MC 24 Health Plans and Medicare

Question 1

Types of Medicare Advantage Plans

Part 1 of 2

Answer 1

1. Coordinated Care Plans
   
   1. 1 Use a network of providers to deliver benefits approved by Medicare
   2. 2 May use financial incentives or utilization review to control the use of services
   3. 3 Must meet quality requirement
   4. 4 Other than in an emergency, no obligation to cover non-network care
   5. 5 plans include HMOs, regional and local PPOs, and SNPs (special needs plans)
2. Health Maintenance Organizations
   
   2. 1 they offer more controlled and limited networks
   3. 2 Medicare offers a POS option where HMOs can cover services out of network
3. Preferred provider organizations
   
   3. 1 do not use PCP gatekeepers, have larger networks
   4. 2 MA-PPOs must meet MA quality requirements
   5. 3 Must have a out-of-pocket limit for in-network, and a catastrophic limit on in and out-of-network services
   6. 4 Local PPOs can choose the service area where they will operate
   7. 5 Regional PPOs (RPPSs) must serve all counties in one or more regions
   8. 6 RPPOs have more flexibility than local PPOs

Question 2

Types of Medicare Advantage Plans

Part 2 of 2

Answer 2

1. Special needs plans (SNPs)
   
   1. 1 usually offered by HMOs
   2. 2 limit enrollment to individuals with special needs
   3. 3 three types of SNPs:
      
      1. 3.1 D-SNP: dual eligible SNPs (beneficiaries eligible for both Medicare and Medicaid)
      2. 3.2 I-SNP: institutional SNPs
      3. 3.3 C-SNP: chronic care SNPs
2. Private fee-for-service plans (PFFS plans)
   
   2. 1 Enrollees self-refer to any Medicare provider willing to accept the patient
   3. 2 plans pay providers at Medicare FFS rates, do not place the provider at financial risk
3. Medicare savings account plans
   
   3. 1 combined a high-deductible MA plan and a medical savings account for paying medical expenses on a pretax basis
   4. 2 confusing to beneficiaries, and only Medicare can contribute to their accounts
4. Medicare Cost Plans
   
   4. 1 similar to MA-HMO, with 2 key differences
      
      4. 1.1 Paid based on the actual cost incurred by the plan
      5. 1.2 Beneficiaries may go a non-network provider, and the services are covered under traditional FFS Medicare

Question 3

Special rules for group retiree MA plans

Answer 3

1. Waivers allow them to:
   
   1. 1 enroll only retirees following the employer or union eligibility rules
   2. 2 group enroll and disenroll retirees
   3. 3 disregard the minimum enrollment requirement
   4. 4 extend services areas to where retirees reside
   5. 5 enroll beneficiaries with ESRD and Part B only retirees
   6. 6 modify websites, call centers and marketing
   7. 7 vary cost-sharing levels and premiums
   8. 8 offer non-calendar year plans
   9. 9 no requirement to submit a part d bid

Question 4

The Medicare Part D Benefit Design

Answer 4

1. Most MA-PDs do not use the standardized design, they offer an actuarially equivalent design
2. The basic Part D plan
   
   2. 1 annual deductible
   3. 2 1st phase: enrollee pays 25% and govt pays 75% up to initial coverage limit
   4. 3 2nd phrase: between initial coverage limit and a catastrophic limit (the gap or the donut hole) enrollee responsible for 100%
   5. 4 3rd phase: beneficiary 5%, govt 80%, and the part D plan pays 15%
3. Difference between MA-PD and a PDP drug benefit is that the MA-PD plan can offer better drug coverage or lower cost-sharing
4. ACA will gradually close the coverage gap until beneficiaries pay only 25%

Question 5

Discuss Medicare Part D Formularies

Answer 5

1. Formularies are lists of drugs that are covered under the plan
2. Developed by a pharmacy and therapeutics (P&T) Committee
3. Part D formularies must include drug categories that cover all disease states
4. Each category must include at least two drugs
5. CMS reviews the formulary
6. Part D plans typically have 4 or 5 tiers, where the fifth tier is a specialty tier
7. The P&T Committee recommends prior authorizations, step therapies, quantity limitations, generic substitutions, drug utilization review

