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Risk Adjustment Never Sleeps

A Four-Part Series by Will Stabler

Click here for a PDF of the entire series

About This Series

I wrote this article series in four parts over two months during the height of the coronavirus  pandemic to examine how the pandemic and its lockdowns affected those in the business of risk adjustment, and what happens with the industry as the world returns to “normalcy.”

Articles in This Series

Introduces the series and addresses short-term adaptations in the industry, enhanced support for telehealth services, and reiteration of the need for EHR connectivity and interoperability.
 
Examines some of the options for reopening, making the best use of time in the transition, and taking advantage of new opportunities in provider/health plan partnerships. 
 
Explores some the gradual reopening of the healthcare industry, including patient outreach and the point of care, how Medicare Advantage and other plans can help support member health needs, and the effects the pandemic has had on the IT interoperability issues in health care.
 
4. Navigating This New World
Addresses what the priorities should be in RA in the end of 2020 and beyond, how best to use time and resources in the new environment, and looks on the positive side of what the industry has gained from the COVID experience.

Risk Adjustment Never Sleeps: Navigating This New World

By Will Stabler

First published on June 24, 2020

In the first three articles of this series I wrote about the situation that we in Medicare Advantage, and risk-adjustment more broadly, found ourselves in with the COVID-19 response, how we plan for the possibility of opening up and getting back to “normal,” and what we do once the team gets back to work. This final article addresses what our priorities are through the end of 2020, and how very recent, significant changes in our world wrought by the Coronavirus Pandemic may guide how we act to implement them.

What Coronavirus has done to the financial picture in health care

First, the financial picture. Recently, we were given a peek at what the COVID-19 Pandemic may cost U.S. health insurers. According to a report conducted by Wakely Consulting Group for America’s Health Insurance Plans (AHIP), the costs for insurers in 2020 and 2021 could be anywhere from $56 billion to $556 billion (Cohen, Whittal & Murray, 2020).

The study was based on 255 million people insured through commercial, Medicaid and Medicare Advantage managed care plans. These numbers depend on the percentage of people who are ultimately infected, with a range of 20% to 60% of the population. The study estimates that enrollees would pay from 14% to 18% of the costs, meaning that copays and deductibles would run from $10 billion to $78 billion, depending on the infection rate.

So, before we move on, we have to consider the resources we have going forward, because that will dictate what we are able to do operationally. Because there has been very little medical expense during the lockdown, many health plans are giving back premiums or are considering doing so. For example, in early May United Healthcare committed $1.5 billion to premium rebates and other concessions, and in the beginning of June Anthem committed to $2.5 billion.

Medicare Advantage organizations and other health plans need to decide now how much, if anything, they can afford to give back in premium rebates, and how much that will impact operations going forward in 2020. With that in mind, we need to consider that, just as in every given year, 2020 only has 12 months, and we are beginning to get indications that 2021 could be as bleak as this year. So, even though we remain hopeful for better days ahead, we cannot afford to be complacent.

Beyond the financial situation, we also need to consider the current state of the COVID crisis. In its recent study, titled, “Reopening the U.S. Healthcare System: Tracking the Pandemic, Reopening Readiness, and Health Services Utilization,” the IQVIA Institute for Human Data Science found that, “While the United States has passed a modeled peak number of active cases in late May, significant numbers of active cases persist.” Among other findings, “Based on new active cases reported, 177 million people—55% of the population—live in States that are rebounding or have not peaked” (IQVIA, 2020).

All indications are that we may see widespread COVID-19 outbreaks in the fall, and if not, there will certainly be pockets in different regions of the country through the end of the year. So, health plans, physicians and other providers, and patients/members need to plan for the worst-case scenario—another shutdown in their own region or throughout the nation.

We also need to look at how the pandemic shutdown may have affected people’s health. Nearly half (48%) of people in a new survey by Kaiser Family Foundation said a member of their household has skipped or delayed medical care due to the COVID-19 outbreak. Among them, 11% said the person’s condition worsened as a result. Of those who have postponed care, about 32% said they would seek care in the next three months and 10% plan to do so in the next four months to a year (Hamel, et. al, 2020).

According to the IQVIA Study, two noteworthy things happened that have a huge effect on closing care gaps:

“Elective procedures nearly ceased during the depths of the COVID 19 shutdown in April but have mostly recovered through the week of May 22, particularly orthopedic procedures, while colonoscopies/sigmoidoscopies are still at levels 40% below the baseline. Oncology visits have rebounded while new diagnoses lag and lab diagnostics remain about 40% below baseline levels nationally.

