RADAR on Medicare Advantage

For Now, New Alzheimer’s Treatment Is Subject to Limited Medicare Coverage

Marking the second approval of an Alzheimer’s disease treatment aimed at slowing cognitive decline by reducing amyloid plaque buildup on the brain, the FDA on Jan. 6 granted accelerated approval to Biogen and Eisai, Co., Ltd.’s Leqembi (lecanemab-irmb). For now, the drug remains subject to the restrictive National Coverage Determination that Medicare initially gave its predecessor, Aduhelm (aducanumab-avwa), and similar Alzheimer’s treatments last year, but CMS could consider broader coverage if the drug receives traditional FDA approval.

The drug is indicated for the treatment of Alzheimer’s disease in people with mild cognitive impairment or mild dementia. Patients must have confirmed presence of amyloid beta pathology before starting treatment. The FDA gave the humanized immunoglobulin gamma 1 monoclonal antibody fast track, priority review and breakthrough therapy designations. Japanese pharmaceutical company Eisai developed the drug and will co-market it with its U.S. partner Biogen, which launched Aduhelm in 2021 and had to halve its price from $56,000 a year to $28,000. Eisai estimates the cost of Leqembi will be $26,500 per year, though the actual price could vary by patient.

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2023 Outlook: MAOs Mull How to Compete While They Brace for Change, Uncertainty

In a sweeping proposed rule for the 2024 contract year, CMS last month took a strong stance on multiple aspects of the Medicare Advantage program, from misleading marketing and prior authorization to quality gains incentivized by the Star Ratings. As plans digest the many changes proposed in that rule, several major unknowns remain that could impact their revenue streams and ability to compete going forward. For our annual series of outlook stories on the year ahead, we asked a range of industry experts to weigh in on how doing business in 2023 might differ from previous years. Here’s the first installment on industry challenges and trends as told to AIS Health, a division of MMIT.

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News Briefs: CMS Innovation Center Report Recognizes Potential for ‘Upcoding’ in Models

A new report from the CMS Innovation Center identified redesigning financial benchmarks and risk adjustment to improve model test effectiveness as a priority going forward. In its annual report to Congress, the Innovation Center noted that “[m]any financial benchmarks and risk adjustment methodologies have created opportunities for potential gaming and upcoding among participants — and have therefore reduced savings for Medicare.” The Innovation Center largely tests models serving fee-for-service Medicare beneficiaries and has relied on risk adjustment as a critical component of its models, including all accountable care organization (ACO) based models. The agency added that it has launched “an examination of its benchmarking and risk adjustment approaches to provide incentives to encourage participation, especially among providers caring for underserved beneficiaries and ACOs with varying levels of experience, as well as ensure payment accuracy.” The report also highlighted health equity as an ongoing focus and observed ways to improve communications with potential hospice benefit enrollees, referring to one component of the ongoing Medicare Advantage Value-Based Insurance Design model, to ensure that hospice and palliative care are accessible to all beneficiaries.

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2023 Outlook: Plans Prepare for Pending Wave of Changes to Star Ratings

When it comes to chasing high ratings and quality bonus payments to help them stay competitive, Medicare Advantage and Part D plan sponsors this year may be forced to overhaul their current strategies and investments if CMS finalizes a host of recently proposed changes. In addition to implementing a new outlier methodology that will drive up cut points and make it harder for plans to achieve 4 stars next fall, CMS last month issued a sweeping rule proposing policy and technical changes across the MA and Part D programs for contract year 2024. That rule included multiple proposals aimed directly at the stars program, such as the creation of a health equity index for the 2027 Star Ratings and the addition of several new measures to the 2026 Star Ratings.

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2022 Year in Review: The Top 25 Medicare Advantage Payers

The top 25 Medicare Advantage insurers enrolled a combined 26.3 million lives, or 87.9% of the national market, as of the fourth quarter of 2022, according to AIS’s Directory of Health Plans. Among the large national insurers, only market leader UnitedHealthcare and Centene Corp. — which has rapidly expanded into MA following its 2020 acquisition of WellCare — each saw year-over-year enrollment growth of more than 10%. Centene expanded to 327 new counties for the 2022 plan year, compared to United’s 276. Cigna Corp., meanwhile, saw its MA enrollment decline by 5.8%, despite expanding to three new states for 2022. The company will bring its MA offerings to New York and Kentucky for the 2023 plan year. Among regional insurers, Guidewell Mutual Holding Corp., the parent company of Florida Blue, saw explosive growth of nearly 75% following its February acquisition of Triple-S Management Corp., one of the largest MA insurers in Puerto Rico. Highmark Health, SCAN Health Plan and Blue Cross and Blue Shield of Minnesota all saw enrollment gains of more than 20%. See the complete list in the table below.

