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.

The HHS Office of Inspector General (OIG) is asking Humana Inc. and a division of CVS Health Corp.’s Aetna to refund the federal government a combined $11 million for estimated overpayments, according to two reports posted on Sept. 25. OIG is seeking $6.8 million from Humana and $4.2 million from Aetna’s HealthAssurance based on extrapolated audit findings. For the Humana audit, the agency examined a random sample of 240 enrollee-years for which Humana submitted high-risk diagnosis codes in 2017 and 2018. It found that for 202 enrollee-years, the claims submitted by Humana to CMS “were not supported by the medical records and resulted in $497,225 in overpayments.” HHS OIG performed a similar analysis for HealthAssurance and found the medical records did not support the diagnosis codes for 222 of the 269 sampled enrollee-years and resulted in $657,744 in overpayments. Humana and Aetna both disagreed with the findings, according to the report.

After failing to meet minimum medical loss ratio (MLR) requirements for three years in a row, Centene Corp. is prohibited from enrolling new beneficiaries into its Medicare Advantage Prescription Drug (MA-PD) plan in Missouri, while a UnitedHealthcare (UHC) subsidiary regained enrollment abilities after a similar suspension. According to a Sept. 6 letter posted to CMS’s Parts C and D enforcement actions webpage, Centene’s Wellcare of Missouri Health Insurance Company, Inc. reported MLRs of 78.9%, 77.7% and 84.0% for contract years 2021, 2022 and 2023, respectively. When an MA organization has an MLR for a contract that is below 85.0% for three or more consecutive years, CMS must suspend the MAO’s ability to accept new enrollments in the second succeeding contract year after the third consecutive year of noncompliance, explained CMS. The enrollment freeze will take effect for any coverage beginning Jan. 1, 2025, through Dec. 31, 2025, and the contract will be removed from the Medicare Plan Finder list of available MA-PD plans during the 2025 Annual Election Period that begins on Oct. 15. According to CMS enrollment data for September, Wellcare of Missouri serves 4,254 MA enrollees, including 2,872 with Part D coverage. Meanwhile, UHC’s Care Improvement Plus South Central Insurance Co. was released from an enrollment suspension after reporting an MLR exceeding 85.0% for contract year 2023, according to a separate notice issued on Sept. 6. The UHC plan, which currently serves about 8,600 MA-PD enrollees, will be allowed to enroll beneficiaries during the upcoming AEP.

As insurers await the October release of the 2025 Star Ratings, Chicago-based insurer Zing Health is pursuing a lawsuit stemming from CMS’s calculation of the 2024 Star Ratings, which prompted an unprecedented redo and resubmission of 2025 bids. Based on the third year of poor performance from that initial calculation, CMS in December 2023 informed Zing that it intended to terminate its Medicare Advantage Prescription Drug (MA-PD) contract serving approximately 3,000 enrollees at the end of this year. Although termination was avoided when CMS recalculated the 2024 Star Ratings, the insurer has a few demands of CMS for the “irreparable harm” caused by its initial calculation.

A Humana Inc. executive speaking at the Wells Fargo Healthcare Conference on Sept. 4 said the Medicare Advantage-focused insurer will exit 13 counties where membership was “insignificant” and reduce its plan offerings in other counties, impacting an estimated 560,000 MA members next year. The selected counties will leave Humana’s footprint largely intact, while impacted members in other counties will have Humana plans to choose from, Chief Financial Officer Susan Diamond told Wells Fargo analyst Stephen Baxter. “The exit itself is positive in the sense that those plans were not contributing,” said Diamond. And in the other counties, if Humana can “ultimately retain more of those members, that’s incrementally positive because the plan choices left behind are priced in such a way that they will be positively contributing.” Despite seeing elevated utilization and medical cost pressure in the first half of the year, the insurer on Sept. 3 reaffirmed its full-year guidance of approximately $16.00 adjusted earnings per share. Diamond during the conference added that Humana is seeing more prior authorization decision appeals than it has seen historically. She also disclosed that Humana anticipates greater utilization of supplemental benefits such as over-the-counter cards and dental services in the fourth quarter, "just recognizing the benefit changes we've made for 2025."

Participants in the Affordable Care Act risk adjustment program will pay a record $10.3 billion for the 2023 benefit year, according to CMS. CVS Health Corp.’s Aetna is estimated to owe the highest amount, while several not-for-profit Blue Cross Blue Shield plans are slated to receive significant payments.

