Lighting the Path in the Golden Age of Government-Sponsored Health Programs: Join Us for the GHG Client Forum
More than 300 guests will convene on May 1-2 at the Red Rock Casino in Las Vegas for the 2014 Gorman Health Group Forum, our annual strategic retreat for leaders in government-sponsored health programs. This year's gathering promises to be the most actionable, content-packed conference you could attend on how to succeed in this new Golden Age of government business. And when the learning and planning is done for the day, we will celebrate this unique moment in health care history as only GHG can in Vegas. Here's what's happening this year and why you've got to join us:
- The event features 27 content-charged sessions, including multiple presentations on Star Ratings tactics, quality improvement, risk adjustment, and compliance challenges unique to Medicare Advantage and Part D, Medicaid, and the ObamaCare exchanges
- A keynote presentation from CMS leadership
- An expert roster of presenters from Gorman Health Group and leading health plans in government-sponsored programs. No fluff, no sales pitches, no history lessons -- it's all about what to do NOW
- Approved for up to 12 continuing education credits from the Compliance Certification Board
- The perfect off-the-strip venue to minimize distractions during the day, but close enough to the action to make plenty of bad decisions in the evenings. ;)
Based on feedback from last year's Forum, I'm speaking in three separate sessions on overall strategy and implementation planning for government programs. If you've heard my "state of the industry" presentation before, you may think you know what to expect from me on stage. Think again. This is my favorite gathering of the year, and I'm building three brand-spankin' new presentations that are focused on specific steps and mileposts your organization needs to reach this year in care management innovation, risk adjustment, Star Ratings, and operational performance improvement. In each session I'll drill down to specific steps, and we'll leave you with a self-assessment tool in our closing session to help track your progress.
Many of our clients use the Forum as an offsite retreat for their government programs executive teams, and so we offer huge group discounts to encourage it. It's a unique opportunity for team-building and action-oriented planning and budgeting.
If government-sponsored health programs are central to your company's future, do yourself a favor and join us in Vegas. You'll come back tired, happy, and ready to win in this crazy new environment of health reform.
Don't believe me? Hear what last year's attendees thought about the event, and why they keep coming back for more.
Resources
Register today for The Annual GHG Forum held May 1-2 at the Red Rock Casino and Resort in Las Vegas. This two day event is designed to provide best practices for the decision makers of organizations serving Medicare members, Exchange beneficiaries, and the Dual eligible population.
On April 11, Bill MacBain and Jean LeMasurier will be back, and this time joined by John Gorman, Executive Chairman of GHG, to offer insight on the Final Rate Announcement from CMS. You will walk away from this session with critical to-do items and issues to tackle in order to ensure your success in 2015 and beyond. Register now >>
2015 Medicare Advantage Draft Rate Notice is a Bear: Messy, Noisy, and Smells Like Roadkill
Friday after the close of business, CMS released the draft 2015 "call letter", the rate announcement for Medicare Advantage. As expected, it's a bear: messy, noisy, and smells like roadkill. It's just about a worst-case scenario for flabby, distracted, uncommitted health plans in Medicare -- the roadkill to come. The table is now heavily tilted against low performers who can't keep up. Some topline observations:
- The benchmark calculations were anticipated and about as rough as they could be under the Affordable Care Act. Having said that, for the "glass half-full" types, the average MA benchmark is still 103.4% of Medicare fee-for-service expense. In the 1990's under the old AAPCC methodology, all plans got 95% of fee-for-service, and plenty of plans were profitable -- and that was before risk adjustment and Stars. We knew the Bush party was over. It's time to get over it and push forward because the only way out now is through.
- The Star Ratings quality demonstration is officially over, and those plans below 4 Stars are now leaving a blood trail in the snow. After this year, as required under the ACA, all plans above 4 Stars will get a 5% bonus, while those below get nothing.
- CMS makes it clear in the call letter that it will terminate sub-3-Star plans for three consecutive years at the end of 2014. The reaping is coming in a few short months.
- The demo's conclusion is a grave wound for 3.5 Star plans, who just missed the threshold and take an additional 3.5% cut for added misery.
- At the same time, CMS made a big move to remove Stars as a barrier to market entry for new plans, especially those spawned by high-performing veteran organizations. A new plan starts out with a 3.5 Star rating now -- and will receive the 3.5% bonus; a new plan born of a veteran MA organization gets a weighted average of all its other plans. It's a welcome mat for Stars heroes like Kaiser, Providence, and CIGNA to expand to new markets, especially those with weak competition.
