Health Plan Weekly

2022 Outlook: MAOs Face Payment Unknowns, Increased Competition This Year

For the Medicare Advantage industry, change wasn’t a major outcome of the Biden administration’s first year in office. But for 2022, MA organizations face a host of unknowns — such as potential risk adjustment and star ratings changes that could impact plan revenue — and challenges that include staying competitive in an increasingly rich benefits landscape. For AIS Health’s annual roundup of perspectives on the year ahead, industry experts weigh in on how doing business in 2022 might differ from previous years.

AIS Health: What do you view as some of the biggest challenges or uncertainties facing MAOs in 2022?

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By the Numbers: National Health Insurance Market in December 2021

Although the pandemic-driven economic crisis led to a massive increase in unemployment, loss of commercial health coverage has not been as great as predicted, and enrollment has rebounded over the past year. Meanwhile, the launch of a special enrollment period for the federal health insurance exchange and the temporarily expanded premium subsidies in the individual market led to membership growth in managed Medicaid and exchange plans, according to AIS’s Directory of Health Plans. Among the top five Blue Cross Blue Shield plans, all but BCBS of Illinois saw enrollment increases compared with December 2020.

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News Briefs: Humana Lowers MA Growth Estimate | Jan. 7, 2022

Humana Inc. said it is decreasing its net membership growth estimate for its individual Medicare Advantage products, sending the insurer’s stock tumbling. In a Jan. 6 filing with the Securities and Exchange Commission, Humana said it now expects to add 150,000 to 200,000 members to its individual MA plans in 2022, down from a range of 325,000 to 375,000 members. The company said its revised estimate “is primarily attributable to higher than anticipated terminations during the AEP [annual election period], combined with the expectation of higher than originally projected terminations for the remainder of 2022.”

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News Briefs: Biden Promises to Deliver Free At-Home COVID Tests | Dec. 23, 2021

On the heels of announcing that private health insurers will soon have to reimburse Americans for at-home COVID-19 tests, President Joe Biden said on Dec. 21 that the federal government will also distribute a half-billion free at-home tests. During the president’s remarks, which come as case counts are rising due to the omicron variant, he acknowledged that “we need to do better with at-home testing,” adding that the administration will set up “websites where you can get them delivered to your home.” Biden also said the federal government will set up emergency testing sites in areas that need additional testing capacity, starting with sites in New York City.

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News Briefs: AMA, AHA Sue Over Surprise Billing Regulation | Dec. 10, 2021

The American Medical Association (AMA) and the American Hospital Association (AHA), the largest provider trade groups in the country, sued the Biden administration over regulations HHS issued in implementing the No Surprises Act. In a lawsuit filed Dec. 9 in the U.S. District Court for the District of Columbia, the AMA and AHA request injunctive relief of the latest interim final rule implementing the No Surprises Act. The Biden administration’s most recent rule aimed at implementing the surprise billing ban, which comes into effect on Jan. 1, 2022, has come under fire from provider groups — and members of Congress, many of them physicians — for “plac[ing] a heavy thumb on the scale of an independent dispute-resolution process that would unfairly benefit insurance companies,” in the words of an AMA press release.

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News Briefs: 3M People Sign Up for HealthCare.gov Plans | Dec. 3, 2021

So far during the 2022 open enrollment period for Affordable Care Act marketplace plans, approximately 3 million people have selected plans on HealthCare.gov. That running total includes 560,000 who selected plans during week four of open enrollment, according to CMS’s weekly enrollment snapshot.

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News Briefs: Becerra Defends No Surprises Act Regulation | Nov. 24, 2021

HHS Sec. Xavier Becerra is defending No Surprises Act-related regulations from growing criticism by providers and members of Congress, citing an HHS report on the cost and prevalence of surprise bills. Becerra said on Nov. 22 that providers who overcharge for services will simply have to change: “I don’t think when someone is overcharging, that it’s going to hurt the overcharger to now have to [accept] a fair price,” he told Kaiser Health News. “Those who are overcharging either have to tighten their belt and do it better, or they don’t last in the business. It’s not fair to say that we have to let someone gouge us in order for them to be in business.” The HHS report found that “surprise medical bills are relatively common among privately insured patients and can average more than $1,200 for services provided by anesthesiologists, $2,600 for surgical assistants, and $750 for childbirth-related care.” More than 150 members of Congress from both parties, many of them physicians, sent a letter to Becerra earlier this month protesting the latest rulemaking on the No Surprises Act. In addition, Texas’ largest provider organization filed suit to block the latest interim final rule.

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Wall Street Isn’t Sweating Cigna’s Third-Quarter MLR Miss

Cigna Corp. on Nov. 4 reported a higher-than-expected medical loss ratio (MLR) for the third quarter of 2021, which the company blamed on rising medical costs from COVID-19 care and from high utilization among customers who signed up for Affordable Care Act exchange plans during the pandemic special enrollment period. However, equities analysts were not overly concerned, noting that most investors saw the “MLR miss” coming and that Cigna did beat Wall Street consensus estimates for its quarterly earnings.

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For Many Specialties, Commercial-to-Medicare Markup Is Modest

Only a small number of physician specialties paid commercial health insurance plans over 150% more than Medicare payment rates for healthcare services, according to a recent Urban Institute study based on data from FAIR Health’s private health insurance claims database from March 2019 to February 2020. Anesthesia received the highest markup, at 330% of Medicare rates. Meanwhile, many specialties, such as cardiology, cardiovascular surgery, general surgery and orthopedics, received modest commercial payment rates that were 130% to 150% above Medicare rates.

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Humana Lowers EOY Guidance, Looks for More Home Care Deals

Humana Inc.’s earnings for the third quarter beat Wall Street projections, but the firm lowered its end-of-year guidance, citing COVID-19 costs. The Medicare Advantage-focused payer’s executives also said it would sell off much of its hospice operations, touted the firm’s acquisitions in home care and said they are actively looking for more home health and primary care providers to purchase.

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