Impact of the 2018 Medicare Advantage (MA) Call Letter on Puerto Rico. As of May 16, 2017

Transcription

1 Impact of the 2018 Medicare Advantage (MA) Call Letter on Puerto Rico As of May 16, 2017

2 Healthcare Spending in Puerto Rico vs. U.S. $10,000 $8,000 Total Health Expenditures, Per Capita $8,404 $9,515 $6,000 $4,000 $3,240 $3,065 $2,000 $ Puerto Rico United States Sources: Department of Health and Human Services, Evidence Indicates a Range of Challenges for Puerto Rico Health Care System (2017); Centers for Medicare and Medicaid Services, NHE Summary Including Share of GDP,

3 Funding Sources for PR Healthcare System Estimated Distribution of Healthcare Resources in 2016 *Total of $10.5B not including direct expenses by government agencies, CFSE, ACAA, and out of pocket expenses by patients estimates equivalent for ASO employees is $300-$400 Million $4.9 B Traditional Medicare 5% $0.43 B Medicare Advantage and Part D 46% Medicaid Program/GH IP 26% Private Commercial 23% $2.8 B $2.2 B Revenue per Member Per Year/Per Month Medicare Advantage $8,400 /$700 Medicaid/MiSalud $2,000/ $166 Commercial $1,900/ $158 Medicaid Breakdown: PR (47%) $1.2B ACA $1.1B Medicaid Base $0.3B CHIP, Other $0.2B Total $2.8M 3

4 Cost of Living Index (COLI) for Medicare Paying Residents of Puerto Rico I am thinking of moving from Puerto Rico to Orlando, FL Philadelphia, PA Brooklyn, NY Houston, TX Overall COLI 12.1% 5.6% 33.8% 12.6% Supermarket Items 15.3% 5.5% 2.2% 29.2% Utilities 40.9% 25.0% 21.2% 37.5% Housing 3.0% 43.9% 220.2% 9.9% Transportation 13.4% 10.8% 20.8% 7.6% Health 66.8% 90.1% % Miscellaneous 12.3% 1.2% % 6.7% Sources: Council for Community and Economic Research (C2ER) and Instituto de Estadísticas de Puerto Rico, Council for Community and Economic Research, Tercer Trimestre

5 Source: Centers for Disease Control and Prevention; Behavioral Risk Factor Surveillance System

6 Executive Summary of 2018 MA Call Letter and Ratebook 1. Positive Steps - CMS approved key policies that are supportive of the MA program in 2018 for PR responding to proposals and request from the PR Government, Congress and healthcare community. Critical Policies approved include: (A) STARs methods, (B) Zero-claims adjustment, (C) STARs double bonus, (D) updates to Traditional Medicare costs BUT, we do not have a permanent solution for the MA base payment yet. 2. New Federal Republican Administration is committed to continue supporting the enhancement of the Medicare Advantage program in PR. MA rates in 2018 for PR are summarized as follows: a) The base rate increase is 1.6% from 2017 to 2018 b) The net impact to PR after considering the HIT is -.05% from 2017 to c) Quality changes made by CMS, impacting the highest quality plans in PR, yields a potential net overall increase of 4.9%s (Quality is Key!!!). d) These fee changes should be weighed against an overall Healthcare cost trend/increase of 4%-7% expected in Reality Check: The resulting 2018 average MA base payment rate for PR ($483) is still: a) 26% below the rates in the neighboring US Virgin Islands ($653), b) 39% below the average in the next lowest State (Hawaii at $788), and c) 43% below the national average MA rates ($849). d) Annual loss still estimated at $1 billion compared to 2011; close to $5B aggregate funding loss since the Affordable Care Act (ACA) was implemented in THANKS HHS, CMS, Governor of PR, Resident Commissioner, healthcare community our hard work has been rewarded But. 5. THE WORK CONTINUES with HHS/CMS leadership to share information and policy ideas on how to the protect the long-term viability of the MA program in PR, which is the backbone of the entire healthcare system. 6

