"This is a re-imagined PA process, one where expedited approval becomes the standard," says one Humana executive.
Editor's note: This article is part of HealthLeaders' Mind the Gap series, a three-part exploration of how healthcare is bringing information, patients, care, and payment closer together. Read the other articles on real-time benefits checks and hospital-at-home care.
Humana is expanding its real-time prior authorization (PA) platform to its providers in all 50 states. The planned rollout comes less than one year after the company launched a 12-state pilot, which generated enough ROI for Humana to begin a nationwide implementation. One plan executive reports that the platform's instant service approvals are generating immediate, short- and long-term improvements.
The early results
The platform—which was designed and implemented in partnership with Cohere Health—is focused on PAs for musculoskeletal (MSK) services. "In just nine months, the results … have exceeded our expectations," said William Shrank, MD, MSHS, chief medical officer at Humana. Those results include:
Platform processes 95% of MSK PAs
Median PA approval time of 0 minutes
89% of service requests can be scheduled immediately
The platform expansion will apply to all Humana Medicare and commercial members and bring real-time MSK PA to more than 65,000 contracted providers. The company hopes to build on what it sees as both the obvious and broader value of PA automation: better treatment decisions, faster service, and significant savings, with the added benefits of increasing patient safety and reducing utilization waste.
The secret sauce
Humana's PA platform is an example of a technology approach that solves multiple problems through multiple components. The approval process is linked to best-practice treatment suggestions at the point of authorization—"clinical nudges" that help doctors make smarter and more cost-effective choices.
The result, according to Cohere and affirmed by Humana, is a platform that "automates both provider and payer steps in the process, while also coupling AI and machine learning with evidence-based clinical policy to support better care decisions."
Embedded within Cohere's platform are MSK clinical pathways defined by the American Academy of Orthopaedic Surgeons (AAOS), are publicly available, and that signal pop-up recommendations at point-of-service authorization. Physicians who request 24 physical therapy visits, for example, but accept the platform AAOS recommendation of just 12 to start will receive an automatic PA.
This replaces the historical process where the request would likely be denied, activating a lengthier, manual review. Cohere reports, for example, that this "successfully influences providers to switch from an inpatient to an outpatient setting, when warranted by the evidence, in 65% of cases."
"This is a re-imagined PA process," says Lisa Stephens, MBA, PMP and SVP of operations at Humana. "One where expedited approval becomes the standard, especially if clinically proven care pathways are chosen."
Improving payer-provider relationships
In the state of the union between payers and providers, PA and other utilization management (UM) controls are a growing sore spot. In a May 2021 Medical Group Management Association (MGMA) Stat poll, 81% of MGMA members indicated that payer PA requirements had increased since 2020, with some adding full-time staff to focus on PA management.
"PA is a significant pain point. It's a high administrative burden on both ends for payers and physicians," acknowledges Stephens.
The American Medical Association (AMA), in collaboration with patients, providers, and medical associations, has defined more than 20 principles for PA and UM reform tied to clinical validity, continuity of care, transparency and fairness, access and administrative efficiency, and alternatives and exemptions.
Humana's PA platform touches on several of these principles, including AMA Principle #1: "Any utilization management program applied to a service, device or drug should be
based on accurate and up-to-date clinical criteria and never cost alone. The referenced clinical information should be readily available to the prescribing/ordering provider and the public."
Humana physician response has been positive.
"We are hearing from physicians and their staffs that this is a better experience," adds Stephens. "Providers can give real-time feedback via the PA interface." The result? Cohere reports that 72% of providers are "very satisfied" with the platform.
Just the beginning
Humana is exploring how to refine its current operational model as it partners with Cohere to add other conditions to the platform, including those that present a similar profile to MSK.
"MSK traditionally has a very disparate service approach. Diagnostic and treatment options could include x-ray, MRI, physical therapy, surgery, pain medication. MSK is a great example of a complex care situation." Such situations are ripe for the physician partnership, automated platform, and clinical pathways that approach what Humana is expanding.
Humana's Stephens also calls the PA platform "just one proof point of what we're doing to simplify, improve and automate … we are trying to be a leader in the industry." In addition to the MSK PA expansion, other company approaches and objectives include:
Integrating PA into the physician EHR
Improving clinician peer-to-peer review
Partnering with national organizations
Stephens notes that these efforts exceed traditional targets.
Humana's PA platform is an example of how healthcare's stakeholders are better minding the gaps of time, access, care delivery, and reimbursement. The ideal outcome is that the highest-touch, most important aspects of care delivery occur where they belong: between provider and patient.
"With more insurers in almost every state exchange, there is less risk of getting hit with adverse selection like they did the first time. The volatility of the mid-2010s has gone away," says one industry analyst.
Before December 15, the first cut-off date for open enrollment, the Centers for Medicare & Medicaid Services (CMS) reported that close to 4.6 million people had signed up for marketplace coverage through either HealthCare.gov or a State exchange. This includes nearly 1 million new enrollees. These numbers are from CMS' National Marketplace Open Enrollment report. The agency has been providing weekly snapshots throughout open enrollment, with subsidies from the American Rescue Plan and increased plan participation continuing to boost numbers.
