The Truven Health Blog

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

Health Plans: Choose Your Initial Validation Audit Vendor Wisely

By Anita Nair Hartman/Tuesday, March 21, 2017

For health plans, the time to select an initial validation audit (IVA) vendor is drawing near. Selecting a qualified vendor should be a thoughtful and informed process. If the audit shows a plan’s EDGE data are not valid and have risk score-impacting errors, the Centers for Medicare & Medicaid Services (CMS) may act to scale down the plan’s premium risk transfer payments, which may incur negative results for the plan’s financial performance. As a CMS-accepted IVA entity, we’ve been partnering with health plans to meet this requirement since the law was implemented.

CMS developed IVA requirements to help ensure that accurate and complete membership and risk adjustment information is submitted by health plans to the EDGE servers for eventual payment transfer calculations. According to the regulations, qualified commercial health plans must have an independent auditor with certified coders review medical records for 200 random members (or less if the Finite Population Analysis applies to the issuer) selected by CMS and must validate the enrollment and the diagnosis codes submitted. The deadline to select a vendor for this year is April 28, 2017.

 Medical records review is a critical part of the validation process, so health plans should consider experience and certification when selecting a vendor. Some other important qualities to look for in an IVA vendor are:

●      Deep knowledge of ACA regulations. A vendor should have a history of monitoring, evaluating, and influencing the changing ACA requirements.

●      Data, analytics, and auditing experience. A long history analyzing large claims databases and auditing healthcare claims, and prior experience with CMS-mandated reporting, are critical experiences.

●      Experience with EDGE servers. To efficiently audit EDGE data, the vendor needs experience with EDGE data format and content, and in processing large amounts of data.

●      Risk and reinsurance expertise. Look for an auditor with experience with risk models.

●      Flexible approach. This is not a completely straightforward process. Every health plan is different, and your vendor should be able to implement a solution to meet a health plan’s specific needs.

●      Certified coders. This one is straightforward. By law, the coders must be certified by the American Health Information Management Association (AHIMA) or the American Academy of Professional Coders (AAPC).

●      An IVA Approved by CMS. Plans must choose from a list of CMS-accepted entities.

Selecting an experienced and qualified partner to support the IVA will help give health plans peace of mind in managing the IVA requirements. If complying with CMS’s EDGE server requirements is taxing your organization’s resources, it’s time to consider partnering with a qualified EDGE server administrator, and IVA vendor, so you can get back to the business of offering quality health care. Contact us to learn more.

Anita Nair-Hartman, Senior Vice President, Payer Strategy and Business Operations
Bryan Briegel, Healthcare Reform Solutions Specialist

Employers and Health Plans Need Modeling Solutions for Pay or Play Decision Making

By Anita Nair Hartman/Thursday, November 13, 2014

Without much fanfare, the Department of Health and Human Services (HHS) opened the Small Business Health Options Program (SHOP) marketplace in five states last week after a year-long delay. HHS did this soft launch as a test before rolling out the SHOP to most of the rest of the country by on November 15. Although the action was quiet, make no mistake: this is big news for small employers and the health plans that serve them. Employers are once again faced with the tough decision on whether to continue offering benefits. And health plans have much to gain or lose in this process.

When it comes to Pay or Play decisions, health plans are also at risk, because employer decisions about this Affordable Care Act (ACA) provision will have a far-reaching impact on their business. There are billions of premium dollars at stake, potential shifts in health status, and the significant challenge of managing the Medical Loss Ratio requirements. 

Any Pay or Play decisions must be approached by measuring the impact of continuing to offer group health benefits and complying with legislative mandates (Play) or exiting group health and paying the noncompliance penalty (Pay). Modeling should project the effect of the ACA regulations on employer health plan costs for 2014-2020, as well as the influence of the Cadillac tax slated for 2018, transitional reinsurance, comparative effectiveness fees, and for small employers, the value of Small Business Healthcare Tax Credits.

