Below is a roundup of payer-centric news headlines you may have missed during the month of December 2024 and over the holidays.
Leading stories
CVS lays off 164 more workers after failed Kansas Medicaid contract
CVS Health amended a previous layoff announcement, declaring that 164 additional remote employees would lose their jobs.
The company said the layoffs are because of an “unexpected loss of contract” in Kansas. In May, the state chose UnitedHealthcare, Centene and a Blue Cross plan over Aetna for its KanCare program, serving nearly half a million individuals.
Aetna Better Health of Kansas protested the state’s decision unsuccessfully.
Oscar Health CEO calls for ending employer-sponsored insurance
Oscar Health CEO Mark Bertolini is in favor of eliminating employer-sponsored insurance, the executive said on CNBC.
He said the percentage of the country’s GDP that goes to healthcare is nearly 20%, more than twice as much in the 1980s, and that life expectancy has decreased.
“When my employer buys my healthcare coverage, they buy for the average,” he said. “I would eliminate employer-sponsored insurance. The ability of your employer to negotiate against the large insurance company, that has a much larger relationship with the provider community, is very stunted now. The companies have no leverage now."
Kaiser drops anesthesia policy
Just days after Anthem Blue Cross faced widespread criticism for its policy enforcing new anesthesia reimbursement standards, Kaiser Foundation Health Plan of Washington turned its back on its new anesthesia policy.
The policy would’ve not reimbursed services submitted without the correct modifiers and would’ve capped reimbursements for other services, said the American Association of Nurse Anesthesiology (AANA).
“AANA continues to call on Kaiser and other commercial payors to do the right thing by abandoning these discriminatory policies and instead prioritize and support patient care,” said AANA President Jan Setnor in a statement. “We also continue to call on HHS to enforce the provider nondiscrimination provision of the ACA, as commercial payors need to be held accountable to the law.”
House investigating CVS for antitrust violations
The House Committee on the Judiciary is investigating whether CVS Caremark is actively violating antitrust law, referencing a government hearing from earlier this year alleging PBMs can stop independent pharmacies from working with pharmaceutical hubs.
Rep. Jim Jordan, R-Ohio, asked during the hearing whether PBMs threaten pharmacies with fees, audit and network cutoffs if they work with companies that help obtain medications, improve adherence or better manage out-of-pocket costs. A witness said this “probably happens,” as the letter (PDF) to CVS details.
The committee is asking for all documents where CVS requires independent or specialty pharmacies to stop interactions or practices with pharmaceutical hubs. They want a response by Dec. 30.
J&J sues Cigna units
Johnson & Johnson added Cigna’s pharmacy benefit manager Express Scripts to its long-running lawsuit against SaveOnSP LLC, as first reported by The Wall Street Journal.
The lawsuit says Express Scripts and Accredo worked with SaveOnSP since 2016, causing J&J to pay more than $100 million in copay assistance.
Legal
Nebraska sues UnitedHealth over Change Healthcare debacle
The state of Nebraska is suing Change Healthcare for allegedly violating Nebraska’s consumer protection and data security laws, the state’s attorney general said in a news release.
Change Healthcare is accused of not properly protecting Nebraskans’ health information and for slowing down payment processing. The state said the company has outdated IT systems and left patients without proper care.
“Healthcare providers, including critical access hospitals in rural areas, have unfairly been forced to absorb financial pain, forcing major cash flow issues and, in some cases, delayed services,” said Attorney General Mike Hilgers in a statement. “And to make matters worse, Change has woefully disregarded the duty to provide notice to Nebraskans, depriving them of a fighting chance to be prepared for possible scams and fraud.”
Supreme Court to hear Planned Parenthood Medicaid case
The Supreme Court announced it would listen to arguments and determine whether South Carolina can remove Planned Parenthood from the state’s Medicaid program, reported The Hill.
In the state, the two facilities conduct non-abortion services like screenings, physicals and administers birth control, but the state didn’t believe the organization should receive taxpayer money.
Aetna employee files discrimination lawsuit
A Georgia-based Aetna employee is suing her former company for alleged disability discrimination.
The plaintiff, Donna Paulsson, worked in Aetna’s fraud, waste and abuse program in the analytics and behavior change department. Paulsson is prescribed medication for her attention-deficit disorder, and she alleged her direct boss subjected her to a hostile work environment.
