We recently talked about the need for Medicare Advantage plans to ensure that premium dollars coming in from the Centers for Medicare and Medicaid Services (CMS) are accurate. As with Medicare Secondary Payer, Medicare Advantage plans are losing out on premium dollars from members with End-Stage Renal Disease (ESRD).
Members with End-Stage Renal Disease account for a disproportionate amount of medical expenses. Experience shows that health plans are underpaid an average of $50,000 in CMS premiums for each misidentified or inappropriately documented ESRD member. Correcting inaccuracies and ensuring accurate submissions to CMS help plans restore millions in underpaid premium dollars. Here are answers to a few frequently asked questions about End-Stage Renal Disease validation:
What is End-Stage Renal Disease (ESRD)?
End-Stage Renal Disease, also known as ESRD, is a condition in which there is permanent and almost complete loss of kidney function. Some of these patients are treated by dialysis or kidney transplant. If members are flagged appropriately with the Centers for Medicare and Medicaid Services (CMS), the Medicare Advantage plan will receive the appropriate premium amount to pay for their care.
The challenge with ESRD members is that it is up to dialysis providers to submit appropriate documentation to CMS for members with ESRD. The plan has no control over this. Dialysis clinics can be difficult to work with due to high turnover and a lack of motivation to ensure accuracy.
What is the financial impact of ESRD to Medicare Advantage plans?
Medicare Advantage plans pay the full cost of ESRD claims, regardless of the amount of premium dollars received from CMS. For the sake of comparison, the average Medicare Advantage premium is $815. The average ESRD premium is $7,100. Multiply the difference over multiple members and multiple months, and the financial impact becomes significant.
What are common reasons that ESRD status is missed?
There are three areas where ESRD status is missed and where recovery opportunities exist. First, there may be members with ESRD diagnoses that the plan never knew about. Second, the member may have been flagged with ESRD at one point in time, but the flag was turned off and never turned back on. This may happen in a scenario in which the member went to hospice for a period of time. Lastly, the ESRD dates might not line up. CMS may not have paid the ESRD premium for the first few months of dialysis treatment.
What does ESRD validation entail?
When looking to ensure accurate premiums for ESRD members, the plan needs to first verify where it might recoup premiums due to missing ESRD flags. Once those members have been identified, the plan will want to ensure the complete and accurate submission of required documentation to CMS. Plans can recoup ESRD premiums for the previous 84 months.
Some Medicare Advantage plans find that they lack the resources to focus on ESRD validation or lack continuity due to multiple points of ownership throughout the organization. And the process of identifying members, gathering and correcting documentation, and working with dialysis clinics can be time-consuming and overwhelming. In these cases, the plan is wise to work with an ESRD validation vendor.
What do I need to consider when partnering with an ESRD validation vendor?
There are several factors to consider when evaluating ESRD validation partners. Most important is making sure the vendor has experience in the process and has developed proven best practices with measurable results.
Analytics plays a key role. The ideal partner will have developed advanced analytics and strong proprietary algorithms to find eligible members. Also important are established relationships with dialysis centers across the country and best practices developed with CMS over time.
In addition, the partner will manage the entire process from start to finish, requiring minimal to no involvement from the plan. The vendor will use proprietary analytics to identify members with the highest propensity of inaccurate ESRD statuses, perform subject matter expert review, work with dialysis clinics to correct data inaccuracies, submit accurate reports to CMS, and monitor the submission and acceptance process.
Lastly, the vendor will offer complete transparency by tracking, reconciling, and reporting on the progress of ESRD efforts and resulting financial outcomes.