For years, Discovery has been protecting and restoring premium dollars for our Medicare Advantage clients, working quickly and delivering results to most clients within 90 days. In today’s blog post, we will explain the challenges that health plans face due to Medicare Secondary Payer (MSP) and End-Stage Renal Disease (ESRD) and offer a few stories that illustrate the value of premium restoration for our clients.
The challenge with Medicare Secondary Payer
Medicare Advantage plans often encounter inaccurate member eligibility data, which results in underpaid premium dollars. When other primary medical coverage exists, the Centers for Medicare and Medicaid Services (CMS) reduces premiums by 82%. CMS puts the burden on Medicare Advantage plans to prove when they deserve primary premiums, and many plans don’t realize how much revenue they lose in underpaid premiums.
Finding inaccuracies and identifying primacy is inherently complex. It requires the right mix of data modeling, sophisticated tracking, and workflow technology. The key is to target the records that have the greatest potential for restoration. The good news is that CMS allows Medicare Advantage plans to recover premiums from the previous 96 months.
The savings can be significant. An 82% premium reduction equates to $492 per member per month. Over 96 months, that amounts to $47,232. In our experience, approximately 20% of MSP records are incorrect and should receive a premium adjustment. With our MSP Validation services, we help to quickly and accurately confirm CMS records, make updates, and restore millions in underpaid premiums.
Discovery began offering MSP validation services in February 2013. With a department of one (yours truly), we restored $7.3 million for our first MSP client in only four months. Our MSP team and client results have grown since then. Altogether, we have achieved over $478 million in MSP restorations for 73 clients in seven years. Of the 542,000 validations we have completed, we were successful in getting 122,000 records updated with CMS and restored a total of 932,000 months of premiums.
One notable case involved a large health plan with 1.5 million members. Initially, the plan wanted us to complement their internal team’s efforts. In our first four months, we helped them restore $9 million. Pleased with the initial savings, the plan now relies on us exclusively for their MSP restorations. Over seven years, we have restored $120 million for the plan.
We have achieved similar results for plans large and small that have varying levels of skill and commitment to premium restoration. We restored $26 million over two years for a smaller plan with 62,000 members. For a large plan with 4.2 million members, we restored $36 million over three years. After this plan experienced trouble with the ECRS web portal, they ran a pilot using Discovery for a segment of their membership. Seeing the successful results Discovery delivered, the plan shifted their entire membership to us.
Another health plan with 200,000 members partnered with us to restore $32 million over six years. The plan was so pleased that they now use all of our solutions—MSP, ESRD, Subrogation, Coordination of Benefits, and Data Mining.
The challenge with End-Stage Renal Disease
Research shows that members with End-Stage Renal Disease account for a disproportionate amount of medical expenses. Some ESRD patients need costly dialysis treatment several times a week and will need lifelong care unless they receive a kidney transplant. In our experience, health plans are underpaid an average of $50,000 in CMS premiums for each misidentified or inappropriately documented ESRD member.
The primary challenge lies in the fact that dialysis clinics are responsible for flagging ESRD patients with CMS so that the plans can receive a higher premium for covering these patients. The process can be complex, creating gaps and inaccuracies. Clinics might not fill out the form required, send incomplete forms, or neglect to submit the form to CMS. It can be difficult to work with the clinics to correct errors or determine the source of the errors. Despite the fact that CMS submission requirements are outside of the health plan’s control, the onus lies with the plan to ensure they are receiving the correct premium dollars for these members.
Our work with ESRD Premium Restoration began in December 2017. In three years, we have achieved over $40 million in ESRD restorations and reviewed over 3,400 cases for 33 active clients. Of the 3,400 cases we investigated, we’ve restored ESRD premiums for 500 members for 7,474 months.
Several of our clients see results with our ESRD Premium Restoration solution in just a few months. One plan with 230,000 members and multiple lines of business restored $4 million in seven months. Another plan with 100,000 members worked with Discovery to restore $3 million in 12 months. One plan with 200,000 members partnered with us for two years, during which time we restored more than $6.5 million in ESRD premiums for the plan.
Similar to MSP, our ESRD solution delivers successful results for small plans as well as large. One of our newest clients has only 10,000 members. In just two months, we restored over $300,000 for the plan.