medpac

Major Medicaid Managed Care Changes Follow Medicare Ones

Following major changes in Medicare Advantage (MA) and Part D, the Centers for Medicare and Medicaid Services (CMS) finalized a number of rules impacting Medicaid, but specificially managed care. With the vast majoirty of Medicaid beneficiaries in managed care, CMS is targeting numerous prorgams to the managed care programs in states.  What are the major changes impacting Medicaid managed care? Waiting times/access Rates, spending, and transparency Quality and satisfaction Nursing homes The Biden administration finalized numerous changes impacting nursing homes, including minimum staffing requirements and directing that 80% of all payments from Medicaid (over a six-year period and with some flexibility) go to wages for aides and nurses.  The problem with the rule is that rates just are not sufficient enough to meet these requirements and proposals Biden has made. Proposals to increase dollars have not yet passed.  The fear is that the moves in each case could force many

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April 22, 2024

United Did Pay Ransom In Cyberattack United HealthGroup confirmed that personal health information (PHI) and personally identifiable information (PII) was exposed in the attack and “could cover a substantial proportion of people in America.” It also confirmed a ransom was paid. It will take awhile to get to what was exposed and who was impacted. Experts have data which points to the payment of a $22 million ransom by United.  United confirms that while some systems are functioning near normal, others are not yet up and will be restored over time. In additional news, the United CEO will appear before a House subcommittee on May 1: https://www.reuters.com/business/healthcare-pharmaceuticals/unitedhealth-ceo-testify-before-us-house-panel-cyberattack-tech-unit-2024-04-19/ . Additional article: https://www.modernhealthcare.com/cybersecurity/change-healthcare-update-unitedhealth-ransom (Some articles may require a subscription.) #united #changehealthcare #cyberattacks https://www.fiercehealthcare.com/payers/unitedhealth-offers-update-cyberattack-data-analysis-systems-restoration Sweeping Medicaid Manage Care Rule Finalized The Centers for Medicare and Medicaid Services (CMS) finalized Medicaid managed care rules today that cover a number of critical areas, including requiring

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April 19, 2024

Optum Appears To Be Laying Off Employees Over Cyberattack Given the fallout from the Change Healthcare cyberattack, Optum appears to be laying off hundreds if not thousands of employees.  United HealthGroup has not commented on the matter at this point. I have heard that some of the laid off employees are even within the Change Healthcare unit, which could be impacting the return to normal business operations for some plans and providers. If this is true, that is outrageous. #changehealthcare #optum #cyberattacks https://www.fiercehealthcare.com/payers/optum-undergoes-mass-layoffs-scale-unclear Continued Fallout Over Change Healthcare Cyberattack Good Kaiser Health News article on the continued fallout over the Change Healthcare cyberattack.  United tries to put the best face on the issue, saying that in many cases it is seeing normal operations.  But this article shows that many healthcare entities continue to see huge impacts on cash flow and their ability to bill.  I have personally been in contact

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April 18, 2024

Elevance Health Reports Positive Q1 News Elevance Health reported overall good numbers for Q1 2024.  While membership has dropped in Medicare Advantage (MA) and Medicaid, margins were up and it reported little fallout on the Medicare medical expense or Change cyberattack front. Due to the MA rate cut, Elevance will balance business expansion with margin. On the call, the CEO also discussed the need to excel at Star measurement in MA.  It also continues to build its Carelon services unit. Additional articles: https://www.fiercehealthcare.com/payers/elevance-health-sees-double-digit-profit-growth-q1-posting-22b-earnings and https://www.modernhealthcare.com/insurance/elevance-health-medicaid-medicare-advantage-earnings (Some articles may require a subscription.) #elevancehealth #medicareadvantage https://www.healthcaredive.com/news/elevance-health-earnings-q1-change-cyberattack-medicaid-medicare-advantage/713521 Lawmaker-Physician Burgess Calls For Site-Neutral Policies Retiring Rep. Michael Burgess, a physician, is calling on the Biden administration to implement site-neutral payments for hospitals, arguing it could be a way to free up dollars to overhaul the physician payment formula in Medicare and lower overall costs.  He is right! I am not always sympathetic to physicians,

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Strong Growth As Major Enrollment Season Continued In Medicare Advantage

I have posted several blogs now on the exciting news that Medicare Advantage (MA) growth has been very robust not only in the traditional enrollment period from October 15 to December 2023, but also in the supplemental period from January 1 to March 31, 2024. Growth will continue throughout the year (due to aging primarily), but we should begin to see some slowing perhaps after the May numbers. So what have we seen.  As I have reported, growth from January 2023 to January 2024 was a robust 8.7% increase or 2.674 million.  Enrollment in MA reached 30.799 million in January.  Since that time, enrollment has continued to climb: The growth from January 1 to April 1 represents an additional 1.2% increase or 413,000 lives. MA enrollment has now increased beyond 51% of all Medicare beneficiaries. As we saw with January 2023 to January 2024, PPO growth now significantly outstrips HMO

