Employer Group Waiver Plan (EGWP) growth has predominantly outpaced that of Individual Medicare Advantage plans over the past 10 years and continues to build in popularity. Many Medicare Advantage (MA) plans struggle with the best way to move forward in an EGWP market. There is uncertainty in what strategies will work to benefit the health plan sponsors, employer groups, and plan members.
Research shows that for current retirees, most sponsors (93%) expect to continue sponsorship for Medicare-eligible retirees in the near future. The number of large companies and public employers offering benefits has not changed significantly over the last five years.
For future retirees, sponsors are increasing eligibility requirements (minimum age/service requirements), etc. While some plans are phasing out coverage, a significant number of sponsors will continue to offer coverage to future retirees.
Despite some contraction in the number of employers offering health benefits to retirees, the 65+ group retiree market remains sizeable now and into the future.
The EGWP market is primed for growth and is an excellent opportunity for MA plans that implement thoughtful, well-rounded strategies.
The Convey family of companies have studied EGWP in-depth. From our experience advising on everything from market entry to operationalizing EGWP for MA organizations, we have identified areas that can result in a successful EGWP Medicare Advantage strategy.
Steps to EGWP Success
Some challenges that health plans encounter related to the administration of MA-EGWP plans include everything from the compliance rigor, administrative challenges, and year-round marketing.
EGWPs are not confined to the strict calendar year periods that traditional MA plans are required to follow. Engaging with multiple entities who could have different open enrollment periods, year-round marketing, and managing that population is something that some health plan sponsors have found to be a challenge.
The unique requirements touch all the areas within a health plan organization, including front office, middle office, back office, and most importantly compliance, as we would see with anything that is MA-related. Follow these steps to implement a successful EGWP strategy:
Step 1: Set Up Your Front Office
The front office is the first step to designing and implementing a successful EGWP strategy. You will need to ensure that your front office is capable of:
- Marketing. From a front office perspective, marketing is vital to drive membership growth. Employer groups need to make sure that they have a competitive benefit design that includes Part D and ancillary benefits.
- Pricing & Protocol Consistency. The Group MA pricing model and established protocols must be consistent with what the population you are trying to serve is looking for in a plan.
- Supportive Sales & Marketing Capabilities. Health plans need supportive sales operations infrastructure that includes rigor around RFP response capabilities and subject matter expertise.
- Market Expertise. Market expertise to support overall sales and administrative processes is critical to the success of an EGWP strategy. Subject matter expertise is valuable to any market initiative, but EGWP market strategies are often taken for granted with traditional Medicare Advantage Organizations (MAOs), resulting in higher expenses and troubled operations.
Step 2: Evaluate Your Middle Office
In terms of middle office, we must look at the effects on margins, cost management, and revenue optimization.
There are many benefits for the health plan and the sponsor or employer group for administering a retiree plan of this type. For example, offering and supporting EGWP allows employers to provide group medical, drug, and supplemental coverage at a reduced cost and / or increased benefits. This is because of the prospective payment and care management opportunities found in high performing Medicare Advantage plans.
Middle office teams must develop custom processes on top of capabilities to meet EGWP success. For the middle office, this includes:
- 4-Star Rated Offerings & Cost Management. Medical cost management results from integrated care coordination analytics and programs. Maintain the effects of those margins, whether it be through Star ratings, appropriate contracts, or physicians having the proper level of member engagement. Ensure that your organization can bring in the membership necessary to make the program cost-effective.
- Revenue Optimization. Risk adjustment tools and techniques drive revenue optimization to classify the membership appropriately. With an aging membership population, you want to make sure that you can maintain and receive the appropriate revenue for that member.
- Risk-based Local Partnerships. Local partnerships with physicians support the risk-based model, manage cost, evaluate abilities to make sure that you are meeting requirements, pull together crucial pieces of data, and analyze that information to ensure that you incorporate these points into your programs.
Step 3: Adress Back Office Support Needs
Look for administrative efficiency in daily activities to ensure that the member population, the health plan, and the employer sponsors are receiving all the care that they need. Your back office must address:
- Expansive Member & Provider Support. When it comes to operating a successful EGWP, your organization must provide exceptional member and provider support services beyond the traditional call center. For example, when you evaluate a traditional call center environment, you may find that it will require specific customizations for addressing EGWP, requiring further development or investment in both technology and business processes. Customizations could incorporate everything from benefit periods, what waivers apply, intake of new waivers, and designing customer service scenarios to certify that health plans, beneficiaries, and sponsors receive a suitable, or exemplary, level of care.
