The health insurer will also no longer offer Medicare Advantage plans outside of California and Florida.
Bright Health Group is scaling back its business in 2023 by cutting individual and family plan offerings, as well as removing Medicare Advantage products outside of two states.
The payer announced its decision to remove Affordable Care Act plans while also saying it has raised $175 million that is expected to close in the coming weeks and "take the business through profitability."
Bright Health will turn its focus to its Fully Aligned Care Model, which the company states is "a faster path to profitability, has greater predictability, and is more capital efficient."
The shift allows the health insurer to reach profitability on an adjusted EBITDA basis in 2023, with $3 billion in net revenue expected next year, according to the health insurer. The $3 billion is down significantly from the $6.8 billion in revenue expected in 2022 from the company's second quarter earnings report, which also showed a net loss of nearly $432 million in the first half of the year.
"We have demonstrated the power of the Fully Aligned Care Model in serving aging and underserved populations and progressed the marketplace towards seeing the promise in value-based care across all populations," Mike Mikan, Bright Health Group president and CEO, said in a statement. "The changes announced today give Bright Health a strong and stable platform for profitable growth at much lower risk. This is one more strategic step to building a differentiated and profitable business at scale."
As of June 30, Bright Health had 970,000 commercial members, 120,00 Medicare Advantage members, and 500,000 NeueHealth patients.
With this recent announcement, along with previously announced market exits, Bright Health will not offer individual and family plans in Alabama, Arizona, Colorado, Florida, Georgia, Nebraska, North Carolina, Texas, and Tennessee after 2022. It will also not offer Medicare Advantage plans outside of California and Florida.
Bright Health said it will continue meeting the needs of members for the rest of the year and will work with impacted members in the move to new plans during the upcoming annual and open enrollment periods.
CMS released the 2023 star ratings for Medicare Advantage and Part D plans, with the average rating at 4.15.
The average star rating and number of five-star contracts for Medicare Advantage (MA) plans declined for 2023, CMS announced.
The agency released the annual star ratings for MA and Part D plans to help potential beneficiaries compare plans ahead of the annual enrollment period, which begins on October 15. The ratings are on a one-to-five scale and determined on up to 38 unique quality and performance measures.
For 2023, the average rating across all plans is 4.15, down from last year's 4.37. The number of five-star contracts fell significantly from 74 in 2022 to 57 for the coming year.
Overall, there are 67 contracts that earned 4.5 stars (96 last year), 136 that earned four stars (152 last year), 116 that earned 3.5 stars (122 last year), and 90 that earned three stars (25 last year).
CMS stated that approximately 51% of MA plans that offer prescription drug coverage will have an overall rating of four stars or higher in 2023, while 72% of people currently in MA plans with drug coverage are enrolled in a plan that earned four or more stars.
The decline in ratings for 2023 isn't necessarily performance-based, as CMS adjusted its methodology to account for the COVID-19 pandemic no longer being at the height it was in recent years.
Guardrails were introduced for 2023 for all measures that have been in the Part C and D star rating program for more than three years, aside from the Consumer Assessment of Healthcare Providers and Systems survey and the Part C and Part D improvement measures.
America's Health Insurance Plans (AHIP) responded to the release of the ratings by backing MA's benefits to members.
Matt Eyles, AHIP president and CEO, stated: "The ongoing and continuing effects of factors such as COVID-19, along with recent CMS methodological and measurement changes, may have affected the 2023 Star Ratings results, which primarily relate to the 2021 performance year. Even so, the majority of Medicare Advantage enrollees are projected to be covered by high performing plans. AHIP and our member plans will continue to review the latest Star Ratings results and data closely to assess impacts."
MA advocacy group Better Medicare Alliance (BMA) also responded to the ratings by reiterating that MA beneficiaries will continue to receive quality, affordable care.
"CMS's announcement shows that, even amid the impact of the ongoing public health emergency and recent methodological changes, Medicare Advantage continues to deliver high-quality care for seniors. In fact, the number of 5, 4.5, and 4-star Medicare Advantage plan contracts is higher for 2023 than just two years ago, in 2021," said Mary Beth Donahue, BMA president and CEO.
Aetna's vice president and head of Medicare Part D shares insights into Medicare Advantage's growth ahead of the annual enrollment period (AEP).
Medicare Advantage plans will welcome an influx of new beneficiaries when the AEP opens this month, adding to the momentum towards the private sector offering.
No longer a small piece of the Medicare pie, Medicare Advantage has grown at a steady rate and now accounts for nearly half (48%) of the eligible Medicare population, according to data by Kaiser Family Foundation.
