Dual Eligibles

Supplemental benefits are popular among Medicare Advantage members, but they’re particularly valuable for Medicare-Medicaid dual eligibles, suggests a new report from Elevance Health, Inc.’s Public Policy Institute. Following legislation and regulatory changes in 2018 and 2019 that established new types of supplemental benefits and expanded the definition of what CMS considers “primarily health-related,” payers began to offer supplemental benefits that target members’ health-related social needs (HRSNs), such as food insecurity and lack of access to transportation. Elevance is one of the first payers to release any data on the uptake and utilization of these benefits, while research on duals’ unique social needs and supplemental benefit use continues to emerge. A July 2023 study from Humana Inc., for example, found that 80% of duals in a sample population of its MA enrollees reported experiencing at least one HRSN, vs. 48% of non-duals. Deft Research in its 2023 Dual Eligible Retention Study, meanwhile, found that duals “absolutely depend” on their supplemental benefits and are likely to switch plans if not satisfied with their supplemental benefits.

Just under half (49%) of Medicare-Medicaid dual eligibles were enrolled in Medicare Advantage or other private plans in 2020, according to a new analysis from KFF. But only 30% were enrolled in private plans or programs specifically designed for duals, such as Dual-Eligible Special Needs Plans (D-SNPs), Fully Integrated Dual-Eligible Special Needs Plans (FIDE-SNPs), Medicare-Medicaid Plans, or Programs of All-Inclusive Care for the Elderly (PACE). This could be concerning for lawmakers looking to leverage MA in their efforts to improve care coordination for this vulnerable population.

A large swath of Medicare Advantage members report experiencing health-related social needs (HRSNs), such as financial troubles and unreliable access to transportation, according to new research from Humana Inc. published in the July issue of Health Affairs. Researchers surveyed more than 60,000 Humana members (which also included about 12,000 Medicare-Medicaid dual eligibles) in 2019 and found that more than half (56%) reported experiencing at least one HRSN. Financial strain, food insecurity and poor housing quality were the most reported issues.

Some HRSNs — namely unreliable transportation — were more commonly associated with hospitalizations and heavier emergency department (ED) use, researchers found. The overall burden of HRSNs also made an impact, with beneficiaries reporting multiple HRSNs experiencing more hospitalizations.

Payers’ increasing interest in offering integrated health plans for Medicare-Medicaid dual eligibles, namely Dual-Eligible Special Needs Plans (D-SNPs), also led to a proliferation in “look-alike” plans marketed to duals. The main difference — look-alike plans are not legally required to contract with state Medicaid programs on care coordination, a cause of concern for advocates and policymakers alike. As D-SNPs gained traction over the past decade, enrollment in look-alike plans also grew rapidly, according to a new study published in the July 2023 issue of Health Affairs. While CMS has already cracked down on look-alike plans — new regulations caused dozens of contract non-renewals for 2023 — the study authors suggest that look-alike plans still pose a potential threat to improving integrated care delivery for duals, who are often more medically and socially vulnerable than other Medicare beneficiaries.

New data from Deft Research suggests that Medicare Advantage plans continue to struggle with retaining their dual eligible members, mainly because of problems associated with the supplemental benefits offered to address social needs. Published on June 29, Deft’s 2023 Dual Eligible Retention Study found that duals switch plans at about twice the rate of other MA beneficiaries. And while Deft says duals “absolutely depend” on supplemental benefits such as dental care, grocery allowances and utility assistance, duals’ reported issues with their current health coverage often stem from these enhanced offerings, whether they be a source of confusion or just prove difficult to use.

An estimated 30% of dual eligibles make a coverage change over the course of a year, and 8% of duals have already made a switch this year as of mid-May, according to Deft. (Dual eligibles can enroll in or switch dual plans once per quarterly Special Enrollment Period or during the Medicare Annual Election Period). By contrast, Deft in its 2023 Medicare Shopping and Switching Study, which is based on the responses of about 5,000 Medicare beneficiaries, observed that switching by “full pay” (i.e., those receiving no extra help) MA beneficiaries shot up to 15% this past AEP, compared with 12% in the prior two periods.

After a long history of serving Medicare and Medicaid beneficiaries in New York State, Schenectady, N.Y.-based MVP Health Care in 2022 launched a Dual Eligible Special Needs Plan (D-SNP) through a joint venture with Belong Health, which specializes in in helping regional payers launch MA and SNP products. This month, the insurer expanded its duals portfolio with a new integrated product and extended its managed Medicaid service area to eight New York counties.

