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The Truven Health Blog

The latest healthcare topics from a trusted, proven, and unbiased source.

Appealing the CMS Risk Adjustment and Reinsurance Calculations: Making Sense of the Discrepancy Regulations

By Bryan Briegel/Friday, April 24, 2015

On March 16, the Centers for Medicare & Medicaid Services (CMS) issued a memorandum to all Edge server issuers, titled Technical Guidance for FORMAL Discrepancy Reporting Procedures Regarding Edge Server Outbound Risk Adjustment and Reinsurance Program Estimate Reports

This technical guidance reminded issuers that if they want to appeal CMS’s risk adjustment and reinsurance calculations, two windows are available to file a formal discrepancy. (A formal discrepancy is a required action to preserve the issuer’s rights to appeal these calculations.)

The first formal discrepancy reporting window allowed issuers to use either the Risk Adjustment & Reinsurance (RARI) reports that CMS triggered in March, 2015, or the RARI reports they triggered on April 3, 2015. This first formal discrepancy reporting window closed on April 14.

The second—and final—formal discrepancy reporting window for issuers who wish to preserve any calculation appeal rights opens on May 4th and closes 15 days later, on May 18th. Because this final formal window is extremely brief and the process is detailed and complex, issuers are naturally looking for a way to gain more time.

The compressed timeline, combined with CMS’s recent decision to trigger RARI reports weekly until April 30, has led to some confusion on which CMS reports may be used to support the second and final formal discrepancy process. Issuers now have so many CMS-triggered RARI reports and so little time that some are planning to use April-triggered reports, but the regulations dictate that the May reports must be used.

Truven Health Analytics encourages issuers to review CMS’s guidance, and ensure they use their May 1–3 CMS-generated RARI reports in any formal discrepancy process. In tandem, we have reached out CMS to ask them to consider publishing an FAQ reminding issuers that only this report may be used in the second and final discrepancy reporting process. To learn more about this issue or other Edge processes, contact us.

Using Productivity, Absence, and Quality Measures to Drive Business Decisions

By John Azzolini/Thursday, April 23, 2015

Implementing an effective health and productivity management strategy is critical to creating a healthy, high-performing workforce and, ultimately, business competitiveness. Although employers have known for a long time that a healthy employee is more loyal and engaged, studies1 have also shown a direct relationship between employee health and profitability.

As employers take a more integrated view of the programs that touch on all of the aspects of employee health, well-being and productivity, they are realizing the importance of having benchmarks that are similarly comprehensive. Unfortunately, such broad benchmarks have been difficult or expensive to come by. This issue was an impetus behind the creation of EMPAQ® (Employer Measures of Productivity, Absence and Quality™).

EMPAQ is an online survey-based measurement tool, developed by employers for employers, that helps quantify the costs of poor health, low productivity, and absence. The goal is to assist companies with health and productivity program evaluation by comparing their experience to benchmarks of peer performance based upon a set of key metrics in four categories:

  • Overall absence
  • Non-occupational absence
  • Occupational absence
  • Group health and employee assistance programs 

EMPAQ was originally created by the National Business Group on Health in 2001 and after a 5-year hiatus was re-launched this year in conjunction with Truven Health. Employers who submit their data between April 2 and May 29, 2015 will receive an individualized benchmark report for the 30 key EMPAQ metrics. Results will also be pooled across survey participants to create EMPAQ-wide benchmarks and a national report which will be released to the general public.

In short, the EMPAQ initiative should provide much needed benchmarks for the important work of keeping employees, healthy and productive. For more information, visit

John Azzolini
Sr. Director, Practice Leadership

1 Loeppke RR, Taitel M, Haufle V, Parry T, Kessler R and Jinnett K. Health and productivity as a business strategy: A multiemployer study, J Occup Environ Med. 2009; 51:411-428.
Loeppke RR, Taitel M, Richling DE, et al. Health and productivity as a business strategy. J Occup Environ Med. 2007;49: 712–721.
Edington DW, Burton WN. Health and Productivity. A Practical Approach to Occupational and Environmental Medicine. Philadelphia: Lippincott Williams & Wilkins; 2003:140 –152.

Inpatient Medical Care Transitions

By Michael L. Taylor/Monday, April 20, 2015

One of the architects of the Affordable Care Act, Ezekiel Emanuel, has famously said, “We don’t need 5000 hospitals.” For several years, the number of inpatient admissions has been declining, and that trend is not likely to change. According to the American Hospital Association, 27 hospitals permanently closed their doors in 2014. Inpatient days have declined by 5% over a recent 4 year period, and the US hospital occupancy rate is down to 60%. There are myriad reasons for this decline, including the shift to outpatient centers for many procedures, fewer elective surgeries, declining length of stay, and more patient awareness of other options.

Other factors include the readmission penalties instituted by CMS, the increase in “observation” stays, and the growth of high deductible health plans with the resulting shift of costs to employees.  A newer driver of the fall in hospital days and services utilization is the move from Fee for Service (FFS) to more shared risk/reward strategies. As Accountable Care Organizations (ACOs) and similar arrangements become larger and more prevalent, hospitals will see payment reform impacting all lines of services. Under the FFS form of payment, high tech services were revenue generators, and hospitals were incented to build more MRIs and cardiac catheterization labs. Due to payment reforms, these services now are cost centers, and hospitals are urgently seeking new ways to manage their costs. 

Many communities across the country have an excess number of beds given the falling demand, so hospitals will find other uses for these extra beds – or close them.  Shedding unneeded capacity should help hospitals run more efficiently and decrease redundancies in many markets. Hospitals can use data to decide how many services are needed, and can build facilities based on need, rather than as a revenue driver. Hospitals need more data to understand the market they serve, to analyze the efficiency of the services they provide and the quality of the service lines they do keep.