Terri Swanson, Aetna vice president and head of Medicare Part D, spoke with HealthLeaders about the Medicare Advantage surge and Aetna's plan to bring in members, as well as the shifting payer landscape.
Aetna has more than 3.2 million beneficiaries enrolled in a Medicare Advantage plan and recently announced its 2023 Medicare offerings ahead of the AEP, which runs from October 15 to December 7.
This transcript has been edited for clarity and brevity.
HealthLeaders: What do you attribute the Medicare Advantage boom to?
Swanson: It's grown for a couple of different reasons. First of all, the demographics is growing. You've got over 10,000 people aging into Medicare every day nationally. The other thing is more and more people are learning about Medicare Advantage. Because, as Medicare Advantage plans, we're able to manage the all-in, totality of members' health benefits, we've been able to invest in other kinds of benefits that original Medicare doesn't offer. So people who come to Medicare Advantage can get things like dental, vision, hearing. Now there's even more supplemental benefits as CMS has changed some of the regulations over the last few years to give plans more flexibility in terms of what we can offer people that will assist in maintaining or improving their health.
HL: What is driving Aetna's Medicare Advantage strategy?
Swanson: We've had really strong growth over the last number of years and we expect to continue on that trajectory. One of the things we work on every year is to make sure we have a product portfolio that has something for everyone. The Medicare population and particularly the people driving Medicare Advantage are very diverse. Minorities comprise over a third of Medicare Advantage beneficiaries, versus closer to 15% on the fee-for-service side. Medicare Advantage beneficiaries tend to be low-income. Many are dual eligible, which is a large and growing sector of the business. And they're medically complex with multiple chronic conditions. So our product strategy is to make sure we have products for that diverse spectrum of people.
HL: What factors are driving competition the most and how have those evolved?
Swanson: The marketplace is incredibly competitive and that's actually one of the things I like about it, to be quite honest. It's really competitive because you have companies like ours and our peers in the industry, who are very focused on growth. So we want to bring something to the market that beneficiaries will like. We want to meet their needs, we want to innovate, and continuously innovate to keep upping our game. In the grand scheme, that's how our country really benefits from having the private sector involved in things like Medicare Advantage plans.
There are tons of plans available, something like 4,000-plus nationally, the momentum is not going to slow down. With the different kinds of benefits we're now allowed to offer, we can just give beneficiaries things they can't get in a traditional Medicare fee-for-service plan.
HL: In general, what do you identify as the biggest challenges facing payers in the near future?
Swanson: There are a lot of changes coming. The Inflation Reduction Act that was recently passed has a lot of changes for Medicare and particularly Medicare Part D. All of us have to navigate those changes and pivot. It will be good in the long term but it's a lot of regulatory change and that’s always challenging. It's a feature of our business. That particular set of changes is the most significant set of changes for Medicare Part D since its inception in 2006.
The other thing is, with the nature of our changing membership base, the expectations are much higher. We talk about things often in terms of not wanting to necessarily judge ourselves relative to other insurance providers, but our members are going to judge us based on every other digital experience they have. So we are very aware that people expect our online experience to be like Amazon, like Google, like Uber or other services they use that are purely consumer services. So as CVS Health and certainly Aetna as part of that, we are very focused on making sure the member experience is as great as it can possibly be, whether that's digital on the phone or in one of our in-person locations. That rising tide of expectation is something that the entire industry needs to step up in and do right by our members.
The Office of Inspector General (OIG) discovered improper Medicare payments totaling $39.3 million to acute-care hospitals from 2016 to 2021.
Changes to CMS' system significantly reduced Medicare overpayments to acute-care hospitals for outpatient services provided to beneficiaries who were inpatients of other facilities, according to an audit by OIG.
The report uncovered $39.3 million in inappropriate Medicare Part B payments to acute-care hospitals from September 2016 through December 2021, none of which should have been paid because the inpatient facilities were responsible.
However, only $3.4 million, or less than 9% of the $39.3 million in overpayments, was improperly paid from June 2019 through December 2021, after CMS edited its system in May 2019. The system edits were not working properly prior to May 2019, OIG stated.
The audit was conducted as a follow-up to a previous OIG report that found Medicare overpaid acute-care hospitals $51.6 million from January 2013 through August 2016. The payments were for outpatient services to beneficiaries who were inpatients of long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs), and critical access hospitals (CAHs).
To review payments from 2016 through 2021 and determine if CMS had corrected the system edits, OIG identified inpatient claims from LTCHs, IRFs, IPFs, and CAHs and then used beneficiary information and service dates to find outpatient claims from acute-care hospitals that overlapped with the inpatient claims.
