Radar on Medicare Advantage

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.

With the aim of improving care for dual eligible individuals while promoting value-based care in fee-for-service Medicare, CMS last month introduced a new option for certain Medicaid managed care organizations to become Direct Contracting Entities (DCEs) that will coordinate care and share risk for duals who access their Medicare benefits through FFS. But some MCOs have questions about the design of the model, and one organization warns that the arrangement could have a detrimental impact on accountable care organization (ACOs) that have made significant investments in value-based care.

Model Promotes Value-Based Care

Starting Jan. 1, 2022, CMS will test whether holding these entities accountable for health outcomes and Medicare FFS costs for their full-benefit dually eligible Medicaid MCO enrollees will lead to innovative strategies for improving care for this high-risk population. Operated by the CMS Center for Medicare & Medicaid Innovation (CMMI), the overall aim of the Direct Contracting Model is to “test financial risk-sharing arrangements to reduce Medicare expenditures while preserving or enhancing the quality of care furnished to beneficiaries,” according to a Dec. 17 press release from the agency. And a key tenet of that program is inviting a variety of different organizations to participate in value-based care arrangements in Medicare FFS.

With a new administration that will be focused on the COVID-19 pandemic and improving health care coverage, industry experts do not anticipate major changes to the Medicare Advantage program, although many agree the pandemic will leave a lasting impact on the industry. And as President-elect Joe Biden looks to expand coverage, MA will likely be held up as a “successful example of a public-private mechanism to take Medicare eligibility to age 60,” predicts Wunderman Thompson Health’s Lindsay Resnick.

For AIS Health’s annual roundup of predictions about the year ahead for MA organizations, numerous experts weigh in on how doing business in 2021 might look different than in previous years.

Following the recent acquisition of PANTHERx Rare, LLC and the first- quarter 2020 addition of WellCare Health Plans, Inc., Centene Corp. kicked off the new year with an agreement to purchase Magellan Health, Inc. for $2.2 billion. Magellan also just completed the previously disclosed sale of its managed care division to Molina Healthcare, Inc. The newer transaction will allow Centene to expand its behavioral health platform, increase its specialty health and pharmacy capabilities and enhance its ability to address members’ whole health.

During a Jan. 4 conference call to discuss the planned transaction, Centene Chairman, President and CEO Michael Neidorff said the combination is in line with the company’s diversification strategy and boosts Centene’s capacity to “provide comprehensive care to the most complex and vulnerable populations,” especially as it relates to behavioral health care.