Voluntary Care
Management in Privatefee-for-service Medicare
Patricia R. Salber, MD, MBA
PRS Strategic Health Care Consulting
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Medicare basics
• Federal health insurance for people 65 and
older, under 65 with disability, ESRD
• Part A: Hospital benefits
• Part B: Physician benefits
• Part C: Medicare Advantage plans
• Part D: Prescription drug plans
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Part C: Medicare Advantage Plans
• Medicare Advantage plan members are
still enrolled in Medicare.
• The only difference is that providers’
payments come from a private insurance
company rather than Medicare and a
Supplement carrier.
• Includes HMOs, PPOs, PSOs, Medicare
MSAs, Private-fee-for-service (PFFS).
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Part C: Medicare Advantage Plans
Payment
• Plans are paid based on the CMS/Medicare
Risk Adjusted Reimbursement Model
– It is called the CMS-HCC (Hierarchical
Condition Category) model
– Payment is based on the severity of the
medical condition of the member as
documented by diagnoses submitted on
claims and encounters from qualifying claims
generated by face-to-face visits during the
prior year
– Diagnoses must be re-documented every year
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Part C: Medicare Advantage Plans
Payment
• Some, but not all HCC groups are additive
• Some conditions, like diabetes, have a
hierarchy of severity:
–
–
–
–
–
HCC19
HCC18
HCC17
HCC16
HCC15
250.00 Diabetes with no complications
250.5x Diabetes w/ ophthalmic manifestations
250.1-3x Diabetes w/ acute complications
250.6x Diabetes w/ neurologic manifestations
250.4x Diabetes w/ renal or peripheral
circulatory manifestations
• When this is the case, only the highest
HCC is counted
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Part C: PFFS Plans
• PFFS includes the benefits of Parts A and
B, plus additional benefits.
– Replaces the need for Medicare Supplements
• Eliminates some member out-of-pocket
costs under Medicare A and B.
• Offers more freedom of choice than more
managed health plans
– Members may go to any eligible doctor or hospital
anywhere in the U.S. that is willing to provide care
and accept Medicare PFFS terms and conditions.
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Medicare Private Fee-For-Service
(PFFS)
• Provides an option for Medicare
beneficiaries who:
– Don’t want limitations on choice of doctors and
hospitals
– Want supplemental coverage beyond
traditional Medicare, but don’t want or can’t
afford to pay for a Medigap plan
– Want an alternative to traditional Medicare, but
HMO/PPO not available where they live
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Medicare Private Fee-For-Service
(PFFS)
• PFFS plans have become an increasingly
viable alternative to traditional Medicare A &
B with Medicare Supplements.
• A strong middle-ground between HMOs and
Supplement plans.
• Provide a Medicare health plan alternative to
beneficiaries in rural areas or smaller
metropolitan markets where none existed
before.
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Value Propositions
Private Fee-for-Service
– Offer the best of both worlds!
Medicare
Supplements
Freedom to Choose
Your own provider
HMO’s
Private-fee-forservice
$$$ Monthly
Premium Savings
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PFFS recently drawing fire
From Today’s Wall Street Journal
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PFFS recently drawing fire
From Yesterday’s New York Times
Methods Used by Insurers Are Questioned
By Robert Pear
Published: May 7, 2007
WASHINGTON, May 6 — Insurance companies have
used improper hard-sell tactics to persuade Medicare
recipients to sign up for private health plans that cost the
government far more than the traditional Medicare
program, federal and state officials and consumer
advocates say.
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Today’s Options is the PFFS
product of:
• $2.8 billion total assets
• More than 180,000 covered lives in Today’s
Options PFFS product
• Enrollment growing at a rate of 4-5,000 members
per week
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UAFC has a comprehensive portfolio
of senior market products
HMO plans
 Private Fee-for-Service
 Special Needs Plans
 Individual and Group

Medicare Advantage
Medicare Part D
Prescription Drug Plans
 Individual and Group

Medicare Supplement / Select
 Senior Acute Care and Dental
 Individual and Group

Senior Market
Health Insurance
3rd Party Administration: Medicare Supplement, Long
Term Care, Medicare Advantage & Part D
 ElderCare (non-risk)

