Medicare Advantage Value-Based Insurance Design: Key Considerations
The Centers for Medicare & Medicaid Services (CMS) recently announced a proposed demonstration that will test varying benefit designs based on health status. The Medicare Advantage Value-Based Insurance Design (MA-VBID) Model will allow organizations to offer targeted supplemental benefits and/or reduced cost sharing to enrollees with specific chronic conditions to further the goal of improving beneficiary health, reducing the utilization of avoidable high-cost care, and reducing costs for plans, beneficiaries, and the Medicare program. The overall goal of this demonstration is to improve clinical outcomes while reducing plan expenditures.
Do you qualify?
This demonstration is proposed for seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. According to the announcement, only current MA organizations in good standing in those states will be allowed to participate. The demonstration is aimed at Health Maintenance Organizations (HMOs), Health Maintenance Organization Point of Service (HMO-POS) plans, and local Preferred Provider Organizations (PPOs) in order to determine how it affects beneficiaries and costs in the most common plans. Special Needs Plans (SNPs), Regional PPOs, Medicare-Medicaid Plans (MMPs), Private Fee-for-Service (PFFS) plans, Employer Group Waiver Plans (EGWPs), Health Savings Accounts, and cost plans are not eligible.
The demonstration will waive certain regulations so benefit plans can vary for enrolled members based on their diagnosis, condition, or need for a medical service. Currently, health status distinctions in providing benefits to enrolled beneficiaries are prohibited by regulations.
How we can help:
Applications
The CMS process begins with the submission of a Request for Application (RFA), which is currently due on November 15, 2015. Organizations failing to submit an RFA cannot participate in 2017 but may be allowed at a later date during the five-year demonstration period. Organizations must submit an RFA that has sufficient detail to allow CMS to determine if the benefit plan addresses targeted beneficiaries, will provide measureable results, and is appropriately structured for the demonstration. We can work with your organization through every step of the application process, from gathering the right data and completing the application, to submitting the application and responding to follow-up questions.
Financial Analysis
The key to designing a successful MA-VBID model is to establish programs to simultaneously manage revenue through best-in-class Star Ratings operations and targeted risk adjustment for these prevalent diseases and avoid adverse risk selection as well as an ongoing review of cost and utilization drivers from medical and pharmacy claims. An initial assessment of claims and financials can help highlight existing strengths and weaknesses in medical management (including pharmacy) as well as provider networks. With annual bids as the source of financial truth, targets need to be realistic and timely.
Benefit Design Analysis
Organizations can propose any myriad of combinations of benefits or services provided they are based on the proposed chronic conditions listed in the announcement. Most importantly, CMS notes participating organizations can initiate the demonstration with a limited benefit and can expand their benefit plans during the five-year term of the demonstration. While the benefits will be mandatory supplemental benefits, CMS proposes to prohibit marketing these benefits to non-member beneficiaries.
Resources
We can work with your organization to design and implement a comprehensive data analysis to guarantee you have the right products, programs, and capabilities in place to compete and ensure you are go-to-market ready.
Is this the right opportunity for your organization? Attend our webinar to find out. Join John Gorman, Founder and Executive Chairman at Gorman Health Group, and I on Tuesday, September 29, from 1-2 pm ET, as they outline the MA-VBID plan requirements as well as what you should be doing now to prepare for January 2017. Register now >>
The Imminent Medicaid Mega-Reg is Gonna be "Epic"
For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We're coming to call it the "mega-reg" here. Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting the term "epic" used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.
Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn't address long term care services and supports and managed long-term care, a major impetus for program reform at the state level. The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.
MACPAC's debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:
- Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard. CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard. The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
- Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit. Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers. The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
- Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services. CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
- Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance. CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
- Transparency — Medicaid health plans want transparency of state practices to develop capitation rates. CMS could require states to share data and assumptions and allow plans to comment during federal review.
- Baseline/Encounter Data — CMS could impose additional standards in addition to "appropriate data." CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
- New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.
