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As CMS Finalizes RADV Rule, Prior Audits Shed Light on Payment Errors, High-Risk Codes

In a highly anticipated final rule on the Medicare Advantage Risk Adjustment Data Validation program, CMS on Jan. 30 said it would extrapolate RADV audit findings starting with the 2018 payment year. Notably, CMS will not extrapolate RADV audit findings for payment years 2011 through 2017 as it had previously proposed. Currently, CMS reviews a small sample of patient medical records to compare them with billing codes sent to the federal government. Under the final rule, CMS will extrapolate the error rate found in the sample to the entire plan. Additionally, the rule finalized a plan to not apply a “fee-for-service adjuster” to its audit methodology. Using the new methodology, CMS officials said the agency expected to recover $479 million in overpayments from 2018 alone, and an extra $4.7 billion from 2023 through 2032.

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Medicare Enrollees May Still Face Affordability Issues After Part D Benefit Redesign

About 800,000 Medicare beneficiaries in 2024 and 200,000 in 2025 could see their out-of-pocket (OOP) medication costs exceed 10% of their annual income, even with the Part D drug benefit reforms passed via the Inflation Reduction Act (IRA), according to an Avalere analysis.

The IRA will establish a beneficiary OOP cap at the catastrophic threshold, which is estimated to be $3,233 in 2024. Avalere estimated that 1.5 million Part D enrollees without low-income subsidies (LIS) are projected to reach OOP drug spending levels above the catastrophic threshold in 2024. Among them, about 18% of beneficiaries will reach the catastrophic phase in the first three months. Greater shares of beneficiaries who are younger than 65 years old or who are Hispanic will face affordability challenges compared to the average non-LIS enrollees. The analysis also suggested that non-LIS enrollees taking asthma drugs, blood thinners, immunology therapies, cancer treatments and HIV drugs are more likely to reach the OOP cap in 2024.

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Medicaid Beneficiaries Are Unequally Served by Non-Emergency Medical Transportation

Medicaid beneficiaries of different races and ethnic backgrounds may not have equal access to non-emergency medical transportation (NEMT), suggests a new study from the Medical Transportation Access Coalition (MTAC). While only a small number of Medicaid beneficiaries use NEMT, it is more common among beneficiaries with complex, costly medical needs. When breaking down NEMT utilization by race and ethnicity, MTAC (staffed by Faegre Drinker Consulting, in partnership with the National Opinion Research Center) found that the number of riders was not proportionate to overall enrollment distribution, which “indicates that NEMT is not serving beneficiaries of different races and ethnicities equally and may suggest a need for focused education about NEMT to certain groups.” Researchers and policymakers should focus on finding and addressing the root causes of these differences, the authors asserted. American Indian and Alaska Native beneficiaries had the highest utilization rates, followed by Black enrollees, then white enrollees.

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Elevance-BCBS of Louisiana Deal, by the Numbers

Elevance Health has signed a deal to acquire Blue Cross and Blue Shield of Louisiana, the companies said on Jan. 23. With 1,049,194 members, BCBS of Louisiana is currently the second-largest health insurer in the state, according to AIS’s Directory of Health Plans. Combined, the two insurers will surpass the current market leader, UnitedHealthcare, with over 1.4 million enrollees in the state.

The acquisition builds on an existing joint ownership of Healthy Blue, which offers Medicaid and Medicare dual eligible coverage. The deal would expand Elevance’s presence in the state by 281%. If the deal closes, Elevance, the largest Blue Cross and Blue Shield affiliate with almost 37.6 million enrollees, will operate as a Blues licensee in 15 states.

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Medicare Enrollees May Still Face Affordability Issues After Part D Benefit Redesign

About 800,000 Medicare beneficiaries in 2024 and 200,000 in 2025 could see their out-of-pocket (OOP) medication costs exceed 10% of their annual income, even with the Part D drug benefit reforms passed via the Inflation Reduction Act (IRA), according to an Avalere analysis.

