2/10/2014 1 Turning Compliance into a Competitive Advantage: Lessons Learned from Medicare-Medicaid (“Duals”) Demonstration Program Implementations www.pwc.com Mitch Harris PwC Director, Health Care Compliance Katherine Kohatsu PwC Director, Health Industries Strategy Christopher Cameron Health Net, Inc. Vice President, Dual Eligible Program Management & Coordination February 2014 PwC Introductions 2 PwC and our client plans in several states have experienced the growing pains of implementing the Medicare-Medicaid Demonstration Programs Katherine Kohatsu PwC Director, Health Industries Strategy Mitch Harris PwC Director, Health Care Compliance Christopher Cameron Health Net, Inc. Vice President, Dual Eligible Program Management & Coordination
Transcript
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Turning Compliance into aCompetitive Advantage: LessonsLearned from Medicare-Medicaid(“Duals”) Demonstration ProgramImplementations
www.pwc.com
Mitch HarrisPwCDirector, Health Care Compliance
Katherine KohatsuPwCDirector, Health Industries Strategy
Christopher CameronHealth Net, Inc.Vice President, Dual Eligible Program Management & Coordination
February 2014
PwC
Introductions
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PwC and our client plans in several states have experienced the growing painsof implementing the Medicare-Medicaid Demonstration Programs
Katherine Kohatsu
PwC
Director, Health Industries Strategy
Mitch Harris
PwC
Director, Health Care Compliance
Christopher Cameron
Health Net, Inc.
Vice President, Dual Eligible Program Management & Coordination
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PwC
Agenda
• Overview of the Medicare-Medicaid Financial AlignmentDemonstration
• California’s Cal MediConnect MMP Demonstration
• An Integrated Approach to Compliance
• Q&A
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PwC
Overview of the Medicare-MedicaidFinancial Alignment Demonstration(Duals Demonstration)
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PwC
The Alignment Initiative
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“Partnering with States, health care providers,caregivers and beneficiaries, CMS will work toimprove quality, reduce costs and improve thedual eligible beneficiary experience. Throughthe Alignment Initiative the Medicare-Medicaid Coordination Office seeks totranscend boundaries, facilitating a nationalconversation with stakeholders from aroundthe country to identify opportunities foralignments and improve the two programs.”
Although both Medicare and Medicaid are administered by CMS, they havevery different rules, payment methodologies and guidelines resulting indisparate funding, misalignment of incentives and confusion for providers
Capitated Model: A State, CMS, and a health plan enter into a three-waycontract, and the plan receives a prospective blended payment to providecomprehensive, coordinated care.
Managed Fee-for-Service Model: A State and CMS enter into an agreementby which the State would be eligible to benefit from savings resulting frominitiatives designed to improve quality and reduce costs for both Medicare andMedicaid.
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States can enter into one of two types of dual demonstrations as part of thefinancial alignment initiative
Source: State reports, Centers for Medicare and Medicaid Services, PwC analysisNote: Washington MOU for FFS only; no MOU yet for MCO pilot
Twenty-one (21) states are moving forward with the Duals Demonstration –PwC has been working with five plans in four states and one state agency
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Critical Success Factors
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The rightmarket
conditions
The rightskills
The rightdeliverymodel
A costcontainmentstrategy tied
to qualityoutcomes
EngagedStakeholders
• Competitive positioning
• Receptive providers
• Adequate rates and risk factors; quality withholds
• State and federal program design features
• Enhanced operationalcompetencies
• Care management
• Data and analytics
• Change management
• Compliance culture
• A truly integrated model across thefull continuum of care supported byreal time data and analytics
• Integrated care coordination formedical, behavioral, social services,LTCSS
• Understanding andmanaging the true costs ofcare
• Demonstrated financial andmedical effectiveness
• Physician incentives
• Changing communitypractice patterns
• Involved members
• Integrated LTCSS andbehavioral health
Success in the duals market will require new delivery models, skill sets,and relationships as well as the right market conditions
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Common Threads NationallyOur clients have faced many similar issues
1. Two sets of requirements =A lot of learning for many plans
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CMS State
2. Readiness Reviews are a big effort
- P&Ps / Desk Review
- On-site Review
- Remediation & Final Review
4. Regulations and guidance on key processeshave come out quite late
- Marketing, enrollment, data sharing with state agencies
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CMS
State
3. The Demonstration isintegrated to the beneficiary,but not necessarily operations
Medicare
Medicaid
PwC
California’s Cal MediConnect MMPDemonstration
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Timeline of the Duals Demonstration in California
2012
May 31: DHCSsubmits finalDemonstrationproposal to CMS
January: 3-waycontracts signed
Jan 27: RFS releasedby DHCS
April 4: Sites selectedby DHCS
April 5: Health Netbegins design andimplementation
20142013 April
September:Readiness reviewfindings
September: Finalrates released
October: 3-waycontract released
March 28: Health plans receiveReadiness Tool from CMS
April 19: Desk review documentssubmitted
June 14: Network submitted forapproval
July 17: Site reviews in LA begin
March: MOUsigned byDHCS andCMS
April 1:Go Live