7 Estimated 2018 BASE RATE Impact of MA Call Letter MA Advance Notice Change to 2017 Impact Assessment 2017 to 2018 Prev Year Notes PR or National Starting Point ALL (A) MA Benchmark 6th Year of ACA Phase In (2017 last year) 0.0% -6.0% ACA formula phase in fiinalized. PR (B) Change in UC Part A Payments $66M to $78M (Imp 2018) 1.0% -1.7% UC for PR : $95M, $75M, $66M, $78M PR (C) Part B Changes - GPCI 5.0% 0.0% Adjustment for changes to Traditional Medicare Part B GPCI PR Category Subtotal 6.0% -7.7% MA Benchmark Impacts with Announcement 2018 (D) National Effective MA Growth Rate 2.53% 3.10% As per Advance Notice 2018 National (F) Other Rebasing/Repricing of FFS Cost Estimates -5.0% -3.0% Resulting unexplained negative factor. Deterioration from anomalous FFS data. National & PR (H) MA Normalization -1.90% -0.60% As per Advance Notice 2018 National (I) Omnibus Part A IPPS Increase 0.25% 0.8% Updates related to the capital portion of the formula, and other changes. PR (K) MA Benchmark Zero-Claim Members Adjustment** 0.00% 4.4% CMS said they will evaluate if needed. PR Category Subtotal -4.1% 4.7% Running Total 1.9% -3.0% Other Factors in Rates (G) MA Coding Intensity Adjustment -0.25% -0.25% It is 5.91%, with the minimum yearly increase of 0.25% National (E) CMS Risk Score Model Proposal (Assumes CMS Mantains Proposa 0.0% 2.3% CMS is not proposing changes to Part C risk score model, Part D changes not sign National (J) Adjustment for Non-Duals in Risk Score Proposal 0.0% 0.0% Not mentioned. We can include in comment letter. PR Category Subtotal -0.3% 2.0% Running Total 1.6% -1.0% Current Estimate from the AN % 7

8 Estimated TOTAL 2018 Impact of MA Call Letter / Ratebook Category Base Rate Adjustments Estimated Impact Compared to MA Base Payment Average Change 1.60% Notes With zero-claims, GPCI adjustment, Part A Adjustments, Normalization, Coding Intensity, Risk Score model, etc. 2. HIT Health Insurance Providers Fee -2.10% 2017 Moratorium goes away Sub-Total - Base Rate Adjustments -0.50% Net Change in Base Rate for 2018 Adjustments Based on Quality 3. Blended impact of Stars Bonus - both basic and double bonus impact. 5.40% Impact is roughly 50%/50% between the following 2 elements: a) For plans attaining 4 STARs and b) Re-interpretation of double bonus eligibility. Total Change in MA Rates from 2017 to % After the HIT and with the quality bonus changes based on plans increasing to 4 STARs and CMS reinterpretation of the eligibility of PR counties for double bonus. 8

9 MA Rate Comparison Lingering effects of the ACA (Obamacare) and Flawed FFS Calculation are killing PR MA rates Forcing Doctors to Leave Puerto Rico 2018 Over $1B Annual Loss Aggregate Loss over $5 Billion Slight improvement for 2018 BUT PR is still: 43% below US Avg 26% below VI 9

10 PW GPCI PE GPCI MP GPCI GAF VALUE PW GPCI PE GPCI MP GPCI GAF VALUE PW GPCI PE GPCI MP GPCI GAF VALUE Comparison of Relative Costs and Revenues for Neighboring USVI and PR PR and VI 2018 GPCIs (geographic cost index) on par but PR Benchmarks and ESRD Rates remain 26 and 28% BELOW VI Rates $ MA Benchmark (Avg.) GPCI and GAF Value Comparison Virgin Islands vs. Puerto Rico $ % $ $ $ VIRGIN ISLANDS PUERTO RICO VIRGIN ISLANDS PUERTO RICO $6, $5, ESRD Rate -28% $4, $3, VIRGIN ISLANDS PUERTO RICO 10

