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Health policy priorities on the table: Understanding the post-election landscape for Marketplace, Medicaid, and Medicare programs

This week’s In Focus section addresses post-election implications and initial considerations for understanding President-Elect Donald J. Trump’s possible federal healthcare policy agenda. Though healthcare was not the highest priority campaign issue, the president-elect and his team have signaled the policy agenda could include changes to the Affordable Care Act (ACA), Medicaid, and the nation’s public health programs.

Additionally, President Trump’s first term policy agenda and how these policies fared, provide critical insights into the policy direction for his second term, including policies on Medicare drug pricing, ACA marketplaces, and interoperability. Also vital to understanding and planning for a second term will be the appointees to key healthcare positions at the Department of Health and Human Services and in the White House.

Policy officials and specific policy agendas are still nascent, and Health Management Associates, Inc., federal and state experts are continuing to monitor these developments. The remainder of this article focuses on a few key considerations for the Marketplace, Medicaid, and Medicare healthcare insurance programs heading into 2025.

ACA Marketplace Issues to Watch

President-Elect Trump signaled he is uninterested in revisiting a legislative initiative to repeal and replace the ACA. However, one of the major defining issues facing the president-elect and the next Congress is the temporary policy providing enhanced tax credits that lower ACA premiums, which expires at the end of 2025. This and other tax policies are very likely to be on the table, particularly as budget reconciliation is an available tool in unified government.

Key considerations for healthcare stakeholders regarding the subsidy policy and federal funding for Marketplace outreach and education programs include:

The Congressional Budget Office (CBO) estimates that extending the present enhanced subsidy policies would cost more than $300 billion over 10 years. The CBO also reports that ACA marketplace enrollment would drop from 22.8 million in 2025 to 18.9 million in 2026 if the subsidy policy is not renewed.
The loss of subsidies would increase the number of uninsured individuals in the United States, but the size of the increase would depend on the state-specific landscape. For example, states that have not adopted the ACA’s Medicaid expansion for adults are expected to have a higher increase relative to states that have more expansive Medicaid eligibility. One potential approach is for lawmakers to modify the enhanced subsidy policy, rather than let it expire entirely.
Marketplace plans should be prepared for a change in the acuity mix of enrollees while providers should expect a change in their payer mix, with more uninsured individuals in states that have not expanded Medicaid.

Federal and state policymakers may pursue a combination of alternatives to fill gaps in access to healthcare coverage and services. For example, the president-elect and incoming congressional leaders may focus on alternative coverage options and other state-driven reforms to Marketplace programs. Alternatives that could become part of the regulatory policy agenda include:

Supporting association health plans (AHPs) and high-risk pools
Reverting to a federal regulatory environment that supports short-term limited-duration healthcare insurance (STLDI) plans
Approving Section 1332 waivers to allow state-designed programs

Medicaid Policy Outlook

During Mr. Trump’s first term, one of his administration’s signature Medicaid initiatives was approving Section 1115 demonstrations that allowed states to apply work requirements to certain populations, including adult expansion populations. The first Trump Administration also revised the demonstration parameters for Section 1115 Institutions for Mental Disease (IMD), allowed coverage lockout for beneficiary noncompliance with premium payments, and approved a pilot program to test interventions addressing health-related social needs (HRSNs).

Key considerations for healthcare stakeholders regarding Medicaid flexibilities and funding include:

Officials in the first Trump Administration approved North Carolina’s Medicaid 1115 demonstration program to address HRSNs. President Biden’s Administration expanded these policies and approved demonstrations in more than 10 states, with additional state applications pending. Incoming officials may maintain the overall policy direction with regard to HRSNs. However, they could pivot to narrow the scope of future state HRSN proposals. Another approach could include directing states to use in lieu of services (ILOS) authority in managed care delivery systems to address HRSN.
During President-Elect Trump’s first term, Centers for Medicare & Medicaid Services (CMS) officials prioritized work requirements and capped allotments for certain components of a state’s Medicaid program. Some states might consider revisiting these options, with modifications. If this policy direction is refreshed, federal and state officials would benefit from the foundational work conducted during the first term.
New CMS officials could prioritize work on transparency in Medicaid financing and reimbursement to providers. Federal officials, regardless of political affiliation, historically have sought to improve their understanding of the flow of Medicaid funding. Incoming officials could prioritize this issue again, which would have a varied effect on health plans and providers.

Medicare Priorities:

Relative to Marketplace and Medicaid, first term Trump Medicare policies were advanced with less conflict. Notable policy initiatives included a focus on healthcare-related challenges in rural communities, improving transparency, and reducing provider burden —all of which were also cross-cutting issues that encompassed policy work beyond Medicare and could continue to be central to the next Medicare policy agenda.

Key considerations for healthcare stakeholders regarding Medicare policy are as follows:

The president-elect’s first term approach to Medicare Advantage (MA) plans sought to maximize enrollment in MA and encourage innovation and value-based design. It’s reasonable to expect second term CMS officials to maintain an overall favorable approach to MA too. Incoming officials could narrow their scrutiny of MA plans to bipartisan concerns, for example MA plans’ prior authorization policies.
While improving outcomes for dually eligibles beneficiaries generally is a bipartisan issue, state agencies, MA and Medicaid managed care plans, and other interested stakeholders should monitor the incoming Administration’s policy agenda for dually enrolled beneficiaries in Medicare and Medicaid. During the Biden Administration, CMS issued final rules for Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) to improve integration for the Medicare-Medicaid dually eligible population., Incoming Trump officials could revisit the approach, including the breadth of requirements and compliance timelines.
During his first term, President Trump was highly engaged in elevating concerns about prescription drug prices and HHS and CMS announced models and policies to lower drug prices for patients. In his second term, however, the President could seek to rein in certain aspects of the Inflation Reduction Act (IRA), while revisiting some of his prior proposals.

What to Watch

The incoming Administration and its transition team are moving expeditiously to nominate new Cabinet Secretaries and to identify key staffers. The individuals appointed to departmental, agency, and advisory leadership positions will have significant leeway in shaping the federal and state healthcare policy landscapes – determining which existing policies to review and potentially revise, new policies to develop, and the approach to working with state and local officials and stakeholders. This includes the Secretary of Health and Human Services, CMS Administrator, Director of the Centers for Disease Control and Prevention, Food and Drug Administration Commissioner, and Director of the National Institutes of Health, all of which require Senate confirmation. Additionally, healthcare stakeholders should continue to monitor the leadership races for the House and Senate and the primary congressional committees with jurisdiction over healthcare programs. These leaders will be key to a second term Trump legislative policy agenda.

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This article focuses in on a subset of issues within Marketplace, Medicaid, and Medicare and in the overall healthcare sector. Our 2024 Political Checkpoint webinar features our experts discussing these and other insights on the election results. They provided an overview of what to expect from Congress and the Administration, focusing on key legislative priorities and executive actions.

Join us for our next two webinars in the series exploring the election results:

November 19: The Future of Medicare Advantage: How the Election Results Impact the Program
November 20: Electoral Consequences: Impact on the ACA Marketplace

Comprehensive 50-state survey explores Medicaid policy landscape for FY 2025

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This week, our In Focus highlights the 24th annual Medicaid Budget Survey conducted by the Kaiser Family Foundation (KFF) and Health Management Associates, Inc. (HMA), in collaboration with the National Association of Medicaid Directors (NAMD). Survey results were released on October 23, 2024, in two new reports: As Pandemic-Era Policies End, Medicaid Programs Focus on Enrollee Access and Reducing Health Disparities Amid Future Uncertainties: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2024 and 2025 and Medicaid Enrollment & Spending Growth: FY 2024 & 2025.

The sections below review results and share key takeaways. On November 12, during NAMD’s 2024 Fall Conference, KFF experts and state Medicaid directors will delve into survey findings on policies in place or planned for fiscal year (FY) 2024 and FY 2025, including state experiences with reduced state revenues and the unwinding of the pandemic-related continuous enrollment provision.

