Millions of Americans with chronic or disabling conditions rely on home and community-based services (HCBS) to meet daily self-care and independent living needs. These services enable participants to remain safely in their homes and communities rather than moving to a nursing home or other institutional setting. State Medicaid programs are the largest payer for HCBS across the United States. The COVID-19 pandemic has presented numerous challenges and had a significant impact on the provision of HCBS.
In this paper, Milliman’s Jill Herbold and Nick Johnson discuss some challenges faced, actions taken, and the impact that the COVID-19 pandemic may have on HCBS for years to come.
State Medicaid programs have recently been considering
implementing a requirement that a single preferred drug list (PDL) be used
across their fee-for-service (FFS) and managed care programs. States have
considered a single PDL for multiple reasons, such as providing smooth
continuity of care transitions for members who move between managed care plans,
reducing confusion and potential administrative complexities for physicians who
currently have Medicaid patients subject to different PDLs, and the potential
to maximize federal and supplemental drug rebate dollars paid to the state.
Constructing a single PDL involves designating which drugs
are preferred and non-preferred in each drug therapeutic class. Along with
constructing a single PDL, a state will need to make policy and operational
decisions so that a single PDL is administered consistently across its FFS and
managed care programs. Policy considerations may include transitions, grandfathering,
utilization management, and excluded therapeutic classes.
States will also need to estimate how much in federal and supplemental drug rebates they will receive under a single PDL relative to current conditions as well as how managed care capitation rates paid to health plans will need to change due to the single PDL.
In this paper, Milliman consultants Jill Herbold and Melanie Kuester discuss these decision points and considerations for states evaluating a single PDL requirement.
The Medicare Shared Savings Program (MSSP) final rule includes changes to the financial benchmark methodology that measures the gross savings or losses of an accountable care organization (ACO) under the MSSP. Four key elements of the financial benchmark methodology changed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend.
In this paper, Milliman’s Jill Herbold, Cory Gusland, Charlie Mills, and Matt Kramer discuss these changes and important implications for Medicare ACOs. Each of these changes in the MSSP’s financial benchmark methodology will have significant implications for most ACOs. Given the increase in the agreement period length from three to five years, it is critical that ACOs assess how the final rule will affect their financial benchmarks and related strategies.
In August, the Centers for Medicare and Medicaid Services (CMS) released a sweeping proposed rule that, if enacted, will significantly change the Medicare Shared Savings Program (MSSP).
Under the proposed rule, CMS will change how it determines whether evaluation and management (E&M) services were furnished in a skilled nursing facility (SNF), as opposed to a custodial (non-skilled) nursing facility setting, for purposes of beneficiary assignment to an accountable care organization (ACO). The change will cause minimal impact to physicians who do not primarily practice in a nursing facility setting, but there will be important effects for physicians who do:
• Most nursing facility-based physicians will see a material change in the number of assigned beneficiaries, with roughly one-third seeing an increase or decrease of at least 25%. Office-based physicians will see minimal impacts to the number of beneficiaries assigned to them as a result of this rule change.
• ACOs with nursing facility-based physicians will no longer need to focus attention on how to adjust their place of service coding practices to improve their MSSP performances.
• Nursing facility-based physicians who are in ACOs that have chosen retrospective assignment will be less penalized by the regional cost adjustment to their benchmarks under the proposed rule. However, the penalty will continue to be far greater than if the ACO were to choose prospective assignment.
In this paper, Milliman’s Anders Larson and Jill Herbold discuss the current and proposed rules related to E&M services in nursing facilities and then present an analysis of their findings.
The Centers for Medicare and Medicaid Services (CMS) proposed rule on the Medicare Shared Savings Program (MSSP) will significantly change the program if enacted. The proposal, titled “Pathways to Success,” includes changes to the financial benchmark methodology that measures gross savings or losses under the MSSP for an accountable care organization (ACO). There are four key elements where changes have been proposed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend.
In this paper, consultants Jill Herbold, Cory Gusland, and Charlie Mills discuss the proposed changes and important implications for Medicare ACOs. This paper is the second in a series of Milliman papers on the proposed rule.
We recently used machine learning techniques to understand key drivers of Medicare Shared Savings Program (MSSP) financial performance. Of the 190-plus objective accountable care organization (ACO) features reviewed, ACO baseline efficiency proved to be the most important financial performance driver we identified. Another way of putting it is that MSSP rewarded inefficient ACOs more than ACOs that have attained efficiency.
You may be asking, “How did you measure baseline efficiency?” The chart below tells an interesting story.
We analyzed ACO baseline efficiency by reviewing ACO baseline expenditures that were unadjusted, risk-adjusted, and geographic-risk-adjusted. Risk-adjusted per capita expenditures were adjusted to account for each ACO’s average risk score and mix of entitlement categories. Geographic risk-adjusted per capita expenditures were adjusted to account for Medicare reimbursement levels in each ACO’s area.
Below are a few interesting notes:
1. Despite adjusting for risk levels, mix of entitlement categories, and reimbursement levels, there is still significant variation in baseline per capita expenditures. See the third column above for this wide range of variation.
2. The Centers for Medicare and Medicaid Services (CMS) has already made MSSP rule changes that balance the rewards between ACOs at different levels of starting efficiencies. Past financial performance in MSSP agreement period 1 may not be a strong indicator of performance in agreement period 2. ACOs should understand how these rule changes affect them.
Beyond baseline efficiency, we found that several other features were strongly associated with gross savings:
1. National fee-for-service (FFS) trends higher than local market trends
2. Location in the Southeast and south central regions
3. Low performance year expenditures for short-term inpatient admissions
4. High baseline per capita expenditures, unadjusted
5. High CMS-hierarchical condition category (HCC) risk scores
However, we also found that these features still explained less than half of the variation in gross savings across ACOs. This may indicate that ACO care management efforts are accounting for some of the remaining variation.
The full report is posted at Milliman Insight and includes a deeper dive into research conducted by Jill Herbold, Cory Gusland, and myself.