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According to Medpac, the country’s baby-boom generation (born between mid-1946 and 1964) began aging into Medicare in 2011 at a rate of about 10,000 people per day, a rate that will continue until 2030.

Over the next 15 years, Medicare’s enrollment is projected to increase by almost 50 percent— rising from 54 million beneficiaries today to more than 80 million beneficiaries in 2030!

Accordingly, the impacts of this enormous demographic shift will drive the evolution of market demand and the corresponding effective responses from providers and health plans alike.

Some of the key market driver questions include:

• How will the incoming baby boomers affect the age structure of the Medicare population? Will the Medicare population be more racially and ethnically diverse, given the growing racial and ethnic diversity of the total U.S. population?
• Given the improvements in life expectancies, will the next generation of Medicare beneficiaries live longer and healthier lives than previous generations? Or will the longer life expectancies increase the oldest age groups in Medicare, thereby increasing the rates of disease and chronic conditions?
• Have baby boomers and especially the oldest baby boomers had time to recover from the 2007 to 2009 recession before entering retirement?
• What is the outlook for the Medicare program’s financial health as the number of taxpaying workers per beneficiary declines?  
• What is the projected growth in the share of enrollment in private plans, and what do health plans do to be best positioned to address these unique needs?

With sufficient input from market demand, public policy, and the adoption of best practices in other industries, healthcare, and health insurance technology suppliers can offer scalable, data-driven solutions.

There are key areas of focus to address these business challenges, including value-based benefit plans and contract reimbursement development and administration. Customer service is also crucial, including enrollee navigation tools that help older members shop and choose the right health benefit for them and access to expert knowledge-based analysis and provider channeling. In addition, easy-to-use and highly-integrated “traditional” customer service support (e.g., call centers) and increasingly popular self-help tools (e.g., portals, “enhanced CRM,” handhelds). There is also increased use of customer-focused artificial intelligence (AI), particularly utilizing integrated payer/provider data that spans the full continuum of both “member” (health plan view) and “patient” (provider view).

While crystal balls are “foggy,” enrollment in Medicare Advantage and or Advantage-like plans is anticipated to increase at a healthy rate. In turn, the demand for seamless support will continue to evolve. Whether a health plan is regionally owned/provider affiliated or spans the country in a traditional insurance setting, the demand for integrating this population will require significant technical and organizational transformation investment. To do anything less risks missing the next frontier.

Technology, especially next-generation technology, plays a massive role in allowing health plans to embrace change, innovate, and remain competitive. However, when it comes to significant technology purchases, in most instances, the decision-making authority does not reside with one person. Major decisions involve a group of key players —c-suite, technology leaders, board members, and more—who, at some point in time, are instrumental in a comprehensive, enterprise-wide investment.

I recently moderated a webinar featuring HealthEdge customers Independent Health and NeuGen.  John Church, VP and CIO of NeuGen, provided some advice for those thinking about moving to a new core administrative processing solutions (CAPS). “When you evaluate a new CAPS, it’s taking what technology best fits your lines of business, your business model, and how quickly, as an organization, you need to push products out into the marketplace. [Next is] aligning those requirements back to which is the best technology out there for you, because with that, you will see longer-term savings in budgets, you will see shorter times to market.”

For Independent Health, Eric Decker, SVP of Information Technology said his organization saw potential in switching to a new CAPs and took time to look at their options.

“About ten years ago, the Affordable Care Act created uncertainty as to whether our legacy system could handle things like member level benefits, or how it would perform and integrate with exchanges,” said Eric. “We closely evaluated different products in the space at the time and immediately realized HealthRules Payer® would enable us to significantly cut down the time of our new product development. Now, what used to take weeks and months actually takes hours or days.”

Although the process can seem daunting at first, the results can be transformational. To get all key stakeholders on board, technology leaders must help the decision-makers understand that moving to a new core system will benefit the organization at all levels.

“Organizations need cross-functional support between IT and the business involved in evaluating the platform to ensure they are aligned,” said John. “As we look at the success we have with our HealthEdge claims processing system, our billing system, and our eligibility requirements; there is shared coupling between IT and the business.”

Eric agreed with the importance of a tight partnership between IT and the business, not only in what the operating model will look like after the organization completes the migration. “Our system configuration teams, operations teams, and IT work closely together to evaluate upgrades, evaluate new products that our sales team wants to implement, and how it will fit into the core administration platform.”

“The long-term operating model of how you’re going to support the system is key,” added John. “In what was traditionally all core IT functions before, now can reside in the business, and there are good reasons for them to….getting the right people together can be successful and have a lot of long-term efficiencies.”

When it comes to efficiencies, both Eric and John mentioned their high auto adjudication rates, both in the low 90s. John gave credit, once again, to the solid understanding and relationship between IT and the business.

“We can’t get to these numbers with just claims, or just IT. Everyone needs to work together, identifying how we’re going to get there, and [within] the timeline we want to achieve it,” said John. “The key thing is to be in lockstep. If you have a partnership, you will get there. Without a partnership, you will struggle.”