“Total new starts for medicines since March 6th are down 34% cumulatively through May 29th, with 80 million fewer new prescriptions filled compared to baseline” (IQVIA, 2020).

So What to do With the Time and Resources We Have?

The numbers above show that people need to be aggressively driven back into care, and preferably into the telehealth modality.

Now more than ever, physicians and health plans need to team up to bring patients/members with chronic conditions quickly back onboard into a care regimen and get as much necessary face-to-care while they can (including diagnostics), so they can be set up to be better managed by telehealth, now that telehealth is becoming more prevalent and CMS is on board with reimbursement.

Hand-in-hand with that effort is aggressively expanding patient/member outreach in order to identify care gaps. For that we need to stratify our data on patients/members. Those who are the sickest, with unaddressed conditions, have not been getting better through the lockdown because of the lack of temporally contiguous chronic care—health plans must help guide and optimize the use of these data sets.

For example, if our physicians and other providers only have July through December to see patients in person and get them into diagnostics, it makes sense to see diabetics. If those patients/members have not been coming into the doctors’ office for care at all for three months, they are likely to be in much worse condition than before the stay-at-home orders. Also, cancers, heart failure, kidney failure, liver disease, pulmonary problems, and many other conditions did not go away and need to be addressed.

Regionally, providers and health plans need to be aggressive with the time they have through the end of the year. At the same time, because of the urgency and time restraints, you may be tempted to consider canceling vacations or going to a seven-day work week, but don’t forget your greatest asset—your people. Everyone is exhausted and burned out from the response to the Coronavirus Pandemic, and that needs to be taken into account in any plan for moving forward.

While we are working on the nuts and bolts issue of getting patients/members back into care to make up for what we have lost, physicians and health plans must not lose sight of our second mission during these times, which is making sure we do not lose the many things we have gained from the pandemic.

So What we have gained you say?

You heard me right, and our gains may turn out to be significant, so we need to push hard in advocating for them. Let’s look at where we have been driving, or where we are possibly being driven.

As I write this last article in this series, all 50 states are in one phase or another of opening up, and a few are dialing back, as at least 20 states are reporting spikes in new cases and hospitalizations. Like nearly every other industry, health care is reeling from the effects of the coronavirus lockdowns, and is trying to determine a path forward.

The coronavirus may be dictating that path to a large degree, but in some ways, that may not be a bad thing. Remember, back in the old days (a.k.a., last year) when one of the things that made us tremble the most in any business was disruptive innovation? You had two choices with disruptive innovation—you either feared and resisted it, or you threw out your arms and embraced it. I can say with confidence that there has never been a bigger disruptive influence on innovation in the business of risk adjustment than COVID-19.

Back in the “old days” of the twenty-teens, I and many of us in this business cried out for universal access to interoperable EMRs, pushed for telehealth adoption/acceptance, and tried to advance the concept of assuming risk in the interest of advancing value-based care. In all cases we ran into seemingly insurmountable barriers.

In these new days, we seem to have found an unlikely ally. The Coronavirus Pandemic is not just giving us a gentle prod toward those directions—it is on our tails with a bullhorn and out in front of us with a bulldozer, plowing that road.

Telehealth Isn't Going Anywhere; It's going everywhere

Thanks to COVID-19, telehealth is apparently here to stay, if the current head of the Centers for Medicare and Medicaid Services (CMS) has a say in it.

“I can’t imagine going back,” said CMS Administrator Seema Verma at a STAT virtual event in early June. “People recognize the value of this, so it seems like it would not be a good thing to force our beneficiaries to go back to in-person visits” (Ross, 2020, June 9).

Indeed, in the pandemic environment, 89% of patients who have used telehealth say they were satisfied with the experience, according to a new national survey from the Alliance of Community Health Plans and the Academy of Managed Care Pharmacy. On the other hand, 42% percent of people say they are uncomfortable going to a hospital for treatment and 39% say they plan to delay future care. Also, while 58% of respondents view their physician as their most trusted source for information on the coronavirus, only 31% of them say they feel comfortable actually visiting the doctor’s office (ACHP/ACMP, 2020).

