The new CEO of Vibrant Emotional Health and former leader at CVS Health shares a masterclass in executive decision-making.
In July, Cara McNulty became CEO of Vibrant Emotional Health after serving as President of Behavioral Health and Mental Well-Being at CVS Health. It was a big change but met all of McNulty's leadership Whys.
In recognition of National Suicide Prevention Month and following 988 Day on Sept. 8, Cara McNulty spoke with HealthLeaders about how she makes the big decisions — for publicly traded payers and nonprofits alike.
From local to nationwide crisis lines
Two years before Cara McNulty took the helm at Vibrant, the National Suicide Prevention Line transitioned from a 10-digit crisis line number to the three-digit 988 Lifeline. 988 is overseen by lead federal agency SAMHSA, which has entrusted Vibrant to be a part of the network of providers supporting 988, offering essential administrative services to those seeking help.
For more than 50 years, Vibrant Emotional Health has run multiple crisis lines — from the local NYC 988 to the NFL Life Line. Its role now includes 988, an expansion McNulty is proud of as Vibrant's new CEO.
"It took decades to develop 911. For 988's development, Vibrant used best practices plus its tremendous experience. As a broad-based organization, we had a lot to offer."
Those offerings include the infrastructure for 988's technology platforms and the more than 213 mental health centers that Vibrant contracts with across the U.S. for call routing.
"We make the experience seamless for the end user," says McNulty, adding. "Vibrant is really embedded, understanding the community so we can meet the needs of the community."
This includes those with unique needs — veterans, the LGBTQ+ population — and what is most important to meet them in moments of crisis. It's an approach McNulty describes as "Not about me without me" and one that illustrates the importance of "knowing your Why."
"What's your Why? Start with that," she advises. "If you're not fierce behind your why, you're not going to be your best."
For McNulty, this principle applies personally and professionally — and is the first of many she deploys in her executive decision-making.
Executive Playbook: How to choose the right leadership role
McNulty knew her Why when she joined Vibrant: The opportunity to be a population health leader in an entirely new way. Three of her decision factors were:
Optimal reach: "I thought about the healthcare ecosystem, where I've been and what more I could do. I always want to have population-level impact — doing the most for people I may never meet."
Optimal environments: "I also thought about ‘How do we create psychological safety in our work environments.'"
Optimal place: "I asked myself: ‘Where is all this happening and most needed: A startup? A tech-forward company that supports mental health?'"
McNulty concluded: "All roads kept leading me back to an area where I haven't been, kept leading me here to Vibrant. It was a really neat process."
Executive Playbook: How to transition to nonprofit leadership
Still, leaving CVS Health wasn't an easy decision.
"I learned more there professionally and personally due to the organizational size, the infrastructure, the total impact you could have. What a powerful experience. I've never had a harder role — ever," says McNulty, noting that it began just one year before COVID.
McNulty's new role involves another big shift. CVS Health is a publicly-traded, for-profit company. Vibrant Emotional Health is a nonprofit.
"There are a ton of similarities — mainly because most people in the mental health ecosystem know their Why."
She adds, however, that many things are different: "Probably the biggest change for me is that I'm used to a lot of form and function. [At a nonprofit, y]ou don't have five financial systems to choose from; you have one, and we have to make sure we have the right things in place."
For McNulty, those right things include:
Deep work over decks — "Another difference is that people have less time to spend on the basics, like developing decks. There's just too much work to get done. We can't fall prey to perfection and use time we could spend on strategy and innovation."
"The muscle of fiscal accountability" — On the importance of this key skill, McNulty notes: "My past experience has brought financial rigor and understanding the importance of partners."
"Not just good . . . Exceptional" — McNulty prizes this in a leadership team, stressing the importance of accountability, curiosity, advance thinking and being driven by measures and outcomes.
She adds that nonprofits can "move faster and have some agility."
This is critical for McNulty's charge: to lead Vibrant through its stage of scaling and growth.
Executive Playbook: How to scale, smartly
In the coming years, Vibrant will continue to scale 988 and offer broader services beyond its crisis line and programs. This includes policy, advocacy, support, and community engagement.
"We are assessing where Vibrant is best across the mental health ecosystem and where we can leverage our skills to expand." Those skills include:
Keeping it simple: "It's really easy in complex mental healthcare systems to make it complicated for the people who need care and support and their loved ones. There is so much noise. I don't want to create more."
Collaborating across the industry: "I want us to collaborate and partner with the ecosystem so every organization is working at the top of its ability, not tripping over each other."
Maintaining focus: "Where do we add the most value and why? What are our sweet spots and where should we back away because others do it better?"
McNulty notes that some of Vibrant's programs will probably remain only in New York because they are population specific. Those that will scale are relevant to many populations and scenarios (e.g., young adults, providing upstream support before someone is in crisis).
Keeping the main thing, the main thing
Cara McNulty's executive playbook ends where it began: The importance of Why.
"I know exactly why I get up every day to do this job. I don't want people to suffer in silence, to think that they're less than and not worthy. Everyone brings value."
"It takes all of us. I have learned how easy it is for us to point fingers at one or two partners. It can be easy to do that when the system is complicated. But no one can do it by themselves."
She adds: "We all play a role, and I just feel so fortunate to be here."
A memorable healthcare debate moment in an election year focused largely on other issues.
A new federal regulation went into effect Sept. 1, 2024, that once again limits the coverage term of short-term limited-duration insurance (STLDI).
If Sept. 1 came and went without you noticing, you're probably not alone. If you did notice — and watched Tuesday's Presidential debate — you might wonder if Donald Trump's "concepts of a plan" to improve the ACA could once again include STLDI if there is an Executive branch party change come November.
The "concepts of a plan" remark came after ABC News co-moderator Linsey Davis asked Trump about his plans for an alternative to the ACA, with the former president adding: "If we can come up with a plan that's going to cost our people, our population, less money and be better health care than Obamacare, then I would absolutely do it . . . But until then I'd run it as good as it can be run."
