Medicaid insurers at heart of Nevada public option plan

Nevada Plans To Launch Their “Public Option” Medical Coverage By 2026 – Dr.  Daliah

The state will bid out the business to private insurance carriers instead of doing the work in-house. Medicaid managed care organizations will be required to submit a bid.

Nevada’s plan to launch a public option health plan hinges on participation from the state’s Medicaid managed care organizations.

After passing both houses of the legislature, Democratic Gov. Steve Sisolak told reporters Tuesday he will sign the bill that will likely crown Nevada as the second state to pass a public option — a government-run plan that promises to lower premiums and increase access to care by creating an additional insurance option for residents.

To achieve its aims, Nevada’s public option plan requires premiums to be 5% lower than the benchmark silver Affordable Care Act plan in each ZIP code and, ultimately, premiums must be reduced by 15% over a four-year period. At the same time, reimbursement to providers must not go below Medicare rates.

Coverage under the public option would begin in 2026. The bill is just the beginning of a process in which Nevada will seek a waiver from the federal government to enact the public option plan. In short, the state is asking to capture the savings it may generate for the federal government.

Similar to other public health programs, the state of Nevada will bid out the public option business to insurance carriers instead of doing the work in-house. The state will rely heavily on Medicaid managed care organizations, at least at first, as it tries to spur participation.

“As a condition of continued participation in any Medicaid managed care program,” Medicaid MCOs will be forced to offer a public option plan if they want a Medicaid contract with the state, according to the bill sponsored by a Democratic state senator and Nevada’s majority leader, Nicole Cannizzaro, which passed the body earlier this week.

The bill says Medicaid MCOs must submit a “good faith proposal,” in response to an eventual RFP.

Sabrina Corlette, a research professor at Georgetown’s Center on Health Insurance Reforms, said she “assumed they wanted a guaranteed pool of potential bidders for the public option. Maybe they were afraid that if they didn’t require some bidders, they might not get any.”

Currently, there are three Medicaid MCOs in the state of Nevada: Centene, UnitedHealthcare and Anthem Blue Cross Blue Shield.

None of the companies responded to a request for comment.

The Nevada bill comes at a time when there is a renewed interest at the federal level for a public option plan, and a push from a handful of other states interested in creating an affordable health plan option for residents who have found themselves ineligible for Medicaid but unable to afford a marketplace plan.

Washington was the first state to implement a public option plan, which went live this year. 

President Joe Biden is a proponent of a public option plan — instead of “Medicare for All” — as it would build on the ACA, a law he helped usher in under former President Barack Obama, instead of dismantle it.

The insurance lobby is strongly opposed to a public option and previously expressed concern over Nevada’s plan via an opposition letter dated May 3 and addressed to Cannizzaro and the state’s Health and Human Services Committee.

AHIP, America’s Health Insurance Plans, took aim at the way in which the bill requires premiums for the public option plan to be lower than certain competitive plans on the exchange. AHIP characterized it as arbitrary “government rate setting.”

The tactic of prodding insurers into offering a separate business line in a specific state is not new.

The exchanges, launched under the ACA, relied on insurers to voluntarily sell plans to a relatively new market. At times, some counties were at risk of having no exchange plan at all. Some states tried to alleviate this problem by creating incentives for Medicaid MCOs if they also offered an exchange plan.

In a more extreme example, New York banned insurers from providing plans to any other program, including Medicaid, if they exited the exchange, according to a 2017 executive order from Gov. Andrew Cuomo.

Over time, the exchanges have become a core business for Medicaid MCOs.

Selling exchange plans is a complementary business for Medicaid MCOs that traditionally contract with states to care for Medicaid-eligible members. By selling exchange plans, Medicaid MCOs attempt to attract the Medicaid members they were serving as they churn off the program as their income fluctuates. It’s a key strategy for players like Centene.

However, if they’re forced to participate in the public option plan they will have to undercut their own premium prices on the exchange.

In Nevada, UnitedHealthcare and Centene command the largest market share on the exchange, according to the Kaiser Family Foundation.

‘We feel bullish’: Payers look ahead to 2021

https://www.healthcaredive.com/news/we-feel-bullish-payers-look-ahead-to-2021/585211/

Amazon.com: I'm Feeling Bullish, Stock Trading Log Book: Day Trading Log  Journal, Stock Trading Log for active traders of stocks, Log Trade.  (9798600033962): Publishing, Stockers & Brokers: Books

Top executives at some of the biggest commercial insurers outlined their shifting strategies and what markets are growth opportunities in light of the recession at Morgan Stanley’s annual conference.

