It’s challenging to identify and restore underpaid ESRD premiums. Here’s how to solve that.

Why it’s a challenge to identify and restore underpaid ESRD premiums

In her recent blog, Why Medicare Advantage plans may be losing money on members with ESRD, my colleague Lyndsay Deckert addressed the challenges MA plans face with receiving accurate premiums from CMS for members with end-stage renal disease (ESRD). I’ll pick up from Lyndsay’s information and delve more deeply into how Medicare Advantage plans can restore underpaid ESRD premiums.

Health plans miss out on millions in premium revenue that can be traced back to missing or inaccurate CMS data about ESRD statuses for MA members. To address this, many plans have developed processes for identifying and correcting inaccurate data, restoring underpaid premiums, and ensuring they collect the correct premiums going forward for their members with ESRD. However, ESRD premium restoration is a complex process that requires combing through multiple data sources to identify potential premium gaps and working through providers to correct ESRD-related patient information. This process is painstaking and requires tenacity.

ESRD reporting is (mostly) out of your control

The first challenge is sifting through data in CMS Monthly Membership Reports (MMRs), plan eligibility files, and claims data to find any potentially underpaid premiums. The clues may be hidden in various, disparate data sources. To make sense of these clues, it helps to have an automated process to bring all these data sources together and use optimized analytical queries to find anomalies in the data. This is in your control.

What’s not in your control is updating the potential missing flags once you’ve identified them. Plans must work with providers who are often pressed for time and resources and are subject to human error. One simple mistake can prevent CMS from restoring a patient’s ESRD status in the member data. This omission can take years to uncover and can cost the health plan millions in the meantime.

Plans can take control of ESRD restoration with systematic approach and patience

CMS allows health plans to identify, investigate, and restore up to 84 months of underpaid premiums for members with ESRD. However, it’s the plan’s responsibility to identify those ESRD members and to ensure their data is validated and corrected according to CMS guidelines.

Plans that take a systematic approach to analyzing and reconciling their ESRD membership can successfully restore underpaid premiums and ensure accurate premium payments going forward. Many plans find that partnering with an experienced ESRD premium restoration vendor to focus on the things outside the plan’s control can help maximize results.

Here are 5 components of an effective ESRD premium restoration program that plans should look for:

Analytics—Comb through vast amounts of MMR, eligibility, and claims data going as far back as 84 months and identify likely ESRD members that require further investigation

Investigation—Determine the root-cause issues for each ESRD member that’s identified and the right process for addressing the issues with the appropriate submitting authorities

Remediation—Use the right method of outreach and coordinate with dialysis centers, CMS, or other third parties to ensure that information is corrected and updates are confirmed

Restoration—Diligently track and reconcile restored premiums and monitor future premiums for accuracy for as long as it takes to make sure revenue is fully realized

Monitoring—Ensure that each identified ESRD member status continues to be reported accurately and that correct premiums continue to be paid

With a systematic approach, time, and patience, plans can gain control of ESRD member statuses and restore underpaid premiums.

Kevin McDonaldIt’s challenging to identify and restore underpaid ESRD premiums. Here’s how to solve that.
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Infographic: ESRD has a major impact on Medicare Advantage financials

ESRD has a major impact on Medicare Advantage financials

Additional ESRD Premium Restoration resources

For more information, please visit our ESRD Premium Restoration resource page or complete the contact form on the right to speak with a Business Development Associate.

Discovery Health PartnersInfographic: ESRD has a major impact on Medicare Advantage financials
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Why Medicare Advantage plans may be losing money on members with ESRD

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 underpaid premiums.

Like with premiums for Medicare Secondary Payer (MSP), CMS allows health plans to recover underpaid ESRD premiums 84 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 restore underpaid 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 underpaid premiums for those members.  We’ve consistently identified millions of dollars in underpaid 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 underpaid premiums for members with ESRD.


Lyndsay DeckertWhy Medicare Advantage plans may be losing money on members with ESRD
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Webinar: Restoring underpaid CMS premiums for members with ESRD

Restoring underpaid CMS premiums for members with ESRD

What you can expect from this webinar

The process of identifying and restoring underpaid ESRD premiums is time-consuming and complex. This can stand in the way of maximizing the premiums you deserve for your membership with ESRD. View this on-demand webinar to learn:

  • Why CMS premiums for ESRD can go unreported and underpaid
  • The challenges involved in identifying underpaid premiums for MA members with ESRD
  • The challenges involved in restoring premiums
  • Discovery’s solution to help MA plans find and restore additional premiums

Use the quick form on the right to view the webinar on-demand.

Discovery Health PartnersWebinar: Restoring underpaid CMS premiums for members with ESRD
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Four tips for balancing the effects of Medicare Secondary Payer

Medicare Secondary Payer (MSP) is a multi-pronged issue for Medicare Advantage plans. If plans aren’t monitoring the effects of MSP on medical and pharmacy claims as well as premiums from CMS, they could be hurting their bottom line—to the tune of millions of dollars. MSP also introduces compliance responsibilities that plans must regard or else face possible consequences.

