A diversified portfolio was the name of the game late last month as publicly traded insurers discussed third-quarter 2021 earnings and braced for the return of Medicaid eligibility redeterminations, which could happen anytime after the latest public health emergency extension runs out in mid-January 2022. Despite a surge in COVID-19 costs in the quarter, Anthem, Inc., Centene Corp. and Molina Healthcare, Inc. all delivered better-than-anticipated earnings, which they attributed in part to Medicaid enrollment growth as states continue to put off eligibility reverifications.
Reporting earnings on Oct. 27, Molina Healthcare, Inc. beat Wall Street projections by three cents with adjusted earnings per share (EPS) of $2.83 and a medical loss ratio (MLR) of 88.9%. The net effect of COVID increased the overall MLR by approximately 110 basis points and impacted all three lines of business (Medicaid, Medicare and Affordable Care Act marketplace), as the company experienced higher COVID-related inpatient costs that began to decline in late September. COVID led to increased medical costs in both the Medicaid and marketplace segments; while non-COVID utilization by exchange members who enrolled through the pandemic Special Enrollment Period also impacted the marketplace segment, there was a lower negative net effect of COVID among Medicare members.
The delivery of prepared meals, often triggered by a hospitalization, has played a steadily increasing role in Medicare Advantage plans’ efforts to manage members’ chronic conditions, but now the more nuanced area of nutrition is starting to gain traction as a supplemental benefit offering. Nutrition services vendors say offering healthy food options and education to at-risk members can result in major medical cost savings for plans.
According to a recent Avalere Health analysis of selected non-medical benefits offered by MA plans in 2022, 30% of plans will feature a nutrition benefit next year, compared with 17% of plans in 2021. For that analysis, Avalere focused on four benefit categories — meals, transportation, nutrition and in-home support services — differentiating nutrition as “general education and nutrition counseling from a practitioner (e.g., dietitian)” as opposed to pre-made meals that may be delivered to a patient’s home. The firm found that meals will be offered by 68% of MA plans next year, compared with 55% this year. The analysis excluded Special Needs Plans, many of which are promoting enhanced food benefits for 2022 (see story).
Thanks to numerous flexibilities granted to plan sponsors during the COVID-19 public health emergency, nearly 70% of Medicare Advantage Prescription Drug (MA-PD) plans earned an overall rating of 4 stars or higher for 2022, CMS said on Oct. 8. That’s compared with just 49% of MA-PD plans in 2021. But the underlying data shows that quality improvements weren’t as impressive as the 2022 star ratings suggest, and with rising quality bonus payments (QBPs), the 2022 ratings could have major implications for MA revenue in the future, industry experts warn.
According to the CMS fact sheet released alongside the stars data, the average MA-PD star rating weighted by enrollment improved from 4.06 in 2021 to 4.37 for 2022. And 74 MA-PD contracts received the high performing indicator on the Medicare Plan Finder for earning 5 stars, compared with just 21 contracts for 2021 (see infographic). Fifty-three of those plans did not receive 5 stars last year. Weighted by enrollment, approximately 90% of MA-PD members are currently in contracts that will have 4 or more stars in 2022, CMS estimated.
Just eight days into the marketing period for the 2022 Medicare plan year, CMS issued a memo on third-party marketing that, while expected, has led to some confusion among Medicare Advantage plans and their industry partners regarding already finalized marketing materials.
In an Oct. 8 memo from the Medicare Drug & Health Plan Contract Administration Group, Director Kathryn Coleman reminds MA organizations that they are responsible for the activities of first tier, downstream or related entities (FDRs), including those marketing on their behalf. The memo did not come as a surprise given increasing reports of aggressive and misleading marketing practices that plans say has resulted in members leaving the plan who never intended to switch, but experts take issue with the timing.
As Medicare and Medicaid plans seek ways to improve overall care quality by addressing members’ social determinants of health, an emerging source of beneficiary-level SDOH data is a subset of ICD-10 “Z Codes,” which can be attached to claims and encounters to identify causes other than a disease or injury. While there is payer enthusiasm for using these codes, new research suggests that plans have a long way to go to increase provider uptake and establish best practices in this area.
According to an analysis of the most recently available Z code data from the CMS Master Beneficiary Summary File, NORC at the University of Chicago found that just 1.3% of all Medicare beneficiaries had their social needs tracked with a Z code in 2018. In Medicare Advantage, that percentage was slightly higher at 1.5%, compared with 1.2% in fee-for-service Medicare. In an August report prepared on behalf of the Better Medicare Alliance (BMA), NORC estimated that 1.4% of FFS Medicare enrollees had an SDOH-related Z code in 2017.
Meet Our Reporters
Meet Our Reporters