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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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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MSP Validation momentum continues for Discovery with new wins in Q3

Blue Cross and Blue Shield plans headline new client roster


ITASCA, IL—October 24, 2017 – LaunchPoint division Discovery Health Partners, a provider of payment and revenue integrity solutions for healthcare payers, added three Blue Cross and Blue Shield plans in Q3 to its growing roster of clients. More than 50 health plans, including 4 of the top 10 insurers, are Medicare Secondary Payer (MSP) Validation clients.

Honored two years in a row as a top 100-finalist in the Chicago Innovation Awards, MSP Validation helps Medicare Advantage plans recoup millions of dollars to their bottom lines by ensuring the accuracy of healthcare premiums paid by Centers for Medicare and Medicaid Services (CMS) for members with other health insurance. To date, Discovery has restored more than $200 million in underpaid premiums for its clients, including more than a dozen Blues plans.

MSP Validation analyzes plans’ open MSP records, validation of primacy, ECRS submissions, response monitoring, and premium reconciliation. The solution is typically delivered as an outsourced business process with Discovery experts managing the entire process on behalf of the client. It is often provided as a supplemental offering that complements clients’ existing efforts to help restore more. Clients can also subscribe to the service as cloud-based software to manage the MSP process in-house with their own staff. Many choose to take over ongoing maintenance after Discovery manages the initial restoration effort.

About Discovery Health Partners

Discovery Health Partners, a division of LaunchPoint, offers payment and revenue integrity solutions that help health payers improve revenue, avoid costs, and enhance the member experience. We offer a unique combination of deep healthcare expertise and analytics-powered technology solutions to help our clients improve operational efficiency, achieve financial integrity, and generate measurable results.


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Discovery Health PartnersMSP Validation momentum continues for Discovery with new wins in Q3
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HEA Medicare Accounting & Reconciliation 101 Boot Camp

Mastering the Essentials of Membership & Revenue Reconciliation


Date: January 30-31, 2017

Location: Nashville, TN

Venue: Holiday Inn Express, Downtown Nashville

Join Discovery Health Partners at the HEA Medicare Advantage Accounting & Reconciliation 101 Boot Camp, an innovative, comprehensive training event for health plan professionals seeking to build the foundation of their membership accounting and financial reconciliation knowledge. Whether you are new to Medicare Advantage or seeking a refresher on the basics, this boot camp will give you all the requisite essentials related to CMS’ monthly finance and membership reports and how to reconcile them with your payment data.


Discovery Health PartnersHEA Medicare Accounting & Reconciliation 101 Boot Camp
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Networking, new thinking, and no snow – our Medicare Accounting and Reconciliation conference update

The Discovery Health Partners team spent some time earlier this week digging into Medicare at the Health Education Associates Medicare Accounting and Reconciliation conference.

We were certainly excited to escape the snow and cold of the Midwest with a couple of days in Florida, and we were (almost) as excited to hear what our health plan partners were talking about when it comes to better managing the financial impacts of Medicare. And, once we cracked the Medicare code (all of those acronyms are impressive!), the amount of information and networking packed into this one-and-a-half day conference was insightful, engaging, and fun.

As a chairperson for the conference, I had the opportunity to get to know our speakers and have a front row seat for some great presentations. Here are just a couple of things we heard about:

  • Compliance is necessary, even when the ROI isn’t obvious. Finding a way to sync your activities with the sometimes challenging CMS calendar is critical to running a compliant MA plan.
  • Accurately calculating member revenue requires an investment in understanding ALL of the factors that affect your payments, checking and rechecking for errors, and appropriately prioritizing your efforts against potential ROI.
  • Resolving discrepancies with effective SOPs can be done with the proper management of Category 2 and Category 3 submissions, daily reconciliation, and again, a working understanding of the CMS calendar and the gaps it creates in timing.
  • Leveraging technology to simplify processes like MSP validation that can reduce the amount of resources required to run an efficient and effective program.
  • Learn from each other! Sharing victories, and more importantly challenges, is critical to success. Share case studies and leverage your peers to deepen your understanding and enhance your program’s performance. If you’d like to be a part of our MSP conversation, please join our MSP LinkedIn group.

In addition, our very own Vice President of Operations, Laura Cohen, presented five tips for improving your MSP validation and premium restoration process.

1. Align commercial and Medicare Advantage eligibility

  • Communicate termination dates to CMS
  • Avoid paying primary claims, while receiving secondary premiums

2. Understand how much revenue is at risk

Use our calculator (insert link) to identify your potential outcomes

3. Implement best practices

  • Identify and prioritize open records
  • Validate correct other coverage
  • Submit updates to CMS
  • Update eligibility information
  • Track, monitor, and reconcile financial impact

4. Evaluate technology

  • Management insight and control
  • Automation
  • Dashboard/reporting

5. Consider outsourcing

  • Get started quickly; adjust to changing work demands
  • Gain the focus and dedication this process requires
  • Access subject matter experts
  • Leverage proven processes and technology

Laura Cohen

Laura has lent her expertise in this area to 12 plans over the past 18 months and the results she and her team have been able to achieve have been staggering. They have helped our clients restore a total of over $77 million and improve their processes for ongoing revenue optimization.

As Laura mentioned, even plans who are doing an excellent job of managing their MSP Restoration process find significant dollars when they partner with our team.

We look forward to seeing you at one of our upcoming conferences this year!












Discovery Health PartnersNetworking, new thinking, and no snow – our Medicare Accounting and Reconciliation conference update
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