Radar on Medicare Advantage

Medicare Advantage enrollment grew just 1% during the 2021 Open Enrollment Period (OEP) that ran from January to March, compared with growth of 7% during the preceding Annual Election Period (AEP), according to AIS’s Directory of Health Plans (DHP). While the large MA insurers continued to nab the bulk of OEP signups (see infographic, p. 7), an AIS Health analysis finds that of the top 25 OEP performers, regional players ranging from established not-for-profit organizations to rising startup insurers followed their AEP successes with OEP gains that were impressive relative to their size.

After the Medicare AEP that typically runs from Oct. 15 through Dec. 7, the Medicare OEP allows beneficiaries who selected an MA plan to make a onetime coverage change. This year was the third OEP since it was reinstated by the Trump administration, and seniors’ awareness of the opportunity has steadily grown, according to Deft Research. Compared with 67% two years ago, 76% of the MA population was aware of the January through March election period this year, while switch rates during the OEP have stayed between 4% and 5% over the last three years, Deft’s 2021 Open Enrollment Period Study observed.

✦ Reporting earnings for the first time since going public in March, Alignment Healthcare, Inc. posted a net loss of $56.9 million for the first quarter of 2021, compared with a net loss of $10 million in the year-ago quarter. It also recorded a medical loss ratio (MLR) of 91.5% and expects to end the year in the “high 80s,” Founder and CEO John Kao stated during a May 17 earnings conference call. In addition to 32% year-over-year growth in its Medicare Advantage membership, Kao disclosed that Alignment launched two Direct Contracting Entities (DCEs) under the name Axceleran that are serving about 5,800 fee-for-service Medicare lives in California and North Carolina. Meanwhile, Clover Health during its own May 17 earnings call disclosed that it was serving at least half as many Medicare lives as a DCE than it originally projected (RMA 4/15/21, p. 1). In addition to serving more than 66,300 MA members as of March 31, Clover CEO Vivek Garipalli told analysts that the company on April 1 added another 65,000 individuals “through claims alignment alone” as a DCE. In a slide deck presented to investors prior to going public in January, the insurer said it had 200,000 DCE members “already under contract for 2021.” Garipalli during the earnings call said Clover believes it has “access to up to 200,000 Medicare beneficiaries through our contracts with participating providers” and expects to end the year with between 70,000 and 100,000 total aligned beneficiaries. For the quarter ending March 31, Clover reported a consolidated MLR of 107.6%, compared with 89.4% during the first quarter of 2020, largely due to COVID-19 costs, and posted a net loss of $48.4 million, up from a loss of $28.2 million for the year-ago quarter. Read more at https://bit.ly/3wyKZcn and https://bit.ly/3u1H9q8.

✦ After failing to secure funding to implement voter-approved Medicaid expansion, the Missouri Dept. of Social Services (DSS) on May 13 submitted a letter to CMS formally withdrawing its State Plan Amendments for MO HealthNet expansion. A Missouri appellate court in June 2020 ruled that the ballot initiative, which was approved in August 2020, did not create a revenue source or direct the General Assembly to appropriate funds, thereby giving the GA discretionary authority to fund or not fund expansion, noted a press release from Gov. Mike Parson (R). The GA on May 7 finalized the state’s fiscal year 2022 budget without funding for MO HealthNet expansion or appropriation authority to DSS or the governor. The DSS had estimated that the expansion would cost the state approximately $1.9 billion, which was included in the governor’s recommended budget. Read more at https://bit.ly/33N8VfJ.

Although growing Medicare Advantage enrollment helped fuel better-than-expected first-quarter 2021 earnings for some publicly traded insurers, they appear to be approaching the full year with caution, as earnings in 2021 could be dampened by a couple of factors. These include the unfavorable impact of the health insurer fee (HIF) repeal for 2021 and lower Medicare risk-adjusted revenue — a recurring and expected theme during insurers’ recent quarterly earnings calls.

Risk scores that determine MA organizations’ risk adjustment payments for the current year are based on diagnoses gathered during the previous year to determine the relative health of an insurer’s MA enrollees and predict costs. But because the pandemic led many seniors to delay or forgo care, insurers’ ability to collect diagnoses last year was limited, despite the temporary authorization to use telehealth to gather diagnoses for MA risk adjustment.

A prescriber fax program alerting physicians when their diabetic patients have not had a statin claim demonstrated a statistically significant boost in statin use and could be a valuable addition to Medicare Advantage Prescription Drug (MA-PD) plans’ efforts to improve both medication adherence and star ratings, according to a new study from Prime Therapeutics LLC. That program was shown to be especially effective when combined with pharmacist outreach, researchers observed.

Cholesterol-lowering statin drugs have been shown to prevent cardiovascular disease and reduce health care costs. Statins began to play a bigger role in the CMS star ratings in 2019, when the Pharmacy Quality Alliance-developed Statin Use in Persons with Diabetes (SUPD) measure was added to the Part D calculations and when the NCQA-developed Statin Therapy for Patients with Cardiovascular Disease measure was added to the Part C ratings. Both had a weighting value of 1, but with the 2021 ratings that came out last fall, SUPD became one of four triple-weighted Part D measures, which include Medication Adherence for Cholesterol (Statins).

Medicare Advantage plans are at a critical juncture in their quest for quality bonus payments, as this month marks the end of a three-month data collection cycle that will have a meaningful impact on the 2023 star ratings, when member experience measures take on a larger weight in star ratings calculations. While it’s too late to make a difference in how members responded to the recent Consumer Assessment of Healthcare Providers and Systems (CAHPS) that reflects the patient experience in late 2020 and early 2021, MA organizations should be focused on innovations that can prevent and resolve issues members face throughout the year to foster more positive feedback for future surveys, advises one longtime stars expert.

As numerous measures based on CAHPS and CMS administrative data move from a weighting value of 2 to 4 starting with measurement year 2021, the increased value of those measures will make up 32% of the overall 2023 star rating on a weighted basis. “Just two years ago it was only worth half that much, so we literally doubled the relative value of CAHPS and the measured member experience through these surveys in the math path toward 4 stars,” says Melissa Smith, who is executive vice president of consulting and professional services at HealthMine, Inc., a Dallas- based member engagement firm. “We’ve always known member experience was important and we’ve always agreed we need to focus effort and attention in that area, but attaching such a heavy contribution to the overall star ratings to the surveys is the forcing function that most plans are seeing as the impetus for new actions.”