The Emerging Market in Medicare Part D and Sponsor Compliance Strategies
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The Emerging Market in Medicare Part D and Sponsor Compliance Strategies A Presentation to the Pharmaceutical Compliance Congress November 8, 2005. John Gorman President/CEO Gorman Health Group, LLC 2176 Wisconsin Avenue, NW Washington, DC 20007 (202) 364-8283 Fax: (202) 244-8324

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The Emerging Market in Medicare Part D and Sponsor Compliance StrategiesA Presentation to the Pharmaceutical Compliance CongressNovember 8, 2005

John Gorman

President/CEO

Gorman Health Group, LLC

2176 Wisconsin Avenue, NW

Washington, DC 20007

(202) 364-8283

Fax: (202) 244-8324

www.gormanhealthgroup.com


Today s agenda
Today’s Agenda Compliance Strategies

  • The Emerging Market in Medicare Part D

    • Medicare Advantage: Local and Regional Outlook

    • Prescription Drug Plans (PDPs)

    • Employers and Retiree Groups

  • Medicare Fraud, Waste and Abuse (FWA) Issues and Sanctions

  • Compliance and FWA Elements

  • Medicare Prescription Drug Integrity Contractors

    (MEDICs) and Their Role

  • Part D Plan Sponsor FWA Exposure

  • PBM Integrity

  • Subcontractor Oversight

  • Keys to Minimizing Exposure

  • Conclusions


New medicare part d beneficiaries will have several coverage options
New Medicare Part D Compliance StrategiesBeneficiaries Will Have Several Coverage Options

Medicare Options

  • Regional Options

  • Blended benchmark

  • Stabilization fund

  • Risk Corridors

Prescription Drug-only Plan (PDP)/

FFS Add-On

Must offer benefits equivalent to standard coverage

Medicare Advantage PPO Option

Medicare Advantage HMO Option

Must offer benefits equivalent to standard coverage on at least one plan in portfolio

Local (county-based) Options

Medicare Advantage PPO Option

Special Needs Plan (SNP) Option

Other Options

If insufficient number of PDPs or PPOs emerge in the market

Must offer benefits equivalent to standard coverage to receive subsidy

Limited Risk or Fallback Drug-Only Plan

Qualified Employer Plan


Medicare risk contracts 1985 to 2005
Medicare Risk Contracts Compliance Strategies1985 to 2005

Source: CMS, October 2005. Note: 570 PDPs will launch on January 1, 2006.


Convergence of health policy factors create opportunities for snps
Convergence of Health Policy Factors Create Opportunities for SNPs

Lock-In Exemptions

SNPs

Medicaid Reform

Part D Auto-Enroll of Duals

Risk Adjustment


Regional ppo sponsors and revenue vs cost
Regional PPO Sponsors and Revenue vs. Cost for SNPs

Region 1

118.7%

Region 2

107.7%

Region 3

111.1%

Region 23

119.6%

Region 19

116.0%

Region 11

110.3%

HUM

UHC

NPA

HUM

Region 22

111.6%

Region 6

114.0%

Region 12

114.7%

Region 4

106.2%

Region 14

110.9%

WLP

HUM

HUM

WLP

AET

WLP

SIE

HUM

Region 24

108.6%

Region 5

107.7%

Region 15

111.9%

Region 7

119.9%

Region 13

112.4%

Region 20

117.7%

Region 18

110.0%

Region 21

117.9%

AET

HUM

HUM

Region 10

111.7%

HUM

HUM

Region 8

114.3%

HUM

HNT

HUM

Region 16

110.4%

Region 17

111.0%

BSC

Region 9

109.7%

HUM

Region 26

110.8%

HUM

UHC

HUM

Region 25

139.9%

UHC

Source: GHG analysis adapted from CMS 2005 MA Payment Rates and 99% FFS Cost Files, January 2005.



Impact of dual assignments on pdps
Impact of Dual Assignments on PDPs for SNPs

Source: Lehman Brothers and GHG Analysis, September 2005.


Pdps to watch
PDPs to Watch for SNPs

Source: company reports



Summary
Summary for SNPs

  • The minimum number of plans participating in any of the regions is 11 (Region 34, Alaska).

