Aetna's Medicare Multicultural Initiative seeks to improve equity for members who are Black and Hispanic.
April is National Minority Health Month. Thirty days is not enough time to focus on health equity. Neither is two years—the amount of time it took the pandemic, racial inequality, and their intersection to disproportionately shorten the lifespans of Black and Hispanic people, daily and across the long term.
Aetna and CVS Health are making an impact through data, focus, funding, and partnership, as illustrated by the health plan's Medicare Multicultural Initiative.
HealthLeaders interviewed two Aetna executives close to the program: Dr. Alena Baquet-Simpson, Medicare senior director of medical health services, and Dr. Jamie Sharp, VP and CMO of Aetna Medicare. With expansion planned, program results are promising—as is the revelation that history, memory, and hope have a role to play in health equity objectives.
Results from the Medicare Multicultural Initiative
Aetna, a CVS Health company, launched its Medicare Multicultural Initiative in January 2020 to bring a cross-functional approach to health equity for members who are Black and Hispanic. More than two years later, expansion is planned for more markets and conditions. Growth will remain rooted in the voices of Aetna's Medicare beneficiaries.
"Their voices were so powerful, the loudest" says Baquet-Simpson. From these focus groups, which also included providers, the initiative has achieved the following:
Sustained funding. Committed dollars are any program's proof of concept. Baquet-Simpson understands full well that investment demonstrates Aetna's deliberate commitment to health equity.
Guiding principles. As the initiative grows, it will continue to be guided by four principles to: Boost community involvement, involve members' families and loved ones, address whole health, and alleviate barriers.
Community trust. The Medicare Multicultural Initiative brings services to where people are, from vaccine clinics to healthy cooking education. The program builds relationships with community- and faith-based leaders to leverage their influence and build trust.
800+ hours of training. As part of the initiative, Aetna team members, including physicians, have received cultural sensitivity training.
These results and objectives reveal two macro views: understanding that a member's health habits are often influenced by their family and that chronic conditions must be understood collectively, not individually. The Aetna initiative has embedded these macros in its Guiding Principles and targets members with three or more chronic conditions.
Examples of payer-provider collaboration
The Medicare Multicultural Initiative is also grounded in provider collaboration through:
Data. "We are sharing social determinants of health [SDOH] data with our value-based providers," says Baquet-Simpson. Additional resources include internally developed SDOH indices, Z codes attached to claims, and collaboration with the medical economics team. Sharp adds: "We understand how hard it is for providers to get this data. We're using it to look at quality more broadly [e.g., Star Ratings]."
Monthly reporting. Physicians receive reports that incorporate SDOH risk insights at the individual and community levels.
Health equity through the lens of history, memory, and trust
Baquet-Simpson emphasizes: "We know that disparities are not new. The pandemic's effects are a reminder of how much work is left to be done. It's a dire situation that we must address."
Reminders and memory are intertwined with the history of racial inequality.
In a November 2021 article about the initiative, Aetna invokes the 40-year Tuskegee Study, which left Black men untreated so that syphilis could be studied. It is but one example, says Baquet-Simpson, "of why there’s an absence of trust in the healthcare system." As part of the article, she adds: "One of the things that I heard the loudest [in the focus groups], and that really resonated with me, was that people wanted to know they were understood, they were heard and that we care." With HealthLeaders, she adds that "we cannot exclude the impact of history from interventions."
So why do we forget?
Tuskegee and other injustices demonstrate how daily life can drown out even imperatives as important as health equity. Baquet-Simpson and Sharp acknowledge that healthcare is not immune to this "forgetting" and that it must improve.
"The silver lining, including the racial unrest of the past two years, have accelerated awareness that more work must be done on health equity," says Baquet-Simpson. "All stakeholders need to be working together and committed to breaking down barriers."
When asked about the state of equality during National Minority Health Month in April 2022 compared to 2020, she answers: "I feel more hopeful."
Broader CVS Health investment
Healthcare is now investing in what has always been true: that health outcomes are driven largely by SDOH dimensions such as food, medication, and housing. CVS Health has expanded its SDOH funding, including the more than $1.2 billion it has invested in affordable housing.
