Integration around chronic conditions, such as chronic kidney disease
Many of our clients have requested customized mapping and integration which electronically links the findings from the Advanced Evaluation into their medical management system. Health plans and medical groups both appreciate the in-depth reporting, plus electronic connection that triggers or flags particular members for placement into unique case management programs, whether it is a COPD, CHF, frail and fall reduction, or chronic kidney disease referral.
This is an easy workflow to ensure the data is transformed from a picture in time to an integrated care support tool.
One of the diagnoses we focus on a great deal is Chronic Kidney Disease. We have built a specific module around the clinical guideline statement from the National Kidney Foundation regarding Chronic Kidney Disease and have engaged experts to ensure our clinical analytics, detection, and evidence based findings are easily understood by the members, interact with the health plan's platform, and are simply formatted for community physician plan of treatment development.
Dr. Dambro, CMO and Dr. McCallum, CEO of CenseoHealth will be sharing more information about our chronic disease modules and clinical outcomes in future conferences and blogs. Stay tuned.
When Worlds Collide: ACOs and Risk Adjustment
By John Nimsky & RaeAnn Grossman
As we enter the era of ACOs, we have to be aware of all the clinical and operational essentials that are needed to make the ACO a viable health care solution for members, plus the elements needed to support the ACO as an engaged and intelligent communicator with CMS.
If you have a shared cost saving ACO you must have an accurate picture of the member's health status at Day 1. This detailed clinical picture will help you as an ACO:
1) engage the member in appropriate care programs
2) understand their cost today and project cost for next year, and
3) calculate the risks and benefits of treatment.
In traditional Medicare, it is well substantiated that over 75% of the members may have undocumented HCCs or gaps in care. However, as an ACO your primary concern is wellness and cost saving, and so you want to push toward 100% member evaluation completion for each calendar year. Why? Your members really should be evaluated to ensure there is a documented, compliant health status profile of of each member who starts with your ACO, and each year thereafter.
If you stratify the patient population within the ACO for relative health status, your plan for future treatment intervention will include identification of those members who can benefit from:
• referrals to case management;
• inclusion in disease registries;
• and other target services on a one to one basis.
Effective population stratification and risk assessment produces a complete health profile, a tool that can help reduce:
• admits;
• re-admits;
• acute utilization;
• ER visits;
• and other avoidable costs found in today's fragmented approach to health services delivery
Specifically, a robust risk assessment approach for a defined populations will
a) identify ACO members who will benefit from treatment but are currently missed by the system and thus are more likely to develop more serious pathologies later;
b) give physicians and members/patients quantitative information about the risks of adverse events and the benefits of treatment;
c) identify priorities for appropriate outreach programs; and
d) assist in calculating appropriate benchmarks and shared savings incentives for physicians.
An in-office or in-home assessment of the patient's medical history and current health status, when appropriately employed at the time of member assignment to an ACO, is a powerful tool that must be ready to launch Day 1 of ACO implementation. Because members are likely to join the ACO throughout the year, the stratification for those new members must occur monthly and integration into the care pathway must be timely and seamless. Timely integration of the member into standardized clinical treatment approaches will lessen the burden on care givers and will ensure that services are provided efficiently and in the appropriate setting. This is not a time for a long implementation phase, lags in data refreshes, or delays in re-stratifying members.
One of the tools available to assist in the process of identifying member current health status and treatment planning is offered by CenseoHealth, which has ACO Advanced Evaluation modules for Medicare, Medicaid, and commercial members. These populations' clinical conditions differ, and so their outreach, analytics, and engagement strategies are also dissimilar.
RADV Rules Show a New Era Dawning at CMS
After the market close last Friday CMS released its long-awaited methodology for conducting Risk Adjustment Data Validation (RADV) audits. It's a critically important document as for years President Obama has threatened in his budgets to recover billions in payments from Medicare Advantage plans. What it shows is that a new era is dawning at CMS, one brought about by the "tipping point" of Medicare Advantage exceeding 25% of all beneficiaries this year. Call it the era of "the open hand and the closed fist."
