Top Tips for Star Ratings Success in 2016
Amidst our rapidly-changing industry landscape, the Star Ratings program essentially serves as a "Medicare Advantage stress test," measuring a plan's ability to master the operational complexities encountered while improving the quality of care and general health status of Medicare beneficiaries through member-pleasing experiences. At any given time, there are multiple Star Ratings cycles in play. For example: operational teams and providers have now shifted their focus to services impacting 2018 Star Ratings, Quality and Pharmacy teams are beginning to finalize Healthcare Effectiveness Data and Information Set (HEDIS®) and Prescription Drug Event (PDE) data for 2017 Star Ratings, and the Star Ratings team is feverishly working to optimize performance across both the 2017 and 2018 Star Ratings cycles.
As we've said before, there is no rest for the weary within Star Ratings, and 2016 will likely be no different. But January is a time for new beginnings and fresh starts, so we want to provide you with a few helpful tips to start off the New Year strong:
Monitor and Manage Execution Risk
As John described in his blog this week, we are watching a slew of significant industry issues this year. Some of these issues will directly impact Star Ratings workflows (such as potential new measures, potential program changes to account for dual eligibles/low-income subsidy (LIS) members, and the evolution of Medication Therapy Management (MTM), some will directly impact Star Ratings strategy (such as mergers, drug pricing, provider networks, and care delivery), while others will have an indirect impact on Star Ratings. The Star Ratings impact of these issues and risks, combined with the impact of internal and local risks and issues, will continue to evolve and may change unpredictably throughout the year. It's important for health plan leaders to understand the Star Ratings impact associated with these, and other, types of issues so risks can be routinely evaluated and mitigated where possible. Just as importantly, monitor and evaluate your internal execution risks so mitigation strategies can be deployed when staffing challenges, organizational changes, or administrative processes are not functioning as designed. Make sure your Star Ratings reporting, monitoring, and oversight processes spotlight these risks so leadership is aware of key risks and can adjust the sails as needed if the winds change during the year.
Align Your 2016 Star Ratings Work Plan with Your Strategic Plan.
Health plans are updating their strategic plans more frequently, and often more significantly, than in the past to account for the nature, extent, and speed of industry changes. It is not uncommon for staff to invest time, effort, and resources in selected areas only to later discover there were other, more critical, areas which could have yielded a higher return on investment (ROI) from Star Ratings-related investments. Star Ratings success amidst a changing industry will test a plan's flexibility, agility, and leadership. With that in mind:
- Ensure your 2016 Star Ratings work plan aligns with your organization's strategic plan and captures activities needed to mitigate the impact of strategic adjustments.
- When planning for strategic change, engage Star Ratings leaders to ensure leadership is prepared for, and can mitigate the impact of, such strategic change on Star Ratings. As changes are made, help department leaders understand the full scope of change and its impact on Star Ratings and deploy well-planned tactics to mitigate Stars Ratings risk as changes are implemented.
- Align Star Ratings strategies and tactics with population health, quality improvement, and care management workstreams, and cross-leverage member interventions to simultaneously achieve cross-functional purposes.
- Evaluate the impact of your delegates and vendors on your Star Ratings strategic goals and deploy targeted efforts where improvement is needed.
Run Star Ratings as a Strategic Program
A health plan's Star Rating ultimately reflects the effectiveness with which the entire organization (and its first-tier, downstream, and related entities) and its provider/pharmacy networks work together to improve quality of care and the health status of Medicare beneficiaries in ways which meet members' expectations. As Star Ratings expand into long-standing, multi-faceted new clinical areas, health plans may discover a need for increased collaboration among internal teams and with providers. With this in mind, it is important plans run Star Ratings as a strategic program with dedicated leadership, well-documented workflows, and carefully-crafted leadership support to best ensure the plan hits the ever-important 4-Star threshold.
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Every Star Ratings work plan is unique, and the opportunities to improve performance are similarly unique. With this in mind, it can often be helpful to conduct an objective evaluation of your program. Gorman Health Group's team of experts can help you review key infrastructure and workflows to identify opportunities to improve your Star Ratings performance.
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Issues That Will Define Government Health Programs in 2016
The new year brings a slew of issues that will define government-sponsored health programs. Here's what we're watching closely, not necessarily in this order. Opportunities have never been greater in Medicare, Medicaid, and ObamaCare, but execution risk is rising fast. If this was an easy business, we'd be out of business.
