Latest / Becker’s Healthcare Podcast / Jakob Emerson on Payer Policy Uncertainty and the Shifting Medicare Advantage Market

Transcript

Jakob Emerson on Payer Policy Uncertainty and the Shifting Medicare Advantage Market · Becker’s Healthcare Podcast

• 0:02
  This is where health insurance leadership comes together.
• 0:05
  Becker's fourth annual spring payer issues roundtable brings
• 0:08
  together over 400
• 0:10
  payer and health plan executives and more than
• 0:13
  100 speakers to Chicago April.
• 0:16
  This year's event includes keynote conversations with the
• 0:19
  industry's top leaders and former president George w
• 0:23
  Bush. For the full agenda and event details,
• 0:25
  visit beckershospitalreview.com
• 0:27
  and click on the events tab in the
• 0:29
  upper right. We're looking forward to hosting you
• 0:31
  here in Chicago.
• 0:34
  This is Scott Becker with the Beckers Health
• 0:36
  Care Podcast.
• 0:38
  Thrilled to say to be visiting with brilliant
• 0:40
  journalist Jacob Emerson.
• 0:43
  Jacob follows the payer area and what's going
• 0:45
  on in the payer world.
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  Jacob,
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  tell us what's going on currently. What are
• 0:50
  the big stories you're watching in the payer
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  universe currently?
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  Yeah. Hey, Scott. Good to talk with you.
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  So last night, we had the state of
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  the union with president Donald Trump, the first
• 1:00
  one of his second administration.
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  And health care was a topic during the
• 1:05
  speech.
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  Longest speech in in history in terms of
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  state of the unions, hundred and seven minutes,
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  and health care got about four minutes of
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  that. So, you know, I think that kind
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  of speaks for itself in terms of where
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  the policy focuses for for the administration in
• 1:20
  terms of health care right now. And I
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  can I can dig into that a bit
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  in terms of,
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  some of the lack of details we have
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  around specific things like ACA subsidies
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  moving forward? We we would love you too.
• 1:30
  We we would love you too. Tell tell
• 1:32
  us what's going on there. I know that,
• 1:33
  like, I was on
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  the on the podcast yesterday with leader of
• 1:37
  Banner Health, leader of of HonestHealth,
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  and basically saying in terms of value based
• 1:42
  care, they're gonna have several 100,000 people in
• 1:45
  the city of Arizona coming off of health
• 1:47
  insurance. So we've gotta make sure they get
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  to cure those people as well as possible.
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  Yeah. And and as efficiently as possible because
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  there'll be there'll be not only no margin,
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  probably no
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  reimbursement for a lot of those people as
• 1:59
  they gotta and and it it plays right
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  into this discussion, but it's a brilliant discussion
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  about value based care and how important it
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  is. We're particularly in the areas we gotta
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  take care of people who don't pay,
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  and you have to make sure they're still
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  taken care of really well but efficiently. But
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  yeah. So tell us what what you heard
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  coming out of the State of the Union.
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  Yeah. And and it's interesting you talk about
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  what Banner told you, Scott, because we heard,
• 2:19
  I believe it was last week from Tenet
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  Healthcare
• 2:22
  executives projecting a 20% drop in exchange enrollment
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  nationally.
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  And last year, there's about 24,000,000
• 2:28
  people, a little more than that, enrolled in
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  in the exchange plans.
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  So a 20% drop. That's, you know, that's
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  a huge,
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  patient population
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  coverage shift for or a payer mix shift.
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  For for health systems all over the country,
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  a volume shift, more people going to the
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  ED for for basic care.
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  So huge on that front alone. But in
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  terms of the president's speech,
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  he he definitely used the address to criticize
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  the ACA.
