Medicare Advantage (MA) plans aren't required by CMS to include indicators in their encounter data, unlike Medicare and Medicaid.
Requiring MA organizations (MAOs) to identify when payment claims are denied would improve oversight of fraud and abuse, according to the Office of Inspector General (OIG).
The HHS watchdog conducted a study to examine whether the lack of an indicator to identify payment denials in MA encounter data makes it harder for proper oversight of MAOs.
While MAOs are not required to include that indicator, CMS' records of services do include denied-claim indicators for Medicare fee-for-service and Medicaid, including Medicaid manage care. The service-level data is used to "detect potentially inappropriate billing patterns and investigate suspected fraud and abuse," OIG said.
Rather than including the indicator, MAOs must submit claim adjustment reason codes when they do not pay the amount billed by the provider. The adjustment codes explain why a claim has had a payment adjustment, such as denials, reductions, or increases in payment.
For the report, OIG analyzed 2019 MA encounter data records to identify which contained payment denials. The organization also interviewed CMS staff, as well as the entities with oversight on MA.
The study revealed that adjustment codes are not enough to identify denied claims in the encounter data because some codes are too vague.
"In addition, oversight entities—including CMS program integrity staff; OIG investigators and analysts; and DOJ health care fraud staff—reported that a denied-claim indicator in the MA encounter data would improve the efficiency, scope, and accuracy of their efforts to combat fraud, waste, and abuse," the report stated.
The absence of an indicator means oversight entities have to make separate requests to MAOs asking them to identify denied claims, which creates burden and adds time.
"The lack of an indicator limits the scope of efforts to determine the full impact of potential fraud activities in MA," the study said.
OIG recommended that CMS require MAOs to provide an indicator on encounter data records to determine when payments have been denied for a service or a claim.
While CMS' MA payment group expressed concern to OIG about requiring MAOs to include an indicator in their encounter records, OIG highlighted that many of the companies covering MA enrollees also have contracts for Medicaid managed care, which is required to include a denied-claim indicator.
CMS "did not concur or nonconcur" with OIG's recommendation.
Both sides have raised concerns to CMS over the ramifications of the Medicare Advantage (MA) advance notice rule.
Payers have unsurprisingly voiced their displeasure with the proposed risk adjustment changes to MA, but providers are also taking issue with the rule's quick coding transition.
The Medical Group Management Association (MGMA) and the American medical Group Association (AMGA) were among the voices from the provider side expressing concern for the MA advance notice rule in comments submitted to CMS.
The rule, which changes MA payment methodologies by updating the risk adjustment model for 2024, expectedly drew the ire of insurers over potential payment cuts.
While providers agree with the rule's purpose to create fair and accurate payments to MA plans, they are concerned with the implementation of the proposed switch in MA diagnosis codes from ICD-9 to ICD-10 in the Hierarchical Condition Categories (HCC) model.
"While MGMA shares concerns about abuse in the MA program, we are concerned that this overhaul of the CMS-HCC model may result in unintended consequences that could impact beneficiary access to care and impede important value-based care initiatives critical to the success of medical group practices," Anders Gilberg, senior vice president of Government Affairs at MGMA, said in a statement.
AMGA echoed these sentiments, saying that the proposed changes should not be implemented until stakeholders can understand the impact on MA plan design and care delivery.
"Modifying the HCC model is not a simple technical update or revision," said AMGA president and CEO Jerry Penso. "It's likely to have significant ramifications, affecting both plans and providers. CMS should recognize that stakeholders can't provide substantive, constructive feedback in such a short timeframe."
For insurers, the attention is on potential pay cuts and the impact that may have on beneficiaries through increased premiums and reduced benefits.
Insurance trade association group AHIP point to a study commissioned by them and conducted by the Wakely Consulting Group, which found that the proposed changes to the MA risk adjustment model would result in an average payment cut to MA plans of 3.7%. On average, the rule would cut payments for dual eligibles by 6.4%.
CMS said it expects plan payments to increase by 1.03%.
"Our most significant concern with the Advance Notice is the flawed revision to the proposed risk model for 2024…. it included an inadequate process for considering such a complex change and a failure to account for the disproportionate and potentially devastating impacts it would have on certain areas and populations, including individuals dually eligible for Medicare and Medicaid," said Matt Eyles, AHIP president and CEO.
Another analysis commissioned by MA advocacy group Better Medicare Alliance (BMA) and conducted by consulting firm Avalere Health found that the rule would cut payments by 2.27%.
