How Are Hospitals Like Airplanes?

In the larger sense of risk-management, this NY Times article on having pilots training hospital teams on accident avoidance is a worthwhile read (free NY Times online registration required to read the article).

A growing number of health care providers are trying to learn from aviation accidents and, more specifically, from what the airlines have done to prevent them. In the last five years, several major hospitals have hired professional pilots to train their critical-care staff members on how to apply aviation safety principles to their work.

At the end of the day, it's all about delivering the best possible care to plan members.

TriZetto Acquires Plan Data Management

Payer-focused information technology provider TriZetto today announced a definitive agreement to acquire Plan Data Management (PDM) in a move designed to "bolster its Medicare Advantage solutions."

Like Leprechaun, PDM sells a product in the Medicare risk management arena. Unlike Leprechaun's product offerings, PDM does not focus solely on HCC management for Medicare Advantage plans, and relies on reports sent "...back to the provider [to] determine if there are other diagnoses that should have been coded/included."

Nevertheless, we're glad to see this important strategic challenge for Medicare Advantage plans getting increased visibility as a result of this planned acquisition, and congratulate Steve Jackson and his team at PDM on their good fortune (Steve and our associate John Gorman of Gorman Health Group recently shared a stage at the second Medicare Risk-Adjustment Seminar presented by Financial Research Associates).

Prospective Activities for Your MA Plan

The real key to HCC management for Medicare Advantage plans is to completely and accurately code patients from the outset.

While it's possible to do retrospective recovery up to 13 months after the close of a calendar year, your plan must wait up to 18 months to see payments that they might otherwise have seen within 6 months (assuming CMS gets the checks out on time, an issue they are currently dealing with). Delaying cash flow by 12 months is not a good idea for any business.

In turn, the key to prompt coding is provider education. Do your providers have an understanding of the entire HCC risk-adjustment process? If not, they may not be doing complete and accurate coding of their patients. Most providers still code based on pre-2004 ideas (i.e. based on the treatment delivered during an encounter, not the patient's overall health status).

In addition, there are at least two activities which your plan needs to perform on a prospective basis:

1. New members should be seen as soon as possible - a new member represents an unknown risk profile for your plan.
2. Each of your members should be seen at least annually. This is because every January 1st, CMS conveniently forgets that a patient has, for example, an amputation or other diagnostic status.

Prospective activities are not hard to manage if you have the proper tools for your provider relations, member relations, or providers to use. Leprechaun provides both physician education and prospective management tools for its clients.

Medicare Special Needs Plans

A Special Needs Plan (SNP, or "snip"), which focuses on particular diseases in the Medicare population, has even more at stake when it comes to managing revenues based on member risk profiles.

If you're interested in this growing segment of the Medicare plan arena, here's a way to save 15% on this AIS audioconference, Medicare Special Needs Plans: Strategies for Success in 2007 and Beyond.

We can offer this discount to you courtesy of Gorman Health Group, the leading Medicare consulting company. John Gorman, who will be speaking at the above conference, is the former associate director of HCFA's Office of Managed Services (the precursor to Medicare). Leprechaun works closely with GHG to offer our risk-management services to Medicare Advantage plans across the country.

Retrospective Chart Review

As I mentioned in my previous post, a Medicare Advantage plan has 13 months following the calendar year of service to submit updated information to Medicare, e.g. by January 31, 2007 for 2005 dates of service. By submitting already-documented ICD-9s which were not submitted to Medicare via claims, a plan can correct a patients Risk Adjustment Factor (RAF) to accurately reflect their complete health status.

Note that not all of the 10,000+ ICD-9-CM codes map to the 164 Hierarchical Condition Category codes which form the basis for a patient's RAF. In fact, only 4,036 ICD-9s carry any HCC value at all.

Leprechaun analyzes 8 distinct data sets from your health plan to assess, for every member in your plan, the likelihood that a member's current RAF does not completely reflect their actual risk, due to incomplete or inaccurate coding. That, in turn, allows us to create a list of charts (and the provider offices where those charts are located) which should be reviewed.

Once you have a list of charts for review, there is the issue of how to efficiently manage the chart review process itself. First, you need to deploy your review staff effectively, to large groups of "charts of interest", and to smaller groups of "extremely interesting" charts. Second, you don't want a reviewer to spend hours looking through a chart - you want them to go directly to the relevant information in the chart. Finally, you need a way to determine the overall effectiveness of the review process. Is it, in fact, locating documented diagnostic information which should rightfully be submitted to CMS, and what is the future economic impact onyour plan?

Retrospective review also helps drive prospective action by your plan, which I'll talk about next time.

The Essence of Good Risk Management

As you probably know, Medicare pays Medicare Advantage (MA) plans based on the risk profile of each individual member in a plan, as determined by their Hierarchical Condition Category (HCC) codes. In turn, HCC codes are derived from ICD-9 codes, which are the ultimate basis for the entire system.

The essence of good risk management for Medicare Advantage plans, then, is to make sure that every one of their members is completed and accurately diagnosed on an annual basis, and that other factors (such as your data processing systems) don't lose this data on the way to CMS.

If diagnostic information about your members does get sidetracked, it can be recovered for up to 13 months after the service period. For example, many MA plans are currently (and intensely) focused on the January 31st, 2007 deadline for recovering payments due for 2005 dates of service.

I'll be writing more about retrospective and prospective action for Medicare Advantage plans in my next couple of posts.

A Capital Idea for Medicare Advantage Plans

Leprechaun's CEO, Dr. David Bach, will be speaking at the Financial Research Associates conference, Capitalizing on Medicare's New Product Opportunities, on November 13th and 14th in Silver Spring, MD. The conference price is $1,695.

David also personally delivers most of our product demonstrations to interested clients. So, if you're interested in the state of Medicare Advantage risk management, and you don't want to pay $1700, please schedule a demo with us. Besides, you can ask all the questions you want.

(Demos can be arranged by calling Alex Keltner at Gorhman Health Group, 202-364-8283, extension 181.)