Radar on Medicare Advantage

✦ President Joe Biden at press time was expected to name Chiquita Brooks-LaSure as the new CMS administrator, according to multiple news reports. Currently a managing director with Manatt Health, Brooks-LaSure is a former director with HHS and CMS who played a key role in passing and implementing the Affordable Care Act.

✦ Two weeks after President Joe Biden issued an executive order instructing federal agencies to review waivers and policies that may “reduce coverage or otherwise undermine Medicaid,” including Medicaid work requirements, Acting CMS Administrator Elizabeth Richter notified states that the agency is retracting the additional procedures for potential waiver withdrawals presented in letters of agreement with former Administrator Seema Verma. CMS said it will instead “adhere to the regulations and STCs [special terms and conditions], which generally provide that States will receive notice and an opportunity to request a hearing before a determination to suspend, modify, or withdraw a demonstration project becomes effective,” according to an excerpt of one of the letters posted by JD Supra. Notably, the letter issued to Tennessee did not retract approval of the TennCare III waiver, which establishes a fixed funding approach. Visit https://bit.ly/2M0wlJc.

Last year, Medicare Advantage plans for the first time were able to extend a variety of non-primarily health-related items and services to their chronically ill beneficiaries, but insurer adoption of these benefits was relatively small. In 2021, the availability of such benefits has more than tripled, suggesting carriers are becoming more comfortable with a variety of new supplemental benefits and the idea of incorporating cost offsets into their bids.

At the same time, an examination of 2021 Plan Benefit Package (PBP) data illustrates the heavy influence of the COVID-19 pandemic on benefit design, as more insurers are offering grocery delivery, virtual companionship and other services aimed at supporting isolated seniors. But whether those services are one-offs or will be sustained by insurers remains to be seen.

Although many publicly traded insurers touted enrollment growth from the 2021 Medicare Annual Election Period (AEP) when reporting fourth-quarter and full-year 2020 earnings, some expressed the concern that care deferrals seen last year may have a negative impact on Medicare Advantage risk adjustment payments this year.

Humana Inc. on Feb. 3 posted a loss of $2.30 per share on an adjusted basis, which was driven by three main factors: (1) higher treatment and testing costs related to COVID-19 that were more than offset by a decline in non-COVID utilization, (2) ongoing pandemic relief efforts, and (3) increased expenses associated with the AEP. Humana ended the year with approximately 4.6 million total MA members, reflecting year-over-year growth of 11%, driving consolidated revenue growth of 90% in 2020. The company expects to gain between 425,000 and 475,000 individual MA members this year, for growth of 11% to 12%.

Recent data from the 2021 Medicare Annual Election Period (AEP) reflects the anticipated increase in Medicare Advantage enrollment, which is up 9.8% from a year ago and indicates penetration exceeding 43%, according to industry estimates. But multiple factors are making it harder for MA organizations to attract new members, and while plans are enhancing their benefit offerings to stay competitive, they must do so in a way that aligns with their star ratings and other financial goals.

For our occasional series of interviews that examine pertinent issues through the words of the industry’s leading executives, AIS Health spoke with GHG Vice President John Selby, whose long career in the insurance industry includes 10 years in various roles at Horizon Blue Cross Blue Shield of New Jersey. In his new role at the Convey company formerly known as Gorman Health Group, he is responsible for developing and executing growth strategies for GHG and its clients.

In what the plaintiff’s attorneys are calling the first False Claims Act settlement arising from a Medicare Advantage organization accepting a kickback from a pharmaceutical company, Humana Inc., Roche Diagnostics Corp. and related entities this month agreed to pay $12.5 million to resolve allegations that they engaged in a debt forgiveness scheme to keep Roche’s products on Humana’s formularies. Although the settlement amount is relatively small and the government did not intervene in the relator’s case, experts say the suit has some important takeaways for MA organizations.

The case (U.S. ex rel. Crystal Derrick v. Hoffman-La Roche Ltd. et al. 1:14-cv-04601), originally filed in 2014 in the Illinois Northern District Court, was brought by a former Roche employee who claimed she was privy to internal discussions that resulted in Roche forgiving millions of dollars owed by Humana in exchange for continued access to its formularies. These included formularies for Humana’s MA plans and the Right Source mail-order formulary, which covered diabetes products such as glucose strips, meters and lancets made by Roche.