First, we have to acknowledge that the RADV methodology clearly reflects the intensive consultation CMS did with industry stakeholders to get their approach right. In a word, where we ended up is great, and CEOs and CFOs across the industry are heaving up sighs of relief this week.
There were four big developments in the announcement. The first: CMS says RADV audits will begin with plan year 2011, not retroactive to 2007, eliminating the four worst years of exposure for the industry as it figured out risk adjustment -- documentation is much better today than it was when the system launched in 2007. Essentially, CMS is saying "the sins of the past are absolved." They didn't have to do that, and we, hundreds of CFOs, and bankers up and down Wall Street and Madison Avenue are thankful they did. For plans that have already accrued for RADV for 2007-2010, like Aetna, there's the potential in the accrual for "found money" or a boost to earnings.
Second, CMS is introducing a "Fee-for-Service Adjuster." This mean the error rate found at individual Medicare Advantage plans will be reduced by the error rate of the traditional Medicare population. This was probably the biggest issue for the industry in the year's worth of negotiations since the draft methodology was released. Doctors generally suck at coding, regardless of whether a member is in a managed care plan or in traditional Medicare. Initially, CMS intended to compare error rates in managed care to 0, rather than comparing them to an error rate in the traditional Medicare program. If CMS had gone with its original approach, it could be argued that plans were being penalized twice. According to CMS, the estimated error rate at managed care plans is around 11%, down from the 2010 error rate of 14%.
Third, CMS will allow plans to submit multiple medical records to substantiate submitted codes, rather than requiring plans to only submit one best medical record. This will make it easier for plans to provide supporting documentation, as sicker members typically see several physicians, and the documentation from all of the treating physicians is rarely combined into a single medical record. The only disappointment here is that CMS will continue to focus audits on medical records and will still not allow alternative sources of clinical data like prescriptions.
Fourth, the audit results will be extrapolated only to the contract being audited. CMS will first determine the number of beneficiaries who are RADV eligible. The RADV eligible members are then ranked from highest to lowest based on their risk score and divided into three equal groups, with one group having the highest risk scores, another the lowest, and the remaining enrollees in the middle. CMS will then select 201 members to review medical records, with 67 enrollees randomly selected from each of the three cohorts. Plans will then submit medical records for these 201 members to support all the submitted codes. The resulting error rate is then reduced by the fee for service error rate, and the resulting figure is applied across the contract being audited only, not across the plan's entire book of MA business.
All in all, CMS made a number of concessions in the RADV methodology that they didn't have to, and which have the effect of significantly mitigating the risk and impact on the plans. They stated they're only after about $370 million in recoveries in 2012, much lower than the President's FY 2012 budget anticipated, and equating to about 0.3% of Medicare Advantage revenues, well below Wall Street expectations. RADV wasn't even mentioned in Obama's FY 2013 budget. Combine that with more favorable-than-expected draft 2013 rates for Medicare Advantage against the backdrop of the Age of Austerity we're in, and we see that these are big, important gestures that point to a new era at CMS: "the open hand and the closed fist." The open hand is that the Administration is now actively working to help plans where it can, especially on matters impacting revenues; the closed fist is the agency's continued willingness to take action against weak performers and the noncompliant. It's about as good as it's gonna get with this gang in the White House.
Physician Engagement... What can you really do?
Health plans have tried a hundred ways to engage providers — incentive stipends, P4P, P4Q, capitation, clinical initiatives, episode of care payment, onsite coders, in office case management liaisons. But what works? Open communication, reasonable expectations, and simplicity.
Before CenseoHealth launches a patient evaluation program we meet with the community physicians to discuss:
1. Program Overview
2. Program Goals & Objectives
3. Community Customization & Clinical Opportunities
a. What are you doing well?
b. What do you need help with?