Effective July 1, MVP’s Medicaid and Medicaid-adjacent plans for adults and children who don’t qualify for Medicaid became available in Clinton, Essex, Franklin, Fulton, Hamilton, Herkimer, Montgomery and St. Lawrence counties. Enrollees in these areas will also be able to access virtual primary and specialty care through digital health company Galileo.

After issuing a request for information (RFI) and reviewing feedback from stakeholders, Sen. Bill Cassidy, M.D. (R-La.), is circulating discussion draft legislation to improve coverage for Medicare-Medicaid dual eligibles. While several industry experts agree that the legislation is moving integration in the right direction, they also say certain elements of it may be overly ambitious and raise many questions, such as whether states that have limited the number of Medicaid managed care organizations will inhibit the ability of Medicare Advantage plans to participate in the new model.

Cassidy, who frequently tackles health care issues as a member of several Senate committees, led a bipartisan group of senators in drafting the proposal, which was informed by more than 125 responses to the November RFI. According to a Cassidy aide, the senators will collect feedback through July 1 and hope to formally introduce legislation after Labor Day.

Whether Medicare Advantage insurers like it or not, a host of changes are coming their way that will impact risk adjusted revenue starting in 2024 and could have downstream effects on beneficiaries and providers. The forthcoming overhaul of the CMS-Hierarchical Condition Categories (HCC) risk adjustment model, which will be phased in over three years starting in 2024, was arguably the hottest topic over four days of sessions at last month’s Fourth National Medicare Advantage Summit, where industry experts’ views on the model ranged from supportive to reproving.

MA plans next year can expect to receive, on average, a 3.32% increase in risk adjusted revenue, driven in part by an underlying coding trend of 4.44%, CMS estimated in a fact sheet on the final 2024 MA and Part D rate notice. With that notice, CMS finalized plans to remove thousands of diagnosis codes mapped to HCCs for payment, transition to the use of ICD-10 codes and update the underlying fee-for-service (FFS) Medicare data years. CMS has explained that the new model is intended to reflect the cost of care more accurately by using the more commonly used ICD-10 system and addressing discretionary coding (i.e., upcoding) that leads to wasteful spending.

For payment year 2024, Medicare Advantage plans can expect to receive, on average, a 3.32% increase in risk adjusted revenue, compared with the 1.03% increase CMS projected in its Advance Notice released on Feb. 1. That’s largely because the agency opted to phase in its controversial changes to the CMS-Hierarchical Condition Categories (HCC) risk adjustment model, rather than fully implement it next year, after considering feedback from stakeholders. Still, some organizations remain concerned about the potential impact the new model will have on certain high-risk populations.

According to a fact sheet about the 2024 MA and Part D rate notice, which was released on March 31, two key components of the agency’s forecast changed: (1) a revenue decline stemming from the risk model revision and fee-for-service (FFS) normalization changed from -3.12% to -2.16%, and (2) the underlying coding trend is now expected to be 4.44%, compared with a previous estimate of 3.30%. CMS noted in the fact sheet that unlike in previous years’ estimates, it could not provide a separate update on the FFS normalization factor “because there is considerable interaction between the impact of the MA risk adjustment model updates and the normalization factor update.”

Managed care plans, particularly Dual Eligible Special Needs Plans (D-SNPs), are showing promise in improving health outcomes and reducing health care utilization among Medicare-eligible individuals who qualify as partial Medicare-Medicaid dual eligibles, according to a March 2023 study published by Elevance Health’s Public Policy Institute. Elevance’s analysis of 2020 CMS data found that 5% of the 65.9 million Medicaid eligibles that year were partial duals — those who are eligible for Medicare but are not yet enrolled in or do not qualify for the full range of Medicaid benefits in their state. 

Meanwhile, the D-SNP population has grown considerably in recent years, from just over 2 million members in 2017 to 5.1 million members in 2023, according to AIS’s Directory of Health Plans (DHP). (Elevance, for its part, is the third-largest D-SNP insurer nationally, serving just over 600,000 members as of DHP’s March 2023 update). A handful of states also participate in CMS’s Financial Alignment Initiative for duals, enrolling their qualifying duals in Medicare-Medicaid plans (MMPs). And the vast majority of people enrolled in the Program of All-Inclusive Care for the Elderly (PACE) are dual eligibles.