The Emerging Market in Medicare Part D and Sponsor Compliance Strategies A Presentation to the Pharm

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The Emerging Market in Medicare Part D and
Sponsor Compliance Strategies A Presentation to
the Pharmaceutical Compliance CongressNovember
8, 2005

• John Gorman
• President/CEO
• Gorman Health Group, LLC
• 2176 Wisconsin Avenue, NW
• Washington, DC 20007
• [phone]
• Fax [phone]
• www.gormanhealthgroup.com

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Todays Agenda

• The Emerging Market in Medicare Part D
• Medicare Advantage Local and Regional Outlook
• Prescription Drug Plans (PDPs)
• Employers and Retiree Groups
• Medicare Fraud, Waste and Abuse (FWA) Issues and
  Sanctions
• Compliance and FWA Elements
• Medicare Prescription Drug Integrity Contractors
• (MEDICs) and Their Role
• Part D Plan Sponsor FWA Exposure
• PBM Integrity
• Subcontractor Oversight
• Keys to Minimizing Exposure
• Conclusions

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New Medicare Part DBeneficiaries Will Have
Several Coverage Options
Medicare Options

• Regional Options
• Blended benchmark
• Stabilization fund
• Risk Corridors

Prescription Drug-only Plan (PDP)/ FFS Add-On
Must offer benefits equivalent to standard
coverage
Medicare Advantage PPO Option
Medicare Advantage HMO Option
Must offer benefits equivalent to standard
coverage on at least one plan in portfolio
Local (county-based) Options
Medicare Advantage PPO Option
Special Needs Plan (SNP) Option
Other Options
If insufficient number of PDPs or PPOs emerge in
the market
Must offer benefits equivalent to standard
coverage to receive subsidy
Limited Risk or Fallback Drug-Only Plan
Qualified Employer Plan
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Medicare Risk Contracts1985 to 2005
Source CMS, October 2005. Note 570 PDPs will
launch on January 1, 2006.
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Convergence of Health Policy Factors Create
Opportunities for SNPs
Lock-In Exemptions
SNPs
Medicaid Reform
Part D Auto-Enroll of Duals
Risk Adjustment
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Regional PPO Sponsors and Revenue vs. Cost
Region 1 118.7
Region 2 107.7
Region 3 111.1
Region 23 119.6
Region 19 116.0
Region 11 110.3
HUM
UHC
NPA
HUM
Region 22 111.6
Region 6 114.0
Region 12 114.7
Region 4 106.2
Region 14 110.9
WLP
HUM
HUM
WLP
AET
WLP
SIE
HUM
Region 24 108.6
Region 5 107.7
Region 15 111.9
Region 7 119.9
Region 13 112.4
Region 18 110.0
Region 20 117.7
Region 21 117.9
AET
HUM
HUM
Region 10 111.7
HUM
Region 8 114.3
HUM
HUM
HNT
HUM
Region 16 110.4
Region 17 111.0
BSC
Region 9 109.7
HUM
Region 26 110.8
HUM
UHC
HUM
Region 25 139.9
UHC
Source GHG analysis adapted from CMS 2005 MA
Payment Rates and 99 FFS Cost Files, January
2005.
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Competitive Landscape for PDPs -- 2006
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Impact of Dual Assignments on PDPs
Source Lehman Brothers and GHG Analysis,
September 2005.
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PDPs to Watch
Source company reports
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Part D Final Benchmarks for 2006
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Summary

• The minimum number of plans participating in any
  of the regions is 11 (Region 34, Alaska).
• The maximum amount of plans participating is 20
  plans (NY, TX, OR/WA).
• In 37 states 100 of Medicare eligibles will have
  access to a PPO plan.
• The number of auto-assigned beneficiaries per
  organization in a given region will range from as
  low as 2,000 to the 6 plans in Alaska to as high
  as 133,000 individuals in the 7 plans in
  California.

