On December 31, 2018, the Centers for Medicare and Medicaid Services (CMS) released a sweeping new rule that will significantly change the Medicare Shared Savings Program (MSSP).
One of the hallmarks of the new MSSP rule is faster movement to downside risk. Under the current regulations, accountable care organizations (ACOs) can stay in an upside-only track for up to six years. The new rule requires some ACOs in the Basic Track to begin assuming some downside risk in year 3 (low-revenue ACOs new to MSSP and inexperienced with risk can remain in an upside-only arrangement until year 4) and those in the Enhanced Track assume downside risk in year 1. To date, ACOs in Track 1 have had a longer trajectory for assuming downside risk and may not have experienced the same pressure to reduce costs as ACOs participating in MSSP tracks with downside risk.
Under the new rule, there will be a more urgent need for ACOs to reduce population costs in order to mitigate losses. Identification and reduction of medically unnecessary services should be considered as a strategy to reduce population costs.
In this article, Milliman’s Kate Fitch, Adam Laurin, and Michele Berrios discuss data mining tactics that identify medically unnecessary services. They share several approaches they have seen successful ACOs adopt to effectively guide strategies to reduce medically unnecessary services and in turn reduce the ACO’s total population costs.
In the United States, colorectal cancer (CRC) is the fourth most common cancer diagnosed among men and women and the second leading cause of death from cancer. The majority of cases of CRC can be prevented by the detection and removal of noncancerous adenomatous polyps. As in other types of cancer, survival is significantly better when CRC is diagnosed early while the disease is still localized.
Although optical colonoscopy has been the dominant method for CRC screening in the United States to date, there are other methods recommended by established guidelines. These include computed tomography (CT) colonography, guaiac-based fecal occult blood test, fecal immunochemical test-DNA, flexible sigmoidoscopy, and flexible sigmoidoscopy with fecal immunochemical test. Offering patients choices for CRC screening appears to lead to higher screening rates and better screening compliance.
CT colonography’s effectiveness, its associated patient advantages, and its potential role to increase CRC screening rates have been demonstrated in previous research, but whether CT colonography has a cost advantage relative to optical colonoscopy for the commercially insured U.S. population has not been assessed.
This research report by Milliman consultants compares the costs of CRC screening using CT colonography or optical colonoscopy for commercially insured people in the United States.
Dr. Judy Yee, chair of the Department of Radiology at Montefiore Medical Center, also coauthored this report.
Hospital readmissions can add unnecessary cost to the healthcare system and can adversely affect patient health. Readmission rates are key metrics for measuring the performance of hospitals, health plans, accountable care organizations (ACOs), physicians, and post-acute care facilities because they are tied to financial rewards and penalties for those entities. This article by Milliman consultants Maggie Alston and Michele Berrios identifies key elements that should be considered when evaluating readmission rates across populations or when comparing readmission rates with different methodologies.
The opportunity to reduce Medicare claims cost in the Bundled Payment for Care Improvement Initiative (BPCI) of the Center for Medicare and Medicaid Innovation (CMMI) is typically in the post-acute care (PAC) period. Analyzing the opportunity to reduce Medicare PAC spending requires providers to adopt a payor state of mind—payor tools and approaches will be very helpful. Benchmarking to best practices is one of those tools.
Milliman has developed nationwide average and well-managed (WM) benchmarks for PAC periods of one to 30, 31 to 60, and 61 to 90 days. Milliman’s Bruce Pyenson, Kate Fitch, Michele Barrios, and Tyler Engel provide perspective in this healthcare reform paper.
Analysis of Medicare cost and utilization data has been extensively documented, most notably by the Dartmouth Atlas, and has revealed significant variation from one region to the next. Similar analysis using commercial insurance data, however, has been lacking. This study, the first to consider commercial populations, examines regional cost variation, providing cost relativities for claims paid by commercial payors for particular hospital referral regions. Among other findings, the study highlights the importance of negotiated provider reimbursement as a factor in the nation’s healthcare cost. While Medicare sets provider reimbursement rates based on formulas and rules, commercial provider reimbursement is set by negotiation between the insurer and the provider. This means, among other things, that regions with low Medicare costs could have high commercial costs. An examination of commercial data alongside Medicare data is crucial for understanding the true nature of healthcare cost variation across the country.