Senior Administrative
Services
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PFFS Today’s Options’ Value
Propositions
• Monthly premium less costly than Original Medicare
plus Medicare Supplements.
• Balance billing prohibited
• Low co-payments
• Covers all services under Medicare Part A and B.
• Offers additional benefits (i.e. routine exams in both
plans) beyond what Medicare Parts A and B provide
• Most claims can be handled between plan and
providers, so there is almost no paperwork for
member to complete.
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Today’s Option Differentiator
• Today’s Options “Health &
Wellness Services
–A voluntary care management
program
–Provides a range of services,
including disease management
and case management
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Today’s Options’ Health &
Wellness Services
• Program goal
– to have meaningful impact on
members in need of complex case
management; disease management
focused on COPD/CAD/HF/Diabetes;
and unmanaged, yet high risk people
(frequent hospitalizations, ER visits,
poly-pharmacy etc.)
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Components of the voluntary care
management program
• A 24/7 nurse line to assist members with their
healthcare concerns and needs.
• Post-hospitalization “Welcome Home” calls
• Eldercare Services
• Complex case management and care
coordination
• Chronic condition management
• Pharmacy support for individuals with a linked
Part D benefit
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Implementation Challenges
• Rapid growth
– Increased from 20 K at the end of 2006 to ~170 K
members currently
• Geographic dispersion
– 35 states and 2600 counties
• No provider networks
– Limited ability to get providers attention
• Many providers
• Few members/provider
– FFS payment
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Implementation Challenges
• Many rural members
– Limited experience with care management
processes
• Limited data
– Many new members with no prior claims
– No lab data
– Limited pharmacy data
• Existing internal care management program
comprehensive, but not at the same scale as
new membership
– Need to ramp up rapidly to accommodate explosive
plan growth
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The TO approach
• Divide the work between three different
programs
– Internal program ~55,000 members in 13 states
– Vendor A ~83,000 members in 18 states
– Vendor B ~32,000 members in 4 states
• Three programs will be compared to
determine which ones bring the most value
(quality/cost)
• Very rapid implementation
– Vendor selection in late Jan./early Feb
– First health coaching calls with members by end of February
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Jump start the program with
outbound telephonic HRAs
• Used HCC data to prioritize the outreach
– Members with 2 or more of the “big four” chronic
condition HCC codes are being called first
– By end of January, there were ~100,488 members
• Telephonic HRAs on ~26,829
• Mailed HRAs to ~34,916 with ~9,214 returned
– Currently, about 20% of the population have
completed HRAs
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Jump start the program with
outbound telephonic HRAs
• Secure electronic transfer of HRA results to
vendors and the internal program
• The programs used these results to identify
members with the following:
– Acute or immediate needs that would benefit from
complex case management/care coordination
– Chronic illnesses that could benefit from health
coaching
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Developed a leadership team and subteams to get the work done quickly
• Weekly telephonic implementation lead call to
review progress and problem solve barriers
• Communications team to customize member
materials and address web portal issues
• Data team to rapidly format data feeds
needed to support the program:
– Eligibility, medical claims, hospital pre-notification,
pharmacy (when available), and MOR files (ICD9
codes that track to HCCs)
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Incentives and accountability
• Initial payment is PMPM, but working towards
a risk arrangement
• Initially required daily reporting of “touches,”
now weekly
– Allowed rapid identification of problems
– Monthly impact reports to begin next month
• Full clinical and utilization reporting once
claims begin to be populated (6-8 months
after implementation)
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Accomplishments to date
• Varies by program
• Vendor A has completed a general
awareness mail campaign and several
rounds of automatic outbound telephone
campaigns. They have also completed more
than 5,500 outbound health coaching calls
(~6% of the population) and more than 500
follow-up calls
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Accomplishments to date
• Vendor B has completed more than 200
complex case management calls
• The internal program has completed ~2,000
health coaching calls, 1200 care
management calls, and 55 onsite
assessments
• Feedback from front line coaching staff is that
members are pleased with the program;
formal member satisfaction surveys are
planned
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Lessons learned
• Early health assessments are an effective
means of getting the program started while
waiting for claims databases to get populated
• Frequent communication, including data
reporting, between plan and vendors key to
rapid implementation
• Both vendors and plan must be accountable
for addressing identified issues in a timely
fashion – this is not implementation “as usual”
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What is on the horizon?
• Assessment of enrollment to determine high
volume clusters of members
– Outreach to high volume providers
– Complete physician engagement strategy and rollout plan
– Partnerships with community-based programs
• Roll-out of member web portals
• Continual evaluation of results to make the
programs more efficient and effective
• Moving towards a risk-share arrangement
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Questions
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