According to the Balanced Budget Act of 1997, beginning in November 1998, Medicare beneficiaries eligible to participate in the Medicare+Choice program will be able to enroll in a participating plan. Beneficiaries will be able to disenroll from plans once a month through 2001, moving to disenrollment every 6 months in 2002 and finally to annual enrollment with a 3-month disenrollment period in 2003. Over the next 5 years (1998 to 2003), as the health plan choices made during an open season carry increasingly more significance due to the availability of smaller windows of time for disenrollment, the Health Care Financing Administration (HCFA) will be looking at organizations that run open-season programs for large groups of beneficiaries (be they employees or retirees). At the March 1998 workshop representatives of a major state employees' plan, the State of North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan (TSECMMP), and the Federal Employees' Health Benefits Plan (FEHBP), discussed some of the lessons that their organizations might offer HCFA. As part of the panel, General Electric, known for the effectiveness of its Answer Center, discussed how technology can best be used to convey basic information to a large, widespread population during an open season. All of these large purchasers emphasized the value of public-private partnerships and standardized benefits. They also emphasized the benefit of using retirees themselves to educate the beneficiary population.
North Carolina is an example of a state with an immature overall managed care market. The level of penetration into managed care outside the two major counties (Mecklenburg and Wake) is minimal. Hospital systems compete with each other only in the cities of Charlotte and Raleigh. The limited degree of competition among medical providers puts managed care organizations interested in operating in North Carolina in the position of competing with other plans using the same panel of providers and the same hospital. Of the 24 health maintenance organi
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--> 6 Best Practices and Models for an Open-Season Enrollment Process* According to the Balanced Budget Act of 1997, beginning in November 1998, Medicare beneficiaries eligible to participate in the Medicare+Choice program will be able to enroll in a participating plan. Beneficiaries will be able to disenroll from plans once a month through 2001, moving to disenrollment every 6 months in 2002 and finally to annual enrollment with a 3-month disenrollment period in 2003. Over the next 5 years (1998 to 2003), as the health plan choices made during an open season carry increasingly more significance due to the availability of smaller windows of time for disenrollment, the Health Care Financing Administration (HCFA) will be looking at organizations that run open-season programs for large groups of beneficiaries (be they employees or retirees). At the March 1998 workshop representatives of a major state employees' plan, the State of North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan (TSECMMP), and the Federal Employees' Health Benefits Plan (FEHBP), discussed some of the lessons that their organizations might offer HCFA. As part of the panel, General Electric, known for the effectiveness of its Answer Center, discussed how technology can best be used to convey basic information to a large, widespread population during an open season. All of these large purchasers emphasized the value of public-private partnerships and standardized benefits. They also emphasized the benefit of using retirees themselves to educate the beneficiary population. State of North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan* North Carolina is an example of a state with an immature overall managed care market. The level of penetration into managed care outside the two major counties (Mecklenburg and Wake) is minimal. Hospital systems compete with each other only in the cities of Charlotte and Raleigh. The limited degree of competition among medical providers puts managed care organizations interested in operating in North Carolina in the position of competing with other plans using the same panel of providers and the same hospital. Of the 24 health maintenance organi * The material in this chapter is based on presentations by David De Vries, Jim Morrison, and Guy Peterson. * David De Vries.
