Radar on Medicare Advantage
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CMS Seeks to Level Member Playing Field Via Stars Changes
Aside from a headline-grabbing estimated pay boost of nearly 8% for Medicare Advantage organizations next year, the Biden administration’s first preliminary rate notice didn’t include many surprises for MA and Part D sponsors. Instead, the notice focused largely on potential changes to star ratings in the name of advancing health equity and monitoring member experience. At the same time, the notice addressed one aspect of payments for insurers serving a large portion of patients diagnosed with end-stage renal disease (ESRD) but left another to future policymaking.
“The release of the Advance Notice, coupled with the release of the proposed rule last month, marks an important milestone in the policy and rate setting process, and really represents the first major rate notice developed entirely under the Biden administration,” said Greg Gierer, vice president of policy and research, during a Feb. 9 webinar hosted by Better Medicare Alliance (BMA). Moreover, it “provide[s] an opportunity for the admin and CMS to really shape the program as the administration looks to advance important policy work on shared goals, including advancing health equity, improving the beneficiary experience, lowering out-of-pocket costs, and improving quality of care and health outcomes.”
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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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