Several of HMA’s former Medicaid directors and Medicaid experts will be in attendance at the NAMD meeting to provide additional context and address questions about FY2025 Medicaid policies in the post-election landscape. Visit our Medicaid team at our exhibit hall booth, where we will have executive summaries on hand.

Medicaid Enrollment and Spending Growth

During the COVID-19 pandemic, Medicaid enrollment reached record highs as a result of the Families First Coronavirus Response Act, which authorized a 6.2 percentage point increase in the federal match rate, also known as the or Federal Medical Assistance Percentage until the public health emergency ended, provided that states did not disenroll people with Medicaid coverage. During this time, Medicaid and Children’s Health Insurance Program (CHIP) enrollment rose to 94 million in April 2023 from 71 million in February 2020. In FY 2024 and into FY 2025, states are concluding their Medicaid unwinding eligibility redeterminations.

Medicaid enrollment declined by 7.5 percent year over year in FY 2024 and is expected to further decline by 4.4 percent in FY 2025. However, net Medicaid enrollment remained above pre-pandemic levels. Total Medicaid spending growth slowed to 5.5 percent in FY 2024 and is expected to slow further to 3.9 percent in FY 2025. State shares of spending, however, rose by 19.2 percent in FY 2024 and is estimated to slow to 7 percent in FY 2025. According to FY 2025 enacted budgets, most states anticipate revenue growth will continue to flatten and expect state general fund spending growth to slow. More than half of responding states anticipated a state revenue shortfall to some degree (see Figure 1).

Figure 1. Percent Change in Medicaid Spending and Enrollment, FY 1998−2025

Source: FY 2024−2025 spending data and FY 2025 enrollment data are derived from the annual KFF survey of state Medicaid officials conducted by HMA, October 2024. All 50 states submitted survey responses by October 2024; state response rates varied across questions. FY 2025 projections based on enacted budgets. Historic data reflects growth across all 50 states and DC and comes from various sources.

Managed Care and Provider Rates

Capitated managed care remains the predominant delivery system for Medicaid in most states. Specifically:

A total of 46 states operated some form of Medicaid managed care (managed care organizations [MCOs] and/or primary care case management [PCCM]).
42 states contracted with risk-based MCOs.

States use a variety of risk mitigation tools to ensure appropriate payment levels for MCOs, including risk-sharing arrangements, risk and acuity adjustments, medical loss ratios, or incentive and withhold arrangements (see Figure 2).

Of the 41 responding MCO states, 25 reported seeking approval from the Centers for Medicare & Medicaid Services (CMS) for a capitation rate amendment to address shifts in the average risk profile of MCO members in FY 2024 and/or FY 2025 because of the unwinding.
Separate from the KFF report, HMA tracks state Medicaid managed care rate certifications. In addition, Wakely, an HMA Company, published a paper summarizing approaches taken by actuaries in 27 states, and considerations for how they relate to the biggest enrollment shift in Medicaid since the implementation of the Affordable Care Act.

Figure 2. States Seeking Capitation Rate Amendments to Address Acuity Shifts Resulting from the Unwinding for the Rating Periods Beginning in FY 2024 and/or FY 2025

Source: Annual KFF survey of state Medicaid officials conducted by HMA, October 2024

States also are implementing a range of fee-for-service (FFS) rate increases across provider types. More than half of states reported increasing both inpatient and outpatient hospital FFS base rates in FY 2024. States reported rate increases for nursing facilities and home and community-based service providers more often than for other provider categories, reflecting ongoing staffing challenges for long-term services and supports (LTSS). Most states also reported rate increases for outpatient behavioral health providers, primary care professionals, and dentists.

Social Determinants of Health and Reducing Health Disparities

States are increasingly addressing social determinants of health (SDOH) and associated health-related social needs (HRSN) using several types of Medicaid authorities. For example:

A total of 39 states reported leveraging Medicaid MCO contracts to promote at least one strategy to address SDOH, including screening enrollees for behavioral health or social needs, providing referrals to social services, partnering with community-based organizations, and requiring providers to capture SDOH data and employ community health workers. See Figure 3 for details.

Figure 3. MCO Contract Requirements Related to SDOH, FY 2024−25

Nearly all states also had least one specified MCO requirement related to reducing racial and ethnic health disparities in FY 2025. About one-third of states reported at least one MCO financial incentive tied to reducing racial/ethnic disparities in place in FY 2024, most commonly linking capitation withholds or pay for performance incentives to improving health disparities.
Medicaid Section 1115 demonstrations are also being used to expand flexibilities by adding HRSN services and supports, including coverage of rent/temporary housing, utilities, and meal support. CMS has approved ten states under the new HRSN Section 1115 framework.

Benefits

In all, 41 states reported new or enhanced benefits in FY 2024, and 38 states reported plans to add or enhance benefits in FY 2025. Benefit enhancements continue to outpace benefit cuts.

States especially continue to expand behavioral health benefits, particularly for mental health and substance use disorder services.
A total of 11 states reported benefit actions related to the addition or expansion of crisis services, including mobile crisis responses and crisis services for youth.

Prescription Drugs

Rising prescription drug costs are an ongoing concern for states and nearly three-quarters of states reported at least one new or expanded initiative to contain prescription drug costs in FY 2024 or FY 2025.

Efforts to implement or expand value-based arrangements with pharmaceutical manufacturers were the most frequently mentioned cost-containment initiative across states.
Weight-loss prescription drugs also are a hot topic in the states; 13 states now cover GLP-1s (glucagon-like peptide-1s) prescribed to treat obesity. Most state Medicaid programs reported that cost was a key factor contributing to their decisions.

Key Opportunities, Challenges, and Priorities in FY 2025 and Beyond

Medicaid directors are focused on behavioral health, LTSS, and key initiatives related to SDOH or reentry services for justice-involved populations in FY 2025 and beyond. In addition, state-reported priorities included maternal and child health, rural initiatives, school-based services, continuous coverage for children, value-based payment and quality initiatives, and network monitoring and oversight.

Budget pressures and workforce shortages are among the main challenges for Medicaid. States noted adequate staffing and systems are obstacles for compliance with recently promulgated federal regulations, particularly the access and managed care rules, which present new reporting, oversight, and beneficiary protection responsibilities for states. Many states also reported a notable increase in per enrollee costs due to the greater healthcare needs of enrollees who retained coverage during the unwinding, adding pressure to budgets.

Connect with Us

The KFF Medicaid budget report provides important policy insights for federal and state government decisionmakers and Medicaid stakeholders. HMA’s Medicaid experts know the impact and planning needed to navigate these policies and to inform new decisions in 2025 and beyond. For more information about the key takeaways from the KFF report and HMA’s Medicaid solutions, contact our experts below.

How satisfaction impacts Medicare Advantage plans Star ratings

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Medicare Advantage (MA) Star ratings are more than a quality score—they shape the financial and operational success of MA plans. These ratings hinge on factors that every plan can impact by developing continuous improvement processes. The Consumer Assessment of Healthcare and Provider Systems (CAHPS) survey, Healthcare Effectiveness Data and Information Sets (HEDIS) ratings, and the Member Retention rate are all significant levers affecting Star ratings.

The importance of member retention rate

Member retention rate is a measure of member satisfaction but also impacts plan scale. One Medicare Advantage (MA) plan typically reports 0% voluntary disenrollment each year. Another plan is reporting 60% voluntary disenrollment. The voluntary disenrollment threshold is currently set at 18% for a 4-star rating and 10% for a 5-star rating on the measure. The average MA plan is losing more than $60 million in Medicare premium annually due to voluntary disenrollments. The voluntary disenrollment measure excludes members moving out of the service area or sponsor-initiated contractions of the service area.

