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.
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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!
Star Ratings: The Moving Target
Recently announced changes to the Star ratings program continue to present Star Ratings as a moving target for Medicare Advantage organizations. While the Centers for Medicare & Medicaid Services' (CMS') recent memo and request for comments on the 2016 Star Ratings program changes illustrates CMS' continued commitment to rapidly driving better care for patients, better health for communities, and lower costs, the proposed changes will simultaneously usher in a new era of accountability and integration within Medicare Advantage health plans.
CMS announced plans to reintroduce three previously-removed measures (breast cancer screening, beneficiary access, call center/TTY), add the long-awaited CMR completion rate measure, retire three HEDIS measures (two LDL screening measures and the LDL control measure), and make a lengthy list of changes to existing measure specifications in the 2016 ratings. CMS also laid the groundwork for the 2017 addition of measures related to asthma, depression and opiod-overutilization.
Since the new 2017 Star measures will likely be officially announced as 2016 Display Measures later this year, and will be computed based upon services provided throughout 2015, the 1st quarter of the year is an optimal time for plans to adjust population health tactics for 2017 Star Ratings success. With the nature and extent of the 2016 and 2017 changes, Medicare Advantage organizations will want to be very strategic as workstreams are developed or adjusted to accommodate CMS' proposed changes.
Given the complex clinical and social issues associated with asthma, depression and overuse of opiods, integrated activities and coordinated services among providers, clinical teams, case managers, and retail pharmacies will help plans achieve Stars success. Executive leaders will want to understand the nature of CMS' new focus areas, and operational and budgetary decision-makers will want to be poised to rapidly understand the changes, as well as deploy new or adjusted tactical workstreams in early 2015 to best ensure Stars success.
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Our team of experts can help you develop or enhance care coordination within your programs and processes. Contact us today, and let's work together to help your plan achieve 4 Stars.
GHG can evaluate your Star Ratings approach, and identify tactics you can begin implementing immediately, to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. Visit our website to learn more >>
Registration for the Gorman Health Group 2015 Forum is now open and our Early Bird discount has been extended to January 16. Enter promo code EarlyBird30 at checkout to receive your 30% discount. Register today >>
The Good, the Bad and the Ugly in Medicare Advantage
In the last two weeks there's been good, bad and ugly news for Medicare Advantage (MA) plans. On one hand, the program has never been stronger and quality metrics are surging in the right direction; on the other, the industry is sucking it up on following the rules of its biggest customer, the Centers for Medicare and Medicaid Services (CMS).
First, the good: CMS did its annual data dump on Medicare Advantage and Part D bids and showed the program continuing its robust growth, with higher-than-ever enrollment approaching 17 million, and plans holding premiums and benefits steady during the worst rate environment in decades. Then, CMS released the MA Star Ratings database for 2015, showing MA quality continues to improve. The enrollment-weighted Average Star Rating for the industry stands at 3.91 out of 5. 40% of MA contracts were awarded 4+ Stars for 2015, but 60% of enrollees are members of those plans, showing a 30% increase since 2012 and demonstrating the competitive advantage high-performing plans now enjoy. The 2015 ratings show stable or improved performance in almost 70% of the 46 Part C & D Star measures, 7 of which improved by more than one-half star from 2014 to 2015, and 13 of which earned average ratings above 4 stars in 2015. There was even an 85% decline in plans receiving the low-quality performance badge of shame.
But then the bad: it's clear plans have eaten low-hanging Star fruit and are starting to struggle on more complex and outcomes measures, such as managing chronic conditions, managing mental health to improve outcomes, or increasing physical activity and reducing fall risk. The longitudinal Health of Seniors survey scores are below 3 Stars, and 135 plans remain on the Quality Bonus Payment bubble at 3.5 stars in 2015, meaning almost half of MA plans are circling the financial toilet bowl. Not good.
And then the ugly: last week's blistering New York Times story on rampant noncompliance among MA plans. The Times combed through months of compliance action reports and found widespread failures by plans in administering the program, including some common and potentially life-threatening stumbles:
- In more than half of all audits, "beneficiaries and providers did not receive an adequate or accurate rationale for the denial" of coverage when insurers refused to provide or pay for care.
- When making decisions, insurers often failed to consider clinical information provided by doctors and failed to inform patients of their appeal rights.
- In 61% of audits, insurers "inappropriately rejected claims" for prescription drugs. Insurers enforced "unapproved quantity limits" and required patients to get permission before filling prescriptions when such "prior authorization" was not allowed.
- MA plans frequently missed deadlines for making decisions about coverage of medical care, drugs and devices requested by doctors and patients.
