 Medicare Advantage plans not rated in 2016. This huge group of plans will impact the bell curve as they receive their first ratings.
If your plan missed a 4-Star Rating this year, now is not the time to panic. There is still time to influence your 2017 Star Ratings, particularly since the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) and Health Outcomes Survey (HOS) surveys will not be fielded until early 2017. But since time is definitely of the essence, it is important to invest time and resources wisely into the areas with the greatest opportunity for short-term improvements.
We can help. Gorman Health Group understands the complexities and nuances of the Star Ratings program and measures. We know how to design programs, initiatives, and tactics to improve Star Ratings performance. From evaluating organizational strategy to developing and optimizing tactical Star Ratings work plans, our team of experts has a long history of success helping health plans achieve Star Ratings success.
With time waning to influence the 2017 Star Ratings, find calm amidst the chaos and prepare for the great changes to come.
Resources
Registration for the GHG 2016 Forum is now open! This year we are offering a tiered pricing schedule. Register between now and November 30 to receive the biggest savings at $795. Come December 1, the price increases to $1,095. Register today >>
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2016 Star Ratings are Working, and the Bar is Rising
The Centers for Medicare & Medicaid Services (CMS) released the 2016 Medicare Advantage (MA) Star Ratings early this year, on Thursday morning. The usual practice is to wait until Friday after the close. It was a shift designed to move markets, and the news was mixed. Overall, Star Ratings are working to improve quality in many areas of health plan performance, but insurers and their provider and pharmacy benefit partners are struggling on a similar number of metrics. What is clear is that Star Ratings are now the fulcrum of competition in government health programs — and man, this stuff is hard and getting tougher.
There are clear winners and losers in this release. There is a "Divine Dozen" of 5-Star-rated plans, including a couple of new arrivals to the 5-Star world. CIGNA traded its 5 Stars in FL (the legacy HealthSpring plan at the legendary Leon Clinic) for its Arizona plan. Sierra (9 states), Tufts (MA), Group Health of MN, and Essence (IL and MO) made it into the Pantheon. Repeat 5-Star rock stars include Kaiser in 8 states, Martin's Point (ME and NH and will soon own Medicare in Northern New England), and Gunderson in IA and WI.
The half-dozen "walking dead" — plans scoring below 3 Stars for 3 consecutive years —included Wellcare of LA, Sierra Health, Touchstone, Cuatro, Windsor, and GHS (owned by HCSC). Three will be terminated by CMS at the end of 2016.
Star Ratings are proving to be tremendously effective in moving markets and forcing industry investments in population health and the member experience and are driving big improvements in Medicare quality. Roughly half of MA plans (179 contracts) earned 4 Stars or higher for their 2016 overall rating, a nearly 9% increase in a year and the first time a majority scored over 4. On an enrollment-weighted basis, over 70% of MA enrollees are in contracts with 4+ Stars, a nearly 11% increase year over year.
But below the water line, at the metric level, the news was mixed and cautionary:
- The good news: Average Star Ratings increased for 10 Part C measures and 5 Part D measures. We saw significant improvements in several challenging, longitudinal Health Outcomes Survey (HOS) measures: Improving/Maintaining Mental Health, Monitoring Physical Activity, Part D Appeals Autoforwards, and High Risk Medications. There were smaller improvements on many other measures, where removal of the 4-Star thresholds helped plans improve ratings.
- The bad news: Average Star Ratings DROPPED for 16 Part C measures and 6 Part D measures. We saw significant decreases in several screening measures (colorectal cancer screening, diabetes kidney disease monitoring) and the HOS measure of improving/maintaining physical health. And there was a big drop on the Medicare Plan Finder (MPF) Price Accuracy measure, where the cut points have gotten so small that 97% accuracy only gets 3 Stars, 99% results in 4 Stars, and it literally takes a perfect 100% to earn 5 Stars.
