The Medicare Advantage Value-Based Insurance Design (MA-VBID) Model Test
The Centers for Medicare & Medicaid Services (CMS) announced on September 1 a proposed demonstration that will test varying benefit designs based on health status. The overall goal is to improve clinical outcomes while reducing plan expenditures.
This demonstration is proposed for seven states: Arizona, Indiana, Iowa, Massachusetts, Oregon, Pennsylvania, and Tennessee. According to the announcement, only current Medicare Advantage organizations in good standing in those states will be allowed to participate. The demonstration is aimed at Health Maintenance Organizations (HMOs), Health Maintenance Organization Point of Service (HMO-POS) plans, and local Preferred Provider Organizations (PPOs) in order to determine how it affects beneficiaries and costs in the most common plans. Special Needs Plans (SNPs), Regional PPOs, Medicare-Medicaid Plans (MMPs), Private Fee-for-Service (PFFS) plans, Employer Group Waiver Plans (EGWPs), Health Savings Accounts, and cost plans are not eligible.
The demonstration will waive certain regulations so benefit plans can vary for enrolled members based on their diagnosis, condition, or need for a medical service. Currently, health status distinctions in providing benefits to enrolled beneficiaries are prohibited by regulations. Organizations can propose any myriad of combinations of benefits or services provided they are based on the proposed chronic conditions listed in the announcement. Most importantly, CMS notes participating organizations can initiate the demonstration with a limited benefit and can expand their benefit plans during the five-year term of the demonstration. While the benefits will be mandatory supplemental benefits, CMS proposes to prohibit marketing these benefits to non-member beneficiaries.
The CMS process begins with the submission of a Request for Application (RFA). Organizations failing to submit an RFA cannot participate in 2017 but may be allowed at a later date during the five-year demonstration period. Organizations must submit an RFA that has sufficient detail to allow CMS to determine if the benefit plan addresses targeted beneficiaries, will provide measureable results, and is appropriately structured for the demonstration.
RFAs are currently due by November 15. CMS will bind the organization to the proposed benefits in the RFA to their bid proposal for 2017. Consequently, conducting in-depth data analyses is necessary to propose a benefit plan in the RFA. This is the critical step that must begin in the very near future to meet the RFA submission date.
Is this the right opportunity for your organization? Attend our webinar to find out.
Join John Gorman, Founder and Executive Chairman at Gorman Health Group, on Tuesday, September 29 from 1-2 pm ET, as they outline the MA-VBID plan requirements, as well as what you should be doing now to prepare for January 2017.
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Health plans in the applicable states need to place emphasis on data analysis and strategic planning as well as application support. We can help - Contact us today.
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Government Sends Stark Reminders that Insurers' Biggest Customer is Still the Regulator
Since we opened our doors 19 years ago, we've preached to health insurers to think of the government as your business partner. This week, we got several reminders that insurers' biggest customers -- Medicare, Medicaid, and ObamaCare -- are still the regulator. As business conditions improve for health plans across these business lines, government expectations are rising, and scores are about to get settled, as they always are in the second term of a Democratic administration.
We see it in enforcement activity from the Centers for Medicare & Medicaid Services (CMS). We see it in a steadily-rising bar of Star Ratings and other performance measures for health plans for all three programs, the basis of looming contract terminations. And now the White House jumps in with an aggressive schedule of risk adjustment data audits, openly seeking repayments and dropping "f" bombs: fraud, that is.
They named a great film after a moment like this: "There Will Be Blood."
You can't argue with the numbers: 2015 remains the most punitive year in Medicare Advantage history. Look at the trend:
CMS is also being much more aggressive this year with data-driven oversight and enforcement. Communications to health plans who are "outliers" in various performance measures, especially in member communications and consumer protections, began recently. A pattern we are seeing play out is CMS chasing down all clients of noncompliant pharmacy benefit managers; where poor Part D performance is seen in one plan, the agency then begins auditing that vendor's other customers, assuming they'll get the same findings.
