In my post from Monday on LifeMasters seeking Chapter 11, I dropped a BTW comment.
The part that’s puzzling to me is the statement that LifeMasters owes $125 M to CMS. That’s hard to figure…the company only participated in MHS for a few months, and to my knowledge MHS is the only Medicare demo that required guaranteed savings (i.e., payback if targets aren’t hit).
I really have to stretch my imagination to compute how CMS ran the tab to such an astronomical number. It raises questions around CMS’ good faith as a business “partner”.
Let’s do the math.
- LifeMasters participated in MHS from 8/05 through 12/06 — 17 months.
- Estimated monthly “fees” advanced by CMS — under $40 M (20,000 patients x .90 participation rate x $130 per patient per month x 17 months — this is a high estimate)
How do you explain the difference between $125 M (amount supposedly owed) and $40 M (estimated actual payments to LifeMasters)?
- CMS claims LifeMasters can’t get out of the contract?
- CMS not flexible on full 3 year comparison of intervention vs. control group?
- CMS still insists on 5% savings from LifeMasters? (even though it later allowed other MHSOs to back off to break even vs. 5% savings?
- something else?
So how could LifeMasters wind up owing CMS $125 Million!!!???
The title of this series of blog posts has been “CMS Bumps Off Medicare Health Support”. I think that’s the right imagery.
Mr. O, CMS seems to be a good place to start with your campaign to reform government and make it transparent.
Updated: 3:30 PM, 9/17/09
A colleague called and politely tapped me on the shoulder about my back-of-the-envelope calculations about how LifeMasters owes $125M to CMS.
LifeMasters had 3 separate contracts with CMS; my math only accounted for LifeMasters Oklahoma Medicare Health Support (MHS) project.
While I wish that my colleague would have felt comfortable posting a comment on the blog or to the broader DM listserv, I understand there are many sensitivities involved.
So, I stand corrected on my math. My concerns about lack of transparency around MHS remain.
Table of contents for the series--CMS Bumps Off Medicare Health Support
- CMS: “Rumors of Medicare Health Support’s Death Have Not Been Greatly Exaggerated”
- $389 M of Healthways’ Market Value Vaporizes After CMS Announcement. What Happened?
- Insufficient Evidence to End Medicare Health Support
- Guest Post: The CMS Announcement Of Medicare Health Support Program Cancellation — What It Means For Buyers
- Medicare Health Support: “Do not go gentle into that good night”
- The Medicare Health Support Saga: Opacity in Government Going Strong
- NYT Provides More “Enlightened Ambiguity” on Medicare Health Support
- Healthways Fights an Uphill Battle on Medicare Health Support Phase II
- CMS Releases 2nd Report on Medicare Health Support
- Medicare Health Support: 8 Takeaways on Building Better Bridges
- Medicare Health Support (MHS) Claims Another Victim: LifeMasters Files for Chapter 11
- Lifemasters Bankruptcy: Will CMS Earn Reputation as a Good Business Partner or Thug?