Tag Archives: medicare

Key to Opportunity in Medicare Supplement

You’ve probably heard the statistics about why Medicare is the largest growth market in insurance: 10,000 people turn 65 every day. In fact, by 2030, one in five U.S. residents will have reached retirement age, and, for the first time ever, adults 65-plus will outnumber children. Considering that over 90% of Medicare enrollees have some form of supplemental insurance, it’s no wonder that this growth potential is attractive to carriers, agencies and investors looking to make big bets in the supplemental health insurance market.

But along with this potential comes a curse of riches. During annual enrollment period (AEP) for Medicare, a flood of potential customers request quotes from brand sites and comparison shopping domains. With each passing day, insurance marketers and sales teams take in and call on leads, nurturing existing quotes and ensuring that the customers they’ve acquired make their first premium payment without defecting, all while trying to shield their existing customer base from their competitors. Friends in these positions have told me they’re running for their lives from Oct. 15 to Dec. 7 every year.

So how do we seize the sizable opportunity in Medicare without stepping on the landmines: spending time and money on the wrong people, not spending enough time and money on the right ones, missing multi-product sales opportunities, churning more customers than you’re acquiring? The answer is deceptively simple: Know who your prospects and customers are, understand when they are shopping and be ready to meet them in the market at that time with a relevant and timely message that will help them make the most informed decision.

How do you do that? Well, more and more, Medicare shoppers are researching their options online, meaning there is measurable insight (i.e., behavioral data) into who is on a buying journey versus who isn’t, who is just starting versus who is accelerating the buying process and who still needs the white-glove treatment post-sale.

Teams that harness this data to power their focus during AEP are winning. Instead of spreading their efforts across all consumers, they are successfully addressing only the ones who need attention. This leads to better performance across every stage of the customer buying cycle: acquisition, placement, cross-sell and retention. But these comments are much easier said than proven empirically. So, Jornaya’s data science team set out to do just that.

See also: New Phase for Innovation in Insurance  

Jornaya’s Research Findings

We analyzed more than 1.3 million Medicare supplement consumer-driven online shopping events that occurred during the annual enrollment period in 2018 to better understand the buying journey from start to finish. The results of that research, Understanding the Insurance Consumer Journey: Auto, Life & Health, shine the light on several areas:

  • The Journey Begins Early: The buying journey begins well before a quote is requested. Of the 1.3 million shopping events that were analyzed, 46% of consumers were shopping in the Jornaya network before they requested a quote, and the average consumer began shopping on health insurance domains 72 days before asking a brand about Medicare supplement insurance. Another 18% began shopping more than 90 days before ultimately filling out a lead form.
  • Consumers Shop Around: On average, consumers initiated 3.4 health insurance shopping events before submitting a request-for-quote. 93% visited a different health insurance web domain than the site where they ultimately requested a quote. Those consumers visited 3.5 different sites before requesting the quote, beginning their shopping journey 72 days before they filled out a lead form.
  • Consumers are comfortable shopping on multiple devices, including mobile. 53% of consumer shopping events that Jornaya analyzed were initiated on a mobile device. And, while only 16% of consumers began their journey on one device and requested their quote on another (e.g. started shopping on their phone but requested the quote via desktop), this segment shopped almost twice as frequently, on twice as many sites, as their counterparts who began shopping on one device and requested the quote on the same device.
  • Shopping activity intensifies once consumers request quotes: More than half, 59%, continued to shop after they requested their first quote (versus the 46% who were shopping before the quote). On average, they returned to market 26 days after the initial lead submission. And of those who returned to market within the first 30 days, the average shopper initiated 2.7 additional health insurance events post-quote. A quarter of consumers continued shopping more than 90 days post-quote, averaging 3.2 health insurance shopping events during that time.
  • Consumers are shopping for multiple insurance products at once. Of the 1.3 million leads that we analyzed, 21% of consumers were simultaneously shopping online for life insurance, and 30% of consumers were in-market for a mortgage.

