Category Archives: Providers

What should payers and providers understand about joint venture health plans?

Joint venture health plans are still relatively new to providers and payers. It’s important for both sides to engage a skilled actuary who can assess the potential risks and benefits of such a partnership. In this article, Milliman actuary Lynn Dong provides some perspective on the following questions that providers and payers must consider concerning joint venture arrangements.

• How much is the provider system’s volume likely to increase?
• What is the provider’s range of potential outcomes under the rate concession or risk-sharing arrangement? How does this compare with the current contractual reimbursement arrangements?
• What insurance risks are transferred from the payer to the provider, and how will these risks be managed?
• How will the responsibility for care management, ongoing data and financial reporting, and financial settlements be allocated? What additional resources will be needed from the provider and payer to perform these functions?
• What ongoing data and reports will be made available to the provider? What level of detail will be available, and how often will this information be provided?
• What are the key financial, strategic, and business risks for the provider and payer?

Three-pillar strategy for value-based contracting

Healthcare providers can improve their financial performance under value-based contracts by implementing an effective contracting strategy. Milliman consultants David Williams, David Liner, and Colleen Norris discuss how providers can accomplish that by prioritizing and measuring operational and contractual elements against three core pillars: transparency, stability, and control. Here is an excerpt from their article “Building a successful value-based payer contracting strategy.”

Providers prioritize each pillar and attribute to create weights for each cell. Contractual elements are then evaluated against those pillars to produce a score for each cell. This can be either a subjective evaluation or a more rigorous analytic evaluation depending on the nature of the element. The weighted scores can be used to prioritize areas of administrative concentration and to compare payer contracts on a similar basis. This prioritization is a critical step to a successful contracting evaluation process….

…The exercise of scoring the grid identifies high-risk elements and compares contract structures from different payers that require revisions. When performed rigorously, this process brings focus that allows management to spend more time on contracts with the greatest risk and potential for improvement. Applying each pillar to specific payer contract elements identifies specific risks and creates areas of focus for providers during negotiation. However, this analysis alone does not enable providers to easily compare value-based contracts in their entirety.

The complex evaluation process is illustrated below in a simplified form. The intent of this illustration is to highlight important aspects of the decision-making process required to effectively manage complex payer relationships.

First, the contract is scored for each pillar and element cell in the scoring grid. Each contract is evaluated separately and may contain different elements. The provider may require independent help.

Second, the provider weights each cell in the grid based on priorities. These weights would likely be consistent across contracts. The provider may counsel with outside help to prioritize, but ultimately will be responsible for the focus of their efforts.

Finally, the total score is calculated by applying weights in each cell based on prioritization of the contracting elements. Figure 2 illustrates this contract-scoring approach.

Overview of the Merit-Based Incentive Payment System

As part of the Medicare Access and CHIP Reauthorization Act (MACRA), the Merit-Based Incentive Payment System (MIPS) seeks to tie Medicare payments to provider performance within the fee-for-service (FFS) system.

In her article “MIPS adjustment overview,” Milliman’s Pamela Pelizzari discusses the MIPS inclusion criteria and the MIPS Composite Performance Score (CPS). She also demonstrates how the CPS leads to the determination of the MIPS adjustment factor and explores the effect of changing practices on both the CPS and MIPS adjustment factor.

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.

Advanced APM considerations for clinicians

Two value-based reimbursement models exist under the Medicare Access and CHIP Reauthorization Act (MACRA) that tie Part B payments to clinician performance: the Merit-Based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (Advanced APM) track. The Advanced APM track encourages groups of clinicians to shift from fee-for-service to delivery models in which clinicians assume more accountability and risk for the cost and quality of care. In the initial years of the program, MACRA provides incentive payments to early APM adopters.

This paper written by Milliman’s Lynn Dong and Pamela Pelizzari explores the definition of an Advanced APM, how providers can qualify to be paid under the provisions of the Advanced APM track instead of under MIPS, and why that might be desirable. In addition, the authors highlight the need for careful evaluation regarding APM participation because there is often a complex interaction between the risk inherent in an Advanced APM and the benefits under MACRA.

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.

CMS announcement shapes MACRA implementation

norris-colleenOn September 8, Andrew Slavitt, Acting Administrator of the Centers for Medicare and Medicaid Services (CMS), made a significant announcement on the CMS blog regarding the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) implementation timeline.

According to CMS, providers will be allowed to “pick their pace” with respect to the Quality Payment Program (QPP) in the first year of MACRA implementation. Mr. Slavitt has outlined four proposed “pace” levels in which providers can enter the QPP.

Colleen Norris graph

The blog post is light on specifics; however, the way options 1 through 3 are described indicates that the financial penalties in the QPP may be substantially lessened in the first year of program implementation.

CMS is scheduled to release the final rule by November 1. We will provide more details on this change, and what it means for the market at that time.

MACRA deadlines and timeframes

While many of the programs of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) start after 2019, there are some aspects that will begin by 2017. In this article, Milliman’s Pamela Pelizzari, Susan Pantely, and Mary Huizinga explore key deadlines and timeframes associated with MACRA. The figure below represents an overall view of many of the MACRA activities from 2016 to 2027. The authors describe each one in the article.

MACRA

The article is part of a series examining the impacts of MACRA on providers, alternative payment models, and health plans. To read other articles in the series, click here.