Medicaid Managed Care

Nearly 5.5 million people have selected health plans since the Affordable Care Act open enrollment period began on Nov. 1, CMS said in its latest marketplace enrollment update. That total captures signups on HealthCare.gov through Dec. 3 and through Nov. 26 for the state-based marketplaces, and it represents an 18% increase compared to the same time period last year. So far 22% of total plan selections have been from individuals who are new to the marketplaces, while 78% are returning customers, CMS said. The open enrollment period lasts through Jan. 15 for HealthCare.gov states and most state-based marketplaces.

Blue Shield of California — which lost its bid to continue to serve California’s Medicaid managed care program — plans to lay off 373 employees by Jan. 25, Modern Healthcare reported. The decision from California’s Dept. of Health Care Services came in August after the state held its first competitive bidding process for Medi-Cal contracts. Blue Shield was not chosen — prompting the insurer to later sue the state — while Elevance Health’s Anthem Blue Cross Partnership Plan, Centene Corp.’s Health Net and Molina Health Care were selected to participate in varying service areas across 21 counties. The layoffs represent a small portion of Blue Shield’s total workforce of 7,800, Modern Healthcare noted, and the cuts are mostly concentrated at the insurer’s Sacramento-area offices.

In a rule proposed on Dec. 6, CMS seeks to impose new requirements on federally funded health plans surrounding their prior authorization processes and data interoperability. While that might normally induce private payers to push back, the health insurance sector’s main trade group has already endorsed the regulation, which CMS issued to replace a previously proposed rule that appears to have generated more industry pushback. Health care industry observers, meanwhile, tell AIS Health that the new requirements could be a win for consumers, providers, and payers alike.

“I think it’s good for the business,” says Katherine Hempstead, Ph.D., a senior policy adviser at the Robert Wood Johnson Foundation. “It’s good immediately for consumers and providers, and it’s good in the long run for plans. It’s going to be better for everyone.”

Among the large companies that offer health benefits to Medicare-age retirees, 50% provided those benefits through a contract with a Medicare Advantage plan in 2022, according to a new Kaiser Family Foundation analysis. That’s almost double the share of firms — 26% — that did so in 2017. The analysis also noted that about 44% of large employers offering MA coverage to their retirees give them no choice but to receive their benefits through such a plan, and the most common reason the employers elected to contract with an MA plan was cost. Such decisions have not always been well-received: Retired New York City workers are currently locked in a legal battle with Democratic Mayor Eric Adams’ administration over the city’s move to enroll nearly 250,000 retirees into an MA plan managed by Anthem, Inc. in partnership with EmblemHealth.

More than half of Medicaid managed care organizations have health equity strategies for some of their members, while four in 10 have health equity plans for their entire membership, according to a survey from the Institute for Medicaid Innovation (IMI). The survey found that 48% of MCOs have pursued health equity accreditation from the National Committee for Quality Assurance (NCQA), with 33% “planning to pursue” the accreditation. And 14% have no plans to do so, while 5% didn’t respond. Meanwhile, 86% of MCOs have “programs/policies for health plan internal staff” that are meant to address structural racism or promote racial equity, and 48% have policies for members that do the same. Outside of racial equity concerns, other notable findings from the survey include widespread problems with care coordination and telehealth delivery: 71% of responding MCOs said “access to information from previous providers [is] a key barrier to care coordination,” while 67% said “their information technology systems were a barrier to setting up effective telehealth delivery services.”

At some point in the next year, it’s likely that Medicaid eligibility redeterminations will resume — a process that will be kicked off when the Biden administration declares an end to the COVID-19 public health emergency (PHE). Medicaid has hit record-high enrollment this year, meaning states and managed care organizations will have to contact more people than they ever have before in a short period of time; meanwhile, MCOs will also have to deal with looming cuts to reimbursement and rising provider rates.

Margins for MCOs seem likely to shrink. Provider rate increases are coming soon, though it’s likely that they will vary in timing and scope depending on market and contract cycles. However, the pricing effects of workforce shortages and inflation will impact every plan and provider, sources previously told AIS Health.

Centene Corp. managed to beat Wall Street’s earnings expectations in the third quarter of 2022 while also reporting lower-than-expected Medicare Advantage Star Ratings and MCO contract struggles in California and Florida, two of the Medicaid-focused carrier’s largest states by enrollment. Reviews from Wall Street analysts were mixed, with financiers praising Centene’s continued efforts to spin off its PBM business but raising concerns over the contract disputes and the looming resumption of Medicaid eligibility redeterminations.

The insurer reported $1.30 in adjusted earnings per share (EPS), beating the Wall Street consensus projection of $1.24. Membership grew by 322,400 to over 26.7 million total members during the quarter, raising the year’s cumulative enrollment growth to nearly 950,000 members. Executives project an end-of-year EPS of $5.65 to $5.75, slightly up from a previous projection of $5.60 to $5.75. Centene’s medical loss ratio was 88.3%, and its total revenues reached $35.9 billion in the quarter, up 11% compared with the third quarter of 2021.

Elevance Health, Inc. (formerly Anthem) released its third-quarter financial results on Oct. 18, beating Wall Street consensus earnings projections and receiving praise from financial analysts. The insurer — which claims it passed UnitedHealth Group in total enrollment this year — said growing membership, the performance of the commercial insurance and health care services divisions, and lower-than-expected utilization all contributed to the strong results.

The managed care giant reported $7.53 in adjusted earnings per share (EPS), beating the Wall Street consensus projection of $7.15. Membership grew by 232,000 to 47.3 million total members during the quarter, raising the year’s cumulative enrollment growth to 2.2 million. Executives project a fourth-quarter dividend of $1.28 per share, with end of year EPS “greater than $28.95 per share,” according to a press release.

During UnitedHealth Group’s recent conference call to discuss third-quarter 2022 financial results, executives discussed a variety of topics in addition to the company’s earnings — including broad-based trends like inflation and the looming return of Medicaid redeterminations, as well as UnitedHealth’s strategies for integrating a recent acquisition and furthering risk-based payment models.

Overall, equities analysts seemed satisfied with both UnitedHealth’s quarterly performance and its plans to overcome potential headwinds going forward.

On Oct. 7, CMS released the 2023 Medicare Advantage Star Ratings, revealing that 51.3% of Medicare Advantage Prescription Drug (MA-PD) plan contracts will be rated 4 stars and above next year. That’s down from 68.4% of 2022 MA-PD contracts, Citi analyst Jason Cassorla observed in a note to investors. On an enrollment basis, 72.1% of current MA-PD enrollees are in plans rated 4 stars and above for 2023, down from 89.7% in 2022. “The lower MA Star Ratings for 2023 on a [year-over-year] basis are largely a function of CMS removing many of the COVID-19-related guardrails and relaxed criteria that aided Stars performance for 2021-2022,” Cassorla pointed out. “Ratings for 2023 were also impacted by changes to how plans are rated with CMS a greater emphasis on the Consumer Assessment of Healthcare Providers and Systems survey.”

Recently, the Biden administration approved a pair of wide-ranging Medicaid waiver demonstration programs in Massachusetts and Oregon, granting those states authority to test unique policies such as keeping certain populations enrolled in Medicaid for more than a year and covering clinically tailored housing and nutritional supports. Medicaid managed care plans that serve Massachusetts and Oregon tell AIS Health that they’re planning to play a major role in helping to implement the new waiver programs, which will allow them to expand some of the social-needs-based interventions that they’re already providing and reduce the enrollee churn that can stymie care-management efforts.