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--> zations (HMOs) licensed to do business in the state, only 12 participate in TSECMMP. The enrollment level in 4 of those 12 plans accounts for 75 percent of total enrollment in HMOs. TSECMMP was established by general statute by the North Carolina legislature in 1982. In 1986, it began offering its first HMO options to plan members. TSECMMP covers 533,000 people, 67,000 of whom are eligible for Medicare. Only 3,000 of those 67,000 people have chosen to join 1 of the 12 HMOs (less than 5 percent penetration). There is an expectation that the level of penetration will increase as more active employees (nonretired) enrolled in managed care become eligible for Medicare. Currently, 27 percent of all TSECMMP enrollees participate in some type of managed care plan. TSECMMP markets to all of its members, be they active or retired, with the same materials and provides them with the same benefits. All beneficiaries receive a booklet, "It's Your Choice," which is published every year and which provides basic information about the plans, including benefits and health plan telephone numbers. If a beneficiary is interested in a particular plan, it is up to him or her to call that plan and request additional information. Marketing materials are screened by TSECMMP. The state of North Carolina has attempted to make it fairly simple to compare information about different plans. The benefits are standardized, and copayments are regulated by state law. HMOs may offer additional benefits, such as vision or dental coverage; however, the benefits offered through TSECMMP tend to be more generous than those typically offered by HMOs to their other customers. Lessons Learned TSECMMP uses its retired employees to help pensioners and active employees with the decision-making and enrollment processes during its annual open-season enrollment period. The training of retirees across the state to become information counselors works well for TSECMMP. It has found that its beneficiaries work well with these counselors because the counselors have had practice in making the same decisions that the beneficiaries are facing. North Carolina has found that many of the plans that initially signed up to provide care under TSECMMP dropped out after the first couple of years. The plan's administrator advised HCFA that as competition among the Medicare+Choice plans begins to take place, it is likely that quite a few of the health plans will end up leaving the federal program as well. Of the plans that remain after the initial phase of competition, only a few will have enrolled most of the market share. To a great extent, TSECMMP relies on its participating health plans to provide detailed information on services that they provide to beneficiaries. This public-private partnership has worked well for the state, saving personnel and resources. Federal Employees' Health Benefits Program* FEHBP is the largest health plan in the country, with about 9 million covered lives. FEHBP currently has approximately 4 million actual contract holders, split evenly between ac- * Jim Morrison.
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--> tive employees and retirees. The proportion of retirees to active employees is expected to increase as the government continues to downsize. The program has 350 participating health plans. Ten of these operate nationwide and are open to all enrollees, and seven operate nationwide but are open only to specific groups of retirees and employees such as employees of the Federal Bureau of Investigation, the U.S. Foreign Service, and the Secret Service. The remaining plans are managed care organizations. For the past several years, all of the plans, including those labeled as fee-for-service plans, have possessed numerous features typical of managed care plans. The Office of Personnel Management (OPM) manages FEHBP and mandates an annual open season that extends for about 5 weeks in November and December of each year. Significantly, only about 5 percent of all enrollees switch plans during any one open season. OPM produces a plan comparison guide and approves the brochures and marketing materials used by the individual plans. Federal retirees receive their open-season enrollment materials at their address of record. Each packet is tailored to the enrollee's geographical location and contains information about all of the national plans for which the enrollee is eligible and all of the plans in the enrollee's area. Enrollees do not receive information on all 350 plans in the program. The enrollment materials that each enrollee receives indicate the plan in which he or she is currently enrolled, information on how to receive additional information about any plan in which the enrollee might have an interest, how to make an open-season selection, and how to switch health plans. Most active employee enrollees switch plans by using a Touch-Tone telephone. Retirees may use the automated telephone enrollment system unless two or more retirees reside in the same household. There are clear distinctions between FEHBP and the Medicare program. Federal retirees have about 25 to 30 years of experience in an open-season enrollment environment. Even though they may not have changed health plans very often over those 25 or 30 years, they have had the opportunity to do so and they have had direct interactions with health plans during this period of time. Also, because they have been in this system for a number of years, the retirees already possess a great deal of knowledge about deductibles, copayments, and so forth. These two factors indicate that HCFA's task will be much more complex than FEHBP's. Presenters indicated that a heavy premium will need to be placed on the general and massive education initiative on the front end of the Medicare+Choice program. Mitigating HCFA's task is the fact that Medicare is a program that enrolls only individuals. HCFA will not have to contend with the complexities of families, dependents, and dual entitlements. Additional differences include the fact that federal employees in FEHBP basically trust that OPM has screened the health plans and that they cannot make a bad choice. Medicare+Choice, however, introduces several new types of plans such as provider-sponsored organizations and provider service networks that do not have performance histories with Medicare beneficiaries. Lessons Learned Jim Morrison offered the committee several lessons from FEHBP's experience. The first lesson is that HCFA must make extensive use of the private sector, most importantly, the plans participating in Medicare+Choice. Participating plans play a large role in FEHBP, and almost all of the innovation for which the program and OPM take credit has come from the plan side. However, OPM has made use of the health plans' expertise in working with enrollees for many
