Justice Department sues Anthem, alleging Medicare fraud

https://www.axios.com/doj-anthem-lawsuit-medicare-advantage-fraud-11cdba13-eacd-4847-9bb0-20aa993235f9.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Justice Department sues Anthem alleging Medicare Advantage fraud ...

The Department of Justice has sued Anthem, alleging that the health insurance company knowingly submitted inaccurate medical codes to the federal government from 2014 to 2018 as a way to get higher payments for its Medicare Advantage plans and turned “a blind eye” to coding problems.

Why it matters: This is one of the largest Medicare Advantage fraud lawsuits to date, and federal prosecutors believe they have more than enough to evidence to claim that Anthem bilked millions of dollars from taxpayers.

Background: DOJ has been probing the “risk adjustment” practices of all the major Medicare Advantage insurers for years, but hadn’t pulled the trigger on a lawsuit against a major player.

  • Risk adjustment is the process by which Medicare Advantage companies assign scores to their members based on the health conditions they have. Patients who have higher risk scores lead to higher payments from the federal government to the companies that insure them.
  • Insurers are required to review patients’ medical charts to verify the health conditions, and if insurers find any inaccurate diagnoses, they have to be deleted — which also would require the companies to pay back money to the federal government.

The Department of Justice is alleging that Anthem reviewed medical records, but only focused on finding “all possible new revenue-generating codes” while purposefully ignoring all erroneous diagnoses.

  • For example, according to the DOJ’s lawsuit, Anthem coded one member in 2015 as having active lung cancer.
  • “Anthem’s chart review program did not substantiate the active lung cancer diagnosis,” the DOJ alleges. Instead of deleting that diagnosis, Anthem allegedly added another three codes — leading to a $7,000 overpayment just for that member that year.

The other side: Anthem said in a statement that it intends “to vigorously defend our Medicare risk adjustment practices” and that “the government is trying to hold Anthem and other Medicare Advantage plans to payment standards that CMS does not apply to original Medicare.”

The big picture: Medicare Advantage continues to enroll seniors and people with disabilities at high rates, even as more allegations of fraud come out against the insurers that run the program.

Read the lawsuit.

 

 

 

 

Health plans ramp up physician practice acquisitions

https://mailchi.mp/9e118141a707/the-weekly-gist-march-6-2020?e=d1e747d2d8

 

Health systems and private equity firms aren’t the only ones aggregating physician practices—many large insurers are rapidly acquiring or affiliating with physician groups, especially to support their Medicare Advantage (MA) strategies.

As the map below shows, most insurers are focusing this vertical integration in states like Florida, Texas, and California—places where they also have large populations of MA beneficiaries. Astonishingly, UnitedHealth Group—through its Optum division—is likely the largest employer of physicians in the US, employing or affiliating with 50,000 physicians—roughly 5,000 more than HCA Healthcare and nearly double the number of Kaiser Permanente. The number of Optum-controlled physicians has increased rapidly in recent years, the result of many large-scale deals, including the $4.3B acquisition of DaVita Medical Group.

When it comes to leveraging this growing physician network, United is setting its sights well beyond Medicare Advantage, as demonstrated by its recent introduction of Harmony, a commercial narrow network health plan in Southern California based almost exclusively on a network of Optum physicians.

Meanwhile, Humana’s physician strategy has focused more on affiliations with non-traditional groups serving MA patients, including Iora Health and Oak Street Health—though Humana also has two large primary care groups, Conviva and Partners in Primary Care, the latter of which just secured a $600M private equity investment to expand.

Notably absent from this map is Aetna, which has been pursuing a different strategy, focused around steering its MA population to its advanced practice provider-run HealthHUBs in CVS pharmacies.

This trend of insurer acquisition of physicians is obviously worrisome for health systems, as the health plans they negotiate with for payment are now directly competing with them at the front end of the delivery system.  

 

 

Financial updates from UnitedHealth, Anthem + 5 other for-profit payers

https://www.beckershospitalreview.com/payer-issues/financial-updates-from-unitedhealth-anthem-5-other-for-profit-payers.html?utm_medium=email

The following seven health insurers recently released their financial statements for the fourth quarter of fiscal year 2019:

1. Anthem saw its revenues and profits grow in the fourth quarter, but the insurer missed analysts’ earnings expectations.