"Being healthy and having a roof over your head is a minimum basic need that many of us take for granted," says Sharp.
Other CVS Health investments include using medical and social needs data to design total health benefits and the addition of the first Chief Health Equity Officer—Dr. Joneigh Khaldun who joined the organization in October—to its executive suite.
"Health equity is going to be part of the conversation for how we can do our best," Sharp emphasizes. "It must be a foundational building block along with access and quality."
Payer corporate venture capital investment remains strong as the government looks to the private sector for more solutions.
When $10.4 billion represents a quarterly investment decline, you know you have a robust digital health market.
In the first quarter of 2022 (Q1 2022), global digital health funding was 36% lower quarter over quarter (QoQ), down from $16.2 billion. The decline included sizeable decreases in mental health (60%) and telehealth (32%) investment. Within the U.S., the numbers were similar with digital health investment down 37% overall.
It's important to put this in context, while also identifying the role of key payers in the digital health investment landscape.
You don't have to look back far for the last decline (19% in Q3 2021). Both recent quarters with declines were home to the COVID-19 surges. Before then, digital health funding had experienced nearly uninterrupted, overall growth since Q4 2019, with growth in three additional quarters dating back to Q1 2018.
Payer investors loom large
One of the largest digital health investors is Optum Ventures, the corporate venture capital (CVC) arm of UnitedHealthcare. The CVC has been betting on digital health since its founding in 2017. It was "the single most active corporate investor" from January–June 2021. In Q1 2022, Optum Ventures ranked:
Fifth in the number of company investments globally
Second among CVCs for the same metric
Third among U.S. investors, also for the number of company investments
Among health plan–affiliated firms, Optum Ventures outranks only integrated payer-provider Kaiser Permanente, whose venture arm ranked seventh globally for its company investments.
Payers and providers alike are among the largest investors in a private equity landscape where CVC involvement has grown steadily and in three primary areas identified by Deloitte Insights:
Well-being and care delivery
Data and platform
Care enablement
Deloitte noted two types of benefits: "For VC arms of large health systems and health plans, investment gives them first access to innovative solutions and the ability to pilot extensively and shape the solutions rather than just be the customers … some are [also] focused on investments as a stepping-stone to full-scale acquisitions; others are focused on financial returns and diversifying their revenue sources."
Whether one thinks these trends are largely positive or negative, even CMS has indicated it will turn to the private sector for more cost-control and equity solutions. But what happens when the private sector leans out instead of leaning in? While a single-quarter downturn in digital health funding does not constitute a leaning out, the financial trends—as well as stakeholder consolidation—bears watching as the things like telehealth utilization decrease as the pandemic wanes.
Common threads are emerging across CMS, its programs, and the private sector.
CMS' new action plan to advance health equity suggests what industry analysts have been predicting: that health equity will be a shared mandate, with specific steps to drive alignment and collaboration across the public and private sector.
Per the release, CMS' equity work will span all its Centers and Offices and includes nine actions:
Reduce gaps in access, quality, and outcomes
Ensure services are culturally and linguistically appropriate
Increase Medicare, Medicaid/CHIP, and Marketplace enrollment
Grow data collection and standardization, particularly related to health equity
Support providers who care for the underserved
Help underserved communities implement and be accountable for programs
Use screening and subsequent data to identify and address needs
Design CMS programs to be successful and executable
Strive to provide the best and safest care
Linkage to CMMI
The CMS action plan follows the strategy refresh that one of its agencies, the Center for Medicare and Medicaid Innovation (CMMI), announced in October 2021. CMS and CMMI common objectives include equity, innovation, and partnership. CMS' other Strategic Pillars are Expand Access, Protect Programs, and Foster Excellence. Unique CMMI objectives include Drive Accountable Care and Address Affordability, which are further supported by ACO REACH, its recently announced and reimagined accountable care model.
Sean Creighton, managing director of revenue at Avalere, has noted: "There is a more refined relationship between the two [CMS and CMMI] due to new issues—equity—and more collaboration around innovation." Commenting on CMS' "surprising level of focus on health equity proposals," Creighton notes the operational and revenue effects for which private insurers must continue to plan.
