Radar on Medicare Advantage

New research conducted by Avalere on behalf of the Better Medicare Alliance (BMA) suggests Medicare Advantage plans aid in earlier detection of type 2 diabetes and that seniors diagnosed with type 2 diabetes generally fare better than similar patients in fee-for-service (FFS) Medicare. Specifically, lower medical spending and rates of inpatient hospitalizations/emergency department visits observed by researchers may be particularly compelling for policymakers as they consider the overall value of the MA program.

With MA serving more seniors than ever before — having just reached a milestone of enrolling more than 30 million Medicare-eligible beneficiaries — and one-third of seniors estimated to have a diagnosis of type 2 diabetes, it is important to look at how these patients’ care differs in MA vs. traditional Medicare, asserted Matt Kazan, managing director with Avalere, during a Jan. 12 webinar hosted by BMA. In many cases, there are “major differences,” he noted.

The number of seniors who switched from traditional Medicare to Medicare Advantage increased annually from 2016 to 2020, according to new research published in JAMA Health Forum. The switch rate from traditional Medicare to MA grew to 6.8% in 2020 — more than three times higher than the switch rate from MA to traditional Medicare. This trend was noticed across populations with a variety of traits, including age, race and mortality status, and was particularly strong among Medicare-Medicaid dual eligibles. Switch rates from MA to traditional Medicare, meanwhile, are largely on the decline, but still more common among duals than non-duals. The study’s authors suggested this movement was a contributor to overall MA growth, noting that MA’s share of Medicare enrollment is projected to exceed 50% this year. They also observed that switching accounted for a growing share of new MA enrollment growth, rising from 49% in 2016 to 67% in 2020.

Reporting financial results for the quarter and year ending Dec. 31, 2022, UnitedHealth Group on Jan. 13 said full-year revenues grew 13% year over year to $324.2 billion, and earnings from operations rose 19% to $28.4 billion. The company ended the year with an 82.0% medical loss ratio, which was consistent with projections provided at its annual Investor Day. The UnitedHealthcare segment reported full-year revenues of $249.7 billion, up 12% from the prior year, and operating earnings of $14.4 billion, up 20% from 2021. Those results were largely driven by growth in the number of people served, including an additional 615,000 in Medicare Advantage; overall MA enrollment exceeded 7.1 million at the end of 2022. UnitedHealth also reported adjusted earnings per share of $22.19 for full-year 2022 and maintained guidance of adjusted EPS between $24.40 and $24.90 for 2023.

With upcoming changes to marketing regulations, the Star Ratings program, and various other aspects of Medicare Advantage — combined with ongoing scrutiny of MA plan payments and a pending rule that could significantly boost the federal government’s collection of overpayments through Risk Adjustment Data Validation audits — achieving success in MA continues to be a balancing act. For our annual series of Outlook stories on the year ahead, we asked a range of industry experts to weigh in on how doing business in 2023 might differ from previous years. Here’s the second installment, on the investments and strategies that will drive success in 2023, as told to AIS Health, a division of MMIT.

Marking the second approval of an Alzheimer’s disease treatment aimed at slowing cognitive decline by reducing amyloid plaque buildup on the brain, the FDA on Jan. 6 granted accelerated approval to Biogen and Eisai, Co., Ltd.’s Leqembi (lecanemab-irmb). For now, the drug remains subject to the restrictive National Coverage Determination that Medicare initially gave its predecessor, Aduhelm (aducanumab-avwa), and similar Alzheimer’s treatments last year, but CMS could consider broader coverage if the drug receives traditional FDA approval.

The drug is indicated for the treatment of Alzheimer’s disease in people with mild cognitive impairment or mild dementia. Patients must have confirmed presence of amyloid beta pathology before starting treatment. The FDA gave the humanized immunoglobulin gamma 1 monoclonal antibody fast track, priority review and breakthrough therapy designations. Japanese pharmaceutical company Eisai developed the drug and will co-market it with its U.S. partner Biogen, which launched Aduhelm in 2021 and had to halve its price from $56,000 a year to $28,000. Eisai estimates the cost of Leqembi will be $26,500 per year, though the actual price could vary by patient.

In a sweeping proposed rule for the 2024 contract year, CMS last month took a strong stance on multiple aspects of the Medicare Advantage program, from misleading marketing and prior authorization to quality gains incentivized by the Star Ratings. As plans digest the many changes proposed in that rule, several major unknowns remain that could impact their revenue streams and ability to compete going forward. For our annual series of outlook stories on the year ahead, we asked a range of industry experts to weigh in on how doing business in 2023 might differ from previous years. Here’s the first installment on industry challenges and trends as told to AIS Health, a division of MMIT.

A new report from the CMS Innovation Center identified redesigning financial benchmarks and risk adjustment to improve model test effectiveness as a priority going forward. In its annual report to Congress, the Innovation Center noted that “[m]any financial benchmarks and risk adjustment methodologies have created opportunities for potential gaming and upcoding among participants — and have therefore reduced savings for Medicare.” The Innovation Center largely tests models serving fee-for-service Medicare beneficiaries and has relied on risk adjustment as a critical component of its models, including all accountable care organization (ACO) based models. The agency added that it has launched “an examination of its benchmarking and risk adjustment approaches to provide incentives to encourage participation, especially among providers caring for underserved beneficiaries and ACOs with varying levels of experience, as well as ensure payment accuracy.” The report also highlighted health equity as an ongoing focus and observed ways to improve communications with potential hospice benefit enrollees, referring to one component of the ongoing Medicare Advantage Value-Based Insurance Design model, to ensure that hospice and palliative care are accessible to all beneficiaries.

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).