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  Nothing new for the president,
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  but calling it the unaffordable care act and
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  basically reiterating
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  some of the,
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  I don't know if I wanna say their
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  policy proposals, but some of the ideas that
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  he and and some Republicans have been, pushing
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  forward
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  last year, a little bit early this year
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  as some of the talks over the enhanced
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  subsidies continued, which is basically,
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  you know, going against the insurers completely, really
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  just
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  talking trash about the insurance companies
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  and proposing having funds,
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  instead of subsidies, having funds go straight to
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  Americans.
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  A lot of Republicans supporting the idea of
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  that being through HSAs, which as we know,
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  you know, it's not really a replacement for
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  a health insurance plan,
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  funding an HSA just because,
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  HSA funds can't be used to,
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  pay insurance premiums.
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  And, you know, funding HSA of, let's say,
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  like, $2,000,
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  that doesn't really get you anywhere in terms
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  of premiums that can cost you 20 plus
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  thousand dollars annually every year. So that's kind
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  of where things are at with that. But
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  I think overall, it's we're operating in a
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  space now where the the marketplace
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  now that these these talks around the subsidies
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  have completely fallen apart,
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  there is no where to go really with
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  them at this point, it seems like.
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  The marketplace is operating without any clear federal
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  policy direction for the first time in a
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  long time.
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  So no no real plan right now from
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  either side. Ideas, like I just mentioned, but
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  no votes, no details, no implementation path.
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  So, you know, for for the for the
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  hospital systems, let's say that it's it's a
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  scary time because you've got,
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  like, according to tenant, 20% less exchange enrollees
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  and, you know, a lot of change to
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  your payer mix. And then on the insurer
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  side, a lot less members,
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  and overall, just a a directionless marketplace as
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  things currently stand.
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  Right. And you and you do see some
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  of the big insurers
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  peering down their Medicare Advantage marketing and populations
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  in in
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  in areas that they're serving. Is that is
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  that is that right?
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  It is it is correct. And a lot
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  of it was very deliberate.
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  Basically,
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  they got too big, and we're really talking
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  about the national carriers.
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  And and I put an asterisk there because
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  there were some exceptions that we saw in
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  some of the most recent enrollment data during
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  the annual enrollment period that just wrapped up
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  last fall.
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  But, yes,
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  United,
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  Aetna, CVS,
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  Elevants, and then some of the big Blue
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  Cross conglomerates besides Elevants,
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  all seen really big reductions in in disenroll
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  NA disenrollments.
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  And, again, a lot of that was very
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  deliberate. But I thought what was really interesting
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  is,
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  Humana actually enrolled over a million people just
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  this past fall. So Humana kind of bucking
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  the trend of of the national publicly traded
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  insurers.
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  And then what we really saw, in the
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  enrollment data was the the start up, the
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  smaller insurers, the nonprofits, some of the Blue
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  Cross plans,
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  plans that, you know, have a very special
• 5:47
  focus. They they focus in one region or
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  they focus on a specific population for Medicare.
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  They they boomed. We saw plans
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  double their enrollment,
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  in in in already
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  having in the hundreds of thousands of members.
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  So,
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  so we're actually speaking with insurance about that
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  this week, but it it was a definitely
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  noticeable trend that the small guys, some of
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  the hospital and insurers did fantastic.
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  And then deliberately, a lot of the big
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  publicly traded guys,
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  lost a a lot of members for United
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  up to,
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  a million just, because of the the rising
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  utilization costs and trying to shed some of
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  those unprofitable,
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  plans.
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  Right. I mean, they truly tried to move
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  out of those markets because they're they're not
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  making money in those markets, and and they'd
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  rather not do it. It. Where does that
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  leave us in terms of Medicare Advantage? Is
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  it still last year, I think it ended
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  up up 54%
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  of Medicare.
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  Where where is that currently at? Do we
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  have a sense of that or not not
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  exactly?
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  As as it stands now, it's at, over
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  55%.
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  It it slowed. The, the
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  enrollment rate itself actually slowed during this past
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  annual enrollment. We're we're in open enrollment.