Implications for Carriers

Knowing that these trends exist, what can insurance marketing and sales teams do to improve? How does this information change their engagement strategy? Here is a high-level summary of the playbook that insurers are using to capitalize:

  • Know who your customers are. Use the data and tools available to you to segment your portfolio. Craft plays for each of these segments and be ready to run them when the consumer exhibits buying signals. If you feel ill-equipped to do this with your current infrastructure, explore data and technology vendors who can help you with this.
  • Market to your segments as early as you can. This research shows that consumers are beginning their Medicare supplement buying journey several months in advance of AEP. You must comply with the marketing guidelines set out by CMS. That said, you need to meet your prospects and customers in the market when they are interested in learning about their options throughout the year, not only during AEP, when your prospects and customers will be inundated with marketing messaging. Being first in line and top-of-mind when the consumer begins the journey has proven to substantially increase conversion likelihood.
  • Assume your prospects are getting more than one quote. Given that the price of supplemental plans is highly regulated, insurance providers must primarily compete on customer experience. Jornaya’s research indicates that consumers are educating themselves, across multiple devices, prior to requesting quotes. Differentiate yourself by using behavioral data to understand where the consumer is in her buying journey and creating value as an adviser to her during that stage. Clearly explain what makes your offering different from other providers she may be considering. Provide consumers with a direct number to call should they have any questions. Tell them you will be following up with them (and when) to help them make the most informed decision.
  • The sale is only just beginning post-quote. Jornaya’s research shows that shopping activity intensifies after the initial request-for-quote. 59% of consumers returned to market post-lead. They are doing so for two reasons: 1) They have not yet made a decision, or 2) they made a decision that they are now unsure of. Either scenario is an opportunity/risk that must be considered. A winning strategy takes a data-driven approach to creating multiple touch points over weeks (not days), even post-sale, to ensure a complete and optimal customer experience.
  • Identifying parallel buying journeys can differentiate your marketing from your competitors. Consumers are looking for guidance on all major life purchases; not just Medicare supplement insurance. Use behavioral data to identify opportunities to assist them with more than just Medicare. Ask questions that prompt the prospect to think about all his needs. What else is going on in his life that is worth considering? Having this data allows marketers to create personalized offers that appeal directly to the buyer, which trickles down to more positive interactions for agents and the brand over time. Those who take the time to truly help their clients feel at ease about life’s big decisions are much more likely to secure multiple policies per customer, at the point of initial sale and throughout the customer lifecycle.

See also: 8 Questions on Medicare Set Aside  

Consumers now spend as much time engaging with digital content as they do sleeping. It’s no wonder they expect brands to personalize their shopping experiences, across multiple devices, especially for major life purchases like insurance. To seize the substantial opportunity in Medicare supplement, insurance firms must seek to better understand their prospects. Leveraging behavioral data to drive early, timely and relevant interactions with prospects and customers is the key to winning (and keeping) a consumer’s business.

North Carolina’s Battle for Healthcare Value

In North Carolina, a storm is brewing that highlights the healthcare industry’s influence and stranglehold over public dollars. An experienced civic-minded reformer with clout has emerged. Dale Folwell is a certified public accountant who served four terms as a Republican in the NC House of Representatives and was elected speaker pro tempore. Now state treasurer, he has responsibility for the State Employees’ Health Plan and its 727,000 employees, dependents and retirees (including my wife, a sign language interpreter in the Charlotte-Mecklenburg  school system). The plan spends $3.3 billion annually, making it the largest healthcare purchaser in the state. “Right now, the state health plan and members spend more on healthcare to employees and retirees than is appropriated for the entire university system or for public safety,” Folwell says. He has made it his mission to bring reason and stability to that program.

Beginning Jan. 1, 2020, Folwell proposes to switch the health plan’s reimbursement method to reference-based pricing. The approach, around a decade and now gaining momentum with employers around the country, would in this case pay 177% of (or nearly double) Medicare reimbursement. The health plan’s program, called the Provider Reimbursement Initiative, would allow providers a reasonable margin but would cut an estimated $300 million annually from the plan costs and another $60 million from enrollees’ costs in the program’s first year. The health plan’s board of trustees unanimously supported the proposal.

See also: 5 Health Insurance Tips for Small Business  

In promoting his plan, Folwell has described some of the issues he’s faced. The most important is that, under longstanding arrangements with the state’s providers and the plan’s administrator, Blue Cross of North Carolina, the health plan can’t access pricing information on the services it’s purchasing. “I know what I’m being charged, but I don’t know what I’m paying,” Folwell explained. “For years, the plan has paid medical claims after the fact without knowing the contracted fee. It is unacceptable, unsustainable and indefensible. We aim to change that.”