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Sweeping MA, Part D Proposed Rule Touches on Everything From Stars to SNPs

Exceeding 950 pages in its initial prepublication version, CMS’s most recent rule proposing policy and technical changes for contract year 2024 is the Biden administration’s most complicated and sweeping Medicare Advantage and Part D rule to date. Following a comprehensive request for information issued last summer on various aspects of the MA program, the rule addressed many of the same hot-button topics — from health equity and misleading marketing to behavioral health and prior authorization — that CMS asked about in the RFI. Additionally, the rule proposed major reforms to the Star Ratings and contained meaningful clarifications for MA Special Needs Plans (SNPs).

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Express Scripts, Optum Add Humira Biosimilars to 2023 Formularies

As multiple biosimilars to AbbVie’s Humira (adalimumab) are set to hit the market in 2023, two of the largest pharmacy benefit managers (PBMs) in recent weeks made favorable coverage decisions for the soon-to-debut drugs. The FDA has approved seven Humira biosimilars so far, with Amgen’s Amjevita set to launch first, in January 2023. Bloomberg on Nov. 15 reported Optum Rx will cover up to three of the new biosimilars on the same tier as Humira on its 2023 formularies, while Cigna Corp.’s Express Scripts on Dec. 5 said it will cover the biosimilars as preferred products on its “largest formularies.” The PBM said it will “continue to evaluate all biosimilar products to Humira….and will provide updates related to specific changes as available.” Combined, the two PBMs and their corresponding payer units cover nearly 15 million people on their Medicare formularies, according to data from MMIT Analytics (MMIT is the parent company of AIS Health). Most people (86%) covered under Medicare formularies have access to Humira on the specialty tier, with utilization management restrictions such as step therapy and prior authorization.

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SCAN Group, CareOregon Form HealthRight Group to Create ‘Formidable’ Government Partner

SCAN Group, the parent company of not-for-profit Medicare Advantage insurer SCAN Health Plan, on Dec. 14 said it will combine with another not-for-profit organization, CareOregon. For more than 25 years, CareOregon has provided health services and community benefit programs to Medicaid and the Children’s Health Insurance Program in its home state and currently serves more than 500,000 Oregonians, including individuals who are dually eligible for Medicare and Medicaid.

Under the name HealthRight Group, the combined companies will operate as a mission-driven not-for-profit health care organization and maintain their respective consumer-facing brands, according to a press release from the firms.

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As PACE Program Grows, CMS Ups the Auditing Ante in 2023

As Programs of All-Inclusive Care for the Elderly (PACE) grow across the U.S., sponsoring entities can expect CMS to put additional scrutiny on their operations. New PACE organizations are subject to audits in their first three years of operation, and updated audit protocols for 2023 include expanded collection of data around both the clinical services provided to participants as well as the non-clinical program features such as transportation, according to BluePeak Advisors, a division of Gallagher Benefit Services, Inc. This will require significantly more man hours and readiness on the part of the sponsoring PACE organization, adds BluePeak, which helps PACE organizations and Medicare Advantage organizations prepare for audits.

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Employer Shift to Medicare Advantage for Retiree Benefits Drives Up Program Costs, KFF Report Suggests

The share of large employers offering retiree health benefits via Medicare Advantage plans nearly doubled from 2017 to 2022, according to a new analysis of the 2022 Kaiser Family Foundation Employer Health Benefits Survey. Notably, 44% of those firms do not offer any additional health benefit options outside of MA coverage. This shift has emerged as the overall percentage of large firms offering any kind of medical retirement benefit declined dramatically from the 1980s ⁠— KFF found that 66% of large employers offered retiree health benefits in 1988, compared to 21% in 2022.

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