CAHPS survey impact on Star ratings

CAHPS metrics are an important factor in the Centers for Medicaid and Medicare Services (CMS) Star rating system. MA plans need to develop strong companywide focused member experience processes to help them navigate the healthcare delivery system and community resources available. Evaluating the entire member experience from enrollment through access to care, messaging, outreach, customer service, to disenrollment, involves mapping out every member touchpoint, from a population health approach, to ensure the plan has a caring, approachable, supportive, and balanced experience with the member. Opportunities to eliminate frustrative process steps include identifying health related social needs and disparities that provide easier and time-sensitive access to care and services that are essential to increasing member satisfaction and engagement.

Health plans need a process to identify members who are most likely to be dissatisfied due to events and contact these members to understand the needs and resolve issues quickly. A dissatisfying process issue will repeat if not addressed. Understanding what data the health plan should be continually monitoring and the steps to effectively address any issues is essential to increasing trust with members. It is imperative that members get the opportunity to express their concerns to the health plan with the opportunity to resolve issues satisfactorily before they receive a CAHPS survey.

HEDIS and Star ratings

MA plans need to develop focused processes to proactively monitor HEDIS metrics and drive improvement interventions to keep up with the competition. Having a holistic approach to monitoring, understanding the status and what gaps persist, and a year-round strategy for addressing these gaps is essential to being able to focus efforts on improvement.

As the National Committee for Quality Assurance (NCQA) is moving from a hybrid sampled process to an administrative whole population calculation system, it’s essential that MA plans are addressing each measure in its entirety throughout the year. Digital measurement and Electronic Clinical Data Sets (ECDS) measures are increasing with CMS having a goal of interoperability and implementation of digital quality measures by 2030. Changes with CMS Star metric weightings has increased the total percentage that HEDIS impacts the overall calculation.

Partnering with Pharmacy Benefit Manager to improve Stars

Medicare Part D measures are among the most highly weighted measures in the CMS Stars performance program. Having a strong Pharmacy Benefit Manager (PBM) p artner is a necessity for success. Measures include medication adherence for high blood pressure, cholesterol, and diabetes. Successful plans ensure that members have sufficient prescription fills and re-fills to cover 80% of the days during the year. Measures are scored based on the percentage of members in the denominator who are compliant by the end of the measurement year. Member satisfaction with the plan’s pharmacy program is a key determinant in plan rating by the member and plan retention, impacting other parts of the CMS Stars program, whether Part D is measured alone or as part of an MA-PD plan.

Accelerating Star Rating Performance

The HMA Stars Accelerator Solution offers a comprehensive, results-oriented approach to Star Rating performance improvement that addresses the multifaceted challenges faced by health plans. It examines your plans leadership structure, operational processes, technology, reporting, member-centric engagement, provider partnerships, and develops a strategy for your organization using a data-driven approach for continuous improvement. Multiple “what-if” scenarios are developed that identify top priorities. Measure thresholds that are too far to reach are replaced by measures that are within reach during the final months of the year.

The Accelerator approach includes “all-hands-on-deck” – care coordination, customer service, network development, marketing, analytics, and others. Accelerator plans introduce provider and member incentives and/or fee schedule adjustments to increase interest. These plans also provide information to providers on those attributed members who have measure gaps to facilitate provider outreach that is coordinated with plan outreach.

HMA Accelerator plans experience a reduction in members choosing to leave, attributed more to prevailing cultural changes over time than to enhanced benefits or member rewards. This program is a cultural transformation designed to strengthen star performance. Click here to learn more about the HMA Stars Accelerator Solution’s capabilities, where you can request a copy of the HMA Stars Accelerator Playbook. Let’s have a conversation about how your plan can improve member retention for increased star rating and increased enrollment scale.

We are also holding two webinars that may be of interest:

Falling Stars: Who’s Who in the 2025 Star Ratings
November 7, 2024 – 3:30 PM ET
Register now

Colleagues from Wakely Consulting Group, an HMA Company, will discuss trends in Overall Star Ratings, the appeals and lawsuits filed in response, and future changes to the Star Rating program that are likely to depress Star Ratings even further over the next few years.

Mastering Star Performance: Strategies from the HMA Stars Accelerator Program
November 13, 2024 – 12:00 PM ET
Register now

In behavioral health, parity is essential, but not enough

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Today’s post is by Linda Rosenberg, who has recently joined HMA as a Senior Advisor. In this blog she offers her perspective on parity rules for behavioral health from her many years of experience in the field, most recently as the President and CEO of the National Council for Mental Wellbeing until her retirement in 2019 and as part-time faculty member at the Columbia University Department of Psychiatry.

Attending the 2024 Alignment for Progress conference and experiencing the collective commitment to the 90/90/90 goals, I was once again struck by the groundbreaking nature of the Mental Health Parity and Addiction Equity Act of 2008. The legislation was the critical step in ensuring mental health and substance use is treated on equal footing with physical health. Patrick Kennedy, both as the driver of the Act and in his ongoing advocacy helped us to reshape national conversations and policies.

The new regulations released by the Biden administration add much-needed teeth to the Mental Health Parity and Addiction Equity Act. The regulations take on one of the biggest ongoing challenges: the lack of adequate provider networks. Behavioral health clinicians are far harder to find in-network compared to medical providers, with many leaving networks due to low reimbursement rates. Under the new regulations, insurers must maintain adequate networks, regardless of the challenges, which will likely come with significant costs to entice clinicians back.

Implementation of the regulations won’t be simple. The insurance industry is sorting out what compliance will mean to their operations and bottom line. The federal government is struggling to fund and build a monitoring infrastructure. State governments need to understand their roles and responsibilities. And patients and the people who love them need to learn about their expanded rights and how to exercise those rights. Everyone has a job to do.

The intent of the parity law was about ensuring that mental health and addiction services are treated with the same urgency, seriousness, and respect as any other form of medical treatment. And yet parity has remained a promise unfulfilled for too many. The new regulations are a welcome and necessary step forward, but they cannot address all that needs to be done. Parity is essential, but it’s not enough.

Early on in my tenure and long before I retired from the National Council for Mental Wellbeing, a very special member and mentor Carl Clark MD, CEO of WellPower in Denver shared a secret with me. There are “wicked” problems, and wicked problems don’t have a single solution. A wicked problem is complex and interconnected … and has no stopping rule, rather wicked problems are opportunities for progress.

For too long I’ve listened to too many talks and read too many reports about “fixing” or “creating” a behavioral health system, but the reality is far more complex, far more “wicked”. Fragmentation is endemic to all of healthcare in the USA, we have no single healthcare system and no unified behavioral health system either. We have thousands of systems—public, private, nonprofit, hospital-based, and government-run – each serving different populations and communities with varying levels of resources and approaches and each dependent on a bottom line.

The fight for parity was never just about changing laws—it’s about changing hearts, minds, and systems, reshaping the way we understand and deliver care across all these thousands of systems we’ve created and continue to create.

Well intentioned programs with layered initiatives focused on whole health, social determinants of health, and other efforts are adding complexity to a system that’s already overwhelming for the very people these systems are supposed to serve.

What we need is a financing model that ties all the pieces together – Certified Community Behavioral Health Centers (CCBHCs) are a promising start – a financing model that pays for the continuum of services, inpatient and community, rather than the current fragmented approach that pays for pieces separately. At the same time, we need to leverage technology to alleviate pain points, establish desperately needed standards of care, and provide decision support for both clinicians and patients. With technology, we can measure and benchmark care across systems, creating transparency and accountability at every level.

By aligning financing with the full spectrum of services and using technology to drive transparency and accountability, we can finally begin to address the wicked problems that prevent effective mental health and addiction care. As I help non-profits, health technology companies, and venture firms build growth strategies that result in consumer and economic benefits, I understand that the new regulations give us a foundation to build on—the rest is up to us.