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  So people, you know, there's still people enrolling,
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  but for new enrollees, that was happening this
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  past fall, and the rate did slow.
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  I I think, though, Scott, one one story
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  I did wanna mention that contextually is a
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  part of all of this, and it's just
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  it it it's massive. It's, it's the largest
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  Medicare Advantage fraud settlement to date,
• 7:12
  with Kaiser Permanente.
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  And that happened in January between them and
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  the DOJ. $556,000,000,
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  settlement to resolve
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  allegations from the government that basically the health
• 7:23
  system,
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  gained the the MA payment system by doing
• 7:27
  the upcoding that we've heard about in the
• 7:29
  headlines for over a decade now, but basically
• 7:31
  inflating patient diagnosis codes to get higher, higher
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  payments from the government. And this is all
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  alleged,
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  but it's a it's a big scheme, a
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  lot of details that the DOJ alleged in
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  in their release about this. And, again, it's
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  a record fraud settlement,
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  which I just think is interesting even just
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  from the fact that Kaiser often has some
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  of the highest quality rated Medicare Advantage Plans
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  in the country. In some of their markets,
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  they get five out of five stars in
• 7:57
  some of their markets with CMS.
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  So CMS's highest quality Medicare Advantage Plans arguably
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  now
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  having the largest Medicare Advantage fraud settlement.
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  So, you know, I I I would let
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  the the listeners, you know, come to their
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  own conclusions about that, but I just think
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  it's a very interesting
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  contrast,
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  in terms of recent developments.
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  No. It's it's, you're fascinated. You've got some
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  actually moving in the right direction, some moving
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  in the wrong direction. Even though the growth
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  is slow to Medicare Advantage, it's still up
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  to 55%
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  as opposed to retrenching. That's fascinating too, isn't
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  it? Yeah. Definitely. And where we saw most
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  of the growth, majority of the growth, was
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  not in traditional Medicare Advantage with healthy seniors.
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  It was in, dual special needs plan special
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  special Medicare Advantage Plans that take care of
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  very sick chronic chronically sick, populations or people
• 8:47
  who are dually eligible for Medicaid and Medicare.
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  So really, really low income seniors.
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  That is where that is the fastest growing
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  portion of Medicare Advantage now across the country
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  for the entire program, and that's what drove
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  most of the growth this last fall as
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  well. So not normal MA anymore.
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  And who are the payers that specialize in
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  that market? Are there peers that really specialize
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  there? Honestly, they they all they all, they
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  all,
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  have have, business lines in this market because
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  it's growing so fast. They and it's really
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  Scott, it's grown. I'd say in the last
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  two, three, four years is where we've really
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  started to see,
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  resources invested in this
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  this space and and then the the corresponding
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  enrollment.
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  A lot a lot of the reasons because
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  you get higher reimbursements for taking care of,
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  sicker populations, especially when they're dually eligible for
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  Medicaid.
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  Right. And that was that was the next
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  one I was gonna ask you. Is is
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  there higher reimbursement because they're
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  more more sick, and those payers are still
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  making money off it so that part of
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  the market grows. I mean, it's fascinating how
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  it works, how things really do follow the
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  money. And I don't mean in a bad
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  way or good way, just an observational way.
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  Yeah. Definitely. But I think some would argue
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  that now these individuals,
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  pretty vulnerable populations,
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  are now getting
• 10:03
  health benefits that are a lot more comprehensive
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  than just traditional Medicaid, traditional Medicare, which, you
• 10:08
  know, doesn't really cover much,
• 10:10
  on the Medicare side, much of anything beyond
• 10:12
  just, you know, the hospital stays and and
• 10:13
  stuff like that. You know? Now they're getting
• 10:15
  at least dental benefits, hearing benefits,
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  things like that. So some could argue, you
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  know, the growth here is a good thing
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  because it's it's getting better benefits for some
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  of these more vulnerable populations. A 100%. I
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  mean, those are the people that need it
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  the most. And if you could manage it
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  efficiently, get them some extra benefits, god bless.
