CMS Largely Holds Firm on Most Proposed MA Payment & Policy Changes for 2017
On April 4th, the Centers for Medicare & Medicaid Services (CMS) issued the Final Notice of Methodological Changes for Calendar Year (CY) 2017 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies, and 2017 Call Letter. This is the final notice of changes in rates of payment and overall policy.
CMS finalized most of its proposals from the Advance Notice and Call Letter, however did make some notable changes:
- Rates and Trend: The final trend is 3.12% inclusive of underlying trend and prior period adjustments. The underlying trend was slightly higher than estimated while the correction to the prior period was lower than expected (0.14%), so in the end, the trend nets out close to the original estimate. CMS estimates a 0.85% increase of all-in rates.
- Normalization Factor: CMS notes a technical error which affected the proposed normalization factors in the Draft Call Letter. The normalization factor was updated from 0.993 to 0.998.
- Encounter Data: CMS will increase the use of encounter data-based risk scores to 25% in 2017, instead of 50% as proposed in the Draft Call Letter.
- Employer Group Waiver Plans (EGWP): CMS is finalizing its new policy for calculating EGWP county payment rates, with two modifications. First, CMS will blend individual market plan bids and EGWP bids from 2016 for 2017, in order to allow for a two year transition period. Second, CMS will use prior payment year information to calculate base payment amounts in order to release the final EGWP payment rates in the Rate Announcement instead of August as previously expected. It is also important to note that while the methodology waives the bidding requirements, MA EGWPs must still submit plan benefit package and formulary in accordance to the 2017 Final Call Letter.
- Star Reduction Policy: As noted in a March HPMS memo, CMS is suspending the reduction of the overall and summary Star Ratings of contracts that are under sanction, while CMS re-evaluates the impact of sanctions, audits, and CMPs on the Star Ratings. CMS plans to describe the new proposals in Fall 2016.
- Low rated plans to be terminated: Although CMS will continue with termination of plans falling below 3 stars, CMS announced it may ‘stay' a termination, including notification of beneficiaries, if the organization holding the poorly-rated contract is prepared to consolidate that contract into a higher rated contract during the bid cycle for the upcoming plan year.
The following major proposals were finalized as proposed:
- Risk Model for Dual Eligibles: Although the proposed methodology will be implemented, data will be updated, so the original estimated rate impact by category may change. Despite the new rate impact, organizations should still expect increase in payments for non-institutional full-duals and reduced payments for all other categories. CMS estimates a net impact on rates of -0.6%.
- Stars dual Interim Adjustment: CMS is moving forward with its proposal to apply the Categorical Adjustment Index factor to overall, Part C Summary and Part D Summary Ratings as an interim solution to account for the Star Ratings impact of dual-eligible and disabled beneficiaries.
- Opioid Overutilization: CMS is finalizing its proposal to combat opioid overutilization by implementing new edits to prevent overutilization at the Point of Sale (POS). CMS expects sponsors to implement either a soft edit or hard edit, or use both as originally proposed in the draft Call Letter, and work toward at minimum a hard edit in 2018.
Compliance Updates:
- CMS again reminds Part D sponsors that it is stepping up enforcement actions on coverage disputes and complaints, the leading noncompliance issue for plans.
- Plans failing financial audits conducted on one-third audits will now also be subject to sanctions and civil money penalties
- CMS is ramping up audits and enforcement actions in network adequacy, provider directory accuracy, and medication therapy management programs.
These are just the major highlights of from CMS' Final Notice and Call Letter. Stay tuned for Gorman Health Group's (GHG's) industry experts summary and analysis of the final changes for 2017, coming out shortly. questions about the summary? Contact us to start a dialogue.
Resources
New Webinar! Join us TODAY from 1-2 pm ET for a hard-hitting analysis of the final rulings in the 2017 MA rate announcement and final Call Letter. We will outline the critical areas that will have the greatest impact on the industry, emphasizing core business functions in Risk Adjustment, Provider Network, Quality, Compliance, Pharmacy, and Data Integrity. Register Now >>
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Engaging Providers in Quality
According to a recent study by researchers from Weill Cornell Medical College, and as recently reported in Health Affairs, medical practices in four common specialties (cardiology, orthopedics, primary care, and multi specialty practices) spend an average of 785 hours per physician and $15.4 billion annually reporting quality measures to Medicare, Medicaid, and private payers.
