American Action Network Promotes Government Subsidies
The American Action Network (AAN), a 501(c)(4) conservative think tank, has published a report that purports to show that Medicare Advantage (MA) payments will be about 13% less in 2015 than they would have been had the Affordable Care Act not interfered. To get the attention of members of Congress, the report shows the reductions by Congressional district.
The AAN analysis doesn't mention sequestration, which probably accounts for 2% of this 13%. Sequestration of course, has nothing to do with the ACA. Nor do they mention MedPAC's repeated recommendations to Congress to reduce the benchmarks that determine MA payments, so that they equal Medicare's average fee for service (FFS) costs. For example, see MedPAC reports in the period just prior to the passage of the ACA: http://www.medpac.gov/chapters/Jun09_Ch07.pdf and http://www.medpac.gov/documents/Mar10_EntireReport.pdf.
Reducing Medicare Advantage payments to parity with Medicare FFS, as recommended by MedPAC, is the reason for the cuts that the ACA imposes. As usual in Washington, the word "cuts" in this context doesn't mean an absolute reduction, just less than what would have been spent under the old law.
The AAN report does not describe how either the projected 2015 payments or the pre-ACA 2015 payments-that-would-have-been were calculated, so there's no way to comment on the validity of the 13% figure beyond the above observations. By my calculations, the ACA reductions amount to about 9% less than what the average benchmark would have been, before sequestration. With sequestration, I come up with a reduction of 11% relative to the trended pre-ACA benchmark, compared with the AAN's 13%. That figure doesn't take into account any changes in risk adjustment or quality bonuses, which the AAN report claims to include. One would expect risk adjustment to be a net positive, even after the increase in the amount deducted by the coding intensity adjustment, as plans have gotten better at coding. And quality bonuses are also a net positive, even with the end of the Stars demo in 2015. So adding these to the 9% reduction in the published benchmark should produce a smaller reduction, relative to the pre-ACA benchmarks trended forward. So I am skeptical of the 13% figure published by the AAN, without more information regarding how they calculated the 2015 pre and post ACA figures.
However, it is worth noting a couple of consequences of the pre-ACA figures. One is that these additional payments would have been funded, in part, by an increase in all Part B premiums, including those paid by non-MA members. Avoiding this increase is tantamount to a tax cut for Medicare beneficiaries. Yet the conservative AAN, whom I would expect to applaud anything that has the effect of a tax cut, is criticizing this reduction.
The other consequence is that the remainder of the additional payments would have been drawn from public funds. These funds would come either from the Part A trust fund, or from general revenues. The balance in the trust fund is being drawn down each year, since Medicare payroll tax receipts are less than trust fund obligations. Since the money in the trust fund is invested in treasury bonds, the fund gets the cash it needs by cashing in those bonds. To redeem the bonds, the treasury has to issue more debt.
And, since general revenues are less than expenses, the portion paid from general revenues would actually be paid from additional borrowing as well. So, by reducing the amount that would otherwise have been paid to MA plans, the ACA is reducing the net federal debt. The net debt would be the amount of real debt after excluding money the government owes itself (like the trust fund).
Taken together, I would expect a conservative think tank to argue in favor of reducing MA payments, to reduce the Part B premium and to reduce the net federal debt. The AAN position seems like a triumph of politics over policy, where an ostensibly conservative organization is promoting public subsidization of MA because a Democratic Congress took the conservative approach and cut the subsidies.
This report will probably be useful in ginning up some high dudgeon among conservative-leaning seniors whose conservative principles are somewhat plastic when it comes to getting government subsidies. Maybe it will help get out the vote in a few districts, if the target population remembers it come November. Otherwise, I'm not sure what the point of this is.
Resources
Find out what provisions in the final marketing guidelines will have the greatest impact on your organization and how plan sponsors can prepare for the upcoming changes in a webinar next Wednesday, July 23.
