Transcript The Impact of Encounter Data on Risk Adjustment Operations

The 2016 Advance Notice of Methodological
Change
February 25, 2015
Presented by: Richard Lieberman
TODAY’S AGENDA
• A new feature: “30 Days in 30 Seconds.”
• A fact-based survey of health reform events!
• Plan payment rates for contract year 2016
• Changes to risk adjustment
• In-home assessments
• Quality measurement
WHO ARE WE?
 Mile High Healthcare Analytics is a recently founded population
health analytics enterprise.
 Richard Lieberman is the Chief Data Scientist who has been
actively involved in the development of risk adjustment and
quality measurement systems for over 20 years
 Duke Owen, an expert in the NCQA and PQA quality measure
certification process, among other talents!
• Eric Olmsted is a Senior Consultant with 15 years of experience
designing, implementing and evaluating total population health
management programs
“30 DAYS IN 30 SECONDS”
• Medicaid Expansion: Indiana agrees to a comprehensive
expansion that will cover 350,000 residents
• Alabama, Florida, Idaho, Utah and Wyoming are considering
expansion
• In 2013 U.S. health care spending increased 3.6 percent to reach
$2.9 trillion, or $9,255 per person, the fifth consecutive year of
slow growth in the range of 3.6 percent and 4.1 percent.
• The share of the economy devoted to health spending has remained
at 17.4 percent since 2009 as health spending and the Gross
Domestic Product increased at similar rates for 2010 - 2013
“30 DAYS IN (another) 30 SECONDS!”
• HHS' announced that 11.4 million people are now signed up for
exchange coverage
• The briefs are filed in King v. Burwell (see,
http://www.scotusblog.com/case-files/cases/king-v-burwell/)
• Nearly 69 million Americans were enrolled in Medicaid or CHIP in
November 2014
• This is a 17.5 percent increase, or about 10.1 million people, over the
July-September 2013 baseline
• The data also show a 25.5 percent increase in enrollment in states
that expanded Medicaid
• 7 percent enrollment increase in those states that did not expand
Medicaid eligibility
HOW MUCH ARE WE REALLY SPENDING?
• According to CBO’s January 2015 baseline, the
ACA’s coverage provisions will cost $76 billion in
2015
• The average exchange subsidy per subsidized
individual is $4,330
• The $64,000 question is: will we save enough
money to offset the ACA’s expenditures?
• The federal government has pegged the cost of
readmissions for Medicare patients alone at $26 billion
annually, and says more than $17 billion of it pays for
return trips that need not happen if patients get the right
care
WILL ACA BEND THE COST CURVE?
• Tenet Healthcare Corp. saw patient volume rebound in the
fourth quarter of 2014
• Same-hospital admissions increased 4% and were up 4.5%
when adjusted for outpatient activity
• The number of paying admissions similarly increased 6.1%
• Those numbers led to an operating margin of 7.5% for the
fourth quarter compared with 4.3% in the prior-year period
• Net income increased to $61 million on nearly $4.5 billion in
revenue compared with a net loss of $24 million on $3.9 billion
in revenue in the fourth quarter of 2013
• Uninsured and charity admissions declined 62.4% in its five
states that expanded their Medicaid programs
•
ARE WE CUTTING MEDICARE-ADVANTAGE
PAYMENT RATES AGAIN?
• Well, it depends upon whom you
ask!
• The annual announcement of
benchmark rates has become
unnecessarily politicized
• Medicare-Advantage payment rates
are far too complicated to be fought
about in the “mainstream” media
and by advocates issuing reports to
the internet
BACK IN 2014, IT WAS A GREAT DEAL
SIMPLER TO UNDERSTAND
• The annual change to
Medicare-Advantage rate
book was determined from
several formulas using:
• The National Per Capita MA
Growth Percentage
• FFS USPCC Growth
Percentage
• Several tables defined by
the ACA
FROM THE BETTER MEDICARE ALLIANCE
MA RATE SETTING ANNOUNCEMENTS ARE
ALL ABOUT SPIN
THE BENCHMARK AND THE AFFORDABLE
CARE ACT
• Since 2006, MA Plans have “bid” to participate in MedicareAdvantage
• Plans prepare a set of utilization and cost estimates by type of
service that resolve to a pmpm rate
• Cost estimation uses a combination of experience and
manual rates, trended to the subsequent contract year
• The cost estimates are adjusted for each county the Plan is
authorized to service
• The cost estimates comprise what is known as the
Standardized Part A/B bid
• “Standardized” refers to a risk score 1.0
WHAT IS THE BENCHMARK?