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Highlights of California’s Cal MediConnectDemonstration
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Counties participating: Orange County is postponeddue to readiness issues
Planned go-live: Dual eligible members voluntarilyenrolling for an initial period in some counties, all-at-once in others
Estimated eligible beneficiaries (inclusive of Orangecounty)
Maximum enrollment in Los Angeles County
Source: Calduals.org, CA Department of Health Care Services
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April 1
456,000
200,000
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Requirements originated from a varietyof key sources including:
3-way contract
OIG’s guidance on elements of effectivecompliance programs
CMS Medicare Managed Care Manual& Prescription Drug Benefit Manual
HPMS memos
Examples of changes from currentprocesses include but are not limitedto:
Finalizing marketing materials basedon CMS review and approval
Processing specific enrollmenttransaction types (e.g. TransactionCode 72 - 4Rx Data Change)
Disbursement of interest payments (incases of untimely claims processing)
Monitoring and addressing CTMs
Introducing New Requirements into OperationsPlans must successfully incorporate contractual and regulatory requirementsinto operations, some of which may be new to current processes
OperationalProcess
Medicare Medicaid Duals
Marketing
Benefits
Enrollment
Claims Appeals andGrievances
CustomerService
QualityStandards andReporting
= Represents a change in current business practices for a
specific plan type (e.g. Medicare Advantage, Medicaid, etc.)
Sample List of Operational Differencesby Plan Type
PwC
Building Compliance into the ProgramCompliance should be integral to program operations and corporateculture
• Compliant operations is only possible with a full understanding of programrequirements
• Management must be fully conversant with:
• MA rules
• Medicaid rules
• The State-CMS Memorandum of Understanding
• The terms of the three-way contract
• MMP-specific guidance
• High-quality training is needed for employees and FDRs
• Contractual and regulatory compliance becomes the cornerstone of theMMP’s performance management activities
• Compliance staff are active members of the program management process
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Preparing for Readiness ReviewsPreparation is a significant undertaking, requiring broadorganizational involvement and lasting several months
Key lessons:
• Organization is critical
• Don’t forget basic program/project management
• Develop a plan and manage to it
• Resource adequately not just to perform the work, but to effectivelycoordinate
• Understand the program requirements and evaluation criteria
• Make full use of the readiness tool
• Respond completely and specifically to deficiency notices
• Prepare the team thoroughly for the Site Review
• Identify the correct people to address the review objectives
• Develop interview questions
• Conduct mock interviews
• CMS and the states are serious about MMP readiness
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The complexity in meeting contractual and regulatory requirements presentedchallenges to MMPs working to launch Cal MediConnect
A Programmatic View into Key Challenges
• Plans adherence/reconciliation of requirements between: 3-way contracts, CMSmanuals, state-specific MMP manuals, and state Medicaid requirements.
• Variation across states is a concern for national health plans with a presence inmore than one state.
• Vagueness of regulatory requirements as captured in guidance received from CMSInnovation Center and/or State.
• Compressed timelines to implement regulatory and contractual requirements.
• Marketing: Adjust current processes to provide adequate time for membermaterials to be reviewed and approved by both CMS and the State, including timeto address (potential) conflicting guidance from the two regulatory agencies.
• Enrollment: Roles and requirements related to enrollment between States, CMSand health plans are not clearly defined, thus introducing challenges in managingthe accuracy of enrollment data and in performing timely revenue reconciliation.
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Lessons Learned
• Apply a similar level of discipline and rigor from existing compliance programs toguide operational areas in implementing contractual and regulatory requirements
• Adapting the current infrastructure (at both the parent and affiliate levels)resulted in decreased costs and effort and enhanced the organization’s ability torespond to change
• Seek a clear understanding of roles and responsibilities to be owned by the Stateversus the MMP (e.g. ownership of delivering timely enrollee notices)
• Leverage established communication processes with CMS and/or the State toremain informed of new and changing regulatory requirements and expectations
• CA would have benefitted from a combined Plan-State-CMS work group thatmet regularly to discuss operational, compliance and implementation issues
• Broader duals market / MMP guidance as disseminated through HPMS memosmay not apply to specific state demonstrations (e.g. the use of the appropriateIntegrated Denial Notice)
• Remain flexible in adapting to and incorporating new requirements into dailyoperations (e.g. weekly enrollment reconciliation process), as these may emergeeven after key milestone dates
The MMP program experience provided key learnings from both acompliance and programmatic perspective
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An Integrated Approach to Compliance
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Establishing Compliance as the FoundationCompliance should be embedded in an organization’s business operations,governance and employee rewards structures, where Compliance serves as theday-to-day foundation to support the organization in meeting / adhering toregulatory requirements.
