Radar on Medicare Advantage
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2022 Outlook: Increased Marketing Oversight Is Top MAO Compliance Concern
While CMS guidance and oversight regarding Medicare Advantage sales and marketing was rather uneventful under the Trump administration, several recent actions by the Biden administration signal a growing focus on Medicare marketing, including MA organizations’ use of third-party entities. The most notable of those was an October 2021 memorandum that explicitly reminded MAOs that they are responsible for the activities of first tier, downstream or related entities (FDRs), including third-party marketers with which they may not directly contract. CMS in that memo clarified that MA plans must submit all marketing materials to CMS prior to use, even when certain advertisements do not mention a plan by name, and reiterated this in its latest update to the Medicare Communications and Marketing Guidelines.
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Infographic: Out-of-Pocket Prescription Drug Costs Remain a Burden for Medicare Beneficiaries
Most older adults in the U.S. have been diagnosed with one or more chronic illnesses, and managing these conditions presents a significant cost burden, according to a January study in JAMA Internal Medicine. The authors studied eight of the most common chronic conditions, both as single disease states and in clusters, and determined hypothetical annual out-of-pocket (OOP) costs for individual seniors enrolled in Medicare Advantage-Prescription Drug plans and Standalone Part D plans in 2009 and 2019. While annual costs for many of the conditions dropped, likely due to the availability of new generic drugs, OOP costs for atrial fibrillation, type 2 diabetes and heart failure skyrocketed. This was attributed to the introduction of brand-name therapies without generic alternatives that received clinical guideline recommendations. To remedy this, study authors urged Congress to act on drug pricing reforms, including allowing Medicare to negotiate list prices and cap annual OOP costs for seniors.
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News Briefs: America’s Physician Groups and Others Are Urging CMS Not to Cancel GPDC Model
America’s Physician Groups (APG) and other stakeholders at press time were urging the Biden administration not to cancel the Global and Professional Direct Contracting (GPDC) model. The model, in which provider groups and other entities share risk and receive capitated payments for serving fee-for-service (FFS) Medicare beneficiaries, formally launched in April 2021 and has drawn interest from Medicare Advantage organizations. Although CMS put a pause on new applicants for the 2022 performance year, progressive lawmakers have asked the administration to stop it out of concern that private entities are seeking to funnel FFS enrollees into managed care without their knowing. In a sign-on letter to HHS Secretary Xavier Becerra, APG and other groups suggested that instead of canceling the model, the administration should limit participation to provider-led entities and “place additional guardrails and add more beneficiary protections.”
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Humana Seeks to Calm Investors With EPS Outlook, $1B Value Plan
As publicly traded Medicare Advantage insurers begin to report fourth-quarter and full-year 2021 earnings, Humana Inc.’s recent disclosure of lower-than-expected individual MA growth for 2022 has raised questions among the investment community around the use of external sales channels and their impact on membership churn. But reports by UnitedHealth Group and Anthem, Inc. in late January seemed to assure investors that Humana’s experience was not reflective of an overall trend, while executives during Humana’s Feb. 2 earnings call vowed that the MA-focused insurer is making every effort to ensure its external partners appropriately convey what members are buying and confirmed its long-term growth outlook.
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Potential 5-Star SEP Disruption Depends on Marketing Prowess
With 74 Medicare Advantage Prescription Drug plan contracts earning a 5-star rating for 2022, compared with just 21 such plans last year, an unprecedented number of MA-PD plans have the ability to market 5-star products throughout the year — thanks in large part to COVID-related adjustments to the star ratings that are not likely to reoccur. According to multiple industry experts, that anomaly presents a unique set of challenges for plans that weren’t expecting to be 5 stars and could create some unusual midyear enrollment shifts.
That all depends, however, on how aggressive 5-star plans are with their marketing and how many enrollees take advantage of the so-called 5-star special enrollment period (SEP). While MA insurers have the advantage of marketing their 5-star plans year round, enrollees who are in a service area where a 5-star plan is available may switch from their current Medicare plan to a 5-star contract one time between Dec. 8 and Nov. 30.
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