Top executives at some of the biggest commercial insurers provided a peak behind their curtains at Morgan Stanley’s annual investor conference this week, discussing the pace of utilization recovery and how they’re approaching rate setting and risk going into next year

Though there’s significant uncertainty around the future of the insurance industry, many remarks can be summed up in a line from Cigna CEO David Cordani: “We feel bullish on 2021.”

And despite the major role of government in regulating healthcare, most officials seemed agnostic on the presidential election looming in less than two months.

Payers are reporting skyrocketing profits amid the COVID-19 pandemic as patients deferred care in droves in the second quarter, sparking a congressional investigation into business practices. Use of healthcare services continues to recover from a nadir in March and April, and that recovery has continued into the third quarter, payer executives said. But the pace has differed by segment.

At the start of the pandemic, Humana saw beneficiary use drop to about 30% of pre-COVID-19 levels until mid-May, when it slowly started to tick back up. The Louisville, Kentucky-based insurer’s utilization is now still “a little below par,” but well above that depression and meeting internal expectations, CEO Bruce Broussard said.

CVS Health-owned Aetna has seen its commercial business come back faster than Medicare, CFO Eva Boratto said. Primary care and labs have seen a quicker rebound, but it’s been slower in inpatient and ambulatory.

Centene CEO Michael Neidorff predicts utilization will be between 65% to 80% of normal by the end of the year, but remains cautious due to the shifting nature of the pandemic, and how it could coincide with a potentially nasty flu season.

“We don’t know what other peaks we’re going to see,” Neidorff said.

2021 rate setting, strategic pivots

Unsurprisingly, COVID-19 is also shaping major payer’s go-to-market approaches and how they’re thinking about 2021 bids.

Humana, for example, studied both historical data prior to COVID-19 and did scenario planning around what the pandemic could do to factors like utilization, testing and treatment if it continued throughout the year. Eventually, the payer decided to base bid assumptions off trending historical information forward, according to Broussard.

“We were very oriented to pricing that was more conservative as we thought about the approach,” he said.

It appears Centene, contrastingly, is using 2020 data to risk score. When asked how the payer is approaching rate setting, Neidorff said: “We’re dealing with this year. And we’re saying that any concessions this year should not necessarily carry into next year, which is an entirely different year.”

Employers and plans nationwide are struggling with this issue. Only about 60% of employers are using 2020 claims to set rates for next year, while another 26% are calculating expected medical costs based on data from 2019, and 9% are using data from the first two months of 2020 alone, according to Credit Suisse.

The pandemic has also shifted insurers’ broader strategic priorities in 2021 and beyond, especially by hammering home the need for diversified revenue streams to keep afloat, top execs said.

“We’re in 37 states. If you have a stock that’s not performing well in your portfolio, you probably have some that are offsetting it,” Centene’s Neidorff said.

Humana has been investing in telesales, at-home and in-community offerings and digital capabilities, with an eye for growth. Broussard said Humana’s customers have been mostreactive to an omnichannel approach to care delivery.

For example, the payer is seeing home as an increasingly valid path for care a little more acute in service than in the past. As a result, Humana plans to continue investing in areas that dovetail with that trend, and those with biggest impact on downstream healthcare costs, including primary care, social determinants of health, behavioral health and pharmacy.

CVS has also accelerated development of its virtual care offering, eClinic, as a result of the pandemic and relaxed federal regulations. Visits are up 40% since the end of June, CEO Larry Merlo said, noting he believes the future of healthcare delivery is at the intersection between digital and physical.

Because of the pandemic, “we are seeing an accelerated shift to this multichannel, integrated approach,” Merlo said. “We did change some of our priorities, and accelerate some things that may have been further down the road.”

CVS is continuing to convert existing stores to health- and wellness-focused locations, called HealthHUBs, which devote a fifth of floor space to healthcare products and services. Currently, the Rhode Island-based giant has 275 HUBs up and running, despite pausing conversions for a time in March.