"We are especially concerned about proposed changes to the risk model which could negatively impact Medicare beneficiaries, especially those with chronic conditions, those who are low income, and those who are dually eligible for Medicaid. As a result, these changes place at risk the substantial progress made in improving care and outcomes for Medicare beneficiaries," said Mary Beth Donahue, BMA president and CEO.
While insurers and providers have pushed back against the rule, 39 healthcare leaders from public health, public policy, health care executive management, and clinical care voiced their support.
In a letter to CMS, the leaders stated: "These improvements are long overdue and badly needed to assure appropriate financial payments and stewardship for MA funds, fair payments to enable excellent care for sicker patients, sustainability of the overall Medicare program, and security for all beneficiaries."
However, Medicare Advantage (MA) patients experience higher rates of emergency department (ED) direct discharges and observation stays.
MA beneficiaries have a lower risk of hospitalization for ambulatory care sensitive conditions (ACSCs) than traditional Medicare members, according to a study published in JAMA Health Forum.
That tendency may be due to shifting MA patients to other care settings though, with the research also finding that MA beneficiaries are more likely to be directly discharged from the ED or stay for observation.
The study examined 2018 administrative claims and encounter data for patients enrolled in MA and traditional Medicare to compare utilization of hospitalizes, observations, and ED direct discharges with ACSCs.
"Medicare Advantage plans have strong incentives to reduce potentially wasteful health care, including costly acute care visits for ambulatory care−sensitive conditions (ACSCs)," researchers stated.
It's unclear, however, if MA plans lower acute care use compared to traditional Medicare, or if they shift patients to other settings of care.
Based on the study's findings, "apparent gains in lowering rates of potentially avoidable acute care have been associated with shifting inpatient care to settings such as ED direct discharges and observation stays."
MA plans are known to use tools such as prior authorization to treat patients at the lowest cost site of care allowed, the researchers highlighted, pointing to 70% of MA enrollees being in a plan that required prior authorization for inpatient stays in 2018.
A recent report by Kaiser Family Foundation found that more than two million prior authorization requests, accounting for six percent of the 35 million total requests, were denied MA plans in 2021.
Site shifting can save on out-of-pocket costs, but the tradeoff may be in care quality, resulting in MA members incurring higher costs from other care settings.
"Additionally these findings suggest the need for caution in relying on hospitalizations for ACSCs to serve as an indicator of higher-quality care in ambulatory settings," the researchers concluded.
Analysis of hospitals' machine-readable files finds inconsistencies in what and how price information is reported.
Much has been made about the widespread noncompliance to the hospital price transparency rule since it went into effect over two years ago, but the struggle to get hospitals on board is only part of the problem.
The bigger challenge to achieving effective price transparency may be the lack of data standardization and reporting specification, according to a study by Kaiser Family Foundation and the Peterson Center on Healthcare's Health System Tracker.
The analysis revealed shortcomings in price transparency data currently shared by hospitals that makes it difficult for patients to compare prices across hospitals or payers.
Researchers examined price transparency data compiled by Turquoise Health, focusing on machine-readable files and not the shoppable services identified by CMS that can be scheduled by a patient in advance. The study analyzed two payer-specific negotiated prices for two types of care associated with common procedure codes: hip and knee replacement and diagnostic colonoscopy.
Inconsistencies were found in specification of what services prices correspond with, particularly for episodes of care, such as negotiated rates attached to a treatment episode for a hip-knee replacement possibly corresponding to a per diem charge instead of the entire episode.
Data quality also varied significantly, with negotiated rates showing questionably low and high values. Finally, crucial pieces of information were missing, like contracting method and payer class (Medicare, Medicaid, and commercial).
"The issues discussed above result primarily from the way the rule is crafted, particularly from the lack of specificity and uniformity about what should be included with each charge in their machine-readable files and how that information should be laid out," researchers stated. "There are no standards for what needs to be included in the description or whether codes should include commonly used modifiers.
"Although providers are required to include de-identified minimum and maximum negotiated charges, lack of standardization for how these are labeled in the data result in difficult isolation of these values for use in further analysis."
These challenges are not necessarily because many hospitals continue to be noncompliant with the rule, the study highlighted.
A recent report by PatientRightsAdvocate.org showed that 75.5% of hospitals are still not complying with the law, with 5.8% failing to post any standard charges files. However, the report also found a wide variation in data size, further underscoring the need to establish clear standards.
