Milliman’s UK Health Cost Guidelines™ (HCGs) is a tool for modelling health costs and utilisation from a payer perspective to provide a consistent way to price and analyse claims experience. The 2016 Milliman UK HCGs cover a significant proportion of the private medical insurance (PMI) market, comprising base tables for each sector of the market: corporate, small and medium enterprises (SMEs), and the individual market.
Further analytics include looking at cancer trends and cancer specific costs by service lines. In this article, Milliman’s Joanne Buckle, Neha Taneja, and Natasha Singhal provide an introduction to the HCGs. They also provide perspective on their HCGs analysis, focusing primarily on cancer-related research and future projections in cancer trends.
Prescription drug plan sponsors must consistently evaluate and update their pharmacy benefit manager (PBM) contracts to control costs. In their article “Medicare Part D PBM contracting strategy,” Milliman actuaries Michael Polakowski, Nicholas Johnson, and Todd Wanta highlight numerous contract provisions that plan sponsors should examine and renegotiate to reduce pharmacy expenses.
Here’s an excerpt:
As contracting has become more complex, the following contract provisions are becoming more common as plan sponsors look to reduce their pharmacy expenses.
• Price protection. In the current environment of high-cost trends for brand-name drugs, price protection can offer more inflation protection than discount guarantees. Any price increases above a predefined threshold are paid back to the PBM by the manufacturer and considered rebates by the Centers for Medicare and Medicaid Services (CMS). Plan sponsors should carefully consider how price protection can affect Medicare bids and end-of-year settlements.
• Membership. More favorable dispensing fees, discounts, and/or rebates may be achieved for plan sponsors with higher membership counts. Improved contracting levels are specified directly in the PBM contract.
• Discount/rebate guarantees. Discount and rebate guarantees may be presented in many different forms, e.g., rebates per brand-name script or on a per member per month (PMPM) basis, or discounts off AWP or the maximum allowable cost (MAC) list. Rebate guarantees may exclude certain drugs. At a minimum, plan sponsors should ensure the targets are clearly understood and auditable. Plan sponsors should be wary of proprietary definitions when industry definitions are available for reference. Plan sponsors should also ensure that reimbursement mechanisms are in place if targets are not achieved.
• Rebate maximization. Because of the structure of the Part D benefit, rebates can be a more effective way to reduce Medicare bids than discounts. Over the last few years (and with the increasing cost of specialty drugs), plan sponsors have increasingly negotiated with PBMs to maximize rebates rather than discounts. The financial incentives for this approach are discussed by Milliman consultants Adam Barnhart and Jason Gomberg in a recent article for the AIDS Institute, “Financial Incentives in Medicare Part D.”1
• Multi-year agreements. Some PBMs have been willing to provide discount or rebate improvements over time if plan sponsors commit to multi-year contracts. Plan sponsors should be sure to verify that the improvements are contractually guaranteed and meet or beat market-wide improvements. Even multi-year discounts should have market check provisions to allow plan sponsors the ability to receive better terms when the market changes.
The Medicare Access and CHIP Reauthorization Act (MACRA) makes significant changes to the Medicare payment system by introducing a quality-based payment model. While MACRA primarily affects Part B clinicians, there are numerous implications that Medicare Advantage (MA) plans should consider. A strategic approach can help MA plans understand and respond to the legislation.
In the article “MACRA and Medicare Advantage plans: Synergies and potential opportunities,” Milliman actuaries explore the answers to the following questions:
• How will MACRA affect MA plans’ provider payments?
• What synergies exist between MACRA’s quality scoring and the MA Stars quality program?
• How can MA plans help providers achieve Qualifying Participant (QP) status?
• What incentives exist under MACRA for providers to improve risk score coding?
• How are MA plans in the market responding to MACRA?
Read Milliman’s “MACRA: The series” to learn how the legislation will affect providers, alternative payment models, and health plans
The Robert Wood Johnson Foundation and Milliman are cohosting a webinar on Monday, February 27 at 2 p.m. ET to summarize and discuss the results of round one of the Actuarial Challenge. Round two activities will also be noted.
The webinar will look at the various types of proposed reforms in the Round One papers, noting common suggestions as well as proposed changes that are more unique.
On February 15, the Actuarial Challenge issued an announcement of its Round One results. The announcement provided a summary of each of the 14 papers submitted during the Challenge. You can find a copy of the announcement posted on the Actuarial Challenge website.
To participate in the WebEx webinar, use the following information:
Meeting number: 636 329 625
Or join by phone toll-free: 1-866-913-6864 (US)
Conference Code: 262 796 3471
Milliman PRM Analytics™ (PRM), a leader in data-driven value-based healthcare support systems, today announced that Cascade Health Alliance (CHA), a coordinated care organization (CCO) serving Klamath County, Oregon, has selected the PRM Platform and its suite of cloud-based analytic and population risk management solutions to support their growing clinical integration initiatives.
“By giving us greater ability to better manage our population health, the PRM tool allows for more efficient risk stratification and management,” said Peter Waziri, CHA’s Chief Financial Officer. “Working with Milliman and PRM Analytics will help CHA to better serve our members by allowing staff deeper insights to those members’ health information.”
“We are pleased to be selected by Cascade to help them manage their risk-based populations. Milliman continues to be the industry leader in helping providers manage population risk. PRM™ represents a disruptive approach to population stratification and management. The analysis focuses on the prospective opportunity for potentially avoidable costs so the patient care team can focus on them in advance. Care management can then be focused on the patients with the greatest potential to ‘bend the cost curve’ resulting in the optimal deployment of limited care management team resources,” said Art Wilmes, FSA, MAAA, a Principal and Consulting Actuary in Milliman’s Indianapolis office.
“I have access to new ways of seeing cross-sectional data and how it all works together,” said Angela Leach, CHA’s medical informatics analyst. “Case managers will use it to get at-a-glance profiles of patients they are caring for, and the quality management department can use it to find ‘hot spots’ that may benefit from additional programs.”
The case management team at CHA can use PRM Analytics in a variety of ways, according to Diane Barr, Director of Case Management. “We can identify high-cost members, plus we can filter for diagnosis and identify members for disease management,” Barr said. “We can also look at an individual member to determine their utilization, chronic conditions and other details. The best part is we can do risk stratification and identify members that are at the highest risk for re-hospitalization or emergency department utilization. The program is easy to use and provides us with volumes of useful information.”
Prior to the Patient Protection and Affordable Care Act (ACA), mini-medical plans had no standard meaning, though they typically shared a few characteristics. Such plans provided limited coverage that could be exhausted quickly and/or result in significant out-of-pocket expenses if enrollees needed comprehensive services.
Total annual benefit limits may have been as high as $250,000 with more typical limits ranging from $10,000 to $50,000. Coverage was provided on an expense-incurred basis and used for traditional comprehensive health insurance, with lower premiums the trade-off for dollar-value benefit levels that fell below traditional health insurance.
The ACA effectively eliminated the expense-incurred mini-med market with the prohibition of annual limits on essential health benefits. What role might mini-med plans play in a post-ACA environment? Milliman’s Nick Ortner provides perspective in his article “What can I afford? Mini-med 2.0 and cost-coverage questions in a post-ACA world.”