“I said [to Blue Cross], I know what you are charging, but what am I supposed to pay? There is no transparency,” Folwell said. “Blue Cross would not tell me, and there are laws on the books that say they need to tell us. The healthcare system has worked long and hard to develop this broken system, and they’ve been completely successful.”

Not surprisingly, the state’s healthcare lobby is gearing up to protect its turf.  State Rep. Josh Dobson, a McDowell county Republican, is expected to file a bill that would block Folwell from instituting the plan. Steve Lawler, president of the North Carolina Healthcare Association, one of a half dozen health industry associations with powerful lobbies, has claimed that Folwell has resisted discussion. But Lawler does not appear to have publicly addressed the transparency or excessive cost issues that are central to Folwell’s complaint.

While the battle is shaping up to be a high-stakes, all-out fight, the healthcare lobby may not simply get its way this time. Robert Broome, executive director of the formidable State Employees Association of North Carolina, favors Folwell’s plan and said, “The state health plan board made a very sound financial and public policy decision that will save money for taxpayers and will save money for plan members, while bringing some common sense to how we pay for healthcare. It boggles my mind that folks could actually line up and be opposed to this.”

The beauty of Folwell’s strategy is that it is grounded in doing the right thing, and he has made it very visible to the Carolina rank-and-file. When challenged, politicians and business leaders will likely have to openly support the public interest over the healthcare industry’s interest, especially an industry that has become wealthy by taking advantage whenever possible for decades.

Folwell’s bold initiative takes its cue from a groundbreaking reference-based pricing initiative by the  Montana State Employees Health Plan, with about 30,000 enrollees. That program’s success has since led the Montana Association of Counties to implement a similar program. Here’s an introductory video on how that program works, and another one here explaining how the payment is calculated.

As healthcare costs have relentlessly risen, much of it due to opaquely excessive care and unjustifiable unit pricing, federal, state and local government workers around the country have seen their benefits slashed and their contributions drastically increase. The initiatives in North Carolina and Montana may be the leading edge of a drive by purchasers exercising their newfound market leverage. There’s every reason to believe they can be replicated throughout the country by governmental and non-governmental purchasers, fundamentally moving our broken healthcare system in the right direction.

See also: Avoiding Data Breaches in Healthcare  

It’s also important to remember that reference-based pricing is just one of several dozen powerful quality- and cost-management arrows in a larger healthcare performance management quiver. Smart employers and unions around the country are finally beginning to go around their health plans and deploy high-performance solutions in drug management, musculoskeletal care, cardiometabolic care, imaging, allergies, claims review and many other opportunity areas for quality improvement and cost containment.

Folwell may well be the champion we need at the moment, and it’s possible he could achieve something meaningful. If governmental and business leaders follow his lead in North Carolina and around the country, it would be a key first step to drastically changing our health system for the better.

6 Tips for Reference-Based Pricing

Reference-based pricing, also called metric-based pricing, is an alternative to the traditional PPO model that offers substantial cost saving and benefits for self-funded employers by leveraging fair and transparent practices.

If you aren’t familiar with reference-based pricing, it could seem disruptive to your operations to make a change. However, many self-funded employers are implementing this alternative and reaping the benefits.

How does reference-based pricing compare with the PPO employers are currently offering to their employees?

PPO: The most prevalent form of health insurance, where the annual cost for employers increases year-over-year and high deductibles are a challenge for patients.

Members use a network of hospitals and doctors under a discount to take advantage of pre-negotiated costs. Oftentimes, these discounts vary widely inside the network and result in fluctuating costs. An independent study conducted by Castlight Health, a San Francisco-based healthcare price transparency company, shows PPO allowable amounts for common procedures swing as much as 500% in some regions.

The variable discounts are calculated on variable billed charges from the hospitals’ chargemaster, prices that many times are inflated and fluctuate dramatically between hospitals for the same service. In one example, the California Public Employees’ Retirement System (CalPERS), which manages the largest public employee benefit fund in the U.S, found that facilities throughout the state charged vastly different rates — between $15,000 and $110,000 — for a hip or knee replacement.

Referenced-based pricing: A modern solution for self-funded employers to manage healthcare costs for their business and employees.

