Can better data coordination help connect health plans to the future?

My Take

Can better data coordination help connect health plans to the future?

By Sarah Thomas, managing director, Deloitte Center for Health Solutions, Deloitte Services LP

Health plans collect mountains of data that they use to manage risk and improve care management and population health. However, despite the potential value of this information, these functions tend to be separate and uncoordinated. Can health plans do a better job managing the data needed to support the upcoming changes to Medicare Advantage (MA) and Medicare Part D? Absolutely! Health plans could—and some already do—use data from diagnoses, utilization, and quality gaps to identify high-risk members and to determine methods of care, which could help improve population health. This could also help streamline reporting.

Recent announcements from the US Centers for Medicare and Medicaid Services (CMS) reminded me of a new and relevant project. The emphasis is on the policies underlying these very activities, which not only affect payment, but also help improve patient health and overall spending. Health plans that invest in collecting, managing, and using patient data to improve outcomes and costs in MA and Part D will likely have an edge over others. Such investments could also help reduce the cost of compliance and highlight new ways that data can be used. Getting a better handle on data could also help health plans move beneficiaries toward a future of health that emphasizes prevention and well-being.

On April 5, CMS issued a Final Call Letter, which includes changes to the risk-adjustment and quality rating/incentive programs (see the April 9, 2019 Health Care Current). These programs have become critical features in Medicare. The agency also wants health plans to more effectively manage the outcomes and risk among Medicare beneficiaries who have chronic health conditions or addiction issues. The final rule also lets MA plans expand telehealth services beginning on January 1. It is clear from this guidance—and from the legislation preceding it—that regulators and lawmakers want health plans to play a role in improving population health.

Health plans aren’t quite there

It appears that many health plans might still have a way to go when it comes to coordinating their use of data, according to recent conversations with health plan executives and vendors. Here’s what they’ve told us:

The use of data is often duplicative and not well-aligned. None of the executives we interviewed said they have fully integrated the data, people, technology, and processes that are needed to form an enterprise-wide view. While the health plan executives acknowledged data collection/dissemination processes could be streamlined, they admitted those functions typically aren’t coordinated.

Risk adjustment, quality, and care management functions are partially or totally segregated. Most of the health plan executives said their organizations intend to integrate and align risk adjustment and quality functions. These plans tend to either be in early stages, or the strategies are still being mapped out. Some health plans are establishing centers of excellence, while others are creating senior-level positions that focus on risk adjustment and Star ratings. Several health plan executives said they are moving quality program management from the chief medical officer to the finance or government departments.

Many health plans are waiting to invest in emerging technologies. Most health plan executives we talked to see potential in artificial intelligence (AI), robotic process automation, cognitive computing, and other emerging technologies. However, some of them want to capitalize on the technologies they already have in place before investing in something new.

Improving efficiencies in the short term

How can health plans take steps toward the future—a world where data are seamlessly coordinated and continually updated? They can start by organizing more efficiently around the systems they already have in place. Health plans should consider applying an enterprise-wide approach to understanding where the data are, overhauling existing processes to optimize the flow of data, and adopting emerging technologies to further enhance their use of data.

How about the long-term?

We are all excited about our vision of the future of health and what it might mean for health plans and other industry stakeholders. Looking forward to 2040, we envision a future of health where actionable health insights are driven by radically interoperable data and smart AI. The use of optimized data can help health plans identify illness early and intervene much more quickly…maybe well before any symptoms appear. Health will be focused more on well-being than on treatment.

In the future of health, the always-on, sensor-driven environment will generate massive amounts of data—data that are continuously gathered and stored by multiple owners and selectively shared and used to improve health. The data will come from traditional players (health plans, providers, government regulators) and non-traditional players (digital giants, retailers, and consumers). This kind of radical interoperability will enable seamless integration of multiple, disparate data sources and apply advanced analytics to create real-time insights that will improve the patient experience and drive the delivery of always-on care.