We know that Star Ratings and expanding reporting requirements in Medicare Advantage and Part D mean the bar is rising and establishes data-driven thresholds against which health plans can be penalized and terminated beginning in 2016. CMS announced sweeping new reporting requirements for both programs this week, which inevitably get picked up in Medicaid and ObamaCare rules in following years.
And now the White House is piling on. In Washington, we talk a lot about "setting the terms of debate." Our industry has lost the debate on risk adjustment coding and has allowed anti-managed care advocates to define payers' inaccurate diagnostic coding as fraud. A just-disclosed February 2015 letter from President Obama's Budget Director to Health Secretary Sylvia Matthews Burwell stated, "While some progress has been made on this front, we believe a more aggressive strategy can be implemented to reduce the level of improper payments we are currently seeing...we must continue to explore new and innovative ways to address the problem and attack this challenge with every tool at our disposal...the government estimate of $12.2 billion in these mistakes for fiscal year 2014 remains a concern." He extended his mandate beyond Medicare Advantage to over $3 billion in questionable payments from Medicaid. This means a spike in data validation audits for payers across both programs with the threat of improper payment clawbacks and even prosecution under the False Claims Act.
There has never been a more Golden Age of opportunity for health insurers in government programs. But the threats are escalating as well, and as my politics professor told me, "99% of political wounds are self-inflicted." Plans caught up in this dragnet will have gotten plenty of warnings.
Resources
The Part C and Part D Reporting Requirements and Supporting Regulations were posted in the PRA Listing on August 24th for review and 30-day comment. Since we are still in this window, this is a great opportunity for Compliance and Operations to review these together. Click here to review the Part C highlights that merit your attention in a blog posted by Regan Pennypacker, Senior Vice President of Compliance Solutions at Gorman Health Group (GHG).
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Takeaways from Accountable Physician Groups' Annual Summit
Twice a year I get the honor of speaking to the California Association of Physician Groups' (CAPG) annual summit and DC policy meeting. CAPG represents accountable, capitated physician groups, and now has members in 39 states. They're always among my favorite speeches given how sophisticated the audiences are. Here's a few takeaways from my talk last week on "The Future of Government Programs":
- Forevermore, physician group revenues and earnings will be dominated by Medicare Advantage, Medicaid and dual eligible health plans, and the ObamaCare plans, most likely in that order.
- Everything that Medicare Advantage (MA) does, the Medicaid, ObamaCare, and commercial markets follow 3-5 years later. Nobody knows this better than the CAPG members from CA, which the rest of the nation lags. Want to still be attending CAPG meetings in 2020? Master Star Ratings and risk adjustment. They'll apply to all lines of business if they don't already, and they are the keys to survival already in MA.
- Value-based contracting is in its infancy but will soon define all health plan contracts with physician groups. Fee-for-service is dead. Performance-based capitation is the only future. To master it a physician group needs a range of capabilities, including eligibility verification, interoperability, actionable clinical intelligence in real time, standardized care processes, and chronic care management, across all business lines.
- Most Accountable Care Organizations (ACOs), especially the 424 in Medicare, will not see a return on their investment. They will have spent millions to participate in these experiments and around 80% won't see a payoff. 2016 and 2017, when Medicare Advantage benchmark rates turn into a tailwind, present the perfect opportunity for ACOs to "move up the food chain" to become health plans.
- Dual eligibles are the biggest opportunity of our lifetimes, and there is no question that Special Needs Plans designed to serve them can be profitable. SNPs are a principal mechanism for states to shift long-term care risk into the private sector, and will be a central product for ACOs converting into Medicare Advantage. But they require a range of capabilities most physician groups lack today, such as enabling and social services that duals must have from their insurer.
- In all government programs, the "5/60 Rule" governs. 5% of members often account for 60% of costs. Any physician group that aspires to bear risk must be able to identify and intervene with their 5 percenters or they won't be risk-bearing for long.
