Medicare Advantage

Humana Will Buy One Primary Care Group — and Could Snap Up Another

Humana Inc. will spend between $450 million and $550 million in debt and cash to gain full control of a group of primary care clinics that it launched with private equity firm Welsh, Carson, Anderson and Stowe (WCAS), and company executives said during the firm’s recent investor day that Humana plans to double down on its existing primary care M&A strategy. Health care finance experts tell AIS Health, a division of MMIT, that insurers’ spending spree on providers is only likely to accelerate, but that Humana is in pole position to benefit from deep investments in Medicare Advantage-focused primary care.

Health insurers have spent billions to acquire outpatient providers since the onset of the COVID-19 pandemic. Finance experts tell AIS Health that the spending spree has two sources of capital. Carriers are spending huge cash reserves taken in during the deepest parts of the pandemic, which saw utilization plummet as premium revenues increased. In addition, Wall Street is bullish on managed care: Lenders are lining up to offer generous terms to acquisition-hungry insurers, which have enjoyed strong stock performance since the start of the pandemic era.

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Private Plans in Michigan Stall Under CPC+ Model

A primary care reform model in Michigan failed to deliver intended cost savings and quality improvements among two private payers, casting doubt on whether current value-based model designs in the primary care space have the muscle to exert real benefits.

A study published in the September issue of Health Affairs analyzed the spending and quality results of two large insurers in Michigan that offered a payment reform model designed after the federal Comprehensive Primary Care Plus (CPC+) program. The results were muted: Among the private payers involved, the CPC+ model failed to reduce total spending; the results indicate that, when accounting for care management fees, spending actually rose under the CPC+ program. On the quality side, performance remained unchanged between CPC+ and non-CPC+ participants.

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Report Shows Limited Access to Opioid Use Disorder Treatments for Medicare Beneficiaries

More than 50,000 Medicare Part D beneficiaries experienced an opioid overdose in 2021, while almost a quarter of Part D enrollees (12.1 million) received at least one prescription opioid through Medicare, according to a recent report from the HHS Office of Inspector General.

The proportion of beneficiaries receiving opioids has been declining, from 33% in 2016 to 23% in 2021. Alabama saw the highest proportion of opioid recipients (36%), while New York and Hawaii ranked the lowest (15%).

Walmart, UnitedHealth Strike Latest Insurer-Retail Clinic Deal

Walmart Inc. and UnitedHealth Group will launch a co-branded Medicare Advantage plan in Georgia, license Optum-branded analytic and decision-making tools to existing Walmart Health clinics in 15 Florida and Georgia locations, and use Optum software to enable those Walmart clinics to enter value-based network agreements with MA plans.

One health care insider tells AIS Health that the move is further evidence of patients’ frustration with traditional, standalone clinics — and evidence that managed care firms are placing heavy bets on new types of providers to capitalize on that dissatisfaction.

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Medicare Advantage Plans Pay Higher Prices Than CMS for Dialysis Care

A new study published in Health Affairs urged government leaders to limit market consolidation among the largest dialysis providers as more and more seniors choose Medicare Advantage over fee-for-service (FFS) Medicare. Analyzing 2016 and 2017 outpatient Medicare claims data, the study authors found that MA organizations paid inflated costs for dialysis services compared to what FFS Medicare would have paid, especially to large national dialysis organizations — where the majority of patients receive treatment. Notably, MA plans’ median cost for in-network hemodialysis (the most common form of the therapy) was $301, which was markedly higher than the $232 median cost for out-of-network treatments. Findings were similar for peritoneal dialysis, the less common form of dialysis.

Overall, MA plans paid 131% of the FFS price for in-network hemodialysis at large chains, compared to 120% of the FFS price at regional chains, and they paid 112% of the price at independently owned facilities. These markups were also found for in-network peritoneal dialysis but were not observed for out-of-network services.