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Part D Projections 2006

• GHG expects in 2006
• 112B in revenues generated for private plans (up
  from 51B in 2005) 38 (42B) through PDPs
• 900,000 new beneficiaries in MA products (5.8M in
  2005)
• 14.3M in PDPs (including duals and low-income)
• Therefore, over 21M beneficiaries in some form of
  managed care in 2006

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Strategies Employers Are Likely to Pursue in 2006
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Retiree Health Benefits Two Choices for Employers

• For 2006, Expect Most Employers to Choose RDS but
  some may prefer Part D
• Actuarial Equivalence - employer plan may not
  qualify for the RDS
• Part D offers higher subsidies, especially for
  employers with low utilization
• Tax status - governmental entities or nonprofits
  do not realize the tax benefits of RDS
• Retirees already in MA plans
• LIS may be better off in Part D
• Administrative Part D plans handle
  administration and financial risk

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Retiree Health Benefits Two Choices for Employers

• For 2007 and Beyond, expect a shift to Part D
• Market will be known
• Financial benefits of Part D will be clearer
• Time to submit Part D applications
• Fewer employers will qualify for the RDS, e.g.
  percent of plans meeting cap

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Employer Options for Retiree Drug Coverage
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Impacts of Retiree Drug Coverage Options
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Impact of Likely Employer Strategies -- 2006

• 77 of retirees likely to be in plans that
  continue drug benefit coverage and accept the 28
  subsidy
• 6 of retirees likely to be in plans that
  supplement Medicare drug coverage
• 4 of retirees likely to be in plans that
  discontinue drug coverage
• 13 of retirees in plans that do not yet know
  their strategy or had a different strategy

Source Kaiser/Hewitt Survey, December 2004.
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Privatization of the Drug Market
Total U.S. Drug Spending
After Medicare Drug Benefit
Before Medicare Drug Benefit
Consumer Out-of-Pocket 18
Consumer Out-of-Pocket 30
Private Health Insurance 48
Medicaid, Other Public 12
Private Health Insurance 70
Medicaid, Other Public 22
Sources CMS, National Health Spending, 2002
and CBO, Issues in Designing a Prescription Drug
Benefit for Medicare, Oct, 2002.
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Compliance Strategies for Part D Sponsors
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Government Oversight Structures

• CMS Part C D Monitoring Programs
• 2-3 year on-site, regularly - scheduled audit
  cycle, depending on risk assessment for MA plans
  (3 years for PD plan)
• Focused/targeted desk and on-site audits,
  depending on risk assessment
• MEDICS Monitor and evaluate data and trends to
  identify potential fraud, abuse, and waste in the
  Medicare Part D Program.
• Receive reports from contractors and
  beneficiaries
• Develop and refer cases to the appropriate Law
  Enforcement (LE) Agency or to CMS for
  administrative action as necessary
• Inspector General
• Civil Money penalties
• Exclusion
• Department of Justice
• Civil and Criminal Prosecution

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Medicare Part D Compliance Plan Required Elements

• 7 Required Elements of a Part D Compliance
  Program
• Written policies, procedures and standards of
  conduct regarding compliance with all applicable
  Federal and State standards
• Compliance Officer and Committee accountable to
  senior management
• Effective training programs for employees,
  contractors, agents and directors
• Effective lines of communication
• Enforcement through well-publicized disciplinary
  guidelines
• Effective internal monitoring and auditing
• Prompt response to detected offenses (e.g.
  payment or delivery of drugs) and development of
  corrective action initiatives (e.g. repayment of
  overpayments and disciplinary actions)
• Comprehensive Fraud and Abuse Program
• Detect, correct, and prevent fraud, waste, and
  abuse
• Voluntary self-reporting of potential fraud or
  misconduct
• Separate plan or integrate with the other 7
  compliance plan elements

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Medicare Compliance and FWA Risks

• Standard Part C Compliance Tests that will Apply
  to Part D Sponsors
• Fails to provide medically necessary services, if
  adverse effect
• Imposes excess charges on enrollees
• Discourages enrollment due to health status
• Misrepresents or Falsifies information
• Employs or contracts with excluded individuals
  and entities
• Substantially fails to carry out the contract,
  inefficient administration of the contract, or no
  longer substantially meets the contract
  requirements

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Medicare Compliance and FWA Risks

• Administrative Sanctions
• Contract Termination
• Intermediate Sanctions (Suspension of enrollment
  and payment)
• Exclusion from all Federal Programs
• Civil Monetary Penalties
• 25,000 for each failure to provide medically
  necessary services, health screening or
  falsification of information to the Secretary
• 25,000 for each determination of failure to
  carry out the contract if adverse effect

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Medicare Compliance and FWA Risks

