Radar on Medicare Advantage

Leavitt Partners Presents Multiyear MA Framework

May 6, 2019

In the age of value-based contracts and social determinants of health, why shouldn’t plans have an opportunity to serve Medicare Advantage (MA) beneficiaries for longer periods of time and maximize the potential to improve health outcomes and reduce costs?

That’s the question at the center of “Multi-Year Medicare Advantage Plans: A Framework for Action,” a new white paper by consulting firm Leavitt Partners.

By Lauren Flynn Kelly

In the age of value-based contracts and social determinants of health, why shouldn’t plans have an opportunity to serve Medicare Advantage (MA) beneficiaries for longer periods of time and maximize the potential to improve health outcomes and reduce costs?

That’s the question at the center of “Multi-Year Medicare Advantage Plans: A Framework for Action,” a new white paper by consulting firm Leavitt Partners.

Under the MyMAP demonstration project proposed in the paper, MA insurers would be able to offer a multiyear product to beneficiaries with certain high-cost chronic disease needs or high-cost acute medical episodes and test the hypothesis that making “upfront investments” would be recovered over a multiyear period because they produced better care management and better outcomes for beneficiaries.

The authors recommended a contract period of at least three years between health plan and member. To incentivize members to enroll in a multiyear plan, the MyMAP framework suggested that plans could focus on attractive benefits and cost-sharing. Moreover, it might be possible for insurers to guarantee beneficiaries $0 premiums across multiple years of the model, they added.

Moving forward, “the idea will be acted on with specifics,” says former Utah Governor and HHS Secretary Mike Leavitt. He adds that the firm is working with two organizations that are not yet prepared to go public and that focus on certain conditions that would fit well within the framework.

“Multiyear contracting deserves further thought — perhaps as a demonstration,” says Michael Adelberg, a principal with Faegre Baker Daniels Consulting and a former top CMS MA official. “If beneficiaries are locked in, that begs the question of whether plan benefits, networks, service areas also will be locked in.”

Final Flexibility Rule Expands Telehealth Benefits Under Medicare Advantage

April 25, 2019

With the April 5 release of the Calendar Year 2020 Medicare Advantage and Part D Flexibility Final Rule that implements many provisions of the Bipartisan Budget Act of 2018, MA organizations may offer telehealth services on a scale that’s never been allowed before.

Under the final rule, MA plans starting in 2020 will be able to offer as part of the basic benefit package “additional telehealth benefits” beyond what is available to Medicare fee-for-service beneficiaries and to include more telehealth services in their basic benefit bid paid by the capitation rate.

By Lauren Flynn Kelly

With the April 5 release of the Calendar Year 2020 Medicare Advantage and Part D Flexibility Final Rule that implements many provisions of the Bipartisan Budget Act of 2018, MA organizations may offer telehealth services on a scale that’s never been allowed before.

Under the final rule, MA plans starting in 2020 will be able to offer as part of the basic benefit package “additional telehealth benefits” beyond what is available to Medicare fee-for-service beneficiaries and to include more telehealth services in their basic benefit bid paid by the capitation rate.

CMS also finalized a requirement that if an MA plan covers a Part B service as an additional telehealth benefit, it must also provide access to such a service through an in-person visit and not only through “electronic exchange.”

“I think this is going to be a positive impact from a health plan perspective and I think this is something that health plans wanted CMS to implement for a while,” remarks Brian Collender, specialist leader in the health actuarial practice of Deloitte Consulting. For those larger MA plans that already have telehealth relationships set up with national vendors, expanding telehealth is a low cost/low risk opportunity, he says. Smaller health plans, meanwhile, may not have the capabilities to offer telehealth as a benefit right away, but have options when it comes to vendors that specialize in telehealth.

Moreover, “by reclassifying telehealth services as Medicare-covered under Parts A and B, MA plans can offer telehealth without using up precious rebate dollars that fund supplemental benefits,” says Michael Adelberg, a principal with Faegre Baker Daniels Consulting and a former top CMS MA official.

Clover Health’s Challenges Offer Takeaways for Venture-Backed MA Firms

April 10, 2019

After breaking into the Medicare Advantage market five years ago with a focus on technology, San Francisco-based startup Clover Health is in the process of laying off 140 employees with the intent of acquiring more people with health care knowledge.

Founded in 2014 by an investment banker and a software engineer, Clover has reportedly raised close to $1 billion in financing. Clover began offering MA plans in 2015, and now serves nearly 40,000 members across seven states. At the time of Clover’s launch, its mission seemed simple: own the technology, control the outcomes. But the insurer in 2016 was fined by CMS for marketing violations and later reportedly ticked off customers when data-sharing negotiations resulted in members receiving unexpected medical bills for blood work.

By Lauren Flynn Kelly

After breaking into the Medicare Advantage market five years ago with a focus on technology, San Francisco-based startup Clover Health is in the process of laying off 140 employees with the intent of acquiring more people with health care knowledge.