As open enrollment draws to a close, Bill Melville—principal analyst of Market Access Insights with Clarivate—identifies five key reasons for 2022 success compared to the early days of the exchanges:
1. The big players continue to come back
"Markets are essentially stable," says Melville "which is why the for-profit nationals have returned to the business." This includes UnitedHealth Group and Aetna, which can offer low-cost care options through its growing integration with CVS Health.
2. More options are available
In addition to 32 new insurers, Melville notes, "Centene has stepped into many places and boosted exchanges. Anthem widened its scope, and regional plans like Medica and CareSource stretched into new markets." Some states are seeing more options than ever before. "In 2022, Georgia has four new carriers, bringing the state to 11; this is more than any time since the exchanges began. That is a big turnaround."
3. New insurers are expanding
Startup health plans continue to earn their stripes and expand their business lines. "New for-profit companies like Oscar and Bright Health are continuing to expand, but their narrow, high-performing network models were built for exchange customers," notes Melville.
4. It's not the 2010s
"The risk is much lower for participation now, as payers have learned how to price for exchanges," adds Melville. "With more insurers in almost every state exchange, there is less risk of getting hit with adverse selection like they did the first time. The volatility of the mid-2010s has gone away. A few years ago, we were talking about the risk of 'bare counties'–counties with zero exchange options." Today, that's simply not the case.
5. Putting the affordable into the Affordable Care Act
CMS reports that $10 monthly premiums are available to 80% of enrollees. Says Melville, "For 2022 and 2023, consumers will pay no more than 8.5% of their income on premiums. It was previously 10% and was lowered through the coronavirus relief package passed in early 2021. But it addresses a longstanding issue—premiums were not affordable for people who earned too much for subsidies."
This is all great news as open enrollment extends through January 15 for coverage that starts February 1. CMS notes that HealthCare.gov will continue to offer help from more than 1,500 trained Navigators, thanks to a $10.2 million funding boost for the 2022 season.
"This is a whole new ballgame," notes one academic consultant—an observation about marketplace exchanges that also applies to every aspect of healthcare next year.
Pandemic year three is at hand and will continue to affect everything from cost-sharing and telehealth to data disruption and tech innovation. Expect multiple disruptions aimed at improving patient experience and outcomes, including, social determinants of health (SDOH); exchange and Medicare Advantage (MA) plan growth; and advanced digitization. Payers will continue to grapple with the forces of consolidation and value-based care (VBC) as COVID concern runs tandem with delivery system progress.
Finally, the full story of patient health
The pandemic laid bare healthcare's disparities. Healthcare, especially payers, have the data to do something about it. To a degree that they always have, but alternative data integrated from multiple sources and activated by artificial intelligence will be even bigger game changers.
Big payers will continue to cozy-up the exchanges
Federal subsidies, a special enrollment period, and change of administration have breathed new life into the ACA marketplace. As of August 2021, the Kaiser Family Foundation (KFF) reported that a record 12.2 million people were enrolled in exchange plans. And while KFF was cautious as to current Open Enrollment projections, others are more optimistic. "This is a whole new ballgame," says consultant and adjunct professor Katie Keith of Georgetown University Law School.
In addition to 32 new insurers, larger payers have reestablished themselves. Bill Melville, principal analyst of Market Access Insights with Clarivate notes: “Exchanges have drawn back major insurers who left them, notably Aetna in eight new markets and UnitedHealth Group in seven. The risk is much lower for participation now, as payers have learned how to price for exchanges."
Expect more Medicare Advantage disruptions
MA plans will continue to see enrollment growth through expansion and collaboration. Cigna has expanded its small-group partnership with insurance startup Oscar while more established players like Blue Cross Blue Shield (BCBS) either expanded or entered new markets (CareFirst's group entry).
Two additional MA disruptions loom with Humana at the crux of both: Star Rating changes with quadruple-weighted customer experience measures as of plan year 2023 and a larger shift to VBC rooted in home health. "Humana has invested heavily in home-based health services for its Medicare Advantage members," says Paula Wade, also a Market Access Insights principal analyst with Clarivate. Her colleague Melville adds: “The company plans to have 50% of its MA lives in value-based home-health models within five years," noting that "Humana’s strength in MA could lead the entire segment into a value-based shift.”
VBC will expand within its limits
That an MA payer's shift into VBC could lead others to follow says a lot about how original Medicare's VBC demonstrations are faring. Quality has improved and costs decreased—or not—depending on the source. All eyes will be CMS' strategy refresh and Global and Professional Direct Contracting (GPDC) Model, which welcomes new entrants January 1, 2022, and "opens capitation for both new and experienced groups" per industry consultant Jennifer Bresnick.
This is against a payer VBC backdrop that will continue to be marked by expansion and constraint in 2022: the former as VBC is applied to novel drug treatments and digital therapeutic services, and the latter as the industry seeks more degrees of separation from its fee-for-service chassis. But this will be just the beginning. Speaking at a Health Plan of the Future webinar, Jake Sattelmair, co-founder and CEO of Wellframe, notes: "Provider payment is no longer the primary vector for influencing risk," with co-presenter Marcia Macphearson, Partner, Oliver Wyman, adding: "Alignment of reimbursement structures is only a first step … If payers stop there, they will not get the results."
