Provider Relations | 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.

What Medicare Advantage and Part D do, Medicaid and the commercial market, including the ObamaCare Exchanges, follow 3-5 years later.
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.
If government health programs were an easy business, we'd be out of business.
Inspect what you expect. Or, as Reagan said, "Trust but verify."
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.
Fish where the fishes is.
Pick your vendors and partners like you pick your fruit.
Capitation with performance-based payment is the only real hope for long-term viability of entitlement programs.
Being a doctor is the worst job ever. Right after community hospital CEO and President of the United States.
High-performing health plans are good at everything, especially those functions that are member- and/or provider-facing. It's about culture and execution.
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.
It's easier to increase revenue than it is to cut costs.
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.
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.
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.
So much of the future is about retail pharmacy. In short time, they will make more providing services than filling bottles.
Ninety percent of the evil and waste in the system occurs at the tip of a doctor's pen.
We are all going to retire thanks to government programs. Demographics is destiny.
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.

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by GHG Advisors

Network Adequacy Test Submissions for Medicare-Medicaid Plans

In follow up to the October 2014 Health Plan Management System (HPMS) memo titled "MMP Network Adequacy Standards," the Centers for Medicare & Medicaid Services (CMS) announced dates in which Medicare-Medicaid Plans (MMPs) and Minnesota Senior Health Options Dual Eligible Special Needs Plans (D-SNPs) can check their network against the MMP standards in the HPMS Network Management Module (NMM). These standards were developed using the same methodology that is used to develop the network standards for Medicare Advantage but were adapted to reflect the population served under the demonstrations. Specifically:

Utilization Patterns and Minimum Number of Providers — Medicare Advantage network standards are based on analysis of service utilization patterns in fee-for-service Medicare. The new standards use the same analysis but based exclusively on utilization rates for dual eligible individuals.
Total Beneficiaries — In Medicare Advantage, network standards are set based on current market penetration in MA. In the new standards, we will use actual or projected enrollment based on the enrollment policies for each demonstration. This affects the minimum number of providers and acute inpatient hospital beds criteria.
Time and Distance — The Medicare Advantage standards require that 90% of beneficiaries are able to reach the minimum number required for a certain provider type within the time and distance standards established. These new network standards adjusted the time and distance for certain provider and facility types in certain counties.

To ensure your health plan's Medicare portion of the network adequately reflects and supports the beneficiaries served by this demonstration, Gorman Health Group (GHG) can analyze your existing provider file, assist in uploading the prepared files into NMM, and provide strategic planning should any deficiencies be found. The gates in the NMM will be open on the following dates:

March 31, 2015
May 26, 2015
August 4, 2015

GHG advises all MMPs to be proactive and take advantage of the pre-checks available. The annual network submission deadline is September 17, 2015, with an exception request period to follow. Let's work together to ensure your provider network not only meets CMS standards but is working to meet the strategic initiatives of your plan.

Contact us today to start a conversation >>

Resources

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

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 >>

by GHG Advisors

Risk Adjustment Data Validation (RADV) Audits Just Got Real

Last night the second-largest Medicare Advantage plan in the country, Humana, filed an SEC document detailing a US Department of Justice investigation into the company's risk adjustment coding and data collection practices. The investigation is an extension of a 2010 physician-led whistleblower action under the False Claims Act. The company has over 3.2 million Medicare Advantage members.

For years CMS has struggled to define the process and methodology it would use to pursue payment recoveries from Medicare Advantage plans which were overpaid under risk adjustment. In 2012 it finalized its process and launched its first round of RADV audits, on a parallel track with those being conducted by the Office of Inspector General at the Department of Health and Human Services.

The Justice Department's involvement in the Humana audit would appear to indicate the review is in the advanced stages and has been underway for some time. The methodology assures an extrapolated repayment to the Federal government for unsubstantiated codes submitted for risk adjustment. That this action also comes in connection with the False Claims Act and a qui tam whistleblower action could signal serious trouble for the insurance giant.

RADV just got real.

