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Will The U.S. Healthcare System Finally Make Care Management Its Main Focus?

Will The U.S. Healthcare System Finally Make Care Management Its Main Focus?

Since the introduction of modern insurance back in the days of the Blue Cross and Blue Shield Associations, managing utilization and its costs have been the focal point, whether in extracting concessions from providers for commitments of volume to later scrutinizing requests for authorization of services. But while utilization management will always be important, the Centers for Medicare and Medicaid Services (CMS) is striving to make care management the nexus of health care in America.

CMS and other policy-makers believe the lack of focus on care management has had major impact on overall outcomes. While there is little reason to doubt that we have the most technologically advanced system in the world, major healthcare indicators for the United States point to a fundamental lack of focus on prevention and quality. The United States has the highest percentage of health care expenditures in terms of Gross Domestic Product (GDP), yet it ranks low on most indices: outcomes, frequency of prevention visits, emphasis on health education and care coordination, and admissions and readmissions for controllable disease states and conditions. Although some of this is attributable to demographic factors, there is no question that the system has been fundamentally unhinged for some time, with a utilization-based payment system and few incentives to emphasize care coordination and management.

As we have written in past Strategic Insights blogs, CMS has begun changing the current landscape by making managed care programs more accountable. But these reforms are rooted in a far-greater effort that is emerging that seeks to bring care management and elements of a national model of care to all members in some form and fashion, regardless of their line of business or socio-economic status. The elements of this overall transition effort can already be seen in a number of initiatives.

The rework of the Medicare Advantage (MA) Special Needs Plans (SNPs) was the first of these efforts. Just a decade ago, SNPs looked to be on their death bed, viewed by Capitol Hill and CMS as plan marketing vehicles that had little quality or cost-reduction benefit. They survived via a series of last-minute legislative extensions. During this period of limbo, CMS began a fundamental redesign of the program, including reining in disease states allowed for Disease-Specific Chronic Care SNPs, requiring closer coordination with state Medicaid funding streams and policy for Dual Eligible SNPs, and instituting a rigorous Model of Care for all SNPs. The National Committee for Quality Assurance (NCQA) must approve the Model of Care and review it over time as well. In addition, CMS has expanded its audit scrutiny of SNPs and has formulated numerous best practices for timeliness of assessments, ongoing individualized care plans (ICPs), activities of the interdisciplinary care teams (ICTs), ongoing stratification and interventions for members, and compliance with the overall Model of Care.

The establishment of the dual demonstration plan pilots, also known as Medicare-Medicaid Plans (MMPs), was the next step. Paralleling the dual eligible SNP reforms above, MMPs seek to form an even greater integration of Medicare and Medicaid funding streams and, in some states, both acute and long-term care spending. The duals pilots are rooted in CMS’ belief that accountable, care management-focused managed care across the two government programs can finally tackle the dual eligible quandary. They represent less than 20% of both the Medicaid and Medicare populations but account for almost 40% of each program’s spending. Over 350,000 Dual members are now in the MMP pilots in nine states, with California having over one-third of the enrollment.

But CMS is worried about an additional problem that can be seen in both Medicare and Medicaid: other beneficiaries with multiple co-morbidities. Members of this group drive overall costs and these individuals are not solely in the dual types plans noted above. For example, in 2011, Medicare beneficiaries with two or more disease states or conditions consumed 93% of Medicare spending (they accounted for under 70% of the enrollees). So how does CMS go beyond the focused reform of dual eligible programs to tackling the need to focus better care management and prevention on the overall population, especially those that drive costs and have low outcomes?

One step is the introduction in the coming year of the Value Based Insurance Design (VBID) initiative in Medicare Advantage in seven pilot states. The aim is to have greater focus on members who have multiple disease states. Traditionally, mainstream Medicare Advantage plans have been one-size-fits-all for enrollees. Everyone has the same benefits and cost-sharing. With the VBID, plans in the pilot states may fashion benefits and services for a subset of their population in need of additional interventions. In this case, plans will be able to offer additional benefits and incentives as well as reduce cost sharing to incent the use of value-added services (PCP, specialist, and other preventive services). In addition, CMS expects plans to wrap disease and care management around these revised benefit offerings. While the pilot is initially narrow, it should expand in the future and allow even greater flexibility in approach. The VBID can be viewed as the first step in CMS’ desire to target appropriate benefits and care management services that match a Medicare enrollee’s actual risk and needs.

In its recent Medicaid Uber rule announcement related to Medicaid reform, CMS takes steps in a similar direction for Medicaid as well. Medicaid beneficiaries in all states will require an initial assessment to determine risk and morbidity. Those found to be of increased risk will get additional assessments and will also have ongoing treatment plans similar to care plans. Care coordination rules for those in need of various long-term care services will be even stricter and more complex.

Quality incentives is an additional linchpin of the reform of the system. In just five years, CMS’ efforts with Medicare Star has meant enrollees in 4 and 5 Stars plans have jumped from just 25% to 71% this year. Each MMP plan has its quality incentive program. Within a few years, state Medicaid programs must fashion their own quality incentive program or adopt CMS’ soon-to-be-announced one, which is expected to be modeled after Medicare 5 Star.

With the Affordable Care Act now in full swing, over time we can expect CMS to move these principles into the Exchange world. A good portion of the Exchange population has multiple co-morbidities, as many were previously excluded from consistent coverage due to pre-existing condition exclusions and/or were levied exorbitantly high premiums due to health status. Indeed, new dictates are coming every year, including piloting the display of its Quality Rating System (QRS) star ratings in certain federal marketplace states beginning for the 2017 welcome season in October. The states selected for this pilot program are Michigan, Ohio, Pennsylvania, Virginia, and Wisconsin. CMS selected these states because they have strong participation of plans and relative variation in ratings. CMS’ goal is test how consumers react to the system in plan choice for coming year enrollment (similar to MA). As the Exchange mandates set in, it should lead to a change in approach in the greater self-insured and small- and large-group commercial sectors. Indeed, some reform demonstrations in the commercial world are ongoing in coordination with CMS.

And lastly, care management reforms are not limited to managed care but are penetrating Medicaid and Medicare fee-for-service in the form of Accountable Care Organizations (ACOs), primary care case management pilots, bundled payment initiatives, quality achievement bonuses and penalties, and Delivery System Reform Incentive Payment (DSRIP) Waivers, among others.

So the stage is set. While major work has to be focused on the high-cost individuals that consume the vast majority of resources, CMS understands that a national model of care is needed to fundamentally realign the system, reduce costs, and improve quality. In time, CMS will expect plans to perform the following on all insureds:

  • Assess all members for health risks and conditions.
  • Identify and stratify these populations.
  • Fashion interventions appropriate to care needs for each member, up to and including complex case management.
  • Identify care gaps to improve health outcomes.

It is only in this way that the entire system will benefit from a prevention and care management focus. It too, is a must to bend the cost curve and have continuous quality improvement.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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