Radar on Medicare Advantage

As select insurers in recent weeks posted first-quarter 2021 earnings, the positive impact of lower-than-normal utilization, rising COVID-19 vaccination rates and increased Medicaid, Medicare and/or exchange enrollment was slightly tempered by post-pandemic unknowns, especially for those with a heavy Medicaid presence. Some examples of lingering questions include: What will utilization look like when it returns to normal? When will states’ Medicaid eligibility redetermination efforts resume? How will financially strapped states adjust Medicaid rates?

For Centene Corp., those uncertainties dominated the company’s first-quarter earnings conference call and were reflected in a conservative earnings outlook for full-year 2021. Centene on April 27 posted adjusted earnings per share (EPS) of $1.63, up from 86 cents per share in the first quarter of 2020, and revenue of $30 billion, compared with $26 billion a year ago. That 15% increase was due in part to the acquisition of WellCare, which was completed on Jan. 23, 2020, and the ongoing suspension of states’ eligibility redeterminations, which Centene does not expect to resume until at least Aug. 1. Revenue growth, however, was partly offset by an overall drop in exchange membership, state rate and risk-sharing actions, and the repeal of the health insurer fee (HIF) for 2021, explained Executive Vice President and Chief Financial Officer Jeff Schwaneke during an April 27 call to discuss quarterly earnings.

✦ First-quarter 2021 revenues for UnitedHealth Group increased 9% from the year-ago quarter to $70.2 billion, driven in part by growth in its UnitedHealthcare business, which recorded quarterly revenue of $55.1 billion, up from $51.1 billion a year ago. The insurer on April 15 said that growth was partly due to strong performance during the 2021 Medicare Annual Election Period and reported overall Medicare Advantage enrollment of 6.3 million, up from 5.7 million as of Dec. 31, 2020. UnitedHealth raised its full-year 2021 adjusted earnings outlook to $18.10 to $18.60 per share. Visit https://bit.ly/3x0T4av.

✦ Nearly half of Medicare Advantage organizations in a recent survey did not include National Provider Identifiers (NPIs) for ordering providers on at least some MA encounter records, observes a new report from the HHS Office of Inspector General (OIG). CMS does not currently require MAOs to submit the ordering NPI on encounter records for any high-risk services (e.g., durable medical equipment, home health services), although it has previously said it would look into implementing such a requirement. In an online survey conducted by OIG, 81 out of 179 MAO respondents said they lacked ordering NPIs on more than 10% of their encounter records; 36 MAOs in that group stated that this limits their data analyses for program integrity, according to the report. OIG asked that CMS encourage MAOs to conduct oversight activities using ordering NPIs to safeguard the MA program from fraud and abuse; CMS neither concurred nor disagreed. Visit https://bit.ly/2RobaTw.

As Centene Corp. defends allegations made by the Ohio Attorney General regarding its pharmacy benefit practices, recent court filings indicate the company’s strong desire to clear the air in a public way. At the same time, Centene and its affiliates allege that the plaintiffs lack a basic understanding of Medicaid billing and pharmacy benefits.

“There are no secrets here; there is nothing that needs to be hidden or, in fact, that even justifies the filing of this lawsuit,” argue Centene, Buckeye Community Health Plan and Envolve Pharmacy Solutions in a March 2 filing in the case, Ohio Dept. of Medicaid, et al. v. Centene Corporation, et al. (No. 21-cv-1502). Although the case was originally filed under seal in the Franklin County Court of Common Pleas, Centene requested that it be unsealed for the sake of transparency, and it has since moved to the U.S. District Court for the Southern District of Ohio. “The Complaint in this case reflects a misunderstanding of the admittedly complex world of Medicaid accounting and billing” in which MCOs and PBMs like Buckeye and Envolve operate, and the allegations can be “easily explained away once the facts about Buckeye’s reporting and billings” to the Ohio Dept. of Medicaid (ODM) are understood, contend the defendants.

As holdout states consider whether to accept the Biden administration’s offer of enhanced federal funding to expand Medicaid, a recent evaluation report on Indiana’s conservative Medicaid expansion demonstration may hold some lessons learned for states that look to managed care plans to do some of the heavy lifting for such programs.

The American Rescue Plan, signed into law by President Joe Biden in March, extends a five percentage-point bump in the Medicaid Federal Medical Assistance Percentage (FMAP) to states that newly expand Medicaid eligibility for all adults with income up to 138% of the federal poverty level (RMA 3/18/21, p. 8). Fourteen states have yet to expand Medicaid under the Affordable Care Act, although lawmakers in Tennessee have reportedly expressed an openness to exploring it while advocates in other red states like Georgia continue to push hard for expansion. Voters in Missouri and Oklahoma last year approved Medicaid expansion via a ballot measure (RMA 8/6/20, p. 1), but Republican lawmakers in Missouri are now trying to keep expansion out of the next budget. Funding-related uncertainties also face Oklahoma, which recently submitted a request to amend its SoonerCare demonstration to begin enrolling expansion adults in the next fiscal year.

As CMS kicks off the first performance year of a new care delivery model — in which provider groups and other entities will share risk and receive capitated payments for serving fee-for-service Medicare beneficiaries — the initial round of participants indicates solid interest from Medicare Advantage organizations. Meanwhile, CMS has paused applications for future years of the so-called direct contracting model and is reevaluating a component that would have included Medicaid managed care organizations, raising questions as to what other value-based care models the CMS Innovation Center might have in the works or what modifications it could potentially make to this one.

After an implementation period last fall in which participants weren’t accountable for costs or quality, the first performance year of the Global and Professional Direct Contracting (GPDC) Model began on April 1 and involves 53 Direct Contracting Entities (DCEs) that will serve FFS beneficiaries in 38 states as well as the District of Columbia and Puerto Rico, the Innovation Center announced on April 8.