In 2015 a Slap on the Wrist Can Be the Kiss of Death
It is truth that in the second term of Democratic administrations, scores get settled between Washington regulators and business partners of the Federal government. 2015 will be no different for our favorite agency, the Centers for Medicare & Medicaid Services (CMS). It's already on a pace for 2015 to be the toughest year ever in enforcement actions against Medicare Advantage plans. And generally speaking, the regulatory bar is rising faster than anyone imagined. Consider:
- So far in 2015 CMS has issued significant new Medicare Advantage and Part D regulations, and this year's Advance Notice for 2016 rates and rules for Medicare and Part D health plans is the most anticipated I can remember in more than 20 years.
- 2015 is the toughest year in benchmark payment rates thanks to the approximately $200 billion in cuts from the Affordable Care Act.
- 2015's technical corrections for Star Ratings are almost bewildering in their complexity in raising the clinical bar. Indeed, in 2014, an election year, CMS famously told Medicare Advantage plans below 3 Stars for 3 consecutive years that a stay of execution was granted. In the fall, many of those low performers were quietly shown the door and were non-renewed. In 2015, however, the agency is handing out live ammunition to its firing squad. Now an intermediate sanction freezing marketing and enrollment automatically knocks the plan down to 2.5 Stars, often meaning loss of millions in bonus payments and rebate dollars. In competitive markets now, the first plan sanctioned is the first hunk of roadkill.
- The HHS Office of Inspector General, the guys with the badges and guns in Medicare, have made data validation audits for Medicare Advantage risk adjustment one of its top priorities in its 2015 workplan. And the President's budget includes over a half-billion dollars in recoveries from these RADV audits.
- But nowhere is there better evidence that the paper tiger is growing its claws back than in CMS' track record in enforcement actions against MA plans. In January, the agency levied the highest monthly toll of civil monetary penalties ever -- and if it keeps up the pace, 2015 will be nastiest enforcement environment in Medicare history.
*January 2015
Granted, CMPs don't typically amount to much, usually no more than a couple hundred grand, rarely 7 figures plus. But the damage is actually far greater, when considering damage in the local and national press; the chatter factor among beneficiaries; lost membership, and damage to the Star Rating and the relationship with CMS, which for many plans is or is becoming its biggest customer. A slap on the wrist is now the kiss of death in this environment.
Last week, my colleague conducted a webinar on the "Top 10 Things Killing Your MA Plan." CMS' top infractions, in order, are coverage determinations and grievances, and formulary administration, or performance of your pharmacy benefits management vendor. Those findings are driven by these 10 root causes:
Now is the time to ensure your compliance function and Medicare operations have the right tools, processes and people to be successful in the toughest environment we've ever seen in government health programs. In 2015, Gorman Health Group launched its latest product, CaseIQ™ , providing a new way to ensure your Appeals & Grievance cases come to a timely and compliant resolution. The tool not only captures all the data points needed to categorize, work and report coverage disputes and complaints; it also guides users through the appropriate processing of each case, minimizing the risk of non-compliance due to user error. Built and governed by GHG Medicare compliance subject matter experts, CaseIQ™ aims to keep our clients out of CMS' audit crosshairs. Learn more in our recent press release.
In addition, in the Common Conditions, Improvement Strategies, and Best Practices memo based on 2013 program audit results, CMS outlined areas where plans have been consistently non-compliant and described best practices to address failings. Ongoing monitoring is at the heart of non-compliance. Our solution, the Online Monitoring Tool(OMT™), is a highly flexible oversight tool and dash boarding software that brings together key metrics, documents, and tasks for ongoing monitoring and auditing, which results in the Organization being audit ready. This integrated solution also streamlines vital compliance activities, such as the implementation of new requirements and corrective actions. Read our recent White paper to learn more.
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CaseIQ™, GHG's latest solution, offers built-in reports that allow for tracking of past performance, current backlog as well as trends, and is designed to assist the caseworker to a complete and compliant resolution in Part C (MA) appeals, Part D appeals, and Part C and Part D grievances. Learn more >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
Getting Ready for the Bid Season
Since the CMS Medicare Advantage January enrollment numbers did not include the last three days of the Annual Election Period (AEP), it is important to utilize the February enrollment file to get the full picture of AEP results. At GHG, we like to develop the reporting in January for directional results and get an idea of where the landscape may be heading for the year ahead. Plus, looking at your marketplace at the beginning of each year is very important to the product/plan/benefit process that is now upon us.
