This is Jacob Emerson with the Becker's Payer Issues podcast. Here's your biweekly industry news briefing for September 16th. The National Committee For Quality Assurance has named the best rated health plans of 2024 based on nearly fifty factors that include patient experience and clinical quality.
The ratings were released September 16th and are based on 2023 data from commercial, Medicare, Medicaid, and ACA plans that reported HEDIS and CAHPS results to the NCQA, NCQA, which cover more than 227,000,000 people nationally. NCQA accreditation status was also factored in. Plans were rated on a 0 to 5 star scale with 5 being the highest rating. And in total, just over a 1000 plans received a rating nationally. No Medicaid plan received 5
stars this year. Last year, 2 health plans overall received 5 stars. In terms of commercial plans that received a 5 star rating, that went to BCBS Massachusetts, Independent Health Association out of New York, and Kaiser's Mid Atlantic Health Plans, which is Washington DC, Maryland, and Virginia. And then 2 Medicare Advantage Plans received a 5 star rating as well. That went to Kaiser's health plan in Colorado and Froedtert Health's network health insurance corporation in Wisconsin.
Well, Florida's insurance commissioner has given the green light for health care service corporation to purchase Cigna's Medicare business in the state. On September 11th, insurance commissioner of Florida signed a consent order approving the indirect acquisition of Cigna's HealthSpring of Florida by HCSC, which is the parent company of 5 Blue Cross Blue Shield plans. The Cigna Group reached a deal in January to sell its Medicare business to HCSC for $3,300,000,000.
The pending sale includes Cigna's Medicare Advantage, supplemental benefits, Medicare Part d offerings, and Care Allies, a value based care management subsidiary. The deal will nearly quadruple HCSC's Medicare Advantage membership. In January, HCSC had just over 217,000 MA members. Cigna has just under 600,000 MA members, which is a small share of its 19,000,000 total insurance customers. The company also has 450,000 supplement members and 2 and a half 1000000 people under Part d plans.
Well, Centene's Fidelis Care has reached a $7,600,000 settlement agreement with New York's attorney general for billing Medicaid for services provided by an individual convicted of a crime. Managed care organizations contracted with the state of New York are required to terminate their relationships with any provider excluded from the state's Medicaid program. State and federal law also requires Fidelis to conduct routine checks of those exclusion lists.
Fidelis billed Medicaid for patient services from February 2019 to July 2021 from a company owned by a social worker that had previously lost his license in 2017 after being convicted of a misdemeanor for firing a BB gun at a child. Under the settlement, Fidelis will pay back more than $7,600,000 in reimbursements to the state's Medicaid program.
The company has also agreed to perform routine status checks of its contracts for providers excluded from Medicaid and terminate any relationships identified during those reviews. Well, CMS is suspending new enrollment for a Centene Medicare Advantage subsidiary in Missouri after the company failed to meet the required medical loss ratio for 3 years in a row. MA plans are required to spend at least 85% of the money they receive on patient care and quality improvement.
If a company fails to meet that threshold for 3 consecutive years, CMS can stop the company from enrolling new beneficiaries. WellCare of Missouri, owned by Centene, reported the following MLRs for its Medicare Advantage prescription drug plan. It's just under 79% in 2021. It was 77.7% in 2022, and it was 84% in 2023.
Because of that WellCare of Missouri will not be allowed to enroll new members in its MA prescription drug plan in 2025, and it will be removed as an option during the upcoming enrollment period. WellCare must also ensure that all communications and marketing materials clearly state that it is not accepting new members for next year. If the company reports an MLR of at least 85% this year, it may be allowed to enroll new members again in 2026.
If not, the suspension will continue, and CMS could terminate the contract entirely. While Anthem Blue Cross Blue Shield is requesting payments from some providers, it alleges falsified patients' medical records when prescribing Ozempic. That's according to a new report from Bloomberg. A spokesperson for Elavance Health, which owns the Anthem plans, told Bloomberg it contacted a small number of providers about repayments for Ozempic prescribed to their patients.
In some cases, the amount of repayment requested was more than $1,000,000 Representatives for Elavance told Bloomberg that Anthem only covers Ozempic for patients with type 2 diabetes. The drug is not approved by the FDA for weight loss, but it is often prescribed off label for that purpose. Wegovy, which contains the same active ingredient as Ozempic, is also approved for weight loss.
Last year, Anthem sent a small number of providers letters indicating that off label use of diabetes drugs is, quote, at an all time high. In those letters, Anthem told providers that falsifying medical records in order to secure insurance coverage of a drug is health care fraud. One consultant told Bloomberg that the request for the payment from providers was, quote, highly unusual.
And as the providers did not receive reimbursement for the drugs, the pharmacies that dispense the drugs would have been paid by insurers. Well, UnitedHealthcare and Humana are expected to collectively receive 50% of the total Medicare Advantage Star bonus payments being distributed in 2024, while Kaiser Permanente is expected to collect the highest average bonus per enrollee at $516. That's according to a new analysis from KFF.
Total MA star ratings bonus payments increased by more than 400% between 2015 and 2023, though those payments will decline by 8% to $11,800,000,000 in 2024. Total spending on MA bonuses is still higher this year than in every year between 2015 and 2022. UnitedHealthcare is expected to receive 3,400,000,000, Humana, 2a half 1000000. All other insurers, which includes companies with less than 2% of total MA enrollment nationally, are collectively going to receive $2,100,000,000.
BCBS plans, which do include Elavance plans, are going to receive 1,700,000,000. CVS's Aetna will get 1,100,000,000. Kaiser Permanente will get 976,000,000, and Centene will receive 35,000,000. And finally, administrative costs now account for more than 40% of hospitals' total expenses for delivering patient care with a significant portion of that driven by the rising number of care denials stemming from the growing use of artificial intelligence tools by insurers.
Between 2022 and 2023, claims denials surged by an average of 20.2% for all commercial plans and by over 55% for Medicare Advantage Plans according to the American Hospital Association. The wrote that one factor driving this growth is the increased use of machine learning algorithms and other artificial
intelligence tools. Poor applications of these technologies can result in automatic denials of care without consideration of a patient's individual clinical circumstances or review from a clinician or plan medical director as required. And although the 2024 MA final rule did provide some guidance around payment denials and practices, the emphasized that AI driven denials remains a serious issue.
In its guidance earlier this year, CMS raised concerns about the potential for AI tools to perpetuate discrimination and bias. The agency wrote in February that they are concerned that algorithms and many new AI technologies can exacerbate discrimination and bias. The agency advised that before implementing AI tools, insurers must ensure that they do not reinforce existing biases or introduce new ones. Scrutiny of AI use by insurers has intensified
in recent years. UnitedHealthcare, Humana, and Cigna are all facing lawsuits alleging they wrongfully denied care to Medicare Advantage members using AI algorithms. As software technologies evolve rapidly, CMS has sought to clarify the distinction between algorithms and AI. It's also clarified coverage requirements for payers when using algorithms and other AI technologies.
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