As executives are under increasing pressure to improve performance, the question is – what performance matters? Our March 2017 OPEN MINDS Management Newsletter focused on this topic – see Why Performance Management (& Metrics) Is A Leadership Issue, The ‘How To’ Of Metrics-Based Management, and Performance Management Fundamentals: An Introduction.
My rule of thumb is that management teams can’t go wrong if they focus on the consumer’s experience and the health plan’s contract. For the consumer experience, net promoter scores and consumer experience data are pretty straightforward (see Does Your Organization Need A Digital Transformation? Is Your Team Ready? and Seven Steps To Delivering ‘Breakthrough’ Consumer Experiences).
For the health plan contracts, with a little effort your management team can get a better understanding of what health plan executives might be looking for. We can use a recent contract award as an example. We just covered MassHealth (the Massachusetts Medicaid program) signing a three-year, $58.5 million contract with Optum Government Solutions, Inc. to support its management and oversight of fee-for-service long-term services and supports (LTSS) programs (see MassHealth Selects Optum As Third-Party Administrator For LTSS Programs).
The interesting part of this contract for me was the “performance” requirements. During the first contract year, Optum will be able to earn bonuses of up to $3 million for meeting six performance incentive arrangements related to quality of care, customer satisfaction, and provider organization relationships:
- $1 million – Improve provider quality and performance
- $500,000 – Achieve increased efficiencies on durable medical equipment (DME) and consumable medical supplies for dual-eligible members
- $500,000 – Create efficiencies in the delivery of LTSS consistent with applicable MassHealth regulations and sub-regulatory guidance
- $250,000 – Refer members likely to benefit from services of LTSS integrated programs of care
- $250,000 – Identification of members likely to benefit from services of LTSS community partners
- Overall favorable rating member experience survey has tiered bonuses – a rating of 75-82.5%: would earn a bonus of $150,000; a rating of 82.5% to 92.5% would merit a bonus of $200,000; and a rating of 92.5% or higher would merit a bonus of $250,000
In addition to this bonus structure, the plan has a liquidated damages penalty structure based on twenty areas of service. For example, one of the twenty areas of service is “Prior Authorizations: Decision Timeframe.” Suitable performance is defined as: “All Prior Authorization (PA) requests must have a decision rendered within no more than 15 or 21 days of receipt in accordance with 130 CMR 450.303(B)(2)(c) and on average no more than 5 days across all Prior Authorizations.” The penalty is $5,000 per month for any month during which any authorization decision requires more than 15 days or 21 days and on average no more than 5 days. (To review the liquidated penalty structure for all twenty service requirements, OPEN MINDS Circle Premium and Elite members can review them in Long-term Services and Support Third-Party Administrator Request for Response Overview).
Reading the performance-based contract for a health plan gives a good indication of what the health plan managers are likely to be concerned with – and they will be looking to collaborate with provider organizations that can help them meet these benchmarks.
For more, OPEN MINDS Circle subscribers can check out the award information, winning proposals, and contracts for a number of public health plan contracts in The OPEN MINDS Government RFP & Contract Database. Just a few of the proposals and contracts in the database include:
- Iowa Department Of Human Services Awarded 4 Contracts To Provide Health Care Services For The Iowa Medicaid, Iowa Health And Wellness Plan, And Healthy And Well Kids In Iowa Programs
- Kentucky Awarded 5 Contracts To Provide Medicaid Managed Care Services
- Michigan Awarded Multiple Contracts To Provide Comprehensive Health Care Program Services
- Nebraska Awarded Contract To Unitedhealthcare Of The Midlands, Inc. To Provide A Full-Risk, Capitated Medicaid Managed Care Program For Physical Health, Behavioral Health, & Pharmacy Services
For more on getting your organization up to speed, join me on August 17 for my plenary address, “Reinventing Your Organization In A Complex Market: A Guide To Building A Sustainable, Performance-Driven Organization,” at The 2017 OPEN MINDS Management Best Practices Institute in Long Beach, California.