Radar on Medicare Advantage

Medicaid MCOs Hope for Expanded Access, Care Opportunities

January 10, 2019

Despite a recent federal court ruling creating some uncertainty about the future of Medicaid expansion, industry experts express optimism about several recent developments that they believe will give way to better patient care going forward.

For one, November’s midterm election results may spell more Medicaid expansion, particularly in historically Republican-controlled states. Voters in three states approved measures to extend Medicaid coverage, and three Democratic governors unseated Republicans who did not support expansion.

By Lauren Flynn Kelly

Despite a recent federal court ruling creating some uncertainty about the future of Medicaid expansion, industry experts express optimism about several recent developments that they believe will give way to better patient care going forward.

For one, November’s midterm election results may spell more Medicaid expansion, particularly in historically Republican-controlled states. Voters in three states approved measures to extend Medicaid coverage, and three Democratic governors unseated Republicans who did not support expansion.

From a policy perspective, given that Congress is “fairly neutered in the split in the House and the Senate, then the bigger macro level, seismic changes like per capita caps are probably off the table vs. more under-the-radar, yet significant impacts you see from a regulatory and even judicial perspective,” predicts Alex Shekhdar at Medicaid Health Plans of America.

“In terms of patient engagement, payment reforms and so forth, the biggest tool that the administrator and the secretary have to effectuate the Medicaid programs is the 1115 waiver,” he says, referring to the demonstration waiver that states can use to make broad changes to their Medicaid programs or modifications that focus on a specific population or service over a five-year period. “And [CMS] has indicated that there is no stop and believes they have the legal authority to continue to push forward on the waivers.”

“I think the tide has turned and the red states realize that Medicaid is an important part of the continuum of health care in the U.S.,” weighs in Jerry Vitti, CEO of Healthcare Financial, Inc. “But I also see the potential for more work requirements, lockout periods and premiums, copayments, deductibles…and I think there will be a continued push to get those approved” via 1115 waivers. As a result, Medicaid managed care organizations may see a “burst of enrollment” from expansion, followed by churn due to various requirements that make it difficult for people to maintain coverage, he predicts.

Meanwhile, states and plans are hoping for more leeway to address social determinants of health, adds Vitti.

HHS Sec. Alex Azar in public comments last fall hinted at a possible demonstration addressing social determinants through the Center for Medicare and Medicaid Innovation. Given some of the work already being done by Medicaid MCOs to address housing and other non-medical factors through local partnerships, CipherHealth’s Friso van Reesema says he is optimistic that CMS will “follow suit” and start reimbursing for those types of services.

NM Medicaid Buy-In Could Leverage Managed Care Structure

December 26, 2018

With the aim of expanding health care coverage and affordability for residents who would not otherwise qualify for Medicaid or federal subsidies to purchase Affordable Care Act marketplace coverage, several states are exploring the concept of allowing people to buy into their Medicaid programs. New Mexico may be the furthest along in that process, having commissioned a two-part study to seriously consider the financial implications of four different Medicaid buy-in scenarios.

By Lauren Flynn Kelly

With the aim of expanding health care coverage and affordability for residents who would not otherwise qualify for Medicaid or federal subsidies to purchase Affordable Care Act marketplace coverage, several states are exploring the concept of allowing people to buy into their Medicaid programs. New Mexico may be the furthest along in that process, having commissioned a two-part study to seriously consider the financial implications of four different Medicaid buy-in scenarios.

According to the report produced by Manatt Health, “Evaluating Medicaid Buy-In Options for New Mexico,” Medicaid is the largest payer in the state, covering more than 40% of the state population. By contrast, the BeWellNM marketplace covers about 50,000 individuals, or 2% of the population. While marketplace coverage may be affordable for some, there are various reasons why eligible individuals are opting out, such as rising premiums and cost-sharing affordability, especially if they do not qualify for federal subsidies, observed the report.

The report also suggests that individuals would pay premiums and cost-sharing, but by leveraging Medicaid’s purchasing power, provider networks and reimbursement rates, the cost of buy-in coverage would be less than the cost of private coverage. That report made a qualitative assessment of four options:

(1) Targeted Medicaid Buy-In Program, where the state offers Medicaid-like coverage off the BeWellNM marketplace to those not eligible for Medicaid, Medicare or subsidized marketplace coverage.