Resources

GHG can support your risk adjustment from start to finish when it comes to preparing for your RADV audit and prepare a readiness plan. We're standing by to support you in comprehensive audit coordination, limited audit oversight and targeted engagement services. Visit our website to learn more >>

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?

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.
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.
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 togetherâ€¦.a realist would say, "Thanks HHSâ€¦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.

by GHG Advisors

Private label health plans - a tool for increase market capture and improved patient outcomes

Private label health plans or co-branded health plans are joint efforts between like minded health plans and provider organizations interested in enhancing market share, achieving improved patient outcomes, minimizing duplication of services and achieving financial accountability. In its purest form, a private label health plan combines the strengths of the participating providers such as reputation, innovative practice patterns, trusted referral patterns and coordination of care techniques with those of the participating health plan such as benefit design, network design, contract administration and other insurance plan core competencies.

Most often, a private label enterprise has as its core characteristics, a value based limited network in which the participating providers agree to, and adhere to, mutually designed clinical and financial performance targets which are intended to optimize patient outcomes and financial performance targets ultimately leading to increased provider and health plan profitability. Benefit plans are customized to maximize in network access, member engagement and minimize out of network referrals. The insurance partner, in addition to providing the basic insurance administrative and medical management insurance functions, contributes by offering access to data and technology often unavailable to providers otherwise.

Private label health plans are a potentially attractive option for health plans that are already working with Accountable Care Organizations , (ACO's) and large Integrated Health Systems, (IDS) who control all, or a majority of, the resources necessary to achieve continuity of care ranging from primary care to end of life care.

Large self insured Employers that labor under legacy self insured insurance programs for their retiree populations are potential customers for private customized private label benefit plans and value based networks because they offer the Employer greater control over benefit offerings, defined employee or retiree contribution and medical cost.

At the Gorman Health Group we have a history of supporting Medicare and Medicaid Health Plans and Provider organizations on innovative approaches to network development, healthcare pricing and model of care development, as well as working with ACO's on achieving improved financial performance and member engagement.

Resources

Need our help? Interested in starting a dialogue on Private label plan development, value based network formation or optimization of ACO performance? Take the first step and call us at 202-364-8283 and ask for me directly or one of our senior subject matter experts or contact us via the GHG website. We are here to help.

Registration for the Gorman Health Group 2015 Forum is now open and our Early Bird discount has been extended to January 16. Enter promo code EarlyBird30 at checkout to receive your 30% discount. Register today >>

by GHG Advisors

CMS Initiates New Program to Support Care Coordination Among ACOs

Many of you are aware of the recently published Centers for Medicare & Medicaid Services (CMS) Affordable Care Act (ACA) initiative to support care coordination nationwide.

CMS announced the availability of a new initiative for Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program. The initiative is designed to encourage ACOs to realize quality improvement and care coordination through the use of health information technology; thereby helping to move the health care system to one that values quality over quantity, and preventative care over treating people after they get sick. The new ACO Investment Model is designed to bring these efforts of better coordinated care to rural and underserved areas by providing up to $114 million in upfront investments to up to 75 ACOs across the country.

"The ACO Investment Model will give Medicare Accountable Care Organizations more flexibility in setting quality and financial goals, while giving them greater accountability for delivering quality care efficiently," said CMS Administrator Marilyn Tavenner. "We are working with these organizations to make necessary investments that encourage doctors, hospitals and other health care providers to work together to better coordinate care and keep people healthy."

Through the CMS Innovation Center, this initiative will provide up front investments in infrastructure and redesigned care process to help eligible ACOs continue to provide higher quality care. This will help increase the number of beneficiaries — regardless of geographic location — that can benefit from lower costs and improved health care through Medicare ACOs. CMS will recover these payments through an offset of an ACO's earned shared savings. Eligibility is targeted to ACOs who joined the Shared Savings Program in 2012, 2013, 2014, and to new ACOs joining the Shared Savings Program in 2016. The application deadline for organizations that started in the Shared Savings Program in 2012 or 2013 will be December 1, 2014. Applications will be available in the Summer of 2015 for ACOs that started in the Shared Savings Program in 2014 or will start in 2016.