2. Cigna continued to realize higher revenues and profits in the fourth quarter, thanks to its subsidiary Express Scripts.

3. Molina Healthcare ended the fourth quarter with lower net income than a year prior as premium revenues declined.

4. Humana saw total revenue and net income grow in the fourth quarter, thanks in part to growth in its Medicare Advantage business and health services segment.

5. Centene Corp. saw its revenues grow in the fourth quarter, but experienced higher-than-expected flu costs.

6. UnitedHealth Group saw its revenues just miss analysts’ expectations in the fourth quarter, but the health insurance giant’s Optum unit boosted profits.

7. Aetna‘s parent company, CVS Health, exceeded Wall Street’s expectations with its fourth-quarter results, boosted largely by its pharmacy benefit management business.

 

The attractive economics of Medicare Advantage

https://mailchi.mp/0ee433170414/the-weekly-gist-february-14-2020?e=d1e747d2d8

 

 

After years of subsidizing Medicare Advantage (MA) plans in an effort to attract more insurers and beneficiaries to the market, the government has succeeded in its goal: the average beneficiary can now choose from 28 plans in 2020, and recent studies have shown MA plans are outperforming fee-for-service (FFS) Medicare on several key quality measures.

As shown above, this subsidy has decreased in recent years—as mandated by the Affordable Care Act—and per-beneficiary MA payments are roughly equal to those of FFS Medicare. (These numbers may be underreported, however, due to aggressive risk adjustment measures on the part of MA plans.) However, risk-adjusted average Medicare cost per MA beneficiary is actually 13 percent lower than per Medicare FFS beneficiary, due mainly to lower utilization of high-cost services and other efficiencies.

Insurers offering MA plans are profiting from this lucrative “spread.” 

Growth in MA plans in recent years ensures that private insurers will continue to play an important role in the future of Medicare—the most recent projections estimate that 47 percent of Medicare beneficiaries will be in MA plans within a decade.

But inefficiencies in traditional Medicare may not make it the best standard on which to base MA payments. And ultimately, relative MA payment rates will have to continue to drop for the program to sustainably manage the healthcare costs of the gigantic Baby Boom generation.

 

 

Humana doubles down on its primary care strategy

https://mailchi.mp/192abb940510/the-weekly-gist-february-7-2020?e=d1e747d2d8

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Humana, the nation’s second largest Medicare Advantage (MA) insurer, is partnering with a private equity (PE) firm to expand its senior-focused subsidiary medical group, Partners in Primary Care.

The arrangement will be structured as a joint venture between Humana and Welsh, Carson, Anderson & Stowe, with a combined initial $600M investment that will give the PE firm majority ownership of the medical group. The new venture is likely to double the number of centers that Humana’s Partners in Primary Care operates—currently 47 throughout Texas, Kansas, Missouri, Florida and the Carolinas.

While Humana has been looking to grow its MA membership, patients need not be Humana members to access care at the centers. Humana has established other partnerships in the physician practice space, including last fall’s announcement that it is teaming up with Iora Health to add 11 additional Iora-branded primary care practices to its MA networks in Arizona, Georgia, and Texas.

Humana has previously partnered with private equity to acquire postacute providers Kindred Healthcare and Curo Health Services. These latest moves suggest the company is shifting its focus to the front end of the delivery system, looking to control costs of care for seniors by quickly building a primary care physician network focused on reducing high-cost referrals to hospitals and specialists.

 

 

 

Latest boost for Medicare Advantage

https://www.axios.com/newsletters/axios-vitals-0460cccc-499e-4609-80e6-745311cef1ad.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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The Trump administration yesterday announced more changes designed to make Medicare Advantage more appealing and to lower prescription drug costs for seniors.

Why it matters: Although the proposal mainly tinkers around the edges, it could have a meaningful impact on some seniors’ pocketbooks while furthering the administration’s commitment to Medicare Advantage, a cash cow for insurers.

Details: The proposal aims to create more transparency within Medicare’s prescription drug benefit, and to enhance price competition.

  • Beginning in 2022, plans would be required to give beneficiaries tools to compare the out-of-pocket costs of different drugs, which would allow patients to know their drug costs ahead of time and to shop around for the cheapest medications.
  • The proposal also aims to create more price competition among specialty drugs, which tend to be the most expensive drugs on the market.

It also would allow all seniors with end-stage renal disease to enroll in Medicare Advantage, beginning in 2021.