4 Points to Ponder from CMS' Oversight and Enforcement Conference
On June 26, CMS hosted their MA-PD Oversight and Enforcement conference. Not one of the topics was less relevant to the audience than another — they prepared ahead of time to present current, critical information related to their data-driven approach to oversight, best practices and common findings, preparing for an audit and enforcement actions. I was glad to see CMS invite plan sponsor staff to share their experiences. They included Todd Meek of SilverScript Insurance Company; Margaret Drakeley of Kelsey Care Advantage; Shannon Trembley of Martin's Point Health Care; Marcella Jordan of Kaiser Permanente, and Jenny O'Brien of UnitedHealthCare. Their first-hand accounts are worth your full attention.
The webinars and materials are all available to the public and I encourage you to watch them and encourage your staff to watch. Of all of the things said, the following should be enough to kick your compliance efforts into high gear:
- Jerry Mulcahy shared that the improvement is not what CMS had hoped, and that organizations are still not testing effectively. That should warrant a hard look in the mirror to ensure your "trust but verify" methods are working. Put another set of eyes on your validation. Leverage staff with auditor experience. If the improvement is not what CMS has expected, especially after having shared their protocol and numerous best practice/common findings memos over the past few years, then consider this a red flag.
- Statutes and regulations expect nothing but 100% timeliness. Too often we are asked for the acceptable threshold for compliance of a measure. Unless otherwise published, the expectation is 100%. Kady Flannery stressed this while explaining the 2014 method for checking CDAG and ODAG universe timeliness.
- LCDR Lorelei Piantedosi communicated an additional best practice that didn't make the slides, and that's a 100% rejected Part D claims look-back. Seeing as how all five of the Formulary Administration common findings have been common findings published in the past, it is a wonder when an organization does not dedicate resources to this activity. (She also communicated a best practice near and dear to our hearts, but I'll leave that for another blogger.)
- "Be transparent!" Todd Meeks says he would often times get asked about how transparent to be. Based on the fact that he shared how collaborative CMS was in aiding his organization, at times providing easier, cleaner ways to correct something, then the answer should be simple.
Think about it this way: if you draw the short straw this year for a CMS Program Audit (and I use ‘short straw' in the most lovingly way possible, CMS), then everything you add to your Self-Assessment Questionnaire should already be known by your Account Manager. We can be broken-record about this, but a Medicare Compliance Officer should know what's going on well before CMS does — it's arguably just as important to your organization that your Account Manager knows about it before Central Office.
Resources
From a simple gap analysis to a comprehensive, deep-diving Part C and D audit, our team can help you minimize your compliance risk and maximize your time and resources. Learn more >>
Taking the time needed to regularly assess the risk exposure of operations can be both disruptive and costly — if not impossible. Let us augment your efforts by conducting your required annual risk assessment. Visit our website to learn more >>
PBMs are the Health Plan Industry's Achilles Heel
In this Golden Age of government programs, the health plan industry has never had more exposure to the generally poor performance of pharmacy benefit managers (PBMs). Performance metrics in Medicare, Medicaid and ObamaCare are directly tied to PBM execution, and the recent track record of these companies means they are the Achille's Heel of insurers.
PBMs historically made most of their money on commercial insurance and have lagged on government programs, a trend exacerbated by a brain-drain of talent following a wave of PBM consolidation. The danger has never been greater for health plans, and their choice of vendor has never been more important.
First, Medicare's Star Ratings system has several critical performance measures directly tied to PBM performance, notably those related to drug plan service, formulary administration, patient adherence to drug therapies for chronic diseases like hypertension, and readmission prevention (many hospital readmits are due to drug over/underdose post-discharge). The numbers don't lie: Medicare Part D Star ratings and formulary administration were the two leading reasons for CMS-mandated corrective action plans dropped on insurers in the last year. Of plans scoring less than 2 Stars by performance domain, Drug Plan Customer Service came up worst in CMS's last review cycle -- followed by Member Experience with the Drug Plan, and Member Complaints, Problems Getting Care, and Improvement in the Drug Plan's Performance. It's a dismal record and getting worse.
Then consider that the two critically-important health plan quality improvement measures -- C33 and D07 -- are now weighted 5, a first for CMS and a huge development. The concern here is that PBMs are often terrible at data management, and under these measures a plan can be reduced to 1 Star where mishandled data resulted in bias or error, or where appeals and grievances handling is in question. With that 5-weighting, this has come as a rating killer for several plans and a major vulnerability for the rest, as most don't keep good logs of non-compliance issues or audit results.
