RADAR on Medicare Advantage

Medi-Cal Awards Diss Centene With Reduced Service Area

As part of a Medicaid managed care revamp and its first statewide competitive procurement for the Medi-Cal program, the California Dept. of Health Care Services (DHCS) on Aug. 25 named the three insurers that will serve as commercial managed care plans (MCPs) in 2024. Elevance Health’s Anthem Blue Cross Partnership Plan, Centene Corp.’s Health Net and Molina Health Care were selected to participate in varying service areas across 21 counties. Health Net’s loss of three counties, however, spooked investors as Centene already faces declining Medicaid enrollment and continues to settle allegations of mishandling Medicaid pharmacy benefits in multiple states, the latest being Washington.

As States Seek to Regain Control of MA Marketing, Senate Launches Probe Into Plan Practices

As CMS urges Medicare Advantage insurers to tighten up their oversight of third-party marketing organizations (TPMOs) and as state insurance regulators seek to regain authority over MA marketing that was transferred to CMS nearly 20 years ago, Sen. Ron Wyden (D-Ore.) wants answers about “potentially deceptive marketing tactics practiced by Medicare Advantage plans.” His investigation could signal legislative interest in returning MA marketing oversight to states, but some industry experts question whether breaking up the CMS-owned process would be in the best interest of beneficiaries.

In letters sent last month, the Senate Finance Committee chairman wrote to 15 state insurance commissioners and State Health Insurance Assistance Programs (SHIPs) expressing his concern about reports of increased beneficiary complaints regarding MA and Part D plan marketing materials and “alarming reports that MA and Part D health plans and their contractors are engaging in aggressive sales practices that take advantage of vulnerable seniors and people with disabilities.”

Part D Changes in Inflation Reduction Act Could Lead to Tighter Formulary Management

In a major win for Democrats facing midterm elections in the fall, the Biden administration this month passed the Inflation Reduction Act, a $430 billion-plus spending package that contained some of the president’s key priorities for climate, drug pricing and tax reform. While the legislation made headlines for allowing Medicare to negotiate the prices of certain drugs, industry experts say it’s changes to the Medicare Part D program that have the greatest potential to save seniors money and to force plans to rethink their management of the drug benefit.

The Inflation Reduction Act of 2022 (H.R. 5376) passed along party lines in both chambers and was signed into law on Aug. 16. It includes $369 billion to fight climate change, imposes a 15% corporate minimum tax and extends enhanced Affordable Care Act subsidies for another three years. Notable among the other health care provisions, the law requires CMS to negotiate the prices of prescription drugs, starting in 2026 with 10 Part D-covered drugs (including highest cost drugs and biologic agents, excluding “small biotech drugs” and certain orphan drugs to treat only one rare disease or condition). That number will increase to 15 in 2027 and 2028 — when Part B covered drugs may be included in the list of drugs subject to negotiation — and will rise to 20 agents in 2029 and beyond.

National Average Part D Bid Continues Downward Trajectory, but for How Long?

In its annual release of the Medicare Part D payment benchmarks and other bid-related information for the coming plan year, CMS on July 29 reported that the national average monthly bid amount will continue a years-long downward trend, dropping to a historic low of $34.71. At the same time, monthly premiums are expected to take a slight dip. While both pieces of information — released by CMS in an effort to help Part D sponsors finalize their premiums and prepare for open enrollment this fall — reflect positive trends and a competitive market, upcoming changes included in the recently passed Inflation Reduction Act of 2022 could start to reverse those trends in the future.

The national average monthly bid amount is a weighted average of the standardized bid amounts for each stand-alone Prescription Drug Plan (PDP) and Medicare Advantage Prescription Drug (MA-PD) plan. Bids were submitted by PDPs and MA-PD plans in early June. CMS said it anticipates releasing the 2023 premium and cost-sharing information for 2023 Medicare Advantage and Part D plans in September.

Mississippi Medicaid Plays Musical Chairs With MCOs, Trades UHC for CareSource Affiliate

Despite a challenge earlier this year to its longstanding pact with Mississippi Medicaid, Centene Corp. on Aug. 10 said its Magnolia Health Plan subsidiary was selected to continue serving the Mississippi Coordinated Access Network (MississippiCAN) and the Mississippi Children’s Health Insurance Program (CHIP). Meanwhile, the state’s Division of Medicaid (DOM) unveiled its intent to award new four-year contracts to two other insurers, including new entrant and CareSource affiliate TrueCare, which will bump leading managed care organization UnitedHealthcare out of the market.

Centene over the past year has reached multiple settlements with states regarding its handling of Medicaid pharmacy benefits. In June 2021, the health care giant agreed to pay $55.5 million to Mississippi after a 2019 investigation by the Office of the State Auditor concluded Centene’s pharmacy benefit manager was overbilling the state.