Cigna is also looking to drive revenue by moving beyond a payer’s traditional wheelhouse. On Wednesday, the insurer announced it was rebranding its health services division as Evernorth, in a next step for the Cigna-Express Scripts megamerger completed almost two years ago.

For its part, Centene is introducing more value-based contracts in 2021, after seeing providers it contracts with in alternative payment models are reporting stronger cash flow and patient relationships amid COVID-19 than those in fee-for-service relationships.

Going into next year, the payer is also focused on margin expansion, working with states to set rates and federal lobbying for friendly policies like an increased Medicaid match rate, Neidorff said.

Attractive markets

The COVID-19 recession booted millions of Americans off employer-sponsored insurance, though the full scope of the insurance crisis isn’t yet clear. Cigna’s Cordani noted the disenrollment in the first half of the year in its commercial population was lower than expected, helped by the fact the payer is less active in sectors hit hardest by the pandemic like travel and leisure.

But disenrollment could still snowball in the second half of 2020. As a result, a number of major commercial payers are building out offerings in two coverage backstops in the market: Medicaid and the Affordable Care Act exchanges.

Broussard said Humana sees ample opportunity in Medicaid — including the dually eligible — but wants to be more surgical in expansion moving forward, especially as states look for a more contemporary delivery of services and engagement with clinical programs. Humana is going to look for tuck-in acquisitions.

“Is there a way to enter the market in a small way, and leverage our capabilities and grow from that?,” Broussard said.

Cordani agreed that budget-strapped states are looking for new ways to lower costs, but said “Medicaid has always been a lower priority growth platform” for Cigna. Instead, the insurer sees the safety net program as an opportunity for Evernorth in the near term, more than its government business.

Of the 1.1 million new members Centene added from March through August, the majority were in Medicaid, but a significant portion were in the ACA exchanges, Neidorff said. Capitalizing on that momentum, Centene — already the largest payer in the exchanges — is adding 2 new states to its footprint for 2021. “I think we’ll grow in marketplace, given the level of people and the subsidies they get,” Neidorff said. “I see it as a positive going forward.”

Humana, however, is leery on entering the exchange market, given political uncertainty around the upcoming 2020 presidential election, according to its top exec.

“The exchange market has stabilized in a lot of different ways, but still has elements where it tends to be a sicker, more transient population,” Broussard said. “We’d rather not be in the situation where we go in and have to pull out because of the political realm.”

Payers also continue to forecast strong growth in Medicare Advantage. Currently, about 34% of Medicare beneficiaries are in the privately run Medicare plans. It’s a popular program: The Congressional Budget Office predicts MA’s share of the overall Medicare population will swell to 47% by 2029.

CVS is currently on track for mid-single-digit growth next year, and sees Aetna’s continued growth in MA as one of the building blocks to continued earnings power, Boratto said. 

Similarly, Cigna is well on track to meeting its goal of 10% to 15% annual organic growth in MA, Cordani said. Historically, Cigna has only been present in about 18% to 19% of the addressable government market, but is trying to eventually expand to 50%.​

Shrugging off election

Unlike years past when some payers worried of Democratic plans for Medicare and other aspects of insurance, most executives seemed to shrugged off the coming presidential election.

President Donald Trump has made undermining the ACA one of the chief goals of his first term, while Democrat nominee former Vice President Joe Biden’s healthcare plan revolves around shoring up the decade-old law, enacting a public option and lowering Medicare’s age of eligibility.

But executives noted Trump’s tenure hasn’t necessarily been bad for them, and having Biden at the helm could provide some opportunity for savvy operators.

Humana could be particularly at risk going into a period of political uncertainty. The payer has a smaller portfolio and fewer assets than some of its bigger peers, Ricky Goldwasser, managing director at Morgan Stanley, said.

But Broussard said regardless of whether the inhabitant of the White House is blue or red, they’ll likely support value-based payment models — a key tenet of its strategy. Additionally, the seemingly-threatening Medicare buy-in option is “very similar to MA,” Broussard said. “We’d see that as the opportunity to expand our ability to bring our capabilities to maybe a younger population, but with a lot of the same elements.”

Some industry experts see the public option, which has bipartisan support among voters, as a potential benefit for companies with leading market share in MA, like UnitedHealth, Humana and Aetna.

“We’ve had public options and done well in public options. So history says that’s fine,” Centene’s Neidorff said. “I think Biden would not be a threat, but an opportunity. I think a Trump re-election would just be more of what we’ve seen. And we’ve done OK with that.”

