MA plans may be operating at a deficit for some members with ESRD diagnoses
Among the Medicare Advantage (MA) population, roughly half of a percent of members have a costly disease known as ESRD, or end-stage renal disease. Though this accounts for just under 100,000 people nationwide, the disease requires expensive, life-long care, which results in a disproportionate percentage of medical expense. For this reason, MA plans must ensure they know who these members are and verify that the premiums they’re receiving from The Centers for Medicare and Medicaid Services (CMS) are correct.
The 21st Century Cures Act (CURES; P.L. 114-255) will allow Medicare-eligible individuals with existing ESRD to enroll in Medicare Part C plans beginning in 2021[i]. With this significant change and as MA plans grow in popularity among older Americans, plans can expect to see an increase in their members with ESRD. To help manage this change, plans must focus on maximizing their financial performance so they can continue to remain competitive and offer enhanced benefits and care for their members.
And when it comes to covering the cost of care for members with ESRD, if CMS isn’t correctly paying these members’ premiums, then plans begin to operate at a deficit for these members. They pay the high cost of care, including ongoing dialysis treatments, but they do not receive the revenue to cover those costs. Over time, this adds up to millions in lost revenue for plans.
Higher CMS premiums should cover higher cost of care
CMS pays MA plans a significantly higher premium for each member with ESRD to help cover the higher costs of their expensive long-term treatment and care. The difference between a base monthly premium for a healthy member and a member with ESRD is roughly $6,000.
Because most members with ESRD are affected by a variety of additional health factors that affect their CMS premiums to the MA plan, the actual monthly loss per member can exceed $7,000. You can see how, when those premiums go unpaid, this adds up quickly for a single member and why, for such a small population, the deficit can grow exponentially across the whole population. Considering nationwide MA membership, this represents as much as $600 million in lost ESRD revenue opportunity industry-wide.
ESRD diagnoses go unnoticed
You may wonder how CMS might be overlooking ESRD statuses. The reasons range from clerical errors to eligibility issues to technology problems. Sometimes it’s just a matter of a delay before CMS begins paying the premiums. In any case, it’s incumbent on the health plan to find these errors and work to correct them so they can recoup unpaid premiums.
Like with premiums for Medicare Secondary Payer (MSP), CMS allows health plans to recover unpaid ESRD premiums 72 months in arrears. All MA plans should examine their populations to identify any missed ESRD statuses and corresponding premium errors. They can work through CMS and providers to identify why the errors happened, correct the problems, and recover unpaid premiums.
Is my plan losing out on ESRD revenue?
Possibly. Unfortunately, ESRD premium gaps are difficult to manage because of the reliance on third-party providers such as dialysis centers.
The bottom line is that ESRD patients may not get flagged in CMS data. And since plans don’t have ready access to the information used in ESRD treatment and reporting, they may not even be aware of a member’s diagnosis until months or years into their treatment, after they have already missed out on millions in premiums.
We work with a number of MA plans to find missing ESRD flags and restore unpaid premiums for those members. We’ve consistently identified millions of dollars in unpaid premiums for plans with more than 100,000 members. And even though some of these plans already successfully identified missing ESRD flags, we uncovered even more.
Learn more about restoring unpaid premiums for members with ESRD.