United Cuts Commissions In MA But Predicts Stars Improvement
Troubled UnitedHealthcare is ceasing or cutting commissions on new sales of more of its products. This will impact 18% of its products for 2026. United will pay only partial commissions for another 2% of its MA products. The insurer will continue to compensate brokers for renewals. United will not pay for new enrollments into its Institutional Special Needs Plans and will continue to zero out commissions for standalone Part D (PDP) drug plans.
But in good news for the nation’s biggest MA plan, United told investors today that it expects roughly 78% of its MA enrollees to be in plans rated 4 Stars or greater. This information came from Stars Plan Preview 2, which started today. It still will shed about 600,000 members next year to hit finance targets.
Humana told investors it expects ratings to improve but gave no details. Centene says it expects improvement as well. Elevance and CVS Aetna gave no guidance on quality bonuses.
Additional articles: https://www.modernhealthcare.com/insurance/mh-unitedhealth-hcsc-medicare-advantage-commissions/ and https://www.healthcaredive.com/news/unitedhealth-medicare-advantage-star-ratings-preview/759623/ and https://www.beckerspayer.com/payer/medicare-advantage/unitedhealthcare-expects-most-medicare-advantage-members-to-be-in-4-star-plans-in-2026/
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#medicareadvantage #stars #cms
CMS Pauses Some MA Supplemental Benefit Reforms
The Centers for Medicare and Medicaid Services (CMS) paused implementation of midyear member notification of usage of supplemental benefits. CMS said it did so pending evaluation of questions from the industry and “while it reconsiders the regulatory requirements.” The policy was scheduled to take effect next year.
I believe the reforms are important. Plans are working through submission of encounter data related to supplemental benefits.
Additional article: https://www.beckerspayer.com/payer/medicare-advantage/cms-pauses-ma-supplemental-benefit-notification-rule/
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#supplementalbenefits #medicareadvantage
Hospital Quandaries
The Trump administration issued guidance in anticipation of rulemaking regarding state directed payments. The One Big Beautiful Bill Act passed major limits on state directed payments, which are usually funded by provider taxes. Such payments for inpatient and outpatient hospital care, skilled nursing and services from a qualified practitioner must be capped at 100% of Medicare rates in states that expanded Medicaid and 110% in non-expansion states. If a Medicare rate is unavailable, the payments will be based on state Medicaid rates, per the CMS. Thirty-nine states now use such payments.
The Congressional Budget Office (CBO) finds that spending on prescription drugs under the 340B drug discount program grew more than sixfold from 2010 to 2021. Hospitals and other safety-net providers participating in 340B spent $43.9 billion on covered drugs in 2021, a 565% increase from $6.6 billion in 2010. While a number of factors contributed to the growth, researchers note that the program tends to encourage behaviors that increase federal spending.
In other news, Kaufmann Hall finds that hospitals’ operating margins continued to soften through July as volumes remained strong, but spending on supplies and drugs inched upward. Hospitals had a median 1.7% operating margin across seven months.
Last, states are already making tough decisions given the impending reductions from passage of the OBBBA and other budgetary cuts.
Additional articles: https://www.cms.gov/newsroom/press-releases/cms-issues-guidance-strengthen-oversight-medicaid-state-directed-payments and https://www.fiercehealthcare.com/regulatory/cms-issues-guidance-limits-state-directed-payments-medicaid and https://kffhealthnews.org/news/article/state-budget-fallout-trump-health-funding-cuts-obbba/ and https://www.modernhealthcare.com/providers/mh-340b-drug-pricing-program-spending-cbo/
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#hospitals #medicaid #providertaxes #statedirectedpayments #340b #budgetreconciliation #obbba #states #margins
MedPAC Finds MA Penetration Not Linked To Hospital Margin Changes
The hospital propagandists and Chicken Little health system executives have to be sweating this one. MedPAC, the congressional Medicare policy arm, finds that Medicare Advantage (MA) enrollment growth, on average, is not associated with significant profit margin changes for hospitals. A 10-percentage-point increase in a county’s MA penetration was associated with a 1.3% reduction in all-payer revenues and a 1.2% reduction in all-payer costs. The resulting 0.1% dip in profit margins was not statistically significant. Perhaps MA forces hospitals to look at their bloated costs.
Additional article: https://www.beckerspayer.com/payer/medicare-advantage/no-link-found-between-growing-ma-enrollment-hospitals-profit-margins-report
#hospitals #medicareadvantage
Trump Order Restricts Drug Advertising
A Trump administration executive memorandum would increase oversight and enforcement of direct-to-consumer prescription drug advertising. The memo directs the Department of Health and Human Services (HHS) to ensure transparency and accuracy in direct-to-consumer advertising, including by requiring greater disclosures of side effects.
#drugpricing #branddrugmakers
https://thehill.com/policy/healthcare/5494962-trump-prescription-drug-ads
Capitol Hill Happenings
The White House wants a continuing resolution (CR) that funds the government from October 1, 2025 to January 31, 2026. In addition, pressure from vulnerable moderate Republicans is mounting on leaders to pass an extension of the Exchange enhanced premium credits.
Additional article: https://thehill.com/policy/healthcare/5492622-obamacare-subsidies-gop-pressure/
#governmentshutdown #exchanges
Transparent Moves
The National Alliance of Healthcare Purchaser Coalitions finds that 31% of employers in a recent survey had their primary pharmacy benefits manager (PBM) contract with a transparent organization rather than one of the traditional leading companies. This is a huge trend given the lack of transparency and rising costs.
#pbms #drugpricing #transparency
— Marc S. Ryan
