Radar on Medicare Advantage

Economic instability, food insecurity, limited access to transportation and overall lack of support are seniors’ top barriers to staying healthy, according to new data from Alignment Health. Sponsored by the tech-enabled Medicare Advantage insurer, the second-annual Social Threats to Aging Well in America survey polled 2,601 seniors across Alignment’s six-state service area, asking them about their financial, physical and emotional needs — and how those needs are impacting their health. Their responses illuminate the types of supplemental benefits that could prove most valuable to seniors weighing their coverage options as the 2024 Annual Election Period approaches.

Not having enough money for medical expenses was the most common overall obstacle to health, reported by 41% of survey respondents who anticipate any upcoming challenges. And about 20% of respondents cited financial instability as their top obstacle to health and wellness. One in 5 seniors said they’ve skipped out on needed medical care, and lack of funds was the No. 1 reason for doing so. In addition, 14% of seniors said they have outstanding medical debt, and 11% do not think they will be able to pay all of their medical bills in the coming year. When asked about supplemental benefits, nearly half (46%) of respondents said they would take advantage of assistance with rent, mortgage payments, and/or utility bills. Seniors also responded positively to fuel and grocery allowances.

To help overwhelmed seniors make better Medicare Advantage plan comparisons, the Medicare Payment Advisory Commission (MedPAC) nearly a year ago began discussing the concept of standardizing a limited number of common supplemental benefits in MA. During its September public meeting, MedPAC agreed to devote a chapter of its June 2024 report to standardizing select MA benefits, while several commissioners echoed previous sentiments about striking a balance between standardization and flexibility.

At its November 2022 public meeting, the independent congressional agency considered two different approaches: (1) standardizing a limited number of common supplemental benefits, such as dental, hearing and vision, and (2) standardizing Medicare Parts A and B services, whereby plans use a limited number of benefit packages. But some commissioners at the time expressed concern about potentially hampering MA plan innovation.

Since the January release of CMS’s controversial final rule on Risk Adjustment Data Validation (RADV) audits, all has remained quiet on the litigation front. But in a complaint filed in a federal court on Sept. 1, Humana Inc. opens old wounds regarding the years-long leadup to the final rule and invokes the Administrative Procedure Act (APA) in asking the court to vacate the rule. In doing so, it seeks to stop CMS from applying its new audit policy of seeking extrapolated recovery amounts.

Issued on Jan. 30, the final rule (88 Fed. Reg. 6643, Feb. 1, 2023) pertains to contract-level audits that CMS began conducting more than a decade ago to verify the accuracy of payments made to MA organizations and recover improper payments. In that rule, CMS codified its plans to begin extrapolating RADV audit findings with payment year 2018 — but not findings for payment years 2011 through 2017, as once proposed. And the agency confirmed it would not adopt a “fee-for-service adjuster” to account for any impact from unaudited diagnosis codes in FFS data that are used to calibrate the MA risk adjustment model.

CMS on Aug. 29 unveiled the long-awaited list of 10 drugs for which Medicare will negotiate prices and included drugs to treat common diseases like diabetes, high blood pressure and certain cancers. Industry experts tell AIS Health, a division of MMIT, that while the list provides Part D stakeholders with some new clarity, a host of uncertainties remain, such as how the negotiation process itself will unfold and how plan sponsors will respond to mandated benefit design changes in 2025. But if CMS prevails in implementing drug price negotiation with no delays from manufacturer lawsuits, sources are hopeful that the new process will ultimately provide more insight and fewer uncertainties for subsequent rounds of negotiation.

Based on criteria outlined in the Inflation Reduction Act (IRA), CMS is tasked with selecting drugs for price negotiation, beginning with 10 Part D drugs in 2026, an additional 15 Part D drugs for 2027, and another 15 Part D and Part B drugs in 2028. Starting in 2029, the agency will add another 20 Part D and Part B medications each year to the list. The Congressional Budget Office (CBO) has projected that Medicare will save $3.7 billion in 2026, $8.3 billion in 2027 and $17.5 billion in 2028.

Medicare Advantage members using post-acute care services are reporting less favorable outcomes than their fee-for-service counterparts, according to a new study published in JAMA Health Forum. Not only are outcomes worse, MA beneficiaries are also using fewer post-acute care services than those enrolled in traditional Medicare (TM), which study authors said could be linked to payers’ tight prior authorization (PA) requirements.

The study authors explained that prior research on this topic, which has generally shown favorable post-acute outcomes in MA, relied largely on administrative data, which can’t capture individual beneficiaries’ perception of quality or health status. That’s why they looked to self-reported data from the National Health and Aging Trends Study, focusing on seniors age 70 and older who lived in community settings (rather than nursing homes). “Examining self-reported patient outcomes is key to ensuring that the MA program adequately meets beneficiaries’ needs, particularly since there is evidence that MA enrollees are treated at lower-quality SNFs [skilled nursing facilities],” authors wrote.

Since the 21st Century Cures Act loosened enrollment rules in 2021, enabling more patients with a previous diagnosis of end-stage renal disease (ESRD) to enroll in Medicare Advantage, MA insurers have been striking innovative partnerships with kidney care management companies to better manage care and control costs for kidney disease patients. Most recently, Humana Inc. — one of the leading MA insurers serving ESRD enrollees — unveiled a new value-based care pact with Interwell Health that will cater to most Humana MA HMO and PPO members in 13 states living with chronic kidney disease (CKD), as well as members across the country living with ESRD.

