The COVID-19 pandemic has created many uncertainties for providers and accountable care organizations (ACOs), which can seem overwhelming. Medicare Shared Savings Program (MSSP) ACOs are particularly concerned about the potential for 2020 results to decrease because of the virus. In this paper, Milliman actuaries discuss eight key considerations for MSSP and other risk-sharing arrangements as they assess the impact of COVID-19.
The new voluntary payment model of the Center for Medicare and Medicaid Innovation (CMMI), Primary Care First (PCF), will debut in 2020. As its name indicates, the new model focuses on primary care. PCF aims to offer additional flexibility in how physicians care for patients while holding them accountable for patient outcomes. It also offers providers a payment model option for accepting accountability for the high-need seriously ill population. Milliman consultants Raheel Sohail, Cory Gusland, and Daniel Henry provide an overview of the payment model in their paper “Early thoughts on the Primary Care First model.”
Shared-risk contracts between health plans and healthcare
providers are becoming increasingly common and sophisticated. As these
arrangements become more prevalent, there is an increasing amount of money at
stake between health plans and providers. Transparency and verification are
best practices in any relationship between parties that involves money, and
this includes provider risk-sharing agreements. A settlement audit prepared by
an independent third party is a recommended best practice for any organization
considering entering into or already participating in one of these
The underlying principle in these agreements is
straightforward: healthcare providers are in the best position to identify and
reduce unnecessary, duplicative, or inefficient care, and shared-risk
arrangements provide a financial incentive for providers to do just that. While
shared-risk contracts may be conceptually simple, the actual real-world
financial adjudication of them is usually complex.
This paper by Milliman consultants Colleen Norris and Tom Snook explores some proposed best practices for an independent audit of provider risk-sharing settlements, and discusses the value of this review for all parties involved.
In February, the Center for Medicare and Medicaid Innovation released a Request for Applications (RFA) for the Medicare Part D Payment Modernization Model (PMM). The PMM is a voluntary program whose goal is to reduce Part D federal reinsurance costs by adding new program flexibilities and introducing a two-sided risk-sharing arrangement around federal reinsurance costs. Interested Part D plan sponsors were required to submit an application to the Centers for Medicare and Medicaid Services (CMS) by March 15 in order to participate in the 2020 plan year.
There are many unknowns and questions regarding the PMM RFA. Some of these questions are:
• Who is eligible to participate (and who would want to)?
• What types of formulary or other program flexibility might be offered?
• What costs are associated with participating?
• Will this really result in Part D savings?
• How should plans determine information required for the application without insight on key program aspects?
• How would the benchmark be calculated?
• How could this be affected by the U.S. Department of Health and Human Services (HHS) proposal to move drug rebates to point of sale?
• What are the financial implications to the bid?
• What are the potential risks with participating?
In this article, Milliman’s actuaries discuss the answers to these questions.
There are a variety of reasons why alternative payment models (APMs) can be more difficult to implement and manage in Medicaid, compared to the commercial or Medicare markets. Understanding these nuances and building strategies to address them is critical to the success of Medicaid APMs. An upcoming Milliman webinar hosted by Anders Larson, Rebecca Johnson, and Zach Hunt will focus on the challenges Medicaid payers face when attempting to establish APMs with providers. The webinar is based on their coauthored paper “Seven key challenges for Medicaid states considering alternative payment models.”
Title: Seven key challenges for Medicaid states considering alternative payment models
Date: Wednesday, February 27, 2019
Time: 2:00 p.m. EST
To register, click here.
While the use of alternative payment models (APMs) in the Medicare and commercial markets is prevalent, the use of APMs in the Medicaid market is low. There are several reasons why these models are more difficult to implement in Medicaid. Understanding the nuances of Medicaid APMs and building strategies to address them is critical to their success.
In this paper, Milliman’s Anders Larson, Rebecca Johnson, and Zach Hunt discuss seven key challenges that Medicaid payers face when trying to establish APMs with providers. The paper specifically focuses on shared savings/risk contracts based on total cost of care (TCOC) models. The following excerpt provides some perspective.
One challenge with any total cost of care model is that providers inherently take on some level of insurance risk due to random claims fluctuation that can influence results. This is true in the Medicare ACO models, which is why CMS uses a minimum savings rate (MSR) that varies by population size to limit its payments for “false positives.” This is likely to be more pronounced in Medicaid because of challenges with attribution, beneficiaries moving in and out of Medicaid, and a higher prevalence of zero-dollar claimants.