RADAR on Medicare Advantage

RFI Commenters Envision More Plan Flexibility, Improved Transparency in MA

After giving stakeholders a month to formulate their thoughts on how best to address a variety of aspects of the Medicare Advantage program, CMS received nearly 4,000 comments on its request for information (RFI). An AIS Health review of select letters reveals comments on a multitude of hot-button topics including beneficiary decision-making, marketing practices and plan oversight, and MA reimbursement.

CMS published the MA-focused RFI on Aug. 1 and asked for input by Aug. 31. The sprawling request asked commenters to consider dozens of questions on key topics such as health equity, risk adjustment, social determinants of health (SDOH), supplemental benefits and value-based care.

News Briefs: Medicare Advantage-related Marketing Complaints to CMS More Than Doubled From 2020 to 2021

The number of Medicare Advantage marketing-related complaints submitted to CMS more than doubled between 2020 and 2021, according to a recent report from Axios. Referencing CMS data, the news outlet reported that CMS received approximately 39,600 complaints about the marketing of MA and Part D plans in 2021, compared with about 15,500 in 2020 and an average of 6,000 to 7,000 in prior years. Consumers complained about things like being enrolled without contact from a health plan and misleading information about provider networks. Senate Finance Committee Chair Ron Ryden (D-Ore.) last month wrote to 15 states asking for detailed information about such complaints, while CMS has taken steps to tighten oversight of third-party marketing organizations. “While actions to reign in marketing constructs could affect competitive dynamics within MA, we should continue to see robust growth in this end market in totality, with an emphasis on consumer choice, branding, and benefit constructs affecting the competitive landscape moving forward,” observed Citi Research analyst Jason Cassorla.

Medicare Advantage Plans Face Stiff Test in Twin-Power Dialysis Market

Overwhelming consolidation in the dialysis provider market, dominated nationally by two organizations, may have a chilling effect on the financial health of some Medicare Advantage plans, which hold limited negotiating power barring regulatory reform, says a new study.

Since the 21st Century Cures Act loosened enrollment rules in 2021, allowing more patients with a previous diagnosis of end-stage renal disease (ESRD) to join Medicare Advantage, plans have witnessed a significant shift. More than 40,000 fee-for-service (FFS) Medicare members with ESRD switched to an MA plan during the first Annual Election Period under the new policy, according to the consultancy Avalere.

News Briefs: HHS Predicts 15M Will Lose Coverage Once Medicaid/CHIP Redeterminations Resume

HHS is currently projecting that 17.4% of Medicaid and Children’s Health Insurance Program (CHIP) enrollees — or about 15 million people — will move out of those programs when the COVID-19 public health emergency (PHE) ends. States have been barred from conducting eligibility redeterminations for Medicaid and CHIP during the PHE, as a condition of receiving enhanced federal funding, but those eligibility checks will resume whenever the PHE ends. Of those expected to lose Medicaid/CHIP coverage, almost one third are expected to qualify for premium tax credits to help defray the cost of Affordable Care Act marketplace plans, and among those people, more than 60% can access a zero-premium plan.

Medicare Advantage Plans Pay Higher Prices Than CMS for Dialysis Care

A new study published in Health Affairs urged government leaders to limit market consolidation among the largest dialysis providers as more and more seniors choose Medicare Advantage over fee-for-service (FFS) Medicare. Analyzing 2016 and 2017 outpatient Medicare claims data, the study authors found that MA organizations paid inflated costs for dialysis services compared to what FFS Medicare would have paid, especially to large national dialysis organizations — where the majority of patients receive treatment. Notably, MA plans’ median cost for in-network hemodialysis (the most common form of the therapy) was $301, which was markedly higher than the $232 median cost for out-of-network treatments. Findings were similar for peritoneal dialysis, the less common form of dialysis.

BCBSRI Achieved Savings, 5-Star Rating With Help of Embedded ACO Pharmacists

While an unprecedented number of Medicare Advantage Prescription Drug plans earned a 5-star rating for 2022 largely because of flexibilities granted during the COVID-19 public health emergency, Blue Cross & Blue Shield of Rhode Island (BCBSRI) credits a performance-based pharmacist intervention model with dramatically improving its drug-related scores and contributing to a 5-star summary rating for both of its contracts.

For 2022, CMS allowed plans to use the better of the two years’ rating (2021 or 2022) for most measures because all contracts qualified for the “extreme and uncontrollable circumstances policy.” Plans will not have that flexibility for the 2023 star ratings due out this fall.

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.