Convening for better equity
As part of its press release, CMS stated that it will convene "healthcare facilities, insurance companies, state officials and providers" this summer as the agency seeks input from private and public stakeholders.
These requests have included equity design feedback in CMS' 2023 Notice of Benefit and Payment Parameters (NBPP) rule. NBPP included proposals that Marketplace plans support in general while noting the many components—data, measures—that need time to sort.
These proposals fall in line with the agency's intent to "lean on [the] private sector to address costs, disparities." CMS' Brooks-LaSure expressed this intention at the J.P Morgan Health Care Conference in January, adding: "Our role with the private sector is really partnering and trying to align goals."
In its strategy refresh lessons learned, CMMI acknowledged the need to streamline programs given that many stakeholders participate in diverse models. Collectively, the CMS and CMMI announcements—and the need of the public and private sectors to execute at scale—may prove a powerful common lever as health equity strategy evolves.
As Brooks-LaSure adds: "We can't achieve our health system goals until everyone can attain the highest level of health."
The insurer had its strongest selling season to date with organic growth across all business lines.
On its first quarter (Q1) 2022 earnings call and in a companion press release, Anthem reported performance that surpassed analyst expectations, including earnings of $8.25 per share and operating revenues of $37.9 billion—the latter an 18% increase over Q1 2021. Anthem’s earnings were in line with the company’s consistent 12%–15% share price growth projections, highlighted at its March 2021 Investor Day and which the company continued to support on the earnings call. President and CEO Gail Boudreaux and EVP-CFO John Gallina emphasized the following contributors to Anthem’s best selling season to date.
"Best national accounts selling season ever." Anthem’s employer account gains were a recurring headline on the earnings call. Boudreaux noted that multiple large employers had consolidated their business with Anthem and cited usage growth of the company’s Sydney mobile app for healthcare navigation.
Organic growth across business lines. Anthem’s overall medical enrollment grew 7.5% (from 43.5 million to 46.8 million). Medicare Advantage (MA) growth—a key strategic priority for Anthem—came largely from dual-eligible special needs plan (D-SNP) enrollment. On the Medicaid side, Anthem’s organic increases were aided by its acquisitions of MMM and Paramount Advantage.
Acceleration of value-based care (VBC). Boudreaux named VBC as "one of the most important strategic imperatives inside our organization." Anthem noted that more than 60% of its consolidated medical expenses were paid under VBC contracts and that its primary focus is to "increase penetration of downside risk-sharing including global capitation" to more than one-third of its contracts across all business lines by 2025.
The role of Diversified Business Group (DBG). Anthem’s DBG targets chronic and specialized care and is a separate reportable segment that is key to company strategy. DBG is also designed to help the company grow its risk-based contracts and manage beyond traditional utilization management strategies.
The importance of whole-person health. Via Anthem’s press release, Boudreaux stated: "Our strong momentum across all our businesses is evidence that our transformation to become a lifetime, trusted health partner continues to drive our growth and accelerate our capabilities focused on whole person health." In the earnings call, the CEO added that the whole health focus is central to Anthem’s transition from a "traditional health insurer." This message is supported by the company’s intent to rebrand as Elevance Health (elevate plus advance) and deliver, in Boudreaux’s words, "health beyond healthcare."
Dr. Wieland continues his long history of leadership and shares what's next for the payvider joint venture.
Given that Allina Health | Aetna is an integrated payer-provider joint venture (JV), having a physician and CMO take the helm may not be surprising—particularly if that person is Dr. Robert Wieland. The physician leader assumed his new role as CEO after an interim appointment that began last November and after more than two decades with Allina Health, before and after its Aetna partnership.
In an interview with HealthLeaders, Wieland discusses how innovation will help move Allina Health | Aetna from startup to growth phase, and with patient and employee experience as a continued priority.
A long history of leadership
Prior to leading the JV, Wieland's Allina Health leadership roles included the organization's ambulatory and network divisions. There, he generated organic growth and practice strength through clinical integration, EHR optimization, and advanced care models. More recently as the health system's chief strategy officer, Wieland led the innovation, digital, and risk models that helped lay the groundwork for the Allina Health | Aetna JV.
Allina Health is a nonprofit health system that includes hospitals and providers across Minnesota and western Wisconsin. Allina Health | Aetna is a health plan that links the health system's resources to Aetna's national payer expertise.