  • The maximum amount of plans participating is 20 plans (NY, TX, OR/WA).

  • In 37 states 100% of Medicare eligibles will have access to a PPO plan.

  • The number of auto-assigned beneficiaries per organization in a given region will range from as low as 2,000 to the 6 plans in Alaska to as high as 133,000 individuals in the 7 plans in California.


Part d projections 2006
Part D Projections: 2006 for SNPs

  • GHG expects in 2006:

    • $112B in revenues generated for private plans (up from $51B in 2005) – 38% ($42B) through PDPs

    • 900,000 new beneficiaries in MA products (5.8M in 2005)

    • 14.3M in PDPs (including duals and low-income)

  • Therefore, over 21M beneficiaries in some form of managed care in 2006



Retiree health benefits two choices for employers
Retiree Health Benefits: Two Choices for Employers for SNPs

  • For 2006, Expect Most Employers to Choose RDS but some may prefer Part D

    • Actuarial Equivalence - employer plan may not qualify for the RDS

    • Part D offers higher subsidies, especially for employers with low utilization

    • Tax status - governmental entities or nonprofits do not realize the tax benefits of RDS

    • Retirees already in MA plans

    • LIS – may be better off in Part D

    • Administrative – Part D plans handle administration and financial risk


Retiree health benefits two choices for employers1
Retiree Health Benefits: Two Choices for Employers for SNPs

  • For 2007 and Beyond, expect a shift to Part D

    • Market will be known

    • Financial benefits of Part D will be clearer

    • Time to submit Part D applications

    • Fewer employers will qualify for the RDS, e.g. percent of plans meeting cap




Impact of likely employer strategies 2006
Impact of Likely Employer Strategies -- 2006 for SNPs

  • 77% of retirees likely to be in plans that continue drug benefit coverage and accept the 28% subsidy

  • 6% of retirees likely to be in plans that supplement Medicare drug coverage

  • 4% of retirees likely to be in plans that discontinue drug coverage

  • 13% of retirees in plans that do not yet know their strategy or had a different strategy

Source: Kaiser/Hewitt Survey, December 2004.


Privatization of the drug market
Privatization of the Drug Market for SNPs

Total U.S. Drug Spending

After Medicare Drug Benefit

Before Medicare Drug Benefit

Consumer

Out-of-Pocket

18%

Consumer

Out-of-Pocket

30%

Private

Health

Insurance

48%

Medicaid,

Other Public

12%

Private

Health

Insurance

70%

Medicaid,

Other Public

22%

Sources: CMS, National Health Spending, 2002; and CBO, Issues in Designing a Prescription

Drug Benefit for Medicare, Oct, 2002.



Government oversight structures
Government Oversight Structures for SNPs

  • CMS – Part C & D Monitoring Programs

    • 2-3 year on-site, regularly - scheduled audit cycle, depending on risk assessment for MA plans (3 years for PD plan)

    • Focused/targeted desk and on-site audits, depending on risk assessment

  • MEDICS Monitor and evaluate data and trends to identify potential fraud, abuse, and waste in the Medicare Part D Program.

    • Receive reports from contractors and beneficiaries

    • Develop and refer cases to the appropriate Law Enforcement (LE) Agency or to CMS for administrative action as necessary

  • Inspector General

    • Civil Money penalties

    • Exclusion

  • Department of Justice

    • Civil and Criminal Prosecution


Medicare part d compliance plan required elements
Medicare Part D Compliance Plan Required Elements for SNPs

7 Required Elements of a Part D Compliance Program

  • Written policies, procedures and standards of conduct regarding compliance with all applicable Federal and State standards

  • Compliance Officer and Committee accountable to senior management

  • Effective training programs for employees, contractors, agents and directors

  • Effective lines of communication

  • Enforcement through well-publicized disciplinary guidelines

  • Effective internal monitoring and auditing

  • Prompt response to detected offenses (e.g. payment or delivery of drugs) and development of corrective action initiatives (e.g. repayment of overpayments and disciplinary actions)

