Poor customer service and communication scores brought down customer satisfaction in J.D. Power's new study.
Commercial health plans are struggling to meet patients' engagement needs as member satisfaction continues to plummet, a study by J.D. Power shows.
The data analytics, advisory services, and consumer insights company released its 2023 U.S. Commercial Member Health Plan Study, which measures satisfaction among members of 147 health plans in 22 regions throughout the country. Responses for the 17th annual report are from 32,656 commercial health plan members, fielded from January to April 2023.
Member satisfaction is measured by evaluating six factors: billing and payment, cost, coverage and benefits, customer service, information and communication, and provider choice.
The study found that overall satisfaction dropped by 13 points (on a 1,000-point scale) this year, mostly due to a 33-point decrease in satisfaction with customer service. Other areas that suffered notable decline were coverage and benefits (-20), provider choice (-16), and information and communication (-16).
Meanwhile, among patients with a self-reported health status of "poor/fair," 36% said their health plan helped them coordinate care. That figure jumped to 43% among patients with a self-reported status of "very good/excellent."
Additionally, the study revealed that the average Net Promoter Score for new members was 6 (on a scale of -100 to 100), compared to 25 for established plan members, indicating that health plans are falling short on providing information and support on navigating their benefits.
Finally, the report uncovered that digital usage by members for all tools and support remains under 50%. Usage of online health assessments was 18% among the sickest patients, while use of chronic disease management tools was 8%, use of online triage and nursing support was 10%, and remote monitoring was 6%.
Though the study found members' usage of digital tools lacking, another report by Accenture identified ease of navigation, including poor experiences using digital tools, as the top reason why beneficiaries leave their health plans.
A separate study by American Customer Satisfaction Index found that the most important experience benchmarks for health insurance customers were quality of mobile apps and reliability of mobile apps.
Health plans wanting to retain and attract new members, especially in the younger generations, need to prioritize how they engage their patients.
"The transition to value-based care is predicated on the idea that payors and providers can drive better outcomes at a lower cost by improving patient engagement, yet many commercial health plans are having challenges getting the right information and support to patients when and where they need it," Christopher Lis, managing director, global healthcare intelligence at J.D. Power, said in a press release.
"Moreover, in patients with self-reported health status of 'poor and fair,' only 17% were assigned to a case manager. Yet for these patients with oftentimes complex health conditions, seeing multiple providers and taking several prescriptions, care fragmentation leads to poor health outcomes and higher spending in the very population that needs coordinated care the most."
Lack of data reporting means there are unanswered questions around how supplemental benefits are utilized.
Supplemental benefits are a significant differentiator between Medicare Advantage (MA) and traditional Medicare, with enrollees often opting for the private program because of its coverage for services like dental and vision.
However, how beneficiaries actually use these benefits continues to be a mystery because MA insurers do not reportthat data, leaving gaps that limit necessary assessment of the private program.
Analysis by Kaiser Family Foundation (KFF) found that most enrollees in individual MA plans have access to eye exams and/or glasses (more than 99%), hearing exams and/or aids (98%), a fitness benefit (98%), telehealth services (98%), and dental care (96%). A report from the Government Accountability Office (GAO) examined plan benefit data for 3,893 MA plans and found that all but one plan offered at least one supplemental benefit not covered under traditional Medicare, with vision and hearing being the most common at 98% and 94%, respectively.
As MA has dramatically grown in recent years, more and more money is going to MA insurers for these supplemental benefits. In the last five years, these payments have more than doubled, increasing from $1,140 per enrollee in 2018 to $2,350 per enrollee in 2023, according to KFF.
How this money is being used by payers is also difficult to understand without the aforementioned data on enrollee spending on supplemental benefits. But why is that data not available?
Though MA plans are required to submit encounter data, which includes supplemental benefits, to CMS, GAO's report uncovered that the information is limited for two reasons.
First and foremost, CMS guidance on encounter data does not specifically mention data for supplemental benefits. GAO said that according to interviewed CMS officials, the inclusion of supplemental benefits is clear. Officials from three MA organizations, on the other hand, told GAO they are not required to submit encounter data on supplemental benefits.
