How Medicare Advantage steers the Silver Tsunami into coordinated, value-based care

https://www.healthcarefinancenews.com/news/how-medicareadvantage-steers-silver-tsunami-coordinated-value-based-care

CMS and other health insurers are using the program to deliver innovative and unique value to customers, both in terms of cost and quality.

Today’s Medicare Advantage plans are flourishing and the Silver Tsunami is among the reasons.

“Over the last four years, Medicare Advantage enrollment increased by more than 30 percent, while the number of people eligible for Medicare grew by about 18 percent,” said Steve Warner, vice president of Medicare Advantage Product for UnitedHealthcare Medicare and Retirement.

Other reasons for the growth: Innovative models from big insurers and upstarts alike that improve care for health plan members and drive revenue for payers as they look beyond fee-for-service.

IT STARTS WITH THE CONSUMER

Consumers are finding unique value in MA, both in terms of the quality of care and in the financial value.

Medicare Advantage, in fact, makes it easier for consumers to navigate the healthcare system and choose providers, in a way that traditional Medicare does not, said those interviewed.

“Actually it’s pretty hard to navigate the healthcare system on your own,” said Tip Kim, chief market development officer at Stanford Health Care. “Most Medicare Advantage plans have some sort of care navigation.”

Warner of UnitedHealth’s Warner added that Medicare Advantage also offers value and simplicity.

“It provides the convenience of combining all your coverage into one plan so you have just one card to carry in your wallet and one company to work with,” Warner said. “Most plans also offer prescription drug coverage and additional benefits and services not available through original Medicare, including dental, vision and fitness.”

REBRANDING FOR THE NEW ERA

MA plans did not emerge out of thin air. By another name, Medicare Advantage is managed care, a term that was the bane of healthcare during the height of HMOs in the 1980s.

“Medicare Advantage has rebranded ‘managed care’ to ‘care coordination,'” said consultant Paul Keckley of The Keckley Report. “Humana and a lot of these folks have done a pretty good job. Coordinating care is a core competence. Managed care seems to be working in this population.”

MA came along at the right time for CMS’s push to value-based care.

“I would suggest on the providers’ side, embracing Medicare Advantage is an opportunity to get off the fee-for-service mill,” said Jeff Carroll, senior vice president of Health Plans for Lumeris, which recently paired with Stanford Health Care on the Medicare Advantage plan, Stanford Health Care Advantage.

“Provider-sponsored Medicare Advantage plans are a way to put teeth into an accountable care organization,” Keckley added. “Medicare Advantage success is a silver tsunami among major tsunamis. Obviously it’s a profitable plan for seniors and profitable for underwriters. The winners in the process will get this to scale.”

MA is an innovative model that is not a government-run system, but a privately-run system essentially funded by the government.

PAYERS IN THE MA GAME

UnitedHealthcare has the largest MA market share of any one insurer.  Twenty-five percent of Medicare Advantage enrollees are in a UnitedHealthcare MA plan, followed by 17 percent in Humana, 13 percent in a Blue Cross Blue Shield and 8 percent in Aetna, according to the Kaiser Family Foundation.

Numerous insurers, in fact, have gotten into the MA market, including Clover Health in San Francisco, a five-year-old startup which has Medicare Advantage as its only business.

Clover is a tech-oriented company that boasts machine learning models that can accurately predict and identify members at risk of hospitalization.

Because Clover focuses only on MA, it can do a better job at problem solving the needs of an older population, said Andrew Toy, president and CTO of Clover Health.

“The problems we face in Medicare Advantage are very different from a younger generation,” Toy said.

Forty percent of the older population is diabetic. Most seniors will be dealing with a chronic disease as they get older.

In other insurance, whether its individual or commercial, the lower cost of the healthier population offsets the cost of the sicker population. MA has no way to offset these costs. Plans can’t cherry-pick consumers or raise premiums for a percentage of the population.

What MA plans can do is design plans that fit the varying needs of the population. A plan can be designed for diabetics. For younger seniors or those not dealing with a chronic disease, a plan can be designed that includes a gym membership.

“All these plans are regulated,” Toy said. “We have the flexibility to move dollars around. We can offer a higher deductible plan, or a nutrition plan. The incentives for us in Medicare Advantage are different than the incentives in Medicare. CMS has explored giving us more leeway for benefits. Consumers have a choice while still having the guarantees of Medicare.”

Toy believes regular Medicare is more expensive because MA offers a more affordable plan based on what an individual needs.

“When you need it, we get more involved in that care,” Toy said, such as “weight control issues for diabetics.”