Drug Pricing: Prospects for a legal fix in Congress is questionable, and this will be a leading issue in the Presidential campaign. Expect administrative action, demonstration project solicitations from the Centers for Medicare & Medicaid Services (CMS), "comparative effectiveness research" by federal agencies on specialty drugs, and "collaborative pricing" initiatives between pharma manufacturers and payers on high-profile therapeutic classes. Health plan CEOs expect higher specialty drug cost trends to be the biggest driver of medical cost trend in 2016.
Medication Therapy Management (MTM): 2016 is the year MTM gets real. CMS will begin conducting widespread audits of Medicare Advantage (MA) and Part D plan medication reviews, and there is tremendous emphasis on MTM in the Star Ratings system. Making MTM real for your members will require extensive vendor contracting and Pharmacy Benefit Manager (PBM) coordination, so turn your plan's attention to this fast.
Antitrust/Mergers: Sometime in Q3 or Q4 of 2016, the Federal Trade Commission and the Department of Justice Antitrust Division will rule on proposed mergers for Aetna/Humana, Anthem/CIGNA, Walgreens/Rite-Aid, and Pfizer/Allergan. We expect all four deals to be approved but with strings attached; e.g., we expect Aetna/Humana will have to divest 250,000-450,000 lives to get a green light.
Star Ratings: Must be a central focus of all payers and providers in government programs. Star Ratings has transcended MA and Part D. Star Ratings data is already being collected by ObamaCare plans, and over a dozen state Medicaid programs are using CAHPS® and Star Ratings data in contracting with plans for dual-eligible and managed long-term care (LTC) initiatives. And while there aren't major changes to Star Ratings measures in 2016, scoring is the game-changer: 50% more plans will be scored for the first time this year, guaranteeing a shift right in the ratings bell curve and that many of 2015's 4-Star plans will go off the cliff. To maintain progress, plans must run Star Ratings as a program with dedicated leadership and execution spelled out at the workflow level.
Risk Adjustment: 2016 will usher in increased efforts to ensure payment accuracy through more stringent and expansive Risk Adjustment Data Validation (RADV) reviews, and so providers delegated for risk and sharing in a percent of premium will be in the spotlight. CMS is seeking to contract with third-party auditors on RADV, and risk adjustment is a top concern in the Department of Health and Human Services (HHS) Office of Inspector General (OIG) work plan.
Providers and Care Delivery: 2016 will be a transformative year with contracted providers in government programs. Narrow/preferred networks and value-based risk contracting will go mainstream this year, whether providers are ready or not. Huge penalties start this month on network adequacy and accuracy of provider directories, and NAIC's model guidance on provider networks will be a central document governing the issue. Star Ratings measures on access to care and the member experience put new heft and revenue behind network requirements. Provider-sponsored entities will provide a mini-surge of dozens of new plans into MA and Medicaid in 2016 and 2017, especially among Medicare Accountable Care Organizations (ACOs), so keep your friends close and your enemies closer. Home- and community-based services and alternatives to nursing homes will go mainstream in 2016. Retail pharmacies will become the second-most-important provider type for health plans. With crushing burdens of ICD-10 and meaningful use, small and mid-size practices will become overwhelmed and will underperform. Plans will need aggressive oversight, quality improvement, and directory management activities to stay ahead.
Exchange Payment: For the first time in two years, CMS is going to begin paying plans HIX 820s at the member level, which will shine a spotlight on enrollment reconciliation issues that have been lingering. The plans' readiness transition period is from January to March, then it gets real in April.
Medicaid and Dual Eligibles: Unexpected states like LA, SD, and IA are now considering Medicaid expansion. CMS is focusing on new Medicaid quality measures and will be depending heavily on NCQA quality measures to gauge health plans. This will impact payment and future membership for some lower-rated plans. Beneficiary opt-outs in excess of 75% are plaguing early dual-eligible demos, but many states remain in fiscal crisis and need to move ahead to balance budgets.
Compliance: 2015 was a near-record year in CMS enforcement actions, and scores always get settled with insurers in the second term of a Democratic administration. There will be a slew of rules coming from CMS this year as well as expanded audits from OIG. Both agencies' approaches indicate how critical documentation remains: CMS added a number of items to documentation requests for Compliance Program Effectiveness; Medicaid, dual-eligible, and LTC demos are still very documentation-heavy, and CMS found that approximately two-thirds of CMS-reviewed FFM issuer plan policies and procedures (P&Ps) were incomplete or had operational findings with their vendor contracts. So even though there is focus on data monitoring and passed/failed samples, P&Ps and documents are still the cornerstone.