CMS has offered resources to help hospitals comply with the rule, including releasing three sample formats (wide, tall, and plain) for machine-readable files. Those formats are voluntary though, meaning hospitals have no real reason to alter their process until standardization is put in place.
The Peterson-KFF study suggests the reliability and usability of data would improve with "consistent specification" of the following: the charge’s applicable hospital setting (inpatient or outpatient), charge type (facility or professional), associated charge modifiers that affect pricing or payment of a service, the time period covered, any bundles the charge is a part of, the health plan type, and how the charge differs from the base rate.
"Until there is more standardization in how machine-readable files are organized and made available, analysis of these data will be challenging," the researchers concluded. "More fundamental issues surrounding what is included in a negotiated charge remain."
Analysis of health insurer financial performance in 2021 finds Medicare Advantage (MA) plans had significantly higher gross margins.
MA plans reaped over twice as much value as other insurance markets by the end of 2021, according to a report by Kaiser Family Foundation.
As utilization of medical care rebounded following the early stages of the COIVD-19 pandemic, MA gross margins per enrollee returned to pre-pandemic levels while commercial markets fell behind, researchers found.
The analysis examined financial data reported by insurance companies to the National Association of Insurance Commissioners and compiled by Mark Farrah Associates to compare gross margins and medical loss ratios between MA, Medicaid managed care, individual, and fully insurance group markets through the end of 2021.
Gross margins per enrollee is the amount by which total premium income exceeds total claims costs per enrollee per year. Though it doesn't necessarily translate into profitability because it doesn't take into account administrative expenses or tax liabilities, the researchers said, it does give an indication of financial performance.
MA plans averaged gross margins of $1,730 per enrollee in 2021, significantly higher than those in the individual ($745), fully insured group ($689), and Medicaid managed care ($768) markets.
When utilization was low due to the pandemic in 2020, MA plans grossed $2,257 per enrollee, compared to $1,317 for individual, $958 for group, and $845 for Medicaid managed care.
Prior to the pandemic in 2019, MA plans averaged gross margins of $1,819 per enrollee, well ahead of individual ($1,167), group ($832), and Medicaid managed care ($586).
Researchers highlighted that because MA plans cover an older, sicker population, they have both higher average costs and higher premiums, which are mostly paid by the federal government.
"So, while Medicare Advantage insurers spend a similar share of their premiums on benefits as other insurers in other markets, the gross margins—which include profits and administrative costs—of Medicare Advantage plans tend to be higher," the analysis stated.
As more distance is created from the pandemic, researchers posit that healthcare utilization could continue to increase.
Utilization and costs for Medicaid managed care, meanwhile, will be impacted by the upcoming Medicaid eligibility redetermination, which could result in millions losing coverage.
CEO Andrew Toy said "accelerating our path to profitability" is the company's top priority.
Clover Health trimmed its losses in the fourth quarter (Q4) of 2022 and experienced healthy revenue gains, according to the company's earnings report.
The insurtech's report showed $84 million in loss in Q4, a sizeable improvement from the $187.2 million loss incurred over the same period in 2021. For the full year, losses were $338.8 million in 2022, compared to $587.8 for 2021.
Meanwhile, Clover's revenue more than doubled year over year. After generating $432 million in Q4 of 2021, the company accumulated $898.8 million in Q4 of 2022 to finish the year with $3.47 billion, a marked increase from $1.47 billion in 2021.
Clover Health CEO Andrew Toy said the company is focused on continuing to make gains to quickly turn losses into profit.
"In 2023, accelerating our path to profitability is our top priority, and I am excited by Clover Assistant's role in helping physicians identify and manage chronic diseases earlier, which improves care for Medicare beneficiaries," Toy stated.
Toy assumed the role of CEO in January of this year after first serving as Clover's CTO and then president and board member.
In a recent exclusive interview with HealthLeaders, Toy discussed the company's leadership transition and how his tech background benefits him in his new position.
He also talked about how Clover Assistant is a major asset for not just the company, but for physicians who can utilize it to support what they do.
"The analogy I use for Clover Assistant is the GPS. It provides useful, specific data that could inform a better route that supplements or complements a provider’s clinical care," Toy said.
With Toy now at the helm, Clover is eyeing continued growth in 2023. The company stated that insurance revenue is expected to be in the range of $1.15 billion to $1.20 billion this year, representing a growth rate of 6% to 11% as compared to 2022. Non-insurance revenue, meanwhile, is expected to be in the range of $750 million to $800 million.
