insurance
The looming Medicare Advantage regulation
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Mark your calendars: One week from today, the Biden administration will release the vital payment regulation for next year’s Medicare Advantage plans — marking the end of a loud lobbying campaign where the health insurance industry has attempted to scare seniors and the public into thinking the federal government is slashing Medicare benefits.
But insurance companies, as well as some doctors’ groups, are distorting the reality of the government’s proposals in an effort to protect the sizable and growing profits they earn from Medicare Advantage. If anything, the Biden administration’s proposals are relatively tame, according to researchers and experts who have no ties to the industry. And they say officials could do more to combat the most egregious coding practices, which increase costs.
The proposed rules are “a good beginning … but a kind of baby step,” Richard Kronick, a health policy professor at the University of California, San Diego, who has scrutinized Medicare Advantage, said during a Kaiser Family Foundation webinar last week.
Read the story to understand more about the specific changes, like which codes Medicare wants to eliminate, and why almost everyone STAT interviewed believes insurers are blowing smoke when they threaten to cut MA benefits and raise premiums.
insurance
What a watered-down MA audit looks like
Staying on Medicare Advantage: Earlier this year, CMS moved forward with a rule to impose more stringent audits of MA plans and how they coded their members. But there was a big loophole: Any erroneous billing codes found between 2011 and 2017 would not be extrapolated to an insurer’s entire membership, a gift of at least $2 billion to health insurers.
We now have our first glimpse into just how beneficial this can be for a Medicare Advantage plan. HHS’ Office of Inspector General audited Geisinger Health Plan last year and found a ton of problems in its sample. Geisinger coded many people as having severe health problems, like a stroke, heart attack, or artery blockage, but the medical records didn’t back up any of those conditions — or Geisinger couldn’t find the medical records in question, according to OIG.
OIG’s ruling: Geisinger should pay back $6.5 million, a number that was extrapolated from the agency’s sample size to Geisinger’s entire contract. However, because of CMS’ new loophole, OIG could only recommend Geisinger repay money based on the much smaller sample size, amounting to just 9% of the original amount, or $566,476. That’s right: Geisinger gets to keep $6 million of taxpayer money for coding Medicare Advantage patients with health conditions that could not be supported.
Geisinger still had complaints about the audit. Notably, the not-for-profit said there’s no law saying Medicare Advantage plans have to be 100% accurate with their risk adjustment, so OIG was acting outside of its “authority.” Read the OIG’s report, which includes the back-and-forth between OIG and Geisinger.
compensation
The man who has gotten extremely rich covering the poor and elderly
Taxpayers have just underwritten one of the largest-ever pay packages of a health insurance executive. And it involves a company that sits in the shadows of far bigger players.
Molina Healthcare CEO Joe Zubretsky made $181 million in 2022, according to Molina’s newest
compensation disclosure. That figure represents the actual realized gains of stock that Zubretsky exercised, not the estimated value of his stock. It also adds to the $52 million he made in 2021.
It’s the largest single-year payout for any health insurance CEO
in the past decade. Keep in mind, this is coming from an insurance company that gets all of its revenue from government-funded programs — 80% from Medicaid, and the rest from Medicare and the Affordable Care Act marketplaces.
Zubretsky joined Molina in late 2017, right after the board fired two of the company’s founding family members. (You can read more about the separation
here.) Zubretsky brought in a much more bottom-line-focused regime — exiting ACA markets that the company didn’t view as profitable, investing more in Medicare Advantage, and winning new state Medicaid contracts. The result: Molina’s stock was almost five times higher at the end of 2022 ($330 per share) than when Zubretsky started ($68 per share).
In a statement, a Molina spokesperson did not directly address our questions about Zubretsky’s pay package. The spokesperson said Zubretsky “was granted stock options to compensate him for options from his former employer that he was surrendering. The value realized by Mr. Zubretsky in 2022 was primarily related to the exercise of these options and reflected the strong performance and growth of the company since 2017.”
