Navigating Medicare+Choice: The Future Outlook

1. Medicare+Choice:What does the future hold?HCCA’s 2000 Compliance Institute Wendy L. KrasnerSeptember 26, 2000McDermott Will & EmeryWashington, DC wkrasner@mwe.com

2. Medicare+Choice • Overview • Key regulatory developments • Key compliance issues • What next?

3. 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

4. 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

5. 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

6. 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

7. Significant Issues for Plans • Burdens increased: • Post-stabilization and emergency coverage • Scope of appeal rights • No relief on pre-emption • Applicability to 2001?

8. 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

9. 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

10. M+C Compliance Update • Recent OIG Corporate Integrity Agreements on M+C • Distribution of policies • Review procedures • Performance engagement • Compliance engagement

11. M+C Compliance Update • Performance engagement • Enrollment data • Encounter data • ACR data • Claims processing • Selective marketing • Disenrollment

12. 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?

13. 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

14. M+C Compliance Update • Ongoing M+C issues • Encounter data • Part B certifications • Dual eligibles • PIP rules • Privacy • PBM arrangements

15. 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

16. 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