Risk adjustment, quality measurement, and population health/care management are three important activities for health plans. Here’s where we see them 20 years from now:

• Risk adjustment: By 2040, the need for risk adjustment—and the teams, processes, and technologies to support it—could be substantially minimized as illnesses are identified and addressed at the earliest stages. Risk-adjustment models that are based on a complete health picture of the patient—rather than on a specific condition—could be far more accurate and dependable.
• Quality measurement: In the future, quality measurement could shift away from tracking what we can measure and move toward tracking only what we want to measure. For most patients, that means achieving goals—whether it is to improve function, restore function prior to an injury, reaching personal health goals, or something else. Under this vision, the industry will revolve around patients and their needs.
• Population health/care management: The programs that we know today will be aimed at preventing disease, rather than managing care once an illness becomes apparent. We envision a shift to business models that are built around sustaining well-being and enabled by predictive technologies and comprehensive data on each patient.

This is all exciting to think about! Although 2040 seems a long way in the future, I think it is helpful for health plans—and regulators—to think forward to determine how they can help evolve care management, accountability, and incentives as technology and the availability of data and insights accelerate.

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In the News

CMS issues final 2020 payment notice for exchange plans

On April 18, CMS released the final annual Notice of Benefit and Payment Parameters for the 2020 benefit year. Provisions include:

• Reducing user fees by 0.5 percent for both federally-facilitated exchanges (FFEs) and state-based exchanges (SBEs), beginning in 2020. User fees are typically passed onto consumers through premiums. CMS says it was able to reduce the fees by improving enrollment and upgrading IT systems.
• Building on the Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs by promoting the use of lower-cost generic drugs to reduce premiums (see the January 8, 2019 My Take). Drug manufacturers sometimes give coupons to consumers to help cover copayments for brand-name products. The final rule allows issuers to determine whether to apply the value of these coupons toward an enrollee’s maximum out-of-pocket costs if generic alternatives are available. According to the agency, this could encourage greater use of generic drugs.
• Refining the risk-adjustment program to improve the accuracy of data used to calculate charges and payments. Specifically, the rule finalizes proposals to validate the accuracy of diagnoses.
• Increasing ways consumers can enroll. Last year, CMS launched Enhanced Direct Enrollment (EDE), which allows consumers to enroll in an exchange-based plan via an approved partner website. CMS says the final rule updates regulations to accommodate innovation and enhance the consumer experience. The agency says the rule also makes it easier to terminate or suspend agents and brokers who violate exchange rules.
• Modifying the annual premium-adjustment percentage by basing calculations on premiums in individual and employer-based plans. In the past, these calculations were based solely on employer-based plans. The premium-adjustment percentage is used to set annual cost-sharing and to establish the percentage of income that consumers must spend on premiums before tax credits can cover the rest. This new calculation sets the limits higher than the old methodology, which would lower federal premium-tax credit spending. The US Department of Health and Human Services (HHS) estimates that 70,000 fewer people will enroll in coverage if this provision is implemented.

(Source: CMS, CMS Issues Final Rule for the 2020 Annual Notice of Benefit and Payment Parameters, April 18, 2019)

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HHS extends comment period for CMS, ONC interoperability proposed rules

On Friday, April 19, HHS announced an extension of the comment period for two proposed rules aimed at promoting interoperability. Comments for CMS’s and for the Office of the National Coordinator for Health Information Technology’s (ONC’s) proposed rules are due on June 3. The proposed rules seek to reduce information-blocking and promote electronic health record (EHR) interoperability (see the February 19, 2019 Health Care Current).

The same day, HHS released its second draft of the Trusted Exchange Framework and Common Agreement (TEFCA), as required by the 21st Century Cures Act. The TEFCA aims to facilitate trust among health information networks (HINs) to enable greater exchange of electronic health information. TEFCA is based on six overarching principles: standardization, transparency, cooperation and non-discrimination, security and patient safety, access, and data-driven accountability.

