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Saturday, July 30, 2016
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Participate in the Project

Welcome to the website for the Wakely National Risk Adjustment Reporting Project (WNRAR). The objective of the project is to provide interim information for the risk adjustment program under the Affordable Care Act. This information is critical for health plan issuers for purposes of pricing health plans and estimating the ACA individual and small group risk adjustment transfer payments. Please review the tabs below for detailed information on this project.

Overview

Health plans participating in the project will receive the following benefits:

  1. Estimated 2015 risk adjustment payables and receivables
  2. Estimates of health plan specific risk scores by state and market for purposes of pricing and reserving products in 2016, as well as general strategic initiatives.
  3. Data diagnostics to assess potential data issues early, so they can be corrected.
  4. Detailed reports that show the key drivers behind risk scores.
  5. Guidance for estimating the pricing impact of high risk pool members and previously uninsured members entering the individual insurance market.
  6. A deeper understanding of the ACA risk adjustment program.
  7. We expect HHS to provide return files to verify data uploads. We do not expect these files to include market averages, which would only be available on an interim basis through participation in the WNRAR project. 
  8. Further, we expect that HHS will not release any detail pertaining to: pre-ACA business risk scores; including 51-100 lives in small group in states where applicable; details by HCC and comparing issuer to market; include completion estimates to risk scores
  9. Providing independent verification of market averages provided by HHS and derived from the enterprise data warehouse rather than EDGE directly

Participation in the project will not require the transfer of any detailed data to Wakely or any other outside parties. Participating companies will only provide Wakely with summary level results after running the Wakely Risk Adjustment Reporting model code on their data. Wakely has implemented very strict controls and security to ensure that even the summary level results by health insurance company will not be shared. The only information that will be shared with other companies is aggregate results by state and market, across all health insurance companies. In fact, this aggregate information is the primary reason for companies to participate in this project.

It is important to the success of this project that we receive notification of intent to participate from as many health plans as possible, as early as possible.  It is important to note that intent to participate is not a binding agreement to participate, it only represents a health plan's intention at the time the notice is provided.  Actual participation is contingent on results being submitted to Wakely and payment. 

To protect the confidentiality of health plan information and to ensure that the modeling is credible, Wakely has set a minimum participation requirement.  We will require participation from at least 75% of the state and market and at least three health plans each representing at least 5% of the market.  If either or both of the market minimums are not met and would likely not be met, we will contact all companies that had agreed to participate in that state / market and see if they would be willing to waive the minimum requirements and proceed with the simulation.  We are using NAIC data from the 2014 Supplemental Healthcare Exhibit report to determine enrollment by state and market.

How to Participate

We have tried to make it easy to participate in the Wakely National Risk Adjustment Reporting Project. Just follow these steps:

  1. Register with this website: To do this, please click on the Login button in the top menu.  Once you register, Wakely will list your company name on the Participants tab.
  2. Download & run the model: Click on the Participation Guide tab for specific guidance.
  3. Upload report: You are able to upload data as soon as you register with the site. The files to be uploaded are the output summaries from running the WNRAR code set. To upload data securely to your own private folder on our server, please go to the Data & Results page (you can also go there from the top menu).
  4. Access Results: Once we have compiled the results, we will notify registrants via email that the results are available on the website. You will be able to access results using the same process as in #3.

Technical Details

Wakely has issued several papers (see Resources tab) related to the risk adjustment and reinsurance provisions of the Affordable Care Act (ACA) . We believe it is critical for health plans to identify and correct data issues prior to submitting final data for 2015 and to have estimated risk scores available in early 2015 to price individual and small group products for 2016.

The following notes are intended to provide a high level discussion of the proposed reports that will be returned to the participants of the project. The focus of the 2015 results is a) pricing for 2016 products, and b) estimating risk transfers from the ACA risk adjustment program. A total of 9 versions of results will be provided for each of the 2015 runs. The result versions are described further below.