In the report, OIG explains the postpayment and prepayment edits in the Medicare claims processing system as such: Before Medicare administrative contractors (MACs) pay outpatient claims, all claims are sent to CMS' Common Working File (CWF) for verification, validation, and payment authorization. The CWF consists of both postpayment and prepayment system edits that should detect overpayments.
Once the CWF has processed a claim for payment, it sends information to the MAC about potential errors on the claim. If the outpatient claim is processed for payment before the inpatient claim, once the inpatient claim is processed, a postpayment edit should send an alert to the MAC so the payment can be recovered. The MAC is responsible for covering the overpayment.
If the inpatient claim is processed for payment before the outpatient claim, once the outpatient claim is processed a prepayment edit should deny the outpatient claim.
In response to the findings, OIG recommends CMS direct the MACs to recover the portion of the $39.3 million in overpayments that is within the four-year reopening period, as well as instruct acute-care hospitals to refund beneficiaries up to $9.8 million that may have been incorrectly collected from them.
In addition, CMS should notify appropriate providers so they can identify, report, and return any overpayments in accordance with the 60-day rule, along with continuing to review the system edits to prevent future overpayments.
Lastly, OIG also recommends CMS direct the MACs to recover any inappropriate payments after the audit period.
In written comments to the report, CMS concurred with all but the final recommendation and said it will consider how to address any overpayments made after the audit period.
In a separate, recent audit, OIG found that CMS had collected only $120 million of the $498 million in Medicare overpayments, despite CMS reporting it had collected $272 million.
A new report compiles survey responses from healthcare leaders to better understand revenue cycle strategy.
Reducing costs and improving efficiency are among the driving factors for why health systems seek out revenue cycle partnerships, according to a report from The Health Management Academy.
Sponsored by revenue cycle management company R1 RCM, Vetting the Right Revenue Cycle Partner includes 40 quantitative survey responses and eight qualitative interviews among C-suite executives, as well as vice presidents and directors in finance and revenue cycle management roles at leading health systems.
The report states that 83% of health systems outsource some revenue cycle components but maintain internal oversight of most of their revenue cycle functions, with challenges like budget constraints hampering further investing in revenue cycle partnerships.
Meanwhile, the survey finds 10% of health systems use end-to-end partnerships, with an additional 36% in modular partnerships answering they would consider investing in a future end-to-end solution.
Health system pursue revenue cycle partnerships because of four key reasons, according to the report:
Improve financial performance: From accelerating cash flow, to minimizing denials, revenue cycle partnerships first and foremost serve to increase operational efficiency, reduce costs, and improve revenue.
Drive standardization to increase efficiency: Standardization, such as automating workflows, can eliminate variation across the organization.
Optimize the patient experience: Partnerships that can support tailored digital interfaces can give patients more price transparency and digital self-service processes.
Create a sustainable workforce: With the labor shortage presenting a major problem for health systems, revenue cycle partnerships that support automation can relieve administrative burden and extend staffing capabilities.
These reasons, leading to improved outcomes, are what's driving investments in revenue cycle partnerships.
The report states: "There is near-consensus across health systems that relying on manual processes prone to human error or stop-gap technologies only solves specific RCM pain points. Furthermore, internally built technologies have struggled to keep up with the complexities of RCM or technology leveraging automation and artificial intelligence (AI). This recognition ultimately results in those health systems abandoning their own solutions and 'do-it yourself' mindset"
Groups are applauding CMS for lowering premiums ahead of the upcoming Medicare open enrollment period.
The Biden administration announced it will lower premiums for Medicare Advantage (MA) plans in 2023, a decision backed groups like America's Health Insurance Plans (AHIP) and Better Medicare Alliance (BMA).
Beneficiaries will see the projected average premium for MA plans decrease nearly 8%, from $19.52 in 2022 to $18 per month next year.
The announcement comes in the lead-up to the Medicare open enrollment period, which runs from October 15 to December 7. CMS said it projects enrollment will reach 31.8 million people in 2023.
The administration is also highlighting the effects of the new Inflation Reduction Act on Medicare prescription drug coverage, which includes a $35 cost-sharing limit on a month's supply of each covered insulin product.
"The Inflation Reduction Act will provide much needed financial relief and increase access to affordable drugs," said CMS Administrator Chiquita Brooks-LaSure. "It is more important than ever for people to review their health care coverage and explore their Medicare options during Open Enrollment this year."
Supporters of MA have touted CMS' decision to cut premiums, with AHIP president and CEO Matt Eyles noting that health insurers are doing their part to improve affordability.