11 Blue Sheet Comparison of all US Counties/Municipalities Increasing PR Funding Disparity in MA continues the Poor get poorer! PR Counties 2011 US Avg = $787 PR Avg = $595 PR 24% lower Ongoing deficiency in the underlying MA formula for PR Imperfect FFS data that does not reflect the cost of a functional Traditional Medicare program. PR Counties 2018 US Avg = $850 PR Avg = $483 PR 43% lower MA funding formula NEEDS to be revised to treat PR similar to the states and other territories HHS-CMS will need to make comparable adjustments on a year-by-year basis to alleviate the disproportional cuts to MA. 11

12 What's Next? Washington Overview current status of local PR and national healthcare reform 1. Puerto Rico faces a short-term funding issue on its Medicaid program which it must remediate. Although Congress will provide a $296 million relief, Medicaid funding still has an approximate $266 million shortfall during the June 30, 2018 plan fiscal year. It seems that ASES will have no choice but to cut spending in the PR Government Health Plan in FY by no less than $266 million approximately. 2. The next effort should be to propose the multi-year solution to maintain the current funding levels. At least, the PR government will have to pursue the remaining $266 million left to cover FY 2018 in the SCHIP reauthorization bill in September, if no multi-year solution is obtained. 3. The Trump Administration seeks to repeal and replace Obamacare during A preliminary attempt to force repeal to a Congressional vote was pulled in April 2017, with a potential revised proposal expected in the coming weeks after the budget bill. 4. Given the current challenges for Puerto Rico with Congress and the Trump Administration, fixes to the MA program becomes our only vehicle to bring meaningful incremental funding to the Medicare-Payroll-Tax paying US citizens and the healthcare economy in PR. Every effort should be made to ensure that Medicare Advantage plans in Puerto Rico are being fairly and properly compensated for the services they provide. CMS Administrator Seema Verma confirmation hearings records, February 16,

13 What's Next? Administrative Solutions which can get passed by the Administration either in the 2019 Advance Notice or thru a mid-year letter ruling; 1. Establish an MA benchmark proxy for 2019, no less than 15% lower than the lowest state OR through the use of a surrogate (e.g. USVI), given new empirical evidence about anomalies in Medicare FFS program and data (i.e. zero-claims adjustment). 2. Implement alternative technical fixes to MA benchmark calculation: (a) maintain the 2017 and 2018 zero-claims (+4.4%) adjustment for 2019, (b) make an adjustment to address the dual bias in FFS data, (c) avoid negative effects of rebasing for PR; 3. Adjust MA ESRD Benchmarks for 2019 by using the USVI MA ESRD benchmarks for PR beneficiaries as a temporary proxy. 4. Support for Part B member premium as a core A/B benefit for duals. This could increase by 50% the help to the poorest MA beneficiaries to pay for Part B. 5. Make correction for FFS payments in ESRD dialysis and on the Part A IPPS Wage Index and Uncompensated Care factors HIT (health insurance tax) relief for the healthcare system of Puerto Rico, unfairly imposed by the ACA. 13

14 What's Next? Legislative Solutions which can get passed by Congress 1. Medicaid cliff multi-year solution to retain current funding levels. 2. HIT Repeal Nationally likely to be contemplated as part of Repeal and Replace. 3. HIT Repeal for PR a stand-alone issue contemplating Administrator Tavenner s (CMS) July 2014 letter to PR, coupled with the fact that PR receives no benefits (e.g. market subsidy, admin expense support) from Washington for Obamacare products or market. 4. Minimum MA Benchmark at no less than 15% lower than the lowest state OR through the use of a surrogate (e.g. USVI). 14

