Below is a roundup of payer-centric news headlines you may have missed during the month of September 2024.
Updated: Monday, September 30 at 2:40 p.m. ET
Leading stories
California signs AI, IVF bills but vetoes PBM law
California Governor Gavin Newsom signed a host of healthcare bills into law this weekend.
This includes 17 bills focused on artificial intelligence, including one requiring health insurers to base their algorithms on patient medical history but not “supplant” provider decision making.
Also signed into law is a bill requiring group health plan contracts and disability insurance policies to cover in vitro fertilization.
However, Newsom vetoed a bill requiring the California Department of Insurance to establish a licensing and oversight structure for PBMs, as well make PBMs report more data on prescription drugs. Newsom said the state needs more “granular information (PDF)” to determine why drug prices are increasing.
He also vetoed a bill that would have required private equity investors from earning approval from the state attorney general for healthcare investments. It also would have added new restrictions on the relationship between private equity and physician practices. Newsom determined (PDF) the law would step on the toes of the Office of Health care Affordability, which already refers transactions to the state AG office.
Newsom also vetoed a significant AI safety bill, SB 1047, claiming it was not the best approach to protect the public.
Elevance Health sued over anti-obesity medications
Elevance Health has been accused of discrimination in how it designs and administers its health plans by excluding prescription medications for obesity treatment, in a new class action lawsuit filed in Maine.
The lawsuit argues the Affordable Care Act prohibits discrimination against those with disabilities (in this case, obesity), and that medications like semaglutide and tirzepatide should be included in plans. These drugs are covered when treating conditions other than obesity.
"Anthem’s obesity exclusion is irrational, arbitrary and likely more expensive than covering prescription medications for obesity,” according to the suit.
Minnesota health systems drop hammer on Humana
Minnesota-based Essentia Health informed patients it will no longer accept UnitedHealthcare or Humana Medicare Advantage plans starting in January.
Essentia said its decision is because UHC and Humana delay care through prior authorization more than twice as much as other insurers.
Elsewhere in Minnesota, Sanford Health announced it would also be dropping Humana at the end of year, similarly citing prior auth delays, meaning these members will be out-of-network.
In Kansas, LMH Health is no longer accepting Humana and Aetna MA plans, reported KMBC.
Legislation
Alaska signs PBM bill
A bill requiring pharmacy benefit managers to pass on negotiated discounts from manufacturers to the state was signed in Alaska, reported KTUU.
It also requires the PBMs to disclose any conflicts of interest and register with the Alaska insurance division.
State lawmakers said the bill should fight back against powerful PBMs that force independent pharmacists out of business.
Competing IVF bills fail in Senate
Legislation to protect the right to in vitro fertilization did not advance Wednesday, Sept 17.
Sen. Chuck Schumer, D-New York, brought forward the Right to IVF Act to force the Republicans to a vote after President Trump recently said he would require insurers to cover IVF, a claim Democrats do not believe is genuine. Republicans countered the vote was conducted purely for political reasons. The vote failed 51-44, needing 60 votes on the floor.
“The Democrat’s bill is not an IVF bill but is instead designed to backdoor and federalize broad abortion legislation,” said Sen. Ted Cruz, R-Texas.
With Sen. Katie Britt, R-Alabama, Cruz first asked for unanimous consent for the IVF Protection Act. This bill also did not advance.
“The cold hard reality is this Republican bill does nothing to meaningfully protect IVF from the biggest threats from lawmakers and anti-abortion extremists all over this country,” said Sen. Patty Murray, D-Washington. “It would still allow states to regulate IVF out of existence and this bill is silent on fetal personhood, which is the biggest threat to IVF.”
New No Surprises Act legislation introduced
A bill to close loopholes and better help patients within the No Surprises Act framework has been brought forward by Rep. Greg Murphy, R-North Carolina, and four of his colleagues.