PBMs are generally good at managing the drug benefits of commercial members, but the complexity of seniors and the low-income and the previously uninsured continues to confound these companies. Gorman Health Group ran 15 solicitations for government program PBM services for its clients in the last 12 months, and we wouldn't wrap fish in one of the responses we received. All varying degrees of suck.
In this last round of contract and service area expansions for 2015 Medicare Advantage and Part D, in our 18 years we have never seen more rejections due to PBM failings like pharmacy and home infusion network adequacy -- literally dozens this cycle, due both to PBM sloppiness and a new resolve at CMS to directly address it.
As PBMs continue to consolidate, plans need to protect themselves from weak execution by bringing renewed focus on PBM-directed Star ratings measures and most importantly, inspecting what they expect. The delegation oversight plan for this vendor is the most important document in compliance right now. Payers are now literally at the whim of the government programs sophistication of their PBM account manager, and that is not a comfortable place to be with literally billions of dollars and millions of seniors and the vulnerable hanging in the balance.
PBMs need to awaken to the new reality of the primacy of government programs today, and make a serious commitment to catching up.
Resources
If you've just submitted your HEDIS data, now is the time to analyze that data for gaps and identify interventions for your health plans, providers and members. On July 17 join John Gorman, Executive Chairman at GHG, Jane Scott , Senior Vice President of Clinical Services and Anita McCreavy, Senior Consultant, for a webinar on HEDIS reporting, the new measures and what's next. Register now >>
The rapid changes to Part D regulations make the tracking and implementation of these CMS requirements exceptionally difficult -- to say nothing of actually managing to them. Contact us today to learn how we can help >>
Tuesday Night's Primary Elections Were Huge. Here's What They Mean for Our Industry.
House Majority Leader, Eric Cantor (R-VA) is toast. Trounced in his Richmond district by a nobody Tea Bagger Tuesday night. Cantor gave up his leadership position yesterday. Depending on where you sit politically, either the unthinkable or the inevitable happened. In fact, a Majority Leader hasn't lost incumbency since the office was created in 1899. "The defeat of the second-ranking Republican in the House by an ill-funded, little-known tea party-backed candidate ranks as the biggest congressional upset in modern memory and will immediately generate a series of political and policy-related shock waves in Washington," wrote Chris Cilizza of WaPo.
What it means for our industry is that legislatively speaking, President Obama's second term is already over. The House will seize up like a bag of concrete in a toilet. The most unproductive Congress in history is about to continue and worsen that record as an epic Republican leadership battle ensues.
That means Obama is left chasing his agenda through administrative action, Executive Orders, regulations and enforcement. With brand-new and surprisingly popular HHS Secretary Sylvia Mathews Burwell on the job, expect her department to flex its muscles in ways we haven't seen, especially given the number of oversight hearings she's about to be subjected to:
- There will be tough new rules for all government-sponsored health programs: Medicare, Medicaid and implementation of the Affordable Care Act. The contentious new Part D rules are just the beginning.
- There will be increasing activism in network adequacy and rate reviews of insurers in Medicare Advantage, Part D and the exchanges;
- CMS will take a hard line on Medicare plans lagging in Star ratings and/or compliance records. The second term of a Democratic administration is always when scores are settled; the renewed Congressional scrutiny on our favorite agency will make the paper tiger grow some claws;
- CMS and the HHS Inspector General (IG) will finally put the pedal down on dreaded RADV audits with the promise of hundreds of millions in recoveries.
- With wingnuts like House Oversight Chairman Darryl Issa (R-CA) salivating for domestic Benghazis, the HHS IG will likely deliver a few surprises of its own.
Every time there's a major electoral event in Washington like this, elected and appointed officials alike will usually settle back on the motherhood and apple pie of health care politics: kicking the crap out of the insurance industry and other monied interests like pharmaceutical manufacturers and PBMs. If you're not wearing them already, it's time to pull on the kevlar boxers and the asbestos Spanx.
