From Tom's Desk

Tactical Use of Stop-Loss Insurance

Patients whose care costs have hit their stop-loss limits should receive as little care as possible---they’ve already cost you enough.
That’s how untrained, un-mentored clinicians approach a risk-sharing contract.
In reality, patients who have hit their stop-loss limits should be managed to ensure every anticipated expense is incurred during the coverage period---usually the calendar year. That way, the stop-loss insurer is footing the bill.
That’s the successful, high-value approach.
Do your clinicians have the professional self-confidence to take it?
Warning: if you take this approach too aggressively, it will result in your stop-loss premia increasing over time.  The trade-off is usually a net positive, but the increase in rates can surprise.  Use it selectively though and it’s an incredible tool to control costs.


You Should Know...

New Part D Regs

Medicare part D drug benefit rules were rolled out by CMS this past week---some final, some proposed.
The writing quality in CMS’s own summary is surprisingly poor. Here is what you need to know (with my italicized comments presented after).

  • Most of the new rules are optional in that they allow, and not mandate, Medicare Advantage plans to incorporate the changes---allowing beneficiaries to choose between plans which include the new regulations and those which do not. 
(Relying on an “informed” consumer to make good decisions in something as complex as Medicare Advantage is an iffy proposition at best---We all know how susceptible our patients are to the fly-by-night Medicare Advantage plans being pitched on late-night infomercials and at big-box store kiosks. Developing relationships with high-performing local insurance agencies and encouraging your patients to use them to inform themselves is your best approach as long as this current “consumer choice” environment lasts).

  • CMS lightened the requirements of drugs in “protected classes.”  Formerly, all Medicare Advantage part D formularies were mandated to include drugs in the “protected classes.". Limited in number and without generic alternatives, pharmaceutical manufacturers were able to command high prices for meds in "protected classes."  Under these new rules, If the rate of increase in the cost of such drugs exceeds inflation, the inclusion of meds in  "protected classes" on a plan’s formulary is no longer mandated. CMS will also allow insurers to appeal a med's inclusion in the "protected class" category if the plan can show that the med in question does not have clear benefits to alternatives meds that are available. 
(These new rules may slow the rate of cost-increase of such meds, but they won’t bring the cost down---and this rule may limit the availability of truly revolutionary drugs. You can be sure new “protected class” drugs will start out at a very high price. If a patient is on one of these meds, make sure their coverage is supervised by a high-quality insurance agent so that their part D plan is tailored to their needs---and make especially sure your specialists are made aware of this new rule. They are the ones who usually prescribe "Protected class" meds. That puts them in the best position to come up with equivalents that will save the patient---and your prescription pool---money.

  • The long-threatened step-edits and prior-authorization requirements will become a reality. The incorporation of these restrictions are allowed, not required.  All plans will, however,  be mandated to include two different meds in each therapeutic class. CMS will also require an “expedited appeals process” for refusals. 
(This will result in greater labor intensity for your clinicians and their staff with no real benefit or cost savings to you---or to the patient for that matter.  Prepare for it).  
Additional note:  if these prior-auths and step-edit requirements actually save money and bring down costs, it will be the first time in history that they have done so. You can keep trying to drive a nail with a banana, but no matter how long you do it it’s still not going to work---it’s the wrong tool for the job.

  • CMS is mandating greater transparency at the beneficiary level of actual drug costs. From a “real-time” formulary with cost information to a “dashboard” where clinicians and patients can collaborate on the cost of their meds, these changes are again meant to inform consumers. 
(Again, get your patient to an insurance agent you and they can both trust---they’re the only ones with time and skill to use the tools. Your clinicians won’t have the time, neither will your staff---and your patients won’t have the expertise).

  • CMS is considering mandating in 2020 that beneficiaries be allowed to purchase every medication at the lowest possible cost, no matter where they purchase it from---be it a chain or a local pharmacy. 
(This is the single best intervention of the bunch, though it still is a proposal. Drug prices are the result of a labyrinthine path of kickback and discounts between the PBMs, manufacturers and retail chains. Local pharmacies are dying out because they can’t compete---and that’s a damn shame for any number of quality, access and service reasons. There’s no good argument against this intervention other than rent-seeking and you should absolutely contact whatever lobbyists you employ to support it.  After all, since the higher costs are coming out of the prescription drug portion of your risk share, a big part of the increased price is coming directly out of your pocket!).


Tips From Tom

Buy every one of your clinicians a copy of “The Science of Influence” by Robert Cialdini. Pay them $100 to pass a brief post-test on the content. Or better yet, $1000 to let them know how important the material is. 
Clinicians know absolutely nothing about how to influence their patients, yet an increasing amount of their compensation (and your revenue) is based on their ability to do so.
Shouldn’t you be encouraging them to do it well?
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