Beyond payment issues in the mega-reg, the Commissioners discussed:
- Long Term Care -- CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
- Provider Networks -- the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans. Strengthened requirements for appeals and grievances may also be included. The proposed rule may also include enhanced quality data and reporting. It's expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.
We'll have scads of analysis of the Medicaid proposed rule as soon as it hits the street. It's gonna be huge.
Resources
Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>
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Gorman Health Group Client Forum Takeaways: Government Programs are Booming, Bar is Rising
We just wrapped our best-ever Gorman Health Group 2015 Client Forum at National Harbor with over 200 of our closest clients and partners. There was both great and tough news, so here's a few takeaways, including a couple stunners:
- For the first time, a prominent Wall Street analyst said he could see a path to 100% Medicare Advantage penetration. Barclay's eminent health care observer, Josh Raskin, stunned our audience with projections of over 29 million Medicare Advantage enrollees by 2023, a penetration rate of over 42%, with the potential to go all the way with Ryan Plan-like legislation now feasible this decade.
- 47 states now hold Section 1915(c) home and community-based services waivers for Medicaid, which will unleash a new flood of dual eligibles into health plans. Special Needs Plans (SNPs) for duals are now on a path to permanent reauthorization, and over 30 states now use D-SNPs to enroll over 1.6 million beneficiaries. That number will more than double in the next 2 years.
- While year 2 of open enrollment for ObamaCare was dramatically improved from its messy launch, problems persist, especially with membership reconciliation and issues related to the interim process to auto-enroll most members staying in their plans. Cleanup of membership discrepancies will likely take another year or even longer.
- Risk Adjustment Data Validation (RADV) audits will become the new normal in Medicare Advantage. 2015 will be the first time we see plans prosecuted under the False Claims Act and hundreds of millions clawed back by the Centers for Medicare and Medicaid Services for unsubstantiated codes submitted for higher payments.
- Maximizing data, strong provider partnerships, documentation and ICD-10 preparedness are keys to audit proofing your Risk Adjustment program.
- The Star Ratings system of performance-based payment is the new cornerstone of competition among health plans. Stars has expanded into more than a dozen state Medicaid programs, and to ObamaCare's issuers as well, and the bar is rising. Technical changes to several measures mandate much higher performance to stay ahead of the curve and avoid falling below 4 Stars, where bonus payments and bid rebates vanish. 2015 will be the first year where plans below 3 Stars are terminated.
- Medicare Advantage plans won several lobbying victories in this year's "Call Letter", the rate and policy announcement for 2016, including an average 1.25% benchmark increase from a cut in the February draft. This signals a new era of influence muscle for the industry, where CMS will increasingly fight out policy changes "below the waterline" in subregulatory guidance and enforcement, where politicians are less likely to intervene.
- Appeals and grievances and pharmacy benefit management vendor performance remain the #1, 2 and 3 regulatory infractions in Medicare Advantage, and integration of long-term care and supports and services the leading challenge facing Medicaid health plans.
- CMS is on pace for its most aggressive enforcement year ever, with over a dozen actions taken against plans this year already.
As we've said since the passage of the Affordable Care Act, we are now in the Golden Age of government-sponsored health programs, and the opportunities and challenges that come with this shift have never been greater. Our clients went home with a clear grasp of both, and we are thrilled so many joined us this year.
Resources:
Join John Gorman, GHG's Founder & Executive Chairman, as well as Bill MacBain, GHG's Senior Vice President of Strategy on April 14 as they provide a hard-hitting analysis of critical areas addressed and finalized in the document from 1-2pm ET. Register now >>
GHG's Senior Vice President, Healthcare Analytics & Risk Adjustment Solutions, Dan Weinrieb, recaps the Risk Adjustment rulings in the Final Call Letter and provides keys to success in an article on the GHG blog. Read more here >>
The Risk in DIY: CMS Mandated Material
"Do It Yourself", or DIY, has been the rave for years now. From social media sites like Pinterest to television networks like HGTV, Americans have become fond of this philosophy. Now, I am a big believer in being self-sufficient and must say that I have been sucked into marathon viewings of DIY shows often (Nicole Curtis of Rehab Addict is no joke!). And, while I have seen my share of success stories, more often than not, I see DIY projects result in complete frustration from those attempting to DIY and very costly mistakes.