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ONC data brief shows increased EHR use among hospitals for clinical practice, quality improvement, and finding high-risk patients

Hospitals are increasingly using data from EHRs to support quality improvement efforts and to monitor patient safety, according to an April 17 data brief from ONC. The agency analyzed information from the American Hospital Association’s (AHA’s) IT survey to determine how non-federal, non-acute-care hospitals used EHR data from 2015 through 2017. While ONC has issued several reports that discuss EHR adoption rates, this brief is the first to examine how hospitals are using the data.

ONC’s data brief includes the following observations:

• 94 percent of hospitals used EHR data to inform clinical practice in 2017—an increase from 87 percent in 2015.
• ONC tracked 10 clinical practice measures to determine how hospitals used EHR data. Among the measures identified, 82 percent of hospitals used the data for quality-improvement efforts, 81 percent used it to monitor patient safety, and 77 percent used it to measure organization performance.
• From 2015 and 2017, the number of hospitals using EHR data to identify high-risk patients rose from 53 percent to 68 percent, and the number of hospitals using EHR data to identify care gaps increased from 53 percent to 60 percent.

The brief also noted that hospitals’ use of EHR data varied significantly by what vendor the hospitals had chosen. In addition to encouraging adoption of technology, HHS has recently focused on making EHR data more actionable. In February, ONC and CMS released proposed rules promoting interoperability and providing secure tools that would let providers and patients access and share electronic health information (see the February 19, 2019 Health Care Current).

(Source: ONC, Hospitals’ Use of Electronic Health Records Data, 2015-2017, April 2019)

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MACPAC recommends removing Medicaid drug-rebate cap

The Medicaid and CHIP Payment and Access Commission (MACPAC) unanimously voted to remove the drug-rebate cap in Medicaid during an April 11 meeting. According to MACPAC research, prices for 18.5 percent of all brand-name drugs rose quickly enough to reach the cap.

Brand-name drug manufacturers pay a base rebate of 23.1 percent to Medicaid, plus additional rebates if they raise their prices faster than the Consumer Price Index (CPI). Medicaid rebates are capped at 100 percent of a drug’s average manufacturer price (AMP). However, once drug manufacturers reach the cap, they can raise list prices without further penalty.

During a March meeting, several MACPAC advisers were concerned about the potential impact of removing the cap and compromised by setting the cap at 125 percent AMP.

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Primary care makes up a small percentage of Medicare spending, study finds

About 2 percent of all Medicare spending goes to primary care, according to a RAND Corporation study published on April 15. Even if primary care is defined more broadly, just over 4 percent of Medicare spending goes for these services. To conduct the study, researchers analyzed 2015 medical data, including outpatient care, hospital services, and prescription drugs, for more than 16 million fee-for-service (FFS) Medicare beneficiaries. In contrast to Medicare spending, the report notes that a 2017 Milbank Memorial Fund study found that primary-care spending averages over 7 percent across all commercial preferred-provider organization (PPO) plans.

In the RAND study, the researchers narrowly defined primary-care services as office visits and preventative care, and the broader definition included any service furnished by a primary-care practitioner. The study’s narrow definition of primary care practitioners includes family practitioners, internists, pediatric physicians, and general practitioners, while the broad definition encompasses nurse practitioners, physician assistants (PAs), geriatric medicine physicians, and gynecologists.

The study made the following observations:

• Primary-care spending percentages were lower among beneficiaries who were dually eligible for Medicare and Medicaid and for beneficiaries who have chronic illnesses.
• Spending was lower for African American beneficiaries and for Native American beneficiaries, at 1.76 percent and 1.51 percent, respectively.
• Primary-care spending was less than 2 percent among beneficiaries aged 85 and older.
• Primary-care spending varies by state. Under the narrow definition, the range was 1.59 percent of medical spending in North Dakota to 3.18 percent in Hawaii. Under the expanded definition, spending percentages ranged from 2.92 in the District of Columbia (DC) to 4.74 percent in Iowa.