Nevada releases Medicaid managed care RFP: State will expand managed care statewide into rural areas

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This week, our In Focus section highlights the State of Nevada’s October 21, 2024 request for proposals (RFP), which will expand Medicaid managed care to cover nearly all populations in all counties. The Department of Health and Human Services’ Division of Health Care Financing and Policy (DHCFP) estimates that the expansion statewide will cover 75,000 additional individuals who live in rural areas, including children, parents, and adults without children. The expansion to rural areas in all counties presents new opportunities and critical issues for managed care plans, ensuring that they meet the needs of rural populations effectively.

Background

In 2024, Nevada covers 788,000 Medicaid members, with risk-based capitated Medicaid managed care making up about 75 percent of the total Medicaid population. Managed care covers traditional Medicaid and expansion, the Children’s Health Insurance Program (CHIP) known as Nevada Check Up, and children who have aged out of foster care. Enrollment in an MCO is mandatory for these populations. Currently, Medicaid managed care is only offered in the urban Washoe and Clark counties, which include cities such as Reno and Las Vegas.

Nevada has four MCOs that were procured in 2021: Centene/SilverSummit HealthPlan, Elevance/Anthem, Molina, and UnitedHealthcare/Health Plan of Nevada. These MCOs serve approximately 588,000 beneficiaries in Urban Washoe and Urban Clark counties as of August 2024.

United and Elevance make up the majority of market share by enrollment, with 34.4 percent and 33 percent respectively.

Individuals who receive Medicaid through fee-for-service (FFS) are Medicaid-enrolled children in foster care, juvenile justice, and child welfare systems; individuals with disabilities; seniors; and individuals receiving services through one of the three 1915 home and community-based waiver programs. These individuals will continue to receive services through FFS.

RFP Highlights

The RFP describes the state’s three managed care service areas (SA): Urban Washoe, Urban Clark, and Rural. The Rural SA will include all other counties in Nevada in addition to the rural areas of Washoe and Clark counties.

MCOs must bid on all service areas. DHCFP anticipates selecting four plans. The two awarded vendors with the highest rural care score will operate in all three SAs. The remaining awarded vendors will operate in Urban Clark and Urban Washoe SAs. The state has the option to award a fifth contract to an MCO to operate in the Urban Clark SA only.

The RFP focuses on rural care and policies designed to improve outcomes and access to care, reduce burdens for providers to participate, and simplify administrative tasks for the state. MCOs will need to show their understanding of the unique challenges facing rural providers. They will describe their approach for provider outreach, contracting, and provider training strategies in rural areas, with a focus on primary care, maternal and child health, and behavioral health. Due to the geographic limitations, telehealth will also play a strong role. MCOs will need to address limitations such as access to internet and provide an approach to help members access telehealth. Additionally, MCOs will need to provide their experience in managing non-emergency medical transportation (NEMT) in rural areas and describe an approach for establishing and maintaining a network of transportation providers in these remote areas.

MCOs also will be required to offer at least one Silver and one Gold Qualified Health Plan (QHP) on Nevada Health Link Marketplace by the 2026 coverage year. The state expects this contractual requirement will help reduce churning and improve continuity of care for individuals and families who have a change in eligibility status.

MCOs must also contract with providers that use alternative payment methodologies (APMs), and plans will need to outline value-based purchasing (VBP) strategies within their proposals. APM contracting strategies must support priority areas such as addressing health-related social needs (HRSNs) and improving health equity, access, behavioral health, and maternal and child health outcomes. APM contracting strategies must include quality measures in the payment methodology and outline reporting and estimated financial details. Additionally, MCOs are required to develop a Population Health Program, so proposals must outline how it will leverage specific APMs to meet the program’s goals.

Evaluation

MCOs will require a minimum score of 945 points (out of 1,350 points) on the Technical Proposal to be eligible to win a contract. The Building Provider Networks and Access to Care technical questions is worth the most points, 450, while 300 points are available under the Rural Care and Service Area Expansion section. The table below provides a breakdown of the Technical Proposal Scoring.

The state assigns the highest number of points to the section addressing provider networks and access to care followed by the section addressing rural care and service area expansion.

Timeline

Key Considerations

HMA experts identified the key considerations for MCOs, partners to MCOs, providers who will furnish services to members, and other interested stakeholders.

The Building Provider Networks and Access to Care Rural Care and Service Area Expansion sections together are worth 750 points, most of the minimum needed, and more than half of the total available points. This is a strong indicator of that MCOs need to demonstrate capacity and innovation to ensure access to members using multiple strategies. Ensuring a robust network of healthcare providers in rural areas is crucial. This includes recruiting and retaining providers who are willing to serve in these regions.
In this RFP, DCHFP is evolving its value-based payment (VBP) initiatives and expectations for MCOs. The VBP strategies are intended to enhance care quality, improve patient outcomes, and ensure the sustainability of the Medicaid program. MCOs will need to design these models and successfully work with providers to implement the strategies and models.
Both improving maternal and child health outcomes and addressing mental health and substance use disorders are priorities for the state. These can be more challenging in rural settings due to limited access to specialized care and will require rural specific solutions.
Changing the Medicaid delivery system model in some rural areas may create the need for building awareness and understanding for the changes that come with this transition. MCOs should be prepared to effectively address the issues of equity and disparities that are present in in rural communities.

Connect with Us

HMA’s experts understand the Medicaid managed care environment and specific issues presented by rural areas. We work with clients to address the multilevel challenges for delivery of quality healthcare and social services to rural populations, and the workforce concerns they create. We identify and help plan for access issues such as lack of services, transportation difficulties, and socio-economic barriers. HMA knows the difficulties that often keep rural providers and organizations from achieving their full potential to serve and support their communities’ need and help Medicaid clients in rural areas in states around the country to solve these difficult problems.

Read more about the work we are engaged in with a range of healthcare industry leaders focused on rural and frontier areas.

Healthcare solutions unlocked: Key takeaways from the 2024 HMA Conference

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The HMA Conference – Unlocking Solutions in Medicaid, Medicare, and Marketplace – was held in early October in Chicago, drawing a crowd of 350 participants hailing from all parts of the healthcare ecosystem. In the words of one attendee, what made the HMA conference unique was that “it was very rare to have providers, CBOs, health systems, insurers, and public sector organizations in one place…I gained significant value by viewing similar issues from different perspectives.”

Attendees participated in plenary sessions and breakouts that were grounded in Medicaid, Medicare, and Marketplace, with each session extending beyond the traditional topics for these public health insurance programs. Attendees were challenged and inspired to consider the cross-cutting work underway to address health equity, the integration of housing into healthcare, innovative strategies for behavioral health coverage for adults as well as children and families involved in the child welfare system, and the opportunities for federally qualified health clinics to engage in value-based care delivery to improve outcomes.

Signature HMA discussions with health plan leaders and Medicaid directors also provided valuable insights that will help guide the next phase of innovative programs and technologies designed and deployed to improve health. Breakout sessions offered in-depth exploration across Medicaid/Duals, Medicare/MA, and Marketplace/ACA tracks, alongside discussions on demand for innovation, advances in treating sickle cell disease, and creative workforce strategies. The conference concluded with a panel that prepared attendees for policymaking in the post-election, post-Chevron deference landscape.

The HMA event created opportunities to learn and network with potential partners against the background of the city of Chicago skyline, as one participant put it, “away from the daily craziness.” The discussions were robust and focused on new ideas that can be deployed by stakeholders all trying to improve the accessibility, quality, equity, and value of healthcare.

Listed below are conference takeaways that will be of interest and relevant to the broader healthcare ecosystem:

Systemize the little things that improve outcomes.

Keynote speaker Dr. Darshak Sanghavi from ARPA-H challenged people to focus on systematizing the “little things” that drive measurable improvements in outcomes as a source of meaningful innovation. His presentation focused on how ARPA-H is investing differently in private sector innovation – not just big breakthroughs, but also in data-informed approaches that produce consistent quality.

Housing is a healthcare issue.

There is increasing overlap between initiatives to address housing support in Medicare and Medicaid. Bridging diverse sectors and stakeholders is essential to address critical gaps in service delivery. HMA’s new Housing Services & Supports practice group recognizes that housing is part of healthcare, but it does not have to be fully funded by healthcare entities.