Teasing 2023 Expansions, Regional MA Insurers Eye Competitive Texas Market

As Medicare Advantage insurers gear up to compete for enrollment during the 2023 Annual Election Period (AEP) that begins on Oct. 15, a handful of companies have already unveiled service area expansions that are pending CMS approval. Several of them named new territories in Texas, where some 4 million Medicare beneficiaries reside.

According to AIS's Directory of Health Plans (DHP), more than half of Medicare beneficiaries in Texas are enrolled in an MA plan. UnitedHealthcare has the biggest market share in the state, with 48.9% of enrollees, followed by Humana Inc., with 16.8%. And UnitedHealthcare has reportedly purchased the seventh-largest Texas MA plan, KelseyCare Advantage, which is operated by KS Plan Administrators and affiliated with medical group Kelsey-Seybold.

News Briefs: Individual Medicare Advantage Enrollment Surpasses 24.7 million, Up 9% Year Over Year

Individual Medicare Advantage enrollment this month surpassed 24.7 million lives, reflecting 9.3% membership growth since last August, according to a Barclays analysis of CMS’s latest monthly enrollment report. The publicly traded MCOs saw year-over-year individual MA membership grow by 10.5%, with Centene Corp. and CVS Health Corp.’s Aetna delivering double-digit enrollment gains, according to the analysis. Cigna Corp., however, underperformed with a year-over-year membership decline of 5.5%, observed Barclays. CMS’s August data release reflects enrollments accepted through July 8.

Highmark Wholecare has partnered with Posit Science to incorporate “brain fitness” into a program aimed at reducing vulnerable members’ risk of falling and improving balance. Highmark Wholecare, formerly Gateway Health, will offer BrainHQ exercises and services to approximately 7,000 qualifying members who are dually eligible for Medicare and Medicaid and identified as a high risk for falls. BrainHQ’s evidence-based brain fitness program is available via web or mobile phone and is supported by more than 200 peer-reviewed studies, according to an Aug. 15 press release from the partners.

Florida Blue, Prime Post Encouraging Results of Opioid Intervention Pilot

After the Centers for Disease Control and Prevention reported alarming increases in the number of opioid-related deaths in the U.S., HHS in 2017 declared the opioid crisis a public health emergency. Insurers across the country have responded with initiatives to address opioid overuse and misuse among their member populations, including Medicare Advantage enrollees. And CMS has deployed numerous strategies to ensure the appropriate use of pain treatments among Medicare, Medicaid and CHIP beneficiaries, including requiring that all Medicare Part D sponsors adopt drug management programs by 2022. Yet opioid overuse continues to be a concern for MA and Part D organizations.

Could MA-Focused Request for Information Foreshadow Wholesale Changes to the Program?

Signaling what some say is an unusual move, CMS late last month released a request for information (RFI) in which it encouraged a variety of stakeholders to submit responses to questions related to nearly every aspect of the Medicare Advantage program, from supplemental benefits and social determinants of health (SDOH) to risk adjustment and other payment-related policies. And while that could mean CMS is looking to change multiple aspects of the program, industry experts say the agency is asking the right questions, and they are encouraged that it signals a willingness to understand the potential impact of program changes on MA organizations.

Although previous administrations have issued more general RFIs on Medicare and the Biden administration in February released an RFI specific to Medicaid and CHIP coverage and access, Avalere Senior Consultant Tom Kornfield says he can’t recall seeing one that was so explicitly focused on MA. When asked whether he thinks the request was prompted by a recent hearing on Capitol Hill regarding MA oversight and beneficiary access, Kornfield suggests it’s more likely that CMS is seeking information as it works on a proposed MA and Part D rule that would come out in the fall and contain policies for plan year 2024. “They could be using this opportunity to collect information that could then help them determine what types of policies to put into that proposed rule,” he tells AIS Health, a division of MMIT. And the RFI could generate a lot of feedback, he says.

CMS Takes Next Steps Toward Phasing Out D-SNP Look-alikes

In a new enrollment transition memo issued to Medicare Advantage organizations with a significant number of dual eligible enrollees in products that are not Dual Eligible Special Needs Plans, CMS appears to be pushing so-called D-SNP look-alike plans to the brink of extinction. But the two-year transition process, which will wrap up for the 2023 plan year, still allows traditional MA plans to enrollee a limited number of duals. And one trade organization suggests more could be done to incentivize MAOs to set up D-SNPs.

CMS in 2019 first began cracking down on D-SNP look-alikes — MA plans that are marketed to duals but are not D-SNPs or integrated products — when it released draft revisions to the Medicare Communications and Marketing Guidelines that stated look-alikes cannot imply that the plan is for dual eligibles, cannot claim or infer that they have a relationship with the state, and cannot exclusively market to duals. A year prior, the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress had argued that more needed to be done to promote the development of integrated plans and raised the issue of D-SNP look-alikes. At the time, approximately 2.7 million dual eligibles were enrolled in one of four types of managed care plans available to them, yet only 8% of full-benefit duals were in a plan with a high level of Medicare and Medicaid integration. More than 4.1 million individuals are now enrolled in a SNP, of which nearly 3.7 million are in a D-SNP.