Exchange participation is creating new challenges as more health plans enter health insurance exchanges and realize a solid Risk Adjustment model must be planned, built, and set sail before a tidal wave of transfer payments hits their deck. Imminent threat of revenue loss due to poor data collection processes may sink otherwise thriving plans as they watch their money being swept back to sea by the rip current known as ‘reallocation of premium’ or risk adjustment transfers. Further loss of future revenue looms large as plans with poor risk models skip the opportunity to shore things up with quick and proactive provider education. And the oncoming tidal wave of CMS measures are challenging for even the industry experts. To stay afloat, commercial plans must change course from a ‘selecting and protecting’ to an ‘absorbing and distributing’ risk model.
Do Medicare Advantage Risk Models Translate?
Medicare Advantage plans have been navigating these waters for some time now, but experts agree, retrofitting a commercial plan with a MA Risk Adjustment model isn’t smooth sailing. For one thing, data audit timelines are different and tightly compressed for risk adjustment activities and reporting in the exchanges. The timing is much shortened from data-submission to payment adjustments. Another thing exchange plans will have to contend with is a smaller percentage of suspects, which at initial glance seems to lighten the administrative load, but in actuality, can be brutal to the results of even slightly inefficient plans. To provide some insight into the financial impacts of your plan’s risk adjustment activities, the Congressional Budget Office estimated that we could be seeing $10 BILLION PER YEAR in risk adjustment transfers. At Health Data Vision we realize most Health Plans are at about the halfway point, or hopefully a little beyond, for their 2014 HEDIS®data collection projects. This is when it gets fun and it is truly the last time to really be able to address problems before it’s too late. Here are a few things a plan can do to m
Data & Revenue: Choice of Workflow Platform Critical
Health plans will be paid with levels of member health status taken into account, as reported by the health plan through their data collection activities. This plan revenue, as explained in HHS regulations, will take into account member ages, genders, and documented diagnoses. Since this information is privacy protected, the data and plan payment scores will remain housed within each individual health plan’s technology platform. Of course, HHS regulations include auditing of this data, not once but twice by both your health plan auditors, while HHS determines your audit sample, and then again by HHS auditors. Therefore, the workflow platform chosen by the health plan is critical to maximizing the efficiency of data management and revenue optimization.
Since at this point, no one knows exactly what the audit data points will consist of, it makes choosing and building the most transparent and controllable data platform a must for health plans. Transparency of the process, scalability and control will all play into the health plan success or failure to correctly extract quality audit data. Financial and compliance implications, and significant operational workload will certainly beach health plans who drag their heels and are slow to launch. Health plans options to design, test and implement risk models necessary to participate in exchange business include the option to purchase a scalable software platform.