As the transition to value-based care, alternative payment models, and quality-related financial incentives continues, the number of quality measures and complexity of both measures and payment methodologies will also continue to expand in the coming years. To best preserve and strengthen the provider partnerships we've worked hard to create within Medicare Advantage (MA), we must consider the effectiveness of our provider engagement and support strategies in our pursuit of success within quality measurement programs such as Star Ratings within MA and the Quality Ratings System (QRS) within the Health Insurance Marketplace.
Although many providers have established robust quality programs with expert resources to build workflows, streamline care pathways, and coordinate care across their patients' clinical and social realms, many more are still adapting to this new reality of quality measurement, and some are struggling to develop workflows that meet the wide array of their various payers' requests. In order to successfully impact the Triple Aim, payers and providers will have to continue actively collaborating and coordinating care across differing specialties, differing clinical settings, and with their patients' pharmacies and pharmacists. Similar to a Customer Experience strategy, which a health plan may develop to support members' needs, a health plan should similarly develop a Provider Engagement strategy to support providers' needs during this evolutionary period. While such strategies are often built around a foundation of quality-related financial incentives, many plans are finding success using other incentives that more closely align with a practice's needs, such as staff support, member engagement and outreach support, and enhanced care coordination efforts.
Despite growing efforts to align measures and measure criteria across federal programs, measure developers will likely continue adding measurements associated with more complex clinical conditions. For example, the Centers for Medicare & Medicaid Services (CMS) is considering the addition of measurements of Medication Reconciliation Post Discharge and Hospitalizations for Potentially Preventable Conditions to the 2018 Star Ratings program and Statin Therapy (both in Part C and Part D), Asthma medication management (Part C), and Depression (Part C) to the 2019 Star Ratings program. Because more than 25% of the 2018 Star Ratings Healthcare Effectiveness Data and Information Set (HEDIS®) measurement year has now passed, many plans are already opening a new dialog with providers to broaden quality improvement efforts into more intensive, higher return on investment, member-centric engagements that will address these important clinical areas.
As many plans begin delivering their initial 2016 Gaps in Care reports to providers, this may be an ideal time to evaluate your provider engagement strategy. Following are some important elements to be considered in an effective provider engagement strategy:
- How closely is your provider profiling aligned and prioritized with the full scope of Star Ratings and/or QRS quality measurement needs? Have you evaluated your providers' historical performance across the entire spectrum of cost, quality, risk, and utilization to help manage current year expectations and risks?
- How effectively are field personnel (Provider Relations, Quality, Contracting, etc.) identifying the "ask" for each provider among all quality measures (including HEDIS®, Consumer Assessment of Healthcare Providers and Systems (CAHPS®), Health Outcomes Survey (HOS), and Prescription Drug Event (PDE) measures) and communicating the right "call to action" to your high-need providers based on your contract's highest priority measure gaps?
- How effectively are various field teams (including those across product lines, including MA, Medicaid, and commercial plans) collaborating and partnering to deliver seamless, unified service to your providers? How effectively are field personnel identifying each provider's barriers to success and sharing examples of proven industry best practices that have proven to be successful within similar practices?
- Are your provider compensation programs strategically designed in ways that minimize risk and optimize provider engagement and performance?
- Has your provider engagement strategy been designed to evolve naturally and contextually throughout the year? Do all field personnel understand which clinical areas, quality measures, and resources to focus on each month? How effectively have CAHPS® needs been woven into the strategy?
- Do you know which providers need your support and expertise and are open to your help? Do you know which providers need improvement but are not open to help?
- Are your reports and data comprehensive and actionable for providers? Can providers easily access and use your data-related tools and resources?
- Do your providers understand how to support their patients' social and lifestyle needs after a clinical visit? Do they have adequate resources to meet such needs in a way that accomplishes your goals?
- How effectively are plan-driven activities, such as case and disease management, health and wellness coaching, etc., coordinated with providers?