• Each year (the first Monday in
April), CMS publishes a “rate book”
• The rate book contains the
maximum amount that it will pay an
MA Plan in each county of the
United States
• These county-specific rates are
known as Standardized Part A/B
benchmark rates
• Each county rates assumes that
the population has a risk score
of 1.0
• Since 2012, star ratings are
integrated into the rate book
HOW THE RISK SCORE FITS INTO THE
BIDDING PROCESS
• Every April, CMS estimates contract-level risk scores for
plans to use in the bid development process
• Typically, they use a member-cohort with the following
characteristics
• Enrolled in the contract on July 1, 2014
• Were continuously eligible for Medicare for the prior 12
months
• This year, the risk score estimation process will be
complicated by the transition to EDPS
BID VS. BENCHMARK
• Bids are submitted by MA Plans to CMS on
the first Monday in June
• If the bid is less than the benchmark, the MA
Plan does not have to charge a supplemental
premium
• If bid exceeds the benchmark, a supplemental
premium must be charged
• Impact of Star-ratings: Contracts at the 4-Star
level or higher bid against contracts with
similar Star ratings; contracts with less than 3Stars bid against “lower-quality” contracts
THE AFFORDABLE CARE ACT (ACA) AND
RATE SETTING
• The ACA mandated a transition from the historical
“administrative price system” which was based on a
historical national benchmark that increased every year
• The county-specific rates had to increase at least 2 percent
each year, prior to ACA implementation
• ACA mandated that maximum rates paid to MA Plans (the
Standardized Part A/B benchmark) transition to Medicare
FFS spending in each county over a period of 2, 4 or 6
years
• The transition policy created two rates to be blended together
• The applicable amount (Pre-ACA rate)
• The specified amount (Post-ACA rate)
CHANGE TO APPLICABLE AMOUNTS FOR
2016
• The applicable amount is the pre-ACA
rate
• CMS proposes to increase the
applicable amount by 2.68 percent for
contract year 2016
• Only 6-year phase-in counties are
impacted by the applicable amount
• About 32 percent of MedicareAdvantage enrollees reside in 6-year
“phase-in” counties
• This figure will be impacted by CMS’
decision to rebase FFS rates for 2016
THE SPECIFIED AMOUNT IN 2016
• The specified amount is the post-ACA rate
• The specified amount is the sole driver of
the benchmark rates in 2-year and 4-year
transition counties
• Derived from estimates of Medicare FFS
spending
• CMS proposes to increase the specified
amount by 1.47 percent for contract year
2016
• This proposed increase is likely to change
because historical Medicare FFS
expenditures will be rebased for 2016
IMPACT OF THE SPECIFIED RATE PHASE IN
• “2-year” and “4-year” counties are fully phased-in to ACA
rates
• Standardized Part A/B benchmark is based solely on specified
amount
• 68 percent of MA enrollees
• “6-year” counties in 2016 are 1/6 applicable amount and 5/6
specified amount:
• 32 percent of MA enrollees
• The specified amount may increase by 1.47 percent
GEOGRAPHIC ADJUSTMENT OF USPCC
• The “competitive bidding” process requires
benchmark rates at the county level
• CMS doesn’t tabulate FFS Medicare costs by
county (too unstable year-to-year)
• There is a geographic adjustment factor for each
county derived from a five-year rolling average of
FFS Medicare claims
• CMS will rebase the geographic adjustment factor
for 2016
• This results in a very small positive adjustment
to projected costs: $797.59 in 2016 vs. the
previous projection of $794.81 (an increase of
0.3%)
CODING INTENSITY ADJUSTMENT
• Coding intensity adjustment will rise to 5.41 percent for
2016
• The American Taxpayer Relief Act of 2012 (P.L. 112-240)
increased the maximum coding intensity adjustment to 5.9
percent
