Member engagement may be the different between success and failure for those taking on Medicare Advantage populations.
by Dan HoemkeSenior Healthcare Advisor at Nudge, Chief Business Officer at BaseHealth
As traditional fee-for-service (FFS) models continue to be phased out in favor of per-member, per-month (PMPM) risk-based capitation, it is now more critical than ever that population health management delivers on its “Triple Aim” promise.
Perhaps nowhere else in healthcare is this more true than for plan sponsors, risk bearing and risk-sharing entities taking on Medicare Advantage populations, where significant risk is a virtual guarantee, but where incentives also align to offer opportunities for not only cost-savings but also significant top-line revenue generation.
The potential payoff is enormous, but fully realizing the opportunity at hand requires something that the healthcare industry as a whole has never come close to achieving…
Effective and efficient member engagement.
Risk Adjustment Factor (RAF) Basics
The Nuts And Bolts of Medicare Advantage
If you’re reading this there is a good chance you already understand the Risk Adjustment Factor (RAF) scoring methodology used by CMS (the Centers for Medicare and Medicaid Services) to allow risk bearing enterprises, such as Medicare health plans and Accountable Care Organizations (ACOs), to receive increased Medicare payment for higher risk members who enroll in their plans during open enrollment.
But for the uninitiated, it will be helpful to do a quick level-set on this fundamental aspect of Medicare Advantage plans so we are all on the same page.
The way it all works is relatively simple.
At the beginning of each new plan year, each Medicare Advantage enrollee is ascribed a RAF score. This score directly determines the amount of the monthly capitation payment (essentially the PMPM revenue) that risk bearing enterprises are paid by CMS for each member.
But here is where it begins to get interesting...
It turns out that RAF scores are based solely on demographic factors like age and sex, meaning that they don’t take into consideration any pertinent prior medical history, or current health status or conditions that may make some members more costly to health plans or ACO’s than other members.
Realizing that risk bearing enterprises attract different levels of member risk, CMS allows for the upward adjustment of any RAF score - and as a result, an increase in PMPM capitation payments - if at any time during the plan year a member is diagnosed for a medical condition that warrants the adjustment.
And regardless of when during the year the diagnosis is made, whether in January or December, the plan receives the increased payment amount for the entire plan year.
This means the quicker you can get a member diagnosed and report the change to CMS, the quicker CMS can validate the change and process the adjusted payout for the plan year.
In short, efficient care management pays.
I’m sure any plan manager, officer or executive would agree that it is mission critical to capture all of the revenue to which a plan is entitled, and therefore optimizing speed of diagnosis and RAF score adjustment to accelerate payments from CMS is mission critical as well.
Identifying The Ideal Opportunities
So you may be thinking, “what does this long dissertation have to do with member engagement?”
In an effort to optimize both revenue and clinical outcomes, plans are increasingly using advanced predictive analytics, such as those pioneered by BaseHealth, to identify members with a low current RAF score, who are high risk and very likely diagnosable for a condition that would justify the score adjustment and subsequent increased payment.
As you can imagine, the ability to identify and target these individuals effectively unlocks an enormous opportunity to simultaneously increase revenue and greatly enhance our ability to deliver the most timely and highest quality health care experience.
But even with the targets identified and the incentives perfectly aligned for optimal outcomes, there is still just one problem that stands in the way of success.
The Last Barrier To Successful PHM
Once these ideal individuals are identified, the ideal plan and workflow is as follows.
Population health management teams reach out to these members in hopes of engaging them, nudging them to schedule clinical visits which will result in new diagnoses, and enrolling them in care management plans that correct CMS and improve revenue payments.
Furthermore, health management and clinical outcomes are optimized and that means everyone is happy.
This story sounds simple enough, but unfortunately it relies on one huge assumption that consistently stops plan sponsors from realizing the revenue opportunities that are right in front of them.
This assumption is that population health management teams will be effective at executing the outreach and engagement efforts needed to move these individuals along the care continuum.
Unfortunately, plan sponsors are struggling mightily with the strategic and tactical imperatives of connecting with these individuals and engaging them through the appropriate care pathways.
Thus the vaunted ‘Triple Aim’ promise of population health management remains elusive, this time foiled by a simple inability to connect with and engage people.
Extrapolating The Lost Revenue Opportunity
Aside from the significant impact on clinical outcomes and potential for interventional savings, the lost revenue opportunity associated with engagement ineffectiveness is momentous!
In one analytic study performed by BaseHealth on a population of 10,000 members they identified an additional $8.4M in incremental revenue improvement, with approximately half of that being new-found revenue, and the other half being revenue that could have been appreciated earlier with a speedier diagnosis.
Ultimately, this goes to show that effective member outreach and engagement in the Medicare Advantage space may be the difference between success and failure for plan sponsors.