Small Health Plans: Establish Customer-Focused Compliant Processes to become the Leader
By Nidhi Saxena, Project Manager, VUE Software
For the last half decade or longer, the smaller senior care providers have been plagued with limited revenue, CMS monitoring rules, MARx automation, and a patchwork of manual and weak automation solutions as the political fate of Medicare Advantage hung in the balance.
Predictions of increased participation, a gradually increasing number of enrollees, innovative product lines, new regulations, and the needs of the sales force in an “automation – less” world, poses serious regulatory and customer service repercussions.
The five leading MA providers—with huge market shares—as well as the smaller plans, are facing challenges. For example, Humana, with 3+ million enrollees in their MA offerings struggled with compliance and enrollment-management issues. The Louisville, KY-based insurance giant reported an expected 21.2% decline in net income in the third quarter of 2014, as investments in healthcare reform-related programs overshadowed the positive effect of additional members.
Who Has the Advantage?
1. Thin profit margins: Obamacare imposes fees and restrictions on insurers, including a new 85% medical-loss ratio imposed on private Medicare plans starting in 2014. Though most insurers will be able to comply with this ratio, it simply means lower profits! The points outlined below contribute to the woes of sponsors:
Health Reform Law of 2014: Setting Medicare Advantage rates wasn’t always the subject of intense scrutiny outside the insurance industry. The Affordable Care Act changed that. The health-reform law reduces $156 billion from the program over the next ten years, according to the Congressional Budget Office.
The American Tax Relief Act of 2012: Eliminated an additional $2.5 billion from Medicare Advantage.
Budget Control Act of 2011: Reduced funding to Medicare Advantage by an additional 2%.
2. Threat of CMS noncompliance: Companies must adhere to stringent year-after-year CMS requirement changes. Compliance not only impacts the way companies market, promote, or structure customer service; it has even greater impact on managing the data. CMS mandates intake of enrollments and updates based on its own coding of transactions, appropriate tagging of statuses and eligibility criteria, and the correct use of data in adhering to marketing and compensation guidelines.
3. Demotivated Salesforce: Endless stories describe disillusioned agents who are at the receiving end of commission reductions due to regulations and the trimmed profits of employers. This disillusionment has led to lower remuneration for the sales force, shifting from field agents to call centers, and other attempts to restructure marketing. Agents complain of incurring more out-of pocket expenses to ensure they have the appropriate paperwork completed for licensing, appointments, and education.
A 2013 Deloitte Health Plan Retail Online Capability Survey of 6 health plans concluded Technology investments aren’t an option, they’re an imperative. The four major areas to automate are agent compliance, enrollment, governing innovative channels, and revenue. The business case can be made for automation. The benefits are quantifiable and the cost of automation has decreased significantly.