Modernizing Medicare

1. Modernizing Medicare Presented by Mike Smith, President of The Brokerage, Inc.

4. Medicare topics for consideration • Medicare Enrollment Updates • MACRA – Medicare Access and CHIP Reauthorization Act • New: The CMS Primary Cares Initiative • The Medicare OEP (Jan-Mar) • New saving strategy for Medicare Beneficiaries subject to IRMAA using Social Security Form 44 • Medicare “gotchas” to watch for • Group Health and Medicare Coordination

5. 2019 Medicare Enrollment Facts

6. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Monthly-Enrollment-by-Plan-Items/Monthly-Enrollment-by-Plan-2019-01.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descendinghttps://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Monthly-Enrollment-by-Plan-Items/Monthly-Enrollment-by-Plan-2019-01.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending

7. Current Medicare Enrollment Statistical Data • Search by County, State or the nation • Search by Original Medicare, MA, or Other https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Dashboard/Medicare-Enrollment/Enrollment%20Dashboard.html

8. Enrollment in Medicare Advantage has nearly doubled over the past decade

9. 67% individual 20% Employer/union-sponsored group plans 13% Special Needs (SNP)

10. The share of Medicare beneficiaries in Medicare Advantage plans ranges across states from 1% to over 40%

11. Most Medicare Advantage enrollees are in plans operated by UnitedHealthcare, Humana, or BCBS affiliates in 2018

12. Half of Medicare Advantage Prescription Drug Plan enrollees pay no premium (other than the Part B premium)

13. Most Medicare Advantage enrollees have access to some benefits not covered by traditional Medicare in 2018

14. Total bonuses paid by Medicare to Medicare Advantage plans more than doubled over 4 years

15. 74% of enrollees are in Medicare Advantage plans that received bonuses in 2018 (4 or more stars)

16. MACRA Medicare Access and CHIP Reauthorization Act

17. MACRA MACRA's primary provisions are: • Changes to the way Medicare doctors are reimbursed • Repealed the Sustainable Growth Rate (SGR) formula • Changes the way CMS pays healthcare providers and establishes a new framework to reward providers for value over volume • Required CMS by law to implement an incentive program which is referred to as the Quality Payment Program • Extension to the Children's Health Insurance Program (CHIP)

18. Transitioning Fee-for-Service to Value-Based Care • MACRA replaces the current Medicare reimbursement schedule with a new “pay-for-performance” program that’s focused on quality, value, and accountability • The Centers for Medicare and Medicaid Services (CMS) stated that MACRA enacts a new payment framework that: “rewards health care providers for giving better care instead of more service”

19. Transitioning Fee-for-Service to Value-Based Care • CMS is set to transition from a fee for service (FFS) system • FFS allowed physicians and providers to bill Medicare and Medicaid for services they provided to their patients • The new system is a pay for performance based system using either a: • Merit Based Incentive Program or • Alternative Payment Model (APM) Source: https://en.wikipedia.org/wiki/Medicare_Access_and_CHIP_Reauthorization_Act_of_2015

20. Merit Based Incentive Programs MACRA combines parts of: • The Physician Quality Reporting System (PQRS) • Value-based Payment Modifier (VBM) • And the Medicare Electronic Health Record (EHR) incentive program …into one single program called the Merit-based Incentive Payment System, or “MIPS” Source: https://www.practicefusion.com/blog/what-is-macra-and-mips/

21. Merit Based Incentive Programs The new model will now require the provider to provide information on: • The quality of service being given • How valuable the care is to the patient • And accountability that provider has to the treatment being performed

22. Alternative Payment Models APMs are risk-based arrangement between providers and payers, with the most common being accountable care organizations (ACOs) such as those in the CMS-run Medicare Shared Saving Program or Next-Generation ACOs • Require participants to bear a certain amount of financial risk • Base payments on quality measures comparable to those used in the MIPS quality performance category • Require participants to use certified EHR technology

24. MACRA and the Med Sup Market Will Plan F really go away? Will Plan G become the new, most popular plan?

26. Two Med Sup Markets as of 1-1-20 • The Newly Eligible (NE) market Will consist of individuals who reach the age of 65 after January 1, 2020 • The Non-Newly Eligible (NNE) Market Will consist of individuals who reach the age of 65 before January 1, 2020 This is terminology from the regulatory language that specifies eligibility to purchase a Medicare Supplement plan that pays first dollar benefits (Plan C, F or High Deductible Plan F)

27. Plan F - Beyond January 1, 2020 • Plan F sales, which will only be available to the NNE market, will consist of a greater portion of healthier underwritten business than under the current environment • Plan F will still be available to NNE individuals under certain guarantee issue provisions

28. Plan F - Loss Ratio after 1-1-20 • Policies issued in 2020 and later should initially exhibit a loss ratio as much as 1.0% - 2.5% lower than would otherwise be the case • The reason: less exposure to the Guarantee Issue • Higher loss ratio GI enrollees will shift from Plan F to Plan G • Initially, the favorable underwritten Plan F experience issued at higher rate levels could offset the negative Plan G experience (due to guarantee issue)

29. Plan G – Beyond January 1, 2020 • Plan G will likely comprise a greater portion of higher cost/utilization OE and GI business from the NE market • As the NE market grows and the NNE market shrinks over time, the relative mix of Plan F and Plan G will shift and the market will be more reflective of Plan G experience

30. Plan F – worth keeping? Answer: probably • Until such time future Plan G sales significantly outpace Plan F sales, the previously mentioned lose ratio results could continue for several years

31. What market shifts will occur both before and after 2020? • Will Plan G sales increase as new carriers enter the market with a focus on Plan G? • Will Plan D or Plan N gain in popularity? • Or will consumer education and agent/broker influence result in a “run” on Plan F sales to a greater degree than exists even today? • At what point will the market anticipate the impact of MACRA and narrow the F/G gap in pricing?