When STLDI was part of the plan
In its recap of the exchange, The New York Times noted that "the congressional plans he [Trump] later endorsed as president would have decreased insurance coverage overall, cut funding to states, and erased protections for many Americans with pre-existing conditions" — adding that "Congressional Republican leaders . . . have shown little appetite for advancing such bills again."
It's worth noting that expanding STLDI coverage was a plan that Trump executed during his Administration. While STLDI plans are designed to provide a stop-gap when individuals lose their health insurance (e.g., after a job loss), the Administration's 2018 rule expanded coverage from six months to three years, a term that the Biden Administration has reduced again, this time to four months.
The ACA's awkward years
The ACA was at first "broadly unpopular". This includes the Marketplace — from its early years, when premiums were higher and many large insurers had temporarily exited the Exchanges, to as recently as 2020.
But even in this climate, STLDI never took off as an ACA alternative. Earlier this year, HealthLeaders explored this proposition in a two-partseries. Our coverage noted that STLDI:
lacks the federal coverage mandates of Marketplace plans: 10 Essential Health Benefits, out-of-pocket maximums (MOOP), free preventive services, and no denials for pre-existing conditions;
is also often much cheaper and the benefits it may exclude aren't benefits that younger, healthier, childless individuals may need; and
lack of data makes it difficult to demonstrate its real costs and value, although it is widely viewed as "junk insurance" when used as a form of comprehensive coverage.
And now, times have very much changed. The American Rescue Plan Act of 2021 (COVID-19 relief) increased and expanded Marketplace subsidies. As The Times noted: "Almost 50 million Americans have signed up for plans through the Affordable Care Act's marketplaces since 2014 . . . [while m]illions of lower-income Americans now have Medicaid coverage in states that expanded the program" through the ACA.
Past is prologue
Forbes'coverage of the Presidential debate noted that Harris's plan would be to "maintain and grow the Affordable Care Act" while continuing to support Medicare and Medicaid. The Times coverage, meanwhile, quoted a Trump campaign spokesperson that POTUS 45's "overall position on health care remains the same: bring down costs and increase the quality of care by improving competition in the marketplace."
A Harris Administration's would surely maintain and grow, not change, the new STLDI coverage term limits. And it's far more likely that a Trump Administration would improve competition in the marketplace by improving competition with it. If past is prologue, that could once again include enrollment options for longer-term STLDI plans — just not at critical mass.
Coverage for substance use disorder varies but the view from 2024 looks so much brighter.
Created by SAMHSA in 1989, the goal of September’s National Recovery Month is “to promote and support new evidence-based treatment and recovery practices, the nation’s strong and proud recovery community, and the dedication of service providers and communities who make recovery in all its forms possible” (Substance Abuse and Mental Health Services Administration, a branch of HHS).
In recognition of National Recovery Month, HealthLeaders examines where substance use disorder (SUD) coverage has been, recent changes, and the additional factors that influence access, outcomes and long-term recovery.
A little history: Treatment, parity and coverage
SAMHSA defines recovery as “a process of change through which individuals improve their health and wellness, live self-directed lives, and strive to reach their full potential.” Since 2000, recovery-oriented systems of care (ROSC) have been a growing focus of substance use disorder (SUD) treatment.
Treatment
In terms of SUD treatment, ROSC represents a shift — from the long-standing acute-care model to one that views SUD like other chronic illnesses (e.g., diabetes, asthma; McLellan et al. 2000) with multiple focus points including: engagement and assessment; service integration, planning, options, and duration; and long-term maintenance with the help of a broader personal, professional, and community network (Slaying the Dragon: The History of U.S. Addiction Treatment And Recovery in America, William L. White).
Coverage
In Slaying the Dragon, White cites the role of payers in the development of ROSC, “who were tiring of paying for multiple treatments without measurable recovery outcomes.”
But it got worse before it got better. The Recovery Research Institute notes that “the advent of managed care in the 1990s . . . greatly reduced access to formal addiction treatment by tightening insurance reimbursement for care.” This began to change with the Mental Health Parity Act of 1996 (MHPA), which mandated that large group health plans could not limit mental health benefits differently than medical/surgical benefits (annual or lifetime dollar limits; CMS).
Parity
While the MHPA was a first step, it did not include SUD benefits. It wasn’t until 2008 that Congress added SUD to parity legislation (MHPAEA, or The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008). And it wasn’t until 2010 that the ACA required that health plans provide SUD/MH coverage if they wanted to participate in the Marketplace.
But what is the current state of SUD coverage across multiple payers — and how is it evolving?
Medicare SUD coverage is limited but expanding
Data from 2020 shows that approximately 3% of Medicare beneficiaries had a past-year SUD (1.7 of 61.5 million) — but that only 11% sought treatment due to insufficient coverage and high cost of care.
Current Coverage: Historically, Medicare has only covered hospital- or outpatient-based SUD treatment.
Developing: CMS has added some coverage for intensive outpatient (IOP, or treatment beyond traditional OP services), and new legislation would grant access to residential SUD care in non-hospital settings (Residential Recovery for Seniors Act, introduced just last month).
Medicare Advantage coverage varies
With MA growing as a percentage of overall Medicare enrollment (54% in 2024), it’s important to look at this subset related to SUD.
Current Coverage: The Kaiser Family Foundation notes that despite this growth, “not much is known about the scope of mental health and substance use disorder benefits covered by these plans” — including OOP limits, the use of prior authorization and resulting care delays/denials — as well as SUD provider network access. What was known as of 2022:
Inpatient: MA must cover what Medicare does (Part A) but only 12% of plans offered extra SUD/MH benefits
Outpatient: Again, MA matches Medicare (Part B) but plans required and varied in their cost-sharing.
Out-of-network: 60% of plans offered no SUD/MH coverage.
Developing: The traditional Medicare IOP additions should cascade to MA plans as part of Part B coverage. Beyond this, SUD coverage is at the discretion of MA plans.
Medicaid MCOs are in the driver’s seat
Medicaid MCOs cover the majority of Medicaid enrollees, who have a higher prevalence of SUD (more than 20%) compared to 16% of commercial enrollees; KFF).
