Radar on Medicare Advantage

Amid Budget Standoff, North Carolina Delays Medicaid Transformation

November 27, 2019

In the middle of an epic budget standoff between the state’s Democratic governor and the Republican-controlled legislature over Medicaid expansion and teacher pay, North Carolina’s plan to transfer some 1.6 million Medicaid enrollees into managed care in February is now indefinitely delayed, the North Carolina Dept. of Health and Human Services (DHHS) said on Nov. 19.

By Lauren Flynn Kelly

In the middle of an epic budget standoff between the state’s Democratic governor and the Republican-controlled legislature over Medicaid expansion and teacher pay, North Carolina’s plan to transfer some 1.6 million Medicaid enrollees into managed care in February is now indefinitely delayed, the North Carolina Dept. of Health and Human Services (DHHS) said on Nov. 19.

Because the North Carolina General Assembly adjourned on Nov. 15 without providing the needed funds and program authority for a Feb. 1, 2020, managed care start date, said DHHS, it has suspended implementation and open enrollment, which began for part of the state in July and went statewide in October.

With an estimated annual spend of approximately $13 billion, North Carolina is the largest state in terms of Medicaid expenditures that has not yet made the move to managed care. And the five managed care organizations taking part in North Carolina’s Medicaid transformation began enrolling beneficiaries on Oct. 14.

Taylor Griffin, a spokesperson for the NC Association of Health Plans, says the MCOs are ready to go live on schedule. “Once the state approves a budget, health plans are fully prepared to serve North Carolina’s Medicaid managed care recipients,” he tells AIS Health.

AmeriHealth Caritas North Carolina, one of the insurers contracted to serve the new Medicaid program, said it “remains committed to helping North Carolina bring about its innovative plan for Medicaid transformation” and does not intend to lay off any staff, as one GOP lawmaker had suggested insurers would be forced to do.

But one industry expert cautions against the statewide implementation. “When you push everything statewide all at once, your problems tend to magnify and it becomes very, very challenging for a state to manage not just the beneficiaries — figuring out where to go, how to go, all of that — but the state to manage their five contracted [payers],” remarks Jeff Myers, former Medicaid Health Plans of America president and founder of health care consultancy OptDis.

National and Regional Players Make Dual Eligible SNP Moves, 2020 Landscape Shows

November 25, 2019

Through strategic acquisitions, product launches and geographic expansions, Medicare Advantage insurers across the U.S. are offering new Special Needs Plans (SNPs) aimed at improving the lives of members who are dually eligible for Medicare and Medicaid.

According to an analysis of the 2020 “landscape” files posted by CMS in September, Chicago health care consultancy Clear View Solutions, LLC, estimates that there are 171 net new SNP IDs, up from 60 net new plans in 2019. And 97 of those net new plans are dual eligible SNPs, compared with 47 D-SNPs that were introduced for 2019.

By Lauren Flynn Kelly

Through strategic acquisitions, product launches and geographic expansions, Medicare Advantage insurers across the U.S. are offering new Special Needs Plans (SNPs) aimed at improving the lives of members who are dually eligible for Medicare and Medicaid.

According to an analysis of the 2020 “landscape” files posted by CMS in September, Chicago health care consultancy Clear View Solutions, LLC, estimates that there are 171 net new SNP IDs, up from 60 net new plans in 2019. And 97 of those net new plans are dual eligible SNPs, compared with 47 D-SNPs that were introduced for 2019.

“I do think there is some ‘pent up energy’ from plans, and now that there is clarity with permanency and the requirements for integration, plans are ready to move forward,” Cheryl Phillips, M.D., CEO of the SNP Alliance, says in an email to AIS Health.

Phillips says plans may also be “working to better position themselves” for managed long-term services and supports, as states sharpen their focus on rebalancing their long-term care populations and shift more of the responsibility to managed care organizations.

A review of the new D-SNP offerings for 2020 indicates that larger players such as Anthem, Inc., Centene Corp., Humana Inc., Molina Healthcare, Inc. and UnitedHealthcare are leading the charge, but numerous plans have been introduced on a local level.

For instance, UCare, the largest provider of SNPs in Minnesota, said it is expanding its UCare Connect + Medicare plans to mirror the 62-county UCare Connect service area. And Priority Health is preparing to launch its first D-SNP, which will serve all 68 counties of Michigan’s lower peninsula.

Molina Loses Parts of Texas STAR+PLUS Medicaid

November 13, 2019

The Texas Health and Human Services Commission (HHSC) on Oct. 29 delivered the highly anticipated results of its latest managed Medicaid procurement, revealing its intent to award contracts to Aetna Inc., Anthem, Inc., El Paso Health Plan, Molina Healthcare, Inc., Centene Corp.’s Superior Health Plan and UnitedHealthcare to serve approximately 525,000 high-acuity enrollees through the STAR+PLUS program. The news came as a disappointment to Molina, which had been banking on reprocuring its existing business in six regions instead of renewing just one service area and picking up a new zone.

by Lauren Flynn Kelly

The Texas Health and Human Services Commission (HHSC) on Oct. 29 delivered the highly anticipated results of its latest managed Medicaid procurement, revealing its intent to award contracts to Aetna Inc., Anthem, Inc., El Paso Health Plan, Molina Healthcare, Inc., Centene Corp.’s Superior Health Plan and UnitedHealthcare to serve approximately 525,000 high-acuity enrollees through the STAR+PLUS program. The news came as a disappointment to Molina, which had been banking on reprocuring its existing business in six regions instead of renewing just one service area and picking up a new zone.

