Federal health exchange risk adjustment model now available in Milliman Advanced Risk Technologies’ MARA software

June 24th, 2014

By jeremy.engdahl-johnson

Milliman has announced the expansion of its Milliman Advanced Risk Adjusters (MARA) software to include greater flexibility for calculating risk scores in and outside of health exchanges. The latest release includes the federal risk adjustment model developed by the U.S. Department of Health and Human Services (HHS) for use in the individual and small group marketplaces starting in 2014. The complex HHS-HCC model set, which employs the hierarchical condition category (HCC) grouping logic, requires specific diagnosis and demographic handling to calculate risk scores.

“Our latest product release is a testament to our commitment to provide healthcare organizations with on-demand risk scoring solutions in support of their reform initiatives,” said Diane Laurent, MARA’s managing director.

The HHS-HCC risk adjustment model is provided in a platform-independent software package that is easy to install in any environment. Clients who wish to tightly integrate the processing engine receive automated processing interface support. Milliman’s MARA product is proven technology with analytical support available from Milliman’s consulting actuaries and other industry experts.

“The MARA tools give the industry on-demand processing of metallic-level and cost-sharing reduction (CSR) risk scores, with completely transparent scoring. Adding the HHS-HCC risk adjustment model means plans and others have another powerful tool for understanding and managing risk in their own technical environments,” added Hans Leida, Milliman principal and consulting actuary.

In addition to the HHS-HCC risk adjustment model, MARA includes a library of more comprehensive, higher-performing risk adjustment tools that are widely deployed in solutions offered by leading healthcare technology providers, including business intelligence, care workflow solutions, and electronic medical records (EMR) vendors. MARA adds insight for population health activities in accountable care organizations (ACOs), primary care medical home programs, and other health-based budgeting, pricing, and risk-based performance measurement programs.

For more information, go to www.millimanriskadjustment.com.

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Regulatory roundup

June 23rd, 2014

By Employee Benefit Research Group

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Government agencies issue final rules on 90-day period limitation
The U.S. Departments of Treasury, Labor (DOL), and Health and Human Services (HHS) have issued final rules that clarify the maximum allowed length of any reasonable and bona fide employment-based orientation period, consistent with the 90-day waiting period limitation under the Patient Protection and Affordable Care Act (ACA).

The final rules are scheduled to be published in the Federal Register on June 25, 2014.

DOL announces it will issue proposed rule to extend Family Medical Leave Act protections to all eligible employees in same-sex marriages
The DOL has announced a proposed rule extending the protections of the Family and Medical Leave Act (FMLA) to all eligible employees in legal same-sex marriages regardless of where they live. The proposal would help ensure that all families will have the flexibility to deal with serious medical and family situations without fearing the threat of job loss. Secretary Thomas Perez is proposing this rule in light of the U.S. Supreme Court’s decision in United States v. Windsor, in which the court struck down the Defense of Marriage Act provision that interpreted “marriage” and “spouse” to be limited to opposite-sex marriage for the purposes of federal law.

The proposed rule would change the FMLA regulatory definition of “spouse” so that an eligible employee in a legal same-sex marriage will be able to take FMLA leave for his or her spouse or family member regardless of the state in which the employee resides. Currently, the regulatory definition of “spouse” only applies to same-sex spouses who reside in a state that recognizes same-sex marriage. Under the proposed rule, eligibility for FMLA protections would be based on the law of the place where the marriage was entered into, allowing all legally married couples, whether opposite-sex or same-sex, to have consistent federal family leave rights regardless of whether the state in which they currently reside recognizes such marriages.

For additional information on the FMLA, including information and fact sheets on the proposed revisions, click here. Comments must be received within 45 days following publication in the Federal Register.

Also, to read the entire proposed rule, click here.

HHS report shows premium affordability, competition, and choice in the marketplace in 2013-2014
A new report released by the HHS finds that people who selected silver plans, the most popular plan type in the federal marketplace, with tax credits paid an average premium of $69 per month. In the federal marketplace, 69% of enrollees who selected marketplace plans with tax credits had premiums of $100 a month or less, and 46% premiums of $50 a month or less after tax credits.

