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CMS 2015 Advance No2ce
March 19, 2014
TODAY’S PRESENTERS
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! Wanda Kochhar – President / Senior Advisor, Outcomes • All membership in coun8es that are 2-‐year transi8on. 4.0 STAR ra8ng. No
historical use of enrollee risk assessments. • 3% (Normaliza8on factor) -‐ 1.65% (benchmark trend) -‐ 0% (% FFS transi8on) -‐
0.25%(coding intensity) – 0% (STARs bonus) – 0.7% (industry fee) – 0% (enrollee risk assessments) = Total impact Posi2ve 0.4%
• Ms. Kochhar received her BBA and MBA from the Hugh McColl School of Business at Queens College.
! Rolland Ho – SVP, Risk Adjustment Solu9ons & Analy9cs, Outcomes • Rolland Ho leads the design and development of risk adjustment solu8ons that
support Commercial/Marketplace, Medicaid and Medicare Advantage plans • Prior to joining Outcomes Health, Rolland served as Vice President of Medical
Economics at Arcadian Health Plan overseeing risk adjustment, medical analy8cs and bid development.
• Rolland graduated Magna Cum Laude from Harvard University with an AB in Economics and obtained his Master in Business Administra8on from Stanford University.
2015 ADVANCE NOTICE
! Con2nued revenue compression for MA plans: • Change in FFS normaliza8on factor methodology (+3.0%) • Combined benchmark trend change of Nega8ve 1.65-‐2.3% (weighted average
Neg 1.9%) • Add’l decline in average benchmarks with transi8on to % FFS (weighted average
Neg 2.3%) • Coding intensity adjustment increased from 4.91% to 5.16% (Neg 0.25%) • STAR ra8ng bonus eliminated for < 4.0 STAR plans (Neg 3-‐3.5% for affected
plans, weighted average (Neg 1.6%) • Increased industry fees (Neg 0.7%) • Requirement that risk assessment diagnoses be confirmed in clinical sefng
(Neg 0-‐3% depending on plan usage of risk assessments)
However, specific impact is highly variable depending on plan profile.
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IMPACT ON TWO DIFFERING PLAN PROFILES
! Plan A • All membership in coun8es that are 2-‐year transi8on. 4.0 STAR ra8ng. No
historical use of enrollee risk assessments. • 3% (Normaliza8on factor) -‐ 1.65% (benchmark trend) -‐ 0% (% FFS transi8on) -‐
0.25%(coding intensity) – 0% (STARs bonus) – 0.7% (industry fee) – 0% (enrollee risk assessments) = Total impact Posi2ve 0.4%
! Plan B • All membership in coun8es that are 6-‐year transi2on. 3.5 STAR ra2ng. Heavy
historical use of enrollee risk assessments. • 3% (Normaliza8on factor) – 2.3% (benchmark trend) – 3.3% (% FFS transi8on) -‐
0.25%(coding intensity) – 3.5% (STARs bonus) – 0.7% (industry fee) – 3% (enrollee risk assessments) = Total impact Nega2ve 10.1%
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While na2onal average impact is Neg 5% on average, plan specific impact can range widely from +0.4% to over Neg 10%.
DANCING WITH THE STARS
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Termina2on of Star bonus demo for 2015 may materially affect the market compe22veness of many plans
TRANSITION TO % OF FFS BENCHMARKS
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Much less variability across plans in terms of impact from transi2on to % FFS.
THE ENROLLEE RISK ASSESSMENT WILDCARD
! Plans will likely be split in terms of support for/against new rule • Plans that are heavily invested in enrollee risk assessments will obviously favor
con8nua8on of current status quo. • Plans that currently conduct few assessments could be on either side. Some
might protest rule change because looking to counteract benchmark declines with expanded assessment program. But some might support rule change to cheaply and effec8vely level playing field against compe8tors who are more heavily invested in assessments.
! What plans and vendors are likely pushing CMS to think about • Will there be any situa8ons in home sefng (POS=12) that qualifies for risk
adjustment such as an assessment that fulfills Annual Wellness Visit criteria? Or if the visit is conducted by member’s assigned Primary Care Physician?
• Does each specific diagnosis have to be re-‐documented in the subsequent clinical sefng encounter? Or is having the clinical encounter itself sufficient to make diagnosis valid for risk adjustment?
• What other place of service loca8ons might be specifically excluded or included? Mobile units (POS=15)? Retail health clinics (POS=17)?
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HOW WILL PLANS ADAPT?
