After years of intense discussion and little action, outcome-based healthcare has arrived with a boom.

Transcription

1 September 2013

2 After years of intense discussion and little action, outcome-based healthcare has arrived with a boom. It s as if that twinkling little star went supernova. In fact, are driving the new world of value-based healthcare. This market shift began in earnest with the Medicare Advantage (MA) 5-Star Quality Rating System. The 5-Star Quality Rating System provides enormous financial rewards for health plans that improve member health. Health plans are scrambling to develop effective initiatives that improve outcomes and motivate members towards healthy behavior change. Deadlines are pressing. Health plan executives are struggling to answer these questions: What impact will Medicare s Star ratings have on our revenue performance? How do we reshape member relationships so that incentives are aligned with healthy behavior change and quality improvement we can actually measure? What 5-star measures should we address first to increase our rating in short order? What tools are available to help us quickly drive member behavior change? This edition of ion Healthy Outcomes highlights the key elements of Medicare s 5 -star rating system and provides insights on how to achieve and maintain a 5-star rating.

3 Star Rating s Rebates and Bonus Payments Factors that determine your CMS revenue. Get on the Fast Track with Weighted Measures Health outcome improvements are given the greatest weight. Double Bonus Counties For 210 counties the upside is even greater, and should be leveraged as much as possible. Members Actively Migrate to High Rated Plans The Medicare Advantage population selects higher rated plans. Stars are Worth Millions of Dollars Quality improvement is no longer an expense, but a game changing revenue driver. Key Benefits of Achieving a 5-Star Rating Higher ratings provide a compelling competitive advantage Star Plans A handful of elite leaders earn 2012 bonuses. Low Ratings Adversely Impact Member Retention Strong correlation between complaints and attrition. The Acceleration Impact A tale of two plans. What s the Impact of Increasing Stars? With millions at stake; reaching for the is well worth the effort. Where to Focus to Improve Your Rating Analyze and prioritize for greater rewards. You Need Answers for these Five Questions Turn the spotlight on maximizing your CMS Star rating. A Bellwether of Success Kaiser Healthy Outcomes Coordinated actions results in enormous gains. What is your Plan for Action?

4 Factors that determine your CMS revenue. Plans are measured on multiple domains, each of which is compose of a series of individual measures. Domain ratings are calculated as a weighted average of the star ratings of the individual measures within the domain. QBP for Medicare Advantage organizations introduced as part of the Accountable Care Act Quality Bonus Payment (QBP) by Star Rating YEAR % 3.0% 3.5% 4.0% 4.0% 5.0% % 3.0% 3.5% 4.0% 4.0% 5.0% % 3.0% 3.5% 5.0% 5.0% 5.0% % 0.0% 0.0% 5.0% 5.0% 5.0% Domains for Medicare Advantage (36 measures 2012) Staying healthy: Screenings, tests and vaccines (13) Domains for Prescription Drug Plans (17 measures 2012) Member experience with drug plan (3) Managing chronic conditions (10) Drug pricing and patient safety (4) Plan responsiveness and care (6) Customer service (7) Percentage of the savings a plan receives from bidding under benchmark Rebate Percentage by Star Rating Member complaints, problems getting services, and choosing to leave the plan (4) Customer service (3) Member complaints, problems getting services, and choosing to leave the plan (3) YEAR % 66.7% 71.7% 71.7% 73.3% 73.3% % 58.3% 68.3% 68.3% 71.7% 71.7% % 50.0% 65.0% 65.0% 70.0% 70.0% < Source: CMS >

