Entries in Surveys & Reports (141)

Friday
Jan112019

Two New Milliman White Papers On MSSP Pathways to Success: 

Final Rule Revisions and Data Mining Tactics to Reduce Population Costs

By  Clive Riddle, January 11, 2019

Milliman's Noah Champagne, Charlie Mills, and Jason Karcher published a white paper on January 7th: “Pathways to Success” MSSP final rule: Key revisions to the proposed rule, which was preceded with a paper on January 4th by Kathryn V. Fitch, Adam Laurin, and Michele M. Berrios: “Pathways to Success” MSSP final rule: Faster movement to downside risk increases focus on reducing population costs.

The final rule isn’t a radical departure from the proposed rule, but as Champagne, Mills and Karcher summarize, these are the key changes from the proposed rule:

  • Levels A and B maximum shared savings percentage increased from 25% to 40% while Levels C and D increased from 30% and 40%, respectively, to 50%.
  • Less strict definition of low-revenue ACO: Now ACOs are considered “low revenue" if their historical Medicare Part A and B fee-for-service (FFS) revenues are less than 35% of the total historical expenditures for their assigned Medicare beneficiaries. 
  • High-revenue ACOs currently participating in MSSP Track 1+ will be allowed an exception to renew for one agreement period in Level E of the BASIC track.
  • New, low-revenue ACOs, not experienced with performance-based Medicare ACO initiatives, will be allowed to remain in Level B (one-sided risk) for an additional performance year. 
  • The final rule retains the proposed 3% cap on benchmark increases for risk scores. However, ACOs’ benchmarks will be fully adjusted for changes in the relative risk score when there is a decrease from the baseline year to the performance year instead of applying a 3% reduction cap as originally proposed.
  • The final rule still uses a maximum regional cost blending percentage of 50%, but finalizes a more gradual phase-in of the maximum blending percentage from the proposed rule for ACOs with historical expenditures above their regional service areas.
  • ACOs participating in the July to December 2019 performance period and selecting prospective assignment will be assigned beneficiaries based on October 2017 to September 2018 experience data.

Champagne, Mills and Karcher conclude that “CMS introduced the MSSP with the goal of transitioning ACOs to becoming risk-bearing entities and improving the quality of care provided to Medicare FFS beneficiaries. With the MSSP final rule, CMS has reaffirmed its commitment to these goals while offering greater shared savings potential to ACOs participating in the BASIC track and making the BASIC track available to a broader set of ACOs. The effect of these rule changes on specific ACOs will vary significantly depending on an ACO’s size, region, cost and quality performance, and structure.”

 

Fitch, Laurin and Berrios remind us that “one of the hallmarks of the new MSSP rule is faster movement to downside risk. Under the current regulations, accountable care organizations (ACOs) can stay in an upside-only track for up to six years. The new rule requires some ACOs in the Basic Track to begin assuming some downside risk in year 3.”  They stat that “under the new rule, there will be a more urgent need for ACOs to reduce population costs,” and that “two major tactics are typically implemented by health plans and ACOs to reduce population costs” are demand management and supply management.

 

Their report “focuses on supply management and, in particular, data mining tactics that identify medically unnecessary services.” They advocate "several data mining tactics we have seen successful ACOs adopt to effectively guide strategies to reduce medically unnecessary services and in turn reduce the ACO’s total population costs." including:

  • "For MSSP participants, the monthly Claim and Claim Line Feed (CCLF) data files provided by CMS should be routinely grouped and summarized into an actuarial cost model in order to evaluate cost drivers, identify potential targets for utilization reduction initiatives, track outcomes expected from key initiatives, and track overall costs compared to the ACO’s PMPY expenditure benchmark set by CMS."
  • "After identifying potential services to target from the actuarial cost model, organizations need to evaluate whether the utilization and spend in a service category represents efficient or inefficient care with very little or very large opportunity for improvement."
  • "ACOs must be able to target inefficient physician performance, which requires credible provider profiling. As with the benchmarking exercise described previously, physician profiling requires credible risk adjustment."
  • "ACO should also consider data mining to identify leakage of services to providers outside of the ACO." 
Friday
Dec072018

Premium and Deductible Cost Sharing: A Dozen Key Findings from the Commonwealth Fund

by Clive Riddle, December 7, 2018 

CMS has just touted the National Health Expenditure growth of 3.9% for 2017 is at historic low levels, with the Office of the Actuary stating “prior to the coverage expansions and temporary high growth in prescription drug spending during that same period, health spending was growing at historically low rates. In 2017, health care spending growth returned to these lower rates and the health spending share of GDP stabilized for the first time since 2013.” 

Meanwhile, The Commonwealth Fund paints a different picture from another perspective, and has just released a 21-page DataBrief: The Cost of Employer Insurance Is a Growing Burden for Middle Income Families, with lead author Sara Collins commenting “The cost of employer health insurance premiums and deductibles continues to outpace growth in workers’ wages. This is concerning, because it may put both coverage and health care out of reach for people who need it most — people with low incomes and those with health problems. Policies that would reduce health care burdens on employees include fixing the Affordable Care Act’s family coverage glitch, requiring employers to exclude some services from the deductible, and increasing the required minimum value of employer plans.” 