- The risk adjustment provisions were very tough, but leave significant maneuvering room for sophisticated plans to adapt their much-maligned home visits into a mobile medical home model that closes gaps in care for the chronically ill.
- It's the beginnings of good policy but not there yet, and CMS is giving the industry an opportunity to shape it. We should not fight this policy change and should embrace the dialogue.
- The home is the most underutilized source of care for frail elders, and risk adjustment must be much more than a data collection exercise.
- While we got some hidden rate relief in a slightly favorable FFS normalization factor, we only anticipate 300 bps improvement on average, but for those flabby plans who can't keep up, the impact will be much less.
Our estimate is that the average MA plan will experience a real cut in payment of -4.9% if the draft is finalized in April. This includes a rough estimate of the impact of the new risk adjustment rules, and the average impact of the end of the Stars demo.
If this rate announcement is enacted, it's survivable for the adaptable and the high performers -- like the old adage about walking in the woods with a friend when you get chased by a bear, you just have to outrun the other guy. There is no question the 2015 call letter is an evolutionary event and some inferior species will be eliminated.
Want to know more? Watch this space for tons of additional resources from the veteran Gorman team.
Resources
Sign up for a Free GHG web account and receive an alert when GHG's summary of the draft 2015 "call letter" is available.
Join us on Thursday, February 27 to hear financial expert and former health plan CFO, Bill MacBain, and former regulator and industry-renowned policy expert Jean LeMasurier review critical take aways from the CMS Advance Notice, and what MA plans should prepare for in the next 45 days. Register >>
John Gorman featured in Wall Street Journal article "Government Proposes Cuts to Insurers' Medicare Payments." Click here to read more.
On April 11, Bill MacBain and Jean LeMasurier will be back, and this time joined by John Gorman, Executive Chairman of GHG, to offer insight on the Final Rate Announcement from CMS. You will walk away from this session with critical to-do items and issues to tackle in order to ensure your success in 2015 and beyond. Register now >>
Register today for The Annual GHG Forum held May 1-2 at the Red Rock Casino and Resort in Las Vegas. This two day event is designed to provide best practices for the decision makers of organizations serving Medicare members, Exchange beneficiaries, and the Dual eligible population.
Much Progress on Healthcare.gov, But "Back End" Fixes Will Determine Success
Of the many, many things I gave thanks for last week, there was Jeffrey Zients, the White House management guru brought in to sort out the mess that is the launch of ObamaCare, and for his geek squad working feverishly on the fixes. His long-awaited progress report was released on Sunday, and it's amazingly sanguine for a government document. Knowing big IT projects as we do, it's impressive how far the fix team has gotten in a matter of weeks, much of it in consumer-facing functionality on the "front end" of the website and the enrollment process. What remains to be seen is what can be done this month on the crucial "back end" functions that connect to insurance companies participating in the exchanges -- the functions for which ObamaCare will ultimately be judged when coverage kicks off on January 1, and the true test for Mr. Zients and his geeks.
"HealthCare.Gov on December 1 is night and day from where it was on October 1," Zients told reporters in his victory lap Sunday morning. "While we still have work to do, we've made significant progress with HealthCare.gov working for the vast majority of consumers." The administration released some geek speak to make its case. Response times, capacity, and system stability are markedly improved, and conventional wisdom is that the consumer-facing functionality -- the "B to C" part -- is in much better shape.
It's the "B to B" piece that's still a problem. The metrics Zients released Sunday focused almost exclusively on the front end of healthcare.gov -- there were precious few details on the back end, specifically on the all-important "834" transmissions to insurers that tell them who's signed up, and which have been problem-plagued since the launch. You'll recall that last month Henry Chao, who oversaw healthcare.gov's technical development, said 30-40% of the back end functions remained to be completed, including a system to send payments to insurers. Without timely and accurate 834s from the Federal data hub, coverage can't be effectuated, members can't get their insurance cards, insurers can't get paid, and claims can't start flowing through the system for the uninsured.
The omission was glaring, and the Administration jumped in to address it. White House spokesman Jay Carney said that 834 fixes were ongoing but that the problems were "vastly improved." "We believe that the majority of fixes to the 834 forms have been made, including significant ones over the weekend," Carney said. "We're going to continue to work with issuers to make sure that the remaining problems for issuers will be fixed."
"A number of the fixes that went into place this weekend in particular will significantly address some of the highest priority things that we know were a particular concern with those transaction forms," said Julie Bataille, spokeswoman for CMS.
