Final Rule: The Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017

The anticipation is finally over — the "Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017 Final Rule" has arrived. This annual document provides health plan issuers the rules and requirements to develop plans and operational processes for the upcoming year. Since the Affordable Care Act (ACA) was enacted, health plans have been feeling the pressure regarding the premiums allocated to the Marketplace plans, coupled with staggering losses for this line of business with the elimination of the underwriting process, health plans have been receiving negative feedback from all angles. Now to layer onto that pressure, for 2017, two of the three stabilization programs — reinsurance and risk corridor — will no longer be included to provide health plans financial relief since the applicable timing for these programs has expired. To enhance the existing stabilization program, the risk adjustment model will be recalibrated using more recent data to reflect more closely with the commercial market risks experienced.

Some of the high-level changes reflected in the Final Rule are the following:

  • Open Enrollment Period for 2017 and 2018 will continue to have the same dates as 2016, which is November 1 through January 31 of the following year. Starting in 2019, the open enrollment period will be shortened to start on November 1 and end on December 15 of the same year.
  • Standardized plans have been introduced as an option for 2017. Issuers are not required at this point to utilize these standardized plans and are allowed to offer non-standardized plans if they choose, however, it is encouraged that issuers offer the standardized silver plans. Standardized plans are preferred by the Centers for Medicare & Medicaid Services (CMS) to allow the enrollee to have a better shopping experience on the Marketplace. It allows for a more apples-to-apples comparison of the plans offered. Therefore, because of the ease to enrollees, the Marketplace will arrange the plans to be found more easily. There are 6 standardized plans available to choose from. One for each metal level with the exclusion of platinum. The standard or "base" silver plan also has benefits aligned for each of the actuarial value (AV) plans that are utilized for the members that are eligible for the cost sharing subsidy. In total the silver plan ends up with 4 standardized plans and then 1 plan each for gold and bronze.

Each plan has a fixed deductible, fixed annual limitation on cost-sharing, and fixed copayment or coinsurance for the Essential Health Benefits (EHBs) that are a part of the actuarial value (AV) calculator, with the addition of urgent care. These benefits represent a large percentage of the total allowable costs for an average enrollee.

  • Cost-sharing maximum out-of-pocket limit has increased from $6,500 to $7,150 for an individual and from $13,000 to $14,300 for a family.
  • Network Adequacy proposed requirements were partially accepted in the final rule. Probably the biggest requirement that was not accepted was the time and distance standard.
  • "Surprise Bills" are a concern of members, which has been addressed in this notice.
  • Federally-Facilitated Marketplace (FFM) user fees will stay at 3.5% for issuers utilizing the (FFM). Issuers who are part of a State-Based Marketplace (SBM) that utilized the FFM platform will see some relief with a reduction in their user fee for 2017, from 3% to 1.5% of premium.
  • Medical Loss Ratio (MLR) will not be allowed to include fraud prevention expenses as part of the numerator as proposed in the Notice of Proposed Rulemaking (NPRM).

A detailed analysis of the Final Rule including health plan impacts, will be provided in the coming week.

 

Resources

Register your team for the 2016 GHG Forum! For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>.

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

CMS Releases New Medicaid Rule, OMB in Final Review

Last week, the Centers for Medicare & Medicaid Services (CMS) finalized the new Medicaid rule — a 653-page proposal requiring Medicaid managed care organizations (MCOs) to enhance their network adequacy, establish quality ratings, set a medical loss ratio (MLR) threshold of 85%, and develop a robust managed long-term care program. The new Medicaid rule has now been sent to the Office of Management and Budget (OMB) for final review. This means the new Medicaid rule could be published by mid- to late May. There are 39 states and the District of Columbia that currently outsource their Medicaid programs and about 46 million lives that will be affected by this new change.

Some of the proposed changes that were up for consideration:

  1. Medical Loss Ratio — CMS proposed an MLR of 85% for Medicaid managed care plans, the industry standard for Medicare Advantage (MA) plans. CMS proposed to mostly use commercial rules in calculating and reporting MLR due to the "need for consistency" between plans in the Marketplace and in Medicaid.
  2. Appeals and Grievances — The proposed rule made a few updates to the appeals and grievances process to align with MA plans. For example, the rule seeks to shorten the time frame in which MCOs and Prepaid Inpatient Health Plans (PIHPs) have to make a decision about a standard appeal from 45 days to 30 days, the same as MA plans. The expedited appeal time frame would be shortened from 3 days to 72 hours, also the same as MA.
  3. Beneficiary Protections — Under current regulations, coordination and continuity of care focus on primary and acute medical care. The proposed rules aim to reduce coordination issues beneficiaries with chronic and complex conditions face. The proposed rule also seeks to align enrollment practices between Medicaid fee-for-service, Medicaid managed care, and Marketplace coverage.
  4. Create standards to evaluate network adequacy and ensure beneficiaries are receiving accurate network information.
  5. Medicaid Managed Care Quality Rating System — Align with existing MA and Marketplace rating systems. Standardize quality metrics among states and plans.
  6. Updates to rate development standards and actuarial soundness of capitation rates, with a focus on federal oversight and a more detailed process to ensure actuarial soundness.
  7. Calls on states to update quality strategies at least once every three years. Currently, some states are operating on strategies drafted more than five years ago. States are called on to develop a description of quality metrics and performance targets the state will use to assess Medicaid managed care quality.