  • Medicare Advantage beneficiaries this year are gaining access to telehealth benefits that aren’t available to seniors enrolled in traditional fee-for-service Medicare, and the new proposal would build on these benefits.

 

 

 

5 trends and issues to watch in the insurance industry in 2020

https://www.fiercehealthcare.com/payer/top-5-trends-and-issues-to-watch-insurance-industry-2020

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The insurance industry appears likely to have another big year in 2020, as growth in government and commercial markets is expected to continue.

But a presidential election and new transparency initiatives could throw some major curveballs to payers.

Here are the top five issues and trends to watch out for in the next year:

Medicare Advantage diversifies

Enrollment growth in Medicare Advantage is likely to continue next year, as more than 22 million Medicare beneficiaries already have a plan. But what will be different is diversification into new populations, especially as insurers pursue dually eligible beneficiaries on both Medicare and Medicaid.

“This is being made possible because of strong support from government,” said Dan Mendelson, founder of consulting firm Avalere Health.

Support for Medicare Advantage “transcends partisanship and that has been true under Trump and Obama,” he added.

New benefit designs, such as paying for food or transportation to address social determinants of health, are also going to increase in popularity. The Centers for Medicare & Medicaid Services (CMS) has made it easier for plans to offer such supplemental benefits.

Get ready for transparency, whether you like it or not

This past year saw CMS release a major rule on transparency that forces hospitals to post payer-negotiated rates starting in 2021 for more than 300 “shoppable” hospital services.

The rule, which is being contested in court, could fundamentally change how insurers negotiate with hospitals on how to cover those services. The rule brings up questions about revealing “private information for the sake of transparency,” said Monica Hon, vice president for consulting firm Advis.

But it remains unclear how the court battle over the rule, which has garnered opposition from not just hospitals but also insurers, will play out. Hospital groups behind the lawsuit challenging the rule have had success getting favorable rulings that struck down payment cuts.

“I think there is going to be a lot of back and forth,” Hon said. “Whatever the result is that will impact how payers and providers negotiate rates with this transparency rule.”

Don’t expect major rules in 2020

2020 is a presidential and congressional election year, and traditionally few major initiatives get going in Congress. But experts say the same goes for regulations as administrations tend not to issue major regulations in the run-up to the vote in November, said Ben Isgur, leader of PwC’s Health Research Institute.

“What we will end up with is much more change on regulations on the state side,” Isgur said.

But new regulations on proposals that have been floated could be released. Chief among them could be a final rule to halt information blocking at hospitals and a new regulation on tying Medicare Part B prices for certain drugs to the prices paid in certain countries.

Congressional lawmakers are still hoping to reach a compromise on surprise billing, but they don’t have much time before campaigning for reelection in November.

A lot of the healthcare direction will be set after the presidential election in November. If a Democrat defeats President Donald Trump, then waivers for items like Medicaid work requirements and block grants will likely go by the wayside.

“Depending on who takes the White House and Congress, are we going to further repeal the Affordable Care Act and replace it or will we have Medicare for All,” Isgur said.

Insurers continue to go vertical in dealmaking

Insurers certainly weren’t shy about engaging in mergers and acquisitions in 2019, and that trend doesn’t appear likely to dissipate next year.

But the types of mergers might be different. Insurers and providers are increasingly looking at deals that would offer a vertical integration, such as acquiring more pharmacy services or a technology company to enhance the patient experience. Plenty of big-ticket vertical deals, such as CVS’ acquisition of Aetna and Cigna’s purchase of Express Scripts, have changed the industry landscape significantly.

“Deals in 2020 are going to be much more around the identity,” Isgur said. “Five years ago we had a lot of horizontal deals where health systems got bigger and regional payers got bigger.”

Payers continue to push patients away from hospitals

Insurers are going to try to find new ways to push patients toward outpatient services to avoid higher costs from going to a hospital.

For instance, “we are seeing a lot of payers not going to honor hospital imaging,” said Hon. “A lot of payers are saying we want you to go outside the hospital and that is a lot cheaper for us,” she said.

Instead, payers will try to steer patients toward imaging centers or physicians’ offices.

“We are seeing that with imaging and free-standing surgical centers now being able to do a lot more,” she added.

Insurers are also starting to use primary care more proactively to “ensure that they understand the needs of the patient, their needs are being addressed,” Mendelson said.