• Criminal Penalties (felony conviction and up to 5
  year imprisonment)
• Knowing and willful false statement or
  misrepresentation of fact in application for
  benefit or payment under a federal health care
  program
• Knowing and willful kickback, bribe or rebate to
  inappropriately secure federal funds
• False Claims (Whistleblowers) Act
• Signature acknowledging that information is being
  submitted for purposes of obtaining Federal funds
  triggers the FCA
• FCA prohibits false or fraudulent claims
• Treble damages and up to 11,000 per claim
• Whistleblowers receive up to 30 of the recovery
• Liability extends to those who submit the false
  claim and those who cause the submission of the
  false claim
• Intent to defraud is not required mistake or
  negligence with system wide effects sufficient

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MEDIC Part D - Data Analysis

• Utilization Management
• Medication Adherence and Persistence
• Quality Assurance
• Performance Measures
• Coverage Determination
• Long Term Care (LTC) - Pharmacy Access
• Complaint Tracking

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CMS Data Collection Management Information
Integrated Repository

• Performance Assessment
• Data mining and standard reports will be used to
  inform CMS of Plans performance under Part D
• Standard Required Reports
• PDE data (claims data)
• Eligibility data
• Complaint data (CTM)
• Plan-reported data (HPMS)
• Plan-finder data

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MEDICS Role In CMS Compliance and FWA Review
Audit CMS Defense against the Mississippi
River of Dollars

• IDIQ Contract (Indefinite Delivery Indefinite
  Quantity Solicitation)
• Of the 21 Examples of General Fraud, Waste and
  Abuse in the MEDIC Statement of Work, 15 were
  targeted toward PBM or pharmacy related issues
  and business practices 6 were Beneficiary fraud
  issues
• PBMs and Part D Sponsors will be at risk for the
  acts of their downstream pharmacy contractors for
  false claim submission
• Of the 12 Examples of potential Financial Fraud,
  all 12 will impact PBMs
• Effective cost allocation systems critical for
  administrative services
• Rebate contracts will be under scrutiny

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General Fraud and Abuse Issues

• Misrepresenting the enrollment, encounter, or
  prescription drug event data
• Improper reporting of prescriptions dispensed to
  maximize payments.
• Billing for services not furnished and/or drugs
  not provided.
• Billing that appears to be a deliberate
  application for duplicate payment
• Soliciting, offering, or receiving a kickback,
  bribe, or rebate
• Billing based on gang visits
• Billing non-covered prescriptions as covered
  items
• Billing under Part A or Part B, and also under
  Part D

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General Fraud and Abuse Issues (Continued)

• Dispensing without a prescription
• Billing for recycled prescription drugs
• Submitting false Medicare claims
• Receiving duplicative co-pays or premiums from
  beneficiaries
• Billing for brand when generics are dispensed
• Altering scripts or data to obtain a higher
  payment amount
• Misrepresentations of dates, descriptions of
  prescriptions or services

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MEDICS Role In CMS Compliance and FWA Review
Audit CMS Defense against the Mississippi
River of Dollars

• 8 MEDICs selected
• NDCHealth
• Delmarva Foundation for Medical Care
• Electronic Data Systems (EDS)
• IntegriGuard
• Livanta
• Maximus Federal Services
• Perot Systems Government Services
• Science Applications International Corporation
  (SAIC)

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MEDICS Role In CMS Compliance and FWA Review
Audit CMS Defense against the Mississippi
River of Dollars

• MEDICs Responsibilities include
• Review Part D and RDS plan compliance data to
  detect fraud
• Review bids and FWA components of compliance
  plans
• Coordinate with law officials
• Conduct investigations, including audits of PDPs
  and sub-contractors
• MEDICs will annually audit at least 1/3 of PDP
  and MA plans
• Risk Based Audit Strategy conduct more
  investigation and analysis with unusual billing
  patterns

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MEDICS Role In CMS Compliance and FWA Review
Audit CMS Defense against the Mississippi
River of Dollars

• MEDICs Responsibilities (contd)
• Review improper enrollment and eligibility
• Review improper marketing and distribution
• Audit RDS sponsors, including RDS eligibility and
  claims review
• Conduct Part D, MA and RDS complaint
  investigations

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MEDIC Audit Target Drivers

• Near Term
• Beneficiary Complaint Data (e.g. sales
  misrepresentation)
• Past PBM issues identified in legal proceedings
  will be focus of audit
• Areas where there are questions of transparency
• Eligibility and Claims Data audits for Retiree
  Drug Subsidy
• Longer Term
• PDE data and comparisons with other Medicare
  Claims Data
• Whistleblowers
• Routine on-site audit reviews (P T, FWA
  implementation etc.)

