Compliance

News Briefs: Clover Health Says SEC Will Not Pursue Enforcement Action

After a yearslong investigation into Clover Health Investments Corp.’s business practices, the U.S. Securities and Exchange Commission (SEC) does not intend to recommend an enforcement action related to the investigation. As Clover previously disclosed, the SEC in February 2021 launched its probe shortly after a 2021 report from Hindenburg Research criticized multiple Clover business practices and accused its leaders of failing to disclose when the firm went public that it was under an active investigation by the Dept. of Justice. The MA-focused startup earlier this year settled a series of shareholder-led class action lawsuits that related to the DOJ probe. According to Sept. 30 SEC filing by the company, the SEC on Sept. 26 informed Clover that it had concluded its investigation and, “based on the information that the SEC had as of the date of the Notice,” it would not seek an enforcement penalty.

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Madness, Method and Medicaid: Behind Arizona’s Long-Term Care Contracting Controversy

After informing three local plans of its decision to ignore the findings of an administrative law judge (ALJ) and move forward with statewide long-term care contracts awarded to Centene Corp. and UnitedHealth Group, the Arizona Health Care Cost Containment System (AHCCCS) on Sept. 12 in a surprise move extended existing agreements for one year. “Members continue to be the agency’s primary focus throughout this process,” stated AHCCCS, just days after insisting that its procurement process was applied “fairly to all bidders, including the non-awarded health plans.”

In the “Director’s Decision” posted Sept. 9, however, the state Medicaid agency said it was denying the appeals of Mercy Care, Blue Cross Blue Shield of Arizona, and Banner-University Family Care, and it defended its request for proposals (RFP) process, which the ALJ concluded was flawed and should be redone. That was after, according to a statement from AHCCCS, more than one managed care organization “submitted additional information for the Director to consider following the ALJ’s Decision.” AHCCCS said that information was “neither reviewed nor considered in developing the Director’s Decision.”

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Centene Execs Address Part D Broker Pay Controversy at Wells Fargo Conference

Centene Corp. late last month riled agents and brokers with the news that it would no longer pay new and renewal commissions for enrollments in its stand-alone Prescription Drug Plan (PDP) products. During a Sept. 4 presentation at the Wells Fargo Healthcare Conference, Centene executives for the first time publicly acknowledged the firm’s controversial decision.

“One important thing to note on PDP, partly because of the IRA [Inflation Reduction Act] changes and then final rate notice provisions at the time that we filed bids, we made the difficult decision to eliminate broker commissions this year for PDP only,” Centene CEO Sarah London emphasized during the conference. She added that “we'll continue to pay full commissions in Medicare Advantage and obviously work very closely with the broker community to support the work they do, to support our members.”

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CMS Flexes Reporting Muscle With Proposed Service-Level Data Collection

In a Paperwork Reduction Act (PRA) notice issued on Aug. 9, CMS informed Medicare Advantage organizations of its plans to collect more granular information on service-level decisions, including both initial determinations and appeals. Sources say this approach aligns with CMS’s continued focus on health equity and transparency, and it could lead to greater oversight of prior authorization decisions.

To plan sponsors, the transmittal should not have come as a surprise, given that the 2024 MA and Part D rule finalized in April affirmed CMS’s authority to collect detailed information from MA organizations and Part D plan sponsors. “An example of increased data collection could be service level data for all initial coverage decisions and plan level appeals, such as decision rationales for items, services, or diagnosis codes to have better line of sight on utilization management and prior authorization practices, among many other issues,” CMS stated in that rule.

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With Brokers’ Blessing, CMS Targets Unauthorized Plan Switching

CMS on July 19 took new steps to protect Affordable Care Act marketplace enrollees from unauthorized plan switching — moves that were applauded by the independent broker industry. One policy expert says the new policies are welcome and should help with unauthorized plan switching, but she suggests that more must be done to prevent unauthorized plan signups. Meanwhile, a new Senate bill and industry efforts could make a difference in unauthorized signups.

In a July 19 press release, CMS said it would make notable changes in the way it processes plan switches on HealthCare.gov, including:

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MAOs, Brokers, Agents Get Relief With Legal Pause on Policy Changes

Medicare Advantage insurers and the agents and brokers who sell their plans got a temporary reprieve this month when the U.S. District Court for the Northern District of Texas granted a stay in two cases seeking to stop CMS from implementing new agent and broker regulations. Sources say this means the previously finalized restrictions on payments and contract terms will not take effect for the 2025 Annual Election Period, which starts on Oct. 15 and is preceded by official marketing activities beginning Oct. 1, but they advise plans to consider implementing compliant arrangements for plan year 2025 in case things go awry.

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Experts Challenge Specter of ‘Widespread’ ACA Enrollment Fraud

In recent letters to two federal watchdog agencies, Republican leaders of key House committees demand an investigation into “widespread” improper enrollment in Affordable Care Act exchange plans, citing the findings of a paper from Paragon Health Institute, a right-leaning think tank.

Health policy experts who spoke to AIS Health agree that that there are incentives for enrollees — and the brokers who help them find coverage — to estimate their income in such a way that they will qualify for the richest ACA subsidies. However, they aren’t convinced that there’s large-scale enrollment fraud taking place.

In their paper, the Paragon researchers estimate that 4 million to 5 million people are improperly enrolled in $0-premium (or fully subsidized) ACA exchange plans as of 2024, costing taxpayers between $15 billion and $20 billion.

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MedPAC’s June Report Flags Interest in Provider Directory Accuracy

Taking a breather from the continuing debate over Medicare Advantage plan overpayments, the Medicare Payment Advisory Commission (MedPAC) in its latest report to Congress touched on three crucial aspects of MA plan administration: encounter data, prior authorization and provider networks. Within its discussion of the latter, MedPAC pointed to persistent gaps in provider directory accuracy, something that insurance executives during the 2024 AHIP Conference in Las Vegas described as creating a “horrible experience” for members and providers.

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FMO Lawsuits Could Delay Agent and Broker Compensation Rules

With Medicare Advantage plan bids off to CMS for the 2025 plan year, MA organizations now turn their attention to arrangements with agents and brokers who will sell their plans this fall and the field marketing organizations (FMOs) that support them. But at least three complaints have been filed challenging CMS’s implementation of new provisions that will impact those relationships and take effect Oct. 1.

A central question raised in all three complaints is whether CMS exceeded its regulatory authority by abruptly setting a cap on administrative payments made to agents and brokers by MA organizations that have long been allowed in the MA program. Sources say a delay or additional clarifying guidance could result from at least two of the complaints, which were filed in a federal court with a history of striking down HHS regulations. CMS, meanwhile, is taking the stance that it is following Congress’ orders to ensure a level playing field among plans.

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Hospitals Charged Private Health Plans 2.5 Times Medicare Rates in 2022

Employers and private insurers, on average, paid 254% of what Medicare did for the same inpatient and outpatient services at the same facilities in 2022, according to a new RAND Corp. study.

The report examined data from more than 4,000 hospitals across all U.S. states except Maryland and found that average relative prices paid by private insurers increased from 241% of Medicare rates in 2020 to 254% in 2022, which was largely driven by growth in inpatient relative prices.

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