Cross-payer collaboration would improve behavioral health.

Behavioral health coverage has historically relied on the Medicaid-based chassis of coverage, but the breadth of needs and federal parity requirements have created an urgent need for new approaches to coverage across all systems and all payers. Cross-payer innovation and collaboration are essential, and systems need to position themselves to scale effective solutions that allow individuals to access services when they need them. In particular, youth and family voices must be part of the transformation of children’s mental health systems to smooth their experience.

The ACA is stable, but 2025 brings uncertainty.

The stability and future success of the ACA marketplaces hinge on the decisions of the 119th Congress regarding the extension of subsidies. If these subsidies are reduced or cancelled it could disrupt what has become a robust and reliable segment of the health insurance market, potentially requiring another pivotal transformation.

Community collaboration can bridge Medicaid health gaps.

New norms are emerging in the Medicaid program. There is unprecedented policy and programmatic work underway to ensure member experiences are informing the design of Medicaid programs as well as the type and pathways for accessing health and health adjacent services. Federal and state government, managed care plans, and providers must work together to bridge the gap to ensure Medicaid programs are best able to serve their members.

Interoperability remains foundational to quality improvement.

We have many different information systems, but when data is pushed to providers to help them manage their patient panel — ED visits, medications, and other data – higher quality care is more likely to be provided to patients.

Provider networks can be structured to ensure success in value.

Medicare providers are embracing value-based care on different timelines and in varied ways. Policymakers, health plans, and other stakeholders need to think carefully about how to structure networks with those providers who are doing it well to get the best results.

Clinics need help with data and financing to drive value-based outcomes.

Poverty is the primary diagnosis for patients of federally qualified health centers (FQHCs), and payment can better recognize the connections FQHCs make to anti-poverty services and programs. As the healthcare industry moves providers along the trajectory of value-based payment, FQHCs will be positioned to deliver whole person care if their data and financing is aligned.

These – and other takeaways and partnerships – will inform strategic, policy, programmatic and operational decisions at the hundreds of organizations represented at the HMA conference. They are also key points as we shape the conversations for the 2025 event.

Medicare Advantage Plans: It’s time for the Stars 4th quarter push

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The Medicare Stars program is a year-round endeavor for Medicare Advantage (MA) plans. That being said, all MA plans intensify their Stars campaign during the fourth quarter of each year. The most important aspect of the fourth quarter push is to know where to focus. MA Star ratings are more than a quality score—they shape the financial and operational success of MA plans.

Some measures may no longer apply in the fourth quarter. Once the Consumer Assessment of Healthcare Providers & Systems (CAHPS) survey has been completed, the fourth quarter becomes a time to continue the effort to enhance and improve consumer experience for next year’s CAHPS survey. For example, post discharge follow-up is time limited and going back to earlier quarters is not possible. Adherence measures work similarly; if a member has already lost 80% of days covered, coverage cannot be made up during the fourth quarter. The message should be “focus only on measures where you can make a difference.”

Mammograms and colorectal exams can occur any time of year. These two measures should definitely be the focus of a fourth quarter push. A constraint may be provider capacity since all MA plans are focused on the same measures. Measures with low denominators like the osteoporosis management measure may be an important element in fourth quarter strategies.

Star Ratings and Operational Excellence

Operational excellence begins with robust, accurate, and actionable data, and even using lean six sigma principles to drive process improvement. Advanced analytics platforms are needed to aggregate and analyze vast amounts of healthcare data and operational data. Accurate risk adjustments, quality measurement, and operational metrics like appeals are essential. Data discrepancies or delays result in penalties, lower Star ratings, and incorrect payments. MA plans must develop processes to validate via quality assurance process and audit data regularly against CMS requirements.

Operational excellence also relies on a well-trained engaged workforce. Training should focus on fostering a culture of continuous improvement, where every team member is aligned with the organization’s goals of improving quality and operational performance.

Star ratings are a byproduct of strategic, data-driven approaches to care management, quality improvement, and operational efficiency. Success lies in the ability to optimize data integrity, streamline care coordination, and proactively resolve member concerns.

Accelerating Star Rating Performance

The HMA Stars Accelerator Solution offers a comprehensive, results-oriented approach to Star Rating performance improvement that addresses the multifaceted challenges faced by health plans and makes sure that your intensified 4^th quarter effort is productive. The HMA Stars Accelerator Solution analytics provides information to plans about prioritizing measures during the fourth quarter push. It examines your plans leadership structure, operational processes, technology, reporting, member-centric engagement, provider partnerships, and develops a strategy for your organization using a data-driven approach for continuous improvement. Multiple “what-if” scenarios are developed that identify top priorities. Measure thresholds that are too far to reach are replaced by measures that are within reach during the final months of the year. The Accelerator approach includes “all-hands-on-deck” – care coordination, customer service, network development, marketing, analytics, and others. Accelerator plans introduce provider and member incentives and/or fee schedule adjustments to increase interest. These plans also provide information to providers on those attributed members who have measure gaps to facilitate provider outreach that is coordinated with plan outreach.

As the fourth quarter push occurs in the middle of the Annual Enrollment Period, lessons learned can be applied immediately. The HMA team can backstop your organization during this very busy time, avoiding missed opportunities. The fourth quarter push does not end until midnight January 31^st of each year.

The HMA Stars Accelerator Solution will create a permanent change in your organization that is designed to yield a 4-star rating or higher each year. The Accelerator is a cultural transformation designed to strengthen star performance. Click here to learn more about the HMA Stars Accelerator Solution’s capabilities, where you can request a copy of the HMA Stars Accelerator Playbook. Let’s have a conversation about how your fourth quarter push is designed and unfolding.

We are also holding two webinars that may be of interest:

Mastering Star Performance: Strategies from the HMA Stars Accelerator Program
November 13, 2024 – 12:00 PM ET
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CMS releases draft benefit and payment parameters for 2026 Marketplace

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Our second In Focus article reviews the recently proposed Notice of Benefit and Payment Parameters (NBPP) for 2026. The Centers for Medicare & Medicaid Services (CMS) proposed rule, released October 10, 2024, describes the policy and payment changes that will affect the Affordable Care Act (ACA) markets in 2026. Public comments must be submitted to CMS by November 12, 2024. Key highlights from the proposed rule follow.

Broker Oversight and Monitoring

CMS proposes to increase oversight and accountability for brokers and agents that write policies through HealthCare.gov. In response to the discovery earlier this year of fraudulent actors reassigning broker designations and switching consumer enrollments without their permission or knowledge, CMS has already implemented several corrective actions, including the suspension of 850 Healthcare.gov agents and brokers. CMS intends to build on these actions through the following interventions:

Clarify that lead agents, typically an agency owner or executive, are subject to the same rules as individual brokers, agents, and web-brokers and that enforcement action can be taken against the lead agents if they explicitly or implicitly condone misconduct or fraud
Broaden CMS’s authority to suspend broker and agent system access, inclusive of instances of suspected misconduct that affects eligibility determinations, operations, applicants, or systems
Update the model consent form to include documentation of the broker reviewing and confirming the accuracy of submitted application information with the consumer.

Marketplace User Fees

CMS proposes to increase the user fee collected to pay for administration of HealthCare.gov as follows:

Between 1.8 percent and 2.5 percent in 2026 for federally facilitated marketplaces (FFM) states, up from 1.5 percent of monthly premiums in 2025
Between 1.4 percent and 2 percent in 2026 for state-based marketplaces on the federal platform (SBM-FPs), up from 1.2 percent in 2025

The proposed changes are due, in part, to uncertainty caused by the future of the enhanced premium tax credits that are set to expire at the end of 2025. The enhanced premium tax credits are the driving force behind the increase in nationwide marketplace enrollment to more than 21 million people in 2020 from 11.4 million in 2020. If not extended, or if it takes past March 2025 for Congress to act, CMS has indicated the user fees will increase in 2026 to 2.5 percent for FFM states and 2% for SBM-FPs to accommodate expected enrollment declines. Notably, after several years of significant decreases, CMS is proposing to increase the user fees above 2025 levels regardless of the outcome of the enhanced premium tax credits.