The report also looks at competition and choice nationwide among health insurance plans in 2013-2014, and finds that most individuals shopping in the marketplace had a wide range of health plans from which to choose. On average, consumers could choose from five health insurers and 47 marketplace plans. An increase of one issuer in a rating area is associated with 4% decline in the second-lowest cost silver plan premium, on average.

To read the entire report, click here.

IRS updates FAQs on the Additional Medicare Tax
On November 26, 2013, the Internal Revenue Service (IRS) issued final regulations implementing the Additional Medicare Tax as added by the ACA. The Additional Medicare Tax applies to wages, railroad retirement (RRTA) compensation, and self-employment income over certain thresholds. Employers are responsible for withholding the tax on wages and RRTA compensation in certain circumstances.

The IRS has since updated 58 frequently asked questions (FAQs) on the matter. To view the updated page, click here.

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Prices determine plan selection on ACA exchanges

June 23rd, 2014

By Javier Sanabria

A recent Managed Healthcare Executive article suggests that individuals’ decisions to purchase plans on the health exchange were largely price-driven. According to the article, Milliman’s Tom Snook agrees that buyers were more price-sensitive than many anticipated.”

Managed Healthcare Executive published the graphic below showing the percentage of plans selected by tiers.

Offering less expensive plans under a “copper” tier has also been suggested, although data is needed to establish rates and learn who may benefit from such plans. In the article, Snook addresses the challenges insurers face setting rates for existing tier plans ahead of 2015:

Because of the confusion accompanying the rollout of the insurance exchanges, [insurers] have not yet yielded much insight into how accurate rate setting will be for 2015. However, this lack of data is not surprising to executives of health plans. “They knew going in that they would be flying not entirely blind but close to it for 2015,” says Snook. “Even if they know their risk profile they don’t know how they compare to the rest of marketplace.”

…“There is a sense that 2015 may be the first real year of ACA experience,” he says. However, he believes that health plans are still likely to see a lot of unexpected developments and that it will take several years for things to settle into a recognizable pattern.”

For more of Tom Snook’s perspective on healthcare reform, click here.

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Regulatory roundup

June 16th, 2014

By Employee Benefit Research Group

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Private employers spent $2.36 per hour worked for employee health benefits in March
The U.S. Bureau of Labor Statistics (BLS) has published a news release highlighting employer costs for employee compensation during March 2014. The release states that private employers spent an average of $29.99 per hour worked for compensation during the month. Health insurance was the largest individual employer benefit cost at $2.36, accounting for 7.9% of total compensation costs.

To read the entire release, click here.

IRS advisory committee publishes 2014 Report of Recommendations
The Advisory Committee on Tax Exempt and Government Entities of the Internal Revenue Service (IRS) has issued its 2014 Report of Recommendations (Publication 4344, Rev. 6-2014). Healthcare topics relevant to employee benefits include “The Affordable Care Act and government employees.”

To access the entire report, click here.

CMS’s Retiree Drug Subsidy Center releases welcome kit
The Retiree Drug Subsidy Center of the Center for Medicare and Medicaid Services (CMS) announced the release of its Retiree Drug Subsidy (RDS) “welcome kit” to help new account managers, authorized representatives, actuaries, and designees become acquainted with the RDS Program and its role-specific tasks.

To access the welcome kit, click here.

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Storify: 2014 Milliman Medical Index media roundup

June 13th, 2014

Milliman to showcase Healthcare Intelligence products at America’s Health Insurance Plans (AHIP) 2014 Institute Conference

June 11th, 2014

By jeremy.engdahl-johnson

Milliman announced today that it will showcase its growing line of Healthcare Intelligence products and solutions at AHIP’s Institute 2014, June 11-13, in Seattle. Milliman is exhibiting as an AHIP major sponsor and conference attendees will be able to stop by booth 810 to learn more about or schedule private presentations for all Milliman Healthcare Intelligence products.