Digitization growth through a consumer focus
Macphearson and Sattelmair highlight that the next step for VBC is identical to that for healthcare's digital transformation: putting consumers first. The two are intertwined, as reflected in AI Multiple's definition of digital transformation as "the use of the latest technologies to enhance existing processes and offer new and improved services and products to customers. It aims to create value by changing how businesses operate and how they deliver value." In 2022, and over the next decade, payer digitization efforts will accelerate beyond core business with the help of startup supporters and payers' own innovation ventures.
Payers will continue to get a little closer
How will payers achieve this? Consolidation and integration, the disruptive forces that show no signs of stopping. Clarivate's Wade notes: "So many hospital systems have morphed into huge regional Integrated Delivery Networks (IDN), and that has inhibited carriers' ability to dictate contract terms and pricing. It also allows the more advanced IDNs to contract directly for care with local employer groups. Often, the payers' best solution is to design a co-branded regional plan." Reflecting IDN power, payer advocacy group America's Health Insurance Plans even rebranded itself in 2021. The new "just AHIP" reflects a "P" that increasingly stands for "payvider."
As these arrangements grow, Wade adds that "big insurers will continue to develop and integrate their own healthcare delivery assets: from the large-scale buyups by UnitedHealth … to Humana's network of owned clinics and home health operations." Melville adds another example, the increased CVS Health-Aetna integration that is tying more CVS MinuteClinic and HealthHUBs to Aetna plan designs.
Wait and see on BBB
Finally, there is the grab bag known as the Build Back Better bill (BBB): its items have been picked through and who knows what the leftover goodies are worth? The BBB is already a shell of its former self but does—if it passes—retain in-home care funding and coverage subsidies for the Medicaid program, drug-price negotiation levers, and hearing benefits for original Medicare but not the lower age-in threshold that would have expanded care. Still, any major healthcare reform proposal is a step forward. It remains to be seen whether that step will happen in 2022.
The plan describes its approach as a glimpse into what the future of U.S. healthcare could look like.
Can a health plan be calibrated to achieve value-based results? Healthfirst and its latest patient outcomes across eight clinical areas suggest yes—and by making the community-based, health-equity infrastructure that has historically been missing from value-based care (VBC) models central to its response. The health plan's most recent gains in maternal health, senior care, and other areas are documented in new case studies. They are rooted in Healthfirst's ADVANCE health equity model which—combined with complex resource management, provider integration, and clinical leadership—has helped Healthfirst activate public health and equity as a care strategy, not a crisis response.
1. Results spanning conditions and populations
Healthfirst's new case studies feature better outcomes in five areas:
Asthma – Fewer ER admissions for those with asthma, with AIRnyc
Hypertension – A 30% improvement in six-month blood pressure control among South Asian Americans, with Project IMPACT, Community Heath Worker, and Million Hearts
Senior care – Reduced hospital readmissions and higher likelihood of two or more PCP visits, with JASA care transitions program
Maternal health – Higher rates of postpartum visit and outpatient gynecological care (11% and 7% respectively), with Mount Sinai
HIV – Better overall health for those living with HIV/AIDS, with WholeYou
Healthfirst—a nonprofit integrated delivery network co-founded in 1993 with 15 hospitals—is delivering these results across its 1.7 million members in the New York City, Long Island, and surrounding areas enrolled in the company's Medicaid, Medicare Advantage, and individual and small group plans.
"These areas are compelling because public health and Healthfirst administrative and claims data showed clear issues," says Tom Wang, manager of research and evaluation, partnerships for medical outcomes with Healthfirst.
To this he adds one important callout: "Programs involving health equity are not targeted for quick wins." Wang noted the roughly three-year period to ensure careful program study, contracting, implementation, and evaluation.
In the results above, notice the word "with." The power of "with" is central to Healthfirst's approach: find care models that are working, the community organizations that created them, then use plan and provider data to personalize them across both plan populations and individual neighborhoods.
In this way, Healthfirst's approach spans hyperlocal, state-level, and national models and partners.
"For senior care, we were advised to talk to JASA (Jewish Association Serving the Aging)," says Rashi Kumar, Healthfirst director of research and policy, partnerships for medical outcomes. "They already had a care transitions program and we implemented it using Healthfirst members and data. Another example is WholeYou, a Public Health Solutions program that Kumar reports was already evidence based.
These and other examples illustrate an unsung aspect of VBC: smart, complex resource orchestration.
3. Public health and equity as care strategy, not crisis response.
Using proven, partnership-based models suggests another aspect of resource management: an all-hands-on-deck approach to meeting the mission differently.
"The industry focused for a long time on reducing costs amongst so-called 'high utilizers of care', which is a stigmatizing term," says Kumar. "The focus on high cost, and reducing high cost, was the prevailing concept for a long time, and I believe it is adversarial to the true concept of population health."
To combat this, Healthfirst has embedded its health equity model, ADVANCE, throughout its operations. ADVANCE, as defined on the Healthfirst website, is named for its components and based on the belief that healthcare should be: Available, Data-Informed, Value-Driven, Accessible, Nurturing, Community-Based, and Evidence-Based.
Healthfirst is using its results and the ADVANCE model to call other stakeholders to action.
"Disparities will not be eliminated unless everyone is at the table," says Errol Pierre, Healthfirst SVP, state programs. "It's a team sport. And we are a health plan that does not take an adversarial role."
