Radar on Medicare Advantage

Although many publicly traded insurers touted enrollment growth from the 2021 Medicare Annual Election Period (AEP) when reporting fourth-quarter and full-year 2020 earnings, some expressed the concern that care deferrals seen last year may have a negative impact on Medicare Advantage risk adjustment payments this year.

Humana Inc. on Feb. 3 posted a loss of $2.30 per share on an adjusted basis, which was driven by three main factors: (1) higher treatment and testing costs related to COVID-19 that were more than offset by a decline in non-COVID utilization, (2) ongoing pandemic relief efforts, and (3) increased expenses associated with the AEP. Humana ended the year with approximately 4.6 million total MA members, reflecting year-over-year growth of 11%, driving consolidated revenue growth of 90% in 2020. The company expects to gain between 425,000 and 475,000 individual MA members this year, for growth of 11% to 12%.

Recent data from the 2021 Medicare Annual Election Period (AEP) reflects the anticipated increase in Medicare Advantage enrollment, which is up 9.8% from a year ago and indicates penetration exceeding 43%, according to industry estimates. But multiple factors are making it harder for MA organizations to attract new members, and while plans are enhancing their benefit offerings to stay competitive, they must do so in a way that aligns with their star ratings and other financial goals.

For our occasional series of interviews that examine pertinent issues through the words of the industry’s leading executives, AIS Health spoke with GHG Vice President John Selby, whose long career in the insurance industry includes 10 years in various roles at Horizon Blue Cross Blue Shield of New Jersey. In his new role at the Convey company formerly known as Gorman Health Group, he is responsible for developing and executing growth strategies for GHG and its clients.

In what the plaintiff’s attorneys are calling the first False Claims Act settlement arising from a Medicare Advantage organization accepting a kickback from a pharmaceutical company, Humana Inc., Roche Diagnostics Corp. and related entities this month agreed to pay $12.5 million to resolve allegations that they engaged in a debt forgiveness scheme to keep Roche’s products on Humana’s formularies. Although the settlement amount is relatively small and the government did not intervene in the relator’s case, experts say the suit has some important takeaways for MA organizations.

The case (U.S. ex rel. Crystal Derrick v. Hoffman-La Roche Ltd. et al. 1:14-cv-04601), originally filed in 2014 in the Illinois Northern District Court, was brought by a former Roche employee who claimed she was privy to internal discussions that resulted in Roche forgiving millions of dollars owed by Humana in exchange for continued access to its formularies. These included formularies for Humana’s MA plans and the Right Source mail-order formulary, which covered diabetes products such as glucose strips, meters and lancets made by Roche.

In the ever-evolving world of star ratings, Medicare Advantage plans are at a unique crossroads where they must balance a bevy of changes to the measures used to determine their overall rating with managing members’ health and needs during the ongoing COVID-19 pandemic. And with CMS placing more emphasis on member experience in the star ratings, plans are encouraged to apply lessons learned from the pandemic about how to communicate and maintain good relationships with members, several experts advised during the Fourth Annual Medicare Advantage Leadership Innovations conference, which was held virtually on Jan. 26-28 by Strategic Solutions Network.

According to Melissa Newton Smith, executive vice president of consulting and professional services with HealthMine, Inc., more than half of a plan’s overall star rating is subject to changes that have just taken effect or are taking effect in 2021 or 2022, thereby impacting the 2023 and 2024 star ratings. Those include “additions, removals, weighting changes or significant specification changes to 23 of our 44 star measures,” Smith told attendees. “That should be causing us to innovate with changes to our processes, to our technology and tools, to our budgets no doubt, and possibly to the type of work our people are doing at our core in order to keep up with these program changes.”