MA Experience Data: Pitfalls and Concerns Beyond ASOP23

Question 1

Introduction

Answer 1

1. MAOs must use appropriate data to price their bids, both in order to comply with required bid instructions and to increase accuracy of future projections
2. MAOs must consider influences both internal and external to the claim adjudication process as they review and use their data
   - Is the claims experience consistent with the plan benefit package (PBP) and provider contracts?
   - Does the claims experience seem reasonable compared to prior years and benchmarks?

Question 2

Internal Considerations

1. Does the data contain the required elements?
2. Is claims experience consistent with benefit parameters and provider contracts?
3. Is claim experience reasonable compared to internal expectation?

Answer 2

1. Does the Data contain the Required Elements?
- Store and classify all relevant data for covered memebers and benefits
i. Eligibility data
ii. FFS claims data
iii. Capitated encounter and payment data received from all vendors

• MAOs must compare the data they have to the benefits covered in that period to identify any missing elements
• Assess the quality of the data and address any deficiencies
• Missing information
  i. MAOs may struggle to obtain complete data at the level of detail required to perform bid pricing
  ii. For certain benefits, an MAO may have difficulty receiving claims data at the member level
  iii. MAO or its vendor may not have tracked encounter data associated with capitation arrangements
• Aggregated data
  i. Some vendors may not include enough detail to allow for an accurate allocation to the corresponding services
• Integration of benefits
  i. Where a service integrates Medicare and Medicaid benefits, segregate the two benefits and use only the subset of data covered by Medicare
• Medicare vs non-Medicare covered benefits
  i. If a supplemental benefit is offered, the MAO must be able to identify and separate claims for Medicare covered vs. non-Medicare covered services
• Incomplete data
  i. There may be significant lags in the compeltion of the data
  ii. If the MAO switched vendors or negotiated contracts, it will need complete information that reflects the terms of the new contracts
• Eligibility
  i. MAOs must confirm that the claims and encounter records are consistent with the eligibility records
  ii. Part C data must exclude all claims for ESRD individuals
• Utilization considerations
  i. Identify any claim records that could lead to over-or underreporting utilization if handled incorrectly
  ii. Sufficient data must be collected in order to determine the unique number of utilizers for each service category to satisfy Bid Pricing Tool (BPT) reporting requirements
• Paid amount considerations
  i. Understand the contents of each dollar amount field to ensure data are used appropriately
  ii. Understand each source of paid data and confirm it has accurately captured all payments associated with a given service
• Classification
  i. Classify data into the categories the BPT and PBP requrie for bid pricing
  ii. It incorporates numerous claim elements and decision-tree logic to ensure appropriate classification, account for denials or adjustments and assign various utilizaqtion metrics
  iii. Consistent classification of claims allows for meaningful benchmark testing and multiyear analyses
  iv. Tools built around groupign software allow MAOs to efficiently perform such classification and provide a platform for consistent benchmarking

2. Is Claims Experience Consistent with Benefit Parameters and Provider Contracts?
- Identifying adjudication errors is important from both a financial standpoint and a bid preparation standpoint.

• MAOs should audit their data to identify claims that may be inconsistent with the PBP or provider contracts
  (1) Capitated arrangements
  a. MAOs may contract with certain vendors under a capitated arrangement
  b. MAOs should validate that the vendor is receiving the correct cotracted amount and that they are covering services consistent with the PBP for eligible members only
  c. MAOs should confirm that the covered services are being paid only under the specified capitation arrangment and are not additionally being erroneously paid as FFS as well

(2) Member Cost Sharing
a. MAOs should audit their data to confirm that vendors and providers are charging the plan’s beneficiaries correct member cost sharing
b. MAOs should monitor data to ensure compliance with all CMS rules

(3) Benefit coverage
a. MAOs should ocnfirm providers and vendors are providing their beneficiaries with the correct coverage for each of their plans
b. MAOs should validate that each plan is being adjudicated and covered at the correct level for that particular plan

3. Is Claims Experience Reasonable Compared to Internal Expectations?
- the MAO should review experience and compare to what it expected for that book of business

• Actual-to-expected comparison will help the MAO
  a. Understand emerging financial results
  b. Identify new adjudication or contracting issues
  c. Identify areas of utilization management improvement
  d. Set assumptions for the upcoming bid year
• MAOs should perform this actual-to- expected review throughout the year, as well as during the year-end financial statement reporting process
• MAOs can prepare for the upcoming bid cycle during the year-end financial statements reporting process by
  a. Reviewing and reconciling claims
  b. Gathering certain settlement items
  c. Developing incurred but not reported (IBNR) completion factors

Question 3

External Considerations

1. Is Claims Reasonable given External Benchmarks?
2. Is Claim Experience Being Prepared to comply with CMS Requirements for Bid Pricing?

Answer 3

1. Is Claims Experience Reasonable Given External Benchmarks?
- MAOs should compare their claims experience to both the plan’s expected results and external benchmarks

• External benchmarks should consider
  a. Plan’s geographic area
  b. Covered benefits
  c. Risk score
  d. Level of utilization management

2. Is Claim Experience Being Prepared to Comply with CMS Requirements for Bid Pricing?
- Some common problem areas and solutions
(1) Nonbenefit Expenses
a. Payents must be categorized as nonbenefit expense or a medical claims expense consistent with CMS guidance
b. MAOs may pay an “administrative fee” to a vendor for adjudicating a certain benefit
c. The classification of this expense as nonbenefit expense or medical claims expense in the BPT may depend on how the total vendor payment is structured
d. An MAO may consider certain internal expenses to be an “administrative expense” rather than a medical claims payment (e.g. for a nursing hotline benefit)
e. The classification of these expenses in the BPT must be consistent with the classification in the PBP

(2) Capitation encounters
a. CMS requires encounter data for all services to be incorporated into the BPT, including for those services that are provided under a capitation arrangement
b. If accurate encounter data are not available, plans are required to disclose the deficiency and develop a corrective action plan for future years

(3) Global Payment Allocation
a. Global payments related to capitation or risk-sharing arrangements are required to be allocated proportionally to the net cost of services covered under the contract forr Worksheet 1 reporting
b. MAOs must ensure appropriate classification of benefits and isolation of different provider contracts in order to accurately compelte such an allocation