Medicare Advantage (MA) health plans, under which elderly Americans can choose to receive medical benefits through private companies, continue to grow rapidly. Thanks to changes in policy and the rising number of baby boomers qualifying for Medicare, enrollments in MA are expected to grow at a 5 percent compound annual growth rate (CAGR) through 2026. As we have previously discussed, analysis from Strategy&, PwC’s strategy consulting business, projects annual revenues for MA plans to rise from US$215 billion in the government’s fiscal year 2017 to more than $500 billion by 2025.

However, the expected increase of growth and profitability in this highly regulated market will sharpen the focus on regulatory compliance. Regulatory compliance for Medicare Advantage plans requires precision in both administrative activities (processing enrollment applications, including clear rationale in claim denial letters) and clinical activities (providing access to care and drugs at the appropriate time). Companies that fail to meet the standards set by the Centers for Medicare & Medicaid Services (CMS) will have difficulty achieving high CMS ratings (as our colleagues at the PwC Health Research Institute note in the just-released report on the top health industry issues of 2018), attracting and retaining members, expanding their geographic footprint, and achieving sustainable and profitable growth. And given the frequent changes in regulations, health insurance companies are trying to catch up to a speeding train.

Many plans are taking the approach of treating the symptoms rather than addressing the underlying problem. They’re redesigning systems and developing monitoring tools to mitigate compliance problems as they crop up. But changes to tactics and processes are not sufficient. What’s really needed is for payors to treat the root cause by building a culture of compliance excellence. Doing so will allow for solutions that prevent problems and address new issues as they arise. As our colleagues at the Katzenbach Centerhave shown, organizational culture can provide a powerful platform and mechanism for improving performance. But working with organizational culture can be a challenge because, as seasoned executives know, cultures don’t change very much, very fast. The key is to tap into the existing cultural traits that can energize a stronger focus on compliance.

Challenges to Compliance

Health insurers are grappling with the issue of precisely who is responsible for Medicare Advantage compliance. Although compliance teams accept the main ownership of monitoring adherence to regulation, it’s important to understand that these responsibilities cannot be undertaken in silos. A compliance culture needs to permeate the entire organization, including all functions. We’ve identified three common challenges to a compliance culture.

Leaders are not completely aligned. Senior leadership may agree on the importance of compliance, but misalignment crops up at lower levels because accountability is distributed throughout the organization and there is competition for resources. For example, business leaders may lack the resources they need to review, interpret, and implement new compliance guidance while also tackling high-volume operational activities.

Health insurers are grappling with the issue of precisely who is responsible for Medicare Advantage compliance. Although compliance teams accept the main ownership of monitoring adherence to regulation, it’s important to understand that these responsibilities cannot be undertaken in silos. A compliance culture needs to permeate the entire organization, including all functions. We’ve identified three common challenges to a compliance culture.

Leaders are not completely aligned. Senior leadership may agree on the importance of compliance, but misalignment crops up at lower levels because accountability is distributed throughout the organization and there is competition for resources. For example, business leaders may lack the resources they need to review, interpret, and implement new compliance guidance while also tackling high-volume operational activities.


Read more: https://www.strategy-business.com/article/How-Medicare-Advantage-Insurers-Can-Turn-the-Compliance-Function-into-a-Competitive-Edge

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