Medicare Advantage in the headlines: 10 recent updates

It has been a busy few weeks for Medicare Advantage policy. CMS proposed a slight cut in benchmark rates, and payer executives were split on the impact of rising costs in the business. 

Here are 10 Medicare Advantage updates Becker's has reported since Jan. 31. 

1. Montgomery, Ala.-based Baptist Health sued Humana, alleging the insurer's Medicare Advantage plan underpaid the hospital for drugs purchased through the 340B program.
   
   
2. Facing rising interest rates and regulatory scrutiny, private equity investments in the Medicare Advantage space are slowing down, according to the Private Equity Stakeholder Project. Investments in the space reached a peak in 2021, spurred by "industry-friendly" rollbacks on marketing regulations before slowing down in 2022 and 2023, according to the watchdog group.
   
   
3. In 2024, Medicare Advantage plans must provide coverage for an inpatient admission when the admitting physician expects the patient to require hospital care for at least two midnights, otherwise known as the two-midnight rule. Here are seven key updates on the rule.
   
   
4. Challenges in the Medicare Advantage market may force insurers to cut back on extra benefits like vision and dental in 2025, The Wall Street Journal columnist David Wainer wrote.
   
   
5. Algorithms and artificial intelligence-powered software tools can be used to support Medicare Advantage plans in making coverage decisions for members, but payers are still bound by CMS' internal benefits requirements and nondiscrimination rules under the ACA, the agency said in guidance to insurers regarding its final 2024 MA rule. The new guidelines may not be clear enough, experts told members of the Senate Finance Committee.
   
   
6. Don Berwick, MD, who served as CMS administrator during the Obama administration and is a current health policy lecturer at Harvard Medical School in Boston, told Becker's he would like to see the Medicare Advantage program "slowed or stopped."
   
   
7. UnitedHealthcare is still the largest Medicare Advantage insurer in the U.S., with 7.7 million members. Here's how the largest payers stacked up on Medicare Advantage membership at the end of 2023.
   
   
8. Insurers are reporting rising costs in the Medicare Advantage business but differ in their predictions of how these trends will affect their business in 2024. Analysts said "two camps" have emerged — those who say rising costs won't affect 2024 earnings, and those who say they will. 
   
   
9. CMS proposed a slight decrease in Medicare Advantage benchmark payments for 2025, cutting them by 0.2% on average. Risk model revision will amount to a 2.45% decline in revenue, according to a fact sheet issued by the agency. Payer executives called the rates inadequate.
   
   
10. Some hospitals and health systems are paring the number of Medicare Advantage plans with which they contract, seeking payer partners that align on clinical and financial outcomes. Becker's sat down with Shannon Drotning, market president for Providence Health Plan's consumer and specialty division, to discuss how the health system-owned insurer is working to act as a partner to providers.