The HealthMine Blog
Some Medicare Advantage plans scored a 3.74 and were rounded to the “nearest half Star” based on Centers for Medicare & Medicaid Services (CMS) rules, so the plan was rated a 3.5. Conversely, other plans were scored 3.75 and were rounded to the nearest half Star of 4.0.
The 1/100th of a point difference is monumental. (See the chart from CMS below)
For example, McKinsey has analyzed CMS results and being above or below 3.5 Stars is basically a 50/50 proposition.
McKinsey also analyzed enrollment comparing 2014 and 2016. It documents impact of losing a 4+ rating. Results showed that contracts that lost a 4+ rating grew membership by 7.8% versus a 40.9% growth for contracts that retained the high rating.
It should be noted that those stellar plans that achieve a 5-Star rating can enroll members year round, while plans below 5 Stars can only enroll members during the traditional late fall open enrollment period.
The McKinsey analysis also revealed the correlation between low Star ratings and survival of plans. McKinsey analyzed all contracts that have left the market since 2013. The reasons for exit were either that coverage was terminated or contracts were consolidated. Analysis revealed that on a member-weighted basis:
- Over 90% of the contracts that left each year had fewer than 4 Stars
- Of 320 contracts that had fewer than 4 Stars in 2013, 46% were terminated or consolidated into other contracts by 2017
Beyond high Star ratings translating into higher enrollment, it has other financial implications. A Medicare Advantage plan’s Star ratings affect revenue in two ways.
- First plans (three years and older) are paid a base rate based on the county in which beneficiaries are enrolled. Plans with 4.0 Stars and higher receive a 5% quality bonus payment. Plans rated 3.5 Stars or less are only paid a base rate.
- Rebate percentage: Plans with higher Star ratings receive higher rebate percentages; the result is higher federal revenue. Plus, a higher rebate increases supplemental benefits for plans.
The bottom line is that 1/100th of a point can mean survival.
CMS Administrator Seema Verma announced in April that the agency has released Medicare Advantage encounter data to researchers. (Encounter data are records of the health care services for which managed care organizations pay.) It was reported that she said at the 2018 Datpalooza conference, “We recognize that the MA data is not perfect, but we have determined that the quality of the available MA data is adequate enough to support research.”
The purpose of the encounter data is to help researchers better understand care trends for seniors. The data could create new benchmarks for patient outcomes and costs for Medicare Advantage. We believe that analysis of encounter data will have implications for Star Ratings, risk adjustment revenue, and cost of care for Medicare Advantage plans.
CMS released preliminary 2015 Medicare Advantage data and more data is expected from insurers through August, with final data reports to follow. It is the beginning of the CMS releasing data on MA enrollees annually going forward.
The amount of data will only grow based on Medicare Advantage enrollment. It has been reported that Medicare Advantage enrollment has grown from 5.3 million in 2004 to 19 million people in 2017. Government payments to Medicare Advantage plans have grown from $77 billion to $200 billion-plus in the same time period.
Health care researchers noted that Medicare Advantage encounter data can help analysts get insight into how much value Medicare Advantage delivers. “Taxpayers deserve to know how their money is being spent, considering that Medicare Advantage plans receive substantial payments from the federal government and provide care for a significant and growing proportion of beneficiaries,” Niall Brennan, Charles Ornstein and Austin Frakt wrote in JAMA, the Journal of the American Medical Association, on March 13, 2018.
While taxpayers deserve to know how money is being spent, MA plan members deserve to know that data analytics can lead to better patient outcomes.
Based on actual encounter data we have analyzed within plans, we expect that MA plans are just at the start of a data tsunami that they must manage to meet more demanding metrics from CMS for plan performance.
CMS started its VBID (value-based insurance design) innovation model for Medicare Advantage on January 1, 2017 to run for five years.
Eligible Medicare Advantage plans can offer “varied plan benefit design” for enrollees based on specified clinical categories identified and defined by CMS. In 2017, diabetes, congestive heart failure, chronic obstructive pulmonary disease (COPD), past stroke, hypertension, coronary artery disease, mood disorders, and combinations of thereof were the defined categories.
As reported in Healthcare Finance, CMS chose nine Medicare Advantage organizations to participate in the 2017 value-based insurance design model: Blue Cross Blue Shield of Massachusetts, Fallon Community Health Plan of Massachusetts, Tufts Associated Health Plan of Massachusetts; Geisinger Health Plan, Aetna, Independence Blue Cross, Highmark of Pennsylvania, UPMC Health Plan of Pennsylvania; and Indiana University Health Plan. (Blue Cross Blue Shield of Michigan was added in 2018.)