4. Analytics and clinical leadership.
Leadership is part of that team sport. Says Kumar: "We have proximity to public health leaders and researchers and the ability to look at Healthfirst data in concert with these experts. This includes clinical leaders at Healthfirst's member hospital, like Mount Sinai, and its own VP and executive medical director for partnerships and medical outcomes."
Healthfirst's analytics and clinical leadership is rooted in an alternate view of measuring equity.
"There is a big focus right now on being able to measure disparities by stratifying metrics, for example, cancer screening rates by race and ethnicities," says Kumar. "Some researchers are beginning to question whether this is solution-oriented enough … and are interested in measuring patient trust and developing an equity index. This is the next frontier: developing new methods to understand and even quantify equity."
5. From safety nets to safety networks.
Value-based has many meanings, depending on who you talk to. It is a contracting model, a care model, and a finance and reimbursement model. When VBC achieves its highest aims, it drives integration in a way that brings non-traditional, community providers to the table. The Healthfirst team says it believes that its approach is truly different, that it is a mission-, equity- and value-based glimpse into what the future of U.S. healthcare could look like.
Editor's note: This story was updated on December 27, 2021.
Here are the six best reimbursement stories from 2021 HealthLeaders' coverage and beyond.
COVID-19 continued to impact healthcare reimbursement as the pandemic entered its second year. Yet, what's different is that longer-term strategies and new business opportunities are emerging beyond crisis response. The Centers for Medicare & Medicaid Services (CMS) aided these plans by extending telehealth reimbursement. Conversely, the results of its value-based care programs remain mixed with the agency announcing a revamped road map. Otherwise, the tie that continues to bind reimbursement is healthcare's increasingly complex value chain and how new services, therapies, and players will impact the delivery system. Here are the six best reimbursement stories from 2021 HealthLeaders' coverage and beyond.
CMS extends telehealth reimbursements for physician services, mental health
Virtual medicine isn't going anywhere. In fact, it's expanding thanks to 2021 final regulations from CMS. Recognizing that you can't unscramble the egg that COVID cracked—i.e., primary care and mental health virtual visits that kept access alive during quarantine—the agency continued physician reimbursement for Medicare telehealth service through 2023. The list of reimbursable telehealth services is here.
With payers now introducing virtual-first health plans and the pandemic still a factor, there has been a national awakening that network inadequacy in rural areas is not the only reason people can't access care. The final rule also makes virtual Medicare mental health services more broadly available in a field that is already suffering a provider shortage, in remote and urban areas alike.
COVID eliminates cost-sharing, payers bring it back
The pandemic impacted healthcare cost in addition to access. Costs like copays and deductibles were waived for care no one could have anticipated, including hospitalizations. But that was 2020. In June 2021, HealthLeaders reported that "[m]any major payers … [had] lifted their cost-sharing waivers for COVID-19 bills based on a preprint University of Medicine study that is now final in the Journal of the American Medical Association (JAMA).
A related Health System Tracker survey from August 2021 found that while Delta was still surging, hospitalization costs were no longer waived by 72% of plans, specifically the two-largest plans in every state and the District of Columbia. Among these payers, only 2% planned to extend waivers through March 2022. While Omicron appears to be a weaker variant, hospitalizations continue—along with the cost burden of care.
Amazon's impact on healthcare reimbursement
Jeff Bezos' attempt to bend the employer cost curve through the Haven co-venture may have failed, but Amazon Care is taking off as HealthLeaders reported in March 2021. Amazon Care aims to strengthen in-home care by linking on-site and virtual services. It includes independent pilots as well as a multi-partner Moving Home Health coalition that is "dedicated to advancing home-based care policies and reimbursement models." The company's home-delivery prescription business is growing as well, including with payers who have spoken on background with HealthLeaders regarding their Amazon contracts.
Value-based care (VBC) charts new waters
Depending on the lens you use, the pandemic either slowed or advanced value-based progress: the first via suspended or fewer VBC contracts (particularly for high-cost, condition-specific therapies), the latter via gains in telehealth usage and reimbursement that will likely remain permanent. Either way, COVID ensured that 2021 was a less-than-great year for data continuity, particularly the compared-to-baseline results needed to measure VBC, as the FFS chassis continued to dominate.
CMS' yes—wait maybe?—on VBC
Year two of COVID marked performance year one for CMS' Global and Professional Direct Contracting (GPDC) program. GPDC, a next-next generation of accountable care organizations (ACO), puts a greater emphasis on capitation and higher risk models and opens the door to new types of participants.
This is according to industry consultant Jennifer Bresnick, who suggests sign-up has been lackluster with program applications now closed. New insurers like Clover Health are on the participant list but it remains to be seen whether GPDC can achieve the notable quality and cost improvements— with June 2021 HealthLeaders coverage suggesting price increases linked to ACO consolidation.
Congressional calls for more, please, on VBC progress as ACO participants dropped was followed by a strategy refresh announcement from CMS' Center for Medicare & Medicaid Innovation (CMMI) that seeks to advance accountable care and other innovations, health equity, access, and system transformation. Look for more news in 2022 as part of the CMMI's new 2030 vision.
Reimbursement and funding pathways for new services
Virtual health is not the only service seeing pandemic growth. Digital therapeutics (DTx), including those that require prescription (PDT), emerged in a big way in 2021 as did strategies to reimburse them. Even as CMS repealed its final rule on Medicare Coverage of Innovative Technology, payers, PBMs, employers, and DTx manufacturers forged ahead. And while there is plenty still to figure out, 2021 saw two big steps: the first state Medicaid program to plan reimbursement for PDT and the continued growth of PBM pipelines to manage DTx claims.
