HMA Weekly Roundup - September 4, 2024 - Health Management Associates (2024)

How States Are Shaping Medicaid Managed Care and Marketplace Participation

This week, our In Focus section reviews state policies designed to increase insurer participation in Medicaid managed care and Marketplace programs. As states seek to address healthcare costs, affordability, and consumer experiences, they are exploring a range of initiatives—from the rise of prescription drug affordability boards to cost containment commissions, cost growth benchmarks, transparency, and examination of mergers and acquisitions.

A notable trend is the use of state policy and purchasing power to encourage or mandate that Medicaid managed care organizations (MCOs) offer Marketplace plans. Dual-market participation can help smooth coverage transitions, ensure continuity of care, and expand consumer choice. The remainder of this article addresses original research and analysis of this trend by Health Management Associates, Inc. (HMA), experts Zach Sherman, Aimee Lashbrook, and Hannah Turner.

Current Landscape

In 2024, enrollment in the Marketplace program has surged to more than 21 million, approximately a 30 percent increase from 2023. This growth was largely attributed to the temporary enhanced subsidies that allowed more people to access affordable coverage. Over the past several regulatory cycles, federal policymakers also have taken steps to further align the Marketplace framework with Medicaid on key issues, such as essential community provider access, eligibility and enrollment processes, and plan design standards. In response, states are innovating to meet federal requirements while pursuing their own healthcare goals related to coverage, affordability, access, and healthcare outcomes. 

Value Proposition

A compelling value proposition for Medicaid MCOs to participate in the Marketplace (and vice versa) includes the ability to market to and retain people moving from one program to another as life circ*mstances change. Dual-market participation also supports diversification and growth strategies. In fact, enrollment in the Marketplace has nearly doubled since 2020. For Medicaid MCOs in particular, expanding product offerings to include Marketplace plans presents a unique opportunity to leverage existing provider networks and reimbursem*nt arrangements to deliver more competitive rates.

Consumers benefit when the same organization participates in both markets. Families with parents and children who obtain coverage under different programs have an opportunity to work with a single organization and choose providers from the same or overlapping networks. Income fluctuations may result in disenrollment from one program (e.g., Medicaid) and eligibility for a new program (e.g., Marketplace subsidies). Continuity of care policies can smooth these transitions in areas such as prior authorization, care management, and provider network.

State Strategies to Increase Dual-Market Participation

The Affordable Care Act expanded access to affordable health insurance coverage for as many as 45 million individualsby giving states the option to expand Medicaid and provide federal subsidies to people who purchase Marketplace plans. States are now using various strategies to encourage or require insurer participation in both programs to ease transitions for individuals and families “churning” from one program to another, increase competition and choice of Marketplace plans, and reduce the risk of coverage gaps. For example:

• Nevada is requiring any bidder that plans to respond to its upcoming Medicaid MCO procurement to separately submit a “good faith” response to the Battle Born State Plans (BBSP) RFP. This state-contracted, public option will be available on the Silver State Health Insurance Exchange beginning in 2026. Failure to submit a good faith proposal will disqualify an organization from participating in the Medicaid MCO procurement later this fall. Nevada’s current Medicaid MCOs must participate in the Marketplace by offering at least one Silver and one Gold qualified health plan (QHP) that has overlapping provider networks, serves the same service area, and charges reasonable premiums.

• Rhode Island and New Mexico require or intend to require that their Medicaid MCOs participate in the Marketplace. As an awardee of Rhode Island’s recent Medicaid MCO procurement, UnitedHealthcare, must reenter the HealthSource Rhode Island market in 2027. These states also have designed their Medicaid MCO auto-assignment methodology to favor enrollment in a Medicaid MCO affiliated with an individual’s previous Marketplace plan or a family member’s Marketplace plan.

• In its last Medicaid MCO procurement (2018), North Carolina offered bonus points to any bidder that agrees to offer a Marketplace MCO. The resulting contract codified the market entry commitment and included implications for failure to follow through. Nonfulfillment could result in the highest level of contract noncompliance and associated penalties.

• Arkansas expanded its Medicaid program using federal matching funds to purchase QHP coverage through the Marketplace. Minnesota, one of the few states offering a basic health program, contracts with the same organizations to provide coverage under both programs.