But there's still clearly a very long way to go. Administration officials and a new "Payer Exchange Performance Team," made up of insurance industry leaders, in a meeting on Monday acknowledged that about one-third of completed applications since Oct. 1 contain errors generated by healthcare.gov. The errors included failure to notify insurers about new customers; duplicate enrollments or cancellation notices for the same person; incorrect information about family members; and miscalculated federal subsidies. It's still bad enough that yesterday CMS recommended that consumers who choose a health plan through HealthCare.gov contact the insurer afterward to make certain they are actually enrolled. "Consumers should absolutely call their selected plan and confirm that they have paid their first month's premium, and coverage will be available Jan. 1," Bataille said.
There is no margin for error this month. Deadlines for enrollment are coming up in less than 2 weeks for people to get insured by Jan. 1. If the 834s can't be fixed by then, and it appears likely they won't, the next big barrier to enrollment is the ACA's requirement that eligible exchange customers pay their first month premium before they receive coverage. Without clean 834s, susbidy verification and calculations given to the plans, no one knows what the first month's premium will be. That may be the next "audible" to be called on the field: the Administration will seek a way around the premium payment requirement, and then ask insurers to take a leap of faith, issue coverage, and hope that premiums and subsidies catch up later. And that's a real problem that strikes at cash flow for many of the smaller, regional players in the exchanges, and especially for start-ups, like the ACA's co-ops. Nobody set aside contingency funds for this kind of headache.
So Mr. Zients and his geeks can't let any grass grow under their feet, and we all ought to spill some Starbuck's or Red Bull for what lies ahead for them. But to also give some perspective, a hat tip to Dr. J. Mario Molina, CEO of Molina Healthcare: "A few people are going to have data that's not correct; but compared to the tens of millions of people who don't have coverage right now, that's a minor problem." He's thrilled with the progress made, and points out "We process a couple million patients through our system the last week of the month as it is."
Whether you're a glass half-empty or full type of person, I think we can all agree we are looking at one wild and hairy enrollment reconciliation process in Q1 and 2 of 2014, so grab your shovels. There's a pony in here somewhere.
Resources
Join us December 11 from 2:00 — 3:30 pm ET for a lively session with Gorman Health Group strategy and data analysis experts who will discuss actual case studies that show how plans can mine data for precious insight that can help improve performance. Register >>
Gorman Health Group's Valencia, was designed to create workflows organizations need for critical operational functions, and give you insight into where your membership and premium-related data is out of sync. See how Valencia can revolutionize your capitation management >>
Reading the Stars in Medicare in 2014-2015
Whatever you may think of healthcare.gov, CMS is killing it on the Medicare Star Ratings Quality Demonstration.
As we move into the final year of CMS's historic and controversial $8.5 Billion Quality Demonstration, we see clear evidence that quality incentives are working, plans are making major investments to improve their ratings, and quality is improving across the industry. One thing we can be sure of in uncertain times: proven performance-based payment systems like MA Star Ratings will spread to Medicaid, the exchanges, and commercial accounts in the next 3-4 years under banners of transparency and accountability. $8.5 Billion in a $3 Trillion industry seems infinitesimal, but Stars are moving the industry in ways outsize to their impact.
Many industry experts giggled at the Affordable Care Act ‘s (ACA) provision allowing MA plans to earn up to 5% additional reimbursement from the government for quality metrics based on the CMS star system, and 10% in double bonus (mostly rural) counties. The Star ratings system was, at the time, a laughable ranking barely 2% of beneficiaries paid any attention to. Not anymore. In 3 years, CMS has evolved Stars to an increasingly sophisticated carrot and stick for quality improvement, with massive financial implications for payers.
To date, each half-star rating equated to roughly $50 per member per month in bonus payments. For 2014, we estimate the enrollment weighted-average increase to plan paymentst from Star bonuses is approximately 4.75% and 3.3% in 2015. Anything below 4 Stars in 2015 means no bonus and a major financial headwind for plans. With MA plans seeing roughly 5% margins, 2014 being the worst year of MA reimbursement cuts from the ACA, and 2015 meaning the end of bonuses for plans below 4 Stars, plans are making significant investments to improve their ratings.
There was clear evidence that Stars incentives are working: 52% of MA plans are now at 4 Stars, up from around 37% of all MA plans. The average member weighted ranking for 2013 is 3.86, up from 3.7 in 2012. The biggest chunk of MA enrollment is now in 3.5 Star-rated plans: 30% or 4.4 million. There are now 16 5-Star rated plans up from 3 this year.