- The biggest vulnerabilities for MA plans are consumer protections like appeals and grievances and complaint management, and who they have selected as their pharmacy benefit manager (PBM). Most PBMs are frankly terrible at Medicare Part D administration, and Star Ratings now count far more in Part D than in Medicare Advantage to a health plan's overall score. Physician groups typically have little or no experience with either PBMs or consumer protections.
- Retail pharmacies and the home are the most underutilized sources of care to government programs beneficiaries. Any successful physician group evolution will involve better integration of both sites for the chronically ill.
- Most at-risk physician groups are directly involved in coding and reporting for risk adjustment. Federal agencies are paying unprecedented attention to upcoding in Medicare Advantage with an eye to hundreds of millions of dollars in clawbacks and recoveries. The emphasis at physician groups involved in risk adjustment must move from chart reviews and claims extracts to more holistic member evaluations, and from a culture of "what can we get?" to "how do we stay out of trouble?"
Evolution is a messy business. Nowhere is that more the case than in physician groups evolving from fee-for-service to value-based contracting and becoming insurance companies. If it was an easy business, we'd be out of business.
Resources
Don't miss Gorman Health Group's Chief Consulting Officer, with colleagues Jane Scott, Senior Vice President of Clinical Innovations and Regan Pennypacker, Vice President of Compliance Solutions, as they discuss your member experience and the factors that influence success and failure, as well as prominent compliance and service issues plaguing the industry. Register now >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Let's get started. Contact us today.
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CVS Health is Serious About Growing its Clinic Business
CVS Health is serious about growing its clinic business. On Monday, USA TODAY reported that CVS Health plans to acquire Target's pharmacy and clinic business for $1.9 billion.
Healthcare reform is producing a surge in newly insured people seeking care, and hospitals are under severe pressure to keep pace.
"This long-term strategic relationship will certainly benefit the patients, the employees and the shareholders of both companies," CVS Health CEO Larry Merlo said in a conference call.
In addition, a primary care provider shortage is predicted to limit access to care. This is where CVS Health's new acquisition will come into play with more than 1,660 Target pharmacies offering accessible care in 47 states.
Demographic change exacerbates the challenge, with a steep rise in the ratio of elderly to young, adding yet more demand. Retail health clinics may be the "release valve" to the strained healthcare system and the future of care.
CVS Health has been the leader in the retail clinic industry to date, but other retailers like Walmart and Walgreens are poised for growth. The move to acquire Target's pharmacy and clinic business allows CVS Health to solidify its lead in the clinic business.
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Gorman Health Group continues to provide strategic, operational, financial, and clinical services to the healthcare industry, across a full spectrum of business needs. Our software solutions place efficient and compliant operations within reach. Learn more: https://www.ghgadvisors.com/about/.
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Medicaid Rule Imposes New Standards for Beneficiary Access
Per the announcement by CMS on Tuesday, the proposed Medicaid rule would require plans to implement an 85% medical loss ratio (MLR). Implementing an MLR for Medicaid would bring the programs in line with the private health insurance market and Medicare Advantage. However, as mentioned by GHG's Sunmi Janicek, it would not be without challenges. The compliance costs for Medicaid plans with the increase in diligence needed in identifying & documenting costs incurrent to improve quality could be high. Additionally, the CMS proposed rule would impose new standards for beneficiary access and availability to the MCOs provider network.
As with our Medicare Advantage clients, GHG can assist plans by doing a deep dive into their MLR cost drivers, such as poor-performing providers within their participating network, while balancing the requirements for a robust, accessible provider network for beneficiaries. Once we have identified the key cost drivers, we can work with plans to do the following:
- Develop forward looking budget assumptions for benefit premiums, project clinical utilization and provider reimbursement budgets
- Develop clinical & financial performance metrics designed to bring performance in line with expectations
- Develop strategies around how to best impact provider practice patterns, access, treatments, referrals and coordination of care
- Design network modifications based on clinical & financial performance
- Develop performance based payments for provider reimbursements benchmarked to clinical & financial outcomes metrics
Reaching these goals will require the formation of great partnerships between the plan and providers. Plans will want to reach out to provider partners that share their same goals and incentives and secure strong leadership and physician champions to lead the charge. We know the transformation will not be easy. The shift from fee-for-service to value based reimbursement, facing the social services, behavioral health needs of the population, and developing the analytical capabilities to support these changes are challenges that Medicaid managed care plans will face under the proposed rule.