This requires a balancing act to ensure primacy information is correct for members with other insurance and to verify that claims are paid and premiums are collected in accordance with the member’s primacy.  Plans should work to identify inaccurate primacy information and build processes that can help correct these errors so they can ensure accurate payments all around.

Let’s look further at each area.


It’s important to realize that CMS primacy information is not always correct. Medicare Advantage plans should be reviewing CMS information each month to verify primacy to identify underpaid premiums as well as overpaid premiums.

What’s your motivation to verify premium underpayments? Your bottom line! Underpaid premiums often cost health plans more than they realize, and, in fact, Discovery Health Partners has recovered more than $200 million in underpaid premiums for Medicare Advantage plans. When the MA plan moves from secondary payer to primary payer for a member, the plan can recoup underpaid premiums going back 72 months. This adds up quickly!

On the other hand, CMS mandates that plans repay premium overpayments within 60 days. Obviously, this is required to stay in compliance, so plans need to ensure they are checking for CMS overpayments as well.

As plans work to identify and correct primacy errors, we always advise them to do a root-cause analysis to determine why dollars were taken from the plan and identify the entity that “took” the dollars. For example, was it due to a Section 111 reporting issue? You can see this on a quarterly basis if you have constant flip-floppers (members for whom you already corrected primacy but who show up again later as secondary). This could indicate a problem on the commercial side of your own plan.

Once you identify the owner of the problem, you can work with them to make corrections. And you can prioritize the work by which entity or problem affected the most dollars for your plan.


The financial impact of incorrectly paid claims due to MSP is not as great as the premium impact, but it’s still a worthy effort to verify claims that can return dollars to your plan. As you know, primacy order determines how claims should be paid.

As you update primacy information based on a monthly review of CMS files, it’s important that MSP and claims specialists work closely together. As primacy order changes, claims specialists can make sure claims get adjusted and reviewed. They also should make sure that claims systems are updated in order to pay claims correctly to providers.

You also can recoup overpaid claims (claims that you paid as primary but should have paid as secondary). Usually, you can go back 12 or 18 months to adjust claims and recoup dollars—it depends on contracts with providers or state regulations—which can add up to millions of dollars. It seems that CMS is paying closer attention to how claims are paid and if they follow the order determined by the plan, so if you haven’t focused on this before, now is a good time to change that.

It’s important to look at the full picture across premiums and claims—if you’re getting a reduced premium and paying claims as primary, then it’s a double hit for your plan. If you can correct both, it’s an even bigger improvement to your bottom line.


Part D plans have an obligation to verify primacy and ensure that member drug benefits are available to them when they need them. Plans that use a pharmacy benefits management firm (PBM) to manage pharmacy claims should be sure to share primacy updates with them and verify that they actually use that information. The PBM should pay claims based on recent verification on the medical side.

It helps to ask PBMs about their processes and how they use the information you give them. Ask them to map out the process so you can see that payments will be correct based on the information you share. Again, CMS is looking at this to ensure pharmacy claims are paid accurately.

Tips and tricks

If you’re uncertain about the performance of your MSP process, keep these tips in mind:

  1. Make it an ongoing process. Member primacy is constantly changing, so you have to keep on top of your monthly reviews.
  2. Check everything. As I said before, CMS may have inaccurate primacy information, so you have to double check that each month. Likewise, make sure your recovered premiums match your expectations each month—if you expect 60 months of premiums back, make sure you get the full 60 months.
  3. Assess. Get to root cause of errors and make sure updates get made.  For example, look for constant flip flops for indications such as Section 111 reporting problems. Also, review TRR 245 and 280s, which notify the plan of a member’s MSP status turning on and off. By reviewing and verifying the daily 245, you can avoid losing dollars instead of recouping after the premium has been reduced.
  4. Validate. Other insurers are your best source of validation information. Consider keeping a database of other insurer phone numbers to make research easier and faster. Use all the information available to you—member surveys, Section 111 responses, CMS reports, etc.

For more on this topic, view our on-demand webinar, Walking the line: balancing claims, premiums, and compliance for MA plans.



Discovery Health PartnersFour tips for balancing the effects of Medicare Secondary Payer
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Webinar: Walking the line – balancing claims, premiums, and compliance for Medicare Advantage plans

Walking the line – balancing claims, premiums, and compliance for Medicare Advantage plans

The inter-connected relationship between MA compliance, claims, and revenue

As Medicare Advantage plans walk a tight line when ensuring optimal care, paying claims correctly, and meet regulatory standards, they must carefully consider the intertwining dependencies within their plans and with CMS, which can impact their ability to meet company goals while managing compliance.

Listen to Discovery Health Partners’ Medicare subject matter expert, Amy Cogsdill, as she discusses the delicate relationships between premium recovery, claims payments, and compliance for Medicare Advantage plans.

Please use the quick form on the right to access the webinar today.

Discovery Health PartnersWebinar: Walking the line – balancing claims, premiums, and compliance for Medicare Advantage plans
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Webinar: 2017 Trends in healthcare payment integrity

2017 Trends in healthcare payment integrity

The 8 trends impacting payment integrity in 2017

Managing costs is the fundamental challenge facing all health plans today, and payment integrity is at the heart of this issue.

