Weekly Health Tech Reads | 10/9/22

MA star ratings released, a look at MA overbilling, a survey of mental health providers, & more!

This week's newsletter is sponsored by Synapse Medicine.

Synapse Medicine, an intelligent medication management platform that connects to real-time data to drive clinical decision support tools for prescribers, is hosting a webinar on October 27th where they'll share how the Synapse platform helps organizations build prescribing workflows.

The Synapse platform processes drug data and each patient's clinical conditions to help inform how providers treat individual patients. It was cool to see Synapse announce this week that they're launching a clinical study at Brigham and Women's and Vanderbilt to validate the effectiveness of the platform.If you're a care delivery organization looking to integrate prescription workflows, check out this webinar with the Synapse team. Sign up here. 

News of the Week:

  • The NY Times featured a piece on Medicare Advantage that is sure to make waves this week, highlighting how many large insurers are using risk adjustment to increase revenue from the government. Folks who have been following this conversation will recognize this as similar to the debate we've been seeing about MA for some time now. This article doesn't necessarily resolve anything in the debate, although it does provide some additional eye-opening examples as to how much is being made here. The article highlights that private insurers are over-billing the government by between $12 and $25 billion annually for Medicare Advantage, which exceeds the entire federal budget for agencies like the FBA (which is $9.8 billion). Yet payors will continue to say - as Kaiser does in the article - that everything they are doing is in compliance with CMS guidelines. Regardless, the chart below is not a good look for MA payors, and articles like this should serve as a good reminder that MA likely won't continue to print cash for payors (and then VCs and startups downstream of payors) forever as political pushback continues to increase. Link / Slack (h/t Duncan Reece)

  • Speaking of Medicare Advantage financials, 2023 Medicare Star Ratings were released on Thursday, and a number of plans took hits to their star ratings. Per this Modern Healthcare analysis, almost 20% of plans lost their 4+ star designation, which means those plans are ineligible for quality bonus payments, an important driver of revenue for MA health plans in 2024. It's enough of an issue for CVS that it decided to issue an 8-K filing, sharing with Wall Street that only 21% of members will be in 4+ star plans in 2023, versus 87% of members that were in such plans in 2022. CVS's 8-K highlights how its primary driver of decline was due to CAHPS scores, but not surprisingly they didn't feel the CAHPS results were reflective of broader experience on the plans. While most organizations faced declining Stars scores, a number of plans still performed quite well. Most notably, health insurance startup Devoted Health appears to have all of its plans at 4+ Stars, which seems like a notable feat given the growth Devoted has been seeing. Link (Modern Healthcare paywalled) / Link (CVS 8-K) / Slack

  • The NY Times has been going after both payors and providers with vigor recently, and this week it followed-up on its investigation of Providence's Rev-Up program. Providence is now refunding 700+ patients who were pressured into paying bills despite being entitled to receive free care. Not surprisingly, Providence appears to disagree with the narrative of the NYT investigation, suggesting that it is false that Providence "intentionally takes advantage of the poor to enrich itself". The only issue with that response is that it doesn't explain why Providence used training materials that said things like (this is from the NYT article): “Ask every patient, every time,” the materials said. Instead of using “weak” phrases — like “Would you mind paying?” — employees were told to ask how patients wanted to pay. Soliciting money “is part of your role. It’s not an option.” If nothing else, this should serve as a clear reminder of the downsides of scale in healthcare. I have no doubt that Providence's execs didn't intend for this, and feel badly about it. But I also don't think it should surprise anyone that it takes a NYT investigation for anything to happen here. Link / Slack

Other Announcements:

  • OneOncology shared this week that all fourteen of its partner oncology practices have applied to participate in Medicare's Enhancing Oncology Medicine model, a value-based care model for oncology. It's a friendly reminder of how quickly provider practices can get on board with change if they see a financial incentive for doing so (and a partner who can help them get comfortable with the change management). Link

  • CVS announced this week that it is selling bswift, a benefits administrator serving 65,000 employers, to private equity firm Francisco Partners. Aetna acquired bswift back in 2014 for $400 million. I'd imagine CVS is doing well in this deal and getting some upside, while Francisco is getting a platform it can start building upon in the employer health benefits space. Given that CVS has quite a few other growth priorities, this deal seems like it makes a lot of sense for both parties.  Link

  • Per this Axios article, consumer women's health startup FemTec Health appears to be imploding. This comes after a short run that saw it acquire a bunch of assets including BirchBox for $45 million about a year ago. The details of the implosion invoke a facepalm reaction - FemTec seems it'll go down as a cautionary tale from the hype over the last few years.Link

  • ApolloMed is expanding into Nevada and Texas after acquiring Valley Oaks Medical Group, a group of nine primary care clinics in Las Vegas, Houston, and Fort Worth. Valley Oaks currently treats 20,000 patients across those nine clinics, including 6,000 Medicare patients.Link

  • Ro launched a new partnership this week with the NIH National Institute on Aging attempting to identify patients for Alzheimer's clinical trials. It's an interesting extension of Ro's platform, which we'll discuss more in our Deep Dive on Tuesday that'll recap our conversation with Ro's CEO Zachariah Reitano last Friday. Link / Slack (h/t Nick Samonas)

  • CMS is seeking input on a new national provider directory. As discussed on Slack, this is complex for a number of reasons, but it'd be very cool to see it come to fruition. Link / Slack (h/t Nikita Singareddy)

  • Alleva, a mental health EMR, raised $12 million. Link

  • Hume AI raised $3 million to build machine learning tools that interpret speech. Link

Opinions:

  • This is a nice post exploring who is benefitting from Medicare Advantage, looking at the experiences of brokers and providers working with MA plans. It highlights the process of post-acute care and how MA plans are influencing the decisions around whether patients go to inpatient rehab or SNFs. It's worth noting the last point made here - about how brokers are incentivized to sell MA plans.Link

  • D2C digital health companies are increasingly shifting their sights to pursuing B2B deals for growth as the D2C market gets oversaturated and growth stalls. It sure seems indicative of the space at the moment - a lot of money has gone into D2C ideas that aren't growing as expected, and this means there's a whole new crop of companies that haven't yet experienced the pain of B2B healthcare sales. Link

  • This is a really good podcast exploring the current state of maternal health in New Jersey and work that's underway to try to address health equity issues in the state. Link

Data:

  • This is a really interesting 'Substack study' from Owen Muir & Carlene MacMillan, surveying 300 behavioral health providers on their perceptions of insurance. It helps drive some understanding of the frustrations they have with insurers - low reimbursement rates, insurers meddling in clinical decisions, the stress of interacting with insurers, etc. It also presents some really good questions / challenges to the rise of recent mental health MSOs like Alma and others.  Link / Slack (h/t Owen Muir) 

  • Kaufmann Hall published its latest hospital flash report, highlighting the challenging year hospitals are reporting in terms of operating margins. Interesting to note in the takeaway section that Kaufmann Hall notes that hospitals are starting to see new entrants take outpatient volume and "should reimagine how to deliver care in nonhospital settings as part of their long-term planning.Link / Slack (h/t Kevin Wang)

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