Advancing how to finance and reimburse novel therapies was another 2021 development. Avalere reported that 56% of payers have executed outcomes-based contracts (OBC), a value-based approach applied to extremely high-cost drug treatments—often cell- or gene-based and sometimes one-time curative therapies. Participation grew for some therapies while shrinking in others as health plan assess OBC challenges, including unique timelines for funding, cost-savings, and outcomes.
"Who is going to pay is the $10,000 question. And it's not just health plans," says one Avalere executive.
Avalere Health's fifth annual survey of outcomes-based contracts (OBC) for novel therapies showed varied results in overall participation and across specific therapies. OBCs center on "high-cost novel treatments and other types of products" and "typically include an agreement between health plans and drug or device manufacturers that ties product reimbursement to specific clinical, quality, or utilization outcomes." John Neal, an Avalere managing director notes: "These products come with big price tags. Payers want to make sure the outcomes are what was indicated in clinical trials."
Year-over-year survey results were mixed and include:
56% of payers participate in OBCs.
There was an increase in payers with more than 10 OBCs in place (from 6% to 12%) but a notable decrease among those with 5–10 contracts (from 19% to 9%).
The number of payers with only one OBC or 2–5 was steady.
The September 2021 survey included 51 U.S. health plans and pharmacy benefit managers of diverse size and their approximately 59 million lives.
Interest across therapies
Payers are deploying OBCs across multiple treatment areas. Included in the Avalere results were high-uptake areas like respiratory, endocrine, oncology, and heart. These OBC types were followed by infectious and immune/inflammatory diseases, then orthopedics and mental health. Therapeutic-specific results were mixed as well:
The largest therapeutic area increases were: endocrine (49% to 68%), respiratory (45% to 54%), and cardiovascular (70% to 79%).
Three areas saw the largest declines in the number of OBCs: oncology (62% to 18%) and infectious disease (41% to 31%).
Rare/Orphan diseases represent the smallest number of OBCs, which also dropped sharply from 18% to 5%.
What the results suggest
Of the results overall, Neal says: "While there was continued and steady interest and growth from payers—especially in transformative areas with new therapies and big price tags—declines in the number of contracts was probably due to COVID. This was especially true in oncology and areas where treatment and data measurement was deferred," he notes.
Avalere head of client solutions, marketing, and operations Sarah Butler adds: “The significant increase in payers who have more than 10 OBCs in place is showing us that some payers are successfully executing these agreements. … At the same time, however, the decline in payers that have tried one OBC indicates fewer new entrants in this space.”
OBC payer challenges
Applying alternative payment and financing methods to novel therapies is particularly challenging. "Successful implementation and adjudication of an OBC or other type of value-based contract requires significant investment into infrastructure that can support outcomes tracking and coordination among entities involved."
The survey results highlight that payers are looking not only for cost control but outcomes, especially for novel therapies. Brigit Kyei-Baffour, an associate principal with Avalere, emphasizes: "It's not just how much the payer saves but also patient results like avoiding readmissions, preventing complications, and improved adherence—all of which have important cost offsets."
"Not just payers"
These risks and challenges are acute with OBC payment and financing. "These therapies are a huge upfront investment," says Avalere consultant Zach Zalewski. "Where the rubber meets the road is when a product hits the market and the question is, 'How am I going to front a $2 million price tag.' "
"Who is going to pay is the $10,000 question. And it's not just health plans," says Neal. "This is where value-based contracting comes into play, having some certainty that products will work will help forecast risk."
"Where payers need help," Kyei-Baffour adds, "is increased education around novel therapy added values and benefits. Thinking about a patient's trajectory is part of the value story when there are so many unknowns."
Innovative solutions
OBC design for these areas will need to be as innovative as the products they cover.
These new entrants include cell and gene treatments that range from curative, one-time therapies to those that could span multiple payers if members change plans.
"For patients who travel to other payers, risk pooling can capture longitudinal reinsurance," says Neal. "These kinds of arrangements could massively accelerate but there is a huge operational challenge."
Installments: Payment made over time with amounts and time frames calculated based on patient benefit.
Hybrid: Payment also made over time and with incentive payments linked to defined health outcomes.
Payers will need more pilots to build the systems to support these alternative payment approaches. These will take place if payers see that the long-term value of one-and-done treatments can offset higher initial costs.
A better endgame
Earlier collaboration between pharmaceutical companies and payers could be an answer. Some stakeholders are recognizing the benefit of discussions on data needs, effectiveness, and market potential as early as Phase II of clinical trials, according to Clinical Leader.
The endgame is the potential for a longer, healthier life.
"There is a lot of payer interest on the manufacturer side. We're talking about new, transformative therapies where there are no good alternatives and where you have an opportunity to modify a disease to transform people's lives."
Health plans need to get familiar with consumerism as they plan for the future.
Digitization must come to healthcare, which is easily 10 years behind its industry counterparts. The good news? Progress is here, but it must integrate consumerism to impact all aspects of business strategy. In making these decisions, health plans must decide whether to buy, partner, or compete their way ahead given the growing role of healthcare startups.