We often assume our providers will rapidly move with us to a more proactive, more coordinated model of care. The reality is, many providers are still struggling to adapt their practices to meet day-to-day operational demands while trying their best to meet as many payer needs as possible. Because the quality bonus payments to MA plans for strong Star Ratings performance expedited the pace of learning and adaption within MA plans, MA personnel now have a unique opportunity to participate in the industry evolution by educating and supporting their providers.
The industry's transition to proactive care coordination is just the beginning. This is an ideal time to truly expand our provider partnerships with high-value, mutually-beneficial resources, support, and tools to help our providers redirect some of their valuable resources from quality measurement reporting to caring for our members.
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Whether your organization is developing a provider engagement strategy, honing provider engagement tools and tactics, or looking for targeted improvement opportunities, we can help. For additional questions and inquiries about how Gorman Health Group can support your organization's provider engagement efforts, please contact me directly at msmith@ghgadvisors.com.
Resources
We are proud to announce a new session at the Gorman Health Group 2016 Forum featuring David Sayen, a former Centers for Medicare & Medicaid Services (CMS) Regional Administrator, who will provide a CMS update on "The March to Value-Based Payment." The hotel room block was extended to April 4 so register now to reserve your seat!
We have partnered with EvisitMyDr.com (EVMD), an asynchronous virtual platform that will transform how physicians and care teams deliver and coordinate care across the continuum in a digital world. We're really excited about what EVMD can do for our clients in offering members a convenient alternative to a regular office visit while increasing practice productivity and revenue streams. Read our full press release.
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2016 Annual Election Period (AEP) Medicare Advantage (MA) Enrollment Growth Slows Compared to 2015
The number and share of Medicare beneficiaries enrolling in MA plans continue to increase, but the pace of growth is beginning to decline. Currently, there are nearly 18 million Medicare beneficiaries enrolled in MA health plans across the country. This includes all individual and group plan enrollment.
Approximately 32% of Medicare beneficiaries are now in MA plans, but we are starting to see the MA penetration begin to flatten out (Figure 1).
Figure 1 — Total Medicare Private Health Plan Enrollment, 2012-Feb 2016
The following chart shows the dramatic growth of Medicare beneficiaries enrolled in MA plans as of February 2016 (Figure 2), but the percentage growth of enrollment is declining. Since 2012, MA enrollment has grown 32% to nearly 18 million.
Figure 2 Total Medicare Private Health Plan Enrollment, 2012-Feb 2016
Note: Includes Medicare Medical Savings Account (MSA) plans, Cost plans, demonstration plans, and Special Needs Plans (SNPs), as well as other MA plans (individual and group).
Gorman Health Group (GHG) analyzed the 2016 AEP and saw the following when analyzing national and state-level enrollment trends:
- MA enrollment has continued to grow and increase in virtually all states in the 2016 AEP.
- MA enrollment is highly concentrated among large organizations.
- Most enrollees continue to be in Health Maintenance Organizations (HMOs). (Enrollees in HMOs typically pay lower premiums and have lower limits on out-of-pocket expenses.)
But we also saw a real decrease in the MA percentage of growth from the 2015 AEP to the 2016 AEP. The following tables show the total enrollment from December to February of each year.*
2015 AEP VS. 2016 AEP
While the 2015 AEP saw an overall growth of nearly 650,000 beneficiaries enrolled in MA health plans, the 2016 AEP saw an overall growth of 445,245 beneficiaries enrolled in MA health plans — this is nearly a 31% decrease in enrollment from 2015 AEP to 2016 AEP. This is attributable to the lack of growth in the Medicare-Medicaid Plan (MMP) product, which had an almost 160,000 increase in growth last AEP but only increased approximately 15,000 in the 2016 AEP. In addition there were losses in enrollment in the HMO-SNP enrollment as well as in Preferred Provider Organization (PPO) plans. The enrollment in HMOs continues to see growth, although the growth was not enough to compensate for the other losses or decreased gains from last year.
*AEP is measured by looking at February MA enrollment since the total AEP enrollment is not captured in January enrollment numbers.
For more information on enrollment trends or other Sales, Marketing, and Strategy consulting services through GHG, email ghg@ghgadvisors.com or contact me directly at dhollie@ghgadvisors.com.
Also, read about "MA Plans' Must-Fix: The Member Experience" in a blog by John Gorman.