One way to keep up growth is by increasing membership once again, as the company did last year. Clover saw an increase from 68,120 insurance members in 2021 to 88,627 for 2022, and a drastic rise in non-insurance beneficiaries from 61,876 in 2021 to 164,887 in 2022.
"I'm pleased we are achieving real momentum towards profitability," Toy said in the company's release. "We intentionally priced our Insurance plans for 2023 with profitability in mind while still expecting to grow our top-line Insurance revenue.
"We believe this, coupled with a maturing membership base and increased reimbursements based on our improved star ratings, will enable us to achieve continued meaningful improvement in our Insurance MCR in 2023."
Insure.com compared payers in various categories to review and rank the best companies currently.
Kaiser Permanente is the best health insurer for 2023 based on its customer satisfaction and other factors, according to Insure.com.
The website's rankings are based on National Association of Insurance Commissioners' complaint data and National Committee for Quality Assurance (NCQA) ratings, as well as on a survey of 1,500 insurance consumers asking how insurers fare in multiple categories.
The survey results accounted for 60% of the total score, while the NCQA made up 25% and the NAIC figured for 15%.
Kaiser garnered the top spot with a rating of 4.164 out of five stars, followed closely by UnitedHealthcare with 4.158 and Aetna at 3.8.
"Consumers certainly want to save money and receive a low premium when choosing an insurance company. However, it is important to also consider factors such as financial ratings, regulatory compliance and customer satisfaction," said David Marlett, managing director, Brantley Risk & Insurance Center at Appalachian State University, and an Insure.com editorial advisor.
"These rankings incorporate all of these issues and provide the consumer with a more comprehensive approach to evaluating insurance options."
Best health insurers of 2023:
1. Kaiser Permanente, 4.16
2. UnitedHealthcare, 4.15
3. Aetna, 3.8
4. Elevance Health, 3.63
5. Humana, 3.61
6. BCBS Michigan, 3.5
7. Blue Shield of California, 3.3
8. Florida Blue, 2.98
9. Molina Healthcare, 2.96
10. Cigna, 2.9
Best health insurers by category:
Best for customer satisfaction: Kaiser Permanente
Best for ease of service: Kaiser Permanente
Best for policy offerings: Kaiser and Blue Shield of California
Best digital experience: Aetna
Best for seniors: Humana
Best for low deductibles: Blue Shield of California
Best for its provider network: Elevance Health
Best for its referral policy: UnitedHealthcare
Most likely to be recommended to others: Kaiser Permanente
A new survey finds high satisfaction with Medicare plans, but plenty of concern over costs and future access to benefits.
Though many Medicare beneficiaries are satisfied with their plan, they have trepidation about where the health insurance program is heading, according to a survey by eHealth.
The private health insurance marketplace surveyed 4,567 members with either Medicare Advantage (MA), Medicare Supplement, or Medicare Part D prescription drug plans through eHealth this month to gauge how beneficiaries feel about their coverage.
Nearly nine in 10 respondents (88%) said they are satisfied with their coverage, but 60% believe political leaders who influence Medicare policy aren't listening to their needs.
Costs are the biggest concern, with more beneficiaries saying they are worried about being able to afford out-of-pocket expenses (75%) than their monthly premiums (43%).
The fear of costs is heightened due to the end of the COVID-19 public health emergency, with 62% of members expressing concern about their out-of-pocket expenses for COVID-related care increasing.
Beneficiaries are worried about the future of Medicare, but those concerns differ by income. Lack of access to prescription drugs is the top concern for those with an income over $100,000, while benefits being reduced is foremost for those making between $50,000 and $75,500, and not being able to afford care is front of mind for those making below $25,000.
"As our research demonstrates, there are important nuances in how Medicare beneficiaries feel about their coverage and cost burden," Fran Soistman, CEO of eHealth, said in a statement. "Understandably, uncertainty about future expenses weighs heavily on those living on a fixed income. They want to know that insurance carriers and Medicare policymakers are listening to them.
"As an organization that advocates for transparency in health insurance coverage, it is important for us to shine a light on their concerns."
The survey also revealed that awareness among beneficiaries is low. While 95% of members said it's important to review coverage options at least once per year, only 10% of MA enrollees were aware of the MA enrollment period currently under way.
Lack of awareness is also set to affect Medicaid enrollees. A survey from the Urban Institute found that 64% of adults in a Medicaid-enrolled family have no idea that they may lose coverage with the return to regular Medicaid renewal processes.