Now is the time for employers to tap into the right resources to make an educated Pay or Play decision. Wise health plan executives will take the lead by supporting their employer partners in this process. 

Anita Nair-Hartman, Vice President, Market Planning and Strategy
Bryan Briegel, Director, Operations


Although Not Typical, Walmart’s Employee Benefit Costs Worth Noting

By Anita Nair Hartman/Tuesday, September 16, 2014
Anita Nair-Hartman imageA recent CNBC article discussed Walmart’s announcement that it will spend far more than anticipated on employee health coverage and have to trim its earnings forecast for the year. The retailer expected more workers to seek coverage under the Affordable Care Act’s (ACA) mandated coverage requirement, but the actual number topped their projections. Although this news has gotten a lot of attention, National Business Group on Health research indicates that most employers aren’t expecting as large of a jump in healthcare costs as Walmart, and Truven Health research supports this. As the CNBC article points out, Walmart’s employee base has some unique characteristics -- including low-wage workers in states where Medicaid expansion didn’t occur, forcing them to chose Walmart (rather than Medicaid) coverage. These aren’t typical employer circumstances.

Nonetheless, after years of low healthcare inflation, employee benefit costs have grown this year, and Wall Street is going to be keeping an eye on the impact to every company’s bottom line. For employers, monitoring benefits spend and strategy is more critical than ever. Equally important will be engaging employees in healthcare decision making, improving health and productivity through wellness programs, and remaining vigilant on fraud and waste.

Anita Nair-Hartman
Vice President Market Planning and Strategy

Ensuring Success in the Health Plan Marketplace

By Anita Nair Hartman/Thursday, September 4, 2014
Anita Nair-Hartman imageA recent New York Times article discussed the impact of competitive health insurance markets on the cost of purchasing health insurance, particularly via Marketplaces. Health plans are just beginning to understand and create market-based products tailored for consumer needs and market competition. Competition motivates health plans to improve value and align consumer needs with products and services, resulting in the consumer benefits of lower premiums and additional services and coverage.

As part of the retail and complex channel strategies for health plans, aligning consumer needs (provider network, out-of-pocket-costs, and service coverage) with their products becomes increasingly important, as does ensuring appropriate consumer education on plan design choices, cost transparency, and engagement in healthcare. Health plans that can manage these aspects when offering products in the new Marketplaces will have greater success – gaining more consumers and keeping them for the long-term.

Anita Nair-Hartman
Vice President of Market Planning and Strategy

Big Data and Analytics: Getting Past the Hype to Real Value

By Anita Nair Hartman/Monday, March 24, 2014
Anita Nair-Hartman imageAs a health plan in today’s complex and challenging environment, it’s easy to get your head turned by promises of Big Data and new analytic techniques. After all, you’re facing an immediate need for information and analyses to successfully manage your business. Big Data must be the answer, right?

 The best answer is “maybe.” The new data sources and analytic techniques just might hold the answers you’ve been looking for. Then again, the answers you need might have been right in your backyard all along. The question is, How do you get past the “Big Data hype” to find the sound data sources and smart analytic methods that will help you meet your goals?

The bottom line is that unless you know how these new tools and techniques can help you make better decisions, they won’t be useful to you. Before you jump to the “next big thing,” be sure you’ve fully explored the value in the data you already have.

Anne Fisher image“Next Generation” healthcare analytics can help you make better decisions — but only if the new tools, techniques, and science are combined with good data and a deep understanding of the business environment. Properly leveraged, the most promising analytics will help you respond to today’s rapidly changing business environment and enable you to thrive under reform, control costs, engage your consumers, and make the best or your new provider relationships. Intelligent application is what matters.

Read our latest insights brief, Next Generation Analytics: Getting Past the Hype and Finding Real Value, for more details. Or email us to find out how we can help you meet your business challenges with smart data and analytics.

Anita Nair-Hartman, Vice President of Market Planning and Strategy
Anne Fischer, Director of Healthcare Analytics