Healthcare providers and health plans continue to integrate vertically through consolidation and virtually through accountable care organization (ACO) risk-sharing arrangements. In this article, Milliman’s Dave Liner discusses how providers and health plans can improve their financial performance by considering strategies that optimize regulatory capital.
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 skilled nursing facility (SNF) industry is an important area for Medicare accountable care organizations (ACOs), Medicare Advantage health plans, and other Medicare programs. How can these organizations appropriately benchmark performance to provide efficient healthcare and reduce spending for SNF services?
Milliman’s Jill Herbold and Anders Larson offer some perspective in their report “Performance of skilled nursing facilities for the Medicare population.” The report highlights several utilization and expenditure metrics for measuring SNF performance. It also explores SNF performance levels across the United States and provides a quantitative assessment of the opportunities to reduce spending for SNF services.
The Department of Health and Human Services (HHS) is striving to link 50% of Medicare payments to alternative payment models by 2018. One of the primary alternative payment models offered to Medicare providers is the Next Generation Accountable Care Organization (NGACO). Due to the potential large risk exposure for organizations considering this model, they should work with an actuary to understand the critical elements driving financial success (or failure). In this article, Milliman’s Charlie Mills, Cory Gusland, and Noah Champagne identify five key financial considerations that all ACOs should review before committing to the program. The considerations are ranked by the authors’ perceived importance, with one being the most important.
5. ACO’s CY2014 experience is the baseline for the first three performance years
4. Risk score changes are capped at 3% from the baseline year to each performance year
3. First dollar savings and losses
2. The 2016 benchmark trends are likely understated
1. In order to achieve savings, participants must outperform trended baseline less discount
On December 18, 2015, the Senate Finance Committee released alternative policy options meant to improve the care of chronic conditions for Medicare beneficiaries. In this article, Milliman’s Michael Polakowski and Nicholas Johnson outline 24 proposals that may have a wide-ranging impact on traditional Medicare, Medicare Advantage, and Medicare accountable care organizations. These policies are still under consideration; the Finance Committee’s bipartisan chronic care working group is requesting feedback and comments by today.
Organizations that employ provider performance metrics can position themselves better for long-term success as provider reimbursement continues to transition from pay-for-volume to pay-for-value. In her article “Evaluating healthcare provider performance,” Milliman’s Jill Herbold discusses how healthcare organizations can select the best metrics to increase the overall performance of their organizations.
Here is an excerpt:
There are many types of providers involved in the delivery of healthcare—tertiary hospitals, primary care and specialty physicians, skilled nursing facilities, and home health providers, to name a few—and each plays a unique role. Though there are commonalities, a unique set of metrics is often useful to evaluate the performance of different provider types.
The specific metrics selected should depend upon the quality and robustness of available data, the ability of providers to control or influence the metric, and the ability to compare the metric across providers in an objective manner. Ideally, metrics address each component of the triple aim (cost, quality, and access) and are aligned with the organization’s financial and other goals. It is important to ensure metrics are appropriate for the particular value-based payment arrangement, the organization’s circumstances, and the population that care is being provided to. For example, skilled nursing facility utilization is an important metric for an aged Medicare population but not for a pediatric Medicaid population. It is helpful to use metrics that can be compared over time so changes can be monitored. Comparison of metrics across peer groups and to targets or benchmarks can potentially be helpful to motivate and drive performance improvements….
To achieve financial and other goals, some organizations are using performance metrics when selecting preferred providers to partner with and driving performance improvements across the organization. More specifically, adjusted performance metrics can be useful as part of:
• Evaluating physician groups and other providers for participation in a narrow network, accountable care organization (ACO), or other affiliation of providers
• Identifying post-acute care and other providers with whom to develop preferred relationships
• Identifying preferred specialty physicians to whom primary care physician can refer patients
• Rewarding participating providers via incentive compensation programs
• Driving performance improvement across hospitals, primary care physicians, specialty physicians, and other providers