Presentation on theme: "Getting from Here to There Eleven Steps to a Provider- Sponsored Health Plan July 31, 2013."— Presentation transcript:
Getting from Here to There Eleven Steps to a Provider- Sponsored Health Plan July 31, 2013
Today’s discussion 2 > Goals: How do I become a health plan? Practical tactical steps > Agenda Why Provider-Sponsored Plans 11 Steps Q&A > Speaker 37 year managed care executive With Valence since 2004 Currently VP of Medicaid Operations Previously o COO of Major Provider Plan with 60,000 lives o Hospital Administrator Today’s Speaker Joe Cecil VP Of Medicaid Operations, Valence Health
Take a Step Back – Why Provider-Sponsored Plans? 3 > History and What’s Different Now > Financial Imperatives: Continued Medicaid FFS deterioration Medicare FFS rates below Medicaid’s by 2020 Employers less willing to accept cost shifting FFS penalizes high-value providers Already insuring employees > Prevalence and Performance > The Fit With Value-Based Care Why Should Providers Play? Waste: 30-40% of all medical expense is waste. 1 Quality: 50% of medical care is substandard. 2 Provider sponsored plans more efficient and effective. 5 Preventative Disease: 75% of total medical costs are for preventable conditions. 3 Administrative Cost: 31 cents out of every health care dollar goes to administrative cost, not medical care to people. 4 Source: 1) Institute of Medicine reports. 2)New England Journal of Medicine 3) CDC 4) Richard Clarke, Wall Street Journal 5) Commonwealth Fund.
Health Plan Fit for Provider-Sponsored Organizations 4 > Mission > Community value > Profit motives > Brand identification > Payer pitfalls
11 Steps to Provider-Sponsored Plans 5 1. Assessment / Business Case 2. New Organization Formation 3. Plan Design 4. Provider Network Recruitment and Relations 5. Medical Management 6. Operations 7. Financial Planning and Reporting 8. Technology Systems 9. Regulatory Compliance / Community Relations 10. Expertise and Staff 11. Health Plan Sales / Broker Relations
Assessment and Business Case 6 > What other providers would be participating in the plan? How strong is our primary care base? > Will independent payers still be willing to work with the organization? If not, can the organization function without those contracts? > With which patients or in which geographical regions does the provider hold a competitive edge over other systems? > How will the region’s consumers and employers respond to a provider-sponsored plan? > Is there legislation that makes it difficult for provider-sponsored plans? Is there legislation that is supportive? > Does the provider organization have the cash on hand and a bond rating high enough to allow it to set aside the necessary reserves? Identify the potential network size and types of providers Identify the organization’s market position and local competition Gauge community receptiveness Regulatory environment Costs and financial position Assess local payer reaction
Cost Analysis: Illustrative Example 7 Startup Implementation Costs$500,000 Staff (comp, facility)$4,500,000 Legal/Consulting$1,000,000 Other$500,000 Total$6,500,000 Risk Based Capital$15,300,000 Total Initial Required Capital$21,800,000 7 Ongoing Financials PMPMAnnual 1 Total Premium$150.00$180,000,000 Medical Costs$132.08$158,500,000 Operations$4.17$5,000,000 Admin/Medical Management$8.50$10,200,000 Premium Tax$3.00$3,600,000 Profit$2.25$2,700,000 Payback period2.4 years 1 Assumes 100,000 members
New Organization Formation 8 > Mission / Vision > Legal Creation – what type of organization? What type of MCO – HMO, PPO, EPO, etc > Governance – internal, community, hybrid > Arm’s Length Rule
Plan Design 9 > Which business lines (Medicare, Medicaid, Commercial, Employees) > Benefit levels > Targeted members > Reinsurance / stop loss > Coverage specifics Clinical coverage Administrative philosophy Limits
Provider Recruitment and Relations 10 > Provider network is required to submit for a Certificate of Authority to the Department of Insurance > Map your network by type, location and specialty. What is owned? What is contracted? Who are friends and allies? What is missing from your network? Who is in the marketplace that would contract for missing services? > Map community providers by type, location and specialty > Create contract templates – need legal assistance > Hire seasoned Provider Relations Representatives > Obtain provider commitments on signed contracts > Credentialing processes
Provider Recruitment and Relations - #2 11 > What do you need in order to get providers to sign? Without a product line, it may be difficult to get signatures from providers outside the system Provider Manual – they want to know the rules and they want to know that you know what you’re doing Committee Structure – credibility means physician involvement – inside and outside your sponsoring entity Authorization and Referral Rules – outside might differ from inside
Medical Management 12 > Medical Director > Medical Management Policy Utilization Management Case Management Disease Management Population Management – gaps in care Provider Profiling > MIS – best if integrated with administrative systems > HEDIS and quality of care reporting > Pre-certification requirements Clinical Policy Case Management Care Management Utilization Management Quality Management
Operations 13 > MIS > Claims Processing Claims analysts Audit and recovery Claims system configuration – rules for payment > Member Customer Services Information Complaints Fulfillment > Provider Customer Services > Provider Relations > Network Management and Contracting
Financial Planning and Reporting 14 > Financial analysis > Cash-on-hand requirements > Reserves > Reinsurance/stop loss > Audits > Ongoing reporting Basic Analysis o Service Utilization o Claim Lag Reporting o IBNR – Incurred But Not Received o Medical Loss Reporting o Provider Profiling
Technology and Systems 15 > Claims Processing EDI EFT and 835 > Customer Service > Care Management > Data Warehouse > Portals Authorizations Provider query for eligibility and claims Population management
Regulatory Compliance and Community Relations 16 > State filing National Association of Insurance Commissioners (NAIC) State Department of Insurance Purchasers > Dealing with CMS or State Medicaid Commissions Lots of reporting Micro-management Sometimes not timely or clear with what they want > Community Relations > Marketing
Expertise and Staff 17 > Executive team > Training > Recruitment > Use domain experts not repurposed high performers > Perform internally or outsource? There is no need to reinvent the wheel.
Expertise and Staff – What makes sense to outsource? An art not a science 18 Staffing ratios are an estimate. Largely depends on programs. FunctionPlanPartnerFTE Estimates Customer ServicesX1:7,500 members Invoice Management – Group/BrokerX1:30,000 members Utilization Management – moderate pre-cert programX1:5,000 members Case & Disease Management – Complex Case MngtX1:3,500 members Claims Management – adjudication, audit, recovery, mailX1:3,000 members Eligibility ManagementX1:20,000 members Data Integration – Trading partnersX1:30,000 members Finance and AccountingX1:20,000 members Analytics and ReportingX1:30,000 members Provider Relations and Network ManagementX1:800 provider groups ComplianceX1:30,000 members MarketingXDepends on model Community RelationsX@ 1:25,000 members Quality ManagementX1:20,000 members
Go to Market Execution 19 > Marketing Consumer Employer > Direct Sales > Exchange > Broker Network > Premium Billing
Summary 20 > No provider-sponsored plan is cookie cutter, but parts of other’s experiences can be reused > Get the mission and objectives right > Know the market and the providers in the market > Choose partners with integrity and experience if you need help > Don’t be afraid to outsource, but maintain control over your core functions of network, quality and branding > There’s no time like the present
Questions? 21 > Joe Cecil, VP of Medicaid Operations, Valence Health Information@ValenceHealth.com www.valencehealth.com
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