Medicare Advantage updates include a $12.8 billion CMS bonus for 2023, legislative changes to prior authorization, and concerns over beneficiary understanding. UnitedHealthcare’s market share growth and Kaiser Permanente’s top bonus payments are highlighted. Network shifts, benefit design adjustments, and Humana’s membership growth also shape the landscape. Challenges arise from rising medical costs, while legislation proposes prior authorization exemptions. Legal settlements and Centene’s star rating efforts conclude the updates, reflecting an evolving Medicare Advantage landscape.
Medicare Advantage programs are poised to receive a substantial $12.8 billion in additional funds from the CMS in the upcoming year, coupled with the introduction of novel legislative proposals aimed at reforming the prior authorization procedures within the program.
Here are ten key Medicare Advantage updates that have been covered by Becker’s since the end of July.
1. Clarity Gap for Beneficiaries: According to a survey by Retirement Living, half of the beneficiaries enrolled in Medicare Advantage plans confess to lacking a comprehensive understanding of their respective plans.
2. UnitedHealthcare’s Dominance: Over the last decade, UnitedHealthcare has maintained its prominence by having the highest percentage of Medicare Advantage enrollees both in 2013 and 2023, expanding its market share by an impressive 7 percentage points during this period. A comprehensive breakdown of the shifts in market share among UnitedHealthcare and other payers is outlined, reflecting a decade-long evolution.
3. Substantial Bonus Payments: CMS is set to allocate a significant $12.8 billion in bonus payments to Medicare Advantage plans in 2023. This marks a nearly 30 percent increase compared to the preceding year. Among major payers, Kaiser Permanente is slated to receive the highest bonus payments per Medicare Advantage enrollee in the coming year.
4. Network Changes: In 2024, Brookings Health System in South Dakota will sever its network ties with all Medicare Advantage plans. The decision, as explained by Julia Yoder, the director of marketing and public relations at Brookings Health System, is a strategic move aimed at ensuring the organization’s financial viability.
5. Potential Benefit Design Adjustments: Payer executives conveyed to investors during second-quarter earnings calls that changes in CMS’ risk model for Medicare Advantage, coupled with rising medical costs among the Medicare population, could necessitate modifications in benefit design.
6. Membership Dynamics: The second quarter of 2023 witnessed Humana achieving the most substantial growth in Medicare Advantage membership, while UnitedHealthcare continues to boast the largest member base, as indicated by the companies’ earnings reports. An in-depth analysis of major payers’ Medicare Advantage membership at the midway point of 2023 is provided.
7. Cost Ratio Challenges: Executives from CVS Health and Humana informed investors that heightened utilization is exerting pressure on Medicare Advantage medical cost ratios. This trend is expected to persist until the conclusion of 2023.
8. Prior Authorization Exemption: A legislative initiative, termed the gold-card legislation, has been introduced by two U.S. representatives. If enacted, it would exempt qualifying providers from prior authorization requirements associated with Medicare Advantage plans.
9. Resolution of Allegations: Martin’s Point Health Care, based in Portland, Maine, agreed to a settlement of $22.5 million to address allegations of knowingly submitting inaccurate diagnosis codes for Medicare Advantage Plan enrollees. These actions were purportedly taken to inflate reimbursements from Medicare.
10. Centene’s Rating Efforts: Centene, under the leadership of CEO Sarah London, acknowledged the possibility of concluding 2023 without any Medicare Advantage contracts rated with four stars. The company is striving to enhance its Medicare Advantage star ratings after witnessing a drastic decline from 48 percent to 3 percent in the preceding year.