These topics were covered in The Health Plan of the Future, a December 8 online panel featuring consulting firm Oliver Wyman and two newly merged digital health companies HealthEdge Software and Wellframe. The panelists offered these insights from their work with payers. The panel was hosted by Highwire PR and moderated by Matthew Holt, founder of The Health Care Blog.
1. Digitize the core parts of your business now.
Marcia Macphearson, a partner at Oliver Wyman, reported that health plans have made "good strides investing in consumerism, including mobile and digital apps, around the core parts of their business such as benefit and plan detail look-up. Macphearson noted that "legacy modernization in these areas is the low-hanging fruit" and something many plans are achieving quickly over 12–18 months.
2. Shift your mindset.
Jake Sattelmair, co-founder and CEO of Wellframe, noted: "A lot of plans have had a legacy B2B mindset from working with employers." Citing this as a contributor to lagging progress in healthcare consumerism and digitization, Sattelmair advised plans to shift from B2B to B2C by focusing on areas like care coordination and navigation. "The expectations of consumers have moved on precipitously, and new healthcare industry entrants are pushing the envelope. Incumbents understand this and are positioning themselves for long-term success."
3. Use a customer experience to break down silos.
Coding consumer experience into digitization can also help payers better integrate their business functions—a strategy that can improve everything from Net Promotor Scores (NPS) to Medicare Advantage Star Ratings. Sattelmair: "Plans can learn from and partner with customers to break down silos across their clinical, administrative, benefits, and care management teams." Steve Krupa, CEO of HealthEdge Software, added payment integrity, claims accuracy, prior authorization, and high-risk member identification to this mix.
4. Strengthen personalization through data, advanced analytics, and robotic process automation.
Again noting the industry's slower progress, Macphearson stated: "We don't yet have personalization in healthcare like you see in other industries. Companies like Amazon know how to personalize transactions at a fraction of penny across a portfolio of companies." She identified advanced analytics to "help data feel more personalized" and robotic process administration and mobile solutions more generally as the necessary components of the modern and personal digital healthcare experience. "Mobile is the new front end and can help position a health plan as a consumer advocate."
Krupa added that health plans need digitization on the front and back ends for better customer experience. "This is the investment cycle plans will be doing over the next 10–20 years, digitizing more aspects of consumer experience to become a truly modern digital company."
5. Treat virtual health as both a service and business model.
The health plan of the future will need to take a micro and macro view of virtual health. Telemedicine as a service must maintain what Sattelmair called "continuous memory" with in-person care. This through line is critical for payers that evolve their virtual care services into virtual-first networks and products. Macphearson added that consumer uptake, including employers, and price differential will be key metrics for payers over the next few years.
6. Balance buy-partner-compete strategies.
Health plans can't achieve digital transformation on their own, and the exponential growth of venture capital and startups in healthcare is a powerful indicator. Krupa: "The flood of capital tells you it's become a mainstream idea that healthcare will go through digital change." These partners can help plans achieve transformation faster, better, and cheaper. But as Macphearson noted: "Investment is coming from big incumbent players in healthcare." This includes payers that have their own venture arms.
Regardless of approach, most health plans are working toward the common goal of using digitization to make care more personal and customer centric. Focal areas include delivery innovation, population health management, and risk. Macphearson summed it up: "Health plans see rich opportunities … to create new approaches, manage in different ways, and transform how they serve patients."
"It's really about connecting the dots. We said, 'Let's build a model that links the behavioral with the physical and SDOH, then put virtual and community interventions in place beyond traditional care management,' " says one Horizon Blue Cross Blue Shield of New Jersey executive.
In October 2021, Horizon Blue Cross Blue Shield of New Jersey announced that its Neighbors in Health program had reduced total cost of care (TCOC) while increasing needed behavioral health services. Horizon credits integrated data and advanced analytics for "identifying patients at risk upstream, providing insights on best timing and type of intervention, and reducing cost and utilization." The plan seeks to continue these first-year results by making these strategies part of its overall value-based care solutions.
Program results
Horizon's behavioral health initiative uses multiple, disparate data sources, structured and unstructured, to look backward and forward. Using "advanced analytics," Horizon identified probable high-cost members and generated risk scores to link patients with providers, programs, and community resources.
Specific populations aided included mothers at risk for postpartum depression, members with inpatient behavioral health admissions, and younger members at risk for conditions like schizophrenia. For the latter group, Horizon reported shorter times between initial psychotic episodes and subsequent treatment. Horizon reported an overall "25% reduction in total cost of care and a 60% increase in utilization of behavioral health resources."
Behavioral health's impact on overall costs
Focusing on behavioral health's role in TCOC reduction is an important component of not only the Horizon program but a larger industry concern: that a small percentage of patients represent the highest costs and that a majority of this group include those with behavioral health conditions.
In their white paper, Allen J. Karp, Horizon's executive vice president of healthcare management and transformation, and Sheila Talton, CEO of Horizon's platform partner Gray Matters Analytics—cite the following 2020 Milliman study statistics:
10% of study participants generated 70% of overall costs.
Of this 10%, 57% had documented behavioral health diagnoses and/or treatments.
Only 4.4% of TCOC was spent on behavioral health treatment across the entire study population.
These statistics begin to demonstrate how prevalent, costly, and paradoxically under-addressed behavioral health conditions are. And why targeted interventions informed by data and other factors can make a difference.