There is no question that 2016 will be a banner year in government programs enrollment, and the long walk in the desert on payment rates in MA and Medicaid appears to be over. But execution risk and the enforcement environment have never been tougher. This year will be a "Darwinian moment:" it's not about being the biggest or even the smartest but being the most adaptable.
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AEP Is Winding Down, But Your Work Is Not Over!
As the Annual Election Period (AEP) begins to wind down, you have a pretty good idea of where you will end up this AEP. Whether you knocked the socks off your competition or missed your goals, now is the best time to assess your marketing and sales strategies in preparation for 2017!
Typically, we all have to perform an analysis for senior management showing where the leads and sales came from and what the costs per lead and sale were. Based on that information, we want to understand what changes need to be made or tested for next AEP to increase lead generation and decrease the cost per lead or sale.
But that shouldn't be the end of the analysis — now is the time to do the following:
- Conduct an AEP Process Analysis — From an operational perspective, what went right and what didn't go as well as expected? Were there reprints? What were the call center stats — were they better or worse than last year? From an operational perspective, what would we like to change from this year to the next? What do we have to do internally/externally to accomplish that?
- Vendor Assessment — What vendors over-performed or performed as expected? Do vendors need to be replaced? If so, the Request for Proposal (RFP) process should probably be completed by the end of the first quarter.
- Review Competitive Creative — There is nothing wrong with understanding what competitors are doing and seeing where you might need to strengthen your own creative in the next year.
- Review the sales distribution strategy to understand where the sales opportunities may have been missed and where they were most successful.
- Deep-dive Evaluation of Lead Generation to Member Onboarding — Since now is the time when we really remember all of the pain points and accomplishments, we want to document them to ensure we make changes where needed and expand the successes.
- Look back at the work plan/tactical execution plan to understand where more time is needed next year for a better execution come AEP.
Based on our experience, now is the time to conduct the assessment — before everyone has forgotten what needs to change and before the frustration of a missed date or opportunity becomes a distant memory. Gorman Health Group (GHG) has helped several organizations with this type of assessment — to provide that outside-in perspective which is honest and non-partisan.
Have questions? Contact GHG at ghg@ghgadvisors.com.
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Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans. We will position you for the challenges — and opportunities — posed by health reform, designing a strategy that takes into account your service area, market environment, core competencies, and vision of the future. Visit our website to learn more >>
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Mergers Pave Way for Good Opportunity to Enter Medicare Advantage Market
While the largest insurance companies await their fate at the hands of federal regulators, other plans and investors should pay close attention to the opportunity to acquire divested plans from the two deals.
With the shareholders overwhelmingly approving the merger between Aetna and Humana, all eyes are on what the Department of Justice (DOJ) and the Federal Trade Commission (FTC) will make of the proposal for the two largest health insurers to consolidate. Anthem and CIGNA also await federal scrutiny. The mild grilling of the healthcare executives on the hill has led many to believe these deals will receive federal approval. And while hospital associations warn of lack of competition in programs such as Medicare Advantage (MA), it is widely recognized these companies will face significant divestitures in markets which will become highly concentrated due to the mergers. Aetna already announced it took a conservative look at the amount of business it would need to divest in order to make this deal go through.
Humana and Aetna would need to divest their plans anywhere the two plans have too much of the market combined — financial analysts estimate this to be any county where the market share is over 40% to 50%. One example of such state is Kansas, where Humana and Aetna combined hold 90% of the MA business. Other major states include West Virginia, Iowa and Missouri, and Ohio, where the two insurers would control an overwhelming amount of MA business. While, according to the Kaiser Family Foundation, Aetna currently only controls 7% of the MA business nationwide, Humana has the largest enrollment in 11 states.
These divestures present a great opportunity for investors and existing plans to enter or increase their presence in the MA market. MA enrollment currently sees no end to the growth spurt it is experiencing. In fact, the National Committee for Quality Assurance (NCQA) recently praised MA plans for their success in increasing quality for seniors, for the first time ever outpacing commercial plans on some quality measures. These existing MA plans are also attractive because of their existing infrastructure already in place, as the investment in creating a new MA plan is very burdensome and can take a long time to reap the benefits.
With both deals expected to close mid to late 2016, investors should really consider looking at states and counties where divestitures will be particularly significant and entering the ever-growing MA market.
Interested in entering or increasing your presence in the MA market?
