coverage

RADV instructions show CMS is serious about attacking overpayments, but is the approach fair? The Centers for Medicare and Medicaid Services (CMS) is true to its word. Late Friday the agency published methods and instructions for Risk Adjustment Data Validation (RADV) audits for Payment Year (PY) 2019. In addition, a companion Frequently Asked Questions (FAQ) document was published. The agency announced on May 21 it will audit all eligible Medicare Advantage (MA) plans for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years (PYs) 2018 through 2024. Details of the announcement and some of my concerns are in this June 5 blog: https://www.healthcarelabyrinth.com/cms-to-audit-all-plans-on-risk-adjustment/ . On May 12, I also did a blog here ( https://www.healthcarelabyrinth.com/could-medicare-advantage-overpayments-be-considered-to-offset-deep-medicaid-cuts/ ) on the possibility that MA risk adjustment overpayments would be part of the budget reconciliation bill to increase savings and perhaps alleviate

Health plans are in store for a few more rough years On June 12, I blogged about how mighty Big Healthcare has fallen ( https://www.healthcarelabyrinth.com/how-the-mighty-have-fallen/ ). I weighed in on the current pain many large health plans feel and the fact that their vertical integration has not really saved some of them during a downturn. On April 24, I discussed how Compound Annual Growth Rate EBITDA (CAGR EBITDA) dropped by 1.2% from 2019 to 2024 ( https://www.healthcarelabyrinth.com/big-healthcare-struggling/ ). So, will all these struggles continue for the foreseeable future, despite most big health insurers seemingly beginning to dig themselves out of their financial mess. My view – healthcare trends as well as government actions will most assuredly mean continuing bumpy times in all lines of business. Trends Let’s look at trends that we will see globally and by line of business. What will plans need to do? Thus, across the board,

The mighty big healthcare companies have fallen, in this case a victim of their own financial mismanagement and shenanigans. The struggles and in some cases the near implosion of several large national vertically integrated health plans or Big Healthcare have been surprising to many, including me. The biblical phrase “How the mighty have fallen” from Samuel seems particulary relevant right now. David’s lament for King Saul and Jonathan indicates no one is immune from hardship, not even the long-standing, go-to investments in healthcare. Big Healthcare certainly had some external forces undermining its health, but it too was a victim of its own financial mismanagement and shenanigans. The crash offers some insights into the wrong way to attack running a health insurance business these days. United’s woes The most notable failure of late is the UnitedHealth Group. After consistently reporting better news than most of its peers the past year or

The GOP pivoted from an overt ACA repeal in 2017 to stealth policy changes today, but the budget reconciliation bill still will reduce coverage. A number of readers and listeners have contacted me to have me help sort out the number of Americans who will be uninsured if the House-passed budget reconciliation also clears the Senate. After all, they note, didn’t President Donald Trump, House Speaker Mike Johnson, and other GOP officials promise no coverage cuts in healthcare, at least in Medicaid? It is a great point and here is my take on it. First, we need a little history. Back in 2017 under Trump 45, the president and a GOP Congress explicitly set out to repeal insurance coverage by substantially gutting the Affordable Care Act (ACA). A repeal bill passed the House, but a skinny one failed in the Senate when Sen. John McCain, R-AZ, returned from his terminal

Risk Adjustment Data Validation (RADV) bombshell should worry Medicare Advantage (MA) plans In a bombshell announcement, beginning immediately the Centers for Medicare and Medicaid Services (CMS) will audit all eligible Medicare Advantage (MA) plans for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years (PYs) 2018 through 2024. MA opponents and a bipartisan group of lawmakers have raised issues with what they view as immense overpayments, some of which are tied directly to risk adjustment scoring. CMS says risk adjustment overpayments are about $17 billion a year. CMS’ completed audits for PYs 2011–2013 found between 5% and 8% in overpayments. Richard Kronick and his colleagues at the University of San Diego find that risk scores are 18.5% greater in MA in 2021, amounting to $33 billion. The Medicare Payment Advisory Commission (MedPAC) estimates the risk scoring overpayment figure could

A number of chapters in my book, The Healthcare Labyrinth (available at this site and through leading booksellers), tell the story of American healthcare’s conversion from a fee-for-service system to managed care. The truth is that the conversion has not yet fully matured. We still have an over-reliance on traditional transaction payments, which promotes a cost spiral as well as hurts quality attainment. So, the conversion is still in flight and so far I see four so-called conversion cycles of managed care, with the latest hitting just recently. With each cycle, we seem to make some progress toward a better system, but find major barriers still exist. Let’s take a look at the four conversion cycles and where we are headed. I have put together a quick reference table to help illustrate managed care’s maturation over time. Birth of Managed Care – 1970s to 1990s Description/Challenges – The traditional, fee-for-service

I wanted to give you two quick mini blogs today on recent topics after a number of inquiries from my blog readers and podcast listeners. They revolve around President Donald Trump’s proposal for most-favored-nation drug pricing and what is the GOP’s vision on healthcare. So, let’s get to the questions: 1 – One reader/listener asked: “How can Donald Trump really implement his most-favored-nation (MFN) drug policies?” As I have alluded to in a number of blogs and podcasts, it is unknown whether the president alone really has the ability to radically change drug prices in Medicare, and it is even more of a question for the commercial and employer world. We have a national rebate program with a state supplemental rebate program in Medicaid. The posture of courts, especially in light of the Chevron decision last year, would seem to point to the likelihood that the Supreme Court might find

Changes in prior authorization, the Star program, and risk adjustment will force MA plans to pivot to aggressive data analysis and intervention to reduce costs and improve quality. Investor news is crazy with various news about major health plans and the struggles they are seeing. The biggest light has been focused on the sad financial news of Medicare Advantage (MA). There are 340 million people in the country, and there are now almost 70 million seniors and disabled on Medicare. While some major health players, such as The Cigna Group, have divested Medicare plan assets, most others see MA as critical to insurer success overall. After all, MA has huge premiums (let’s say about 2.5 to 3 times other lines of business) and should have margins that are among the best (perhaps 4 to 6% in good years like commercial, compared with 2% at best in Medicaid and the Exchanges).

The House GOP has threaded the needle – so far – on budget reconciliation The House threaded the needle and passed the budget reconciliation bill on a tight 215 to 214 vote Thursday morning, meeting a self-imposed objective by the House GOP leadership of before the Memorial Day weekend. But based on what has occurred and the major fissures that have erupted, quick passage of a final congressional bill is some time off. This week’s developments — Trump intervenes After conservatives initially tanked the bill in the Budget Committee on Friday and voted present on Sunday to advance the bill, President Trump visited the House GOP caucus on Tuesday to urge holdouts to support the package. Trump pushed moderate Republicans from blue states to give up their fight over additional SALT deduction concessions, while warning conservative members not to “f‑‑‑ with Medicaid” as some lawmakers eyed further changes to the

Medicare Advantage (MA) growth continues but with continuing softness in Big MA A quick blog to tell you about enrollment growth in Medicare Advantage (MA) from April 2025 to May 2025. MA growth slowed down from 2024 to 2025 because of the financial woes of the MA industry. But the rolls are still growing due to aging and the popularity and value of MA compared with the archaic traditional Medicare (fee-for-service) program. What do the latest statistics show? Growth from January 2024 to February 2025 was 4.39% or 1.468 million. (I used February 2025 because of issues with the January 2025 statistics). Enrollment in MA reached 34.941M in February 2025. In May 2025, it reached 35.242M. MA enrollment grew about 80K from April to May and about 301K from February to May. How did Big MA do? From January 2024 to February 2025, Big MA (big national plans) enrollment performed