Murphy said the legislation aims to bolster surprise medical billing protections since the original 2020 bill is “rife with unnecessary challenges” after its implementation.
The legislation will “increase penalties for group health plans and health insurance issuers for practices that violate balance billing requirements.”
Legal
Kentucky sues Express Scripts over opioid crisis
Another state is suing a major PBM over the ongoing opioid crisis.
Kentucky filed a lawsuit against Express Scripts, claiming the company is “at the center” of the issues, and the company is responsible for colluding with manufacturers to increase sales, reported The Hill and other media outlets.
Express Scripts denied the claims.
The lawsuit is similar to a case brought by Arkansas against Optum and Express Scripts in June, as reported by Fierce Healthcare.
Blue Cross and Blue Shield of Louisiana to pay $421M
A jury determined unanimously Blue Cross and Blue Shield of Louisiana committed fraud by only paying 9% of bills on 7,800 breast reconstruction surgeries from 2015 to 2023, reported NOLA.com.
The seven-year long legal battle ended with the Blues plan on the hook for paying $421 million.
Blue Cross said they intend to appeal the decision.
Aetna sued for denying coverage of gender-affirming surgeries
A class-action lawsuit accuses Aetna of violating non-discrimination law by denying coverage for gender-affirming facial reconstruction surgeries.
The case’s three plaintiffs are transgender women enrolled in Aetna plans that provide coverage for facial reconstructive surgery for diagnoses other than gender dysphoria.
Aetna plans do cover other types of gender-affirming care, the lawsuit notes.
“When it comes to [gender-affirming facial reconstructive] surgeries and procedures that are medically necessary for transfeminine plan holders, however, Aetna ignores the medical consensus and prevailing standards of care and categorically excludes coverage for those treatment,” the plaintiffs said.
Industry
Cigna leads mental health roundtable
Cigna CEO David Cordani hosted a discussion on mental health with Business Roundtable.
He was joined onstage with Sen. Chris Murphy, D-Connecticut, and top executives at Accenture, USAA and Rockwell Automation.
“This topic is relevant across the board,” Cordani said. “The World Health Organization notes that 30 countries around the globe have mental health and mental well-being as their No. 1 health issue.”
UnitedHealthcare partnering with Hazel Health
UHC is teaming up with the country’s largest school-centered telehealth provider to give virtual mental health services to one million students by 2025.
The collaboration will take place in 14 states, and Hazel Health will work with school systems to build the technological infrastructure required, according to a news release.
Support will be offered to students before, during and after school hours.
Protestors gather outside Optum HQ
Local pharmacists and advocacy groups protested the practices of pharmacy benefit managers like Optum outside the company’s headquarters in Minnesota, reported the Minnesota Star Tribune.
The group, consisting of approximately 50 individuals, argue PBMs are forcing independent pharmacies out of business while drug costs steadily increase.
Optum is vertically integrated with UnitedHealth Group, the nation’s largest health insurer.
CMS unveils ‘comprehensive’ Medicaid adolescent care guidance
CMS released new guidance Thursday to support 38 million children in Medicaid and the Children’s Health Insurance Program (CHIP). According to CMS, the guidance gives best practices to improve access to transportation and care coordination services. It also expands care for children in the welfare system and with disabilities, and provides behavioral health support.
Children in these federal programs have access to services including mental health visits and dental and vision services through Medicaid’s Early and Periodic Screening, Diagnostic and Treatment (EPSDT) requirements. These requirements ensure children can catch, prevent and treat conditions sooner than they’d otherwise be able.
The agency said the guidance is the most comprehensive in a decade. CMS said states have the opportunity to create a children’s behavioral health benefit package and offer support in primary care settings to treat moderate behavioral health needs.
Health benefit costs to increase more than 5% in 2025
Total health benefit cost per employee is projected to jump to 5.8%, analysis from Mercer’s annual survey of employer-sponsored health plans revealed.
Employers expect their costs will rise to 7%.
