Radar on Medicare Advantage

Plans participating in the Medicare Advantage Value-Based Insurance Design (VBID) Model next year must begin reporting beneficiary-level utilization data on three key supplemental benefit categories: food, transportation, and general supports for living (e.g., utilities assistance). That requirement was included in a 2024 request for applications released late last year, and CMS officials have since hinted that the agency is interested in gathering additional information about supplemental benefit usage from the MA industry at large. But in a move that flew largely under the radar, the agency in September issued a proposal to begin requiring all MA organizations to submit information about supplemental benefits at a greater level of detail than some plans may be able to provide at this time, industry experts tell AIS Health, a division of MMIT.

As publicly traded insurers report their third-quarter 2023 financials this fall, two of the Medicare Advantage organizations most impacted by the 2024 Star Ratings recently expressed confidence in their ability to regain higher marks, driven in part by increased adoption of value-based care models.

For the quarter ending Sept. 30, Elevance Health, Inc. beat Wall Street expectations with adjusted earnings per share (EPS) of $8.99, an increase of roughly 20% over the third quarter of 2022, and recorded operating revenue of $42.5 billion, up 7.2% from the prior-year quarter. Its health benefits operating margin of 5.0% was also above consensus, aided by a medical loss ratio of 86.8%, which came in lower (better) than 87.2% reported in the year-ago quarter — fundamentals that Goldman Sachs viewed as “generally favorable” in an Oct. 18 note to investors. The insurer ended the quarter with 47.3 million medical members, a year-over-year increase of 42,000 lives, reflecting growth in its Affordable Care Act, BlueCard and MA businesses. During the quarter, however, membership fell by 664,000, driven by attrition in Medicaid due to eligibility redeterminations and a new entrant into one of the insurer’s state programs in July, explained Chief Financial Officer John Gallina during a conference call held on Oct. 18 to discuss third-quarter 2023 earnings.

The latest Medicare Part C and Part D Star Ratings data show that it’s getting harder for payers to achieve the bonus payment level of 4 stars or higher, in part due to cut point changes driven by the new Turkey outlier deletion methodology. As CMS continues to alter the way it calculates the Star Ratings, including lowering the weight of Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures for 2026, plans should deploy a top-down, cross-departmental government structure to incentivize quality performance across all functions, according to global management and technology consulting firm AArete.

To learn more about this and other characteristics of a 5-star MA plan, AIS Health, a division of MMIT, spoke with Darren Ghanayem, managing director with the health care payer group at AArete. The firm works with payers across the MA, Medicaid and commercial markets, advising them on everything from systems migrations and provider network strategy to maximizing revenue and optimizing administrative costs. Ghanayem previously served as chief information officer with WellCare Health Plans, prior to its acquisition by Centene Corp., and at Anthem, Inc. (now Elevance Health, Inc.).

The stand-alone Prescription Drug Plan (PDP) market — which was already in decline — is poised to take even more hits due to regulatory and legislative changes that are taking effect in 2024 and beyond, according to industry observers. Indeed, one expert who analyzed data from CMS’s 2024 Medicare Advantage and Part D “landscape files” predicts that “a lot of people are faced with pretty significant premium increases” next year.

There’s a complicated calculus driving that trend, explains Tom Kornfield, a senior consultant at Avalere Health. But both he and equities analyst George Hill agree that the Inflation Reduction Act of 2022 (IRA) is a major factor.

“Barbara is a Medicare Advantage member without a car and limited access to other transportation options. She has a health benefit card, issued on Optum’s payments platform, which she can use to pay for eligible over-the-counter items, groceries, and rides,” explains a recent blog post from Uber Health. Announced earlier this month, the new pact with UnitedHealth Group’s Optum health services division is just one example of creative partnerships emerging in Medicare Advantage to attract new members and address health-related social needs. Meanwhile, MA organizations for 2024 continue to strike new alliances with providers, retailers and other insurers to leverage their brands in select markets.

Centene Corp.’s Wellcare, for one, formed a new strategic alliance with Mutual of Omaha. For the 2024 plan year, the insurers will offer two cobranded PPOs — WellCare Mutual of Omaha No Premium and Wellcare Mutual of Omaha Low Premium — in five states: Georgia, Missouri, South Carolina, Washington and select areas of Texas. (Wellcare is also expanding its geographic footprint by 21 counties and adding a new state with entry into Delaware, according to an Oct. 11 press release unveiling its 2024 offerings.)

