Benchmark Target ManagementIn

Medicare Shared Savings Program

September 2014

Managing Benchmark

• Managing Benchmark Surprises• Impact of Churn• Risk scoring in MSSP vs. Medicare

Advantage• ESRD, Dual, Disabled, Aged

– Movements Between Categories

Benchmark Surprises!• Many ACOs experienced a significant adverse

move in benchmark• 1.5% of benchmark reduction in savings

payment.– $10,000 annual benchmark = 150 per bene lost

payment or $12.50 “pmpm” or 50% more than CMMI advance payment

– 8,000 bene = $1.2 million

• Mix of beneficiaries by segment• Missing bene – where did they go?• Final Assignment

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Assignment and Risk Selection

• Quarterly updates– Getting newly assigned addresses– Deceased– Claims info stop = reassigned to different ACO,

MA?– Where did they go?

• Category– ESRD?– Dual?– Disabled?

Segment Management

• ESRD is 6-10x or more Aged/Dual• Dual 20% or more than Aged• Disabled mixed bag – some ACOs

have higher, some lower.• Will vary by ACO – how are you

managing which patients are in each segment?

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Cash Flow Time Lines• RAF in an ACO, a study in delayed gratification

– ACO is a 3 Year Contract• Year 2 drives Year 3 risk score• Year 3 risk score is drives normalization of Year 1 & 2

costs for 2nd Contract (Years 4-6) benchmark• Upward sloping RAF scores “bake in” a favorable bias

for 3 years

– Year 4 savings paid mid Year 5– RAF is a 3 year benefit for a 1 year effort

• Just delayed a long time• Downward sloping RAF is certain economic failure

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MSSP and Risk Scoring

• MSSP will receive some value for RAF management– Not as much as Medicare Advantage on an

annual basis– 3 Year Value

• Not “managing” RAF is risking a negative slope to risk scores which bakes in an unfavorable bias for 3 years!

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Risk Score – Positive Slope Example

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Year Risk ScoreRisk Score Adj Factor

(BY3/BYx) Weight Component

Risk “Inflation”

for 2016,7,8PY1 2013 0.75 1.27 10% 0.127 PY2 2014 0.75 1.27 30% 0.380 PY3 2015 0.95 1.00 60% 0.600

Imputed Risk Score 1.107 10.67%

Moderate Increase in BY 3 Risk ScorePY1 0.75 1.40 10% 0.140 PY2 0.75 1.40 30% 0.420 PY3 1.05 1.00 60% 0.600

Imputed Risk Score 1.160 16.00%

Significant Increase in BY 3 Risk ScorePY1 0.75 1.47 10% 0.147 PY2 0.75 1.47 30% 0.440 PY3 1.10 1.00 60% 0.600

Imputed Risk Score 1.187 18.67%

RAF in MSSP Benchmark Calculations• Three year trend effects benchmark for

next three years.– Getting it right is an imperative.– Not an immediate gratification– Changes can overwhelm care coordination

impact

• Relative movement vs. absolute level• Upward trend is good, downward is bad• There are no MMR, MOR, RAPS return files

– New administrative structures and efforts– Front loaded efforts

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No RAPs file!!!

• No RAPS, MMR, MOR, or Error File• No specific member to HCC identification• Engaging the physician, EMR & Billing• Claims line feed – some of the data• Typical analysis• Action items to physicians• Reconciling CLF vs. MMR/MOR• Twists from MSSP Assignment process10

Submitting New Dx to CMS

• There is no RAPS file!• There is no 2nd chance.• Codes go to CMS on the claim.• 5010 sort of compliant vs. fully

compliant• MSO type pre-clearing house

validation

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Managing Beneficiary Assignment• Not managing assignment is trusting

a negatively biased environment to provide a fair cross section of risk.

• Benchmark credit accrues differently than health care expense

• Cultural nature of ACOs is to further adverse risk selection

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Benchmark vs. Cost Accumulation• Benchmark credit is earned equally for each assigned beneficiary• Total healthcare expense is incurred in a non linear fashion

(note: claims are truncated at 99nth percentile limit on per beneficiary expense)

Savings Credit and Beneficiary Expense

Not Worried Well

COE Transitions

Typical Management Activity• COE Transition Beneficiaries

• Instinctively MSSP contractors reached out to and assisted the vulnerable and high cost population

• Increased PCP engagement slowed or eliminated transition to COE external to the ACO

• MSSP contractors “managed” to keep disproportionate number of high cost beneficiaries, i.e. reduce high cost churn compared to base year processes

• Not Worried Well (NWW)• PCP visits 12-16 months

• Drive attribution to every other year• Most MSSP contractors did not “manage” to reduce NWW churn.

Impact On Total Savings• Assumptions:

– 10,000 Beneficiaries– $9,000 Benchmark– 10% a priori “NWW Churn”

• Moves to 7% from Beneficiary Outreach

– 2% a priori “COE Churn”• Moves to 0% from Case Coord, etc

– Ratio of High Cost Cases to Benchmark• 10% of population = 50% of cost is approximately a

4.5:1 Ration of High to Low Cost

• Conclusion– 5.4% Savings needed to offset unbalanced

churn reduction

Sensitivity To Eliminating COE Churn

Average High Cost Case to Benchmark Ratio

a prioriCOE

4 4.5 5 5.5 6

3.5% 8.4% 10.6% 12.9% 15.2% 17.7%

3.0% 6.6% 8.4% 10.3% 12.2% 14.2%

2.5% 4.8% 6.3% 7.8% 9.3% 10.9%

2.0% 3.1% 4.2% 5.4% 6.6% 7.8%

1.5% 1.5% 2.3% 3.2% 4.0% 4.8%

Sensitivity To NWW ChurnPrior NWW Churn

New Churn 10.0% 9.0% 8.0% 7.0% 6.0%

6.0% -4.% -3.1% -2.1% -1.2% 0%

5.0% -4.9% -4.0% -3.1% -2.1% -1.1%

4.0% -5.8% -4.9% -4.0% -3.0% -2.1%

3.0% -6.6% -5.7% -4.9% -3.9% -3.0%

2.0% -7.5% -6.6% -5.7% -4.8% -3.9%* Negative numbers represent favorable savings

Segment Qualifications

• When is ESRD really ESRD?• Duals are under reported• Disabled are under reported

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ESRD• Benchmark is 6-10 X “Aged”

– CKD 4 is not ESRD and considered “Aged”– Care coordination w/o qualification only holds CKD

4 as “Aged” longer.– ESRD is assigned monthly– Small population (1.5%) at 8 x Aged cost = 12% of

Benchmark expense– Qualification management and ESRD “Medical

Home” should improved appropriate qualification and total and average cost

– Minimum Savings Rate could be achieved from ESRD patients alone

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Duals & Disabled

• Social Work Fairytale– Long time ago hospitals employed social workers

to qualify uninsured patients to Medicaid– 20% increase in Benchmark warrants a look at

MSSP contractors to evaluate “Aged” populations

• Same infrastructure can work disabled status– Automatic processes for CM to review to SW

evaluation?

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High Risk/Opportunity Populations

– ESRD = 5% of Benchmark (+/-)• ESRD = 1% of population = manageable• ESRD Medical Home• ESRD MA spend patterns

– Diabetes – an imperative for quality, cost AND BENCHMARK

• Diabetic risk score should exceed 1.5 as a population

• Typically under reported/coded• Managed through diet/exercise often not coded

at all• Impacts 25% - 40% of Benchmark

Conclusions and Questions?

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Conclusion: You must manage Assignment, Risk Selection and Risk Score