(2) Qualified Health Plan Public Option, where the state offers a lower cost public option product on the marketplace to individuals and small employers, although it could be expanded outside of BeWellNM for people who are not eligible to purchase individual coverage.

(3) Basic Health Program, a state-offered option for individuals with incomes up to 200% of the FPL who are not Medicaid-eligible and are otherwise eligible to purchase coverage through the marketplace.

(4) Medicaid Buy-In for All, where the state offers Medicaid coverage to everyone (except those covered by Medicare) as a lower-cost option off the marketplace.

According to Patricia Boozang at Manatt, the consulting firm and its actuarial partner Wakely Consulting Group are now in the second phase of the study, working “to develop an actuarial analysis that projects the number of people likely to be covered through one or two variations on the Option 1 Targeted Buy-in model” outlined in the paper.

Iowa Dems Aren’t Satisfied With Managed Medicaid Audit

December 13, 2018

Iowa’s 2016 transition from fee-for-service to managed Medicaid was a hot-button topic this past election cycle as Democrat Fred Hubbell campaigned for governor with the promise of returning the program to a publicly managed system. A new report from State Auditor Mary Mosiman (R) is adding fuel to the fire over the controversial IA Health Link program that state Democrats want to dismantle.

According to the report, the state in fiscal year (FY) 2018 is projected to save approximately $126 million from the transition to managed care. But the report noted that three different estimates for FY 2018 savings have been prepared using various methodologies, ranging from as little as $47 million to as much as $234 million.

By Lauren Flynn Kelly

Iowa’s 2016 transition from fee-for-service to managed Medicaid was a hot-button topic this past election cycle as Democrat Fred Hubbell campaigned for governor with the promise of returning the program to a publicly managed system. A new report from State Auditor Mary Mosiman (R) is adding fuel to the fire over the controversial IA Health Link program that state Democrats want to dismantle.

According to the report, the state in fiscal year (FY) 2018 is projected to save approximately $126 million from the transition to managed care. But the report noted that three different estimates for FY 2018 savings have been prepared using various methodologies, ranging from as little as $47 million to as much as $234 million.

Only one estimate — $141 million projected by the Iowa Dept. of Human Services (DHS) in May 2018 — was found to be reliable because it accounted for all Medicaid costs and relied on historical trend information to determine what the cost may have been under the previous program. Based on the DHS methodology used in May 2018, the new report made an updated estimate of $126 million.

The report also noted that initial capitation rates for the program were set in July 2015 but a subsequent review by Milliman resulted in an “emerging trend adjustment” that amounted to an additional $379 million paid to plans in 2017 for FYs 2016 and 2017. Not long after the three managed care organizations that originally contracted with the state began serving the program, they reported financial losses and argued that the rates were not actuarially sound. One insurer dropped out of the program and the remaining two negotiated an 8.4% increase in rates for 2019.

The report contained an adjusted estimate for average cost-per-member growth of 1.5% in FY 2018 and 5.6% in 2019, compared with CMS projections of 5.8% on average between 2017 and 2026. Mosiman suggested that over time such estimates will become less accurate and less meaningful as the program gets further from FFS.

Rob Sand, the Democratic former assistant attorney general who recently defeated Mosiman in the race for state auditor, criticized the report for not assessing the impact on quality or timeliness of services provided to Medicaid beneficiaries under the FFS or managed care program. In a Nov. 26 post to Twitter, Sand vowed to dig deeper after he takes office on Jan. 1, 2019.

Coming Open Enrollment Period Has MA, Part D Plans Focused on Happy Members

December 10, 2018

As Medicare Advantage and Part D sponsors compete for enrollees during the 2019 Annual Election Period (AEP) that began on Oct. 15 and ends on Dec. 7, a major focus this year is the newly reinstated Open Enrollment Period (OEP) during which beneficiaries have a chance to switch plans. While this means possible membership losses for some plans, a prohibition on targeted marketing during the OEP has insurers doing everything they can to ensure smooth member interactions for maximum retention and acquisition of new enrollees, marketing experts tell AIS Health.

