RADAR on Medicare Advantage

PHE Unwinding Delay Gives States, MCOs Time to Ease Transitions

With radio silence from HHS on May 16 — when states at the very latest had expected to hear whether the COVID-19 public health emergency would end in July — HHS at press time appeared to be gearing up for another extension of the PHE. This will give states, insurers and other stakeholders more time to prepare for the inevitable resumption of Medicaid eligibility redeterminations, which could cause millions of adults and children to lose health insurance coverage.

The PHE has been extended multiple times since the start of the pandemic and remains a moving target. As a condition of receiving enhanced federal funds during the PHE, states have been required to ensure continuous Medicaid and CHIP coverage for most enrollees by pausing eligibility redeterminations. And the Biden administration has promised to provide states 60 days’ notice before any possible termination or expiration. But without such notification, sources estimate the next end date could be Oct. 13. Bloomberg on May 16 reported that the PHE would be extended past mid-July, “according to a person familiar with the matter.”

Medicaid Rolls Soar to Nearly 89 Million Beneficiaries as Redeterminations Loom

Nationwide Medicaid enrollment has grown more than 22% since the outset of the COVID-19 pandemic, topping 88.7 million lives, according to the latest update to AIS’s Directory of Health Plans. But the end of the Public Health Emergency (PHE) — which at press time was likely to be extended beyond mid-July — could leave between 5.3 million and 14.2 million people without coverage when redeterminations resume, asserted a May 10 analysis from the Kaiser Family Foundation. A separate study from the Georgetown University Heath Policy Institute found that 6.7 million children stand to lose CHIP coverage at the end of the PHE. See a state-by-state overview of three years of pandemic-fueled Medicaid enrollment changes in the chart below.

Segmented, Personalized Outreach Drives MAO Retention Efforts

Medicare consumers are facing an overwhelming variety of resources and plan choices and are showing signs of increased movement during the Open Enrollment Period (OEP). As a result, effective member engagement during the OEP and throughout the year is becoming increasingly important and can be achieved through using data to segment membership and deliver targeted, personalized messaging to ensure that a member is in the right plan from the start, industry experts advised during the 13th Annual Medicare Market Innovations Forum, hosted by Strategic Solutions Network, LLC (SSN).

After the Medicare Annual Election Period (AEP) that typically runs from Oct. 15 through Dec. 7, the three-month Medicare OEP starts on Jan. 1 and allows beneficiaries who selected a Medicare Advantage plan to make a onetime coverage change. This year was the fourth OEP since it was reinstated by the Trump administration after a hiatus, and seniors’ utilization of the renewed opportunity is growing.

WellCare Kept PDP Enrollees Via ‘Conversational’ Outreach Pilot

A pilot with Drips’ trademarked “conversational texting” platform has helped WellCare significantly lower the percentage of Prescription Drug Plan policies that were being terminated due to nonpayment, according to a case study presented at the 13th Annual Medicare Market Innovations Forum, held May 11 and 12 in Phoenix.

Since WellCare was acquired by Centene Corp. in January 2020, the PDP team has been focused on “optimizing operational execution” and ensuring a positive member experience, said WellCare Senior Director of Prescription Drug Plans Talia Duany, who presented the case study with Drips. “When you’ve got 4.1 million members in an industry that’s shrinking — this year we saw the biggest [decline] in available PDP options, everyone’s moving into [Medicare Advantage] — having a robust member retention strategy” is critical.

News Briefs: Second WCAS-Humana Joint Venture Will Deploy $1.2 Billion for Primary Care Clinics

Humana Inc. on May 16 said it had established a second joint venture with Welsh, Carson, Anderson & Stowe (WCAS) to further expand its value-based primary care clinics. (Hg Capital Partners and WCAS share control of MMIT, the parent of AIS Health.) The new JV will provide up to $1.2 billion of additional capital for the development of approximately 100 new CenterWell Senior Primary Care Clinics between 2023 and 2025, said Humana. The expansion follows an earlier JV that is currently deploying up to $800 million of capital to open 67 clinics by early 2023 and support their ongoing operations, added the insurer. WCAS will have majority ownership of the JV, while Humana will own a minority stake.

CMS Finalizes MA Rule Provisions, Delays Pharmacy DIR Change

Just a month shy of the bid deadline for the 2023 plan year, CMS on April 29 finalized most provisions of a sweeping Medicare Advantage and Part D rule that was proposed in January. Those provisions included restoring detailed medical loss ratio (MLR) reporting requirements, requiring MA Special Needs Plans to incorporate certain questions on social risk factors into health risk assessments, and finalizing a pathway to allow for star ratings to reflect a Dual Eligible SNP’s local performance. But one Part D provision regarding pharmacy direct and indirect remuneration (DIR) was notably delayed, allowing plans, pharmacies and pharmacy benefit managers time to renegotiate pharmacy pacts.

