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The Voice of John Nimsky
Many of you are aware of the recently published Centers for Medicare & Medicaid Services (CMS) Affordable Care Act (ACA) initiative to support care coordination nationwide.
Once again we are in the midst of application season for health plans applying to become a Medicare Advantage Health Plan, expanding their MA geographic footprint or getting into the Health Insurance Exchange space. Regardless of the scope or the specific enterprise, network adequacy and accessibility is a major cornerstone of any MA or Exchange initiative.
When it comes to healthcare, two truism’s are that medical costs are going up along with demand for healthcare services. And when it comes to organic growth of healthcare volume and expenses, government programs represent a major driver, particularly when considering that on a daily basis thousands of baby boomers age into Medicare. During the last several years CMS has published a number of demonstration programs which are intended to improve the quality of Medicare patient outcomes while promoting financial efficiency on a unity cost or per procedure basis.
For many, the medical loss ratio (MLR) is the ratio of the health plan’s incurred medical claims to the total premiums earned. However under the Affordable Care Act and for government health programs, the MLR is the ratio of medical claims plus quality improvement costs divided by earned premiums minus federal and state taxes and fees and payments in lieu of taxes.
Many of the Medicare Shared Savings program ACOs are now in their second year of operation and some of the Pioneer ACOs are approaching year three. As a result, we are beginning to see published data on which of those ACOs are achieving shared savings. For those ACOs that began operating in 2012, (only ones for which any credible data is available), we know that of the 32 Pioneer ACOs only 23 continue to operate. We know that of those 23 operational Pioneers less than half generated shared savings. We also know that of the MSSP ACOs launched in 2012, about 25% shared in interim savings.
Here we are on November 15th one day after President Obama unexpectedly delayed a key provision of the Affordable Care Act, which allows insurance companies to continue, for one year, offering health care plans that fall short of the requirements as outlined in the ACA . The next day our “stewards of national well being” elected to pass a bill in the House of Representatives which is intended to allow insurance companies to sell individual health coverage to anyone who wants it, irrespective of any required standards in the ACA. As expected, the vote was justified on the grounds that the House is concerned that people will be left without health insurance under the current law, no consideration at all, wink wink , was given to 2014 reelection concerns.
With the recent announcement by CMS that nine of the 32 Pioneers were dropping out of the program there has been much “Sturm und Drang” about the passing of ACOs into obscurity. A recent article in the Investor Business Daily has gone as far as to predict that not only are all ACOs going to fail, but while in existence they “will diminish the quality of care received” by Medicare patients.