3/11/2018

HEALTHCARE/MEDICARE: “The number in the corner of Upton Martin’s Medicare plan card from Humana Inc. changed twice over the past four years. He didn’t think anything of it, and his coverage didn’t seem different in any way. The changes, though, were evidence of a lucrative maneuver that has allowed Humana and other providers of Medicare Advantage plans to collect additional revenue from the federal government.
Medicare ranks privately managed plans such as Mr. Martin’s on a five-star quality scale and provides financial bonuses to providers of top-ranked plans. Mr. Martin’s plan was set to be downgraded, which would have cost Humana its bonus. So the company merged plans covering Mr. Martin and more than a million others into different contracts with higher scores. That preserved the bonuses.
The shift boosted the ratings of those plans without requiring any actual improvement in their performance on customer service, health screenings and other quality measures… The tactic, known as crosswalking, adds millions of dollars in federal payments to the companies that sell Medicare Advantage policies. For Humana, the shift is estimated to be worth nearly $600 million in revenue this year, according to JPMorgan Chase & Co. analysts.
Other large managed-care companies, including UnitedHealth Group Inc., Aetna Inc. and Anthem Inc., also engage in the practice, according to an analysis of federal data by The Wall Street Journal. Insurers have used the maneuver to shuffle plans covering more members into higher-rated setups over the past few years—including around 1.45 million people for 2018.”

-Anna Wilde Mathews and Christopher Weaver, “Insurers Game Medicare System to Boost Federal Bonus Payments,” The Wall Street Journal online, Mar. 11, 2018 01:17pm