Below is a roundup of payer-centric news headlines you may have missed during the month of November 2024.
Leading stories
AG nominee Bondi was anti-Affordable Care Act
President Trump’s newest selection for attorney general, Pam Bondi, pushed the Supreme Court to rule the Affordable Care Act as unconstitutional.
She also fought to uphold Florida’s same-sex marriage ban up until federal legalization.
“We should expect an Attorney General Bondi to let corporate wrongdoers off the hook,” said Robert Weissman, co-president of advocacy group Public Citizen, in a statement. “As Florida attorney general, Pam Bondi sued to overturn the Affordable Care Act, sued to block the ACA ban on health insurance companies price gouging people with pre-existing conditions and opposed efforts to reduce homeowners’ mortgage loans in negotiations with financial institutions that had engaged in fraud and misconduct.”
BCBSMA records $29M net income
Blue Cross Blue Shield of Massachusetts posted a net income of $29 million and revenue of $2.4 billion during the third quarter.
Net income is down from $106 million year-over-year. CFO Ruby Kam said Blue Cross members said 2,000 members are starting GLP-1 drugs every month, contributing to the spike in costs. The company is projected to spend $200 million on GLP-1 drugs this year.
We continue to see a significant escalation in spending on medical and pharmacy services; in fact, the growth in spending is the highest in at least a decade,” said Kam in a news release. “While the increase in spending is across almost all categories of services, the growth in spending on new and popular GLP-1 weight loss medications is worth noting.”
CVS insider trading scandal
A Pennsylvania man was arrested and charged by the DOJ with insider trading and lying to the FBI after he earned $617,000 from stock and options trades.
The man, Carlos Sacanell, got his hands on information from his long-term partner, who was an executive at Oak Street Health. He purchased Oak Street stock before CVS publicly bought Oak Street for $10.6 billion. At the time, Sacanell owned more call options than any other retail investor.
The SEC is also charging him with violating antifraud provisions.
Sacanell could face up to 25 years in prison.
DOJ evaluating PBM action
A top Department of Justice official says the department is reviewing business practices by major pharmacy benefit managers, reported the Ohio Capital Journal.
Doha Mekki, principal deputy assistant general for the department’s antitrust division, listened to a roundtable discussion hosted by the American Economic Liberties Project, where participants discussed how PBMs hurt small pharmacies and have outsized impacts over prescription drug prices. She said the business practices by PBMs mimic behaviors the DOJ sees in other industries, but she declined to say what action the DOJ may take.
The Federal Trade Commission sued vertically integrated PBMs and group purchasing organizations for anti-competitive practices in September.
Medicare improperly paid acute-care hospitals by $190M: OIG report
Medicare should not have paid $190 million over five years to acute-care hospitals and enrollees could have saved more than $43 million, a report from the Office of Inspector General for the Department of Health revealed.
OIG recommended the Centers for Medicare & Medicaid Services (CMS) edit system processes to reduce payments to hospice enrollees in this scenario and help educate hospitals.
“Specifically, our medical reviewer found that Medicare paid acute-care hospitals for outpatient services that palliated or managed hospice enrollees’ terminal illnesses and related conditions,” the report summary stated. “These services were already covered as part of the hospices’ per diem payments and should have been provided directly by the hospices or under arrangements between the hospices and acute-care hospitals.”
Legislation
House Republicans axe IVF in defense bill
If Rep. Matt Rosendale, R-Montana, and Rep. Josh Brecheen, R-Oklahoma, get their way, provisions protecting in vitro fertilization (IVF) would not be included in an annual Department of Defense bill, the Hill reported.
They asked House leaders not to include the policy in a letter, saying the proposal would increase taxpayers’ burden by $1 billion annually.
Legal
Anthem Blue Cross sued by logistics company
Anthem Blue Cross and Blue Shield of Virginia was recently sued by healthcare logistics company Owens & Minor, reported Virginia Business.
The company accused Anthem of not allowing Owens & Minor to access data regarding its self-funded healthcare plan. Once it obtained the claims data, they say Anthem increased expenses and did not protect employees from rising healthcare costs.