• To be implemented no later than contract year 2017
• CMS believes it has ample empirical data showing that
actual morbidity levels do not vary between FFS and MA
• Three different investigations described in Advance Notice
• Beginning in 2017, CMS proposes to use the ratio of
change in FFS risk scores to the change in MA risk scores
as a replacement for the statutorily-mandated coding
intensity adjustment
PROPOSED CHANGES TO RISK
ADJUSTMENT FOR 2016: PART C
• For Part C, the blend of the “old” (version 12) HCC model with
the “new” (version 21) HCC model will end
• Over the last two years, the blending formula was a component of
“the spin” used to demonstrate that ACA-mandated cuts to the
benchmark rates were smaller than anticipated
• In 2015, the risk scores were calculated using a 67/33 percent
blend of the “old” model vs. the “new” model
• CMS will adopt the “2014 CMS-HCC Model (version 21) as the sole
model for calculating risk scores
• Certain diagnosis codes no longer yield increased risk scores:
chronic renal failure, stages 1-3, diabetic neuropathy (as a
stand-alone HCC), and old myocardial infarctions
SOURCE OF DIAGNOSIS CODES
• Since the inception of comprehensive risk adjustment in
2004, the sole source of diagnosis codes were RAPS files
• RAPS are a very limited extract from claims data: five fields,
with filtering the responsibility of the plan (or its vendor)
• CMS has “threatened” to sunset the RAPS submission
process for several years
• EDPS data has been collected since 2012, but is fraught with
concerns about its completeness
• For 2015, diagnosis codes from EDPS were added to RAPS
data, using the two sources in tandem (with no preference
for one over the other)
SOURCE OF DIAGNOSIS CODES: EDPS vs.
RAPS
• Beginning in 2016, CMS proposes to
calculate risk scores by blending 90
percent of the score from RAPS with
10 percent of the score from EDPS
• Deficiencies in the EDPS data stream
will, for the first time, alter a contract’s
aggregate risk score
• Sun setting RAPS transfers the
responsibility for diagnosis code
filtering from plans and vendors to
CMS
WHAT PLANS SHOULD WORRY ABOUT
• CMS may filter diagnosis codes incorrectly. But if they do,
they will identify the error(s) (eventually) and fix them
(eventually).
• But MA Plans are far more at risk from:
• Unpaid claims that do not make it into the encounter data
base in the first place. Focus on the reporting of alternative
payment arrangements
• Incorrectly filtered data in RAPS files
• Impact of the ICD-10 cut over on October 1, 2015
• Are you testing impact on risk score of conversion of ICD-10
codes to ICD-9-CM?
PROPOSED CHANGES TO RISK
ADJUSTMENT FOR 2016: PART D
• Significant changes to the RxHCC (Part D) Model:
• Model revisions to map to the 2016 benefit structure
• Clinical update to the diagnoses included in some prescription
drug hierarchical condition categories
• Inclusion of MA-PD data in the model calibration
• Updates to data years used to recalibrate the model
IN-HOME ASSESSMENTS
• CMS probably decided that trying to
disallow diagnosis codes from HRAs
that were not subsequently “treated”
represented a “third rail” (not worth
stepping on!)
• But the latest proposal represents a
radical change in how HRAs can be
deployed
• The proposed changes appear to
represent a good step forward in
developing the HRA as a positive force
for clinical improvement
NEW COMPONENTS OF HEALTH RISK
ASSESSMENTS
• All components of the annual wellness visit,
including a health risk assessment
• Medication review and reconciliation
• Scheduling appointments with appropriate
providers and making referrals and/or
connections for the enrollee to appropriate
community resources
• Conducting an environmental scan of the
enrollee’s home for safety risks, and need for
adaptive equipment
NEW COMPONENTS OF HEALTH RISK
ASSESSMENTS (cont.)
