Radar on Medicare Advantage

As CMS looks to scale back its many models and refocus on health equity, the Center for Medicare and Medicaid Innovation (CMMI) is winding down two Medicare Part D models that were intended to test whether giving plan sponsors certain flexibilities and financial incentives would lead to better outcomes and program savings. One of those models — the Enhanced Medication Therapy Management (MTM) model — did not generate any net savings to the Medicare program and was set to end this year, although one expert suggests the evaluation was flawed. The other model was only in its second year and saw very little interest, and both demonstrate how difficult it is to make significant changes through voluntary Part D models.

Enhanced interventions to improve Part D beneficiaries’ medication use have had a modest impact on beneficiary outcomes but, when taking into account enhanced payments to plans, have not resulted in savings to the Medicare program, according to the third evaluation report on the Enhanced MTM model that began in 2017. Save for two participants’ performance during a single year, “there have been no significant cumulative Modelwide impacts on total gross Medicare Parts A and B expenditures,” observed the report, which was prepared by Acumen, LLC. In fact, in each of the three model years assessed, sponsors’ payments exceeded the non-significant decreases in gross Medicare Parts A and B expenditures (see infographic).

Nearly three years ago, a federal court’s ruling in support of UnitedHealth Group threw a seemingly definitive wrench into CMS’s plans to begin recouping self-identified overpayments from Medicare Advantage insurers. But in a major blow to the leading MA organization and the industry at large, a federal appellate court last week reversed that decision. While this could allow CMS to finally dive into a backlog of overpayments from plans, experts say the ruling may not be the final word on overpayment and that there are some to-be-determined aspects in play.

In an Aug. 13 opinion from the U.S. Court of Appeals for the District of Columbia Circuit, three judges reversed a 2018 ruling in a UnitedHealth lawsuit that challenged CMS’s 2014 Overpayment Rule. CMS in that final rule clarified the statutory definition of overpayment and codified provisions of the Affordable Care Act that required MA organizations to return identified overpayments within 60 days. UnitedHealth in January 2016 filed a complaint against the federal government and alleged that it violated the ACA’s statutory mandate of “actuarial equivalence” by asking sponsors to return overpayments based on audited records while the methods used to determine MA payment rates prior to risk adjustment are based on unaudited records of fee-for-service (FFS) Medicare transactions.

✦ The U.S. Dept. of Justice has intervened in six False Claims Act complaints accusing Kaiser Permanente of submitting inaccurate diagnosis codes to receive inflated Medicare Advantage reimbursements. According to a July 30 press release, the DOJ intervened in cases filed against the following Kaiser Permanente consortium members: Kaiser Foundation Health Plan Inc., Kaiser Foundation Health Plan of Colorado, The Permanente Medical Group Inc., Southern California Permanente Medical Group Inc. and Colorado Permanente Medical Group P.C. The suits alleged that “Kaiser allegedly pressured its physicians to create addenda to medical records after the patient encounter, often months or over a year later, to add risk-adjusting diagnoses that patients did not actually have and/or were not actually considered or addressed during the encounter, in violation of Medicare requirements,” said DOJ. In a statement on its website, Kaiser Permanente said it intends to “strongly defend against the lawsuits” and is confident in its compliance with Medicare program requirements. “Our policies and practices represent well-reasoned and good-faith interpretations of sometimes vague and incomplete guidance from CMS. For nearly a decade, Kaiser Permanente has achieved consistently strong performance on Risk Adjustment Data Validation audits conducted by CMS. With such a strong track record with CMS, we are disappointed the Department of Justice would pursue this path,” stated the not-for-profit insurer.

✦ Anthem, Inc. and Kroger Health have teamed up to offer a Medicare Advantage plan in 2022, according to HealthPayerIntelligence. The new co-sponsored plan will be offered in the Atlanta, Cincinnati, Louisville, Ky., and southern Virginia regions. Meanwhile, Highmark Blue Cross Blue Shield Delaware said it is partnering with two Delaware-based health systems, ChristianaCare and Bayhealth, to offer an MA product next year. According to AIS’s Directory of Health Plans, just 93 of Highmark’s 235,382 MA members reside in Delaware, so the new offering stands to grow the insurer’s presence significantly.

Access to newly launched generic drugs is far more restricted for Medicare Part D beneficiaries compared to those with commercial coverage, according to a July report from the Association for Accessible Medicines (AAM), a trade association representing generic drug manufacturers. The report analyzed formulary and drug benefit design data from MMIT (AIS Health’s parent company), finding that just over 20% of 2020’s newly launched generic drugs were covered under Medicare formularies in 2021 vs. 66% under commercial formularies. And when Part D plans do cover new generics, they’re far less likely to be placed on a generic tier, as the Coverage Gap Discount Program (CGDP) incentivizes payers to prefer brand drugs. Meanwhile, the Kaiser Family Foundation (KFF) reported that the influx of new, expensive drugs coming to market is causing an ever-increasing number of Part D beneficiaries to hit the catastrophic threshold, with cumulative beneficiary spending from 2010 to 2019 reaching nearly $10 billion. Researchers suggested several reforms that could help mitigate these issues. The KFF report advocated for adding an out-of-pocket (OOP) spending cap to Part D, while AAM proposed eliminating the CGDP, decreasing payer cost-sharing for generics and biosimilars and allowing for the creation of generic specialty tiers.

A new report from the Government Accountability Office reveals an alarming statistic that may prompt CMS to more closely monitor disenrollments: Medicare Advantage beneficiaries in their last year of life are more than twice as likely to abandon their MA plan for fee-for-service (FFS) Medicare than other MA enrollees. Although the proportion of disenrollments by dying MA beneficiaries is relatively small — 4.5% in 2016 and 4.6% in 2017 — this trend may indicate issues with care access and quality, and adds costs to the Medicare program, observed GAO.

The report released July 28 follows a 2017 review of disenrollment by members in poorer health that led CMS to begin analyzing disenrollments by health status, as well as other studies that have suggested members in poorer health may be more likely to leave MA.