Radar on Medicare Advantage

Kentucky Medicaid Opens Bidding on RFP

June 20, 2019

The commonwealth of Kentucky said it will select up to five managed care organizations to serve more than 1.2 million Medicaid and CHIP enrollees starting on July 1, 2020. Potentially complicating that process, however, are two recent developments: (1) Evolent Health on May 29 unveiled plans to acquire a 70% interest in struggling incumbent Passport Health Plan, and (2) the RFP calls for interested bidders to support a controversial work requirement program even though it was struck down by a federal court in March.

By Lauren Flynn Kelly

The commonwealth of Kentucky said it will select up to five managed care organizations to serve more than 1.2 million Medicaid and CHIP enrollees starting on July 1, 2020. Potentially complicating that process, however, are two recent developments: (1) Evolent Health on May 29 unveiled plans to acquire a 70% interest in struggling incumbent Passport Health Plan, and (2) the RFP calls for interested bidders to support a controversial work requirement program even though it was struck down by a federal court in March.

Five MCOs currently serve the program. They are Aetna Inc., Anthem, Inc., CareSource, Passport Health Plan and WellCare Health Plans, Inc. With nearly 450,718 Medicaid and CHIP enrollees as of April 2019, WellCare has the biggest market share at 35%, according to AIS’s Directory of Health Plans.

“There are five slots with five incumbents and at least a couple of interlopers seeking to enter into the Kentucky market,” weighs in Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors, via email. “Evolent has some history helping to run plans in Florida, but this is really a double-down on Kentucky given their previous exposure through Passport (i.e., extensive master services agreement whereby Evolent was really doing most of the non-clinical work for Passport anyway.)”

The RFP represents more than $7 billion in revenue, according to industry estimates. Proposals are due July 5 and even though a federal judge vacated federal approval of Kentucky HEALTH, which would have imposed work requirements, the document asks interested bidders how they will promote the goals of that program, “including methods for outreaching to and engaging Enrollees to seek community engagement activities and to take a more active role in their health.”

Awards are likely to be announced in the third quarter of 2019.

Outstanding Part D Proposals Created Uncertainty in 2020 Bid Process

June 10, 2019

Medicare Advantage and Part D plan sponsors submitting bids for the 2020 plan year faced a considerable amount of uncertainty compared with recent years. On the Part D side, there was “not only one but two pending regulations — both of which would have had a significant impact on bids — and it was difficult for carriers to know 1) how they should bid and 2) how others might be bidding,” observes Shelly Brandel, a principal and consulting actuary in the Milwaukee office of Milliman.

By Lauren Flynn Kelly

Medicare Advantage and Part D plan sponsors submitting bids for the 2020 plan year faced a considerable amount of uncertainty compared with recent years. On the Part D side, there was “not only one but two pending regulations — both of which would have had a significant impact on bids — and it was difficult for carriers to know 1) how they should bid and 2) how others might be bidding,” observes Shelly Brandel, a principal and consulting actuary in the Milwaukee office of Milliman.

Perhaps creating the most uncertainty was when HHS would finalize a January proposed rule that would eliminate safe-harbor protections for rebates paid by manufacturers to plan sponsors under Medicare Part D and Medicaid. CMS in Part D bidding guidance posted May 20 confirmed what it had hinted at in an April memo on how bids should be prepared: the rule would not be finalized before the June 3 bid deadline.

If the so-called rebate rule were to be effective Jan. 1, 2020, as HHS proposed, “I think carriers would want to have sufficient time to incorporate those requirements into their contracting for 2020, which obviously would be difficult the later that rule is released,” suggests Brandel.

Meanwhile, CMS on May 16 issued a final rule on MA and Part D drug pricing in which it did not follow through on a proposal to pass through pharmacy pricing concessions in the form of direct and indirect remuneration (DIR) fees to patients through reduced cost sharing. That gave Part D sponsors needed clarity on how pharmacy DIR should be reported in bids, says Brandel.

Humana Explores Strategies for Loneliness Interventions

May 28, 2019

In recent years, Humana Inc. has piloted loneliness interventions as part of its “Bold Goal” initiative. And two population health executives from the company tell AIS Health that addressing senior loneliness isn’t as simple as offering a one-size-fits-all benefit and that it takes time to first study and understand the impact and prevalence of loneliness in your own membership before developing strategies that will work for different people.

By Lauren Flynn Kelly

In recent years, Humana Inc. has piloted loneliness interventions as part of its “Bold Goal” initiative. And two population health executives from the company tell AIS Health that addressing senior loneliness isn’t as simple as offering a one-size-fits-all benefit and that it takes time to first study and understand the impact and prevalence of loneliness in your own membership before developing strategies that will work for different people.