While tremendous progress is being made on Stars, GHG's analysis of the data also shows what a long, hard journey these performance metrics present to health plans. We have much improving to do in managing conditions like osteoporosis and mental health, where most plans scored badly. And the data shows a need to continually improve the service model, like providing interpreters, managing member complaints and coverage disputes.
MA plans in qualifying counties, mostly rural, can receive a "double bonus," the payment impact of which is significant. There are about 4 million MA members in double bonus counties, roughly 27% of the total MA population. Double bonus counties add about 100 basis points to payments across the entire MA program.
5-Star rated MA and Prescription Drug-only plans can enroll members year-round in 2014, rather than just during the annual enrollment period. This is a major strategic advantage for Star leaders, but one that few have taken full advantage of yet — and that's about to change. With big nationals finally attaining the honor, they'll be ready and hustling all year.
CMS has been very clear that it reserves the right to terminate MA contracts that are below 3 Stars for 3 consecutive years, citing its authority in an April 2012 final rule which became effective this year. About a half-million Medicare beneficiaries are enrolled in plans with less than 3 stars.
Resources:
Interested in seeing how your Plan's performance compares to others in your market? Download GHG's Star Ratings Database that combines the CMS-issued 2014 Star Ratings with those over the program's history from 2008 on.
Hear from GHG Stars expert Jane Scott on October 29th. GHG and AISHealth team up to present a 90 minute webinar: "Inside the 2014 Star Ratings for MA and Part D: Trends and their implications." Register now >>
Want to hear more from John? Decision-makers from Health Plans and Provider Organizations are invited to join GHG for a free webinar on November 19th: "The future of the Government sponsored health care." Register for this free event now >>
Live Connects + Motivated Buyers = Better Sales
Converting active leads to instant appointments is vital in today's insurance market. Whether you are working in this fall's first open enrollment period outlined in the Affordable Care Act or Medicare's annual open enrollment period, the company that converts immediate leads has an excellent advantage over its competition.
Agent Connect is a tool that helps shorten that sales cycle by connecting field agents and callers at the exact moment callers are ready to talk. All facets of the sales process — a caller inquiry responding to a marketing piece, a convenient 3-way conference introducing field agents to interested callers, helping agents set the required scope of appointment and the appointment date - are all handled in real time using mobile devices.
Imagine the pleasure of a caller that dislikes following automated instructions on their phone or leaving voicemails. Instead, they are expertly pre-qualified by a professionally trained call agent and are then immediately transferred to a local field agent that is literally at their beck and call. Talk about exceeding expectations!
Using Agent Connect, field agents with time between scheduled appointments indicate their availability for real-time leads via mobile device. Meanwhile, callers responding to a marketing campaign are pre-qualified by a carrier's call center. If the caller wants to meet with an agent, the call center matches them with an available agent nearby and instantly connects them via a 3-way conference. This instant communication allows agents to build an immediate rapport with callers, also shortening the sales cycle.
In this way, Agent Connect provides a seamless "hand-off" of a warm lead to agents that have signaled their availability. Companies using Agent Connect can dispense leads in any number of ways: by top performers, round-robin or random selection.
Agent Connect is an exciting collaboration between agents, insurance carriers and call centers that significantly reduces the sales cycle and is redefining the term "insurance lead."
Resources
The Bloom Call Center is licensed in 48 contiguous states and offers marketing, call center and technology solutions to the health care industry. Since 2007, Bloom has participated in over 55 million conversations about insurance products, submitted over 200,000 applications for insurance, and set over 150,000 appointments for seniors to meet with Licensed Agents. Bloom is a proud partner of Gorman Health Group. Click here to learn more.
Crisis Averted for Medicare and Medicaid. Not So for ObamaCare.
So, just hours from national debt default last night, a deal was struck to reopen the government and raise the debt ceiling. Our long national nightmare is over...at least until January 15, when this entire calamity could be repeated by battered ObamaCare dead-enders. It's a crisis averted for Medicare and Medicaid, but not so for ObamaCare.
As hundreds of thousands of Feds returned to work here in DC this morning, the overwhelming question on the street was, "Wait, what the hell was this for anyway?" (And, "is the PandaCam back on yet?")