We knew the removal of the 4-Star thresholds would produce a tremendous amount of fluctuation in the measure cut points, and that's exactly what happened. It's like playing "Pin the Tail on the Donkey" during an earthquake, making it really hard for health plan leaders to predict where their ratings will ultimately land while they still have time to influence them. For example:
- The average rating on the Diabetic A1c Control measure increased from 3.3 in 2015 to 3.9 in 2016. But there was no change whatsoever in the average performance rate for this measure — in both 2015 and 2016, the average compliance rate was 76%. The improvement on this measure can be entirely attributed to CMS relaxing the cut points once the predetermined threshold was removed.
- In contrast, the Controlling Blood Pressure measure rating dropped from 3.7 in 2015 to 3.4 in 2016. The compliance rate actually increased from 65% in 2015 to 71% in 2016. This is an example of where the removal of the predetermined thresholds tightened the pressure on this measure — in fact, the 4-Star threshold increased 12% upon removal of the predetermined thresholds.
The Star Ratings data for 2016 pretty much emasculated industry arguments for relaxing metrics for Special Needs Plans (SNPs). SNPs saw improvement in their quality scores roughly equal to that of HMOs and PPOs: MA plans operating SNPs averaged a 3.61 rating in 2016 (up from 3.47 in 2015), while plans with HMO/PPO-only contracts averaged 3.87 in 2016 (up from 3.79 in 2015).
Non-profit MA plans are pounding for-profits into the sidewalk on quality. About 70% of non-profit MA plans received 4+ Stars vs. 39% of the for-profits. Much of that discrepancy is due to culture. Non-profits tend to be far more focused on the all-important member experience measures and are more collaborative with their provider networks.
Methodological changes by CMS ensure the Star Ratings bar will continue to rise. 2016 is the first year plans with 500-999 members were rated. Only 369 Medicare Advantage Prescription Drug Plans (MA-PDs) were rated in 2016. 188 more plans weren't rated, but may be in 2017 — and this dilution will warp the bell curve plans are graded on, especially when considering most of those 188 are provider-sponsored, and strong performers will emerge. 4+-Star plans have the most to lose in this environment, and no one can afford to get comfortable.
Some takeaways:
- Stars must be managed as a program and a corporate priority, not as a group of measures. The effort must be directed by dedicated executive leadership and support. No plan improves Star Ratings doing it off the side of their desks.
- The removal of the remaining predetermined thresholds means there is no way for plans to "pick and choose" a subset of measures to focus on. It has to be improvement across the board.
- The bar continues to rise fast among Part C Star Ratings measures. The "low hanging fruit" has been eaten. Part C Star Ratings success is no longer easily influenced by slick reports provided to physicians. Plans need to help providers execute on gaps in care plans and eliminate barriers to care for the vulnerable. There's a reason the 5-Star plans are mostly provider-sponsored, vertically integrated, collaborative, and member-centric by nature.
- Star Ratings measures need to be woven into every department's work streams. This includes not only quality, care management, health services, and pharmacy, but also risk adjustment, network operations, and compliance.
- Lagging SNPs need to work harder and smarter and assume no CMS help on the measures for the low-income and disabled. To the contrary, recent draft measures for dual eligibles from the National Quality Forum focus on mental and behavioral health and will prove an enormous challenge.
If you achieved 4+ Stars this year, congratulations, it's an increasingly impressive accomplishment. Now get back to work. There are 178 plans at 3-3.5 Stars who are close on your heels and feeling the urgency. Now add the 188 unrated plans who will smash the bell curve in 2017. A 4-Star plan's equal effort in 2016 only guarantees a score that starts with a 3 the next year. Keep. Moving. Forward.
If you missed your 4th Star this year, panic a little, but then get it together. Fast. In a competitive market, you're circling the toilet bowl but aren't flushed yet. You still have time to influence your 2017 Star Ratings and must make improvement the focus of your benefit, formulary, and network designs in the months ahead. You have big decisions to make and must invest time and resources wisely and with a sense of urgency.
Once again, the 2016 Star Ratings prove the world's biggest experiment in performance-based payment is working and forcing insurer evolution. And evolution isn't about size, it's about continuous adaptation.