An article in the Archives of Internal Medicine looked at non-emergency cardiac stent placement. In this report two cardiologists reviewed the records of 7000 patients who had stents placed as part of 8 different clinical trials. That analysis suggested nearly 2/3 of the stents placed were not needed – which is both a cost and a quality issue. A Truven Health analysis found nearly 30% of the medical spend in the US was unnecessary. Payment reform under the Affordable Care Act is designed to lessen the burden of unneeded care, and as the healthcare delivery system becomes more efficient, the need for hospitals will continue to decline. As hospitals become more efficient, driving out waste and improving quality, we may see the cost curve stabilize and even “bend” in the right direction. 

Michael L. Taylor, MD, FACP
Chief Medical Officer

Emergency Department Physicians Ordering Unnecessary Imaging Tests

By Byron C. Scott/Thursday, April 16, 2015

As a residency trained, board certified emergency medicine physician who practiced for over 20 years, I was not surprised entirely by a recent Health Leaders’ article stating that ED physicians order unnecessary imaging tests, based on a research article published in Academic Emergency Medicine in April of 2015.    

There is no question that as a practicing physician in the emergency department, you try to make decisions based on sound evidence-based medicine.  The reality is that other factors are constantly influencing decisions, such as patient demands, other physicians involved in a case, liability issues, and just not wanting to miss something that could harm the patient.  On multiple occasions during my career as a medical director and practicing emergency department physician, I have seen patients with a history and physical exam that did not justify ordering an additional imaging test,  however, medicine is an art and often instinct plays into decisions.  If emergency department physicians ordered tests based exclusively on what evidence based medicine supports, many emergent diagnoses would be missed causing a poor outcome for the patient.  The assumption is that not ordering a test because the evidence does not support it will protect you in a malpractice lawsuit.  However, those who have practiced medicine for years know this is not always the case.  

The best approach for now is to continue to look at innovative ways to engage patients and physicians.  For physicians, this will include having real-time prompts and reminders tied into the electronic medical record ordering system, based on evidence based guidelines that are easy to use and access.  Today, patient education and engagement tools are mostly used outside an acute emergency department, but perhaps these tools with their easy-to-use clinical information, statistics, and images could also provide real-time education for the patient to help explain why certain imaging tests are not required.   Tort reform may be one way to influence excessive ordering of diagnostics test but I believe the clinical instinct and art of medicine, as well as evidence based guidelines and patient education, are important to achieving the best outcomes.

Byron C. Scott, MD, MBA, FACEP, FACPE
Medical Director, National Clinical Medical Leader


Dear Employer, Offering Health Plan Choice Alone Is Not Enough

By Chet Winnicki/Thursday, April 02, 2015

Chet Winnicki photoA recent Employee Benefit News article, Many Employees Need Help Picking the Best Health Plan, put some clarity around what we’ve long suspected by sharing details of an Employee Benefit Research Institute study. The study found that nearly half of polled employees consider choice of health plan extremely important, and 36% rate it as very important.

We know plan choice is good. But it’s not enough: the same study found that one-fifth of employees are not confident they can make the best plan choice. Health plan choice during open enrollment can and should be a great experience for employers and employees. As an employer, you’re enabling your employees to enroll in the “right” plans for their healthcare needs, and that’s a real opportunity for both of you to save money: When fewer of your employees over-insure themselves, your healthcare contributions will be reduced as well.

Unfortunately, it’s not that simple.  Despite the time and effort you put into providing plan choices, if you’re offering them without a decision support tool, you’re only creating an opportunity for change. Health plan choice can only reach its full potential when employees pick the best plan for their needs. But according to Aflac’s 2014 Open Enrollment Survey, 90% of American workers choose the same benefits year after year, and 64% say they rarely or never understand the changes in their benefit coverage.

So what’s so hard about forecasting healthcare needs and selecting the best plan? Actually, it’s pretty complicated. Before making an informed decision, employees must consider how much they spent on healthcare in the past, the health status of their family members and costs of any expected treatments or surgeries, and whether they’ll be adding or subtracting any dependents. Their next important step would be to apply their cost forecast against each of the plan options, which includes answering these questions:

  • What will your paycheck premiums total for the year?
  • How much will you pay out-of-pocket before your deductible? How about after your deductible and up to your out-of-pocket maximum?
  • In case you underestimated your healthcare needs, what’s your out-of-pocket maximum?

And we’re not done. High deductible health plans (HDHPs) and the spending accounts (e.g., HSAs, FSAs) that often accompany them add yet another layer of complexity. How will your employees know how much to contribute?


With all they need to know, can we really expect the average consumer to choose the right plan without help and guidance? The answer is absolutely not. Without guidance, your employees are likely to feel confused and frustrated, and believe that you’re passing more healthcare expenses on to them. Employee discontent with the health benefits and open enrollment can lead to job dissatisfaction and lower morale. And open enrollment confusion can burden your human resources staff. In a 2014 survey of human resources executives, nearly half (47%) said that educating employees about health benefits is the most difficult aspect of open enrollment.*

The good news is there are consumer web tools that do this heavy lifting, helping employees forecast their healthcare spending by providing a personalized experience and then recommending the best plan to meet their needs. 

The best of these decision support tools combine an employee’s own historical claims data with a robust, time-tested health care claims database to estimate the cost of conditions or future treatments that are geographically relevant to the employee.  

Plan choice is a great thing, but choice without decision support is a missed opportunity and may actually create employee dissatisfaction. This fall, make the most of the choices you offer your employees by pairing open enrollment with a great enrollment tool.

Chet Winnicki
Senior Director, Product Management

*Keas 2014 HR Executive Survey – Full Report.

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