According to the results of another new survey of 1,800 patients nationwide from Doctor.com, 50% of respondents have used telehealth during the past three months. Of those, 83% say they will likely keep using telehealth even after the end of the pandemic. Three-quarters of respondents said they would take telehealth appointments with a doctor they already had a relationship with. Also, more than half (55%) said they would take remote visits with a new doctor. Good news can also be gleaned from the survey in wellness regimens, care for chronic illness, and continuity of care, as 91% of respondents said they believe having care via telehealth would help them adhere to both appointments and medication regimens (Kitchen, 2020).

One would assume that if the explosion in telemedicine continues, a natural extension would have to be a more rapid advancement of interoperability in EMRs and other healthcare information technology, but also digital transformation in healthcare overall. There are early signs that this is happening.

Even though all large health providers are seeing a steep decline in revenue as a result of COVID-19, there is one place they apparently will not be cutting back on investment for the future—automation and technology. In a new survey from Black Book, 84% of hospitals and 79% of large physician practices confirmed that they have performed audits on the current status of their digital transformation over the past few months (i.e., during the pandemic crisis). In those audits, 93% of those respondents said they identified missing capabilities, redundant technology, or conflicting systems (Lagasse, 2020, June 9). 

The most interesting finding to me in this survey is that even in this tough financial environment, only 12% of CFOs of those organizations plan to cut or defer spending on digital transformation of their financial systems. Also, the survey found that the highest-rated solutions for meeting the current challenges are empowering virtual health (87%) and initiating highly positive patient experiences (73%).

Hmmm… both of those solutions are high on the list of considerations as we look toward the transition to value-based care. Two respected authorities on both sides of the political spectrum recently discussed value-based care in the era of COVID-19, and how the pandemic could be driving a move in that direction.

The COVID Effect on Value-Based Care

As of the end of May, diagnostic testing was down 60% across the nation and the number of people who sought care in the hospital was down about 55%. Many providers drastically reduced elective surgeries. This has resulted in huge losses in the fee-for-service environment, and a worry that a complete recovery from this situation will never occur.

In a Health Evolution virtual Executive Briefing in early June, Andy Slavitt, former acting CMS Administrator in the Obama Administration, and now Chairman and founder of the non-profit United States of Care, said the COVID-19 pandemic may be an opportunity for moving toward value-based care, and away from fee-for-service. A theme throughout the forum was considering the advantages of value-based care for driving sustainability in a post-COVID world of declining revenues (Health Evolution, 2010).

“We ought to pledge to come out of this as a healthcare system better than we entered it,” Slavitt said. While he acknowledged that value-based care is not perfect, he asserted that it is better positioned than fee-for-service in providing services around the needs of patients and how they live, citing issues of equity, prevention, bringing care to where it is most needed, and building healthcare system resilience.

“None of this can happen if we don’t have a resilient healthcare system,” Slavitt said. “None of this can happen if we don’t have a healthcare system driven by value-based payments. That will really enable this.”

Slavitt said providers need to be incentivized to take care of patient populations and the sick, so they can practice in the way they prefer and base their decisions on resources and the needs of the patient population. That means taking on risk.

Adam Boehler, former director of CMS’s Center for Medicare and Medicaid Innovation (CMMI) in the Trump Administration, and now CEO of U.S. International Development Finance Corporation (the government’s development bank), was also featured in the forum.

“One area that has not been negatively impacted in the healthcare system throughout all of this has been risk-based organizations—anybody taking real risks,” Boehler said. He added that if he were in a fee-for-service health system in this environment, he would be concerned about whether electives would ever come back up to 100 percent of where they were before the pandemic.

Boehler added, “Now might be an opportunity for a health system to say, ‘If I enter into full risk or 50-up, 50-down, I’m in a much better situation than continuing with fee for service.’”

“I don’t know how long it’s going to take for things to go back like they were pre-COVID,” said Boehler. “I do know that if you’re in a risk-based environment, taking risk from the government and others, that won’t matter as much, because you’ll be aligned better. This might be the impetus, because on one hand, now as a health system, you have a pretty big negative if you continue in the same vein, and maybe there are unknowns on the risk-based side, but better an unknown than a guaranteed negative, in my opinion.”

Moving Forward

To recap, every minute that our area is not a hotspot overwhelmed with COVID-19 cases, we need to be laser-focused on our priorities:

  • Prepare for the worst for the winter and possibly truncated 2021 (financially and health-wise).
  • Do the best with what you can do within your own four walls.
  • If you are a health plan, work with your provider.
  • If you are provider, work with your health plan.
  • In outreach, stress the importance of virtual visits as a means of avoiding a worsened health condition by putting off care.
  • Work with CMS and others to continue to advocate for telehealth, inclusion of in-home assessments, and digital transformation.
  • Continually ensure you are finding and serving the sickest of the sick.
  • Continually ensure we are using our data most efficiently so we can be hyper-aggressive in member/patient outreach.