Last week, my colleague, Diane Hollie, and I spoke at a conference solely geared toward the upcoming bid process. We spoke about the types of analyses an organization should be looking at and we had great discussions about the data and types of data to be viewed/analyzed. One thing was very evident - Marketing, Sales, and Product Development staff that have the data of the marketplace need to be a part of the bid process.
The bid process needs to be a team approach, with one clear leader, and include representatives that are accountable for profits and losses (P&Ls). For example, some of the team members that should be included are Sales/Marketing, Finance/Actuary, Network, Pharmacy, Medical and Health Management, and Compliance.
At the beginning of the bid process, it is important to level-set the team on the marketplace. Some of the analyses we typically present include:
- Service area demographics
- Medicare penetration
- Current membership analysis
- Enrollment trend analysis
- Results of the last AEP — who are/were the winners and losers this AEP and why?
- Product analysis
- Benefit analysis
It is important to dig into the data to understand the story being told. Remember to ask - what part in the story do you play? Are you a protagonist with a diminishing role, are you the antagonist shaking up the market, or are you just happy to stay alive in the story? Whatever role you play, it is important to understand the part, own it, and have your plot development for the next AEP and beyond.
Check back next month as we look at the AEP results and see what's happening in the marketplace on a national level.
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GHG will provide a complete benefit design and strategy analysis that will take into account organizational strengths in operations and medical management that includes a thorough examination of your intended market and a feasibility analysis. Visit our website to learn more >>
Smart benefit design is a dynamic process that begins with an examination of intended markets with consideration given to strengths in member retention and medical management, and is executed with specific enrollment and financial targets in mind. Visit our website to learn how GHG can help >>
Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay's analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!
Private label health plans - a tool for increase market capture and improved patient outcomes
Private label health plans or co-branded health plans are joint efforts between like minded health plans and provider organizations interested in enhancing market share, achieving improved patient outcomes, minimizing duplication of services and achieving financial accountability. In its purest form, a private label health plan combines the strengths of the participating providers such as reputation, innovative practice patterns, trusted referral patterns and coordination of care techniques with those of the participating health plan such as benefit design, network design, contract administration and other insurance plan core competencies.
Most often, a private label enterprise has as its core characteristics, a value based limited network in which the participating providers agree to, and adhere to, mutually designed clinical and financial performance targets which are intended to optimize patient outcomes and financial performance targets ultimately leading to increased provider and health plan profitability. Benefit plans are customized to maximize in network access, member engagement and minimize out of network referrals. The insurance partner, in addition to providing the basic insurance administrative and medical management insurance functions, contributes by offering access to data and technology often unavailable to providers otherwise.
Private label health plans are a potentially attractive option for health plans that are already working with Accountable Care Organizations , (ACO's) and large Integrated Health Systems, (IDS) who control all, or a majority of, the resources necessary to achieve continuity of care ranging from primary care to end of life care.
Large self insured Employers that labor under legacy self insured insurance programs for their retiree populations are potential customers for private customized private label benefit plans and value based networks because they offer the Employer greater control over benefit offerings, defined employee or retiree contribution and medical cost.
At the Gorman Health Group we have a history of supporting Medicare and Medicaid Health Plans and Provider organizations on innovative approaches to network development, healthcare pricing and model of care development, as well as working with ACO's on achieving improved financial performance and member engagement.
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Need our help? Interested in starting a dialogue on Private label plan development, value based network formation or optimization of ACO performance? Take the first step and call us at 202-364-8283 and ask for me directly or one of our senior subject matter experts or contact us via the GHG website. We are here to help.
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Republican Congress to Use "Inside Baseball" and Courts to Maim ObamaCare
Blowing in like a flu outbreak as year-end approaches, ObamaCare Derangement Syndrome has enveloped the Capital. Republican leaders in Congress are plotting to use arcane parliamentary procedures and the courts to do further violence to ObamaCare, and by extension, to the millions who have gained insurance through it. While it's red meat for the conservative base, the strategy presents a huge political problem for the GOP: they have nothing to replace it with.