UnitedHealth Group on Oct. 13 said overall revenues for the third quarter of 2023 climbed 14% from a year ago to $92.4 billion, reflecting double-digit growth at both its Optum and UnitedHealthcare divisions. The company also recorded a medical loss ratio of 82.3%, which was higher (worse) than the 81.6% reported for the third quarter of 2022. UnitedHealth said that was largely due to the previously disclosed uptick in inpatient care, primarily among seniors, and business mix. Revenues for the UnitedHealthcare insurance segment rose 13% from a year ago to $69.9 billion, reflecting growth in the number of people served. The company estimated it will have added nearly 1 million Medicare Advantage customers by the end of the year. The company raised its 2023 adjusted earnings per share outlook to a range of $24.85 to $25, from a previous range of $23.60 to $23.75 per share.

“Wheel of deceit.” “Sleazy, private sector scoundrels.” The transfer of personal information “from one moneygrubbing hand to another.” These are just a few of the verbal gems dropped by Sen. Ron Wyden (D-Ore.) when, during a recent hearing on Capitol Hill, he described the billion-dollar third-party Medicare marketing machine that has been under increased scrutiny by Congress, consumer advocates and researchers.

But beyond Wyden’s descriptive remarks, the Senate Finance Committee chair and other lawmakers queried stakeholders about real solutions to rein in misleading marketing practices and improve seniors’ shopping experiences. Suggestions that came up on multiple occasions included prohibiting the transfer of beneficiary information from one lead generator to another, putting additional limits on the fees brokers earn for enrolling MA members, penalizing MA insurers for the actions of third-party marketers, and increasing transparency around the full cost associated with enrolling in an MA plan.

Payer anxieties about lower Star Ratings for the 2024 plan year came to fruition last week with CMS’s release of the annual Part C and Part D quality measurements. The average Medicare Advantage Prescription Drug (MA-PD) contract scored a 4.04, down from 4.14 last year and the lowest average rating since 2017. Just 31 contracts received 5 stars, representing 6.8% of current MA-PD enrollment, vs. 57 contracts serving 21.5% of enrollees last year.

Several methodology changes fueled the ratings decline, which Stars experts have dubbed "TukeyGate," referring to CMS efforts to remove outliers from calculating the cut points for non-Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures. The agency also added two new Part C measures, one for care transitions and another for follow-ups after emergency visits for people with high-risk chronic conditions. A Part C measure on kidney disease monitoring for diabetes patients was removed.

Only 42% of Medicare Advantage Prescription Drug (MA-PD) contracts that will be offered in 2024 achieved an overall rating of 4 stars or higher, compared with approximately 51% of contracts in 2023, according to the latest Medicare Part C and Part D Star Ratings data. Weighted by enrollment, the average MA-PD Star Rating fell from 4.14 for 2023 to 4.04, with approximately 74% of MA-PD enrollees estimated to be enrolled in contracts that achieved 4 or more stars for 2024, compared with 72% for 2023, CMS reported on Oct. 13.

Those changes were largely expected due to the application of the new Tukey outlier deletion methodology, which was used in determining the cut points for measures not directly related to member experience and largely achieved CMS’s stated goal of infusing more “predictability and stability” into the Star Ratings.

Leading up to the Oct. 15 start of the Medicare Annual Election Period (AEP), news reports across the U.S. have depicted down-to-the-wire disputes between Medicare Advantage insurers and their network providers over sticking points like reimbursement and prior authorization policies. But another development in payer-provider relations is the evolving trend of regional health systems cosponsoring MA plans, which one industry expert says can take various forms and requires careful consideration.

Morgantown, West Virginia’s Peak Health, for one, will launch a new MA plan that it says was designed in partnership with two West Virginia health systems, WVU Medicine and Marshall Health. According to the new insurer’s website, the company is also owned by two other not-for-profit health care providers, Mountain Health Network and Valley Health. Peak is the only West Virginia-based insurance company to offer MA plans sponsored by West Virginia providers, the company said.