Radar on Medicare Advantage

Fewer Medicare Advantage plans are using Special Supplemental Benefits for the Chronically Ill (SSBCI) to offer non-primarily health-related benefits (NPHRB) in 2024, according to an Oct. 30 report on 2024 non-medical supplemental benefits from ATI Advisory, funded by the SCAN Foundation. The health care research and advisory services firm observed some significant changes across supplemental benefit categories, and one social determinants of health (SDOH) expert expressed disappointment in MA organizations’ uptake of these benefits.

About 30% of MA plans are offering any NPHRB for 2024, just a 2.4% increase from the current plan year. And while fewer plans are using SSBCI to offer these benefits, the Center for Medicare and Medicaid Innovation’s Value-Based Insurance Design (VBID) model got a boost, with 10.4% of MA plans offering NPHRBs through the VBID model in 2024 vs. 5.5% of plans in 2023. (Plans participating in the newly extended VBID model are required to start offering supplemental benefits that address key SDOH in 2025, and ATI suggested some payers may be getting a jump on this.)

Despite declines in the average overall Star Rating for Medicare Advantage Prescription Drug plans and the number of MA-PD contracts earning 4 stars or higher, the 2024 Star Ratings data released by CMS last month indicates that about two-thirds of performers held onto their 5-star rating from the previous year. For our annual series on the success stories of highly rated MA plans, leadership at several repeat 5-star performers touted comprehensive, integrated and localized approaches to continually delivering quality care.

For Quartz Health Plan, simplifying the member journey and working closely with its provider owners have been two areas of focus, according to Christina Ott, chief growth officer. Formed by the 2017 combination of Gundersen Health Plan, UnityPoint Health and Physicians Plus Insurance Corp., and then rebranded as Quartz, the insurer’s MA-PD contract serving enrollees in select counties of Minnesota has earned 5 stars for the 16th time, according to Ott. Quartz also has MA membership in Illinois, Iowa and Wisconsin; Advocate Aurora Health joined as a minority owner in 2021. While Quartz is focused on selling its products where its provider owners can best serve seniors and “has a narrower network than most,” it does have other providers in the network and it “aligns with providers in ways that work for the individual,” she tells AIS Health, a division of MMIT.

Plans participating in the Medicare Advantage Value-Based Insurance Design (VBID) Model next year must begin reporting beneficiary-level utilization data on three key supplemental benefit categories: food, transportation, and general supports for living (e.g., utilities assistance). That requirement was included in a 2024 request for applications released late last year, and CMS officials have since hinted that the agency is interested in gathering additional information about supplemental benefit usage from the MA industry at large. But in a move that flew largely under the radar, the agency in September issued a proposal to begin requiring all MA organizations to submit information about supplemental benefits at a greater level of detail than some plans may be able to provide at this time, industry experts tell AIS Health, a division of MMIT.

As publicly traded insurers report their third-quarter 2023 financials this fall, two of the Medicare Advantage organizations most impacted by the 2024 Star Ratings recently expressed confidence in their ability to regain higher marks, driven in part by increased adoption of value-based care models.

For the quarter ending Sept. 30, Elevance Health, Inc. beat Wall Street expectations with adjusted earnings per share (EPS) of $8.99, an increase of roughly 20% over the third quarter of 2022, and recorded operating revenue of $42.5 billion, up 7.2% from the prior-year quarter. Its health benefits operating margin of 5.0% was also above consensus, aided by a medical loss ratio of 86.8%, which came in lower (better) than 87.2% reported in the year-ago quarter — fundamentals that Goldman Sachs viewed as “generally favorable” in an Oct. 18 note to investors. The insurer ended the quarter with 47.3 million medical members, a year-over-year increase of 42,000 lives, reflecting growth in its Affordable Care Act, BlueCard and MA businesses. During the quarter, however, membership fell by 664,000, driven by attrition in Medicaid due to eligibility redeterminations and a new entrant into one of the insurer’s state programs in July, explained Chief Financial Officer John Gallina during a conference call held on Oct. 18 to discuss third-quarter 2023 earnings.

The latest Medicare Part C and Part D Star Ratings data show that it’s getting harder for payers to achieve the bonus payment level of 4 stars or higher, in part due to cut point changes driven by the new Turkey outlier deletion methodology. As CMS continues to alter the way it calculates the Star Ratings, including lowering the weight of Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures for 2026, plans should deploy a top-down, cross-departmental government structure to incentivize quality performance across all functions, according to global management and technology consulting firm AArete.