Gorman Health Group's integrated team of experts can provide strategic analysis in evaluating market conditions across the country to identify MA opportunities and high potential target areas for expansion. Contact us today >>
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A New Report by Kaiser Family Foundation Found Part D Premiums Will Rise an Average of 13% in 2016
We blogged earlier this month about Medicare Advantage (MA) premiums showing slight decreases to no decreases across the board for 2016 based on the Centers for Medicare & Medicaid Services (CMS) estimates. But what does the landscape look like for Part D?
CMS stated in a September 2015 article, "Premiums in the Medicare Prescription Drug Program (Part D) will [also] be stable next year." Earlier this year, CMS announced the average basic Medicare prescription drug plan premium in 2016 is projected to remain stable at $32.50 per month.1 CMS' Part D average premium estimates include both Medicare Advantage Prescription Drug plans (MA-PDs) and Prescription Drug Plans (PDPs). If we carve out PDPs from the Part D premium average reported by CMS in September, data shows, for most PDP enrollees, premiums are projected to be higher in 2016 than in 2015, and many will also see higher deductibles and more cost-sharing tiers with coinsurance.2 As cited in a recent Kaiser Family Foundation study on Medicare Part D plan offerings for 2016, the average PDP premium is projected to increase by 13 percent from 2015 to 2016, from $36.68 to $41.46 per month. When looking at the $0 premium PDP options, low-income subsidy (LIS) enrollees will have fewer to choose from. This means either plan reassignment or beneficiary plan switches will occur for beneficiaries to continue without a premium.
What will this mean for MA plans offering Part D coverage in 2016? Increased 2016 PDP premiums may contribute to a potential shift in membership from PDPs to MA-PDs this Annual Election Period (AEP). Leveraging this opportunity will require time investment from MA-PDs, educating beneficiaries on how making plan changes could lead to beneficiary cost savings and still meet their Part D coverage needs.
"Premium" may be the first category beneficiaries are looking at, but it is not the only thing beneficiaries consider when comparing Part D options. The entire point of AEP is to offer Medicare beneficiaries the opportunity to evaluate their plan options and choose a plan which best meets their needs. This means, in addition to premiums, beneficiaries are looking at deductibles, cost-sharing, formularies, and network pharmacies.
In 2016, 84 percent of PDPs will use tiered pharmacy networks, with lower cost-sharing in selected network pharmacies and higher cost-sharing in other network pharmacies. Two-thirds of all PDPs will have deductibles, with a growing share of PDPs imposing the maximum deductible allowed by law, which increased from $320 in 2015 to $360 in 2016, the largest increase in the deductible since the start of the program.2
Now that the cards are on the table, your immediate strategy, as well as that for next AEP, should be examined. Are you at risk for losing members to competition due to pricing increases? Are your retention efforts aligned to address this issue? Have you identified opportunities to gain membership and benefit from your competitors' increases?
Have questions or need information? Contact me directly at nlennig@ghgadvisors.com or Charro Knight-Lilly, Senior Vice President of Client Services, at cknightlilly@ghgadvisors.com.
1 CMS, "Medicare Prescription Drug Premiums Projected to Remain Stable" available at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-07-29.html.
2 Oct. 13, 2015 | Jack Hoadley, Juliette Cubanski, and Tricia Neuman, Medicare Part D: A First Look at Plan Offerings in 2016, http://files.kff.org/attachment/issue-brief-medicare-part-d-a-first-look-at-plan-offerings-in-2016
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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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Considering Network Expansion? The Role Network Adequacy, Risk Adjustment, and Star Ratings Play
The leaves are changing colors, pumpkins are out on every front stoop, and the brisk weather signifies fall is in full swing. It also means we are in the midst of application season for health plans wanting to expand their geographic footprint. The Centers for Medicare & Medicaid Services (CMS) has put provider networks front and center under the bright spotlight, and Medicare Advantage (MA) plans need to be even more vigilant in managing their largest asset. Regardless of the size and scope of the organization, your plan's network adequacy and accessibility is a cornerstone of any new initiative.
In today's marketplace, it is no longer acceptable to meet the bare minimum health service delivery (HSD) requirements. Consumers, and CMS, are demanding plans be able to offer choices including quality and cost efficiency. With consumer-savvy, newly aged-in Medicare beneficiaries, there is also a shift in patient expectations and what is available for their healthcare dollar. The new beneficiary is aging in from a world of patient engagement and incentive and rewards programs and will expect the same level of service. Health plans need to find ways to evaluate their existing provider networks and newly expanded networks to meet these clinical and financial goals and be forward-thinking on how to best wrap risk adjustment and Star Ratings into the mix.
