CT's Medicare Advantage market sees new competition

Dr. Bollepalli Subbarao, president, Hartford County Medical Association

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Doctors like Robert Russo were shocked and dismayed last fall when they heard UnitedHealthcare planned to cut 19 percent of its Medicare Advantage physician network in Connecticut.

The move, done in part as a cost-cutting measure ahead of potential federal government funding cuts, drew angry criticism from politicians and a lawsuit by Hartford and Fairfield county physician associations, who worried other insurers would follow suit, costing doctors some of their patient base and reducing access to care.

A year later, some Connecticut physicians are breathing a bit easier, at least for now.

After the outcry and pushback, UnitedHealthcare has since reinstated some physicians to its network, while other insurers largely have shied away from widespread Medicare Advantage provider cuts.

Meanwhile, as open enrollment season kicks off this month, Springfield, Mass., nonprofit insurer Health New England is entering the Connecticut market for the first time, adding competition in an insurance segment that is expecting sizable growth as Connecticut's Baby Boomer population continues to age.

“Physicians agree competition in the marketplace is exactly what we need,” said Russo, a Bridgeport radiologist, who is president of the Connecticut State Medical Society. “Without competition, insurers don't respond to the needs of physicians or patients.”

Market changes

Medicare Advantage, which are privately run health plans for seniors, have long been a cash cow for insurers, but recent changes under the Affordable Care Act are making cuts to the program to help pay for other parts of healthcare reform. The program could lose as much as $156 billion by 2022.

Insurance companies also face pressure to improve their quality performance ratings, which are used by the U.S. Centers for Medicare and Medicaid Services (CMS) to pay out bonuses. Those payouts can total hundreds of millions of dollars in revenues for individual insurers.

Facing reduced reimbursement payments and tougher quality standards, some insurers responded late last year — led by United Healthcare in Connecticut — by trimming their provider networks nationally to keep their Medicare Advantage businesses profitable.

In Connecticut, about 2,200 doctors were told they were getting the boot. Russo said the cuts were “disruptive” and “arbitrary,” and doctors were given little to no information about why they were being divorced from the program. Many doctors, he said, suspected UnitedHealthcare was targeting physicians with sicker patient populations.

Challenges from the provider community, including a November lawsuit in U.S. District Court, have been at least partially effective. Russo said the negative backlash forced UnitedHealthcare to back off some provider cuts, while other doctors went to arbitration and fought their way back into the network.

Those arbitration rulings, however, are confidential, so it's not clear exactly how many doctors have been reinstated by UnitedHealthcare.

“It's a closely-held secret,” said Mark Thompson, executive director of the Fairfield County Medical Association. “We don't have hard numbers to point to.”

Dr. Bollepalli Subbarao, president of the Hartford County Medical Association, said he too is unsure about how many doctors have been reinstated into UnitedHealthcare's network. He said he is aware of a major New Britain nephrology group that was re-enrolled, but he knows some doctors who were so fed up with the experience they stopped doing business with UnitedHealthcare. The cost of going to arbitration also scared some doctors away from fighting the cuts, he said.

In a written statement, UnitedHealthcare said: “We continue to offer a robust network in Connecticut. In some cases, additional review of local-market needs and individual provider concerns led us to reverse a prior decision to remove a provider from the network. In those instances, we have acknowledged the reversal with providers and affected members. We look forward to introducing our 2015 Medicare Advantage plans in October and continuing to serve the health and well-being needs of Connecticut Medicare beneficiaries.”

Russo and Thompson said other major Medicare Advantage insurers in the state, including Aetna, Connecticare, and Anthem, among others, have largely shied away from making significant cuts to their provider networks. They may have severed ties with a few doctors, but nothing widespread, they said.

Growth opportunity

Despite threatened funding cuts, Medicare Advantage's customer base is expected to see significant growth in the years ahead as Connecticut's population continues to get older. Currently, there are just over 612,000 Connecticut residents eligible for Medicare Advantage. There are 44,497 people enrolled in the program in Hartford County and 150,000 people enrolled statewide, according to CMS data. Russo said he expects the market in Connecticut to increase 5-6 percent annually for the foreseeable future.

Nationally, Medicare Advantage enrollment is projected to hit new records for the fifth straight year. Open enrollment kicks off this month.

It's that opportunity that attracted Health New England to enter the Connecticut market, said Jody Gross, the insurer's sales vice president.

Health New England is a nonprofit insurer owned by Baystate Health in Springfield. It has been selling Medicare Advantage plans in Massachusetts since 2009 and will begin offering its products in Hartford County this month, with hopes of expanding into Middlesex, Tolland, and Windham counties in the years ahead.

Gross said being owned by a hospital will give the insurer a competitive edge because they can more easily relate to doctors and hospitals. Health New England is still building out its provider network, but has established a strategic partnership with Hartford Healthcare to provide care for its customers in Central Connecticut. It's looking for more deals with other hospitals and physicians.

“We view this as an opportunity to come into the Connecticut market to collaborate with physicians and hospitals,” Gross said.

Health New England plans to incorporate value-added services in its plans, like dental and vision care, to set itself apart from the competition, Gross said. Its challenge, of course, will be creating brand recognition in a field crowded by much more well-known names.

Gross said the insurer is employing a ground-game strategy, holding health screenings and fairs and meeting potential consumers at community centers to tell its story. The company has a sales office in Wethersfield.

Daniel Dyer, general manager of Aetna's Medicare New England business, said competition in Connecticut is strong right now, with five chief competitors each having more than 2,000 Medicare Advantage members.

Health New England's entrance into the market really won't change Aetna's Connecticut strategy, Dyer said, but nationally, the Hartford health insurer plans to its increase its Medicare Advantage footprint 17 percent next year, by entering about 90 new counties or regions.

“If you have four or five chief competitors, one more really isn't going to change the way you look at the world,” Dyer said.