The drawbacks are narrower networks, though Toy said Clover offers an out-of-network cost sharing that is pretty much in line with being in-network.

UnitedHealthcare’s Medicare Advantage LPPO plans offer out-of-network access to any provider who accepts Medicare, Warner said.

UnitedHealthcare also offers a wide variety of low and even zero-dollar premium Medicare Advantage plans and annual out-of-pocket maximums, Warner said. By contrast, original Medicare generally covers about 80 percent of beneficiaries’ healthcare costs, leaving them to cover the remaining 20 percent out-of-pocket with no annual limit.

“From a consumer value proposition, it makes Medicare Advantage a better deal,” Kim said. “One is Part B, 20 percent of an unknown number. Knowing what the cost will be in a predictable manner is a preferable manner.”

Stanford Health Care launched a Medicare Advantage plan in 2013. Lumeris owned and operated its own plan, Essence Healthcare, for more than eight years. Stanford and Lumeris partnered on Stanford Health Care Advantage in northern California, using Lumeris technology to help manage value-based reimbursementand new approaches to care delivery through artificial intelligence-enabled diagnostic tools and other methods.

“We are not a traditional insurance company,” Kim said. “We’re thinking about benefits from a provider perspective. It’s a different outlook than an insurance company. By definition we’re local.”

MA MARKET STILL HAS ROOM TO GROW

While the Medicare Advantage market is competitive, it is also under-penetrated, Brian Thompson, CEO for UnitedHealthcare Medicare & Retirement, said during a 2018 earnings report.

Currently, about 33 percent of all Medicare beneficiaries are in an MA plan, he added, but UnitedHealth sees a path to over 50 percent market concentration in the next 5-10 years.

It’s a path not so subtly promoted by the Centers for Medicare and Medicaid Services.

As a way to encourage insurers to take risk and get in the market, around 2009, CMS gave MA insurers 114 percent of what it paid for fee-for-service Medicare. The agency began decreasing those payments so that by 2017, traditional Medicare and MA became about even.

MA insurers instead thrive on their ability to tailor benefits toward wellness, coordinate care and contain costs within the confines of capitated payments, the essence of value-based care.

They have received CMS support in recent rate notices that gives them the ability to offer supplemental benefits, such as being able to target care that addresses the social determinants of health. Starting in 2020, telehealth is being added to new flexibility for these plans.

WHAT THE FUTURE MAY HOLD FOR MA

Medicare Advantage plans have expanded and, in so doing, opened innovative new options for plans and their customers alike at the same time that the ranks of people eligible for Medicare continues to swell.

So where is it all going?

Medicare Advantage is changing the way healthcare is paid and delivered to the point that Keckley and Toy agreed the future may not lie in Medicare for All, but in Medicare Advantage for all.

“I think a reasonable place to end, is in some combination where the government is involved in price control, combined with the flexibility of Medicare Advantage,” Toy said. “That’s really powerful.”

 

 

Insurers blame specialty drug costs for rising premiums. This report from California shows why

https://www.fiercehealthcare.com/payer/report-prescription-drug-costs-driving-up-insurance-premiums?mkt_tok=eyJpIjoiWWpZNU4yTTROREExWlRsaSIsInQiOiJjZHh5VGpsWnhSN3RLQjNHbDNsWUROQkg0Y2EzOFZ3OFY2Z0Z1a1dFNVhwNkRXNTE3dTNMK0U2TloxUnFKT1RDU29cL3NEZ0gwMTdJbUptaTFxamFTbFg1cG1PbFRHbTQ2TmQzRHhYZERqcUZXQ1B0YVF1aW1QODBDb2g3aHA1cEwifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Drugs and money sign

Specialty drugs made up about 3% of prescriptions in California in 2017 but accounted for more than half of the prescription drug spending that year, according to new report that compiled drug spending from nine insurers in that state.

According to the first Prescription Drug Cost Transparency Report released by the California Department of Insurance, there were about 270,000 specialty prescriptions compared to about 1.4 million brand-name prescriptions and about 8.9 million generic prescriptions in 2017.

Insurers—including Aetna, Anthem, Cigna, Kaiser Permanente and UnitedHealthcare—reported spending upwards of $606 million on specialty drugs, $271.3 million on brand-name drugs and $172.6 million on generics in 2017.