Additionally, CMS officials and two MA organizations told GAO there are challenges, such as there being no procedure codes for some supplemental benefits, in collecting and submitting encounter data.
HHS concurred with GAO's recommendations to clarify guidance on what encounter data submissions must include in relation to supplemental benefits and to address challenges in submitting encounter data for supplemental benefits. Until the reporting of data on supplemental benefits is fully required and enforced though, MA plans will continue operating without necessary oversight.
"Basic descriptive data could also be used to assess whether supplemental benefits are helping to address health disparities by filling specific social or medical needs, such as transportation, and whether the benefits are being targeted to those with the greatest needs," KFF wrote.
The private program has been unencumbered in its take-off and it's unclear how much upcoming CMS regulations will challenge that.
The Medicare Advantage (MA) takeover is no longer coming—it's already happened.
The private program hasn't exactly stealthily crept in like a thief in the night to become the plan of choice for seniors either. Rather, MA's growth has been impressively consistent and steady over recent years, and there's little reason to think the trend will suddenly stop.
However, speed bumps for payers may be on the way in the immediate future in the form of CMS regulations, but competition is expected to continue driving MA forward.
To better understand where MA is going though, it's necessary to understand how and why it has boomed to this point.
The new normal
For the first time ever, half of all eligible Medicare beneficiaries are now enrolled in a MA plan, according to recently released enrollment data from CMS. In 2007, less than one in five (19%) eligible Medicare beneficiaries were enrolled in the private program.
In a study published in Health Affairs, researchers from the USC Schaeffer Center found that MA added 22.2 million beneficiaries from 2006 to 2022 for a growth of 337%, all while enrollment in traditional Medicare declined by one million (-2.9%). MA penetration increased from 16.9% in 2006 to 49.9% nationally in 2022 and 24% of Medicare beneficiaries with Parts A and B lived in a county with adjusted MA penetration equal to greater than 60%.
It isn't just that MA's enrollment is going up, it's that beneficiaries are migrating over from traditional Medicare at a rapid rate. Research published in JAMA Health Forum revealed a higher rate of switching from traditional Medicare to MA than in the opposite direction from 2017 to 2020, with switching accounting for new MA enrollment growth, increasing from 49% in 2016 to 67% in 2020.
The shift has continued this year. As MA grew by a record 2.7 million members in 2023, traditional Medicare lost 1.3 million beneficiaries, according to analysis by The Chartis Group.
MA can appeal to beneficiaries in ways traditional Medicare can't, namely through it's extra benefits, such as dental and vision, and lower out-of-pocket spending. MA has also aggressively and deceptively marketed to seniors to the point it has drawn restrictions from CMS.
There's also the fact that the aging population is at an all-time high, resulting in more potential enrollees than ever. According CVS Health's recent Health Trends Report, more tan one in five people will be over the age of 65 by 2030.
"Moreover, this age group is more proactive and involved in their well-being than any previous generation, and medical advancements will continue to extend lifespans," Terri Swanson, president of Aetna Medicare, told HealthLeaders. "These factors have triggered a significant transformation in the payer market, which we have taken into account in our strategy."
Evolving to stave off stiff competition
Naturally, as MA's presence continues to expand, payers are fighting for their piece of the pie.
Most of the record MA growth this year was propelled by for-profit insurers, which accounted for 84% of the increase in enrollment, The Chartis Group's analysis found. Overall, the 10 largest for-profit insurers make up 70.6% of MA enrollment nationally, with the top five payers accounting for 67.1%.
For 2023, the typical beneficiary had a choice of 43 MA plans as an alternative to traditional Medicare, which was more than double the average number available in 2018, according to Kaiser Family Foundation.
"Companies are also diversifying their plan offerings to meet consumers' needs," Swanson said. "In short, more choices lead to intensified competition."
