Radar on Medicare Advantage

At a time when the federal government is clamping down on pharmacy benefit managers and seeking ways to bring down prescription drug prices, a recently unsealed whistleblower complaint details how one of the three largest PBMs allegedly drove up costs for Medicare Part D beneficiaries and the federal government. In a lawsuit that CVS Health Corp. intends to fight, the False Claims Act complaint accuses the parent company of colluding with its “supposedly firewalled” entities — the SilverScript Part D subsidiary, PBM CVS Caremark and CVS pharmacies — of striking secret rebate agreements with the drug makers that required SilverScript to block substitution on its formularies of generic drugs in favor of costlier brand-name alternatives.

The U.S. Dept. of Justice chose not to intervene in the second amended complaint, which was filed in the U.S. District Court for the Eastern District of Pennsylvania in March and recently obtained by Stat. The suit was filed by relator Alexandra Miller, who worked for CVS Health for 19 years. According to Miller’s LinkedIn profile, she most recently served as senior director of Medicare Part D operations and is now senior director of member and provider experiences for Oscar Health. 

Using a “tapered” meal delivery approach supported by plan-appointed navigators, Mom’s Meals and Inland Empire Health Plan (IEHP) last year cut both emergency room visits and hospitalizations in half for patients with congestive heart failure who participated in a six-month pilot. The program resulted in a significant medical cost savings and positive outcomes for patients, boding well for future applications in the IEHP population and in California’s recently launched CalAIM Community Supports program.

Patients with congestive heart failure (CHF) tend to have significantly high rates of recurring emergency department visits and hospitalizations, and upon discharge, many lack social supports to pursue the dietary and lifestyle changes that are needed to improve chronic care, according to Mom’s Meals, which provides fully prepared, refrigerated meals across the U.S. and serves the Medicaid, Medicare and individual markets. Since one of the key components of heart failure treatment is reducing sodium in the diet, Mom’s Meals provided lower-sodium (i.e., 600 mg less of sodium) fully prepared meals to members throughout the six-month pilot.

Judicious enhancements to supplemental benefits was the common theme as Medicare Advantage organizations prepared their bids for 2023, according to actuaries who recently helped sponsors submit bids that were due on June 6. The benefit changes come as plans considered potential bonus payment losses in 2024 and other possible drivers of increased costs next year.

“The signature trend of this year was carrying forward a lot of the innovative benefits that we’ve seen take hold over the past few years,” remarks Tim Murray, principal with Wakely, an HMA company. These include “wallet” benefits such as over-the-counter card allowances and flexible “choose your own adventure” benefits often involving healthy food and/or groceries, he observes.

After its last two reports suggested comprehensive reforms to Medicare Advantage plan reimbursement, the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress shifted its MA focus to one area in particular: the potential for high-cost patient outlier data to skew the calculation of risk scores that determine MA plans’ risk-adjusted pay.

Although the Hierarchical Condition Category (HCC) risk adjustment model is intended to produce scores that reflect the relative health status of a plan’s enrollees, fee-for-service (FFS) Medicare spending data that is used to calculate risk scores can include a small group of outliers whose annual costs are much higher than the average costs of patients with a given condition, explained MedPAC Executive Director Jim Mathews during a June 15 web briefing with members of the press.