You'll recall this episode was caused by Congressional right-wingers led by Senator Ted Cruz (R-TX) forcing a shutdown to defund ObamaCare. Didn't happen, never could have happened. Anyone who's watched the famous "School House Rock" episode "I'm Just a Bill" knew that. In the end, the anti-ObamaCare fanatics got nothing. Not one concession. Instead, the Cruzers managed to distract the entire country and the press from the colossal mess that is the launch of the health insurance exchanges. Oh, wait, his 21-hour filibuster and shutdown antics actually did some good: Cruz himself raised over $800,000 in campaign contributions in the third quarter alone. While conservatives promised not to repeat the economic hostage-taking in January when government funding next expires, that kind of cash-for-obstructionism pays and we'll have to see. It will coincide with the now-all-important effective date of ObamaCare coverage on January 1, and may be too much for the Cruz faction to pass up. In the meantime, the ObamaCare Funhouse is open!
With the shutdown in the rearview mirror it's time for oversight hearing Palooza -- and a press refocused on the messy launch of the exchanges. Every House committee with any healthcare jurisdiction is already calling for hearings. Some of the best reporting I've seen in years is happening as a rolling whodunit of finger-pointing. If Health and Human Services Secretary Kathleen Sebelius keeps her job in the face of this epic mess she's going to need her own parking space on the House side. Despite calls for her sacrifice, I think she'll keep her job, as will CMS Administrator Marilyn Tavenner. If for no other reason, the White House knows they'd never get replacements through Senate confirmation hearings in this environment.
To date, healthcare.gov has had some 15 million visitors, but it appears some 150,000, less than 1%, have been able to enroll given persistent technological snags. Indications this week are that the consumer experience with ObamaCare is improving as CMS and its array of contractors work around the clock debugging and finding workarounds. But the fixes aren't coming fast enough to avoid a whirlwind of scrutiny in the weeks ahead from restive Republicans looking for blood and the ultimate "afflict the comfortable and comfort the afflicted" story for journalists. Four major areas will be probed in the coming weeks:
- The Technological Meltdown: the GOP is already calling the ObamaCare exchange launch a "$400 million disaster" and the technological shortcomings have been well-reported. As consumers manage to establish accounts, the next wave to hit ObamaCare will be harder: subsidy eligibility determination. Health plans participating in the exchanges are seeing a trickle of "834" enrollment transactions come through. It's a small sample but thus far the quality of the data is as questionable as the rest of the launch. This is now a footrace to December 15, the cutoff for January 1 effective enrollment; if widespread problems persist, it will become a serious liability for the Administration.
- The Traffic: healthcare.gov has had 15 million visitors thus far. Last week it was learned that HHS estimated on September 5 that 500,000 would be signed up by October 31, and they're clearly way, way behind. But the stunner was the revelation that HHS built the website to handle 50,000 visitors an hour -- in the face of 50 million uninsured Americans, sorry, but that's like 1-800-FLOWERS being unprepared for Valentine's Day. The fanatics will have a field day with this one. Democrats will push back that no one anticipated 36 states revolting and forcing the Federally-Facilitated Exchange to pick up the slack, and predictably, every time the Administration asked for more money, Congress refused.
- Fraud. Republicans were already making hay of hacking and fraud concerns before the government even reopened. It's a simple enough question: "if the rest of ObamaCare's functionality is so third world, how can consumers know their sensitive personal health information is safe?"
- The Guys Who Farted and Are Pointing at the Dog. Lead healthcare.gov contractors like CGI Federal and QSSI are going to get Cruzified in the both hearings rooms and news stories in the weeks ahead.
So ObamaCare drama will intensify, just as Medicare and Medicaid temporarily ducked a bullet. A shutdown of over 30 days -- or worse, a debt-ceiling breach -- could have been big trouble for our favorite health programs. With CMS staffers back on the job, claims and payments will flow again, at least until January 15. But the deal included establishment of a budget conference committee that's supposed to look at the big picture of reining in entitlement programs, the biggest contributors to the national debt. The consensus in town is that panel is DOA, on a road to nowhere, just like the Super-Committee of the last budget debacle, given the worsening political rift in DC. And that means major reforms to Medicare and Medicaid are unlikely in the near future. Some relief as the dust clears here in Dysfunction Central.
Resources:
Hear more of John's predictions and analysis on how the political landscape impacts decision makers for Government-sponsored health care's private partners. Register for his complimentary November 19th Webinar
Podcast from John Gorman: What does the deal to re-open the government mean for Obamacare, Medicare and Medicaid? Listen now
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What ObamaCare's Glitches Mean for Health Plan Operations
It's been a rough couple weeks for the launch of ObamaCare. The only thing that's kept the Federal exchange's woes off Page 1 this week has been the continuing dysfunction on the Hill. Healthcare.gov traffic will wane, bugs can be recoded and dysfunctional processes redesigned pretty quickly, so we haven't seen anything fatal thus far, unless we're still having these problems a week away from the now-all-important effective date of January 1. But the sheer volume of Weeks 1 and 2, with CMS working on a shoestring with a night-shift staff in the middle of a government shutdown, and the hardest part of ObamaCare enrollment to come, has major implications for health plan operations in just a matter of weeks.