Aetna Offers a Playbook for Evolution in the Golden Age of Government Programs
Ralph Giacobbe of Credit Suisse got another terrific "get" hosting Aetna's management team for an insightful discussion last week. I found the takeaways offer a playbook for how to adapt and evolve in the new Golden Age of government-sponsored health programs:
Watch Your Wallet: Aetna assumed an accelerating cost trend in 2014 of 6-7%. The company noted that underlying cost trends remain generally muted and that overall drug spend is within expected ranges. The company's informatics and medical economics function tracks a wide range of data indicators for early warning of cost acceleration, and had nothing unusual to report.
Put the Pedal Down on the Government Platform: Aetna acquired Coventry for the purpose of having a seasoned platform for government business, so integrating the company remains a top priority for Aetna in 2014. You may recall Aetna called Fran Soistman, a legendary founder of Coventry and a battle-hardened veteran of Medicare Advantage and Part D, out of retirement to run its government business unit. He's been making huge progress in leveraging the company he built within Aetna. For instance, Aetna ranked #1 in price in 6 of 7 ObamaCare exchange regions in Florida, largely because of Coventry's footprint there. Aetna continues to expect $200M in synergies and $0.50 of accumulated accretion in 2014, and $400M in synergies and $0.90 of total accretion in 2015 from the Coventry acquisition.
Invest in Medicare Advantage Stars: Aetna invested heavily in Star ratings improvement the last two years, and now averages 4+ Stars. As a result, the bonus payment and favorable rebates it gets allowed the company to maintain competitive premiums and benefit designs for 2015 in the face of a 3-3.5% revenue headwind. The company remains positive on its competitive position, and expects to grow membership next year.
ObamaCare Exchanges in 2014-2015: This year Aetna is participating in 17 states and has 570,000 paid public exchange members, with management expecting to have 450,000 exchange lives by year end due to churn. The company booked some reinsurance in 1Q and now believes it may get the data to begin to factor in risk adjustment. Risk corridor remains more difficult to estimate and will evolve as experience matures. Aetna's exposure in the exchange market is limited to 5% of projected 2014 revenues and its guidance incorporates a modest drag on earnings. The company doesn't expect to expand its footprint in the ObamaCare exchanges in 2015 until it has a clearer picture on costs and the competitive landscape. Management suggested it would seek average high-single digit pricing increases for 2015 on the exchange -- and there's some comfort there as an early indicator that trends so far in the exchanges are not as crazy as the rate hikes of 15%-20% seen from other plans.
Aetna's perspectives, when considered against the backdrop of United's outlook for the next couple years, paints a picture of a rapidly-expanding government book of business that is gaining on its longtime commercial market dominance. It's a portrait of evolution in the Golden Age of publicly-sponsored health care.
Resources
Listen as John Gorman, Executive Chairman at Gorman Health Group and Josh Raskin, Managing Director at Barclays, discuss the recently released Stars data, and the seismic impact of the 8.5 billion quality demonstration. Access the podcast here >>
In this recorded webinar, John Gorman explores what "member centricity" means in today's government health care industry, at a time when consumerism is defining our relationships with members more than ever, and with CMS elevating quality improvement to game-changing levels. Download the webinar >>
The Status of Medicaid Expansion, and Why It Will Keep Getting Better
Medicaid is already the largest insurer on the planet, and the Affordable Care Act (ACA) is driving enrollment faster than anyone imagined. But there are headwinds in covering more Americans through Medicaid, some political, some operational. Here's why it will continue to improve and drive expanded coverage for the uninsured -- and why all insurers need to participate to remain relevant to the new American healthcare landscape.
Twenty-six states have expanded eligibility under the ACA to everyone with incomes under 138% of the federal poverty level, or about $16,100 for an individual. April's Medicaid enrollment report from CMS showed a year-over-year increase of over 6 million, a 10.3% increase. Much of this is due to the "woodwork effect" -- folks heard about ObamaCare, applied through the exchanges, and found they were Medicaid eligible. It doesn't count nearly a million Americans who gained coverage under the ACA's "early option" or a waiver.
