Contract Awards

A New York District Court judge denied Anthem, Inc.’s request to transfer a False Claims Act lawsuit to another district and to strike allegations contained in an amended complaint. The suit in question was filed by the U.S. Attorney for the Southern District of New York in 2020 and alleges that while conducting chart reviews aimed at identifying additional diagnosis codes for obtaining risk adjusted payment through the Medicare Advantage program from 2014 to 2018, Anthem neglected “its duty to delete thousands of inaccurate diagnoses” and “often generated $100 million or more a year in additional revenue” as a result. According to an opinion filed by U.S. District Judge Andrew Carter on Sept. 30, the company now known as Elevance Health filed a motion to transfer this action to the Southern District of Ohio (or dismiss the suit altogether) and to strike portions of the complaint referencing the government’s settlements with other MA organizations or health care providers.

Bowing to CMS’s request after another public comment period, Tennessee is reluctantly pursuing a series of changes to the pending TennCare III demonstration that had been approved by the Trump administration for a start date of Jan. 8, 2021. In what one source says is an unusual back-and-forth on public display, the state will abandon its notorious plans to implement a closed Medicaid formulary and adopt a fixed funding mechanism.

Shortly before President Joe Biden took office, the Trump administration in January 2021 approved Tennessee’s request to use an “aggregate cap” for Medicaid funding that many industry observers had likened to a block grant. Through that approach, Tennessee would have received federal Medicaid funds based on a fixed budget target that is determined by CMS and the state using historical enrollment and costs data. If spending fell below that target cap but certain quality goals were met, the state would earn up to 55% of annual savings to reinvest back into other state health programs.

As part of a Medicaid managed care revamp and its first statewide competitive procurement for the Medi-Cal program, the California Dept. of Health Care Services (DHCS) on Aug. 25 named the three insurers that will serve as commercial managed care plans (MCPs) in 2024. Elevance Health’s Anthem Blue Cross Partnership Plan, Centene Corp.’s Health Net and Molina Health Care were selected to participate in varying service areas across 21 counties. Health Net’s loss of three counties, however, spooked investors as Centene already faces declining Medicaid enrollment and continues to settle allegations of mishandling Medicaid pharmacy benefits in multiple states, the latest being Washington.

Despite a challenge earlier this year to its longstanding pact with Mississippi Medicaid, Centene Corp. on Aug. 10 said its Magnolia Health Plan subsidiary was selected to continue serving the Mississippi Coordinated Access Network (MississippiCAN) and the Mississippi Children’s Health Insurance Program (CHIP). Meanwhile, the state’s Division of Medicaid (DOM) unveiled its intent to award new four-year contracts to two other insurers, including new entrant and CareSource affiliate TrueCare, which will bump leading managed care organization UnitedHealthcare out of the market.

Centene over the past year has reached multiple settlements with states regarding its handling of Medicaid pharmacy benefits. In June 2021, the health care giant agreed to pay $55.5 million to Mississippi after a 2019 investigation by the Office of the State Auditor concluded Centene’s pharmacy benefit manager was overbilling the state.

With a focus on value-based care, health equity and social determinants of health, Delaware this month selected three managed care organizations to serve some 280,000 Medicaid and CHIP recipients through the statewide Diamond State Health Plan and DSHP Plus managed care programs. Incumbents AmeriHealth Caritas and Highmark Health Options Blue Cross Blue Shield were both selected for the new pacts, while Centene Corp.’s Delaware First Health will round out the trio of plans, the state’s Dept. of Health and Social Services (DHSS) said on July 12.

Delaware’s Medicaid managed care program, comprised of DSHP and DSHP Plus, is currently operating under the authority of a Section 1115 demonstration waiver that was most recently extended through Dec. 31, 2023. It provides integrated physical health, behavioral health and long-term services and supports (LTSS) to eligible Medicaid and CHIP enrollees.

After four years, the Enhanced Medication Therapy Management (MTM) Model still has not generated any net savings to the Medicare program. Through the five-year model that started in January 2017, model participants tested a variety of interventions to improve Part D beneficiaries’ medication use. Despite efforts by some sponsors to alter their interventions, there continued to be no statistically significant impacts on Medicare Parts A and B expenditures for the overall enrollee population in model-participating plans, observed the Fourth Evaluation Report released by the CMS Innovation Center last month. Findings from subgroup analyses suggested that enrollees eligible for the low-income subsidy and enrollees with medically complex profiles did not benefit more from the model compared to the overall enrollee population, while the program saw decreases in inpatient expenditures and admissions related to the Ambulatory Care Sensitive Conditions for both the medically complex subgroup and the all-enrollee cohort, according to the report prepared by Acumen.

Anthem, Inc.’s pending contract to serve retired New York City workers and their dependents — which would have nearly doubled the insurer’s Medicare Advantage Employer Group Waiver Plan (EGWP) enrollment — is in peril. Just days before its planned start, the city’s comptroller refused to register the proposed contract and turned it back to Mayor Eric Adams (D) for a revised cost estimate, putting the already delayed transition to a retiree MA plan on hold.

“Due to the legal and budgetary uncertainties that remain while litigation over the City’s contract with Anthem Insurance Companies continues, the Comptroller’s office does not have sufficient information to register the proposed Medicare Advantage Plan contract at this time,” New York City Comptroller Brad Lander explained in a March 30 statement posted to the comptroller’s website. Subsequently, the city’s Office of Labor Relations posted that the transition to the NYC Medicare Advantage Plus Plan would not be implemented as of April 1 as planned and that all retirees “will remain in their current plans until further notice.”

New York City is appealing a recent ruling by the New York Supreme Court that bars the city from imposing a premium on public sector retirees who opt out of group Medicare Advantage coverage that starts April 1. Anthem, Inc. was initially contracted to provide MA coverage to an estimated 200,000 retirees and dependents for a Jan. 1 effective date. Manhattan Supreme Court Justice Lyle Frank on March 3 ruled that automatic enrollment of beneficiaries cannot start until April 1, retirees must be able to opt out of the new coverage up to three months after the effective date, and they do not have to pay a fee to retain their traditional Medicare coverage. The city’s attempt to charge $191 monthly is in violation of New York City law, which requires the municipal employer to “pay the entire cost of health insurance coverage for city employees, city retirees and their dependents,” Frank ruled. The city’s Office of Labor Relations on March 4 filed an appeal; the NYC Organization of Public Service Retirees at press time had filed a cross-appeal and was gathering signatures for a petition urging Mayor Eric Adams (D) not to pursue the appeal.

America’s Physician Groups (APG) and other stakeholders at press time were urging the Biden administration not to cancel the Global and Professional Direct Contracting (GPDC) model. The model, in which provider groups and other entities share risk and receive capitated payments for serving fee-for-service (FFS) Medicare beneficiaries, formally launched in April 2021 and has drawn interest from Medicare Advantage organizations. Although CMS put a pause on new applicants for the 2022 performance year, progressive lawmakers have asked the administration to stop it out of concern that private entities are seeking to funnel FFS enrollees into managed care without their knowing. In a sign-on letter to HHS Secretary Xavier Becerra, APG and other groups suggested that instead of canceling the model, the administration should limit participation to provider-led entities and “place additional guardrails and add more beneficiary protections.”