RADAR on Medicare Advantage

MedPAC Urges CMS to Take Action on Coding Intensity Overpayments

CMS’s coding intensity adjustment, which is used to account for the estimated difference between risk scores that hypothetical beneficiaries would receive if enrolled in Medicare Advantage vs. fee-for-service (FFS) Medicare, has led to more than $91 billion in payments to MA plans between 2007 and 2022, asserted a March 3 letter from the Medicare Payment Advisory Commission (MedPAC) to CMS Administrator Chiquita Brooks-LaSure. The agency in its 2023 Advance Notice proposed to use the statutory minimum adjustment of 5.9%, which MedPAC estimated will lead to an inflated $16.2 billion in payments — and that’s on the conservative end, the commission noted. MedPAC first raised this issue in 2016, when it urged CMS to consider a new model that would use two years of FFS and MA diagnostic data, exclude diagnoses documented only on health risk assessments from either MA or FFS, and then apply an adjustment that fully accounts for the remaining coding differences. The commission in its March letter reiterated its support for this approach.

News Briefs: City of New York Appeals Court Decision on Retiree Switch to Group Medicare Advantage

New York City is appealing a recent ruling by the New York Supreme Court that bars the city from imposing a premium on public sector retirees who opt out of group Medicare Advantage coverage that starts April 1. Anthem, Inc. was initially contracted to provide MA coverage to an estimated 200,000 retirees and dependents for a Jan. 1 effective date. Manhattan Supreme Court Justice Lyle Frank on March 3 ruled that automatic enrollment of beneficiaries cannot start until April 1, retirees must be able to opt out of the new coverage up to three months after the effective date, and they do not have to pay a fee to retain their traditional Medicare coverage. The city’s attempt to charge $191 monthly is in violation of New York City law, which requires the municipal employer to “pay the entire cost of health insurance coverage for city employees, city retirees and their dependents,” Frank ruled. The city’s Office of Labor Relations on March 4 filed an appeal; the NYC Organization of Public Service Retirees at press time had filed a cross-appeal and was gathering signatures for a petition urging Mayor Eric Adams (D) not to pursue the appeal.

Revamped Direct Contracting Model Still Holds Promise for MAOs

After progressive Democratic lawmakers urged CMS to shut down a fee-for-service Medicare model aimed at fostering more value-based care arrangements, the agency’s Center for Medicare and Medicaid Innovation (CMMI) on Feb. 24 unveiled a revamped version that it said more closely aligns with its “vision of creating a health system that achieves equitable outcomes through high quality, affordable, person-centered care.” While the three types of Accountable Care Organizations (ACOs) that may participate starting next year appear to largely mirror the Direct Contracting Entities (DCEs) of the current Global and Professional Direct Contracting (GPDC) Model, CMS aims to ensure that participants in the new model operate as provider-led organizations, have a proven track record of providing care in underserved communities and will not be shifting any enrollees into Medicare Advantage — a key concern expressed by lawmakers and advocates.

Geographic Expansions Assisted 2022 AEP Winners’ Major Gains

Medicare Advantage membership has grown by 8.5% since February 2021 to top 28.6 million lives, according to AIS Health’s analysis of data that included enrollment during the 2022 Annual Election Period (AEP). While nearly two-thirds of all new enrollees selected a plan from market leaders UnitedHealthcare, Humana Inc. or CVS Health Corp.’s Aetna, several regional insurers performed well above average, driven largely by service area expansions, provider pacts and benefit enhancements. (Per AIS’s research methodology, the following figures do not include lives enrolled in CMS’s Financial Alignment Initiative demonstration plans serving about 451,000 Medicare-Medicaid dual eligibles or participants in Programs of All-Inclusive Care for the Elderly.)

Medicare Advantage Enrollment Tops 28 Million in 2022 Annual Election Period

Approximately 2.2 million people enrolled in a Medicare Advantage plan from February 2021 to February 2022, bringing the total MA population to 28.6 million medical lives. That’s an 8.5% year-over-year increase, according to AIS Health’s analysis of data that included enrollment from the 2022 Medicare Annual Election Period (AEP), down from 9.9% growth during the prior-year period. Nearly two-thirds (64.3%) of all new enrollees selected a plan from UnitedHealthcare, Humana Inc. or CVS Health Corp.’s Aetna, while Centene Corp.’s major market expansion paid off, garnering more than 30% enrollment growth for the insurer. Meanwhile, Florida Blue parent GuideWell Mutual Holding Corp.’s completed acquisition of Triple-S Management Corp., one of the largest MA insurers in Puerto Rico, allowed it to crack the top 10 for the first time. Anthem, Inc. also completed a Puerto Rico MA deal with its July 2021 acquisition of MMM Holdings from InnovaCare Health. On the state level, four states saw MA growth of more than 20% (vs. 10 last year), including Delaware and Vermont, which have historically low penetration rates.