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. The hotel room block expires on March 28 so register now to reserve your seat!
The Medicare Advantage marketplace is evolving — are you prepared? Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>
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MA Plans' Must-Fix: the Member Experience
Now more than ever, it's clear to us health plans and their stakeholders will thrive or die based on the member experience they provide. The member experience, especially with drug benefits, now represents more than half of a health plan's Star Rating in Medicare Advantage (MA), with millions in bonuses and bid rebates hanging in the balance. It also drives member retention and thereby acquisition expense (now averaging $1,200 per/member, or more than an average month's premium), so how members are treated now determines both health plan revenues and costs.
Overall, the member experience in a Medicare plan is defined by an enrollee's ability to get timely appointments, care, and information, how well providers communicate, and whether member-facing health plan and provider staff are helpful, courteous, and respectful. It's driven by the company culture, its commitment to communication, and the empowerment of staff to solve problems. And despite two-thirds of plans saying the member experience is their top investment priority, we are losing ground.
In a few short years, the Star Ratings system has evolved from a crappy consumer information tool to a multi-billion dollar pay-for-performance (P4P) initiative investing in improved processes and outcomes of care in MA. In 2016, the scoring methodology for Star Ratings ensures the member experience measures, especially in Part D, count for more than half of a plan's rating. It also narrows the margin for error, so only a 10% deviation in performance on the critical Consumer Assessment of Healthcare Providers and Systems (CAHPS®) is the difference between a 2-Star Rating and a 4-Star Rating.
On an enrollment-weighted basis, MA averages a 4.03 rating, with 49% of contracts (179) and 71% of members in plans over 4 Stars. But on CAHPS®, the program dropped from 3.45 Stars in 2015 to 3.4 Stars this year. That's a big problem threatening to drag the program back below the all-important 4th Star and, taken in context of other recent data, gets downright scary.
Last week our friends at Deft Research released their latest Seniors Shopping survey on the 2016 open enrollment period. They found that for the first time in recent memory, far more seniors are leaving Medicare Advantage for Medigap than vice-versa.
On virtually every measure, they found declining loyalty to and retention with their health plan. That says a lot about the state of the member experience in MA despite the priority and focus. It says we're missing the point.
Meanwhile, Alegeus Technologies had some incredible findings in their annual health plan consumer survey presented at the recent AHIP conference. First, they found half of members (50%) do not want to "play an active role" in their healthcare. This argues plans' investments in "member engagement" may be backfiring with half their enrollees. And there was widespread confusion in what they're paying for, possibly delineating why appeals and grievances processing remains the top compliance challenge for plans:
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66% of members think they're not paying the right amount
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56% complain they don't know how much they are spending until after they receive services
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45% of members say they simply do not know much they spend even after getting a bill
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45% say they never know what is covered
All of this says the way we think of and invest in the "member experience" needs rethinking.
It reminds me of the seminal 2014 behavioral economics study that found that happiness is defined by expectations being exceeded a little bit on a regular basis. Because expectations are variable, everyone can be made happy. That begins during the marketing and sales process and continues throughout the member lifecycle.
Moving to proactive service models is only the beginning. Only half our members want to be involved — the rest are disappointed and confused enough to be leaving in growing numbers to join inferior and more expensive products. They need help navigating provider networks, better understanding of how to use their benefits, and what to expect in out-of-pocket spending in real time. They need in-plan service ninjas empowered to solve their problem on the first call. They need Pharmacy Benefit Managers to get it together and health plans to advocate and agitate for members with their vendors. They need constant improvement in the member experience to be the new normal in government programs.
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Another Health Plan Cuts Commissions — Is there a trend developing?
Is there a trend developing with health plans and their offerings under the Affordable Care Act (ACA)?
Raising rates, high-risk members, and cutting agent commissions continue to be challenges for all health insurance companies offering plans under the ACA. Some of the big plans still in the game say it's too early to bail out, and they see the ACA as a big opportunity. But late last year, one of the largest health plans announced they would be pulling out of the ACA business. Following this news, multiple non-profit Co-Ops announced their closure, and, most recently, another large health plan providing ACA products is following suit, announcing late February they would be cutting commission on sales of individual health plans. We can all agree changes in the structure of the individual market need to happen, but how fast can these changes be made and still accomplish profitable enrollment goals?
