Payer Roundup—UnitedHealth clean energy plan will supply most of U.S. electrical load; How Blue Shield of California is tackling Oakland crime

Below is a roundup of payer-centric news for the week of March 18, 2024.

UHG invests in renewable energy

UnitedHealth Group has entered into a virtual power purchase agreement (VPPA) Danish energy company Orsted by buying power from its solar center in Lamar County, Texas, the insurer announced.

The amount of energy purchased will be enough to power 54,000 homes. A VVPA is a contract where UHG buys renewable energy and matches energy consumption with energy from renewable resources to reduce emissions, according to a news release. They will receive renewable energy certificates (RECs) until 2039.

UHG is also investing $81 million in the Tres Bahias solar project in Calhoun County, Texas, which is currently generating enough energy to power 40,000 homes. The insurer bought RECs from 70 megawatt-hours, enough to account for seven years of pollution-free energy, the company said.

They said these two projects should power 89% of its U.S. electrical burden and 58% of its global energy load, according to its 2021 figures.

Blue Shield of California enters $10M safety initiative in Oakland

CEOs at Blue Shield of California, Kaiser Permanente, Clorox and Pacific Gas and Electric will engage in a joint $10 million effort to improve downtown public safety in Oakland, California.

The organizations expect the program to reduce overall crime plaguing the downtown area, supporting recent efforts from government leaders like California Governor Gavin Newsome .

“We chose Oakland as our headquarters and are proud to be a part of this community,” said Paul Markovich, president and CEO of Blue Shield of California, in a statement. “It’s important that we do what’s needed to not only protect our people who live and work here but support our community as we work together to revitalize this great city.”

Among the new measures, funding will go toward an ambassador program for "on-demand buddy escorts to and from local destinations," employee safety training and subsidized transportation and the implementation of a safe zone downtown in collaboration with local police.

Blue Shield has recently given employees options, like cab services and security guards, to keep transit to the office safe. And Kaiser Permanente sent a memo to employees telling them to eat lunch in the office rather than venturing outside, reported the San Francisco Chronicle in January.

Sanders calls for lower GLP-1 prices

A new study showing injection production costs for semaglutide, a primary ingredient of GLP-1 drugs like Ozempic and Wegovy, are less than $5 a month prompted Sen. Bernie Sanders (I-VT), chairman of the Senate's Health, Education, Labor, and Pensions Committee, to tell drug manufacturers to lower prices.

"Ozempic has the potential to be a game changer in the diabetes and obesity epidemics in America," said Sanders in a news release. "But, if we do not substantially reduce the price of this drug, millions who need it will be unable to afford it. Further, this outrageously high price has the potential to bankrupt Medicare, the American people and our entire health care system."

While this goal could be achieved through executive order or legislation, global strategy firm Capstone doesn't anticipate this policy to be implemented due to outside concerns over limiting pharmaceutical innovation. Additionally, the firm expects Ozempic to be a a likely selection for CMS' drug price negotiations program within 2027.

"We maintain only a 15% chance that Congress or CMS will allow Medicare to cover weight loss drugs by the end of 2024," said Capstone in a recent report.

More from Fierce Pharma: High prices on GLP-1 meds, insulin pens to raise barriers to access in lower-income countries

UNC Health reaches UHG agreement

In other UnitedHealth Group news, the insurer and UNC Health system have reached terms for a long-term agreement.

The organizations' current deal, covering all of United's commercial, individual exchange and Medicare Advantage plans, expires April 1. The new agreement is a multi-year agreement.

“Our patients will not face increased costs and stress of going out of network or seeking new providers for their care," said Matt Ewend, chief clinical officer at UNC Health, in a statement. "We look forward to working with United in the coming years to improve access, reduce costs and eliminate obstacles to care.”

The two parties began negotiations last year. The agreement follows similar good news when UNC Health agreed to terms with Blue Cross and Blue Shield of North Carolina, the health system said in a news release.

Alaska, Idaho approve section 1115 waivers

CMS has agreed to section 1115 waivers for the states of Alaska and Idaho this week.

Alaska's request will extend approval through December 31, 2028 and is designed to "align mental health and substance use disorder under a broader behavioral health definition," according to the announcement.

Idaho's amendment will allow the state to give payment to legally responsible individuals (LRIs) providing personal care services. This amendment will become effective through the end of March 2025.

DOJ Watch

  • Mark Sorenson, the owner of a Chicago-based durable medical equipment company Symed, was sentenced to three and a half years in prison in a $87 million fraudulent billing scheme.

  • Robert Clark, the owner of Clear Choice Diagnostics in Florida, has plead guilty to defrauding Medicare by billing over-the-counter COVID-19 test kits and genetic tests by paying illegal kickbacks. The company submitted $30 million in fraudulent claims to Medicare. Medicare paid around $15 million.

  • Gamma Healthcare, a lab in Missouri, is paying the feds more than $13 million to settle allegations they violated the False Claims Act by submitting unordered Medicare claims for lab tests.