Medicare+Choice:What does the future hold?

HCCA’s 2000 Compliance Institute

Wendy L. KrasnerSeptember 26, 2000

McDermott Will & EmeryWashington, DC

wkrasner@mwe.com

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Medicare+Choice

• Overview– Key regulatory developments– Key compliance issues– What next?

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Regulatory Developments

• Final M+C rules (Fed. Reg. 6/29/00)

• Revised marketing guidelines

• Revised contract for 2001

• Revised OPL #77 regarding provider contracts (updated 7/14/00)

• New QISMC (Quality Improvement System for Managed Care) expected shortly

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M+C Final Rules:Important Dates

• Publication date: June 29

• Effective date: July 29

• Comment due date: August 28

Comments authorized on:– BBRA of 1999 provisions

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Rules to Implement BBRA 1999

• Phase-in of risk adjustment methodology

• Incentives to offer M+C plans in areas without plans

• Reduction of 5-year ban upon non-renewal to 2-years

• New exception if during six months after non-renewal notice, legislative or regulatory change results in increased reimbursement

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Significant Issues for Plans

• Burdens reduced:– Mandatory reporting deleted

– Certification language improved

– NODMAR (Notice of discharge and Medicare appeal rights)

– Encounter data added to definition of clean claim (applies to non-participating as well)

– Value Added Items and Services allowed

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Significant Issues for Plans

• Burdens increased:– Post-stabilization and emergency coverage

– Scope of appeal rights

– No relief on pre-emption

– Applicability to 2001?

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Significant Issues for Providers

• Revised provider contract requirements

• Ability of M+COs to use providers out of area

• In-network providers can participate in POS

• Provider marketing restrictions eased

• Heads up that NODMAR obligation to be placed on providers

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M+C Compliance Update

• Compliance plans mandatory under M+C• OIG active in area• OIG Voluntary Compliance Guidance

(11/15/99)• Recent Humana settlement on

institutionalized beneficiaries• Fundamental tension is OIG views M+C as if

it were cost-based

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M+C Compliance Update

• Recent OIG Corporate Integrity Agreements on M+C– Distribution of policies– Review procedures

• Performance engagement

• Compliance engagement

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M+C Compliance Update

• Performance engagement– Enrollment data– Encounter data– ACR data– Claims processing– Selective marketing – Disenrollment

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M+C Compliance Update

• Factors influencing findings of knowledge– Is compliance plan in place and adhered to?– Actual or constructive notice to M+CO– Clarity of rule– Magnitude of false claim– Past remedial efforts of M+CO– Did M+CO contact agency about rule at issue?

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M+C Compliance Update

• Recent M+C issues– OIG report on high administrative overhead– OIG report regarding findings on non-

compliance with National Marketing Guide – Payment for deceased beneficiaries– Medicare appeals overturn rates– Hospice care payment reconciliations– ACR audit issue

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M+C Compliance Update

• Ongoing M+C issues– Encounter data

• Part B certifications

– Dual eligibles– PIP rules– Privacy– PBM arrangements

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Future of M+C

• Significant non-renewals at end of 2000• For-profits facing investor doubts about

reliability of government as business partner• Concerns with overwhelming regulatory

burdens• Compliance considerations • Provider non-cooperation

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Future of M+C• Remaining relief basically financial

– More funding

– Repeal or modify risk adjustors

• Congress needs to act

• Prospects of Medicare pharmacy benefit complicate picture

• Alternatives may be revisited

– Medicare Select

– Cost contracts

• Skeptical of major renaissance in near term