Miscellaneous 4 Flashcards
EPSDT (pediatric Medicaid benefit)
early & periodic screening, diagnostic, and treatment
Medicaid covers about ____% of the U.S. population
20%
flexible areas that vary by state for Medicaid
- eligibility
- benefits
- provider payment
- other aspects
Medicaid expansion benchmark plans must include
- EHBs
- family planning services
- prescription drugs
- meet Mental Health Parity requirements
Medicare & Medicaid Alignment
plans will receive separate capitation payments for Medicare Parts A & B, Medicaid, and Part D. Capitation rates for Medicare part A & B & Medicaid are calculated using the following process
- project baseline costs in absence of the demonstration
- apply savings %
- apply withhold %
- apply any prospective risk adjustment mechanisms
- apply an retrospective risks mitigation mechanisms (ex. risk corridors)
alignment of Medicaid & Medicare benefits will differ by states with respect to:
- target population
- all duals or subset - geographic area
- state wide or limited - capitated model enrollment process
- benefits covered
Duals compromise ___% of Medicaid population & account for ___% of expenditures
15%, 35%
section 1115 waivers allow changes to member cost sharing, such as:
- all waivers require some level of copayment
- Iowa & Michigan charge monthly premiums
- AR, IN, & MI use an approach similar to an HSA in which enrollees make monthly or quarterly contributions
Medicaid population
highest % of enrollees?
most expensive enrollees?
children & parents (75%)
elderly & disabled (65% of total spending)
ACA efforts to improve Medicaid
- increased payment rates to Medicare levels for PCPs in 2013-2014
- included various incentive and initiatives designed to promote more patient-centered, coordinated, & integrated care
- voluntary reporting of quality of care measure for adults
HEDIS
Healthcare Effectiveness Data & Information Set
-standardized data to measure the quality of care
MCCSR
Minimum Continuing Capital & Surplus Requirement
-amount of capital required by regulators, similar to risk-based capital in the U.S.
life & health insurers whose stock is publicly traded are required by the SEC to prepare financial reports on what basis?
GAAP
generally accepted accounting principles
ASOPs related to actuarial opinions for group insurance
- # 7 - considerations for liability & asset cash flows
- # 22 - cash flows under moderately adverse scenarios
- # 28 - consider specific policy & contract provisions affecting assets & liabilities
if a company grows faster than g*, it must do 1 of the following:
- improve operations by increasing
a. profit margin (P) or
b. asset turnover ratio (A) - alter financial policies by increasing
a. retention rate (R) or
b. financial leverage (T)
external funding required (for pro-forma method)
= total assets - (liabilities + owner’s equity)
Considerations during Risk adjustment implementation
- budget neutrality
- timing of the updates
- data testing & validation
- HIPAA considerations & controls
- Newborns
“Individual” approach to risk adjustment
transfer an individual’s risk score to a health plan when he/she moves
the capitation rate paid to the plan changes (monthly) based on the enrolled membership.
“aggregate” approach to risk adjustment
a composite risk score is calculated across all eligible members enrolled in the experience period. That risk score is used to determine the capitation rate for the entire rating period.