Often Censeo receives questions similar to those that follow:
• What are you doing with my patients?
• What can you really diagnose in the home?
• What do I receive from the Censeo clinical team?
• What if I want to participate?
Again, CenseoHealth shares the following:
• Program from launch to closure
• JAMA articles and clinical research & guidelines utilized in the Censeo programs
• Proprietary iPad tool and outputs for the evaluation
• Open Invitation to participate whether conducted in the office or home
As your internal metrics may highlight, between 8% and 30% of the membership may go to the physician's office for an evaluation, if encouraged. If the network physician has the same tool and the same time allotted for the visit, the outcome can be just as successful. However, if the physician's time is limited, the data collected is also limited. The averages results for an in-office evaluation completed in 25 minutes are approximately 1/3 of the information collected during an in-home evaluation; therefore the premium impact in the office is about 1/3 of the in-home impact.
How does CenseoHealth counter act the lower in-office results?
• invite the community physician to utilize the proprietary tool via iPad or paper
• educate network physicians on the HEDIS, STARs, HCCs, compliance, and accurate coding
• schedule in-office visits for the medical group to ensure the needed time is allocated for the experience
• completed quality assurance, coding, and analytics for the medical groups
• meet with both the health plan and medical to review reports and programs successes
We make your network part of the team and solution. Physicians are great team members when they are invited, respected, and given the premier instrument for success.
Garbage In. Clarity Out
So you may have bad, ugly, horrible, scary data and internally you don't have a means to lump it all together to give you a clear picture of what happened in 2010, 2011, and the challenges you are facing in 2012 with your members, your network physicians or your risk adjustment program.
You have twelve or more different revenue and quality initiatives and twenty different vendors supporting you. How can you combine these or give one clear picture? You need to build an internal repository for charts, claims, and risk adjustment data, which marries your claims and clinical data for each member and each network physicians' profile. Here is how we provide clarity for our clients:
1. Actionable Member Profiles: by combining Censeo Health's Advanced Evaluation, CareCurrent, and CareConnect analytics and reports, we can show you and your physicians the whole picture of the member's history, current conditions, plus what case management programs they have triggered, and the documentation strength of the codes recorded for the member. The complete and actionable member profile is a "must have" output from your risk adjustment and quality systems.
2. Comprehensive & Insightful Physician Profiles: through our service offerings, Censeo highlights coding strengths and weakness, compliance areas of improvement, support documents and elements for a patient's plan of treatment from labs to pharmacy to chronic conditions and possible gaps in care, clinical program and pathways needed, and a monitoring system for the resolution of condition or gaps in care by the community physicians. You need to support the network physician's plan of treatment by providing actionable and insightful tools for the physician as the patient navigates the care pathway.
These are not static report cards with a problem list but rather a dynamic instrument supporting your clinical success and engagement programs. If your system has these elements, fabulous - you are on top of your game. If you are developing these, wonderful - you are on the right track. If you cannot develop these internally, we can create this complete clarity for you in ten (10) business days through our mapping system and integration engine.
The Goat Rodeo
You hear a lot of interesting comments when you are meeting with health plans and large medical groups. One of my favorite phrases is "last year was a goat rodeo." The visual makes me laugh every time — goats, kids, and general goat chaos. However, in risk adjustment, you cannot afford an internal or vendor "goat rodeo."
If last year you had a risk adjustment goat rodeo, start taking notes and you may want to ask for some strategic planning assistance.
Here are the quick start metrics you should collect, map out, and monitor:
• 2011 Chart Review Volume, ROI, and projected timing of premium impact
• 2012 Hospital Data Feed Schedule from their HIMS database
• 2011 Member assessment volume, ROI and projected timing of premium impact
o Percent and impact by PCP
o Percent and impact in the SNF setting
o Percent and impact in the in-home
• 2011 Member data link to member services, case management, and PCP
• 2012 Chart review and member evaluation findings strategies linking to care
• 2012 Gaps in care closure program (outreach to documentation verification)
• 2011 HEDIS deficiencies and resolution success
• 2012 HEDIS program roadmap
• 2011 STARs goals and impact
• 2012 STARs roadmap
• 2011 & 2012 Claims based HCC analysis and documentation closure initiative
If you have a roadmap with timelines and an internal project leader for these aforementioned tasks you may still headed for a goat rodeo. The final pieces to ensure success are internal controls, plus a strong, efficient, and effective partner.