Resources
Whether your plan missed the overall 4-Star Rating necessary to earn Quality Bonus Payments, or whether the new 4-Star cut points have introduced new risks of maintaining your overall 4-Star rating, we can help. Our team of experts understands the Star Ratings program and knows how to influence performance. Contact us to learn more >>
Join us on Friday, October 9, from 1-2 pm ET, as John Gorman, Founder & Executive Chairman at Gorman Health Group (GHG), examines the state of government healthcare programs and outlines proven tactics market leaders are implementing to cut costs, increase member satisfaction, and drive sustainable growth. Register now >>
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ACO vs. Value-Based
Earlier this year, the U.S. Department of Health & Human Services (HHS) set a goal of moving 30 percent of payment for traditional Medicare benefits to value-based payment models by the end of 2016 and 50 percent by the end of 2018. The Center for Medicare & Medicaid Innovation's (CMMI's) Accountable Care Organizations (ACOs) have been the largest movement toward that goal to date, yet the most recent financial results highlight some flaws, and organizations should carefully analyze whether an ACO or a Medicare Advantage (MA) structure is a better fit for them.
The results show these ACOs are important building blocks for many organizations and will continue to generate success coupled with tweaks made by the Centers for Medicare & Medicaid Services (CMS) to generate more positive numbers. Organizations having already proven their success in generating savings could easily graduate to MA and be successful. Plans not as successful, or plans not currently possessing the infrastructure needed to succeed in MA, should look to CMS' Next Generation model to alleviate some of the concerns of the previous demonstrations.
CMS applauded the most recent financial and quality results, stating Medicare ACOs continue to improve quality of care while slowing down healthcare costs. Ninety-seven ACOs qualified to share in savings by meeting quality and cost benchmarks. CMS stated the ACOs generated net savings of $411 million in 2014 and improved in most quality measures. CMS also noted additional ACOs are inquiring about participating next year.
Yet these numbers represent one in four generating enough savings to qualify for bonuses. Only 11 Pioneer ACOs earned savings payments of $82 million. Five generated losses, with three owing CMS shared losses of $9 million. Despite CMS reporting Pioneer ACOs improving an average of 3.6 percent compared to 2013 on 28 of the 33 quality measures, most did not see any rewards. Only 27 percent of Medicare Shared Savings Program (MSSP) ACOs earned shared savings payments.
The results indicate ACOs need time to adjust to the model and show improvement over time. Thirty-seven percent of the MSSP ACOs launching in 2012 generated savings in the third performance year, compared to 27 percent of MSSPs beginning in 2013 and 19 percent beginning in 2014. However, these numbers do not account for the ACOs dropping out of the program, potentially skewing the earlier success rates. The results also highlight the complexity of participating in CMS' alternative payment models. Many ACOs not as successful initially likely lacked or underestimated the investment needed for new infrastructure and systems. Plans and providers need to understand the need to set up more sophisticated information technology (IT) infrastructure and how to successfully utilize data. As potential ACOs evaluate whether to participate, they should consider how much of an investment is needed in order to succeed.
The major concern over CMS' use of benchmarks is also still evident. In order for an ACO to qualify for shared savings, the ACO must beat a benchmark calculated by CMS. The year-to-year trend in this benchmark is a mix of the national percentage growth rate in Medicare and the absolute dollar value of the annual per member per month (PMPM) increase in the average Fee-for-Service (FFS) per capita costs. Because of this, ACOs in high-cost areas consistently achieving lower costs are not rewarded because their improvements in financial and quality performance are not accurately captured. The current program also lacks a full and up-to-date risk adjustment to accurately account for beneficiaries' health status. Thus, ACOs that may generate savings for CMS still miss the benchmark.