“While we’ve seen significant increases in utilization in a few areas, such as for behavioral healthcare and GLP-1 medications, overall utilization has had a relatively modest impact on trend this year,” said Sunit Patel, chief actuary for health and benefits at Mercer, in a news release. “The biggest driver of higher costs is price dynamics, some of which are macro in nature.”
These macro issues include healthcare consolidation and worker shortages. Respondents said they will need to make “cost-cutting changes” in turn, which likely include raising deductibles.
A report from Lively found nearly two-thirds of human resource leaders polled think insurance costs will increase 10% to 35% next year.
Clover Health signs agreement with the Iowa Clinic
Counterpart Health, the physician software platform by Clover Health, is collaborating with The Iowa Clinic in Des Moines and its network partners.
Counterpart will receive a per-member, per-month fee and merit-based incentives as part of the agreement. The technology is designed to detect chronic diseases earlier and improve medical cost ratios better than other solutions.
The Iowa Clinic serves a total population of 1.1 million patients and is considered one of the best multispecialty healthcare groups in the U.S.
Blue Cross plans launch alternative options
Health Care Service Corporation in Chicago and Blue Cross and Blue Shield of Oklahoma announced they are launching new alternative health plans.
These plans inform a member of projected out-of-pocket costs. If members choose the highest ranked providers, based on Blue Cross’ internal metrics evaluating quality of care and cost efficiency, members will pay the lowest amount.
Members do not pay at the time of service and receive one bill at the end of each month.
Humana expands kidney care offerings
Humana and Evergreen Nephrology are launching a new value-based program to treat people living with chronic kidney disease and end-stage kidney disease.
The partnership means Medicare Advantage members will have access to Evergreen professionals. Humana already partners with Evergreen, as well as Monogram Health, Interwell, Strive Health, DaVita and Fresenius.
Value-based arrangements in the kidney space lead to 5% fewer unnecessary hospital admissions than in fee-for-service and lower the insurer’s medical expense ratio by 12%, Humana revealed earlier this year.
Studies
Private equity physician practices linked with lower costs
Perhaps contrary to the growing consensus that private equity’s presence in healthcare is negative, a report from the American Independent Medical Practice Association revealed Medicare expenditures were nearly 10% lower for beneficiaries in physician practices affiliated with private equity in 2022.
Avalere studied five specialties: cardiology, gastroenterology, medical oncology, orthopedics and urology. It found enrollees had 13.5% fewer inpatient hospital days and 7.9% fewer emergency department visits.
“This new analysis shows that many hospital systems are more likely driving spending growth in Medicare—not independent medical practices that are supported by private equity-backed management services organizations,” said Jack Feltz, M.D., an OB/GYN and chair of AIMPA’s Federal Health Policy Committee.
Significant variations in claims denials based on demographics
A new study from JAMA Network Open revealed that insurance claims denials are more frequent for certain groups of people.
They include patients with lower incomes and less education, and variations exist across race and ethnicity backgrounds. It also found preventive services for at-risk populations, such as contraceptive administration or mental health screenings, were more likely to have denial of service.
“Our reported denial rates are based on preventive services; hence, a reported average of approximately 1 in 60 patients is concerning,” the study said. The authors suggest uniform billing standards and implementation of health equity frameworks could help solve this issue.
MA enrollment increased following Cures Act
The proportion of beneficiaries with end-stage renal disease enrolled in Medicare Advantage increased by 72% in the first two years of the 21st Century Cures Act, an investigation from the JAMA Network Open found.
Before the legislation, most of these beneficiaries were only able to enroll in traditional Medicare. Of the 53,366 MA beneficiaries studied since 2021, just 7.9% switched back to traditional Medicare.
The biggest increase in MA enrollment was driven by Black, Hispanic, American Indian and Alaska Native beneficiaries, as well as partial and dual-eligible members.