Since the midterms last month, Republican Congressional leaders have been locked in a furious, behind-closed-doors planning effort to gut ObamaCare once and for all. While the GOP has finally awakened to the fact that repealing the Affordable Care Act ain't gonna happen on Obama's watch, Republicans are licking their chops to use an obscure fast-track budget process called reconciliation to deal it a mortal wound with only a simple majority. It's a longshot with many difficult parliamentary steps, but if successful, could deal a fatal blow to the marketplace subsidies, the Medicaid expansion, and/or the individual mandate. But I've consistently underestimated the effects of ObamaCare Derangement Syndrome, so I'm making no bets this time around.
Barring that, plans are also being laid to craft a bipartisan bill that would strip out more minor provisions like the device tax, the Independent Payment Advisory Board (IPAB), and restoring a 40-hour workweek. That seems to have a better shot, assuming the reconciliation effort doesn't poison the already toxic well on the Hill.
The second prong of the Republican attack is through the courts, with a goal of "repeal by Justices." GOP leaders are convinced that where repeal may fail legislatively because the President won't kill his signature domestic achievement, the Supreme Court just might do the dirty work for them.
The first test, of course, is King v. Burwell, the challenge to the Federal marketplace subsidies the Court accepted in a surprise move last month. The case hinges on payment of Federal subsidies to people who enroll in insurance marketplaces run by CMS, and not by states. It was basically a drafting error that now threatens to put ObamaCare into a death spiral if the plaintiffs win.
The Court has acted to hear the case early in its session in March, but we won't know their ruling until June 2015. I put it at 50/50, because four Justices don't vote to hear a case unless they're confident they can get a fifth for a majority ruling. That fifth vote, of course, is Chief Justice John Roberts, and he's a total wild card. He has voted for both sides of the Court, and is very mindful of his legacy and the institution's legitimacy. He said recently that the partisanship shouldn't penetrate the walls of SCOTUS, and that's encouraging for ObamaCare supporters.
Most Constitutional scholars here in DC seem to think the merits of the case favor the Administration, but there's a whole lot of liberal hand-wringing going on here. A win for the plaintiffs and the end of Federal subsidies to 4.5-7 million Americans would of course be lethal to the marketplaces, and there's little activity underway at the state level for that contingency. It would effectively wipe ObamaCare off the map entirely in Red States with no exchange and no Medicaid expansion. If it fails and the ACA's subsidies are upheld, Republicans are lining up multiple other challenges to the Affordable Care Act, all with a goal of getting them to SCOTUS.
I think a win for Republicans in King creates a huge political problem: they will tear health insurance away from millions of Americans, with no alternative or replacement in sight. Not even Medicaid expansion. And that would take some "splainin'" to do in 2016, when Hillary gets her second act on health reform.
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Registration for the Gorman Health Group 2015 Forum is now open! Register your team for The Gorman Health Group 2015 Forum by December 31, 2014 and SAVE 30% off your ticket using promo code: EarlyBird30 at checkout.
Don't miss GHG Founder & Executive Chairman, John Gorman, at the ICE 2014 Annual Conference, delivering the keynote address titled "Evolve or Die: A Darwinian Moment in Government-Sponsored Health Programs. To find out what other events GHG experts will be speaking at, visit our website >>
Medicare Advantage Rates for 2016: Chanel No. 5 or Another Unicorn Fart?
This week CMS issued a surprise announcement on payment rates for Medicare Advantage in 2016. The 2.02% increase is in line with projections we have been using for 2016, and is also consistent with other projections for Medicare FFS per capita cost growth. But there should be no confusion: this is NOT the final rate, and this will either end up smelling like Chanel No.5 or another "unicorn farting rainbows" like 2015.
First, as CMS says in their release, they reserve the right to change this trend, both in the February advance notice, and in the April final rate notice. So we're nowhere near done with the 2016 rate development process. In fact, we're pretty convinced this announcement was done to avoid the market-twisting "business intelligence" mess of 2014's process and keep it more transparent.