! High likelihood that final rule is substan2ally similar to Advance No2ce • Plans and vendors will need to develop the required links to clinical follow-‐up
treatment which will increase overall assessment costs • Risk adjustment analy8cs will need to be re-‐tooled to beler stra8fy members
by magnitude of opportunity • Plans will need to enable and incent provider partners to perform beler
diagnos8c capture via tools, P4P programs, and revenue sharing
! Assuming the proposed rule stands as-‐is, couple poten2al scenarios: • Plans may decide to subs8tute Physician Office assessments for In-‐Home Clinical
Care Visits • Or, Vendors may change process to u8lize a lower skilled, lower cost clinician
(e.g. RN instead of NP/PA/MD) to conduct the ini8al home assessment and then channel those members iden8fied with a new HCC to a subsequent clinical office visit
• If retail health clinics are allowed, perhaps assessments are structured to occur when member next fills their pharmacy scripts
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THE PROPOSED “DELETIONS” RULE
! A massive sinkhole that may engulf unwary plans • CMS recently released a proposed rule outside of the Advance No8ce process
that would specifically require MA plans to review chart data against claims and submit any unvalidated diagnoses for dele8on.
• For aggressive plans, chart review typically delivers 5-‐6% incremental lin to risk scores. On average, claims HCC’s are known to have a 11-‐12% error rate affec8ng the 45-‐50% of revenue derived from HCCs.
• As a result, if this rule is implemented, unwary plans may effec8vely eliminate their current risk adjustment gains from chart review programs due to the high percentage of unvalidated diagnosis data in claims.
! Implica2ons for plans • Stra8fy HCCs by dele8on risk and take dele8on risk into considera8on when
selec8ng chart review targets. • Develop coding systems and processes that allow DOS-‐specific execu8on of
chart reviews. • Track provider level non-‐valida8on rates and incorporate into future chart
targe8ng decisions.
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DELETION RISK BY STRATA ANALYSIS – Sample
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! Shows # of HCC diagnosis / DOS combina2ons in claims
! Shows # of unique HCCs in claims
! Shows # reviewed in charts
! Shows # not validated
! Detailed results by risk strata
! Calculates weighted average for overall valida2on rate
EDS VS RAPS ! RAPS will survive yet another year as CMS proposes to use both EDS and
RAPS data for PY2015 risk adjustment • Essen8al that plans use this coming year to exhaus8vely compare and test their
EDS risk score results vs. their RAPS risk score results. • Any discrepancies need to be hunted down and fixed to ensure that final
switchover to EDS occurs without a hiccup to plan risk scores. • EDS rejec8on volumes can quickly overwhelm available resources for resolving.
Make sure analy8cs are in place to quickly iden8fy those errors that affect acceptance of any new/incremental HCCs so that they receive highest priority for resolu8on.
• Plans need to determine policy and processes for submission of linked vs. unlinked chart reviews
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WHAT CHANGES COULD HAPPEN IN FINAL NOTICE?
! Always some chance that one or more items may be revised • CMS could poten8ally announce revised trend calcula8ons that bring the
growth rate somewhat closer to 0%. • Last year, CMS decided to defer changes related to enrollee risk assessments.
Could theore8cally (though unlikely) do so again this year.
! But plan specific factors will drive substan2al differences in impact • Star ra8ngs (0-‐3.5% depending on plan) • Enrollee risk assessments (0-‐3% depending on plan) • Distribu8on of membership in 2 vs 4 vs 6 year transi8on coun8es (0-‐3.3%
depending on plan)
Important that each MA plan develop a clear understanding of their specific circumstances and adjust strategy accordingly.
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OVERALL STRATEGIC IMPLICATIONS FOR MA PLANS
! Achieving 4 Star Ra2ng is a must • Qualify plan for a 5% increase in reimbursement benchmark • Qualify for 65-‐70% rebate instead of 50% rebate in bid process
! Highly accurate risk adjustment is essen2al • Plans can no longer afford to leave the typical 20-‐30% of retrospec8ve risk
adjustment reimbursement on the table (~1.0-‐1.8%+ of reimbursement) • Restructured deployment of prospec8ve risk adjustment ini8a8ves can s8ll
deliver addi8onal risk adjustment reimbursement opportuni8es
! Integra2on of Risk Adjustment and HEDIS Programs will differen2ate the winners • 4-‐star plan ra8ngs are the new standard • Plans that successfully cross-‐leverage risk adjustment ac8vi8es to boost HEDIS/
Star scores and vice-‐versa will have a cri8cal compe88ve advantage
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