Health Insurance Exchange & Network Management Solutions
Mike Flanagan AVP, Product Management June 19, 2013
Today’s Presenter
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Mike Flanagan
Associate Vice President of Product Management
McKesson Health Solutions
Health Insurance Exchange Projections
Required Health Plan Capabilities
Network Flexibility is Key
Other Challenges Solved with Network Flexibility
Q & A
Agenda
Insurance Enrollment Projections By 2016, many HIX products will require narrow networks
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Note: Lives add up to more than US population due to Dual Eligible lives and consumers who hold dual coverage.
Source: CMS office of Actuary
Uninsured drops 50% due to ACA
FFS Gov Market up 13%
• Most of growth due to FFS Medicare with
more boomers drawing Medicare benefits
Commercial Market up 17%
• Employer market remains relatively flat
• Managed Medicare down 10% due to parity
of payment laws
• Managed Medicaid up 65% due to Medicaid
expansion
• HIX market @ 22M lives in 2017 – includes
current Individual, Uninsured and Small
Group
Projected Insurance Enrollment 2012 2017
Government
Commercial
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The Models – States Choose Approach
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U.S. Department of Health & Human Services
States using varied approaches for HIX
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TOP 3-5 Health Plans in a State are expected to participate in HIX
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Minimum Plan Requirements1
• Ambulatory patient services, such as doctor’s visits
and outpatient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder
services, including behavioral health treatment
• Prescription drugs
• Rehabilitation and habilitative services and
devices
• Laboratory services
• Preventive and wellness services and chronic
disease management
• Pediatric services, including oral and vision care
HIX Minimum Plan Requirements & Plan Cost Sharing
• 60 % of costs covered by the health plan
BRONZE
• 70 % covered by the health plan
SILVER
• 80 % covered by the health plan
GOLD
• 90 % covered by the health plan
PLATINUM
Cost Sharing Models
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1U.S. Department of Health & Human Services
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Market Complexities
No clear standard
Compressed Timelines
Impacts of Newly Insured
Employers’ Strategies?
Payer Challenges
Price Contraction
Network Adequacy
Managing beneficiaries and churn
Manage changes to operations, technology and capital
Health Insurance Exchange Challenges
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Health Insurance Exchange Challenges
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Qualified Health Plans must meet network adequacy network standards… • include essential community providers to ensure reasonable and timely access to
a broad range of such providers for low-income, medically underserved individuals
• maintain network sufficient in number and type of providers, including mental
health and substance abuse services, to assure that all services will be accessible
without unreasonable delay
• make network provider directory available to the Exchange for publication online
which must identify providers that are not accepting new patients
…for initial certification and ongoing maintenance
Network Adequacy Regulatory Standards
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Health Insurance Exchange (HIX) Challenges
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Network Management Opportunity
Closely manage
medical &
administrative costs
to maintain
profitability
Low Price
Nimbly create
narrow but
accessible network
to fit enrolled
populations & incent
to tightly manage
costs (VBR)
Targeted Networks, Flexible
Contracting
Direct to Consumer Model
Compete on Price and Network Quality and Access
• Studies in MA
demonstrate that
while HIX
successfully
increased access,
costs are still
increasing.
• One of the few
levers left to control
costs is steerage
Cost Impact
• Repurposing closed
HMO network as
narrow network for
cost savings
• Need to define
complex
combination of
relationships
between providers
and products and
reimbursement
Network Design
• Uncertain if existing
networks will be
sufficient to handle
the new population
• Looking for ways to
more quickly stand
up a new network,
enroll new providers
- where needed
Network
Operations and
Contracting
HIX Impacts on Network Management Our customers have shared with us…
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Need to Efficiently Design & Manage Networks
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Manage quality, access, cost/price, contracts
Design Networks
• Rapidly design and deploy attractive and efficient networks for HIX
• Model complex contract terms & value based arrangements
Bottom Line: Network Flexibility is Essential
Manage Networks
• Single source of truth for provider data
• Align incentives for HIX
Service Networks
• Consistently execute policies, processes & business rules for HIX
• Support provider adoption of HIX design
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Clearly, today’s approach is no longer sustainable…
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Manual Load
Manual Load
• New
applications
• PSV
• Add, change,
term
Provider Data
Management Credentialing
Network
Development
Manual Load
Database 1 Database 3
Manual Configuration & Maintenance
Database 2
Increased administrative costs due to inefficient provider and network management processes
Reduced speed to market for new network initiatives
Inability to operationalize complex networks and associated contracts
Mispayments and lower auto adjudication rates due to poor provider data
Network management automation & integration
Provider Data
Management
Credentialing Network
Development
Automated Network Design
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Automated Network Eligibility & Maintenance
Identify HIX providers based upon specific criteria
On going maintenance of HIX network affiliations
Single source of network information for the enterprise and HIX directories
Payment Reform
• Bundled / episodic payments
• Global payment
• Pay for Performance
Employer & Member Demands
• Narrow networks
• Tiered networks
• Customized networks
Care Delivery
• Accountable Care Organizations (ACOs)
• Patient Centered Medical Home (PCMH)
New Populations
• Health Insurance Exchanges (HIX)
• Managed Medicaid / Medicare
Network flexibility can solve other challenges as well…
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McKesson Provider Manager Brings the Required Capabilities
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• Automate network design and
maintenance for enhanced flexibility
• Establish single source of truth
to management and provider and
network related information including
all associations, affiliations,
demographics and reimbursement
data
• Enhance health plan competitive
differentiation in a crowded market
• Streamline network to benefit design
alignment
Required Capabilities
• Reduce medical costs via narrow
networks
• Reduce administrative costs through
the reduction of paper processes and
manual interventions
• Increase speed to market of HIX
offerings
• Reduce claims re-work and manual
interventions leading to improved
payment accuracy and provider
satisfaction
Business Value
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Supports:
• Rapid roll out of new health care
innovations
• Network design and delivery
automation
• Alignment of benefit designs with
networks
• Streamlined provider data
administration
Supports:
• Contract management lifecycle
automation
• Rapid roll out of new contracting
initiatives
• Payer-provider collaboration and
provider adoption of new health care
initiatives
Supports:
• Speed time to market with
reimbursement innovations
• Increase payment accuracy and
auto-adjudication rates
• Administrative cost reductions
• Reimbursement lifecycle automation
McKesson Network Management Solution Suite
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Helps health plans cost effectively
drive strategic care delivery &
reimbursement initiatives.
Helps health plans centralize and
standardize contracts while driving
administrative cost reductions.
Helps health plans increase auto-
adjudication rates for new
reimbursement models and fee for
service.
Provider Manager Contract Manager Reimbursement Manager
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Questions?