Radar on Medicare Advantage

July 20
News Briefs: CMS in 2022 Issued $200,000 in Fines for One-Third Financial Audit Findings

Only three Medicare Advantage insurers received a civil monetary penalty (CMP) as a result of a program audit last year, according to the 2022 Part C and Part D Program Audit and Enforcement Report published on July 18. CMPs based on 2022 program audit referrals totaled $63,220, and another $200,000 in fines stemmed from one-third financial audit findings. By contrast, the previous audit cycle resulted in approximately $1 million in CMPs issued based on 2021 referrals, and nearly half of that amount related to one-third financial audits. The latest audit cycle included 291 contracts under 25 separate parent organizations covering approximately 33.6 million, or 62%, of beneficiaries enrolled in the Parts C and D programs. CMS in the report said the amount of the CMP “does not automatically reflect the overall performance of a sponsor” and that the summary of findings is “not intended to reflect overall industry performance and should not be interpreted to mean that there are pervasive issues throughout the industry related to the noncompliance we identified.”
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July 06
Boosting its Medicare ‘Niche,’ Molina Will Pick Up Bright’s MA Leftovers for $600M

After two months of shopping around its Medicare Advantage business, Bright Health Group, Inc. on June 30 unveiled plans to sell its remaining insurance assets to Molina Healthcare, Inc. in a deal worth approximately $600 million. The transaction will allow the “insurtech” to focus on its consumer care delivery business, which serves fee-for-service Medicare, Medicaid and Affordable Care Act marketplace customers, while enabling Molina to continue its strategic growth in the niche low-income MA space.

Bright in late April disclosed plans to divest its California MA business, Brand New Day and Central Health Plan, to qualify for an extension of an amended agreement with its creditors. (Bright previously exited the ACA exchange business in all 15 states where it operated.) Upon completion of the sale, which is subject to regulatory approval and other closing conditions, the proceeds will provide a significant boost to Bright’s capital position. The company explained in a June 30 press release that it “intends to use the proceeds to satisfy its obligations to its bank lenders with the remaining proceeds used towards liabilities in its discontinued ACA insurance business.” Additionally, it has extended a waiver and amendment to its credit facility.
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- Radar on Medicare Advantage
July 06
With Addition of HEI to Stars, Clock Is Ticking for MAOs to Advance Health Equity

So as not to penalize plans serving a large proportion of enrollees with social risk factors (SRFs) that impact care quality, CMS has previously taken steps to adjust for within-contract disparities in Star Ratings performance among Medicare Advantage and Part D contracts. But beginning in 2027, insurers will be rewarded for their efforts to assess SRFs and address disparities in certain quality measures with the new health equity index (HEI). MA and Part D sponsors must act now to assess disparities within their current performance and begin to pinpoint where their efforts can make the biggest impact in the two years of data leading up to the reward, according to industry experts who spoke at AHIP’s 2023 conference.
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July 06
New MVP Health Care Offering Seeks to Smooth Access for Dual Eligibles

After a long history of serving Medicare and Medicaid beneficiaries in New York State, Schenectady, N.Y.-based MVP Health Care in 2022 launched a Dual Eligible Special Needs Plan (D-SNP) through a joint venture with Belong Health, which specializes in in helping regional payers launch MA and SNP products. This month, the insurer expanded its duals portfolio with a new integrated product and extended its managed Medicaid service area to eight New York counties.

Effective July 1, MVP’s Medicaid and Medicaid-adjacent plans for adults and children who don’t qualify for Medicaid became available in Clinton, Essex, Franklin, Fulton, Hamilton, Herkimer, Montgomery and St. Lawrence counties. Enrollees in these areas will also be able to access virtual primary and specialty care through digital health company Galileo.
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July 06
Medicare Part D Redesign Will Sharpen Policy Focus on Protected Classes

Upcoming changes in the Medicare Part D benefit that involve increasing the risk borne by insurers in the catastrophic phase may boost pressure on plans to control costs in the six protected classes, and manufacturers are worried about what that might lead to.

Under the Inflation Reduction Act, Part D plan obligations for drug costs will increase from 15% to 60% in the catastrophic phase beginning in 2025, while Medicare’s will decrease from 80% to 20% for brands.

Manufacturers will supplement coverage in the catastrophic phase with a new 20% mandatory discount on brands but plans are still expected to look for ways to lower drug spending because they won’t be able shift costs to enrollees in the usual ways. As part of the redesign, cost sharing will be capped at $2,000 a year and annual premium increases will be limited.
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