Managed Medicaid

The Dept. of Justice on Dec. 15 filed a motion to transfer or dismiss Humana Inc.’s case against the federal government and its use of extrapolation in Risk Adjustment Data Validation (RADV) audits of Medicare Advantage insurers. After CMS in January finalized plans to begin extrapolating RADV audit findings in recovering improper payments starting with payment year 2018, Humana on Sept. 1 filed a lawsuit asking the U.S. District Court for the Northern District of Texas to vacate the rule and therefore stop CMS from applying its new audit policy. By excluding a “fee-for-service adjuster” that the agency had once promised would be used in the audits, the RADV audits “do not observe any actuarial standards at all,” the MA insurer argued in Humana Inc. et al v. Becerra et al (No. 4:23-cv-909-O). In its response filed in the Fort Worth division of the District Court, HHS argued that Humana hasn’t been harmed because CMS has not begun any audits under the challenged rule. Moreover, there is no certainty that Humana will be subject to audits under the new rule because CMS hasn’t “chosen the contracts to be audited under the rule for any payment year, nor selected a statistical sampling and extrapolation methodology for any such audits,” stated the response, which was obtained and posted by STAT.

The outpatient prices Medicaid managed care insurers pay to hospitals vary considerably based on geography and type of service, according to a cross-sectional study published on Nov. 28 in JAMA Network Open. The authors examined publicly available data and noted the results suggest the prices could affect government health expenditures and access to care for Medicaid members.

However, Jeffrey Marr, a Ph.D. candidate at Johns Hopkins University and the study’s lead author, acknowledges the analysis “raises more questions than it answers” in part because the researchers could not determine the reasons for the variation. Two health care insiders tell AIS Health, a division of MMIT, that the study reinforces there are still questions related to the usefulness of the hospital price transparency rule that went into effect in 2021 and the various definitions for prices.

AHIP appointed a new president and CEO: Mike Tuffin, UnitedHealth Group’s senior vice president for external affairs. Tuffin succeeds Julie Simon Miller, who has been the health insurance trade group’s interim CEO since September, when Matt Eyles stepped down. Eyles helmed AHIP for nearly five years and said in May that his move to resign was a “personal decision.” Tuffin is no stranger to AHIP, having served as the group’s executive vice president for public affairs from 2002 to 2012. Before his role at UnitedHealth, Tuffin was managing director of APCO Worldwide’s Washington, D.C. headquarters.

Nutrition is a key social determinant of health (SDOH), and the Medicaid program increasingly is an important conduit for connecting beneficiaries with healthy foods. According to state Medicaid officials from Delaware and Nevada, and home care caterer Mom’s Meals, managed care organizations have a critical role to play — and a clear financial incentive — in improving their members’ nutrition.

Using health plan benefits to cover food as medicine — making sure that patients aren’t hungry and are eating a diet that does not exacerbate their chronic ailments — are a popular Medicare Advantage supplementary benefit, with nearly one-quarter of MA plans offering nutrition and dietary services. Medicaid plans are also increasingly viewing hunger and poor nutrition as a SDOH that can, if unaddressed, drive preventable care utilization.

State Medicaid programs have sent substantial amounts of capitation payments to managed care organizations for covering members who have died, a new report from the HHS Office of Inspector General (OIG) found. The problem has bedeviled Medicaid agencies and plans for a long time, Medicaid insiders say, and is indicative of outdated and underfunded data systems.

States paid $249 million in improper capitation payments for deceased Medicaid enrollees between 2009 and 2019, OIG found. In addition, the report said, three states have not recouped a combined outstanding balance of $41 million in such payments: Health plans owe the states of Michigan $27.5 million, New York $3.6 million and Kansas $9.7 million.

Just a few weeks after reports surfaced that The Cigna Group was looking to offload its Medicare Advantage business, reports emerged of a possible transaction with Humana Inc. that would create a diversified health insurance giant in the same weight class as CVS Health Corp. and UnitedHealth Group. Wall Street analysts agreed such a deal would invite scrutiny from regulators, partly because of Cigna’s substantial MA overlap with Humana, although multistate Blues insurer Health Care Service Corp. (HCSC) is reportedly interested in picking up Cigna’s MA book. To complete the square dance, rumors have also resurfaced of Walmart’s interest in purchasing Humana.