Centene’s $2.2B deal for Magellan adds focus on behavioral health

Dive Brief:

  • Centene has entered into a definitive agreement to acquire Phoenix, Arizona-based Magellan Health for $2.2 billion, or $95 per share, the payer said Monday. Magellan will operate independently under the Centene umbrella.
  • Executives said the combination will result in one of the nation’s largest behavioral health platforms as the two will provide behavioral services to about 41 million members in the U.S.
  • The deal also boosts Centene’s already established footprint in government sponsored health plans with the addition of 5.5 million lives and another 2.2 million to add to its pharmacy benefit management platform.

Dive Insight:

The deal is designed to boost Centene’s ability to market a “whole health” approach for its members. The COVID-19 pandemic has underscored the need to care for more than just a member’s physical health by also caring for their mental health, the company said Monday.

“This has become even more evident in light of the pandemic which has driven a dramatic rise in behavioral health needs,” Centene CEO Michael Neidorff said in statement. Both boards unanimously approved the deal.

Magellan Health provides managed care and pharmacy services for an array of clients that include health plans, unions and third-party administrators. Centene has been a client of Magellan’s in years past.

Magellan leans on analytics and other technologies in an attempt to improve health outcomes and lower costs. In addition to behavioral health, Magellan focuses on high-cost or complex patients for its clients. In its presentation to investors on Monday, Centene said 71% of total healthcare costs in the U.S. are spent on complex patients, illustrating the need for the deal.

For its healthcare management services, Magellan typically enters into risk-based contracts with its clients where it assumes all or a substantial portion of the risk in exchange for a per member, per month fee. Or, Magellan will enter into an administrative services only agreement in which it reviews utilization and claims administration and manages provider networks, according to its latest 10-Q filing.

The deal is expected to close in the second half of the year pending regulatory approvals. CEO Ken Fasola and other Magellan executives will continue their leadership roles.

Last year, Centene completed its blockbuster acquisition of rival WellCare, a $17 billion deal that catapulted the company to the fourth-largest insurer by membership when including Aetna, which is now part of CVS Health. The deal also doubled Centene’s Medicare Advantage footprint. Centene’s core business is Medicaid managed care and it is the largest insurer on the Affordable Care Act exchanges.

Are Trump’s Top Medicaid Regulators Ignoring Major Problems? Insurance Giant’s Tense Meeting With a Senator Adds to Growing Concern

https://www.propublica.org/article/centene-bob-casey-are-trump-top-medicaid-regulators-ignoring-major-problems?utm_source=pardot&utm_medium=email&utm_campaign=dailynewsletter

The ranking member of the Senate health committee has complained for months about the Trump administration’s failure to look into Medicaid contractors that have reaped big profits while sometimes failing to provide crucial patient services.

So last week, Sen. Bob Casey, D-Pa., called in the top boss of Centene, the nation’s largest Medicaid managed care company. He wanted to question the company about reports that its Texas subsidiary denied life-sustaining care to sick and disabled children — in one case, leaving a baby in foster care to suffer a catastrophic brain injury.

The meeting with longtime Centene CEO Michael Neidorff did not go well, according to Casey.

“I thought they would try to persuade me that they were going to do better, but they didn’t seem interested in that at all,” Casey told ProPublica and The Dallas Morning News in an interview. “I just couldn’t believe it.”

Casey said the Centene official denied providing inadequate care and cast blame for failures on foster parents and nurses.

Centene declined to make Neidorff available for an interview and emailed a brief statement in response to questions about the meeting with Casey.

“Centene and its subsidiaries care deeply about each and every member we serve,” the email read. “We work tirelessly to ensure we provide the appropriate level of care for our members.”

Under Neidorff, Centene has grown from a tiny health network in the Midwest into a $60-billion-a-year health care empire, backed almost entirely with taxpayer money. The company cares for more than 8.5 million Medicaid patients.

The company came under criticism last year after an eight-part investigation published in the Morning News examined whether Centene and other Medicaid managed care companies were skimping on care to bolster profits. The series raised questions about Centene’s Texas subsidiary, Superior HealthPlan, and its handling of the case of D’ashon Morris, a Texas toddler who was born with severe defects and was living in a foster home.

