Week 6: Utilization and Claims Trends

Developing and Using Reports on Utilization and Claims Trends (10 minutes)

  1. Identify who is responsible for reporting, monitoring and investigating trends in covered members' utilization of health care services and payment for health claims. Identify the number of staff and proportion of administration expenses devoted to managing the day-to-day reporting and investigation of utilization and claims trends.

    1. Identify the number of staff and proportion of administration expenses devoted to the reporting, monitoring, and investigating of trends in utilization and claims.
    2. Identify the separate staff, resources and expenses that may be associated with reporting, as well as monitoring and investigating of trends in utilization and claims for each of the following markets:
    1. Medicare/Medicaid;
    2. Individual/small employer (50 or fewer eligible employees) insured plans;
    3. Large employer (over 50 eligible employees) insured plans; and
    4. Administration of self-funded plans.

  2. Explain what proportion of each of your company's premium dollar for calendar year 2008 was paid out in payments to providers for services provided to your health plan's insured members.

  3. During the 2008 calendar year, how often did you generate reports for your health plan's senior management, providers, and employers buying your health plan regarding trends in utilization and claims? What types of reports were generated? Did you generate different reports for different managers within your organization? Explain in detail the types of reports generated, the audiences for these reports and the reasons that you collected and reported this information.

Trends in Utilization and Forecasting Future Trends (15 minutes)

  1. In preparation for this hearing, the Division of Insurance forwarded a worksheet file 1 on utilization trends for Massachusetts HMOs between 2004 and 2008. The file presents statistical utilization trends in inpatient and outpatient services for HMO's insured business. Identify whether your health plan is seeing similar trends in the utilization of the following categories and the reason that your health plan may experience different trends than included in the aggregate figures:

    1. Non-behavioral health inpatient care
    2. Behavioral health inpatient care
    3. Non-behavioral health outpatient care
    4. Behavioral health outpatient care

  2. According to page 39 of the report entitled "Trends in Health Claims for Fully-Insured, Health Maintenance Organizations in Massachusetts, 2002-2006" that was produced by the Oliver Wyman consulting company in September, 2008, 2 insured health plan non-governmental utilization for hospital services provided on an inpatient basis decreased by 0.7% on an average annual basis between 2002 and 2006. Explain whether you have seen similar changes in utilization for 2007, 2008 and 2009, or explain reasons that utilization may have changed or actions that your company may have taken that may have impacted utilization in these categories.

  3. According to page 39 of the report entitled "Trends in Health Claims for Fully-Insured, Health Maintenance Organizations in Massachusetts, 2002-2006" that was produced by the Oliver Wyman consulting company in September, 2008, 3 insured health plan non-governmental utilization for laboratory/pathology/radiology services provided on an outpatient basis in a hospital increased by 17.7% on an average annual basis and all other hospital services provided on an outpatient basis increased by 15.8% on an average annual basis between 2002 and 2006. Explain whether you have seen similar increases in utilization for 2007, 2008 and 2009 and explain reasons that utilization may have changed and any actions that your company may have taken that may have impacted utilization in these categories.

  4. According to page 39 of the report entitled "Trends in Health Claims for Fully-Insured, Health Maintenance Organizations in Massachusetts, 2002-2006" that was produced by the Oliver Wyman consulting company in September, 2008, 4 insured health plan non-governmental utilization for laboratory/pathology/radiology services provided outside a hospital increased by 4.9% on an average annual basis and all other professional health care services increased by 6.0% on an average annual basis between 2002 and 2006. Explain whether you have seen similar increases in utilization for 2007, 2008 and 2009 and explain reasons that utilization may have changed and any actions that your company may have taken that may have impacted utilization in these categories.