GHG is here to help navigate you through the steps.
Please reach out if we can assist you with any of the following:
- MLR Analysis
- Provider Integration strategies
- Reimbursement strategies
- Risk Assumption strategies
- Network Adequacy compliance
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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement.As states begin to increase oversight activities and implement more robust compliance and fraud waste and abuse practices, our expertise in compliance program development will be an asset to any organization. Contact us today >>
The Imminent Medicaid Mega-Reg is Gonna be "Epic"
For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We're coming to call it the "mega-reg" here. Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting the term "epic" used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.
Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn't address long term care services and supports and managed long-term care, a major impetus for program reform at the state level. The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.
MACPAC's debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:
- Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard. CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard. The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
- Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit. Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers. The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
- Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services. CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
- Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance. CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
- Transparency — Medicaid health plans want transparency of state practices to develop capitation rates. CMS could require states to share data and assumptions and allow plans to comment during federal review.
- Baseline/Encounter Data — CMS could impose additional standards in addition to "appropriate data." CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
- New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.
Beyond payment issues in the mega-reg, the Commissioners discussed:
- Long Term Care -- CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
- Provider Networks -- the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans. Strengthened requirements for appeals and grievances may also be included. The proposed rule may also include enhanced quality data and reporting. It's expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.
We'll have scads of analysis of the Medicaid proposed rule as soon as it hits the street. It's gonna be huge.
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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>
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You're Doing it Wrong in Care Management
An important paper recently released in the American Journal of Managed Care shattered the notion that care management can save money on high utilizers. The article reviewed recent studies of the effectiveness of health plan care management programs and found that, while many studies show significant savings, more rigorous studies concluded that savings were "limited or nonexistent." Mind. Blown.
We're all familiar with the "80/20 rule" of the commercial health insurance market: 20% of members account for 80% of expenditures. In government programs, Medicaid, Medicare, and now ObamaCare, it's the "5/60" rule: 5% of members account for 60% of spending. The AJMC article showed that across all payers in 2012, it's "5/50". 95% of the population accounted for just half of health spending, while the other half of spending was towards care for 5% of the population. The 5% of people needing to spend the most on health care spend an average of around $43,000 annually; people in the top 1% have average spending of almost $98,000. At the other end of the spectrum, the 50% of the population with the lowest spending accounted for less than 3% of all total health spending; the average spending for this group was $234.
The article then explored multiple studies on effectiveness of care management, concluding it's mostly pointless. It gave several reasons for why this might occur:
- Many high-utilizers only stay in this category for a short period of time. Conditions causing them to need intensive care may resolve quickly, reducing costs, but a study lacking a control group may inappropriately attribute this savings to the care management program.
- High utilizers suffer from a wide range of conditions and require a wide range of interventions, making it difficult for care management programs to tailor teams meeting each patient's needs.
- Providers working with a care management team may better identify conditions that were previously going untreated, leading to better outcomes, but also higher costs for additional services and therapies.
The author concluded that "for care management programs focusing on high-utilizing patients, it is crucial to select patients with long-term utilization patterns that are driven by the factors most conducive to change. Given the very limited direct evidence suggesting how to accomplish this, care management programs are best served by being kept small and focused on the highest-need patients, who may not necessarily be current high utilizers."
This finding calls for a rethinking across our industry about care management. For one thing, most health plans in our 19 years' experience are still doing 1990s-style managed care: preauthorizations, referrals, concurrent review -- what we refer to as "make work" medical management. It's look busy, high head-count work that does little to improve quality or reduce unnecessary spending.