The ACA’s risk adjustment program, launched in 2014, transfers funds from insurers that cover lower-risk enrollees to insurers that cover higher-cost and higher-risk populations in the individual and small group health insurance markets.

According to the latest data from KFF’s Medicaid Enrollment and Unwinding Tracker, more than 24.5 million people have been disenrolled from Medicaid as of July 23. Among reporting states, there is wide variation in Medicaid disenrollment rates, KFF noted, ranging from 57% in Montana to 12% in North Carolina. The nonprofit foundation said some of that variation is likely explained by “who states are targeting with early renewals as well as differences in renewal policies and system capacity.” Overall, 31% of people with a completed renewal were disenrolled in reporting states while 69%, or 53.6 million enrollees, had their coverage renewed, KFF said. Still, the foundation noted that “due to varying lags for when states report data, the data reported here undercount the actual number of disenrollments to date.”

Citing a Medicare Payment Advisory Commission (MedPAC) estimate that the government pays about 22% more for Medicare Advantage enrollees than it would if they were enrolled in traditional Medicare, participants in a July 10 panel discussion all agreed that the way MA plans are paid needs to be fixed. However, those panelists — each with ties to MedPAC — had very different views about what those changes should look like, underscoring how difficult it will be to get stakeholders to agree on any reforms even as scrutiny of MA intensifies.

“What’s the diagnosis — in other words, what problem are we trying to solve?” Francis Crosson, M.D., queried during the Virtual Fifth National Medicare Advantage Summit, which was livestreamed from July 9-12. “Is it that the current MA payment methodology is fatally flawed and must be replaced now? Or, MA costs the Treasury too much compared to traditional Medicare? Or, MA costs too much because of a broken risk adjustment process, which if fixed, would solve the cost problem?”

After considering stakeholder feedback on its draft second guidance for the Medicare Prescription Payment Plan, CMS on July 16 released final guidance that gives plans more flexibility around identifying Part D enrollees who are likely to benefit from the M3P. Starting next year, the M3P requires stand-alone Prescription Drug Plans and Medicare Advantage Prescription Drug plans to give enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly payments versus paying the full amount at the pharmacy. After finalizing its first guidance in February, CMS released a draft of the second installment, with a public comment period that ran from Feb. 15 through March 16. CMS in a July 16 memo to plan sponsors said it received more than 100 responses from a broad range of stakeholders, including patient advocates, data vendors, Part D sponsors and pharmacy benefit managers, and it made several clarifications and changes in response. Those included clarifying that it does not expect Part D plans that exclusively charge $0 cost sharing for covered Part D drugs to all plan enrollees to offer members the option to spread out their OOP costs through the M3P and giving plans the option to send an election request form with the member’s ID card mailing or separately in a different mailing. The agency also will allow plans to develop their own strategies for ongoing outreach during the plan year to enrollees who are likely to benefit from the M3P. CMS on July 16 also released a final set of model and standardized materials to support Part D sponsors in meeting their education, outreach and communications requirements for the program.

The Supreme Court’s June 28 rulings overturning the so-called Chevron doctrine could impact federal regulation of multiple industries, including Medicare Advantage, and lead to increased legal challenges to HHS regulations. In a 6-3 decision, the Court ruled on a pair of related cases — Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Dept. of Commerce — that lower courts must “exercise their independent judgment in deciding whether an agency has acted within its statutory authority,” as required by the Administrative Procedure Act (APA). The doctrine stems from a 1984 case, Chevron v. National Resources Defense Council, which dealt with environmental issues but established a legal framework allowing federal agencies such as HHS broad authority to interpret “ambiguous” laws through rulemaking. Without such discretion, the judicial system will have more power to interpret unambiguous rules that face legal challenges, which are common in MA and other highly regulated sectors of health insurance. “We believe the decision will impact the broader legislation process which we view as a positive for healthcare in general,” observed securities analyst Ann Hynes of Mizuho Securities. “HHS and CMS may face difficulties in administering Medicare and Medicaid as tasked by Congress. To ensure the agencies’ interpretations are enforced, Congress would likely need to refine the Medicare and Medicaid statutes to expand the scope of agency authority and address any existing ambiguous language by memorializing the agencies’ interpretations,” warned attorneys from Baker Donelson prior to the ruling. “Without discretion given to the agencies, health care organizations and beneficiaries would have a greater chance of success in bringing litigation against the agencies.”