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The Truven Health Blog


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


Choosing an Initial Validation Audit Vendor: Health Plans Should Start Now


By Anita Nair Hartman/Monday, December 15, 2014


EDGE server data submissions, cost-sharing reduction reconciliations, risk optimization, and now the initial validation audit (IVA) – Affordable Care Act (ACA) compliance has created multiple challenges for health plans, with complicated and ever-changing regulations draining their resources. For the IVA, Centers for Medicare & Medicaid Services (CMS) requires health plans to hire an independent auditor with certified coders to review and validate EDGE server data. CMS developed the IVA requirements to ensure that the membership and risk adjustment information health plans submit to the EDGE servers for eventual payment transfer calculations is accurate and complete. The current deadline to select a vendor is March 31, 2015.

To manage the complex challenges of the ACA regulations, health plans have used a mix of internal resources and third-party vendors. The IVA is one requirement that health plans can’t, by virtue of the law, handle by themselves. Medical records are a critical part of the validation process, so health plans need to be careful to select a vendor with the right experience and certification. Some important qualities that health plans should look for in an IVA vendor are:

 

  • Deep knowledge of ACA regulations. A qualified 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 claims data. 
  • Risk and reinsurance expertise. Look for an auditor with experience building reinsurance and risk models.
  • Customizable approach. This is not a completely straightforward process. Every health plan is different, and the right vendor will 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).

Although CMS is currently considering delaying the IVA auditor selection deadline beyond March 31, 2015, health plans should not delay in making a decision. Selecting a partner to support the IVA will give health plans peace of mind in managing the IVA requirements – which CMS continues to finalize. Selecting a qualified vendor should be a thoughtful and informed process, and the time to prepare is now.

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

Americans Not Concerned with Data Privacy — For the Most Part


By Truven Staff/Monday, December 1, 2014
Truven Health recently conducted a nationwide poll, in conjunction with NPR, to investigate data privacy concerns. The results? Generally, Americans are comfortable with the idea that medical data is shared with employers and health plans. Most of us are willing to share our anonymized data with health researchers. Most of our providers have electronic medical records, and many of us have reviewed our own information. We don’t have a lot of reason to worry about unauthorized access; barely 5 percent have ever been notified of a security breach. 

But we don’t want to share everything with everyone. Our Chief Medical Officer, Dr. Michael Taylor, was shocked to learn that more than three-quarters of Americans would not be willing to share their social and credit card data with their providers and health plans, even if it would improve their overall health. 

NPR’s take on the poll: medical data privacy is not a big concern for most people. Our take: As always, we prefer to let the data speak for itself.

Correlation Between Baldrige Award Recipients and 100 Top Hospitals Winners


By Jean Chenoweth/Tuesday, November 18, 2014
Once again, the selection of St. David’s HealthCare and Hill Country Memorial as 2014 Malcolm T. Baldrige award winners and performance on the 100 Top Hospitals® National Balanced Scorecard overlap. Hill Country Memorial and five of the six hospitals in the St. David’s HealthCare system are or have been 100 Top Hospitals winners. This is important because a significant statistical association between use of Baldrige best management practices and highly balanced performance excellence, as measured by the 100 Top Hospitals National Balanced Scorecard, was found in a study performed for the National Institute of Standards and Technology in 2011. At that time, only 21 hospitals had been named Baldrige Award recipients since its initiation in 1991. These new dual winners add to the growing list of dual winners announced by the Malcolm T. Baldrige program in 2013 (see listing below). This is all very good news for measurement of the impact of leadership in hard data.

The identification of a growing overlap between use of known best management practices (Malcolm T. Baldrige program) and objective measurement of leadership impact on an organization (100 Top Hospitals program) is a testament to the enormous potential of the emerging science of management. Unlike efforts to measure clinical and financial practice in healthcare, the objective research on measurement of leadership effectiveness is miniscule. There are good reasons for that. Very much like the now 30-year old effort to develop evidence-based medicine, complete success is elusive. Both the practice of medicine and the practice of effective leadership have a heavy component of “art” that defies quantification. Almost all of the thousands of management books published are experiential or philosophic – not empirical. Jim Collins’ books on chief executive officer characteristics and practices are among the very few evidence-based business books ever published. That is what makes the increasing number of Baldrige award winners who are also 100 Top Hospitals winners so heartening! There is the potential of an increasingly strong link between actual practice and empirical measurement.

To be explicit, the hospital recipients of the 2014 Baldrige Award are frequent 100 Top Hospitals award winners, which is based solely on a balanced scorecard analysis of public data:

  • Hill Country Memorial is a four-time 100 Top Hospitals winner (2014, 2013, 2012, 2003) in the very difficult category of Small Community Hospitals.
  • St. David’s Medical Center, Austin (which includes St. David’s Heart Hospital and St. David’s Georgetown) is a five time 100 Top Hospitals winner (2014, 2013, 2012, 2011, 2010) and is in the Large Community Class.
  • St. David’s Heart Hospital, a part of St. David’s Medical Center, is a 2015 and 2013 50 Top Cardiovascular Hospital winner.   
  • St. David’s North Austin Medical Center is a three time 100 Top Hospitals winner (2014, 2013, 2012) also in the Large Community Class.
  • St. David’s Round Rock is a 2012 100 Top Hospitals award winner in the Medium Community Class which is the most difficult class to be selected a winner.
  • St. David’s South Austin Hospital was a 2001 award winner and also is in the Medium Community Class and a 2005 and 2004 50 Top Cardiovascular Hospital award winner.