Again, there are some bright spots for the future, but we are still in the thick of this. So, both providers and health plans need to pull as many people back into care so we can close care gaps while we can and make up for some of the financial losses during the shutdown. At the same time, we need to be advocating for progress in value-based care, telehealth, and healthcare information technology more broadly.

In an article I wrote in early 2019 on consumerism and value-based care titled, Healthcare Consumerism and the Move Toward Wellness, I pointed out one of the major impediments to the move toward VBC and true consumerism:

“The implication is that the model we are moving toward will be highly focused on the patient as an involved player. The evidence of that evolution should be a rising wave of consumerism as the transformation takes place, and we are seeing some of that already. But the reality so far is that this move is largely being accomplished without much involvement from the consumer, making it look more like the paternalistic model that has always been a hallmark of the U.S. healthcare system.”

I believe that has changed. The consumer has been thrown into the deep end of the pool by the coronavirus. This has been shown in consumers quickly embracing telehealth. They have been given something they want, and they will likely be demanding more.

Medicare Advantage and other health plans, along with small provider organizations, need to take a cue from these major providers I mentioned above and not cut back on investments in digital transformation, no matter how much it hurts in the short term. This could open up opportunities for partnerships that can streamline operations for both types of organizations and help them together develop a new definition of value-based care in on our “new world.” Perhaps we should call it “value-focused” care.

I have long been a proponent of health plan/provider partnerships. These collaborations most often are formed around data sharing, and those new imperatives of “empowering virtual health” and “initiating highly positive patient experiences,” provide us with the impetus to explore value-focused initiatives together. As always, the health plan has a role in providing greater assistance to providers in health record accuracy. This can get us to identifying and engaging that “sickest of the sick” and determining how their conditions have been impacted by the shutdown, allowing us to more efficiently and effectively manage care gaps in the new pandemic reality going forward.

References

Alliance of Community Health Plans & Academy of Managed Care Pharmacy. (2020, May 22). Fact Sheet–COVID-19 Shifts Consumer Health Care Behavior. Accessed at: https://achp.org/fact-sheet-covid-19-consumer-behavior/

Cohen, M., Whittal, K., & Murray, T. (2020, March 30), COVID-19 cost scenario modeling: Estimating the cost of COVID-19 treatment for U.S. private insurers. Study conducted by Wakely Consulting Group for America’s Health Insurance Plans (AHIP). Accessed at: https://www.ahip.org/wp-content/uploads/AHIP-COVID-19-Modeling.pdf

Hamel, L., Kearney, A., Kirzinger, A., Lopes, L., Munana, C. & Brodie, M. (2020, May 27) KFF Health Tracking Poll—May 2020: Impact of Coronavirus on personal health, economic and food security, and Medicaid. Kaiser Family Foundation. Accessed at: https://www.kff.org/report-section/kff-health-tracking-poll-may-2020-health-and-economic-impacts/

Health Evolution. (2020, June 10). Value-based payments: The case for moving away from fee-for-service as COVID-19 strains hospitals’ revenue. Webcast. Accessed at: https://www.healthevolution.com/collaborative-efforts-to-address-covid-on-demand-recording/

IQVIA Institute for Human Data Science. (2020). Reopening the U.S. healthcare system: Tracking the pandemic, reopening readiness, and health services utilization. Accessed at https://www.iqvia.com/insights/the-iqvia-institute/reports/reopening-the-us-health-system

Kitchen, E. (2020, June 16). Telemedicine today: Patient adoption and preferences during COVID-19 and beyond. Blog. Doctor.com. Accessed at: https://www.doctor.com/blog/telemedicine-today-patient-adoption.

Lagasse, J. (2020, June 9). Healthcare CFOs look to technology and automation for COVID-19 recovery. Healthcare Finance. Accessed at https://www.healthcarefinancenews.com/news/healthcare-cfos-look-technology-and-automation-covid-19-recovery

Ross, C. (2020, June 9). ‘I can’t imagine going back’: Medicare leader calls for expanded telehealth access after Covid-19. STAT News. Accessed at: https://www.statnews.com/2020/06/09/seema-verma-telehealth-access-covid19/

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