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Payment Increases to Medicare Advantage Plans Lower

CMS on Monday said that reimbursement rates for Medicare Advantage plans in 2007 will increase by only about 1.1% on average, rather than 4% as scheduled, because of a technical adjustment of how physicians code beneficiaries for billing, CQ HealthBeat reports. According to CQ HealthBeat, past small increases in reimbursement rates have led to decreases in benefits offered by Medicare Advantage plans.

Medicare Advantage plans in most cases offer more benefits than traditional Medicare because of higher reimbursement rate increases established under the 2003 Medicare law, in addition to separate subsidies from the federal government for plans that provide prescription drug coverage.

Karen Ignagni, president of America’s Health Insurance Plans, said, “No member of Congress will be able to conclude that plans are overpaid next year.”

Health Plans Don’t Fear 2007 Medicare Advantage Rates, See Positive Long Term

CMS is expected to issue final 2007 Medicare Advantage (MA) payment rates April 3. But some established Medicare managed care organizations aren’t holding their breath: They anticipate satisfactory reimbursement for next year’s MA product lines….

Visit AISHealth to read the entire story.

CMS Takes Steps To Clean Up Enrollment

Last week CMS notified Medicare prescription drug plan sponsors of the process for reconciling plan enrollments to ensure that all beneficiaries who have elected to change plans are appropriately disenrolled from their initial plan by April 30, 2006. To ensure that all enrolled beneficiaries would have access to prescription drug coverage in the early days of the new program, particularly for dual-eligible beneficiaries who switched plans later in the month, CMS advised plans in January to delay processing certain disenrollments. By early February, most plans began processing disenrollments. As a result of the January CMS instruction and some plans’ decision to continue delaying disenrollments into February or March, certain beneficiaries have had access to coverage under more than one plan: the initial plan that continued coverage, and a subsequent plan chosen by the beneficiary or an agent acting on their behalf (the Medicare “plan of record”). As the startup of the drug benefit progresses, CMS is now taking steps to ensure that all beneficiaries who changed plans are appropriately disenrolled from their initial plan by April 30, 2006. This process of reconciling plan enrollments will assure consistent coverage, allow appropriate tracking of out-of-pocket costs, permit payments to be fully reconciled between plans, and most importantly, ensure that each beneficiary continues to receive drug coverage smoothly and consistently. Please find attached a one-pager that further describes this process. The standard letters sent to affected beneficiaries on CMS letterhead are also attached for your reference.

DEADLINE: PDPs, MA-PDs, Cost, and PACE 2007 Applications

Today is the deadline for all PDPs, MA-PDs, Cost, and PACE 2007 applications.

Details on the CMS website.

Public Comment Period for Draft 2007 MA, MA-PD and PDP Call Letters

We are pleased to issue this notice announcing the release of the DRAFT 2007 Medicare Advantage (MA), Medicare Advantage-Prescription Drug (MA-PD) and Stand Alone Prescription Drug Plan (PDP) Call Letters for public comment. We are sending theseletters out via HPMS and will post them on our website at
http://www.cms.hhs.gov/HealthPlansGenInfo/02_WhatsNew.asp#TopOfPage

and

http://www.cms.hhs.gov/PrescriptionDrugCovContra/01_Overview.asp#TopOfPage

CMS UPDATE: Advance Notice of 2007 Technical Changes to MA Reimbursement

Here are the highlights from the CMS Advanced Notice of Methodological Changes to 2007 MA Rates and Part D Payments:

GENERAL:

• The National Per Capita Growth percentage is used to baseline the rate tables for 2007. The rate is estimated at 6.9%. It is still not possible to predict the final impact on reimbursement with out knowing the other variables, like the Budget Neutrality and Coding Intensity factors.

