Health Plan Weekly

Humana Inc. and Blue Shield of California recently became the latest payers to ink deals with prior authorization (PA) and billing tech vendors, following a national trend. Experts tell AIS Health that such deals by insurers are key to managing utilization and spending; improving patients’ and providers’ experiences; and complying with federal mandates for interoperability, price transparency and cost estimation — and could be a strategic differentiator for proactive carriers.

Humana struck a deal on Oct. 13 with Cohere Health, Inc., a Boston-based utilization management software firm, to expand a pilot for musculoskeletal (MSK) prior authorization to all 50 states. The deal expands on a 12-state pilot program; in those states, 95% of Humana’s MSK claims are managed on Cohere’s platform, according to a press release. Meanwhile, Blue Shield of California reached an agreement with Google on Oct. 18 to “automat[e] and simplif[y] the billing and payment process for both providers and patients,” a deal that will eventually “scale the initiative over time to all providers, plan types, and categories of claims processed, as well as to health information exchanges,” per a press release.

Centene Corp. reported solid results for the third quarter of 2021, achieving Medicare and Medicaid membership increases and raising revenue guidance for the full year. To Jefferies analyst David Windley, the company’s results “reflect an improvement from a messy 2Q.”

COVID-19-related costs, a headwind called out in Centene’s second-quarter earnings call, peaked in August. Their decline continued in October. “Similar to peers, [Centene’s management] noted an offset dynamic between rising COVID costs and declining non-COVID utilization due to Delta,” Windley noted. Centene was able to manage through this challenge with steady Medicaid and Medicare performance.

✦ The Biden administration released a diminished version of its proposed spending package, and several health care policies coveted by progressive Democrats — including drug price reform — are among the items that got cut. Critically, Medicare drug price negotiation is not included in the so-called “Build Back Better framework.” However, House Speaker Nancy Pelosi (D-Calif.) reportedly was working on a last-ditch effort to include some drug-pricing provisions. The package would extend the expanded tax credits for Affordable Care Act exchange premiums, made available during the pandemic, to 2025, and Medicare would be expanded to include hearing benefits, but would not include vision or dental.

✦ The annual Kaiser Family Foundation (KFF) Medicaid Budget Survey found that, in a majority of the 47 surveyed states, 75% or more of Medicaid enrollees are members of a managed care organization (MCO) run by a private carrier. KFF produced the survey with help from Health Management Associates and the National Association of Medicaid Directors. The survey also found enrollment in Medicaid MCOs has grown since the start of the pandemic, as has Medicaid enrollment as a whole. On balance, states added more benefits to Medicaid than they removed in 2021: “most states used Medicaid emergency authorities to temporarily adopt new benefits, adjust existing benefits, and/or waive prior authorization requirements,” KFF said.

While two separate administrations have now specified that health insurers must cover, without cost sharing, all COVID-19 tests used for individual diagnostic purposes, one trade group says that health plans are still getting stuck with the bill for workplace-related testing — and the problem is only going to get worse.

In an Oct. 5 letter to CMS Administrator Chiquita Brooks-LaSure, the Alliance of Community Health Plans (ACHP) says its member organizations are already seeing testing costs for 2021 surpass levels for full-year 2020, and that for many members, “August was their highest month of tests paid for throughout the entire pandemic, with September data likely to continue the trend.”

In a series of recent moves, large retailers with pharmacy operations have struck deals with or acquired smaller companies with the aim of adding on-demand, retail clinics at national scale — and marketing them to health plans or employers. While storefront clinics aren’t new, especially in big box stores, health care insiders say the emphasis on selling to plans over consumers is novel, and that health plans may come to see such agreements as an essential benefit.

Experts tell AIS Health that the retail clinic deals build on several trends that have transformed health care delivery in recent years. The pandemic has changed patient and member expectations in countless ways: In particular, patients have come to expect on-demand access to virtual care. Also, patients now rely on urgent care for a growing number of encounters. That trend is related to declines in primary care affiliations, especially among younger people. And, perhaps most of all, new players — venture capital and large firms seeking new growth — are making inroads into the potentially lucrative health care space.