medicaid: an edge of your seat view of medicaid risk adjustment by bonnie burke
DESCRIPTION
TRANSCRIPT
![Page 1: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/1.jpg)
Traversing the Medicaid Risk Adjustment Obstacle Course Bonnie Burke, Staff VP, Health Care Analytics WellPoint
Altegra Health Partners Summit March 18-20, 2014
![Page 2: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/2.jpg)
About WellPoint
• WellPoint, Inc. was formed through the 2004 merger of WellPoint Health Networks, Inc. and Anthem, Inc.
• Purpose Statement: Together, we are transforming health care with trusted and caring soluCons
• Vision: To be America’s valued health partner
• Ranks No. 47 on Fortune 500; No. 2 on Fortune 500 health care companies lisCng
• Serves approximately 36 million people in branded health plans and more than 67 million people through subsidiaries
![Page 3: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/3.jpg)
WellPoint Serves 4.3 Million Medicaid Members in 19 States 14 of These States Risk-‐Adjust Premiums Using 4 Main Methodologies
* The GBD began serving Medicaid members in Kentucky on Jan. 1, 2014. Membership data for this state is not yet available.
Risk-‐Adjusted MRx CDPS
CRG
CDPS + Rx ACG
CDPS + Rx CDPS
ACG
CDPS ACG
CDPS
CDPS MRx
CDPS + Rx
MRx: Medicaid Pharmacy, Todd Gilmer, University of California San Diego, California CDPS: Chronic Illness and Disability Payment System, Todd Gilmer, University of California San Diego, California CRG: Clinical Risk Groups, 3M Health InformaJon Systems, Murray, Utah ACG: The Johns Hopkins Adjusted Clinical Groups System, BalJmore, Maryland
Our Medicaid Landscape
![Page 4: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/4.jpg)
The Medicaid Landscape: State Budget Pressures
COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY 4
• Our state partners face big financial challenges with some of the biggest budget shor_alls on record
• Those challenges are only going to grow • ConCnuing economic recovery and high unemployment • Health Care Reform
• By 2019 a majority of the $4.6T in health spending will be public (52%) versus private (48%)
• States are looking for a Return on Investment on the front end
• Premium rates typically lag behind medical cost trends by 12 or more months
![Page 5: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/5.jpg)
The Medicaid Landscape: Competition
COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY 5
• Medicaid Premium Risk Adjustment is a Zero-‐Sum Game
• PopulaCon RelaCve Risk vs Individual • States ensure budget-‐neutrality • An MCO ‘wins’ by submiing complete and
accurate data
• Return on Investment has 2 components • What we prevent in redistribuCon to compeCtors • Truly incremental premium
$1 in Premium From State to cover Medical Costs across 3 MCOs
If Relative Risk differs across the MCOs, then $1 is divided proportionally
![Page 6: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/6.jpg)
6
2011 2012 2013 2014 2015 Market Characteristics • Expansion • Increasing complexity
• Increasing compeCCon
The Medicaid Landscape: Complexity & ROI
• Few states apply risk-‐adjustment
• CDPS dominant model naConally
• Medicaid ‘opCmizaCon’ by few large compeCtors
• Nearly all markets apply risk-‐adjustment
• CDPS, ACG naConal models dominate
• Large compeCtors, vendor services
• Nearly all markets • Mix of models: CDPS/Rx, ACG, MRx, CRG
• Increased use of state weights
• Increasing compeCCon
• Nearly all markets and the Exchange
• Mix of models • Increased use of state/regional weights
• Expect compeCCon
• Nearly all markets • Mix of models, expect increased localizaCon
• Few players not ‘opCmizing’
• Saturated compeCCon
Volume • ExponenCal growth
• Increase target membership
• 3 states, 300k members
• Limited volume • No medical record review
• 4 states, 500k members
• Target volume 5-‐10% of membership
• 25-‐50k records
• 11 states, 3.6M members
• Target 8-‐10% of membership
• 250k records
• 14 states, 4.2M members
• Target 10-‐15% of membership
• All markets, 5M members
• Target 15-‐20% of membership
Strategy • Core competency development
• Shil to prospecCve focus with greater ROI
• Provider amestaCons to support diagnoses on encounters
• Leverage market best pracCces
• Expand core analyCcs
• Added Medical record reviews
• Local support
• Centralized governance
• Market-‐specific analyCcs
• Added member & provider campaigns
• Heavy dependence on Local support
• Increased prospecCve intervenCons
• Monthly reporCng & accountability
• Dedicated Local support
• Year-‐round prospecCve
• Medical records as default
• IntegraCon with Quality, Care Management & Provider RelaCons
ROI • Increased total value, net dampening over Cme
• Limle to no incremental investment
• <$3M Total Value • ROI range 6-‐30:1
• $1M investment • $10M Total Value • ROI range 5-‐15:1
• $5M investment • $36M Total Value • $9M post-‐neutrality • ROI range 2-‐7:1
• $9M investment • $40M Total Value • $5M post-‐neutrality • ROI range 0.6-‐5:1
• $10M investment • $42M Total Value • $0M post-‐neutrality • ROI range 0-‐4:1
![Page 7: Medicaid: An Edge of Your Seat View of Medicaid Risk Adjustment by Bonnie Burke](https://reader034.vdocuments.mx/reader034/viewer/2022042613/54795a4d5906b580048b46ba/html5/thumbnails/7.jpg)
Summary: Medicaid Premium Risk Adjustment
• It is Complex and Becoming More Complex
• MulCple risk-‐adjustment methodologies and data submission routes
• Volume means you must have scalable operaCons
• It has Lower ROI than Medicare
• PopulaCon level risk and state budget-‐neutrality limit ROI
• ROI shils from incremental premium to ‘saved’ premium – there is a plateau
• High Level of Collaboration Required for Success
• Heavy dependency on provider relaCons, contracts, local knowledge
• IntegraCon into prospecCve outreach efforts with Quality, Care Management and Provider Engagement are essenCal
COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY 7