Radar on Medicare Advantage

CMS is making enhancements to the Medicare Plan Finder, including new efforts to improve awareness of the Medicare Prescription Payment Plan, also known as the M3P. In a May 27 memo, CMS told Medicare Advantage and Part D organizations that changes for contract year 2026 include: a new functionality allowing users to easily print the full contents of the M3P cost preview pop-up window, new treatment of out-of-network pharmacies on the M3P cost preview pop-up window “to reduce confusion for users who are reviewing costs at OON pharmacies and encourage users to add in-network pharmacies,” an enhanced pharmacy finder and in-network pharmacy finder, and added service area reduction-related messaging and a new “Service Area Reduction help drawer” to notify beneficiaries when their active plan has a service area reduction for the upcoming contract year.

After a disappointing quarter that sent the company’s stock tumbling and led shareholders to seek a class action, UnitedHealth Group on May 13 unveiled the abrupt departure of CEO Andrew Witty and immediate appointment of former CEO Stephen Hemsley. UnitedHealth's stock price fell 18% that day and continued to decline as the Wall Street Journal reported that the Dept. of Justice is looking into "possible criminal Medicare fraud" related to the insurer's Medicare Advantage business practices. 

"We have not been notified by the Department of Justice of the supposed criminal investigation reported, without official attribution, in the Wall Street Journal today," said UnitedHealth in a statement posted to its website. "The WSJ’s reporting is deeply irresponsible, as even it admits that the “exact nature of the potential criminal allegations is unclear.” 

UnitedHealth added, "We stand by the integrity of our Medicare Advantage program."

News that the Dept. of Justice joined a whistleblower lawsuit alleging a massive kickback scheme between three major insurers and three large broker organizations sent shock waves through the industry and stock prices downward. But to those with experience selling health insurance, the allegations aren’t terribly shocking and bring to light deeply misaligned incentives across the industry.

A major question going forward, insiders say, is whether the lawsuit will lead to regulations that properly address these incentives and weed out the so-called “bad actors” or whether the status quo will be allowed to continue.

As Medicare Advantage overpayments and coding practices face increasing scrutiny from the Medicare Payment Advisory Commission (MedPAC) and other stakeholders, the Washington Post editorial board recently called for the U.S. government to look closely at MA for potential reforms, prompting a letter to the editor from the CEOs of AHIP and the Better Medicare Alliance. MedPAC has long held that MA organizations work to enroll the healthiest seniors and subject them to “upcoding,” a practice condemned by Sens. Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.), among others, in a May 7 letter to Congressional leadership. But two recent studies suggest that MA is actually more attractive to lower-income and other at-risk beneficiaries than original, fee-for-service (FFS) Medicare.

After months of legal battles, negotiations and political wrangling over contracts serving elderly and disabled Medicaid enrollees, the Arizona Health Care Cost Containment System (AHCCCS) reached agreements with four managed care organizations for a start date of Oct. 1, 2025. That’s one year later than previously awarded contracts to serve the Arizona Long Term Care System-Elderly and/or Physically Disabled (ALTCS-EPD) program were slated to begin, and the revised agreements now include two incumbent plans that had lost the original bid, filed protests and took legal action.

A third protesting bidder, Blue Cross Blue Shield of Arizona, was not one of the settling parties, although AHCCCS says the insurer participated in mediation discussions. “Our hope was to work toward a common-sense solution, but the settlement fails to address the problems in the RFP process that the Administrative Law Judge [ALJ] found,” said the Arizona Blues insurer in a May 1 statement.