So how are payers thinking when it comes to differentiating themselves from the competition and ensuring that enrollment growth doesn't stagnate? Swanson outlined her and Aetna's mindset:
"To achieve continued growth, we must assess and take advantage of the available opportunities that enable us to drive better health outcomes and quality of care for our members, such as value-based care arrangements. This enables us to collaborate with our providers to promote preventive care and help our members age actively. It also means examining how and where care is being delivered and making it simpler and more convenient. For example, we recently built upon existing capabilities with new, strategic acquisitions to enhance our in-home and primary care offerings via Signify Health and Oak Street Health.
"Finally, more health care companies, like Aetna, are recognizing the influence of social determinants of health and incorporating services and benefits into their plans to address these non-medical needs. Over time, CMS introduced regulatory changes that enhance Medicare plan flexibility and help drive innovation. This has allowed us to offer our members more tailored benefits that better meet their total health needs—physical and mental—and simplify their health care journeys."
Hurting the bottom line
Payers offerings MA plans have enjoyed how the program's growth has affected their earnings, but the gains may not be the same going forward due to the changes in CMS' 2024 MA final rule.
The changes to the risk adjustment model in particular have the potential to affect insurers' pockets. Though the rule will allow the federal agency to collect billions of dollars in overpayments made to MA payers, CMS ultimately decided to phase in the risk adjustment changes over the next three years. The federal agency said MA plans will see an averagepayment increase of 3.32% due to the phase-in, instead of the 1.03% in the advance notice.
"BCBSA acknowledges the necessity of many of the updates and is appreciative of CMS' more measured approach towards implementation," Kelly Parsons, spokesperson for Blue Cross Blue Shield Association, told HealthLeaders in a statement. "However, the projected decrease in revenue for MA plans and beneficiaries could have negative downstream impacts for certain segments of MA plans and their beneficiaries, potentially making growth more challenging, particularly for smaller, regional plans in highly competitive markets."
UnitedHealth Group CEO Andrew Witty shared similar concerns in a recent investor call following the company's release of its first quarter earnings report, but stated the payer is "encouraged and optimistic" that its MA growth won't slow down.
How payers truly feel about the changes will depend on how the next year-plus plays out. Everyone will have to deal with the same regulations, but the MA market may skew even more to the giants at the top.
Even for insurers, the administrative process in the private program has drawbacks that may not be worth the cost savings.
Prior authorization, in theory, is intended to manage medical costs and promote efficient utilization of care, but the unintended consequences of the administrative process often turn it into a net negative. There's arguably no program in which the pitfalls of prior authorization are more prevalent than Medicare Advantage (MA).
Nearly all MA enrollees (99%) were in a plan in 2022 that required prior authorization for some services, according Kaiser Family Foundation (KFF), whereas beneficiaries of traditional Medicare are rarely required to receive approval.
The result? Countless prior authorization requests shot down, resulting in medically necessary being delayed or outright denied, as well as providers taking on administrative burden.
KFF analysis found that in 2021 alone, more than two million of the 35 million prior authorization requests made to MA plans were denied in full or in part. Only 11% of the denials were appealed, but when they were, 82% resulted in the denial being either fully or partially overturned, indicating that the denial was unnecessary in the first place.
Another report by the Office of Inspector General in April 2022 highlighted concerns of MA plans putting profits over patients through findings that MA organizations often delay or deny services for medically necessary care, even when prior authorization requests met coverage rules.
Though that report was released more than a year ago, a survey by the Medical Group Management Association put out just this past month revealed that little progress has been made with prior authorization in MA. In fact, based on the poll, it's gone the other way. More than four out of five (84%) surveyed medical groups said prior authorization requirements in MA increased in the past 12 months, with less than 1% reporting requirements had decreased.
The toll has affected providers' practice costs and workflow, as 77% of respondents said they had hired or redistributed staff to work on prior authorizations due to an increase in requests, while 60% said at least three different employees are involved in completing a single prior authorization request.
Prior authorization can negatively impact patients and providers, but it can also hurt payers by creating mistrust with enrollees and hindering relationships with providers. A recent survey by the American Hospital Association (AHA) found that 78% of hospital and health systems said their experience with insurers was worsening, with less than 1% saying it improved.