After taking a leave of absence in October 2023 due to stress from her supervisor’s comments, she was then laid off as part of a workforce reduction in October 2024.
UnitedHealth settles 401(k) suit for $69M
UnitedHealth Group agreed to settle a class-action lawsuit that said the company violated the Employee Retirement Income Security Act (ERISA) of 1974, reported Twin Cities Business.
Plaintiffs said the Wells Fargo Target Fund Suite was a poorly performing, and retained, fund that negatively impacted more than 300,000 employees’ retirement savings plans. The plaintiffs’ law firm said UnitedHealth engaged in this behavior to stay in good standing with Wells Fargo.
UnitedHealth denied wrongdoing.
Industry
Optum internal chatbot accessible online
An internal chatbot from Optum was accessible to the public, reported TechCrunch.
The chatbot could be used by employees to ask about insurance claims and disputes but did not contain personal health information of members.
Optum told TechCrunch the chatbot was a demo tool and not deployed for use.
CMS dictates ALS coverages
The Centers for Medicare & Medicaid Services told Medicare Advantage plans in a memo they must cover Biogen’s amyotrophic lateral sclerosis drug Qalsody after the agency discovered some individuals are denied coverage inappropriately.
Some plans excluded Qalsody from Part B by calling the drug “experimental and investigational” despite the drug earning accel erated approval in April 2023.
Michigan insurer acquires Indiana plan
Michigan-based health plan Priority Health is acquiring Physicians Health Plan of Northern Indiana.
Priority Health has more than 1.3 million members and will swallow up the Fort Wayne, Indiana’s plan encompassing 50,000 members.
“With approvals complete, we will now be working over the next several months to develop opportunities for both companies to continue to grow and leverage each other’s strengths as we plan for future growth,” said Praveen Thadani, president of Priority Health, in a statement.
Studies
MA market more concentrated
UnitedHealthcare, Humana, CVS, Elevance Health and Cigna have expanded their reach dramatically since 2012, a study from Health Affairs revealed.
These national carriers accounted for 66% market share in 2023, up from 46% in 2012. Regional carriers not affiliated with Blue Cross Blue Shield declined from 25% to 6% over the same time period.
Prior auth delays and cancer
Prior authorization causes significant delays, unfinished treatments and worse outcomes among cancer patients, found a survey of more than 750 radiation oncologists by the American Society for Radiation Oncology.
Nearly one-third of respondents said prior auth practices have led to ER visits or permanent disability for patients. Almost 9 in 10 respondents said the prior auth burden has increased in the last three years.
The organization supported the Improving Seniors’ Timely Access to Care Act, which was not included in the end-of-year healthcare package after Republicans rewrote the bill.
Quick Hits
- Incoming House Committee on Energy and Commerce chair Rep. Brett Guthrie, R-Kentucky has received more than $1.8 million from pharma and health product lobbyists, data from OpenSecrets show, reported Sludge. Drug companies frequently lobby against the drug price negotiation program within the Inflation Reduction Act. Guthrie is also the top recipient from the health services industry, including the Blue Cross Blue Shield Association and UnitedHealth Group.
- Bryan Health and Sanford Health Plan are creating a new Medicare Advantage plan.
- The Centers for Medicare & Medicaid Services selected Michigan, New York, Oklahoma and South Carolina to participate in the Behavioral Health Model.
- Sidecar Health is undergoing a new pricing agreement with The Ohio State University Wexner Medical Center, the country’s third largest cancer hospital. The companies said prior authorization and “unpredictable” claim editing will be eliminated.
- UnitedHealth acquired Ohio-based OrthoAlliance, an orthopedic physician practice, the Cincinnati Enquirer first reported.
- Medicare Advantage organization Independent Health and its subsidiaries is settling a whistleblower lawsuit alleging the insurer violated the False Claims Act for $98 million. The lawsuit said the company submitted fraudulent diagnosis codes.
- Medicaid gross spending on 10 diabetes and two weight loss drugs increased by nearly $8 billion from 2019 to 2023, a report from the Department of Health and Human Services' Office of Inspector General found.
- A call center employee in Florida was sentenced to 15 years in prison for defrauding Medicare by more than $67 million for unnecessary genetic testing.
- The Centers for Medicare & Medicaid Services approved Florida’s CHIP 1115 waiver (PDF) as well as North Carolina’s (PDF), Kentucky’s (PDF), California’s, (PDF) Arkansas’ (PDF) and West Virginia’s (PDF).