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Voluntary Care Management in Private-fee-for-service Medicare

Patricia R. Salber, MD, MBA

PRS Strategic Health Care Consulting

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Medicare basics

• Federal health insurance for people 65 and

older, under 65 with disability, ESRD

• Part A: Hospital benefits

• Part B: Physician benefits

• Part C: Medicare Advantage plans

• Part D: Prescription drug plans

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Part C: Medicare Advantage Plans

• Medicare Advantage plan members are still enrolled in Medicare.

• The only difference is that providers’ payments come from a private insurance company rather than Medicare and a Supplement carrier.

• Includes HMOs, PPOs, PSOs, Medicare MSAs, Private-fee-for-service (PFFS).

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Part C: Medicare Advantage Plans Payment

• Plans are paid based on the CMS/Medicare Risk Adjusted Reimbursement Model– It is called the CMS-HCC (Hierarchical

Condition Category) model– Payment is based on the severity of the

medical condition of the member as documented by diagnoses submitted on claims and encounters from qualifying claims generated by face-to-face visits during the prior year

– Diagnoses must be re-documented every year

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Part C: Medicare Advantage Plans Payment

• Some, but not all HCC groups are additive• Some conditions, like diabetes, have a

hierarchy of severity:– HCC19 250.00 Diabetes with no complications– HCC18 250.5x Diabetes w/ ophthalmic manifestations– HCC17 250.1-3x Diabetes w/ acute complications– HCC16 250.6x Diabetes w/ neurologic manifestations– HCC15 250.4x Diabetes w/ renal or peripheral

circulatory manifestations

• When this is the case, only the highest HCC is counted

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Part C: PFFS Plans

• PFFS includes the benefits of Parts A and B, plus additional benefits.– Replaces the need for Medicare Supplements

• Eliminates some member out-of-pocket costs under Medicare A and B.

• Offers more freedom of choice than more managed health plans– Members may go to any eligible doctor or hospital

anywhere in the U.S. that is willing to provide care and accept Medicare PFFS terms and conditions.

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Medicare Private Fee-For-Service (PFFS)

• Provides an option for Medicare beneficiaries who:– Don’t want limitations on choice of doctors and

hospitals– Want supplemental coverage beyond

traditional Medicare, but don’t want or can’t afford to pay for a Medigap plan

– Want an alternative to traditional Medicare, but HMO/PPO not available where they live

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Medicare Private Fee-For-Service (PFFS)

• PFFS plans have become an increasingly viable alternative to traditional Medicare A & B with Medicare Supplements.

• A strong middle-ground between HMOs and Supplement plans.

• Provide a Medicare health plan alternative to beneficiaries in rural areas or smaller metropolitan markets where none existed before.

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Value Propositions

Private Fee-for-Service– Offer the best of both worlds!

MedicareSupplements

HMO’s

Private-fee-for-service

Freedom to Choose Your own provider

$$$ Monthly Premium Savings

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PFFS recently drawing fire

From Today’s Wall Street Journal

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PFFS recently drawing fire

From Yesterday’s New York Times

Methods Used by Insurers Are Questioned By Robert Pear

Published: May 7, 2007WASHINGTON, May 6 — Insurance companies have used improper hard-sell tactics to persuade Medicare recipients to sign up for private health plans that cost the government far more than the traditional Medicare program, federal and state officials and consumer advocates say.

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Today’s Options is the PFFS product of:

• $2.8 billion total assets

• More than 180,000 covered lives in Today’s

Options PFFS product

• Enrollment growing at a rate of 4-5,000 members

per week

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HMO plans Private Fee-for-Service Special Needs Plans Individual and Group

Prescription Drug Plans Individual and Group

Medicare Supplement / Select Senior Acute Care and Dental Individual and Group

3rd Party Administration: Medicare Supplement, Long Term Care, Medicare Advantage & Part D

ElderCare (non-risk)

Medicare Advantage

Medicare Part D

Senior Administrative Services

Senior Market Health Insurance

UAFC has a comprehensive portfolio of senior market products

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PFFS Today’s Options’ Value Propositions

• Monthly premium less costly than Original Medicare plus Medicare Supplements.