Here's what's keeping us up at night. All those back-end glitches in the Federal Exchange have yet to be identified, because the back end also includes the next phase of ObamaCare enrollment: subsidy eligibility verification. The key difference between ObamaCare and Medicare Advantage or Part D is the subsidy eligibility maze, and that there are several major steps to effectuate an enrollment that will hit plans in waves, not as a trickle.
ObamaCare is only open to American citizens and documented immigrants, so all applicants' status must be electronically verified with the Social Security Administration and the Department of Homeland Security. The exchanges also have to confirm that applicants are not already enrolled in another government health insurance program, like the Veterans Health Administration, the Department of Defense, the Office of Personnel Management, and the Peace Corps. Then the exchange has to check with the applicant's Medicaid/SCHIP program to see if they're already enrolled. Then the applicant has to apply for the subsidy based on their income, which has to be determined by IRS.
Finally, subsidy in hand, the applicant picks a plan. The exchange must then provide her information to the health plan she has chosen, which then has to reconcile all of that data with the exchange. In Medicare Advantage or Part D, the plan receives the application; in the exchanges, the plan flies blind and doesn't know who its members are until the exchange provides the members' coordinates. And then remember, applicants aren't official until they make their first premium payment, which could come in the form of a cashier's or personal check, cash, credit card or even a prepaid debit card. Only then is an enrollment effective, and all these steps mean big headaches for payers in the weeks ahead.
Think of it this way: 9 million-plus hit Healthcare.gov in its first week; most will return to apply for subsidies and have their eligibility confirmed and calculated; and then all of those folks will pick a plan. Those completed transactions ("834's") will hit the plans, in waves similar to those of the last two weeks. Things get really exciting starting the last week of January 2014, and then the last week of each month thereafter, as the plans must clean up all this data in the runup to the monthly payment. We have about 30 days before the waves start to hit — call it a "shopping lag" or a "glitch lag". We think those waves will look like this, as a function of enrollments and transaction volume for the plans over time:
Our conclusion: "crunch time" for the plans arrives in early December and goes through the end of February, and COOs and executive teams need to plan accordingly. And, oh, by the way: this crunch will happen as plans are trying to close their books for 2013 to make financial reporting deadlines, so grumpy CFOs will abound with their operations colleagues.
Yes it's been a messy launch, but the real mess has yet to arrive.
Innovation and Quality must go hand-in-hand
Plan sponsors are waiting with anticipation for their 2014 Medicare Star Ratings to be released. Just yesterday, Tufts Health Plan in Watertown, Massachusetts released the news that their Medicare Preferred HMO plan was awarded 4.5 out of a possible five stars. It reminds me of the old Ford commercial jingle where they said "Quality is Job 1". No truer words apply when it comes to maintaining high quality plan options for our nation's Medicare beneficiaries.
Recently I accompanied our founder and executive chairman on a field trip, where he enthusiastically addressed a large group of health plan decision-makers as part of their series on innovation. Now, innovation and quality do not always go hand in hand. I have purchased my share of aftermarket tech products to know that while a company might have employed innovation to make something less expensive, often times, it comes at the expense of quality. It's deflating when you finally get on your train with your discounted charger, plug your phone in, and you see the magical words: "not charging". Add it to the list of our countless first world problems, but it illustrates the point.
With the bonus payment going away for any plans earning less than a 4-star rating in 2015, 3.5 stars will not cut it, especially if you are counting on those funds or have incorporated them into your future year's budget. During his presentation, he drew our attention to outcome measures, and how heavily weighted they are. There are so many opportunities for a plan to innovate, not only for purposes of increased quality rating, but also for the most important factor of a plan: its membership. Loyalty can no longer be bought with just the $0 premium plan anymore. The customer service has to be stellar; their enrollment experience must be error-proof; and in times of sickness, when their utilization has to increase, the care management has to be more than just a pre-auth and a smile (and sometimes you don't get the smile). It is time to have a discussion in every department:
- What are we doing to be innovative?
- What are the best in the nation doing?
- What's low-hanging fruit and what requires more significant investment?