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MEDIC Audit Target Drivers

• The Good News on MEDICS
• All New to Medicare Part D
• First Timers or with Some Experience
• Data will take time to gather ? But get it right
  from the start

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General Keys To Avoiding the Inspector General

• Listen to the Noise surrounding Part D
• Identify potential CMS or Congressional hot
  button issues and address them e.g.
  Beneficiaries can find appropriate education
  materials
• Avoid Misinterpretation of Part D Requirements
  Ever watchful for changing CMS regulation or
  guidance
• Pay attention to past industry criticisms, jibes
  and legal proceedings and develop policies and
  oversight in the areas of concern
• Assess and audit current business and operational
  practices at a granular level to identify areas
  of exposure or lack of controls
• Require process by process policy review and
  standards and FWA monitoring requirements
• Ensure documentation of procedures and process
  descriptions
• Ensure diligence in systems configuration
  auditing to catch errors prior to submission

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Further Keys To Avoiding the Inspector General

• Implement granular financial auditing, process
  controls, monitoring
• Use central tracking system for all internal FWA
  control reporting
• Establish routine monitoring and audits of
  operations
• Review appropriate staffing for internal auditors
• Review staffing, scope and frequency of pharmacy
  audit
• Monitor Enrollee grievance and appeals activity
• Enrollees who dont get things trigger
  problems
• Early Warning System
• Develop corrective action plans
• Establish processes for self-reporting of
  potential FWA
• Encourage / Incent Internal FWA issue
  identification referrals
• Make the FWA department well known
• Thorough training at all levels

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Part D Compliance FWA Exposure - Overview

• 5 Critical Areas for a Part D Plan Sponsor
• Part D Specific Requirements Audits in areas
  such as TrOOP, Copay application, COB, PDE data,
  formulary changes, etc.
• PBM Integrity Major PBMs are high profile
  candidates for FWA audits in areas like pricing,
  rebates, benefit adjudication, etc.
• Subcontractor Oversight and FWA Issues Retail
  pharmacies, LTC pharmacies (Part A/D), enrollment
  contractor etc.
• Beneficiary-Prescriber FWA Identification and
  Management Identifying and managing these
  issues
• Sales Misrepresentation and Fraud- a new issue
  for PDP Sponsors and a common CMS target and
  reason for sanction based on complaints

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Part D Compliance FWA Exposure - Overview

• For Each 5 Critical Areas, Part D Plan Sponsors
  should develop
• Tracking and Reporting mechanisms to report to
  CMS and the MEDICS
• Audit and Monitoring Strategies with designated
  Resources
• On-Site or Desk Audit
• Conducted by the Part D plan sponsor, the PBM, or
  Audit organization
• Corrective Action strategies
• Training
• Self-reporting of suspected FWA

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Part D Specific Requirements - FWA Touch Points

• Enrollment Accuracy LIS, Duals, Late Penalty,
  Proper Effective Dates
• Beneficiary Billing Accuracy
• Direct bill vs. SSA
• Proper Refunds to Beneficiaries, Charities
• Premiums, cost sharing and accounting
• Reconciliations
• General Administrative Cost Allocations
• Specific program cost allocations, e.g. MTMP

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Part D Specific Requirements - FWA Touch Points
(Continued)

• Formulary development and beneficiary
  notification of formulary changes
• Generic vs. Brand
• Appeals and Grievances
• Monitoring, Feedback Loops and Disciplinary
  Programs
• COB data collection, working with the COB
  Facilitator

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Part D Specific Requirements - FWA Touch Points
(Continued)

• TrOOP accumulation
• Includes only eligible cost sharing, e.g.
  includes beneficiary payments and excludes group
  health plan payments
• Properly includes all 6 payment fields
• Patient Pay Amount
• Other TrOOP
• Low Income Cost Sharing Subsidy Amount (LICS)
• Covered D Plan Paid Amount (CPP)
• Non-covered Plan Paid Amount, (NPP)
• Patient Liability Reduction due to Other Payer
  Amount (PLRO)

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Part D Specific Requirements - FWA Touch Points
(Continued)

• PDE (Prescription Drug Event) data accuracy
• 100 claims data necessary to calculate risk
  adjustment, LICS, reinsurance, and risk corridor
  payments
• Proper reflection of costs to be included or
  excluded in each of the 4 payment calculations,
  e.g.
• Only Part D drugs covered under the specific plan
• Risk corridor calculations must exclude
  administrative costs, patient pay amounts,
  induced utilization, rebates, reinsurance subsidy
• Reinsurance calculations must reflect full TrOOP
  accounting
• All calculations must properly account for all
  rebates, discounts, and other price concessions