With fewer options, will agents still be a necessary resource for the prospect?
In the last year, we have seen several health plans pulling back on their marketing and reducing the number of choices for the consumer. It appears health plans are still trying to figure out how to price the products and if they should pay commission to agents or have the prospects use online tools to navigate their health care options. Meanwhile, agents are left with less in their pockets and wondering if there is still an opportunity for them in the ACA.
If agents generally sell plans within the Marketplace, and these continue to dwindle, where will that leave the agent? With the uncertainty of how big plans will navigate the complexity of the ACA, it is anticipated that agents will redirect focus to Medicare for 2016:
Reason #1 — No doubt the Medicare space offers unprecedented opportunity! With the growing number of Baby Boomers, health plans and agents continue to see limitless earning potential (nearly 10,000 people turn 65 every day).
Reason #2 — Commissions for Medicare Advantage (MA) are typically paid on application submission for some of the large plans and include lifetime renewals, which means agents and agencies get paid as soon as an application is submitted, and, after 13 months of enrollment, the agent and agency receive a prorated monthly commission for the life of the policy.
Reason #3 — Year-round selling opportunities. These days, it's not just about the open enrollment period — many agents find a great deal of opportunity with the dual-eligible (Medicare and Medicaid) population, as these individuals can enroll year-round.
Don't get distracted by the ACA crisis, focus your time and energy on building a sustainable business in Medicare. For more information about Medicare, Field Marketing Organizations (FMOs), and year-round selling opportunities, please contact:
Carrie Barker-Settles
Director, Sales & Marketing Services
Gorman Health Group
cbarkersettles@ghgadvisors.com
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Gorman Health Group's Sales Sentinel™ provides a platform for organizations to onboard their agents, adapt to any oversight program, as well as generate commission payments. To learn more about Sales Sentinel™ or to request a demo, visit our website >>
CMS gears up for major quality performance program overhaul for ACA program
The Centers for Medicare & Medicaid Services' (CMS') recent issuance of the 2017 Letter to Issuers in the Federally-facilitated Marketplaces and Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017 Final Rule affirms the agency's plans to elevate the importance and transparency of quality performance by Qualified Health Plans (QHPs). Despite the continued absence of financial incentives for high-quality QHP performance, CMS' approach to quality oversight for QHPs is looking much like the early years of the Star Ratings program within Medicare Advantage (MA).
Similar to the MA Star Ratings program, CMS will use a 5-star scale to assign a Quality Rating System (QRS) rating to each QHP based on validated clinical measurements and enrollee survey responses. This year marks the first year QHPs must display these quality ratings prominently to consumers on their websites during the open enrollment period. Public reporting of these clinical measurements and enrollee survey responses will not only offer both consumers and providers new insight into a QHP's clinical quality performance but will also spotlight the consumer's perception of the QHP's operations.
The Affordable Care Act requires QHPs to submit a Quality Improvement Strategy (QIS) for the 2017 plan year if they offered coverage through the Marketplace in 2014 and 2015 and meet certain additional criteria. CMS requirements for the QIS, which must be submitted during 2016 and implemented no later than January 2017, include implementation of:
- A payment structure that provides increased reimbursement or other incentives to providers or enrollees to improve quality and reduce costs by incentivizing high-value rather than volume-driven care, and
- At least one of the following:
- Activities for improving health outcomes;
- Activities to prevent hospital readmissions;
- Activities to improve patient safety and reduce medical errors;
- Wellness and health promotion activities; and/or
- Activities to reduce health and healthcare disparities.
Because strong quality performance is necessary for long-term viability, QHP leaders will likely set new quality-related performance goals and evaluate whether current operations may need to be adjusted to meet those goals. Achieving such goals amidst the ongoing industry evolution, within the competitive environment, and within budgetary constraints will require innovation and creativity. Fortunately, many QHPs can lean into their own organization's Star Ratings experiences, expertise, and successes to help with these efforts.