“Generally speaking, the rule wasn’t surprising. CMS largely did what they proposed. I think the major concession that plans and PBMs were concerned about was the start date of the pharmacy DIR change, and they had that addressed. But by and large this rule was consistent with CMS’s goals of raising the bar for what it means to be a SNP and for reducing costs at point of sale for seniors” starting in 2024, says Tom Kornfield, senior consultant with Avalere.

OIG Report on Prior Authorization Denials Puts Pressure on CMS

As Medicare Advantage insurers face increasing scrutiny from lawmakers over coding practices and a pending pay boost of 8.5% next year, a new HHS Office of Inspector General report on rates of prior authorization and payment denials in MA doesn’t do much to help their case. Although it was based on just a weeklong sample of denial cases, the report adds to a growing body of evidence that the prior authorization process in MA is ripe for improvement and in need of either more guidance from CMS and/or stronger oversight.

Receiving widespread coverage at press time, starting with a New York Times article summarizing it as “saying that insurers deny tens of thousands of authorization requests annually,” OIG on April 28 released a report titled, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care.” The report immediately drew praise from providers, such as the American Medical Association (AMA), which issued a statement agreeing with federal investigators’ recommendations on reining in inappropriate denials. But AMA argued that more needs to be done, such as passing a bipartisan bill that aims to establish new electronic prior authorization (PA) requirements on MA insurers.

PHE Extension, Medicare AEP Boost ’22 Earnings Projections

Better-than-expected first-quarter 2022 earnings aided by Medicare open enrollment successes and the extension of the public health emergency (PHE) drove several insurers at press time to raise their earnings guidance for the year. Some, however, approached their projections with caution as variant-driven surges in the COVID-19 pandemic continue to create uncertainty around utilization.

Reporting first-quarter earnings on April 27, Humana Inc. said its results from the latest Medicare Annual Election Period (AEP) were slightly better than projected and it is making progress on a $1 billion value creation plan unveiled last quarter that will allow the company to further enhance its Medicare offerings. For the AEP that ended Dec. 7, improvements were “driven by higher sales and improved voluntary termination rates,” explained President and CEO Bruce Broussard during an April 27 conference call to discuss recent quarterly earnings. Broussard also provided a detailed update on Humana’s efforts to improve the sales experience through its various distribution channels.

Biosimilars Stand to Cut Costs for Medicare Part D and Beneficiaries, If Uptake Improves

New biologic drugs cost Medicare Part D and its beneficiaries almost $12 billion in 2019, but increased biosimilar uptake could cut spending significantly in coming years, according to a March report from HHS’s Office of the Inspector General (OIG). Specifically, the OIG report pointed to upcoming launches of Humira (in 2023) and Enbrel (in 2029) biosimilars as potential catalysts for change. The two biologics alone accounted for nearly half of 2019’s Part D spending. Studying 2019 Part D plan formularies, OIG found that biosimilar uptake for four select drug classes was limited due to lack of coverage, and formularies that did cover biosimilars did not encourage their use over the original reference products despite their lower cost. OIG advised CMS to encourage payers to place biosimilars on formulary, which the agency agreed with. As of the second quarter of 2022, most Medicare beneficiaries still have better access to the biologics OIG studied over their biosimilars, with the exception of Teva Pharmaceuticals’ Granix, a biosimilar to Amgen’s Neupogen, and Pfizer’s Retacrit, a biosimilar to Amgen’s Epogen and Johnson & Johnson’s Procrit. Granix holds covered or better status for 51% of Medicare beneficiaries, according to data from MMIT Analytics (MMIT is the parent company of AIS Health). Retacrit, meanwhile, holds 66% covered or better status.

News Briefs: New CMS Report Finds Non-White Medicare Advantage Enrollees Continue to Receive Worse Care

A new report looking at disparities in care for Medicare Advantage beneficiaries by race, ethnicity and sex found that non-white MA enrollees generally received worse care in 2020 than their white counterparts. Racial and ethnic differences were more glaring for clinical care measures than for patient experience measures, with scores for Black MA enrollees falling below the national average for 14 out of 36 clinical care measures, according to the April report, which was prepared by The RAND Corp. for the CMS Office of Minority Health. Researchers relied on Consumer Assessment of Healthcare Providers and Systems (CAHPS) data collected from March to May 2021 and the Healthcare Effectiveness Data and Information Set reflecting care received from January to December 2020. White enrollees reported care that was in line with the national average on all patient experience measures from the CAHPS survey, while their scores were similar to the national average on 31 clinical care measures and above average on five measures. Scores for American Indian and Alaska Native MA enrollees were also below the national average on 14 clinical care measures, and scores for Hispanic MA beneficiaries were worse than average on 11 such measures.