Radar on Medicare Advantage

As visits to hospitals and outpatient clinics have become sources of anxiety for patients worried about exposure to the novel coronavirus, plans and providers alike have begun to make major investments in home care. One such plan is Humana Inc., which announced a $100 million investment in home primary care startup Heal Inc. last month. Heal CEO Nick Desai tells AIS Health his company will aid Humana’s long-term strategy to reduce the cost of care and improve quality.

Heal’s model places patients with a consistent primary care physician who makes house calls. The doctors are dispatched and routed using an app and driven to visits with a medical assistant, and they input notes and update care plans into an electronic health record between visits. According to Desai, the company’s physicians typically see 10 or fewer patients per day and spend 30 minutes to an hour with each.

As Medicare Advantage organizations prepare to promote their 2021 offerings this fall with no new guidance from CMS on marketing during a pandemic, plans and their broker partners are proceeding as though the safest approach is through digital and telephonic channels. One area that may see more growth than expected is the online broker space, although the investment plans make in that channel will depend largely on their size, competition, location, and how well their own customer service and internal sales departments can back up their increased online presence, experts tell AIS Health.

Unlike the federal government’s Medicare Plan Finder, a website sponsored by an e-broker (also referred to as an electronic marketing organization, or EMO) by no means represents an exhaustive list of enrollment options for a consumer. Rather, the broker contracts with a handful of insurers in a specific market and trains agents on the finer points of those carriers’ products, and the agents earn a per-enrollee commission. Moreover, how consumers end up on an e-broker’s site varies. For example, they may navigate to it after seeing a television commercial for what appears to be a generic Medicare help line or receiving a mailer directing them to the website, or they may land there after doing a basic Google search for Medicare options in their area.

✦ The Dept. of Justice (DOJ) on Aug. 4 filed a complaint-in-intervention in the U.S. District Court for the Southern District of New York, alleging that Cigna Corp. and its affiliates submitted false and fraudulent risk adjustment claims to CMS resulting in overpayments of more than $1.4 billion. The suit, U.S. ex rel. Robert A. Cutler v. Cigna Corp (7:17-cv-07515-KMK), details an enhanced wellness visit program, known as the “360 Program,” that Cigna-HealthSpring allegedly used to identify health conditions that could raise the risk scores of Medicare Advantage plan members and therefore increase plan payments. The complaint was originally brought by an officer of Texas Health Management, a service provider of Cigna-HealthSpring between 2012 and 2017. Cigna in its latest 10Q filing with the U.S. Securities and Exchange Commission pointed out that the DOJ is conducting an “industry-wide investigation” of MAOs’ risk adjustment practices and said it “will continue to cooperate with the DOJ’s investigation.” The DOJ earlier this year filed a similar suit against Anthem, Inc. Visit https://bit.ly/31ldaNM.

✦ After significantly expanding its presence in Northern California this year, Medicare Advantage insurer Alignment Healthcare plans to enter several new markets across California, Nevada and North Carolina next year. Pending regulatory approval, the product expansion would enable Alignment to reach more than 5.9 million Medicare- eligible beneficiaries, according to an Aug. 6 press release. Also pending approval, the insurer plans to introduce several new products in October, “most notably a signature virtual health plan to provide seniors a safe, convenient and personalized virtual care option.” Contact Priya Shah at priya@mpublicrelations.com.

Earnings posted by publicly traded insurers for the second quarter of 2020 reflect the continued impact of the COVID-19 pandemic that began in March, with low medical loss ratios (MLRs) driven by depressed utilization that only began to pick back up in June. But some managed care organizations, especially those with Medicaid business in states that are feeling the financial crunch of the pandemic, indicated during recent earnings calls that they are approaching the balance of the year with caution given unknowns about medical costs and potential rate adjustments.

Reporting second quarter earnings on July 30, Molina Healthcare, Inc. estimated that COVID-19 drove an increase in earnings per share of about $1.10 to $1.65, for overall EPS of $4.65. Premium revenue rose 8% from the prior-year quarter to reach nearly $4.4 billion as membership experienced sequential growth of 151,000 (4%), primarily in Medicaid. Specifically, Medicaid membership jumped 5% from the first quarter to 3.1 million, but Molina believes this was due to the suspension of redeterminations and that enrollment stemming from unemployment has yet to fully materialize in managed Medicaid, stated President and CEO Joseph Zubretsky during a July 31 conference call to discuss second quarter earnings.

In its annual release of Medicare Part D payment benchmarks and other bid-related information for the coming plan year, CMS on July 29 reported that the average monthly premium for basic Part D coverage will increase just 50 cents in 2021, while the national average monthly bid amount will continue its downward trajectory, dropping nearly 10% to $43.07.

Tom Kornfield, senior consultant with Avalere Health, explains that relative to prior yearly changes, the reinsurance subsidy — which funds 80% of all Part D costs for beneficiary expenses above the catastrophic threshold — went up more than the bid amount went down. “Essentially what we’re seeing is, plans had been projecting relatively flat or very small increases in the reinsurance, but for next year [CMS] projected a 7% increase in the reinsurance amount,” he says.