Health Plan Weekly

SCAN-CareOregon Merger Could Face Antitrust Scrutiny

SCAN Group, parent company of SCAN Health Plan, said last week that it plans to combine with CareOregon to become HealthRight Group. But the deal has yet to be approved by regulators — and because of Oregon’s strict antitrust laws and proactive regulators, the successful execution of the deal isn’t a given, experts tell AIS Health.

If the deal goes forward, the two nonprofit health plans will become one organization with revenues of $6.8 billion. SCAN operates Medicare Advantage plans in California, Arizona and Nevada, with MA operations launching in Texas starting in 2023. CareOregon serves about 500,000 members of Medicaid and CHIP plans, alongside some dual-eligible members. Together, they expect to serve nearly 800,000 health plan members.

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News Briefs: Centene Shakes Up C-Suite

Centene Corp. on Dec. 14 made several C-suite changes in order to “position the company for its next stage of growth.” Ken Fasola, who is currently the firm’s executive vice president of Health Care Enterprises, will be Centene’s new president, while current Executive Vice President and Chief Transformation Officer Jim Murray will become EVP, chief operating officer and report to Fasola. In addition, Dave Thomas will transition from EVP of Markets to CEO of Markets and Medicaid, and President and Chief Operating Officer Brent Layton will become senior adviser to CEO Sarah London “as he begins his transition towards retirement,” the company said.

Separately, Centene on its investor day projected total revenues in the range of $137.4 billion to $139.4 billion and adjusted diluted earnings per share (EPS) in the range of $6.25 to $6.40 in 2023. The firm also said it expects a health benefits ratio (also known as medical loss ratio) of 87.2% to 87.8% next year. “CNC’s ’23 outlook included EPS as expected, though revenue was light,” Jefferies analyst David Windley advised investors in a Dec. 18 research note. He added that Centene’s long-term targets for revenue growth by segment and consolidated EPS growth “are favorable to recent performance, and squarely within a common range across MCOs.”

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Spending Bill Ends Uncertainty by Setting Start Date for Medicaid Redeterminations

While making their financial projections for 2023, health insurers have had to acknowledge that the timing of a major headwind — the resumption of Medicaid eligibility redeterminations — continued to be a question mark. Now, if a newly released draft of Congress’ year-end spending bill is passed as written, that uncertainty will be removed and replaced with a firm date: April 1.

Industry observers tell AIS Health, a division of MMIT, that it’s helpful for both state governments and managed care organizations to have a definite answer about when millions of people will start losing their Medicaid eligibility — although the event itself remains a net negative for MCOs.

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Health Plans Can Leverage Data, Care Coordination to Manage Long Covid

An estimated 16 million working-age U.S. residents are afflicted with “long COVID,” but the risk factors and mechanisms of the condition — let alone how to treat it — are poorly understood, which means caring for patients with the disease is a daunting challenge for health plans. According to one health insurance leader, identifying members struggling with long COVID and proactively coordinating their care are crucial to contain costs and help members manage the disease.

Long COVID is a loose term for a condition with a variety of symptoms that persist after acute COVID-19 infection has passed. According to the National Institutes of Health (NIH), clinicians refer to the term as Post-acute Sequelae of SARS-CoV-2 Infection (PASC). Typical symptoms include fatigue, post-exertional malaise, shortness of breath, coughing, chest pain, heart palpitations, gastrointestinal issues, and joint and muscle pain, according to the Centers for Disease Control and Prevention. Medical researchers have yet to arrive at a consensus on the risk factors behind long COVID and have yet to develop a standard of care. For the most part, practitioners are just trying to manage symptoms as they come.

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MCO Stock Performance, November 2022

Here’s how major health insurers’ stock performed in November 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of November 30, 2022, at $547.76. Humana Inc. had the highest closing stock price among major Medicare insurers at $549.90.

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News Briefs: Health Care Spending Growth Slows in 2021 After Pandemic Spike

U.S. health care spending grew 2.7% to reach $4.3 trillion in 2021, representing a slowdown in growth compared to the 10.3% increase recorded in 2020. That’s according to the 2021 National Health Expenditures Report from CMS’s Office of the Actuary, which attributed the spending-growth slowdown to a 3.5% year-over-year decline in health care expenditures from federal government that jumped in 2020 amid the COVID-19 response. The decline in government spending “more than offset” the impact of greater insurance coverage and higher health care utilization seen in 2021. The report also noted that private health insurance spending increased by 5.8% in 2021 to reach $1.2 trillion.

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Becerra Touts Mental Health, Addiction Treatment Funding; Calls for Telehealth Reform

In remarks at a Dec. 13 Brookings Institution event, HHS Secretary Xavier Becerra touted the rollout of the 988 mental health assistance line and the Biden administration’s push for more mental health funding. In addition to promoting the administration’s victories, Becerra also reiterated the urgent need to recruit and retain burnt out practitioners. And he called on Congress to make pandemic-related emergency telehealth flexibilities permanent.

The relatively low amount of available mental health care providers, particularly for youth and in rural areas, is a stubborn barrier to care that has frustrated health insurers that need to meet network adequacy requirements.

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Union Suit Against Insurer May Be ‘Tip of the Iceberg’ Amid Plan Sponsor Discontent

If a new lawsuit filed by two Connecticut union locals against Elevance Health, Inc. is successful, health insurers managing self-funded plans could face a torrent of litigation from unhappy plan sponsors. Plan sponsor trade groups and the attorneys handling the Connecticut lawsuit argue that carriers across the country systematically overcharge administrative services only (ASO) plan sponsors for procedures — and that newly available price transparency data proves it.

The Connecticut lawsuit alleges that Elevance, the company formerly known as Anthem (which still sells plans under that brand name), charged excessive fees for some procedures or negotiated kickbacks with providers in its network. Attorneys for the union locals — International Union of Bricklayers and Allied Craftworkers Local 1 and Sheet Metal Workers’ Local No. 40 — accuse Elevance of “either unlawfully retaining…improperly discounted amounts for itself, or…imprudently overpaying providers. Either way, [Elevance] is in breach of its fiduciary obligations to the Plans” under the Employee Retirement Income Security Act (ERISA), the suit argues.

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Oscar Freezes ACA Signups in Florida, Citing ‘Market Exits by Certain Carriers’

In a move made at a critical juncture in the annual Affordable Care Act open enrollment period, Oscar Health, Inc. recently said it will “temporarily stop accepting new members in the state of Florida.”

Industry observers tell AIS Health, a division of MMIT, that the decision is clearly linked to fellow startup Bright Health Group, Inc.’s exit from all 15 states in which it was set to sell plans next year. But they’re divided on what the implications are for Oscar’s viability as a business.

In a Dec. 12 press release, Oscar — which was founded in 2012 and went public in 2021 — said that it “proactively engaged regulators [in Florida], as a result of the changing market dynamics following market exits by certain carriers, regarding options to manage its membership growth.”

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In 2024 ACA Payment Rule, Admin Offers Two Fixes for ‘Choice Overload’

While Americans are shopping for 2023 Affordable Care Act marketplace plans, CMS is already looking ahead to the next plan year, as the agency on Dec. 12 issued its annual omnibus proposed rule governing marketplace plans for 2024.

Experts say the policy shifts likely to draw the most industry attention are the newly proposed limits on non-standardized exchange plans, which build on regulations that have already drawn the ire of health insurers. However, CMS seems to give a nod to potential pushback by offering up an alternative means of limiting the dizzying array of plan options consumers now face.

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