The scrutiny of prior authorization in MA has brought about changes by CMS, which introduced regulations in its MA 2024 final rule. Going forward, prior authorization approvals are required to remain valid for as long as medically necessary, while denials of coverage based on medical necessity must be reviewed by healthcare professionals with relevant expertise before a denial can be issued. MA plans are also required to annually review utilization management policies.
Furthermore, the rule requires that coordinated care plan prior authorization policies may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary. Coordinated care plans must also provide a minimum 90-day transition period when an enrollee underdoing treatment switches to a new MA plan, during which the new MA plan cannot require prior authorization for the active course of treatment.
The changes garnered approval by medical groups, such as the AHA, which said: "Hospitals and health systems have raised the alarm that beneficiaries enrolled in some Medicare Advantage plans are routinely experiencing inappropriate delays and denials for coverage of medically necessary care. This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained health care workforce."
Whether or not these changes are enough to ultimately fix the prior authorization issue in MA is yet to be seen, but it's a necessary and overdue step in the right direction.
Misleading marketing has run rampant in the private program for too long, though new CMS regulations will attempt to offer more protection for enrollees.
Medicare Advantage (MA) can attribute its growth to several factors, but deceptive marketing is undeniably somewhere on that list.
When your consumer base is senior citizens, the ease with which MA and traditional Medicare can be confused isn't a bug, it's a feature. Health plans selling the private program are able to take advantage of beneficiaries' confusion with marketing tactics that prioritize profits over well-being.
Whether it's a celebrity endorsing MA on a TV advertisement or a broker not being completely forthcoming, MA has been ripe with misleading and deceptive practices.
Where exactly is that marketing coming from and what is being done to protect enrollees?
According to a recent reportfrom the Commonwealth Fund, non-government entities—agents, brokers, partners, and health plans—account for one-third of all Medicare-related search records and 87% of all search engine ads.
"Medicare Advantage plans are promoted through direct mailings, telemarketing, and advertising on radio, television, websites, and social media channels," the report stated. "No organization, including the federal government, directly 'markets' traditional Medicare, although commercial insurers sell supplemental Medigap and Part D plans for people in traditional Medicare. Thus, nearly all beneficiaries are subject to some form of marketing effort."
When people aged 65 or older sought help with their plan choice, the analysis found that 31% turned to agents and brokers in MA. As brokers and agents are paid commission by insurers, enrollees can be at risk of manipulation.
The Commonwealth Fund also highlighted that CMS reported more than 41,000 complaints in 2021 about Medicare private plan marketing, which was double the number in 2020 and up from about 6,000 in 2017.
The marketing problem has gotten out of hand, which is why plenty of lawmakers have taken notice and attempted to push CMS to implement necessary regulations.
CMS listened and cracked down on unscrupulous marketing tactics in its MA 2024 final rule. The changes will take effect on September 30, before the open enrollment period when plans will once again attempt to lure beneficiaries through TV ads and other media.
Prohibit any ads that do not mention a plan name, use words and imagery that could confuse enrollees, or use Medicare logos in a misleading manner.
Protect beneficiaries from prevent predatory behavior and strengthen the role of plans in monitoring agent and broker activity.
Protect enrollees by ensuring they receive accurate information about Medicare coverage and are aware of how to access accurate information from other sources.
"This final rule will strengthen Medicare Advantage and hold health insurance companies to higher standards for America’s seniors and people with disabilities by cracking down on misleading marketing schemes by Medicare Advantage plans, Part D plans and their downstream entities," CMS said in a press release.
The Office of Inspector General (OIG) uncovered overpayments in 2019 and 2020 for care provided to Medicare beneficiaries.
Medicare overpaid $22.5 million in 2019 and 2020 for physician services while enrollees were hospital inpatients or in skilled nursing facilities, according to an audit by OIG.
Researchers conducted analysis of the 2.1 million physician service claim lines identified at risk of overpayment because of non-compliance with the place-of-service policy.
Medicare pays for physician services separately from the payments it makes to inpatient facilities like skilled nursing facilities and hospitals. However, practitioners may not always correctly report the place-of-service code on a claim line, causing Medicare to pay more at higher nonfacility rates than at lower facility rates while beneficiaries were inpatients of facilities, OIG stated.