Predictably, enrollment has grown much faster in Medicaid expansion states (mostly Blue) than in states that have not expanded Medicaid (all Red): 15.3% in expansion states, but only 3.3% in non-expansion states.
Nine out of 24 states that had Medicaid expansions in effect in April experienced an enrollment increase of 25%. Ironically, many states with the largest Medicaid enrollment growth also had the most dysfunctional exchanges: Oregon at 49.4%; Nevada at 41.1%, and Maryland, at 29.7% growth.
The problem has been that between exchange dysfunction, weak infrastructure, and a culture in many state Medicaid agencies of creating barriers to enrollment rather than the ACA's policy of "no wrong door", more than 1.7 million are still waiting for their applications to be processed — with some stuck in limbo for as long as eight months. The scope of the issue varies widely: California accounts for 900,000 applications pending as of early June; Illinois has 283,000 cases pending, while New York has no backlog at all. All three states have implemented the ACA's expansion of Medicaid. Even some big Red states that chose not to expand have enrollment pileups, including North Carolina (170,000 applications pending), Georgia (100,000), and South Carolina (62,000).
Matt Salo, executive director of the National Association of Medicaid Directors, thinks the worst is over. He said the computerized handoffs from the federal exchange are occurring more quickly and states are getting more data to approve or deny applicants. "I don't want to say it's been solved," he said, "but it's definitely getting a lot better." One measure: Publicly-traded health plan Medicaid revenue grew 19% in the first quarter of 2014, demonstrating the enormous economic opportunity from the expansion and the woodwork effect.
So if the backlog is largely resolved by the next open enrollment period this fall, the next big question is what about the 24 holdout Red states, the ones whose governors like Rick Perry (TX) and Bobby Jindal (LA) seem hell-bent on throwing a middle finger at the White House while thousands of their constituents literally die because of inaction. Speculation is that a growing number of Red states will fold and take the Medicaid expansion money -- but not until after the midterm elections. Here's why:
- Funding: the Feds are funding 100% of Medicaid expansion through 2016, scaling down to 90% in 2020+. While the initial ACA backlash may have provided cover for states not to expand, it will be increasingly difficult to continue to defend not taking the federal money to insure a significant population group. Remember, Red states have the highest rates of uninsurance per capita, largely due to their historically stingy Medicaid programs.
- Access: most states that choose not to expand created a significant coverage gap. This happens because subsidies on the exchange are available from 100%-400% of the Federal poverty limit, but not below that, leaving a low-income population paying significantly more for healthcare coverage.
- "You're Still Paying for It": The ACA funds Medicaid expansion largely from tax revenue. States like Texas and Florida are among the highest contributors to general tax revenue and have the highest number of uninsured population. They are helping to fund Medicaid expansion for other states via higher income taxes, yet not receiving any of the benefits for their own population. Medicaid accounted for about two-thirds of all federal funding to states in 2014, up from 43 percent two years ago.
- Hospitals: hospitals traded in insufficient DSH funding and bad debt for Medicaid or exchange coverage in the ACA. Hospitals in Red states that didn't expand Medicaid are now reporting they can't even issue bonds for capital projects, and are dying on the vine as the DSH funds are taken away without a substitute. Considering hospitals are often the largest employers in their communities, and especially in rural Red states, their lobbying might is expected to break anti-ObamaCare partisanship after the elections are over.
I'm not as optimistic as some on Wall Street that all RedGovs will fold in the face of these arguments, but suspect that several more will as we head into 2015. And given the central and growing role Medicaid plays in healthcare financing, health insurers are awakening to the fact that if they're not in it, they won't be around long.
Resources
Medicaid health plans must be able to navigate through State and Federal regulations and work well with State agencies. GHG can help, find out how >>
What's Gained and Lost with an HHS Secretary Burwell
My old Clinton Administration colleague Sylvia Mathews Burwell sailed through a confirmation hearing last week. What was expected to result in serious anti-ObamaCare fireworks and soundbite fodder for midterm campaigns ended with a whimper. Her second confirmation hearing was yesterday, and it's a "Washington dog isn't barking" story. It's now looking like she'll cruise through and we'll have an unexpectedly rapid successor to the embattled Kathleen Sebelius.