An increased focus on quality, enrollee experience, and outcomes within a QHP will likely require new, short-term resource investments. Investments may be needed in areas such as population health management tools and analytics; member outreach, support, and education; and provider education, support, and engagement. By collaborating with their MA colleagues, QHP leaders may be able to leverage and expand MA tools, tactics, and expertise to simultaneously avoid the "learning curve," minimize provider abrasion, and optimize outcomes through such investments. With careful planning and strategic deployment of resources, a QHP can leverage its short-term investments for long-term return on investment.
Whether your organization is developing a QIS for your QHP, seeking insight to help align your QIS with successful Star Ratings strategies and tactics, or needs help interpreting the quality data recently provided by CMS, we can help. For additional questions and inquiries about how Gorman Health Group can support your QHP quality programs, please contact me directly at msmith@ghgadvisors.com.
Resources
For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year's information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn't. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
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The Good, the Bad, and the Ugly!
Regarding the New Proposed Medicare Marketing Guidelines (MMG)
Taking a quick read of the proposed 2017 MMG, our marketing team had some initial thoughts about the proposed changes we would like to share.
The Good
- It's only February, and we have the proposed 2017 MMG. This is great for us "Marketers" since we can plan now and won't get sucker-punched at the last moment with changes we weren't expecting.
- The proposed MMG state you no longer have to put the disclaimer about "Availability of Non-English Translations" on print ads and postcards except in the language in which the ad is printed. With so little space to work with on ads and postcards, this change is very welcome.
- Although already released in previous guidance, CMS now includes the following key provider directory updates in the MMG:
- CMS includes more specific guidance on timely updating of directories. Hard copy directories are proposed to be updated monthly; using addendums for the updates is acceptable. Online directories are expected to be completed within 30 days of notification. Although updating directories monthly or within 30 days is very difficult, it is better than real time, which was stated last year.
- CMS states all providers and/or pharmacies represented in the directory have a current contract in effect to participate in a Plan's network. At a minimum, any provider and/or pharmacy listed in the hard copy or online directory for the upcoming plan year should have a contract in effect for the first full month of the plan year. This greatly helps those of us in Marketing and Sales as nothing derails a sale better than stating a provider is in the network only to find out later the provider is not in the network.
- Last year the MMG stated Plans needed to contact their providers on a monthly basis to update their information. CMS has updated the previous language to state the provider contact is required quarterly.
- CMS is clarifying when it is acceptable to use the term "free" in marketing materials. CMS states the term "free" may be used when describing mandatory supplemental benefits that are provided at $0 cost sharing for all enrollees.
The Bad
- Unfortunately, CMS has also proposed Plans cannot use the term "free" to describe $0 premium plans, Part B premium buy-downs, low-income subsidy, or dual-eligibility.
- CMS has clarified guidance from last year to state if an agent is conducting a one-on-one appointment telephonically, the agent must follow the Scope of Appointment guidance.
The Ugly
- CMS includes language stating it will no longer generate Summaries of Benefits (SBs), and Plans will be required to develop their SBs based on their bid data in the Health Plan Management System (HPMS) and required data elements provided in an SB guidance memo. First-year changes like this are always ugly since there are always interpretation issues, and timing on these documents is already tight. However, we fully expect CMS to provide additional guidance around the implementation of this change in the months to come.
Not a BIG deal but Worth Mentioning:
- There is a proposed fifth mailing statement to be utilized for the Annual Notice of Changes (ANOC) mailing only: "Important information about the changes to your Medicare drug and health plan."
- CMS has included what they stated in a memo last year: the ANOC/Evidence of Coverage (EOC), directories, formulary, Utilization Management documents, and Multi-Language Insert must be on the website by September 30, with some exceptions.
Changes to the MMG are never wanted, unless it makes our lives easier, but having a "heads up" related to potential changes in February is a great way to get started for the upcoming Annual Election Period―thank you, CMS!
Resources
Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>
Register your team for the 2016 GHG Forum! For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>.
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
There's a Lot to Like and to Fear in the 2017 Medicare Advantage Call Letter
On Friday after the close, the Centers for Medicare & Medicaid Services (CMS) released the 2017 Medicare Advantage (MA) Call Letter with proposed policy and payment changes. There's a lot to like — and much to fear. On payments, CMS came in with higher-than-expected rates that make clear the long walk in the desert from cuts in the Affordable Care Act (ACA) is over. But on compliance, they are rolling out the firing squad with a broad mandate, and the Administration will leave its mark long after Obama has left office.
