Compliance

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.

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.

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.

Building on a sweeping set of marketing-related provisions that went into effect this year, CMS’s recently finalized 2025 Medicare Advantage and Part D rule put new restraints on agent and broker compensation, among other things. The provisions advance the Biden administration’s ongoing efforts to shield consumers from misleading marketing, but with more of a focus on activities performed by independent agents and brokers rather than the broader third-party marketing organization (TPMO) industry that was targeted in previous rulemaking. Industry experts tell AIS Health, a division of MMIT, that the finalized provisions are still open to interpretation when it comes to the role of one type of TPMO — field marketing organizations (FMO) — which often conduct lead generating and advertising on behalf of plans.

As artificial intelligence software proliferates in the health care sector, a good deal of attention has focused on the ways that AI could make existing health disparities worse. Experts say that AI also has the potential to mitigate or reverse health disparities — so long as health care organizations, and insurers in particular, proactively and continuously counter biases in their current and future software platforms.

“We’re at this inflection point where we have new tools. We have new technology that actually may have that opportunity to address health inequality in a way we haven’t been able to before. But we’re at this inflection point where that same tool can actually amplify that bias, amplify the inequality that already exists,” said Maia Hightower, M.D., during a March 26 panel organized by the National Institute for Health Care Management (NIHCM) Foundation.

Thanks to a final rule published just one year ago, Medicare Advantage plans as of Jan. 1 were expected to meet new constraints when it comes to applying their utilization management (UM) policies, including prior authorization. CMS has said it aims to assess UM-related performance of plans serving 88% of beneficiaries this year, and it intends to accomplish this through both routine program audits and “focused audits.” According to compliance experts, the volume of audit activity since CMS began sending engagement letters in late February suggests the agency is eager to meet its goal, but it may not like what it finds.

Comprehensive information about appeals of coverage denials by Medicaid managed care organizations is not available, and state and federal officials are far from setting a common, national data standard, according to a March report from the Government Accountability Office (GAO). The report reiterates some of the same conclusions made by another federal watchdog, the HHS Office of Inspector General (OIG), in a July 2023 report about Medicaid MCOs’ prior authorization denials, and experts say they do not expect data reporting to improve in the short term.

Medicaid MCOs are facing increasing regulatory pressure over prior authorization and other utilization management (UM) practices, particularly at the state level. Federal lawmakers have yet to approach Medicaid UM reforms with the same bipartisan zeal that they have brought to revamping Medicare Advantage practices. But the new GAO report, which was prepared at the request of Sen. Ron Wyden (D-Ore.) and Rep. Frank Pallone (D-N.J.) is an indication that powerful Democratic members of Congress are taking interest in reforming UM in managed Medicaid.

As Medicare Advantage organizations continue to face intense scrutiny — from the government’s latest probe into UnitedHealthcare to the Medicare Payment Advisory Commission calling attention to the cost of higher coding in MA — a new report underscores the power of whistleblower lawsuits in enforcing program requirements. Recent False Claims Act (FCA) settlements with the Dept. of Justice reflect a continued focus on MA insurers submitting inaccurate diagnosis information for the purposes of inflating reimbursement, and while the DOJ isn't involved in proposed class action lawsuits accusing major insurers of using artificial intelligence to wrongfully deny claims, such litigation “bears continued watching as it progresses.”

UnitedHealth Group could face significant financial and legal consequences amid the ongoing cyberattack on its Change Healthcare subsidiary. A federal regulator is investigating the diversified health care giant for possible HIPAA violations; patients and providers have filed lawsuits; and the firm was forced to suspend prior authorization in many cases, which may hurt the bottom line of its UnitedHealthcare insurance arm, according to Wall Street analysts.

In addition to these immediate problems, Change Healthcare may lose the leading position it holds in its areas of operation. Some providers and insurers have already begun to switch to other revenue cycle management platforms and claims clearinghouses, one expert tells AIS Health, a division of MMIT.

As Medicare Advantage organizations grapple with rising medical costs — driven in part by increased spending on supplemental benefits such as dental, vision and over-the-counter coverage — CMS is tasking plans with the immediate submission of utilization data for “all items and services, including supplemental benefits” through the MA Encounter Data System (EDS). That requirement, which is retroactive to Jan. 1, presents a host of challenges as supplemental benefit vendors may not have the kind of detailed information CMS is seeking. And it raises broader questions about how the data will be used.

Supplemental benefits have been on the rise since plan year 2019, when CMS’s reinterpreted definition of “primarily health-related” enabled MAOs to include benefits like adult day health services, support for caregivers of enrollees and therapeutic massage in their plan benefit packages. In 2020, MAOs began offering Special Supplemental Benefits for the Chronically Ill (SSBCI), a category of “non-primarily health related” items and services that can be made available to certain beneficiaries. According to health care research and advisory services firm ATI Advisory, the number of plans offering expanded primarily health-related supplemental benefits and/or non-primarily health-related SSBCI grew from 628 plans in 2020 to 2,334 plans in 2024.