Radar on Medicare Advantage

Continuing a series of audits in which the HHS Office of Inspector General is reviewing the accuracy of diagnosis codes submitted to CMS by Medicare Advantage organizations, OIG last month said most of the codes it reviewed for UPMC Health Plan, Inc. could not be validated by medical records. The agency used its own extrapolation methodology to estimate that the Pittsburgh-based insurer owes $6.4 million for the 2015 and 2016 payment years, prompting a detailed rebuttal from UPMC and adding to the ongoing debate over the use of sampling to approximate a plan’s true payment error rate.

With several states issuing requests for proposals (RFPs), 2022 is shaping up to be a solid year for payers pursuing new Medicaid contract awards. Iowa is looking for up to four MCOs to serve Iowa Health Link, up from its current two, and Tennessee’s awards could come by year-end. As for the most hotly competitive RFPs, eyes will be on California and Texas as they prepare to begin the procurement process for contracts that will cover about 3.5 million and 4.3 million lives, respectively. Meanwhile, previous contract awards in Kentucky, Louisiana and the District of Columbia have caused considerable controversy and sparked ongoing legal challenges between payers and state Medicaid officials, prompting rebids. Below, see an overview of key RFPs that are expected to be issued or awarded in the coming months.

Providing its first glimpse of earnings for 2022, UnitedHealth Group at its Nov. 30 Investor Conference said it expects to achieve revenue in the range of $317 billion to $320 billion and adjusted net earnings per share (EPS) of $21.10 to $21.60. Its UnitedHealthcare division is expected to contribute $245.5 billion to $247.5 billion, driven in part by the anticipated addition of 600,000 to 650,000 net new Medicare Advantage members, reflecting year-over-year growth of 9% to 10%. 

As Medicare Advantage enrollment soars and the number of individual MA plans available across the U.S. reaches a new high for 2022, the MA Special Needs Plan market is also seeing continued growth. According to estimates from Clear View Solutions, LLC, there will be 926 plans available next year that were offered in 2021, compared with 766 plans that carried over from 2020 to 2021 (see infographic). Dual Eligible SNPs (D-SNPs), in particular, will rise from 477 plans offered in 2020 and 2021 to 569 plans available this year and next, according to the consulting firm’s analysis of the 2022 SNP Landscape files from CMS.

Like the other publicly traded insurers that reported third-quarter 2021 earnings late last month, select Medicare Advantage insurers in early November demonstrated strong performances during a quarter that was tainted by a rise in COVID-related costs. Unlike its more balanced peers, however, MA-focused Humana Inc. took a decidedly conservative approach to projecting earnings for the full year given continued COVID uncertainty.