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  What what a fascinating thing to watch. I
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  mean, well, you sort of have a little
• 10:34
  bit of a government policy that's all over
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  the board, not very clear. You do have
• 10:38
  Medicare advantage. Man, it's growing in certain segments
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  even though the big traditional MA is slowing
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  down some and some of the big payers
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  have moved out of it. It's a lot
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  to digest there, isn't it? It is. And
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  and, like, connected to, you know, some of
• 10:51
  the tensions we've seen with the health systems
• 10:52
  and and MA, they use that as kind
• 10:55
  of a marketing piece to tell people, well,
• 10:56
  if you come into our MA plan that
• 10:58
  we own, you're not gonna go out of
• 11:00
  network like you would with some of the
• 11:01
  big guys who are always in danger of
• 11:03
  that. So it kind of all works together
• 11:05
  what we saw, but but like I said,
• 11:07
  the smaller guys, the hospital owned insurers with
• 11:10
  MA, they they did really well this past
• 11:11
  year, and that's what they told us they
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  were they were hoping to do.
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  Absolutely fascinating.
• 11:16
  Jacob, anything else you want to share today?
• 11:20
  No. I don't I don't think so. I
• 11:21
  mean, the president's speech also touched a little
• 11:22
  bit on Trump RX. We've covered that pretty,
• 11:25
  extensively
• 11:26
  on the websites,
• 11:27
  with Becker's. And then, you know, I think
• 11:29
  just overall,
• 11:30
  insurers don't have a lot of friends in
• 11:32
  Washington right now. Yeah. Tell us. And that's
• 11:34
  unusual because for thirty, forty years,
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  they've had an insane amount of friends in
• 11:39
  Washington
• 11:40
  partly because of so much lobbying in Washington
• 11:44
  and a general bent to turn over a
• 11:46
  lot of government health care
• 11:48
  to have it managed for the payers.
• 11:51
  And that seems like it's not going as
• 11:52
  well as people expected. Certainly, it's become very
• 11:55
  expensive.
• 11:57
  Lots of concerns about denials and pre auths,
• 11:59
  all the things that you needed the payers
• 12:01
  to do to try and manage cost, but
• 12:03
  aren't that the population actually just hates. And
• 12:06
  so what a fascinating what a fascinating situation
• 12:08
  where that's gone sort of, you
• 12:10
  you know, for so long, AHIP was so
• 12:13
  strong,
• 12:15
  you know, in in in a in a
• 12:16
  great job advocating for their members, the big
• 12:19
  payers. They were so strong in Washington, both
• 12:20
  sides of the island. Now you see a
• 12:21
  little bit of there's just a populist
• 12:23
  pushback against it. It's fascinating to watch. Yeah.
• 12:27
  And I I think it's also it's just
• 12:28
  a perfect storm right now, Scott, in terms
• 12:30
  of the the economics of all this with
• 12:32
  the Medicaid cuts coming down the line, the
• 12:33
  fact that employers are facing just huge costs
• 12:36
  right now, with self insured plans because of
• 12:38
  just rising costs overall with with health care,
• 12:40
  but also the GLP one factor that's rising,
• 12:44
  care costs with everybody.
• 12:45
  ACA falling apart, Medicare Advantage costs going up,
• 12:48
  all the tensions with providers and going out
• 12:49
  of the network. So I think everybody is
• 12:52
  affected by all these insurance issues now, whereas
• 12:54
  maybe in the past, it was just certain
• 12:55
  segments, certain populations.
• 12:57
  And then during these hearings with the insurance
• 12:59
  CEOs last month, you had congressmen complaining to
• 13:02
  the CEOs talking about, I couldn't get this
• 13:05
  prescription of mine covered by by my health
• 13:07
  plan through you. I couldn't get this prior
• 13:09
  authorization approved. The congressmen are are are complaining
• 13:12
  about health insurance at this point in term
• 13:14
  and and care delays. It's affecting everyone. It's
• 13:17
  it's impossible to ignore
• 13:19
  anymore, and I think that's why we're seeing
• 13:21
  there there's very little friends.