Many GHG clients have been working with us to modernize this approach into data-driven care coordination "pods" providing a holistic model of care focused on high utilizers and those about to become them. This study means we need to recommit to data analytics identifying and directing the work of care managers toward those beneficiaries with long-term needs that can be impacted. This means greater emphasis on preventable episodes of care, and on end-of-life care preferences, advance directives and care plans. If you take the top 5% of the membership that is incurring the most cost and provide complex care management, including a higher level of home care, hospital diversion, medication therapy management, nutrition counseling, and wound care, plans and their provider organizations will see a reduction in avoidable medical expenses.
Savings can also be realized if that membership is appropriately placed in the right plan with the right network. Care Management might not be the answer but applicable coverage is a strategy. That's where plan and benefit design is so important. Innovative plans are working with specialists to design products that reflect risk and chronic conditions of their members. Our work with a prominent dialysis and kidney care provider is a perfect example: design a benefit and align a network that is tailored to patients with varying levels of chronic kidney disease, preventing disease progression and/or avoidable costs traditionally seen if CKD is not managed along the disease state continuum. Progressive conditions like CKD, Alzheimer's, and many cancers lend themselves well to "smart management" that spans clinical staff and benefit design alike.
The one thing you know about government beneficiaries is that if they're not sick today, they're gonna be. The game has always been finding the ones who need extraordinary care before they need it, and ensuring they get it in the right place, at the right time, from the right provider. That hasn't changed. This study underscores the point. "Make work" care management must give way to "make it work".
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Big Data is costly, distracting, overwhelming and paralyzing if not maximized. System and process interoperability and integration are keys to program alignment, oversight and evaluation . Systems and data should not just integrate; they need to align in order to yield superior, reportable outcomes. Visit our website to learn how GHG can help >>
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Five Critical Steps to Enhance Revenue & Maximize Growth Potential
Everybody's talking about revenue management and maximizing growth opportunities for health plans, but no one has laid out the steps for successful outcomes…until now. Gorman Health Group (GHG) is giving you our recipe for enhancing your premium revenue and maximizing your growth potential in the following five-step plan:
Step 1. Targeted Population/Demographics
Different populations have different needs. Understand the makeup of your membership and their healthcare needs, their provider preferences, and understand what they want to experience when interacting with your health plan. Is your health plan designed to meet the needs of your targeted population?
Step 2. Optimizing Revenue and Performance-Based Payments
Revenue management is best performed at the member level. Each member should be viewed as an investment needing optimizing. Revenues for members are based upon bids or other established "base" amounts. These base payments need to be optimized for each member. Optimizing member-level revenue begins with an effective member onboarding and retention program, whereby the following factors can be assigned to each member:
- Health Risk Assessment (HRA) to identify potential Hierarchical Condition Categories (HCCs)
- Medical management needs
- Member-level attributes included in Star Ratings measures denominator (e.g., diabetes, rheumatoid arthritis, high-risk medications, etc.)
- Special payment status for Medicaid, end-stage renal disease (ESRD), hospice, long-term institutional, and other health insurance (OHI)
- Continuous vigilance for status changes that could impact payments (e.g., actively monitoring claims for indications of circumstances warranting special payment statuses)
Focus on keeping members by enhancing the member experience through the entire organization. Member retention is the new "selling."
Step 3. Delivery System and Care Management Approach towards 85% Medical Loss Ratio (MLR)
It is imperative that health plans aggressively manage their medical costs as the most expensive component of healthcare operations. Employing the following programs can significantly impact MLR:
- Effective medical management
- Effective provider and network management
- Effective pharmacy management
- Effective Pharmacy Benefit Manager (PBM) contracting/re-contracting
- Effective claims processing and claims payment rules (Medicare vs. Commercial vs. Medicaid)
- Effective durable medical equipment (DME) management
- Effective hospice and end-of-life care
- Effective fraud, waste, and abuse (FWA) detection and prevention programs
- Effective payment responsibility/Coordination of Benefits (COB) processing
- Effective capitation leakage/correction processes
Health plans must spend at least 85% of premium dollars on healthcare. Effectively managing MLR to below 85% of premium revenue enables a health plan to offer more attractive benefits, lower cost-sharing, offer best-in-class providers, and reward top delivery system performers.