Additionally, the belt is tightening with day-to-day network management, and plans must reach out to their providers on a monthly basis to confirm demographics and availability of their providers to ensure the information is updated in real-time with online directories and close the loop between the providers submitted on the HSD tables versus those in the directory. We will also delve into network adequacy becoming part of the overall audit protocol pilot for 2015.
In an upcoming white paper, Gorman Health Group's (GHG's) Senior Vice President, Regan Pennypacker, will provide compliance insight on the draft application. A key network component in the draft is that plans will be required to submit their HSD tables for their entire network, not just the counties the plan is proposing to enter with the service area expansion request. This requirement further supports the CMS commitment to monitor network adequacy for MA plans much more closely.
Given that applications will be due in a few short months, GHG is here to help. We have a long history of providing direct contracting assistance for plans, the ability to run multiple network adequacy and availability scenarios, and prepare your plan's HSD tables for submission. We also have the bench strength to help you develop a true network strategy taking into consideration the quality, financial, Star Ratings, and risk adjustment goals you need to reach in the competitive landscape of healthcare. Let us know how we can work together and build strategic network operations to support your plan goals.
Important key dates for application submission:
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GHG can assist your organization in developing and executing a networking strategy, from contracting targets to model contract terms, to payment terms that match your budgets and the capabilities of your claim payment systems. Let's get started. Contact us today
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The 2016 Star Ratings: Finding Calm in the Chaos
All great changes are preceded by chaos, and the Centers for Medicare & Medicaid Services (CMS) release last week of the 2016 Star Ratings certainly introduced a great deal of chaos for Star Ratings teams throughout the industry. With approximately 5% of additional reimbursement tied to ≥4-Star performance, health plan leaders are either taking a deep breath this week (if they earned ≥4 Stars and qualified for Quality Bonus Payments) or doing their best to quell the inevitable panic if the 4th Star eluded them.
CMS continues to leverage Star Ratings to support improvements in member perceptions and longer-term, sustainable improvements in health plan performance and health outcomes. CMS continues to make rapid, continuous changes among measures, cut points, and program criteria. The speed and extent of change reinforces the need for a seasoned, dedicated Star Ratings leadership team which embraces and manages Star Ratings as a holistic, silo-busting program. It's vital for health plans to simultaneously excel not only in their clinical and pharmacy quality functions but also in every other health plan function. This includes everything from care coordination, network operations, member experience, risk adjustment, appeals and grievances, and compliance, to claims and encounter data and analytics, marketing, and every other department in the organization.
As we adapt to the first Star Ratings cycle with no predetermined thresholds, it's clear there is very little low-hanging fruit left in the Star Ratings program. It's time for us to climb the tree.
With budget season upon us, it is an ideal time to evaluate Star Ratings strategies and work plans to ensure 2017 investments are wisely made. Now that the 2016 Star Ratings are out, take an objective look at your Star Ratings programs to ask:
- Are we investing adequately in the areas where we need the most Star Ratings lift?
- Will our Star Ratings initiatives achieve our goals?
- Are we conducting the right interventions, with the right members, at the right time?
- Are we adequately integrating medication management and behavioral health into our Star Ratings programs?
- Are we adequately coordinating provider and member engagement activities?
- Are our provider contracts and pay-for-quality programs designed adequately to sustain success in the new Star Ratings environment?
If your plan achieved 4 Stars this year, this is no time to rest. The 178 plans at 3 or 3.5 Stars in 2016 are working hard to achieve 4 Stars this year, and with CMS' bell curve, this means some of the current 4-Star plans will drop in 2017. And don't forget — there are another 188 Medicare Advantage plans not rated in 2016. This huge group of plans will impact the bell curve as they receive their first ratings.
If your plan missed a 4-Star Rating this year, now is not the time to panic. There is still time to influence your 2017 Star Ratings, particularly since the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) and Health Outcomes Survey (HOS) surveys will not be fielded until early 2017. But since time is definitely of the essence, it is important to invest time and resources wisely into the areas with the greatest opportunity for short-term improvements.
We can help. Gorman Health Group understands the complexities and nuances of the Star Ratings program and measures. We know how to design programs, initiatives, and tactics to improve Star Ratings performance. From evaluating organizational strategy to developing and optimizing tactical Star Ratings work plans, our team of experts has a long history of success helping health plans achieve Star Ratings success.
With time waning to influence the 2017 Star Ratings, find calm amidst the chaos and prepare for the great changes to come.