Current Coverage: Despite prevalence and major progress, including enhanced access/services, half of states do not require full SUD coverage via their contracted MCOs. A July 2024 Health Affairsstudy of 33 states and Washington, DC found that while most required that MCOs cover common SUD treatments without annual maximum out-of-pockets and cost sharing:
Many states leave SUD coverage requirements entirely to MCO discretion
Less than one-third of states kept MCOs from applying prior authorization to services
This increased to less than two-thirds of states for medication PAs (drug testing, step therapy)
Developing: New York state is an exception — adding “teeth” to parity law by fining Medicaid MCOs for denials and unpaid specialty care. While these fines applied to MH claims, it’s not a far stretch to expect SUD-related fines and that other states may follow suit. In addition, At least three state Medicaid programs (AL, AR and CA) operate under 1115 waivers that specifically address SUD.
Commercial payer coverage: Workplace versus Marketplace
Collectively, SUD among commercial enrollees is 16% (KFF).
As mentioned, 2008 legislation applied SUD parity to large group health plans (e.g., employers with more than 50 employees) and to other insurers that offer SUD/MH benefits.
Workplace: While it is difficult to quantify employer SUD coverage, one thing is certain: It is costing companies and their health plans a lot, and they are struggling to ensure sufficient provider networks. A 2023 JAMA study found:
1.4% of employer plan members had an SUD diagnosis (2.3 of 162 million).
Annual attributable medical expenditures were nearly $16,000 per enrollee
Across the entire population, these costs were $35.3 billion.
Despite this prevalence and cost, a 2023 KFF annual Employer Health Benefits Survey showed that only 59% of employers offering coverage believe there are enough in-network SUD providers to provide timely access and care.
Marketplace: The ACA brought parity to Marketplace plans by defining SUD (and MH) as one of 10 essential benefits that payers must provide. While SUD is an essential benefit, states can nuance coverage via the benchmark plans they must submit to CMS. In addition, in its 2025 Marketplace rule, CMS has defined SUD cost-sharing ranges for the new standardized Marketplace plans:
Inpatient hospital SUD: $350 to 50%
Outpatient SUD office visit: $0-50
Progress, not perfection
There cannot be parity without coverage but there cannot be care without provider access or service use. The 50% coinsurance for inpatient treatment shows that even when legislation mandates coverage, costs may prohibit care:
Medicare: The previously cited 2020 data showed that only 11% of the 1.7 million beneficiaries with an SUD sought treatment.
Medicaid: ACA expansion increased SUD coverage but multiplestudies have shown that access did not increase treatment rates.
Reasons varied. Medicare beneficiaries cited still-insufficient SUD coverage and high cost of care. The Medicaid studies cited lack of accessible treatment, particularly in rural areas. Of note, CMS did not extend provider network adequacy standards (time and distance) to SUD providers in its 2025 Marketplace plans rule.
SAMHSA cites access to affordable, high-quality SUD coverage and treatment as one of several policy recommendations to support recovery. Legislation and regulations have expanded coverage and parity.
Engagement, innovation, reimbursement, equity and integration will advance the SUD field even further. About alcohol use disorder specifically, the Recovery Research Institute writes: “In the past century there have been dramatic socio-cultural, scientific, and political shifts in how alcohol use disorder is perceived, understood, and treated . . . At the same time, stigma has reduced” as perceptions about SUD shift from the moral to the medical.
Many SUD challenges remain, but so do the opportunities. If we in recovery can sustain not only our sobriety but our hope and capacity for transformation, the healthcare industry can too.
Medicare Advantage makes up 54% of overall Medicare enrollment, with 64% penetration estimated by 2033. But will 10% growth over the next nine years be enough for today's market leaders? Plan executives at Aetna, Centene and Humana have either already announced or anticipate MA market exits and/or membership declines for the upcoming enrollment year.
MA now enrolls more than half with more growth projected through 2033
We've known for some time that Medicare Advantage enrollment would and has eclipsed original Medicare. But how much growth is left in the tank?
MA as a percentage of total enrollment eclipsed 50% in 2023 when its market share was 51%. This is up from just 19% in 2007. Since then, MA penetration has grown from 1-3% annually and was at its highest, 4%, from 2020 to 2021.
In 2024, MA penetration reached 54, and the Congressional Budget Office projects it to be 64% by 2033. The last Baby Boomers will age into Medicare by 2030. That equates to essentially 1% growth per year, the lowest annual rate since 2014-2016.
This and other factors — lower payments from CMS, slower growth from MA leaders, and market consolidation — led The Wall Street Journal to note last year that the "Medicare Gold Rush" was slowing down. Add to this higher payer costs due to higher post-pandemic member utilization — and increased government scrutiny over MA prior authorization, marketing, and brokers — and the path to 2033 looks shakier indeed.
Despite rumors of its demise, the Medicare gold rush is still very much on in select markets
For the time being, the MA market share is already higher than the national percentage in select states and counties.
While MA's share of the Medicare pie is as low as 2% in some states, it is 60% or more in seven states — AL, CT, MI, HI, ME, FL, RI — and in Puerto Rico. This is compared to just three states in 2023.
The proportion of counties with MA enrollment at 60% or more is even higher — 37% in 2024. While 8% of beneficiaries live in a county where MA enrollment is less than one third, the other end of the spectrum shows MA penetration at 80% or more in counties in Florida (80% in Miami-Dad), New York (82% in Monroe) and Texas (81% in Starr).
As KFF notes, this variation reflects "several factors, such as differences in firm strategy, urbanicity of the county, Medicare payment rates, number of Medicare beneficiaries, health care use patterns, and historical Medicare Advantage market penetration."
Two payers control nearly half of MA enrollment; three control more than 60%
Two names have dominated MA since 2010: UnitedHealthcare and Humana. In those 14 years, United's market share has grown (20% to 29%) while Humana's has stayed relatively consistent (16% to 18%), including since 2017. By the numbers, United's MA enrollment was nearly 9.4 million in March 2024; Humana's was just over 6 million.
CVS Health/Aetna has also been in growth mode since 2010 (from 6% to 12% market share). The payer had the largest growth year over year, more than 758,000 members between March 2023-March 2024.
