COVID-19 has had a financially debilitating effect on many medical practices. Some practices are not expected to survive. The impact has been felt by physicians as well as other healthcare entities and led to severe declines in fee-for-service revenue. The pandemic also caused the Center for Medicare and Medicaid Innovation to make adjustments to its Direct Contracting (DC) program. DC adjustments include adding a second cohort that begins January 2022, providing a capitation payment glide path, and increasing physician capitation choices.
These changes create an opportunity for organizations considering becoming Direct Contracting Entities (DCEs) to attract physicians who may not have been interested in the program previously. The application window for the second cohort of DCEs opens in March 2021. In this brief, Milliman’s Coleen Young, Hugh Larson, and Annie Man discuss DC and the impact of COVID-19 on physicians.
The COVID-19 crisis and the enforced lockdowns and shelter-in-place orders worldwide have accelerated the relevance and usage of telehealth, which has major implications for health insurers. The usage of telehealth has been limited historically. For example, 92% of U.S. consumers reported that they were not using telehealth prior to the onset of the COVID-19 pandemic.
In this paper, Milliman professionals examine the current status of telehealth in major geographic markets, including the U.S., Europe, and Asia. They develop a framework for telehealth with its key market participants, including a typology of models of virtual care. They also explore insurer proposition design and cost containment.
The U.S. Food and Drug Administration recently granted emergency approval for the Pfizer COVID-19 vaccine and approval of the Moderna vaccine followed shortly. In November, Pfizer and BioNTech announced a successful Phase 3 study of a vaccine against COVID-19 with an efficacy of over 90%. Days later, Moderna made a similar announcement with the development of a vaccine having an efficacy of nearly 95%. These announcements were met with renewed hope that life will soon return to pre-pandemic normalcy.
Employers have become increasingly anxious to see a return to normal business practices after months of disruption due to COVID-19. The vaccines offer hope that businesses will be able to prepare to roll out plans to return to pre-pandemic practices in the near future. In this paper, Milliman’s Les Kartchner and Brent Jensen present considerations for employers as these new vaccines are made available.
The introduction of the Patient Protection and Affordable Care Act (ACA) brought about many legislative changes intended to improve the health of people in the United States. One such change was the introduction of mandatory coverage with no cost sharing for services determined to be “preventive.” Some examples of the services included on the A and B Recommendations lists of the U.S. Preventive Services Task Force (USPSTF) are blood pressure screening for adults, depression screening for adolescents and adults, intimate partner violence screening for women of reproductive age, and skin cancer behavioral counseling.
The USPSTF regularly updates its recommendations and the ACA preventive services list has been modified many times since the introduction of the ACA in 2014. In this paper, Milliman’s Barbara Collier and Michelle Klein examine the evolution of preventive services. They also discuss how these services have been impacted by the COVID-19 pandemic.
Health actuaries have seen unprecedented challenges this year because of the ongoing COVID-19 pandemic. It has disrupted all facets of the U.S. healthcare system. How the pandemic affects an insurer’s financial statement will vary based on the distribution between lines of business, areas of service, and support channels.
As chief financial officers and actuaries attempt to determine the pandemic’s effect on year-end financial statements, the following five issues will require additional attention:
- Premium deficiency reserves
- Provider financial solvency
- Incurred but not reported (IBNR) claim estimates
- Patient Protection and Affordable Care Act (ACA) risk adjustment
- Appropriate documentation
Milliman’s Catherine Murphy-Barron, Doug Norris, and Daniel Perlman take a closer look at these five issues in their article “Year-end health actuarial work: Five things to consider in light of COVID-19.”
While there is a great deal of focus on resource availability and handling a potential influx of severe inpatient cases resulting from COVID-19 infections, the majority of the United States saw a dramatic reduction in healthcare services around March and April 2020 and measurable reductions continue with great variation across the nation.
As with many prospective risk adjustment models, Medicare Advantage (MA) and Part D (PD) risk scores are based on medical claims, more specifically diagnoses from face-to-face visits from the year prior to the year in which the risk score drives revenue. For 2021 MA payments, 2020 diagnoses are the basis of the final risk scores. To the extent that beneficiaries delay or avoid care, there may be fewer face-to-face encounters with providers where diagnoses can be recorded and applied toward 2021 risk scores.
While the Centers for Medicare and Medicaid Services has announced additional flexibilities in including telehealth-based diagnoses in risk score calculations, a significant reduction in overall services is likely to result in a material reduction in both MA and PD risk scores. In this article, Milliman’s Rob Pipich, Karin Cross, and Deana Bell discuss the results of an analysis they performed to support 2021 MA and PD bids. They present nine scenarios intended to illustrate a range of potential outcomes on 2021 MA and PD risk scores.