With that, according to an analysis by Manatt Phelps & Phillips LLP, there were 45 value-based approaches (aka plan benefit packages, or PBP) being used by the nine Medicare Advantage Organizations (MAO) individual plans. With 45 PBPs implemented by 9 plans, that suggests that administration could be a challenge for each MAO.
Meticulous attention to detail is the first step for these Medicare Advantage plans as they seek to meet three scenarios for success as deemed by CMS:
- Quality improves; cost neutral
- Quality neutral; cost reduced
- Quality improves; cost reduced (best case)
- Determining eligibility for each PBP based upon health status qualifications
a. Aggregating multiple data sources
b. Complex clinical rules
c. Manual vs. automated execution
d. Numerous exceptions to handle
- Considerations for the benefit/incentive strategy
a. Reduced copays/coinsurance
b. Gift cards
c. Free or discounted goods and services
d. Condition-specific procedures
e. Limited network vs all providers
- Member engagement and outreach considerations to take advantage of the benefits
a. Program education
b. Clear/concise communication and explanations
c. Assurance that communication is personalized
d. Omnichannel distribution
- Member benefit/incentive delivery
a. Automated incentive fulfillment
b. Building the PBP into eligibility and claims processing systems
c. Administering cost-sharing reductions at point of care
d. Coordinating supplemental benefits providers
e. Coordinating care of eligible members to specified providers for specified procedures
- Member support
a. Tracking member compliance in real time
b. Tracking incentive fulfillment and benefit usage in real time
c. Answering questions about how the program
d. Fielding calls from members
e. Assurance there is self-serve personalized benefit information
f. 24/7 Support tools and assistance
Read our insights on Medicare Advantage member preferences in our Medicare report.
The Centers for Medicare and Medicaid (CMS) has expanded its Medicare Diabetes Prevention Program (MDPP) to now enroll traditional healthcare providers and community-based organizations as Medicare suppliers of health behavior change services.
The (MDPP) seeks to prevent or delay type 2 diabetes through health behavior changes. MDPP is a structured intervention geared to prevent the onset of type 2 diabetes among Medicare beneficiaries with an indication of prediabetes.
Key to prevention or delay of any chronic disease is to identify at-risk members earlier and close gaps in care faster.
In working with Medicare plans, we have experienced that the key driving force is to get Medicare Advantage plan members to take clinical actions. We have found that the right incentives can drive these clinical actions to interpret more data to find risks earlier.
Some clinical action improvements/success we have encountered in working with Medicare Advantage plans include the following:
+40% increase – adult BMI assessment (E/M visit)
+31% increase - in-home assessment
+17% increase - retinal eye exam
+31% increase - kidney disease monitoring
+10% increase - A1c tests
As the MDPP model expands, the devil is in the details, and getting the right detailed data starts with a member who takes clinical action.
In the end, every action can add up to data that can be interpreted to improve the overall plan performance including increased risk adjustment revenue, consistently high Star Ratings and lower cost of care.
CMS announced that it “finalized polices for Medicare health and drug plans for 2019 that will save Medicare beneficiaries money on prescription drugs while offering additional plan choices.”
While the announcement focuses on prescription drug pricing, the additional plan choices means the agency is “reinterpreting the standards for health-related supplemental benefits.” CMS will now allow supplemental benefits if they “compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization.”
Bruce Japsen of Forbes wrote that Uber and Lyft will likely be included in these benefits to transport seniors to doctors in on-emergency situations.
The precedent has been set for almost 20 years with non-emergency transportation providers like Cleveland-based, Provide A Ride, a van service for Medicaid and Medicare MCO transportation benefit programs.
Plus, for Medicare Advantage plans, promoting and contracting new additional plan choices can become a marketable difference for 2019.
Additional services Medicare Advantage plans could pay for in 2019 include the following:
- Adult day care
- In-home support services to help with disabilities/medical conditions perform activities of daily living within the home
- Short-term “respite care” or other support services for family caregivers. This provides short-term relief for up to five days for primary caregivers
- Making non-Medicare-covered safety changes (e.g. installation of grab bars, chair lifts etc.), to help people remain in their homes
- Plus, as noted, non-emergency transportation to health care services
Uber Health is now live after an eight-month trial with 100 health care providers. Lyft has launched Lyft Concierge. According to Lyft, the “partnership with AllScripts is an important step forward. AllScripts’ seamless integration with the Concierge API will enable any provider to request Lyft rides for up to 7.2 million patients directly within their platform.”
