How to Spend: MLR and COVID-19

I am reminded of the effect the public health emergency (PHE) has had on 2020 plan spending on a weekly basis. I field numerous questions on what creative spending would fall in line with the permissible flexibilities previously issued by the Centers for Medicare & Medicaid Services (CMS). In my opinion, the most creative Medicare Advantage (MA) and Part D stakeholders are in sales and marketing, so perhaps those folks need to have a seat at the table!

In a July post, I mentioned benefit enhancements as the topic became more prevalent in my discussions. I am hard-pressed to identify any plan sponsor who could have forecasted the PHE or the benefit utilization stats that are present today.

This leads us to the importance of medical loss ratio (MLR) and the CMS requirements surrounding it. Section 1857(e)(4) of the Social Security Act (“the Act”) requires MA organizations to maintain a MLR of at least 85%. CMS knows this is a concern of the entire industry, and released some Q&As in July regarding spending related to COVID-19.

More recently, CMS issued an enforcement action related to a MA organization’s failure to maintain a MLR of 85% for three years. This does not happen often, but paired with the PHE, it is a stark reminder that many MA organizations may find themselves under the 85% threshold for the first time this year. My tip: field those creative spending solutions, align them with CMS’ permissive actions guidance, and notify your account manager.

Compliance is the Conscience

I’ve been struggling to consider what might be helpful, applicable information to apply during this health crisis. The questions abound: Should we still do credentialing? Do I need to send written appeal responses? When will program audits start up again? How long do waivers last?

After weeks of reading updates, guidance, the new law signed on Friday, and emails from just about every retail store I’ve patronized, I’ve returned to the foundation to offer advice for my buried audience. It is the first principle as outlined in the Code of Ethics for Health Care Compliance Professionals published by the Health Care Compliance Association

Principle I, Obligations to the Public: “Health care compliance professionals should embrace the spirit and the letter of the law governing their employing organization’s conduct and exemplify the highest ethical standards in their conduct in order to contribute to the public good.”

It is incredibly difficult for even the most astute to read through the CMS Current Emergencies guidance. Who is keeping track of the changes and business decisions your organization and vendors are considering? As CMS said on a recent industry call for PACE and states, they understand the desire for everyone to get more guidance for every specific scenario, but this is a rapidly evolving circumstance. The bottom line: you need to evaluate how to meet your obligations with consideration to health and safety needs. 

The compliance officer is the conscience of the organization. And right now, public health is paramount like I’ve never seen, and like our parents have never seen. Therefore, when reviewing memos, waivers, and fact sheets, please let your obligations to the public, now more than ever, drive your decision-making. The public includes not only your members, but also your employees, contractors, and your surrounding community. Document any modifications and rationale with start and end dates. This is not the time to stop the presses: CMS reminded us on March 10 that business continuity plan requirements are codified. This is the time to get creative.