Managed Medicaid

Positive Commercial Results Boost Elevance in Second Quarter

Elevance Health, Inc. reported positive second-quarter 2023 results, powered by solid commercial performance and promising returns from its Carelon health services division, which was launched last year.

The firm, which is the parent company of the Anthem and Wellpoint insurance brands, took in $43.4 billion of operating revenue in the quarter, up $4.9 billion or 12.7% year-over-year. Adjusted earnings per share (EPS) in the quarter were $9.04, beating the Wall Street consensus of $8.78 and representing a year-over-year increase of $1.07, or slightly more than 13%. The firm’s medical loss ratio (MLR) was 86.4%, down 70 basis points from the prior-year quarter — but it increased from the 85.8% figure.

An Elevance press release said the strong top-line revenue result was “primarily driven by premium rate increases in our Health Benefits business and higher premium revenue due to membership growth in Medicaid and Medicare. The increase in operating revenue was further attributable to growth in pharmacy product revenue within CarelonRx driven by growth in external pharmacy members served and the acquisition of BioPlus” — a specialty pharmacy firm — “in the first quarter of 2023.”

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By the Numbers: National Health Insurance Market as of 1Q 2023

Enrollment in both commercial health coverage and public health insurance slightly increased over the past six months, according to AIS’s Directory of Health Plans. Managed Medicaid membership continued to grow, from 74.0 million in 2022 to 76.5 million in 2023, while a record high 16.7 million people enrolled in Affordable Care Act marketplace coverage. Commercial (employer-based) health coverage grew by nearly 1 million lives, with several major national health plans reporting double-digit growth.

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CMS: Health Insurers Can Be Paid to Help With Medicaid Redeterminations

The return of Medicaid redeterminations, which the managed care sector expected to be a daunting challenge, has proven even more difficult to handle than anticipated. States have begun to seek more time and resources from CMS to manage staggering amounts of beneficiary outreach and other administrative chores. Now, thanks to recent regulatory guidance, states can also pay managed care organizations to take on some of that work.

Several states — which are ultimately responsible for handling the income checks and disenrollments necessary for what many have called the “unwinding” of COVID-19 pandemic-related continuous enrollment — have paused redeterminations or extended their deadlines for enrollees to complete their redetermination paperwork, and others may follow. The pauses are clear evidence of the scale and complexity of the task at hand.

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News Briefs: Biden Admin Moves to Limit Short-Term Health Plans

CMS on July 7 unveiled a long-awaited regulation that would crack down on short-term, limited-duration insurance (STLDI), which some consumer advocates — and the Biden administration — refer to as “junk plans.” Designed to fill a temporary gap in insurance coverage, STLDI plans are exempt from the Affordable Care Act’s rules for comprehensive coverage, allowing them, for example, to deny coverage for preexisting conditions and set lifetime and annual dollar limits on coverage. The Obama administration capped the duration of such plans at three months and limited their renewability, but a 2018 rule from the Trump administration allowed STLDI plans to cover individuals for up to 364 days and be renewed for up to 36 months. If finalized, the Biden administration’s notice of proposed rulemaking would return to the Obama-era three-month limit for SLTDI plans’ initial contract period, and it would set the maximum coverage period at four months, taking into account any renewals or extensions.

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Insurers Say New Medicaid Regs Will Overburden MCOs, States

In comments submitted to CMS about two new proposals aimed at improving the Medicaid program, health insurers and their lobbying groups told the agency in no uncertain terms that implementing the regulations could require more resources than health plans currently have — especially since they’re also trying to navigate the recently resumed Medicaid redetermination process.

The regulations in question are both notices of proposed rulemaking (NPRM) that CMS introduced in May — the “Medicaid and Children's Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality” NPRM, and the “Ensuring Access to Medicaid Services” NPRM. Together, the two proposals represent the first significant regulatory update to Medicaid managed care since 2020.

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States Spent Less on Medicaid During the Pandemic — but Enhanced Funding Is Winding Down

States received more than $117 billion in enhanced federal funding during the COVID-19 pandemic’s Medicaid disenrollment pause, according to a new KFF analysis. With unemployment on the rise during the pandemic, Medicaid rolls surged, but state spending did not. States spent $231 billion on Medicaid in 2019; that figure dropped to $214 billion in 2020, KFF reported. Since then, state spending has yet to surpass 2019 levels. That’s because the federal government elected to increase the Federal Medical Assistance Percentage (FMAP) by 6.2 percentage points in exchange for states’ suspension of eligibility redeterminations for the duration of the Public Health Emergency (PHE). But instead of ending the enhanced FMAP funds with the expiration of the PHE, the Consolidated Appropriations Act of 2023 allowed for enhanced funding to begin a gradual decrease — to 5 percentage points higher than normal levels in April, 2.5 in June, and 1.5 in October.

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New MVP Health Care Offering Seeks to Smooth Access for Dual Eligibles

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.

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News Briefs: 1.5M Medicaid Enrollees Lose Coverage

As of June 27, at least 1.5 million Medicaid enrollees had lost coverage since eligibility redeterminations started back up, according to the Kaiser Family Foundation (KFF) Medicaid Enrollment and Unwinding Tracker. States have been permitted to restart the process of disenrolling Medicaid beneficiaries since April 1; before that, they were barred from conducting routine eligibility checks and purging their rolls as a condition of receiving enhanced federal matching funds during the COVID-19 public health emergency. KFF noted that there is “wide variation” across the 26 states (plus the District of Columbia) reporting data, with a disenrollment rate as low as 16% in Virginia and as high as 81% in South Carolina. Overall, 73% of people kicked off Medicaid so far in the reporting states have lost coverage due to procedural reasons — like not completing their coverage-renewal paperwork — rather than being deemed ineligible.

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CEO: CareOregon, SCAN Merger Will Counter ‘Examples of Excess’ in Managed Care

Late last year, nonprofit, government-focused carriers SCAN Health Plan and CareOregon announced plans to merge and form the HealthRight Group. CareOregon manages nearly 550,000 Medicaid enrollees in Oregon, while SCAN covers over 280,000 lives in four states, according to the AIS Directory of Health Plans.

Eric Hunter is CareOregon’s CEO, while Sachin Jain, M.D. is SCAN’s CEO. If regulators approve the merger, Jain will hold the top spot of the combined organization. Hunter will continue to lead CareOregon, the larger of the two plans — and a Medicaid division that they say will pursue managed care contracts nationally.

AIS Health, a division of MMIT, caught up with the CEOs on June 15 at the 2023 AHIP Conference in Portland, Oregon, and learned more about the ambitious plans that brought the organizations together.

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At AHIP, Medicaid MCOs Talk Behavioral Health Value-Based Contracts

To succeed with value-based behavioral health care contracts, Medicaid managed care plans need to tailor those pacts to the unique needs of a given provider, MCO executives say. And plans may not be able to use risk-based contracts with individual practitioners and other small providers — especially if network adequacy is at stake.

“We really try to think about it in three broad categories: Are we bringing clinical value, operational value or financial value” as a result of a value-based contract? posed Kevin Wheeler, M.D., medical director for practice transformation and value-based contracting strategy at AmeriHealth Caritas, during a June 14 session of the AHIP 2023 conference in Portland, Oregon. “And we’re thinking about this in terms of our relationships with our providers and with our members.”

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