Step 4. Optimized Cost of Operations, Selling, and Administration
A well-run health plan should target cost of operations, selling, and administrative costs to a level at or below 10% of premium revenue. This involves knowing your operational strengths and weaknesses and outsourcing the appropriate functions to experts. This involves making brutally honest assessments of internal capabilities and a willingness to make tough decisions. It is often best to have these "no sacred cows" assessments performed by external experts having an independent viewpoint. In addition to the health plan core operational areas of Membership Accounting, Member Services, Claims Processing, and Appeals and Grievances, health plans must perform critical assessments to ensure:
- Effective financial management
- Effective benefit and premium design
- Effective sales and marketing
- Effective information technology
- Effective project management
The goal is to operate as efficiently and effectively as possible at a performance level that earns maximum quality bonus payments.
Step 5. Profit Margins for Reinvestment in Growth
That leaves a profit margin of 5% of premium revenue. This provides opportunity for strategic investments in:
- More staff and training
- Best practice processes (member onboarding, healthcare concierge, member/patient experience)
- Updated systems and analytics
These investments are key to serving your existing membership with best-in-class performance — all intended to place your organization heads and shoulders above your competitors. In the current competitive environment, growth means attracting members from other health plans. There will be winners and losers.
Winning!
GHG is comprised of some of our industries most experienced and proficient health plan subject matter experts. Our consultants can help your organization with a "whole house" assessment or targeted assessments, and we can help you fix the problems we identify. Contact us today to get started.
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GHG Operational Performance Group includes some of our industries most experienced and proficient claims subject matter experts. Our consultants can help your organization implement best practices in claims cost containment. Contact us today to get started >>
When it comes to financial reconciliation and overall membership data management, you must protect against leakage. Need help staying ahead of the CMS reconciliation process? GHG will access your member premium revenue, accounts receivable and CMS revenue reconciliation. Visit our website to learn more >>
19 Lessons from 19 Years
Nineteen years ago this week, I left the Health Care Financing Administration (HCFA), now the Centers for Medicare & Medicaid Services (CMS) and the Office of Managed Care, to launch what would become Gorman Health Group. Time has flown, the company has grown, and my backside sewn with hard lessons about our industry and government health programs. Here are 19 lessons I've learned in those 19 years.
- What Medicare Advantage and Part D do, Medicaid and the commercial market, including the ObamaCare Exchanges, follow 3-5 years later.
- Every CMS staffer I've ever known is well-intentioned, many are downright brilliant, and all want to be good business partners to health plans. Their shortcoming is lack of business experience and how stuff works in the real world. There is a huge difference between policy/guidance and operations. That's where we come in.
- If government health programs were an easy business, we'd be out of business.
- Inspect what you expect. Or, as Reagan said, "Trust but verify."
- Star Ratings, like risk adjustment before it, is the biggest and most consistent experiment in performance-based payment on the planet, a total game-changer and the new fulcrum of competition. You don't excel at Stars by working on them off the side of your desk.
- Fish where the fishes is.
- Pick your vendors and partners like you pick your fruit.
- Capitation with performance-based payment is the only real hope for long-term viability of entitlement programs.
- Being a doctor is the worst job ever. Right after community hospital CEO and President of the United States.
- High-performing health plans are good at everything, especially those functions that are member- and/or provider-facing. It's about culture and execution.
- Health plans' days are numbered if they can't consistently provide value to CMS, their customer, and to providers, their partners. That value is about two things: making data actionable and moving money to contributors when quality and results improve.
- It's easier to increase revenue than it is to cut costs.
- Pharmacy benefit managers are a health plan's most important partner. They are also the ultimate B2B companies and most are struggling in the transition to B2C and true government accountability for results.
- Big data and high-tech is all the rage -- and all noise, unless it's actionable. What works is low-tech: clogs on the street; a house call; a medication consult.
- Doctors of the future are in multispecialty practice and leaders of a team of nurses, aides, social workers, and pharmacists. They are quarterbacks, not gods. They diagnose, and everybody else treats.