Health insurers can do their part by educating their members and guiding those that lose coverage to new plan options.
The major payer will concentrate its focus on its Medicare and Medicaid health plan offerings.
Humana will leave its employer group commercial medical products business to shift its full attention to its core insurance lines, the company announced.
The exit from the market will be phased over the next 18 to 24 months, the health insurer specified, and will include abandoning all fully insured, self-funded, and Federal Employee Health Benefit plans, as well as associated wellness and rewards programs.
Humana stated the decision comes after a strategic review, which determined the "business was no longer positioned to sustainably meet the needs of commercial members over the long term or support the company’s long-term strategic plans."
The payer can now put all of its efforts into its Medicare and Medicaid plans, including its Medicare Advantage (MA) offering. In a recent study by the American Medical Association found that Humana had the second-largest MA market share at 19%, behind only UnitedHealth Group.
"This decision enables Humana to focus resources on our greatest opportunities for growth and where we can deliver industry leading value for our members and customers," Bruce D. Broussard, Humana president and CEO, said in a statement. "It is in line with the company's strategy to focus our health plan offerings primarily on Government-funded programs (Medicare, Medicaid and Military) and Specialty businesses, while advancing our leadership position in integrated value-based care and expanding our CenterWell healthcare services capabilities.
"We are confident in Humana's continued success, and our commitment to improving the health of those we serve is unwavering."
Last year, Humana restructured by splitting into two business units, insurance services and CenterWell, as part of its goal to generate $1 billion of value to pour into its MA and Medicaid businesses.
The announcement came six months after Humana stock fell by 21%, as the payer slashed MA enrollment projections roughly in half.
The federal agency has highlighted areas of improvement to get more facilities complying with the regulation.
CMS is aware more needs to be done to achieve better price transparency compliance by hospitals and plans to take "aggressive additional steps" to make enforcement a priority.
CMS' deputy administrator and director Meena Seshamani and Center for Medicare chief transformation officer Douglas Jacobs detailed next steps for the federal agency and new compliance statistics in a Health Affairs article.
According to CMS, nearly 500 warning notices and over 230 requests for corrective action plans have been issued as of January 2023, with nearly 300 hospitals having addressed the issues to become compliant.
Since the hospital price transparency regulation went into effect on January 1, 2021, hospitals are required to make public their standard charges for items and services through a consumer-friendly display showing at least 300 shoppable services, as well in a machine-readable file.
Hospitals were slow to adapt out of the gates. In an assessment of 235 randomly sampled hospitals conducted by CMS between January and February 2021, 66% met consumer-friendly display criteria, 30% posted a machine-readable file, and 27% did both.
Those figures improved significantly in CMS' second assessment, this time of 600 randomly sampled hospitals between September and November 2022. The analysis found 493 hospitals (82%) posted a consumer-friendly display, 490 (82%) posted a machine-readable file, and 421 (70%) did both.
The second assessment came after CMS increased the penalty for noncompliance, by adjusting the maximum potential penalty from just over $100,000 annually per hospital to over $2 million annually per hospital.
"We believe the multifaceted effort that CMS has undertaken since initially implementing the regulation—including efforts to educate, monitor, and enforce the regulations with increased applicable potential penalty amounts, along with heightened public interest and scrutiny—have driven this improvement," the article stated.
Despite the improvement, that would still leave 30% of hospitals noncompliant with the law. Yet CMS has only taken action against two hospitals to date, issuing fines of $883,180 to Northside Hospital Atlanta and $214,320 to Northside Hospital Cherokee.
In an effort to streamline enforcement going forward, the article said CMS plans to shorten how much time it affords hospitals to come into full compliance. In addition, the federal agency "plans to take aggressive additional steps to identify and prioritize action against hospitals that have failed entirely to post files."
CMS' compliance statistics differ from findings by other groups, including PatientRightsAdvocate.org in its Semi-Annual Hospital Price Transparency Compliance Report. That analysis of 2,000 hospitals from December 10, 2022 through January 26, 2023 revealed that 75.5% of facilities are still noncompliant.
Researchers also found significant variation in data size, which CMS acknowledged as an issue in the Health Affairs article. The agency said it will take steps to standardize both reporting of price transparency information and the machine-readable file.
Finally, CMS stated it will explore ways to make it easier for the public to find the machine-readable files, which could include mandating the centralization of information.
The article concluded: "We believe that, together with members of the public, we can further unlock the collective potential of hospital price transparency and achieve greater competition in the health care system."