health care utilization

At first blush, The Cigna Group’s second-quarter financial results largely impressed equities analysts, with a higher-than-expected risk adjustment payable representing one of the few headwinds reported by the company.

“Overall, 2Q results look solid and generally in line with expectations versus a backdrop of elevated concern around trend,” Leerink Partners’ Whit Mayo advised investors in an Aug. 3 research note. The latest round of managed care earnings reports has been closely watched by investors amid disclosures from industry bellwether UnitedHealth Group that the firm is seeing elevated medical utilization.

Cigna reported adjusted earnings per share (EPS) of $6.13 for the quarter, beating the Wall Street consensus estimate of $6.04. The diversified health care company — which owns insurer Cigna Healthcare and PBM Express Scripts, among other assets — raised its full-year 2023 revenue projection by $2 billion to $190 billion, and it reaffirmed its adjusted EPS guidance of at least $24.70.

In recent days, health plan members and the U.S. Dept. of Labor (DOL) filed lawsuits against The Cigna Group and UnitedHealth Group, respectively, over what they call unfair, systematic patterns of claims denials. Experts tell AIS Health, a division of MMIT, that the processes behind claims denials in the commercial space — and the purpose-built software that carriers use to adjudicate those claims — are likely to be the subject of intense legal and political scrutiny in coming years.

Plan members seeking to form a legal class filed a suit against Cigna in a California federal district court on July 24. The complaint centers on what it calls an “illegal scheme to systematically, wrongfully, and automatically deny” claims using “an algorithm known as PxDx” that Cigna “relies on…to automatically deny payments in batches.”

Government-focused publicly traded insurers reporting second-quarter 2023 earnings in July devoted a fair amount of discussion to the impact of Medicaid redeterminations on enrollment and rate adjustments, while analysts were interested in the recent trend of increased medical costs, particularly on the Medicare side. Despite these potential headwinds, the insurers appeared confident in their financial outlook for 2023, as all four raised their earnings projections for the full year.

After pausing eligibility verifications in exchange for receiving enhanced federal funding during the COVID-19 public health emergency (PHE), states were allowed to begin disenrolling people who longer qualify for Medicaid as of April 1. According to the latest update to AIS’s Directory of Health Plans, managed Medicaid enrollment as of June was nearly 73.4 million across 41 states, compared with 72.9 million a year ago — a decline that doesn’t yet fully reflect the impact of ongoing redeterminations. Nevertheless, some states have aggressively moved forward, prompting CMS to issue revised guidelines on best practices to avoid terminations driven by procedural reasons. Florida, for example, has already lost some 224,000 managed care enrollees (or close to 5%) from a year ago, according to DHP’s estimates.

Medicaid managed care organizations denied one out of every eight prior authorization requests in 2019, according to a recent report by the HHS Office of Inspector General. Among the 115 MCOs reviewed, 12 MCOs that covered about 2.7 million enrollees had denial rates higher than 25%.

The report studied seven MCO parent companies with the greatest number of Medicaid enrollees across 37 states. Molina Healthcare, Inc. had the highest overall prior authorization denial rate at 17.7%, with seven of its 12 MCOs seeing denial rates greater than 25%.

Medicaid managed care beneficiaries face “high rates of prior authorization denials” and “limited state oversight” of prior authorization, according to a notable new report from the HHS Office of Inspector General (OIG). Medicaid experts who reviewed the report say it demonstrates that Medicaid members and safety net providers may not be able to appeal denials for administrative reasons, and they add that states must do more to facilitate appeals to and prevent inappropriate denials by contracted plans.

The OIG found, in a review of 2019 claims data from seven multistate carriers, that the studied MCOs “fully or partially denied approximately 2.2 million requests for the prior authorization of services,” amounting to one out of every eight requests, or 12.5% of all prior authorization requests. That rate was more than double the Medicare Advantage prior authorization denial rate of 5.7% in 2019, according to the OIG report published July 17.

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.

As the FDA prepares to make a full approval determination on Alzheimer’s drugs such as Biogen Inc.’s Leqembi (lecanemab-irmb), CMS has released new details about its plan to collect real-world data on Medicare patients taking the drugs. To qualify for Medicare coverage of a drug with traditional FDA approval that may slow the progression of Alzheimer’s disease, patients’ physicians will have to participate in the collection of evidence about how the drugs work in patients through a registry. And they will be able to submit that information in an “easy-to-use format” through a nationwide, CMS-facilitated portal, the agency explained last month. CMS is working with multiple organizations preparing to launch their own registries, and once available, those will be listed online and clinicians may choose a registry for participation, the agency clarified on June 22. CMS also listed the various elements it intends to capture through the registry, including information related to questions in the National Coverage Determination, such as whether the drug meaningfully improves health outcomes (i.e., slows the decline of cognition and function) for patients in broad community practice, and whether the benefits and harms (e.g., brain hemorrhage and edema) associated with the use of the drug depend on the characteristics of patients, treating clinicians and setting. The FDA decision is expected by July 6.

Favorable selection associated with beneficiaries choosing Medicare Advantage — which now enrolls more than half of Medicare beneficiaries — in combination with more intense diagnostic coding by plans is leading to increased MA payments that may not accurately reflect the costs of providing care to those beneficiaries, asserts the Medicare Payment Advisory Commission (MedPAC) in its latest report to Congress. And the independent advisory body has some new takes on potential payment policies that aim to lessen the impact of favorable section by moving away from predictive-cost benchmarking that is based solely on fee-for-service (FFS) Medicare spending.

The share of group health insurance plan enrollees with high health care spending increased from 2013 to 2021, and over 80% of them in 2021 had one or more chronic diseases, according to two studies from the Employee Benefit Research Institute.

By analyzing health care claims of millions of enrollees in a group health plan from the Merative MarketScan Commercial Database, the study found that the share of enrollees incurring spending $100,000 or more per year on health care went up 50%, from 0.6% in 2013 to 0.9% in 2021. The group with the highest spending ($2,000,000 or more) was 2.5 times larger in 2021 compared to 2013.

By the end of the third year of the COVID-19 pandemic, health services utilization had returned to their pre-pandemic levels overall, but some shifts have occurred. That’s just one of the findings of the IQVIA Institute for Human Data Science’s The Use of Medicines in the U.S. 2023: Usage and Spending Trends and Outlook to 2027 recently released report. And while spending on medications will continue to grow, driven by new oncology drugs, traditional areas of growth such as immunology and diabetes will instead help to slow that growth.

Since the beginning of the COVID-19 pandemic, the institute has tracked patient visits, including both telehealth and in-person ones; screening and diagnostic tests; elective procedures; and new prescriptions for its IQVIA Health Services Utilization Index. Speaking at a May 18 webinar on the report’s findings, Michael Kleinrock, research director for the IQVIA Institute for Human Data Science, explained that overall, those services have returned to 100% of pre-pandemic levels as of the fourth quarter of 2022. However, some shifts among the four elements have occurred.