Radar on Medicare Advantage

As part of its late-term rulemaking and waiver-approving blitz, the Trump administration on Jan. 8 cleared the way for Tennessee to become the first state to accept a fixed amount of federal funds in exchange for a range of flexibilities in its Medicaid program. Although CMS’s approval of Tennessee’s demo is likely to be revisited by President Joe Biden, who was sworn in as the 46th U.S. president on Jan. 20, experts suggest if implemented it would have a downstream effect on the managed care organizations that serve 1.5 million TennCare beneficiaries.

The Tennessee demo was approved for 10 years, similar to other recently approved section 1115 waiver requests made by nonexpansion states such as Florida and Texas. Through an “aggregate cap” approach, Tennessee will receive federal Medicaid funds based on a fixed budget target that is determined by CMS and the state using “well-established, historical enrollment and Medicaid cost data,” according to a Jan. 8 press release. If it spends less than its target cap while meeting quality goals, Tennessee can earn up to 55% of annual savings to reinvest back into other state health programs, such as those that address the social determinants of health or behavioral health, explained CMS in its approval letter.

With less than a week to spare before the Jan. 20 inauguration of President Joe Biden, CMS on Jan. 15 followed up on its promise for an early release of the 2022 Medicare Advantage and Part D Rate Announcement, indicating that MA organizations will see an average reimbursement increase of more than 4%. At the same time, CMS issued a 272-page rule finalizing several Part D policies that will largely apply to the 2022 plan year. It also codifies some longstanding guidance, potentially making it harder for the Biden administration to quickly reverse course on certain policies, suggests one industry expert.

Although neither document contained anything “earth shattering,” the hefty pay increase is welcome news to plans as they face cost unknowns due to the ongoing COVID-19 pandemic, suggests Milliman Principal and Consulting Actuary Brad Piper.

✦ Humana Inc. in a new lawsuit alleges that Kentucky violated its five Medicaid contracts by allowing Molina Healthcare, Inc. to acquire the Medicaid membership of Passport Health Plan, reports Louisville Business First. After reviewing a second round of bids, Kentucky Gov. Andy Beshear (D) and the Cabinet for Health and Family Services last May named the same five winners in the Medicaid contract awards originally made under former Republican Gov. Matt Bevin (RMA 6/4/20, p. 4). Incumbent bidder Passport, which at the time was on the brink of insolvency, was not chosen. Molina, which was selected for a new contract, acquired Passport’s approximately 315,000 Medicaid members in Kentucky on Sept. 1, 2020. But in a lawsuit filed Dec. 23, 2020, Humana questions whether the takeover entitled Molina to Passport’s membership for a new contract period and asserts that Passport “had no claim to its membership at all beyond its contract” that expired on Dec. 31, according to the business journal. Anthem, Inc., which also was not selected as one of the initial five MCOs, contested the awards and in October won a temporary injunction directing the state to make it the sixth participant. Visit https://bit.ly/3rXRV0U.

✦ Independence Blue Cross and Strive Health this month launched a new initiative to bring specialized care delivery and coordination to Independence Medicare Advantage members living with chronic kidney disease (stages 4 and 5) and end stage renal disease. The program aims to slow disease progression and improve quality of life for these members by assisting with care management and reducing unnecessary hospital stays, according to the Philadelphia-based insurer. Eligible members will receive care from Strive Health’s local team that includes nurse practitioners and dietitians, and will receive direct and virtual clinical services, home dialysis education and training, advanced care planning, and help with social determinants of health. Contact Diana Quattrone at diana.quattrone@ibx.com.

As the novel coronavirus erupted across the U.S. and created a widespread economic downturn, it led to increased enrollment in state Medicaid programs and created devastating budget shortfalls for states. Yet Congress’ latest pandemic relief effort — the Consolidated Appropriations Act signed by President Donald Trump on Dec. 27 — does not include direct financial help for states, which are now rolling out newly authorized COVID-19 vaccines with limited resources and guidance from the federal government.

Earlier legislation, the Families First Coronavirus Response Act, afforded states a temporary increase of 6.2% in their federal match rate, yet multiple stakeholders including managed care plans have beseeched Congress to enact another temporary boost during the public health emergency.