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Registration for the GHG 2016 Forum is now open! This year we are offering a tiered pricing schedule. Register between now and November 30 to receive the biggest savings at $795. Come December 1, the price increases to $1,095. Register today >>
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Where did your organization fall with CMS' estimates for 2016 & what's next?
In September, the Centers for Medicare & Medicaid Services (CMS) estimated the average Medicare Advantage (MA) premium will decrease by $0.31 next year, from $32.91 on average in 2015 to $32.60 in 2016. The majority of MA enrollees (59 percent) will face no premium increase. Sounds great, but the reality is most MA and Part D plan sponsors are finding it more challenging than ever to keep premiums low and still maintain attractive benefit packages and viable business/financial models. $0 premium plans in some markets are now the anomaly. Do you keep premiums low, pare down supplemental benefits, and increase copays, or take the hit for another year and hang on, hoping you will make up the financial loss next year or when those risk adjustment scores and Star Ratings align?
According to CMS, about 65 percent of MA enrollees are currently enrolled in plans with 4 or more Stars for 2016, a significant increase from an estimated 17 percent of enrollees in such plans in 2009.
So, the question is, where did your organization fall with CMS' estimates for 2016? Now that competitive premium and benefit information are available for review, I am sure your organization is among the many updating competitive analyses to see what the real situation is. If not, you need to. "Gorman Health Group (GHG) receives a number of requests for benefit analyses as soon as benefits are publicly released," stated Charro Knight-Lilly, Senior Vice President of Client Services. "It is truly the only way an organization can understand their benefit differentials and make the appropriate changes to marketing and sales strategies."
So what's next? For the short-term, it is time to pull your Sales and Marketing teams back together to review where you actually fall in line for 2016 against your competitors and refine or, in some cases, rework the strategies put in place based on competitive assumptions. Ask yourself:
- Will my marketing dollar garner the projected return on investment under our original strategy, or should I shift my dollar spend?
- Should my messaging change based on competitive product and benefit differentials?
- Should my sales distribution strategy change in order to meet close ratios?
With the Annual Election Period (AEP) for Medicare health and drug plans now underway, there is no time to lose.
Have questions or need information? Contact Charro Knight-Lilly, Senior Vice President of Client Services at cknightlilly@ghgadvisors.com, or contact me directly at nlennig@ghgadvisors.com.
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2016 Star Ratings are Working, and the Bar is Rising
The Centers for Medicare & Medicaid Services (CMS) released the 2016 Medicare Advantage (MA) Star Ratings early this year, on Thursday morning. The usual practice is to wait until Friday after the close. It was a shift designed to move markets, and the news was mixed. Overall, Star Ratings are working to improve quality in many areas of health plan performance, but insurers and their provider and pharmacy benefit partners are struggling on a similar number of metrics. What is clear is that Star Ratings are now the fulcrum of competition in government health programs — and man, this stuff is hard and getting tougher.
There are clear winners and losers in this release. There is a "Divine Dozen" of 5-Star-rated plans, including a couple of new arrivals to the 5-Star world. CIGNA traded its 5 Stars in FL (the legacy HealthSpring plan at the legendary Leon Clinic) for its Arizona plan. Sierra (9 states), Tufts (MA), Group Health of MN, and Essence (IL and MO) made it into the Pantheon. Repeat 5-Star rock stars include Kaiser in 8 states, Martin's Point (ME and NH and will soon own Medicare in Northern New England), and Gunderson in IA and WI.
The half-dozen "walking dead" — plans scoring below 3 Stars for 3 consecutive years —included Wellcare of LA, Sierra Health, Touchstone, Cuatro, Windsor, and GHS (owned by HCSC). Three will be terminated by CMS at the end of 2016.
Star Ratings are proving to be tremendously effective in moving markets and forcing industry investments in population health and the member experience and are driving big improvements in Medicare quality. Roughly half of MA plans (179 contracts) earned 4 Stars or higher for their 2016 overall rating, a nearly 9% increase in a year and the first time a majority scored over 4. On an enrollment-weighted basis, over 70% of MA enrollees are in contracts with 4+ Stars, a nearly 11% increase year over year.
But below the water line, at the metric level, the news was mixed and cautionary:
- The good news: Average Star Ratings increased for 10 Part C measures and 5 Part D measures. We saw significant improvements in several challenging, longitudinal Health Outcomes Survey (HOS) measures: Improving/Maintaining Mental Health, Monitoring Physical Activity, Part D Appeals Autoforwards, and High Risk Medications. There were smaller improvements on many other measures, where removal of the 4-Star thresholds helped plans improve ratings.