A prime example of this within the MA industry is the DIY approach to creating CMS mandated material. Year after year, I see organizations attempt to produce upcoming plan year material in-house with the intention of saving budget dollars, but ending up with a costly mess due to lack of subject matter expertise and lack of adequate resources. When you think about the overall importance that is placed on CMS mandated material and the level at which these materials are scrutinized by CMS, it begs the question, "Is the risk in DIY really worth it?"
Picture this: your organization decides to use existing staff to prepare mandated material for the upcoming plan year. Initially, the approach seems feasible and the cost savings looks attractive. Although the process is very time intensive, your organization completes the undertaking, or so you think. It turns out that the amount of time it took to review materials before HPMS submission could not be supported by your Medicare Compliance Department due to lack of resources. That results in functional areas being made accountable for not only the development of respective mandated material, but also the compliance review. With business-as-usual responsibilities not changing, the Enrollment department, which was tasked with creating ANOC/EOCs did not factor in a review for accuracy of information and compliance. Although your organization met the CMS distribution deadline, it is discovered that many of ANOC/EOCs contain cost-sharing errors and do not follow the CMS model templates and allowances. This discovery impacts about half of your membership and must be reported to CMS. CMS initially requires your organization to create errata for these documents, but when it is identified that the errors are so significant and high in volume, CMS requires your organization to recreate the affected ANOC/EOCs in their entirety and slaps on a civil monetary penalty. With a clear understanding of what led to inaccuracies in the first place, your organization seeks outside help from subject matter experts to limit the risk of non-compliance errors. It is later identified that an original version of an ANOC/EOC is still being sent to members upon request for a particular plan benefit package because a process for document version control was non-existent. In the end, this is a DIY project gone horribly wrong. The intention to save money by DIY resulted in something exponentially more expensive between CMPs and the exorbitant cost to reproduce materials. Most important of all, your beneficiaries were impacted by these inaccuracies.
I know we would all like to think that DIY is always a contending option, which it is, when you have the necessary resources and expertise to do so. But just as I will never claim to be an expert in building houses just because I've performed some wall patchwork here and there, organizations need to face the reality of the risks in DIY. Take the time to seriously consider how well-equipped your organization is to handle the development of CMS mandated materials as the season rapidly approaches. Is it time to bring in the experts?
Resources
For questions regarding consulting services for CMS mandated materials, contact me directly at rpennypacker@ghgadvisors.com
The Gorman Health Group 2015 Forum is April-7-9! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for the Gorman Health Group 2015 Forum today!
Marry Data to Build Accurate Customer Profiles
Have you ever played "Pin the Tail on the Donkey" as a kid and found yourself laughing when you got completely turned around and totally missed the donkey? That's what it's like when blindly developing benefits, products, marketing, and sales strategies without understanding what your current and prospective customers look and think like — except there's not a lot of laughing going on.
Utilizing enrollment and benefit data to gain an understanding of your marketplace is a great beginning to understanding your market. Taking the deep dive into the data gives you a greater understanding of your competitors, their benefits, and how different benefit, product, and possible provider strategies have affected the enrollment trend. It also gives you the ability to look at your own benefits/products and enrollment trends to try and build hypotheses of what is driving enrollment/disenrollment trends and develop premium, benefit, and product strategies to either reinforce the direction you are heading or to get back on track.
When you have the ability to add additional dimensions such as demographics, geographic, and psychographic elements to your current members and prospects to develop member and prospect profiles, it helps to gain clarity about your benefits and possible product development strategies to get a full picture of your market. This sets you up for changes that may need to be made or products to be developed in the future.
Analyzing these dimensions will also allow you to build a better pathway to smarter marketing and sales strategies to succeed. In June, when marketing and sales strategies are finalized, you don't know what your competitive advantage/disadvantage will be in the marketplace. Understanding how your 2016 products/benefits match your current membership and the prospective market and how your marketing and sales strategies will attack the market during the Annual Election Period (AEP) and subsequent year will give you a solid game plan to help crystallize your strategic vision.