Mathews is unquestionably qualified for the job, but there are both positives and negatives of her succeeding the former Governor and Insurance Commissioner of Kansas as Secretary of Health and Human Services at the most critical juncture since Medicare and Medicaid were launched in the 60's.
Here's what's gained: bipartisan support. Sebelius had become the face of last fall's ObamaCare meltdown and needed her own parking spot on the Hill for all the oversight hearings she had to endure. The GOP majority in the House had especially come to revile her, but Mathews is known on the Hill as a skilled technocrat with none of Sebelius' baggage, quiet, non-ideological, and effective. It also helps that with the 7 million enrollee target easily met in the first ObamaCare open enrollment period and at a lower cost than expected, Republicans are turning away from their "repeal and replace" mantra of the last 4 years.
Mathews' proven management skills are also critically important as ObamaCare sails into Year 2. The initative's turnaround this winter was nothing short of incredible, but there's still ample opportunity for health insurers to cause a crackup with the less-visible "back end" problems that persist. Details matter now more than ever. Remember Mark McClellan's impact on Medicare Part D. A massive implementation of government-sponsored insurance needs an operator to see it through.
But here's what's lost: Burwell, locked in the bowels of the Office of Management and Budget for much of her career, enjoys none of the relationships with governors, state Medicaid directors, insurance commissioners or insurance executives Sebelius does, especially those in hostile red states where coverage expansion is needed most. And that could hurt post-midterm chances of getting RedGovs to roll over on the Affordable Care Act's Medicaid expansion and hostile insurance commissioners like Georgia's to back off. She will need to build trust as the face of ObamaCare with politicians in the deep south and west. She will also need a "meet-and-greet" tour of insurance executives, and must demonstrate her ability to hear their concerns and implement fixes quickly in CMS in the runup to open enrollment Round Two.
This isn't to say Burwell will completely avoid controversy and that the Health Secretary's impossible job got much easier. She should continue to pull on her asbestos Spanx every time she sets foot outside her new office in this political environment. But it will give her some breathing room to hit the job hard, get some wins early, and build the trust that's necessary to see ObamaCare through from partisan lightning-rod to established and popular entitlement program.
Follow the Leader: United Health Group's Outlook on Government Health Programs
Ralph Giacobbe at Credit Suisse is a leading health industry analyst and is doing the best work of his career. Today he produced a fantastic recap of his discussion with United Health Group CEO Steve Hemsley and several of his top executives. It included some fascinating insights into the market leader's strategy for government health programs:
â– 2015 Earnings Growth: Management reiterated its focus on growing operating earnings in 2015. While Medicare rate pressures remain (-3 to -3.5%), the company is optimistic of better MA enrollment in 2015 as it does not expect the same level of market disruptions with more limited network reconfigurations...Medicaid is expected to remain a positive contributor. Additionally, UNH has $90B in medical costs and $20B in administrative costs from which to drive savings, which was stressed by management during the meetings...cost creep has backfilled previous administrative cost savings. Management is now "acutely focused" on applying more rigorous standards to general reinvestments in the organization.
â– Medicare Star Ratings and Renewed Focus on Performance: While the management team noted that performance as a whole has been "good", there was clearly a sentiment that performance needs to improve. Hemsley noted that too many of UnitedHealthcare's recent issues have been "self-inflicted," especially Medicare Stars. As a result, UNH is in the process of narrowing its networks to steer patients to high performing providers in an effort to improve quality. Additionally, a greater focus will be placed on leveraging data to stratify members in order to quickly identify and place high acuity members in appropriate care management programs. As the largest player in the market, UNH has several metrics under its control and is expected to perform at high levels. According to management, it took UHC too long to figure out that STAR ratings place significant emphasis on serving both the healthcare and social needs of members. While corrective steps are encouraging the improvement in STAR rating won't be evident until 2017 at the earliest given the lag time in measuring criteria.
