The Centers for Medicare & Medicaid Services has suspended enrollment in three Medicare Advantage plans offered by UnitedHealthcare and one by Anthem because they did not meet the minimum quota for benefits expenditure.
The Social Security Act requires MA organizations to maintain a medical loss ratio of at least 85%, that is, they must spend 85% of their premium income on medical benefits and claims. When an organization fails to do so for three consecutive years, “CMS must suspend that organization’s ability to accept new enrollments in the plans it offers…for the contract year following submission of the report,” the agency wrote in letters to the health plans.
The plans, whose medical loss ratios ranged from 77% to 84.9%, will not be able to enroll any new members until 2023.
Though the move is not new — CMS has suspended enrollment in Medicare and MA plans before — it cannot be characterized as a common course of action, said Dr. Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research, in a phone interview.
The UnitedHealthcare plans that were suspended are UnitedHealthcare of the Midwest, UnitedHealthcare of New Mexico and UnitedHealthcare of Arkansas, which operate in six states in total. Their suspension will impact about 80,000 people currently enrolled in the plans, a small percentage of its nearly 7.5 million MA members as of August.
The Anthem plan is an MMM Healthcare Medicare Advantage-Prescription Drug product, which operates in Puerto Rico. Anthem acquired MMM Healthcare in June. At that time MMM said it had 275,000 MA members, though it is unclear how many of these will be affected by the plan’s suspension. Overall, Anthem has about 1.9 million MA members.
“Anthem, Inc.’s top priority is the health and wellbeing of consumers enrolled in our affiliated health plan,” said Hieu Nguyen, senior public relations director at Anthem, in an email. “This CMS action does not impact any of MMM Healthcare’s other Medicare Advantage plans nor any other Anthem-affiliated health plan… We will also work with MMM Healthcare and CMS to address the agency’s concerns.”
Though Anthem did not provide any reason for why its plan was unable to reach the 85% threshold, UnitedHealthcare blamed the pandemic.
“In a few markets, we were not able to [reach the threshold] because so many of our members deferred going to get care due to Covid-19,” said Heather Soule, a UHC spokesperson, in an email. “As a result, we can’t enroll any new members in a few local plans until 2023 when we expect care patterns to be at more normal levels.”
Overall, the suspended plans constitute a very small share of enrollment in the payers’ overall MA enrollment, but “there is a hassle factor,” said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, in an email.
This is because these payers will need to contact the plan enrollees to let them know that their current coverage will not be interrupted.
“It is also publicity that they would rather not have,” she said.
The payers do have an opportunity to contest the suspensions. UnitedHealthcare and Anthem have 10 calendar days from the date they received the notice from CMS to provide a written rebuttal. They can also request a hearing before a CMS hearing officer. It is not clear if either insurer plans to take this option.
Further, to enable enrollment in the plans for 2023, they need to demonstrate that for this year they have met the 85% threshold, UCLA’s Kominski said. The best way for the payers to show that they are in compliance is to issue rebates to their members.
“The plans obviously monitor spending, they know what the revenues are,” Kominski said. “So, they should have a pretty good idea this year whether they are in compliance or whether they expect to be. And if for some reason they are not, what they really need to do, I would say, is to issue rebates…That’s the best avenue for these plans.”
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