“Plaintiff’s analysis to date has showed tens of millions of dollars of damages to the plan as a result of Defendant’s neglect and misconduct,” the lawsuit reads. “Plaintiff suspects the damages will grow significantly upon receipt of the remaining data which continues to be withheld.”
Minnesota settles with Blue Cross Minnesota
The state of Minnesota has settled with Blue Cross and Blue Shield of Minnesota after allegations the insurer did not meet mental health parity requirements.
Blue Cross denied the allegations but agreed to pay a penalty of $300,000 and will voluntarily pay $600,000 to the Minnesota State University-Mankato for the school’s Center for Rural Behavioral Health.
The insurer will also be required to make prior auth decisions about behavioral health services within five days and accept or reject a provider’s request to join the company’s network within 45 days.
Interestingly, the company will share “nonpublic trade secret information” with the state’s attorney general office to ensure the company has expanded behavioral health access.
Aetna, Optum settle class action suit
Aetna and OptumHealth recently settled a class action lawsuit alleging the insurers hid administrative fees as medical expenses.
Executives were accused of adding service codes to medical bills that increased out-of-pocket costs for patients.
The two insurers will have until the end of January to reach a settlement figure.
Small pharmacies sue PBMs, GoodRx
Two independent pharmacies in New York are taking a class-action lawsuit to CVS Caremark, Express Scripts, GoodRx, MedImpact Healthcare Systems and Navitus Health Solutions.
Old Baltimore Pike Apothecary and Smith’s Pharmacy argue, much like other lawsuits against PBMs in recent years, that PBMs conspire to fix prices for drug claims and cause small pharmacies to pay more in fees.
The lawsuit (PDF) also highlights how PBMs use GoodRx as a clearinghouse, and identifies that prescriptions are processed through discount cards after new partnerships with PBMs in 2023.
HCSC accused in overtime suit
Blue Cross company Health Care Services Corp. is accused of not paying approximately 100 employees overtime pay they were owed, reports Crain’s Chicago Business.
The plaintiff argues the employees were not classified correctly under state and federal overtime laws, and the company was aware of the issue.
BCBSM to dole out $12.7M in vaccine suit
A Blue Cross Blue Shield of Michigan employee was awarded $12.7 million after the insurer rejected her choice to not obtain a COVID-19 vaccination because it interfered with her religious beliefs, reported Crain’s Detroit Business.
The insurer’s vaccine policy, and the court’s decision, could be applied to many other similar vaccine lawsuits around the country.
Harvard Pilgrim, Medica face HIV discrimination complaints
The HIV + Hepatitis Policy Institute filed five discrimination complaints to state insurance commissioners against Medica and Harvard Pilgrim.
The organization claims the insurers try to ensure enrollment remains low among people with HIV, and that the insurers place HIV brand-name and generic drugs on the highest cost formulary tier. It is also alleged the plans do not cover drugs recommended by national guidelines, and the insurers don’t meet health benefits benchmarks.
Similar complaints have been filed against North Carolina Blue Cross Blue Shield and Community Health Choice Texas.
“We continue to uncover private insurers that engage in discriminatory plan design by using drug formularies that discourage enrollment of people living with HIV. Putting every HIV drug, including cheap generics, on the highest cost-sharing tier and not covering drugs necessary to treat HIV are blatant examples of discrimination,” said Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, in a statement. “Without proper regulation and enforcement, some insurers will try to get away with whatever they can."
Industry
Only Vermont ACO to close doors
OneCare Vermont, the state’s only accountable care organization, is terminating its operations at the end of next year.
The decision coincides with the conclusion of the Vermont All-Payer ACO Model, which will end simultaneously.
Executives said the ACO successfully improved primary care in the state and generated millions in shared savings though the extent of those savings is debatable and the ACO struggled in many ways, reported the Burlington Free Press.