- Reporting Solutions. A robust reporting solution for both plans and employers is essential when executing a successful EGWP Medicare Advantage strategy. For example, multi-employer plan sponsors must delineate data, whether it be for membership purposes, or for ensuring appropriate capitation payments. Information management is a critical function of back office support for an employer group plan.
- Efficient Processing Platforms. An efficient back-office administrative processing platform configured for both group and Medicare requirements is necessary for strategic and successful EGWP execution. Both health plan sponsors and employer groups need to focus on meeting the requirements of Medicare. EGWPs contain varying degrees of flexibility to consider during the initial setup process.
Step 4: Compliance Requirements
EGWPs operate under the same compliance requirements in Chapter 9 of CMS’ Medicare Managed Care Manual (MMCM). Compliance is crucial to the success of any plan, especially plans as complex to operate as EGWPs. In terms of compliance, your organization needs to ensure:
- Oversight. Vendor and program oversight to ensure your operations remain CMS compliant is the most important element of an EGWP strategy. EGWPs are unique to the employer group market and offer flexibility in terms of requirements, but hundreds of other CMS requirements must be followed. And, with the increasing popularity of EGWP, CMS is expanding its own oversight.
- Audits. Internal audits, regulatory audits (like those from CMS), and financial auditing all require a unique type of support. Your organization will need to be prepared to handle these, and your partners need to be ready to support you.
- Compliance Monitoring Tools. Compliance monitoring tools to track regulatory changes and process deficiency remediation at multiple levels are necessary for a successful EGWP strategy. Think not just at a plan level, but also at a function or process level across many plan designs for different employer groups.
Addressing these four steps enables your organization to develop unique operating processes on top of the capabilities necessary for EGWP success Medicare market. Only if these points are met will your organization thrive in the EGWP market.
Administrative Considerations for EGWP Success
Administrative considerations are pertinent to health plan organizations venturing into supporting the EGWP program. Employers drive changes to services, and because of this, health plans need to consider:
- Offshore services may not be approved, which can add an expense to the organization. Traditional businesses may have both onshore and offshore capabilities. MA plans can conduct support offshore, but they must provide notice to, and be approved by, CMS. In EGWP markets, that may not work. As you bid on those accounts, the employer may have a requirement that will not allow offshore support.
- Eligibility file workflows–varying requirements. The reconciliation process poses additional complexities for EGWPs. Traditional MA plans conduct and reconcile enrollment activity between internal systems and CMS. In managing the enrollment activities for an EGWP plan, you may have to build additional workflows and processes into your operations. If the employer manages enrollment, you must then work out the workflows and processes for managing and reconciling that enrollment activity between yourself, the employer, and your internal systems.
- Premium billing methodology. Can you support split billing and other billing methodologies? How do you accommodate refunds if split billing has occurred? EGWP can make the bill splitting and reconciliation process more complicated. There are many requirements, and it is essential to evaluate your billing capabilities and systems as you go to market. At Convey, we have noticed that many plans are using some commercial off-the-shelf technology that is not designed for EGWP. Convey holds an advantage in that our systems are purpose-built to support EGWP programs and are in use internally. If your organization is going to handle this internally, this can be both challenging and complicated.
- Consistent service and custom communication needs are aspects that organizations need to be prepared for. Marketing communication may be co-branded or employer-branded, and customized communications may be required. This could throw a curve ball at your customer service team(s). Call center operations must be poised to respond to members, addressing their commentary or feedback. Consistency is key. Too many variations in approach can lead to service inefficiencies.
Roadmap for Successful EGWP Medicare Advantage Strategy
To summarize, the EGWP market is continuing to grow, and organizations looking to delve into this area need to follow our roadmap for EGWP success:
1. Address the opportunity. EGWP represents a significant opportunity to penetrate and leverage local public markets and grow your commercial relationships. Remember to monitor EGWP trends.
2. Embrace diversification. EGWP allows plans to diversify their Medicare market strategy while leveraging commercial relationships and lower acquisition costs. Remember, EGWP requires new capabilities (internally and externally) and presents administrative requirements not found in individual Medicare Advantage plans.
3. Set-up your front office and drive membership growth. Understanding your market and successfully marketing to them is key. Prepare your pricing and look to expand your ecosystem by adding more employers.
4. Evaluate your middle office. Cost management, revenue optimization, and risk-based models all affect your margins.
5. Address your back office. Strive for administrative efficiencies through elevated support services, robust reporting solutions, and efficient technology.
6. Ensure compliant operations. Your program, and your supporting vendors, should have healthy monitoring and auditing capabilities and support functions. With CMS looking at EGWPs more closely, you must be prepared for anything.