    Comprehensive Fraud and Abuse Program

  • Detect, correct, and prevent fraud, waste, and abuse

  • Voluntary self-reporting of potential fraud or misconduct

  • Separate plan or integrate with the other 7 compliance plan elements


Medicare compliance and fwa risks
Medicare Compliance and FWA Risks for SNPs

  • Standard Part C Compliance Tests that will Apply to Part D Sponsors:

    • Fails to provide medically necessary services, if adverse effect

    • Imposes excess charges on enrollees

    • Discourages enrollment due to health status

    • Misrepresents or Falsifies information

    • Employs or contracts with excluded individuals and entities

    • Substantially fails to carry out the contract, inefficient administration of the contract, or no longer substantially meets the contract requirements


Medicare compliance and fwa risks1
Medicare Compliance and FWA Risks for SNPs

  • Administrative Sanctions

    • Contract Termination

    • Intermediate Sanctions (Suspension of enrollment and payment)

  • Exclusion from all Federal Programs

  • Civil Monetary Penalties

    • $25,000 for each failure to provide medically necessary services, health screening or falsification of information to the Secretary

    • $25,000 for each determination of failure to carry out the contract if adverse effect


Medicare compliance and fwa risks2
Medicare Compliance and FWA Risks for SNPs

  • Criminal Penalties (felony conviction and up to 5 year imprisonment)

    • Knowing and willful false statement or misrepresentation of fact in application for benefit or payment under a federal health care program

    • Knowing and willful kickback, bribe or rebate to inappropriately secure federal funds

  • False Claims (Whistleblowers) Act

    • Signature acknowledging that information is being submitted for purposes of obtaining Federal funds triggers the FCA

    • FCA prohibits false or fraudulent claims

    • Treble damages and up to $11,000 per claim

    • Whistleblowers receive up to 30% of the recovery

    • Liability extends to those who submit the false claim and those who “cause” the submission of the false claim

    • Intent to defraud is not required – mistake or negligence with system wide effects sufficient


Medic part d data analysis
MEDIC Part D - Data Analysis for SNPs

  • Utilization Management

  • Medication Adherence and Persistence

  • Quality Assurance

  • Performance Measures

  • Coverage Determination

  • Long Term Care (LTC) - Pharmacy Access

  • Complaint Tracking


Cms data collection management information integrated repository
CMS Data Collection – Management Information Integrated Repository

  • Performance Assessment

    • Data mining and standard reports will be used to inform CMS of Plan’s performance under Part D

  • Standard Required Reports

    • PDE data (claims data)

    • Eligibility data

    • Complaint data (CTM)

    • Plan-reported data (HPMS)

    • Plan-finder data


MEDICS Role In CMS Compliance and FWA Review & Audit Repository–CMS’ Defense against the “Mississippi River of Dollars”

  • IDIQ Contract (Indefinite Delivery – Indefinite Quantity Solicitation)

  • Of the 21 “Examples” of General Fraud, Waste and Abuse in the MEDIC Statement of Work, 15 were targeted toward PBM or pharmacy related issues and business practices – 6 were Beneficiary fraud issues

    • PBMs and Part D Sponsors will be at risk for the acts of their downstream pharmacy contractors for false claim submission

  • Of the 12 Examples of potential Financial Fraud, all 12 will impact PBMs

    • Effective cost allocation systems critical for administrative services

    • Rebate contracts will be under scrutiny


  • General fraud and abuse issues
    General Fraud and Abuse Issues Repository

    • Misrepresenting the enrollment, encounter, or prescription drug event data

    • Improper reporting of prescriptions dispensed to maximize payments.

    • Billing for services not furnished and/or drugs not provided.