Let the team of experts at Gorman Health Group (GHG) help you prepare for the upcoming changes that could impact your organization. GHG's risk adjustment experts can help analyze the financial impact, develop feasibility models to help with meeting the new MLR requirements, and provide guidance on streamlining operations. GHG's Compliance Solutions can assist in the development and monitoring of these new contract requirements, and our clinical team can assist with reviewing and developing integrated care models to provide quality initiatives that are effective and efficiently managed to get optimal results.

For more information, contact me directly at sjanicek@ghgadvisors.com.

 

Resources

Register your team for the 2016 GHG Forum! For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Noteworthy Evolution for Star Ratings in 2017 MA Draft Call Letter

Last week's release by the Centers for Medicare & Medicaid Services (CMS) of the 2017 Medicare Advantage (MA) Advance Notice of Methodological Changes and Call Letter ended the mystery surrounding potential policy and payment changes on the horizon.  As our Founder and Executive Chairman, John Gorman, recently noted: "There's a lot to like — and much to fear." Although CMS is proposing higher-than-expected rates for 2017 and has introduced both payment and Star Ratings relief for plans serving dual-eligible beneficiaries, this positive news was counterbalanced somewhat by a number of factors, including proposals to increase compliance scrutiny in challenging areas such as network adequacy, provider directory accuracy, and medication therapy management programs.

As anticipated from a Star Ratings perspective, there were few surprises but quite a bit of noteworthy evolution for MA this year.  CMS' proposals include:

  • Accounting for the Star Ratings Impact of Dual-Eligible and Disabled Beneficiaries:

After a lengthy research process and significant pressure from the industry, CMS proposes moving forward with an interim analytical solution to account for the Star Ratings impact of dual-eligible and disabled beneficiaries. Despite the fact only a handful of plans would likely gain or lose a full half-star in their rounded overall Star Rating, this is a huge methodological win for plans serving dual-eligible members and will be important to monitor closely.  When combined with CMS' simultaneous proposal to adjust revenues based on beneficiaries' status as either full duals, partial duals, or non-duals, as well as for their status as both aged and/or disabled beneficiaries, my colleague, Dan Weinrieb, advises, "This will mean timely reconciliation and maintenance of clean enrollment data has never been more important for MA plans." This proposal, in combination with the proposed strategy to account for the lack of low-income subsidy (LIS) support to meet Puerto Rican beneficiary needs, reflects a noteworthy shift in CMS' willingness to adjust the Star Ratings program to account for scientifically-supported evidence of nuances within MA.

  • In-Home Risk Assessments

CMS' decision to leave in-home risk assessments untouched is great news for the many MA plans who are leveraging these important visits not only for risk adjustment, but also to connect members with needed care (as measured by Healthcare Effectiveness Data and Information Set (HEDIS®) and Prescription Drug Event (PDE) Star Ratings measures), to coordinate care across the spectrum of providers (as measured by Consumer Assessment of Healthcare Providers and Systems  (CAHPS®) Star Ratings measures), and to help support member's social and lifestyle challenges (as measured by Health Outcomes Survey (HOS) Star Ratings measures). We interpret this to mean CMS now better understands the incredible value in-home care can bring to a patient's holistic healthcare experience. However, despite this welcome news, plans should certainly ensure their program adheres to the best-practice expectations previously set forth by CMS, and supported by encounter data, in order to drive payment.

  • Termination of Contracts Below 3 Stars for 3 Years

CMS not only reaffirmed its previously-announced plans to terminate contracts earning 3 consecutive Part C or Part D Summary Ratings of less than 3 stars, but also set forth an annual calendar by which this practice will become standard. With CMS guidance indicating these termination decisions are non-negotiable, plans will likely expedite efforts to improve Star Ratings performance such that impactful work begins as soon as it looks possible their first Summary Rating below 3 stars may be on the horizon.

  • Connecting Compliance and Star Ratings

From a compliance perspective, CMS proposes to continue strengthening its connections between compliance, data integrity, and Star Ratings. CMS reminds organizations of its policy to reduce a contract's measure rating to 1 star if it's determined biased or erroneous data was submitted. Our experience this year indicates CMS is leveraging this authority much more frequently than it has in past years, which means plans will want to pay particular attention to Medicare Plan Finder and PDE data requirements, Organization Determinations, Appeals, and Grievances (ODAG) and Coverage Determinations, Appeals, and Grievances (CDAG) processes, internal controls to prevent errors in operational areas directly impacting the data reported or processed for specific measures, and Part C and D reporting requirements data validation for specific measures. CMS points out, and we're hearing evidence to support, it continues to identify new vulnerabilities where inaccurate or biased data could exist, which could result in the reduction of a star measure to 1 star. As my colleague, Regan Pennypacker, details in her recent article, CMS' proposed changes will require plans to "implement creativity and do more with less while enhancing the beneficiary experience." Certainly this will be no easy task as we survive 2016 and plan for 2017 under a new administration.