In this exclusive webinar on demand, payment integrity experts Paul Vosters and David Grice discuss the eight major payment integrity trends that have emerged in 2017 and offer recommendations for health plans that want to capitalize on those trends.

Please use the quick form on the right to view the webinar on demand today.

Discovery Health PartnersWebinar: 2017 Trends in healthcare payment integrity
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A second look at underpaid CMS premiums could restore millions


Premium loss due to Medicare Secondary Payer (MSP) has more impact on the financial bottom line of a Medicare Advantage (MA) plan than many people realize. Though MA plans are on the task – attempting to find and correct errors in member eligibility and CMS premium payments – most are still missing millions of dollars due to hidden challenges in the process.

For this reason, any plan could benefit from a supplemental “lookback” at their MSP files to ensure all the bases have been covered and premium revenue has been maximized. This simply means looking back through the plan’s MSP, MMR, and member eligibility files to look for cues that the MA plan is owed additional premium reimbursement for certain members, either because of inaccurate eligibility information or because of a process issue that was unable to correct eligibility information and restore the premium.

Why supplemental MSP Validation is necessary

The reasons that these cues may have been missed in a first pass are varied and often include:

  • Incomplete data aggregation from the plan’s IT department
  • Section 111 reporting inaccuracies by commercial plans
  • Inability to completely or accurately validate a member’s other insurance
  • Acceptance of ECRS Web denials that should actually result in premium reimbursements

Some of the most common reasons plans are unable to identify or restore underpaid premium are out of the control of the department that is managing MSP validation. Would you even know if your IT department is sending you incomplete data? What if you can’t get another insurer to validate eligibility information for a member? If CMS denies a seemingly legitimate eligibility update, do you know how to overturn that?

How supplemental MSP Validation works

Typically, when a MA plan does a “lookback” across its full MSP file, it can expect to see a spike in premium restorations over an initial validation period of about 4 to 6 months, often bringing in millions of dollars in additional premium revenue.  Restorations will then taper off as the plan maintains a best practices MSP program.

Discovery Health Partners provides a supplemental MSP Validation solution that complements MA plans’ internal efforts by doing this lookback for them.  Again and again, we find that even though most of these plans are working diligently to identify eligibility issues and premium reductions due to MSP, every one of them had been underpaid more than they realized.

In fact, in the last three years, we have recovered $150 million in additional premium restoration opportunities across all of our MA clients. These include plans of all sizes and maturity levels:

  • 100,000-member New York area health plan – $24 million
  • 30,000-member Midwestern health plan – $16 million
  • 20,000-member regional plan – $2.1 million

The amount of potential restoration opportunity for a MA plan is a function of five parameters. The variability of these parameters among our clients has resulted in a premium recoupment range of $11 premium per MA member on the low end to $419 premium per MA member on the high end.

  • The number of identified indications of other insurance on file with CMS for the plan’s MA members
  • The percentage of inaccurate records successfully validated
  • The number of months of actual restoration opportunity there is for each incorrect record
  • Average monthly restoration amount
  • CMS acceptance rate of corrections submitted

Check out our newest infographic, which highlights the impressive results MA plans of all sizes have had with a supplemental MSP validation solution that complements their ongoing internal efforts.  You’ll see why using an outside firm to help with this lookback can yield additional premium recoupment at no risk to your plan.

Paul VostersA second look at underpaid CMS premiums could restore millions
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Case study: Payment integrity success for healthcare payers

Case study: Payment integrity success for healthcare payers

Health plans are improving their claim recoveries, premium restoration and margins with advanced payment integrity solutions

Next-generation solutions, combined with greater transparency, allow Discovery Health Partners to build trust while delivering optimal results. See how we helped several health plans optimize their process and add millions to their bottom lines:

  • Top 5 plan expands subrogation business 5 times
  • MSP restores $13 million in 30 days for NY plan
  • Community health plan recovers $25 million for MA and commercial plans
  • Quick $1.9 million win with payment integrity consolidation
  • $13 million in MSP restoration continues into subrogation
  • Insightful dashboard and reporting strengthens MA plan

Just complete the quick download survey on the right for immediate access.

Discovery Health PartnersCase study: Payment integrity success for healthcare payers
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ebook: Maximizing your Medicare Advantage revenue through Medicare Secondary Payer (MSP) validation

ebook: Maximizing your MedAdvantage revenue through Medicare Secondary Payer (MSP) validation

Medicare Advantage plans collectively are underpaid by more than $2 billion because of Part C eligibility issues related to MSP

Most MA plans experience some level of revenue reduction from underpaid premiums due to Medicare Secondary Payer (MSP). At the core, it’s a problem with eligibility data.

Download your copy of this exclusive eBook and learn how proven best practices can improve your MSP validation and premium restoration results by:

  • Understanding the impact of MSP on your premium revenue
  • Recognizing organizational barriers
  • Optimizing your process to overcome obstacles
  • Empowering your team with the right technology

Discovery Health Partnersebook: Maximizing your Medicare Advantage revenue through Medicare Secondary Payer (MSP) validation
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