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--> years. For HCFA to take on a similar relationship with the health plans would be a major change for the agency. The second lesson that may be learned is that the enrollment process should be simplified and automated as much as possible. It is important to involve the plans in this process as well. A prominent feature of any national advisory committee should be the inclusion of officials from several of the participating plans. The plans are the organizations facing the greatest financial risk, so it is in their interest to have informed customers. In the long run, the committee heard, HCFA should assume that health plans are acting appropriately, but HCFA should also stipulate that transgressors will receive heavy penalties and punishments. A final lesson is the need to make a reasonable allowance for Medicare beneficiaries to exercise a choice with which experts and analysts may disagree. It should be recognized that there will be anecdotal evidence and policy making as a result of horror stories, but HCFA will need to allow for the possibility that beneficiaries will exercise choices that may not be considered optimal by policy experts. Protection, however, will be needed to ensure that "poor" plan selection on the part of a beneficiary will not result in serious harm. The Effective Use of Technology: The General Electric Answer Center as a Case Study* The Balanced Budget Act of 1997 mandates that HCFA implement a toll-free telephone number to assist beneficiaries. Representatives of HCFA indicated at the workshop that the agency plans to employ about 3,000 telephone operators to handle Medicare+Choice calls, although HCFA has more recently indicated that it will only use 600 customer service representatives. For the past several years, HCFA has funded a call center demonstration project outside of Baltimore, Maryland, called Trailblazers. The demonstration project has received favorable reviews; however, outstanding models that exist in the private sector may provide ideas for further refinement. Hailed by many as a best practice for customer service and information, the General Electric Answer Center model was highlighted during the workshop. General Electric has more than 200,000 retirees, most of whom use an answer center modeled after the commercial Answer Center for health plan selection and information. General Electric was invited to present information on what makes a good customer service call center and how to avoid some pitfalls associated with the use of toll-free telephone numbers to provide information. Customer Requirements General Electric has found that customers' requirements for a good call center are clear: The phone should be answered quickly, the question asked should be answered, and that answer should be correct. If a customer is speaking with a live operator, that person should be courteous. If the customer is dealing with a voice response system, it should be easy to navigate. * Guy Peterson.
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--> Call Center Requirements Three areas differentiate a good call center from a mediocre one: people, technology, and an inquiry management process. People The right staffing is the most important element, and a General Electric representative informed the committee that the company prefers to hire "thinkers" over clerks. Each thinker (almost all of whom have college degrees) costs about $3,000 to $4,000 more per year than a clerk, but the overall results are worth the up-front investment to General Electric. Once call center employees are hired, they are thoroughly trained, and that training is constantly reinforced. General Electric suggests that good call centers provide feedback to their operators, recognize good performance, and provide career paths to those not wanting to make the call center their career. Technology The next key component in a good call center is technology. The telecommunications industry possesses the ability to create a toll-free telephone system with highly flexible capabilities. A good call center will use the latest technological advancements to the utmost degree possible. The technology used by a call center should at least include a basic call-monitoring system, an inquiry tracking system, the proper capacity and switching technology, a voice response system, an information system for operators to obtain quick and accurate answers to questions, and Internet access that provides the same information as the voice response system. Throughout the workshop participants provided testimony regarding the reluctance of senior citizens to use voice response systems. Several testified that when Medicare beneficiaries contact health plans, they spend an average of 25 minutes on the telephone with the operator. To the contrary, General Electric has found that 50 percent of its pensioners use the voice response system, thereby circumventing an operator interface for this segment of the retired population. Table 1 Typical Costs Incurred by General Electric for Information Requests Method of Contact Cost per Contact ($) Face-to-face counseling 20.00 Letters and forms 10.00 Live operator telephone call 3.00 Voice response telephone call 1.00 Internet 0.40 No contact 0 Inquiry Management Process The third element in a good call center is an inquiry management process. When dealing with a large volume of calls, it is important for the system to manage those calls and not let the calls manage the system. General Electric logs in each call received and dissects the information in a variety of ways to determine better methods of operation. The overall objective of a call center is to reduce the overall number of calls or to drive more of the inquiries to a voice response system or the Internet. Each phone call, particularly one handled by a live operator, is
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--> viewed as a defect in the information infrastructure. Once a particular question is asked several times, General Electric determines a way to get the correct or more clear information to its retirees either on the voice response system, on the Internet, or by altering its printed materials to be more specific. Research indicates that there are wide variations in the cost of an inquiry. Table 1 presents the typical costs incurred by General Electric for different types of information requests.