Every other major MA player has declined:
BlueCross BlueShield: 15% to 14%
Kaiser Permanente: 9% to 6%
Centene: 6% to 3%
Cigna has exited MA altogether. With a market share that was already low and declining — from 3% in 2010 to 2% in 2024 — the commercial payer sold its MA business to Blues-affiliated HCSC in 2024.
All other MA insurers combined account for 16% of the market — just over 5.1 million members and a decline from 24% in 2010
Most MA members have individual plans but that percentage is decreasing
Some 62% of MA enrollment comes from individual plans, but that percentage is steadily declining.
Since 2010, individual plans as a percentage of enrollment have shrunk by 9% — from 71% in 2010, with declines in every year but one.
Meanwhile, enrollment in Special Needs Plans (SNPs) as a percentage of overall MA has grown significantly, from 12% in 2010 to 20% in 2024. SNPs are available to beneficiaries who are dually eligible for Medicare due to age and Medicaid due to lower income (D-SNPs). They are available to individuals with chronic illness (C-SNP) and those who live in institutions such as nursing homes (I-SNP).
Last year, SNPs overtook group plan penetration, whose enrollment has resembled a bell curve over the past 10 years (cresting from 17% to 20% before declining back to 17%). SNP enrollment has more than doubled — from 2.92 million to 6.64 million — since 2019 alone.
D-SNP makes up 88% of SNP enrollment, C-SNP 10%, and I-SNP 2%.
KFF attributes this growth to "the increasing number of SNP plans available on average and more dual eligible individuals having access to these plans" — supply and demand.
The 2025 Annual Enrollment Period
In addition to rapid SNP growth, KFF notes that "Medicare Advantage enrolls a disproportionate share of people of color in Medicare" and that Medicare "pays more to private Medicare Advantage plans for enrollees than their costs would be in traditional Medicare" — 122% or an estimated $83 billion in 2024.
While overall MA growth may be slowing compared to recent years and payer projections, these and other factors will make AEP 2025 worth watching.
Utilization management has the power to perform many jobs. Will it?
Well before the Affordable Care Act, CMS defined the highest aim of utilization management: Value. In its 1991 UM study, the agency (then the Health Care Financing Administration) identified UM as “an important means for assessing the value of health care services.”
The study added: “With large and growing expenditures for health care, payers want to know how their money is spent and what it produces in terms of health care quality (process and outcomes)” — noting within this context that “UM can play a significant role in improving the efficiency of the delivery system.”
“Modern UM programs” — Modern UM problems?
The expanded UM strategies the CMS study called for were:
Reform fee-for-service reimbursement
Partner with preferred and/or employed providers
Deliver care rooted care in evidence-based medicine
Generate more data and better systems to facilitate timely complex decisions
Incentivize it all
These 1991 requirements for “modern UM programs” should sound familiar. They’re still applicable. The 90s may be back, but if these are still the components of a modern UM program . . . how are they doing?
The role of FFS reform and VBC incentives
If FFS reform is vital for modern UM programs, the modern age has not yet arrived.
As noted in Part 1 of this UM series, a 10-year review by CMMI of its programs noted that only six of 50 alternative payment models had generated savings for Medicare since 2012. On the commercial side and also from Part I, a 20-year review of payer VBC programs showed “mixed and modest effects” on quality, cost, or utilization, with none impacting all three consistently.
There is no question that the number of value-based contracts has grown. CMS wants 100% of Medicare beneficiaries in VBC by 2030. But whether quality and cost outcomes will improve in parallel — and help UM achieve the same — remains to be seen.
The role of provider networks and evidence-based medicine
Conversely, if greater use of preferred networks and more employed physicians is a key contributor to UM success, providers must be all in on utilization management. Hardly.
Fact: Preferred provider networks now make up 43% of Medicare Advantage plans (Chartis) and more than 77% of physicians are employed — most by health systems but 10% by UnitedHealthcare alone (Advisory Board; HealthLeaders).
Theory: Contracts that benefit physicians should increase their alignment with and adoption of payer practices.
Reality: Physicians remain generally frustrated by UM. In 2023, the U.S. Surgeon General cited “bureaucratic” requirements like prior authorizations (PA) as a contributor to physician burnout.
The news isn’t all bad. It’s vital to curb “bad actors” who bilk FFS with unnecessary or excessive healthcare claims. Corey Ewing, CEO-WellCare of Kentucky, has shared that the state Medicaid program’s continued suspension of PA for behavioral health and substance use disorder services — a pandemic provision — has attracted more than 300 new providers to Kentucky (from the 2024 Inspire Recovery conference, covered by HealthLeaders).
“Provider differentiation” that supports UM — through the consistent use of evidence-based medicine (EBM) guidelines — can combat such scenarios. This strategy was highlighted by Dr. Cathy Moffitt, Senior Vice President and Aetna Chief Medical Officer at CVS Health, in Part 3 of this Many Faces of UM series: “We are looking for more opportunities to differentiate those providers and free them up on a case-by-case basis from the utilization management process.”
The role of health information technology
Aetna’s Moffitt also noted the importance of real-time UM engagement, an opportunity for payers and providers to lean in together at point of care, not after care.
“Engaging with members in real-time not only increases the probability of improving health outcomes — as engaged members tend to be more adherent — but also allows health plans to reduce administrative and operational costs. Additionally, this timely engagement helps in avoiding unnecessary medical expenditures, further optimizing the overall efficiency of health management strategies.”
“Access to data in near real-time or real-time is vital for reaching members at critical inflection points, where their likelihood of engagement is highest.”
UM, Meet DM, CM and PHM
No matter how far payment reform, provider collaboration, and data platforms evolve, cost-cutting UM alone will never equate to “modern UM.”
Three decades after the CMS UM study, the National Library of Medicine wrote: “UM programs are part of the delicate ecology . . . to deliver the right care to the right patient at the right time.”
This etiology is complex.
“Payers and health care organizations, along with providers and patients themselves collaborate via UM programs along with disease management, care coordination, and population health offerings to control costs, increase collaboration in healthcare delivery, improve the quality of care, and to optimize the patients’ experience with the healthcare system.”
