Radar on Medicare Advantage

  • CMS Proposes 1% Rate Increase for MA Plans in 2021 and New Program Flexibilities

    CMS on Feb. 5 released Part II of the Advance Notice proposing payment changes for Medicare Advantage and Part D plans for 2021, but at press time did not include the draft Call Letter. The agency also posted a proposed rule with changes to the MA and Part D programs for contract years 2021 and 2022.

    Following up on Part I of the Advance Notice, which was released in January and included several expected changes to the risk adjustment model (RMA 1/16/20, p. 1), Part II called for roughly a 1% increase in MA payment rates. Although this estimate is lower than the 2.5% increase plans got in 2020, Citi Research securities analyst Ralph Giacobbe on Feb. 6 noted that it could change with the final rate notice in April. The notice did not, however, adjust rates for serving enrollees with end-stage renal disease, he pointed out.

  • CMS Invites States to Innovate With Fixed Medicaid Funding

    After months of languishing at the Office of Management and Budget, CMS’s long-awaited state Medicaid director letter addressing so-called block grants appeared on Jan. 30. But the revised 56-page “Healthy Adult Opportunity” guidance made no mention of block grants — which Democrats have long argued are harmful and illegal if applied in entitlement programs — and instead presented states with two options for covering a subset of Medicaid enrollees via a fixed budget with additional program flexibilities. Safety net insurers and Medicaid advocates worry that if implemented, such options could restrict certain “able-bodied” adults from maintaining coverage, while analysts predict such coverage losses would be minimal.

    CMS in June had submitted the guidance under the name “State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity” but pulled that version in November and replaced it with a letter extending a new Section 1115 waiver opportunity to “provide cost-effective coverage using flexible benefit designs under either an aggregate or per-capita cap financing model for certain populations.”

  • News Briefs

     Bright Health plans to acquire California-based family-owned health plan Universal Care. Doing business as Brand New Day, the 37-year-old company serves Medicare-eligible seniors and special needs populations in 12 California counties with a focus on care management and patient-primary care relationships, according to a release from the companies. Venture-backed Bright Health started on the exchanges in 2016 and began selling MA plans in 2018; the company has since expanded its offerings by 300% and now sells plans in the individual and Medicare Advantage markets in 12 states. The Brand New Day transaction, which is expected to close this year and still requires regulatory approval, will give Bright Health a “strong presence in California with an established and philosophically aligned partner,” said President and Vice Chairman Mike Mikan. Read more at https://prn.to/39TQEPk.

     Select Medicare Advantage plans of Virginia Beach, Va.-based Optima Health will offer rewards and incentives as part of the MA Value-Based Insurance Design (VBID) model. For 2020, Optima’s Medicare Value and Medicare Prime HMO plans in Hampton Roads will reward qualifying members (e.g., those with diabetes, behavioral health conditions) for participating in certain wellness and health care planning activities. Visit www.optimahealth.com/plans/medicare.

  • Early Look at AEP Data Shows Medicare Advantage Membership Gains of 8.8%

    Preliminary enrollment figures from the 2020 Annual Election Period (AEP) indicate that Medicare Advantage enrollment surpassed 24.3 million lives, up 8.8% from 22.4 million posted a year ago. The January enrollment report from CMS reflects enrollments accepted through Dec. 6, 2019, just one day before the AEP closed. Final enrollment figures will be disclosed in the February report. CMS has projected overall MA enrollment growth of 10% from 2019 to 2020.

    According to Barclays securities analyst Steve Valiquette, publicly traded insurers “continue to consolidate share in the Individual market.” Market leader UnitedHealth Group added 307,000 lives for a year-over-year increase of 13.5% that was in line with the company’s expectations, he observed in a Jan. 10 research note. During a Jan. 15 conference call to discuss fourth-quarter 2019 earnings, UnitedHealth executives said they expect the final AEP increase to be 370,000 lives, for the company’s “strongest performance ever” in that period.

  • CMS Suggests Use of NPPES for Verifying MA Directory Entries

    Though a small assist in the gargantuan task that is improving Medicare Advantage provider directory accuracy, CMS’s new plan to use the National Plan and Provider Enumeration System (NPPES) as a reference source may help insurers gain better insight into the accuracy of their own data. But insurers should be wary of the database’s shortcomings, and they will have to work with their provider partners to ensure that they are making timely updates to the NPPES, industry experts advise.

    As of Jan. 1, the NPPES will enable providers to substantiate the accuracy of their National Provider Identifier (NPI) data, according to a Jan. 3 memo from the Medicare Drug & Health Plan Contract Administration Group within the CMS Center for Medicare. The NPPES contains certain core directory elements (e.g., name, address, specialty, telephone number) in “a machine-readable format for virtually every provider in the country,” explained CMS. The agency has for years maintained that accurate directory data is critical for beneficiary access, while repeated reviews of online directories have found that they are rife with errors.

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