Session 39 OF, Facing Ethical Issues in Medicaid Moderator/Presenter: Clay Farris Presenters: Zachary Christian Aters, ASA, MAAA Sabrina H. Gibson, FSA, MAAA Ernest Gerald Jaramillo III, ASA, FCA, MAAA
2016 SOA Health Meeting Session 39: Facing Ethical Issues in Medicaid Moderator: Clay Farris Presenters: Zachary Aters, ASA, MAAA Sabrina Gibson, FSA, MAAA Ernest Jaramillo, ASA, MAAA, FCA
Session overview Introduction of panel Call for questions for discussion from audience Overview of Key Ethical Concerns Facing the Actual Profession Panel discussion of ethical scenarios 2
Today s Panel 3
Zachery Aters ASA, MAAA Senior Consulting Actuary Optumas 4
Sabrina Gibson FSA, MAAA Vice President Chief Medicaid Actuary WellCare Health Plans 5
Ernest Jaramillo ASA, MAAA, FCA Founder Salud Actuarial Consulting 6
Please submit your questions 7
Introduction American Academy of Actuaries performed a Survey in 2012 Results were published in April 2015 in a paper called: KEY ETHICAL CONCERNS FACING THE ACTUARIAL PROFESSION Available at: http://actuary.org/files/key_ethical_concerns_f acing_the_actuarial_profession.pdf
Top 3 Concerns Concerns were scored from 1 to 5, where 1 means that it is not an ethical problem today and 5 means that it is a major ethical problem today for the actuarial profession.
#1 Concern Responding to pressure from principals and/or management to select inappropriate assumptions used in pricing or reserving Very relevant to Managed Medicaid Rate setting actuaries receive pressure from many principals and stakeholders MCO actuaries receive pressure from management
Other Concerns Relevant to Medicaid Actuarial Work
Pocket Version of Code of Conduct http://www.actuary.org/content/code-professionalconduct
Scenarios for Discussion 13
Who is the Principal? Code of Conduct references responsibility to the Principal multiple times. Consulting actuary principal is the state MCO actuary principal is the MCO Both have a responsibility to the public 14
Warmup As the state s consulting actuary, you are analyzing various managed Medicaid options from PCCM fees to full risk managed care and everything in between. You ve been asked to develop a report that reflects the financial impact of each program, but your state client has made it clear which program they want to be the winner. You know you can produce a report that provides them the answer they want, but it also involves footnoting some items that should probably be included in the results of the report so as not to be misleading. You are not actually misstating anything. Is this OK? 15
Charting new waters Oversight from OACT and CMS in recent years include a push toward alternative payment methodologies. There is a natural tension with how to balance the new direction with antiquated requirements around rates being based on encounter claims data. CMS is expecting empirical answers for every assumption. Rates are being reviewed by other actuaries, and we should all know from an ethical perspective that there are some rate projections that aren t empirically based. They do need to be reasonable but there isn t always a formulaic approach and we need to defend assumptions extensively with CMS. What is your advice on how to handle this challenge? 16
Evaluating inputs State actuaries have to take information for certain adjustments and place reliance on that information what is your obligation when evaluating this information? 17
In the press A report produced by the state s actuary was made public and is being misinterpreted or misleading. What is your obligation? 18
Open communication Where is the line where the MCO actuary and state actuary cannot communicate in the spirit of open communication as required by precepts? 19
Method You develop the rates in an actuarially sound manner, but the end result is not producing results that correspond to past experience. Is it OK to build rates that comply with the ASOPs in an actuarially sound manner when you know they will not produce actuarially sound rates? 20
Audience questions 21
Unreasonable assumptions during state budget crunch You are being asked to include savings estimates for a new program that you feel are a stretch, and you are aware that the state needs to show dramatic savings to be able to pass a budget this year. How do you handle your concerns to make sure you are setting rates within appropriate practice? 22
Competitive intelligence When you have insight into information between competitors or for the MCOs that the state actuary wouldn t normally know or vice versa, how do you treat the information. That is, where do you draw the line between using information because it is your experience versus not using information you know specifically about a competitor? 23