Question 6

MA payment

Describe the bid

Answer 6

1. Bids represent cost for Part A and B services net of cost-sharing, plus admin costs, plus a profit
2. Plans forecast claims for next year based primarily on last year’s data
3. Plans without claims history use a manual rate, based on Medicare cost data
4. The bid is normalized a risk score of 1.0
5. If the bid > benchmark, the plan charges beneficiaries a monthly premium
6. If bid less than benchmark, the plans receive a percentage of the savings as a rebate. Plans must use rebates to provide additional benefits
7. Regional PPOs (RPPOs) calculate their benchmark differently
   
   7. 1 (weighted avg RPPO bid* % of beneficiaries in MA plans) + (Weighted avg county benchmarks * % of beneficiaries in FFS Medicare) = RPPO Benchmark
8. Plans must aVoid designs that are discriminatory, and cost-sharing designs must be no less generous than FFS Medicare

Question 7

MA payment

Describe risk adjustment

Answer 7

1. CMS uses the hierarchical condition category model (CMS-HCC)
2. The model maps ICD-9 diagnosis codes to condition categories
3. Condition categories are ranked in a hierarchy. Higher categories trump lower
4. Each category is assigned a value (risk adjustment factor, or RAF)
5. Problems with the CMS-HCC model
   
   5. 1 Incomplete diagnosis data in Medicare claims determine the risk coefficients
   6. 2 the claim form collects a max of 4 diagnosis codes, so some may be omitted from the claim form
6. Two audit activities: plans looking for incorrect codes resulting in under payments, and the other by CMS to find overpayments

Question 8

Impact of the ACA on MA payment

Answer 8

1. ACA returns the payment to health plans to close to the average FFS cost
2. Benchmark payments vary by county based on a measure of efficiency (the most efficient counties benchmarks will be set higher than FFS)
3. A high quality health plans receive a bonus of 5% of the benchmark payment
4. ACA provides double bonuses for counties that
   
   4. 1 paid at the urban floor rate in 2004 (95% of the AAPCC)
   5. 2 MA penetration of at least 25% of all Medicare beneficiaries in the county
   6. 3 Average FFS costs below the national average
5. Bonuses will be paid to plans achieving a quality score of at least four stars
6. Bonuses are used to provide additional benefits, or reduce cost-sharing or Prems
7. Plan retain % of the savings attribute to a bid less than benchmark
   
   7. 1 These “rebates” provide additional benefits, or reduce beneficiary costs
   8. 2 Plans with a rating of 4.5 or 5 receive a 70% rebate, ratings between 3.5 and 4 receive 65%, plans below 3.5 stars receive 50% rebate
8. For MLR regulations, MA plans will count activities that improve quality as medical costs and deduct certain tax payments from revenues

Question 9

Medicare Prescription Drug Payment

Answer 9

1. Part D plans may be free-standing PDPs or offered by MA plans as MA-PDs
2. Submit bids to CMS based on historical data or manual rates for new plans, and include administrative costs and profit
3. The base beneficiary prem =
   Thenationalaveragemonthlybid * 25.5%/
   (1- projreinsurancepaymentstoplans/totalpaymentsreceivedbypdps)
4. PDPs receive a direct subsidy = (the national average bid - base beneficiary prem)
5. Beneficiary premium =
   (Their plans’ bid - the direct subsidy) =
   Base beneficiary premium + their plans bid - national average bid
6. Payments to PDPs are risk-adjusted, using the RxHCC model
7. Risk-sharing provision
   7.1 if a plan’s costs exceed projected by more than 5%, CMS pays the plan 50% of the amount in excess of 5%. CMS pays 80% of the amount exceeding 10%
   7.2 Plans pay CMS 50% or 80% of any amount exceeding 10%
8. CMS also pays PDPs for beneficiaries qualifying for low-income premium subsidies and low income cost sharing subsidies
9. CMS pays PDP a reinsurance amount to cover 80% of the benefits for members whose out of pocket costs exceed the threshold