Kent Sacia, Milliman Principal, is a featured panelist at AHIP’s Data Analytics Forum, part of the extended Institute Plus conference, and will discuss infrastructure, technology challenges, and the future of big data.

Milliman Healthcare Intelligence products such as MedInsight®, IntelliScript®, Health Cost Guidelines™, and Milliman Advanced Risk Technologies™ will be represented, along with newer products including HealthcareEDU and MyRxConsultant.

Many Milliman Healthcare Intelligence practices will be on site to showcase their latest products and releases:

• The MedInsight team will be available to discuss the upcoming launch of its new MedInsight Platform this fall, built on Microsoft’s powerful Analytic Services Platform. This significant update will improve client data refresh time by as much as 75% and data retrieval time by as much as 90%.
IntelliScript will be featuring AlertRx, a tool for payors to optimize their risk adjustment revenue.
Health Cost Guidelines (HCG) will be on site to discuss the data and rating tools for modeling healthcare utilization and to showcase the HCG Grouper software that sorts medical and pharmacy claims data into hospital, surgical, medical, and other benefit service categories.
• The Advanced Risk Technologies team will be highlighting their latest release of Milliman Advanced Risk Adjusters™ (MARA™), Milliman’s powerful risk adjustment and predictive modeling software.
MyRxConsultant will be showcasing their product of the same name, a pharmacy analytics tool that processes claim data to generate pharmacy benefit costs and experience reports on demand.
HealthcareEDU will be demonstrating their new e-learning courses, specializing in educating your workforce on the healthcare market and its evolution.

To learn more about Milliman Healthcare Intelligence, visit booth 810 at AHIP’s Institute, or visit us at www.milliman.com.

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Medical professional liability industry update

June 10th, 2014

By Javier Sanabria

The year 2013 was once again a year of financial growth for the medical professional liability (MPL) insurance industry, despite a continued decline in profitability. While the industry’s operating ratio remains well below 100%, it has increased noticeably relative to 2011, driven by a decline in reserve releases, increased expenses, and diminished investment income.

Despite this decline in profitability, the MPL industry again returned a substantial portion of its income as dividends to policyholders. Surplus also grew moderately in 2013, providing the MPL industry with additional capital support. MPL writers continue to confront the risk associated with a possible increase in inflation and continue to face uncertainties stemming from healthcare reform.

To get a more detailed picture of the state of the MPL industry today, Milliman’s Chad Karls and Susan Forray have analyzed the financial results of a composite of 38 of the largest specialty writers of MPL coverage using statutory data. The consultants have compiled various financial metrics for the industry in this article.

Reprinted from the Second Quarter 2014 issue of Inside Medical Liability, Physician Insurers Association of America. Copyright, 2014.

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Regulatory roundup

May 27th, 2014

By Employee Benefit Research Group

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

CMS issues FAQs on health insurance market reforms and marketplace standards
The Centers for Medicare and Medicaid Services (CMS) issued a set of frequently asked questions (FAQs) on health insurance market reforms and marketplace standards that provide guidance on the implementation of the essential health benefits and on actuarial value, guaranteed availability, minimum essential coverage, and transitional policy extensions.

As it relates to employers, the guidance answers:

• Can a health insurance issuer file a plan for state approval in the individual or small group market that is intended to be offered only as a qualified health plan in the marketplace?
• Would a large employer with 51 to 100 employees that is a large group policyholder be covered by the March 5, 2014, bulletin with respect to a renewal of its 2013 plan at its 2014 renewal date if the policy is not compliant with the provisions of the Patient Protection and Affordable Care Act (ACA) that apply to the large group market?
• Is a large group employer who employs 51 to 100 employees required to remain with the same insurer between 2013 and 2016 in order to be eligible for transitional relief in 2016?
• Are individual policyholders and small employers who changed carriers between October 2, 2013, and December 31, 2013, eligible for extended transitional relief?
• If an individual or small employer purchased a 2014 ACA-compliant plan, are there circumstances where the policyholder can have the 2013 plan reinstated and be eligible for the transitional policy relief?
• Does the large employer transitional policy starting in 2016 apply to large employers with 51 to 100 employees that did not have health insurance coverage at the time the transitional policy extension bulletin was issued March 5, 2014, but who purchase a large employer policy after March 5, 2014, but before January 1, 2016?

