And the Survey Says... Claims based submissions are scary
During our September 1st webinar, Risk Adjustment: Vulnerabilities in Claim Based HCC Codes, we asked our health plan attendees a few questions about claims-based HCC codes. Here are the answers.
What percentage of your HCC submissions comes from claims?
- 25% of the health plans answered 45-60%
- 21% of the health plans answered 61-80%
- 44% of the health plans answered 81-100%
Studies indicate that between 60-80% of all HCCs comes from claims submissions. However, we also know that between 17-44% of all claims-based HCCs fail a CMS RADV audit. We must verify the validity and accuracy of health plans' claims-based submissions. How can we do that?
CenseoHealth's CareCurrent provides continuous data analysis, reporting and production management designed to mitigate HCC risk. This analysis not only supports a health plan in determining the confidence levels of the ICD-9s that trigger HCCs; the service also indicates how to remediate high-risk codes with chart review or a member evaluation.
Next we asked —
Do you filter your claims based HCCs?
- 50% answered yes and 50% answered no
That is a little scary and the health plan's next RADV audit may be even scarier. Scrubbing your claims based HCCs is a critical part of the mock RADV audit process and the foundation of RADV "proofing" your risk adjustment program.
Finally we asked —
How frequently would you or should you scrub your claims based HCCs?
- 55% of the health plans answered monthly
- 45% of the health plans answered quarterly
Both are good answers. We recommend running a claims based filter in late September so you can resolve any low confidence codes with chart review or member evaluations prior to the end of the calendar year. We also suggest running a claims based code analysis at the end of December to ensure the health plan deletes any unsubstantiated codes before the January 2012 sweeps.
Consolidation in Medicare Advantage and Prospects for Regional/Local Plans
In the past 12 months three health insurers have each acquired a Medicare Advantage HMO: HealthSpring (Bravo), WellPoint (CareMore), and Humana (Arcadian). Large plans are finding that acquisitions make more sense than investments in organic growth in certain markets, and that enrollment will be driven by millions of plan-friendly Baby Boomers and employers seeking to transfer risk for retirees to Medicare. Investors that sat on the sidelines the last couple years during the financial crisis now need to invest, many large players are sitting on piles of cash, and there are many opportunities in the fragmented MA market. So consolidation will intensify -- what does that mean to regional or local MA plans?
First, there's plenty of room in MA's pantheon for regional and local plans. It doesn't take much enrollment to make the Top 25 in Medicare Advantage given revenues for MA members typically run 4-6x what commercial members pay -- take Independence Blue Cross in Philadelphia. They have about 85,000 members and they're among that hallowed group. 10,000-12,000 members is generally thought to be the "magic number" in MA, where a plan achieves actuarial stability with an enrolled pool big enough to weather the inevitable million-dollar babies at end-stage.
If you're above that number today, you can likely endure and thrive through the next several years of ACA transition and consolidation by following some specific best practices, especially around risk adjustment and Star Ratings management. If you're not there yet, this is going to be a very challenging couple of years ahead.
The best ways for local/regional plans to offset the rate cuts in ACA is on the revenue side. Risk adjustment and Star Ratings management best practices are the keys to survival for local and regional plans, and the methodologies of each actually favor these organizations. The new state of the art in risk adjustment is the advanced prospective evaluation -- a health risk assessment on steroids, conducted in the beneficiary's home by a trained physician (see the many posts by my colleagues Dr. Jack McCallum and RaeAnn Grossman on this subject). It's a complex process, arranging the scheduling, executing the visits, reporting the data to CMS -- but one managed more easily by local/regional plans with assets on the ground than large nationals.
Star Ratings quality bonuses from CMS actually favor local/regional plans as they're calculated at the contract ("H-number") level. Large national insurers typically have sprawling MA service areas: United in California, for example, has an MA contract for the entire state, requiring United to coordinate with literally dozens of physician groups to improve their Star Ratings. By contrast, tiny GEMCare Health Plan in Bakersfield, with a 5-county service area and only a handful of provider groups, is far better positioned to secure its Star bonus than United.
On the downside, minimum Medical Loss Ratio (MLR) regulations can be harder for local/regional plans to contend with. Beginning this year the ACA requires health plans to spend 80% to 85% of premium revenue on reimbursements for clinical services and activities that improve health care quality. Further, costs associated with conversion to ICD-10 coding, EMRs and e-prescribing are harder for smaller firms to absorb. But harder doesn't mean impossible, especially with effective planning and local leadership.
In the end, I think we're probably looking at one-third fewer contracts in MA by 2016 -- 671 today, down to about 400 by then, driven by acquisitions and a hard-nosed CMS pushing weak performers out of the program. That leaves plenty of room for local/regional plans -- if they can execute as well or better than the big dogs, especially on the revenue side of the ledger.