Among other findings, the report said:

  • In all, insurers reported that per member per month drug spending reached about $81 last year, or about 16.5% of premiums in 2017, comparable to per member per month spending of about $76 or 16.3% in 2016. Total health insurance premiums per member per month were about $491 in 2017, compared to about $470 in 2016.
  • Specialty prescriptions on average cost about $2,361 per prescription compared to about $236 for brand-name prescriptions and $29 for generics. Members typically pay about $113 per specialty prescription while insurers said they pay about $2,248 per specialty drug. They report members pay about $45 per brand-name drug, while insurers pick up $192 of the tab for brand names. And they report members typically pay about $10 for generics on average while insurers pay about $19.
  • The top 25 most frequently prescribed drugs in California represent about 40% of insurers’ overall spending. Specialty drugs make up about 1.3% of the 25 most frequently prescribed drugs and about 20% of insurers’ spending (resulting in a 3.7% impact on health insurance premiums.) In comparison, brand-name drugs make up about 6.8% of the most frequently prescribed drugs and about 11% of insurer spending (and a 1.2% impact on health insurance premiums). Generics represent about 32% of the most frequently prescribed drugs and 4% of the cost to insurers (and about .3% impact on premiums.)

The most frequently prescribed specialty drugs included HIV drug Truvada, immunosuppressant Humira, insulin therapeutic Humalog, diabetes drug Victoza and hormonal agent Androgel.

The most costly specialty drugs by total annual prescription drug spending included Humira, arthritis drug Enbrel, Truvada, psoriasis and psoriatic arthritis drug Stelara and multiple sclerosis drug Copaxone.

 

 

 

UnitedHealthcare issues warning to hospitals about out-of-network coverage for ER physicians

https://www.healthcarefinancenews.com/news/unitedhealthcare-issues-warning-hospitals-about-out-network-coverage-er-physicians?mkt_tok=eyJpIjoiTUdaa00yUXhZVGhsWlRObSIsInQiOiJSNFQ0ZWR5dDlLeHVVWE9nUEFWcGNwazZDWXorRUJoanpLWHE1UmVEMU1RbjVZSFwvT3pmR0xMMVc0Snp2ZWQzMHlQMHp2c01XbzgwOEdBN1BsSGZJbFhWTnUydnpaWkNKVDlSbGR0aUxYY2Jpbmg0VndqRVNTQVdLTXpqS0RvV28ifQ%3D%3D

 

UnitedHealth plans to update its provider directories to show its beneficiaries those hospitals that use non-participating hospital-based physicians.

WHAT HAPPENED

UnitedHealthcare sent out an advanced notice to more than 700 hospitals that its emergency room contractor, Envision Healthcare, could be out of network starting January 1, 2019. 

WHY IT MATTERS

Dissolving the contract is expected to result in more “surprise bills” for patients who are unaware that their ER doctor, anesthesiologist or radiologist is out-of-network for their insurance coverage.

THE BIGGER TREND

Both hospitals and UnitedHealthcare would bear the brunt of patient complaints, at a time when consumer satisfaction is seen as a priority for value-based care and in rankings that include patient surveys.

UnitedHealth said it plans to update its provider directories to show its beneficiaries those hospitals that use non-participating hospital-based physicians. It is also activating a dedicated hotline for members to call if they receive a surprise bill from Envision and UnitedHealth said it would advocate on their behalf to have the bill waived or reduced.

ON THE RECORD

“A study published by the National Bureau of Economic Research shows ER physicians are paid on average 297 percent of what Medicare allows,” said Dan Rosenthal, president of UnitedHealthcare Networks in the letter to hospitals. “In comparison, Envision demands to be paid nearly 600 percent of Medicare, two times this amount for ER physician services.”

Envision said by statement, “We have offered United a solution that helps with the affordability of healthcare, and yet United is making egregious demands that will force all of our physicians out of network.  They’ve elected to use data for one group in one market and have presented it as the single source of truth. This is misleading and designed to fit their narrative rather than the reality.”

THEIR TAKE

Envision said there were never any problems until UnitedHealth demanded massive cuts to allow it to stay in-network. It calls the insurer’s letters to its hospital partners “aggressive” and “filled with half-truths and inaccuracies.”

UnitedHealthcare, the country’s largest insurer, said it has offered Envision competitive rates for all of their hospital-based services, similar to what other ER and hospital-based physicians are paid in each market, and given them the opportunity to earn additional reimbursement based on the value they bring to customers.

In May, a court ordered arbitration between the insurer and network provider after dismissing a lawsuit brought by Envision claiming UnitedHealthcare changed its payment rate agreement. Envision charged patients at rates three times higher than it should have, UnitedHealth said. Envision said this was due to out-of-network charges because the insurer refused to bring Envision provider groups into their contract agreement.