  • Measure Updates

CMS is not proposing to add any new measures to the 2017 Star Ratings, although several measure specification changes are proposed for use in the 2017 ratings. As previously proposed, CMS indicated both the Improving Bladder Control (Part C) and High Risk Medication (Part D) measures will be moved to the Display page for 2017.

CMS proposes the addition of two new measures to the 2018 ratings (based on 2016 services/operations): Medication Reconciliation Post-Discharge and Hospitalization for Potentially Preventable Conditions. Addition of previously-proposed statin therapy and asthma measures were pushed out at least another year, possibly as a show of support for the recently-released and newly-aligned quality measures, giving plans a bit of breathing room to work with providers in this new area.

As we look ahead with CMS' foreshadowing of future program updates, continued attention is being paid to Care Coordination measures (with the National Committee for Quality Assurance's (NCQA's) assistance) and Depression measures (with NCQA and Minnesota Community Measurement's support), and the Advance Notice highlights a number of potential measure specification changes, which may take effect for the 2018 ratings.

Whether your organization is working to improve performance on your entire Star Ratings program, or just a few Star Ratings measures, or needs assistance understanding how the proposals contained in the Advance Notice may impact your plan, we can help. For additional questions and inquiries about how Gorman Health Group (GHG) can support your organization's Star Ratings programs, please contact me directly at msmith@ghgadvisors.com.

 

Resources

On Tuesday, March 1, from 2:30-3:30 pm ET, join John Gorman, GHG's Executive Chairman, and colleagues Olga Walther, Senior Legislative & Policy Advisor, and Leslie Mullins, GHG's Senior Consultant, as they provide a hard-hitting analysis of critical areas addressed in the document. Learn what the proposed "methodology changes" could mean for your organization and your partners and the steps you can take to soften the impact. Register now >>

Register your team for the 2016 GHG Forum! For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

There's a Lot to Like and to Fear in the 2017 Medicare Advantage Call Letter

On Friday after the close, the Centers for Medicare & Medicaid Services (CMS) released the 2017 Medicare Advantage (MA) Call Letter with proposed policy and payment changes. There's a lot to like — and much to fear. On payments, CMS came in with higher-than-expected rates that make clear the long walk in the desert from cuts in the Affordable Care Act (ACA) is over. But on compliance, they are rolling out the firing squad with a broad mandate, and the Administration will leave its mark long after Obama has left office.

What We Like:

  • The draft offers all-in rates of +1.35% and a trend of +3.05%, better than last year and better than expected.
  • CMS is leaving home visits for MA risk adjustment untouched. If ever CMS was going to clamp down on this after years of threats, this was the time — in the last year of the Administration. By not doing so, we think they're closing the book, acknowledging much good also comes from these house calls, and the home is the most underutilized source of care in the delivery system for seniors.  Despite MedPAC recommendations and a drumbeat of op-eds, CMS didn't want to throw the baby out with the bathwater.
  • There are big proposed changes to risk adjustment and Star Ratingsfor MA plans serving dual eligibles.
    • CMS would launch a new payment system with six subcategories: full duals, partial duals, and non-duals, for both aged and disabled beneficiaries. The net effect is like a crude, mega-risk adjuster, paying plans with more duals bigger, more accurate payments, while paying slightly less to plans with fewer duals.
    • On Star Ratings, CMS is proposing an adjustment on three key measures — the overall plan rating, and Part C and D summary ratings — which will increase ratings for plans with higher proportions of duals and could increase bonus payments if the plan is 4+ stars. This is a big win for the industry.
  • The health insurer issuer tax has been suspended for a year (and will return in 2018).

What We're Worried About:

  • The rapid acceleration from 10% to 50% encounter data driving risk adjustment could depress risk scores. It's clear CMS is moving to 100% encounter data as quickly as possible and likely presages the use of encounters and not Fee-for-Service (FFS) claims to calculate risk factors as well as the phase-out of the coding intensity adjustment.
  • CMS is proposing changes for Employer Group Waiver Plans (EGWPs) that amount to a "tax" on sponsors designed to reduce Medicare's spend on these 3 million of the 18 million beneficiaries in MA. EGWPs typically bid much higher than individual MA plans, and the proposal will likely result in a cost-shift to group members or a reduction in supplemental benefits. There was no estimated impact given, so watch this closely.
  • CMS made it clear Star Ratings low performers will be executed by firing squad as early as next week. The Call Letter states plans rated below 3 stars for 3 consecutive years will be terminated in February 2016 for a December 31 effective date.  Three to six plans qualify for termination. This will be the timeline for future years, and CMS states these decisions are non-negotiable.
  • Huge news here on the compliance front:
    • CMS notified Part D sponsors it's stepping up enforcement actions on coverage disputes and complaints, the leading noncompliance issue for plans.
    • Plans failing the financial audits conducted on one-third of plans each year will no longer be subject to corrective action plans but rather sanctions and civil monetary penalties.
    • CMS is ramping up audits and enforcement actions in network adequacy, provider directory accuracy, and medication therapy management programs.