Resources
GHG's Sales, Marketing, and Strategy division has developed a detailed analysis of the 2015 Annual Election Period (AEP). This allows health plans to understand existing opportunities in their market as well as the potential for new market opportunities.
The Medicare Advantage marketplace is evolving — are you prepared? Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. Visit our website to learn how we can help you >>
Even as you are enrolling beneficiaries for the new plan year, your team should be working on your strategic positioning for the following year — reviewing the past year's performance, conducting feasibility analyses, testing assumptions — all to ensure future success. Contact us for more information >>
Time is running out to register for the Gorman Health Group 2015 Forum, April 7-9, at the Gaylord National Resort & Convention Center. Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team today >>
Go-to-Market — No Department Left Behind
Although the next Annual Election Period (AEP) is a ways off, now is the time to start thinking about product development and overall strategy. In most organizations, the start of the "Go-to-Market" (GTM) strategy discussions begins with the C-Suite, Product Development, and Sales and Marketing. This keen group of professionals works sequestered and siloed for a period of time and then, voilà , they emerge with the lifeline of the health plan's benefits and strategy in their hands.
In order to launch a successful set of products (as well as strategies for selling these products), one of the most important and initial steps must be the creation of a fully integrated GTM governance structure to enable the organization to manage more effectively between strategy implementation, optimization, compliance requirements, and results tracking of an integrated marketing strategy. This will require the involvement of multiple functional areas, even those that aren't traditionally thought of (e.g., Medical Management, Pharmacy, Compliance, Member Services, Provider Relations, etc.), which means no department can be left behind.
"The failure to include Compliance as part of GTM initiatives is a prime reason for some of the regulatory pitfalls that arise and are discovered way too late," says Regan Pennypacker, Vice President, Compliance Solutions. "Whether your organization deals in Medicare, Medicaid, or a combination of these lines of business, the overall guiding principles will be the same. A culture of compliance starts at the top and is effectively integrated when each area of the organization takes ownership of compliance requirements and expectations respective to each functional area."
Execution and management of this initiative is no easy task. A successful GTM strategy brings Compliance and operational stakeholders to the table. Assigning the right accountable parties at the onset is critical to ensuring regulatory requirements are implemented and overall strategy is executed. For suggestions and solutions on how to build your GTM strategy and team, contact me directly, cknight-lilly@ghgadvisors.com.
Resources
Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
Industry Ducks Bullets in 2016 Medicare Advantage Rate Proposal
Friday, February 20th after close of business, the Centers for Medicare and Medicaid Services (CMS), released its 2016 Advance Notice of Medicare Advantage Payment, known affectionately as "the call letter."
This one was the most anticipated in years, and the industry unexpectedly ducks bullets in it, in risk adjustment, Star Ratings, and elsewhere. It's got a few unicorn farts in it, and a couple puffs of Chanel No. 5 as well.
The lack of any shockers is the bigger positive for the industry, a turning point really. CMS is saying it won't settle its scores with payers through policy, but through enforcement, where the facts are often too tough for politicians to stick their necks out.
Last fall's surprise positive announcement that MA benchmarks were tracking to increase 2.02% next year started this year's dance. Now comes the draft call letter, and on April 6, the final, all of which will be different as CMS winds through its process and the full fury of industry lobbying is brought to bear. It's worth noting that this year a first-time majority of 53 Senators signed the annual "don't hurt Medicare Advantage (MA)" letter to CMS, vs. only 40 last year. The increased Congressional pressure and the fact that MA now represents one out of three beneficiaries is driving this call letter.
By our calculations, the 0.95% reduction in MA benchmarks claimed by CMS is really negative 1.76% all-in. This is the unicorn fart. The final number quoted by CMS, 1.1% positive, is in part because CMS is taking credit for a 2.0% improvement in risk scores as plans continue to improve their risk adjustment management skills. Kinda cheeky. Our read on the underlying trend is +1.53%, frankly, better than we anticipated.
