Medicare Advantage – PFFS Products HFMA 2008 Spring Education Conference Kiet Lam

1. Medicare Advantage – PFFS Products HFMA 2008 Spring Education Conference Kiet Lam Senior Manager, Triage Consulting Group

2. In the news… “Medicare Audits Show Problems in Private Plans” – NY Times (Oct 2007) “Medicare Trend Raises Eyebrows” – LA Times (Feb 2008) “For Recipients of Medicare, the Hard Sell” – NY Times (Dec 2007)

3. Agenda Key elements of PFFS products Growth of PFFS Providing care to PFFS members Financial Impact

4. PFFS definition A PFFS product is an open network Medicare Advantage product offered by a state licensed, risk bearing entity contracted with CMS on an annual basis to provide Medicare benefits…

5. History of PFFS Created by the Balance Budget Act of 1997 (BBA) • Expand private options to beneficiaries • Extend availability to rural areas • Address right-to-life concerns Updated by Medicare Modernization Act of 2003 • Congress raised payments to further stimulate growth • Payment to PFFS plans per member is 19% higher than for traditional FFS member (MedPAC, 2006)

6. PFFS payments Plan retains 75% of difference

7. Comparing PFFS with MA HMO/PPO plans

8. PFFS growth - availability source: “Medicare Health and Prescription Plan Tracker” – Kaiser Family Foundation

9. PFFS growth - enrollment source: Avalere Health analysis of CMS data, “Medicare Managed Care Contract Report”

10. PFFS growth – major players (17%) (42%) (5%) (8%) (8%) (8%) (11%) source: Centers for Medicare and Medicaid Services

11. What’s in a name?

12. Providing care to PFFS members key questions/considerations: Do I have to provide care to a PFFS member? only in an emergency If I provide care, what are the financial implications? what are the risks? is there potential gain? Should I provide or continue to provide care to PFFS?

13. Terms and Conditions (T&C)

14. T&C comparison

15. Assess patient volume Starts with Patient Access: Do you have a unique plan code for PFFS plans? If yes: run a report of volume by plan code & description If no: sample your Medicare Advantage volume pull up ID cards talk to patient access reps create unique plan codes

16. Assess patient volume

17. Reimbursement considerations Key questions: Are you contracted with the PFFS plan? How do such rates compare to what original Medicare would have paid? Are you satisfied with your Medicare margin? Is there opportunity to negotiate for more?

18. Reimbursement pitfalls Important to consider: • No advance coverage determination required may lead to retroactive denials • Lesser of contract or Medicare payment • Indirect Medical Education (IME) – needs to be billed separately to Medicare • IPPS Excluded Services • Acute rehab • Acute psych • SNF

19. Blue Cross Freedom Blue • Established by Blue Cross Life and Health • Medicare Advantage PPO • California market penetration • Key Issue: Does your Blue Cross contract cover the Freedom Blue product? Identifying volume is challenging

20. Triage recommends… • Conducting a volume assessment • Implementing operational adjustments to better monitor and track patient volume • Establishing policies and procedures to ensure payment compliance • Considering negotiating PFFS specific rates at a premium above Medicare FFS

21. Online resources: CMS: http://www.cms.hhs.gov/PrivateFeeforServicePlans/ Individual payer websites: Blue Cross: http://www.medicareadv.com/bcc-ca-pffs.html Humana: http://www.humana-medicare.com/medicare-advantage- plans.asp BCBS of Michigan: http://www.bcbsm.com/medicare/index.shtml UHC/Secure Horizons: https://www.securehorizons.com/ourplans/maplans.html

22. Questions? Kiet Lam 221 Main Street, Ste 1100 San Francisco, CA Ph: 415-512-9400 kietl@triageconsulting.com