As always, we now enter the frenzied public comment/lobbying phase where the industry tries to get an even better deal, with the final policies announced April 4. As these things go, MA plans should be generally happy about the financial picture while getting down to the busy work of getting the compliance house in order. Most of what's proposed here, we think, becomes the "new normal" long after Obama has left office.

 

Resources

Join John Gorman, GHG Executive Chairman, and colleagues, Olga Walther, Senior Legislative & Policy Advisor, and Leslie Mullins, GHG's Senior Consultant, as they provide a hard-hitting analysis of critical areas addressed in the document. Learn what the proposed "methodology changes" could mean for your organization and its partners, and the steps you can take to soften the impact on Tuesday, March 1 from 2:30-3:30 pm ET. Register now >>

Register your team for the 2016 GHG Forum. For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>  

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Star Ratings Update: MedPAC Votes to Eliminate Double Bonuses

Star Ratings is already a hot topic in 2016, and we're only one month into the new year.  In most recent news, the Medicare Payment Advisory Commission (MedPAC) unanimously voted last month to eliminate the double bonuses associated with Star Ratings, while also virtually unanimously voting to exclude diagnoses collected during in-home assessments from the Medicare Advantage Risk Adjustment model. Although the Centers for Medicare & Medicaid Services (CMS) may opt to take an alternate approach to resolve Risk Adjustment issues within Medicare Advantage, and since CMS can't independently remove double bonuses with amending certain elements of the ACA legislation, this new development is a great reminder of the need to periodically pause and evaluate the value and ROI of programs which remain prominently placed on CMS' radar screen.

When CMS continued their support of in-home assessments in the 2016 Call Letter, we all breathed a collective sigh of relief.  And since that announcement, we have seen significant effort by both health plans and vendors to make these assessments even more clinically and socially focused while simultaneously aligning them with Star Ratings measure needs.  As a result, any strategic changes made in response to MedPAC's January votes could have a pervasive impact on the care models and operational structure health plans have come to rely on for Star Ratings success. CMS' response to MedPAC's recommendations, along with the plethora of other potential Star Ratings program updates may not only impact health plans and providers, but could also impact a wide array of health services purchased through vendors.

Many health plans (and their vendors) have leveraged risk assessment work streams to hardwire carefully-planned and strategically-prioritized clinical care and care planning activities into in-home assessment workflows in order to seamlessly impact Star Ratings and achieve multi-faceted return on investment (ROI). In addition, the data collected during risk assessments is often stored in centralized data warehouses and used throughout the health plan as a foundation for population health, care management, and consumer experience strategies.  And if that wasn't enough, because members often value the relationship with, and advice received from, the clinician they allow into their home, any changes to in-home assessments introduce a host of new risks relative to self-care and disease management, member satisfaction, and consumer experience.

As we await guidance from CMS regarding their response to MedPAC's recommendations and regardless of how CMS ultimately responds to both issues, this is a great time for leadership to study and thoughtfully consider a number of decisions which could result from either the elimination of double bonuses or changes to CMS' treatment of in-home risk assessments:

  • What is the downstream Star Ratings impact of any benefits proposed for reduction or elimination?
  • How have quality, medical management, pharmacy, Star Ratings measure gap closure, member retention, and other strategic priorities been hardwired into in-home risk assessments?
  • What is the secondary ROI from in-home risk assessments on Star Ratings measures, health outcomes, medical loss ratio (MLR), member satisfaction, and member retention?
  • Are current work streams adequate to support strong 2016 performance on new Star Ratings measures under consideration for addition to the Star Ratings program?
  • How is each department using the data collected during in-home risk assessments?
  • How well positioned is the provider network to serve the care planning and care management needs of members currently receiving in-home assessments?
  • What types of alternative workflows and tactics will be used in the event diagnoses obtained from in-home assessments are not allowed for risk adjustment purposes?

Because time is of the essence in our industry, strategic planning and change management never ends. As John Gorman has said for years, it will be the most adaptable plans which will both survive and thrive through the tumultuous industry evolution.

In-depth analysis and industry-leading commentary on the key announcements from CMS and MedPAC can be found in this recently created white paper.

Gorman Health Group (GHG) can help you adapt your Star Ratings approach to account for these potential changes and streamline your Star Ratings strategy to influence health outcomes while remaining compliant with CMS regulations.  For additional questions and inquiries about how GHG can support your organization's Star Ratings programs, please contact me directly at msmith@ghgadvisors.com.

 

Resources

Register your team now through February 14 for the 2016 GHG Forum, and take advantage of our standard registration rate of $1,095 before the price goes up to $1,295 on February 15.  Register now >>  For more details around the event and agenda, download the full conference brochure or visit our website.