5 Health outcome improvements are given the greatest weight. Measure Type Description Weight Examples Outcome measures Intermediate outcome measurers Patient experience measurers Access measurers Focus on improvement to a beneficiary s health as a result of the care that is provided Concentrate on ways to help beneficiaries move closer to achieving a true outcome Represent beneficiaries perspectives about the care they receive Reflect processes or structures that may create barriers to receiving needed health care 3 Improving or maintaining physical health Improving or maintaining mental health 3 Controlling blood pressure Taking cholesterol medication as directed 1.5 Members overall rating of drug plan Members choosing to leave the plan 1.5 Members ability to get prescriptions filled easily when using the plan Process measures Capture a method by which health care is provided 1 Colorectal cancer screening Annual flu vaccine The measures with the highest weight, are the most difficult to improve. This is because they require member cooperation and often require change in member behavior. Improved outcomes depend upon what happens between medical visits. Proactively engaging members via mobile device apps, combined with education, feedback and rewards are linked to healthier behaviors. These new tools are an effective way to boost your outcome scores. CMS has been shifting to weighing outcomes and patient experience measures more than other measures. -- Jonathan Blum, CMS Deputy Administrator < Source: Kaiser Family Foundation >

6 For 210 counties the upside is even greater, and should be leveraged as much as possible. The health reform law required bonuses to be doubled for plans that are offered in counties with ALL these characteristics: Lower than average Medicare fee-for-service costs MA penetration rate of 25% or more as of Dec A designated urban floor benchmark in 2004 < Source: Kaiser Family Foundation >

7 The Medicare Advantage population selects higher rated plans. CMS Announced Increase in Quality Choices for 2013 Rapid Growth for Four and Five-Star Plans Up from 106 plans in 2012 to 127 Four and Five- Star plans in 2013 serving 37 percent of the Medicare Advantage members (an 11% increase in just one year). Ratings make a significant financial difference: Kaiser 4.53 $400 PMPY received 12% of 2012 CMS bonus funds. Humana 3.08 $220 PMPY <Source: Centers for Medicare & Medicaid Services >

8 Quality improvement is no longer an expense, but a game changing revenue driver. Medicare Advantage Plans will receive $8.2 Billion over three years CMS Paid Out $3.1 Billion in 2012 One-third of total bonuses are projected to be paid to health plans with 4 or more. The financial implications are substantial. Ignoring them is a painful strategy for Medicare Advantage organizations. < Source: Kaiser Family Foundation >

9 A handful of elite leaders benefited from 2012 bonuses Plans Note: Kaiser Permanente Leads the Nation with Six 5-star Medicare Health Plans <Source: Centers for Medicare & Medicaid Services >

10 Higher ratings provide a compelling competitive advantage. Plans that are first to achieve a 5-star rating secure compelling competitive advantages. A health plan with a 5-star rating can enroll new members at any time, while competitors must wait for the standard open enrollment period. 5-star plans earn significant financial bonuses. 5-star plans can enroll new members at ANY TIME during the year. Member turnover is reduced. Members select and stay with 5-star plans over lower rated alternatives. Now that Stars equate to dollars, we have definitely heard from the finance department, How can you get to five Stars? -- Ann Marie Scimmacco, Vice President, Fallon Community Health Plan

11 Strong correlation between complaints and attrition. Star ratings have started to move the Medicare market towards higher rated plans. 2-star plans lose 22% of members annually. Disenrollment data and complaint correlate. Data and quality performance become increasingly important with rollout of insurance exchanges. Engaging your members in a manner that is relevant to each member s individual health, interactive and action based can drive your Star ratings. Clinical data mining gives early insight on high impact opportunities. Multi-channel member campaigns not only increase member retention, they can also help motivate behavior changes. New member engagement tools can improve member outcomes, reduce member complaints, and drive improved Star ratings. < Source: HealthPocket >