To read the entire FAQ guidance, click here.

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Gov. Mike Pence highlights Milliman’s Healthy Indiana Plan research

May 22nd, 2014

By Javier Sanabria

In his recent Wall Street Journal editorial (subscription required), Indiana Gov. Mike Pence cited Milliman studies pertaining to the Healthy Indiana Plan (HIP). HIP is the state’s Medicaid expansion program designed to cover individuals who are uninsured with incomes up to 200% of the federal poverty level (FPL). Here is an excerpt from Gov. Pence’s editorial:

The Healthy Indiana Plan (HIP) now provides health-savings accounts, or HSAs, to nearly 40,000 people and empowers them as health-care consumers. According to a Milliman analysis of HIP and traditional Medicaid claims, 7% fewer HIP members used the emergency room in 2012 compared to traditional Medicaid enrollees.

Another Milliman study showed that 60% of HIP enrollees in 2012 obtained preventive-care services such as annual physicals and flu shots—a rate similar to that of the general commercial marketplace. HIP enrollees choose generic drugs at a much higher rate than people covered by other private insurance plans.

When HIP was first implemented, Milliman’s Rob Damler analyzed patterns of care and pent-up demand in the newly enrolled population; for more on this analysis, reference this 2009 paper. For more Milliman perspective on the Healthy Indiana Plan, click here.

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Healthcare costs climb to $23,215 for a typical American family in 2014

May 21st, 2014

By jeremy.engdahl-johnson

Milliman has released the 2014 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider plan (PPO). In 2014, costs for this family will increase by 5.4% ($1,185), resulting in a total cost of $23,215. The employer pays $13,520 of this and the employee—through payroll deductions and cost sharing at the time of service—pays $9,695.


“The good news is that the annual rate of increase has been declining for years,” said Chris Girod, coauthor of the Milliman Medical Index. “The bad news is that this represents yet another $1,100 jump in costs for this typical family. Even if we are bending the cost curve, there are few other household expenses that increase at four figures per year.”

This year’s 5.4% cost increase is the lowest in the 14-year history of the MMI and is almost a full percentage point lower than the rate of increase in 2013, which, at 6.3%, was the prior record low for this study. Even with the deceleration, the impact over time of high trends is still quite evident.

“Healthcare costs for this family have more than doubled over the past 10 years,” said Sue Hart, coauthor of the MMI. “These costs have increased a total of 107% since 2004.”

Employees and employers have shared the burden of this cost increase. The MMI is somewhat unique among health cost studies because it measures total cost, including out-of-pocket expenses paid at time of service, and it separates the costs into portions paid by employer versus employee. For the fourth consecutive year, employees have assumed an increasing percentage of the total cost of care.

“Since 2010, the total employee cost, which includes both payroll deductions and out-of-pocket expenses, has increased by around 32%,” said Lorraine Mayne, coauthor of the MMI. “Employer premium contributions have increased by 26% in that same period.”

What should this family expect in the future?

“Any number of factors could influence healthcare costs in coming years,” said Scott Weltz, coauthor of the MMI. “The economy is a big one, but there are others: provider risk sharing and increased transparency may contribute downward cost pressure. Specialty pharmaceuticals could introduce upward cost pressure. And while it has yet to materially affect costs, the Affordable Care Act is an elephant that’s about to enter the room. There are provisions in the law that may contribute either upward or downward pressure on employer-sponsored plans; it will take some time before we know how health reform is affecting a typical family that receives coverage through an employer.”

To view the complete MMI, go to http://us.milliman.com/MMI.

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