Second, the 2016 benchmarks to be announced in April will also reflect corrections to the 2015 benchmarks. The CMS release indicates that they may have underestimated the 2015 trend, and that 2015 benchmarks may be too low as a result. If this calculation holds through next April, it will increase the 2016 benchmarks by another 0.7%. However, this may change as well. For 2015, corrections to the prior year estimate served to lower the effective trend.
Some counties will receive a blended benchmark in 2016, with the new Affordable Care Act (ACA) benchmark representing 5/6 of the total, and the old pre-ACA benchmark representing the remaining 1/6. The pre-ACA benchmarks are corrected for cumulative forecasting errors over several years. If the current calculations remain unchanged, this will increase the pre-ACA benchmark by another 2.2%, of which 1/6 will find its way into the blended benchmark. This will add about 3/10 to 4/10 of a percent to the blended benchmarks in these counties. But, again, this is subject to change between now and next April.
Presumably CMS will continue to phase in the new risk adjustment scoring system. CMS has estimated that the average impact of the changes will reduce risk scores by 2.6% when fully phased in. The changed scores were phased in at 1/3 for 2015. If CMS continues this three-year phase-in, the second year's 1/3 will reduce average risk scores by 0.87%. This is an average, and plans will see some variation on how the change affects them individually. CMS may decide that they want to phase in the whole thing in 2016, when there is a positive trend to offset the impact. So the net reduction in payments could easily be doubled to a negative 1.7%, on average.
Another hit to payment is the continued increase in the amount that CMS deducts from plan payments to compensate for the impact of improved diagnosis coding by plans. These deductions increase by 0.25% per year, through 2018. So the effective rate, whatever it turns out to be, will then be reduced by 0.25%. There is also the "wild card" of the fee-for-service normalization factor, which adjusts risk scores for changes in the statistical database used to calculate risk scores. This may be a positive or negative adjustment. And we can expect CMS to revisit the matter of risk scores that are documented in home visits, as they have the last two years, and that in 2016 they may actually do something about it. This would obviously have a negative effect on payments.
Finally, unless the new Congress makes an unexpected change, sequestration will continue to slice off 2% of the amount that plans are actually being paid. This is current law, so it's not a change, just an ongoing challenge. There is always the possibility that a Republican Congress may find a way to rescind the Medicare 2% sequestration and allow plans to receive their full payment, but in this environment, seems very unlikely.
It is encouraging to see that CMS is currently expecting an increase rather than a decrease in the per capita cost for fee-for-service Medicare, since this is the trend that drives the Medicare Advantage benchmarks. However, there are many moving parts, some of which are still unknown, and all of which are subject to change until next April.
It's all very reminiscent of former Defense Secretary Donald Rumsfeld: "There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know." So keep your nose in the air. I'm betting on a scent closer to magical horse flatulence come April.
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GHG can help you streamline the execution of your risk adjustment approach, and build a roadmap to ensure you're keeping pace with CMS expectations in both compliance and health care outcomes. Visit out website to learn more >>
Registration for the Gorman Health Group 2015 Forum is now open! Register your team for The Gorman Health Group 2015 Forum by December 31, 2014 and SAVE 30% off your ticket using promo code: EarlyBird30 at checkout.
Don't miss GHG Founder & Executive Chairman, John Gorman, at the ICE 2014 Annual Conference, delivering the keynote address titled "Evolve or Die: A Darwinian Moment in Government-Sponsored Health Programs. To find out what other events GHG experts will be speaking at, visit our website >>
A Bad Couple Weeks for ObamaCare
It's been a bad couple weeks for ObamaCare. It started with a Republican gorilla-stomp in the midterms, a rout that included several Governors' mansions and state legislatures that essentially froze in place the Medicaid expansion map. Then, in a shocker, the Supreme Court decided to consider King v. Burwell, the case that could undo ObamaCare's marketplace subsidies and threaten the coverage of more than 4 million Americans. It's enough to give weekend bedspins.