15 FY2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule 15

16 FY2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule Key highlights (National): Increase of ~1.6% in operating payment rates for acute care hospitals (that successfully participate in the IQR program and are EHR users). Applicable percentage increase of 1.75% to the standardized amount for hospitals in Puerto Rico. National increase in uncompensated care payments of ~$7 billion. ($1 billion increase from FY2017). Proposes using Worksheet S-10 data to determine payments, but makes an exception for Puerto Rico, and uses the low income-insured days data for FY 2012 and FY 2013 as proxy. (Increase of ~15% from $78M to $91M) Updates to the Hospital IQR Program, the Readmissions Reduction Program, EHR Incentive Program, and the Hospital Value-Based Purchasing Program. 16

17 FY2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule Impact Analysis of Proposed Changes to the IPPS for Operating Costs for FY

18 FY2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule 18

19 What Can I Do? 19

20 What Can I Do? 1. Be Educated. Understand the facts about funding for Healthcare in Puerto Rico (Page 2 and Appendix A) and already enacted MA rate cuts (Appendix B). We need a permanent solution from Washington! 2. Prioritize MA discussions equally with Medicaid matters. Thousands of doctors have left PR as a result of $5B of MA funding leaving PR since Funding must be returned to MA to allow the healthcare system to survive by retaining and attracting quality doctors, and providing quality care sufficient to support economic recovery! 3. Let your voice be heard. Speak up on behalf of Puerto Rico and its healthcare crisis. We are not treated fairly with our United States brethren. Our funding levels are criminally below the national average in MA, there is no actuarial basis for such funding, and we need justice to be served, finally, with the Republican administration. Tell your lobbyists, fellow business leaders and anyone you know in Washington that is cheaper to fix Puerto Rico IN Puerto Rico than to have our doctors and members leave for the US mainland. Fixing PR s healthcare system is essential for PR s economic stability! 20

21 Why is Puerto Rico Unique? Stars Quality Ratings: PR vs. US Average Measure National Plans without PR Puerto Rico Plans Variance PR vs. Net Plans w/o PR C18: Reducing the Risk of Falling C06: Monitoring Physical Activity C14: Diabetes Care Kidney Disease Monitoring C24: Rating of Health Plan C10: Care for Older Adults Functional Status Assessment C23: Rating of Health Care Quality C01: Breast Cancer Screening C02: Colorectal Cancer Screening C05: Improving or Maintaining Mental Health C04: Improving or Maintaining Physical Health C29: Health Plan Quality Improvement C12: Osteoporosis Management in Women who had a Fracture C11: Care for Older Adults Pain Assessment C09: Care for Older Adults Medication Review C19: Plan All-Cause Readmissions C13: Diabetes Care Eye Exam C22: Customer Service C07: Adult BMI Assessment C31: Reviewing Appeals Decisions C28: Beneficiary Access and Performance Problems C20: Getting Needed Care C30: Plan Makes Timely Decisions about Appeals C26: Complaints about the Health Plan C17: Rheumatoid Arthritis Management C08: Special Needs Plan (SNP) Care Management C32: Call Center Foreign Language Interpreter and TTY Availability C16: Controlling Blood Pressure C15: Diabetes Care Blood Sugar Controlled C27: Members Choosing to Leave the Plan C21: Getting Appointments and Care Quickly C03: Annual Flu Vaccine C25: Care Coordination Part C Average Rating Measure National Plans Variance PR vs. Net Plans without PR Puerto Rico Plans w/o PR D08: Rating of Drug Plan D11: High Risk Medication D07: Drug Plan Quality Improvement D10: MPF Price Accuracy D15: MTM Program Completion Rate for CMR D06: Beneficiary Access and Performance Problems D04: Complaints about the Drug Plan D02: Appeals Auto Forward D09: Getting Needed Prescription Drugs D01: Call Center Foreign Language Interpreter and TTY Availability D03: Appeals Upheld D05: Members Choosing to Leave the Plan D13: Medication Adherence for Hypertension (RAS antagonists) D12: Medication Adherence for Diabetes Medications D14: Medication Adherence for Cholesterol (Statins) Part D Average Rating Source: 2017 Part C and D Medicare Stars Rating Data. Centers for Medicare and Medicaid; October 2016

22 Questions? 22