Despite concerns with methodology, there are now approximately 7 million beneficiaries served by more than 400 ACOs. At the same time, CMS has shown it is focused on issues that develop and is working on options which will tweak the program to better fit future participants (the Next Generation ACO, for example). Despite the challenges, ACOs are currently the biggest initiative succeeding in enticing and exposing large numbers of providers and beneficiaries in its effort to coordinate services. The program is still receiving strong interest from both new applicants and existing ACOs seeking to continue the program, and CMS plans to announce new and retiring ACOs by the end of the year.
Resources
We understand Medicare ACOs: We have helped launch eight over the past two years. But we also understand that this is just a first step toward taking greater control over the Medicare revenue stream by "moving up the food chain." Our team of veteran executives can help your ACO evaluate the options, manage the workflow to achieve either a Medicare Advantage contract with CMS or a risk contract with an existing MA plan, and continue to achieve improved outcomes. Visit our website to learn more >>
Join us on Friday, October 9, from 1-2 pm ET, as John Gorman, Founder & Executive Chairman at Gorman Health Group (GHG), examines the state of government healthcare programs and outlines proven tactics market leaders are implementing to cut costs, increase member satisfaction, and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
The MA-VBID Model: Key Takeaways
Now that you have digested the Centers for Medicare & Medicaid Services' (CMS) announcement on the proposed demonstration for high-value benefit designs, the clock is ticking on determining an optimal set of benefits prior to the CMS deadline of November 15, 2015.
Over 37 organizations are eligible to consider this opportunity, which is based on member value and not competition. As John Gorman, Founder & Executive Chairman at Gorman Health Group, and I discussed at length on our recent Medicare Advantage Value-Based Insurance Design Model (MA-VBID) webinar on Monday, a multi-faceted approach within the health plan operation will be needed to quickly put together a review and proposal. Operational "must haves" include high-value, narrow networks which understand the eligible populations, high-quality disease management programs, solid Star Ratings programs, and predictable membership. A strong foundation in claims processing and configuration, product design (including supplemental benefits), return on risk adjustment, efficient organization staffing, and excellent communications (electronically) with providers are needed to support the required capabilities.
Although marketing to the target populations will take place post-enrollment to limit adverse selection, the concept of a target condition is based on two key triggers. Realistically, the target condition is marked on a claim with several months' run-out, even if a need already exists such as follow-up visits to specialists or prescription drugs. Good Electronic Medical Record (EMR) communication can shortcut that process to activate benefits. Fortunately, drugs can be targeted for benefits, but Pharmacy Benefit Manager (PBM) coordination is critical.
GHG has been preparing for this shift in the industry and is already working with clients to assist in the assessment of current providers, referral patterns, and populations within the eight chronic conditions (diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and various International Classification of Diseases (ICD) combinations). Understanding the cost and utilization as well as referral patterns for these members (medical and pharmacy) will help a plan maximize the potential for success. A team of subject matter experts from Gorman Health Group will deliver actionable results, driven by data analysis of current capabilities and benefit designs, to achieve quality care for the target populations.
The benefits must be approved with November submissions and certified by the plan's actuaries with the 2017 bid in June 2016, so they are binding. Gorman Health Group is prepared to help with individual plan assessments and partner with clinically-effective benefit designs that deliver financial and quality results.
Resources
GHG can help you streamline the execution of your risk adjustment approach, and build a roadmap to ensure you're keeping pace with CMS expectations in both compliance and health care outcomes. Visit our website to learn more >>
Join us on Friday, October 9, from 1-2 pm ET, as John Gorman, Founder & Executive Chairman at Gorman Health Group (GHG), examines the state of government healthcare programs and outlines proven tactics market leaders are implementing to cut costs, increase member satisfaction, and drive sustainable growth. Register now >>
Download a copy of the recording from Monday's Medicare Advantage Value-Based Insurance Design Model (MA-VBID) webinar, hosted by John Gorman.
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
New Part D Medication Therapy Management Model: Is It Right For you?