For health plans, creating one comprehensive, integrated platform would facilitate more effective management of and improvement in the health and wellness of their diverse populations. It would streamline internal workflows, reduce the cost and duplication associated with maintaining multiple, separate systems, and enhance the member experience through better data coordination and sharing of information.
For example, a single, digital platform could support patients taking charge of their own health by unifying content, tools and resources. Fifty-three percent (53%) of consumers say they can't access all their clinical health data from a computer. By integrating legacy systems and uniting electronic health records and other clinical and behavioral data into a single platform, health plans can facilitate member access to health information. They can help provide better connections between patients and physicians outside the doctor’s office.
Perhaps the biggest gain for health plans who can move to an integrated platform is the advantage they would have in population health management. An integrated system offers a more complete look at member populations, enabling plans to segment members into risk levels and focus on those with the most intensive needs.
Organizations in other industries have long been reaping the benefits of an integrated technology platform. Verizon saved $1.6 Billion in three years, and Sprint saves millions each year by integrating legacy platforms, sales and customer service into a single platform.
If you have invested in a diverse set of technology systems to capture and collect member data, now is the time to consider moving from “meaningful use to meaningful insight.” Integrating data from separate sources and improving the interoperability capabilities of existing health technology is the first step toward raising your plan’s health intelligence.
[Photo credit: Global X via Creative Commons.]
Your members may feel that taking charge of their own health is like swimming upstream. Overwhelmed by an increasingly complex sea of medical choices and data, Americans can easily get lost, and carried away by the inertia of leaving their healthcare to providers. The consequences are grave, particularly for those with health risks and chronic conditions. In healthcare, being an engaged consumer is essential to promoting positive outcomes and lowering costs.
The problem lies in an imbalance of health intelligence. Before the Internet, smartphones and social media, knowledge about conditions, treatments and medication lived mostly with providers. Diagnostic tools and devices were accessible only in the doctor’s office, and the patient’s health record sat in the physician’s file cabinet. Recently, advances in technology have enabled a shift of information directly to patients. But not everyone is accustomed to finding, interpreting or applying the vast amounts of health data now available to them.
That’s why providers are beginning to implement new tools and strategies to educate and empower their patients to become more active participants in their healthcare. These include providing a clearer look at care options, making complex information simpler, and improving access to electronic records. All of these tools swing the balance of health intelligence to the patient.
The benefits are measurable. According to a 2013 study in the journal Health Affairs, patients who were encouraged by health coaches to review options and get more involved in choices had 5.3% lower overall medical costs, 12.5% fewer hospital admissions and fewer elective surgeries.
But providers aren’t the only members of the healthcare system who can help shift the balance of health intelligence. Health plan sponsors have a role to play, too. You can throw a life vest to members by giving them greater insight into health status and risk, sharing clinical guidance on necessary health actions, and offering personalized motivation to close gaps in care.
To improve health intelligence in a population, plan sponsors must first shore up their own programs and systems. Five key strategies can help: 1) strive for 100% engagement, 2) go digital, 3) close gaps in care, 4) move to a single integrated platform and 5) implement constant intelligent improvement in real time. In subsequent posts we’ll examine these strategies one by one.
As the current of healthcare changes with advances in technology and shifting payment models, the healthcare industry must do a better job of buoying consumers with knowledge and guidance. For plan sponsors, making members feel lighter and stronger in their healthcare journey lifts everyone up.
[Photo credit: Ruth Hartnup via Creative Commons.]
What if an intelligent application could diagnose a health condition as quickly and precisely as a human doctor? A Financial Times story features a digital diagnostic app called Babylon that crunches through billions of data points collected from thousands of test consultations to help pinpoint an ailment. This is just one example of how machine learning, also known as artificial intelligence, is transforming healthcare.
Babylon is just one of a growing collection of intelligent tools that can empower people to manage their own health. Last year, the US Food and Drug Administration approved 36 connected health apps and devices, from mobile lung-function monitors to blood-glucose tests, that provide medical advice to consumers—at a fraction of the cost of a provider visit or traditional lab work.
As we collect and store more and more data about consumers’ health and lifestyles, there is an incredible opportunity for health plan sponsors to capture and apply this data to transform their business. They can integrate and analyze this valuable data by using machine-learning algorithms in the cloud. Applying machine learning can enable plan sponsors to pick out trends and interactions at the population level and — ultimately —predict and prevent disease before it even occurs.
If you’re skeptical about how machine learning can transform business, just look at three behemoths: Airbnb, Uber and Google.