CMS officials expressed frustration that they were seeing the same deficiencies year after year. That these boneheaded infractions are often being repeated makes the news all the more depressing. It's important to remember if an MA plan with a Star Rating over 3.5 gets sanctioned by CMS for noncompliance, it automatically knocks its rating down to 2.5. That's a kiss of death for an otherwise quality company.
What the Stars and compliance data show us is that the plans are doing great on strategy, pricing their benefit designs, selling to Baby Boomers, and managing straightforward quality process measures. But looking closer, it also shows our industry has a serious execution problem. We are lagging on performance measures with multiple clinical moving parts, and embarrassing ourselves and endangering our companies and beneficiaries with "101-level" compliance errors.
With both Federal and state governments increasingly relying on MA plans to manage the most complex and expensive patients in the US health system, we can and must do better.
Resources
Listen as John Gorman provides several takeaways from our first review of the terabytes of CMS data and understand why he believes this data shows the triumph of government-sponsored programs. Access the podcast here >>
Gorman Health Group can evaluate your Star Ratings approach and identify tactics you can begin implementing immediately to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. 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 >>
Noteworthy declines in Star Measures: Ensure a 4-Star Performance
With 5% of revenue contingent on achieving at least 4 Stars, the stakes have never been higher for Medicare Advantage plans. Within the 40% of plans earning at least 4 Stars in 2015, plan leaders are celebrating their return on investment from quality improvement initiatives and other Stars-impactful activities. But for the 135 plans on the Stars bubble at 3.5 Stars, and the 102 plans earning 3 or fewer Stars in 2015, the race is on.
Although performance continued to improve on most screening measures and on measures within the plans' control in 2015, ratings declined on 15 of the 46 Star measures in 2015. The most noteworthy declines occurred on the following measures, all of which require significant coordination across provider , and pharmacy networks, plan personnel and members:
- Three of five diabetes care management measures (with two measures dropping by more than one-quarter star each, and declines on both of the triple-weighted Part C intermediate outcomes measures associated with diabetes),
- All three triple-weighted medication adherence measures and the high risk medication measure,
- Care coordination and customer service measures.
In addition, four additional measures, which are heavily dependent on effective care coordination as well as member education, continue to perform under 3 Stars:
- Improving or maintaining mental health,
- Special needs plan care management,
- Improving bladder control,
- Osteoporosis management in women who have had a fracture.
Since enrollment in high performing plans continues to grow, and dramatic improvements have occurred in low-performing plans, CMS is likely to continue driving quality and accountability of physicians, hospitals, and other providers through the ever-evolving Medicare Advantage Star Ratings program.
As plans race into the unavoidable 4th quarter ‘Stars crunch,' now is an ideal time to ensure that adequate workplans, budgets and resources are available to enable 4 Star performance. If your plan is striving to achieve 4 Stars, Gorman Health Group is ready to help! From evaluating organizational strategy to developing and optimizing tactical Star ratings workplans, our team of experts has a long history of success helping health plans achieve Star ratings success.
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Gorman Health Group can evaluate your Star Ratings approach and identify tactics you can begin implementing immediately to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. We can help you identify clinical, operational, and networking opportunities to increase your score for 2016 and beyond. 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 >>
Reversing the Trend: Improving Care Coordination
The good news from the 2015 Star Ratings is clear: Medicare Advantage plans held steady or improved in almost 70% of the 46 Part C & D Star measures. But the more subtle message hidden underneath the 15 measures where performance declined in 2015 is similarly clear: health plans have not yet mastered population management and care coordination in a way that improves health outcomes. By linking the Quality Bonus Payments to 4 Star performance, the Centers for Medicare & Medicaid Services (CMS) is conveying their message: health plans must effectively coordinate the diagnosis to the healthcare activities for their members in order to drive improved health outcomes and satisfy members.
Gorman Health Group is often asked how plans can achieve Star Ratings success. As 2015 draws to a close, the following are a few key near-term suggestions on which to focus in order to achieve Star Ratings success in 2016:
- Create (or review) 2016 Stars work plan(s), evaluate customer service and medical/case management work streams, and processes to identify areas for improved care coordination.
- Evaluate provider and pharmacy network strategy to ensure that infrastructure supports Stars goals.
- Evaluate Stars performance among provider and pharmacy networks and develop targeted activities with under-performers.
Our team of experts can help you develop or enhance care coordination within your programs and processes. Contact us today, and let's work together to help your plan achieve 4 Stars.