â– Network Reconfigurations Continue: As a result of MA rate pressures, UNH significantly adjusted its networks during the 2014 annual enrollment period for which it received scrutiny. Management reiterated that network reconfigurations will continue, but will be guided by insights gained during 2014. Last year UNH narrowed its Medicare networks by 10-15% and management expects some continuation into 2015, although changes will be made more on a continuous basis vs. occurring all at once and therefore should be less disruptive. Overall, network configuration remains a significant component of managing trend and should not be underestimated as narrowing networks to higher performing facilities/providers can save on medical costs. MA rate pressures for 2015 were evident when management reiterated that the final rate came in below their expectation of flat. UNH sizes the impact in the range of -3% to -3.5%. We would expect network reconfigurations to be an ongoing process, as management believes it is only in the 2nd or 3rd inning, but again, don't expect big disruption like 2014.
â– Reform Update: While UNH's exchange participation in 2014 was limited, it is inclined to increase its involvement in 2015. UNH is currently in the process of evaluating markets, products, regulations, and first year pricing. While it continues to appear that the company is likely to increase its exchange exposure in 2015, it has until September to finalize its decisions.
â– Medicaid: Expansion also appears to be tracking well, as management now expects Medicaid growth to exceed the high end of guidance (+350-450K lives). While the dust has yet to settle, expectations were to see 65% of expansion enrollment 1Q, followed by more moderate enrollment in the middle of the year and a reacceleration around year end. It is still early, but at this point UNH has not seen anything alarming in terms of utilization and feels comfortable about its ability to effectively manage new Medicaid members. Additionally, UNH is getting paid appropriately higher rates for Medicaid expansion members.
â– Optum: Management's new goals are "8 by '16" (8% operating margins, 10 new large relationships, double digit top and bottom line growth, and doubling 2013 op earnings of $2.3B). With a backlog of $7.2B, Optum has an abundance of opportunities at its fingertips...Optum's role as a system integrator for HealthCare.gov was an important building block in establishing its reputation. Management also conveyed a new level of confidence that scrutiny around Optum's association with UNH has subsided, as payors and healthcare systems appear to have gained comfort that the appropriate firewalls are in place for Optum to maintain its independence from UNH.
Resources
On May 7, Gorman Health Group Executive Vice President and former regulator Steve Balcerzak joined Vice President of Provider Network Management Craig Lyon for a deep dive into CMS expectations. Attendees got their their take on what to expect and how to prepare. Access the webinar 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. Contact us for more information >>
POTUS Spikes the Football, but the ObamaCare War-Game Isn't Over
Last week as health insurance exchange open enrollment ended, President Obama spiked the football, announcing that 8 million people had signed up, and that the Obamacare debate is "over." He put an exclamation point on it: that millions more had gained coverage through Medicaid expansion and new mandates on employers. Now, any further discussion of repealing ObamaCare was about taking coverage away from those millions of Americans.
Republicans, sickened by a blinding case of ObamaCare Derangement Syndrome (ODS -- it's in DSM-4, check it out ;)), predictably wailed. "The Debate Will Be Over When the American People Say It's Over," The Weekly Standard‘s Jeffery A. Anderson blogged the next morning.
POTUS is right. This train has left the station. ObamaCare, like Medicare Part D in 2006, is now a part of the firmament of the American health system, and can't be dismantled without a Republican in the White House. And as far as the American public goes, they're done with this repeal nonsense too. Last month, the Kaiser Family Foundation released its monthly polling and found approval of the law rising, especially among the uninsured. 53% of Americans are "tired of hearing about the debate over the ACA and want the country to focus more on other issues." Can we get an amen? Look, it ain't popular -- yet, remember it took the Medicare drug benefit 2 years before opinion turned -- but it's not going away.
But that doesn't mean the repeal fight ends. Oh no. Two things guarantee that: the tax on the wealthy that funds a big piece of ObamaCare, and the Citizens United and McCutcheon cases in the Supreme Court. The New York Times‘ explains: Under the Affordable Care Act, the Medicare payroll tax increased by 0.9% in 2013, but only for couples earning $250,000+ and unmarried taxpayers earning $200,000+. That tax hits just 2% of taxpayers, but helps to explain the spread of ODS among Republicans.
