Strategic Provider Network Management: A National Payor With 3 Million+ Medicare Advantage Lives Saved $1M And Achieved Market Success With NetworkIntelTM
Executive Summary
In the wake of evolving CMS regulations, Medicare Advantage payors face significant cost pressure. This case study examines how a National Payor, managing over 3 million Medicare Advantage enrollees, leveraged HealthWorksAI’s NetworkIntelTM solution to achieve substantial cost efficiency in hospital network structuring. Targeted analysis in Ohio’s Franklin and Delaware counties enabled the National Payor’s actuarial team to identify potential adverse selection in hospital networks, saving $1M by re-aligning provider contracts and strengthening market competitiveness.
Context and Background
Rising Regulatory and Cost Pressures in Medicare Advantage
CMS’s regulatory changes, from adjustments in star ratings to tightened risk coding and prior authorization rules, are reshaping the financial landscape for payors. With rising care costs, our client needed to refine its network structure, particularly focusing on high-impact hospital providers, to balance financial sustainability with care accessibility.
Our Client’s Position as a Market Leader in Medicare Advantage
As a key player with a broad national network, client recognized the urgent need to control costs while ensuring network adequacy in a highly competitive market. This required a data-driven solution that could identify cost drivers quickly and accurately.
Client’s Key Challenges
Our client’s actuarial lead asked,
“Are we outliers with these hospital facilities – or not?”
“If we are the only ones contracting with certain high-cost hospital providers, we are taking on a disproportionate risk, which impacts both our costs and competitive positioning”
- Identifying High-Cost Providers: Our client’s actuarial team needed to pinpoint high-cost hospitals within their network to manage risk exposure effectively.
- Benchmarking Competitors: It was critical to assess if these high-cost providers were exclusive to our client, indicating possible adverse selection, or if competitors faced similar risks.
- Real-Time Analysis: Traditional methods for competitor and claims analysis were time-intensive, delaying actionable insights. Immediate results were necessary to make informed network changes.
How Our Client Leveraged NetworkIntelTM
Step 1: Data-Driven Market and Competitor Analysis
- 2 counties – Franklin and Delaware (OH)
- 4 competitors in each plan type-SNP type segment
- 93 Bids
- 26 Hospitals
Step 2: Financial and Risk-Based Provider Assessment
NetworkIntelTM’s claims-based hospital value scores provided HWAI’s team with a granular look at the financial impact of each provider. By identifying high-cost, low-value providers and comparing competitor affiliations, we evaluated which hospitals represented adverse selections.
Step 3: Network Disruption and Adequacy Insights
NetworkIntelTM’s disruption analysis models could provide our client’s actuarial and sales teams with crucial insights into how provider changes might affect both new and existing membership. Using the Physician Group Affiliation and NPI Search dashboards, our client’s teams could quickly identify affiliated provider options for members impacted by network adjustments. This would help them to ensure seamless care continuity and reduce potential member disruption.
Additionally, the Network Disruption and Network Builder with Adequacy dashboards could give the capability to our client’s team to assess potential member retention risks by analyzing factors like member switching behavior, historical membership loss, and health system brand value. These tools could allow our client’s sales team to align network decisions with membership growth and retention strategies, ensuring financial stability and competitive strength.
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Impact
The NetworkIntelTM-driven analysis provided the client with:
- Cost Savings of $1M: The analysis revealed $1M in hard savings by terminating contracts with high-cost providers.
- Time Efficiency: Our client could consolidate insights in days rather than months, enabling faster decision-making.
- Blueprint for Future Optimization: The process and insights are now a part of our client’s strategic approach to managing hospital networks in other regions, supporting financial sustainability and competitive positioning.
Strategic Insights for Medicare Advantage Leaders
“Instead of asking “You have problems – what can we do to help?”, HWAI team comes with “We have ideas on where we can help you”– that is a key differentiator in working with the HWAI team.”
- From a provider governance leader of the National Payor
- Harnessing Data for Network Efficiency: Payors benefit from real-time data platforms like NetworkIntelTM to rapidly identify cost drivers and adverse selection in their networks.
- Balancing Financial Goals with Access Adequacy: Combining financial insights with disruption and adequacy analysis allows payors to maintain member satisfaction and network integrity.
- Scalable Solution for Broader Network Optimization: By applying this blueprint, payors can replicate our client’s approach across markets, aligning financial sustainability with long-term care accessibility goals.
Outcomes
$1M savings
by restructuring high-cost provider contracts
2 Months
saved in analytics processing time
Blueprint for Expansion
in network management across regions
Key Stakeholders
- Actuarial Team
- Provider Network Team
- Sales & Marketing Team
Challenges
- Identifying High-Cost Providers: Needed to target high-cost hospitals to reduce risk.
- Benchmarking Competitors: Determined if high-cost providers were exclusive to our client.
- Real-Time Analysis: Traditional methods delayed insights, slowing network adjustments.
Our Approach
- Analyzed 2 counties, 4 competitors, 93 bids, 26 hospitals.
- Used hospital value scores to identify high-cost, low-value providers and potential adverse selections.
- Evaluated impact of provider changes on membership continuity and retention.
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