• Iowa uses contract language to encourage, but not require, Medicaid MCOs to participate in the Marketplace to facilitate continuity of care during coverage transitions.

The Centers for Medicaid & Medicare Services (CMS) collaborated with states to promote continuity of coverage following the end of the Medicaid continuous enrollment requirement established in the Families First Coronavirus Response Act of 2020, also known as the Medicaid public health emergency (PHE) unwinding. This support includes the clarification of permissible outreach activities by Medicaid MCOs that also offer a Marketplace plan, information sharing, and other assistance. Many states have incorporated the CMS guidanceiii into Medicaid MCO contracts. North Carolina, Utah, and West Virginia include additional contract terms supporting their Medicaid MCOs’ ability to co-market Medicaid and Marketplace plans, including when an individual is losing Medicaid eligibility.

What to Watch For

Coverage transition challenges throughout the Medicaid PHE unwinding have highlighted the real-life impact of coverage gaps and the importance of policies and practices that promote uninterrupted access to healthcare coverage. Historic Marketplace enrollment levels and recent CMS guidance clarifying the allowability of outreach to people who are losing Medicaid coverage about Marketplace plan available make the prospect of dual-market participation increasingly attractive for Medicaid MCOs. A greater focus on improving continuity of care and Marketplace plan choice may lead to more states encouraging or requiring Medicaid MCOs to participate in the Marketplace.

Connect with Us

The upcoming HMA event, Unlocking Solutions in Medicaid, Medicare, and Marketplace, will offer more opportunities to engage with leaders from various sectors who are advancing innovations in Medicaid managed care and Marketplace programs and the points at which these programs intersect. State Medicaid and insurance commissioners, health plan executives, and community leaders, among others, will share insights into their market success and initiatives designed to address healthcare costs and insurance affordability.

Experts from HMA and our family of companies have extensive experience in the policy, structure, and administration of healthcare markets and health plan contracting. For more information, contact  Zach Sherman.

California

California Gold Coast Health Plan Replaces CEO

Colorado

Colorado Exceeds Medicaid Budget by Nearly $124 Million. The Denver Postreported on August 29, 2024 that Colorado exceeded its projected $16 billion Medicaid budget by about $123.8 million, or 1.2 percent in fiscal 2024. The Department of Health Care Policy and Financing underestimated how much care its traditional Medicaid patients would need. However the department has authority to continue paying claims even when over budget.Read More

Connecticut

Connecticut Medicaid Program Forecasts $210 Million Deficit in Fiscal 2025. CT Mirrorreported on September 3, 2024, that Connecticut’s Medicaid program is facing a $210 million deficit in net expenditures for fiscal 2025 based on current trends that are exceeding budgeted levels, specifically in hospital outpatient, clinic, and pharmacy services. Additionally, the cost of coverage for undocumented children is increasing with over 15,000 children enrolled as of July 2024, although a portion of these costs were already budgeted under HUSKY B, partially offsetting the Medicaid shortfall. Lawmakers previously opted not to adjust a preliminary fiscal 2025 state budget as requested by Connecticut Governor Lamont. Lamont had proposed a $3.4 billion budget for the state Department of Social Services, up about $200 million from what lawmakers had approved in fiscal 2024.Read More

Illinois

Illinois Releases D-SNP RFP. The Illinois Department of Healthcare and Family Services (HFS) released a Dual Eligible Special Needs Plan (D-SNP) request for proposals (RFP) to replace the current Medicare-Medicaid Alignment Initiative (MMAI) demonstration. This procurement will transition the state to a Fully Integrated Dual Eligible Special Needs Plan (FIDE-SNP) model, which will include a requirement for plans to provide managed long-term services and support (MLTSS) beginning in 2027.

