Compliance

The latest round of mental health care parity regulations would require health plans to detail members’ access to mental health care and the extent of behavioral health networks in much greater detail than before — and a recent federal report says that most plans were not in compliance with previous reporting standards. Experts say that the reporting requirements are a drastic change from previous standards, and plan sponsors and insurers have asked the Biden administration for more time to review the proposed rule.

The Biden administration has made significant changes to regulators' mental health parity enforcement powers in the past, and the latest set may be the boldest yet. The latest proposed rules, issued July 25, include specific data reporting requirements around non-quantitative treatment limits (NQTLs) and more stringent network adequacy requirements. Indeed, insufficient network adequacy now could count as an NQTL for enforcement purposes.

As Medicare Advantage insurers prepare for the Oct. 1 start of Annual Election Period (AEP) marketing, they face an increased level of scrutiny as CMS implements various provisions aimed at curbing misleading and aggressive marketing practices. But new research suggests that some of the marketing misconduct of years past could rear its ugly head again this fall, prompting industry experts to question whether CMS should take additional steps or if action from Congress is needed.

Released on Sept. 12, the Commonwealth Fund’s survey of seniors’ experiences during the last week of the 2023 AEP tells the familiar tale of Medicare beneficiaries inundated with marketing messages during open enrollment. Nearly all seniors saw or received some form of plan marketing — ranging from phone calls to television advertisements — and more than three-quarters reported seeing television or online ads once daily. Additionally, 73% received phone calls at least once a week, and 30% reported receiving at least seven calls in a week. And despite CMS rules barring marketers from calling beneficiaries unless they’ve agreed to be contacted or requested the call, 74% of all respondents reported receiving an unsolicited call from a plan or plan representative.

The HHS Office of Inspector General will conduct a series of Medicare Advantage audits focused on diagnoses identified from unlinked chart reviews that resulted in higher risk-adjusted payments to MA organizations. For the risk adjustment program, CMS allows Medicare Advantage organizations to conduct chart reviews of enrollee medical record documentation to identify diagnosis codes that providers either did not originally give the MAO or provided in error. With unlinked chart reviews, MAOs do not have to include the specific date of service for previously unidentified diagnosis codes. In a 2021 report suggesting some MAOs were relying heavily on chart reviews and health risk assessments to achieve higher risk-adjusted payments, OIG previously recommended that CMS reassess whether it should allow unlinked chart reviews to be sole sources of diagnoses for risk-adjusted payments. The audit reports are expected to be released in 2026, according to a work plan summary posted this month.

As the Medicare Payment Advisory Commission (MedPAC) continues to consider ways Congress could achieve greater parity between traditional, fee-for-service (FFS) Medicare and Medicare Advantage, its September public meeting touched on several program aspects that are ripe for change. Three such areas — MA benefit standardization, access and quality, and encounter data — are slated to be addressed in separate chapters of its June 2024 report, MedPAC confirmed. Meanwhile, an analytical discussion on alternative methods of assessing MA coding intensity could lead the commission to conclude that MA plans are overpaid by even more than its current estimates, which are already disputed by the industry’s largest trade group.

Since the January release of CMS’s controversial final rule on Risk Adjustment Data Validation (RADV) audits, all has remained quiet on the litigation front. But in a complaint filed in a federal court on Sept. 1, Humana Inc. opens old wounds regarding the years-long leadup to the final rule and invokes the Administrative Procedure Act (APA) in asking the court to vacate the rule. In doing so, it seeks to stop CMS from applying its new audit policy of seeking extrapolated recovery amounts.

Issued on Jan. 30, the final rule (88 Fed. Reg. 6643, Feb. 1, 2023) pertains to contract-level audits that CMS began conducting more than a decade ago to verify the accuracy of payments made to MA organizations and recover improper payments. In that rule, CMS codified its plans to begin extrapolating RADV audit findings with payment year 2018 — but not findings for payment years 2011 through 2017, as once proposed. And the agency confirmed it would not adopt a “fee-for-service adjuster” to account for any impact from unaudited diagnosis codes in FFS data that are used to calibrate the MA risk adjustment model.

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.

Data breaches have been pummeling health care organizations in recent years, and 2023 has proven no exception. But the largest number of breaches — as well as the ones affecting the most people — do not appear to be occurring at health plans lately. Industry experts tell AIS Health, a division of MMIT, that this is largely because U.S. health insurers have taken significant steps to shore up their cybersecurity defenses since a massive data breach roiled three Blue Cross Blue Shield-affiliated plans in 2015.

However, industry experts point out that even the most robust security protocols can’t prevent every attack — particularly as hackers get smarter. What’s more, soon-to-be-implemented federal regulations will ratchet up timely breach-reporting requirements on publicly traded companies.

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.”

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.

Provider groups that want to sponsor a Medicare Advantage plan have multiple avenues of entering the market and competing with large national players — including building a plan from scratch. But funding, state licensure and other regulatory requirements are key considerations before taking the leap, according to experts who spoke during a recent webinar hosted by Manatt Health.

“There are a lot of players in the market, and a lot of providers are trying to figure out if this is a good strategy for them,” said Paul Carr-Rollitt, partner with Manatt Health, during the July 20 webinar, Creating Provider-Sponsored Medicare Advantage Plans: Opportunities, Risks and Keys to Success.

As the MA market expands, there is increasing interest among provider-based groups — from hospitals, health systems and physician associations — to make an entrance. While the market is currently “dominated by a few key players” and considered “highly concentrated,” that doesn’t mean provider-sponsored groups that are intrigued by the idea must be forced to the sidelines, Carr-Rollitt said.