Medicare Advantage

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.”

“Truly shocking” and “huge setback” were just two of a flood of analyst reactions to Humana Inc.’s Oct. 2 disclosure that its percentage of Medicare Advantage members in plans with 4 or more stars will plummet to 25% next year. That’s down from an estimated 94% for 2024 and is largely the result of a decline in Star Ratings for its largest contract, according to a new filing from Humana.

Although the full set of Star Ratings data won’t be released until next week, this development confirmed industry fears that rising cut points will diminish ratings — and related revenue. UnitedHealthcare, meanwhile, has already filed a complaint over CMS's scoring of one measure, which industry observers predict could be followed by similar challenges.

Editor's Note: This article has been updated to include a statement from Glenview Capital.

In a development that drew mixed reactions from analysts, CVS Health Corp. is reportedly considering breaking up its diversified health care enterprise due to the poor performance of its Aetna health benefits division.

The news of CVS’s deliberations on the company’s future — reported by multiple outlets citing anonymous sources — came shortly after a hedge fund investor, Glenview Capital, reportedly met with CVS executives to offer ideas about turning the company around. However, Glenview Capital then denied that it as pushing for a breakup of CVS.

Starting on Jan. 1, 2025, most Blue Shield of California commercial plan enrollees will have access to a Humira (adalimumab) biosimilar with a $0 copay as part of the insurer’s Pharmacy Care Reimagined model. Blue Shield announced the initiative on Oct. 1 and said it would partner with Fresenius Kabi, which manufactures a Humira biosimilar, and Evio Pharmacy Solutions, a company that Blue Shield and other Blues plans founded in 2021. As part of the agreement, Blue Shield will purchase the Humira biosimilar for a monthly price of $525, significantly below the net price of $2,100 per month for branded Humira. Blue Shield revealed the Pharmacy Care Reimagined model in August 2023 and noted it would shift from a traditional PBM contract with CVS Health Corp.’s Caremark to a pharmacy benefits arrangement with five different vendors.

Medicare Advantage plans are set to receive at least $11.8 billion in quality bonus payments in 2024, according to a recent analysis by the Kaiser Family Foundation (KFF). This figure represents an 8% decline from the $12.8 billion awarded in 2023, a reduction that was not surprising given the expiration of pandemic-era policies that temporarily boosted Star Ratings for some plans. But with rising cut points and looming program changes such as the Health Equity Index (HEI) replacing the current reward factor, payers may struggle to improve their Star Ratings — and thus boost bonus payments — moving forward.

“Truly shocking” and “huge setback” were just two of a flood of analyst reactions to Humana Inc.’s Oct. 2 disclosure that its percentage of Medicare Advantage members in plans with 4 or more stars will plummet to 25% next year. That’s down from an estimated 94% for 2024 and is largely the result of a decline in Star Ratings for its largest contract, according to a new filing from Humana. Although the full set of Star Ratings data won’t be released until next week, this development confirmed industry fears that rising cut points will diminish ratings — and related revenue.

In advance of the Medicare Annual Election Period that starts on Oct. 15, preliminary Stars data became available in the CMS Medicare Plan Finder on Oct. 1. According to Humana’s filing with the U.S. Securities and Exchange Commission (SEC), contract H5216 fell from a 4.5-star rating to a 3.5-star rating for next year, which impacts quality bonus payments in 2026. That contract holds approximately 45% of Humana’s MA membership, including more than 90% of its group MA membership, Humana clarified.

After partnering with fledgling primary care startup Herself Health in January 2023, Blue Cross and Blue Shield of Minnesota recently announced a new contract structure that will incentivize the provider to drive “results-driven health solutions” for the Blues plan’s female Medicare Advantage population. Retroactive to Jan. 1, 2024, the partners have entered a value-based agreement that will include specific, measurable quality targets aimed at improving overall health outcomes for women.

Co-founded in 2022 by Kristen Helton, who previously led Amazon’s now-shuttered Amazon Care service for employees, Herself Health is a value-based health care technology company focused on delivering advanced primary care to women ages 65 and older. Since securing $7 million in seed round funding led by investment firm and founding partner Juxtapose, Herself Health has opened four clinics in the Twin Cities and is preparing to launch a fifth clinic in nearby Eagan, Minnesota.

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 its annual release of key premium, benefit and plan information for Medicare Advantage and Part D, CMS on Sept. 27 emphasized stability and robust offerings for 2025, despite repeated warnings from industry trade groups and plans of anticipated benefit reductions in the face of revenue challenges. While emerging analyses tell a slightly different story — that of insurers pursuing higher deductibles and/or maximum out-of-pocket cost amounts to maintain, for example, competitive premiums — industry experts say these early comparisons only tell part of the story, as other yet-to-be released data will convey additional nuances of MA and Part D market changes.

Amid reports of increasing prior authorization (PA) requests and coverage denials, dozens of hospitals and health systems are exiting or threatening to exit insurers’ Medicare Advantage networks. Although some departures have already taken effect, many will impact the 2025 plan year, which MA insurers have begun promoting in advance of the Annual Election Period (AEP). While on the surface the disputes reflect providers’ growing frustrations with insurers’ PA policies, two industry experts say hospitals’ latest round of muscle-flexing may reflect a trend of health systems looking more strategically at their markets and seeking the best deals.

As of Oct. 1, Becker’s Hospital Review had counted at least 27 health care providers nationwide that have unveiled MA network departures this year. And that is not an exhaustive list, as additional reports of providers joining the exodus continue to pour in from local news outlets across the U.S.