Question 10

Eligibility and application for a Medicare contract

Answer 10

1. Eligibility
   
   1. 1 licensed as risk-bearing entities to offer health insurance in the states
   2. 2 demonstrate financial solvency and a positive net worth
   3. 3 premium may not exceed the actuarial value of Medicare cost sharing. Can offer supplement benefits at an additional cost
   4. 4 benefits and premiums must be uniform throughout the service area
   5. 5 use Medicare qualified providers
   6. 6 provide 24 hr emergency care and pay for out of area emergency services
   7. 7 meet CMS access standards
   8. 8 must have at least 5000 member or in rural areas at least 1500 members
   9. 9 able to administer the contract
2. The application
   
   2. 1 application file a notice of intent of apply
   3. 2 the application is a series of attestations or questions
   4. 3 network adequacy: min number of providers/beds, and time/distance requirement
   5. 4 for part D, applicants must submit a formulary
   6. 5 following the approval, plans submit heir bid and benefit packages
   7. 6 bids are reviewed and CMS executes contracts by mid-September
   8. 7 CMS may verify compliance with Medicare requirements through onsite visits

Question 11

Beneficiaries

1) who may enroll in MA
2) discuss enrollment periods

Answer 11

1. Who may enroll?
   
   1. 1 Beneficiaries in the plan’s service area, having both Medicare Part A and Part B, and requesting to enroll during an election period
   2. 2 Beneficiaries without Part D cannot enroll in MA-PD, but they can in MA-only
   3. 3 Exceptions to the eligibility rules
      
      1. 3.1 if the plan is not open for enrollment, then the beneficiary may not enroll
      2. 3.2 if the plan is limited to special needs individuals or to employer group members, then the beneficiary may only enroll if meets the plan requirements
      3. 3.3 Medicare beneficiaries having ESRD may not enroll. Enrollees who acquire ESRD after enrollment may not be disrolled because they have ESRD
2. Enrollment and Election Periods
   
   2. 1 Annual Election Period: Oct 15 through Dec 7, for enrollment a effective on Jan 1
   3. 2 MA Disenrollment Period: can Disenrollment and return to Medicare FFS 1/1 thru 2/15
   4. 3 Special Election Period: change of residence, loss of employer coverage, loss of MA coverage bc another plan terminates a Medicare contract, or gets Medicaid
   5. 4 Initial Coverage Election Periods
      
      2. 4.1 Begins 3 months before entitled to Part A or B and ends the later of the end of the month before entitled A and B, or last day of Part B
   6. 5 Open-enrollment period for institutionalized individuals
      
      2. 5.1 it ends 2 months after the individual moves out of the institution

Question 12

MA Marketing and Sales Rules

Answer 12

1. Cover all materials and activities targeted to Medicare beneficiaries, including advertising, sales, member communications
2. Prohibited marketing
3. Prior approval: materials must have CMS approval prior to public use
4. Required notifications to prospective enrollees
   
   4. 1 summary of benefits form, plan star rating, enrollment instructions, customer service contact information, explain of the appeals and grievances process
5. Required notifications to enrollees
   
   5. 1 changes in plan membership rules at least 30 days in advance
   6. 2 annual notice of change: evidence of coverage (EOC); providers; out of network and out of area coverage; emergency coverage; prior authorization requirements; grievances and appeals; the quality assurance program
   7. 3 provider directories and member ID cards
   8. 4 plans offering part D must provide pharmacy directories and formulary info
6. Sales: “marketing or sales events” vs “educational events”
7. Agents and brokers and commissions
8. Website and call center requirements