OUR TAKE

This is about money, with patients paying the difference and hospitals caught in the middle. A hospital can choose to employ physicians, but many doctors are independent contractors, including emergency room physicians. Since, Envision has its highest concentration of contracts with UnitedHealthcare in Florida, Texas and Arizona and to a lesser extent, in New York, Wisconsin, Georgia, Tennessee and California, both patients and hospitals in those regions are likely to find themselves managing more surprise bills. 

Insurance start-up launches on-demand health coverage

https://www.cnbc.com/2018/06/27/insurance-start-up-launches-on-demand-health-coverage.html

Related image

 

  • Start-up Bind uses proprietary algorithms, powered by machine learning, to lower health-care costs.
  • Bind discovered that it could break out certain procedures and reduce health benefit costs more effectively than with a high-deductible plan.
  • It is backed by Ascension Ventures, Lemhi Ventures and UnitedHealthcare.

Technology has made on-demand services a reality for everything from food deliveries to gym classes and car-sharing. What if you could have on-demand health coverage for big-ticket procedures like knee surgery?

On-demand health insurance seems like an oxymoron, but digital health insurance firm Bind is betting that by structuring health plans so that people can add coverage and pay for it when they need it, companies and employees can save money in the long run.

“It’s not intuitive for people, but I think when we started this we thought, ‘how do people really use the health-care system?’ And we used it in an on-demand way,” explained Tony Miller, co-founder and CEO of Bind.

The two-year old start-up is not a full-fledged insurer, it administers benefits for self-insured employers using UnitedHealth Group’sprovider networks and data analytics. Using its own proprietary algorithms, powered by machine learning, Bind discovered that it could break out certain procedures and reduce health benefit costs more effectively than with a high-deductible plan. It is backed by Ascension Ventures, Lemhi Ventures and UnitedHealthcare.

Plans are designed with basic co-pays and no deductibles for core medical coverage. In addition to free preventive care required under the Affordable Care Act, Bind’s plans cut out deductibles for primary care and specialist visits, maternity coverage, hospital care, medications and even cancer treatment. Co-pays are priced on a sliding scale — from $15 for a visit to retail clinic to $100 at an urgent care facility.

The big-ticket out-of-pocket costs kick in for elective procedures, such as knee replacement or back surgery. The extra co-pay for those procedures is based on the total cost, with consumers being given the full price of the procedure up front and no surprise bills on the back end. The co-pay can be structured so the worker can pay it off through payroll deductions, like a premium.

By outlining the total costs, Bind said it helps employees generate 10 to 15 percent in savings for themselves and for their employer compared to traditional out-of-pocket deductible plans.

“A market might be $6,000 to $24,000 for knee arthroscopy,” explained Miller. “What Bind does is says (for) the $6,000 performer — you only have to pay $1,000 to have access to them. If you want to go to the $24,000 knee arthroscopy with no difference in quality, no difference in performance, you have to pay $6,000 as a consumer.”

“What happens is the consumers actually go and buy the more cost-effective provider and they save money. But more importantly, the entire pool saves money … we save $18,000 for the group,” he said.

That was the way high-deductible plans were supposed to work, with consumers making the most cost-effective choice. Miller should know. He co-founded Definity Health in the late 1990s, which helped pioneer so-called consumer directed health plans; UnitedHealth bought that firm in 2004.

Does he worry that employers could use Bind’s on-demand plans to skimp on core benefits, and shift more costs to their workers? He does.

“What I would worry about is, taking this very novel plan design and if someone wanted to create a skinny plan out of it,” which he admitted would defeat the goal of Bind plan designs.

“Let’s make sure we fund the things we all need in health insurance and make sure that’s a part of everyone’s core benefit,” he said.

Bind has so far signed up small regional employers for its plan, but hopes to launch with a large Fortune 500 company for 2019 coverage.

 

Study: ‘Big five’ insurers depend heavily on Medicare, Medicaid business

https://www.fiercehealthcare.com/cms-chip/big-five-insurers-medicare-medicaid-growth-profits?mkt_tok=eyJpIjoiT0RnMFkySXdPV0psWldSaCIsInQiOiJQSllQNlpcL2RhTzBDZFwvZXh5M1ZUSDJyUU5JTGw3dnh1QTVac01rZUFcL2pNUUhhMXBaQjBxK29ScHRrOHhsT3d6aE5pcFRJUWd4Sm0rYXA4S0RYVGE2N0czN2hhc2hsXC9EZk9mSGVLR0V1UFlwVDZpQmdkcll0eTBMNDUzTHlIZDIifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Rising Stocks

Even as they’ve retreated from the Affordable Care Act exchanges, the country’s biggest for-profit health insurers have become increasingly dependent on Medicare and Medicaid for both profits and growth.