More Good News for Medicare Advantage in 2013 Rate Announcement
CMS released the 45-Day Notice of CY 2013 Medicare Advantage (MA) rates after the market close on Friday, and while it's the usual hot mess of green-eyeshade factors that comprise payment, it brought unexpectedly positive news for the industry. If it holds up in the final rate announcement on April 2, it will represent the largest increase in payments to plans in 4 years. Here's a brief rundown of what's hot, what's not, and what to watch in the runup to the final rates.
HOT
- The weighted average rate increase for 2013 is 2.47%, net likely flat. Most Wall Street analysts expected a cut of 2-4% in 2013. Again, this represents the largest increase in payments to MA plans in 4 years.
- CMS maintained the risk adjustment coding intensity adjustment at 3.41%, for the third consecutive year. 2013 will be the last year CMS can offer this concession -- the ACA mandates that coding intensity increase to 4.71% in 2014, and then by at least 25 basis points/year 2015-2018, bringing it to at least 5.7% by 2019. There is no incremental impact on 2013 rates, and plans get an extra year to get their risk adjustment houses in order before the pain starts.
- CMS made no mention of Risk Adjustment Data Validation (RADV) audits, which have been looming large over the plans for the past 3 years and remain a prominent source of revenue recoveries in the President's last two budget proposals.
- The fee-for-service normalization factor, which adjusts for upward trend in risk scores in MA vs. FFS, was a big positive for 2013. It usually rises or falls by 1-2% a year, and in most years it increases. For 2013, CMS is dropping the FFS normalization factor by almost 5 points, boosting 2013 rates by around 150 basis points.
- CMS's general tone toward the industry was decidedly more positive, as it was last year. CMS noted that the proposed annual growth rate "will sustain a strong Medicare Advantage landscape for 2013," and highlighted that enrollment increased roughly 10% in the last year. I guess once you top 25% enrollment in Medicare the agency has to show you some love.
- Star Ratings quality bonuses and rebates remain a key source of revenue boosts for high performing plans, which helps to offset the cuts to MA in health reform. Bonuses will increase in 2014 for plans with ratings of 3.5-4.5 Stars. We estimate that Star bonuses will increase payment by more than 4% in 2012 and around 25 basis points in 2013, as MA plans' overall Star rating increased to 3.56 stars, up 0.11 Stars year-over-year.
- CMS is also rebasing MA county rates for 2013. Historically this is usually a good thing for the plans (though CMS notes it could hurt a little next year). CMS is required to undertake this exercise every 3 years, and the consensus among many Wall Street analysts is that rebasing will add approximately 60 basis points to the 2013 rates.
- The "Doc Fix": In the past, CMS has insisted on basing its trends on the law in force at the time they made the projection. The doc fix on the books for 2/17/2012, the date of this advance notice, only extends through 2/29. The new doc fix, through 12/31, hasn't been signed into law yet. So our guess is that the advance notice doesn't include a catch up correction for a doc fix for the remainder of 2012. The fact that CMS didn't hold a conference call makes us think they didn't want to discuss the matter until the bill is signed. If we're right, we'll see a higher trend and higher rates in the final notice on April 2, when an additional 10 months of higher doctors' fees is factored in.
- Sequestration: the 2% cut to Medicare from the failure of the not-so-Super-Committee is the law of the land as of today, so CMS should have included that in their trending -- and we still came out ahead.
