Radar on Medicare Advantage

Medicare Advantage insurers are increasingly targeting their tailored, or “affinity,” plans toward veterans, hoping to attract this subgroup of veterans with benefits that wrap around their Veterans Administration (VA) care. Emerging research questions whether such plans are nothing more than profit-generating enrollment boosters, but industry experts say they present opportunities to improve care coordination for a vulnerable population. Those efforts are complicated, however, by gaps in enrollees’ medical records that also pose challenges when it comes to Star Ratings and risk adjustment, sources tell AIS Health, a division of MMIT. 

While major MA plan sponsors like Humana Inc. and UnitedHealth Group dominate the veteran plan landscape, other smaller insurers have followed suit to differentiate themselves from their competitors while serving a potentially untapped market. Similar to other “flavors of plans” — like SCAN Health Plan’s Affirm plan for older LGBTQ+ adults or offerings catering to the Asian American and Pacific Islander population — these are the “veteran-flavored plans,” says Jenn Kerfoot, chief strategy and growth officer with DUOS and a former Navy hospital corpsman.

A seemingly routine discussion of inefficiencies in Texas Medicaid procurement took a shocking turn last week when the committee’s chair accused Superior HealthPlan CEO Mark Sanders of hiring private investigators to spy on customers, lawmakers and journalists. Texas Attorney General Ken Paxton promptly announced plans to investigate the matter, and Centene Corp. fired the Texas subsidiary’s CEO. 

Superior HealthPlan is currently the largest Texas Medicaid managed care organization, serving more than 930,000 adults and children across the state, according to AIS’s Directory of Health Plans. During a March 26 public hearing held by Texas’s own DOGE committee, the Committee on Delivery of Government Efficiency within the Texas House of Representatives, Superior was one of two MCOs appearing to offer testimony on the Medicaid procurement process, which Sanders said has resulted in six procurement cancellations since 2018. He noted that most of those instances involved “protests and legal challenges with significant time and legal costs for all parties involved,” including the Texas Health and Human Services Commission (HHSC), and often led to the “restarting the process from scratch.”

The Medicare Payment Advisory Commission’s (MedPAC) scrutiny of Medicare Advantage’s financial status continued in its March 2025 Report to the Congress: Medicare Payment Policy. The commission estimated that in 2025, the government will pay $84 billion more than it would pay if MA members were instead enrolled in fee-for-service (FFS) Medicare. These so-called overpayments are driven by MA plans’ enrollment of a healthier risk pool — or favorable selection — MedPAC observed, echoing its previous status reports on MA. The industry’s largest trade group, however, maintained that MedPAC’s MA cost analyses are based on incomplete data and faulty assumptions.

“Many comparisons of MA to FFS spending are conducted on an invalid ‘apples-to-oranges’ basis,” a spokesperson for America’s Health Insurance Plans (AHIP) tells AIS Health, a division of MMIT. “Research has shown that ‘apples-to-apples’ FFS costs more than government estimates, which suggests MA delivers savings to the Medicare program,” the spokesperson adds, citing four recent studies on the topic. 

Of the more than $2.9 billion in recoveries secured last year by the U.S. Dept. of Justice through False Claims Act (FCA) settlements and judgments, more than $1.67 billion involved health care. According to Bass Berry & Sims’ recently released Healthcare Fraud & Abuse Review 2024, the settlements spotlight noncompliance in two highly scrutinized areas of Medicare Advantage: risk adjustment and sales and marketing.

AIS Health, a division of MMIT, spoke with Bass Berry attorney Lindsey Fetzer to understand the implications of these and other cases on MA insurers. Fetzer chairs the firm’s multi-disciplinary Managed Care practice and has extensive experience working with plans, risk-bearing provider groups and vendors in litigation, investigation and compliance counseling matters.

A new report from Senate Finance Committee Democrats said Medicare Advantage insurers spent $6.9 billion on fees and commissions to agents and brokers in 2023, up from $2.4 billion in 2018, and offered multiple recommendations to protect Medicare consumers from “predatory” third-party marketing tactics. The report, Pushing Medicare Advantage on Seniors: Unraveling the Complex Network of Marketing Middlemen, summarized “quantitative data” gathered through interviews, hearings and information collected from the National Association of Insurance Commissioners, major insurers and third-party marketing organizations (TPMOs). As chair of the Senate Finance Committee, Sen. Ron Wyden (D-Ore.) in 2022 issued a similar report based on an investigation of Medicare marketing practices and in 2024 issued letters to five TPMOs seeking information on their data collection and enrollment practices. More than a year later, the committee ranking member released the report, which criticized the practice of lead purchasing and generating. Its review of one TPMO-insurer marketing agreement found that the amount of purchased leads grew by 269% between 2018 and 2022, while another reported an increase of 706% during the same period. Among other things, the report recommended that Congress grant CMS authority to directly regulate marketing organizations and lead generators and allow MA plans to contract only with marketing and lead generation companies that are approved by CMS. It also suggested holding brokers, lead generators and insurers up to new standards by penalizing individuals or companies involved in the chain of enrollment who violate CMS requirements. Penalties could be financial, loss of renewal commissions, loss of licensure and “jail time if appropriate,” suggested the report.