"CMS has expressed reluctance to take enforcement action for these claim lines because neither statute nor CMS's regulation specifically addresses situations in which a SNF or hospital inpatient leaves to receive a physician service in a nonfacility setting."
In its report, OIG recommended that CMS:
Direct Medicare to recover the $22.5 million in overpayments
Notify the practitioners so they can identify, report, and return overpayments within 60 days
Establish and apply common work file edits to detect when practitioners incorrectly use the nonfacility place-of-service code
Take steps to revise its regulations to ensure that Medicare make appropriate payments for physician services
Considering developing a mechanism for facilities to indicate when an inpatient leaves a facility and returns the same day
Provide additional education to practitioners on properly using place-of-service codes
OIG said CMS concurred with and will take action on recommendations one, two, three, and six, while stating it will consider the findings for recommendations four and five before taking action.
Kaufman Hall finds inflation and high expenses continue to hinder hospitals' bottom line.
Hospitals saw their finances break dead even in April with a 0.0% median operating margin as the COVID-19 public health emergency concluded, according to a Kaufman Hall.
The healthcare consulting firm's National Hospital Flash Report highlighted hospitals' lack of financial wiggle room even as the media year-to-date operating margin index slightly improved from -0.3% in March. The report uses data from more than 900 hospitals from Syntellis Performance Solutions.
Hospitals dealt with increases in bad debt and charity care in April, Kaufman Hall stated, which could be the result of widespread disenrollment from Medicaid after the public health emergency ended last month. That, combined with patient volumes dropping while lengths of stay increased, has negatively affected hospitals.
"With states conducting their Medicaid eligibility redetermination, it's predicted that hundreds of thousands of people will ultimately become uninsured," Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall, said in a statement. "The data indicate that we may already be seeing the effects of disenrollment materialize with patients less likely to seek out the care they need and a continued rise in bad debt and charity care."
High expenses continue to put pressure on hospitals, with labor expense per adjusted discharge increasing 3% from March to April, the report revealed. Meanwhile, the costs of good and services remain above pre-pandemic levels.
Though total expenses slightly declined in April, that was offset by operating revenues suffering a 5% decrease month-over-month.
"Hospital and health system leaders must figure out how to navigate the new financial reality and begin to take action," Swanson said. "In the face of operating margins that may never fully recover and inflated expenses, developing and executing a strategic path forward to a future that is financially sustainable is crucial."
The second preview of HealthLeaders Payer Week, five days of in-depth coverage and exclusive interviews.
HealthLeaders Payer Week features five days of in-depth coverage spotlighting the significant roles and contributions of insurers. Our week-long exploration, Medicare Advantage in the Hot Seat: Challenges and Opportunities, will include:
Medicare Advantage's tremendous market growth and expansion
The sticky business of Medicare Advantage prior authorization and marketing
The intersection of benefit design and provider performance
Rising drug costs and Medicare Advantage health plan counter-moves
The Star Ratings program evolution
Below is some of what you can expect for Payer Week. Part one previewed drugs costs and coverage, star ratings, and the Medicare value-based insurance design program.
Preview 1: Deceptive marketing and the role it plays in luring seniors
One aspect of Medicare Advantage that has come under great scrutiny is how plans market to new and existing enrollees. Seniors are often the target of misleading and inaccurate advertising, which only creates confusion for Medicare beneficiaries attempting to choose what plan suits them best.
Where is that marketing coming from and what regulations can combat it? Lawmakers have set their sights on these deceitful tactics and CMS has stepped in to impose tighter restrictions on how plans can attract members.
Preview 2: Can I have your approval, please?
Prior authorization can be problematic in any health plan, but it's been particularly burdensome in Medicare Advantage. And despite it being recognized as a glaring issue, the prior authorization headache in the private program seemingly isn't getting any better.
It's first and foremost leading to situations where necessary care is delayed or denied, but it's also putting increased administrative pressure on providers at a time when hospitals, health systems, and practices are feeling the financial and workforce squeeze.
Preview 3: Will the growth boom quiet down in 2024?