Combine that with virtually unlimited funding for campaign-style ads and events under the Citizens United and McCutcheon decisions, which enable a small number of families to donate more in one election cycle than most Americans will earn in their whole life, and we're looking at a virtually endless ObamaCare war of dead-ender fundraising, attack ads, and futile repeal attempts.
What's more, it seems increasingly likely that Republicans will regain control of the US Senate in the 2014 midterms, putting Congress entirely under GOP control. I wouldn't be surprised to see articles of impeachment filed early in 2015 as ObamaCare Derangement Syndrome sweeps over Capitol Hill. It will be an ugly conclusion to the Obama Administration, but it won't end in repeal, that much is certain. Republicans will just pretend like it could.
Resources
Exchange enrollment is a multi-pronged strategy with member outreach and connection embedded within. Find out more about how GHG can help you with your strategy >>
Member Engagement and Experience are the New Risk Adjustment
In this new era of Star Ratings in Medicare Advantage and Part D, where a 4+ score is now do-or-die, health plan survival comes down to two things: member engagement and the member experience. They're the new risk adjustment when rates in 2014-2015 will be at their lowest levels in more than a decade, and a low-quality rating is a kiss of death in government programs. Plans that can't evolve into kinder, gentler, more coordinated and Member-Centric service providers are already beginning to disappear.
Here's why: the vast majority of the Star Ratings performance measures, especially those that are triple-weighted, are utterly dependent on an engaged member. Example: breast cancer screening. All women hate mammograms, and this measure doesn't move unless the member shows up. Another: Diabetes Care -- Blood Sugar Controlled. "Controlled" is a clinical outcome. And you can't get there with daily testing and insulin treatment without a member who's paying attention every day. Less than 20% of seniors engage in all screenings and tests required in Stars.
Similarly, the patient's experience measures and surveys now comprise fully a third of the Star Rating and are all 1.5 weighted, which means they count 500 basis points more than simple process measures. Getting appointments and care quickly, handling of complaints and coverage disputes, interpreter availability -- just a couple examples, all 1.5 weighted and instrumental to getting or keeping those all-important 4 Stars. The Consumer Assessment of Health Plan Survey (CAHPS) and the Health of Seniors Survey (HOS) are enormous determinants of ratings, both conducted by government surveyors, and both strike fear in the hearts of health plans. "Has your health improved in the last two years you've been enrolled, and who do you attribute it to?" are two of the most critical questions facing our industry. You have no hope of a positive answer to these questions from your members if they don't know who you are and what you're doing for them.
Most of the tasks involved in the Stars measures are actually pretty simple, like getting a flu shot. And behavioral economics show us that simple tasks are susceptible to contingent, or "if-then" rewards. So plans need to have the ability to track member progress on health-related tasks and administer appropriate incentives when they are completed. And all of the patient's experience measures necessitate a responsive, proactive service model that could be lifted from some of the leaders of e-commerce.
So the more we thought about it, the more we realized we needed to offer our clients a platform that can help them execute better on Stars tasks, while ensuring dramatically better member engagement and a much more positive consumer experience. And that's where our new partnership with Novu comes in. Novu is a unique platform which creates a deep ongoing relationship between your plan and your members, and gives you the "stickiness" that keeps them around. Members engage in a fun, easy to use, and rewarding health engagement tool that has a proven record of getting people to actively participate in their health: 76% of members return to the site 2 or more times per week, and stay on the site almost 10 minutes per visit.
We're thrilled to offer this first-of-its-kind engagement platform specifically tailored to the needs of Medicare, Medicaid and ObamaCare exchange members with Novu. Check out the product on the GHG website: https://www.ghgadvisors.com/who-we-are/our-partners/novu
Resources
New Webinar with John Gorman: Join him on April 2 for this complimentary presentation. "Member-centricity is more than a catch-phrase. How enhancing member engagement impacts the top AND bottom lines." Register now.
Learn more about the GHG-Novu partnership by reading our press release.
Join John Gorman, Novu's Tom Wicka, and dozens more industry thought leaders at the 2014 GHG Forum. Full agenda just released.