Indiana

Indiana Must Provide Immediate Attendant Care for Medically Complex Children Amid Ongoing Litigation, Judge Rules. Indiana Public Mediareported on September 2, 2024, that a federal judge has ruled the Indiana Family and Social Services Administration (FSSA) must provide immediate attendant care for two medically complex children whose families are involved in ongoing litigation over the state’s decision to stop reimbursing family members for home care starting July 1. The lawsuit, filed in May, argues that the state failed to provide necessary care to medically complex children and that it violates the federal Americans With Disabilities Act and could result in unnecessary institutionalization of children. FSSA will have to ensure that the rest of the children moved out of the program have in-home skilled nursing care, and that parents are reimbursed through the new Structured Family Caregiving program.Read More

Iowa

Iowa Awards Health Link Medicaid Managed Care Contract to Centene. The Iowa Department of Human Services (DHS) announced on September 3, 2024, its intent to award incumbent Centene/Iowa Total Care a contract to provide physical health, behavioral health, pharmacy services, and long-term services and supports (LTSS) for the state’s Health Link program, which consists of traditional Medicaid program, the Children’s Health Insurance Program (CHIP) known as Healthy and Well Kids in Iowa (Hawki), and the Iowa Health and Wellness Plan (IHAWP). UnitedHealthcare/United Healthcare Plan of the River Valley and UCare also submitted bids. Other incumbents are Anthem/Amerigroup and Molina Healthcare, with separate contracts that have options through June 2029. The contract term will run for four years, beginning July 1, 2025, with one two-year renewal option. Read More

Iowa Medicaid Pharmacy Benefit Administrator Contract Winner Seeks to Block Disclosure of Bid Information. The Gazette/Iowa Capital Dispatchreported on September 2, 2024, that OptumRx is seeking a court injunction to block the state from disclosing its bid information for theMedicaid pharmacy benefit administration (PBA) servicescontract. OptumRx won the procurement to provide claims processing and pharmacy clinical services and Medicaid managed care program oversight in relation to pharmacy services. The state indicated the company’s unredacted bid was being sought by MedImpact, a competing company that also bid on the contract. OptumRx alleges that the information sought by MedImpact would give MedImpact an advantage over competitors and that disclosure will serve no public purpose.Read More

Louisiana

Louisiana Seeks Feedback, Partnership to Implement CMS Maternal Healthcare Model. The Louisiana Department of Health (LDH) announced in August 2024 that it is seeking feedback and partnership from providers and stakeholders for a future funding opportunity for the Centers for Medicare & Medicaid Services (CMS) Transforming Maternal Health (TMaH) model. The model aims to develop and implement a whole-person approach to perinatal health for people enrolled in Medicaid and CHIP, addressing physical health, mental health, and social needs. Two LDH-hosted informational meetings will be held before the September 20 TMaH application deadline. CMS plans to announce awardees in December.Read More

Massachusetts

Massachusetts Medicaid ACOs Improve Care for Pregnant, Postpartum Enrollees. Medical Xpress/Boston University reported on September 3, 2024, that Massachusetts Medicaid Accountable Care Organizations (ACOs) were associated with increases in prenatal and postpartum office visits, postpartum depression screenings, and timely postpartum care, according to a new study led by Boston University School of Public Health (BUSPH). The study evaluated pregnancy and postpartum measures for ACO and non-ACO patients from 2016 through 2020. Based on the results, the study authors suggest that implementing Medicaid ACOs could improve improve maternal health outcomes. Read More

New Mexico

New Mexico Private Marketplace Sees Less Than 5 Percent of Disenrolled Medicaid Beneficiaries Enrolling in Private Insurance. Source NMreported on August 30, 2024, that of the 219,100 people disenrolled from New Mexico’s Medicaid program during the post-pandemic unwinding process, 10,483, or about 4.7 percent, found coverage through the state’s private marketplace, BeWell NM. In July, the state reported it reinstated Medicaid coverage for approximately 21,000 children to provide families more time to pursue their coverage renewal.Read More

New York

New York Individual Marketplace Insurance Premiums to Rise in 2025. Crain’s New York Businessreported on September 3, 2024, that individual marketplace insurance premiums are set to rise about 12.7 percent on average, approximately 4 percent less than requested by insurance companies, in 2025 due to high healthcare costs caused by prescription drug prices, hospital price increases, and taxes on insurance.Read More

New York Certified Home Health Agency Utilization Decreases. Crain’s New York Businessreported on August 29, 2024, that New York home health agency enrollment in Medicare fee-for-service and Medicare Advantage programs, has declined by about 46,000 over five years, despite overall fee-for-service Medicare enrollment increasing. Meanwhile, enrollment for the state’s Medicaid Consumer Directed Personal Assistance Program (CDPAP) enrollment has expanded to cover more than 250,000 enrollees, with a 173 percent increase in the number of workers.Read More