SCAN, CCA Team Up to Support PACE Enrollees Through myPlace

As the pandemic underscores the importance of enhanced support for community-dwelling seniors with complex care needs, two not-for-profit Medicare Advantage organizations have teamed up to sponsor an “integrated care delivery organization” designed to serve enrollees who qualify for Programs of All-Inclusive Care for the Elderly (PACE). Long Beach, Calif.-based SCAN Health Plan and Boston-based Commonwealth Care Alliance (CCA) last month unveiled the launch of myPlace Health as part of their shared mission of keeping seniors healthy and independent.

Robbie Pottharst, CEO of the newly launched company, confirms that myPlace is seeking to become a PACE organization and align with local health plans that may already serve dual eligibles who qualify for PACE and that, in his words, “can lend capability, expertise and a lot of accelerators to build this business.” Pottharst previously held leadership roles with Cityblock Health, Kaiser Permanente and CareMore Health, where Sachin Jain, M.D., served as president and CEO before taking over the reins at SCAN.

Slim Marketing Guidelines Stress Importance of Reviewing Regs

After nearly four years, CMS has released an updated version of the Medicare Communications and Marketing Guidelines (MCMG) that serve to interpret and provide guidance on the marketing and communication rules for Medicare Advantage and Part D sponsors. Compliance experts tell AIS Health, a division of MMIT, that the long-awaited document is light on additional guidance and clarification except for a few topics, and plans are encouraged to review all related regulations to stay compliant with marketing rules.

Aside from severely whittling down the document — the 2022 MCMG is now a mere 51 pages, down from 84 pages when last released as a full document for the 2019 plan year and 124 pages in the 2018 version — CMS has noticeably consolidated and reorganized sections, moving some subsections into other areas or removing guidance that was codified. The agency reminded plans that the document is to “be used in conjunction with the regulatory requirements to aid plans in understanding and complying with the regulations.”

News Briefs: CMS Is Seeking Applicants for the 2023 MA VBID and Part D Senior Savings Models

CMS on March 1 issued a request for applications (RFA) for the 2023 Medicare Advantage Value-Based Insurance Design Model, which will include new elements such as a Health Equity Incubation Program that will encourage testing of interventions in “the most promising focus areas” (e.g., food insecurity) and designing best practices for such interventions. Thirty-four MA organizations are currently offering benefit packages that feature tailored VBID model benefits and rewards and incentives to more than 3.7 million enrollees, according to the model’s website. CMS on Feb. 28 also released an RFA from Medicare Part D sponsors and pharmaceutical manufacturers interested in participating in the 2023 Part D Senior Savings Model. Now in its third year, the insulin-focused model is intended to lower out-of-pocket costs for seniors by featuring “predictable” copayments of no more than $35 for a broad set of insulins. The voluntary model has 106 participants, including five manufacturers. CMS is accepting applications for the VBID model through April 15 and for the SSM through April 8.

InnovAge Stock Falls as Regulators Scrutinize PACE Operations

Despite better-than-expected financial results posted for its fiscal-year 2022 second quarter, shares of InnovAge — the largest provider of Programs of All-Inclusive Care for the Elderly (PACE) — tumbled last week amid concerns about its ability to grow in the face of intensifying regulatory scrutiny. Between federal audits and issues with its state partners, InnovAge’s many struggles relate to program compliance and may demonstrate the difficulties of scaling up a specialized care model in a highly regulated industry.

Providing services primarily through a dedicated center, PACE organizations support frail, elderly Americans who require a nursing-home level of care by offering comprehensive medical care and social supports to help them remain at home. The PACE market serves about 51,000 participants, most of whom are dually eligible for Medicare and Medicaid, and it is largely composed of regional organizations. As the dominant PACE organization, InnovAge serves 12% of that market.

CMS Seeks to Level Member Playing Field Via Stars Changes

Aside from a headline-grabbing estimated pay boost of nearly 8% for Medicare Advantage organizations next year, the Biden administration’s first preliminary rate notice didn’t include many surprises for MA and Part D sponsors. Instead, the notice focused largely on potential changes to star ratings in the name of advancing health equity and monitoring member experience. At the same time, the notice addressed one aspect of payments for insurers serving a large portion of patients diagnosed with end-stage renal disease (ESRD) but left another to future policymaking.