Our health plan partners are becoming more and more engrained in government programs, including Medicare Advantage, Part D, Medicaid, Duals, and the Marketplace. He also reminded us that organizations should be prepared for constant regulatory oversight, which comes with government-sponsored programs. True, some of the regulations are a challenge to implement, but when you've gotten to the point where you have met your compliance requirements, think about ways your organization can supplement that success to exceed a member's expectations - within the rules of course. Who is the town crier at your plan for the beneficiary's experience? Why can't it be you?
Resources
Coming soon: GHG's updated star rating database. We'll send an alert when it's ready! Join our subscription list to be sure you know when this free download is available. In the meantime, take a peek at last year's database that combines the CMS-issued 2013 Star Ratings with those over the program's history from 2008 on.
Register to attend our October 29 presentation "Inside the 2014 Star ratings for MA and Part D: Trends and their implications."
GHG Pharmacist, Lynne Civin, outlines the benefits of daily dispensing requirements in a new article: Short-Cycle Dispensing for Long-Term Care. Lynne discusses key attributes in long-term care , and outlines critical items that warrant further discussion. Download the whitepaper today.
The percentage of plan with an average or below average star rating is staggering - and CMS has made it clear, average just isn't good enough. Learn how GHG can help your plan effect meaningful change in your Star Rating and beat the curve.
The Shutdown Will Become the Siege of the ObamaCare Teahadists
If you're paying any attention to the worsening drama here in DC, dig in because the calendar is not our friend. With the stalemate over the government shutdown ossifying, the Congress just backed into the debt ceiling, which we'll hit in less than two weeks. Now we're going to need a big deal both reopening the government and raising the debt ceiling to get out of this mess, at the very moment postions are hardening. A few days ago, I thought a shutdown would go on for about a week...now I'm thinking it might be a month, or even longer. And that could have big implications for ObamaCare, Medicare and Medicaid.
The supreme irony of this week has been watching right-wing House Republicans shutdown the government over ObamaCare, on the very day ObamaCare launches and almost crashes because so many Americans want it. There is no clearer evidence of the lunacy of the anti-ObamaCare dead-enders. This shutdown and manufactured budget crisis never had a chance of stopping ObamaCare. It's doubly ironic because as the exchanges launch and stumble, its harshest critics are now trying to figure out what they want.
Compounding failures in stopping ObamaCare, resoundingly negative public opinion, and legislative charades like a string of piecemeal "reopen this favorite monument and federal agency that I voted to close" are strengthening the right's resolve, but for what? One of them, conservative Representative Marlin Stutzman (R-IN) summed it up today: "We're not going to be disrespected. We have to get something out of this. And I don't know what that even is." The fight has become a zero-sum game -- if the Democrats win, Republicans lose -- and it's taken on a life of its own. A moderate Republican, Rep. Michael Grimm (R-NY), said "This is not just about ObamaCare anymore."
Head. Banging.
As the extremists -- let's call them the ObamaCare Teahadists -- about 40 in the House and 15 in the Senate -- move the goalposts, we're backing into the Oct. 17 deadline to raise the $16.7 trillion national debt ceiling. Cold reality set in here in DC today that the shutdown and debt ceiling are now intertwined...and the President has been rock-solid that he will not negotiate on the latter. Preparations are being made to dig in for a long siege. And that has implications for our favorite government-sponsored health programs.
The launch of the ObamaCare exchanges this week were predictably messy. The big story has been the astounding level of interest -- over 7 million unique visitors nationally in three days, more than Southwest Airlines' website gets in a month, over 100,000 phone consultations. Several state-based exchanges like Maryland had to delay full openings. California overestimated its volume, literally, by 900%. New York and a handful of states had isolated reports of right-wing bloggers and commentators urging their followers to clog phone lines and ping exchange websites, literally waging electronic warfare against ObamaCare.
The Department of Health and Human Services furloughed over half its workforce this week but hundreds of CMS staffers are soldiering on, unpaid, trying to get this plane off the ground. Tech glitches with the CMS data hub and holes in healthcare.gov made raw by the volume prevented more than a few thousand applications from being accreted this week. Several former colleagues of mine in the agency acknowledged that eligibility and enrollment vendors signed just weeks ago weren't ready to go, but that there was no moving the start date. "It's going to be weeks of crises and workarounds trying to make this work by January 1, all while we're getting bombed by the Taliban on the Hill," one said.