Under this model, reimbursements to providers are based on the actual cost to deliver service or Medicare reimbursements. This more level approach starts at the bottom and adds a fair profit margin. Working with a reputable solution provider, self-funded employers can save up to 30% in their first year after switching to reference-based pricing.

See also: Myths on Reference-Based Pricing  

It’s not uncommon for employers to question making the switch from a PPO to a reference-based model. Is it worthwhile to make a change? Will employees understand the change? Does it require a lot of work? Let’s explore six tips for a smooth transition to reference-based pricing without disruption.

1. Do a little homework: Start by finding an experienced provider

Employers should only work with partners that are trusted and experienced with providing successful reference-based pricing solutions.

Look for a provider that has more than five years of experience auditing claims in all 50 states, welcomes reference calls, shares case studies from successful partnerships and retains clients long-term.

2. Schedule face time: Vet your potential provider

Request to see a provider’s operations in person to assess if the provider is financially secure, is equipped with resources and demonstrates a commitment to the success of their clients.

Look for a partner that welcomes site visits and pay particular attention to the size of the customer service team.

3. Commitment counts: Co-fiduciaries are an important consideration

Your reference-based pricing solution provider should be a partner that is 100% invested in your success.

Look for a partner that is willing to sign on as a co-fiduciary because it may be asked to assist in managing the financial assets of your plan.

4. Knowledge is power: Employee education is paramount

When you make a change to a benefits package, clear communication is important to ensure employees understand the new plan.

Look for a partner that will educate, answer questions and serve as a continuing resource to your office for the duration of the partnership.

5. Relationships count: Employers and medical providers must work together

Reference-based pricing is not a one-size-fits-all solution.

Look for a partner that collaborates with health systems (especially solution providers with established partnerships), and demonstrates dedication toward fair provider reimbursement.

See also: Innovation: ‘Where Do We Start?’  

6. Measure the impact: Assess how your plan is working

The partnership doesn’t stop after a plan is in place!

Look for a partner that is results-driven and reports on your cost savings. A provider should also provide a dedicated support specialist and be a continuing, committed resource.

Care Bridge International’s Deborah Watkins

Care Bridge International CEO Deborah Watkins talks about how its technology helps claims departments to more quickly and accurately forecast the medical cost component of a claim


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How New Medicare Cards Deter ID Theft

There are big changes Medicare has planned in 2018 that will help protect the identity of seniors and continue proper health benefits. The biggest and best change will be the new Medicare ID cards.

When Medicare recipients receive their Medicare card, they are typically shocked to see that their Medicare Identification number is the same as their Social Security number. Medicare beneficiaries run the risk of identity theft when they have their Medicare card in their wallet or purse; it would be comparable to walking around with their Social Security card in their possession.

Identity theft is a major issue; when someone has the Social Security number of another person the thief can apply for loans, open bank accounts and possibly gain employment. When someone has your Social Security number, the person has the key to your credit and identity.

The Social Security administration and the Federal Trade Commission have been urging the Centers for Medicare and Medicaid Services to change the Medicare Identifier for years.

Finally, after years of requesting that changes be made, CMS has made the decision to move to updated cards that do not have a Social Security number as the Medicare identifier. These updated cards were sent via mail in the beginning of April 2018. CMS anticipates all Medicare beneficiaries will have a new, updated card by April 2019.

What to Expect from the New Medicare Cards

The updated Medicare cards will feature a new Medicare Beneficiary Identifier (MBI) number. The card will display a randomly assigned number for all Medicare recipients.

Healthcare providers and Medicare beneficiaries will be able to securely access tools that will allow them to look up MBIs as needed.

During the 21-month transition period, it will be possible for providers to use a patient’s Social Security number or the new MBI number. The transition period was put in place to help things run smoothly for providers and patients across the nation. The issuance of a new card will not affect Medicare benefits.

The new MBI number will have 11 characters, with a combination of numbers and uppercase letters. These new numbers will have no special meaning, making it safe to keep in your wallet or purse.

The new cards will be mailed to you based on your geographical location; however, it is possible that you and your neighbor will get a new card at different times.

See also: Identity Theft Can Be Double Whammy

The Transition Period

CMS is trying to make the transition smooth for caregivers, patients and others who need accurate Medicare information. The transition period will allow beneficiaries and providers to exchange Medicare information with CMS using MBI or a Health Insurance Claim Number; this period is scheduled from April 1, 2018, until Dec. 31, 2019.

