This year, some new and significant market forces have the potential to create a profound impact on Medicare Advantage health plans and their enrollees. Discovery’s recent webinar highlighted changes in the Medicare Advantage world and why your health plan should be paying close attention to your premium restoration strategies. In case you missed the webinar, here are some of the biggest takeaways:
Medicare Advantage membership growth brings complexity for health plans
Medicare is now the fastest-growing segment of the health insurance market, and enrollment is expected to reach 77 million by the end of the decade. Medicare Advantage plans expect to see similar growth—the Congressional Budget Office projects Medicare Advantage will increase to nearly 51% of total Medicare enrollment by 2030.
Medicare Advantage plans are now looking to retain and attract new members in this complex and competitive market. In the last two years alone, 1,200 new plans have been added, offering more choices to Medicare enrollees causing an increase in members shopping plans that may offer more benefits for less cost.
This movement has the potential to create confusion and inaccuracies in eligibility data, ultimately affecting premiums paid to plans by Centers for Medicare and Medicaid Services (CMS). With inaccurate or incomplete member eligibility data, Medicare Advantage plans are at risk for receiving fewer premium dollars than what they are owed.
Considerations for Medicare Secondary Payer success
Knowing where Medicare Secondary Payer (MSP) resides within a health plan is critical—most organizations that are successful with Medicare Secondary Payer have a single owner. While there is not an organizational standard for where MSP lives, having centralized ownership is key.
Additionally, organizations should maintain an iron-clad tracking and reconciliation process. The validation and CMS communication processes are inherently complex, time-consuming, and constantly changing. To obtain the proper revenue in your premium restorations from CMS, it is important to constantly monitor these ever-changing processes.
ESRD enrollment changes causing challenges for health plans
2021 is the first year that a person with End-Stage Renal Disease (ESRD) can enroll directly into a Medicare Advantage plan. While this is a great opportunity for members, this will be challenging for health plans. As a result of the 21st Century Cures Act, we should expect to see upwards of 600,000 members with ESRD moving from commercial plans to Medicare plans this year.
Given that ESRD members account for a disproportionate amount of medical expenses, it’s critical for the plan to manage costs for these members. Although plans have little control over reimbursement levels set by CMS, ensuring that CMS recognizes members as eligible for ESRD status will be more important than ever. However, the process can be fraught with error, resulting in the loss of premium dollars.
Considerations for ESRD success
While the monthly cost of one member is significant, a plan could miss out on hundreds of thousands of dollars for multiple members over time if plans don’t have rigorous procedures in place to prevent coding errors and an equally rigorous process to look back every few months.
Health plans have a growing awareness of the financial impact of incorrect flags for ESRD members, but challenges get in their way. While there are many ways to overcome these challenges, maintaining relationships with dialysis clinics and CMS, as well as investing in multi-dimensional analytics and algorithms, is critical. Doing so will set health plans up for success when digging deep on claims analysis and monthly membership reports to find the root causes of issues, which will ultimately result in fewer missed premium dollars.
The proof is in the numbers
Highmark has maintained a successful premium restoration partnership with Discovery since 2017. After trying to solve for ESRD internally, Highmark realized that the complexities of the process required a partner. The plan trusts Discovery to stay on top of other plans changing member’s MSP indicators and keep track of the many “players” in the ESRD process (ESRD facilities, forms, SSA, CMS). Additionally, Discovery monitors and restores premiums on a monthly basis for Highmark, ensuring that the plan receives all of their ESRD premium dollars.
After a few years into the MSP partnership, Discovery was able to capture $2.7 million in premium recoveries for Highmark, equating to $9.36 per member per year in 10 months. Highmark averaged $11K per month as a backstop to BAU internal processes, capturing an incremental $1.15 per member per year through 2020. While only 0.5% of Highmark’s Medicare Advantage members have ESRD services, $5.8 million was captured in premium recoveries, which equates to $22.16 per member per year in 11 months.