Radar on Medicare Advantage

Since the January release of CMS’s controversial final rule on Risk Adjustment Data Validation (RADV) audits, all has remained quiet on the litigation front. But in a complaint filed in a federal court on Sept. 1, Humana Inc. opens old wounds regarding the years-long leadup to the final rule and invokes the Administrative Procedure Act (APA) in asking the court to vacate the rule. In doing so, it seeks to stop CMS from applying its new audit policy of seeking extrapolated recovery amounts.

Issued on Jan. 30, the final rule (88 Fed. Reg. 6643, Feb. 1, 2023) pertains to contract-level audits that CMS began conducting more than a decade ago to verify the accuracy of payments made to MA organizations and recover improper payments. In that rule, CMS codified its plans to begin extrapolating RADV audit findings with payment year 2018 — but not findings for payment years 2011 through 2017, as once proposed. And the agency confirmed it would not adopt a “fee-for-service adjuster” to account for any impact from unaudited diagnosis codes in FFS data that are used to calibrate the MA risk adjustment model.

CMS on Aug. 29 unveiled the long-awaited list of 10 drugs for which Medicare will negotiate prices and included drugs to treat common diseases like diabetes, high blood pressure and certain cancers. Industry experts tell AIS Health, a division of MMIT, that while the list provides Part D stakeholders with some new clarity, a host of uncertainties remain, such as how the negotiation process itself will unfold and how plan sponsors will respond to mandated benefit design changes in 2025. But if CMS prevails in implementing drug price negotiation with no delays from manufacturer lawsuits, sources are hopeful that the new process will ultimately provide more insight and fewer uncertainties for subsequent rounds of negotiation.

Based on criteria outlined in the Inflation Reduction Act (IRA), CMS is tasked with selecting drugs for price negotiation, beginning with 10 Part D drugs in 2026, an additional 15 Part D drugs for 2027, and another 15 Part D and Part B drugs in 2028. Starting in 2029, the agency will add another 20 Part D and Part B medications each year to the list. The Congressional Budget Office (CBO) has projected that Medicare will save $3.7 billion in 2026, $8.3 billion in 2027 and $17.5 billion in 2028.

Medicare Advantage insurers can’t share the juicy details of their new plan offerings until Oct. 1, but they are taking steps to prime the market and help boost enrollment during the Annual Election Period (AEP) with “preheat” strategies. Such efforts are often used to create or reinforce brand awareness in the month or two leading up to the AEP, and some insurers are shifting more dollars to this channel as consumer switching is expected to rise again this year, marketing experts tell AIS Health, a division of MMIT. (Warning: The following article contains an abnormal amount of marketing lingo.)

“Before AEP starts, ‘market warming’ with mail and DRTV [direct response television] continues to pay off. In fact, many say that if a plan misses pre-AEP market outreach, they’ve missed most of the available leads for the period. For some plans, these early leads represent over half of all AEP volume,” says Lindsay Resnick, executive vice president with Wunderman Thompson Health. However, such efforts are successful only if the plans’ “sales funnel” and call center are prepared to handle high call volumes and if they have a “lead nurturing” process in place to optimize the value of these leads, he advises. For example, “responder non-converters” (i.e., those who have responded in the past but did not become members) tend to convert at higher rates, he notes.

Since the 21st Century Cures Act loosened enrollment rules in 2021, enabling more patients with a previous diagnosis of end-stage renal disease (ESRD) to enroll in Medicare Advantage, MA insurers have been striking innovative partnerships with kidney care management companies to better manage care and control costs for kidney disease patients. Most recently, Humana Inc. — one of the leading MA insurers serving ESRD enrollees — unveiled a new value-based care pact with Interwell Health that will cater to most Humana MA HMO and PPO members in 13 states living with chronic kidney disease (CKD), as well as members across the country living with ESRD. 

According to Brandon Spicer, director of kidney care at Humana, the insurer offers a variety of programs for members living with CKD and ESRD, and its program care managers “work closely with providers to give patients individual support and guidance while educating them about their disease, supporting their physician’s care plan and assisting with coordination of care.”