Radar on Medicare Advantage

Leading up to the Oct. 15 start of the Medicare Annual Election Period (AEP), news reports across the U.S. have depicted down-to-the-wire disputes between Medicare Advantage insurers and their network providers over sticking points like reimbursement and prior authorization policies. But another development in payer-provider relations is the evolving trend of regional health systems cosponsoring MA plans, which one industry expert says can take various forms and requires careful consideration.

Morgantown, West Virginia’s Peak Health, for one, will launch a new MA plan that it says was designed in partnership with two West Virginia health systems, WVU Medicine and Marshall Health. According to the new insurer’s website, the company is also owned by two other not-for-profit health care providers, Mountain Health Network and Valley Health. Peak is the only West Virginia-based insurance company to offer MA plans sponsored by West Virginia providers, the company said.

“Barbara is a Medicare Advantage member without a car and limited access to other transportation options. She has a health benefit card, issued on Optum’s payments platform, which she can use to pay for eligible over-the-counter items, groceries, and rides,” explains a recent blog post from Uber Health. Announced earlier this month, the new pact with UnitedHealth Group’s Optum health services division is just one example of creative partnerships emerging in Medicare Advantage to attract new members and address health-related social needs. Meanwhile, MA organizations for 2024 continue to strike new alliances with providers, retailers and other insurers to leverage their brands in select markets.  

Centene Corp.’s Wellcare, for one, formed a new strategic alliance with Mutual of Omaha. For the 2024 plan year, the insurers will offer two cobranded PPOs — WellCare Mutual of Omaha No Premium and Wellcare Mutual of Omaha Low Premium — in five states: Georgia, Missouri, South Carolina, Washington and select areas of Texas. (Wellcare is also expanding its geographic footprint by 21 counties and adding a new state with entry into Delaware, according to an Oct. 11 press release unveiling its 2024 offerings.) 

The stand-alone Prescription Drug Plan (PDP) market — which was already in decline — is poised to take even more hits due to regulatory and legislative changes that are taking effect in 2024 and beyond, according to industry observers. Indeed, one expert who analyzed data from CMS’s 2024 Medicare Advantage and Part D “landscape files” predicts that “a lot of people are faced with pretty significant premium increases” next year.

There’s a complicated calculus driving that trend, explains Tom Kornfield, a senior consultant at Avalere Health. But both he and equities analyst George Hill agree that the Inflation Reduction Act of 2022 (IRA) is a major factor.

As the 2024 Annual Election Period approaches, Medicare Advantage insurers that began marketing on Oct. 1 have been touting service area expansions and/or the robust provider networks attached to their plans. But in the months and, in some cases, days leading up to the Oct. 15 start of open enrollment, some high-profile contract negotiations have played out in a very public way, with providers expressing their frustration with administrative delays, care denials and less-than-adequate rates. And the loss of key providers could have serious consequences from a network adequacy standpoint, even leading to an enrollment freeze if MA organizations are not careful, warns one compliance expert.

On top of concerns about overly burdensome prior authorization policies used by MA organizations, “providers are getting squeezed” from both sides, remarks Jane Scott, executive vice president of special projects for Rebellis Group. “Providers are getting squeezed on the fee-for-service, CMS side for their reduction in fee reimbursement. And then the health plans also want to reduce reimbursement for savings on their own part, while trying to stay competitive. And in doing that, they may have to reduce their service area size, their network offering, different things…and so that causes some market change.”