Ice Age for Medicaid Expansion
In many states with rampant uninsurance, Republican candidates won critical Governors' races and in others the GOP solidified seats in their legislatures. The net effect: it's a new Ice Age for the Medicaid expansion map, with states taking the Affordable Care Act's (ACA) 100% Federal match for uninsured adults essentially now frozen in place. We may even see some backsliding.
Some 24 states have accepted the ACA deal and expanded their Medicaid programs in the wake of the last big SCOTUS ruling on ObamaCare. In fact, more Americans have gained coverage from Medicaid expansion than ObamaCare's subsidies in the new insurance marketplaces. But despite the fact that holdout states continue to pay their share for Medicaid expansion through Federal taxes, over two dozen mostly Red State governors continue to throw the middle finger at the guy in White House. Most notably, reelection of Rick Scott in Florida, Scott Walker in Wisconsin, Sam Brownback in Kansas, Nathan Deal in Georgia, and Rod LePage in Maine stuck a fork in coverage for the uninsured there.
Utah Gov. Gary Herbert will outline a formal Medicaid expansion plan this month. Republican governors in Tennessee, Wyoming, South Dakota and North Carolina have also flirted with Medicaid expansion plans in 2015. And a late recount win in Alaska for left-leaning Bill Walker may open prospects for coverage for 43,000 residents in 2015.
But we could see real retreat on Medicaid expansion in GOP states that were already moving forward. New Republican governors in Arizona, Arkansas, and Illinois have the power to threaten health coverage for hundreds of thousands who have enrolled in expanded Medicaid, and have done so during the campaign. Indiana Governor Mike Pence was negotiating a plan with the Obama administration pre-election, but now appears to have his own Presidential aspirations in mind and may put the plan on ice. Arkansas' controversial Medicaid expansion waiver to use Federal dollars to buy private coverage was already approved, but its new governor, former US Rep. Asa Hutchinson, is no fan of the plan, which requires annual approval by the legislature and is now very much in doubt.
It was a bad midterm election for the uninsured, especially childless adults. What remains to be seen is how hard a line the Obama Administration takes to force holdout Red States to take the money, using existing Medicaid funds as leverage. My guess is that hard line will be pretty limp. As George Burns said, "like shooting pool with a rope."
The SCOTUS Subsidy Surprise
The day after the election the Supreme Court made a surprise decision to hear arguments in King v. Burwell, what many thought to be a sideshow case in the lower courts around the Constitutionality of ObamaCare subsidies in the 36 states using the Federal exchange. It was basically a case challenging a drafting error in the law, which didn't make clear enough distinction between state-based and Federal marketplaces, and ACA opponents saw their opening.
Even being "strict constructionists" in their jurisprudence, one has to believe the conservative activist Court didn't take this case to rubber-stamp ObamaCare's subsidies. If the justices find for King, some 4-4.5 million Americans will see their martketplace subsidies at risk. Without subsidies, the vast majority of those insured will drop coverage like a hot rock, leaving only the sickest in the pool — what economists call a "death spiral" for insurers operating in the marketplaces. It would essentially lay a mushroom cloud on all private coverage options in those states, leaving ObamaCare a smoking wreck of mostly Blue State Medicaid expansions.
There's no ignoring this point: in Republican territory, the ACA and its marketplaces and Medicaid expansion are more vigorously opposed than in states that elect Democrats. If SCOTUS upholds King, then coverage and politics will truly converge in Red States. A win for King means Red States can effectively purge themselves of all vestiges of ObamaCare, by not expanding Medicaid and not establishing an exchange.
I think this would be a huge problem for Republicans, forcing them to come up with solutions that are politically palatable to them. All these new GOP Members of Congress, and Red State holdout governors, need to start thinking, now, about what to do if SCOTUS announces a decision in June 2015 denying tax credits to millions of their citizens, while they in turn continue to deny Medicaid coverage.