Unadjusted HHS (3 versions of results)

  1. Three versions of results will be provided.
    1. Version 1: This version will use all available 2015 information for a member in order to calculate the risk scores. The primary purpose of this version is to allow a comparison to 2014 partial year ‘unadjusted HHS’ version of results.
    2. Version 2: Similar to version#1, except that all data is assumed to be in Silver plans, no GCF adjustments are assumed.
    3. Version 3: Similar to version#3, except that only ACA-compliant experience is used.
  2. Note that it is difficult to get a good sense of the ultimate relative morbidity (or relative risk scores) from the ‘Unadjusted HHS’ results due to:
    1. Partial eligibility: Partially eligible members, particularly within a small data window, can distort relative risk comparisons (for example, if one issuer has more or less partially eligible members compared to the market average). The calculated relativity may or may not hold up well as experience completes through the year.
    2. Renewal patterns: The potential impact of the renewal pattern across issuers is likely very significant, since only the post-ACA experience is to be used towards calculation of a risk score. This is expected to bias the risk scores, such that a partial year comparison will likely not hold up well as experience completes through the year.
  3. For the reasons outlined in (c) above, we provide additional versions of results as described below.

Best Estimate of Morbidity (2 versions of results)

  1. In this version of results, each member’s risk score is completed to reflect a full year’s worth of experience. The reason is that all 2015 members are expected to be eligible for full year enrollment into ACA compliant plans in 2016. An exception is non-grandfathered pre-ACA policies that were originally cancelled in late 2013, however are now ‘in continuation’. Therefore we report an additional version of results, in which we account for the expectation that these continuation policies are expected to be eligible for risk transfer payments for only part of the year in 2016. Pre-ACA members that are known to have termed at the time that the data is run will receive a zero weight (since they will not be part of the 2015 risk pool).
    1. Version 1: Member risk scores adjusted to reflect a full year of experience, using the regression completion method - includes only those members with post-ACA experience in 2015.
    2. Version 2: Member risk scores adjusted to reflect a full year of experience, using the HCC completion method - includes those members with post-ACA experience in 2015, as well as non-grandfathered pre-ACA members. 

 Best Estimate of Risk Transfer (2 versions of results)

  1. In this version of results, each member’s risk score is completed to reflect projected 2015 ACA experience. This process is intended to get us a better indication of the full year risk transfer.
    1. Version 1: Member risk scores and member months are adjusted to reflect projected 2015 ACA experience, using the regression completion method - includes only those members with post-ACA exprience in 2015.
    2. Version 2: Member risk scores and member months are adjusted to reflect projected 2015 ACA experience, using the regression completion method - includes those members with post-ACA experience in 2015, as well as non-grandfathered pre-ACA members.

The results will be presented with sufficient detail such that pricing actuaries will be able to consider and appropriately reflect the impact of allowable rate variation due to age. We will include issues specific to each state / market in our communication of the average results.

Data provided to Wakely by health plans will not contain any financial expenditure information. Wakely will compile the results at a state and market level and provide those results compared to health plan results to each health plan that participated in a particular state / market.

Information provided to each health plan will include the following:

  1. Risk Score for health plan (individual, small group)
  2. Average risk score for state for the markets the health plan participates in (individual, small group). 
  3. Prevalence report showing proportion of member months by risk adjustment model category (age, gender, and condition categories such as diabetes, asthma, etc.). Risk weights will be included on the prevalence report and calculated 'driver' values will be included showing which categories are most significant in driving differences from the state / market average.
  4. It is important in a distributed approach to develop and review key data diagnostics. Such measures will be output by the software and include:
    1. Average number of months of eligibility during the data collection period,
    2. Number of unique members,
    3. Proportion of eligible members with a medical claim,
    4. Average unique diagnosis codes per claimant,
    5. Proportion of members/member months that were not grouped into a medical condition category.
    6. The output reports showing the above health plan values and state / market values will be provided as part of the reporting package

Wakely will review the results for each health plan for reasonability and only include health plan results in the state / market total if reasonable. We will contact health plans that submit unexpected results and work with them to identify and resolve any issues.

Participation Guide

If you are having difficulty accessing the pdf file, you can also link directly to the document by clicking here

FAQ

Frequently asked questions are answered below. If you are having difficulty accessing the pdf file, you can also link directly to the document by clicking here.

Status

This information is available only to participants in the project. You are not logged in. Please login to access this information.