I'll be speaking on this and related topics at AHIP's Medicare conference here in DC on September 13, and again September 26-27 at the Opal Events 3rd Annual Medicare Advantage Strategic Business Symposium. For more information, click here. Hope to see you there.
United Acquisition of Monarch Healthcare (CA): Marx Meets Managed Care, Again
The Wall Street Journal reported this morning that United Healthcare is acquiring our longtime client, Monarch Healthcare in Irvine, CA. The transaction is further evidence that Marx (Karl, not Groucho) has met managed care: a payer controlling the means of production in an intensely competitive market.
There have been several other payer/provider deals in the last few months confirming the trend: WellPoint recently closed its acquisition of provider-owned Medicare Advantage plan CareMore; in June, Highmark bought West Penn Allegheny Health System; last December, Humana bought Concentra.
Expect to see many more of these kinds of deals, for clear strategic reasons: with greater emphasis on performance-based risk contracting arrangements in the future of healthcare financing, and an emerging focus on the patient's experience of care, in many markets it just makes sense for payers to own their supply chain -- and the day-to-day faces of the health plan with its members.
The Water Hazard of Risk Adjustment: HCCs from Claims
I love the saying "Golf isn't a sport - It is old man walking around in ugly pants."
Ugly pants aside, golf definitely has its challenges: water hazards, sand pits ... other golfers, trees, birds... finding your inner athlete .... and so does risk adjustment.
In the last six years we have gone from focusing on chart review to launching various versions of member evaluation, but this whole time we've been forgetting about HCCs we are submitting from claims. Those claims-based HCCs are the real hazard in our program. (Chart review may be like the sand trap — open another one and another one; just keeping swinging and swinging and at some point you will move the ball closer to the hole.)
We've all been at the conferences and we hear that on average, 37% of claims-based HCCs fail during a RADV audit. Last week during our Flash Webinar, The Analytics of Risk Adjustment, we were talking with 43 health plans and we asked the question:
How many of you health plans are filtering your claims - not just for site of service, provider type, and ICDs that trigger a HCC - but also by code confidence?
The Answer: TWO health plans out of the 43 are filtering their claims by "confidence"
The real question we were driving at? - are you confident this code from claims will be found in a compliant medical record and be documented appropriately enough to pass a RADV audit? Has more the one physician noted this condition? Does this condition look clinically appropriate for this member?
Claims flow in, and submitting them to CMS is like the peaceful water on the golf course. It looks harmless enough. But when your golf ball goes into the water, you don't know if it is 6 inches or 6 feet deep. And you don't know what kind of danger you are in if you don't filter your HCC claims-based codes.
CenseoHealth is now offering CareCurrent, a current-year analytics service that sifts through your claims codes and stratifies them into confidence tiers. This enables a health plan to make an informed decision about submitting claims-based HCCs before taking further action (whether chart review or a face to face member evaluation) to ensure there are compliant conditions.
Even if your golf pants are lacking a certain style, you'll still be sitting pretty with CareCurrent as your Callaway Diablo Edge Driver. Four!
Data Security & Compliance: The Dwayne Johnson of Risk Adjustment
These days, Risk adjustment is a lot like WrestleMania these. I am not sure if that makes CMS John Cena…but I am certain health plans should be prepared for that folding chair to the head move.
Health plans need a new training regime and a new foundation. Security and compliance is the cornerstone on which a health plan's risk adjustment strategies should be built, and it must be supported not only by all health plan departments, but also health plan vendors.
As stated in the CMS call letter, you need to know your business, which also applies to your vendor processes and procedures. In a poll during our August 18 webinar, our audience of health plans shared that they only conduct onsite vendor audits twenty five percent of the time when they outsource risk adjustment servics. Gorman Health Group can help you create the data security checklist, but health plans have to get in the routine of going onsite. Get in the ring!
The health plan IT liaison needs to see the server room, understand the data back-up plan, notification process, and especially how the vendor handles data day-to-day. Is it sitting out on desks? In employees' car? Scary things happen when you don't ask questions.
Even scarier was this poll result: only 55% of health plans read their vendor's compliance plan. You need to know not only what the vendor is doing on your behalf but also how. With PHI fees and RADV extrapolation, make sure your vendor has a compliance plan and that you know what it says.
Download a copy of last week's webinar here.
How's their security and compliance? Your vendor oversight checklist
Yesterday Gorman Health Group Executive VP Steve Balcerzak and CenseoHealth's Director of Techology Archie Block joined me for one of our Flash Webinars, which covered the security and compliance points every health plan should review with their vendors.