The role of "advanced analytics"
Karp and Talton say that the "fundamental problem" is a "lack of behavioral health quantitative data in the right format for traditional reporting and analytics systems. The inability of organizations to access, digitize, and integrate behavioral health data makes it virtually impossible to treat the whole person."
If this is the problem, what is the solution? According to Karp and Talton, "advanced analytics" that are as integrated as the behavioral healthcare they are designed to facilitate.
On the data side, this includes a combination of clinical, claims, social determinants of health (SDOH), and other historical member information. Combined with Natural Language Processing (NLP), artificial intelligence, and other aspects of the Gray Matters platform, these data combine to identify populations most at risk and the resources that may help them most.
Gray Matter's Talton sums it up this way: "It's all about identifying the data's signals and patterns so that the analytics can provide directional answers and serve up different subsets of members that could be targets for intervention."
The importance of integration
Another kind of integration may be aiding Horizon's success: its OMNIA Health Alliance with large health systems and physician groups across New Jersey.
Talton agrees that OMNIA reflects Horizon's leadership: "Because of OMNIA, Horizon can identify in-need populations to its provider care managers (CM)." This is in addition to the outreach the plan's own CMs deliver. In both cases, the key is mutual accountability. "The opportunity as we mature around behavioral health," Talton adds, "is for outreach and recommendations to become part of the payment model."
Another integration component is tied to Horizon's decision to move behavioral health management back in house from its vendor, Beacon Health Options. Karp cites this as an advantage. "Behavioral health is a small part of overall cost and not necessarily flagged when it's outsourced. Insourcing integrated the data, which helped reveal trends that validated our thesis about the impact of behavioral health. This, married with the Neighbors program, creates a much better model."
Karp adds how vital community health integration has been. "It's really about connecting the dots. We said, 'Let's build a model that links the behavioral with the physical and SDOH, then put virtual and community interventions in place beyond traditional care management.' " This has included hiring and training unemployed or underemployed community residents who know their neighbors and provide peer support so that members don’t slip through the cracks.
Behavioral health in value-based care
Karp and Talton agree that "[i]n a value-based care environment, it is critical that behavioral health conditions are effectively managed as part of a comprehensive strategy to control total healthcare costs and deliver positive outcomes for patients."
Even with this commitment, industry challenges abide including the "hidden costs" and hidden populations related to behavioral healthcare. Here, Karp and Talton cite Milliman study advisor Dr. Henry Harbin: “There's commonly a misconception it's the patients with more severe mental illnesses like psychosis or schizophrenia that are the ones that drive these costs. … That's not true. They represent a very small percent of prevalence."
Karp and Talton bring this reality and the help integrated, advanced analytics hope to provide by adding: "People with mild to moderate mental health challenges would be relatively easy to treat if they could be more readily identified, which in turn would result in lower total costs for medical care because their chronic conditions could be better managed or even averted with education and preventative care."
"A broader set of payers has realized that the traditional models will only ever reach a small percentage of people in need," says one digital therapeutic executive.
With the $1-trillion-plus bipartisan infrastructure bill now signed into law, the healthcare industry has its own infrastructure challenges to tackle: how to deliver, bill, and reimburse entirely new kinds of benefits. Digital therapeutics (DTx) are one of those benefits and one of the answers is by using healthcare's "existing pipes" in novel ways. While only some DTx products require a prescription (PDT, or prescription digital therapeutics), stakeholders are using PBM channels to advance DTx commercialization in a way that reduces friction while answering unmet need—particularly in mental health.
Using PBM infrastructure for non-prescription DTx
The Digital Therapeutics Alliance defines DTx products as those that "deliver medical interventions directly to patients using evidence-based, clinically evaluated software to treat, manage, and prevent a broad spectrum of diseases and disorders" alongside medication. And while only some DTx products require PDT, stakeholders are using PBM channels to advance DTx commercialization.
This approach begins with a simple question, captured by Peter Hames, co-founder of Big Health: "Can we bill for software in the same way as a drug, even though it's not a PDT?" Hames continues: "The approach involves taking a machine designed for one thing and retrofitting it to make it work in a different way. There isn't an obvious answer, so you have to try it."
Big Health—which offers two non-prescription DTx products (Sleepio for insomnia and Daylight for anxiety)—worked with CVS Health to uncover these answers. "In our partnership with CVS, we worked with their senior leaders on the overall concepts of a digital formulary for a couple of years prior to going live," says Hames. "We brought a good hypothesis of value and went in with humility. CVS brought expertise in how to execute."
Jill Borrelli, LICSW, vice president of behavioral health at Point32Health, agrees that "collaborating to make … innovative digital therapeutics more accessible to people" is key to care access and support for multiple behavioral health conditions. Point32Health is doing its own work in the space, with member Tufts Health Planpiloting a PDT for substance and opioid treatment in Massachusetts.
From pioneering to expansion
Using PBM as a channel for non-prescription, non-drug claims goes one step further than, for example, a payer using its pharmacy benefit to provide DTx coverage. As Hames notes: "PBMs have enormous reach and administer for every type of payer. They offer standardized methods and formats to submit and adjudicate claims that we’ve been able to harness."