12 A tale of two plans. Plan Orange Plan Green In 2013, Plan Orange and Plan Green were equally average health plans with 100,000 members, but their futures are vastly divergent. The CMS Star rating table below indicates the bonus structure through The table reveals the future of Plan Orange and Plan Green, similar competitors, except one was proactively improving outcomes. Star ratings are based on lagged data, and an average company can quickly find itself out of the running for bonus payments. In 2013 Plan Orange and Plan Green both had an average rating of 3.0. It was business as usual. They didn t feel a pressing need to make changes. Plan Green however began selectively investing in programs to improve health outcomes for its members. As a result, in 2014 Plan Green moved up half a star, to a 3.5 Star rating and earned a corresponding bonus of 3.5%. That was worth close to $60 million in CMS bonus revenue. These funds were reinvested to build infrastructure to improve member relationships, build healthy outcomes and change member behavior. Member satisfaction continued to increase. In 2014, Plan Orange sits tight at 3, using their 3% bonus to offset member co-pays. Everyone is content. It is now 2015, Plan Orange launches an emergency program to boost ratings which results in a half star improvement. It is not enough. A 3.5 star rating no longer qualifies for any bonus. Plan Orange missed the window of opportunity and members begin to migrate to higher rated plans. The mood at Plan Green is optimistic. They have accelerated their most effective programs. Plan Green moves up another half star. The reward is a huge 5.0% bonus which is used to build deeply engaging relationships that improve health outcomes and member satisfaction. Plan Green, an average performer two short years ago, is on track to be a 5-star leader. Plan Orange is no longer a competitor of consequence. CMS Quality Bonus Payment by Star Rating YEAR % 3.0% 3.5% 4.0% 4.0% 5.0% % 3.0% 3.5% 4.0% 4.0% 5.0% % 3.0% 3.5% 5.0% 5.0% 5.0% % 0.0% 0.0% 5.0% 5.0% 5.0% < Reference: Health Watch, May 2012 >

13 Analyze and prioritize for greater rewards. Identify the most attractive criteria to change those closest to the next bonus threshold. Compare relative contribution across CMS measures. Identify the scope and magnitude of improvement required to move your score. Look for improving processes that enhance your member s experience. Keep in mind, measures with the highest weight typically require member cooperation and often require change in member behavior. Evaluate new tools and leverage technology that can help boost your healthy outcome score Identify the most attractive criteria for change. Compare relative contribution across CMS measures. Evaluate and leverage technology that can boost scores. Deploying member relationship applications is one path to quickly strengthen the link between member care, healthy outcomes and reimbursement levels. These applications leverage technology and actively help members modify their behavior.

14 With millions at stake reaching for the is well worth the effort. Analysis from L.E.K. Consulting, reveals that the difference between a 3 Star and 4 Star Medicare Advantage plan is worth roughly $50 per member per month (PMPM). For any plan with 50,000 or more members that equates to a meaningful contribution to the bottom line. $50 PMPM < Source: L.E.K. Executive Insights >

15 Turn the spotlight on maximizing your CMS Star rating. 1. Have we identified the CMS rating criteria, where our current score is closest to the next bonus threshold? 2. What initiatives and/or new technologies are we deploying to improve our performance on these criteria or measures? 3. What is our mechanism for measuring improvement and reporting our metrics? 4. Where can we improve our member outreach in ways that measurably improve their experience and our relationship? 5. Are we able to harness new tools and technology to rapidly improve our CMS Star rating? Most health plans have a strategy for improving CMS Star metrics but lack the tools, processes, and organizational skills to implement quickly and effectively. -- Richard Stewart, Accenture Click to read < Source: Accenture 5-Star White Paper >

16 Coordinated actions result in enormous gains. Controlling Hypertension Member cooperation drives positive change Action: Registry of all hypertension patients Doctors receive regular evidence-based guidelines on medications Simplified, single pill therapy Free, quick medical assistant follow-up after medication changes, <4 weeks Patients asked to monitor blood pressure at home, and report results Patient involvement encourages medication compliance Percent of Hypertensive Kaiser Members within Blood Pressure Guidelines 44% % % 2011 Results: Heart attacks dropped by 24% Fatal strokes dropped by 42% < Source: Journal of American Medical Association >

17 Medicare Advantage plans that are not operating at bonus threshold levels are leaving money on the table and could benefit from a systematic review of plan performance across star ratings measures. -- Joe Johnson, Vice President, Healthcare Services, L.E.K. Consulting

18 Click here to: Receive an copy of this quarterly report. Be removed from the mailing list/cancel your subscription. Send comments. This Issue was Sponsored by Mobile PRM Mobile PRM s member-centric applications support and reward behavior changes that in turn, improve Star Ratings and reimbursement revenue.