(Source: RAND Corporation, Primary Care Services Account for a Small Share of Medicare Spending, April 15, 2019)

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PBMs and generic manufacturers offer opposing comments on HHS’s proposed rebate rule

Pharmacy benefit managers (PBMs) and generic drug manufacturers recently submitted opposing comments on HHS’s proposed rule regarding formulary placement-related rebates. In the proposed rule, HHS argues that rebates paid to PBMs to buy formulary positions would not be protected. The Association for Accessible Medicines (AAM) supports the direction of the proposed rule and wants HHS to prohibit rebates that are tied to formulary placement, according to their recent comment. In general, generic drug manufacturers and the Pharmaceutical Research and Manufacturers of America (PhRMA) are aligned in supporting the proposed rule. According to PhRMA, the rule could “increase use of biosimilars and generics…allowing those drugs to obtain more favorable formulary placement.” The Pharmaceutical Care Management Association (PCMA), however, opposes HHS’s distinction of formulary placement-related rebates and rejects the specific provision in the rule.

For a look at how eliminating drug rebates could affect PBMs and other stakeholders, visit our blog, With drug rebates on the chopping block, stakeholders should prepare for change.

(Source: PhRMA, OIG proposed rule could help strengthen the Part D market, March 28, 2019)

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House, Senate lawmakers seek to exempt APMs from Stark Law restrictions

On April 10, a bipartisan group of House lawmakers reintroduced legislation that would allow CMS to exempt alternative pay models (APMs) from Stark law provisions, which prohibit physician self-referral. The legislation, called the Medicare Care Coordination Improvement Act of 2019, is similar to a bipartisan Senate bill released on April 1.

The legislation would give all APMs—even those under development—the same physician self-referral waivers that the Affordable Care Act (ACA) provides to accountable care organizations (ACOs). Specifically, the legislation would exempt participants in APMs—and those testing potential APM models—from the Stark law’s “volume or value standard,” which prohibits compensation that takes the volume or value of any referrals or business arrangements between parties.

In addition to the legislation, the 2020 HHS budget-in-brief stated that the Administration plans to reform the Stark law (see the March 26, 2019 Health Care Current). Beginning in 2021, HHS proposed the following:

• Creating a new exception to physician self-referral laws for APMs, including identifying criteria for participation.
• Establishing a process for physicians to self-identify inadvertent noncompliance.
• Excluding physician-owned distributors from the indirect-compensation exemption if over 40 percent of the business is generated by the physician owners.

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Breaking Boundaries

New waiting room tool could innovate the primary care visit

An aging population, an increase in chronic conditions, and more evidence-based preventive services recommended for patients are straining the primary-care model. To make the most efficient use of time for a primary care visit, it’s helpful if the patient comes in with a clear understanding of concerns to address. Researchers designed a health IT tool called the Visit Planner to test whether a digital tool could help make primary care visits more efficient and effective and lead to fewer gaps in care.

The tool was tested in eight practices with more than one thousand patients between the ages of 30 and 80 years. The patients either had two or more chronic conditions, or they were new to the practice. The tool was created to help patients prioritize the issues they wanted to discuss during a visit and communicate that information to the physician in the exam room. Patients accessed the tool via tablets in the waiting room and were shown an introductory video about the tool and the importance of communicating health concerns to the physician early in the visit. The tool then prompted them to choose their top one or two concerns from a list of six categories or submit their own. The tool also prompted them to stay involved in their care by taking notes during the visit, asking questions, or by visiting a patient portal after the visit.

Patients who used the tool reported feeling significantly more prepared for their visits and having better discussions with physicians compared to patients in the control group. The tool, however, did not have a significant impact on primary clinical outcomes—both the intervention and control group showed an improvement in closing care gaps over time. The authors concluded that the results might have been different if the test was conducted in a less-integrated care setting where the tool could have helped close some care gaps.

The research team conducted a baseline survey prior to launching the tool that showed that nearly all (96 percent) physicians surveyed say they never, rarely, or only sometimes have enough time during patient visits. Only half of the physicians surveyed said that patients are usually or always prepared to address their top concerns when they arrive. Tools such as this one could help improve the primary care visit for patients and physicians.

(Source: Sheri Porter, Identifying priorities is first step to better outcomes, AAFP, March 27, 2019)

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