Featured in Health Business Daily, March 28, 2017

Competitors Become Co-sponsors With New Provider-Payer MA Joint Venture

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. Subscribe today!

December 1, 2016Volume 22Issue 23

New Medicare Advantage offerings from Johns Hopkins HealthCare, the population health and managed care arm of Johns Hopkins Medicine, will get a boost in their second year of serving 11 counties in Maryland, thanks to a new joint venture with other health systems in Maryland, some of which actually compete with the Hopkins health system.

MA penetration in Maryland is about 10%, compared with a 30% national average, and a Kaiser Permanente cost plan has historically dominated the market, but that is changing due to the entries of provider-led plans from MedStar Health, Hopkins and others in recent years (MAN 8/20/15, p. 1). Hopkins in late 2015 launched its two PPO offerings, building on its experience offering commercial, Medicaid and TRICARE plans. Under the terms of a new agreement, six health systems in the state are now “equity partners” in Hopkins Health Advantage, the licensed insurance company offering the two PPO products.

Victoria Fretwell, chief of staff and vice president of program development, marketing and communications for Johns Hopkins HealthCare, says to her knowledge the seven-system joint venture is unlike other partnerships in the country in that many of the Maryland systems have overlapping service areas, especially in Baltimore city. In an interview with MAN, she explains that the venture grew out of “a general conversation” that Hopkins and other systems began having in 2015 that centered on figuring out how best to serve the Medicare population in the state and develop some best practices.

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Fretwell recalls that while Hopkins was preparing its CMS bid to launch its PPO products, a subset of the Advanced Health Collaborative, LLC (AHC) — which is comprised of six major independent Maryland-based health systems with a combined total of nine hospitals — was seeking a partner around Medicare initiatives. AHC, which was formed in 2015 in response to a new global budget reimbursement system in Maryland, issued a request for proposals to several regional and national MA plans.

Hopkins responded and by fall 2015 was selected to partner with the health system collaborative, which includes: Adventist HealthCare (including Shady Grove Medical Center and Washington Adventist Hospital), Frederick Regional Health System, LifeBridge Health (including Carroll Hospital, Northwest Hospital and Sinai Hospital) and Peninsula Regional Health System. Hopkins also reached out to other systems in the area seeking additional partners; Anne Arundel Medical Center and Mercy Medical Center both “jumped on board,” adds Fretwell.

“The Advanced Health Collaborative recognized the growing demand on the part of Medicare patients for alternative products to provide comprehensive coverage,” remarks Neil Meltzer, CEO of LifeBridge Health. “Since the Medicare Advantage penetration rate in Maryland is below the national average, we saw this as an opportunity to provide a high quality, comprehensive product. We recognize the power in partnership and identified Johns Hopkins as a high quality provider who, together with the AHC members, could offer a product across most of the state of Maryland. Additionally, Johns Hopkins welcomed having the Advanced Health Collaborative become an owner, allowing us to have significant input in the growth and development of the Hopkins Medicare Advantage Plan.”

The agreement, which became effective on Sept. 30, runs for 10 years. Collectively, the equity partners have 37% ownership, and none of them are allowed to have ownership in other MA plans although they may see individuals covered by other plans. Additionally, each system has a member on the board of directors, which is structured so that Hopkins “continues to be the dominant player,” and will have board members serving on committees dedicated to clinical, compliance, provider engagement and other aspects.

With the exception of Frederick, all of the providers were already in the Advantage MD network that now includes about 9,000 facilities and providers. And the addition of Frederick will enable the insurance unit to apply for an expanded service area for 2018 to include Frederick and Allegany counties, says Fretwell. The plan is also looking into the possibility of offering an HMO product, she adds.

New Partners Can Share PPO Info With Patients

Hopkins is currently in the throes of marketing the provider-led plan to seniors as the 2017 Annual Election Period (AEP) nears its Dec. 7 conclusion, and Fretwell says the addition of the health system partners has allowed Hopkins to reach that audience through more channels. While CMS marketing rules prevent them from directly selling products, Hopkins developed tools that enable the other health systems to educate their patients about Advantage MD. These include plasma screens, posters, table top displays and brochures, according to Fretwell. And all these materials direct interested individuals back to the Hopkins sales team, website, call center, etc. for follow-up and direct sales, she explains.

During its first AEP, Advantage MD enrolled nearly 4,000 members, which “for a new plan is pretty significant” and surpassed new enrollment for all the other plans combined in Maryland, says Fretwell. The insurer’s target for this year is 6,000, although she says Hopkins has had “a bit of a slow start,” which may have been due to noise surrounding the presidential election. In order to fully reach its annual goal, Hopkins will rely on more people enrolling post-AEP, when only those people who become newly eligible may enroll.

In addition, Hopkins is planning to launch an Employer Group Waiver Plan product, with enrollment starting March 1, 2017, that will first be available to Johns Hopkins’ retired employees. But the health system is speaking with its equity partners about an opportunity for their retirees as a “second wave,” and then as a third wave it would be made available beyond that group, and “not just in the health care space but regionally,” says Fretwell.

UPMC to Collaborate With Network Provider

Meanwhile, another provider-led MA plan sponsor recently unveiled a joint venture with a network health system. Pittsburgh-based UPMC Health Plan (which is operated by a subsidiary of the University of Pittsburgh Medical Center) on Nov. 22 said it will partner with Reading Health System to offer a “full spectrum” of health insurance products and related services to individuals as well as employers and their employees in the Reading service area. Reading Health, headquartered in West Reading, Pa., is an integrated, nonprofit health care system serving communities in Berks and surrounding counties and includes more than 1,000 physicians and providers across 46 locations. Berks County was added as a new service area for the UPMC for Life HMO plans in 2017.

The partnership allows Reading Health to have economic interest in the joint venture that includes but is not limited to value-based reimbursement, according to UPMC spokesperson Gina Pferdehirt. Starting in January, the health plan will provide third-party administrator and flexible spending account administration services for the health system’s employee benefits plan that serves more than 11,000 individuals. Throughout 2017, the new joint venture will introduce various products that include MA, administrative services only for self-insured employers, individual (exchange), commercial group, Special Needs Plan, Managed Medical Assistance (Medicaid) and Children’s Health Insurance Program offerings. Pferdehirt tells MAN that the partners are in the process of developing a strategic plan that will outline the various product options for rollout over the next five years.

Copyright © 2017 Managed Markets Insight & Technology, LLC. All Rights Reserved.

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