RADAR on Medicare Advantage

  • Enforcement Actions Show Mounting CMPs from Financial Audits (with table: CMP Amounts Imposed on Medicare Advantage Insurers From February to April 2022)

    Between February and April of this year, CMS imposed a total of nearly $1 million in civil monetary penalties (CMPs) on Medicare Advantage and Part D organizations for program violations uncovered during routine audits, including so-called “one-third financial audits.” While CMS has yet to release its annual report that provides a fuller picture of plan noncompliance, the latest round of CMP notices offers some important lessons for sponsors and flags a few potential areas of risk that they should be monitoring in their own operations, according to compliance experts.

    Of the 15 CMP notices recently posted to the CMS Part C and Part D Enforcements Actions webpage, six resulted from 2021 program audits and eight were related to 2020 financial audits. Additionally, CMS imposed a fine on Anthem, Inc. for a Part D appeals violation stemming from a previously detected system migration issue that occurred in 2020.

  • Despite Growth, Barriers Remain to Driving Benefit Innovation

    Innovative, mostly non-medical supplemental benefits have seen tremendous growth in the few years the Medicare Advantage program has allowed them. But that growth is still from a base of zero, and industry experts suggest that numerous barriers are keeping adoption of these new supplemental benefits at a relatively slow pace.

    Starting with plan year 2019, MA organizations began offering a wider range of benefits such as Adult Day Care and In-Home Support Services thanks to CMS’s reinterpretation of the definition of “primarily health-related supplemental benefits.” And with the passage of the CHRONIC Care Act of 2018, MA plans in 2020 began offering Special Supplemental Benefits for the Chronically Ill (SSBCI), a category of “non-primarily health related” items and services that can be made available to certain beneficiaries.

  • Nearly One-Third of Medicare Advantage Members Receive Extra Supplemental Benefits as of 2022

    More than 30% of Medicare Advantage members are currently enrolled in a plan that offers at least one type of newer supplemental benefit, according to an April report from ATI Advisory and the Long-Term Quality Alliance. Researchers studied the growth of both Special Supplemental Benefits for the Chronically Ill (SSBCI), established by the CHRONIC Care Act of 2018 and first made available to eligible beneficiaries in 2020, and Expanded Primarily Health-Related Benefits (EPHRB), which emerged in 2019 following CMS’s reinterpretation of the definition of “primarily health-related.” Both benefit types have grown significantly over the past two years, with nutritional benefits, transportation and in-home support services among the most popular offerings. Just one benefit type, adult day health services, saw a decline in uptake, which report authors attributed to lack of availability caused by the COVID-19 pandemic. See an overview of the findings in the table below.
  • UnitedHealth Delivers Strong 1Q, Touts MA, Value-Based Growth

    Despite variations in care utilization due to COVID-19 that drove up medical costs early in the quarter, UnitedHealth Group reported a strong start to 2022, with financial results exceeding analysts’ expectations driven by outperformance in both the UnitedHealthcare and Optum Health segments. As the company anticipates continued growth in value-based care initiatives and Medicare Advantage enrollment throughout the year, it raised its full-year adjusted earnings-per-share (EPS) outlook by 90 cents to a range of $21.20 to $21.70.

    For the three months ending on March 31, the company recorded overall revenues of $80.1 billion, representing a year-over-year increase of 14.2% that reflected double-digit growth at both Optum and UnitedHealthcare. The UnitedHealthcare segment reported $62.6 billion in revenues, up 13.6% from $55.1 billion a year ago, and operating earnings of $3.8 billion, compared with $4.1 billion last year, reflecting the effects of “pandemic-disrupted care patterns,” the company explained in its earnings press release. Revenue for the Medicare & Retirement segment was $29.1 billion, up from nearly $25.5 billion in the first quarter of 2021.

  • News Briefs: Lawmakers Urge CMS to Rethink 8.5% Medicare Advantage Plan Rate Increase

    Sen. Elizabeth Warren (D-Mass.) and a group of progressive lawmakers wrote CMS Administrator Chiquita Brooks-LaSure asking the agency to reconsider recently finalized policies that would lead to an average revenue increase of 8.5% for Medicare Advantage plans next year. Citing the Medicare Payment Advisory Commission’s March 2022 Report to the Congress, lawmakers wrote that MA plans last year were paid 4% more per enrollee than fee-for-service Medicare, even though the program was designed to generate savings by paying insurers rates set at 95% of those used by FFS Medicare. “To preserve Medicare and its Hospital Insurance (HI) Trust Fund, we urge CMS to mitigate the announced payment increases for Medicare Advantage plans so they are on par with payments to fee-for-service Traditional Medicare and take additional steps to address overpayments and increase transparency in the Medicare Advantage program,” they wrote on April 20.
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