With the release of the September 2017 Consumer Price Index (CPI) by the Bureau of Labor Statistics, the Social Security Administration (SSA) and the IRS have announced cost-of-living adjusted figures for Social Security and retirement plan benefits, respectively, for 2018. The 2018 adjusted figures for high-deductible health plans (HDHPs) and health savings accounts (HSAs) included in this Client Action Bulletin were released by the IRS earlier this year and are provided here for convenience.
The prevalence of multiple sclerosis (MS) in Japan is relatively low compared with that in the United States and Europe. However, the number of MS patients in Japan has been steadily increasing in recent years. This article co-authored by Milliman’s Kosuke Iwasaki and Yusuke Nakamura analyzes health insurance claims data to determine the current treatment status and medical cost of MS in Japan.
This article was originally published in Clinical and Neuroimmunology.
More healthcare-related regulatory news for plan sponsors, including links to detailed information.
Cost-sharing reduction subsidies to seize
The Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma issued a memorandum stating cost-sharing reduction (CSR) payments made to issuers of qualified health plans will stop. The decision is based on a legal opinion provided by the Office of the Attorney General.
Executive order on healthcare allows the purchase of insurance across state lines
President Donald Trump signed an executive order on healthcare directing the Department of Labor (DOL) to updated rules allowing small employers to create association health plans. Small businesses will be able to band together if they are within the same state, in the same line of business, or are in the same trade association.
For more information, click here.
Proposed extension of information collection request submitted for public comment
The DOL released a notice providing the general public and federal agencies the opportunity to comment on a revision of the “Coverage of certain preventive services under the Affordable Care Act—private sector” information collection request (ICR). The notice was issued to align the ICR with the executive order signed on May 4, 2017, “Executive order promoting free speech and religious liberty.”
For more information, click here.
Payment year 2017 is a key year for Medicare Advantage (MA) plans, as encounter data is weighted 25% and has been shown to result in lower risk scores and revenue. An upcoming Milliman webinar hosted by Charlie Mills and Deana Bell will explore how MA plans have prepared for the transition to encounter data, and highlight best practices for monitoring financial results and encounter data submissions. The webinar entitled “Medicare Advantage risk scores: Best practices in financial monitoring and encounter data submissions” is scheduled for October 19 from 11 a.m. – 12 p.m. PT (2 p.m. – 3 p.m. ET).
For more information or to register, click here.
Proponents believe that selling across state lines without being subject to state-specific regulations would increase competition and lower insurance costs. This proposed change could result in critical intended and unintended consequences, which depend greatly on policy intent and design. Milliman consultant Susan Philip provides some perspective in this article.
We recently used machine learning techniques to understand key drivers of Medicare Shared Savings Program (MSSP) financial performance. Of the 190 plus objective accountable care organization (ACO) features reviewed, ACO baseline efficiency proved to be the most important financial performance driver we identified. Another way of putting it is that MSSP rewarded inefficient ACOs more than ACOs that have attained efficiency.
You may be asking, “How did you measure baseline efficiency?” The chart below tells an interesting story.
We analyzed ACO baseline efficiency by reviewing ACO baseline expenditures that were unadjusted, risk-adjusted, and geographic-risk-adjusted. Risk-adjusted per capita expenditures were adjusted to account for each ACO’s average risk score and mix of entitlement categories. Geographic risk-adjusted per capita expenditures were adjusted to account for Medicare reimbursement levels in each ACO’s area.
Below are a few interesting notes:
1. Despite adjusting for risk levels, mix of entitlement categories, and reimbursement levels, there is still significant variation in baseline per capita expenditures. See the third column above for this wide range of variation.
2. Centers for Medicare and Medicaid Services (CMS) has already made MSSP rule changes that balance the rewards between ACOs at different levels of starting efficiencies. Past financial performance in MSSP agreement period 1 may not be a strong indicator of performance in agreement period 2. ACOs should understand how these rule changes affect them.
Beyond baseline efficiency, we found that several other features were strongly associated with gross savings:
1. National fee-for-service (FFS) trends higher than local market trends
2. Location in the Southeast and south central regions
3. Low performance year expenditures for short-term inpatient admissions
4. High baseline per capita expenditures, unadjusted
5. High CMS-hierarchical condition category (HCC) risk scores
However, we also found that these features still explained less than half of the variation in gross savings across ACOs. This may indicate that ACO care management efforts may be accounting for some of the remaining variation.
The full report is posted at Milliman Insight and includes a deeper dive into research conducted by Jill Herbold, Cory Gusland, and myself.