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Risk Adjustment: Proposed Changes & New Regulations

At Gorman Health Group (GHG), we pride ourselves on having our fingers on the pulse of what continues to be a complex and volatile government programs environment. Whether it is fact or fiction, our clients and our peers look to us to interpret and filter through the official announcements, the breaking news, the propaganda, and the hype.

Being accountable for GHG's Risk Adjustment division keeps me and our team of consultants quite busy, and just when other departments get to breathe for the holidays, we are inevitably fielding questions and providing "home stretch" support to clients as they prepare for the final submission of risk adjustment data. (In case you missed it, CMS published this memo outlining extended deadlines for data submission.) See full memo here.

If you live in the risk adjustment world, you know this critical business function never really takes a holiday. The Centers Medicare & Medicaid Services (CMS) calendar for data collection and submissions leaves little room for vacations, especially knowing risk scores recalibrate annually and the work to ensure complete and accurate diagnostic data for Medicare Advantage (MA) beneficiaries requires a watchful eye at all times. The reality is, either your hair is on fire, or you just sent the guy in the cube next to you out to refill your propane tank.

Whether we are in the trenches with our clients, or supporting them from afar, GHG is always keeping an eye on what is coming next. So, while you were collecting charts and checking them twice, and making sure your In-Home Assessment vendors were sending information to your Case Management department, here is what has been coming across the wire…don't worry, we have been keeping tabs on all of the critical activity in the risk adjustment space:

October 28, 2015: CMS announces proposed changes to the CMS-HCC Risk Adjustment Model for Payment Year 2017 which would apply "improved predictive ratios" for full benefit and partial benefit dual-eligible beneficiaries.

https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/RiskAdj2017ProposedChanges.pdf

November 4, 2015: CMS admits to having underpaid dual-eligible health plans and, in turn, overpays for beneficiaries with low medical costs, sparking concern not only about inequities in payment, but the potential for adverse selection.

http://www.modernhealthcare.com/article/20151105/NEWS/151109936?utm_source=modernhealthcare&utm_medium=email&utm_content=20151105-NEWS-151109936&utm_campaign=am

December 2, 2015: CMS released an early preview of 2017 MA Ratebook Growth Rates, signaling a hopeful bump in MA plan payments due to a 3.1% increase in traditional Medicare spending in 2017. This is one variable in the equation. Risk adjustment calculation changes and other policy changes will complete the puzzle. More to come on February 22 when CMS releases the Advance Notice for 2017. Stay tuned.

http://www.modernhealthcare.com/article/20151202/NEWS/312029999

December 28: CMS released a Request for Information outlining the expansion of Medicare's Recovery Audit Program in an effort to identify instances where Medicare is overpaying.

http://www.modernhealthcare.com/article/20151228/NEWS/151229937

January 14, 2016: The Medicare Payment Advisory Commission (MedPAC) voted to pass recommendations which would change how MA plans are potentially paid, potentially saving CMS $5 billion and revealing its position on In-Home Assessments and Star Ratings Quality Bonus Payments.

http://www.modernhealthcare.com/article/20160114/NEWS/160119925

January 22, 2016: This one has a bit of a political spin to it, but we thought it was worth reporting. AHIP released a funded analysis conducted by Avalere Health, finding the risk adjustment model used by CMS "lowballs" the cost of treating chronic conditions such as depression, osteoarthritis, chronic pain, and rheumatoid arthritis by millions, and, in some cases, billions of dollars.

http://www.modernhealthcare.com/article/20160122/NEWS/160129948

Just like our consulting services and our analytics solutions, we assessed the current state of the Medicare risk adjustment industry, collected our findings, and delivered meaningful, actionable information which will keep our clients and readers informed and prepared for what lies ahead in 2017.

A more in-depth analysis and industry-leading commentary on the key announcements from CMS and MedPAC can be found in this recently created whitepaper.

For additional questions and inquiries about how GHG can support your organization's risk adjustment programs, please contact me directly at dweinrieb@ghgadvisors.com.

 

Resources

Whether you rely on multiple vendors or a largely internal team, 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 >>

Register your team now through January 31 for the 2016 GHG Forum, and take advantage of our New Year's special! Save 15% using promo code NewYear16 at checkout. Register now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Issues That Will Define Government Health Programs in 2016

The new year brings a slew of issues that will define government-sponsored health programs.  Here's what we're watching closely, not necessarily in this order. Opportunities have never been greater in Medicare, Medicaid, and ObamaCare, but execution risk is rising fast. If this was an easy business, we'd be out of business.

Drug Pricing: Prospects for a legal fix in Congress is questionable, and this will be a leading issue in the Presidential campaign.  Expect administrative action, demonstration project solicitations from the Centers for Medicare & Medicaid Services (CMS), "comparative effectiveness research" by federal agencies on specialty drugs, and "collaborative pricing" initiatives between pharma manufacturers and payers on high-profile therapeutic classes.  Health plan CEOs expect higher specialty drug cost trends to be the biggest driver of medical cost trend in 2016.