Gorman Health Group has assisted numerous organizations for the past three years in achieving Pioneer and Shared Savings ACO status. Additionally, GHG has assisted operating ACO's in analyzing operating and medical spend performance. If you, as an ACO, are wondering why shared savings expectations are not being realized, or how to improve on your internal analytical and decision support competencies -- we can meet your needs. Contact us today.

Resources

On Friday, September 26, John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, discussed the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Join the Point today to access this webinar recording.

Don't let the application process get in the way of your day-to-day operations. Contact us today to ensure a smooth, compliant process.

From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation - we can help design and implement these arrangements. Find out how GHG can help >>

Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>

by GHG Advisors

High Value Network: Generation 4.0

When it comes to healthcare, two truism's are that medical costs are going up along with demand for healthcare services. And when it comes to organic growth of healthcare volume and expenses, government programs represent a major driver, particularly when considering that on a daily basis thousands of baby boomers age into Medicare. During the last several years CMS has published a number of demonstration programs which are intended to improve the quality of Medicare patient outcomes while promoting financial efficiency on a unity cost or per procedure basis.

Commonalities among the various demonstration programs include: providing financial incentives when providers and plans (through STAR ratings) achieve specific quality and financial metrics, that when properly implemented, result in improved patient outcomes at a reduced cost. Not surprisingly, the discussion among many health plans has started to focus on how to manipulate the size and inherent "quality" of provider networks to achieve performance gains.

The concept is not new, in that payer efforts at developing "Centers of excellence", proprietary physician networks, private label networks, etc., have been around for at least two decades. These efforts were driven by market considerations, provider availability and consolidation, expectations around consumer demand and use of services. Many times high cost hospitals were screened out and networks were defined by the plan offering, e.g.. PPO, HMO POS and the like. Provider price concessions were expected in return for volume. Provider performance, at least as defined by improved patient outcomes, was not a major consideration in the design of these networks.

At least not until now. Given the current climate of healthcare reform, shrinking payer margins, provider flight from Medicare, percentage declines in medical school enrollment and CMS initiatives to constrain medical expense through improved coordination of care and elimination of unnecessary procedures, Medicare Advantage, Medicaid, and commercial health plans are exploring how the design of networks, around performance, can lead to better patient outcomes and better managed financial costs. Thus, the approach to network design is shifting way from preferred pricing in exchange for volume to a network design strategy focused on horizontal and vertical integration, superior treatment outcomes, more efficient use of resources as well as a willingness to share in financial risk. Population management strategies, establishment of consensus clinical protocols and reimbursement strategies tied to CMS STAR ratings, as well as additional quality and financial metrics, dictate network performance and thus health plan sustainability.

Tracking the measurement and reporting on agreed to metrics require a level of analytical sophistication that was not apparent in the early days of network design. The development of high value networks suggests that payers and providers must share a common vision for network design and consensus agreement on expectations around network performance. In addition network design efforts will require unwavering leadership commitment to ensure long term sustainability.

In the final analysis high value network design is a partnership enterprise between the health plan, the provider and the patient. Contributing components include health services/medical management, provider contracting, actuarial services, finance, analytics/ decision support and management.

As a diversified health services consulting company the Gorman Health Group is well positioned to become a partner in this effort from start to finish including the development of the most appropriate network design strategy to development of performance payment models to the implementation of the final network including assurances that the final network meets CMS network adequacy requirements. When you are ready, give us a call.

Resources

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. Visit our website to learn more >>

Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>

by GHG Advisors

Important strategies for a plan's medical management team

It wasn't too long ago that the clinical staff and practitioners in the medical management arena of health plans only focused on the quality and continuity of care with their members. These objectives were very important, and should continue to be the focus of any medical management team. However, in more recent times, it has become just as important for the clinical areas of health plans to become aware of the costs of care they incur and to become involved in the control of those costs.