What We Like:
- The draft offers all-in rates of +1.35% and a trend of +3.05%, better than last year and better than expected.
- CMS is leaving home visits for MA risk adjustment untouched. If ever CMS was going to clamp down on this after years of threats, this was the time — in the last year of the Administration. By not doing so, we think they're closing the book, acknowledging much good also comes from these house calls, and the home is the most underutilized source of care in the delivery system for seniors. Despite MedPAC recommendations and a drumbeat of op-eds, CMS didn't want to throw the baby out with the bathwater.
- There are big proposed changes to risk adjustment and Star Ratingsfor MA plans serving dual eligibles.
- CMS would launch a new payment system with six subcategories: full duals, partial duals, and non-duals, for both aged and disabled beneficiaries. The net effect is like a crude, mega-risk adjuster, paying plans with more duals bigger, more accurate payments, while paying slightly less to plans with fewer duals.
- On Star Ratings, CMS is proposing an adjustment on three key measures — the overall plan rating, and Part C and D summary ratings — which will increase ratings for plans with higher proportions of duals and could increase bonus payments if the plan is 4+ stars. This is a big win for the industry.
- The health insurer issuer tax has been suspended for a year (and will return in 2018).
What We're Worried About:
- The rapid acceleration from 10% to 50% encounter data driving risk adjustment could depress risk scores. It's clear CMS is moving to 100% encounter data as quickly as possible and likely presages the use of encounters and not Fee-for-Service (FFS) claims to calculate risk factors as well as the phase-out of the coding intensity adjustment.
- CMS is proposing changes for Employer Group Waiver Plans (EGWPs) that amount to a "tax" on sponsors designed to reduce Medicare's spend on these 3 million of the 18 million beneficiaries in MA. EGWPs typically bid much higher than individual MA plans, and the proposal will likely result in a cost-shift to group members or a reduction in supplemental benefits. There was no estimated impact given, so watch this closely.
- CMS made it clear Star Ratings low performers will be executed by firing squad as early as next week. The Call Letter states plans rated below 3 stars for 3 consecutive years will be terminated in February 2016 for a December 31 effective date. Three to six plans qualify for termination. This will be the timeline for future years, and CMS states these decisions are non-negotiable.
- Huge news here on the compliance front:
- CMS notified Part D sponsors it's stepping up enforcement actions on coverage disputes and complaints, the leading noncompliance issue for plans.
- Plans failing the financial audits conducted on one-third of plans each year will no longer be subject to corrective action plans but rather sanctions and civil monetary penalties.
- CMS is ramping up audits and enforcement actions in network adequacy, provider directory accuracy, and medication therapy management programs.
As always, we now enter the frenzied public comment/lobbying phase where the industry tries to get an even better deal, with the final policies announced April 4. As these things go, MA plans should be generally happy about the financial picture while getting down to the busy work of getting the compliance house in order. Most of what's proposed here, we think, becomes the "new normal" long after Obama has left office.
Resources
Join John Gorman, GHG Executive Chairman, and colleagues, Olga Walther, Senior Legislative & Policy Advisor, and Leslie Mullins, GHG's Senior Consultant, as they provide a hard-hitting analysis of critical areas addressed in the document. Learn what the proposed "methodology changes" could mean for your organization and its partners, and the steps you can take to soften the impact on Tuesday, March 1 from 2:30-3:30 pm ET. Register now >>
Register your team for the 2016 GHG Forum. For more details around the event and agenda, download the full conference brochure or visit our website. Register now >>
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Is Value-Based Insurance Design All It's Cracked Up To Be?
There continues to be a lot of buzz about value-based insurance design (VBID). VBID is the idea that consumers' out-of-pocket medical costs should be based on the value of a service to their health and not the price. Health Affairs defined VBID as "an approach that attempts to improve the quality of care by selectively encouraging or discouraging the use of specific healthcare services, based on their potential benefit to patients' health, relative to their cost."