In a press release, JV chair and Allina Health CFO Ric Magnuson noted: "We look forward to our next chapter under Bob's leadership and continuing to bring innovative insurance products to market to provide unparalleled care coordination, ease of access, and simplified products to our members."
Pictured: Dr. Robert Wieland is the CEO and CMO of Allina Health I Aetna. Photo courtesy of Allina Health I Aetna.
The excitement of innovation
It's important to note that Wieland is the CEO of a still relatively new health plan. Allina Health | Aetna formed in 2018.
"When I became CMO of Allina Health | Aetna, we started with no members and no revenue," notes Wieland. But that was part of the challenge.
"When you're starting something innovative, it is nothing but curveballs and surprises. That was appealing to me," says Wieland, adding: "Some of the things I'm the most proud of and that have been the most fun have been started from scratch."
After four years as Allina Health | Aetna's CMO—a position he will continue to hold, along with CEO—Wieland seeks to move the JV from "startup to growth and expansion mode" and continue its journey from fee-for-service to fee-for-value. Wieland adds: "A JV structure that's 50/50 like Allina Health | Aetna creates a level of alignment between payer and provider that can accelerate this transition."
In addition to greater trust and transparency, Wieland cites the JV structure as promoting more "co-developed solutions, such as care models and things like hospital at home." He notes that a key focus is how to align around revenue drivers and implement them at scale.
A physician leader improving patient care
Wieland says that as "an early company … membership growth and retention, including measuring member experience” are key objectives. To improve patient experience, he would like other priorities to include automated prior authorization, combined explanation of benefits and billing communications, and more accurate cost estimates for patients.
Wieland thinks these are the differences that patients will see with a physician at the helm. "The advantage of a physician leader is putting clinical and quality first. Providers have first-hand experience with both patient care and payer friction."
What will success look like?
Wieland says he wants those who appointed him and the entire Allina Health | Aetna team to see these differences in action.
"A year from now, I want to be meeting our growth objectives and exceeding the Board's expectations and goals. I also want to continue to focus on maintaining and improving our company's great culture," says Wieland. Highlighting the JV's people and leadership strength, the CEO adds that he wants to "maintain and continue to improve retention and development opportunities."
Health tech predictions
When asked about the proliferation of technology in healthcare, Wieland responds: "I am optimistic and have high expectations for it." He cautions, however, that the technologies that succeed will be those that best integrate with local healthcare ecosystems. "Many of the disruptive technologies are digital point solutions—platforms that help people manage their chronic conditions—that can further fragment care if not integrated. My prediction is that we'll see a massive consolidation of these digital disruption solutions."
Consumers are finding lower costs and more options in many markets.
The term marketplace evokes the image of an active shopping space, one that offers something affordable and attractive for everyone.
That accurately describes the health exchange Marketplace, which for 2022 offered most consumers lower premiums for a third consecutive year. This one of five key findings from a joint report from the Urban Institute, funded by the Robert Wood Johnson Foundation (RWJF).
Report co-author and Urban Institute fellow John Holahan notes: "Several new factors affected insurers as they set premiums for 2022, including increased insurer competition and generous subsidies from the American Rescue Plan Act that increased the likelihood that healthy people would choose to buy coverage previously deemed unaffordable."
A positive downward trend. Three years of lower premiums in most states bodes well for health plan competition and consumer cost predictability.
As Marketplace premiums fall, employer plans rise. National benchmark premiums declined 1.8%—less than 2020's decrease (3.2%) but more than 2021 (1.7%) and better overall than 2021 employer-sponsored plan premiums, which rose 3.6%.
State variability is also part of the story. The average monthly benchmark premium was more than $500 in 11 states but less than $365 in six (demographic: 40-year-old nonsmoker).
Unemployment and competition were contributors. Regionally, higher unemployment was associated with higher premium increases while more health plan choices translated to lower increases.
Health plan participation has nearly doubled. Marketplace stability continues, with 45% more payers offering plans in 2022 (288) versus 2020 (198).
These positive trends come as U.S. consumers confront rising inflation and interest rates.