  5. Explain your company's average annual utilization trends for the (a) Medicare/Medicaid; (b) large group; (c) small/individual merged and (d) self-funded markets for the following utilization services and explain the reasons why your company sees differing utilization trends among any of the market segments:

    1. Non-behavioral health inpatient care
    2. Behavioral health inpatient care
    3. Hospital outpatient services
      1. Radiology services
      2. All other services
    4. Non-behavioral health professional office visits
    5. Behavioral health professional office visits
    6. Prescription drugs
    7. Medical supplies

  6. Explain the categories of health care utilization that your company follows closely. Identify whether there are any specific types of services (e.g., types of procedures or surgeries), types of service locations (e.g., in an ambulatory surgery center or hospice), types of conditions (e.g., diabetes or cancer) or prescriptions or supplies (e.g., types of enteral formulas or DME) that you follow to determine whether your company needs to more closely monitor the medical necessity of utilization.

  7. Explain any utilization change "triggers" or benchmarks that may cause your company to more actively investigate any changes in utilization (either upward or downward).

  8. Explain how your company monitors quality metrics along with utilization trends to evaluate whether there are any concerns about past utilization that may influence company medical management decision-making .

  9. Explain how your company uses prior-year utilization trends when considering the range of utilization that covered members may have in future periods. Explain all the reasons that your company may forecast that any type of utilization may increase or decrease in future periods.

  10. Explain how your company factors in the risk of unusual or catastrophic levels of utilization into its forecasts for utilization in future periods.

  11. Explain how your company factors in the changing demographics of your covered population (e.g., changes in the age/sex of members) when making forecasts of future utilization. Provide details separately about expected changes in utilization due to changes in age/sex of members and the reasons that your company believes that such changes may influence utilization patterns.

  12. Explain how your company factors in new technology when making forecasts of future utilization. Provide details separately about expected changes in utilization due to differing types of inpatient, outpatient, prescription or supplies and the reasons that your company believes that such changes may influence utilization patterns

  13. Explain how your company factors in changes in your provider network when making forecasts of future utilization. Provide the reasons that your company believes that such changes may influence utilization patterns.

  14. Explain how your company factors in your covered persons' changing use of providers within your provider network when making forecasts of future utilization. Explain the reasons that your company believes that such changes may influence future utilization.

  15. Explain how your company factors in changes in expected cost-sharing designs of covered members when making forecasts of future utilization. Provide details separately about expected changes in utilization due to changes in copayments, deductibles, coinsurance or other cost-sharing features and the reasons that your company believes that such changes may influence utilization patterns.

  16. Does your company do retrospective analyses of your company's actual trends as compared to forecasted trends in utilization? If no, explain why not. If yes, explain how this information is used in future forecasts and compare your company's forecasted experience to actual experience in the following categories:

    1. Non-behavioral health inpatient care
    2. Behavioral health inpatient care
    3. Hospital outpatient services
      1. Radiology services
      2. All other services
    4. Non-behavioral health professional office visits
    5. Behavioral health professional office visits
    6. Prescription drugs
    7. Medical supplies

  17. Explain how you measure the effect of your health plan's cost containment programs impact on utilization trends and how this impacts your forecasts of future utilization in the following categories:

    1. Non-behavioral health inpatient care
    2. Behavioral health inpatient care
    3. Hospital outpatient services
      1. Radiology services
      2. All other services
    4. Non-behavioral health professional office visits
    5. Behavioral health professional office visits
    6. Prescription drugs
    7. Medical supplies

Trends in Claims Payments and Forecasting Future Trends (15 minutes)

  1. According to page 40 of the report entitled "Trends in Health Claims for Fully-Insured, Health Maintenance Organizations in Massachusetts, 2002-2006" that was produced by the Oliver Wyman consulting company in September, 2008, 5 the trend for the average per day cost of hospital services provided on an inpatient basis for members of insured non-governmental health plans increased by 9.9% on an average annual basis between 2002 and 2006. Explain whether you have seen similar trend changes for 2007, 2008 and 2009, or explain reasons that trends may have changed or actions that your company has taken that may have impacted service costs in these categories.