In ‘Early Innings’ of Major Retail Collabs, UnitedHealth-Walmart Make Medicare Play

With a focus on Medicare Advantage beneficiaries, UnitedHealth Group and Walmart Inc. have struck a 10-year “wide-ranging collaboration” with value-based care elements that could ultimately extend into Medicaid and commercial plans. In addition to launching a co-branded MA plan, the partnership will connect Walmart Health clinicians with Optum’s analytics and decision support tools for value-based care delivery, and it represents the latest example of a major retailer seeking out a partner to grow its health care business.

Walmart already has a Medicare Part D partnership with Humana Inc. and in October 2020 introduced a co-branded MA offering with Clover Health. The Bentonville, Ark.-based retail giant at the time also launched an insurance brokerage called Walmart Insurance Services. According to walmartinsurance.com, it sells plans from Anthem (Elevance Health), Arkansas Blue Cross Blue Shield, Humana, UnitedHealthcare and Centene Corp.’s WellCare. The site does not, however, list Clover Health, and a spokesperson for Walmart confirms that the collaboration ended in 2021.

Health Systems May See More Savings With Medicare Advantage vs. Medicare ACOs

A new study published in JAMA Network Open raises questions about whether health systems can actually achieve significant savings through the Medicare Shared Savings Program (MSSP), or if Medicare Advantage could be a better bet. To identify spending patterns in MA and MSSP’s Accountable Care Organizations (ACOs), researchers studied the characteristics and claims data of about 16,000 Medicare patients at Ochsner Health System (OHS), a large, academic system in Louisiana, from 2014 to 2018. Ochsner joined MSSP in 2013, and its ACO hosts more than 2,200 providers. It also offers MA plans via a partnership with Humana Inc.

APG’s Susan Dentzer Discusses Value-Based Care Goals, Challenges Across Medicare

CMS’s Center for Medicare and Medicaid Innovation last year declared a goal of having all traditional Medicare enrollees in an accountable care arrangement by 2030. America’s Physician Groups (APG), which represents more than 300 physician groups that accept various degrees of risk with all payer types, including Medicare Advantage plans, wants CMS to apply that same goal to MA. In a recent comment letter on CMS’s request for information on the MA program, APG President and CEO Susan Dentzer urged the administration to incentivize the delegation of full risk to providers in MA.

RFI Commenters Envision More Plan Flexibility, Improved Transparency in MA

After giving stakeholders a month to formulate their thoughts on how best to address a variety of aspects of the Medicare Advantage program, CMS received nearly 4,000 comments on its request for information (RFI). An AIS Health review of select letters reveals comments on a multitude of hot-button topics including beneficiary decision-making, marketing practices and plan oversight, and MA reimbursement.

CMS published the MA-focused RFI on Aug. 1 and asked for input by Aug. 31. The sprawling request asked commenters to consider dozens of questions on key topics such as health equity, risk adjustment, social determinants of health (SDOH), supplemental benefits and value-based care.

News Briefs: Medicare Advantage-related Marketing Complaints to CMS More Than Doubled From 2020 to 2021

The number of Medicare Advantage marketing-related complaints submitted to CMS more than doubled between 2020 and 2021, according to a recent report from Axios. Referencing CMS data, the news outlet reported that CMS received approximately 39,600 complaints about the marketing of MA and Part D plans in 2021, compared with about 15,500 in 2020 and an average of 6,000 to 7,000 in prior years. Consumers complained about things like being enrolled without contact from a health plan and misleading information about provider networks. Senate Finance Committee Chair Ron Ryden (D-Ore.) last month wrote to 15 states asking for detailed information about such complaints, while CMS has taken steps to tighten oversight of third-party marketing organizations. “While actions to reign in marketing constructs could affect competitive dynamics within MA, we should continue to see robust growth in this end market in totality, with an emphasis on consumer choice, branding, and benefit constructs affecting the competitive landscape moving forward,” observed Citi Research analyst Jason Cassorla.