NOT
- CMS is updating and recalibrating the HCC (risk adjustmetnt) system for Medicare Advantage for the first time since 2009. The current HCC model for Medicare Advantage has 70 HCCs, a decrease of 7 from 2011. Our best guess of the impact of the HCC changes will cut 2013 rates by 125 basis points on average. Some
diseases will pay better and some will pay worse after recalibration, which could have a significant impact on some plans. CMS is looking for a better way to calculate the coefficients, one that is not so sensitive to
plans' activities to improve coding accuracy and completeness. One thing they are looking at is the impact when plans target a specific subset of members for prospective evaluations.
WHAT TO WATCH
- Repeal of sequestration before April would, presumably, result in a higher 2013 trend -- but that ain't gonna happen in an election year. Wait for something in the lame duck session after the election, when Congress has to deal with sequestration, the expiration of the Bush tax cuts, the expiration of the payroll tax holiday and the 2012 doc fix. Should look like a cross between cage fighting and smash-mouth hockey. If sequestration is repealed, it will show up as a correction to the 2014 rates.
All in all, a very positive development for our favorite program, considering the Age of Austerity we live in.
End of an Era -- and a New Beginning -- at XLHealth
United Health Group closed the acquisition of XLHealth this week, two months ahead of schedule. XLHealth has been one of our biggest clients for the last 8 years, and I had the distinct honor of serving on their board of directors the last 4 years. It was a brilliant "get" for United -- both in terms of gaining further expertise in management of the severely chronically ill and the dually-eligible and in keeping competitors from acquiring it. But they also got one of the best management teams in the business, led by our old pals Fred Dunlap (CEO), Paul Serini (EVP) and Mete Sahin (CFO) -- and in this new era of execution risk it's their leadership that mattered most. Those 3 guys represent the best turnaround artists our industry has seen in a long time, and United was right to tie them up for the next 3-5 years.
XLHealth was deep in the financial ditch and on the verge of serious regulatory trouble in 2007 when the company was taken over by Matlin Patterson, a New York private equity firm, in their first foray into a healthcare venture (at the time Matlin was known as the guys who took Alitalia Airlines private). XLH's history had been focused on disease management, and they frankly weren't very good at it. When they called us in 2004 with the idea of running Chronic Special Needs Plans on a PPO chassis in largely Southern rural markets ("we want to manage diseases, not providers"), we told them they were nuts and did our best to change their minds. We failed, and by 2007, so had they.
But Matlin Patterson stepped up. They also acquired our risk adjustment subsidiary at the time, and folded the two together under Dunlap's leadership. What happened over the ensuing 4 years should be the stuff of industry legend as Fred wisely deployed capital, revamped the XLH product portfolio to better manage severely ill beneficiaries, dug deep into the plan's troubled operations, and innovated their way out of a clinical black hole. They launched the single-largest house call program in the nation and a call center staffed entirely by pharmacists doing nothing but outbound calls to members with polypharmacy issues. By the fall of 2011 XLHealth had emerged as the first profitable C-SNP in history and was acquired by United for an unprecedented valuation.
As XLHealth now becomes a focal point for United in how to aggressively manage the chronically ill and the dually-eligible, further adding to their pole position among major payers in this brand-new world of health reform, the industry as a whole would do well to steal a page from their playbook: the only way out of Medicare Advantage cuts in 2013-2015 is to focus intensely on your highest-cost members, to move boldly on risk adjustment, and to lead, not just from the top, but from the front.
It was my distinct honor to serve as a director of XLHealth, and we wish Fred, Paul, Mete and the team all the best in their new beginning with United.
Medicare Advantage and Diagnostic Accuracy
There have been recent suggestions that Medicare Advantage plans are receiving excessive reimbursement from CMS as a result of "up coding" in the risk adjustment system. There are a number of reasons why these suggestions are inaccurate and counterproductive.