Resources
Gorman Health Group can evaluate your Star Ratings approach and identify tactics you can begin implementing immediately to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. We can help you identify clinical, operational, and networking opportunities to increase your score for 2016 and beyond. 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 >>
The 2015 Ratings are In: Have the Stars Aligned?
The Centers for Medicare & Medicaid Services (CMS) has released the 2015 Medicare Advantage Star Ratings, and the Stars seem to be aligning with CMS' goals of the Star Ratings program. For the 40% of Medicare Advantage plans earning at least 4 Stars this year, and thus qualifying for Quality Bonus Payments, these newly-released Star Ratings illustrate the value of health plans' investments in clinical innovation and quality improvement within Medicare Advantage product offerings.
The 2015 ratings show stable or improved performance in almost 70% of the 46 Part C & D Star measures, 7 of which improved by more than one-half star from 2014 to 2015 and 13 of which earned average ratings above 4 stars in 2015. Improved health plan quality is illustrated by strong performance on preventive screening and testing measures across all domains, health plan performance measures, and measures of member complaints. During 2015, almost 60% of beneficiaries will be enrolled in one of the 158 Medicare Advantage plans which have earned at least a 4 Star Rating.
Despite these areas of strength and improvement, the Stars are not entirely aligned in the 2015 Ratings. The 2015 Ratings spotlight the ongoing challenges plans continue to face in the following areas:
- Managing chronic conditions
- Managing mental health to improve mental health outcomes
- Increasing physical activity and reducing fall risk
CMS continues to compel health plans to hardwire quality improvement and operational excellence by announcing adjustments to Star measures upon release of the ratings. With the 2015 ratings, CMS has again made Star ratings history by re-weighting the Improvement measures to 5x and announcing the following changes:
- SNP Care Management measure added with single weight
- Breast Cancer Screening and Beneficiary Access/Performance Problems measures removed from ratings and reclassified as Display Measures
- Glaucoma Testing and Call Center Foreign Language Interpreter and TTY Availability measures removed from ratings
- Adjustments made to methodology on Annual Flu Vaccine, High Risk Medication and Medication Adherence measures
With the overall national average for HOS measures below 3 stars in 2015, combined with the changes to 2016 Star measures announced in the 2015 Call Letter, the time is right to acknowledge the potential return on investment from activities aimed at improving performance across all aspects of health plan performance.
The 2015 Star Ratings continue to show opportunities for health plans to break through long-standing silos within our organizations and throughout the industry. Health plans can maximize Star Ratings by leveraging existing infrastructure, teams and processes to improve integration with providers and members. Through innovative tactical adjustments to existing processes and work streams, health plans can better integrate Part C activities with Part D activities, physical health care plans with mental health care plans, and internally-staffed work streams with delegated work streams.
Despite the approximate 85% decline in plans receiving the low performing icon (LPI), 135 plans remain on the Quality Bonus Payment bubble at 3.5 stars in 2015. Whether your plan's 2015 Star Rating is on the bubble or solidly above 4 stars, this is an excellent time to re-evaluate your 2015 strategies, work plans and tactics to best ensure that your Stars remain aligned.
Resources:
The Centers for Medicare & Medicaid Services (CMS) has been aggressively working in the background to establish the Star Ratings program for the Health Insurance Marketplaces. See what you can expect >>
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 >>
Marketplaces — Your Stars are coming
The Centers for Medicare & Medicaid Services (CMS) has been aggressively working in the background to establish the Star Ratings program for the Marketplaces, thus consumers will have their first quality information by 2017. Selecting a Marketplace health plan will no longer be based only on price or provider. As such, quality ratings will have a bearing on market share.
Notably, CMS is also creating future Stars for hospitals, dialysis centers, home health with nursing homes and physicians. However, it's different for the Marketplaces.
The CMS plan starts with a beta test in 2015 by collecting both clinical data defined by HEDIS and consumer rating data collected via CAHPS. Clearly, neither of these is untested. CMS has extensive experience using both HEDIS and CAHPS to build Stars in the Medicare Advantage program; a process that has evolved over the last six years. CMS has honed its methods for conducting statistical analysis of each measure into a dynamic process that annually adds and removes measures to refine information provided to consumers. Notably, CMS is also paying rewards to higher performing plans. Even more significant for 2015, CMS has suspended its regulatory authority to terminate low performing plans. CMS is seeing the focus of these plans on improving Stars when faced with termination.
With the wealth of experience in running Stars in Medicare Advantage, this beta test is merely an assessment of collecting the information from Marketplace plans and validating data and statistical analysis methods. There will not be a long ramp up similar to what Medicare Advantage plans experienced before CMS put in Marketplace rewards and penalties.