Many factors can impact the claims payment process. With so many legacy solutions still present in the market, there is significant opportunity for inefficient processes to slow down work or create inaccuracy. Without the right tools, even the processing of a single claim can drain a payer’s time and resources and strain provider relations.

Consider this. When a claim is submitted on some older systems, edits and errors come back one-by-one – only returning the most egregious error. The claim could be missing date of birth; the claim processor fixes that. Then they send in the claim again and find out the address is wrong and need to fix that. Sometimes these edits require contacting the provider and either resubmitting the claim or gathering the correct information. There could be dozens of bounce backs with a single claim and multiple changes and phone calls that need to be made separately. Health plans need a system that automates this process in real-time. They need a technology solution with advanced logic that can match a claim to the correct provider contract, know when and if a claim needs to run through a third-party solution, and allow the claims processors to resolve all errors at once. Streamlining the parallel process of edits means less back-and-forth and a faster resolution.

Another major factor in improving provider relations is the ability to quickly answer questions and give providers the confidence that payments are handled appropriately. In HealthEdge’s recent independent Voice of The Market Survey, tapping the insights of 245 IT executives at leading health plans, 28 percent of respondents cited lack of transparency for internal/external stakeholders as a top challenge with their core administrative processing system.

A payer does not want to take time and effort to chase down information from a variety of sources. Whether for internal or CMS audits or provider inquiries, health plans with access to a complete audit trail of how a claim was processed can readily defend payments, and providers can clearly understand the reasoning.

By employing new technologies that enable parallel processing and complete transparency of claims adjudication through audit trails, health plans can enhance operational efficiency, improve communication, and ultimately strengthen provider relations and overall satisfaction.

Value-based reimbursements have been much debated since both houses of Congress overwhelmingly passed the Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) in 2015, setting the stage for Alternate Payment Models in Medicare, with incentives for providers embracing pay for value. CMS has been pushing value-based reimbursement models aggressively for years, recently introducing new reimbursements for Medicare and Medicaid members to address social factors such as isolation, food insecurity, and chronic conditions.

IT executives who responded to a recent HealthEdge-commissioned survey, conducted by Survata, cited value-based reimbursement as a top reason for modernizing their infrastructure. Of 245 IT decisionmakers surveyed, 96% said that the expansion of the value-based Medicare Advantage design factors into their recognition of the need to change.

The COVID-19 pandemic has also highlighted the flaws of the Fee-for-Service, with providers of all types experiencing delay of preventative and elective medicine resulting in revenue disruption. This has combined with the wave of hospitalizations of patients creating claims and requiring more manual processing, leading to higher costs for both health plans and providers.

Market pressures to adopt value-based reimbursement create an operational imperative for health plans, and core administrative systems must have the flexibility to configure all types of value-based contracts and benefit plans, from simple incentives to risk sharing, including full capitation. Configuration must also respond to changing regulations and competitive challenges quickly and easily, with minimum disruption and at low cost.

“The ability to stand up new plans and benefits and pivot to satisfy new CMS requirements has become very, very significant for us… a few years ago our claims and data platform was very old. We are on HealthEdge today. And it’s made a difference in how fast we can turn things around.” – Ghita Worcester, Senior Vice President of Public Affairs and Chief Marketing Officer of UCare.

UCare, a regional health plan in Wisconsin and Minnesota, has sustained a 96 percent retention rate over 20 years of proven experience with their Medicare Advantage line of business.

Another key to successful value-based arrangements is the partnership between health plans and providers, a traditionally challenging one. Health plans must not only construct value-based contracts with aligned goals for mutual success, but they must also provide actionable data on a real-time basis to their providers to avoid expensive encounters or hospitalizations. With this information, providers can quickly and confidently take key actions necessary for their patients to remain healthy.

HealthEdge customer Humana recently shared in its “2020 Value-based Care Report” that collectively, its 2.4 million Medicare Advantage members benefitting from value-based models spent 211,000 fewer days in the hospital and emergency rooms. Overall, the value-based agreements resulted in 10.3% fewer emergency room visits and 29.2% fewer hospital admissions, with a cumulative savings of $4 billion compared to original Medicare.

The premise of value-based models depends on operational readiness and data transparency. The results can be overwhelmingly positive for health plans, providers, and patients. HealthEdge customers report great success working with their provider networks to bring down costs while improving outcomes.

Regional non-profits and health plans wholly owned by hospital systems may be facing challenges in the market today, especially considering COVID-19. Analytics suggest patient volumes are trending downward, causing impacts to incoming revenue streams and creating constraints for these critical resources.

Therefore, it is not surprising to find some of these health plans are running on thin margins.

Rightfully, our provider-owned health plans are primarily concerned with taking care of their employees and members first and foremost; though, this tends to delay technology spending decisions.