- So much of the future is about retail pharmacy. In short time, they will make more providing services than filling bottles.
- Ninety percent of the evil and waste in the system occurs at the tip of a doctor's pen.
- We are all going to retire thanks to government programs. Demographics is destiny.
- Five percent of members account for 60 percent of your spend. Put the love and focus on them, and you can pretty much leave everyone else alone.
It's been an incredible ride these last two decades, and especially the last five as health reform blossoms. We look forward to continuing the journey, older, wiser, and bigger. Stay tuned.
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Gorman Health Group Client Forum Takeaways: Government Programs are Booming, Bar is Rising
We just wrapped our best-ever Gorman Health Group 2015 Client Forum at National Harbor with over 200 of our closest clients and partners. There was both great and tough news, so here's a few takeaways, including a couple stunners:
- For the first time, a prominent Wall Street analyst said he could see a path to 100% Medicare Advantage penetration. Barclay's eminent health care observer, Josh Raskin, stunned our audience with projections of over 29 million Medicare Advantage enrollees by 2023, a penetration rate of over 42%, with the potential to go all the way with Ryan Plan-like legislation now feasible this decade.
- 47 states now hold Section 1915(c) home and community-based services waivers for Medicaid, which will unleash a new flood of dual eligibles into health plans. Special Needs Plans (SNPs) for duals are now on a path to permanent reauthorization, and over 30 states now use D-SNPs to enroll over 1.6 million beneficiaries. That number will more than double in the next 2 years.
- While year 2 of open enrollment for ObamaCare was dramatically improved from its messy launch, problems persist, especially with membership reconciliation and issues related to the interim process to auto-enroll most members staying in their plans. Cleanup of membership discrepancies will likely take another year or even longer.
- Risk Adjustment Data Validation (RADV) audits will become the new normal in Medicare Advantage. 2015 will be the first time we see plans prosecuted under the False Claims Act and hundreds of millions clawed back by the Centers for Medicare and Medicaid Services for unsubstantiated codes submitted for higher payments.
- Maximizing data, strong provider partnerships, documentation and ICD-10 preparedness are keys to audit proofing your Risk Adjustment program.
- The Star Ratings system of performance-based payment is the new cornerstone of competition among health plans. Stars has expanded into more than a dozen state Medicaid programs, and to ObamaCare's issuers as well, and the bar is rising. Technical changes to several measures mandate much higher performance to stay ahead of the curve and avoid falling below 4 Stars, where bonus payments and bid rebates vanish. 2015 will be the first year where plans below 3 Stars are terminated.
- Medicare Advantage plans won several lobbying victories in this year's "Call Letter", the rate and policy announcement for 2016, including an average 1.25% benchmark increase from a cut in the February draft. This signals a new era of influence muscle for the industry, where CMS will increasingly fight out policy changes "below the waterline" in subregulatory guidance and enforcement, where politicians are less likely to intervene.
- Appeals and grievances and pharmacy benefit management vendor performance remain the #1, 2 and 3 regulatory infractions in Medicare Advantage, and integration of long-term care and supports and services the leading challenge facing Medicaid health plans.
- CMS is on pace for its most aggressive enforcement year ever, with over a dozen actions taken against plans this year already.
As we've said since the passage of the Affordable Care Act, we are now in the Golden Age of government-sponsored health programs, and the opportunities and challenges that come with this shift have never been greater. Our clients went home with a clear grasp of both, and we are thrilled so many joined us this year.
Resources:
Join John Gorman, GHG's Founder & Executive Chairman, as well as Bill MacBain, GHG's Senior Vice President of Strategy on April 14 as they provide a hard-hitting analysis of critical areas addressed and finalized in the document from 1-2pm ET. Register now >>
GHG's Senior Vice President, Healthcare Analytics & Risk Adjustment Solutions, Dan Weinrieb, recaps the Risk Adjustment rulings in the Final Call Letter and provides keys to success in an article on the GHG blog. Read more here >>