Molina at its May investor day provided 2020 premium guidance that was above Wall Street consensus and a long-term earnings per-share (EPS) growth target in the range of 12% to 15%. Specifically, the company for 2020 forecast annual premiums of $17.0 billion to $17.3 billion, or 7% to 9% growth, before factoring in the return of the Affordable Care Act health insurer fee.
But that growth included the status quo in Texas, and executives during its latest quarterly earnings call acknowledged that the insurer will have to adjust its expectations for 2020 on account of an anticipated four-month revenue shortfall.

Molina currently serves 86,000 STAR+PLUS members in the Bexar, Dallas, El Paso, Harris, Hidalgo and Jefferson service areas. For the contract starting in 2020, it will retain only the Hidalgo area and add the North East region. The change, if finalized, would mean an annual revenue loss of approximately $930 million.

Jefferies securities analyst David Windley in an Oct. 30 research note wrote that this latest setback “is likely destabilizing” with a negative EPS impact of roughly 4% to 5%.

But Molina CEO Joseph Zubretsky during the earnings call emphasized that Texas is a short-term blip that can be overcome.

For the quarter ending Sept. 30, Molina reported EPS of $2.75 and an improved medical loss ratio of 86.3%. Premium revenue for the recent quarter was $4.1 billion.

Executive Order Encourages Rulemaking Around Medicare Medical Savings Accounts

October 24, 2019

In an executive order, President Trump laid out several directives for the HHS secretary aimed at protecting Medicare for seniors while strengthening the Medicare Advantage program and providing more plan choices. The Oct. 3 order directed the agency to promote choice through actions that “encourage innovative MA benefit structures and plan designs, including through changes in regulations and guidance that reduce barriers to obtaining Medicare Medical Savings Accounts and that promote innovations in supplemental benefits and telehealth services.”

By Lauren Flynn Kelly

In an executive order, President Trump laid out several directives for the HHS secretary aimed at protecting Medicare for seniors while strengthening the Medicare Advantage program and providing more plan choices. The Oct. 3 order directed the agency to promote choice through actions that “encourage innovative MA benefit structures and plan designs, including through changes in regulations and guidance that reduce barriers to obtaining Medicare Medical Savings Accounts and that promote innovations in supplemental benefits and telehealth services.”

Out of the 22.4 million enrollees currently in an MA plan, about 6,800 are enrolled in a Medicare MSA, which is an MA plan bundled with a tax-free savings account. The number of insurance companies offering them currently stands at four.

Although MSAs are technically MA products, they work more like Original Medicare in that they have no network and must be accepted by all Medicare-participating providers, which are paid the lesser of billed charges or 100% of the Medicare allowable rate.

Regarding the limited availability of such plans, MSA provider Lasso Healthcare Insurance Co.’s President and Founder Jim Handlan explains that an MSA may not be an ideal addition to an established carrier’s portfolio for several reasons. One is that the provider network is often an insurer’s primary asset, whereas an MSA has no network. Second, it may be difficult for insurers with multiple Medicare products to sell something that is so different from an HMO or a PPO, he suggests. But Handlan says that’s a “surmountable problem,” while the bigger challenge lies with reimbursement and risk.

MSA enrollees tend to be on the healthier side and have lower-than-average risk scores, generating less risk-adjusted revenue than what an HMO or PPO typically receives. “By definition you’re going to get better selective risk with an MSA, but that doesn’t mean you’re not going to have catastrophic burden,” Handlan adds.

More Than 80% of Medicare Advantage Enrollees Are in High Star Plans, CMS Reports

October 21, 2019

According to CMS’s recent release of the 2020 star quality ratings, many Medicare Advantage beneficiaries continue to enroll in plans with 4 or more stars. There was also a notable shift of membership into highly rated Prescription Drug Plans, some of which made meaningful improvements on an individual basis even though PDP performance on average was stagnant.

More than half of Medicare Advantage Prescription Drug plans (210 contracts) that will be offered in 2020 earned overall star ratings of 4 or higher, compared with 46% of MA-PDs (172 contracts) offered in 2019, CMS reported on Oct. 11. Weighted by enrollment, approximately 81% of MA-PD enrollees are currently in contracts that will have 4 or more stars in 2020, up from about 75% in 2019.

By Lauren Flynn Kelly

According to CMS’s recent release of the 2020 star quality ratings, many Medicare Advantage beneficiaries continue to enroll in plans with 4 or more stars. There was also a notable shift of membership into highly rated Prescription Drug Plans, some of which made meaningful improvements on an individual basis even though PDP performance on average was stagnant.

More than half of Medicare Advantage Prescription Drug plans (210 contracts) that will be offered in 2020 earned overall star ratings of 4 or higher, compared with 46% of MA-PDs (172 contracts) offered in 2019, CMS reported on Oct. 11. Weighted by enrollment, approximately 81% of MA-PD enrollees are currently in contracts that will have 4 or more stars in 2020, up from about 75% in 2019.

Given that there were no substantial changes to the star measures in terms of weights or calculations this year, MA-PDs’ performance on average is “good evidence that the industry did a great job teaching to the test,” observes Melissa Smith, senior vice president of strategy and stars with Gorman Health Group.

Meanwhile, the percentage of enrollees in a PDP rated 4 or higher increased from a meager 3.5% in 2019 to approximately 28% for 2020 based on current enrollment, and the average star rating for PDPs rose from 3.34 in 2019 to 3.5 in 2020.

Individually, PDPs showed some significant performance increases, which Smith says may be attributable to pharmacy benefit managers “having really aligned services and offerings around their customers’ Part D star measure needs.”

On a measure level, MA-PDs showed improvements on 13 out of 33 Part C measures. And on the Part D measures, MA-PDs improved on eight measures, including on the three medication adherence measures. PDPs, meanwhile, performed better on average on 11 out of 14 measures.