Moffitt with Aetna-CVS Health highlights these UM needs as well: “In the broader sense, utilization management does allow us to look at the [member’s] case holistically and say, ‘Does this person need discharge planning? Do they need home health? Do they need durable medical equipment to go home? Do they need care coordination do we need to refer them to one of our complex care managers?”
So many jobs to be done
And so, we end where we began with The Many Faces of UM: Is utilization management a payer profit-protection mechanism or a vital part of value-based care?
It is both. And the “Jobs to Be Done” theory can help explain why.
Jobs to Be Done dives deep into how and why people make decisions. Proposed by The Christensen Institute, the theory explores the “functional, social, and emotional dimensions” why people “hire” products or services for the jobs they need help with.
Moffitt at CVS-Aetna believes in UM’s job beyond cost control.
“This is something I'm passionate about. I have been in the payer space now for more than 20 years, and I spent a lot of those years as a medical director actually reviewing utilization cases on a daily basis. I can give you a number of examples where we have really enhanced the quality of the care.”
Still, UM is a payer invention. Providers and patients didn’t hire it, but they do work alongside it in order to deliver and receive healthcare.
Dr. Chirag Patel, CMO-WellCare of Kentucky, has noted: “We want to see utilization come down, but not all utilization is the same” (HealthLeaders Inspire Recovery coverage).
UM has the power to perform many jobs beyond cost control. Just as all utilization is not the same, all UM cannot be either.
"UM absolutely has its place," says Dr. Cathy Moffitt, Senior Vice President and Aetna Chief Medical Officer at CVS Health.
Part 1 of HealthLeaders’ series, The Many Faces of UM, posed the question: Is UM largely obstructive — little more than a payer profit-protection mechanism marked by excessive, over-automated denials — or is it vital for achieving the highest aims of value-based care? Part 2 explored the first part of that question.
Now, Part 3 explores how UM can be a vital part of the path to value-based care — one that helps achieve the now Quintuple Aim of healthcare to improve population health outcomes while controlling costs, closing health equity gaps, and ensuring that the patient and healthcare workforce experience are good ones.
As far back as 1991, CMS — then the Health Care Financing Administration — wrote the following of UM.
“The point is that the need for UM goes beyond the issue of controlling costs. UM is a primary approach that public and private payers can use to determine if patients are receiving appropriate care and if the money spent on health care is providing value. With this information, payers are in a better position to make informed decisions about health plan and delivery system changes that will lead to greater value.”
At least one payer believes it’s possible.
“UM absolutely has its place”
“This is something I'm passionate about,” says Dr. Cathy Moffitt, speaking of UM.
The Senior Vice President and Aetna Chief Medical Officer at CVS Health explains: “I have been in the payer space now for over 20 years, and I spent a lot of those years as a medical director actually reviewing utilization cases on a daily basis. I believe that utilization management absolutely has its place in securing the right care at the right time, for the right reason.”
Not that cost isn’t a factor.
“Healthcare spend is at least 72.3% of the country's gross domestic product. I think we have a role there, but the way we do is to look very, very diligently at the clinical evidence,” Dr. Moffitt adds. “We all have a responsibility to be mindful of the enormous cost of care, especially low value or unnecessary care.”
A focus on clinical evidence is one of three examples Moffitt provides for Aetna’s application of UM.
UM grounded in evidence-based medicine
Moffitt is clear on Aetna’s payer role in UM
“We don't practice medicine, and we don't directly give medical advice. We do endeavor to help members receive appropriate care.”
“When a decision is truly aligned with the best medical evidence, we are able to render a determination that this is safe, effective for the member, and it won't be deleterious to them.”
She adds: “We have over 800 clinical policies that we rigorously maintain. We update at least annually with peer-reviewed journal articles and the standards of practice, both regionally and nationally.
The CMO is also clear on how payers and providers must work together for UM to be effective.
“Payer-provider collaboratives support care to patients that lowers cost, provides a better experience to the members and helps address healthcare based on race, gender, sexual orientation, gender identity — all of the equity buckets that we are so committed to in terms of improving the experience of care for our members.”
“As someone who's been in this industry for over 20 years, I believe with all my heart that the best way to line up all of those priorities (cost, quality, access, equity, workforce) is to have meaningful engagement with providers as true partners.”
UM grounded in provider differentiation
Differentiation is one of Aetna’s UM provider strategies and it links to the payer’s focus on evidence-based medicine.
“We are looking across our networks for providers who have sent us largely approvable cases because they are already ascribing to the same standards of medical necessity in their clinical decision making that we do,” says Moffitt.
The Aetna CMO adds: “We are looking for more opportunities to differentiate those providers and free them up on a case-by-case basis from the utilization management process.”
“That way — with the appropriate continued engagement between us and them, and the appropriate clinical monitoring — we feel like that is a very important part of improving the whole picture. Because again, our remit is to control cost, make sure our members receive appropriate, high-quality care, ensure equitable outcomes, and enhance the experience for members and providers.”
UM grounded in real-time data
Dr. Moffitt notes that Aetna’s “provider differentiation” strategy relies on historical data that “helps us understand when services are submitted but rarely denied.”
But historical data is just the beginning. The use of real-time data to realize UM’s broader promise is key for health plans like Aetna.
“This is where payers can really lean in, because a lot of utilization management is historically post-review/post-service, which doesn't give you that sweet spot, that magic moment where you can get in there and get involved in real time when the care is being provided.”
She adds: “A lot of people would not receive real-time care coordination and the navigation services that we feel that we are able to provide.”
With this, Dr. Moffitt hints at the necessary companions for modern UM programs — featured in next week’s Bonus Brief and conclusion to HealthLeaders’ series The Many Faces of UM.
Denials and prior authorizations are on the rise, but will AI help or hurt?
A 2023 study found that initial overall health plan denials were 11.99% through last year’s third quarter (Kodiak RCA benchmarking analysis). A 2022 study found that prior authorization and denials increased 67% in 2022. (Acdis).