"More than 29 million seniors and people with disabilities choose Medicare Advantage because it delivers better services, better access to care, and better value," Eyles said in a statement. "Today's announcement from CMS is a further demonstration of that value. Even as average premiums continue to decline, Medicare Advantage offers benefits well beyond those in original Medicare does not, such as a cap on out-of-pocket costs; integrated vision, hearing, and dental benefits; and comprehensive prescription drug coverage.
Meanwhile, MA advocacy group BMA also responded to CMS' announcement with praise.
"With the lowest average monthly premiums in 16 years, and separate data showing that Medicare Advantage saves seniors nearly $2,000 per year on total health expenditures, Medicare Advantage is poised to bring meaningful health and financial security to millions of seniors in 2023," said Mary Beth Donahue, BMA president and CEO.
A survey of small to mid-sized businesses examines the pain points in employer-sponsored health insurance coverage.
Employers are challenged by the costs of group health insurance coverage and want another way to insure their workers, according to a survey by eHealth.
The online private health insurance exchange asked 1,300 people in September, including more than 1,000 general population respondents and over 250 owners and managers of small to mid-sized businesses, about the pain points of employers-sponsored coverage.
The findings reveal that employers and employees alike want something different than the typical model.
On the employer side, 51% of those surveyed say they are struggling to cover the costs of group plans, with 60% citing monthly costs as the single biggest challenge in offering insurance.
Though an additional 87% want another way to be able to insure employees without offering a group plan, 64% are unaware of individual coverage health reimbursement arrangement (ICHRA) plans as a solution. ICHRA allows employers to provide non-taxed reimbursements to employees for medical expenses such as monthly premiums and out-pocket-costs.
Meanwhile, 49% of employees surveyed say they were only given 1-2 plan options by their employers, with 58% answering their employer-sponsored plan options are not well aligned with their healthcare needs.
Freedom of choice is important to workers, as 74% of respondents say they would prefer to choose their own plan based on options in their area instead of the plans offered by their employers.
"Our survey suggests that many employers are unsatisfied with the standard group health insurance model – and many employees feel the same way," eHealth CEO Fran Soistman said in a statement. "I would especially encourage smaller businesses that just can't afford group health insurance to consider alternatives like ICHRA to control costs and give employees more personalized coverage options."
Healthcare costs for employers appear to be steadily increasing coming out of the COVID-19 pandemic as medical claims are on the rise.
According to recent analysis by financial services firm Aon, healthcare costs are projected to increase6.5% to more than $13,800 per employee in 2023.
Traditional group coverage has been the norm for some time, but it's clear employers are getting frustrated and looking for new solutions.
A survey of physicians reveals the potential ramifications of the impending 8.5% slashing of Medicare rates in 2023.
Many providers are considering reducing or eliminating the number of Medicare beneficiaries served to offset looming Medicare payment cuts, according to a survey conducted by the Medical Group Management Association (MGMA).
Respondents to the survey, comprised of 517 medical group practices across 45 states, ranging in size from small single provider practices to large health systems with 2,400 physicians, revealed what business decisions they may make in response to the Medicare rate change.
As part of the 2023 Medicare Physician Fee Schedule proposed rule, practices are facing a 4.5% reduction to the Medicare conversion factor and a 4% Pay-As-You-Go sequester, resulting in a reduction of payments by at least 8.5%.
According to 92% of those surveyed by MGMA, Medicare rates before the projected cuts are already insufficient for covering costs.
In response to the proposed rule, 58% of respondents said they are considering limiting the number of new Medicare patients. Additionally, 66% said they may reduce charity care, 58% answered they could reduce the number of clinical staff, and 29% state they are looking into closing satellite locations.
Other possible effects from the survey included projected delays in scheduling care, which could result in up to six months' wait for visits, and the reduction of participation in value-based payment contracts.
The survey results, according to MGMA president Anders Gilberg, offer an "alarming look" into how the proposed rule could hamper providers' ability to treat patients.
"MGMA urges Congress to act expeditiously to prevent the looming 2023 Medicare physician payment crisis," Gilberg said in a statement. "In addition to offsetting the proposed 4.42% cut to the Medicare physician conversion factor and addressing the 4% statutory Pay-As-You-Go (PAYGO) sequester, MGMA is also advocating for an inflationary update based on the Medicare Economic Index (MEI), which would afford medical groups the critical financial stability to ensure our nation’s seniors have unobstructed access to the high-quality healthcare they deserve."
Other medical groups, such as the American Hospital Association, have also released their own comments pushing back on the rule and warning of the consequences for providers and patients.