Question 13

MA consumer protections

Answer 13

1. Access standards
   
   1. 1 min provider to enrollee ratios and Max travel time
   2. 2 the liability of the MA organization for the cost of an emergency
   3. 3 limiting copayments for emergency services to amount specified by CMS
   4. 4 the examine physician prevails regarding when the enrollee may be discharged
   5. 5 female may choose directly a network women’s specialist for a routine services
2. Member appeals and grievances
   
   2. 1 appeal pertain to adverse decisions regarding coverage or cost of an item
   3. 2 appeal step include: the determination by the organization, review by an independent review entity, review by an administrative law judge, review by the Medicare appeal council, judicial review on federal law
   4. 3 grievance are complaints related to dissatisfaction with provision of services
      
      2. 3.1 enrollees must be afforded a “meaningful” grievance right, responses on a timely basis, and notification of investigation results to all concerned parties
   5. 4 Prescription drug coverage determinations and exceptions
      
      2. 4.1 coverage determination tells whether a particular drug will be covered
      3. 4.2 may request an exception to have the drug covered. May also ask for an exception to have the enrollee pay less of the drug is in a more expensive tier
3. Cultural competence

Question 14

MA quality and plan performance

Part 1 of 3

Answer 14

1. Quality requirements
   
   1. 1 MA coordinated care plans must have a quality improvement program
   2. 2 Chronic Care improvement project (CCIP)
   3. 3 Quality Improvement Projects (QIPs)
   4. 4 Plans must have an information system that analyzes and report data
   5. 5 Plans must follow written policies to detect underutilization and over utilization
   6. 6 plan must perform an evaluation annually of the effectiveness of its program
2. Plan Reporting to CMS
   
   2. 1 HEDIS, CAHPS, health outcomes survey, plan information (eg call center performance, appeals, and grievances rates)
3. Star ratings
   
   3. 1 one star is a poor performing plan while five stars is excellent
   4. 2 Medicare displays ratings in the plan finder used by beneficiaries to select plans
   5. 3 plan ratings are reported at four levels: overall rating, summary level, domain, individual measures
   6. 4 organizations hat fail to achieve at least a three-star summary rating on Part C and D for 3 straight years will be out of compliance with their Medicare contracts

Question 15

MA quality and plan performance

Part 2 of 3

Answer 15

1. 1 External Quality review
   
   1. 1 QIOs (Quality improvement organizations) review complaints by MA enrollees
2. Annual Performance Assessment
   
   2. 1 The performance assessment system arrays information from HEDIS, HOS, CAHPS, complaints, audit to identify plans whose performance is poor
   3. 2 CMS may prohibit a plan from expanding its service areas, or deny a new contract
   4. 3 each year CMS reviews all contracts’ performance covering 14 months
   5. 4 A poor-performance MA plan has a negative score of 4 points, and part D plan has negative 5 points
3. Plan Performance Data
   
   3. 1 Operational Data: CMS conducts outlier analysis
   4. 2 Active Monitoring: complaint tracking, sales surveillance activities, and customer service monitoring
4. Audits on one-third of the plans each year
   
   4. 1 if the audit has findings, the organization submits a corrective action plan
5. Prevention and detection of fraud, waste and abuse

Question 16

MA quality and plan performance

Part 3 of 3

Answer 16

1. Compliance Program
   
   1. 1 Written Policies and procedures
   2. 2 compliance officer and compliance committee
   3. 3 training and education
   4. 4 effective lines of communication
   5. 5 enforcement of standards through well-publicized disciplinary guidelines
   6. 6 monitoring and auditing
   7. 7 corrective action procedures
   8. 8 the program must include a code of conduct
   9. 9 it must state nonretaliation for good faith participation or reporting issues
2. Enforcement
   
   2. 1 plans have at least 30 days to implement a CAP (corrective action plan)
   3. 2 Administrative and intermediate Sanctions
   4. 3 Termination, the ultimate sanction
   5. 4 Civil Monetary penalties
   6. 5 exclusion from all federal programs
3. Subregulatory guidance