• 13:23
  But I think that's fascinating because at the
• 13:25
  end of the day,
• 13:26
  there's two different things here that that I
• 13:28
  that you mentioned right there. One is we
• 13:30
  always thought congress was somewhat immune to this
• 13:32
  because the rest of us see this as
• 13:33
  consumers,
• 13:34
  the challenge getting the access we need. But
• 13:36
  even those with better access
• 13:39
  that know everybody,
• 13:40
  there's just a shortage of physicians and caregivers.
• 13:43
  So as much as you know you know
• 13:44
  the CEO of this, you know the CEO
• 13:46
  of this, it's still hard to get the
• 13:47
  right on college when you're the right on
• 13:48
  college, just the right whoever, when you need
• 13:49
  the right whoever. It's just just it's just
• 13:51
  getting more challenging. I mean, the flip side
• 13:53
  is
• 13:54
  you could point the fingers at the insurers,
• 13:56
  but this is completely a problem that DC
• 13:59
  created
• 14:00
  by turning over so much of the federal
• 14:01
  government spend and Medicaid spend through the payers.
• 14:05
  And it's it it it it's arguably cost
• 14:07
  a lot of hyperinflation in health care,
• 14:09
  and no one at least none of them
• 14:11
  are focused on the real issue. The congressman
• 14:13
  yelling at
• 14:15
  at AHIP members. Well, AHIP members have funded
• 14:17
  the congressman, and they've had this mutual sort
• 14:19
  of love for each other is literally the
• 14:21
  height of political theater in some ways. And
• 14:24
  instead of complaining about the insurance companies, it's
• 14:26
  trying to solve problems. Like, how do we
• 14:27
  end up with more specialists, more doctors, more
• 14:29
  primary care? How do we end up actually
• 14:31
  fill solving the problem
• 14:33
  versus just political theater, which is yelling at
• 14:35
  the payers? You you you say it right.
• 14:37
  The payers know a lot of friends in
• 14:38
  Washington,
• 14:39
  but but even the Washingtonians don't seem to
• 14:41
  be really focused on solving the problem. They're
• 14:43
  just they're just they're just grandstanding from what
• 14:45
  I could tell, and and it is what
• 14:47
  it is. Yeah. I think I mean, I
• 14:49
  think you talk to any of our our
• 14:51
  audience, the people we interview. It's a mess,
• 14:53
  and nobody really seems to know how to
• 14:55
  solve the problem. Nobody knows what to tackle
• 14:57
  first.
• 14:57
  Yeah. Because it's just this giant messy web.
• 15:00
  So
• 15:01
  yeah. Yeah. It is what it is, but
• 15:04
  we but we we, we need more doctors
• 15:05
  and nurses particularly and more specialists and everything.
• 15:08
  I mean, you look at the benches for
• 15:10
  oncology. The benches for some of these specialties,
• 15:11
  these are really important.
• 15:13
  Once you get past the the the front
• 15:15
  lines, there's just a real shortage and lots
• 15:16
  of specialties, and it's gonna get a lot
• 15:18
  worse for the next ten years. Yeah. So
• 15:20
  no. I I agree with you. People don't
• 15:21
  know where to start, but we could tell
• 15:23
  them where we think they should start. But,
• 15:25
  it is what it is. Jacob, as always,
• 15:27
  fantastic to visit with you. I always learn
• 15:29
  something. It's my favorite podcast of the week,
• 15:31
  Greg, to visit with you and learn something.
• 15:32
  Thank you for joining us on the Becker's
• 15:34
  Healthcare Podcast.
• 15:35
  I appreciate that. It's good to talk with
• 15:36
  you, Scott.