- The bad news: Average Star Ratings DROPPED for 16 Part C measures and 6 Part D measures. We saw significant decreases in several screening measures (colorectal cancer screening, diabetes kidney disease monitoring) and the HOS measure of improving/maintaining physical health. And there was a big drop on the Medicare Plan Finder (MPF) Price Accuracy measure, where the cut points have gotten so small that 97% accuracy only gets 3 Stars, 99% results in 4 Stars, and it literally takes a perfect 100% to earn 5 Stars.
We knew the removal of the 4-Star thresholds would produce a tremendous amount of fluctuation in the measure cut points, and that's exactly what happened. It's like playing "Pin the Tail on the Donkey" during an earthquake, making it really hard for health plan leaders to predict where their ratings will ultimately land while they still have time to influence them. For example:
- The average rating on the Diabetic A1c Control measure increased from 3.3 in 2015 to 3.9 in 2016. But there was no change whatsoever in the average performance rate for this measure — in both 2015 and 2016, the average compliance rate was 76%. The improvement on this measure can be entirely attributed to CMS relaxing the cut points once the predetermined threshold was removed.
- In contrast, the Controlling Blood Pressure measure rating dropped from 3.7 in 2015 to 3.4 in 2016. The compliance rate actually increased from 65% in 2015 to 71% in 2016. This is an example of where the removal of the predetermined thresholds tightened the pressure on this measure — in fact, the 4-Star threshold increased 12% upon removal of the predetermined thresholds.
The Star Ratings data for 2016 pretty much emasculated industry arguments for relaxing metrics for Special Needs Plans (SNPs). SNPs saw improvement in their quality scores roughly equal to that of HMOs and PPOs: MA plans operating SNPs averaged a 3.61 rating in 2016 (up from 3.47 in 2015), while plans with HMO/PPO-only contracts averaged 3.87 in 2016 (up from 3.79 in 2015).
Non-profit MA plans are pounding for-profits into the sidewalk on quality. About 70% of non-profit MA plans received 4+ Stars vs. 39% of the for-profits. Much of that discrepancy is due to culture. Non-profits tend to be far more focused on the all-important member experience measures and are more collaborative with their provider networks.
Methodological changes by CMS ensure the Star Ratings bar will continue to rise. 2016 is the first year plans with 500-999 members were rated. Only 369 Medicare Advantage Prescription Drug Plans (MA-PDs) were rated in 2016. 188 more plans weren't rated, but may be in 2017 — and this dilution will warp the bell curve plans are graded on, especially when considering most of those 188 are provider-sponsored, and strong performers will emerge. 4+-Star plans have the most to lose in this environment, and no one can afford to get comfortable.
Some takeaways:
- Stars must be managed as a program and a corporate priority, not as a group of measures. The effort must be directed by dedicated executive leadership and support. No plan improves Star Ratings doing it off the side of their desks.
- The removal of the remaining predetermined thresholds means there is no way for plans to "pick and choose" a subset of measures to focus on. It has to be improvement across the board.
- The bar continues to rise fast among Part C Star Ratings measures. The "low hanging fruit" has been eaten. Part C Star Ratings success is no longer easily influenced by slick reports provided to physicians. Plans need to help providers execute on gaps in care plans and eliminate barriers to care for the vulnerable. There's a reason the 5-Star plans are mostly provider-sponsored, vertically integrated, collaborative, and member-centric by nature.
- Star Ratings measures need to be woven into every department's work streams. This includes not only quality, care management, health services, and pharmacy, but also risk adjustment, network operations, and compliance.
- Lagging SNPs need to work harder and smarter and assume no CMS help on the measures for the low-income and disabled. To the contrary, recent draft measures for dual eligibles from the National Quality Forum focus on mental and behavioral health and will prove an enormous challenge.
If you achieved 4+ Stars this year, congratulations, it's an increasingly impressive accomplishment. Now get back to work. There are 178 plans at 3-3.5 Stars who are close on your heels and feeling the urgency. Now add the 188 unrated plans who will smash the bell curve in 2017. A 4-Star plan's equal effort in 2016 only guarantees a score that starts with a 3 the next year. Keep. Moving. Forward.
If you missed your 4th Star this year, panic a little, but then get it together. Fast. In a competitive market, you're circling the toilet bowl but aren't flushed yet. You still have time to influence your 2017 Star Ratings and must make improvement the focus of your benefit, formulary, and network designs in the months ahead. You have big decisions to make and must invest time and resources wisely and with a sense of urgency.