On Jan. 1, 2020, beneficiaries and caregivers will be required to use an MBI for most situations. It is suggested that beneficiaries keep an eye out for their updated Medicare card, and when it comes they should get into the habit of using their new MBI early.

Obtaining an Updated Card

Beneficiaries should destroy their old cards immediately after receiving their updated Medicare card. Once the new card is in possession, you can start using it at once. It is important that you keep your new MBI number confidential and watch the mail carefully so that you are aware when the new card is delivered.

The new cards are going to be made of paper, making it easier for providers to use and copy. If you are enrolled in a Medicare Advantage Plan, the Plan ID card is the main card you show to your providers, although a healthcare provider may ask to see your MBI card, so keep it with you.

How to Protect Your Identity Now

Identity thieves have noticed seniors as ideal victims for identity fraud. Seniors typically have more money in their checking and savings accounts, and they have paid off their major financial obligations.

Because seniors usually receive Medicare benefits, the door for identity theft in the medical industry is wide open. Because most seniors are not purchasing a new home or taking out a large loan, they have no reason to stay informed and therefore check their credit score less often.

How to Keep Important Documents Safe:

  • Make copies of your insurance cards
    • Make a copy of your insurance card and remove the last four digits of your Social Security number.
    • Leave the original at home.
    • If you do need to take an original, remove the card from your wallet after the appointment and store it in a safe place.
  • Keep important documents safe:
    • A home safe can allow you to store important documents; if you have highly important documents, you might want to consider a bank safety deposit box for documents you do not need often.
    • Never carry around extra bank cards, credit cards you don’t frequently use, any health insurance card or your Social Security card.
  • Protect computer and internet access:
    • Be sure you use anti-virus, anti-spyware and firewall software to combat hacking programs that are designed to steal personal information.
    • Be creative with passwords and never use the same passcode for multiple accounts. Changing passwords regularly can ensure privacy.
    • Never send personal or financial information through an email, no matter the situation or company.
    • Be sure to have your Wi-Fi network password protected and secure. Your internet installation service rep can help make sure your wireless network is protected.
  • Check your credit frequently: Per the Fair Credit Reporting Act (FCRA), every 12 months a free credit report can be provided for you from each of the nationwide credit reporting agencies.
  • Destroy old documents:
    • Some documents need to be stored safely; others can be destroyed.
    • You should be destroying credit card statements, receipts, bank statements, tax documents, canceled checks and old driver’s licenses.

The Reason Behind a New Medicare Number

The current Medicare number for many beneficiaries is their Social Security number. The U.S. Railroad Retirement Board, state Medicaid agencies, Social Security, healthcare providers and health plans all use this number.

There are great dangers that can occur when a Social Security number is in the hands of a criminal. The Medicare Access and CHIP Reauthorizations ACT of 2015 is requiring CMS to replace the old numbers with a new updated Medicare Beneficiary Identifier.

These cards are being released for one primary reason, to better prevent seniors from being the victim of identity theft.

See also: 8 Questions on Medicare Set Aside

Be Aware of Scams

The reason for new Medicare ID cards was to prevent seniors from being the victims of identity fraud. Unfortunately, the change has inspired criminals to take a new approach. There have been attempts to mislead Medicare recipients, and more attempts are likely to be made through the transition. It is important that beneficiaries be aware of possible scams.

The new Medicare ID does not cost beneficiaries money. The new card has the same benefits as the current card. Do not give the new card to anyone other than a healthcare provider. Many identity thefts are committed by friends and family.

Medicare will not ask you to give personal information to obtain your new number and card. Nobody should contact you about the new Medicare card, your new number or any personal information.

Medicare does not make uninvited calls to beneficiaries. If you think you are a victim of medical identity theft, contact the Federal Trade Commission about what to do next.

Advantages of Change

Because the new cards will not have a Social Security number, scammers will find it more difficult to commit fraud. Beneficiaries need to keep MBI numbers confidential and treat the numbers like personal identifiable information.

If a beneficiary forgets the new card at home, healthcare staff can search the new Medicare ID number on a secure site. All existing Medicare information will continue to be available to your doctor.

More than 57 million Americans will be provided with greater identity protection from the new Medicare ID cards. CMS intends a successful transition to the MBI for all people with Medicare and for their doctors.