Tag Archives: Medicare Advantage

Medicare Advantage proposed rule could have a profound impact on product development for 2019 and beyond

The Medicare Advantage (MA) and Prescription Drug (PD) Benefit Program proposed rule for 2019 discusses important policy updates that may have a significant impact on the product development process for 2019. The proposed changes provide new opportunities for plans to innovate benefit designs and tailor packages for selected enrollees. The Centers for Medicare and Medicaid Services (CMS) is also requesting feedback on Part D rebates and price concessions that could have a profound impact on the way formularies and pharmacy benefits are managed. Finally, we also highlight additional proposed changes in enrollment policies that may result in strategic implications.

The key advantage for product development is CMS’s proposal to discontinue the use of “meaningful differences” requirements. By removing the restriction that limits the number of plans a Medicare Advantage Organization (MAO) could offer, MAOs would be in a position to develop a more diverse portfolio of products. In addition, plans can focus on creating product designs that are meaningful to beneficiaries instead of making benefit decisions based on the results of the CMS out-of-pocket cost (OOPC) calculator prescribed methodology. CMS did not propose waiving the Total Beneficiary Cost (TBC) requirements, meaning that plans would still need to rely on the OOPC methodology to determine year-over-year plan changes.

CMS is proposing additional flexibility in the benefit design process. One proposal would allow plans to offer different cost sharing and/or additional supplemental benefits for specific subsets of enrollees based on defined health conditions (e.g., zero cost share for diabetic supplies for patients diagnosed with diabetes). In addition, CMS also proposes to allow additional flexibility with plan designs for segments within plans by being able to offer different supplemental benefit packages by segment. Finally, CMS also discusses the possibility of additional maximum out-of-pocket (MOOP) levels and associated cost-sharing limits to allow plans a greater range of options versus the currently prescribed mandatory levels and to encourage plan offerings with lower MOOP limits.

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Exploring Medicare Advantage star ratings

The Centers for Medicare and Medicaid Services (CMS) publish star ratings to measure the quality of Medicare Advantage and Medicare Part D plans. They are also published to help beneficiaries select the best plans for them and to financially reward high-quality plans.

In this article, Milliman’s Dustin Grzeskowiak and Pat Zenner provide an overview of CMS’s methodology for calculating star ratings. Additionally, the authors discuss the financial and marketing implications of star ratings for Medicare plans and summarize best practices common to high-rated plans.

Medicare Advantage risk score considerations

Risk scores are a crucial area of focus for successful Medicare Advantage (MA) plans because changes in risk scores directly affect plan revenue. However, risk scores are complex and are influenced by many factors, which can confuse those who are new to MA risk score development. This article by Milliman’s Hillary Millican and Brad Piper offers perspective on the following questions related to MA risk scores.

• What time period of diagnoses supports risk scores?
• When are revenue payments made?
• Who submits diagnoses used to create risk scores?
• Why is member retention critical for the success of a Medicare Advantage organization (MAO)?

Webinar: Medicare Advantage risk scores

Payment year 2017 is a key year for Medicare Advantage (MA) plans, as encounter data is weighted 25% and has been shown to result in lower risk scores and revenue. An upcoming Milliman webinar hosted by Charlie Mills and Deana Bell will explore how MA plans have prepared for the transition to encounter data, and highlight best practices for monitoring financial results and encounter data submissions. The webinar entitled “Medicare Advantage risk scores: Best practices in financial monitoring and encounter data submissions” is scheduled for October 19 from 11 a.m. – 12 p.m. PT (2 p.m. – 3 p.m. ET).

For more information or to register, click here.

Using prescription drug data for identifying missing diagnoses and for medical management in the Medicare Advantage market

Even though the Centers for Medicare and Medicaid Services (CMS) does not use prescription data in assigning risk scores, Rx data can still be a valuable resource for Medicare Advantage (MA) plans. Because the revenue for an MA plan each year is based on member diagnoses incurred in the prior year and submitted within 13 months of the end of that period, MA plans have a meaningful period of time to ensure complete and accurate coding as well as to identify members for disease management and potential drug adherence outliers. Milliman consultants Corey Berger and Brooks Conway provide perspective in this paper.

How the Medicare Advantage 2018 RxHCC risk score model update impacts plan risk scores

The Centers for Medicare and Medicaid Services finalized a Part D risk score model for payment year 2018. How does this model update affect plan risk scores? This paper by Milliman consultants Adrian Clark and David Koenig summarizes the changes in member risk scores that are due to the RxHCC risk score model update.