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On Friday, November 21, join John Gorman, GHG's Executive Chairman, together with colleague, April Fleming, GHG's Senior Vice President of Products, as they discuss the challenges of non-compliance, and introduce the new Appeals & Grievances solution from 1-2 pm ET. Register now >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
The Importance of a Proactive Call Center
During the AEP we know how critical a role our Member Services team plays. During this time, they are integral to helping prospective enrollees understand the benefits of your Plans, and play an important part in the retention of your current members. Having a strong proactive Member Call Center is crucial in today's environment. Test your call center — see if they pass the test. A proactive Member Service Call Center Department should at a minimum, do all of the following:
- Highly trained call center representatives develop "one on one" member relationships
- Becomes a one stop resource for seniors (meal on wheels, etc.)
- Track and trend Members' problems and resolutions (problem solving)
- Reduce members voluntary disenrollment with focus on first-time call resolution of Member's problems
- Take the time to educate members (benefits, Providers, and Claims)
- Look for opportunities to engage the member in Care Management services
- Provide outreach reminders to members (Member Newsletters, appointment reminder postcards, etc.)
- Proactively, through outbound calls, identify first level problems and implement resolutions
- Provide new members orientation (an educated member is a happy member)
- Provide consistent training to help reduce the number of members' appeals and grievances
- Have Quality Improvement initiatives consistently in play to help improve the Star measures
- Support members in accessing care, even making appointments for them if necessary
If you can answer yes to all the bullets above regarding your current Member Service/Customer Service Department, then you are on the right road to increased retention. If not, then leveraging member's satisfaction is an important retention tool that should be looked at going forward. Now is the time for forward thinking initiatives!
Stats: 30% of Medicare beneficiaries are enrolled into a Medicare Advantage Plan (MA/MAPD). And over 15% of Medicare Advantage Companies Fail to meet the government standards for customer service through a call center for 2014. (Source: https://www.healthpocket.com/healthcare-research/infostat/medicare-advantage-customer-service-ranking.)
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John Gorman, GHG's Founder and Executive Chairman discussed why assessing your current position and developing new strategies to drive profitable market share growth is crucial for continued success. Become a member of the Point to access the webinar recording >>
Gorman Health Group can 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 >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
Little Reason for Optimism in Red State Medicaid Expansion
For months several Wall Street analysts and others have predicted near-total adoption of the Affordable Care Act's Medicaid expansion by the states. To date, only 27 have, and I see little optimism for more than a handful to do so anytime soon.
Red State governors are WAY more entrenched than anyone anticipated, and they're getting too much political mileage out of throwing a middle finger at the guy in the White House to stop. Even if Democratic candidates leading in states like Florida win next week, the barrier is often their state legislatures. Virginia is a great example of a pro-expansion Democrat thwarted by his state lawmakers -- one that will be repeated many times in 2015.
Last week we heard mixed news on Medicaid expansion: it appeared likely that Utah governor Mike Herbert would accept an Arkansas-style expansion in a rare compromise with the Obama Administration, and also pretty certain that Indiana governor and 2016 GOP Presidential possible Mike Pence would reject one. Even if Herbert takes the deal, Utah may be another example like Virginia, with a supportive governor blocked from expanding by his state house.
At least six states could adopt Medicaid expansion, including Florida, Georgia, Kansas, Maine, Wisconsin and Alaska, if -- and it's a huge if given the political headwinds -- Democrats and one independent candidate win their gubernatorial races. The obstacle is getting state lawmakers on board in Florida, Georgia, Wisconsin and Kansas, where Republicans control the legislature.
So maybe it's really just Maine and Alaska that have any real shot at expansion? Maine lawmakers are poised to expand Medicaid if Tea Party wingnut Governor Paul LePage is defeated next week. LePage has vetoed several bills to expand the program after they were passed by the Democrat-controlled Maine legislature, and he is trailing in the latest polls. Alaska isn't nearly as far along.
A handful of new Republican governors could move for expansion, albeit after the midterm elections. Tennessee GOP Governor Bill Haslam said he plans to submit a plan later this year, although state Republican leaders warn it will be difficult to win approval. Wyoming Governor Matt Mead, also a Republican, said he will present an expansion plan to his legislature early next year, but prospects also seem slim there.
In many of the remaining Red States, where uninsurance is most epidemic and the ACA is needed most, there seems to be little hope of elected officials actually doing their jobs and meeting the needs of their constituents:
- In Mississippi, expansion doesn't have a snowball's chance in Hell. GOP Governor Gary Bryant made it clear Mississippi would not participate, leaving 138,000 residents, the majority of whom are black, with no insurance options at all after infighting killed the state's embryonic health insurance exchange.
