Morgantown, W.Va.-based WVU Medicine is doubling down on Medicare Advantage at a time when many health systems and insurers are pulling back from the market.
Through its provider-sponsored health plan, Peak Health, the system is preparing for its largest expansion yet — more than tripling membership since its 2023 launch and entering Pennsylvania, with enrollment beginning this October. The plan has grown from about 3,500 members to more than 12,000 and continues to gain traction, according to Ben Gerber, CEO of Peak Health and senior vice president and chief strategy officer of WVU Medicine.
That growth comes amid persistent reimbursement pressure, increased regulatory scrutiny and a wave of national insurers pulling back from or restructuring their Medicare Advantage books of business.
Mr. Gerber spoke with Becker’s about why Peak Health is expanding while others retrench, what it takes to make Medicare Advantage sustainable for health systems and how consolidation trends are shaping the road ahead.
‘We’re in it for the long haul’
The numbers behind Peak Health’s growth tell a striking story.
The health plan, majority owned by WVU Medicine, launched in 2023 and last year had about 3,500 members. Today it is approaching 12,500 with open enrollment sign-ups driven almost entirely by organic growth in West Virginia, with a small but meaningful foothold of a few hundred members already established in two Pennsylvania counties.
For Mr. Gerber, the growth is a function of product quality and word of mouth, not market conditions.
“I think a lot of folks in West Virginia are sharing their positive experiences with our plan, and that’s showing up in the enrollment,” he said.
The broader Medicare Advantage market, however, is anything but booming.
National payers have reported significant losses, and a growing number of health systems are walking away from commercial Medicare Advantage contracts as reimbursement pressures continue.
Mr. Gerber is candid about the current environment and clear on why Peak Health’s strategy stands apart.
“I don’t think many, if any, Medicare Advantage plans are thriving right now. Some are surviving and weathering this better than others,” he said. “We don’t see Medicare Advantage going away; we see it as popular as ever with seniors, and we’re in it for the long haul.”
The key distinction is purpose, according to Mr. Gerber, who argues Peak Health is not structured to generate returns for shareholders.
“We do not view our Medicare Advantage plan as a profit center. That is not our strategy or how we measure success. We don’t need to pay out dividends, and we’re not looking to generate margins from our Medicare Advantage plan,” he said. “Strategically, we have a Medicare Advantage plan to improve the patient experience with their health plan — particularly for those using our facilities and providers — to reduce administrative burden between the plan and the health system, and to enhance our population health goals.”
That strategy also underpins his message to peers evaluating their role in Medicare Advantage today.
“If you’re looking to be in Medicare Advantage for profit, right now is not a good time to be in the market,” he said. “If you’re looking to break even and improve member experience, it’s a great time to grow.”
The scale problem, and why most systems can’t solve it alone
A question many health system leaders are wrestling with currently is whether a mid-sized regional system realistically can run its own Medicare Advantage plan.
The answer is essentially no. Not without partners.
“It’s very hard for a small or even mid-sized health system to stand up its own MA plan and reach the scale needed,” Mr. Gerber said. “We are now a regional-sized health plan and health system — about an $8.5 billion system, with new acquisitions bringing us closer to $10 billion — and we even have a couple of minority owners that help us get additional scale.”
That challenge becomes clearer when looking at the numbers behind it.
“We’re looking at a minimum of about 30,000 Medicare Advantage members to reach reasonable administrative efficiencies and break even from an administrative perspective,” he said. “And that’s already with some economies of scale built in through our TPA services, since we administer claims for another 70,000 to 75,000 lives. Even with that backbone, we still need about 30,000 Medicare Advantage lives to break even.”
Without that third-party administrator infrastructure, the challenge is far greater.
“If you didn’t have that TPA backbone, where you’re administering claims for other lines of business, that number is probably closer to 50,000 to 60,000,” he said.
Peak Health’s answer to the scale problem has been to bring smaller regional systems in as minority owners — an approach that lets systems like Huntington, W.Va.-based Marshall Health Network and Winchester, Va.-based Valley Health participate in the plan without having to build one from scratch.
“I think they recognized they wanted to be in this space and partner with someone — ideally on the provider side — because they likely couldn’t stand this up on their own,” Mr. Gerber said.
On the operational side, he identified three key priorities for health system leaders trying to make MA work. The first is Hierarchical Condition Category coding accuracy — not upcoding, but ensuring sick patients are not being undercoded.
“For provider systems, it’s about making sure you’re not inflating HCC scores, but instead applying real rigor to ensure everything is accurate,” he said. “It’s really twofold: you need to be compliant and you need to be accurate.”
The second is MA star ratings performance, where the financial stakes are substantial. Peak Health earned a 3.5-star rating in its first scored year, narrowly missing out on a four-star rating, according to Mr. Gerber.
“Almost any additional measure would have pushed us to four stars, which would have had an upwards of a $5 million positive impact,” he said, adding that medication adherence is a heavily weighted and scalable area of focus. Third is a continued emphasis on operations and quality more broadly, disciplines he sees as inseparable from financial sustainability.
A $10 billion system with its eyes on adjacent markets
Peak Health’s expansion into Pennsylvania this year is not happening in isolation. It is the insurance component of a much larger strategic move by WVU Medicine, which plans to acquire Greensburg, Pa.-based Independence Health System — a five-hospital system serving more than 750,000 people in western Pennsylvania — in a transaction expected to close this fall.
WVU Medicine plans to invest $800 million over five years to modernize Independence’s facilities. If the deal closes as expected, the combined system will operate 30 hospitals and employ more than 42,000 people.
Mr. Gerber sees the Independence acquisition as a model for how consolidation should work — geographically adjacent, culturally aligned and mission-driven — and he is somewhat skeptical of the non-adjacent M&As that are becoming more prominent nationally.
For WVU Medicine, scale matters, but only when it reinforces rather than dilutes the organization’s identity.
“If you look at the hospitals that have joined our system — even those coming from Pennsylvania — they’re reasonably close to our flagship hospital in Morgantown,” he said. “They serve very similar, often rural communities and are culturally aligned. I think cultural fit is extremely important when evaluating mergers and acquisitions. The story still has a ways to play out in terms of whether these non-adjacent mergers ultimately make sense.”
On the regulatory front, Mr. Gerber acknowledged that recent high-profile Medicare Advantage settlements — such as Oakland, Calif.-based Kaiser Permanente’s $556 million settlement with the Justice Department — have sharpened compliance focus across the industry.
“I think for those who don’t have full visibility into what’s happening in a particular case or the practices involved, it can certainly be concerning — people don’t know what they don’t know,” he said. “From our perspective, we’re trying to stay well within the line. I think a lot of health plans are taking a similar approach — not being overly aggressive, really focusing on accuracy and not getting close to that line.”
The net result is a health system and health plan that is, by design, playing a longer game than most.
Mr. Gerber expects Medicare Advantage premiums will have to rise eventually — “they have to, or we’ll see a continued exodus, even among national players” — but he is not waiting for that inflection point to justify Peak Health’s existence.
The plan is a tool in service of the system’s broader mission, and for now, that framing is what is keeping it growing while others pull back.
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