A few months ago, we outlined the three major models being developed in response to CMS’s Global and Professional Direct Contracting Model. In two cases, the practice management and center-based models, estimating growth and evaluating TAM are straightforward. By regularly counting the number of National Provider IDs associated with each practice at each location and then linking it to the number of beneficiaries those clinicians cared for, you an get a pretty good idea how many claims-aligned beneficiaries there are.
For the insurer-based model, things are opaque. CareMore Aspire (ANTM), CLOV and HUM are acting more like a financing and risk management vehicle for practices, many of them small, that wish to participate in the GPDC model but perhaps lack the necessary data and infrastructure.
For ANTM’s CareMore and HUM, the DCE program is so tiny it won’t bear a mention by management for a while. CLOV has been left for dead by the street for the time being. However, one of the worries for policy people is that the Direct Contracting Model will get swallowed up by the large insurers, contrary to the intent of the program.
For that reason, it makes sense to follow the insurers’ progress as they develop their programs.
Claims Assignment
Under the Direct Contracting Program, Traditional Medicare beneficiaries are assigned based on claims history. Additionally, a beneficiary can elect to name a clinician with whom they may or may not have claims history to be their PCP. As the program just began in April and voluntary alignment will require a ramp in marketing, the focus for now is on how many beneficiaries each DCE has acquired via claims-based alignment.
As spelled out in the Financial Operating Overview claims alignment follows these steps:
- CMS compares the following:
- The weighted allowable charges for all PQEM Services that the beneficiary received from DC Participant Providers in each DCE participating in the GPDC; and
- The weighted allowable charges for all PQEM Services that the beneficiary received from each provider or supplier that is not a DC Participant Provider and identified by a Medicare-enrolled billing TIN.
Weighted allowable charge = The allowable charge for PQEM services provided during the first (earlier) alignment year will be weighted by 1/3; the allowable charge for PQEM Services provided during the second or more recent alignment year will be weighted by a factor of 2/3.
PQEM services = a list of HCPCS Codes that are frequently billed for Evaluation and Management Services or their equivalent. A list of codes can be found here. See tab labeled HCPCS Codes.
- The Two Track Algorithm:
- If 10% or more of the allowable charges incurred on PQEM Services received by a beneficiary during the 2 alignment years are furnished by Primary Care Specialists, then beneficiary alignment is based on the allowable charges incurred on PQEM Services furnished by Primary Care.
- If less than 10% of the PQEM Services received by a beneficiary during the 2 year alignments are furnished by Primary Care Specialists, then beneficiary alignment is based on the PQEM Services by Selected Non-Primary Specialists.
- Based on these rules, CMS will align a Beneficiary to the DCE based on claims alignment if CMS determines the beneficiary received a plurality of his/her PQEM Services during the two Alignment Years from the DCEs Participant Providers.
Data on billing of weighted allowable charges for the defined PQEM list of codes is only available for a portion of the 2018 alignment year which would be weighted less than the subsequent year. However, utilization data does not vary much from year to year although for a small practice those changes could be material.
Overall, about 56.5M beneficiaries received about 100M E/M services in 2018 classified under the most popular code, HCPCS 99213. For the second most popular code, 99214 there were about 95M beneficiaries receiving 93M services. There is some overlap there. For example, a provider may bill HCPCS Code 99213 on behalf of a beneficiary and then six months later submit a claim for 99214.
The third and fourth most popular codes are for new patients. Codes 99203 and 99204 were billed on behalf of about 20 million beneficiaries.
In assigning beneficiaries, CMS first defines which providers can participate in the program. Primary Care Specialists and non-Primary Care Specialist are designed by Medicare Specialty Codes which are crosswalked to the Practice Taxonomy Code. You can find the list of Taxonomy and Medicare Specialty Codes in the same spreadsheet in tabs labeled DC Primary and DC Non-Primary.
Using the above algorithm, beneficiaries are assigned to the select practitioners associated with a Direct Contracting Entity in those state in which they are approved to operate.
CareMore Aspire and CLOV have disclosed the names of their participant and preferred providers (i.e., their DCE “network.”) while HUM has not; although we do have a call into IR to see if they will share. CareMore lists the names of the individual participant providers while CLOV lists the names of the practices.
CLOV Participant Providers
The case of CLOV, we identified about 2400 clinicians associated with the list of participant providers the company released. We removed any that did not qualify as eligible providers (i.e., did not have correct taxonomy code). CLOV appears to have contracted with 1500 clinicians with an eligible Primary Care taxonomy code and 335 clinicians with an eligible Non-Primary Care Taxonomy code.
When we eliminate clinicians practicing in states that are not included in the Direct Contracting Program, the number of providers with eligible Primary Care taxonomy codes falls to 959. For practitioners with eligible Non-Primary Care taxonomy code, the total is 132.
The number of eligible clinicians participating in CLOV’s direct contracting program and thus used to assign beneficiaries is somewhere between 1100 and 1800, with the upper bound being consistent with management’s disclosure.
It is also important to note that the claims assignment is based on the where the beneficiary lives so it is possible that an individual living in Connecticut but seeing a PCP in New York would be excluded from our approach to the data.
To estimate the beneficiaries that will be claims assigned to CLOV’s DCE, we focused on the most popular HCPCS codes that generally represent a clinician’s client base. As we pointed out these codes are 99213, 99214, 99203 and 99204. While clinicians, especially those classified as Non-primary care specialist, bill regularly under other codes, the number of claims assigned beneficiaries will probably not be material.
Of the ~1800 clinicians that could be included in CLOV’s DCE program, about 800 billed for 99213, 800 billed for 99214, 330 for 99203 and 300 for 99204. Those figures do not represent unique providers and there will be significant overlap. Given 99213 is the most frequently billed we decided to use that code to estimate total beneficiaries eligible for participation.
In 2018, the participant providers, Primary Care Specialist and Non-primary Care Specialist billed HCPCS code 99213 on behalf of 120k Medicare.
That gross number would be below the original projections of the company of ~200k but above more recent disclosures of 62.5k. The wrinkle with CLOV that makes it different from other direct contracting programs is that it only considers a beneficiary part of the Direct Contracting if the physician signs up for Clover Assistant.
On the call tonight, the company indicated they expected most new Direct Contracting lives to come via claims adjustment. Unless the rules change – and the rarely do for models – CLOV will need to wring new lives out of their existing Direct Contracting population of beneficiaries. CLOV will also be able to pick up new Claims-aligned beneficiaries as the populations in the states where they operate age.With MA enrollment increasing a mere 0.4% QoQ, CLOV’s retail “hypergrowth” narrative remains questionable.
CareMore (ANTM) Providers
CareMore is taking a much more targeted approach. We were able to identify 78 providers, virtually all of them Primary Care Specialists serving about 15k beneficiaries. The focus of CareMore’s attention, which should not be a surprise to anyone who knows the history of CareMore and Aspire are high cost residents of non-skilled nursing facilities. The top four codes billed on behalf of Medicare beneficiaries are ones associated with professional services rendered to patients in these types of venues.
Emily Evans
Managing Director – Health Policy
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