First, one must understand where the codes submitted for risk adjustment originate. The majority of diagnostic codes that drive risk adjustment are captured from claims, and the majority of claims data originate from outpatient encounters generated by physician offices in which payments are a function of procedures rather than diagnoses. For that reason, there is a high error rate in those submissions, and, since the risk adjustment model was built on fee for service Medicare claims, the error rate is built into the model as well.
Since Medicare Advantage plans are reimbursed based on diagnostic data, there has been an impetus to improve diagnostic coding. Accuracy and specificity in coding is very different from "up coding." CMS has correctly taken the position that it is in the interest of Medicare beneficiaries to have a correct and complete record of their medical conditions, and the risk adjustment system provides a powerful incentive in that direction.
Conversion to encounter based submissions will have a defining effect on risk adjustment payments as well. It is the stated intention of CMS to use the encounter data/RAPS submission overlap period to create a Medicare Advantage specific reference data base with which to recalibrate the risk adjustment model. When that is done, the difference in coding accuracy between fee for service Medicare and Medicare Advantage cease to be a factor.
Finally, the risk adjustment system affords a unique value to Medicare Advantage members. Because they are reimbursed for accurately documenting the members' medical conditions, a number of forward thinking plans have instituted programs of detailed diagnostic evaluations of their members. Since risk adjustment diagnoses cannot be submitted without a demonstrable link to care for those diagnoses, plans are collecting data on gaps in care and helping the members and their physicians address those gaps. Plans are being rated and will be partially reimbursed based on their performance in this area. That kind of care coordination is not possible in a fee for service setting and is of undeniable benefit to the nation's elderly.
Overall, the Medicare Advantage risk adjustment system is a striking example of using financial incentives to positively influence the delivery of health care. It is yet another example of the Medicare system creating a model that can be productively exported to other government health care programs and to the private sector.
The Cost of Care: "How high can premiums go?"
One of the less publicized requirements of the Accountable Care Act is the requirement of health plans to spend at least 80-85% of the premium dollar on medical services. Aside from the expected discussion of what qualifies as a medical expense, under the previously mentioned medical expense target, health plans that submit "excessive" rate increases will be required to justify any premium increases that are viewed excessive in light of the 80-85 percent MLR target, and will run the risk of State or federal government regulating or rolling back the premium increases.
So why am I blogging about this? What does this have to do with ACOs or redefining how health care is priced and delivered? Well, think about it. If as a health plan I am now required to spend 80 or 85 cents out of every dollar collected on "medical expenses", then I have 20 to 15 cents to pay for everything else. Depending on my profit margins set by my board or others I have to:
a) operate very efficiently;
b) have a very cooperative relationship, (clinically and financially) with my providers;
c) have the tools necessary to properly risk profile my members, to ensure that the member receives the right services from the right practitioner without excessive cost, and
d) create a customer service environment which not only attracts new members to my plan, but retains those members year after year once I have them in the plan.
Getting all that accomplished requires decision support tools (such as a the risk assessment tool), closely alligned provider relationships, clinical and financial integration and appropriate broker, consumer and provider education.
Meanwhile the provider community is faced with increasing consumer and payer demand for efficiency, accountability for quality, and timely and convenient access to services at a reasonable price. All necessary - but difficult to achieve objectives - given the prevailing practice patterns. Programs like ACO development, innovative payment approaches like bundled payment, and "cross over" provider payer initiatives like the Consumer Operated and Oriented Program and the CMS Health Initiatives program, are some of the tools available to Providers by which to achieve healthcare delivery redesign.
Come and talk to us about how we can help you strategize, identify tools and create strategic partnership with providers, vendors and other health industry stakeholders to meet your financial and medical service provision goals and to apply for and implement the programs mentioned above. We always have opinions and suggestions, and more importantly considerable expertise in the areas discussed based on successful client interactions that have spanned all aspects of the healthcare industry.
Our approach to providing the healthcare industry with business and strategic solutions is guided by a belief that there is a solution for every problem encountered --some might even be out of the box and unconventional ... but that's the idea. Think about it.