Tag Archives: CMS

Calculating ACOs shared savings

In 2011, the Centers for Medicare and Medicaid Services (CMS) established the Medicare Shared Savings Program (MSSP) and brought the concept of the accountable care organization (ACO) to a wider audience. A key feature of the MSSP methodology is the minimum savings rate (MSR) and minimum loss rate (MLR). ACOs that participate in the MSSP are familiar with these corridors because they can mean the difference between receiving shared savings and receiving nothing. On the other hand, for ACOs currently taking downside risk, the MLR provides a buffer that neutralizes potential losses.

In this paper, Milliman’s Charlie Mills and Chris Smith explore the MSR/MLR options available to ACOs and provide perspective on what ACOs should consider when selecting the MSR/MLR under an MSSP track with a downside risk.

Health Adult Opportunity 1115 waiver option considerations

On January 30, the Centers for Medicare and Medicaid Services (CMS) introduced guidance describing the new Healthy Adult Opportunity (HAO) 1115 waiver option. This option outlines conditions under which a state might convert open-ended matching funding for expansion adults into a block grant or per capita program.

The HAO offers states new flexibilities for their Medicaid programs in return for assuming the financial risk of block grants. State program directors face many complex considerations as they evaluate these options. While the HAO will clearly appeal to states that have previously considered requesting a block grant, the range of policy options made available under this initiative may bear considerations for states across the country.

In this paper, Milliman’s consultants discuss 10 key considerations for states evaluating the HAO.

What are the potential effects of prospective and retrospective assignment on key ACO metrics under the MSSP?

At the end of 2018, the Centers for Medicare and Medicaid Services published the Pathways to Success final rule for the Medicare Shared Savings Program (MSSP) giving accountable care organizations (ACOs) renewing July 1, 2019, or later the option to select between prospective and retrospective assignment of patients.

Under prospective assignment, beneficiaries are assigned to an ACO based on services occurring prior to the performance year. Under retrospective assignment, beneficiaries are assigned to an ACO based on services occurring during the performance year. Averages for assignment-eligible fee-for-service beneficiaries can help provide understanding of how the two assignment methodologies affect results.

Retrospective and prospective assignment have significantly different effects on the characteristics of the assigned populations for beneficiaries assigned to primary care physicians and specialists. Prospective and retrospective assignment will ultimately affect the population that is assigned to the ACO because some beneficiaries who are assigned under prospective assignment are not assigned under retrospective and vice versa. The choice between these assignment methodologies can have subtle effects on the ACO’s overall benchmark, risk score, and performance year costs.

In this brief, Milliman’s Sam Shellabarger, Charlie Mills, and Lance Anderson explore in more detail the potential effects of prospective and retrospective assignment on key ACO metrics under the MSSP.

Healthcare price transparency requirements and considerations

In November 2019, the Centers for Medicare and Medicaid Services (CMS) released a final rule establishing requirements for hospitals operating in the United States to establish, update, and make public a list of their standard charges for items and services they provide. The provisions of the final rule go into effect on January 1, 2021.

The lack of price transparency in the U.S. healthcare market is well known. There are several reasons that can make estimating costs before care difficult for consumers. One of the main challenges is the variation in billed charges and negotiated rates between insurance companies and providers. The majority of Americans have health insurance coverage through insurance companies (or payers), which negotiate prices with hospitals and providers. The negotiated prices between payers and providers have historically been confidential and subject to nondisclosure agreements.

Health economists and other experts believe that transparency in pricing is key to healthcare cost containment. Opponents of the policies adopted in the CMS final rule say that these requirements will impose a significant burden on hospitals and may lead to confusion without providing any relevant information.

In this paper, Milliman actuaries and consultants provide a summary of key provisions of the final rule that apply to hospitals, briefly touching on topics that require additional consideration by parties affected by the rule.

End-stage renal disease considerations for Medicare Advantage organizations as CMS expands eligibility

Currently, beneficiaries with ESRD are not allowed to enroll in MA plans except in limited situations such as enrolling in an ESRD special needs plan or remaining on the MA plan providing coverage prior to being diagnosed with ESRD. This results in a higher proportion of ESRD individuals receiving coverage through traditional Medicare (59%) relative to Medicare Advantage (14%).

However, starting in 2021, the distribution of ESRD individuals by coverage type may change. Section 17006 of the 21st Century Cures Act allows Medicare-eligible individuals with ESRD to enroll in MA plans as of January 1, 2021. This change in MA eligibility could shift a portion of ESRD individuals currently covered by traditional Medicare to an MA plan. 

MAOs could experience significant impacts to their overall financial results as the behavior, claim costs, and revenue payments for ESRD beneficiaries can vary greatly from non-ESRD beneficiaries. ESRD beneficiaries make up only 1% of Medicare enrollment and account for 7% of Medicare fee-for-service costs.

In this paper, Milliman consultants provide an overview of the upcoming ESRD MA eligibility change and key questions each MAO should consider when planning for 2021.

Medicaid Fiscal Accountability Regulation considerations for state agencies

The Medicaid Fiscal Accountability Regulation (MFAR) rule proposed by the Centers for Medicare and Medicaid Services (CMS) aims to increase transparency of Medicaid supplemental payments and address concerns over their financing. The proposed rule defines supplemental payments as “extra compensation to certain providers” that are often made to providers on a lump sum basis apart from claim-based payments.  If the proposed rule is implemented, many states may need to revise their Medicaid supplemental payment programs to achieve compliance. This paper by Milliman’s Ben Mori, Tyler Schulze, and Jason Clarkson summarizes the key proposed changes under MFAR for state Medicaid agencies to consider.