On risk adjustment, anticipation was that CMS would take a lethal shot at prospective in-home evaluations, a tough fee-for-service normalization factor, and an increase in the coding intensity adjustment, but NONE of those happened.
On home visits, despite a hailstorm of bad press and advocacy group investigations, CMS isn't even dealing anymore, just laying out "best practices" and saying "we're watching you." The regulators laid out 8 criteria that would make the prospective evaluation more like a risk assessment conducted by a Special Needs Plan, including:
- Evaluation performed by a physician or qualified non-physician practitioner
- Includes all components of the wellness visit including health risk assessment
- Medication review and reconciliation
- Scheduling appointments and referrals with appropriate providers and community resources
- Environmental scan of the home for safety risks and need for adaptive equipment
- Verifies that the information obtained during the assessment is furnished to appropriate plan staff and providers
- Provides enrollees with a summary of the information collected
- Enrolls the beneficiary in disease management or care management programs.
Taking these steps and embedding risk adjustment management inside a health plan's Medical Management department would effectively audit-proof the company from the dreaded data validation audits expected to intensify this year.
Another shocker: CMS did the absolute bare-minimum on the coding intensity adjustment, and then heaved up a dangerous proposal to recalculate it starting in 2017. If implemented, CMS would cut payments to all MA plans by enough so that total payments would be no greater than under the pre-HCC, pre-PIP-DCG, pre-2000 AAPCC demographic model. This would make risk adjustment a zero sum game, in which individual plans could win or lose, but in which CMS would never pay out more than under the old AAPCC model. That would settle the score on home visits once and for all, and indelibly damage risk adjustment as a healthcare financing innovation.
A final surprise: CMS acknowledges it has a problem on Star Ratings for health plans serving dual eligibles and the low-income. The agency is cutting the weight of several Stars measures where vulnerable members score poorly, by a whopping 50% in 2016. This buys time for CMS and several plans overweight with low-income members and highly exposed to Stars underperformance to conduct additional research and take steps against what is driving the correlation.
It was, in the end, a surprisingly favorable call letter for health plans and other stakeholders, particularly capitated provider organizations. But we're still a long way from the Final Notice on April 6. How plans should react:
- First, write comment letters. Deadline is March 6 at 5 pm EST.
- The proposal to cap total MA payments at the same level as would have been paid under the pre-2000 demographic-only risk adjustment system is dangerous. Plans need to point out how the Congress, in the 1997 Balanced Budget Act, mandated a health-based risk adjustment system because the demographic adjustments were inadequate. We are not aware of any authority in that, or any other law, to allow CMS to set a cap on total MA payments.
- Take the guidance on home risk assessments seriously, and implement CMS' suggestions before they become mandates. Plans must hard-wire their risk adjustment program into their care management program, so they are actively managing the risks they identify.
- Don't rely on averages: the impact of CMS rates and other changes will vary from county to county, market by market. Let us help you examine the impact on your service area.
- Continued rate pressure means plans have to continue to get better and better at the key components of their business: risk adjustment, care management, Stars, and enrollment data reconciliation.
- Focus on the Stars metrics with the greatest weights, especially the intermediate outcomes measures and the plan-wide quality improvement measures. Determine if the reweighting of seven metrics will have a positive or negative impact on your plan, and react to offset any negative effects, by emphasizing other metrics where there is room for improvement.
It's going to be an interesting 45 days to the Final Notice, but one thing is sure in this call letter: CMS is conceding that Medicare Advantage has gone mainstream, and that its support in Congress can no longer be tangled with. CMS is showing its preference to impact industry behavior through its boot rather than its pen.