We'll follow up later today with a recap of the event's live polls and surveys, as well as a final PDF of the webinar materials. Stay tuned!
We're offering 30 minute Flash Webinars every week this summer and invite you to join us. The next event is Wednesday, August 24 at 3 pm EDT: What's so important about prospective analytics anyway? Health plans can register by clicking here.
Medicare Advantage and PDP Plans Continue Robust Growth
The August enrollment numbers are in from CMS. 61,000 new MA members in August and 544,000 year-to-date. MA and PDP plans continued their robust growth on pace to exceed 2010's enrollment gains. Year to date it appears Boomer "age-ins" are continuing to choose MA at a higher rate than their forebears -- more than 40% for the last two years. With major MA/PDP sponsors like Aetna and HealthNet now relieved of marketing and sales sanctions from CMS, MA enrollment growth may exceed 7% for the year.
The story behind the numbers is clear: MA plans are adjusting just fine to the "new normal" post-ACA. Benefit designs have held relatively steady, and plans are making big investments in better revenue management, like mastering risk adjustment and the new Star Ratings bonuses, to offset the ACA's cuts. Many are revisiting their entire service model in response to Stars, recognizing that keeping members is the new selling.
At the pace we are on, MA will hit 15 million beneficiaries sometime in 2016. But that of course assumes Congress and the debt reduction "supercommittee":
- don't require another pound of flesh from the plans in whatever deal they hatch up in November
- get the Medicare physician pay fix enacted permanently. There's an enormous price tag of over $300 billion over 10 years for this, but without it, MA rates could be cut another 7% in 2013 and beyond. This is the single largest threat facing the program in the next several years.
Let's hope the noble experiments in creating insurance markets that are MA and Part D are allowed to continue when Congress reconvenes in September.
Timing is Everything
We chatted with several health plans during the GHG August 11, 2011 webinar.
The purpose was to highlight that the earlier you begin your risk adjustment the better because you have more chances to:
• Get the data
• Interact with the member
• Impact the member's satisfaction
• Link the findings to care
• Impact the premium sooner
We found that most of the health plans listening:
• Start their retrospective program in April
• Start their prospective program in March
• Have 50% of the prospective evaluations completed by June
• Evaluate 51-75% of their membership each year via member evaluation
Really? These answers bring a tear to our eyes. Be proud if this is your program.
Our tip: Shoot a little higher in your evaluation program next year; a better target is 85%.
Again, shifting your start dates to earlier in the year will help you get to know your member and increase the closure rates or acceptance rates of your evaluations. Plus getting that premium bump in January of the 2012 will answer questions about expansion plans, bid application, and benefit design.
P.S. Join us for the next flash webinar in our series: Your Vendor Security Checklist, August 18 at 3:00 pm EST
Why should physicians do prospective evaluations?
Most plans that have done prospective evaluations have taken one of two approaches: Using their existing physician network, or using mid-level practitioners who live in the same general area as the members to be evaluated.
Although they have been significantly more effective than network physicians in these programs, there is a better way.
It is possible to recruit physicians evaluators who can travel to the area of the project and devote their full day to the evaluations. They bring a number of advantages.
All in all, the traveling physician model works.
CenseoHealth & GHG Poll on Prospective Evaluations
Question: What percentage of your membership are you targeting for prospective evaluations?
Answers: Prof. McCallum Report Card:
9% of webinar attendees said 80 - 100% of members A+
7% of webinar attendees said 65 - 79% of members A-
21% of webinar attendees said 50 - 64% of members B+
19% of webinar attendees said 35 - 49% of members B
44% of webinar attendees said less than 35% of members More Attention Needed
It looks like the marketplace is evolving and those who are evaluating 80-100% are the pack leaders.
Congratulations!
They get an A+ because these health plans & medical groups should have:
• Great member information for medical management and physician as they design treatment plans
• High member satisfaction
• High member retention
• Accurate & timely premium impacts to account for medical expense and aid in bid development
• If they are using a comprehensive evaluation instrument, they should be impacting HEDIS & STARS
The next group to focus on is the 44% who are looking at less than 35%. We have a few questions:
• Are you competitive in your marketplace with benefits?
• What's your MLR?
• How is your member retention & satisfaction?
• How is your physician satisfaction?
• How are you doing on HEDIS & STARS?
For this group, our suggestion is to double your targeted population so you can continue to excel. Make sure you have good member stratification so you are targeting the most appropriate and impactful members.
For those in the middle — continue to increase the number of evaluations, refine your tool, stay competitive and compliant, and make certain you integrate the data into other areas of your health plan or medical group.