time period of prospective & concurrent risk scores
prospective - future period
concurrent - same time period as experience data
type of data needed for risk adjustment models
- age
- gender
- eligibility
- inpatient admissions diagnoses
- outpatient services
- pharmacy data
sustainable growth rate
limit on company’s growth if there is no external source of capital
adjustments in financial reports to reflect unusual or one time items
“normalization”
- items that qualify as extraordinary for accounting purposes
- disputed items resolved after the fact
- expenses discovered after the fact
- significant IBNR adjustments
- legal settlements
- start-up costs for new products
total leverage ratio
- “measure of how much debt the company has”
- most important liability is claims payable
- admin cost to process claims is typically included
Return on Assets (ROA)
measure of how profitable a business is relative to the capital deployed, regardless of whether the capital is equity or debt
advantages of same-size income statement
- profit margins are divided into relevant components, which aren’t a function of company size
2 allows easier comparison between health plans & separate years for same plan
same size income statement definition
express all relevant financial components as a % of revenue
2 most common profit margins
- operating profit margin
- operating profits / revenue - net margin
- net income/ revenue
Net Margin includes non-operating income (investment income & expense, taxes)
nature of assets for the following models:
- Staff Model
- IPA
- ASO
Staff Model: ownership of clinics & hospitals to deliver the care
IPA: substantial investments in liquid assets to pay for care that has been received but not paid for (reserves)
ASO: few fixed assets. do not deliver care or carry revenues
Formulas
- operating profits
- total non-operating income
- pretax income
- net income
- total revenue - total expense
- investment income - interest expense
- operating profits + total non-operating income
- pretax income - income taxes
if there are no dividends, then ROE =
sustainable growth rate
ROE measures
how fast the company’s new worth is growing, assuming 0 dividends
the significance of GAAP financial statements
- capture the overall performance of the enterprise
2. measure owner’s value through valuation models
concept of the discounted future cash flow model
The value of the company is determined by the amount & timing of distributable cash (dividends)
measured value of stock companies
stock price
The main types of administrative service agreements
- self-administration
- 3rd party administrators
- funds held by the insurer
- funds held by the policyholder
- premium billing
Provider Reporting (Canada)
No reporting requirement to providers since they don’t take any insurance risk or shar in any insurance profit
Provider Reporting (U.S.) -provides info for 2 purposes
- provider risk sharing arrangements
2. medical management reporting
policyholder reporting (U.S.) -provides info for 3 purposes:
- assessing the results of risk-sharing arrangements
- fulfilling government reporting requirements (such as ERISA)
- enabling policyholders to complete their own financial reports (such as actuarial reserves for self-funded policies)
Assuris Reporting (Canada)
Consumer protection pans that indemnifies (within limits) the policyholders of life insurance companies that become insolvent.
The DCAT tests the company’s financial position over a 5-year projection period under “stress” from plausible adverse scenarios of:
- external environment (economic, government actions, legal)
- business experience (claims, productivity, sales, surrenders)
- business planning (investment, products, bonus, capital)
Medicaid is the main source of coverage & financing for ____ which are generally not covered by Medicare private insurance
LTSS
long term service & supports
ex. HCBS & NH
For every 1% increase in the unemployment rate, Medicaid enrollment grows by _______
about 1 million enrollees
for Medicaid ACA expansion groups, FMAP =
100% in 2014-2016
phases down to 80% in 2020
federal share of Medicaid is based on ____
FMAP (federal Medicaid Assistance Percentages)
- provides higher reimbursement to states with lower per capita income
- min = 50%
- max - 83%
Medicaid cost-sharing exemptions
- children under 18
- preventative services
- pregnancy-related services
- emergency services
- adults with family incomes at or below 100% FPL may only be charged nominal copays
- aggregate cost sharing < 5% families income
new Medicaid eligible adults due to ACA expansions coverage will be provided through a benchmark plan such as
- BCBS standard plan under the Federal Employer Health Benefits Program
- a plan offered to state employees
- largest HMO in the state
- other coverage approved by the secretary of the Department of Health & Human Services (HHS)
Medicaid eligible groups
- low income families
- pregnant women
- people with disabilities
- people age 65 & older
- additional populations @ state descretion
Medicare plan performance data
- operational data
- active monitoring
- audits
- prevention & detection of fraud, waste, & abuse
- compliance program
TEFRA
Tax Equity & Fiscal Responsibility Act of 1982
MTM (Medicare)
Medication Therapy Management
- target beneficiaries with multiple chronic diseases & >= $3K annual drug costs
Formula for Net Level Premium (P)
used to measure adjustment for interest & policy reserve to compare actual loss ratio to expected loss ratio
P = (policy reserve change plus incurred claims)/ (1+i) - [i / (1+i)*(Beginning Reserve - 50% of incurred claims]
LTC profit criteria
- pre-tax profits
- post-tax profits
- return on investments
- return on equity
NOT LOSS RATIOS
MLR of individual market before the ACA
43%