Insurance coverage linked to fewer suicides
High levels of health insurance, broadband access and household income appear to be closely tied to reduced suicide rates, according to a study from the Centers for Disease Control and Prevention (CDC).
The study suggests health insurance coverage is more likely to connect individuals toward mental health services and crisis intervention.
Nearly 50,000 people died of suicide in the U.S. in 2022.
ACA subsidies extension would improve affordability: RWJF
The enhanced premium tax credits in the Affordable Care Act (ACA), that will expire at the end of 2025 if not extended, lowered premium payments for enrollees, according to researchers with Urban Institute.
The report found out-of-pocket premium payments decreased by 57% for 60-year-olds.
“Researchers conclude that enhanced premium tax credits improve healthcare plan affordability for millions of people in America, across income group, age and geographic area,” the Robert Wood Johnson Foundation said describing the report. “If the tax credits expire, many individuals would see out-of-pocket healthcare costs increase significantly.
A new organization recently formed to advocated for the extension of ACA tax credits. Its members include AHIP, the Alliance for Community Health Plans and the Blue Cross Blue Shield Association.
Seniors skeptical of Part D changes: survey
Popularity for the Medicare Part D program does not necessarily extend to the program’s most recent changes, according to a survey from Medicare Today by the Healthcare Leadership Council (HLC).
Four in 5 seniors polled believe “price setting policies” could limit access to prescription medicines and fear the government is overstepping.
Members of the HLC include Blue Cross plans, UnitedHealth Group, Amazon, health systems and pharma companies.
Quick Hits
- CMS has approved a section 1115 waiver extension for Mississippi (PDF) through September 2029. Its goal is to prevent hospitalizations and increase access to ambulatory and preventive healthcare for individuals aged, blind or disabled but not eligible for Medicare or Medicaid, according to the extension.
- Kaiser Permanente will continue to be one of the state’s managed care organizations after it agreed to a new contract with the Maryland Department of Health, reported Maryland Matters.
- If the ACA subsidies expire at the end of 2025, 1.7 million Americans with chronic conditions would go uninsured, according to Oliver Wyman in a study commissioned by Blue Cross Blue Shield Association. These individuals would see their healthcare costs increase up to 44%.
- A value-based care partnership between Humana and Interwell Health will now be offered to Florida Medicare Advantage members with chronic kidney disease and end-stage kidney disease.
- The Biden administration is providing $9 million through a grant program to improve women’s health coverage and address disparities in reproductive health care. It will be available in 14 states.
- A new rule established by the Arkansas Insurance Department will require PBMs to incorporate dispensing fees in reimbursements to pharmacies, reported Arkansas Advocate.
- New York settled with Fidelis Care for $7.6 million for using a banned Medicaid provider
- The Centers for Medicare & Medicaid Services and regional contractor Wisconsin Physicians Service Insurance Corporation announced 946,000 individuals in Medicare had their personally identifiable information exposed in a data breach through third-party software application MOVEit. The breach occurred July 8.
- Another state, this time New Hampshire, is rolling out community-based mobile crisis intervention teams.
- Blue Cross and Blue Shield of Minnesota and Herself Health, a primary care company for senior women, are restructuring their contract so it falls under value-based care.
- Curative Insurance Company has expanded to Georgia, touting its $0 copay, $0 deductible plans already available in Texas and Florida.
- Colorado announced $361 million in pass-through funding for its health insurance programs through savings from the state’s public option and reinsurance programs. The state said premiums have been reduced by $1.6 billion since 2020. However, the state’s Medicaid budget was $120 million over budget, reported the Denver Post.
- Pennsylvania revealed that taxpayers paid $7 million more for Medicaid prescription drug benefits in 2022 than they should have. Pennsylvania blamed spread pricing from pharmacy benefit managers and poor oversight from the Department of Labor.
- CapitalRx, a PBM and PBM administrator, is helping large employers better meet ERISA requirements through a new program assisting with claims adjudication, data management and more.