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.

[i] https://fas.org/sgp/crs/misc/R45290.pdf

Lyndsay DeckertWhy Medicare Advantage plans may be losing money on members with ESRD
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Healthcare claim recoveries jump with Discovery Health Partners

ROLLING MEADOWS, IL (July 13, 2011) – Discovery Health Partners, a provider of cloud-based healthcare cost containment solutions, today announced that it has successfully improved claims recoveries for all customers who have implemented its Intelligent Full Service Subrogation and Overpayment solutions – even driving a recovery increase of 40%  for one customer.

Since its 2008 founding, Discovery Health Partners has broken new ground within healthcare cost containment by launching the industry’s first purely cloud-based platform that offers Subrogation, Dependent Eligibility Verification, Coordination of Benefits and Information Analytics solutions in a fully outsourced model or via SaaS (pay-as-you-go) for in-house management – or in any combination in between.

“Traditional recovery and overpayment methods are antiquated, slow, complex and opaque. Analytics and cloud computing are driving a major wave of change in healthcare cost containment, and we’re at the forefront of it,” said Paul Vosters, President and COO of Discovery Health Partners. “Greater visibility and transparency enable organizations to monitor, control and improve their programs and those of their vendors. This insight is essential for better recoveries and operational savings.”

Discovery Health Partners’ customers include national and regional health insurers, healthcare providers, and self-funded organizations such as Humana, Lovelace Health Plan, Meritor, The Mentor Network and Rush System for Health, among others.

The intelligent platform enables customers to monitor their recovery operations more closely, manage other vendors on a single platform, and even compare their recovery operations to others through industry benchmarking. Three proprietary applications – Discovery Identification℠, Discovery Case Manager℠ and Discovery Dashboard℠ — identify cases for investigation; provide start-to-finish case management tools; and offer interactive analytics for visibility into current cases, real-time and historical views, and a range of customizable reports.

Rapid scalability is an additional benefit of Discovery Health Partners’ cloud platform. Within three weeks, Discovery Health Partners successfully began processing claims for a major national health plan with five million lives. The platform also supports massive data growth as Discovery Health Partners approaches petabyte-level claims analysis.

“We’ve raised the bar for methods in healthcare and benefits cost containment,” said Vosters. “Savvy organizations today expect higher standards for transparency, advanced analytics and reporting, and flexible delivery in healthcare recovery.”

 

 

 

 

 

 

 

 

 

 

 

 

 

Discovery Health PartnersHealthcare claim recoveries jump with Discovery Health Partners
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