Managed Medicaid

The second administration of Donald Trump may well run the gamut as far as its impact on health care and pharma. Biotech companies may benefit from a good business environment, prompting more mergers and acquisitions, but they may also experience challenges in working with what could be somewhat unconventional leaders of federal agencies, such as Robert F. Kennedy Jr., whom President-elect Trump tapped on Nov. 14 to run HHS.

RFK Jr., a politician and environmental activist who has questioned the safety and efficacy of vaccines and spread misinformation about them, has said that “there are entire departments, like the nutrition department, at FDA that have to go, that are not doing their job.”

After a yearslong investigation into Clover Health Investments Corp.’s business practices, the U.S. Securities and Exchange Commission (SEC) does not intend to recommend an enforcement action related to the investigation. As Clover previously disclosed, the SEC in February 2021 launched its probe shortly after a 2021 report from Hindenburg Research criticized multiple Clover business practices and accused its leaders of failing to disclose when the firm went public that it was under an active investigation by the Dept. of Justice. The MA-focused startup earlier this year settled a series of shareholder-led class action lawsuits that related to the DOJ probe. According to Sept. 30 SEC filing by the company, the SEC on Sept. 26 informed Clover that it had concluded its investigation and, “based on the information that the SEC had as of the date of the Notice,” it would not seek an enforcement penalty.

In the latest twist in Arizona’s controversial quest to implement new statewide long-term care contracts with Centene Corp. and UnitedHealth Group, a Republican state senator said he is looking into the potential mismanagement of state taxpayer dollars by Gov. Katie Hobbs (D). That includes the questionable procurement of Medicaid contracts serving approximately 26,000 elderly and disabled members conducted by the Arizona Health Care Cost Containment System (AHCCCS).

The agency on Dec. 1, 2023, said it selected subsidiaries of Centene and UnitedHealth for contracts that would begin on Oct. 1, 2024. The contracts are worth an estimated $15 billion over seven years. An administrative law judge (ALJ), however, last month agreed with three local not-for-profit plans that the request for proposals process was flawed and should be redone. In a move that sources say is extremely rare, the state ignored the ALJ ruling and said it intends to move forward with the contracts after a one-year delay.

With nearly all states having completed the Medicaid “unwinding process” that shed millions of people from the rolls, a new analysis notes that total Medicaid and Children’s Health Insurance Program (CHIP) enrollment is actually higher than it was before the COVID-19 pandemic. One expert tells AIS Health that private insurers helped conduct crucial outreach to ensure people losing coverage could get insured elsewhere — although Medicaid managed care organizations (MCOs) still are grappling with the financial consequences of the unwinding.

The unwinding process began in April 2023 after the end of the continuous enrollment provision in the Families First Coronavirus Response Act. This provision was enacted due to the COVID-19 public health emergency to ensure that no one covered by Medicaid lost their insurance — even if a change in income rendered individuals ineligible. Enrollment had reached an all-time high of 94 million when unwinding began, up from 71 million in February 2020.

More than 25 million people lost their Medicaid or Children’s Health Insurance Program (CHIP) coverage and over 56 million had their coverage renewed during the Medicaid eligibility redetermination process, according to a KFF analysis of data released by states and CMS. Though millions have been disenrolled, nearly 10 million more people are currently enrolled in Medicaid/CHIP than at the start of the pandemic.

Starting in April 2023, states were permitted to resume disenrolling people from Medicaid who no longer qualify after a multiyear pause of routine eligibility checks during the COVID-19 public health emergency. Compared to pre-pandemic levels, total Medicaid/CHIP enrollment is now higher in all but four states: Colorado, Montana, Arkansas and Tennessee. Missouri and North Carolina saw Medicaid/CHIP enrollment growth of more than 50%, as of May 2024.

A recent Avalere Health analysis found that some managed Medicaid insurers have stricter policies for cell and gene therapies than fee-for-service Medicaid programs, even though the authors cited a federal regulation that “requires MCO coverage policies to be no more restrictive than FFS policies.” Despite that regulation, Margaret Scott, an Avalere principal and report co-author, says it is “a little bit of a gray area” whether MCOs need to abide by that mandate.

“That really isn’t defined very well either in regulation or in any guidance from CMS,” Scott tells AIS Health, a division of MMIT. “We also see that a lot of states don’t actually review the clinical coverage criteria that are used by their MCOs. It may not come to a state’s attention that a particular MCO may have stricter coverage criteria unless they receive a complaint from a beneficiary.”

In August, Highmark Inc. launched a new Medicaid managed care organization in West Virginia, becoming the Mountain State’s first Blue Cross Blue Shield-branded MCO. In doing so, the insurer will confront challenges that MCOs of all stripes are facing, such as building a comprehensive provider network and grappling with the financial pressures related to states resuming their routine eligibility checks after a multiyear pause.

The West Virginia Dept. of Human Services approved Highmark Health Options’ application to be the state’s newest MCO in January, giving the not-for-profit organization a statewide contract that runs for four years. Highmark Health Options will compete against a trio of MCOs in West Virginia that include Elevance Health, Inc.’s Unicare Health Plan of West Virginia, Aetna Better Health of West Virginia, and The Health Plan’s Mountain Health Trust. As of September, Highmark Health Options West Virginia had attained roughly 1,800 members, according to AIS’s Directory of Health Plans (DHP).

After informing three local plans of its decision to ignore the findings of an administrative law judge (ALJ) and move forward with statewide long-term care contracts awarded to Centene Corp. and UnitedHealth Group, the Arizona Health Care Cost Containment System (AHCCCS) on Sept. 12 in a surprise move extended existing agreements for one year. “Members continue to be the agency’s primary focus throughout this process,” stated AHCCCS, just days after insisting that its procurement process was applied “fairly to all bidders, including the non-awarded health plans.”

In the “Director’s Decision” posted Sept. 9, however, the state Medicaid agency said it was denying the appeals of Mercy Care, Blue Cross Blue Shield of Arizona, and Banner-University Family Care, and it defended its request for proposals (RFP) process, which the ALJ concluded was flawed and should be redone. That was after, according to a statement from AHCCCS, more than one managed care organization “submitted additional information for the Director to consider following the ALJ’s Decision.” AHCCCS said that information was “neither reviewed nor considered in developing the Director’s Decision.”

Elevance Health, Inc. has agreed to acquire Indiana University Health Plans, according to a Sept. 10 press release. IU Health Plans, a subsidiary of Indiana University Health, has 19,000 Medicare Advantage members and 12,000 fully insured commercial beneficiaries. It will become a part of Anthem Blue Cross and Blue Shield in Indiana, which is Elevance’s insurance affiliate in the state. The deal is subject to customary closing conditions and is expected to close by the end of the year.

During the Wells Fargo Healthcare Conference on Sept. 4, executives from Centene Corp. and Humana Inc. shared new details about how the headwinds facing their Medicaid and Medicare businesses are expected to play out. And within those updates, there was both good and bad news.

Centene Chief Financial Officer Drew Asher said during his presentation that the firm is “continuing to get Medicaid pressure,” largely due to the resumption of routine eligibility checks that restarted last spring after a multiyear pause during the COVID-19 pandemic. Centene discussed the issue at length during its second-quarter earnings call in July, “and so you might ask, all right, what’s changed in the last month and a half?” Asher said.