    • Billing that appears to be a deliberate application for duplicate payment

    • Soliciting, offering, or receiving a kickback, bribe, or rebate

    • Billing based on “gang visits”

    • Billing non-covered prescriptions as covered items

    • Billing under Part A or Part B, and also under Part D


    General fraud and abuse issues continued
    General Fraud and Abuse Issues (Continued) Repository

    • Dispensing without a prescription

    • Billing for recycled prescription drugs

    • Submitting false Medicare claims

    • Receiving duplicative co-pays or premiums from beneficiaries

    • Billing for brand when generics are dispensed

    • Altering scripts or data to obtain a higher payment amount

    • Misrepresentations of dates, descriptions of prescriptions or services


    MEDICS Role In CMS Compliance and FWA Review & Audit Repository–CMS’ Defense against the “Mississippi River of Dollars”

    • 8 MEDICs selected:

      • NDCHealth

      • Delmarva Foundation for Medical Care

      • Electronic Data Systems (EDS)

      • IntegriGuard

      • Livanta

      • Maximus Federal Services

      • Perot Systems Government Services

      • Science Applications International Corporation (SAIC)


    MEDICS Role In CMS Compliance and FWA Review & Audit Repository–CMS’ Defense against the “Mississippi River of Dollars”

    • MEDICs’ Responsibilities include:

    • Review Part D and RDS plan compliance data to detect fraud

    • Review bids and FWA components of compliance plans

    • Coordinate with law officials

    • Conduct investigations, including audits of PDPs and sub-contractors

      • MEDICs will annually audit at least 1/3 of PDP and MA plans

      • Risk Based Audit Strategy – conduct more investigation and analysis with unusual billing patterns


    MEDICS Role In CMS Compliance and FWA Review & Audit Repository–CMS’ Defense against the “Mississippi River of Dollars”

    • MEDICs Responsibilities (cont’d)

    • Review improper enrollment and eligibility

    • Review improper marketing and distribution

    • Audit RDS sponsors, including RDS eligibility and claims review

    • Conduct Part D, MA and RDS complaint investigations


    Medic audit target drivers
    MEDIC Audit Target Drivers Repository

    • Near Term:

      • Beneficiary Complaint Data (e.g. sales misrepresentation)

      • Past PBM issues identified in legal proceedings will be focus of audit

      • Areas where there are questions of transparency

      • Eligibility and Claims Data audits for Retiree Drug Subsidy

  • Longer Term:

    • PDE data and comparisons with other Medicare Claims Data

    • Whistleblowers

    • Routine on-site audit reviews (P & T, FWA implementation etc.)


  • Medic audit target drivers1
    MEDIC Audit Target Drivers Repository

    • The “Good News” on MEDICS

      • All New to Medicare Part D

      • First Timers or with Some Experience

      • Data will take time to gather  But get it right from the start


    General keys to avoiding the inspector general
    General Keys To Avoiding the Inspector General Repository

    • Listen to the “Noise” surrounding Part D

      • Identify potential CMS or Congressional “hot button” issues and address them – e.g. Beneficiaries can find appropriate education materials

    • Avoid Misinterpretation of Part D Requirements – Ever watchful for changing CMS regulation or guidance

    • Pay attention to past industry criticisms, jibes and legal proceedings and develop policies and oversight in the areas of concern

    • Assess and audit current business and operational practices at a granular level to identify areas of exposure or lack of controls

      • Require process by process policy review and standards and FWA monitoring requirements

    • Ensure documentation of procedures and process descriptions

    • Ensure diligence in systems configuration auditing to catch errors prior to submission


    Further keys to avoiding the inspector general
    Further Keys To Avoiding the Inspector General Repository

    • Implement granular financial auditing, process controls, monitoring

    • Use central tracking system for all internal FWA control reporting

    • Establish routine monitoring and audits of operations

      • Review appropriate staffing for internal auditors

      • Review staffing, scope and frequency of pharmacy audit

    • Monitor Enrollee grievance and appeals activity

      • “Enrollees who don’t get things” trigger problems

      • Early Warning System

    • Develop corrective action plans

    • Establish processes for self-reporting of potential FWA

      • Encourage / Incent Internal FWA issue identification & referrals

      • Make the FWA department well known

    • Thorough training at all levels


    Part d compliance fwa exposure overview
    Part D Compliance & FWA Exposure - Overview Repository

    • 5 Critical Areas for a Part D Plan Sponsor

      • Part D Specific Requirements – Audits in areas such as TrOOP, Copay application, COB, PDE data, formulary changes, etc.

      • PBM Integrity – Major PBMs are high profile candidates for FWA audits in areas like pricing, rebates, benefit adjudication, etc.