Treatments, medications, and procedures evidence has shown to be effective and recommended for a condition are provided at no or low cost to the patient. Care that is ineffective or unnecessary is priced higher to discourage utilization. Corporations like Pitney Bowes, Caterpillar, and Marriott, and organizations like Oregon Educators Benefit Board and the Colorado Springs School District 11 have implemented several models of VBID. Reported outcomes include savings from reduced adverse events like hospitalizations and emergency department visits.
Some Medicare Advantage Special Needs Plans have designed their benefit structure along the lines of the value-based model. For example, members who have diabetes have $0 copays for necessary medications and may have additional benefits like gym classes, cooking classes, and Certified Diabetes Educator access.
Designing a value-based benefit for Medicare patients with chronic conditions begins with a review of the peer-reviewed treatment guidelines. These treatment guidelines can be accessed at https://www.guideline.gov/. Medications designated as first-line therapy should be provided at very low or $0 copays. Medications lower on the list, such as third- or fourth-line therapy, can be placed on a different/higher tier. Lab tests, provider visits, and other recommended therapies (physical therapy, exercise, dietary requirements, etc.) can also be provided at low cost to the member. Most chronic conditions lend themselves to a value-based design. Barriers like the cost of a custom formulary will hopefully be resolved by more industry uptake of VBID.
Resources
Gorman Health Group can map the right strategy for realizing value-based care by aligning clinical and revenue cycle workflows for faster and more accurate payment, redesigning care delivery models to benefit from outcomes-based reimbursement, transforming the quality and effectiveness of care, as well as designing a value-based benefit for your members with chronic conditions. Visit our website to learn more >>
Register your team now through February 14 for the 2016 GHG Forum, and take advantage of our standard registration rate of $1,095 before the price goes up to $1,295 on February 15. Register now >> For more details around the event and agenda, download the full conference brochure or visit our website.
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Sales 2017 Readiness — Are You Maximizing Your Sales Potential Today?
Here we go again, planning for the upcoming selling season. Every year it seems to approach more quickly than the year before. Are you ready? If the answer is no, or you are not sure, here are a few critical items to consider as you create your 2017 Annual Election Period (AEP) strategy:
- Market Analysis — What worked during AEP 2016? This is the time to reflect on strategies which helped and/or hindered your success from the previous year. While it's fresh in your mind, create a market analysis to review all the components of your sales process. From material distribution to product design, it's important to understand what components of your strategy worked and what needs to be adjusted.
- Channel Mix — Do you have the right mix of agents to represent your plan? It's important to evaluate the effectiveness of both your internal and external sales forces. The industry is moving toward a more diverse distribution channel. The need for internal and external field agents, coupled with telesales, helps maximize your footprint and reach all corners of your market.
- Seminar Plan Development — Did the materials you provided keep your agents compliant during their presentations? CMS secret shoppers are out in full force, and having the right tools for your agents will be imperative to high Star Ratings. In addition, baby boomers are also forcing us to rethink how we present products to Medicare beneficiaries. With the growth of internet shopping, online enrollment presentation opportunities must be included as a part of your strategy.
- Marketing — Did your direct mail make the phones ring, or did your marketing miss the mark? How you implement your marketing strategy impacts lead flow, brand awareness, and enrollment. Successful marketing programs deploy a multi-touch communication strategy which blends education, lead generation, and conversation tactics to maximize new member acquisition.
- Sales Training — Was your sales force ready to sell your plan? Sales training is a critical part of plan and agent success. Create a curriculum which encompasses sales and product training, time management, Medicare basics, and compliance. Don't forget to teach them about member retention―it's hard enough to acquire new members, so you also need to know how to retain them. Enable your agents to start the season with all the knowledge needed to make that sale and keep that new member on the books.
With the narrowed time frame for AEP, your sales strategy must continually change to adjust to the Medicare climate. What worked last year may not work this year. Don't delay, the time is now―start planning for your success today!
For more information, please contact Carrie Barker-Settles at cbarkersettles@ghgadvisors.com.
Resources
Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. We will work with you to understand your market, mining demographic data for opportunity and finding the gaps in the competitive field into which your plan can fit. Visit our website to learn more >>
Register your team now through January 31 for the 2016 GHG Forum, and take advantage of our New Year's special! Save 15% using promo code NewYear16 at checkout. Register now >>
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