- In South Carolina, where expanding Medicaid could reduce the number of people without health insurance by one-third, the state's health plan association doesn't expect any movement until at least 2017. Even its state medical association won't back expansion, apparently preferring bad debt and fewer customers to Medicaid payment.
- In Louisiana, payers aren't hostile to expansion, they just don't see any point in pushing it. The state health plan association chief said "it's a state where both the House and the Senate, and the governor, are pretty much on the same page of not being interested in moving toward expansion this year or next year."
- In Alabama, even the state's health plan association is openly opposed to expansion. "I agree, and I think my members agree, that [Governor Robert] Bentley is doing the right thing" by saying no, the association CEO said. In its current form, "expanding Medicaid makes zero sense for Alabama."
- In Texas, which has more uninsured people than Colorado has people? Um, no.
With Republicans poised to retake the US Senate next week and expand their dominance in the House, all this hopeful chatter about Medicaid expansion seems more like liberal dreaming than reality. Maybe 2-3 more states in the next two years, if we're lucky.
Resources
Gorman Health Group, LLC (GHG), the leading consulting firm and solutions provider in government health care programs, announced its further expansion into Medicaid, and the promotion of one of the nation's leading Medicaid experts, Heidi Arndt, to lead the division. Read more >>
GHG is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
The Good, the Bad and the Ugly in Medicare Advantage
In the last two weeks there's been good, bad and ugly news for Medicare Advantage (MA) plans. On one hand, the program has never been stronger and quality metrics are surging in the right direction; on the other, the industry is sucking it up on following the rules of its biggest customer, the Centers for Medicare and Medicaid Services (CMS).
First, the good: CMS did its annual data dump on Medicare Advantage and Part D bids and showed the program continuing its robust growth, with higher-than-ever enrollment approaching 17 million, and plans holding premiums and benefits steady during the worst rate environment in decades. Then, CMS released the MA Star Ratings database for 2015, showing MA quality continues to improve. The enrollment-weighted Average Star Rating for the industry stands at 3.91 out of 5. 40% of MA contracts were awarded 4+ Stars for 2015, but 60% of enrollees are members of those plans, showing a 30% increase since 2012 and demonstrating the competitive advantage high-performing plans now enjoy. The 2015 ratings show stable or improved performance in almost 70% of the 46 Part C & D Star measures, 7 of which improved by more than one-half star from 2014 to 2015, and 13 of which earned average ratings above 4 stars in 2015. There was even an 85% decline in plans receiving the low-quality performance badge of shame.
But then the bad: it's clear plans have eaten low-hanging Star fruit and are starting to struggle on more complex and outcomes measures, such as managing chronic conditions, managing mental health to improve outcomes, or increasing physical activity and reducing fall risk. The longitudinal Health of Seniors survey scores are below 3 Stars, and 135 plans remain on the Quality Bonus Payment bubble at 3.5 stars in 2015, meaning almost half of MA plans are circling the financial toilet bowl. Not good.
And then the ugly: last week's blistering New York Times story on rampant noncompliance among MA plans. The Times combed through months of compliance action reports and found widespread failures by plans in administering the program, including some common and potentially life-threatening stumbles:
- In more than half of all audits, "beneficiaries and providers did not receive an adequate or accurate rationale for the denial" of coverage when insurers refused to provide or pay for care.
- When making decisions, insurers often failed to consider clinical information provided by doctors and failed to inform patients of their appeal rights.
- In 61% of audits, insurers "inappropriately rejected claims" for prescription drugs. Insurers enforced "unapproved quantity limits" and required patients to get permission before filling prescriptions when such "prior authorization" was not allowed.
- MA plans frequently missed deadlines for making decisions about coverage of medical care, drugs and devices requested by doctors and patients.
CMS officials expressed frustration that they were seeing the same deficiencies year after year. That these boneheaded infractions are often being repeated makes the news all the more depressing. It's important to remember if an MA plan with a Star Rating over 3.5 gets sanctioned by CMS for noncompliance, it automatically knocks its rating down to 2.5. That's a kiss of death for an otherwise quality company.