Plan Limits for Non-Standard Plans

CMS proposes to clarify rules limiting the number of non-standardized plans an issuer can offer through HealthCare.gov (two or less in 2025). The limit is applied per product network type (e.g., HMO, PPO), per metal level, per service area, per inclusion of adult/pediatric dental and/or vision benefits (with additional exceptions, starting in payment year (PY) 2025, for plans with specific design features that would substantially benefit consumers and meet other requirements). To maximize the number of non-standardized plans offered on HealthCare.gov, an issuer could offer up to 16 plans per metal level and network type in a given service area by creating every combination of adult dental, pediatric dental, and adult vision (or even more, if plans meet the exception requirements).

Though CMS does not limit the number of standardized plan options an issuer offers on HealthCare.gov, they propose reinstating a meaningful difference standard to prevent consumer confusion and unnecessary plan proliferation. The proposed standard is similar to the removed standard from 2019; for plans in the same metal level, product type, and service area, a reasonable consumer needs to be able to identify at least one material difference in benefit coverage, provider networks, and/or formulary.

New Premium Payment Threshold Options for Issuers

CMS proposes new options for issuers to avoid triggering late payment grace periods for consumers who make most but not all of their premium payment to minimize termination of coverage for consumers who owe a small amount. The options include:

The current option of a “reasonable” percentage of net premium. CMS proposes codifying 95 percent as the minimum threshold.
New proposals of as low as 99 percent of gross premium and a fixed-dollar threshold of $5 or less.

CMS is also considering limiting issuers to offering just one payment threshold option—either fixed-dollar or percent of premium—to avoid consumer confusion.

Increased Transparency for State-Based Marketplaces

CMS proposes new initiatives to promote transparency into state-based marketplace (SBM) program operations. These initiatives include:

Publishing State Marketplace Annual Report Tool (SMART) submissions, which are used to monitor SBM compliance with select eligibility and enrollment, program integrity, and financial reporting requirements. SBMs must annually participate in independent programmatic and financial audits as part of SMART. CMS proposes to make the 2023 SMART submissions public in spring 2025.
Expanding the disclosure of SBM information to include data collected but not currently published, including details on SBM eligibility, enrollment, and plan certification policies as well as Navigator program spending, call center metrics, and website traffic data.

SBMs already are required to publish programmatic and financial audit summaries and generally publish robust data and information on their program operations through public reports and meetings; however, this information is neither centrally located nor consistently published across all SBMs.

Key Considerations

The proposed 2026 NBPP would build on previous actions that CMS has taken to address fraudulent broker and agent activity and to shore up financial sustainability of Healthcare.gov operations in light of uncertainty about the enhanced premium tax credits. It also seeks to make clear how plan variations adding dental or vision benefits factor into HealthCare.gov plan limits and gives issuers new premium payment threshold options. Lastly, it proposes new transparency requirements for SBMs. Interested stakeholders, including SBMs and issuers, should monitor how these proposed changes will affect consumers, operational processes, product strategy, and financial sustainability.

Connect With Us

The Health Management Associates, Inc., team has the depth, experience, and subject matter expertise to assist with tailored analysis and the modeling capabilities to assess the policy impacts to consumers, marketplaces, and issuers. If you have questions or want to discuss the proposed rule, contact our featured experts below.

For additional information on elements of the proposed NBPP not discussed here, Wakely Consulting’s white paper, Summary of Provisions of HHS’ Proposed 2026 Notice of Benefit and Payment Parameters and Other Key Regulations, highlights the proposed changes to the Risk Adjustment program, Medical Loss Ratio, and the Actuarial Value Calculator, among other changes.

Medicaid unwinding: enrollment shifts and Q2 2024 managed care insights

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This week, our In Focus section addresses the significant change in national and state-specific Medicaid enrollment as a result of the Medicaid unwinding process. First, we highlight notable enrollment changes in the post-unwinding months. Next, we provide an update on second quarter (Q2) 2024 monthly capitated, risk-based Medicaid managed care enrollment. The experiences of the unwinding and the impact and current enrollment landscape are directly affecting strategic and programmatic decisions across all states, Medicaid managed care plans, and their partners and stakeholders.

Background

As explained in previous In Focus articles (here, here and here), federal COVID-19 relief laws allowed states to receive higher federal funding for Medicaid as long as they did not terminate Medicaid coverage for anyone enrolled in Medicaid during the public health emergency. One result of the continuous coverage policy was sustained growth in Medicaid enrollment. More than 21 million additional individuals were continuously enrolled in Medicaid for up to three years between February 2020 and March 2023. In December 2022, Congress ended the Medicaid continuous coverage policy after March 31, 2023. States were allowed to begin processing redeterminations as early as February 2023 and start disenrolling ineligible individuals as early as April 2023.

The Centers for Medicare & Medicaid Services (CMS) offered states a series of flexibilities intended to facilitate the unwinding process, which reduced some administrative burden and improved continuity of coverage for Medicaid enrollees. Most states adopted at least one of the flexibilities, with many using multiple options. Nonetheless, variations in timing and implementation of the flexibilities have affected their effectiveness.

California, for example, received federal approval for flexibilities in its automatic redetermination process early on but implemented enhanced automation months into its unwinding process. This increased automation cut the number of disenrollments in half. Another key challenge during the unwinding was contacting enrollees about the redetermination process, and several of the federal flexibilities involved increased coordination with Medicaid managed care organizations (MCOs).

Key Takeaways

States lost an average of 15 percent of their peak COVID-era Medicaid enrollment between March 2023 and June 2024. Several effective practices could be adopted to address those individuals and families who remain eligible but not enrolled and to minimize procedural disenrollments in the future. Below is a snapshot of data and early insights Health Management Associates, Inc. (HMA), experts identified through their work with Medicaid stakeholders and analysis of Medicaid enrollment and eligibility data.

Some states are several months beyond their anticipated unwinding period. Still, more than half of states continue to see small net reductions in their Medicaid populations (see Table 1).

Table 1. Enrollment Changes during and after Unwinding, September 2024

Despite the ongoing enrollment reductions, net Medicaid enrollment generally remains above pre-pandemic levels and is likely to remain so. This enrollment change has been boosted by several states—Idaho, Utah, Nebraska, Oklahoma, Missouri, South Dakota, and North Carolina—which expanded their Medicaid programs immediately before or during the COVID-19 pandemic.
Following the official end of the Medicaid unwinding period, the acuity of the Medicaid population increased significantly. Early actuarial assessments, including those conducted by HMA actuaries, indicate that the average Medicaid population is older and sicker than before the unwinding started. Consequently, Medicaid populations may be more complex and expensive to manage—prompting states and managed care plans to reassess their capitation rates for current and future years. The 24th annual Medicaid Budget Survey conducted by The Kaiser Family Foundation (KFF) and Health Management Associates (HMA), in collaboration with the National Association of Medicaid Directors (NAMD), also provides key take-aways on provider rates and managed care, among other issues in the report As Pandemic-Era Policies End, Medicaid Programs Focus on Enrollee Access and Reducing Health Disparities Amid Future Uncertainties: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2024 and 2025.