For the first time ever this year, Medicare Advantage became the coverage provider for more than half of all eligible Medicare beneficiaries. The growth has been steady and consistent over recent years and it's unclear when it will slow down.
However, CMS has thrown a monkey wrench into the works with some of its regulations, especially the risk adjustment changes which may impact how payers operate. Plans have experienced record enrollment, but competition is also as high as ever.
Preview 4: Checking under the supplemental benefits hood
Nearly all Medicare Advantage plans offer supplemental benefits and those offerings can entice enrollees in ways traditional Medicare can't. Yet encounter data on utilization of those benefits is still limited.
Better understanding how supplemental benefits impact beneficiaries can potentially further unlock Medicare Advantage, but that could require implementing standardization and reporting measures that are currently not in place.
The two sides remain apart as the payer's prior authorization mandate is set to begin on June 1.
A meeting between UnitedHealthcare (UHC) and the American College of Gastroenterology, American Gastroenterological Association, and American Society for Gastrointestinal Endoscopy failed to produce a resolution in the fight over the insurer's prior authorization policy, the societies said.
The payer and GI providers convened for a meeting in which UHC proposed delaying its GI prior authorization program, which goes into effect June 1, "in exchange for an 'advance notification program,' requiring GI practices and staff to gather detailed patient data prior to procedures and in preparation for a Gold Card program in 2024," according to a joint press release by the societies.
"Unfortunately, what UHC verbally presented in our meeting was a poorly defined and complicated administrative process. The GI societies are not in a position to appropriately evaluate the UHC proposal with the limited information presented.
"A pause in the June 1 launch of UHC's prior authorization policy requires the GI societies to publicly support this alternative proposal by early next week. Our patients' health is at stake and we cannot meet this unreasonable request."
The societies reaffirmed their desire for UHC to halt its prior authorization policy, which will require approval for nearly half of gastrointestinal endoscopies.
In a response to HealthLeaders about the prior authorization program, UHC said:
"We have made no changes to our policy regarding screening colonoscopies for preventive care, and this policy does not impact screening colonoscopies. We are asking physicians to follow the guidelines and evidence-based practices developed by their own gastroenterology medical societies to help ensure our members have timely access to safe and clinically appropriate care. The physicians who will be most affected by this new policy are those who are not already following these evidence-based practices, which again, were developed by gastroenterology-related medical societies."
"Our electronic submission process allows for immediate approvals for physicians who have a history of following evidence-based guidelines for the requested procedure. For procedures that do not receive immediate approval, decisions are typically made within two business days after receipt of all required clinical information needed for our GI specialists to review the case – well within the average wait time to schedule a service included in this policy."
Only 21% of the payer's Medicare Advantage (MA) members are enrolled in plans with at least four stars.
CVS Health is expecting to take a hit of around $800 million to $1 billion to its operating income in 2024 due to a decline in MA star ratings, the company announced.
In a filing with the Securities and Exchange Commission, the payer revealed that the percentage of its MA members enrolled in plans with star ratings of at least four stars dropped from 87% in 2022 to 21% for 2023. Plans with ratings of at least four stars qualify for bonus payments in 2024, which is why CVS is bracing to take a loss to its operating income.
The insurer said the main reason for its star ratings drop is the full star decrease to Aetna National PPO, which fell from 4.5 to 3.5 stars. The health plan, which makes up 59% of the payer's MA membership, will no longer be eligible for bonus payments in 2024.
When CMS released the 2023 star ratings for MA plans in October 2022, the average rating across all plans fell from 4.37 to 4.15. The methodology was adjusted to account for the pandemic no longer being at the height it was in recent years.
In CVS' recent earnings call, CEO Karen Lynch said she was "encouraged by what we're seeing on the internal metrics relative to our stars performance."
In the filing, the payer stated: "There can be no assurances that the Company will be successful in maintaining or improving its star ratings in future years. Accordingly, the Company's Medicare Advantage plans may not continue to be or become eligible for full level quality bonuses, which could adversely affect the benefits such plans can offer, reduce membership and/or reduce profit margins."