If you haven't already, now's the time to put your team in place. Not just to respond to CMS setup requirements and contract with your HEDIS and CAHPS vendors, but to also begin establishing the Stars team as an operational component in your organization. It will be important to create a focus to find and monitor operations that affect Stars performance. Building the proper team and charging them with the responsibility to track and develop a Stars framework is necessary for a long-term commitment to achieving five-Star performance.
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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 >>
High Value Network: Generation 4.0
When it comes to healthcare, two truism's are that medical costs are going up along with demand for healthcare services. And when it comes to organic growth of healthcare volume and expenses, government programs represent a major driver, particularly when considering that on a daily basis thousands of baby boomers age into Medicare. During the last several years CMS has published a number of demonstration programs which are intended to improve the quality of Medicare patient outcomes while promoting financial efficiency on a unity cost or per procedure basis.
Commonalities among the various demonstration programs include: providing financial incentives when providers and plans (through STAR ratings) achieve specific quality and financial metrics, that when properly implemented, result in improved patient outcomes at a reduced cost. Not surprisingly, the discussion among many health plans has started to focus on how to manipulate the size and inherent "quality" of provider networks to achieve performance gains.
The concept is not new, in that payer efforts at developing "Centers of excellence", proprietary physician networks, private label networks, etc., have been around for at least two decades. These efforts were driven by market considerations, provider availability and consolidation, expectations around consumer demand and use of services. Many times high cost hospitals were screened out and networks were defined by the plan offering, e.g.. PPO, HMO POS and the like. Provider price concessions were expected in return for volume. Provider performance, at least as defined by improved patient outcomes, was not a major consideration in the design of these networks.
At least not until now. Given the current climate of healthcare reform, shrinking payer margins, provider flight from Medicare, percentage declines in medical school enrollment and CMS initiatives to constrain medical expense through improved coordination of care and elimination of unnecessary procedures, Medicare Advantage, Medicaid, and commercial health plans are exploring how the design of networks, around performance, can lead to better patient outcomes and better managed financial costs. Thus, the approach to network design is shifting way from preferred pricing in exchange for volume to a network design strategy focused on horizontal and vertical integration, superior treatment outcomes, more efficient use of resources as well as a willingness to share in financial risk. Population management strategies, establishment of consensus clinical protocols and reimbursement strategies tied to CMS STAR ratings, as well as additional quality and financial metrics, dictate network performance and thus health plan sustainability.
Tracking the measurement and reporting on agreed to metrics require a level of analytical sophistication that was not apparent in the early days of network design. The development of high value networks suggests that payers and providers must share a common vision for network design and consensus agreement on expectations around network performance. In addition network design efforts will require unwavering leadership commitment to ensure long term sustainability.
In the final analysis high value network design is a partnership enterprise between the health plan, the provider and the patient. Contributing components include health services/medical management, provider contracting, actuarial services, finance, analytics/ decision support and management.
As a diversified health services consulting company the Gorman Health Group is well positioned to become a partner in this effort from start to finish including the development of the most appropriate network design strategy to development of performance payment models to the implementation of the final network including assurances that the final network meets CMS network adequacy requirements. When you are ready, give us a call.
Resources
On Friday, September 26, John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, discussed the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Access the recording here >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Another Flood of Good News for Medicare Advantage
Last week the Centers for Medicare and Medicaid Services (CMS) did its annual data dump for the 2015 Medicare Advantage (MA) and Prescription Drug Plan (PDP) bids. Even with MA plans sailing into the worst rate environment in over 15 years, the data offered another flood of good news for the industry.
Several takeaways from our first review of the terabytes of CMS data:
- 2015 will look a lot like 2014, with slightly fewer plan options. The average MA premium will rise $2.94/month, or $1.30/month on an enrollment-weighted basis, and 61% of MA enrollees will see no premium increase. Having said that, zero-premium options are down 18% in 2015, following a 14% decline this year as previously-free plans institute modest monthly fees to offset payment rate cuts in the Affordable Care Act (ACA). It speaks to how well the market is working as plans compete intensely for share.
- The number of MA plan bids were down 4.3%, but most of the reduction was attributable to non-renewing Private Fee-for-Service plans, and good riddance -- PFFS remains the worst policy fart in Medicare. PFFS products are down 31% next year following a 61% year-over-year decline in 2014. Network-based plans like HMOs and PPOs were only down 0.9%, showing tremendous commitment to this line of business across the country as MA membership surges past one-third of all Medicare enrollment.