Medicaid Managed Care Enrollment Update – Q2 2024

Today, HMA Information Services (HMAIS) posted a quarterly update for Medicaid managed care enrollment. We collected and analyzed monthly Medicaid enrollment data from the second quarter (Q2) of 2024 (April−June) in capitated, risk-based managed care in 29 states. These data allow for the timely analysis of enrollment trends across states and MCOs as well as state and plan-specific analyses of managed care enrollment following the official end of the Medicaid unwinding period.1

The 29 states highlighted in this review have released monthly Medicaid managed care enrollment data via a public website or in response to HMA’s public records request. This report reflects the most recent data posted or obtained. HMA has made the following observations related to the enrollment data (see Table 2):

As of June 2024, Medicaid managed care enrollment across the 29 states tracked in this report was 62.7 million, down by 10.2 million (14 percent) year over year.
In our review, all but one state, Mississippi, saw decreases in enrollment in June 2024 because of Medicaid redeterminations.
The 22 expansion states included in the review—Arizona, California, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Virginia, Washington, and West Virginia—have seen net Medicaid managed care enrollment decrease by 6.2 million (11.1 percent) in the past year, to 50.1 million members at the end of Q2 2024.
The seven states that had not expanded Medicaid as of June 2024—Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and Wisconsin—have seen Medicaid managed care enrollment decrease 24 percent to 12.6 million members at the end of Q2 2024.

Table 2. Monthly MCO Enrollment by State, April−June 2024

Note: In Table 2 above, “+/- m/m” refers to the enrollment change from the previous month. “% y/y” refers to the percentage change in enrollment from the same month in the previous year.

It is important to note the limitations of the data presented. First, not all states report the data at the same time during the month. Some of these figures reflect beginning of the month totals, whereas others reflect an end of the month snapshot. Second, in some cases the data are comprehensive in that they cover all state-sponsored health programs that offer managed care options; in other cases, the data reflect only a subset of the broader managed Medicaid population. This limitation complicates comparison of the data described above with figures reported by publicly traded Medicaid MCOs. Hence, the data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than a comprehensive comparison, which cannot be established based solely on publicly available monthly enrollment data.

Connect with Us

More detailed information on the Medicaid managed care landscape is available with a subscription to HMAIS, which collects and aggregates Medicaid enrollment data, health plan financials, and additional actionable information about eligibility expansions, demonstration and waiver initiatives, as well as population- and service-specific information, such as Medicare and Medicaid dually eligible beneficiaries, ABD populations, long-term services and supports, and patient-centered medical homes. HMAIS also includes a comprehensive public documents library containing Medicaid requests for proposals and responses, model contracts, scoring sheets, and protests.

For additional analysis of the Medicaid unwinding initiative and HMAIS’s enrollment data and subscription service, contact our featured experts below.

24th annual Kaiser Family Foundation state Medicaid budget survey released

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The 24^th annual Medicaid Budget Survey conducted by The Kaiser Family Foundation (KFF) and Health Management Associates (HMA), in collaboration with the National Association of Medicaid Directors (NAMD), was released on October 23, 2024 in the report As Pandemic-Era Policies End, Medicaid Programs Focus on Enrollee Access and Reducing Health Disparities Amid Future Uncertainties: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2024 and 2025.

At the end of state fiscal year (FY) 2024 and heading into FY 2025, states were wrapping up the unwinding of the pandemic-related continuous enrollment provision, focusing on an array of other priorities, and facing uncertainty about the stability of state revenues. States were also looking ahead to federal and state elections in November and the potential implications of those elections for Medicaid enrollees, states, and providers. As states have emerged from the now-expired COVID-19 Public Health Emergency, which profoundly affected Medicaid enrollment and spending, many are focused on using Medicaid to address long-standing health disparities (often exacerbated by the pandemic), improve access to behavioral health services and long-term services and supports (LTSS), address enrollee social determinants of health, and implement broader delivery system and value-based initiatives. The report includes key take-aways on provider rates and managed care, benefits and prescription drugs, and social determinants of health and reducing health disparities.

The report was prepared by Kathleen Gifford, Aimee Lashbrook, and Caprice Knapp from HMA; and by Elizabeth Hinton, Elizabeth Williams, Jada Raphael, Anna Mudumala, Robin Rudowitz from the Kaiser Family Foundation. The survey was conducted in collaboration with NAMD.

read the 2024 report

Other links:
Press release
Growth and Spending report

The release of 2025 Medicare Advantage Star ratings and improving future rating cycle performance

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This week, our In Focus section reviews the release of the 2025 Medicare Advantage (MA) Star Ratings and pivots to the actions that Medicare Advantage Organizations (MAOs) could take to improve performance in future rating cycles.

Background

Newly released MA Star Ratings information is based on the 2025 Star Ratings published on the Medicare Plan Finder on October 10, 2024. Star Ratings are largely based on the quality of care, member satisfaction, and retention.

The Centers for Medicare & Medicaid Services (CMS) increased many measure-level cut points from the 2024 Star Ratings, requiring MAOs to achieve higher performance on these measures to receive a four or higher Star Rating. An earlier In Focus reviewed a white paper published by Wakely, an HMA Company, which provides an in-depth analysis of CMS’s latest policy and methodology changes that affect an MAO’s overall quality performance and Star Rating.

Topline Results

Significant attention is being given to the notable overall industry decline in Star Ratings. Specifically, only seven Medicare Advantage (MA) plans received an overall 5-Star Rating in 2025, compared with 38 in 2024. Only 40 percent of MA prescription drug plans achieved a score of four or five Stars versus 43 percent in 2024.

Key Considerations for Star Ratings, and What to Do About Them

The ratings significantly influence the financial and operational effectiveness of each MAO, directly affecting plan reimbursement and ability to enhance benefits. The 2025 Star Ratings will impact 2026 MA quality bonus payments. Health plans that earn four or more Stars are eligible for quality bonus payments and greater rebate percentage the following year. Plans may reinvest payments to make plan products more attractive to beneficiaries and emphasize a higher rating in their marketing efforts.

In the wake of CMS’s release of Star Ratings, an intense focus has shifted to each MAO’s specific overall Star Rating. Given the clear implications for population health and health plan sustainability, companies will need to quickly pivot to address opportunities for performance improvement. Key steps to optimize Star Ratings include:

Grow Foundational Knowledge – MAOs need to build broad organizational understanding of the domains and measures, the weights, the levers that can affect individual measures and domains, and the rating cycle.
Assess the Current Landscape – Organizations will benefit from having executive sponsorship, a governance structure, and overall leadership for each domain and measure. They should develop the ability to report on measures, and set interim goals. Assessments also need to ensure the network and bonus structure are aligned with Stars.
Develop a Roadmap –A calendar of events is critical for supporting performance improvement. This should include a preoperational and operational strategy as well as a year-over-year workplan to track, assess, and identify systems, technology, processes and people with a process for evaluation. Formulate a hiring and investment plan, if needed.
Prepare for Reporting and Oversight – Develop a reporting and oversight structure, including a cadence of reporting and structure for review, process, and timing of reports by measure/domain leads. Ensure dashboards are updated annually to include new measures and weights and that a process is in place for managing display measures.

What to Watch

The MA landscape is highly dynamic, with some companies leading in market share, while others are leaders on quality ratings. As companies adapt to regulatory changes and strive for higher quality ratings, we can anticipate further shifts in the coming years. This will be exacerbated by shifts we are forecasting based upon the Health Equity Index and upcoming changes in Star weights. Strategies and actions MAOs implement in 2024 and 2025 will affect their 2026 Star Ratings.

Connect with Us

HMA experts have conducted in-depth analysis on all contracts, domains, and measures that roll into the Star Ratings. For further analysis of the 2025 trends and plan-specific impacts, contact our featured experts below.

Explore The HMA Stars Accelerator Solution for additional insights into programmatic strategies, best practices for design of meaningful solutions to implement, and approaches to measure the effectiveness of these solutions.

What to watch for in Medicare Advantage policy this fall

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This week’s In Focus section previews key public policy issues affecting Medicare Advantage (MA) and Medicare Part D that could potentially be addressed under regulations issued by the Centers for Medicare & Medicaid Services (CMS) later this fall. CMS’s highly anticipated regulations—which include annual programmatic, policy, and technical updates to the MA and Part D programs for the coming plan year—are under review at the Office of Management and Budget and are expected to be released in the coming weeks ahead.