Recall from part one in this series that, in addition to cost containment, utilization management “helps ensure that patients have the proper care and the required services without overusing resources” and that the “organizations making these decisions are following objective, evidence-based practices” (NCQA).
Before we measure the statistics against the objective, let’s begin with a brief primer of UM.
The types of UM
UM can happen at any point of healthcare service delivery: before delivery (prospective), at delivery (concurrent), and after delivery (retrospective). In addition, health plans apply UM in m multiple ways:
Prior Authorizations (PA): Review of a provider’s service request before they deliver care.
Step Therapy and Quantity Limits: Types of PA that require a less-expensive drug or limited quantities of a drug before a health plan approves or continues current therapies.
Preferred Physician Network and Drug Lists: Steering patients toward providers and medications that demonstrate higher quality and/or lower costs.
Denials: Refusal to pay for a healthcare service
Medical Necessity: Care that is proper and needed to diagnose or treat a medical condition.
This feature will focus on PAs, denials and medical necessity — through the lens of automation and federal regulations.
An automated river in Egypt
When discussing the role of denials in an early UM analysis, CMS (then called HCFA) noted that “denial of certification only means the insurer will not pay for (all or part of) the services.”
“Only” means? CMS continued: “Although this does not prevent the patient from receiving treatment, it may act as a significant deterrent for expensive services.” Given that nearly one-quarter of Americans today report that they could not pay an unexpected medical bill over $250 (2024 Healthcare Financial Experience Study), “expensive” is a highly relative term.
The personal stories of unpaid claims are strain logic — everything from life-saving $140k heart procedures preauthorized then denied to infants receiving denials for extended neonatal ICU care because they could now drink from a bottle and breathe on their own (KFF Health News-NPR “Bill of the Month” project).
Meanwhile, automated denials — including those for medical necessity — strain credulity that payer UM objectives are about little more than cost cutting. Attorney Lindsey Fetzer, chair of multi-disciplinary Managed Care practice at Nashville-based law firm Bass, Berry & Sims, adds: “What’s changed is in how organizations leverage tools to arrive at those decisions – without undermining the need for clinical judgment and decision making.
These tools may be part of the solution, but they are also a part of the problem.
Jama Health Forum notes: “Utilization review by health insurers is the type of problem that seems, on the surface, to cry out for solutions using artificial intelligence (AI) … however, the results illustrate that seemingly perfect opportunities for using AI can become clear examples of how algorithms can go awry when humans do not provide the expected bulwark against error.”
The Jama article notes class-action suits filed against UnitedHealthcare, Humana and Cigna. The Cigna suit involving an algorithm that would “allegedly batch deny thousands of claims in an average of 1.2 seconds each.” A separate investigation found that an automated system allowed human reviewers to sign off on 50 charts in 10 seconds, presumably without medical record review (ProPublica 2023).
Regulators tackle UM irregularities
The Jama article adds: “These reports stoked the ire of congressional committees already provoked by other evidence of insurers’ wrongful denials of prior authorization requests.”
The ire of federal agencies too and on a rapid timeline:
April 2022: The OIG reported its concerns with prior auth denials for medically necessary care by Medicare Advantage plans.
April 2023: CMS clarified in a Final Rule that MA plans must cover inpatient stays that require care for at least two nights (“the two-midnight rule).
January 2024: CMS issues two UM-related Final Rules:
Medical Necessity: MA plans must make medical necessity determinations “based on the circumstances of the specific individual…as opposed to using an algorithm or software that doesn’t account for an individual’s circumstances” and those determinations “must be reviewed by a physician or other appropriate health care professional.”
Prior Authorization: Payers must improve the timeliness and reporting of their prior auth decisions, including clear reasons for denials.
February 2024: CMS issues guidance to emphasize the applicability of not only the two-midnight rule to MA plans but other medically necessary hospital admissions.
“The regulatory landscape continues to evolve, which requires all organizations to adapt when considering the question of medical necessity,” notes Fetzer.
But too often, payer adaptation means simply adhering to their own commitment for clinically appropriate care that members’ plans are supposed to cover.
“Decades ago, insurers’ reviews were reserved for a tiny fraction of expensive treatments to make sure providers were not ordering with an eye on profit instead of patient needs. These reviews — and the denials — have now trickled down to the most mundane medical interventions and needs, including things such as asthma inhalers or the heart medicine that a patient has been on for months or years. What’s approved or denied can be based on an insurer’s shifting contracts with drug and device manufacturers rather than optimal patient treatment” (Jama Network).
Fetzer adds: “UM processes always should focus on driving clinically appropriate decision making . . . Moving forward, we can expect continued use of UM and — in all likelihood — reliance on technology in various ways.”
Part 3 of this series examines how UM can function successfully in these ways and the efforts of Aetna, a CVS Health company, to do so.
The definition of UM has changed. Some of the results remain stubbornly the same (and unclear).
While utilization management clearly has a role in healthcare, the jury is still out on its ability to control costs more broadly, to improve quality — and its primary objective.
The answers to these questions are important: for where healthcare has been, where it’s going, and what role UM will play for payers, providers and patients. In this three-part series, HealthLeaders will examine a brief history of UM and whether it is primarily a cost-control mechanism or an essential component of value-based care.
UM: Early definitions and goals
“Historically, one of the primary purposes of UM has been to address overutilization of services or procedures and address the potential for waste and/or abuse of healthcare dollars,” says attorney Lindsey Fetzer, chair of multi-disciplinary Managed Care practice at Nashville-based law firm Bass, Berry & Sims. This framework bears out the early definitions of UM from the 1980s and 1990s.
The Institute of Medicine developed one of the earliest definitions of UM (1989) as " ... a set of techniques used by or on behalf of purchasers of health benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care."
CMS — then called Health Care Financing Administration (HCFA) — cited this definition in a 1991 analysis, identifying UM as a “primary cost-containment strategy.” At that time, UM’s focus was on hospital costs and the overutilization of inpatient care, specifically unnecessary admissions and lengthy stays.
The strategy worked, to a degree. The CMS review showed improvements in all areas, noting: “Clearly, UM systems are associated with major changes in practice behavior.”
But that’s where full clarity around UM — its purpose and its benefits — ended.
