Radar on Medicare Advantage
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Medicare Advantage Could Flourish Under Second Trump Presidency
Garnering 295 electoral votes as of Nov. 6, Donald Trump is headed for a second term in the White House. Although health care was not a top priority of Trump's campaign, industry analysts agree that major insurers have the most to gain from a Republican administration, which could bless the Medicare Advantage industry with looser regulations and improved reimbursement. The outcome for managed Medicaid, however, is a little murkier, although the return of work requirements and other efforts aimed at getting folks off the rolls is likely.
Republicans are projected to control the Senate, but the fate of the House at press time had not been decided. If both the executive and legislative branches end up under Republican control, “the use of budget reconciliation to advance Republican priorities will be a watch area and Congressional margins will matter here,” observed Wells Fargo analyst Stephen Baxter in a Nov. 6 research note.
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Exclusive: With Extrapolation, OIG Audits Reveal $800M in Medicare Advantage Overpayments
Based on a review of select diagnosis codes submitted by Medicare Advantage plans for risk-adjusted reimbursement dating back to 2015, the HHS Office of Inspector General (OIG) estimates that 34 MA contracts received at least $801.3 million in overpayments from the federal government, according to an analysis from AIS Health, a division of MMIT. That amount is based on extrapolation, a concept that has been challenged by Humana Inc. as it applies to separate Risk Adjustment Data Validation (RADV) audits conducted by CMS. Nevertheless, a CMS spokesperson tells AIS Health that the agency “in the next few months” will begin collecting enrollee-level improper payments identified in HHS-OIG RADV audits.
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MLR Pressures Continued to Irk Select Medicaid, Medicare Insurers in 3Q
As major publicly traded insurers reported third-quarter 2024 earnings results in recent weeks, familiar issues continued to impact select government players. For one, Medicaid managed care organizations are still feeling the pain of a sicker population resulting from redetermination efforts, although executives during recent earnings calls hinted at signs of stabilization. At the same time, medical loss ratios (MLRs) continued to be affected by higher-than-expected utilization in Medicare Advantage, which was particularly pronounced for CVS Health Corp.
Reporting third-quarter earnings on Nov. 6, CVS Health said its MLR soared to 95.2%, compared with 85.7% a year ago. During a conference call held the same day, Chief Financial Officer Thomas Cowhey explained that the increase was largely due to increased utilization, higher acuity in Medicaid and the impact of lower Star Ratings for payment year 2024. The MLR increase included a 220-basis point impact from $1.1 billion in premium deficiency reserves recorded in the quarter, which is related to expected losses in the fourth quarter within the Medicare and individual exchange product lines, he added.
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As Special Needs Plan Market Booms, Can I-SNPs Catch Up?
Even as 2025 shapes up to be a year of service area reductions and product reshuffles, Medicare Advantage insurers are still making big investments in Special Needs Plans (SNPs). There are 137 net new SNP plans for 2025, according to Clear View Solutions, LLC’s analysis of the 2025 MA and Part D landscape files. Nearly 7 million people are currently enrolled in SNPs, and the majority are dually eligible for Medicare and Medicaid, according AIS’s Directory of Health Plans (DHP). CMS expects SNP membership growth of more than 8% in 2025.
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As Negative Prior Auth Accounts Mount, Blues Plans Get Caught in Provider Fray
As reports continue to emerge of major insurers deploying prior authorization to boost profits, contract disputes between health systems and Medicare Advantage plans across the U.S. also persist. While it’s not unusual for negotiations to heat up this time of year, the ones that are playing out in the public eye appear to have more do to with payment delays and care denials than with payment rates, which historically have been the sticking point. Rochester, New York-based Excellus BlueCross BlueShield (BCBS), for one, was caught by surprise when one major network provider publicly accused it of routinely denying claims.
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