By Lauren Flynn Kelly

As Medicare Advantage and Part D sponsors compete for enrollees during the 2019 Annual Election Period (AEP) that began on Oct. 15 and ends on Dec. 7, a major focus this year is the newly reinstated Open Enrollment Period (OEP) during which beneficiaries have a chance to switch plans. While this means possible membership losses for some plans, a prohibition on targeted marketing during the OEP has insurers doing everything they can to ensure smooth member interactions for maximum retention and acquisition of new enrollees, marketing experts tell AIS Health.

The OEP returns on Jan. 1, but unlike the previous OEP, sponsors cannot actively or knowingly market their products to potential switchers. They may, however, conduct marketing activities that focus on other enrollment opportunities such as marketing to age-ins who have yet to make an enrollment decision or dual-eligible and low-income status beneficiaries who may make changes once per calendar quarter during the first nine months of the year.

Renee Mezzanotte at DMW Direct says she has been working with clients since July to help them prepare for the OEP with a focus on two key areas: retention and “careful, thoughtful” acquisition. And most clients are taking an “equal two-prong approach” in terms of budgeting to both reinforce retention and to boost acquisition, with strategies in each category varying, she says.

DMW has identified four types of customers who are likely to take advantage of the newly reinstated OEP. These are: (1) those who didn’t realize their plan had changed until they used it; (2) those who switched during the AEP but didn’t fully understand the benefits of their new plan and were surprised when they went to use it; (3) customers whose situation changed and whose plan is no longer a good fit; and (4) consumers who wanted a change during the AEP and procrastinated.

To retain current and new members, DMW advises that plans:

  • Send membership cards out as early as possible.
  • Provide an easy-to-understand (“no jargon”) guide to key benefits, particularly the new benefits.
  • Train their member services team well.
  • Call new members to make them feel welcome.
  • Customize their message for new members.

Data and ‘Proof Points’ Are Keys to Strong Medicaid Bids

November 21, 2018

Requests for proposals from Medicaid managed care organizations are becoming more intense, as state Medicaid agencies look to pass on greater responsibility to insurers, further integrate services such as medical and behavioral health, and incorporate “buzz” terms like social determinants of health and value-based purchasing (VBP), observed speakers during a panel on Medicaid procurement trends at the AHIP National Conference on Medicaid.

By Lauren Flynn Kelly

Requests for proposals from Medicaid managed care organizations are becoming more intense, as state Medicaid agencies look to pass on greater responsibility to insurers, further integrate services such as medical and behavioral health, and incorporate “buzz” terms like social determinants of health and value-based purchasing (VBP), observed speakers during a panel on Medicaid procurement trends at the AHIP National Conference on Medicaid.

Many states are placing more emphasis on an “integrated approach,’ but what integration means very much depends on the state, said Darin Gordon, founding partner of Speire Healthcare Strategies, LLC. States’ definitions of VBP also tend to vary, and one “disturbing trend” he’s seeing is high expectations from states that MCOs have a certain percentage of their spend on VBP in a certain amount of time. Gordon said these expectations are often not realistic because of provider reluctance to enter into value-based contracts.

Being able to demonstrate your community linkages will be critical to RFP responses around social determinants, said Carol Backstrom at Harbage Consulting. “Given how stretched states are from a bandwidth perspective, whatever you can offer up in terms of things you are already working on … the value you can add to the contract, [things that] you inherently already do well, are in my opinion going to very much [be] welcome by the state,” she said.

“The three biggest expectations in RFPs are data, data, data,” added Gordon. “Don’t just generally talk about something; actually [have] some proof points….you have to be able to tell that story well about how you are…able to address these high need populations.”

Another trend Speire has observed is quality outcomes increasing in scoring weight in RFP responses. Measures such as HEDIS and NCQA are “becoming more and more prevalent because of the national comparability that you get from those measures, but you also have to have the ability to describe the quality outcomes,” said Gordon.

John McCarthy, another Speire founding partner, advised that plans meet with the state Medicaid director when they know an RFP is coming and get an idea of whether the state is open to newcomers. “Where I see the biggest barrier to entry is whether they’ve been there or not,” he said.