Founded in 2014 by an investment banker and a software engineer, Clover has reportedly raised close to $1 billion in financing. Clover began offering MA plans in 2015, and now serves nearly 40,000 members across seven states. At the time of Clover’s launch, its mission seemed simple: own the technology, control the outcomes. But the insurer in 2016 was fined by CMS for marketing violations and later reportedly ticked off customers when data-sharing negotiations resulted in members receiving unexpected medical bills for blood work.

While there is a need for “consumer-grade technology and service,” plans should not “underestimate the underlying complexity in health care or the underlying importance of getting the technicalities right. You can’t gloss over those, especially in MA,” says Deb Gordon, senior fellow at the Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government.

Even with the right technology, “the realities are that it’s very hard and very expensive” once a plan starts performing the actual functions of health care and navigating the web of federal guidelines, state insurance regulations and consumer expectations, she adds.

Moreover, there’s a danger to acting “bigger than you are” when negotiating with other service providers, which may have been Clover’s downfall when attempting to get data from LabCorp and Quest Diagnostics, according to a CNBC report from 2018.

Ohio Gets Medicaid Work Requirements, But Lawsuits Create Uncertainty

March 28, 2019

Amidst uncertainty around the fate of Medicaid work requirements as they are tested in two separate cases this month, Ohio became the ninth state to gain section 1115 demonstration authority to tie work-related provisions to Medicaid coverage.

As of Jan. 1, 2021, certain individuals in Ohio’s adult Medicaid expansion population must participate in community engagement activities for at least 20 hours per week (80 hours on average per month).

By Lauren Flynn Kelly

Amidst uncertainty around the fate of Medicaid work requirements as they are tested in two separate cases this month, Ohio became the ninth state to gain section 1115 demonstration authority to tie work-related provisions to Medicaid coverage.

As of Jan. 1, 2021, certain individuals in Ohio’s adult Medicaid expansion population must participate in community engagement activities for at least 20 hours per week (80 hours on average per month). Ohio estimated that approximately 36,000 out of the 710,000 beneficiaries expected to be in the adult Medicaid expansion group would not be considered exempt and would need to demonstrate compliance with the work requirements.

CareSource, the largest Medicaid MCO in Ohio with 45% market share, “looks forward to partnering with the state to support work requirements and the community engagement waiver,” according to a statement from Steve Ringel, Ohio market president for the insurer.

On March 14, U.S. District Judge James Boasberg heard two separate cases challenging Medicaid work requirements in Arkansas and Kentucky and expects to rule by the end of the month.

“What is uncertain is whether Judge Boasberg will soon rule again against the work requirements and impose a nationwide injunction that could arrest other states from pursuing such initiatives,” observes Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors.

For the MCOs that serve as state partners, “…adding community engagement requirements to a state Medicaid program creates additional administrative burdens for plans that might not be recouped through capitation,” warns Shekhdar. “If the courts eventually strike down these programs, these burdens become ‘sunk costs’ to the plans.”

With MA Switch Rates on the Rise, Plans Might Rethink 2020 Benefits

March 25, 2019

With switching rates during the 2019 Medicare Annual Election Period (AEP) on the rise after years of decline, experts say it’s hard to predict what will happen during the newly reinstated Medicare Open Enrollment Period that ends on March 31. But as insurers prepare their bids for 2020, emerging market research on consumer behavior during these periods may provide valuable insight into the types of benefits and practices that attract — and keep — enrollees.

By Lauren Flynn Kelly

With switching rates during the 2019 Medicare Annual Election Period (AEP) on the rise after years of decline, experts say it’s hard to predict what will happen during the newly reinstated Medicare Open Enrollment Period that ends on March 31. But as insurers prepare their bids for 2020, emerging market research on consumer behavior during these periods may provide valuable insight into the types of benefits and practices that attract — and keep — enrollees.

According to the 2019 Medicare Shopping and Switching Study recently released by Deft Research, switching among MA Prescription Drug plan members during the most recent AEP climbed to 14% after three years of declining switching rates.

“Some of the reasons we saw consumers actively engaged and [seeking] to switch were not the same reasons that we saw them make changes in the past,” says Tim Brousseau, vice president of client services with the health insurance market research firm. “In the past these consumers were raked over the coals in terms of huge benefit changes — any time a member doesn’t have access to their doctor or to their drugs, they can’t stick with their current plan.”

But this year Deft found that consumers were “performing due diligence” themselves; 46% of survey respondents said they were satisfied with their 2018 plan but found a better option for 2019.

Deft also observed that half as many people than in recent years cited plan-specific issues that caused them to shop and switch. That’s led to what Brousseau refers to as the “de-commoditization” of MA, where plans are starting to add more attractive supplemental benefits because of new flexibility offered by CMS. These include things like transportation, meal delivery and personal home help aids.

Brousseau tells AIS Health that over-the-counter and other allowances were the most widely regarded. Survey respondents also identified hearing aids and fitness benefits as being of high interest.