The series, titled “Pain & Profit,” reported that D’ashon was denied 24/7 nursing care and suffered brain damage after a medical incident that occurred while he did not have his nurse around. (Read the full story here.)

The Morning News reported that state health officials had found the Centene subsidiary in violation of state and federal Medicaid rules and recommended the company face steep fines for what happened to the child. But top Texas health officials never assessed those fines, the Morning News reported.

D’ashon’s adoptive mother sued the Centene subsidiary in Texas state court. That case is tied up in the Texas appeals court, where the Centene subsidiary has argued that the lawsuit should be dismissed because D’ashon and his mother are stifling the company’s right to free speech.

During hearings in the state Capitol, Superior representatives denied that the company’s refusal to provide 24/7 nursing was improper.

After his meeting with the Centene official, Casey sent a strongly worded letter to Seema Verma, a former health consultant appointed by President Donald Trump to run the Centers for Medicare and Medicaid Services.

In the letter, Casey called Centene’s response to questions about D’ashon’s case “callous.”

He also asked Medicaid officials to dig further into Centene’s business practices and to provide documentation on any response to the Morning News investigation.

“It’s another indication that the regulatory approach here by the administration is, at best, suspect,” Casey said.

A CMS spokesman said that Texas officials have shared with the agency an “action plan they intended to take to address the concerns raised,” adding that CMS is in regular communication to ensure the state improves.

“CMS has received Sen. Casey’s letter and will respond to his office directly,” spokesman Brian Leshak said in an email.

Casey’s position as the top Democrat on two Senate panels overseeing federal health programs gives him the standing to raise questions about the Medicaid managed care system.

It’s not unusual for company officials facing a federal audit or investigation to meet with members of Congress to address concerns, but it is unusual for such meetings to spill into public view.

Casey said he sent the letter to CMS because of what he called Centene’s “cold and clinical” defense of what happened in D’ashon’s case. He said it gave him concern about how the company cares for other patients — and what, if anything, regulators are doing when things go wrong.

Last month, more than a year after the Morning News story was published, Centene officials provided Casey’s office with a one-page rebuttal titled: “The Dallas Morning News got it wrong.”

The company’s explanations include that D’ashon’s foster mother was a trained nurse. But, as the Morning News reported, she was on an approved vacation at the time of D’ashon’s injury, and he had been placed in a different foster home.

The company also said D’ashon’s foster mother should have restrained the baby, but the Morning News previously reported that Texas foster care officials confirmed restraints would have required a doctor’s order, which she did not have.

“It was all blame shifting and pointing to other factors,” Casey said of Centene’s letter.

Casey said the meeting left him wondering why federal regulators weren’t doing more.

“It might even be worse than asleep at the wheel,” he said of CMS under Verma’s watch.

“They may be awake at the wheel but choosing consciously to say, ‘We’re going the other direction.’”

Without commenting on specific cases, the CMS spokesman said the agency routinely monitors states and intervenes when necessary.

Problems with this privatized Medicaid model have grabbed headlines in other states, too. And advocates in those states said they haven’t heard much from CMS, which they say is a shift from the Obama administration.

In Iowa, for instance, The Des Moines Register reported failures to provide care and chronicled patients who had been caught in that state’s broken medical appeals system.

Rob Sand, Iowa’s state auditor, wrote to state officials in June that two large managed care companies had “significantly harmed” two paraplegic patients by refusing to provide services they needed.

Mary Nelle Trefz, of Iowa’s Child and Family Policy Center, said she’s been shocked to hear nothing about that from CMS.

“I don’t feel, or can’t observe, or point to anything, where CMS has stepped in to provide that oversight and accountability,” she said.

In March, California’s state auditor found that millions of children in that state’s privatized Medicaid system weren’t being provided services that taxpayers had paid for. Auditor Elaine Howle blamed California health officials’ “deficient oversight of the managed care plans.”

Andy Schneider, a researcher at Georgetown’s Center for Children and Families, and a former top adviser to CMS under the Obama administration, said these episodes come at an inconvenient time for the Trump administration, which is focused on reducing regulation and creating additional eligibility hurdles like work requirements.

CMS has taken a hands-off approach compared with the previous administration, he said.

“These are reports coming from reputable media sources,” he said. “They’re very concerning, they have to do with the operation of the program, they suggest that something is wrong.”