Resources
Join John Gorman, GHG Executive Chairman, and colleague, Bill MacBain, GHG's Senior Vice President of Strategy and former health plan CFO, as they provide a hard-hitting analysis of critical areas addressed in the document, including a look at the various components that make up the trend factor, a proposed change to how risk scores are determined, health risk assessments, and Star Rating measures on March 3, 2015. Register Now >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
In 2015 a Slap on the Wrist Can Be the Kiss of Death
It is truth that in the second term of Democratic administrations, scores get settled between Washington regulators and business partners of the Federal government. 2015 will be no different for our favorite agency, the Centers for Medicare & Medicaid Services (CMS). It's already on a pace for 2015 to be the toughest year ever in enforcement actions against Medicare Advantage plans. And generally speaking, the regulatory bar is rising faster than anyone imagined. Consider:
- So far in 2015 CMS has issued significant new Medicare Advantage and Part D regulations, and this year's Advance Notice for 2016 rates and rules for Medicare and Part D health plans is the most anticipated I can remember in more than 20 years.
- 2015 is the toughest year in benchmark payment rates thanks to the approximately $200 billion in cuts from the Affordable Care Act.
- 2015's technical corrections for Star Ratings are almost bewildering in their complexity in raising the clinical bar. Indeed, in 2014, an election year, CMS famously told Medicare Advantage plans below 3 Stars for 3 consecutive years that a stay of execution was granted. In the fall, many of those low performers were quietly shown the door and were non-renewed. In 2015, however, the agency is handing out live ammunition to its firing squad. Now an intermediate sanction freezing marketing and enrollment automatically knocks the plan down to 2.5 Stars, often meaning loss of millions in bonus payments and rebate dollars. In competitive markets now, the first plan sanctioned is the first hunk of roadkill.
- The HHS Office of Inspector General, the guys with the badges and guns in Medicare, have made data validation audits for Medicare Advantage risk adjustment one of its top priorities in its 2015 workplan. And the President's budget includes over a half-billion dollars in recoveries from these RADV audits.
- But nowhere is there better evidence that the paper tiger is growing its claws back than in CMS' track record in enforcement actions against MA plans. In January, the agency levied the highest monthly toll of civil monetary penalties ever -- and if it keeps up the pace, 2015 will be nastiest enforcement environment in Medicare history.
*January 2015
Granted, CMPs don't typically amount to much, usually no more than a couple hundred grand, rarely 7 figures plus. But the damage is actually far greater, when considering damage in the local and national press; the chatter factor among beneficiaries; lost membership, and damage to the Star Rating and the relationship with CMS, which for many plans is or is becoming its biggest customer. A slap on the wrist is now the kiss of death in this environment.
Last week, my colleague conducted a webinar on the "Top 10 Things Killing Your MA Plan." CMS' top infractions, in order, are coverage determinations and grievances, and formulary administration, or performance of your pharmacy benefits management vendor. Those findings are driven by these 10 root causes:
Now is the time to ensure your compliance function and Medicare operations have the right tools, processes and people to be successful in the toughest environment we've ever seen in government health programs. In 2015, Gorman Health Group launched its latest product, CaseIQ™ , providing a new way to ensure your Appeals & Grievance cases come to a timely and compliant resolution. The tool not only captures all the data points needed to categorize, work and report coverage disputes and complaints; it also guides users through the appropriate processing of each case, minimizing the risk of non-compliance due to user error. Built and governed by GHG Medicare compliance subject matter experts, CaseIQ™ aims to keep our clients out of CMS' audit crosshairs. Learn more in our recent press release.
In addition, in the Common Conditions, Improvement Strategies, and Best Practices memo based on 2013 program audit results, CMS outlined areas where plans have been consistently non-compliant and described best practices to address failings. Ongoing monitoring is at the heart of non-compliance. Our solution, the Online Monitoring Tool(OMT™), is a highly flexible oversight tool and dash boarding software that brings together key metrics, documents, and tasks for ongoing monitoring and auditing, which results in the Organization being audit ready. This integrated solution also streamlines vital compliance activities, such as the implementation of new requirements and corrective actions. Read our recent White paper to learn more.