According to Brandon Spicer, director of kidney care at Humana, the insurer offers a variety of programs for members living with CKD and ESRD, and its program care managers “work closely with providers to give patients individual support and guidance while educating them about their disease, supporting their physician’s care plan and assisting with coordination of care.”

Medicare Advantage insurers can’t share the juicy details of their new plan offerings until Oct. 1, but they are taking steps to prime the market and help boost enrollment during the 2024 Annual Election Period (AEP) with “preheat” strategies. Such efforts are often used to create or reinforce brand awareness in the month or two leading up to the AEP, and some insurers are shifting more dollars to this channel as consumer switching is expected to rise again this year, marketing experts tell AIS Health, a division of MMIT. (Warning: The following article contains an abnormal amount of marketing lingo.)

“Before AEP starts, ‘market warming’ with mail and DRTV [direct response television] continues to pay off. In fact, many say that if a plan misses pre-AEP market outreach, they’ve missed most of the available leads for the period. For some plans, these early leads represent over half of all AEP volume,” says Lindsay Resnick, executive vice president with Wunderman Thompson Health. However, such efforts are successful only if the plans’ “sales funnel” and call center are prepared to handle high call volumes and if they have a “lead nurturing” process in place to optimize the value of these leads, he advises. For example, “responder non-converters” (i.e., those who have responded in the past but did not become members) tend to convert at higher rates, he notes.

As Medicare Advantage attracts a greater share of Medicare-eligible enrollees, switching from fee-for-service Medicare to MA has been on the rise since 2010 and peaked at 7.8% in 2021, according to new research published in Health Affairs. Researchers used data from the CMS Medicare Enrollment Database and the Risk Adjustment Processing System, and their primary objective was to understand where the bulk of new MA membership is coming from (i.e., FFS Medicare vs. new-to-Medicare) and those individuals' health profiles. After 2010, switching from MA to FFS Medicare consistently declined while switching in the other direction increased, with the greatest difference in rates occurring in 2021, when just 1.2% of individuals left MA for FFS Medicare, according to the analysis. (The switching rate was defined as the percentage of switchers out of the total number of switchers and stayers in either FFS Medicare or MA.) Between December 2021 and December 2022, the overall switching rate from FFS to MA averaged 7.4%, and men had a higher switching rate than women, researchers observed. During that time, the switch rate from FFS to MA was highest for Black beneficiaries (15.6%), closely followed by Hispanic beneficiaries (15.0%), and the lowest rate was among white enrollees (6.4%). Researchers noted their analysis was descriptive in nature and that they were not able to discern the underlying factors driving the observed switching patterns, such as aggressive marketing or attractive plan benefits. Moreover, the analysis did not differentiate between voluntary and involuntary switching. As the MA program continues to grow, however, “understanding reasons for switching will become important,” they observed.

Supplemental benefits are popular among Medicare Advantage members, but they’re particularly valuable for Medicare-Medicaid dual eligibles, suggests a new report from Elevance Health, Inc.’s Public Policy Institute. Following legislation and regulatory changes in 2018 and 2019 that established new types of supplemental benefits and expanded the definition of what CMS considers “primarily health-related,” payers began to offer supplemental benefits that target members’ health-related social needs (HRSNs), such as food insecurity and lack of access to transportation. Elevance is one of the first payers to release any data on the uptake and utilization of these benefits, while research on duals’ unique social needs and supplemental benefit use continues to emerge. A July 2023 study from Humana Inc., for example, found that 80% of duals in a sample population of its MA enrollees reported experiencing at least one HRSN, vs. 48% of non-duals. Deft Research in its 2023 Dual Eligible Retention Study, meanwhile, found that duals “absolutely depend” on their supplemental benefits and are likely to switch plans if not satisfied with their supplemental benefits.

Manhattan Supreme Court Justice Lyle Frank issued an order “permanently” banning New York City from pushing some 250,000 retirees and their dependents into a private Medicare Advantage plan managed by CVS Health Corp.’s Aetna. Led by Mayor Eric Adams (D), the city has spent the last couple of years trying to implement a group MA plan for its retired workers, who continue to protest the switch for a variety of reasons, namely that the plan goes against a longstanding promise to provide them with free and comprehensive health care coverage in retirement. Frank previously ruled that the proposal violated city law by charging retirees $191 per month to maintain their fee-for-service Medicare coverage. In July, Frank granted the petitioners’ request for a preliminary injunction, which temporarily barred the city from executing its plan. In a decision issued Aug. 11, Frank ordered that the city be “permanently enjoined from requiring any City retirees and their dependents from being removed from their current health insurance plan(s), and from being required to either enroll in an Aetna Medicare Advantage Plan or seek their own health coverage.” On Aug. 14, the NYC Office of Labor Relations posted a new update to its retiree health benefits webpage stating that there is “no Opt-Out or Waiver deadline in effect due to an injunction issued by the court” and all current health plans remain in effect. Meanwhile, Aetna appreciates the agreement between the plaintiff’s counsel and the city “to not conduct any additional hearings, briefings or discovery in order for Judge Frank to immediately issue his decision,” according to Rick Frommeyer, senior vice president with Aetna Group Retiree Solutions. “This approach speeds the appellate review of this matter. We look forward to the City’s appeal.”