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PBM Integrity FWA Touch Points

• Pharmacy Contracting, Term Application and
  Disclosure
• Proper Benefit Set Up And Adjudication at POS
• Eligibility Accuracy and benefit plan assignment
• Drug Pricing AWP, MAC etc.
• Claims Edit Processing Accuracy (e.g. Part A, B
  and excluded drugs)

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PBM Integrity FWA Touch Points (Continued)

• Mail Order Prescription Fills
• Rebate Accounting and Pass Through ? Member
  level detail and transparency
• E-Prescribing

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Subcontractor Oversight

• Retail Pharmacy
• Monitor dispensing activity of specifically
  identified retail pharmacies
• Retail audit by PBM or Audit organization to
  identify outlier pharmacies
• Desk audit on all outlier claims to determine
• Appropriateness of RX dispensed
• Correct quantity and strength of medication
• Correct administration of benefit design and
  trend management programs
• Instances of potential fraud and abuse
• On Site audit of pharmacies that continue outlier
  dispensing performance

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Subcontractor Oversight

• Retail Pharmacy (continued)
• Automated reporting editing systems can include
  the following triggers
• Dispensing volume of high profile medications
  (e.g. controlled substances, medications targeted
  for re-sale or addicted medications)
• Significant number or percent of U C claims
• Multiple instances of reversed or altered claims
• Multiple pharmacy overrides to excluded or Prior
  Authorized medications
• Excessive units per day dispensing
• High dollar medications

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Subcontractor Oversight

• Retail Pharmacy (continued)
• Individual Pharmacist Audit - Based on
  conclusions from the on-site audit, more focused
  audits of individual pharmacists may be warranted
  to review
• Potential cases of trafficking
• Potential cases of fraud and abuse
• Retail Pharmacy audits also may include review
  of
• Disclosure of low cost generic
• Non-submission of zero-balance claims
• COB Audits Duplicate Billing

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Subcontractor Oversight

• LTC Pharmacies
• Example Determining whether LTC pharmacy filed
  claims should be part of a Part A Skilled Nursing
  Benefit
• Proper destruction or return of drugs
• Enrollment and Premium Billing Subcontractors
• Developing appropriate metrics and audit
  protocols
• Insurance Subsidiaries
• Enforcing integrity downstream
• Re-insurance costs if provided by subsidiaries
• Subsidiary service pricing and cost allocations

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Beneficiary and Prescriber FWA

• New populations and schemes may require enhanced
  system edits
• Addressing Issues common within the Medicaid
  population
• Development of Beneficiary and Prescriber Fraud,
  Monitoring, Investigation and Referral Unit
• Divining whether Grandma Smith or her nephew
  Billy is responsible for the rash of inhaler
  purchases
• Physician submission of claim for same drug
  dispensed at retail pharmacy or by infusion
  provider

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Beneficiary and Prescriber FWA

• Physician Auditing
• Identified from review of automated or ad hoc PBM
  Rx Utilization and Prescriber Utilization Reports
• Focused on identification of
• High volume prescribing of specific high dollar
  or abuse type of medications
• Volume based tracking (number of claims, total
  drug spend, targeted drugs)
• Review of controlled substance prescribing
  patterns
• Cross check of patients to eliminate critically
  ill patients
• Summary reports to PBM or Part D plan sponsor for
  further review

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Beneficiary and Prescriber FWA

• Beneficiary Auditing
• Identified from automated PBM Reports or
  desk/on-site audits
• Focused review of individual patient RX
  utilization focusing on
• Zip code analysis of where RXs are picked up
• Potential for Grey Market second hand selling
  of drugs with or without the beneficiaries
  knowledge
• Multiple pharmacy utilization for the same RX
• Multiple physician visits to generate same RX

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Retiree Drug Subsidy FWA

• Employer or Union Plan Sponsors are accountable
  for accuracy and completeness of all information
  submitted to CMS
• Application includes attestation that plan
  sponsor is submitting a claim to the government
• May delegate major data submission to CMS to
  subcontractors, but still accountable
• Oversight of subcontractors, including PBMs, is
  critical
• While Attestations are sufficient for payment,
  ultimately all data must be tracked to the
  individual retiree level by employer benefit
  option
• Timeline Final reconciliation 15 months after
  the end of the plan year
• Prevention of errors and omissions essential
  through monitoring and audits