PwC’s ComplianceProgram EffectivenessFramework
The ‘Compliance ProgramEffectiveness Framework’ consistsof 10 compliance elements and~100 associated attributes.
• Each element is considered andmeasured to assess the design,implementation andeffectiveness of an organization’soverall Compliance Program,from its foundation to the Boardto vendor management throughits business functions.
Business strategy
Businessmanagement
Businessassurance
Tone atthe top
Risk assessment
Lines ofcommunication
Oversight and responsibility
Policies and procedures
Training
Monitoring
AuditingEnforcementand discipline
Response andprevention
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High-Level Duals Business Capability Model
CareCoordination
ConcurrentReviewManagement
NetworkDevelopment
Product Set-Up
ActuarialAnalysis
Physicians,Hospitals
DataReporting &Analytics
Individualand MemberServices
Enrollment
MedicalManagement
MemberOutreach and
Marketing
ProductDevelopment
Financialand Quality
Management
FinancialPerformanceManagement
DiseaseManagement
ComplianceCulture
StrategicPartnerships
ProductDesign
BeneficiaryEngagement
ProviderEngagement
QualityImprovementManagement
ProviderData andReporting
ReadinessReviews
Audits
Code ofConduct
HEDIS,CAHPs, Stars
UtilizationManagement
HCCs, ICD 10
Other CareGivers
CareCoordination
InformationTechnology
Financers
ProviderServices
Member andProvider
Operations
ClaimsProcessing
EncounterReporting
RiskStratification
Re-thinking the Operating ModelMMP programs require plans to understand their operations and the degree ofchange required to successfully achieve compliance with contractual andregulatory requirements
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Integrating Compliance into OperationsLeveraging the elements of effective compliance programs serves as aframework for operationalizing contractual and regulatory requirements andfor ultimately embedding compliance into operations on a go-forward basis
PwC’s Compliance Program EffectivenessFramework provided the overarchingroadmap for assessing gaps in howcompliance was achieved in day-to-dayoperations
Making Compliance partof an organization’s DNAat the functional arealevel helps reinforce aculture of consistentlyoperating in alignmentwith regulatoryrequirements andstandards
Assessing current stateoperations and developing a“heat map” helps prioritizeefforts in operationalizingrequirements
• Assess integratedimplementation acrossfunctional areas
• Engage in additionalconsultation andupdates, as needed
ReviewPolicies/Procedures
UnderstandProcesses
Review Training
Review FunctionalDocuments
Facilitatefuture state
designsessions
Review ofoperational
implementationeffectiveness
IntegratedCompliance
andOperational
roll out offinalized
enhancement
Test ImplementOperational
Review
Developnew/updateddocuments,process and
trainingcapabilities
Assess processes toconfirm
appropriate designand build
With the need to embed Compliance into operations as the underlying driverfor how business is conducted, the preparation for the initial go-live wastreated like a new product launch
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Lessons Learned
Operations:
• Re-visit business process design to identify opportunities to enhance operations, ensure thatappropriate business activities are incorporated in the process to meet regulatory requirements, andupdate operational reporting (monitoring) to capture the “right data” at the “right time”.
• Appeals and Grievances: Adjust current processes to accommodate both CMS and the State rulesand requirements, emphasizing coordination points between departments / business units.
• Claims: Verify claims payment rules and configuration to ensure that processes are in place toidentify Medicare or Medicaid as primary, application of appropriate payment limitations andcoordination between operational and encounter reporting to understand data prior to submission.
Compliance:
• Clearly delineate roles and responsibilities between the Compliance Officer and Contract Officer foroversight and accountability of Compliance with regulations (and contract terms).
• Allocate time in existing Compliance Committees to include MMP-specific to focus on addressingthe specific risks, issues and other concerns of for the MMP product.
• Establish and apply a standard checklist of key criteria to use in updating and reviewing policies,procedures and training, including guidance on writing easily understood process descriptions (forthe intended audience ,e.g. operational staff) with embedded regulatory requirement references.
• Utilize operational reports for monitoring regulatory compliance, providing consistency acrosscompliance and operational metric reporting and streamlining oversight process.