As a customer-centric organization, we value patience and understanding and how important those values are in the payer industry. We live in an unprecedented time of difficulty that requires a critical level of care to ensure our customers’ success. In my experience in this business, any organization that lacks these ideals simply will not last.

As such, we must remain sensitive to the issues facing health plans, providers, and members that are out of their control. Working with the customers and prospective clients on their timelines, supporting their critical initiatives becomes our collective success story and our organizational paradigm.

You see, at HealthEdge, we make sure we always create customer value. In my experience, if we stay focused on creating value day-in and day-out, everything else will fall into place. The cycle of opportunities is constant. And when a previous opportunity with a prospective client does resurface, absolutely those customers remember the consideration and mutual purpose of success shown in a time of need.

I’ve built long-term relationships with people in this industry over the years, and being a reliable partner for our customers remains my top priority. It is so important to always put yourself in the customers’ shoes, understanding the obstacles they face on a daily basis. You must be sensitive to what they’re going through and remain supportive in order to provide critical value-based solutions.

The healthcare technology space is complex. Millions of factors can impact our business, but it is how we respond and react to those challenges that will build trust.

I care about our customers, and we need to do right by them. Their collective success is good for all.

Transparency in Coverage Final Rule

On October 29th, the Transparency in Coverage Final Rule was released and will be published in the Federal Register. We reviewed the Proposed Rule which impacts health plans, which would require health plans to provide personalized out-of-pocket cost information for all covered healthcare items and services.  This information that a health plan must post to its website includes in-network negotiated rates and out-of-network historical payment amounts using a very specific format at regular intervals. So basically, negotiated rates would be transparent to the world. Insurers that incentivize consumers by encouraging them to shop for services from lower cost and higher value providers will be allowed to use the shared savings in the MLR calculations.

The timeline of the Final Rule begins in 2022 and we will review the 500-plus page document in the next few days and begin to develop the HealthEdge Compliance Requirements and Position Statements.

• 2022 -Plans must post in-network negotiated provider rates, out-of-network coverage rates, and in-network drug pricing in a machine-readable format
• 2023- Plans must offer an online shopping tool or similar platform that includes an out-of-pocket cost estimate and negotiated prices for 500 of the “most shoppable” services
• 2024- The online shopping tool is extended to all services

The Final Rule also allows the plan to include in the numerator of the MLR any shared savings payments the issuer has made to an enrollee as a result of the enrollee choosing to obtain health care from a lower-cost, higher-value provider, beginning in the 2020 MLR reporting year.

In addition, because of the provider world’s current state, specifically hospitals, some clients are concerned about the Hospital Price Transparency final rule that becomes effective January 1, 2021. Hospitals will have to put the prices of their most common services on their website.

ONC and CMS interoperability rules

The Patient Access API and Provider Directory API will be enforced in mid-2021.

Right now, plans are likely focused on the current member portal technology that they have and how to leverage that for the patient access and provider directory APIs—the data will be similar, but the access points will be different. Many plans are also wondering about authentication and authorization management, meaning how a plan can ensure that they are only releasing information to the correct third party under the member’s consent.

A much heavier lift for health plans will be the payer-to-payer data exchange that will be enforced in 2022. At this point, it is unlikely that plans are looking to achieve the ingestion of payer-to-payer data. They are focused on the extraction and sending of the information. The ingestion is the more complex, requiring a look at how the information will benefit the member’s care by creating a continuum that can be used to guide the member’s care decisions.

HealthEdge is currently looking at the known data requirements in CMS recommended companion guides —CARIN Alliance Blue Button® Framework and Common Payer Consumer Data Set (CPCDS) and others.  We are assessing changes to the API and monitoring future requirements to ensure all data available from our technology is in the appropriate formats for their use.  We have plans to address the business use cases for the use of the received data in early 2021.

We are in the CMS world at the moment, and these requirements will impact Impacts Medicare Advantage (MA), Medicaid, CHIP, and Qualified Health Plan (QHP) issuers on the Federally-Facilitated Exchanges (FFEs).

Information Blocking

Going hand-in-hand with interoperability, the Information Blocking final rule goes into effect on November 2, 2020. This rule prohibits health providers, technology vendors, health information exchanges, and health information networks from practices that inhibit the exchange, use, or access to electronic health information (EHI). There are some exceptions that the federal government has put into place.

Although payers may not fit neatly into any of these categories, they do hold information that interoperability is trying to put into members’ hands. We will continue to monitor updates and the potential impact this rule could have on payers.

Additional news

In other news, discussions are ongoing between the National Committee on Vital and Health Statistics’ (NCVHS) and the Department of Health and Human Services on adopting a newer version of the X12N HIPAA EDI Transactions. At some point in the next few years, we can anticipate moving all of our EDI transactions to a newer version of the X12 rolls.

The final item is the CMS Annual Enrollment Period. On November 2 and November 3, CMS will conduct its CMS-generated rollover processing, a big deal for health plans. Some health plans may hit some bumps in the road and need our immediate attention and we are ready to support our customers.