State Medicaid Scorecard Data analysis

In this report, Milliman’s Andrew Dilworth and Paul Houchens provide an analysis of the recently announced Centers for Medicare and Medicaid Services Medicaid and Children’s Health Insurance Program (CHIP) Scorecard. They primarily focus on the Scorecard’s State Health System Performance (SHSP) quality metrics, based on the Child and Adult Core Set data.

MLR rebate considerations for ACA health plans

Many issuers faced financial challenges in the individual market in the first few years of the Patient Protection and Affordable Care Act (ACA). The continually changing landscape made it difficult to keep up even after significant rate increases, and issuers repeatedly reported medical loss ratios (MLRs) well above sustainable targets.

As experience emerges for plan year 2018, the tides are changing. A number of issuers filed rate decreases across the marketplace for plan year 2019 and new market entrants are appearing once again, a sign of a more stable market with potential for profitability. MLRs are projected to approach, and potentially to drop below, the 80% threshold for the individual market, on average. As the average MLR continues to decrease, the portion of ACA issuers below the MLR threshold continues to increase.

As MLRs decrease, individual ACA issuers need to start thinking about something that has been mostly irrelevant for them until now—MLR rebates. Although MLR rebate requirements have applied in several markets since 2011, the individual ACA market is unique in that high MLRs have prevented rebates from entering the equation for the majority of issuers since the ACA’s inception.

MLR rebates were introduced in the ACA market with the goals of stabilizing the market and providing customer protection by returning money back to policyholders when an issuer’s MLR reflects high profitability, administrative inefficiencies, or low claim levels not otherwise reflected in premium.

To learn more about MLR considerations for the 2018 reporting year and how to plan for 2019 and beyond, read this paper by Milliman’s Esther Blount, Michelle Klein, and Alison Fasching.

What is a Critical Point anyway?

How did Milliman’s podcast get its name? In this episode of Critical Point, Hans Leida and Doug Norris—both health actuaries and math PhDs—discuss how they decided on “Critical Point” for the name of the podcast. Hans and Doug talk about various aspects of mathematics, including topology, optimization theory, and chaos—and why the term “critical point” is so relevant in the actuarial world today.

To listen to this episode of Critical Point, click here.

Key considerations for VBID participation

In January, the Centers for Medicare and Medicaid Services (CMS) announced an opportunity for Medicare Advantage organizations (MAOs) to enter the Value-Based Insurance Design (VBID) model for 2020. MAOs will need to act fast to take advantage of the opportunities afforded by the Medicare VBID model.

The first step in this process is understanding the types of interventions allowed under the model that will benefit an MAO’s covered population, if any. MAOs must then quantify savings and incorporate these interventions into the MAO’s previously submitted 2019 bid in order to apply by CMS’s March 15 deadline. The application must also include additional narrative and quantitative support as described in the calendar year 2020 VBID model actuarial guidance.

In this article, Milliman’s Catherine Murphy-Barron, Pamela Pelizzari, and Brian Regan describe the model and explore key issues for eligible MAOs considering participation in the model.

“Pathways to Success” rule changes financial benchmark methodology

The Medicare Shared Savings Program (MSSP) final rule includes changes to the financial benchmark methodology that measures the gross savings or losses of an accountable care organization (ACO) under the MSSP. Four key elements of the financial benchmark methodology changed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend.

In this paper, Milliman’s Jill Herbold, Cory Gusland, Charlie Mills, and Matt Kramer discuss these changes and important implications for Medicare ACOs. Each of these changes in the MSSP’s financial benchmark methodology will have significant implications for most ACOs. Given the increase in the agreement period length from three to five years, it is critical that ACOs assess how the final rule will affect their financial benchmarks and related strategies.

Brief study of UK health insurers’ second SFCRs

This analysis by Milliman consultants compares information provided in Quantitative Reporting Templates (QRTs) and Solvency and Financial Condition Reports (SFCRs) and draws conclusions about the balance sheets and risk exposures of 15 UK private medical insurance and health cash plan providers. The analysis also highlights noteworthy trends between the 2017 and 2018 publications.