RADAR on Medicare Advantage

  • KHN Report Underscores Looming Issue of Extrapolation, FFS Errors in RADV Audits

    After settling a three-year Freedom of Information Act (FOIA) lawsuit, Kaiser Health News (KHN) last month finally made public the results of multiple CMS audits of Medicare Advantage plans — which showed the federal government intends to collect an estimated $12 million for overpayments identified over a three-year period. KHN said it filed the lawsuit against CMS in September 2019, after the agency failed to respond to a FOIA request for the audits pertaining to care delivered between 2011 and 2013.

    Those years represent the latest Risk Adjustment Data Validation (RADV) audits to be completed, referring to contract-level audits conducted by CMS to verify the accuracy of payments made to MA organizations and recover improper payments. Industry experts say the results obtained by KHN may not be representative of insurer practices today, and that they highlight the overarching question of whether the audit methodology that CMS plans to finalize aligns with the current payment and bidding system that’s in place for MA.

  • Memory Fitness Offerings Jump 38% as MA Insurers Promote Mind-Body Wellness

    Nearly three years ago, when insurers were in the early days of experimenting with new offerings under CMS’s reinterpretation of “primarily health related” supplemental benefits, very few plans were offering benefits specifically geared toward “memory fitness.” Now, a new Faegre Drinker analysis shows that these benefit offerings will be featured in more than 1,300 plan benefit packages (PBPs) next year —an increase of 38% over 2022.

    Henry Mahncke, Ph.D., CEO of Posit Science Corp. — the maker of BrainHQ online brain training exercises — says this trajectory reflects a growing recognition by insurers that the mind and body are connected and a growing interest in whole person care. And Mahncke says it’s notable that one in four plans in the Faegre Drinker analysis that offer a physical fitness program now also offer a memory fitness program, making it the fastest-growing category of fitness benefits. “It’s exciting for us to see that more and more plans are realizing, ‘If I’m offering a physical fitness benefit, I need to be offering a memory fitness benefit as well. My customers want and expect that a supplemental benefits package is going to take care of their brain and body,’” he tells AIS Health, a division of MMIT.

  • OIG Audits Add to Debate Over Extrapolation in Recovering MA Overpayments

    As the Medicare Advantage industry draws attention for millions of net overpayments identified in a recent Kaiser Health News report on audits conducted by CMS, two new audit reports from the HHS Office of Inspector General seek to recover estimated MA overpayments for inaccurate diagnosis codes. Separate from the contract-level Risk Adjustment Data Validation (RADV) audits used by CMS to verify the accuracy of MA organizations’ risk adjusted payments, the OIG audits may further support the notion that MA plans are overpaid. They also exemplify insurers’ fierce opposition to the use of sampling to approximate a plan’s true payment error rate.

    In two reports released last month by the OIG’s Office of Audit Services, auditors found that most of the selected high-risk diagnosis codes submitted by the selected MA sponsors did not comply with federal requirements. The reports determined that, based a sample of enrollee records, the government overpaid Blue Cross & Blue Shield of Rhode Island (BCBSRI) and California Physicians’ Service, Inc. (CPS) by roughly $4.9 million and $2 million, respectively, and recommended that they return the estimated overpayments. Additionally, OIG advised that the insurers should identify similar instances of noncompliance and submit associated overpayments, and that they should examine and improve their respective compliance procedures.

  • States Seek Integrated Services and Health Equity in Pending Medicaid RFPs

    The latest round of current and upcoming state requests for proposals (RFPs) is continuing a sea change toward integrated care and greater health equity in managed Medicaid programs. Several states are redesigning their programs altogether, with a focus on integrating physical and behavioral health, as well as addressing social determinants of health. New Mexico’s new Turquoise Care program will combine physical health, behavioral health and long-term care services, while Oklahoma will incorporate managed care into its Medicaid program for the first time in 2023. Notably, the state is soliciting bids from both MCOs and provider-led entities to integrate physical health, behavioral health and prescription drug services. Moreover, Georgia and Virginia both hinted at upcoming program changes as they prepare to release RFPs within the next year, with Georgia recently asking stakeholders how it could improve health care in underserved communities. Texas, meanwhile, in the second quarter of 2023 will unveil...
  • News Briefs: For 2023, UnitedHealth Group Expects Its Overall Medicare Advantage Enrollment to Jump 9%

    UnitedHealth Group at its annual Investor Day projected strong Medicare Advantage membership growth of 9% next year, overall revenues in the range of $357 billion to $360 billion and earnings per share between $24.40 and $24.90. Along with financial projections shared on Nov. 29, the company said it expects to serve a total of 7.1 million MA members by the end of 2022, and estimated that figure will grow by another 600,000 to 650,000 next year. That year-over-year growth of 9% reflects a “blended projection across Individual MA and Group MA books,” wrote Barclays Steve Valiquette in a research note. “As such, we expect that Individual MA growth is likely higher than the blended 9% (likely in the low-double-digit range) which remains slightly above market growth.” He also noted that UnitedHealth’s projected medical loss ratio of 82.6% (give or take 50 basis points) was “slightly more conservative than expected” but not surprising given that the company said its MLR guidance reflects an expectation of a slightly elevated flu season in early 2023.
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