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How Payers Can Weather the COVID-19 Storm – and Its Aftermath


COVID-19 has revealed the power and value of data analytics as claims have gyrated in unprecedented ways.

Throughout the pandemic, organizations accountable for managing members’ quality of care, healthcare costs, and risk have grappled with significant challenges as they plan for a COVID-19 world. Navigating the complexities of COVID-19 with data and advanced analytics will be key to payers’ ability to contain costs and support optimal outcomes.

Issues such as rising costs and declining revenue are top of mind for payer executives. During a recent Cotiviti webinar, challenges such as the rapid growth of telehealth and impact to clinical outcomes were among organizational leaders’ chief concerns amid the COVID-19 pandemic. Meanwhile, executives expect some of these major shifts—such as telehealth and provider/network management in support of value-based care—to become a permanent part of the healthcare landscape.

Rachael Jones

Rachael Jones

The impact of COVID-19 on members’ healthcare decision-making, the heightened level of risk for health complications, and the effect of COVID-19 on healthcare costs necessitates fundamental shifts in priorities, best practices, and future planning. Payers should focus on the following three areas to keep pace with the evolving environment.

Know the characteristics of your population. The COVID-19 outbreak presents not only an influx of patients with a new and poorly understood disease, but also raises the stakes in managing members with existing chronic conditions, such as diabetes, heart disease, and addiction. A survey by the Alliance of Community Health Plans and the Academy of Managed Care Pharmacy (AMCP) found 72% of consumers have dramatically changed their use of traditional healthcare services, with 41% delaying care and 31% saying they feel uncomfortable visiting their physicians’ offices.

Many consumers are delaying care for safety reasons. As millions lose their jobs and their insurance coverage due to the pandemic—a scenario faced by 5.4 million Americans this spring—concerns about cost are also holding consumers back from seeking needed care. Payers have seen an overall reduction in claim volume, particularly in commercial lines of business, as members lose employer-sponsored coverage. Additionally, there has been a drop in emergency department, inpatient, and office visit claims across all plan types, indicating that members are deferring care. Meanwhile, telehealth visits surged, comprising nearly 8.7% of total claim lines in May 2020 versus just 0.15% May 2019.

Here is a table that shows that huge swing in claims and certain types of claims (the increase in telehealth is truly remarkable) between Jan. 1-March 14 before the COVID-19 outbreak and March 15-May 30, during the early phase of the pandemic in this country:

Type of claim
Emergency dept.
Hospital inpatient

Source: Cotiviti

Each of these factors will have implications for health outcomes and cost management. For example, oncology specialists fear that as clinical research trials are paused and treatment protocols are revised, health outcomes for cancer patients—whose care is already disproportionately affected by COVID-19—will decline. Among members with diabetes, particularly seniors, there are concerns that the psychological stress of the pandemic will affect their ability to self-manage their disease.

One way that payers can more effectively manage vulnerable populations is by surveying at-risk populations at regular intervals to enable timely intervention. Cohorts to watch include those with chronic illnesses such as hypertension, diabetes, and kidney disease as well as members with these conditions who have been treated for COVID-19; members who experienced COVID-related complications; and members who have received critical care services during the pandemic.

Closely evaluate incoming COVID-19 data. While it may feel as though we have been in the throes of this pandemic for a long time, we are just beginning to understand the effects of COVID-19 from a cost-of-care perspective. As payers continue to gather data around member diagnoses, procedures, and outcomes—both those associated with COVID-19 and others witnessed during the pandemic—the resulting changes in member risk scores will be gradual. And because most risk algorithms use 12 months of claims to “normalize” the noise in the data, the majority of data used for risk analyses reflects pre-COVID periods. As a result, most payers will not see drastic changes in risk scores that are proportional to members’ changes in utilization for several months.

In this environment, real-time data analysis will be key to understanding the wax and wane of COVID-19, its effect on cost-of-care trends and member risk profiles, and how to manage and triage care in ways that most effectively add value. For example, leveraging “hot spot maps” based on population health analytics will help payers better understand areas of highest risk based on patient demographics, prevalence of chronic conditions, and medical spending patterns. Coupling this with risk-based predictive modeling will allow them to identify populations that would benefit from early intervention and pinpoint primary drivers of risk based on analysis of diagnosis symptom codes.

Increased speed-to-insight positions payers to be more agile in managing the health of vulnerable populations, such as by addressing social determinants of health that can impede recovery from infection. It also enables them to visualize the ways in which pent-up demand will drive utilization in the near and long term.

Drive real transformation around value-based care. According to Catalyst for Payment Reform, from 2012 to 2017 value-based reimbursement in the commercial sector increased from 10% to 53% of payments—but the growth rate slowed significantly over time. While this marks significant progress toward a value-based care model, it also underscores how far the industry still has to go. Already, experts have begun to speculate that COVID-19 could accelerate the move toward value-based payment, given the ways in which the outbreak disrupted traditional utilization patterns and thus fee-for-service payment. But starting a conversation around value-based payment with already-fatigued providers means strengthening relationships by easing their burden during the pandemic. It also requires more intense focus around data-sharing to support improved outcomes.

Payers can look for opportunities to alleviate providers’ administrative burden. They can consider relaxing claim filing requirements during COVID-19, increasing access to data analytics, and adjusting value-based payment programs to focus on outcome improvements that are within providers’ control during the pandemic.

Another key for mutual success is for organizations to leverage their own data to highlight opportunities for quality gains. Share data that show which members are most at risk of adverse outcomes during the pandemic and collaborate with providers around interventions that could mitigate or eliminate risk. Where possible, identify the factors that contribute to increased costs by provider, such as specific procedures or therapies.

One emerging opportunity for payers to support providers in their COVID-19 response is the use of data analytics to predict physician burnout. Factors such as the severity of member diagnoses by physician, the duration of visits by diagnosis (such as patients who require respiratory care), and the extent to which physicians have cared for members who have died after contracting COVID-19 all can lead to or compound physician burnout. Using data analysis to alert providers to specific physicians who may be at high risk for burnout supports and protects providers’ capacity for high-value care, now and after the pandemic.

Turning crisis into opportunity

Although COVID-19 presents tremendous uncertainty for payers, data-driven tactics give payers an avenue toward clarity and an edge in navigating the complexities of the pandemic. Emphasizing the use of data analytics to plan for members’ pent-up healthcare needs, aggressively monitor the health of vulnerable populations, and develop proactive interventions that enhance health and reduce risk will strengthen payer performance—now and in a post-COVID future.

Rachael Jones is senior vice president, performance analytics and quality for Cotiviti, healthcare analytics company.

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