UM’s early (and continued) mixed results
The 1991 study noted that UM had a limited role in reducing total cost of care. Its role in improving quality was even less known, with CMS noting: “The effect of UM on the quality of care has generated a great deal of speculation but little serious study.”
Flash forward a decade — the time frame by which CMS predicted that “decreased utilization rates will be reflected in significant reductions in the growth of health care costs” — and UM’s effectiveness in improving healthcare’s effectiveness was still unclear.
One 2002 review showed that “evaluations of UM have generated mixed findings, with some studies showing reductions in utilization and costs and others showing little effect” (Annual Review of Public Health).
Two decades later, the prognosis is similar: “What is clear is that additional research is necessary to provide a more robust answer to the question of what the impact is on utilization and quality of care based on UM and payment policies” (National Library of Medicine, 2023).
UM’s (attempted) evolution
In 2024, and depending on the source you consult, UM definitions emphasize either cost, quality or both.
The National Library of Medicine states that UM “remains a well-recognized component of a cost management approach in the health care service delivery and payment arenas.”
The NCQA, which offers UM Accreditation, defines utilization management as a tool that “helps ensure that patients have the proper care and the required services without overusing resources” and that the “organizations making these decisions are following objective, evidence-based practices.”
Another source states that “[r]educing coverage denials is one of the key goals of utilization management.” (Today’s headlines would suggest otherwise; more on this later).
So which is it: Cost or quality? They’re not mutually exclusive. It’s just that it’s so darn hard to achieve both. A 20-year review of commercial payers’ value-based care programs in 2022 showed “mixed and modest effects” on quality, cost, or utilization — and none that impacted all three consistently.
A 10-year review by CMMI of its programs yielded a similar result: only six of 50 alternative payment models had generated savings for Medicare since 2012.
While these results apply to VBC not UM, the parallels are important because the questions they must answer are similar:
Are payer programs lowering healthcare costs and improving quality?
Are they addressing healthcare disparities?
Do they partner with providers and patients to improve experience and outcomes for both?
Fetzer notes: “The tensions inherent to any UM process have always been the same: the goal is to balance healthcare utilization and manage cost while also expecting that the core of any UM framework be focused on whether the service is clinically appropriate/medically necessary.”
And not just clinically appropriate but proven to generate better outcomes.
The many faces of UM
This rolls us, in the words of T.S. Eliot, toward the overwhelming question: What is UM’s real objective? The next two articles in this HealthLeaders UM series will explore the issue from two perspectives:
That UM is largely obstructive, little more than a payer profit-protection mechanism marked by excessive, over-automated denials — even for medically necessary care.
That UM is vital for achieving the highest aims of value-based care.
Fetzer defines UM’s focus as “making sure the right care is delivered at the right time, in a way that optimizes outcomes, reduces risk of adverse clinical outcomes, and considers other data points like quality and compliance — adding that the importance of “also controlling Medicare (and other government and private program) spend so that services can continue to be offered to future generations.”
Parts 2 and 3 of this series will assess how the UM experiment is going.
The risk-based contract marks meaningful expansion for both companies in a state that is growing its Medicaid rolls to include additional vulnerable populations.
Medicaid MCO Alliance Health will partner with value-based care provider Cityblock to deliver “comprehensive, integrated medical and behavioral health care to members with serious mental illness and/or substance use disorder” (SMI/SUD) North Carolina’s Medicaid program.
The partnership began July 1, 2024, and will deliver community-based care to regional members of Alliance Health's Behavioral Health and Intellectual/Development Disability (BH I/DD) Tailored Plan.
The partnership grows both Alliance Health and Cityblock’s presence in North Carolina Alliance Health serves 137,000 Medicaid members in North Carolina’s Cumberland, Durham, Harnett, Johnston, Mecklenburg, Orange and Wake counties. Cityblock serves more than 100,000 Medicaid and Medicare-Medicaid dually eligible beneficiaries in seven states.
Dr. Kam Matthews, Chief Health Officer of Cityblock, tells HealthLeaders: “The partnership with Alliance Health marks a meaningful expansion for us in a state that is making immense progress in its Medicaid expansion efforts. This partnership will not only enhance access to quality healthcare for the most vulnerable members of North Carolina’s Medicaid population but also drive better health outcomes for those with complex care needs.”
An integrated, multi-modal and community-based care model
Alliance Health’s BH I/DD Tailored Plan includes an expanded network of PCPs, SCPs, ancillary providers, pharmacies, and other organizations designed to deliver a more integrated, comprehensive approach to member care and care management.
As one of these providers, Cityblock will apply its multidisciplinary care model that allows patients to see their care team virtually, in their homes, or at a Cityblock clinic. The model’s technology core includes custom-built tools that span care team operations and the member experience.
"Alliance believes that Cityblock's treatment approach of providing community-based integrated primary care, behavioral health care, and attention to social supports is an ideal model to address the complex needs of our members," noted Alliance Health COO Sean Schreiber in the partnership press release. "We have been impressed with their desire and commitment to engage and serve our population."
Cityblock’s Matthews adds: “With Alliance Health’s extensive experience serving the state’s Medicaid population, our community-based care model . . . will aim to address both the clinical and non-clinical needs of those in Alliance Health’s Tailored Plan.”
A number of firsts
The partnership with Cityblock is Alliance Health’s first risk-bearing contract and includes performance targets for better quality, outcomes, equity and sustained value. More broadly, these targets will help support North Carolina’s new Tailored Plans, which went into effect as part of the state’s Medicaid Expansion.
Tailored Plans are “a new kind of NC Medicaid Managed Care health plan” that support the more complex needs of members with SMI, SUD or IDD. North Carolina’s Tailored Plans went into effect as part of the state’s Medicaid Expansion efforts. The expansion has enrolled 500,000 new members in seven months — far exceeding the goal of 600,000 people in two years. Nearly 1 in 4 people in North Carolina were already on Medicaid, or 3.5 million statewide.
It’s great news in a year that has seen 23 million people disenrolled from Medicaid since April 2023 and the beginning of the “unwinding” — the return to Medicaid program eligibility redeterminations suspended during the pandemic.
