Radar on Medicare Advantage

While the COVID-19 pandemic complicated many smaller Medicare Advantage organizations’ efforts to connect with members during the Medicare Annual Election Period (AEP) last fall, reports of aggressive and misleading marketing practices also resulted in the unintentional disenrollment of individuals from their plans, which not only hurts from a revenue perspective but can negatively impact their star ratings. According to several sources who spoke with AIS Health, a division of MMIT, these tactics were more egregious than usual during the 2021 AEP and the Open Enrollment Period (OEP) that ran from January through March, when members who selected an MA plan in the fall may make a one-time coverage switch.

“We’ve always seen some very aggressive marketing practices, especially from some of the large, national players. But over the last two years, and especially in the last six months, it’s gone from aggressive marketing tactics to what many plans would qualify as teetering on the side of deceptive marketing practices. And it’s not just one large player,” says a source who works with health plans and asked not to be identified for this article.

✦ Sens. Bill Cassidy, M.D. (R-La.) and Bob Menendez (D-N.J.) on July 14 introduced legislation seeking to redesign the Medicare Part D benefit structure and limit seniors’ out-of-pocket (OOP) drug costs. The bipartisan Seniors Prescription Drug Relief Act would establish an OOP cap on catastrophic coverage, so that seniors would pay no more than $3,100 in OOP spending, and restructure Part D to “realign these flawed incentives and lower the cost of prescription drugs.”

✦ CMS this month began a National Coverage Determination (NCD) process for the newly approved Alzheimer’s treatment Aduhelm (adacanumab). That analysis, which will create Medicare coverage standards on a national level, will apply to Aduhelm “as well as any future monoclonal antibodies that target amyloid for the treatment of Alzheimer’s disease,” CMS stated. The July 12 start of the NCD process also kicked off a 30-day public comment period; CMS will also host two public listening sessions this month. The FDA last month approved the $56,000-a-year infused drug, despite questions about its clinical efficacy. CMS will first issue a proposed NCD, which will be subject to a second 30-day comment period and is expected within six months, with a final decision posted within nine months. Until then, coverage decisions will be made at the local level by Medicare Administrative Contractors, according to the announcement.

Drugmakers spent $17.8 billion on direct-to-consumer advertising (DTCA) from 2016 to 2018, the U.S. Government Accountability Office (GAO) detailed in a May 2021 report to Congress. Meanwhile, 58% of the $560 billion that Medicare Parts B and D spent on drugs in the same time period was spent on advertised drugs. While the GAO said other factors such as increased unit prices and doctor prescribing habits make it difficult to establish a strong link between DTCA, beneficiary use and Medicare spending, the agency identified four drugs that were among the costliest for Medicare and had the highest DTCA spending: Eliquis, Humira, Keytruda and Lyrica. Bristol Myers Squibb (BMS)’s Eliquis in particular stands out, as the blood-thinning agent became Part D’s most expensive drug in 2018, reaching nearly $5 billion in spending. The GAO highlighted a marked increase in the use of Eliquis from 2013 to 2014 that correlated to a nearly doubled advertising budget, in addition to its FDA approval for new indications. The use of Eliquis among seniors and its Medicare spend continued to grow even as BMS reduced the drug’s DTCA budget.

As other technology-enabled, start-up insurers eye service area expansions to aid in membership growth next year, Zing Health is planning to acquire Lasso Healthcare Insurance Co., a Harrisburg, Pa.-based provider of Medicare Medical Savings Accounts (MSAs) that serves 34 states and Washington, D.C. Zing, which launched in 2019, said the move will give it a “national footprint to reach diverse communities with innovative Medicare Advantage Health plans that lower the cost of high-quality care.”

Zing Health is the third company to spin out of Health2047, Inc., which was founded in 2016 as the health care innovation arm of the American Medical Association (AMA). AIS Health, a division of MMIT, spoke with Zing Health Founder and CEO Eric Whitaker, M.D., about the planned acquisition and the company’s continued focus on reaching underserved communities. As the founder of Chicago-based health care investment firm TWG Partners, Whitaker helped establish local Medicaid managed care organization NextLevel Health, which was picked up by Centene Corp. in 2020, and previously launched Medicare Prescription Drug Plan Symphonix Health, which was acquired by UnitedHealth Group in 2016.

While the COVID-19 pandemic led to increased digital engagement with consumers during the last Annual Election Period (AEP), regional Medicare Advantage plans that thrive on community events and other in-person communications look forward to returning to a more normal course of business this fall. During a session of the 12th Annual Medicare Market Innovations Forum, hosted July 13 and 14 online by Strategic Solutions Network, LLC, two such plans discussed how they tailored their omnichannel approaches to Medicare marketing and how those strategies will evolve for the 2022 AEP that begins in October.

In Michigan, where Health Alliance Plan (HAP) serves about 75,000 MA lives, a lengthy lockdown period and the state’s battleground positioning in the presidential election made for a “whirlwind” AEP that called for a reduction in TV and direct mail strategies, recalled Jennifer Rossbach, marketing manager for consumer retail. “There was no room in the air space for an omnichannel approach,” she said. “We thought we could actually get more out of our digital spaces, but even there the digital space was being overrun by the political campaigns and COVID.” The insurer heavily relies on in-person engagement, but COVID restrictions in the state forced the plan to “go virtual” during the AEP, such as through Facebook Live events and Zoom meetings.