Radar on Medicare Advantage

In the first year of the COVID-19 pandemic, when many people were having trouble accessing basic personal protective equipment, Highmark Blue Cross Blue Shield began sending out care kits including PPE and other items to support seniors at home. The response from Medicare Advantage members was so positive that what started out as a feel-good gesture has become a full-blown supplemental benefit, and the insurer continues to refine the kits to meet members’ evolving needs and ensure continued satisfaction with the plan.

Starting with plan year 2022, eligible Highmark members were given the option to receive one of 17 condition care kits. Commonly referred to as the “big blue box,” each kit is filled with a variety of items tailored to a specific condition, with a focus on member choice and high quality, speakers from Highmark and its strategic partner RR Donnelley explained during the 14th Annual Medicare Market Innovations Forum, held on March 28 and 29 in Orlando. RR Donnelley, a firm that provides marketing and business communications, commercial printing, and related services, has assisted CVS Health Corp.'s Aetna and Humana Inc. with similar initiatives.

As the industry prepares for a comprehensive overhaul of the model used to determine Medicare Advantage insurers’ risk-adjusted pay, the three largest MA organizations signaled during recent earnings calls that they are well positioned for the changes.

Reporting first-quarter 2023 financial results on May 3, CVS Health Corp. beat Wall Street expectations of $2.09 per share with adjusted earnings per share (EPS) of $2.20, largely driven by better-than-expected membership in the health care benefits segment despite a year-over-year increase in medical loss ratio. Total revenues increased 11% from the first quarter of 2022 to reach $85.2 billion, fueled by growth across all segments, while the health care benefits segment (Aetna) generated revenues of $25.9 billion, up from $23.1 billion a year ago. Medical membership grew sequentially by 1.1 million members to a total of 25.5 million lives as of March 31, reflecting increases across all product lines including growth of 900,000 enrollees in the Affordable Care Act exchange business.

As CMS takes multiple steps to steer managed care organizations and states toward advancing health equity across government programs, the agency’s Office of Minority Health recently put out its annual report illustrating persistent disparities in Medicare Advantage. Released for National Minority Health Month and produced in collaboration with The RAND Corp., the 2023 Disparities in Health Care in Medicare Advantage by Race, Ethnicity, and Sex report showed some modest improvements on clinical care measures for a few groups, but a substantial proportion of clinical care scores continued to fall below the national average for American Indian/Alaska Native (AI/AN), Black and Hispanic MA enrollees.

Compared with the traditional, fee-for-service Medicare program, the MA program serves a larger proportion of minority enrollees. The April report compared care for six groups across 44 measures: (1) seven patient experience measures based on responses to the 2022 Consumer Assessment of Healthcare Providers and Systems (CAHPS), which was conducted between March and May of last year and asked respondents about care received in the six months prior to the survey, and (2) 37 clinical care measures based on the Healthcare Effectiveness Data and Information Set (HEDIS) that is collected from medical records and administrative data and reflects care received in 2021.

A comprehensive pair of rules introducing new “access standards” in Medicaid and the Children’s Health Insurance Program (CHIP) propose new requirements touching on multiple aspects of managed Medicaid, from medical loss ratio (MLR) reporting and state directed payments (SDPs) to provider payments and quality ratings. Industry experts tell AIS Health, a division of MMIT, that such changes are intended to ensure that Medicaid dollars are being used appropriately in managed care, support the Biden administration’s efforts to advance health equity and align Medicaid and CHIP with other government programs such as Medicare Advantage and the Affordable Care Act exchanges. But experts say not all provisions will be easy to implement, and the rules should be viewed as directing incremental steps toward moving the needle on health equity.

A Senate Finance Committee “secret shopper” investigation of Medicare Advantage plan provider directories turned up inaccurate, nonworking phone numbers or unreturned calls in 33% of 120 provider listings. Staff reviewed directories of 12 different plans in a total of six states and called 10 systematically selected providers from each plan for a total of 120 calls, according to the May 3 report. Furthermore, more than 80% of the supposedly in-network mental health providers that were contacted by reviewers were unreachable, not accepting new patients or out of network. In remarks given at a May 3 hearing to discuss the issue, Committee Chairman Ron Wyden (D-Ore.) called these so-called ghost networks a “breach of contract” by health insurers and vowed to “use all resources” at his disposal to “get some real accountability.” When insurers host such ghost networks, “they are selling health coverage under false pretenses, because the mental health providers advertised in their plan directories aren’t picking up the phone or taking new patients,” he stated. “In any other business, if a product or service doesn’t meet expectations, consumers can ask for a refund.” He also pointed out that CMS performs regular audits of MA plans to ensure that they meet minimum standards but does not routinely audit MA provider directories. "[T]he results speak for themselves. It’s time for that to change," he added.