North Dakota

North Dakota Submits Amendment Request for Section 1915 HCBS Demonstration. The Valley City Times Recordreported on September 1, 2024, that North Dakota has submitted an amendment to its section 1915(c) waiver demonstration for home and community-based services (HCBS) to improve access to HCBS. The amendment would change allowable tasks for case management and broaden provider qualifications; update tasks for extended personal care services; and update language on the state’s nursing facility level of care process. Public comments will be accepted through September 26.Read More

Pennsylvania

Pennsylvania Releases CHIP RFA. The Pennsylvania Department of Human Services (DHS) released on September 3, 2024, a request for applications (RFA) for the Children’s Health Insurance Plan (CHIP), which provides comprehensive primary and behavioral healthcare services across all 67 counties to 168,000 children up to 19 years of age who are not eligible for or enrolled in Medicaid. Proposals are due October 18. Contracts will run for five years, with two one-year renewal options. Incumbents include Aetna Better Health, Capital BlueCross, Geisinger, Health Partners, Highmark HMO, Independence BlueCross/Keystone Health Plan East, UnitedHealthcare, and UPMC.

Tennessee

Tennessee Submits Section 1115 Waiver Amendment to Expand Coverage for Working Individuals with Disabilities. The Centers for Medicare & Medicaid Services (CMS) announced on August 29, 2024, that Tennessee has submitted an amendment for its Section 1115 TennCare demonstration. This amendment aims to establish a Work Incentives Group designed to offer coverage for working individuals with disabilities whose income or resources exceed the thresholds for current coverage categories. Under this new Work Incentives Group, individuals would pay monthly premiums equal to 5 percent of their countable earned and unearned income. The public comment period will be open through September 28.Read More

Wisconsin

Wisconsin Announces Maternal Health Innovation Bridge Project Grant Funding. The Wisconsin Department of Health Services (DHS), Division of Public Health announced on August 20, 2024, a $400,000 grant funding opportunity for organizations looking to implement Maternal Health Innovation Bridge Projects, which aim to reduce maternal mortality and morbidity by improving maternal healthcare and reducing maternal health disparities. Projects eligible for funding must serve one of three focus areas: Wisconsin’s Native American/American Indian population; Medicaid beneficiaries or those who are uninsured in the Southern region; or Medicaid beneficiaries or those who are uninsured in the Northern and/or Western region. DHS will issue up to twelve awards between $25,000 and $50,000 for use between January 1, 2025, and September 30, 2025. Applications are due September 24.Read More

National

CMS Issues State Guidance on Medicaid, CHIP Eligibility Renewal Timeliness Requirements. The Centers for Medicare & Medicaid Services (CMS) issued on August 29, 2024, an informational bulletin and slide deck to provide states with guidance on staying compliant with federal regulations for timely processing of Medicaid and Children’s Health Insurance Program (CHIP) eligibility renewals. The guidance also explains the temporary revisions to the deadlines for states to complete eligibility renewals, address persistent backlogs in processing redeterminations, and ensure that states achieve compliance with federal renewal timeliness requirements by December 2025.Read More

Medicaid, CHIP Enrollment Drops by 841,000 in May 2024, CMS Reports. The Centers for Medicare & Medicaid Services (CMS) announced on August 30, 2024, that Medicaid and Children’s Health Insurance Program (CHIP) enrollment was nearly 81 million as of May 2024, down by 840,795 from April 2024. Medicare enrollment was 67.4 million, an increase of nearly 123,000 from April 2024, including nearly 34 million enrolled in a Medicare Advantage plan. More than 8 million were dually eligible and counted in the enrollment totals for both programs.Read More

CMS Suspends 450 Marketplace Brokers Over Fraud, Abusive Conduct Suspicions. Health Payer Specialistreported on August 30, 2024, that the Centers for Medicare & Medicaid Services (CMS) has suspended 450 marketplace brokers for suspicion of fraud or abusive conduct related to unauthorized enrollments and plan switches. CMS began practicing more stringent oversight of individual insurance brokers in July, adding rules that require brokers to be on a three-way phone call with the broker, plan, and enrollee to make changes to a plan or enroll a prospective beneficiary. The agency expects more suspensions to come as they continue with stricter anti-fraud practices.Read More