The Commonwealth Fund tells us their study uses “the latest data from the federal Medical Expenditure Panel Survey–Insurance Component (MEPS–IC) to examine trends in employer premiums at the state level to see how much workers and their families are paying for their employer coverage in terms of premium contributions and deductibles. We examine the size of these costs relative to income for those at the midrange of income distribution.” 

Here’s a dozen key findings: 

  1. Average employee premium contributions for single and family plans amounted to nearly 7 percent of U.S. median income in 2017, up from 5 percent in 2008. 
  2. In 11 states (Arizona, Delaware, Florida, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, Texas), premium contributions were 8 percent of median income or more, with a high of 10.2 percent in Louisiana.
  3. Premium and deductible costs amounted to nearly 12 percent of median income in 2017. Added together, the total cost of premiums to workers and potential spending on deductibles for both single and family policies climbed to $7,240 a year in 2017. 
  4. This combined cost ranged from a low of $4,664 in Hawaii to a high of more than $8,000 in eight states (Alaska, Arizona, Delaware, New Hampshire, North Carolina, South Dakota, Texas, Virginia). 
  5. In two states, Mississippi and Louisiana, these combined costs rose to 15 percent or more of median income.
  6. Premiums for employer health plans rose sharply in nearly every state in 2017. After climbing modestly between 2011 and 2016, overall premiums for employer health plans (employer and employee share) grew more sharply in 2017, by 4.4 percent for single plans and 5.5 percent for family plans. 
  7. Annual single person premiums rose above $7,000 in eight states (Alaska, Connecticut, Delaware, Massachusetts, New Jersey, New York, Rhode Island, Wyoming) and family premiums were $20,000 or higher in seven states (Alaska, Connecticut, Massachusetts, New Jersey, New York, West Virginia, Wyoming) and the District of Columbia. 
  8. Average premiums for families increased overall in 44 states and the District of Columbia.
  9. As employer premiums have risen, so have workers’ contributions. Between 2016 and 2017, employee premium contributions rose by 6.8 percent to $1,415 for single-person plans and by 5.3 percent to $5,218 for family plans.
  10. Contributions for single plans increased in 32 states, ranging from a low of $675 in Hawaii to a high of $1,747 in Massachusetts. 
  11. Contributions for family plans rose in 35 states and the District of Columbia, with the lowest increase in Michigan ($3,646) and the highest in Delaware ($6,533).
  12. The average deductible for single policies rose to $1,808 in 2017, a 6.6 percent increase. Average deductibles rose in 35 states and the District of Columbia, ranging from a low of $863 in Hawaii to a high of about $2,300 in Maine and New Hampshire.

 

Friday
Nov302018

EHR and Patient Self-Pay: A Tale of Two Provider Woes

By Clive Riddle, November 30, 2018

In the provider administrative world, two continuing challenges causing large audible sighs are dealing with EHRs and ever-increasing levels of patient cost-sharing. An 11-page report just released on the annual HFMA/Navigant survey tackles these topics, providing findings from responses of 107 hospital and health system CFOs and revenue cycle management executives.

On the EHR front, we are told that 56% of executives “said their organizations can’t keep up with EHR upgrades or underuse available EHR functions, up from 51% last year. Moreover, 56% of executives suggested EHR adoption challenges have been equal to or outweighed benefits specific to their organization’s revenue cycle performance.”

Timothy Kinney, managing director at Navigant, says “hospitals and health systems have invested a significant amount of time and money into their EHRs, but the technology’s complexity is preventing them from realizing an immediate return on their investments.”

The survey found that 44% quickly adapt to EHR functional release, and the above cited 56% includes 39% that underutilize available EHR functions, and 17% can’t keep up with EHR functions. Regarding adoption challenges and benefits, the also above cited 56% includes 34% stating benefits and challenges are equal, and 22% who feel challenges outweigh benefits.

Regarding patient self-pay, the report tells us that 81% of executives “believe the increase in consumer responsibility for costs will continue to affect their organizations, down from 92% last year. Among them, 22% think that impact will be significant, compared to 40% last year. Executives from health systems and larger hospitals believe their organizations will be more heavily impacted by consumer self-pay.”

Navigant Managing Director James McHugh comments that “the impact of consumer self-pay on providers will only increase with the popularity of high-deductible health plans and negative changes to the economy. Providers must take advantage of opportunities to more holistically educate patients on out-of-pocket costs, predict their propensity to pay as early as possible, and secure alternative payers or financing when needed.”

The survey results seem to indicate self-pay continues to be a big issue, yet is more manageable now than a year ago. Time will tell if that trend continues.