It’s also great news for Medicaid expansion in general. As of May 2024, 41 states (including DC) have expanded their program eligibility to adults earning up to 138% of the Federal Poverty Level as approved by the Affordable Care Act. North Carolina’s expansion in December 2023 makes it the newest state to approve. Other state innovations include a July 1 request to CMS that make hospitals’ receipt of enhanced Medicaid funds contingent on their waiver of $4B in existing medical debt for low and middle-income residents.
“We want you to innovate”
Additional callouts from the Alliance Health-Cityblock press release speak to the importance of Medicaid innovation in North Carolina.
"Access to integrated care for people with behavioral health needs is critical to . . . [our] priority of behavioral health and resilience. People have better outcomes when we treat the mind and body – the whole person," said Kelly Crosbie, Director, Division of Mental Health, Developmental Disabilities, and Substance Use Services, NC Department of Health and Human Services. "NCDHHS applauds Alliance and Cityblock's leadership in tailoring this innovative model to address the whole-person needs of people with behavioral and substance use disorder needs."
Cityblock CEO and cofounder Dr. Toyin Ajayi adds: "Together, and on the heels of North Carolina's groundbreaking transition to Medicaid managed care, we will deploy care to treat individuals holistically and reduce health disparities, and we look forward to delivering clinical and financial outcomes for marginalized and underserved communities throughout the state."
In a prior interview with HealthLeaders, Dr. Ajayi noted the overall move toward advancing Medicaid not only by her company but in programs nationwide.
"There's been a real trend there, States aren't just saying, 'We want you to manage the population. Here's the rate book.' They're saying, 'We want you to innovate.'"
After years of coverage growth, the very factors that are protecting more Americans could reverse progress.
New Congressional Budget Office projections factor the end of Marketplace premium subsidies
While the number of Americans without health insurance dropped to 7.7% in 2024, the Congressional Budget Office expects this number to rise to 8.9% over the next decade. This from the CBO’s latest report on the issue — Health Insurance Coverage Projections For The US Population And Sources Of Coverage, By Age, 2024–34— published in Health Affairs.
Why uninsured rates are at record lows
There are two primary reasons why uninsured rates have dropped below 8%: Expanded Marketplace subsidies and a pause in Medicaid eligibility redeterminations.
Before COVID-19, the ACA-created Marketplace was still struggling. [pull from my priors]. In 2019, Marketplace enrollment was 10 million. Five years later, enrollment has more than doubled as 22 million people now have Marketplace coverage. The CBO projects that number will rise to 23 million in 2025 — an all-time high — before tapering if expanded Marketplace subsidies end.
The CBO anticipates that some Marketplace gains will stand. Even the projected enrollment drop to 16 million by 2034 is still 60% higher than pre-pandemic rates.
The pandemic also reduced uninsured rates by suspending Medicaid and CHIP eligibility review and keeping members on the books that no longer qualify for enrollment. The result? Some 92 million adults and children were enrolled in the two programs in 2023.
The combined Marketplace and Medicaid enrollment gains had another effect: Less delayed care due to high healthcare costs. In a separate Urban Institute study, the share of adults who delayed care dropped from 12.1% in 2019 to 9.7% in 2022.
But headwinds are coming.
Why gains will become losses
The CBO projects that the number of uninsured Americans will increase from 26 million in 2024 to 32 million in 2027.
Urban Institute study author Michael Karpman noted: “The continued unwinding of the Medicaid continuous coverage requirement and the potential expiration of enhanced Marketplace subsidies after 2025 could make these gains in coverage and access difficult to sustain.”
In other words, the very factors that have brought uninsured rates down will likely raise them again: the return of Medicaid eligibility determinations, the possible end of expanded Marketplace summaries — plus another factor, growth in immigration.
The CBO projects a “surge in immigration through 2026.” While some will gain health insurance coverage during this period, the overall uninsured rate for this population is approximately four times higher than the rest of the U.S.
As for Medicaid, most of the COVID-19 waivers that suspended redeterminations have expired. With eligibility again under review, the CBO projects that enrollment in the two programs will decline 14% — from 92 million in 2023 to 79 million in 2024 as states complete redeterminations through September of this year.
Then there is the Marketplace. If Congress does not renew the expanded subsidies currently in place, the CBO projects enrollment will drop by 5 million between 2025 and 2026. The agency notes that most of that decrease will occur for those making more than 250 percent of the federal poverty level. The current subsidies give premium tax credits to those who earn more than 400% above the FPL.
The biggest losses and gains
The CBO projects that the biggest increases in uninsured rates will be for any adults between the ages of 19–44, who are “more likely to be eligible for Medicaid than older nonelderly adults (ages 45–64) but less likely to take up available private coverage, leading more to be uninsured.”
While lack of insurance may rise for this group, access is projected to increase for those with employer-based coverage — from 164 million to 170 million, and again related to possible Marketplace changes.
“In 2026 and 2027, employment-based coverage will expand after the scheduled expiration of
the enhanced Marketplace subsidies, as some workers newly take up existing offers (particularly those defined as not affordable under the Affordable Care Act) and some employers newly offer coverage to their workers,” notes the CBO, adding: “That increase
will be spread over two years because, the agency expects, employers and workers will react slowly to the change.”
The CBO expects Medicare enrollment to jump from 61 million in 2024 to 74 million by 2034, calling out that Medicare Advantage now represents more than half of this population and could be nearly two-thirds by 2034 based on enrollment and payment trends.
The caveats
Projections can be wrong and the circumstances that drive them often change.
For example, the CBO underestimated the effect that both continuous Medicaid eligibility and expanded Marketplace subsidies would have on enrollment.
The agency adds: “The CBO’s projections are intended to show what would happen to health insurance coverage if current law and regulation remained in place. But over time, applicable laws and regulations do change, and uncertainty increases as the projections extend. Certain changes to laws and regulations, such as extending the temporary enhanced Marketplace subsidies, would cause enrollment outcomes to diverge considerably from the CBO’s projections.”
Time — and the results of this year’s presidential election — will tell.