Drum roll, please…beginning January 1, 2017, the Centers for Medicare & Medicaid Services (CMS) will pay Medicare Prescription Drug Plans (PDPs) to play in Medication Therapy Management (MTM)—and it's all about the money. Where before MTM costs were administrative, there will be two additional payments for plans approved for participation in the model program. The "model test performance period" will actually span seven total years (2017-2023) because payments will be made for two additional years after the five-year model performance period. There will be a prospective payment for "more extensive MTM interventions to members and providers" and a performance payment "in the form of an increased direct premium subsidy for plans that successfully achieve a certain level of reduction in fee-for-service expenditures and fulfill quality and other data reporting requirements through the model." The final approved prospective payment will be on a per member per month (PMPM) basis and will be paid per enrollee in the plan regardless of how many enrollees are receiving enhanced MTM services.
As of August 2015, there are 24 million enrollees in Medicare PDPs. Enrollees sign up because the PDP premiums are usually less expensive than MAPD plan premiums. However, these plans usually provide minimal MTM services meant to meet the letter of CMS compliance, not the intent. For example, provider interventions may have no feedback loop to ascertain whether or not the provider agreed or disagreed with or accepted the recommendations. And, therefore, any cost avoidance or actual cost savings data are missing or suspect.
This new enhanced MTM performance model has the potential to move the needle, but PDPs in the eligible regions will have to complete an accurate risk analysis for their members to determine what a viable program consists of and how new and innovative MTM endeavors will positively impact the CMS MTM goals of "optimized therapeutic outcomes through improved medication use, and reduced risk of adverse events, including adverse drug interactions—while reducing net Medicare expenditures."
"Gorman Health Group is ready to help work with PDP plans in identifying the cohort populations that would benefit from this demonstration," explained a Senior Consultant in Risk Adjustment & Healthcare Analytics at Gorman Health Group. "The successful MTM programs will leverage pharmacy costs and utilization to achieve savings in medical costs. CMS is looking for this savings, and participating plans need to monitor their effectiveness with new MTM programs."
Resources
Click here to download Gorman Health Group's whitepaper on the Part D Enhanced Medication Therapy Management (MTM) Model, written by Celia Girard, Director of Policy & Training and Caron Wingerchuck, Senior Director of Pharmacy Solutions.
Join us on Friday, October 9, from 1-2 pm ET, as John Gorman, Founder & Executive Chairman at Gorman Health Group (GHG), examines the state of government healthcare programs and outlines proven tactics market leaders are implementing to cut costs, increase member satisfaction, and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Medicare Advantage Value-Based Insurance Design: Key Considerations
The Centers for Medicare & Medicaid Services (CMS) recently announced a proposed demonstration that will test varying benefit designs based on health status. The Medicare Advantage Value-Based Insurance Design (MA-VBID) Model will allow organizations to offer targeted supplemental benefits and/or reduced cost sharing to enrollees with specific chronic conditions to further the goal of improving beneficiary health, reducing the utilization of avoidable high-cost care, and reducing costs for plans, beneficiaries, and the Medicare program. The overall goal of this demonstration is to improve clinical outcomes while reducing plan expenditures.
Do you qualify?
This demonstration is proposed for seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. According to the announcement, only current MA organizations in good standing in those states will be allowed to participate. The demonstration is aimed at Health Maintenance Organizations (HMOs), Health Maintenance Organization Point of Service (HMO-POS) plans, and local Preferred Provider Organizations (PPOs) in order to determine how it affects beneficiaries and costs in the most common plans. Special Needs Plans (SNPs), Regional PPOs, Medicare-Medicaid Plans (MMPs), Private Fee-for-Service (PFFS) plans, Employer Group Waiver Plans (EGWPs), Health Savings Accounts, and cost plans are not eligible.
The demonstration will waive certain regulations so benefit plans can vary for enrolled members based on their diagnosis, condition, or need for a medical service. Currently, health status distinctions in providing benefits to enrolled beneficiaries are prohibited by regulations.