- PDP bids were down around 7%, mostly attributable to consolidation among Pharmacy Benefit Management companies. Humana remains the cheapest PDP in 33 out of 34 regions. Aetna will get auto-assignment of low-income beneficiaries in 10 new regions, while WellCare lost auto-assigns in 10 regions.
- CMS implied MA membership in 2015 at 16.9 million, or growth of just 2.7%. That's very conservative -- we expect 5-8% growth in 2015, following 10% growth in 2014. CMS suggested that MA enrollment is up 42% over 2010 levels -- stunning growth that defies the funeral dirge played for the private Medicare option the year the ACA passed.
- Most of the major publicly-traded MA sponsors are keeping or expanding their service areas in 2015. Eminent analyst Josh Raskin of Barclay's points out that publicly-traded companies' enrollment growth in 2014 is up 9% year-to-date, while all others are at 8%.
- Humana continues to account for 25% of all MA/Special Needs Plan offerings nationally.
"Since the Affordable Care Act was enacted, enrollment in Medicare Advantage plans is now at an all-time high, and premiums have fallen," said CMS Administrator Marilyn Tavenner. "Seniors and people with disabilities are benefiting from a transparent and competitive marketplace for Medicare health and drug plans."
The good news didn't end there. MA quality continues to improve as the Star Ratings performance-based payment system continues to punch WAY above its weight. 40% of MA contracts were awarded 4+ Stars for 2015, but 60% of enrollees are members of those plans, showing a 30% increase since 2012 and demonstrating the competitive advantage high-performing plans now enjoy. Beneficiaries are now choosing higher-quality plan options in far greater numbers, and ALL of the roughly 200 plans we work with have made Stars their top priority for focus and investment. Stars has proven to be a game-changer in MA and a model all other government-sponsored programs from Medicaid to ObamaCare's marketplaces are beginning to follow. NCQA's 2015 health plan rankings show California-based Kaiser once again leading the pack among Medicare plans.
To me, the CMS data shows the triumph of government-sponsored, highly-regulated insurance markets. Medicare Advantage is one of the few examples of government getting it mostly right in partnering with private-sector companies to accomplish a tremendous public good, and continues to be a beacon of hope as ObamaCare enters what promises to be an even tougher second season.
For more updates, follow me on twitter @JohnGorman18
Resources
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 >>
Join John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, as they discuss the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Register today >>
Bombshells from MedPAC on Medicare Advantage Retention
The Medicare Payment Advisory Commission (MedPAC ), the nonpartisan blue-chip Congressional uber-nerds on our favorite entitlement program, met this week and the staff report presented a couple bombshells on retention rates in Medicare Advantage (MA).
In the aggregate, the commission noted that in 2012 the voluntary disenrollment rate from plans was slightly below 10%. The vast majority of individuals who disenrolled -- 80% -- switched to another MA plan, with the remaining 20% going back to traditional Medicare. Bombshell #1: we're seeing an overall MA retention rate of roughly 98%, and speaks to the tremendous popularity of the program vs. "old school" coverage.
The commission also noted:
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When beneficiaries changed plans, a large majority picked another plan with a lower premium.
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Beneficiaries who elected to switch back to traditional Medicare from MA had higher average cost per beneficiary vs. those who stayed in MA. Does this indicate that sicker beneficiaries feel they'll get less hassles and/or better care in unmanaged fee-for-service Medicare? I doubt it. More likely: once back in unmanaged Medicare they go on a wild utilization binge. Why? Because...
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Older MA enrollees are less likely to disenroll than younger ones. This is puzzling, given the finding above and the direct correlation between income, age and health status in the elderly. Older beneficiaries are, on average, poorer and sicker than younger ones.
On a plan-specific basis, Star ratings also correlate positively with member retention. Bombshell #2: MA plans with 2 or less Stars experienced a 17% disenrollment rate, while plans with 4 Stars or higher had a disenrollment rate of 4.9%. That's an incredible statistic, showing the rapid effectiveness of Stars impacting the member experience at the plan level in just a couple years. Stars has truly become a game-changing indicator of quality across health plan functions.
All of this speaks to the fundamental triumph of Medicare Advantage: for those who know, it's the far superior option for senior care. And once they're in, they don't leave.
Resources
Join GHG for an in-depth discussion on the end-to-end management of data from noting identified gaps in data processing, concerns regarding data completeness and accuracy. Register now >>
To succeed in Medicare Advantage, plans must achieve higher quality and Star Ratings, surmount CMS and medical loss ratio (MLR) requirements, and develop member onboarding and retention capabilities, all while operating in a highly competitive market. Learn how GHG can help ensure your MA plan is positioned to make the most of the program's opportunity.
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>