Medication Therapy Management (MTM): 2016 is the year MTM gets real. CMS will begin conducting widespread audits of Medicare Advantage (MA) and Part D plan medication reviews, and there is tremendous emphasis on MTM in the Star Ratings system.  Making MTM real for your members will require extensive vendor contracting and Pharmacy Benefit Manager (PBM) coordination, so turn your plan's attention to this fast.

Antitrust/Mergers: Sometime in Q3 or Q4 of 2016, the Federal Trade Commission and the Department of Justice Antitrust Division will rule on proposed mergers for Aetna/Humana, Anthem/CIGNA, Walgreens/Rite-Aid, and Pfizer/Allergan.  We expect all four deals to be approved but with strings attached; e.g., we expect Aetna/Humana will have to divest 250,000-450,000 lives to get a green light.

Star Ratings: Must be a central focus of all payers and providers in government programs.  Star Ratings has transcended MA and Part D.  Star Ratings data is already being collected by ObamaCare plans, and over a dozen state Medicaid programs are using CAHPS® and Star Ratings data in contracting with plans for dual-eligible and managed long-term care (LTC) initiatives.  And while there aren't major changes to Star Ratings measures in 2016, scoring is the game-changer: 50% more plans will be scored for the first time this year, guaranteeing a shift right in the ratings bell curve and that many of 2015's 4-Star plans will go off the cliff. To maintain progress, plans must run Star Ratings as a program with dedicated leadership and execution spelled out at the workflow level.

Risk Adjustment: 2016 will usher in increased efforts to ensure payment accuracy through more stringent and expansive Risk Adjustment Data Validation (RADV) reviews, and so providers delegated for risk and sharing in a percent of premium will be in the spotlight.  CMS is seeking to contract with third-party auditors on RADV, and risk adjustment is a top concern in the Department of Health and Human Services (HHS) Office of Inspector General (OIG) work plan.

Providers and Care Delivery: 2016 will be a transformative year with contracted providers in government programs.  Narrow/preferred networks and value-based risk contracting will go mainstream this year, whether providers are ready or not. Huge penalties start this month on network adequacy and accuracy of provider directories, and NAIC's model guidance on provider networks will be a central document governing the issue. Star Ratings measures on access to care and the member experience put new heft and revenue behind network requirements. Provider-sponsored entities will provide a mini-surge of dozens of new plans into MA and Medicaid in 2016 and 2017, especially among Medicare Accountable Care Organizations (ACOs), so keep your friends close and your enemies closer. Home- and community-based services and alternatives to nursing homes will go mainstream in 2016.  Retail pharmacies will become the second-most-important provider type for health plans.  With crushing burdens of ICD-10 and meaningful use, small and mid-size practices will become overwhelmed and will underperform.  Plans will need aggressive oversight, quality improvement, and directory management activities to stay ahead.

Exchange Payment: For the first time in two years, CMS is going to begin paying plans HIX 820s at the member level, which will shine a spotlight on enrollment reconciliation issues that have been lingering. The plans' readiness transition period is from January to March, then it gets real in April.

Medicaid and Dual Eligibles: Unexpected states like LA, SD, and IA are now considering Medicaid expansion. CMS is focusing on new Medicaid quality measures and will be depending heavily on NCQA quality measures to gauge health plans.  This will impact payment and future membership for some lower-rated plans. Beneficiary opt-outs in excess of 75% are plaguing early dual-eligible demos, but many states remain in fiscal crisis and need to move ahead to balance budgets.

Compliance: 2015 was a near-record year in CMS enforcement actions, and scores always get settled with insurers in the second term of a Democratic administration.  There will be a slew of rules coming from CMS this year as well as expanded audits from OIG. Both agencies' approaches indicate how critical documentation remains:  CMS added a number of items to documentation requests for Compliance Program Effectiveness; Medicaid, dual-eligible, and LTC demos are still very documentation-heavy, and CMS found that approximately two-thirds of CMS-reviewed FFM issuer plan policies and procedures (P&Ps) were incomplete or had operational findings with their vendor contracts. So even though there is focus on data monitoring and passed/failed samples, P&Ps and documents are still the cornerstone.

There is no question that 2016 will be a banner year in government programs enrollment, and the long walk in the desert on payment rates in MA and Medicaid appears to be over.  But execution risk and the enforcement environment have never been tougher.  This year will be a "Darwinian moment:" it's not about being the biggest or even the smartest but being the most adaptable.

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Resources

Register your team now through January 31 for the 2016 GHG Forum, and take advantage of our New Year's special! Save 15% using promo code NewYear16 at checkout. Register now >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

by GHG Advisors

Proposed Changes to the CMS-HCC Risk Adjustment Model

Policy changes governing risk adjustment in plans for Medicare-Medicaid dual eligibles may soon be coming.

In response to concerns about the accuracy of the Centers for Medicare & Medicaid Services (CMS)-Hierarchical Condition Category (HCC) risk adjustment model for predicting costs of dual eligible beneficiaries, CMS recently released a Health Plan Management System (HPMS) memo stating it will evaluate how well the model performs for these beneficiaries based from concerns raised that "the model may disproportionately affect specific populations, particularly dual eligibles."