      • Subcontractor Oversight and FWA Issues – Retail pharmacies, LTC pharmacies (Part A/D), enrollment contractor etc.

      • Beneficiary-Prescriber FWA Identification and Management – Identifying and managing these issues

      • Sales Misrepresentation and Fraud- a new issue for PDP Sponsors and a common CMS target and reason for sanction based on complaints


    Part d compliance fwa exposure overview1
    Part D Compliance & FWA Exposure - Overview Repository

    • For Each 5 Critical Areas, Part D Plan Sponsors should develop:

      • Tracking and Reporting mechanisms to report to CMS and the MEDICS

      • Audit and Monitoring Strategies with designated Resources

        • On-Site or Desk Audit

        • Conducted by the Part D plan sponsor, the PBM, or Audit organization

      • Corrective Action strategies

      • Training

      • Self-reporting of suspected FWA


    Part d specific requirements fwa touch points
    Part D Specific Requirements - FWA Touch Points Repository

    • Enrollment Accuracy – LIS, Duals, Late Penalty, Proper Effective Dates

    • Beneficiary Billing Accuracy

      • Direct bill vs. SSA

      • Proper Refunds to Beneficiaries, Charities

      • Premiums, cost sharing and accounting

    • Reconciliations

      • General Administrative Cost Allocations

      • Specific program cost allocations, e.g. MTMP


    Part d specific requirements fwa touch points continued
    Part D Specific Requirements - FWA Touch Points (Continued) Repository

    • Formulary development and beneficiary notification of formulary changes

    • Generic vs. Brand

    • Appeals and Grievances

      • Monitoring, Feedback Loops and Disciplinary Programs

    • COB data collection, working with the COB Facilitator


    Part d specific requirements fwa touch points continued1
    Part D Specific Requirements - FWA Touch Points (Continued) Repository

    • TrOOP accumulation

      • Includes only eligible cost sharing, e.g. includes beneficiary payments and excludes group health plan payments

      • Properly includes all 6 payment fields:

        • Patient Pay Amount

        • Other TrOOP

        • Low Income Cost Sharing Subsidy Amount (LICS)

        • Covered D Plan Paid Amount (CPP)

        • Non-covered Plan Paid Amount, (NPP)

        • Patient Liability Reduction due to Other Payer Amount (PLRO)


    Part d specific requirements fwa touch points continued2
    Part D Specific Requirements - FWA Touch Points (Continued) Repository

    • PDE (Prescription Drug Event) data accuracy

      • 100% claims data necessary to calculate risk adjustment, LICS, reinsurance, and risk corridor payments

      • Proper reflection of costs to be included or excluded in each of the 4 payment calculations, e.g.

        • Only Part D drugs covered under the specific plan

        • Risk corridor calculations must exclude administrative costs, patient pay amounts, induced utilization, rebates, reinsurance subsidy

        • Reinsurance calculations must reflect full TrOOP accounting

        • All calculations must properly account for all rebates, discounts, and other price concessions


    Pbm integrity fwa touch points
    PBM Integrity FWA Touch Points Repository

    • Pharmacy Contracting, Term Application and Disclosure

    • Proper Benefit Set Up And Adjudication at POS

    • Eligibility Accuracy and benefit plan assignment

    • Drug Pricing – AWP, MAC etc.

    • Claims Edit & Processing Accuracy (e.g. Part A, B and excluded drugs)


    Pbm integrity fwa touch points continued
    PBM Integrity FWA Touch Points (Continued) Repository

    • Mail Order Prescription Fills

    • Rebate Accounting and Pass – Through  Member level detail and transparency

    • E-Prescribing


    Subcontractor oversight
    Subcontractor Oversight Repository

    • Retail Pharmacy

      • Monitor dispensing activity of specifically identified retail pharmacies

      • Retail audit by PBM or Audit organization to identify outlier pharmacies

      • Desk audit on all outlier claims to determine:

        • Appropriateness of RX dispensed

        • Correct quantity and strength of medication

        • Correct administration of benefit design and trend management programs

        • Instances of potential fraud and abuse

      • On Site audit of pharmacies that continue outlier dispensing performance


    Subcontractor oversight1
    Subcontractor Oversight Repository

    • Retail Pharmacy (continued)

