Compliance

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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DOJ Probe of UnitedHealth Could Spawn Optum Spinoffs, SEC Review of Stock Sales

A group of lawmakers is urging federal regulators to investigate UnitedHealth executives’ sale of company stock right after learning that the health care firm was the target of a Dept. of Justice (DOJ) investigation concerning its provider-acquisition spree. As for the investigation itself, one antitrust lawyer says it could take years before the DOJ files a case — but if it does, regulators could try to force the health care giant to spin off all or part of its Optum division.

Meanwhile, the DOJ’s antitrust division on May 9 announced a new Task Force on Health Care Monopolies and Collusion, which it said will “guide the division’s enforcement strategy and policy approach in health care, including by facilitating policy advocacy, investigations and, where warranted, civil and criminal enforcement in health care markets.” Some of the competition concerns the task force will examine include “issues regarding payer-provider consolidation” and “serial acquisitions.”

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Insurers Urged to ‘Look Carefully’ at AI Tools in Wake of New Rule

On April 26, the Biden administration released a final rule which, in addition to strengthening the Affordable Care Act’s antidiscrimination protections, attempts to address rising concern about health insurers’ use of artificial intelligence, algorithms and other tools to make care and coverage decisions.

Managed care experts say that the new regulation — titled Nondiscrimination in Health Programs and Activities — likely won’t catch insurers off guard given the scrutiny they are already receiving about their use of AI. However, “they’re going to have to look carefully at their use of any kind of automated tools,” predicts Harvey Rochman, a litigation partner at Manatt, Phelps & Phillips, LLP. “There’ll be a large focus on the kinds of automated tools that plans can use in various aspects of their work, from claims to utilization management.”

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SFHP Leverages Local Connections, In-House Capabilities to Launch D-SNP

To prepare for new integrated care requirements for dual eligible Californians, San Francisco Health Plan (SFHP) and other Medi-Cal plans are in throes of setting up a Medicare Advantage Dual Eligible Special Needs Plan (D-SNP) in their service area, if they haven’t done so already. During the 15th Annual Medicare Market Innovations Forum, held April 8-9 in Orlando, Florida, SFHP’s Diane Sargent discussed the daunting task of building a D-SNP and the tremendous potential to improve care delivery for up to 47,000 dual eligible beneficiaries in the plan’s service area.

As part of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, the state’s Dept. of Health Care Services (DHCS) is implementing new policies to promote integrated care for duals that build on the Coordinated Care Initiative (CCI), the state’s financial alignment demonstration with CMS that included Medicare Medi-Cal Plans (MMPs) serving duals. Under the first phase of CalAIM, which kicked off in January 2023, DHCS launched D-SNPs in the seven CCI counites. Under an exclusively aligned enrollment (EAE) model, duals access their Medicare and Medi-Cal coverage via the same managed care plan. Managed care plans in non-CCI counties that wish to continue serving dual eligibles must launch EAE D-SNPs no later than Jan. 1, 2026.

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News Briefs: Kaiser Reports Data Breach Affecting 1.34M

Kaiser Foundation Health Plan, Inc. is notifying millions of current and former customers that their information may have been shared with third parties included Google, Microsoft and the social medial platform X. Kaiser reported the breach to the HHS Office for Civil Rights on April 12, according to an OCR filing, which stated that the number of individuals affected was 1.34 million. In a statement to the news outlet TechCrunch, Kaiser said that “certain online technologies, previously installed on its websites and mobile applications, may have transmitted personal information to third-party vendors.” Compromised data includes member names and IP addresses, as well as information about how members “interacted with and navigated through the [Kaiser Permanente] website and mobile applications, and search terms used in the health encyclopedia,” according to the article.

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Employer Group Fires First Shot in Fight Over Mental Health Parity Regs

The ERISA Industry Committee (ERIC), a benefits trade group for large employers, launched an ad campaign attacking the Biden administration’s mental health parity policies — a notable escalation in plan sponsors’ intensifying opposition to the administration’s approach to mental health care access, which could ultimately lead to litigation.

In a press release, ERIC said it hopes to influence upcoming mental health parity regulation, noting that “departments of President Biden’s administration, including the U.S. Departments of Health and Human Services (HHS), Labor (DOL) and the Treasury are finalizing proposed rule changes regarding mental health and substance use disorder parity.” The expected rule would be a finalized version of a regulation released in September 2023, which calls for much stricter network adequacy standards than were required in previous parity rulemaking.

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