These proposed changes will not affect the clinical relevance CMS has already included in the existing model or on non-dual eligibles. However, this new approach is a clear "win" for plans having significant numbers of full dual eligibles, both Dual Eligible Special Needs Plans (D-SNPs) and otherwise. The under-payment in the current system is pretty severe, based on the statistics in the CMS memo, and this new approach will fix that.

"This is an interesting change and will definitely have downstream impacts," said a member of the Operational Performance team at Gorman Health Group (GHG). "There isn't a lot of reconciliation on the Medicaid status. Health plans have to go by the designation by the state of what type of dual eligible someone is as there is no independent way to validate that level of coverage.  So there isn't any additional reconciliation which will occur.  Health plans can no longer submit updates to Medicaid eligibility through the retro processer.  That data is much cleaner now than in past years and is fixed quickly due to Low-Income Subsidy (LIS) status cost share implications for dual eligibles."

Further, SNPs determine the type of dual eligible they will cover during the application process.  They validate the member is eligible, based on that status at time of enrollment, but there is no submission or correction of that status.  They have to use the state's data to validate whether they are a full dual-eligible, Specified Low-Income Medicare Beneficiary (SLMB), or Qualified Medicare Beneficiary (QMB), etc.

What may be a challenge is identifying more clearly who is in what status to allow for projections and reconciliation of risk adjustment status.

I cannot stress the dire need for your Risk Adjustment team to be in constant collaboration with the core operations leaders within your organization to be sure the necessary reconciliation is occurring and that you have a solid data management and analytics strategy in place.

Initial Highlights:

a. The Impact on Partial Dual Eligibles

Some SNPs have most likely been generating some of their profits by enrolling partial duals for which the current HCC model generates some over-payment.  The new model will eliminate this, and SNPs with significant partial dual populations need to start planning now.

b. Member Eligibility and Reconciliation

Beneficiaries could have months in one or more of the six sub-populations. Tracking a member's status and the hierarchy of the status in the base year will be important as plans forecast and reconcile their risk adjusted payments. If CMS moves forward with reviewing predictive ratios for six segments as it states in the HPMS memo, it will be very important for plans to ensure they are updating a member's Medicaid eligibility (QMBs/SLMBs, etc.) in a timely manner, which is currently a requirement, and the accuracy will be even more critical for projections and reconciliation of risk adjustment status.

Takeaways:

a. New Opportunities to Manage Trend and Control Utilization Costs

With improved accuracy for predicting cost, comes an opportunity for plans to be more targeted and efficient with their efforts to manage trend and control the utilization of those beneficiaries that are seemingly very costly (or at least are predicted to be very costly).

Processes around moving patients to and from the community and back to institutional settings will need to be seamless, clinically appropriate, and efficient. Politics and system loopholes allow facilities and health systems to game the system, keeping people in beds or reserving space in order to receive the reimbursement associated with the patient's status. Controls will need to be put in place: Utilization Management and Compliance need to be involved to keep a close eye on patterns for both beneficiaries and providers.

Data has had a staggering increase of importance and remains an integral part of the healthcare industry. The need to have refined data management processes to ensure data integrity and quality analytics is at an all-time high. Achieving this should be at the forefront of health plans' minds, especially with impending policy changes.

This proposed model will improve payments a little for the least expensive non-dual members, while reducing payments a little for the most expensive.  But the most expensive probably have the most unreported and under-reported diagnoses, so a good risk adjustment program could compensate for the small predicted impact of this new approach.

CMS is soliciting feedback on their approach to revising the CMS-HCC risk adjustment model to better predict costs for beneficiaries based on their dual status and aged/disabled status for Payment Year 2017. If you wish to submit comments, please submit them to RiskAdjustment@cms.hhs.gov , with the subject heading "Proposed Updates to the CMS-HCC Risk Adjustment Model," by November 25, 2015.

If you are unsure how this will affect your organization, or how to accurately communicate your ideas to CMS in two weeks, our integrated team of experts specializing in risk adjustment, analytics, compliance, pharmacy, and operations can work with your organization to ensure you have the right processes in place to ensure a timely submission to CMS. Contact us today >>

Resources

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by GHG Advisors

The Transition From RAPS to EDS: New Offering Helps Your Plan Calculate & Define Risk Level

In 2016, the Centers for Medicare & Medicaid Services (CMS) will start to transition from utilizing Risk Adjustment Processing System (RAPS) files, to support the Medicare risk adjustment payment, to encounter files. The transition process is gradual, with a weighted percentage being taken for 2016: 10 percent based on the encounter files and 90 percent based on the RAPS files. With this transition, it is critical that health plans ensure that their RAPS files and Encounter files are in sync. Oh- and the vendors are on the hook for this too.

For some, the financial and operational impact of the transition from RAPS files to EDS files for risk adjustment is still a mystery. On October 23, CMS announced further guidance regarding RAPS and EDS Submissions.

There were three key elements:

1). The addition of diagnoses submitted after the risk adjustment deadline for payment year

2). The submission of HIPPS Codes for CAH's

3). The use of default NPIs for atypical providers.