Kathy Hempstead, RWJF senior program officer, affirmed the importance: "Three years of declining benchmark premiums combined with the American Rescue Plan provisions has been a win for Marketplace consumers, as evidenced by record enrollment."
Hempstead added the importance of continued subsidies and "rate discipline" to continue Marketplace access and affordability.
Higher premiums and deductibles but lower out-of-pocket maximums were revealed in the exchange giant’s application analysis.
eHealth’s fifth annual Medicare Index Report showed a mix of cost increases and decreases for 2022 private Medicare plans. Just as customer development theories stress the value of what consumers do and actually pay for—not just what they say—eHealth’s analysis is based on submitted applications to its exchange, the first and one of the largest in the U.S. eHealth’s Index Report includes data on Medicare Advantage (MA), Part D standalone (PDP), and Medicare Supplement (Med Supp) plans.
The following are highlights from the more than 260,000 applications submitted via eHealth for plan year 2022:
87% of customers chose plans with a $0 premium. This percentage has risen annually as more insurers offer more $0 premium options. In 2018, the first year of eHealth’s annual Index Report, only 63% of the exchange’s customers enrolled in $0 premium plans.
Despite the prevalence of $0 plans, average monthly premiums rose overall from 2021—although only slightly. This includes: $6 monthly for MA plans (up from $5), $22 monthly for PDP (up from $20), and $178 monthly for Med Supp.
Med Supp monthly premiums have increased the most. Average monthly premiums from eHealth Med Supp enrollments were $142 in 2018 (a 25% spike). MA and PDP average monthly premiums have decreased over that same period. MA premiums are more than half of what they were in 2018: $6 versus $17.
2022 annual deductibles were higher, with Med Supp showing the largest increase over time. Med Supp deductibles were nearly 14% higher ($181 versus $159), PDP 7% higher ($427 compared to $400), and MA 4% higher ($121, up from $116).
MA enrollees are paying less out of pocket. Plans’ annual maximum out of pocket (MOOP) average was $5,108, down 5% from $5,367 the prior year. MOOPs analyzed from eHealth applications have fallen just over 10% since 2018, when they were $5,694.
The National Association of ACOs is the latest to respond to CMS electronic quality measure goals.
Which challenge to tackle first in digital quality reporting?
The National Association of ACOs (NAACOS) is one of many posing the question as CMS aims to "[t]ransform measures to fully digital by 2025." NAACOS announced that it "has launched a new task force, aimed at developing recommendations for how to successfully collect and electronically report on ACOs' quality of care through disparate health information technology (IT) systems."
In its press release, NAACOS noted the following digital quality measure challenges for the Medicare Shared Savings Program (MSSP) and other stakeholders:
Interoperability. An abiding industry challenge requiring the collection, integration, and analysis of data from dozens of disparate EHR systems.
Standardization. A key part of interoperability applies not only to data but quality measures themselves. Electronic clinical quality measures (eCQM) were a component of CMS' final Rate Announcement.
Streamlining. CMS' Meaningful Measures program, now in Phase 2.0, will continue to target measure reduction and consolidation. Some ACOs have already done this work. A consolidated value-based care Star Rating from one MSSP—the Baylor Scott & White Quality Alliance—spans 50+ multipayer contracts and was featured in a January 2022 NAACO webinar.
Unique ACO challenges. NAACOS reports that more than 75% of ACOs must navigate at least six EHR systems, with 37% managing 15 or more. NAACOS also cited the "unintended implications and consequences of mandating data reporting on total patient populations instead of just the MSSP," which has been the decade-long standard.
Financial and operational changes. Achieving all the above by 2025 will require time, resources, and money, what NAACOS terms "significant investment by vendors, practices, and ACOs."
The NCQA response
NAACOs is not alone. In mid-2021, the NCQAresponded to CMS' Meaningful Measures 2.0 announcement and Request for Information (RFI). Placing eCQM needs within the context of a pandemic that revealed just how vulnerable we are, NCQA Federal Affairs Director Eric Musser wrote:
"Now imagine this: It's 2025, and there's another pandemic—but this time, there's a solution to those issues. There's a solution because the federal government, with support from private industry, looked at the how the system failed in 2020 and asked, 'How do we build an infrastructure that ensures we'll never be caught flat-footed again?' "
NCQA's digital quality measures priorities include a "digital first" portfolio and measures that are "configurable, modular" and can be accessed and integrated via API and standards such as Fast Healthcare Interoperability Resources (FHIR).
