We're often asked for our thoughts on where health plans have the greatest opportunity to reduce their spend and/or increase revenue. Obviously there are many ways to go about improving your bottom line, however, we find the following opportunities are most often overlooked:
First, the easy four:
When was the last time you reviewed your Medicare risk scores compared to the actual risks presented? Surprisingly, you may be missing a significant revenue opportunity. Plans that effectively close the gap between actual and potential reimbursement could realize substantial Risk Adjustment Factor (RAF) increases. In fact, industry estimates suggest that the average Medicare Advantage plan could increase Medicare reimbursement by as much as 20 percent by improving the accuracy and completeness of Medicare Advantage HCCs.
Additionally, have you assessed the 2014 CMS blended model to determine the potential impact on your risk score and more importantly, your future revenue?
We recommend that you have an outside Medicare risk adjustment firm review your claims abstracts to determine if your risk scores match your claims data. This opportunity analysis should be available to your plan at no cost and provide you with a clear analysis of risk score data and the opportunities for revenue enhancement, as well as, a perspective on your adherence to CMS regulations.
Home visit assessments can also be implemented that will not only help identify the needs of some of your higher risk members but also provide the documentation needed to substantiate appropriate capitation rates. This approach is especially effective if integrated with a care management outreach program that would help target the right members and build rapport and trust necessary to maximize the number of actual assessments.
It’s very likely that additional savings are possible from your pharmacy costs, even if you've just completed a new contract with your PBM. The PBM marketplace is extremely dynamic, with frequent changes in discounts, trends, formularies and benefit management. We encourage you to bring in a pharmaceutical consulting firm that is completely independent of PBMs and manufacturers. These contractors can review your current contract (at no charge) and let you know where changes are possible and the potential cost savings prior to any engagement. They can also provide on-going pharmacy consulting services – ensuring your PBM is performing to the contract terms, and bringing clinical and pharmacy trend management ideas to your plan.
While research has demonstrated the impact that a behavioral health condition can have on the cost and health outcomes of a member with a co-morbid health condition, we still find that a significant number of health plans still maintain separate medical and behavioral care management health protocols. You can miss a valuable opportunity to better manage your members’ health outcomes if you do not take advantage of the powerful synergy created by an integrated care management program. Members with multiple chronic illnesses and psychosocial issues represent about 10 percent of the population but can drive more than 35 percent of the cost. These are members that are often difficult to find and engage, and prove more difficult to manage because you first must identify potential underlying behavioral issues. Proven, integrated care management programs can deliver a real ROI of at least 2:1. With expansion of Medicaid to include childless adults, there will be a significant influx of new members with co-morbid conditions. Make sure your plan is prepared to meet this challenge.
How do your plan’s medical and administrative costs compare to benchmarks from similar plans? A benchmarking assessment can be an effective evaluation approach. Even the best internal analytics can't provide the comparative benchmarks necessary to know whether a problem you're seeing is specific to your plan or more indicative of the market as a whole. Many of your competitors take advantage of operational benchmarks, medical expense benchmarks, staff performance and productivity assessments, administrative cost analyses, and technology assessments to evaluate their performance against their peers and competitors. Benchmarking and assessments can help you identify ways to improve your plan’s efficiency, and optimize administrative and medical expenses.
Now one that takes more time and thought but is well worth it:
For a surprisingly high number of health plans, the concept of “selling” is relegated to the marketing department. While it’s important to have a designated unit responsible for growing membership, this separation ignores the importance of creating an organizational culture where growing and retaining members is part of every employee's DNA.
Getting there requires a comprehensive approach that starts with a clear, meaningful description of the company, its products and its uniqueness. An example is FedEx’s slogan: "When it absolutely, positively has to be there overnight." A succinct description of the company and its products is necessary to be successful. From there, embed your descriptor in every aspect of your organization from job descriptions to performance evaluations to your marketing collaterals. To be clear, a sales culture is not a high-pressure sales environment. It’s a culture where every aspect of the company walks the talk.
So, could any of these five improve your bottom line?
If you’re not sure, it’s time to evaluate each opportunity. In most cases, it’s a matter of identifying potential vendors who can identify the positive financial impact you could experience, often for no fee unless a significant impact has been determined. We pride ourselves on knowing the some of the best companies in the market – let us know if we can help you find them.