Radar on Medicare Advantage

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.”

As Medicaid managed care organizations look to assist states with ensuring enrollees maintain coverage throughout the redetermination process, text messaging is often seen an effective way to reach members whose only method of communication may be a smartphone. During an Aug. 9 webinar hosted by Medicaid Health Plans of America, mPulse Mobile Chief Marketing Officer Brendan McClure said the technology company has reached out to more than 7 million members this year on behalf of its Medicaid plan clients.

The engagement solutions provider divides its phone-based outreach efforts into two main categories:

Effective April 1, states were allowed to begin disenrolling people from Medicaid who no longer qualify after a multiyear pause during the COVID-19 public health emergency (PHE). Yet data from the federal government suggests many people are losing coverage for procedural reasons, and surveys show a concerning lack of awareness regarding the redetermination process. Medicaid managed care organizations say they are working to supplement outreach efforts from state and federal agencies and are trying a variety of tactics to activate impacted members, including text messaging and notifications at the pharmacy. Since the start of redeterminations, CMS has clarified that states may rely on MCOs to assist enrollees with completing and submitting renewal forms and even pay them for this type of work.

KFF estimates that at least 4.77 million Medicaid beneficiaries have been disenrolled as of Aug. 15, with three quarters of disenrollments occurring for procedural reasons. HHS had previously estimated that 8.2 million people will no longer qualify for Medicaid once redeterminations resumed and find other coverage, while 6.8 million Medicaid enrollees could lose coverage despite still being eligible.

After a handful of publicly traded insurers last month reported second-quarter 2023 earnings that reflected the impact of increasing utilization, additional insurers reporting results in August said they witnessed a similar phenomenon, particularly among the Medicare Advantage population. But the insurers indicated that they were able to factor those trends into their bids for the coming plan year, while analysts were reassured that the issue was largely confined to MA and not the commercial sector.

UnitedHealth Group first disclosed the uptick in outpatient care utilization in June, sparking an insurer-stock selloff. Shortly after, Humana Inc. revealed in an 8-K filing with the U.S. Securities and Exchange Commission that it was also seeing elevated medical costs due to an increased use of services. Humana in that filing projected its insurance medical loss ratio (MLR) for the full year would settle in the higher (worse) end of its previously stated 86.3% to 87.3% range. “This expectation is primarily driven by the emergence of higher than anticipated non-inpatient utilization trends, predominantly in the categories of emergency room, outpatient surgeries, and dental services, as well as inpatient trends that have been stronger than anticipated in recent weeks, diverging from historical seasonality patterns,” the MA-focused insurer stated. The company also explained that it was seeing strong growth in its MA membership, including a “higher-than-expected proportion of age-ins” during the three-month Open Enrollment Period that ran from January to March, and such members tend to have an above-average MLR when compared to more established customers.

Just under half (49%) of Medicare-Medicaid dual eligibles were enrolled in Medicare Advantage or other private plans in 2020, according to a new analysis from KFF. But only 30% were enrolled in private plans or programs specifically designed for duals, such as Dual-Eligible Special Needs Plans (D-SNPs), Fully Integrated Dual-Eligible Special Needs Plans (FIDE-SNPs), Medicare-Medicaid Plans, or Programs of All-Inclusive Care for the Elderly (PACE). This could be concerning for lawmakers looking to leverage MA in their efforts to improve care coordination for this vulnerable population.

Humana Inc. on Aug. 2 said it expects to enroll approximately 825,000 members in its individual Medicare Advantage products this year, adding another 50,000 members to its initial projections and reflecting year-over-year growth of 18%. For the quarter ending June 30, the MA-focused insurer reported adjusted earnings per share (EPS) of $8.94, up from $8.76 in the second quarter of 2022, and a medical loss ratio (MLR) of 86.3%, up from 85.8% a year ago. The company raised its full-year 2023 adjusted EPS guidance to “at least $28.25,” reflecting a 25-cent increase. Humana also highlighted “stabilizing” MA utilization based on its most recent claims activity and said it continues to predict a full-year MLR of between 86.3% and 87.3%.

CVS Health Corp. on Aug. 2 reported second-quarter 2023 consolidated revenues of $88.9 billion, including $26.7 billion in revenue for the health care benefits segment, and reflecting overall growth of 10.3% from the year-ago quarter. Adjusted operating income for the health care segment declined by nearly 20% from a year ago, partly because of increased outpatient utilization in Medicare Advantage when compared with pandemic-driven utilization levels in the prior year, CVS Health explained in a detailed earnings release. For the quarter ending June 30, the company recorded an MLR of 86.2%, compared with 82.7% in the year-ago quarter, and adjusted EPS of $2.21, down from $2.53 in the second quarter of 2022. CVS Health confirmed its adjusted EPS guidance range of $8.50 to $8.70.