PART C:

• The HCC model will be recalibrated for 2007 using 2002 and 2003 Fee For Service data. The current model is based on 1999-2000 data. It is expected that the new model will provide a more accurate prediction between health status and the costs associated with providing care. All segments will be updated (community, long-term institutional, new enrollee, and ESRD). There are no changes to the disease grouping in the model however coefficients (the higher the weight allocated to a grouping the higher the reimbursement). As a result of the recalibration of the HCC model, the frailty factor will also be recalibrated.
• The Fee For Service Normalization factor will be recalibrated for 2007 and will no longer be applied to the rate book but to the risk scores. The expectation is that mathematically the result will be the same. However between recalibrating the HCC model AND applying the FFS Normalization factor to the risk scores, the 2007 risk scores will be substantially different in 2007 and not really an apple-apple comparison to 2006 scores
• In 2007 Pain Management will be added (Medicare code 72) to the qualified specialty type and pain management has been added to the HCC model.
• 100% risk adjustment payments in 2007 for all MA plans except Social Health Maintenance Organizations (S/HMOs), Minnesota Senior Health Options (MSHO)/ Minnesota Disability Health Options (MnDHO), Wisconsin Partnership Program (WPP) and Massachusetts Senior Care Options (SCO) demonstrations who will be 75% risk adjusted in 2007.
• The budget neutrality factor will begin its’ phase out in 2007 with a 45% reduction.

DOWNLOAD THE CMS ADVANCE NOTICE HERE

Letter From CMS to Providers

Dear Health Care Professional:The new Medicare Part D prescription drug program is the single biggest change to Medicare since the program began 40 years ago and one which has been long overdue. But adding a benefit as significant as the new Medicare prescription drug program, which affects millions of individuals, involves some start-up challenges.

We’re writing today with the objective that, during this initial period, CMS and providers keep lines of communication open. Physicians may occasionally need to help a patient by filing a prior authorization for a medication or appeal a medication’s tier. We want to make it as easy as possible for you to help your Medicare patients, as well as to ensure that you get the support you need if questions arise. Here’s a brief glossary of terms that may assist you in working with your patient’s prescription drug plan:

Continue reading Letter From CMS to Providers…

NEW Report: Tracking Medicare Health And Rx Plans

January 6^th, 2006 – Monthly Report for December 2005

The Kaiser Family Foundation releases a great monthly update on activites that impact Medicare Advantage and PartD businesses.

Credits:
Prepared by Stephanie Peterson and Marsha Gold, Mathematica Policy Research Inc. as part of work commissioned by the Kaiser Family Foundation

Download MA Plan Tracking Report

Medicare and Pay For Performance

P4P is already on its way and most organizations that manage Medicare lines of businesses are not preparing for the changes in data collection and reporting. Here is a good article outlining the P4P programs already in demonstration with CMS and where they are headed. Now is the time for us to pay attention and begin planning and preparing.

What 2007 Holds For Risk Adjustment Reimbursements?

Medicare Advantage (MA) Plans are beginning to plan for all of the anticipated changes in payments and reimbursements and there are many planned in 2007. Here are just a few factors that will determine who wins and loses on the battle for MA plan reimbursements:

• 100% Risk Adjustment – 2007 will be the first year that Medicare Advantage Plans will be reimbursed using 100% of the risk adjustment model since it was introduced in 2000. There will be no reimbursement based on the demographic model in 2007. Take a look at how your reimbursement would have looked last year if there was no demographic payments…nervous? This is the reality in 2007. Those with healthier populations (or appear to be because ICD9 codes are lost or miscoded) stand to lose.
• Expected Increase In National Base Payment Rate – CMS is expected to announce an increase in the national base payment rate for specific service areas in April 2006. Many experts assume a “reasonable” increase would be 5%. This will affect everyone the same way. The most significant variable is how much…wait till April to find out.
• “Budget Neutrality” Factor Going Away – Last year CMS announced that they have accelerated the phase out of the Budget Neutrality Factor over a five year period starting in 2006-2007 reducing the factor by 45%! The adjustment factor is currently 13.05% and would be reduced to approximately 7% in 2007.
• Shorter Final Submission Deadline for 2005 Data –Plans have been allowed approximately 1yr 5 months to make final risk adjusted data submission to CMS. For data with a data of service in 2005, the deadline will be reduced by five months, the final submission due date is 1/15/2007. So much for the 2006 holiday season!

Continue reading What 2007 Holds For Risk Adjustment Reimbursements?…