What the Stars and compliance data show us is that the plans are doing great on strategy, pricing their benefit designs, selling to Baby Boomers, and managing straightforward quality process measures. But looking closer, it also shows our industry has a serious execution problem. We are lagging on performance measures with multiple clinical moving parts, and embarrassing ourselves and endangering our companies and beneficiaries with "101-level" compliance errors.
With both Federal and state governments increasingly relying on MA plans to manage the most complex and expensive patients in the US health system, we can and must do better.
Resources
Listen as John Gorman provides several takeaways from our first review of the terabytes of CMS data and understand why he believes this data shows the triumph of government-sponsored programs. Access the podcast here >>
Gorman Health Group can evaluate your Star Ratings approach and identify tactics you can begin implementing immediately to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>
High Value Network: Generation 4.0
When it comes to healthcare, two truism's are that medical costs are going up along with demand for healthcare services. And when it comes to organic growth of healthcare volume and expenses, government programs represent a major driver, particularly when considering that on a daily basis thousands of baby boomers age into Medicare. During the last several years CMS has published a number of demonstration programs which are intended to improve the quality of Medicare patient outcomes while promoting financial efficiency on a unity cost or per procedure basis.
Commonalities among the various demonstration programs include: providing financial incentives when providers and plans (through STAR ratings) achieve specific quality and financial metrics, that when properly implemented, result in improved patient outcomes at a reduced cost. Not surprisingly, the discussion among many health plans has started to focus on how to manipulate the size and inherent "quality" of provider networks to achieve performance gains.
The concept is not new, in that payer efforts at developing "Centers of excellence", proprietary physician networks, private label networks, etc., have been around for at least two decades. These efforts were driven by market considerations, provider availability and consolidation, expectations around consumer demand and use of services. Many times high cost hospitals were screened out and networks were defined by the plan offering, e.g.. PPO, HMO POS and the like. Provider price concessions were expected in return for volume. Provider performance, at least as defined by improved patient outcomes, was not a major consideration in the design of these networks.
At least not until now. Given the current climate of healthcare reform, shrinking payer margins, provider flight from Medicare, percentage declines in medical school enrollment and CMS initiatives to constrain medical expense through improved coordination of care and elimination of unnecessary procedures, Medicare Advantage, Medicaid, and commercial health plans are exploring how the design of networks, around performance, can lead to better patient outcomes and better managed financial costs. Thus, the approach to network design is shifting way from preferred pricing in exchange for volume to a network design strategy focused on horizontal and vertical integration, superior treatment outcomes, more efficient use of resources as well as a willingness to share in financial risk. Population management strategies, establishment of consensus clinical protocols and reimbursement strategies tied to CMS STAR ratings, as well as additional quality and financial metrics, dictate network performance and thus health plan sustainability.
Tracking the measurement and reporting on agreed to metrics require a level of analytical sophistication that was not apparent in the early days of network design. The development of high value networks suggests that payers and providers must share a common vision for network design and consensus agreement on expectations around network performance. In addition network design efforts will require unwavering leadership commitment to ensure long term sustainability.
In the final analysis high value network design is a partnership enterprise between the health plan, the provider and the patient. Contributing components include health services/medical management, provider contracting, actuarial services, finance, analytics/ decision support and management.
As a diversified health services consulting company the Gorman Health Group is well positioned to become a partner in this effort from start to finish including the development of the most appropriate network design strategy to development of performance payment models to the implementation of the final network including assurances that the final network meets CMS network adequacy requirements. When you are ready, give us a call.
Resources
On Friday, September 26, John Gorman, GHG's Founder and Executive Chairman together with colleague, John Nimsky, Senior Vice President of Healthcare Innovations, discussed the vehicles for achieving what could be characterized as a reengineering of the health care delivery process and its effectiveness. Access the recording here >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Visit our website to learn more >>
Save the Date for the Gorman Health Group 2015 Forum. Join us April 7-9, 2015 at the Gaylord National Resort and Convention Center in National Harbor, MD. Learn more about the event >>