• Balance billing prohibited• Low co-payments• Covers all services under Medicare Part A and B.• Offers additional benefits (i.e. routine exams in both

plans) beyond what Medicare Parts A and B provide• Most claims can be handled between plan and

providers, so there is almost no paperwork for member to complete.

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Today’s Option Differentiator

• Today’s Options “Health & Wellness Services–A voluntary care management

program –Provides a range of services,

including disease management and case management

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Today’s Options’ Health & Wellness Services

• Program goal– to have meaningful impact on

members in need of complex case management; disease management focused on COPD/CAD/HF/Diabetes; and unmanaged, yet high risk people (frequent hospitalizations, ER visits, poly-pharmacy etc.)

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Components of the voluntary care management program

• A 24/7 nurse line to assist members with their healthcare concerns and needs.

• Post-hospitalization “Welcome Home” calls • Eldercare Services• Complex case management and care coordination• Chronic condition management• Pharmacy support for individuals with a linked Part

D benefit

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Implementation Challenges

• Rapid growth– Increased from 20 K at the end of 2006 to ~170 K

members currently

• Geographic dispersion– 35 states and 2600 counties

• No provider networks– Limited ability to get providers attention

• Many providers• Few members/provider

– FFS payment

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Implementation Challenges

• Many rural members– Limited experience with care management

processes• Limited data

– Many new members with no prior claims – No lab data– Limited pharmacy data

• Existing internal care management program comprehensive, but not at the same scale as new membership– Need to ramp up rapidly to accommodate explosive

plan growth

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The TO approach

• Divide the work between three different programs– Internal program ~55,000 members in 13 states– Vendor A ~83,000 members in 18 states– Vendor B ~32,000 members in 4 states

• Three programs will be compared to determine which ones bring the most value (quality/cost)

• Very rapid implementation– Vendor selection in late Jan./early Feb– First health coaching calls with members by end of February

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Jump start the program with outbound telephonic HRAs

• Used HCC data to prioritize the outreach– Members with 2 or more of the “big four” chronic

condition HCC codes are being called first– By end of January, there were ~100,488 members

• Telephonic HRAs on ~26,829• Mailed HRAs to ~34,916 with ~9,214 returned

– Currently, about 20% of the population have completed HRAs

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Jump start the program with outbound telephonic HRAs

• Secure electronic transfer of HRA results to vendors and the internal program

• The programs used these results to identify members with the following:– Acute or immediate needs that would benefit from

complex case management/care coordination– Chronic illnesses that could benefit from health

coaching

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Developed a leadership team and sub-teams to get the work done quickly

• Weekly telephonic implementation lead call to review progress and problem solve barriers

• Communications team to customize member materials and address web portal issues

• Data team to rapidly format data feeds needed to support the program:– Eligibility, medical claims, hospital pre-notification,

pharmacy (when available), and MOR files (ICD9 codes that track to HCCs)

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Incentives and accountability

• Initial payment is PMPM, but working towards a risk arrangement

• Initially required daily reporting of “touches,” now weekly– Allowed rapid identification of problems– Monthly impact reports to begin next month

• Full clinical and utilization reporting once claims begin to be populated (6-8 months after implementation)

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Accomplishments to date

• Varies by program• Vendor A has completed a general

awareness mail campaign and several rounds of automatic outbound telephone campaigns. They have also completed more than 5,500 outbound health coaching calls (~6% of the population) and more than 500 follow-up calls

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Accomplishments to date

• Vendor B has completed more than 200 complex case management calls

• The internal program has completed ~2,000 health coaching calls, 1200 care management calls, and 55 onsite assessments

• Feedback from front line coaching staff is that members are pleased with the program; formal member satisfaction surveys are planned

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Lessons learned

• Early health assessments are an effective means of getting the program started while waiting for claims databases to get populated

• Frequent communication, including data reporting, between plan and vendors key to rapid implementation

• Both vendors and plan must be accountable for addressing identified issues in a timely fashion – this is not implementation “as usual”

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What is on the horizon?

• Assessment of enrollment to determine high volume clusters of members– Outreach to high volume providers– Complete physician engagement strategy and roll-

out plan– Partnerships with community-based programs

• Roll-out of member web portals• Continual evaluation of results to make the

programs more efficient and effective• Moving towards a risk-share arrangement

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Questions