Once again, the 2016 Star Ratings prove the world's biggest experiment in performance-based payment is working and forcing insurer evolution. And evolution isn't about size, it's about continuous adaptation.
Resources
Whether your plan missed the overall 4-Star Rating necessary to earn Quality Bonus Payments, or whether the new 4-Star cut points have introduced new risks of maintaining your overall 4-Star rating, we can help. Our team of experts understands the Star Ratings program and knows how to influence performance. Contact us to learn more >>
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ACOs Should Run for the Exits and Into Medicare Advantage
CMS recently released results from the Medicare Pioneer Accountable Care Organization (ACO) Program and the Medicare Shared Savings Program (MSSP). Once again the results are a mixed bag: quality is up, but the ROI for most participants is a joke. The update should have the most sophisticated demo sites running for the exits and into Medicare Advantage — but they need to move fast with the holidays and a February filing deadline for 2017 looming.
Pioneer ACO Program
CMS initially selected 32 health systems to participate in the program. It's down to 19 today. For the year 2014, 622,000 beneficiaries participated. Findings:
- Pioneer ACOs generated total savings of $120 million in 2014, a 24% increase from 2013 ($96 million) and $88 million in Year 1 savings.
- Eleven health systems generated gross savings beyond the minimum goal and received performance payments totalling $82 million. That's a pittance for what's been invested to participate. Of the 11 companies, a few reported notable savings:
- Banner Health in Arizona generated roughly $18.7 million in savings
- Partners Healthcare in Massachusetts generated roughly $13.2 million in savings, with around 70,000 beneficiaries participating.
- Beth Israel in Massachusetts lowered costs by 3.7% and generated roughly $9.8 million in savings.
- OSF Healthcare System in Illinois lowered costs by 3.0%
- Michigan Pioneer ACO in Michigan lowered costs by 6.3%
- Monarch Healthcare in California lowered costs 4.0%
Three Pioneers incurred the nightmare scenario of a giveback payment to CMS in 2014, including Beacon Health in Maine ($2.9 million), Dartmouth-Hitchcock in New Hampshire ($3.6 million), and Franciscan Alliance in Indiana ($2.5 million). All had to inform CMS of their decision to stay or exit the program by September 14. After two years of consecutive losses, Dartmouth-Hitchcock planned to exit Pioneer and apply instead for the Next Generation ACO program. It's a black eye for the system that's home to Dr. Elliott Fisher, widely considered to be the inventor of ACOs. Beacon Health is also exiting the program after facing losses for two years in a row, and will also apply for Next Generation.
Total model savings per Pioneer was $6.0 million in Year 3 (2014), up from $4.2 million per ACO in 2013 and $2.7 million per ACO in Year 1 (2012). The mean quality score among Pioneer ACOs increased to 87.2% in 2014, an improvement of 200bps from 85.2% average performance in 2013, and way ahead of 71.8% in Year 1. The Pioneers improved on 28 out of 33 quality measures. So most are delivering the quality goods, but aren't seeing much if any return for the effort.
Medicare Shared Savings Program
In 2014, there were 333 participants in the Medicare Shared Savings Program, and 92 of these ACOs kept spending below their targets, up from 58 ACOs out of 114 in 2013. The victorious 1/3 earned $341 million in performance payments. Takeaways:
- $465 million of the savings generated will accrue to the Medicare Trust fund, $341 million will be returned to participants.
- 89 ACOs actually reduced health care costs compared to their benchmark, but did not qualify for shared savings because they did not meet the minimum savings threshold. So 2/3 of ACOs are winning on expense, but only half of those got paid. That's a problem.
- Veteran ACOs were more likely to generate performance payments. Twice as many ACOs that entered the program in 2012 got paid vs. freshman systems (38% vs. 19%).
Lined up alongside other innovation failures like the bundled payment and nursing home quality demonstrations, it's clear CMS's innovation agenda has been hobbled by poor design and lack of business acumen. There's never been a better time for an industry veteran like Andy Slavitt to lead the agency out of the darkness.
The clock is ticking for ACOs to make the evolutionary leap into the one "devil we know" of Medicare Advantage.
Resources
Our team of veteran executives can help your ACO evaluate the options, manage the workflow to achieve either a Medicare Advantage contract with CMS or a risk contract with an existing MA plan, and continue to achieve improved outcomes. Visit our website to learn more >>
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