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Retiree Drug Subsidy FWA

• CMS and OIG have announced that RDS audits will
  be a priority
• MEDICs tasked to review
• Actuarial Equivalence documentation to support
  attestation that Plan Sponsor coverage is
  equivalent to Part D
• Accuracy of RDS Payments review actual claims
  and rebate data to support RDS payment requests
• Creditable Coverage Disclosures review to
  assure consistent with Medicare requirements
• OIG 2005 OIG workplan includes audits of CMS
  controls and 2006 audits will focus on AE,
  payments and CC notices

55
Retiree Drug Subsidy FWA Touch Points

• Actuarial Equivalence Attestations
• Supporting documentation for the gross and net
  tests
• Benefit combination assumptions for net test
• Assumptions on integrated medical and drug
  premiums
• Subsidy Claims and Rebate Data
• Controls and monitoring to assure that only
  claims for eligible costs are submitted, e.g. no
  Part B or excluded drugs
• Controls and monitoring to assure that complete
  and accurate rebate data is submitted
• Controls to assure no administrative costs are
  submitted

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Retiree Drug Subsidy FWA Touch Points

• Retiree Lists
• Controls and monitoring to assure that only
  validated retirees and dependents are submitted
• Cross checks with CMS eligibility data
• Creditable Coverage Notifications
• Controls to assure that active workers and
  retirees get notices
• Documentation to support claims that coverage is
  creditable for each benefit option
• Controls to assure that notices for
  non-creditable coverage were issued

57
What Does the Future Hold?
58
Part D Key Implementation Dates
59
Part D Key Implementation Dates
60
The Politics of the MMA

• 2005 budget reconciliation will likely include
  12B in Medicare savings
• Elimination of Stabilization Fund for Regional
  PPOs.
• Codify budget neutrality policy for risk
  adjustment
• Outstanding MedPAC recommendation to reduce MA
  county benchmarks to 100 FFS, but no consensus
  on Hill to advance.
• Program appears stable for foreseeable future.
• Impact of Medicaid reform
• Greater flexibility to states
• Emphasis on Aged/Blind/Disabled into managed
  care.
• Underscores positioning for SNPs one-stop
  shopping

61
2007 Strategic Considerations

• Part D sponsors will be facing contraction of
  aggregate reinsurance
• Part D sponsors will be ratcheting-up control
  mechanisms
• Step therapy, prior authorization, quantity
  limits, strict formularies
• Will evidence-based practices dictate preferred
  drugs or tier placement in a therapeutic class?

62
Immunizing for FWA

• Conduct Operations GAP Analysis
• Part D and RDS Operations Analysis
• Compliance Program Review and Assessment
• Review PBM Operations for FWA Exposure
• Monitoring and audit mechanisms and staffing
• Performance metrics Internal and External
  Reports
• Policies and procedures assessment and review
• Systems tests
• Contract requirements
• Management Oversight

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Immunizing for FWA

• Ongoing FWA Program Development
• Business Process Workflow Documentation
• Policy and Procedure Development
• Internal Audit Procedures and Policies
• Subcontractor oversight program development
• Data Analysis to detect beneficiary, prescriber,
  pharmacy FWA
• Staff and Subcontractor training
• System logic review for benefit adjudication
• Sales program FWA monitoring program development

64
New Marketplace

• Expanded role of private plans growing
  influence of PBMs, and of Medicare regulators on
  them.
• Increased information for plans, patients and
  government.
• Eventual price (rebate) transparency
• comparative drug information
• increased emphasis on medical evidence and
  outcomes
• Growing pressure on price and performance.
• PDP competition and premium pressures
• pay-for-performance for providers
• cost-effectiveness for drugs
• Expanding out of pocket costs for beneficiaries
• Increased competition
• Dozens of PDPs all majors will play
• increased incentives for generic substitution

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The Challenges

• Moving purchasers toward value-based purchasing
  
• Better data on outcomes and quality
• Pay for performance -- quality indicators
• Integrating disease management and MTMP
• Plan influence on provider decision-making
• Proving the market works
• Helping the PDPs and MA-PDs survive
• Encouraging accelerated movement toward
  integrated health plans
• Minimizing government intervention,
  reference-based pricing/price controls, PDP
  failure
• Helping CMS become a successful purchaser (rather
  than a regulator)

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How to Reach Us
Gorman Health Group, LLC (202)
364-8283 jgorman_at_gormanhealthgroup.com