The IRA will establish a beneficiary OOP cap at the catastrophic threshold, which is estimated to be $3,233 in 2024. Avalere estimated that 1.5 million Part D enrollees without low-income subsidies (LIS) are projected to reach OOP drug spending levels above the catastrophic threshold in 2024. Among them, about 18% of beneficiaries will reach the catastrophic phase in the first three months. Greater shares of beneficiaries who are younger than 65 years old or who are Hispanic will face affordability challenges compared to the average non-LIS enrollees. The analysis also suggested that non-LIS enrollees taking asthma drugs, blood thinners, immunology therapies, cancer treatments and HIV drugs are more likely to reach the OOP cap in 2024.

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Executive Compensation Data for Presidents and/or CEOs of Blue Cross and Blue Shield Affiliates, 2021

See a full list of director compensation for Presidents and/or CEOs of Blue Cross and Blue Shield Affiliates at https://bit.ly/3GPOdyK, compiled by AIS Health.

N/A = Not Available.

Compensation data for Jared Short includes payments allocated to Regence insurance operations in Washington state, Oregon and Utah but not Idaho.

SOURCE/METHODOLOGY: All data is compiled from individual health insurance companies, state insurance department documents and U.S. Securities and Exchange Commission filings.

Health plans selected based on commercial medical risk enrollment as of the beginning of 2022, per AIS’s Directory of Health Plans.

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TRICARE Program at a Glance

The U.S. Dept. of Defense recently awarded $136 billion in contracts for its TRICARE program that provides health care benefits to military service members, retirees and their families. The contract award for the West region went to TriWest Healthcare Alliance of Phoenix, which is partnering with Regence health plans and Health Care Service Corp. to administer the program. Humana Government Business Inc. will continue to serve the East region when the next contracts begin in 2024. Currently, Health Net Federal Services LLC, a subsidiary of Centene Corp., covers the West region with about 2.8 million beneficiaries, and Humana covers the East region with more than 6.8 million enrollees. In 2024, six states in the East region — Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin, with a total of 1.5 million beneficiaries — will transfer to the West region in order to balance out the number of beneficiaries served by the two regions.

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Seniors Make the Switch to Medicare Advantage in Increasing Numbers

The number of seniors who switched from traditional Medicare to Medicare Advantage increased annually from 2016 to 2020, according to new research published in JAMA Health Forum. The switch rate from traditional Medicare to MA grew to 6.8% in 2020 — more than three times higher than the switch rate from MA to traditional Medicare. This trend was noticed across populations with a variety of traits, including age, race and mortality status, and was particularly strong among Medicare-Medicaid dual eligibles. Switch rates from MA to traditional Medicare, meanwhile, are largely on the decline, but still more common among duals than non-duals. The study’s authors suggested this movement was a contributor to overall MA growth, noting that MA’s share of Medicare enrollment is projected to exceed 50% this year. They also observed that switching accounted for a growing share of new MA enrollment growth, rising from 49% in 2016 to 67% in 2020.

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TRICARE Program at a Glance

The U.S. Dept. of Defense recently awarded $136 billion in contracts for its TRICARE program that provides health care benefits to military service members, retirees and their families. The contract award for the West region went to TriWest Healthcare Alliance of Phoenix, which is partnering with Regence health plans and Health Care Service Corp. to administer the program. Humana Government Business Inc. will continue to serve the East region when the next contracts begin in 2024. Currently, Health Net Federal Services LLC, a subsidiary of Centene Corp., covers the West region with about 2.8 million beneficiaries, and Humana covers the East region with more than 6.8 million enrollees. In 2024, six states in the East region — Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin, with a total of 1.5 million beneficiaries — will transfer to the West region in order to balance out the number of beneficiaries served by the two regions.

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Enrollees in 2023 ACA Plans Face Higher Average Premiums, but Get Rich Subsidies

Nearly 11.5 million people selected or were automatically reenrolled in health plans for 2023 on HealthCare.gov as of Dec. 15, 2022, an 18% increase over the same time period in 2021, according to CMS. Although the average premium for benchmark silver plans (before accounting for tax credits) increased by 4.1% in 2023 after four years of declines, enrollees receiving subsidies may find their net premiums for low-cost bronze, silver and gold plans are lower than last year, according to a Kaiser Family Foundation analysis.

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