How we can help:
Applications
The CMS process begins with the submission of a Request for Application (RFA), which is currently due on November 15, 2015. Organizations failing to submit an RFA cannot participate in 2017 but may be allowed at a later date during the five-year demonstration period. Organizations must submit an RFA that has sufficient detail to allow CMS to determine if the benefit plan addresses targeted beneficiaries, will provide measureable results, and is appropriately structured for the demonstration. We can work with your organization through every step of the application process, from gathering the right data and completing the application, to submitting the application and responding to follow-up questions.
Financial Analysis
The key to designing a successful MA-VBID model is to establish programs to simultaneously manage revenue through best-in-class Star Ratings operations and targeted risk adjustment for these prevalent diseases and avoid adverse risk selection as well as an ongoing review of cost and utilization drivers from medical and pharmacy claims. An initial assessment of claims and financials can help highlight existing strengths and weaknesses in medical management (including pharmacy) as well as provider networks. With annual bids as the source of financial truth, targets need to be realistic and timely.
Benefit Design Analysis
Organizations can propose any myriad of combinations of benefits or services provided they are based on the proposed chronic conditions listed in the announcement. Most importantly, CMS notes participating organizations can initiate the demonstration with a limited benefit and can expand their benefit plans during the five-year term of the demonstration. While the benefits will be mandatory supplemental benefits, CMS proposes to prohibit marketing these benefits to non-member beneficiaries.
Resources
We can work with your organization to design and implement a comprehensive data analysis to guarantee you have the right products, programs, and capabilities in place to compete and ensure you are go-to-market ready.
Is this the right opportunity for your organization? Attend our webinar to find out. Join John Gorman, Founder and Executive Chairman at Gorman Health Group, and I on Tuesday, September 29, from 1-2 pm ET, as they outline the MA-VBID plan requirements as well as what you should be doing now to prepare for January 2017. Register now >>
ACOs Should Run for the Exits and Into Medicare Advantage
CMS recently released results from the Medicare Pioneer Accountable Care Organization (ACO) Program and the Medicare Shared Savings Program (MSSP). Once again the results are a mixed bag: quality is up, but the ROI for most participants is a joke. The update should have the most sophisticated demo sites running for the exits and into Medicare Advantage — but they need to move fast with the holidays and a February filing deadline for 2017 looming.
Pioneer ACO Program
CMS initially selected 32 health systems to participate in the program. It's down to 19 today. For the year 2014, 622,000 beneficiaries participated. Findings:
- Pioneer ACOs generated total savings of $120 million in 2014, a 24% increase from 2013 ($96 million) and $88 million in Year 1 savings.
- Eleven health systems generated gross savings beyond the minimum goal and received performance payments totalling $82 million. That's a pittance for what's been invested to participate. Of the 11 companies, a few reported notable savings:
- Banner Health in Arizona generated roughly $18.7 million in savings
- Partners Healthcare in Massachusetts generated roughly $13.2 million in savings, with around 70,000 beneficiaries participating.
- Beth Israel in Massachusetts lowered costs by 3.7% and generated roughly $9.8 million in savings.
- OSF Healthcare System in Illinois lowered costs by 3.0%
- Michigan Pioneer ACO in Michigan lowered costs by 6.3%
- Monarch Healthcare in California lowered costs 4.0%
Three Pioneers incurred the nightmare scenario of a giveback payment to CMS in 2014, including Beacon Health in Maine ($2.9 million), Dartmouth-Hitchcock in New Hampshire ($3.6 million), and Franciscan Alliance in Indiana ($2.5 million). All had to inform CMS of their decision to stay or exit the program by September 14. After two years of consecutive losses, Dartmouth-Hitchcock planned to exit Pioneer and apply instead for the Next Generation ACO program. It's a black eye for the system that's home to Dr. Elliott Fisher, widely considered to be the inventor of ACOs. Beacon Health is also exiting the program after facing losses for two years in a row, and will also apply for Next Generation.
Total model savings per Pioneer was $6.0 million in Year 3 (2014), up from $4.2 million per ACO in 2013 and $2.7 million per ACO in Year 1 (2012). The mean quality score among Pioneer ACOs increased to 87.2% in 2014, an improvement of 200bps from 85.2% average performance in 2013, and way ahead of 71.8% in Year 1. The Pioneers improved on 28 out of 33 quality measures. So most are delivering the quality goods, but aren't seeing much if any return for the effort.