Gorman Health Group (GHG) continues to stress the importance of accurate and timely submission of RAPS and EDS files to CMS. This memo clearly supports our rationale behind this emphasis, and it takes it one step further. Your organization not only needs controls on the front end, it needs quality oversight and standard operating procedures in place to manage the file return elements from CMS.

CMS states that it will not incorporate into the risk score for a payment year additional diagnoses submitted after the risk adjustment deadline. Specifically, after the final risk adjustment submission deadline for a payment year, only diagnoses deletes will be included in a rerun of risk scores for the payment year. Knowing this, there is no time like the present to reevaluate your RAPS and EDS processes. Our new capability will help your plan do this while calculating and defining its current level of risk.

This is a critical time and an imperfect process for health plans and risk baring provider groups, GHG is excited to introduce our new RAPS/EDS Variation Analysis capabilities. Our team of operations and data experts will assess your current processes and data, identifying gaps and discrepancies that need to be addressed in order to ensure compliance and secure accurate payment from CMS through Risk Adjustment operations.

Clients will receive the following critical items upon completion of the analysis:

  • Operational Assessment Report - Outline of the processes that the health plan currently has in place for RAPS/EDS file submissions, returns and error resolution, providing areas of opportunity for improvement.
  • Variation Analysis Review - Review of findings, outlining instances for potential inaccuracies and risks associated with the health plans current methodology and processes applied to the internal variation analysis.
  • Discrepancy Reports - Identifies opportunities to improve completeness and accuracy of each submission to CMS.
  • Encounter File Member Analysis - Provides detail around the member attributes utilized for risk score calculation to identify gaps when comparing to the RAPS file member analysis.
  • RAPS File Member Analysis - Provides detail around the member attributes utilized for risk score calculation to identify gaps when comparing to the encounter file member analysis.

With this information, a health plan can feel confident that they fully understand the revenue and operational impact of this transition and are able to put processes in place to ensure that there is no loss of revenue or instances of data inequities when transitioning to the Encounter file format. 

For more information on our approach and the results, please contact me directly at dweinrieb@ghgadvisors.com.

 

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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by GHG Advisors

10 Millon People Expected to Have Marketplace Coverage in 2016

The 2016 Health Insurance Marketplace open enrollment is right around the corner, opening on November 1, 2015. With premium rate increases well above 10% for 2016, it's no surprise the 2016 enrollment projections for the Marketplace are estimated to increase by less than a million from the total current 2015 enrollment, bringing the total individuals enrolled by the end of 2016 to 10 million.

In the most recent press release from the U.S. Department of Health and Human Services (HHS) on October 15, 2015, HHS is aiming to enroll more than one out of every four individuals eligible for Marketplace insurance. It's great news that more individuals will be enrolled, but 10 million is a rather conservative target set by HHS and significantly lower than the January 2015 Congressional Budget Office (COB) estimate of 21 million individuals. HHS anticipated the migration from employer-sponsored coverage to the Marketplace would be much more significant. Companies are still choosing to work with insurance companies directly to purchase health insurance as opposed to purchasing insurance through the Small Business Options Program (SHOP) or sending employees to the Marketplace to purchase health insurance on their own.  This is contributing to the slower enrollment increase.

Starting in 2016, the definition of a small group employer will be increased to include companies having 51-100 employees. The enrollment increase we will see in 2016 will be due, in part, to this change. In previous years, these companies were classified as large groups and not subject to the Affordable Care Act (ACA) regulations. By changing the definition of a small group, it now requires companies having 51-100 employees to abide by the ACA regulations and will increase Marketplace enrollment. The annual tax penalty for not having health insurance will also be a driver for increased membership in 2016. The penalty for not having health insurance has been gradually increasing each year.  The uninsured are becoming more aware of the tax penalty which will be applied to their annual income tax filing if they cannot provide proof of insurance coverage. For 2016, the penalty is $695 per person, or 2.5% of yearly income, whichever is greater. For each child under the age of 18, the penalty is $347.50. If 2.5% of your yearly income is greater, then the penalty will be capped at no more than the national average premium for a bronze plan. If your penalty is based on the per person/per child method, then the maximum penalty for a family is capped at $2,085. As the penalties start to increase, the more people with be inclined to purchase health insurance coverage.

For health plans, this means consumers are not just looking towards the Marketplace as the only channel to purchase health insurance. Health plans still need to be actively working with their sales brokers and potentially exploring new channels of enrollment, such as a private exchange. Redefining internal operations to support the changes implemented by the ACA should be the biggest focus for health plans right now. With the growing trend of members enrolling into a Qualified Health Plan (QHP), health plans need to be looking at transforming internal operations to support a more value-based outcome approach. This approach is driven by the company, provider, and membership knowledge acquired from internal data analytics.  

The top three areas health plans should be focusing on are:

Ensuring all Americans have affordable healthcare is the core reasoning behind the ACA. The three areas listed above are starting points to help health plans keep the cost of healthcare down while ensuring individuals are offered affordable insurance with quality benefits.   

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 >>

Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>

 

by GHG Advisors