Returning to NAACOS' response, Katherine Schneider—Digital Quality Measurement Task Force chair—noted: "[W]e know digital quality reporting in general is the direction we need to move in, but we need to get it right, ultimately for the benefit of the momentum of value-based care and for patients, including those cared for by safety net providers."
Two decades of innovation reveal mixed findings for quality, cost, and utilization—and unclear ways to resolve.
The results are in on the impact of value-based payments (VBP) and once again, they're mixed.
In what Health Affairs calls "the first-systematic review" of commercial VBP models, the study has yielded mixed results. The review, based on 59 studies published since 2000, found "mixed and modest effects" and that commercial VBPs were far more likely to improve healthcare quality then lower costs or steer utilization.
The conclusion? "Given the … nature of the findings, commercial insurers should identify ways to strengthen value-based payment programs or leverage other strategies to improve health care value."
What are these new ways and other strategies? Read on for the summary and HealthLeaders' analysis.
The results
Health Affairs analyzed 20 years of commercial VBP studies (2000–2020) to assess quality, spending, and utilization. Studies for each category demonstrated either clearly positive/negative outcomes or mixed-to-no effect. The studies spanned VBP commercial models (P4P, bundled/episode-based payment, shared savings and risk, and population-based payment) with the following results:
There were more positive outcomes for quality (81%) than for spending (56%) or utilization (58%).
Shared risk was studied the most, bundled/episode models the least.
Only P4P had positive outcomes across all three dimensions (quality, spending, and utilization).
P4P and bundled/episode models aided quality; most other models either improved or did not.
Spending studies were slightly more prevalent and their results the most mixed.
Shared risk outcomes were the most conflicting:
More positive/mixed-positive studies across all dimensions.
The most mixed-to-no effect on spending.
One of the only models with clearly mixed-negative results.
Five study conclusions
The Health Affairs results are important for three reasons. First, less is known about commercial VBP versus other payer models. In addition, commercial coverage is responsible for higher spending and more quality variation compared to traditional Medicare. Finally, VBP evaluation methodology is often as inconsistent as VBP results. Key findings include:
Something's got to give. After 20 years, the question remains: Can commercial VBP make a difference?
Don't abandon benefit/delivery system innovation. Combining narrow networks with shared savings/risk models could prove effective.
Providers need support, not just data. Payers should offer technical assistance, reporting tools, and shared learning.
Streamline for success. Private and public payers may benefit from aligning VBP strategies.
Hospitals, where are thou? How can VBP impact the high-cost and -utilization services that drive revenue?
In an interview with HealthLeaders, study co-author Roslyn Murray noted: "I don't necessarily think that VBP is the silver bullet to our healthcare spending problem." Citing commercial VBP's mixed results, underestimated costs, and the lack of significant quality improvements, Murray—a PhD student in the University of Michigan's Health Services Organization and Policy program—added: "It makes it a little concerning as to whether to spend more time, money, and energy on these models."
Murray cites pricing as the primary driver of healthcare cost, one that VBP may lack the levers to affect.
Additional HealthLeaders analysis
Health Affairs suggests that payers must either strengthen their commercial VBPs, look to other strategies, or both. How?
Don't leave tools on the table. The VBP studies are unclear on whether payers align "demand-side benefit designs with supply-side payments." But insurers definitely use this strategy. Anthem is tackling market and VBP challenges simultaneously by linking high-performing providers to its best plans and giving them added marketing support.
When healthcare moves forward, it often leaves things behind. The Health Affairs analysis shows that VBP strategies have been more sequential than concurrent. As new models emerge, others fade. Pure-play P4P has been eclipsed, yet its studies yield higher quality. Meanwhile, many cost-focused studies exclude net savings after incentives.
The industry may repeat this history with health equity. Health equity is the latest "add-on" to VBP model design. Understandably, there is little consensus on how to integrate equity: should it be assessed independently or as a component of other dimensions? Just as cost and utilization followed quality, heath equity is a trailing consideration looking for its place. Murray notes that as healthcare spending becomes an even-larger part of GDP, it compromises investment in the areas associated with social determinants of health (e.g., housing, education).