The Patient Protection and Affordable Care Act of 2010 mandates that health insurers report plan costs for the purpose of calculating their medical loss ratio (MLR), which is defined as the percentage of insurance premium dollars spent on reimbursement for clinical services and activities to improve health care quality. Large group insurers must spend at least 85 percent of premium dollars on claims and activities to improve health care quality, while individual and small group insurers must spend at least 80 percent of premium dollars to improve health care quality. If insurers fail to meet these minimum MLRs in a given year, they are required to provide a rebate to their members.

Thus, as a barometer of a health plan's solvency, management of the MLR is an important strategy for the plan's medical management arena. For example, the effective use of health information technology, or medical economics, can be one of the best assets for a health plan in controlling costs and service levels, especially when there may be an increase in plan membership. In addition, investing in quality improvements, such as electronic health records for the plan's provider network, or a web portal for the exchange of health care information can indirectly help to improve the health plan's MLR by reducing administrative costs. Reviewing the utilization data of the health plan's services to determine areas of over or under utilization, and monitoring the process for the authorization of member services are two additional important means for medical management to identify unnecessary costs that may be occurring.

Although there are multiple ways to look for an optimal MLR for health plans through medical management functions, the ultimate goal should be to monitor and take action to improve key indicators affecting MLR, such as the management of complex / high cost members, network contracts with providers and ancillary groups, inpatient performance, and pharmacy utilization, all of which can help to improve a health plan's overall financial performance.

Resources

On Friday, September 26 Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register today >>

On Tuesday, August 19, GHG's Senior Vice President, Bill MacBain and Senior Vice President of Healthcare Innovations, John Nimsky, explored the drivers and trends in cost and revenue which affect your MLR. Access the webinar recording here >>

Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>

by GHG Advisors

Bombshells from MedPAC on Medicare Advantage Retention

The Medicare Payment Advisory Commission (MedPAC ), the nonpartisan blue-chip Congressional uber-nerds on our favorite entitlement program, met this week and the staff report presented a couple bombshells on retention rates in Medicare Advantage (MA).

In the aggregate, the commission noted that in 2012 the voluntary disenrollment rate from plans was slightly below 10%. The vast majority of individuals who disenrolled -- 80% -- switched to another MA plan, with the remaining 20% going back to traditional Medicare. Bombshell #1: we're seeing an overall MA retention rate of roughly 98%, and speaks to the tremendous popularity of the program vs. "old school" coverage.

The commission also noted:

When beneficiaries changed plans, a large majority picked another plan with a lower premium.
Beneficiaries who elected to switch back to traditional Medicare from MA had higher average cost per beneficiary vs. those who stayed in MA. Does this indicate that sicker beneficiaries feel they'll get less hassles and/or better care in unmanaged fee-for-service Medicare? I doubt it. More likely: once back in unmanaged Medicare they go on a wild utilization binge. Why? Because...
Older MA enrollees are less likely to disenroll than younger ones. This is puzzling, given the finding above and the direct correlation between income, age and health status in the elderly. Older beneficiaries are, on average, poorer and sicker than younger ones.

On a plan-specific basis, Star ratings also correlate positively with member retention. Bombshell #2: MA plans with 2 or less Stars experienced a 17% disenrollment rate, while plans with 4 Stars or higher had a disenrollment rate of 4.9%. That's an incredible statistic, showing the rapid effectiveness of Stars impacting the member experience at the plan level in just a couple years. Stars has truly become a game-changing indicator of quality across health plan functions.

All of this speaks to the fundamental triumph of Medicare Advantage: for those who know, it's the far superior option for senior care. And once they're in, they don't leave.

Resources

Join GHG for an in-depth discussion on the end-to-end management of data from noting identified gaps in data processing, concerns regarding data completeness and accuracy. Register now >>

To succeed in Medicare Advantage, plans must achieve higher quality and Star Ratings, surmount CMS and medical loss ratio (MLR) requirements, and develop member onboarding and retention capabilities, all while operating in a highly competitive market. Learn how GHG can help ensure your MA plan is positioned to make the most of the program's opportunity.

Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>

by GHG Advisors