In fact, Medicare and Medicaid accounted for 59% of the revenues of the “big five” U.S. commercial health insurers—UnitedHealthcare, Anthem, Aetna, Cigna and Humana—in 2016, according to a new Health Affairs study.

From 2010 to 2016, the combined Medicare and Medicaid revenue from those insurers ballooned from $92.5 billion to $213.1 billion. The companies’ Medicare and Medicaid business also grew faster than other segments, doubling from 12.8 million to 25.5 million members during that time.

All these positive trends, the study noted, helped offset the financial losses that drove the firms to reduce their presence in the individual marketplaces. Indeed, the big five insurers’ pretax profits either increased or held steady during the first three years of the ACA’s individual market reforms (2013-2016). Their profit margins did decline during those three years, but stabilized between 2014 and 2016.

Not only do these findings demonstrate the “growing mutual dependence between public programs and private insurers,” the study authors said, but they also suggest a useful policy lever. The authors argued that in order to help stabilize the ACA exchanges, federal and state laws could require any insurer participating in Medicare or state Medicaid programs to also offer individual market plans in those areas.

Nevada has already done something similar: It offered an advantage in Medicaid managed care contract billing for insurers that promised to participate in the state’s ACA exchange. The state credited that policy with its ability to coax Centene to step in and cover counties that otherwise would have lacked an exchange carrier in 2018.

It’s far less certain, though, whether such a concept will ever be embraced at the federal level during the Trump administration, since its focus has been on unwinding the ACA rather than propping it up.

Either way, recent events underscore the study’s findings about how lucrative government business has become for major insurers. One of the main goals of CVS’ proposed acquisition of Aetna is to improve care for Medicare patients, which would help the combined company “be more competitive in this fast-growing segment of the market,” CVS CEO Larry Merlo said on a call this week.

Aetna CEO Mark Bertolini added that the transaction has “incredible potential” for Medicare and Medicaid members, as the goal is to provide the type of high-touch interaction and care coordination they need to navigate the healthcare system.

 

1 in 3 People in Medicare is Now in Medicare Advantage, With Enrollment Still Concentrated Among a Handful of Insurers

http://www.kff.org/medicare/issue-brief/medicare-advantage-2017-spotlight-enrollment-market-update/?hsCtaTracking=cf7ca7bd-f263-4b1f-9f13-7153c1da02a1%7Ceb71522c-161b-4f47-906e-5abc935ef3b4

Medicare Advantage plans have played an increasingly larger role in the Medicare program as the share of Medicare beneficiaries enrolled in Medicare Advantage has steadily climbed over the past decade.  The trend in enrollment growth is continuing in 2017, and has occurred despite reductions in payments to plans enacted by the Affordable Care Act of 2010 (ACA).  This Data Spotlight reviews national and state-level Medicare Advantage enrollment trends as of March 2017 and examines variations in enrollment by plan type and firm. It analyzes the most recent data on premiums, out-of-pocket limits, and quality ratings.  Key findings include:

  • Enrollment Growth. Since the ACA was passed in 2010, Medicare Advantage enrollment has grown 71 percent. As of 2017, one in three people with Medicare (33% or 19.0 million beneficiaries) is enrolled in a Medicare Advantage plan (Figure 1).

 

  • Market Concentration. UnitedHealthcare and Humana together account for 41 percent of enrollment in 2017; enrollment continues to be highly concentrated among a handful of firms, both nationally and in local markets. In 17 states, one company has more than half of all Medicare Advantage enrollment – an indicator that these markets may not be very competitive.

 

  • Medicare Advantage Penetration. At least 40 percent of Medicare beneficiaries are enrolled in Medicare private plans in six states: CA, FL, HI, MN, OR, and PA. In contrast, fewer than 20 percent of Medicare beneficiaries are enrolled in Medicare Advantage plans in 13 states, plus the District of Columbia.

 

  • Premiums and Cost-Sharing. While average Medicare Advantage premiums paid by MA-PD enrollees have been relatively stable for the past several years ($36 per month in 2017), enrollees may be liable for more of Medicare’s costs, with average out-of-pocket limits increasing 21 percent and average Part D drug deductibles increasing more than 9-fold since 2011; however, there was little change in out-of-pocket limits and Part D drug deductibles from 2016 to 2017.

Medicare Advantage enrollment is projected to continue to grow over the next decade, rising to 41 percent of all Medicare beneficiaries by 2027.1  As private plans take on an even larger presence in the Medicare program, it will be important to understand the implications for beneficiaries covered under Medicare Advantage plans and traditional Medicare, as well as for plans, health care providers and program spending.