Conducting its own research in partnership with the Robert Wood Johnson Foundation, Humana found that social isolation and loneliness ranked as the No. 1 most impactful social determinant of health as it relates to Healthy Days, a metric developed by the U.S. Centers for Disease Control and Prevention that Humana uses to track and measure population health.

According to Caraline Coats, vice president for Bold Goal and population health strategy with Humana, the insurer built a predictive model to determine where members are most lonely or severely lonely, where to deploy pilots in the most impactful way, and how to segment and target interventions at different groups.

Andrew Renda, M.D., corporate strategy director with Humana’s population health segment, says the insurer is encouraged by the early results of those interventions and as it evaluates how to expand them further or create others, has approached it in two ways:

(1) Looking for stand-alone interventions that it can pilot and scale up.

(2) Looking for ways to integrate loneliness strategies within its current clinical operating model.

Humana has also created public-facing tools to help educate patients and make it easier for physicians to implement loneliness screenings in their practices.

Increasing Focus on Dual Integration May be Key to Possible Humana-Centene Combination

May 23, 2019

As Centene Corp. and WellCare Health Plans, Inc. prepare to create a “premier” government-sponsored health insurance entity, news emerged earlier this month that certain Centene shareholders may be seeking to block the deal in favor of selling Centene to a large company such as Humana Inc. Although Humana declined to comment on reports of a possible friendly takeover, industry experts say acquiring a major Medicaid provider would make sense for the insurer given increasing integration of Medicare and Medicaid.

By Lauren Flynn Kelly

As Centene Corp. and WellCare Health Plans, Inc. prepare to create a “premier” government-sponsored health insurance entity, news emerged earlier this month that certain Centene shareholders may be seeking to block the deal in favor of selling Centene to a large company such as Humana Inc. Although Humana declined to comment on reports of a possible friendly takeover, industry experts say acquiring a major Medicaid provider would make sense for the insurer given increasing integration of Medicare and Medicaid.

Centene in late March said it planned to buy WellCare for approximately $17.3 billion. Reuters on May 6 reported that hedge funds Corvex Management LP and Sachem Head Capital Management LP are exploring challenging that acquisition; a report from StreetInsider followed that indicated Humana’s interest in pursuing a deal if Centene walked away from WellCare. But Centene spokesperson Marcela Hawn affirmed the company’s commitment to the transaction in an email to AIS Health.

The reported desire of Centene shareholders to have an “arranged marriage” with Humana is not necessarily surprising, given that Centene is the biggest player in Medicaid with a desire to grow its MA business, remarks Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors. Such a deal would have less market overlap than Centene-WellCare and therefore involve fewer divestitures and an easier regulatory approval process, he suggests.

“This is all about duals, all about the interface of Medicare and Medicaid and the potential growth of MLTSS [managed long-term services and supports],” he says of a possible Humana-Centene combination.

CMS Extends Options to States to Test Innovative Dual-Eligible Care Models

May 8, 2019

Although independent evaluations of ongoing demonstrations to integrate care for dual-eligible Medicare-Medicaid beneficiaries are still underway, an April 24 letter from CMS Administrator Seema Verma signaled the agency’s commitment to proving the value of the models as well as testing alternatives.

By Lauren Flynn Kelly

Although independent evaluations of ongoing demonstrations to integrate care for dual-eligible Medicare-Medicaid beneficiaries are still underway, an April 24 letter from CMS Administrator Seema Verma signaled the agency’s commitment to proving the value of the models as well as testing alternatives.

In the letter to state Medicaid directors, CMS extended three new opportunities to “test state-driven approaches” for integrating duals’ care:

(1) For interested states with capitated Financial Alignment Initiative (FAI) model demos, CMS said it is “open to partnering on revisions.”

(2) For interested states without capitated demos, CMS said it welcomes interest in testing the model through new demos in additional states.

(3) CMS said it is open to partnering with states on testing new state-developed models to better serve dual eligibles and invited states to respond with ideas, concept papers and/or proposals.

Kevin Malone, a senior counsel in the Health Care and Life Sciences practice in the Washington, D.C., office of Epstein Becker & Green, P.C. and a former duals officer at CMS, predicts that, for states with existing demos, they will not only revisit their memoranda of understanding that outline the terms of their agreements with CMS, but will use it as a chance to amend their three-way contracts with CMS and plans. This presents a unique opportunity for the plans to suggest changes around certain programmatic requirements or provider training that may reduce some of their burden and streamline some of the technical details of their arrangements.