AMA meetings pinpoint priorities
The American Medical Association discussed various policy positions during recent meetings. They include:
- Requiring insurers to cover donor human breast milk
- Simplifying the Medicare enrollment process for seniors
- Legal action against insurers with inappropriate claim denials
- Robust oversight of nonprofit hospital charity care policies
- Offering incentives to drug manufacturers
- Supporting ACA subsidies for undocumented immigrants, reported MedPage.
- Bolstering data privacy protections
- Developing a national strategy to root out cancer in rural areas
- Reviewing the Health Professional Shortage Area scoring system to improve the primary care physician staffing crisis in rural areas
Allstate Health Solutions enters ICHRA partnership
Insurance company Allstate is beginning a partnership with Thatch and Centene subsidiary Ambetter Health to offer individual coverage health reimbursement arrangements (ICHRAs) through the Affordable Care Act.
Intuit QuickBooks customers can also utilize Allstate Health Solutions’ group insurance platform, and Ambetter will start offering Ambetter Health Solutions in 2025 in six states.
Aetna in Illinois offering same-day pharmacy delivery for free
Aetna Better Health of Illinois will begin to provide free, same-day pharmacy delivery for all eligible prescriptions.
The insurer has offered same-day prescription delivery since 2019. Deliveries under this new policy should take three hours or less. Aetna is the first managed care organization in the state to offer this benefit to Medicaid members.
Members must live within 15 miles of a CVS pharmacy. Aetna Better Health of Illinois serves more than 360,000 Medicaid members in 102 counties.
L.A. Care Health Plan gives $2.7M to health equity initiatives
L.A. Care Health plan is awarding $1.3 million to the California Association of Food Banks, $700,000 to the Advancing Economic Mobility Initiative and $700,000 to the Equity & Resilience Initiative.
Funds for the food banks will go toward helping residents sign up for the state’s supplemental nutrition assistance program (SNAP), while the other funds will progress projects for underrepresented residents.
“Healthcare is much more than a plastic card in somebody’s wallet,” said L.A. Care CEO John Baackes in a statement. “L.A. Care is dedicating new funding to three of its ongoing initiatives to ensure that it is continuing to support needy members and their communities beyond their doctor’s visits.”
Studies
Payer-provider model did not improve quality
A look back at a payer-provider value-based relationship in New Hampshire revealed there was no improvement in medical utilization, quality or spending from 2013 to 2019, a study from Health Services Research shows.
Pharmaceutical spending increased by $142 per member and a 13% increase in days covered for diabetes medications, but only 15% of members engaged in care management.
“In a disconnect from the empirical findings, payer and provider group leaders believed that the joint venture reduced healthcare costs and improved quality,” the study found.
Quick Hits
- Approximately 496,000 new members enrolled in an ACA plan for 2025, CMS announced.
- CMS approved five state section 1115 demonstrations. The states are Colorado, Hawaii, Minnesota, New York and Pennsylvania and each demonstration addresses continuous eligibility.
- From 2018 to 2023, the Accountable Health Communities model from CMMI reduced expenditures for Medicare and Medicaid beneficiaries, and navigation services were more likely to reach underrepresented groups. More insights here.
- More than four in five Medicaid-insured births were free to the patient, versus just 15.7% of commercially insured patients, a study from Milbank found. A majority of commercially insured births cost more than 1,000 out-of-pocket.
- 93% of Congressional incumbents received funds from national insurance companies during their election campaigns, data from OpenSecrets shows, according to Rachel Madley, director of policy and advocacy for the Center for Health and Democracy, in collaboration with Health Care un-covered.
A shell company to a major Kamala Harris campaign vendor worked for PhRMA in 2022. The group ran ads opposing Biden’s drug price negotiation program. Another consultancy firm close to the campaign worked for Partnership for America’s Health Care Future, whose membership includes the AHA, Blue Cross Blue Shield and the UnitedHealth Group, which opposed a single-payer system.
Consulting firm Precision Strategies included CVS Health as a client. Harris called for transparency against PBMs in her campaign and Caremark is one of the biggest PBMs in the country. Read more from Sludge.
- The National Association of Manufacturers began a seven-figure ad campaign pushing PBM reform.