      • Automated reporting editing systems can include the following triggers:

        • Dispensing volume of high profile medications (e.g. controlled substances, medications targeted for re-sale or addicted medications)

        • Significant number or percent of U & C claims

        • Multiple instances of reversed or altered claims

        • Multiple pharmacy overrides to excluded or Prior Authorized medications

        • Excessive units per day dispensing

        • High dollar medications


    Subcontractor oversight2
    Subcontractor Oversight Repository

    • Retail Pharmacy (continued)

      • Individual Pharmacist Audit - Based on conclusions from the on-site audit, more focused audits of individual pharmacists may be warranted to review:

        • Potential cases of trafficking

        • Potential cases of fraud and abuse

      • Retail Pharmacy audits also may include review of:

        • Disclosure of low cost generic

        • Non-submission of “zero-balance claims”

        • COB Audits – Duplicate Billing


    Subcontractor oversight3
    Subcontractor Oversight Repository

    • LTC Pharmacies

      • Example: Determining whether LTC pharmacy filed claims should be part of a Part A Skilled Nursing Benefit

      • Proper destruction or return of drugs

  • Enrollment and Premium Billing Subcontractors

    • Developing appropriate metrics and audit protocols

  • Insurance Subsidiaries

    • Enforcing integrity downstream

    • Re-insurance costs if provided by subsidiaries

    • Subsidiary service pricing and cost allocations


  • Beneficiary and prescriber fwa
    Beneficiary and Prescriber FWA Repository

    • New populations and schemes may require enhanced system edits

      • Addressing Issues common within the Medicaid population

  • Development of Beneficiary and Prescriber Fraud, Monitoring, Investigation and Referral Unit

    • Divining whether Grandma Smith or her nephew Billy is responsible for the rash of inhaler purchases

    • Physician submission of claim for same drug dispensed at retail pharmacy or by infusion provider


  • Beneficiary and prescriber fwa1
    Beneficiary and Prescriber FWA Repository

    • Physician Auditing:

      • Identified from review of automated or ad hoc PBM Rx Utilization and Prescriber Utilization Reports

      • Focused on identification of:

        • High volume prescribing of specific high dollar or abuse type of medications

        • Volume based tracking (number of claims, total drug spend, targeted drugs)

        • Review of controlled substance prescribing patterns

        • Cross check of patients to eliminate critically ill patients

      • Summary reports to PBM or Part D plan sponsor for further review


    Beneficiary and prescriber fwa2
    Beneficiary and Prescriber FWA Repository

    • Beneficiary Auditing:

      • Identified from automated PBM Reports or desk/on-site audits

      • Focused review of individual patient RX utilization focusing on:

        • Zip code analysis of where RX’s are picked up

        • Potential for “Grey Market” – second hand selling of drugs with or without the beneficiaries knowledge

        • Multiple pharmacy utilization for the same RX

        • Multiple physician visits to generate same RX


    Retiree drug subsidy fwa
    Retiree Drug Subsidy FWA Repository

    • Employer or Union Plan Sponsors are accountable for accuracy and completeness of all information submitted to CMS

      • Application includes attestation that plan sponsor is submitting a “claim” to the government

      • May delegate major data submission to CMS to subcontractors, but still accountable

    • Oversight of subcontractors, including PBMs, is critical

    • While Attestations are sufficient for payment, ultimately all data must be tracked to the individual retiree level by employer benefit option

    • Timeline – Final reconciliation 15 months after the end of the plan year

      • Prevention of errors and omissions essential through monitoring and audits


    Retiree drug subsidy fwa1
    Retiree Drug Subsidy FWA Repository

    • CMS and OIG have announced that RDS audits will be a priority

      • MEDICs tasked to review

        • Actuarial Equivalence – documentation to support attestation that Plan Sponsor coverage is equivalent to Part D

        • Accuracy of RDS Payments – review actual claims and rebate data to support RDS payment requests

        • Creditable Coverage Disclosures – review to assure consistent with Medicare requirements

      • OIG: 2005 OIG workplan includes audits of CMS controls and 2006 audits will focus on AE, payments and CC notices