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April 17, 2024

Many Healthcare Bankruptcies Linked To PE Firms I often talk about the pernicious impact that private equity firms have on healthcare.  Where the firms are successful, they tend to drive up costs in the system by buying provider groups, including owning emergency room providers, and pushing for huge payouts in No Surprises Act (NSA) arbitrations.  They also own hospitals where they cut costs due to high debt. Quality of course suffers and patient care takes a back seat. Such firms also force providers to practice at high-cost hospital places of service (the same is true for hospitals who are independent but are buying up doc groups). But the other pernicious impact is on shoddy investments and the churn and fallout that occurs.  PE firms tend to saddle the entities they buy with debt.  What’s more, some of the investments are questionable and speculative.  A new report says that more than

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April 16, 2024

Affiliate Of BlackCat Reportedly Published PHI From Change Cyberattack While the main operator of BlackCat ransomware appears to have kept a rumored $22 million ransom paid by United HealthGroup, an affiliate published data from the Change Healthcare cyberattack after United did not pay an additional ransom.  The affiliate controlled the captured PHI and data. #changehealthcare #cyberattacks https://www.fiercehealthcare.com/payers/optums-change-healthcare-responding-cybersecurity-issue United Reports Stabilization of MA And Costs Of Cyberattack United HealthGroup reported two critical factors on Tuesday.  First, Medicare Advantage (MA) costs have stabilized in Q1 2024.  Second, the Change Healthcare cyberattack will cost up to $1.6 billion.  The costs will likely far exceed this estimate. Additional articles: https://www.modernhealthcare.com/insurance/change-healthcare-update-cyberattack-cost-unitedhealth and https://www.healthcaredive.com/news/change-cyberattack-unitedhealth-cost-q1-earnings/713288/ and https://www.beckerspayer.com/payer/medicare-advantage-costs-begin-to-stabilize-unitedhealth-says.html (Some articles may require a subscription.) #unitedhealthcare #changehealthcare #cyberattacks #medicareadvantage https://www.fiercehealthcare.com/payers/unitedhealth-says-seasonal-pressures-ma-utilization-eased-q1 Lawmakers Receptive To Provider Recommendations On Cyber Security With United HealthGroup declining an invitation to attend a congressional hearing, lawmakers largely were empathetic to providers’ views on the cyber

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April 15, 2024

Some Big Insurers May Lose Medicaid Contracts In Florida Humana, Centene, and Elevance Health were the three big plans to win Florida Medicaid awards moving forward along with a number of local plans. But UnitedHealthcare, Aetna, Molina Healthcare, and AmeriHealth Caritas Florida were not given awards. Many states are seeking to cultivate local plans. Appeals will likely follow from the three big plans not selected. Additional article here: https://www.fiercehealthcare.com/payers/unitedhealth-cvs-molina-big-losers-florida-medicaid-contract-awards #medicaid #fl #managedcare #healthplans https://www.healthcaredive.com/news/florida-medicaid-awards-centene-elevance-humana-unitedhealth-cvs-molina/713154 Carelon And Private Equity Firm Partner On Primary Care Elevance Health announced that its service unit Carelon will partner with private equity firm Clayton, Dubilier & Rice and its assets, Apree Health and Millennium Physician Group on advancing primary care.  About 1 million will be covered. The move seeks to drive a close relationship between primary care and Elevance as an insurer.  The move is a bit of a surprise given the extreme focus on private equity’s

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Major Changes Occurring in Medicare Part D

As a result of the Inflation Reduction Act (IRA), major changes are occurring in the Medicare Part D retail drug program.  Here is my best effort to explain the changes.  Phases of the program  It is first important to understand the four phases of the program.  Figures change from year to year with inflation so I am outlining the 2024 phases here. Deductible Phase: Here, the Part D member is required to cover all costs of his or her drugs up to the deductible amount.  In 2024, the deductible amount is set at $545.  But remember that both standalone Part D plans (PDPs, who enroll beneficiaries in Medicare Advantage (MA) Part C Only plans or traditional Medicare fee-for-service (FFS)) and MA-Part D plans can lower the deductible in their benefit design.  Some even eliminate it for some or all drugs. Initial Coverage Phase:  Here, costs are split between the plan

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April 12, 2024

Physician Pay Increases, But Hurt By Inflation A survey of physicians shows that pay increased by about 3% in 2023, but it was offset by high inflation. #physicians #providers https://www.fiercehealthcare.com/providers/physician-pay-rose-modest-3-2023-here-are-specialties-saw-biggest-gains Corporate And Hospital Ownership Of Physicians Continues I often talk about the pernicious effect of hospital and private equity ownership on healthcare costs. Hospitals drive changes in practice to higher-cost settings.  Together, the entities continually push fees higher. The ugly effects of the takeover of independent practices continues.  Not too long ago, studies showed about half of all physician entities owned by hospitals or private corporations and about 70% of all physicians employed by them.  Now, the latest stats show the two types of entities owning 58.5% of all physician entities.  They now own 77.6% of all physicians. For the first time, corporate practice ownership (30.1%) exceeded hospital and health system ownership of docs (28.4%). Additional article: https://www.fiercehealthcare.com/providers/more-and-more-physicians-are-working-under-hospitals-corporate-entities-report-finds #physicians #providers

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