By next week media attention will turn from high interest to insufficient results of open enrollment, and HHS Secretary Kathleen Sebelius will be forced to play a shell game with her department's budget to reinforce the exchange staff in the middle of a shutdown. One casualty already: the Centers for Disease Control's annual flu vaccination campaign got iced, right on the brink of flu season, with direct implications for Medicare and Medicaid plans. All of this will put more fire in the Teahadists' bellies, entrenching positions further: longer shutdown, longer debt crisis. To whit, as House Speaker John Boehner (R-OH) just said: "With Obamacare proving to be a train wreck, the president's insistence on steamrolling ahead with this flawed program is irresponsible. It's time for the President and Senate Democrats to come to the negotiating table and drop their my-way-or-the-highway approach that gave us this shutdown."
Wooooo-sahhhhh.
This doesn't start to get too ugly for Medicare Advantage, Part D, or Medicaid plans unless this nonsense stretches longer than 30 days. But if we're still at impasse heading into Thanksgiving -- and that is very much a possibility now -- we could be looking at the winter of our discontent in government-sponsored health programs. With a side of Tea.
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Healthy Outlook for Medicare Advantage and Part D from CMS in 2014
Last week amid all the ObamaCare drama on the Hill CMS released the 2014 data for Medicare Advantage (MA) and Prescription Drug Plan (PDP) bids. The numbers show a better-than-expected 2013 and a healthy 2014 ahead for Medicare health plans. The market will see new service areas, lower bids, more zero premium plans, and more mainstreaming of Medicare Advantage as it approaches one-third of the program. CMS noted significant gains on plan quality measures, pointing out that more plans are receiving a rank of four -plus on Star Ratings, the minimum threshold for quality bonuses in 2015 when the quality demonstration expires. Overall there is clear evidence that CMS quality incentives are working, and that MA will continue its steady ~10% growth in 2014.
For MA, there were 35,070 bids for 2014, down 18% from 2013, but when you extract Private Fee-for-Service (graciously in its death throes), HMO/PPO/Special Needs Plan bids were only down 5.7%, and those largely due to consolidation among plan sponsors this year. Medicare health plans continue to wind down PFFS plans 61% year over year, and PDP bids showed similar stability, and evidence of continuing consolidation.
Some of the major points and trends we observed:
Medicare Advantage
- CMS indicates that Medicare Advantage membership will close 2013 with 10% growth, with similar gains expected next year. Three years after passage of the Affordable Care Act, and on the verge of its deepest cuts to MA phasing in in 2014, it's clear plans are adapting and evolving — and that there's no exodus in sight.
- Beneficiaries will have an average of 28 MA plan choices. The average MA national benchmark was around $31, and premiums are expected to increase by $1.64, or 5.3%, over 2013, at $32.60. There are thousands of benefit design changes coming in 2014, like plans adding and eliminating copays and deductibles. So while relative premium stability would suggest less volatility this enrollment season, benefit design changes will force millions of beneficiaries to go shopping this winter.
- As a barometer of the industry's continued health, each of the major publicly-traded MA companies are offering new HMOs in new markets for 2014:
- Humana is expanding its HMOs in PA and OK.
- UnitedHealth is expanding in VA, ME, MA, and NH.
- Aetna/Coventry has new HMOs launching in LA, TX and WV.
- Cigna is expanding in GA, AR, IN, NC and SC.
- WellPoint is expanding in WA, NH, IN, ME and MO.
- WellCare expands its footprint with its recent acquisition of Windsor Health Plans.
Medicare Prescription Drug-only Plans
- A stunning finding in all the clutter, likely the result of the move to preferred pharmacy networks and the effect of increased buying power from consolidation: the cheapest PDP plans available in 2014 are a better buy than in 2013, and have 31% lower premiums than those available in 2010. Unbelievable.
- ObamaCare haters take note: seven years after its launch, Medicare Part D serves as a shining example of how the Federal government can create an insurance market from a green field, regulate the hell out of it, and achieve a tremendous public good at much lower-than-expected cost.
- Channel partnerships have come to define the top of the PDP food chain. Humana now offers the cheapest PDP plan across all 34 regions. The company's Walmart Rx Plan has a monthly premium of $12.60 across every region, and this will be the fourth consecutive year that Humana is eligible for auto-assigns nationwide. UnitedHealth continues to make big gains with its AARP MedicareRx Saver Plus plan.
- WellCare was "most improved bidder", and is now be eligible for auto-assigns in 32 regions, up from 19 this year. Aetna is losing auto-assignment in 5 regions, though none with significant enrollment. These were evidence of clear strategic shifts by new Medicare leadership in both companies: WellCare deeper into the low-income segment, Aetna shifting more upscale.
All in all the CMS bid data shows Medicare health plan vital signs in hale and hearty territory for 2014. It's one ray of light — and should be a beacon for bipartisanship — as ObamaCare anarchy rages on.