32. CMS Primary Cares Initiative Transforming primary care to deliver better value for patients

34. CMS Primary Cares Initiative Developed by the Innovation Center and are a part of Secretary Alex Azar’s value-based transformation initiative • Introduces a new set of payment models • Designed to transform primary care to deliver better value • Reduce administrative burdens • Empower primary care providers to spend more time caring for patients while reducing overall costs April 22, 2019, CMS News “HHS to Deliver Value-Based Transformation in Primary Care”

35. Introducing Five Payment Model Options • Primary Care First (PCF) • Primary Care First - High Need Populations • Direct Contracting – Global (full risk) • Direct Contracting – Professional (partial risk) • Direct Contracting – Geographic (January 2021) April 22, 2019, CMS News “HHS to Deliver Value-Based Transformation in Primary Care”

36. Objectives of the new payment models • Provide better alignment for high needs Medicare FFS beneficiaries* *Patients with serious illness who do not have a PCP and express an interest will be assigned to a model participant (estimated to be 11M people) • Offer new participation, payment options, and opportunities for an estimated 25% of PCPs and other healthcare providers • Create new, coordinated care opportunities for the beneficiaries dually-eligible for Medicare and Medicaid

37. Primary Care First Payment Models • Designed for smaller practices • Will feature performance-based payment • Will seek to reduce hospitalizations and manage patients with chronic conditions through their primary care providers • Providers will take on more risk with patients under these models, but will be eligible for additional payments if their patients stay healthy • These models will be tested for five years beginning in January 2020

38. Direct Contracting Payment Models • Will target a wider variety of organizations that have experience taking on financial risk, such as ACOs, MA plans and MCOs • Will feature risk sharing between CMS and providers • Includes a focus on patients with complex, chronic needs and seriously ill populations (SIPs)

39. New Proposed Payment Rule for Rural Hospitals April 23, 2019

40. Proposed Payment Rule for Rural Hospitals • CMS proposed a rule that would update Medicare payment policies for hospitals in fiscal year 2020 • The Inpatient Prospective Payment System (IPPS) • The Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) • There are policies in the rule that help to advance certain priorities of Ways and Means Committee Republicans, including: • Improving health care, including rural health, and • Promoting competition and innovation

41. Open Enrollment Period (OEP) Avoid compliance issues. Build sales.

42. Hello Again to the OEP • Allows certain Medicare related products to be changed • Easiest way to remember this: Everything but Part D to Part D products may be changed • Note: Medicare Supplements may be enrolled year-round • Timeframe: January 1 – March 31

43. FAQs about the OEP Question: During OEP, can agents inform their clients that they have the ability to make a plan choice if they are not satisfied? Answer: Only if the beneficiary indicates dissatisfaction with the plan they’ve selected, the agent can discuss all applicable election periods with the consumer (SEP, OEP, etc). https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

44. FAQs about the OEP Question: I was unable to reach some of my existing MAPD clients during AEP. May I contact them to discuss their options during OEP? Answer: No. You may not market the ability to make a plan change during OEP. However, if someone contacts you expressing dissatisfaction with their current plan, you may then discuss their election period options (SEP, OEP, etc). https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

45. FAQs about the OEP Question: Can a doctor’s practice communicate with patients reminding them of the OEP? Answer: A provider’s marketing of the OEP would likely be considered prohibited. Providers should consult with their own legal and compliance team regarding any activities to ensure compliance with CMS and OIG guidelines and any other applicable laws and regulations. https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

46. FAQs about the OEP Question: If we are working at a kiosk such as at a Flea Market and someone stops to talk, are we able to discuss the OEP? Or, must we wait for them to ask about changing? Answer: Only if the beneficiary indicates dissatisfaction with the plan they’ve selected, then the agent can discuss all applicable election periods with the consumer (SEP, OEP, etc.). https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

47. FAQs about the OEP Question: If a client on a Medicare Advantage plan did not make a plan change during AEP, can they make a change during OEP? Answer: Yes, individuals enrolled in MA plans as of January 1, or new Medicare beneficiaries who are enrolled in an MA plan during their ICEP who are not satisfied with their current Medicare Advantage plan can use the OEP to make a change. https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

48. FAQs about the OEP Question: Could agents wear a button that said something like “Ask me about OEP” or “OEP?” Answer: No. The agent could, however, have a button that says Ask me about Medicare Plans. https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

49. Social Security Form 44 Reduce the Income Related Monthly Adjustment Amounts (IRMAA)

50. Part B IRMAA