Medicare Shared Savings Program
In 2014, there were 333 participants in the Medicare Shared Savings Program, and 92 of these ACOs kept spending below their targets, up from 58 ACOs out of 114 in 2013. The victorious 1/3 earned $341 million in performance payments. Takeaways:
- $465 million of the savings generated will accrue to the Medicare Trust fund, $341 million will be returned to participants.
- 89 ACOs actually reduced health care costs compared to their benchmark, but did not qualify for shared savings because they did not meet the minimum savings threshold. So 2/3 of ACOs are winning on expense, but only half of those got paid. That's a problem.
- Veteran ACOs were more likely to generate performance payments. Twice as many ACOs that entered the program in 2012 got paid vs. freshman systems (38% vs. 19%).
Lined up alongside other innovation failures like the bundled payment and nursing home quality demonstrations, it's clear CMS's innovation agenda has been hobbled by poor design and lack of business acumen. There's never been a better time for an industry veteran like Andy Slavitt to lead the agency out of the darkness.
The clock is ticking for ACOs to make the evolutionary leap into the one "devil we know" of Medicare Advantage.
Resources
Our team of veteran executives can help your ACO evaluate the options, manage the workflow to achieve either a Medicare Advantage contract with CMS or a risk contract with an existing MA plan, and continue to achieve improved outcomes. Visit our website to learn more >>
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How to Partner with Key Health Systems in your Service Area to Optimize Benefit Plan Offerings
As we anticipate additional information this week on the Centers for Medicare & Medicaid Services (CMS) network adequacy (pilot) audit, we can't help but consider how CMS' rigorous access and availability standards hamper Medicare Advantage (MA) plans' ability to be on the cutting edge of innovative network design. The Affordable Care Act, in comparison, has allowed for Marketplace plans to offer narrow networks as long as the networks have sufficient numbers and types of providers to deliver services without "unreasonable delay," leaving states to define the meaning of "unreasonable." This difference in network adequacy standards has widened the gap in plan offerings.
MA plans, after meeting network adequacy standards, are able to offer tiered benefit plans to members ensuring members are still afforded access to the larger network if not all standards are met within the smaller subset. The tiered benefit designs leave MA plans with the question of which providers would be the best partners.
In evaluating provider partners for tiered benefit designs or co-branding opportunities, health plans need to determine the attractiveness of each prospective provider by asking questions such as: Does the potential provider system have a similar philosophy? Is the provider system large enough to meet network adequacy standards in a given market area on their own, or would fill-in providers be required? How would their participation or non-participation in our network affect our market strategy? Does the provider system do anything particularly well, do they have unique services, service area, or exclusive providers, and how can those services be packaged? Would these bundled services contribute to increased revenue and/or market share?
In turn, provider systems that may be contemplating offering their own provider-sponsored health plan could be asking themselves similar questions and determining if a payor partnership would be a good option. Providers should develop a plan/partner evaluation process concurrent with developing a marketing strategy in order to find the best available partnership.
As we see the Marketplace and Medicaid proposing similar network access and availability standards as MA plans, we easily foresee a change in how these two government-sponsored programs will need to re-evaluate their network design. By beginning to monitor their networks now, Medicaid and Marketplace plans will be able to identify some of the provider network challenges MA plans have faced. As CMS moves forward with decisions on network adequacy for all government-sponsored health plans, enhanced relationships between payors and providers will be key in developing the networks needed to support competitive benefit plans.
Resources
Gorman Health Group evaluates the design and delivery of high quality collaborative care while achieving compliance and improving revenue cycle management. Our multidisciplinary team of experts will assess the alignment of your products, your current network and your market to translate your business strategies into practical, efficient and rigorous work processes with the highest degree of compliance and accountability. Visit our website to learn more >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Let's get started. Contact us today
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