Find the balance. Many of CMS' VBP goals stress either cost or quality gains, and that one does not stifle the other. Among Health Affairs studies, only the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract improved all dimensions, though inconsistently. Murray notes that the AQC studies "were by far the most methodologically rigorous and incorporated provider payouts to assess net savings."
The Announcement—otherwise known as the Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies—also included plan risk adjustment and coding intensity; health equity; Star Ratings and overall quality; and end stage renal disease (ESRD) guidance. For each issue, HealthLeaders has analyzed Avalere's key quotes, surprises, and predictions to help payers prepare for another wait-and-see pandemic year.
The big picture
"This year's rule reads more like a first-year announcement," noted Avalere Managing Director Revenue Sean Creighton. This refers to the relative lack of risk and other adjustments that plans were expecting.
"The major lever that everyone expected to be pulled was taken off the table, so I can't describe the Final Announcement as anything but positive, but it depends on what happens with legislation," Creighton added.
Federal legislation could impact plans beyond the rate notice, along with the decisions CMS has left to health plans and the additional technical levers it can pull via other regulations. About these levers Creighton noted that while CMS has many, they must apply them while assessing beneficiary impact—a kind of Hippocratic Oath for payment policy.
Three top-line payer recommendations for next year were:
Keep COVID-19 central to strategy (even after the public health emergency ends) as it pertains to care access, delivery, and quality measurement.
Look for legislation that addresses what the Rate Announcement didn't.
Expect more specificity related to equity, including closer collaboration between CMS and the Center for Medicare & Medicaid Innovation (CMMI).
Coding intensity and plan risk adjustment
"There was a possibility of significant downward rate adjustments, and they weren't there," noted Creighton.
While CMS did not change how it calculates risk scores, the Rate Announcement and other CMS rules signal the agency is assessing its risk methodology across plan types. It must also consider the role of social determinants of health (SDOH) in risk adjustment as well as long-standing concerns over MA plan upcoding practices that increase reimbursement by teasing out patient risk.
In addition to the lack of any real rate adjustment, CMS also did not tinker with its normalization factors and coding intensity adjuster. As a result, Creighton adds: "There is a huge risk of CMS doing something on coding intensity adjuster next year; they haven't done anything for years, even though MedPAC has been beating the drum."
Creighton said CMS may be leaving coding intensity as a legislative activity as it tries to leverage other changes related to benefits and drug costs.
Star Ratings and quality
Some 90% of MA plans had a 4+ Star Rating in 2021. These gains rode the back of pandemic losses and anomalies. Continued COVID-19 impacts are an area of concern, including the CAHPS response rates and results that will factor heavily in CMS' new patient-experienced-focused Stars program.
Related to CMS' broader quality approach, Avalere Associate Principal Taylor Musser noted the intent to not only stratify but evaluate measures based on social risk, in part to create a Health Equity Index that would impact a plan's overall Star Rating. The Rate Announcement also addressed SDOH screenings, manual versus electronic measure reporting, and CMS' intent to "begin sharing confidential stratified reports with contracts this spring."
Health equity
Quality and equity were intertwined in the Rate Announcement takeaways, with Avalere analysts surprised at the level of health equity program detail but advising that CMS will introduce health equity measures "in a fairly careful way."
Creighton said that current risk models "already take into account" some aspects of health equity and SDOH. He added that MLR may be a better place to look for payment-equity gains (e.g., shifting equity outreach costs to clinical).
ESRD
One plan year into MA ESRD eligibility, CMS finalized two expected changes—risk modeling and network adequacy—but left a widely desired rate change off the table. "Leaving it to the plans for now" was the ESRD theme, at least for now.
Creighton noted: "If I had to look at the tea leaves, there is probably a belief at CMS … that plans can bring down costs without doing damage." Explaining CMS' rationale, he cited the looser network adequacy rules and plans' power to negotiate with providers, including large dialysis providers.
Case management was the other ESRD hot topic, yielding some of the strongest warnings and predictions for plans.