In 2013, the Malcolm T. Baldrige program issued a listing of Baldrige and state or sector based state and sector program award winners who had also won the 100 Top Hospitals award. 

Baldrige Award Recipients

  • Advocate Good Samaritan (Downers Grove, IL) a 2010 Baldrige Award recipient
  • North Mississippi Health Services North Mississippi Medical Center (Tupelo, MS) a 2012 Baldrige Award recipient
  • Poudre Valley Hospital (Fort Collins, CO) a 2008 Baldrige Award recipient
  • Regional Medical Center at Plano (Plano, TX) a 2011 Baldrige Award recipient
  • Sutter Davis Hospital (Davis, CA) a 2013 Baldrige Award recipient

Baldrige-based State or Sector program awards

  • Advocate Good Samaritan Hospital (Downers Grove, IL), 2010 Illinois Performance Excellence recipient, 2010 Baldrige Award recipient
  • Advocate Lutheran General Hospital (Park Ridge, IL), 2012 Illinois Performance Excellence winner
  • Banner Boswell Medical Center (Sun City, AZ) – parent Banner Health, 2012 Showcase in Excellence Award (AZ) winner
  • Duke University Hospital (Durham, NC), 2013 Governor’s Award of Performance Excellence in Healthcare recipient (NC)
  • INOVA Fair Oaks Hospital (Fairfax, VA), 2006 U.S. Senate Productivity and Quality Award (VA) winner
  • Kettering Medical Center (Kettering, OH) – parent Kettering Health Network, 2010 Governor’s Award for Excellence (OH) winner
  • Maury Regional Medical Center (Columbia, TN), 2009 Excellence Award (TN) winner
  • McKee Medical Center (Loveland, CO), 2006 Timberline Award Recipient (CO)
  • Riverside Methodist Hospital (Columbus, OH), 2005 Achievement of Excellence (OH) winner
  • Sauk Prairie Memorial Hospital and Clinics (Prairie du Sac, WI), 2012 Wisconsin Forward Award winner
  • SSM St. Joseph Hospital West Lake (Saint Louis, MO) – parent SSM Health Care, 2011 Missouri Quality Award recipient, 2002 Baldrige Award recipient
  • St. David’s Medical Center and St. David's North Austin Medical Center (Austin, TX) – parent St. David’s Healthcare System, 2008 Texas Award for Performance Excellence winner
  • St. Luke’s Hospital (Cedar Rapids, IA), 2010 Iowa Recognition for Performance Excellence winner
  • Sutter Davis Hospital (Davis, CA), 2012 Governor’s Award for Performance Excellence (CA)
  • Texas Health Presbyterian Hospital Rockwall (Rockwall, TX) – parent Texas Health Resources, 2013 Texas Award for Performance Excellence recipient
  • University of Colorado Hospital (Aurora, CO) – part of a joint operating agreement with Poudre Valley Health System, 2010 Rocky Mountain Performance Excellence recipient, 2008 Baldrige Award recipient

Jean Chenoweth
Senior Vice President, Performance Improvement and 100 Top Hospitals


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

 



The Hidden Impact of Drug Formularies on Member Health


By Kristen Lybrook /Wednesday, October 22, 2014
A recent Action Brief from the National Business Coalition on Health described prescription drugs as the third largest healthcare expense in the United States. As plan sponsors continue to search for opportunities to manage rising prescription drug costs — including option-limiting strategies such as narrow pharmacy networks and formulary options — the larger Pharmacy Benefit Managers (PBMs) have implemented a closely related strategy: exclusion of products from their standard formularies.


 
The PBMs assert the exclusion of products from the formulary has had a positive impact for plan sponsors:

  • Increased rebate payments due to greater leverage with pharmaceutical manufacturers.
  • Exclusion of “me-too drugs” that are structurally very similar to existing drugs, but with a high price and little, if any, clinical benefit.
  • Control of products linked to manufacturer copay coupons that reduce member cost sharing but increase the plan’s cost.

However, plan sponsors must also consider the impact of excluding therapies on a member’s medication adherence and overall health outcomes. When a claim is rejected at the pharmacy because the drug is excluded from the formulary, the member must pay out-of-pocket or ask their physician to prescribe an alternate medication. The increased cost or additional effort can be a barrier for members and may cause them to abandon the prescription, which can compromise their health and lead to costly complications.

Member out-of-pocket costs are also negatively impacted when a PBM chooses to reduce therapy options to one brand product in a class. For 2015, the two largest PBMs have limited the formulary option for diabetic test strips to one brand product line. Although plan sponsors will see an increase in rebates, members enrolled in a Consumer Driven or High Deductible Health Plan will likely face higher out-of-pocket costs at the pharmacy to comply with the formulary.

The member may choose to go outside of the benefit to purchase lower-cost supplies; however, the costs won’t count toward meeting deductibles or out-of-pocket maximums. Further, utilization data for the claims will be lost because the claims will be rejected at the point of sale. Thus, any medication adherence or disease management program reporting you produce will be understated, making it seem like members are non-compliant when they are making choices based on paying a lower cost.

To ensure you fully understand the impact of any formulary changes made by your PBM, consider:

  • Conducting an independent review of your PBM’s formulary to evaluate whether the changes being made are clinically appropriate.
  • Gaining a thorough understanding of the cost impact of formulary changes to both you as the plan sponsor and to your members as consumers.
  • Asking what support is available to encourage impacted members to start on a new therapy and monitor that they continue to take them.
  • Providing members with resources (letters, articles, newsletters) to help them make informed decisions about medications.

Kristen Lybrook
Account Director


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