To learn more about this and other characteristics of a 5-star MA plan, AIS Health, a division of MMIT, spoke with Darren Ghanayem, managing director with the health care payer group at AArete. The firm works with payers across the MA, Medicaid and commercial markets, advising them on everything from systems migrations and provider network strategy to maximizing revenue and optimizing administrative costs. Ghanayem previously served as chief information officer with WellCare Health Plans, prior to its acquisition by Centene Corp., and at Anthem, Inc. (now Elevance Health, Inc.).

The stand-alone Prescription Drug Plan (PDP) market — which was already in decline — is poised to take even more hits due to regulatory and legislative changes that are taking effect in 2024 and beyond, according to industry observers. Indeed, one expert who analyzed data from CMS’s 2024 Medicare Advantage and Part D “landscape files” predicts that “a lot of people are faced with pretty significant premium increases” next year.

There’s a complicated calculus driving that trend, explains Tom Kornfield, a senior consultant at Avalere Health. But both he and equities analyst George Hill agree that the Inflation Reduction Act of 2022 (IRA) is a major factor.

“Barbara is a Medicare Advantage member without a car and limited access to other transportation options. She has a health benefit card, issued on Optum’s payments platform, which she can use to pay for eligible over-the-counter items, groceries, and rides,” explains a recent blog post from Uber Health. Announced earlier this month, the new pact with UnitedHealth Group’s Optum health services division is just one example of creative partnerships emerging in Medicare Advantage to attract new members and address health-related social needs. Meanwhile, MA organizations for 2024 continue to strike new alliances with providers, retailers and other insurers to leverage their brands in select markets.

Centene Corp.’s Wellcare, for one, formed a new strategic alliance with Mutual of Omaha. For the 2024 plan year, the insurers will offer two cobranded PPOs — WellCare Mutual of Omaha No Premium and Wellcare Mutual of Omaha Low Premium — in five states: Georgia, Missouri, South Carolina, Washington and select areas of Texas. (Wellcare is also expanding its geographic footprint by 21 counties and adding a new state with entry into Delaware, according to an Oct. 11 press release unveiling its 2024 offerings.)

UnitedHealth Group on Oct. 13 said overall revenues for the third quarter of 2023 climbed 14% from a year ago to $92.4 billion, reflecting double-digit growth at both its Optum and UnitedHealthcare divisions. The company also recorded a medical loss ratio of 82.3%, which was higher (worse) than the 81.6% reported for the third quarter of 2022. UnitedHealth said that was largely due to the previously disclosed uptick in inpatient care, primarily among seniors, and business mix. Revenues for the UnitedHealthcare insurance segment rose 13% from a year ago to $69.9 billion, reflecting growth in the number of people served. The company estimated it will have added nearly 1 million Medicare Advantage customers by the end of the year. The company raised its 2023 adjusted earnings per share outlook to a range of $24.85 to $25, from a previous range of $23.60 to $23.75 per share.

“Wheel of deceit.” “Sleazy, private sector scoundrels.” The transfer of personal information “from one moneygrubbing hand to another.” These are just a few of the verbal gems dropped by Sen. Ron Wyden (D-Ore.) when, during a recent hearing on Capitol Hill, he described the billion-dollar third-party Medicare marketing machine that has been under increased scrutiny by Congress, consumer advocates and researchers.

But beyond Wyden’s descriptive remarks, the Senate Finance Committee chair and other lawmakers queried stakeholders about real solutions to rein in misleading marketing practices and improve seniors’ shopping experiences. Suggestions that came up on multiple occasions included prohibiting the transfer of beneficiary information from one lead generator to another, putting additional limits on the fees brokers earn for enrolling MA members, penalizing MA insurers for the actions of third-party marketers, and increasing transparency around the full cost associated with enrolling in an MA plan.

Payer anxieties about lower Star Ratings for the 2024 plan year came to fruition last week with CMS’s release of the annual Part C and Part D quality measurements. The average Medicare Advantage Prescription Drug (MA-PD) contract scored a 4.04, down from 4.14 last year and the lowest average rating since 2017. Just 31 contracts received 5 stars, representing 6.8% of current MA-PD enrollment, vs. 57 contracts serving 21.5% of enrollees last year.

Several methodology changes fueled the ratings decline, which Stars experts have dubbed "TukeyGate," referring to CMS efforts to remove outliers from calculating the cut points for non-Consumer Assessment of Healthcare Providers and Systems (CAHPS) measures. The agency also added two new Part C measures, one for care transitions and another for follow-ups after emergency visits for people with high-risk chronic conditions. A Part C measure on kidney disease monitoring for diabetes patients was removed.