Reuters on Nov. 6 first reported that Cigna was exploring a sale of its MA business, which represents about 3% of its overall medical membership. Sources told the news outlet that the insurer was working with an investment bank to evaluate its options and that the potential sale could bring in several billions of dollars. Analysts at the time suspected that the move was an effort to preempt the intense antitrust scrutiny Cigna might face if it sought to merge with a government-focused firm such as Humana or Centene Corp.

Leading up to the 2024 Annual Election Period (AEP) that started on Oct. 15 and concluded on Dec. 7, major Medicare Advantage insurers unveiling geographic expansions signaled their continued pursuit of dually eligible Medicare-Medicaid beneficiaries. A new analysis of the 2024 Special Needs Plan landscape confirms that more SNPs designed specifically for dual eligibles will be available next year, while interest in Institutional SNPs (I-SNPs) appears to be waning after experiencing a short burst of growth. The Chronic Condition SNP (C-SNP) market, meanwhile, will remain relatively stable.

There will be 1,368 SNPs on the market in 2024, up from 1,320 in 2023 — a modest increase compared with the 10% jump between 2022 and 2023, according to the analysis from Clear View Solutions, LLC. Within the total, however, Clear View observed a notable increase in the number of D-SNPs. In 2024, there will be 874 D-SNPs available — including 698 plans that were available in 2023 and 176 new plans — compared with 809 in 2023 and 401 in 2018, before the Bipartisan Budget Act (BBA) of that same year granted permanent authorization to all SNP types. There are also more D-SNPs being added than dropped next year, which could be due to some plan consolidation, observes Clear View.

As part of new actions to lower health care and prescription drug costs by promoting competition, the Biden administration on Dec. 7 said it aims to further improve Medicare Advantage transparency. Noting that the MA program now serves roughly half of Medicare-eligible beneficiaries, the Biden administration in a fact sheet said it is committed to ensuring that MA plans “best meet the needs of people with Medicare, there is timely access to care, and the market has healthy competition.” Therefore, early next year HHS will solicit from the public “programmatic data” to better understand “the effects of market shifts on consumers and care outcomes.” When asked during a Dec. 6 press call for more details on this effort, a senior administration official responded: “We’ll be seeking additional information that will allow the agency to explore new policies and learn more about this really important program for seniors and people with disabilities.” Additionally, the administration said it will build on recent steps “[c]racking down on anticompetitive and anti-consumer practices” in MA and continue to implement updates to MA payment “that improve payment accuracy, address gaming, and recover overpayments.”

Three quarters into 2023, Moody’s Investors Service says the predictions it made at the start of the year for the health insurance sector — namely, earnings growth in the mid-to-high single digits — have largely proven accurate. However, while financial results were consistent with the credit rating firm’s expectations, analysts said in a new report that the reasons for those results were not exactly what they predicted.

“Our outlook was premised on reduced membership as a result of Medicaid redeterminations and the impact of a possible recession on commercial membership,” the analysts wrote in a report released on Nov. 20. “However, with no recession this year, commercial membership has been better than expected, but its growth has been offset by higher-than-expected MA [Medicare Advantage] utilization.” Additionally, “although Medicaid redeterminations are underway, their impact so far has been relatively small.”

Most employer-sponsored plans that have stop-loss insurance coverage should be able to pay for expensive gene therapies that have proven to be cost-effective, according to a recent paper from Health Affairs Scholar. However, a separate Health Affairs analysis published this month argues that payers must assess alternative payment models to afford the medications, which can cost more than $1 million per dose.

Aaron S. Kesselheim, M.D., one of the authors of the latter Health Affairs paper says that plans have taken varied approaches to paying for gene therapies ranging from “extremely permissive to extremely tight coverage.”