• A process to verify that follow-up care is
provided
• A process to verify that information obtained
during the assessment is provided to the
appropriate plan provider(s)
• Provision to the enrollee of a summary of the
information, including diagnoses, medications,
scheduled follow-up appointments, plan for care
coordination, and contact information for
appropriate community resources; and
• Enrollment of assessed enrollees into the plan’s
disease management/case management
programs
BUT THEY ARE NOT GOING TO CHECK (yet)!
• While not specifically part of the current
CMS audit guidelines, these new HRA
requirements can be evaluated as a
component of vendor oversight
• EDPS data can be used to test for
subsequent actions following an in-home
assessment
• The OIG will now have requirements to
build a work plan item around
• Part C RACs, which still looming could
have a field day with these requirements
PLAN RESPONSES TO NEW IN-HOME
ASSESSMENT REQUIREMENTS
• These new requirements will require a
substantial change in how Plans approach
in-home assessments
• Just transferring the responsibility for risk
score optimization to vendors will no longer
work
• Vendors can take on more of the burden,
but many of these requirements must be
done directly by the plan
• HRA instruments used by vendors and
plans will have to undergo significant
revision
QUALITY IMPROVEMENT: STARS
• There has been a substantial push from plans and advocates
to blunt the impact of lower Star-ratings attributable to sociodemographically disadvantaged members (e.g., duals, SNPs,
etc.)
• The evidence of the impact is variable: some plans with large
concentrations of duals have Star-ratings consistent with the
broader population. Plans with smaller concentrations of
disadvantaged members seem to be adversely impacted
• CMS is reluctant to create lower quality expectations for
socio-demographically disadvantaged members
• Many duals are moving into Medicare-Medicaid plans, which
are not subject to Star-ratings
FURTHER EMPHASIZING OUTCOME
MEASURES
• As an interim step toward blunting the impact of
disadvantaged members on Star-ratings, CMS has
proposed to reduce by half the weights for:
• Breast Cancer Screening
• Colorectal Cancer Screening
• Diabetes Care – Blood Sugar Controlled
• Osteoporosis Management in Women who had a Fracture
• Rheumatoid Arthritis Management
• Reducing the Risk of Falling
QUESTIONS?
Send your questions to:
[email protected]
MILE HIGH HEALTHCARE ANALYTICS
CAN ASSIST YOU…
• With Medicare-Advantage bidding season on the horizon, do
you have accurate risk scores to produce the optimal bid?
• We design, transform, and load data into data warehouses
• Redesign of the HRA process and oversight of the process
• The Quality Rating System (QRS) beta test puts significant
data requirements in front of overworked issuers. The QRS
measures pose significant complexities, particularly around
continuous enrollment requirements
• It’s a new year for Stars, and the majority of MedicareAdvantage enrollment is moving to plans with 4-stars or more
NEXT WEBINAR
• Mile High Healthcare Analytics is committed to our free webinar
series. We will continue to present key risk adjustment and
performance improvement topics to health plans and provider
groups on a monthly basis throughout the year.
• Our next webinar will be held on March 19, 2015 at 2 p.m.
Eastern time. This webinar will take a deeper dive into quality
improvement, for both Medicare-Advantage plans and
Exchange issuers
• Register at: http://www.healthcareanalytics.expert/news-andevents/free-webinar-series/
AHIP WEBCAST SPONSORED BY ORACLE
HEALTH INSURANCE
Richard Lieberman will be the primary presenter on,
“The Changing World of Value Based Payments.”
April 9, 2015
Details to follow- please check the AHIP website
(http://www.ahip.org/eventcalendar/) or the Mile High website
(www.healthcareanalytics.expert).
CONTACT INFORMATION
Richard Lieberman
[email protected]
or
[email protected]
720-446-7785 (voice)
www.healthcareanalytics.expert
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