  2. According to page 40 of the report entitled "Trends in Health Claims for Fully-Insured, Health Maintenance Organizations in Massachusetts, 2002-2006" that was produced by the Oliver Wyman consulting company in September, 2008, 6 the trend for the average cost for laboratory/ pathology/radiology services provided outside a hospital increased by 6.2% on an average annual basis and all other aggregate professional health care services increased by 3.5% on an average annual basis between 2002 and 2006. Explain whether you have seen similar increases in trend for 2007, 2008 and 2009 and explain reasons that trends may have changed and any actions that your company may have taken that may have impacted utilization in these categories.

  3. Explain the categories of health care average costs that your company follows closely. Identify whether there are any specific types of services (e.g., types of procedures or surgeries), types of service locations (e.g., in an ambulatory surgery center or hospice) or prescriptions or supplies (e.g., types of enteral formulas or DME) that you follow to determine whether your company needs to more closely monitor the medical necessity of certain expensive utilization.

  4. Explain any average cost "triggers" or benchmarks that may cause your company to more actively investigate any changes in average costs (either upward or downward).

  5. Explain how your company monitors quality metrics along with average cost trends to evaluate whether there are any concerns about past average cost changes that may influence company medical management decision making .

  6. Explain how your company uses prior-year average cost trends when considering the range of average costs in future periods. Explain all the reasons that your company may forecast that any type of service's average costs may increase or decrease in future periods.

  7. Explain how your company factors in the risk of unusual or catastrophic levels of utilization into its forecasts for changes in average costs in the future.

  8. Explain how your company factors in new technology when making forecasts of future average costs. Provide details separately about expected changes in average costs due to differing types of inpatient, outpatient, prescription or supplies and the reasons that your company believes that such changes may influence future average costs of services.

  9. Explain how your company factors in changes in providers in your provider network when making forecasts of future average costs. Explain the reasons that your company believes that such changes may influence future average costs.

  10. Explain how your company factors in your covered members' changing use of providers within your provider network when making forecasts of future average costs. Explain the reasons that your company believes that such changes may influence future average costs.

  11. Explain how your company factors in changes in expected cost-sharing designs of covered members when making forecasts of future average costs. Provide details separately about expected changes in average costs due to changes in copayments, deductibles, coinsurance or other cost-sharing features and the reasons that your company believes that such changes may influence average costs.

  12. Does your company do retrospective analyses of your company's actual trends as compared to forecasted trends in average costs. If no, explain why not. If yes, explain how this information is used in future forecasts and compare your company's forecasted experience to actual experience in the following categories:

    1. Non-behavioral health inpatient care
    2. Behavioral health inpatient care
    3. Hospital outpatient services
      1. Radiology services
      2. All other services
    4. Non-behavioral health professional office visits
    5. Behavioral health professional office visits
    6. Prescription drugs
    7. Medical supplies





1 Derived from material submitted to the Division of Insurance by Massachusetts Health Maintenance Organizations as part of their annual submission of inpatient/outpatient utilization reports.
2 Available at http://www.mass.gov/Eoca/docs/doi/Consumer/MAHMOTrendReport.pdf pdf format of Trends in Health Claims for Fully-Insured,...
3 Available at http://www.mass.gov/Eoca/docs/doi/Consumer/MAHMOTrendReport.pdf pdf format of Trends in Health Claims for Fully-Insured,...
4 Available at http://www.mass.gov/Eoca/docs/doi/Consumer/MAHMOTrendReport.pdf pdf format of Trends in Health Claims for Fully-Insured,...

5 Available at http://www.mass.gov/Eoca/docs/doi/Consumer/MAHMOTrendReport.pdf pdf format of Trends in Health Claims for Fully-Insured,...

6 Available at http://www.mass.gov/Eoca/docs/doi/Consumer/MAHMOTrendReport.pdf pdf format of Trends in Health Claims for Fully-Insured,...