In addition to the proposed rule, healthcare organizations are closely tracking CMS regulations that are expected to be released later this year, which would impact MA plan payment rates as well as proposed regulations intended to streamline the prior authorization process for prescription drug coverage under Medicare. This annual regulatory policymaking process is getting under way as the Medicare Open Enrollment period begins October 15, 2024, during which Medicare beneficiaries will compare Medicare health plan and drug coverage options and select the coverage that best meets their health care needs. (See Table 1 for key 2024 MA dates.)

As the last major Medicare policy regulations from the Biden Administration, healthcare entities can expect a continued focus on regulatory policies and requirements that strengthen program oversight and enhance beneficiary protections, while also seeking to maintain stability in Medicare benefits offerings and plan choices.

Following are some of the key issues to watch for as CMS’s annual regulatory process begins this fall.

Health Equity

Ensuring health equity is a foundational element of CMS’s strategic plan and the agency seeks to advance health equity goals and improvements across all of its programs, including Medicare Advantage. Beginning next year, MA plans will be required to conduct an annual review and analysis of utilization management (UM) policies and procedures from a health equity perspective. By requiring public reporting and identifying any impacts on underserved populations, this requirement is designed to ensure MA plans’ UM policies and procedures ensure access to medically necessary care, especially for vulnerable, low-income populations, such as beneficiaries who receive the Part D low-income subsidy and those who are dually eligible for Medicare and Medicaid.

In addition, CMS has finalized rules to collect health equity data, including race and ethnicity data, and adopted changes to the MA quality measurement program that will provide incentives for MA plans to improve care for underserved and vulnerable populations, including beneficiaries with high social risk factors.

Stakeholders should expect CMS to continue building and strengthening policies to advance health equity goals while exploring new initiatives to reduce disparities and close gaps in care for vulnerable populations.

Consumer Protection and Oversight

Earlier this year, CMS launched a high-profile effort to increase transparency in Medicare Advantage, including the release of a request for information (RFI) to solicit public input on ways to improve data collection and enhance oversight over all aspects of the MA program. More details are available in the press release. In addition to seeking comments on improving overall MA data collection and public reporting, the CMS RFI on MA data collection solicited specific recommendations to improve data collection and accountability for MA plans’ provider networks and prior authorization process.

While the formal comment period closed in May 2024, responses to the CMS RFI on MA data collection can inform and shape future regulatory policy direction, as CMS continues to examine ways to improve transparency and oversight over MA plans.

Quality and Star Ratings

CMS will soon release the Medicare Advantage Star Ratings, which measure the quality of MA plans based on a range of quality and performance metrics. The Star Rating system provides beneficiaries with crucial information to compare plans and select the coverage option that best meets their needs. High-performing plans receive bonuses—which provides incentives for plans to continue to improve quality of care for beneficiaries and patient outcomes. Last year, MA plans received $11.8 billion in bonus payments, and 74 percent of MA beneficiaries were enrolled in plans that achieved a rating of four or more stars. For more information, read the issue brief.

On the regulatory front, CMS recently adopted significant changes to Star Ratings that continue to have far-reaching impacts on MA plans’ quality performance, which, in turn, will continue to shape and inform their quality improvement strategies. Among the notable regulatory changes CMS has adopted is the new Health Equity Index, which rewards MA plans that provide high quality care to beneficiaries with social risk factors, including low-income beneficiaries and those dually eligible for Medicare and Medicaid. Though this policy change takes effect in 2027, MA plans can take steps now to prepare and enhance their capabilities to improve quality of care for beneficiaries with social risk factors, including using targeted care coordination programs.

As policymakers and stakeholders continue to monitor the impact of recently finalized changes to MA Star Ratings, CMS will continue exploring improvements to the MA Star Ratings system that further raise the bar on quality and ensure the program aligns with CMS’s broader goals and objectives.

Prior Authorization

As MA plans have increased the use of prior authorization and drawn scrutiny among patient advocates and providers, CMS has taken important steps to streamline and improve the prior authorization process to ensure timely access to care for Medicare beneficiaries. These regulatory policy changes—which include continuity of care requirements beneficiaries, increased oversight over UM practices, and ensuing evidence-based clinical decisions within MA are consistent with traditional fee-for-service (FFS) Medicare—are intended to ensure prior authorization and other UM tools do not create barriers to medically necessary care for Medicare beneficiaries.

Policymakers continue to look for ways to further improve the prior authorization process, and CMS has signaled additional interest in further regulatory standards to strengthen oversight and improve beneficiary protections. Potential policy options CMS could pursue include requiring more detailed reporting by MA plans (including number of prior authorization requests, denials, and appeals by type of service), extending prior authorization standards and consumer protections to prescription drugs covered by Medicare, and improving the timeliness of prior authorization decisions to avoid delays in necessary care.

Risk Adjustment Payment Policy and Coding

CMS has adopted significant changes to the MA risk-adjustment model, which continue to be phased in over a three-year period (2024−2026). These changes include important technical changes to improve the model’s payment accuracy, including a focus on conditions that are subject to more coding variation. Because CMS risk-adjustment changes will be fully implemented by calendar year 2026, policymakers and stakeholders are closely monitoring whether CMS will pursue additional regulatory policies to improve the accuracy of the risk adjustment program and address coding issues.

Since 2018, CMS—as required by statute—has applied a coding intensity adjustment that reduces MA risk scores by 5.9 percent annually to ensure consistency with Medicare FFS coding. However, MedPAC and others have continued to raise concerns that MA risk scores are higher than those for similar Medicare FFS beneficiaries, even after accounting for the 5.9 reduction in MA risk scores, which results in increased payments to MA plans. As policymakers continue to evaluate changes to ensure the long-term sustainability of the Medicare program, CMS could consider further changes in this area to equalize payments between MA and FFS Medicare through risk adjustment or coding changes.

Table 1. Key 2024 Medicare Advantage Dates

Date	Event
September 2024	CMS announces average premiums, benefits, and plan choices for MA and Medicare Part D for 2025.
Early-to-mid October 2024	CMS releases MA and Part D plan Star Ratings 2025.
October 15, 2024	Medicare Annual Election Period begins. Medicare beneficiaries can enroll in MA or Part D plans for CY 2025.
October or November 2024	CMS CY 2026 Policy and Technical Changes to MA and Medicare Part D (CMS-4208).
November 2024	CMS Interoperability Standards and Prior Authorization for Drugs (CMS-0062).
December 7, 2024	End of Annual Election Period.

Next Steps

The imminent release of CMS regulations come at a critical time for the Medicare Advantage program, which continues to experience enrollment growth amid a challenging and ever-changing regulatory environment. MA plans and other stakeholders need to be prepared to engage in the formal notice and comment process as well as offer policy solutions and best practices to strengthen and enhance the program for the 33 million beneficiaries it serves.

The Health Management Associates, Inc. (HMA), team will continue to closely monitor the timing of the release of CMS regulations and will analyze the impact of the key provisions once these rules are released. We have the depth, experience, and subject matter expertise to assist organizations engaging in the rulemaking process and assessing their impact. HMA can also assist with tailored analysis and modeling capabilities to assess the policy impacts across the multiple rules and guidance.

If you have any questions about the forthcoming CMS regulations and potential impact on MA plans, providers, and beneficiaries, contact our featured experts below.

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Medicaid Enrollment and Spending Growth

Managed Care and Provider Rates

Social Determinants of Health and Reducing Health Disparities

Benefits

Prescription Drugs

Key Opportunities, Challenges, and Priorities in FY 2025 and Beyond

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The importance of member retention rate

CAHPS survey impact on Star ratings

HEDIS and Star ratings

Partnering with Pharmacy Benefit Manager to improve Stars

Accelerating Star Rating Performance

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Evaluation

Timeline

Key Considerations

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Star Ratings and Operational Excellence

Accelerating Star Rating Performance

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