Reprinted with AIS Health permission from the Oct. 5 issue of Radar on Medicare Advantage

As the 2024 Annual Election Period approaches, Medicare Advantage insurers that began marketing on Oct. 1 have been touting service area expansions and/or the robust provider networks attached to their plans. But in the months and, in some cases, days leading up to the Oct. 15 start of open enrollment, some high-profile contract negotiations have played out in a very public way, with providers expressing their frustration with administrative delays, care denials and less-than-adequate rates. And the loss of key providers could have serious consequences from a network adequacy standpoint, even leading to an enrollment freeze if MA organizations are not careful, warns one compliance expert.

On top of concerns about overly burdensome prior authorization policies used by MA organizations, “providers are getting squeezed” from both sides, remarks Jane Scott, executive vice president of special projects for Rebellis Group. “Providers are getting squeezed on the fee-for-service, CMS side for their reduction in fee reimbursement. And then the health plans also want to reduce reimbursement for savings on their own part, while trying to stay competitive. And in doing that, they may have to reduce their service area size, their network offering, different things…and so that causes some market change.”

And as recent headlines would suggest, some groups and hospital systems “are not willing to play ball with some of the health plans,” she continues. “For so long, the health plans were the ones that could swing the big hammer, and basically providers had no choice. I like to see providers flexing their muscles a little bit, honestly. I think it’s good for the marketplace. It’s a good reality check for the health plans.” Notable examples include last year’s refusal by the Mayo Clinic to accept MA plans at its campuses in Arizona and Florida. That same year, however, the top-ranked hospital system inked a multiyear deal with UnitedHealthcare giving MA members in-network access to Mayo Clinic Rochester and Mayo Clinic Health System in the Midwest for the first time, effective Jan. 1, 2023. And UnitedHealthcare earlier this year said it would eliminate nearly 20% of current prior authorizations for most commercial, MA and managed Medicaid plans, while Cigna Healthcare continued paring down its own prior authorization restrictions.

Most recently, Elevance Health, Inc.’s Anthem Blue Cross Blue Shield reached a new multiyear deal with Bon Secours Mercy Health (BSMH) after the Catholic health system sued Anthem over unpaid claims. The health system had ended its MA contract with Anthem in Virginia on Aug. 1, and its managed Medicaid contract in the state was slated to end on Oct. 1. In Ohio, BSMH had been out of network for Anthem Medicaid members since July 1. But on Sept. 29, the health system unveiled a new agreement enabling managed Medicaid members and MA enrollees in Kentucky, Ohio and Virginia to continue receiving in-network care. The pact also extends coverage for Anthem employer-based and Affordable Care Act plans until 2028.

In recent months, other contract disputes have some health systems exiting MA altogether, while some have yet to be resolved. Here are a few developments:

· In May, Cameron Regional Medical Center in Northwest Missouri said it would no longer contract with CVS Health Corp.’s Aetna and Humana Inc., according to news reports. The regional provider then announced that effective Sept. 26, it would be an out-of-network provider for Humana but would continue to accept MA plans offered by Aetna, Blue Cross Blue Shield and UnitedHealthcare.

· In July, Brookings Health System in Brookings, South Dakota, said it would no longer be a network provider for any MA plan. The not-for-profit, city-owned health system has been reaching out to impacted members and area insurance agents to let them know about the change, reports the Brookings Register.

· In August, Oregon provider St. Charles Health System said it was evaluating its participation in MA plans, including those offered by Humana Inc., PacificSource, HealthNet and WellCare “after years of concerns piled up not just at St. Charles, but at health systems throughout the country.” The Bend, Oregon-based nonprofit health system at the time “strongly encourage[d]” individuals with MA coverage in Central Oregon to review their health insurance options for 2024 and consider making a change to traditional Medicare this fall. As of Aug. 31, the health system said it was in contract negotiations with four MA plans, had asked them to include proposals addressing their concerns about delays in patient care, and intended to finalize agreements in advance of the AEP. On Sept. 29, St. Charles unveiled a new pact with PacificSource that excuses St. Charles Cancer Center patients from prior authorization policies starting next year. It had yet to reach agreements with Humana, HealthNet and WellCare as of AIS Health press time.

· In September, Adena Regional Medical Center in Ohio said it was pulling out of the MA and managed Medicaid provider networks of Anthem Blue Cross Blue Shield in Ohio, effective Nov. 2. “Like other health systems across the country, we have reached out to insurers and asked them to work with us to find a fair rate that appropriately covers the costs of the care provided. Unfortunately, conversations with the Anthem Medicare Advantage Plan and Anthem Medicaid Advantage have not been productive,” explained the not-for-profit health system, which serves south central and southern Ohio through four hospitals and six regional clinics. Adena said Anthem was not willing to offer Medicaid and Medicare reimbursement rates that reflect the “increased cost of care,” and that traditional Medicare payment is generally more in line with actual costs than the rates paid by private insurers like Anthem. Yet it listed seven other insurers it will continue to accept. Anthem did not respond to a request for comment as of AIS Health press time.