Providers are still unhappy with the government's final rule regarding the No Surprises Act's independent dispute resolution (IDR) process.
Provider groups are once taking aim at the arbitration process under the No Surprises Act, expressing dissatisfaction with the government's rewritten final rule.
The Texas Medical Association (TMA), Tyler Regional Hospital, and a physician filed a new lawsuit in the United States District Court for the Eastern District of Texas, arguing that the final rule still gives health insurers an unfair advantage over providers in the IDR process.
Meanwhile, the American Hospital Association (AHA) and the American Medical Association (AMA) stated they would file an amicus brief in support of the lawsuit.
Under the No Surprises Act, patients are protected from unexpected bills for emergency services at out-of-network facilities or for out-of-network providers at in-network facilities. The law has an arbitration process when providers and insurers disagree on the charged rates.
After the government released the interim final rule in 2021, TMA filed a lawsuit challenging it, alleging that IDR process unlawfully required arbitrators to consider the insurer-calculated qualifying payment amount (QPA) as the primary factor in deciding between the provider or payer rate.
A federal judge ruled in favor of TMA in February, striking down the piece of arbitration process, which HHS appealed in April before requesting a hold on its appeal.
CMS then released a revised interim final rule in August, but TMA claims the new rule is simply rewritten from the previous one and continues to give insurer an advantage by requiring the arbitrator to consider the QPA first and foremost.
"This is unfair to physicians and the patients we care for, so we had to seek a fairer process. There should be a level playing field for physicians in payment disputes after they’ve cared for patients," TMA president Gary Floyd said in a statement.
"TMA was hopeful the federal agencies would write final rules fair to everyone, especially after the federal district court ruled the agencies’ previously challenged rules were unlawful. Unfortunately, the federal agencies returned with a plan tipping scales in health plans' favor once again," he added.
The AHA and AMA had their own lawsuit against the government's September 2021 interim final rule, but moved to dismiss the challenge after the revised final rule was released in August. Now, they will move forward with the amicus brief as they continue their fight.
"The Texas court previously held that the interim final rule impermissibly rewrote clear statutory terms by placing a thumb on the scale in favor of commercial insurers," The AHA and AMA said in a joint statement. "The final rule suffers from the same problems. As was the case with the previous suit, the AHA and AMA want to see the law's core patient protections move forward and seek only to bring the regulations in line with the law."
Analysis of price transparency data suggests better information on health insurance exchange plans (HIX) is needed.
Payers generally negotiate lower amounts for HIX plans than their commercial group rates and significantly more than their Medicare Advantage (MA) contracts at the same hospital, according to a study published in The American Journal of Managed Care.
Researchers at the University of Southern California (USC) Schaeffer Center compared price transparency data of 25 common inpatient services and 56 common outpatient services across hospital-insurer pairings and found stark differences in allowed amounts.
The 16 insurers in the study with both HIX and commercial group plans paid providers for their HIX enrollees 88.6% of their commercial group rate for inpatient services and 88.9% for outpatient services.
The 19 insurers with both HIX and MA plans paid providers for HIX enrollees 143.3% of their MA enrollees for inpatient services and 243.6% for outpatient services.
The authors attribute the price discrepancy to a few factors such as narrow network plan design and hospitals' willingness to accept lower rates for HIX plans to recoup on bills that may otherwise go unpaid due to the lower income level of HIX enrollees.
"Although hospitals receive lower reimbursement for HIX enrollees than other commercial plan enrollees, the HIX plan payment level is still preferable to the uncompensated care burden hospitals faced before the Affordable Care Act established the HIXs," the report states.
Additionally, the study's findings also back up the rulemaking in the No Surprises Act related to calculating qualifying payment amounts (QPAs) as arbitration for out-of-network payment disputes between insurers and providers. The rule states payers should calculate QPAs separately for individual and group markets, which is supported by the observed differences in negotiated prices between plans.
"The divergence between HIX and non-HIX commercial group plans that we observe in this study suggests that bifurcating the markets when calculating QPA measures is appropriate," the researchers said.
Lastly, the authors note that in the process of collecting the data for the study, a lack of price transparency led to challenges acquiring comprehensive pricing, as well as difficulties analyzing nonstandardized file formats.
A recent report by PatientsRightsAdvocate.org revealed that only 16% of hospitals are complying with the hospital price transparency rule, nearly 20 months after it went into effect.
"More robust hospital price transparency data, made available as legislated, would enable investigators to evaluate longitudinal trends in contracted rates, compare payment generosity across insurers, and assess the association between prices and market competition," the USC researchers said.