UnitedHealth Group on April 14 said revenue for the first quarter of 2023 rose 15% from the prior year to $92 billion, reflecting double-digit growth at both Optum and UnitedHealthcare. The insurance segment, which served about 1.2 million more people in the first three months of the year with broad-based growth across its commercial, Medicare and Medicaid lines of business, saw revenues climb 13% to $70.5 billion, according to the company’s earnings press release. And the insurer said it expects to “exceed the upper end” of its Medicare Advantage membership growth expectations for the year. The company stated in November that it anticipated adding between 800,000 and 900,000 new MA members in 2023. As of March 31, the company served more than 7.54 million MA enrollees, compared with 6.89 million a year ago. UnitedHealth recorded first-quarter adjusted earnings per share of $6.26, an increase of 14% from first quarter 2022, and raised its full-year adjusted EPS outlook to between $24.50 and $25.00. During an April 14 conference call to discuss first quarter earnings, CEO Andrew Witty commended CMS for deciding to phase in changes to the MA risk adjustment system. “The phase-in will allow for more time to minimize impacts on beneficiaries as we lean on the multiple levers available to us, including our ability to manage costs and our relentless focus on member and patient needs,” he stated, according to a transcript of the call from The Motley Fool.

Family caregivers have long been regarded as an important part of care teams for high-needs Medicare beneficiaries, especially those enrolled in Dual Eligible Special Needs Plans (D-SNPs). But there are strong cases for Medicare Advantage insurers to support caregivers as part of their broader care management strategy, as they can help improve outcomes, reduce costs and enhance member experience, according to speakers at a session of the AHIP 2023 Medicare, Medicaid, Duals & Commercial Markets Forum, held March 14-16 in Washington, D.C.

Although there is “concurrent public policy and private solution[s] and investment going on in the caregiver space,” multiple challenges exist with activating them, from identifying potential caregivers to supporting them with the training they need to identify issues such as a change in condition, observed John Mach, M.D., founder and general manager of Mach Health Care Strategies, LLC, during the panel discussion, “Achieving the Triple Aim for Medicare Members by Activating Family Caregivers.”

If the federal government decreased payments to Medicare Advantage plans — something of a boogeyman for insurers in recent years — would seniors see higher premiums and a reduction in the availability of supplemental benefits? That’s a question a new study published in the April 2023 issue of Health Affairs aimed to answer, to mixed results.

Using a nationally representative sample of both MA and traditional Medicare data from 2012 to 2019, researchers sought to estimate the impact of changes in MA benchmark payments on plan premiums, member cost sharing and supplemental benefit availability. (One of the study’s four co-authors is Harvard University’s Michael Chernew, Ph.D., chair of the Medicare Payment Advisory Commission, which has long argued that MA plans are overpaid relative to traditional Medicare.) The benchmark is an annual payment established by CMS to determine the maximum amount that Medicare will pay an MA plan for providing services to each member. The amount is calculated based on traditional Medicare costs in a given service area and is adjusted based on member health status and the plan’s individual offerings. If an MA plan's bid is below the benchmark in its county, the difference is returned to the plan and can be used to provide supplemental benefits and/or lower premiums. If the bid is above the benchmark, the plan must cover the additional cost or pass it on to members in the form of higher premiums or cost sharing.

As marketing experts from regional Medicare Advantage plans and their strategic partners shared success stories from the recent Medicare Annual Election Period and their year-round member engagement campaigns at the 14th Annual Medicare Market Innovations Forum, there was one commonly recurring theme: Today’s MA beneficiaries are increasingly embracing technology for everything from conducting AEP research to maintaining a healthy lifestyle.

In his experience working with digital marketing agency Amsive, Dan Paladino noted that Medicare consumers are relying on digital tools to research their coverage options “early and often” and that clients have experienced a surge in digital use “across many channels” this past AEP.

Since the conclusion of the 2023 Medicare Annual Election Period (AEP), several common threads have emerged from industry reports, Medicare Advantage insurers and marketing experts. These include a slow start to the AEP, a higher rate of switching among MA enrollees, increased use of digital channels, and member confusion or frustration with certain benefits. These observations and other data may help MA insurers and their marketing partners predict future member movement and influence strategy when it comes to both marketing and benefit design.

While the midterm elections certainly created a distraction, inflation and economic concerns may have created a drag in signups, suggested Dan Paladino, vice president of healthcare client experience with Amsive, while speaking at the 14th Annual Medicare Market Innovations Forum, held March 27-29 in Orlando. At the same time, the digital marketing agency observed more people using digital tools to conduct their research about coverage, such as online educational videos and Google search. “When that happens, they’re not picking up the phone and calling as early as we would probably like and I think some of our clients would like,” said Paladino, during a panel discussion moderated by AIS Health.