Below is a roundup of payer-centric news headlines you may have missed during the month of June 2024.
Updated: Thursday, June 27 at 4:30 p.m.
MA plans' use of AI under microscope by lawmakers, again
A bipartisan group of lawmakers is ramping up pressure on CMS to better protect consumers in Medicare Advantage.
“Plans continue to use AI tools to erroneously deny care and contradict provider assessment findings,” the letter reads. “We believe more detailed guidance is needed to protect access to care for Medicare beneficiaries and improve clarity for providers.”
The group suggested specifying the information required in denial, an approval process for the implementation of artificial intelligence tools and more transparency around when MA plans can use its own determinations for prior authorization decisions with AI. Additionally, the lawmakers want to restrict instant denials after a prior auth decision is reversed.
In November, 30 House Democrats wrote to CMS with concerns about how MA plans used AI during its prior authorization process.
Employer coverage of GLP-1 drugs on the rise
Most employers cover GLP-1 drugs for diabetes and more employers are considering coverage for weight loss, according to a survey from The International Foundation of Employee Benefit Plans.
The survey found 57% of employers provide coverage for diabetes only and 34% give coverage for diabetes and weight loss. Both figures are an 8% increase from 2023.
Employers also said 8.9% of annual claims represent GLP-1 drugs used for weight loss, an increase from 2023 by 2%. Nearly nine in 10 employers use utilization tactics to curb costs. They include prior authorization, BMI and comorbidity requirements and step therapy.
BlueCross BlueShield of Tennessee, CommonSpirit agree to contract
BlueCross members through certain employer plans or in Medicare Advantage will continue to stay in-network with CHI Memorial facilities after BlueCross BlueShield of Tennessee reached an agreement with the health system.
Following the three-year contract, an automatic renewal will occur unless either party terminates the deal.
Negotiations were tense between the two sides just a couple months earlier. BlueCross BlueShield of Tennessee Chief Operating Officer Scott Pierce took to LinkedIn denouncing Commonspirit’s “outrageous rate increases.”
“$70 million: That’s how much more CHI Memorial initially pushed to get paid over the next 3 years,” said Pierce. “This 40% rate increase would’ve made them the most expensive hospital system in the state. A real-life example of what this means is that a coronary bypass would’ve cost $24,000 more if we agreed to those demands.
Literature update: Medicaid outpatient specialty care and more
- Medicaid is less likely to provide outpatient specialty care for children with asthma, according to a study in JAMA Network Open using claims data in Massachusetts from 2014 to 2020. Those children would be more likely to receive outpatient specialty care if they had private insurance, and the disparity widens further for children with persistent asthma.
- Industry group Better Medicare Alliance says Medicare Advantage (MA) beneficiaries spend significantly less per member on out-of-pocket costs and premiums than traditional Medicare members. The analysis, released by ATI Advisory, shows MA beneficiaries spend $2,541 less per year, an increase from the previous year by more than $140. Member with three or more chronic conditions spend $3,165.
- Some expectant mothers on high-deductible health plans hit their cost-sharing limit twice if their pregnancy occurs over two calendar years, a study from the University of Southern California Center for Health Policy & Economics and published in the American Journal of Managed Care found. Patients pay $1,310 more on average for the same care, depending on when they became pregnant.
Michigan health plan acquires Indiana health plan
Priority Health is acquiring Fort Wayne, Indiana-based Physicians Health Plan of Northern Indiana (PHPNI).
PHPNI has more than 52,000 members and will now be part of Priority Health, a plan with more than 1.3 million members. The deal is expected to close at the end of the year.
“Our focus will remain on whole-person health and an exceptional member experience,” said Praveen Thadani, president of Priority Health, in a statement. “This will also help simplify and enhance the experience for members of both plans who live near the Indiana or Ohio borders.”
HHS announces $500 million for Navigators
Navigators, or people that help individuals sign up for health insurance coverage, earned a boost from the Department of Health and Human Services (HHS) on June 7.
HHS is awarding $500 million in grants over the next five years. This fall, HHS will award $100 million, the largest investment in the program to date. Since 2016, HHS has awarded more than $400 million to Navigators.
Reports released by HHS also show that the uninsurance rate has declined dramatically for many demographics from 2010 to 2022. For example, the uninsurance rate for Black Americans fell from 20.9% to 10.8% and Latinos from 32.7% to 18%.
BCBSMA, Folx Health partnership
Blue Cross Blue Shield of Massachusetts is expanding ties with Folx Health to offer more support for LGBTQIA+ members.
Folx Health offers gender-affirming care services, primary care, mental health, fertility and family building in its suite of care.
BCBSMA is one of the first health plans in the country with a team dedicated to gender-affirming care and the first plan to cover facial reconstruction surgery in the state the company said in a release. It also offers therapy for transitioning members and covers vocal cord surgery.
