2023 was an eventful year for Medicare Advantage.
As the program continued to grow, with enrollment surpassing 30 million in 2023, some hospitals are beginning to push back on private Medicare plans. CMS also introduced new rates and regulations in 2023 that are taking effect in 2024.
Here are 10 of the biggest Medicare Advantage stories Becker's reported in 2024.
- A growing number of hospitals and health systems nationwide are pushing back and dropping some or all contracts with Medicare Advantage plans, citing excessive prior authorization denial rates and slow payments from insurers. Becker's has reported at least 15 systems dropping some or all MA plans in 2023.
- CMS' overall average star ratings declined slightly for Medicare Advantage plans for plan year 2024. The average star rating for 2024 is 4.04, down from 4.14 in 2023. The number of contracts receiving five-star designation also declined to 31 for 2024, down from 57 in 2023, with just 7% of MA enrollees in a five-star contract.
- UnitedHealthcare is discontinuing some Medicare Advantage plans and exiting some service areas for 2024. In September, the nation's largest Medicare Advantage insurer said affected plans include some plans co-branded with AARP; UnitedHealthcare MedicareDirect, a fee-for-service-based program; some dual-eligible plans; and other MA options. A UnitedHealthcare spokesperson told Becker's the company's overall MA footprint will expand in 2024.
- There are major changes afoot for Medicare Advantage plans and when they are required to cover inpatient services in hospitals for their members. The changes are likely to present challenges for hospitals and how physicians document inpatient care. Here are six things to know about the "two-midnight rule" taking effect in 2024.
- In October, a former executive of Elevance-owned HealthSun Health Plans was charged for allegedly orchestrating a multimillion-dollar Medicare fraud scheme. The scheme allegedly caused HealthSun to submit tens of thousands of false claims to CMS, which resulted in millions of dollars in overpayment.
- In October, the Cigna Group agreed to pay $172.3 million to resolve allegations that it violated the False Claims Act by submitting incorrect Medicare Advantage patient data to CMS to receive higher payments from the agency.
- Lawmakers increased scrutiny on prior authorization denial rates in Medicare Advantage in 2023. In May, the Senate Permanent Subcommittee on Investigations sent letters to CVS Health, Humana and UnitedHealth Group seeking internal documents detailing how the companies decide to approve or deny claims, including how the payers use artificial intelligence in the process. Analysts say more regulation could be on the horizon in 2024.
- In 2023, several payers, including UnitedHealthcare, said healthcare utilization among the Medicare Advantage population is on the rise. In addition to pent-up demand from the COVID-19 pandemic, when many delayed elective medical procedures, pickleball could be one contributor to the increase.
- CMS is moving ahead with Medicare Advantage risk adjustment changes payers and some provider groups opposed, but the agency will phase in the model over three years, beginning in 2024. Payers were against the coding adjustments, which industry groups said would amount to a cut in funding for the program, though CMS maintains the changes are not a cut, and plans will see a slight increase in overall payments over three years.
- CMS will implement stricter audits of Medicare Advantage plans, a move that could leave payers on the hook for billions of dollars in repayments to the federal government. In a final rule issued in January, the agency said it will strike the fee-for-service adjuster from risk adjustment data validation audits, a tool that would have calculated a permissible level of payment errors and limited audit recoveries to payment errors above that level. Humana is challenging the rule in court.