The Big Health-CVS partnership paved the way for other DTx products to join the PBM's Point Solutions Management, which grew from six in 2020 to 10. Two additional services target fertility and specialty drug cost management for Point Solutions Management which, per CVS, is designed to help its PBM clients "simplify contracting, secure lowest price and monitor ongoing performance of third-party health care point solutions, which can help maximize their benefits program while minimizing associated spend."
CVS Health is not alone in the DTx partnership space. The leading PBMsincluding CVS Health—Caremark, Express Scripts, OptumRx—represent 77% of prescription claims managed, are all linked to payers (Aetna, Cigna, and UnitedHealth, respectively), and are all working with manufacturers to help commercialize DTx and PDT.
The impact of unmet need on patients and payers
This expansion is needed. Mental Health America reports that 57.2%. U.S. adults diagnosed with mental illness receive no treatment. Many face access challenges when they do.
"I often say that we are looking the wrong way when it comes to mental health. With … adult Americans experiencing a clinical level mental health issue, we simply don’t have enough therapists to address the body of need," says Hames. "Due to the limited number of therapists, in-person and teletherapy are only addressing the tip of the iceberg. We are focused on helping those under the waterline."
Provider shortages impact patients and payers alike. Despite federal and emerging state laws that mandate and penalize for inadequate networks and long wait times, Kaiser Health News highlights that there are parts of the U.S. that "don't have enough therapists at any price."
This doesn’t mean that DTx is intended to replace providers. "DTx solutions that are proven clinically effective can function as a standalone while also integrating with existing care models," notes Hames.
He does say, however, that established approaches to mental healthcare are topping out: "A broader set of payers has realized that the traditional models will only ever reach a small percentage of people in need."
Solving payer problems
These scenarios create opportunities for DTx to help payers meet need. In a separate interview with Digital Health Today, Hames shared the related insight that the customer is "whoever economically benefits from … [an] individual being healthy as quickly as possible. That customer is, therefore, whoever pays their healthcare costs." In continued conversation with HealthLeaders, Hames added: "Our goal is to align incentives with the people we’re trying to help to deliver value."
The other goal is working out the mechanics of making PBM DTx delivery a "low-lift engagement" through:
Pre-approved DTx products that make it easier to add them to plan coverage via PBM addendum.
Integration of distribution and care pathways.
DTx itemized alongside drugs on pharmaceutical invoices.
"Leveraging standard coding models, creating new ones, looking at benefit categories and copays, who sends what when and how items appear on the invoice. We looked at every single piece of the process and how to apply it to digital therapeutics instead of drug reimbursement in a way that removes friction from the process."
Clinical effectiveness and challenging precedent
Demonstrating clinical effectiveness for improved outcomes is part of this process.
About Point Solutions Management, for example, CVS Caremark CMO Sreekanth Chaguturu, MD, states: "We have analyzed pharmacy and medical claims to identify where these benefits can make a difference and employ a rigorous and transparent evaluation process to [ensure] that any vendor included in Point Solutions Management meets high standards for safety, quality and user experience at the vendor's lowest price in the marketplace."
Collectively, Big Health's Sleepio and Daylight products have been the subject of 13 randomized controlled trials as part of the company's clinical evidence focus.
Results like these are important to payers, with their concerns over outcomes being part of the reason why the Centers for Medicare & Medicaid Services is going back to the drawing board on its federal DTx guidelines.
A combination of proven results and the novel delivery and reimbursement will be needed.
"DTx is technology on the front of human-delivered care," says Hames. "This is a hard area of development and healthcare is largely precedent based. But so much is done just because that's the way it's always been done."
"Implementing robust network adequacy requirements is an underutilized tool. Failing to address network adequacy undermines other policy initiatives to expand access to affordable care," says the Legal Action Center.
In October, California became the latest of seven states to mandate that payers reduce wait times for member access to mental health services. But the new law highlights challenges linked to existing federal requirements that remain unmet and often unenforced: provider shortages, network adequacy, and reimbursement parity. As payers seek to make strides, they do so against the backdrop of recommendations from the Legal Action Center (LAC)'s most recent report on network adequacy for mental health and substance abuse disorder (MH/SUD) services.
The LAC recommends the following:
Standardized network adequacy measurement: Specific metrics for network adequacy that include accessibility and availability to "create greater accountability and uniformity across health plan."
Specific MH/SUD metrics: To "address historical discriminatory insurance coverage for these services, the LAC recommends metrics that "cover the full range of MH and SUD practitioners and facilities and that quantitative measures for geographic distance, wait time and provider/enrollee ratios align with those for primary care physicians and comparable medical facilities."
Payer cost-share: To address adequacy and out-of-network care's higher costs, the LAC recommends that states require coverage parity with in-network services.
More transparency: Including the filing and/or public availability of payer access plans, compliance results, and contracting criteria along with required, continuous monitoring programs.
More education: LAC advises that consumers "need to be better informed when selecting a health plan about the carrier’s provider network and the trade-offs associated with plans that offer lower premiums for limited plan networks."
Ongoing oversight: To include enforcement and corrective action.
The LAC's report includes specific state callouts as well. In addition to the states with wait time laws—Colorado, Maine, Maryland, Missouri, New Hampshire, Texas, and now California—a dozen have travel time/distance requirements specific to MH/SUD.
LAC's diverse recommendations are tied to its identification of "other factors that contribute to inadequate networks." These include: the lack of available providers, lower rates of pay, balance billing, and provider directory quality.