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Choosing and optimizing your Medicare Advantage plan’s FDR partners

Choosing an FDR partner for your MA plan

7 min read


Choosing and optimizing your Medicare Advantage plan’s FDR partners

This post is sponsored by Convey Health Solutions.

Medicare Advantage Organizations (MAOs) that align themselves with trusted First Tier, Downstream, or Related (FDR) Entities augment essential expertise, skills and industry knowledge of Medicare Advantage (MA). This is particularly beneficial in the critical areas of administrative services and information technology, where limitations on time, money and focus can be debilitating to a plan’s operations. In facing the multitude of challenges present in the highly regulated marketplace today, MAOs can reduce these operational burdens through immediate access to an FDR or delegated entity’s highly skilled and experienced workforce. New market entry, regulatory compliance and continual improvements to technology can be successfully managed by a partner that is able to scale and meet the plan’s needs.

FDRs often assist with:

  • Enrollment processing and verification
  • Resolution of appeals
  • Benefits coordination and administration
  • Claims management and billing
  • Call center support.

Today especially, due in part to the effects of the COVID-19 pandemic, “the capabilities around the consumer interface are going to be much more critical because so many people are doing things virtually or by mail order,” says Cary Badger, principal with HealthScape Advisors. “I think plans have underestimated that capability set.”

Consider the common scenario of a member calling in with a medication question. A typical response would involve a transfer to the pharmacy benefit manager, but ideally, the call center agent should be prepared to answer questions unique to Part D benefit management. “We’ve got to close that gap,” Badger said. With the right FDR, MA organizations can do this and more.

Planning for growth

With the expert assistance of a well-qualified FDR, plans can enjoy faster speed to market as well as efficiencies in scaling up when the time comes. MAOs need to consider where they want to be in two or three years and embed that strategy in both their selection criteria and contracting. This means engaging with FDRs that show the same interest in growth and can demonstrate an alignment with the plan’s goals.

The right FDR will provide innovative offerings and configurations, as well as look to new markets and supplement their products with consulting services that help plans grow. “An FDR that is willing to invest in a long-term, collaborative relationship enables the health plan to develop lines of business over time, competing successfully in existing markets as well as those it might pursue in the future,” says Badger.

The employer group waiver plan (EGWP) market is one such market that MA plans may choose to consider, as there are about 4.6 million MA members in EGWP in 2020 out of about 24.1 million MA members nationwide. The EGWP market is also growing at a 9% rate, compared with the individual market’s 5% rate, so “even if you’re not in EGWP in a big way today, you need to play to compete,” Badger said. He noted that payers should seek vendors with capabilities in both group and individual coverage, and they should be thinking about what the market holds for them several years down the road before signing a multi-year contract for administration. Proper vendor selection means looking beyond today’s goals and needs.

Before deciding on an FDR, plans should ask:

  • What will the FDR do for the plan after open enrollment is complete?
  • Do they have an end-to-end solution that is configurable and expandable?
  • Does the FDR have deep experience in MA and Part D markets?
  • Can the vendor maintain continuity of member information and experience across commercial and MA plans?
  • Does the FDR have redundant processes to ensure uninterrupted service delivery?
  • What kind of regulatory and compliance measures does the FDR have in place?
  • What capabilities exist beyond enrollment including billing, reporting and CMS audit support?

Regulatory considerations

When MA plans outsource critical services to a partner, these entities often qualify as FDRs, which brings a higher level of regulatory oversight. CMS holds the MA plan accountable for all services provided by the partner, including regulation, performance and compliance.

As noted in CMS regulations, “the MA organization agrees to take ultimate responsibility for all services provided and terms of the contract and otherwise fulfilling all terms and conditions of its contract with CMS regardless of any relationships that the organization may have with entities, contractors, subcontractors, first-tier or downstream entities.” This responsibility and the associated oversight requirements mean it can be difficult to change partners without the risk of business disruptions or additional compliance considerations, such as pre-delegation audits.

Therefore, MA and Part D organizations must choose FDRs carefully and seek those with deep knowledge of program regulations and a sound record of compliance.

FDRs also have their own compliance obligations, such as ensuring their downstream and related entities abide by regulations. CMS requires them to have measures for preventing, detecting and correcting regulatory non-compliance, as well as fraud, waste and abuse. Plans should examine their protocols for meeting these requirements and quickly adapting to new requirements.

Specific areas to ask about include:

  • Documented policies, procedures and standards of conduct, including business continuity and disaster recovery plans
  • Procedures for responding to and reporting potential fraud, waste, abuse and non-compliance
  • Employee training programs on various regulations
  • Effective lines of communication
  • A system for routine identifying and monitoring of compliance risks, and a mechanism for prompt response and mitigation.

Data privacy and service

Privacy is critical for any government contract, and plans should determine if a vendor partitions off protected health information. A lot of FDRs may not do this, but it is a best practice,” Badger says. Some MAOs now want member data completely partitioned off, rather than just adding a special prefix on the membership or Plan contract number. This adds another level of security and avoids problems with customer service and HIPAA regulations.

FDRs should also track and organize member data in a way that makes it more useful for the plan. For example, they can connect the dots for sales representatives by sharing information about member search history. That way, when a sales rep gets a call from a member, they will know if that person has been looking up information on certain elective surgeries and the representative can proactively provide the member with relevant information.

FDRs can also help plans elevate call center operations by equipping them to handle all forms of member inquiries. “Consumers have questions on providers, coverage and logistics, and somebody has to answer all of those questions for them in real time,” Badger says.

This kind of personalized, comprehensive service can improve member retention, and “retaining Medicare clients right now is a big deal,” Badger notes. This is especially important amid significant market growth–10% market growth is expected for 2020–and fierce competition that is pushing plans to expand coverage, provide better customer experiences.

FDR partnering done right

Relationships with FDRs should be more than transactional. To realize all the efficiencies available through an FDR partnership, MA plans must ensure they can trust their vendor enough to share data and connect services to provide better care for members.

The wrong FDR selection can be a time-consuming, costly burden for health plans, but the right one can bring significant value and improvements to the plan. An MA-focused FDR can streamline operational processes and save money while providing a faster, more personalized and more helpful experience for plan members.

Convey Health Solutions focuses on building specific technologies and services that can uniquely meet the needs of government-sponsored health plans. Convey provides plan and member management, supplemental benefit management and advisory solutions for the rapidly changing health care world. Learn more.