"Navigating the personal, emotional, and often confusing nature of the reproductive health and gender-affirming care landscape can be challenging," said Sandhya Rao, M.D., Blue Cross' chief medical officer, in a statement. "As demand for these services continues to grow, our job is to ensure our members have access to high-quality, equitable care and the resources they need to feel supported.”
Colorado signs payer transparency bill into law
Transparency in Healthcare Coverage was signed into law in Colorado June 5, requiring insurance carriers to comply with federal price transparency laws and make prices more easily available online.
“Coloradans deserve to have easy access to information on health insurance costs,” said Democratic State Senator Rhonda Fields in a statement. “Right now, too many health insurance carriers aren’t complying with federal price transparency laws. By addressing the problem at the state level, we can hold these companies accountable and help save Coloradans money on health care.”
The bill’s text can be found here (PDF).
Blue Cross members get lactation care services
Health tech company Aeroflow Health is offering online breastfeeding classes, private lactation appointments and care guides to Blue Cross Blue Shield members.
Care guides include education on breast pump cleaning among other topics, according to a news release.
“Blue Cross Blue Shield represents a large patient base in all 50 states. It has been a really rewarding journey and we are so proud to have established coverage for services that are so sought after by moms,” said Amanda Minimi, director at Aeroflow Health, in a statement. “We look forward to working with BCBS patients to educate them on their benefits, while making it easy to receive the support and supplies they need at each stage of motherhood.”
Vermont signs PBM reform into law
Vermont recently signed into law a bill (H.233) designed to rein in pharmacy benefit managers and lower prescription drug prices.
The National Association of Chain Drug Stores and the National Community Pharmacists Association supported the state’s new law.
The bill mandates PBMs receive a license from the Vermont Department of Financial Regulation and bans spread pricing and gag clauses, the organizations said.
CMS approves Oregon health program blueprint
Starting July 1, Oregon can establish a basic health program and receive federal funds, the Centers for Medicare & Medicaid Services announced June 7.
For people enrolled in the state’s section 1115(a) waiver program and with income at 138% to 200% of the federal poverty level, the members will be transferred to the BHP.
Under Section 1331 of the Affordable Care Act, states can create a BHP for its low-income residents so they can purchase healthcare through the health insurance marketplace even if they don’t temporarily qualify for Medicaid or CHIP coverage.
11 states adopt NAIC’s AI standards
Since February, nearly a dozen states have adopted AI responsibility standards set forth by the National Association of Insurance Commissioners (NAIC), according to an analysis by law firm McDermott Will & Emery.
The states are Alaska, Connecticut, Illinois, Kentucky, Maryland, Nevada, New Hampshire, Pennsylvania, Rhode Island, Vermont and Washington.
NAIC tells insurers they should be transparent with their AI usage, maintain a written program for AI systems and internal controls should be recorded, among other criteria.
Florida loses CHIP legal bid
The state of Florida, challenging a law guaranteeing 12 months of continuous coverage in the federal Children’s Health Insurance Program, had its legal challenge dismissed out of court.
Florida’s request for a preliminary injunction for the federal law’s provision was denied by the judge.
“The judge’s ruling is good news for children in working families in Florida and across the country who benefit from access to affordable health coverage through CHIP,” said Joan Alker, executive director of the Georgetown University Center for Children and Families at the McCourt School of Public Policy, in a statement.
Medigap enrollment falls
After enrolling more than 14 million individuals in 2020, Medigap enrollment decreased 1.4% in 2023, according to Mark Farrah Associates, a health insurance analysis company, and data filed with the National Association of Insurance Commissioners.
In 2022, Medigap enrollment declined less than 1%. UnitedHealth has the most members in Medigap at 4.3 million members, with Mutual of Omaha, CVS and Elevance Health rounding out the rest of the top four insurers.
“Med Supp plans collectively earned more than $35.3 billion in premiums and incurred $29.6 billion in claims during 2023,” the report said.
Interest rates propel insurers’ portfolio yields: credit agency
Higher interest rates have increased the portfolio yields of health insurers by almost 30 basis points from 4.47% to 4.74%, a recent report from credit agency AM Best revealed.
Net investment income grew by 9%, its second highest percentage growth in the last 10 years, in 2023 to more than $224 billion. Gross yield hit its highest levels since 2019.
“Insurance companies are looking to make profits on underwriting and investment returns are sort of on top of that,” John McGlynn, an AM Best analyst, told Fierce Healthcare.
Earlier this year, the Centers for Medicare & Medicaid Services (CMS) decreased Medicare Advantage benchmark payments by 0.16%. Health insurers hoped CMS would reverse this decision to decrease benchmark payments, as CMS agreed to do in previous years.
Underlying pressures on underwriting means investment income will be a larger percentage of net income, said McGlynn.
“It remains to be seen how they’re going to treat that with their strategy,” he said. “Are they going to be more aggressive with underwriting or treat that as bumper profit?”