 

Thursday
Oct042018

Eighteen Things to Know from the 2018 KFF Employer Benefits Survey

By Clive Riddle, October 4, 2018

 

The Kaiser Family Foundation 2018 Employer Benefit Survey, an annual 200+ page definitive report of the state of employer health benefits since 1999, includes these eighteen things to know that KFF highlights:

 

 

  1.  On average, employees are contributing $5,547 toward the cost of family coverage, with employers paying the rest.
  2. Annual premiums for single coverage increased 3 percent to $6,896 this year, with employees contributing an average of $1,186.
  3. This year’s premium increases are comparable to the rise in employees’ wages (2.6%) and inflation (2.5%) during the same period. 
  4. Since 2008, average family premiums have increased 55 percent, twice as fast as employees’ earnings (26%) and three times as fast as inflation (17%).
  5. Currently 85% of covered employees have a deductible in their plan, up from 81% last year and 59% a decade ago. 
  6. The average single deductible now stands at $1,573 for those employees who have one, similar to last year’s $1,505 average but up sharply from $735 in 2008. 
  7. 26% of covered employees are now in plans with a deductible of at least $2,000, up from 22% last year and 15% five years ago. 
  8. Among covered employees at small firms (fewer than 200 employees), 42 percent face a deductible of at least $2,000.
  9. 57% of employers offer health benefits, the same as five years ago. 
  10. Some employers that offer health benefits provide financial incentives to employees who don’t enroll – either for enrolling in a spouse’s plan (13%) or otherwise opting out (16%).
  11. Overall 10% of all offering firms – and 24% of large ones – expect fewer employees and dependents to enroll because of the elimination of the ACA tax penalty.
  12. 21% of large firms report they collect some information from employees’ mobile apps or wearable devices as part of their wellness or health promotion programs (14% last year.)
  13. Most large offering employers (70%) provide employees with opportunities to complete health risk assessments.
  14. 38% of large offering firms provide incentives for employees to participate in wellness programs.
  15. 29% of firms that offer health benefits offer a high-deductible health plan with a savings option. 
  16. 61% of firms offering HDHPs only this type of plan to at least some of their employees. Overall, 29% of covered employees are enrolled in such plans.
  17. 74% of large firms (200+ employees) cover services provided through telemedicine, up from 63% last year and 27% in 2015. 
  18. 76% of large firms cover services received in retail clinics.

 

 

 

Friday
Sep142018

Post ACA Operating Margins: Health Systems and Health Plans

By Clive Riddle, September 14, 2018

Navigant this week released an eight-page report: Stiffening Headwinds Challenge Health Systems to Grow Smarter, that provides “an analysis of a three-year sample of the financial disclosures of 104 prominent health systems operating 47% of U.S. hospitals,” in which Navigant  “found broad-based and significant deterioration of operating earnings.”

 

Navigant reports that from 2015 to 2017:

  • The average operating margin decline for analyzed systems was 38.7%. Not-for-profit system margins fell 34%, while for-profit margins fell 39%.
  • 65% of systems experienced operating income declines totaling $6.8 billion, with the most significant reductions occurring in the U.S.’s fastest-growing regions: West/Southwest and South Central.
  • At the root of these declines were multiyear reductions in the rate of topline operating revenue growth, which fell from 7% (2015 to 2016) to only 5.5% (2016 to 2017), and a failure to contain expenses in line with revenue deterioration. 

Navigant cites these drivers of earnings deterioration:

  1. Weakening demand for such core hospital services as surgery and inpatient admissions, due in part to rising patient cost exposure from high-deductible health plans;
  2. Deteriorating collection rates for private accounts in non-ACA expansion states;
  3. Steady erosion in Medicare payment rates due to the ACA and the 2012 federal budget sequester; and
  4. Failure of health system value-based insurance contracts to deliver sufficient patient volume to offset steep upfront payer discounts and significant hospital population health investments.

Meanwhile on the other side of the post-ACA equation, Mark Farrah Associates this week “released an analysis brief providing insights into mid-year profitability for commercial and government lines of health insurance business. MFA compared second quarter, year-over-year profitability for the Individual, Employer-Group, Medicare and managed Medicaid segments.”

They found that:

  • At the end of second quarter 2018, the average medical expense ratio for the Individual segment was 70.8%, as compared to 77.2% the previous year.
  • Growth in premiums pushed the average medical expense ratio for the Employer-Group segment down to 80.9% for 2Q18 from 81.8% in 2Q17.
  • For Medicare Advantage, premium growth outpaced increases in medical expenses pushing the medical expense ratio down to 85.3% from 86.1% in 2Q17.
  • 2.9% increase in premiums per member per month pushed the medical expense ratio for Managed Medicaid down to 88.6% from 91.0% in 2Q17.

Mark Farrah Associates concludes the current outlook is better than the one Navigant finds for health systems: “At the mid-year point, all four health care segments are signifying improved profitability for health insurers over 2017.  The most significant change is once again in the Individual segment showing improvement over 2017, which ended up being a profitable year for the segment overall.  While this analysis of mid-year segment performance sheds light upon profitability trends for 2018, it’s a wait and see proposition until final financial results are revealed in spring of 2019.”