Resources
CaseIQ™, GHG's latest solution, offers built-in reports that allow for tracking of past performance, current backlog as well as trends, and is designed to assist the caseworker to a complete and compliant resolution in Part C (MA) appeals, Part D appeals, and Part C and Part D grievances. Learn more >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
Getting Ready for the Bid Season
Since the CMS Medicare Advantage January enrollment numbers did not include the last three days of the Annual Election Period (AEP), it is important to utilize the February enrollment file to get the full picture of AEP results. At GHG, we like to develop the reporting in January for directional results and get an idea of where the landscape may be heading for the year ahead. Plus, looking at your marketplace at the beginning of each year is very important to the product/plan/benefit process that is now upon us.
Last week, my colleague, Diane Hollie, and I spoke at a conference solely geared toward the upcoming bid process. We spoke about the types of analyses an organization should be looking at and we had great discussions about the data and types of data to be viewed/analyzed. One thing was very evident - Marketing, Sales, and Product Development staff that have the data of the marketplace need to be a part of the bid process.
The bid process needs to be a team approach, with one clear leader, and include representatives that are accountable for profits and losses (P&Ls). For example, some of the team members that should be included are Sales/Marketing, Finance/Actuary, Network, Pharmacy, Medical and Health Management, and Compliance.
At the beginning of the bid process, it is important to level-set the team on the marketplace. Some of the analyses we typically present include:
- Service area demographics
- Medicare penetration
- Current membership analysis
- Enrollment trend analysis
- Results of the last AEP — who are/were the winners and losers this AEP and why?
- Product analysis
- Benefit analysis
It is important to dig into the data to understand the story being told. Remember to ask - what part in the story do you play? Are you a protagonist with a diminishing role, are you the antagonist shaking up the market, or are you just happy to stay alive in the story? Whatever role you play, it is important to understand the part, own it, and have your plot development for the next AEP and beyond.
Check back next month as we look at the AEP results and see what's happening in the marketplace on a national level.
Resources
GHG will provide a complete benefit design and strategy analysis that will take into account organizational strengths in operations and medical management that includes a thorough examination of your intended market and a feasibility analysis. Visit our website to learn more >>
Smart benefit design is a dynamic process that begins with an examination of intended markets with consideration given to strengths in member retention and medical management, and is executed with specific enrollment and financial targets in mind. Visit our website to learn how GHG can help >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
The Importance of a Proactive Call Center
During the AEP we know how critical a role our Member Services team plays. During this time, they are integral to helping prospective enrollees understand the benefits of your Plans, and play an important part in the retention of your current members. Having a strong proactive Member Call Center is crucial in today's environment. Test your call center — see if they pass the test. A proactive Member Service Call Center Department should at a minimum, do all of the following:
- Highly trained call center representatives develop "one on one" member relationships
- Becomes a one stop resource for seniors (meal on wheels, etc.)
- Track and trend Members' problems and resolutions (problem solving)
- Reduce members voluntary disenrollment with focus on first-time call resolution of Member's problems
- Take the time to educate members (benefits, Providers, and Claims)
- Look for opportunities to engage the member in Care Management services
- Provide outreach reminders to members (Member Newsletters, appointment reminder postcards, etc.)
- Proactively, through outbound calls, identify first level problems and implement resolutions
- Provide new members orientation (an educated member is a happy member)
- Provide consistent training to help reduce the number of members' appeals and grievances
- Have Quality Improvement initiatives consistently in play to help improve the Star measures
- Support members in accessing care, even making appointments for them if necessary
If you can answer yes to all the bullets above regarding your current Member Service/Customer Service Department, then you are on the right road to increased retention. If not, then leveraging member's satisfaction is an important retention tool that should be looked at going forward. Now is the time for forward thinking initiatives!
Stats: 30% of Medicare beneficiaries are enrolled into a Medicare Advantage Plan (MA/MAPD). And over 15% of Medicare Advantage Companies Fail to meet the government standards for customer service through a call center for 2014. (Source: https://www.healthpocket.com/healthcare-research/infostat/medicare-advantage-customer-service-ranking.)
Resources
John Gorman, GHG's Founder and Executive Chairman discussed why assessing your current position and developing new strategies to drive profitable market share growth is crucial for continued success. Become a member of the Point to access the webinar recording >>
Gorman Health Group can work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>