NYC Group Medicare Contract Rises From the Dead With $15B Aetna Pact

by Lauren Flynn Kelly

 

After much delay, the City of New York appears to be moving forward with a plan to transition its retiree health care coverage to a group Medicare Advantage plan, having recently chosen CVS Health Corp.’s Aetna to administer a PPO plan starting Sept. 1. The contract is valued at $15 billion over the first five years and four months of the term agreement.  Adams administration revives deal with Aetna  The city’s plan to transition some 250,000 retirees and their eligible dependents away from fee-for-service (FFS) Medicare coverage was initially supposed to begin on April 1, 2022, and be managed by Elevance Health, Inc. (in partnership with EmblemHealth). Retirees petitioned to block the move, and state Supreme Court Judge Lyle Frank in March 2022 ruled that the proposal violated city law by requiring retirees who opted out of the switch to pay $191 per month to maintain their FFS coverage. That July, Elevance backed out of the deal.  Since then, New York City Mayor Eric Adams (D) reportedly considered an alternative framework and tried to amend city code to allow for the monthly charge. But the Adams administration ultimately struck a deal with Aetna to make its PPO plan the only premium-free coverage option as a way to comply with the court decision, according to The Daily News.  The transition is expected to produce $600 million a year in savings. Currently, the city funds a Medicare Supplement plan administered by EmblemHealth and outpatient costs for retirees enrolled in FFS Medicare.  New plan addresses prior authorization concerns  In a March 30 press release, the Adams administration said it has significantly reduced the number of procedures subject to prior authorization under the new PPO plan. The NYC Organization of Public Service Retirees, which sued to block the implementation of the Elevance (then-Anthem) contract, had cited prior authorizations and access to providers/hospitals as major concerns, among other things.   The Municipal Labor Committee (MLC), which represents more than 100 public sector unions, approved the Aetna contract on March 9. Effective Sept. 1, retirees who are currently enrolled in the city’s Senior Care plan will be automatically enrolled in the Aetna MA plan. In addition, they will be auto enrolled in the Aetna Medicare Rx offered by SilverScript prescription drug plan, according to Aetna’s dedicated website for City of New York retirees. That website also says beneficiaries will be able to access in or out-of-network providers at the same member cost share. “If your doctor accepts Medicare, they can bill Aetna for covered services,” states the site.  Eligible beneficiaries have the option join the HIP VIP Premier Medicare Plan, an HMO administered by EmblemHealth, if they reside in the five boroughs of New York City or Nassau, Orange, Rockland, Suffolk or Westchester counties.   Aetna said it has already collaborated with the city and the MLC on ways to educate retirees about their new MA plan and this month will host a series of in-person town hall meetings.

 

From Radar on Medicare Advantage

 

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