· Also in September, two medical groups owned by San Diego-based Scripps Health said they would no longer contract with MA plans as of Jan. 1, 2024, because of poor reimbursement and prior authorization difficulties, according to multiple news outlets. · And on Sept. 22, Baptist Medical Health Group in Kentucky said it was unable to reach an agreement with Humana regarding its employer-sponsored commercial and MA plans. That contract ended on Sept. 22. Humana previously told local news outlet WHAS11 that it intended to work with impacted members to help them find new in-network providers to avoid disruptions in care. According to WDRB News, the Baptist Health Medical Group includes about 780 physicians and 870 advanced practice clinicians, and the dispute does not involve Baptist’s hospitals. In a statement provided to AIS Health, a division of MMIT, Humana says it has not faced difficulties with contracting in new/expanded service areas for 2024. “Humana members continue to have broad access to health care across all of our plans and service areas,” states the insurer.

The timing of some of these disputes shouldn’t come as a surprise, given that plans must meet network adequacy standards by Jan. 1. “Providers are smart. We need to give them credit,” says Scott. “They have become very educated [about MA] and, because CMS publishes what the network adequacy requirements are, they know that if plans have to submit criteria for exceptions or patterns of care that make inadequacies in a provider network explained, it’s more work for the plan. So, the providers are in a good space. And they’re pushing back at the right time.”

Adds Scott, “I think what you also see happening is because there are larger systems that are merging, it’s strengthening the provider community.…There are health systems that are purchasing what used to be more standalone groups. And they now are not just groups, but they’re hospital systems, they’re specialty clinics, they’re ambulatory surgical centers — their campuses are growing. So that does give them power. And they know that without them in the mix, the plan is not going to have an adequate network to submit to CMS. So, they have to play ball.”

Network Adequacy Issues Threaten Expansion

Another issue that may be in play is that some health systems can’t handle the levels of risk that MA insurers may want them to take in value-based contracts. “The health systems, especially in rural areas, or the organizations that are part of a large clinically integrated network, are looking at some of these value-based contracting requirements — upside/downside risk — and it’s just too much onus for them to perform in a monetarily acceptable way,” observes Charles Baker, vice president for compliance solutions with ATTAC Consulting Group. And for MA insurers that want to expand their service areas, “that poses a huge problem.”

To offer an MA plan in a service area, sponsors must have a minimum number of providers accessible to beneficiaries by specific time and distance standards. In other words, plans must ensure that no enrollee residing in a service area must travel an unreasonable distance or amount of time to obtain covered services. While insurers with established service areas are subject to network adequacy review every three years, those filing for new and expanding service areas are required to demonstrate network adequacy at the time of application, thanks to a provision finalized in CMS’s 2023 MA and Part D rule issued last May. That rule gave them a “time-limited 10-percentage point credit” toward meeting the required standards, meaning they have until Jan. 1, 2024, to sign contracts and be fully compliant. The new process was a deviation from previous rules that required plans to “attest” that their provider networks will sufficiently provide access to covered services.

“So, if you are a health plan that wants to offer a new [plan benefit package] or a new service area, and you can’t meet those time and distance standards without a contract, the likelihood that you’re going to be able to get that service area expansion approved is now in jeopardy,” says Baker. For established plans, “if these health systems are not renewing and you were once relying on them for network adequacy standards, now you’re at a compliance risk for failing your triennial network adequacy reviews. And so, the implications are big for both the health system and for Medicare Advantage plans,” especially given the number of beneficiaries that are opting to enroll in MA, including in rural areas. And that’s where we may start to see more MA plan partnerships with “mobile care” providers, he says.

Insurers can file exception requests, but they’re not easily granted. “The exception request is really based on a significant area of need, whether or not that is a rural county,” explains Baker, who previously worked as Medicare compliance officer for a large regional Medicare plan in Michigan. “For example, in the state of Michigan, there is a county called Alpena. It is just above the thumb on the east side of the state, in this kind of weird jetty that goes out into Lake Huron. And there are people who live out on that little jetty, maybe 10, 15 miles out on Lake Huron. It’s small, but that’s part of the county. And so, if you have membership within that little jetty…it makes it next to impossible for you to meet time and distance standards for that specific location.” In such a scenario, an MA plan would first look at CMS’s provider data to see if there are any physicians serving MA enrollees in that area whom it hasn’t contracted with and who would meet these time and distance standards. And if there are no such physicians, then the MA plan would go to CMS to request an exception because based on the members’ location, it’s “basically impossible” to meet the adequacy standards.

What happens if Jan. 1 comes along and a plan is operating with an inadequate network? For new and expanding plans that had that 10% leeway, it’s unclear what CMS will do to enforce the new provision. A likely first step would be a notice of noncompliance, suggests Baker. Worst case scenario, however, is CMS imposes an enrollment suspension because the plan certified during the application process that it would meet the adequacy requirement. “Then you’d have to notify your members that they can now switch during the OEP [Open Enrollment Period that runs from Jan. 1 through March 31] because your plan doesn’t meet those adequacy standards…or your membership would qualify for a special election period,” he says.

Meanwhile, plans that are not up for their triennial review must notify CMS if their networks are inadequate. The 2023 MA and Part D final rule specifically stated that “MA organizations are in the best position to determine when and whether access to network providers has been compromised.” And the agency reminded plans that they are required to monitor their contracted networks throughout the year to ensure that they continue to meet adequacy standards.

— By Lauren Flynn Kelly