Airbnb uses big data and machine learning to guide hosts to the perfect price and deliver a better experience than a traditional hotel service model. In New York, Airbnb rentals now represent 25% of all lodging, and the company is grabbing market share from traditional hotels. Airbnb is now valued at $30 Billion.
Uber uses machine learning to find customers, set competitive prices and create a more convenient ride than a taxi. In doing so, the company is displacing the taxi industry. Uber is now valued at $62.5 Billion.
And of course, let’s not forget about Google. By tracking Web browsing, emails, chats and more, Google has become a dominant force in digital ads. It mines that wealth of personal data to present ads to the people most likely to care about them. Google’s parent company, Alphabet Inc., relied on that ad machine for about 88% of its $75 billion in revenue last year.
Right now, plan sponsors are collecting terabytes of data on their members. But how many are integrating that data, analyzing it, and intelligently applying it to detect and predict disease and anticipate members’ healthcare needs? Plan sponsors that integrate intelligent learning into their health plan/wellness program will be the game changers in the payer industry.
[Photo credit: NEC Corp. via Creative Commons.]
The prognosis for prescription drug costs in 2017 is not good. Prescription prices are projected to jump 11.6 percent in 2017 for Americans under 65 years old, and increase 9.9% for older Americans. This growth outpaces both the cost of living and wages, which are expected to rise just 2.5 percent this year, in contrast. The data comes from a new report by Segal Consulting.
Hours of congressional investigation into U.S. drug prices have done little to soften the hit to American consumers, and it’s no surprise that four out of five Americans say that drug prices are unreasonable (Henry J. Kaiser Family Foundation).
Yet despite the fact that prescription prices can vary widely by pharmacy, 70% of Americans still don’t price shop for healthcare services including prescription drugs.
Rising prices could easily lead to more Americans skipping doses or essential medications altogether; in fact, about one in 10 American adults don’t take their medications as prescribed because of the costs. Add to that narrowing formularies that are increasingly shutting off access to previously covered drugs, and it’s easy to see how consumers are losing both power and ownership of their healthcare. Prescription drugs now account for almost 17% of personal healthcare expenditures.
This is a wake up call for health plan sponsors, who have an obligation and vested interest to help members gain greater ownership of their health. One effective step would be to educate members about drug price variation. But today, less than a third (29%) of plan sponsors offer a price comparison tool in consumer wellness programs.
Do you know whether your members are adhering to their medication requirements as prescribed by their providers? Do you offer them a price comparison tool to pinpoint the lowest-cost sources for their needed medications? If not, now is the time to equip members the health intelligence they need to become better healthcare consumers. This is a critical step in the path to lowering population health costs.
[Photo credit: Casey Fleser via Creative Commons.]
We spent nearly $10,000 per person on healthcare last year. That’s a higher healthcare bill than Americans have ever paid, and it accelerated at the fastest rate ever since the Great Recession in 2007. This new data comes from the Department of Health and Human Services.
We know that this astoundingly high number is largely driven by the expansion in healthcare coverage for millions of Americans enabled by the Affordable Care Act. We also know that rising prescription drug costs played their part. It’s not surprising that the lion’s share of our $3.2 Trillion health bill was spent caring for the sickest of patients suffering from largely preventable chronic diseases.
While the federal government and households were hit the hardest, businesses who sponsor employee and family health plans also took a big blow; they payed 20% of this bill. 2015 saw a notable increase in enrollment in employer-sponsored plans (1.4%) as the labor market continued to improve.
But there are bright spots--pockets in America that have been able to hold their healthcare bills steady, despite external pressures. Chicago is one such anomaly; for the past five years, the city has kept its healthcare bill for employees and retirees roughly flat, at about $450 million a year. We can learn a lot from their strategy, particularly as it relates to employer-sponsored healthcare.
Although the cost to cover employees has grown by 25% over the past 5 years, a few of the strategies Chicago used to counteract this trend included:
- introducing incentives for employees to seek higher-value doctors and other healthcare providers
- offering incentives for members to buy generic drugs rather than more expensive branded versions
- redesigning its copayments to encourage people to see primary care physicians
- creating incentives for employees to obtain MRIs and other scans at independent facilities, which often charge less than hospitals do
Plan sponsors: you can also transform your population into a success story that bucks the national trend. Start by empowering your members with health intelligence that is actionable. Then steer and reward them to manage their health continuously. Your wellness program is the perfect place to start.
[Photo credit: m.a.r.c. via Creative Commons.]