    Retiree drug subsidy fwa touch points
    Retiree Drug Subsidy FWA Touch Points Repository

    • Actuarial Equivalence Attestations

      • Supporting documentation for the gross and net tests

      • Benefit combination assumptions for net test

      • Assumptions on integrated medical and drug premiums

    • Subsidy Claims and Rebate Data

      • Controls and monitoring to assure that only claims for eligible costs are submitted, e.g. no Part B or excluded drugs

      • Controls and monitoring to assure that complete and accurate rebate data is submitted

      • Controls to assure no administrative costs are submitted


    Retiree drug subsidy fwa touch points1
    Retiree Drug Subsidy FWA Touch Points Repository

    • Retiree Lists

      • Controls and monitoring to assure that only validated retirees and dependents are submitted

      • Cross checks with CMS eligibility data

    • Creditable Coverage Notifications

      • Controls to assure that active workers and retirees get notices

      • Documentation to support claims that coverage is creditable for each benefit option

      • Controls to assure that notices for non-creditable coverage were issued





    The politics of the mma
    The Politics of the MMA Repository

    • 2005 budget reconciliation will likely include $12B in Medicare savings:

      • Elimination of Stabilization Fund for Regional PPOs.

      • Codify budget neutrality policy for risk adjustment

    • Outstanding MedPAC recommendation to reduce MA county benchmarks to 100% FFS, but no consensus on Hill to advance.

      • Program appears stable for foreseeable future.

    • Impact of Medicaid reform:

      • Greater flexibility to states

      • Emphasis on Aged/Blind/Disabled into managed care.

      • Underscores positioning for SNPs – “one-stop shopping”


    2007 strategic considerations
    2007 Strategic Considerations Repository

    • Part D sponsors will be facing contraction of aggregate reinsurance

    • Part D sponsors will be ratcheting-up control mechanisms

      • Step therapy, prior authorization, quantity limits, strict formularies

    • Will evidence-based practices dictate preferred drugs or tier placement in a therapeutic class?


    Immunizing for fwa
    Immunizing for FWA Repository

    Conduct Operations GAP Analysis

    • Part D and RDS Operations Analysis

    • Compliance Program Review and Assessment

      Review PBM Operations for FWA Exposure

    • Monitoring and audit mechanisms and staffing

    • Performance metrics – Internal and External Reports

    • Policies and procedures assessment and review

    • Systems tests

    • Contract requirements

    • Management Oversight


    Immunizing for fwa1
    Immunizing for FWA Repository

    • Ongoing FWA Program Development

      • Business Process Workflow Documentation

      • Policy and Procedure Development

      • Internal Audit Procedures and Policies

      • Subcontractor oversight program development

      • Data Analysis to detect beneficiary, prescriber, pharmacy FWA

      • Staff and Subcontractor training

      • System logic review for benefit adjudication

      • Sales program FWA monitoring program development


    New marketplace
    New Marketplace Repository

    • Expanded role of private plans – growing influence of PBMs, and of Medicare regulators on them.

    • Increased information for plans, patients – and government.

      • Eventual price (rebate) transparency

      • comparative drug information

      • increased emphasis on medical evidence and outcomes

    • Growing pressure on price and performance.

      • PDP competition and premium pressures

      • pay-for-performance for providers

      • cost-effectiveness for drugs

      • Expanding out of pocket costs for beneficiaries

    • Increased competition

      • Dozens of PDPs – all majors will play

      • increased incentives for generic substitution


    The challenges
    The Challenges Repository

    • Moving purchasers toward “value-based purchasing”

      • Better data on outcomes and quality

      • Pay for performance -- quality indicators

      • Integrating disease management and MTMP

      • Plan influence on provider decision-making

    • Proving the market works

      • Helping the PDPs and MA-PDs survive

      • Encouraging accelerated movement toward integrated health plans

    • Minimizing government intervention, reference-based pricing/price controls, PDP failure

      • Helping CMS become a successful purchaser (rather than a regulator)


    How to Reach Us Repository

    Gorman Health Group, LLC

    (202) 364-8283

    [email protected]


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