Radar on Medicare Advantage

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.

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.

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).

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.

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.

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.

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.

Of the approximately 30.2 million seniors currently enrolled in Medicare Advantage, more than 5.2 million receive their coverage through an employer-sponsored group MA plan, according to the latest CMS enrollment data. That’s roughly the same proportion of MA enrollees in group plans as last year, when AIS Health reported on the rising popularity of Employer Group Waiver Plans (EGWPs, also commonly referred to as group Medicare). Meanwhile, those offerings are growing as the share of employers sponsoring retiree medical benefits is on the decline, according to recent analysis from the Kaiser Family Foundation, which raised questions about the lack of transparency around these plans and the potential cost implications to the overall Medicare program. But industry experts argue that MA offers value to retirees that they can’t get through traditional, fee-for-service (FFS) Medicare.

Building on previous interoperability regulations, CMS on Dec. 13 published a proposed rule that seeks to improve the efficiency and transparency of prior authorization processes in Medicare Advantage and other federally funded health care programs. Industry experts say the rule should ultimately speed access to care, potentially alleviating some but not all of the concerns expressed by providers, patient advocates and lawmakers about the burden of prior authorization, particularly on seniors.

In issuing the proposed rule, the agency said it withdraws and replaces a previously proposed rule (CMS Interoperability and Prior Authorization Proposed Rule, 85 Fed. Reg. 82586), and addresses public comments received on that rule. Published in December 2020, the aforementioned rule proposed to place new requirements on Medicaid and Children’s Health Insurance Program managed care plans, state Medicaid and CHIP fee-for-service programs, and Qualified Health Plan (QHP) issuers to improve the electronic exchange of health care data, and streamline processes related to prior authorization. The rule included five sets of proposals and five requests for information but did not specifically apply to MA.

In a sweeping proposed rule issued Dec. 14, CMS addresses a variety of hot-button aspects of the Medicare Advantage and Part D programs, including Medicare marketing, prior authorization and overpayments. The 957-page proposed rule, scheduled for publication in the Dec. 27 Federal Register, seeks to protect MA and Part D enrollees from misleading marketing by banning the use of advertisements that “do not mention a specific plan name as well as ads that use words and imagery, such as the Medicare name or logo, that may confuse beneficiaries in a way that is misleading, confusing, or misrepresents the plan,” according to a fact sheet. It also proposes to adopt the False Claims Act definition of “knowing” and “knowingly” regarding when an MA or Part D sponsor identifies an overpayment, thereby removing the “reasonable diligence” standard. In addition, CMS proposes new requirements to ensure continuity of care, such as requiring that an approved prior authorization remain in place for a beneficiary’s full course of treatment and that all MA plans annually review their utilization management policies to maintain consistency with traditional Medicare’s coverage guidelines. Moreover, the rule proposes the creation of a health equity index in the Star Ratings program that would encourage plans to improve care for enrollees with certain social risk factors, starting with measurement data from 2024. In a statement on the proposed rule, Better Medicare Alliance President and CEO Mary Beth Donahue called it a “thoughtful, comprehensive proposed rule” and said BMA “appreciates the agency’s engagement with stakeholders across the health care spectrum ahead of the rulemaking process.” CMS on Aug. 1 published a request for information seeking input on how to address various aspects of the MA program; it received nearly 4,000 comments.