Below is a roundup of payer-centric news headlines you may have missed during the month of January 2025.
Leading stories
Setback in J&J PBM responsibility case
A judge dismissed two claims in a case against Johnson & Johnson. The lawsuit alleged the drug company failed to protect its employees by negotiating a fair agreement with its pharmacy benefit manager (PBM), did not consider alternative pricing models and didn’t monitor the PBM.
Some in the industry are hopeful these lawsuits could be a source of change, and is more likely to upend the business models of PBMs than any legislation could.
But the court said the plaintiff’s claim she paid more for premiums was not concrete, among other determinations, said law firm Trucker Huss in an explainer.
“The decision in the J&J Case is a win for plan sponsors,” said Mary Powell, partner at Trucker Huss. “However, we assume the plaintiffs’ bar will continue to bring ‘excessive’ fee cases against the fiduciaries of employer-sponsored health plans. If they are able to establish standing and survive a motion to dismiss—such as on the claim of a prohibited transaction in the Wells Fargo Case—the flood gates could open.”
Grassley challenges Trump on inspectors general
Sen. Chuck Grassley, R-IA, expressed concern in a letter to President Trump for the administration’s firing of more than a dozen inspectors general without 30-day notice as required by law.
“While IGs aren’t immune from committing acts requiring their removal, and they can be removed by the president, the law must be followed,” he co-wrote with Sen. Dick Durbin, D-IL. “The communications to Congress must contain more than just broad and vague statements, rather it must include sufficient facts and details to assure Congress and the public that the termination is due to real concerns about the IG’s ability to carry out their mission."
HHS OIG Christi Grimm was terminated by Trump during his first term, Fierce Healthcare reported.
Trump wrote a two-sentence letter to Grimm and the other IGs, ABC News learned.
“On behalf of President Donald J. Trump, I am writing to inform you that due to changing priorities your position as Inspector General… is terminated, effective immediately. Thank you for your service.” He began the letter “Dear Christi,” rather than including a more formal title.
In confirmation hearings this week, Robert F. Kennedy Jr. was asked about Trump’s desire to lay off a large number of federal workers and many inspectors general. He said he would follow the law as HHS Secretary.
HHS sued over Biden mental health parity rule
In the final days of the Biden administration, the ERISA Industry Committee (ERIC) filed a complaint (PDF) against HHS, DOL and the Treasury to undo the Mental Health Parity and Addiction Equity Act of 2008 as well as the Consolidated Appropriations Act of 2021.
The organization ran an ad campaign against the regulation in April, but the rule was finalized in September.
Mental health and substance use parity requires health plans to limit coverage the same as other types of services. But ERIC argues the final rule will decrease access to mental health benefits, in contradiction to the rule’s goal.
“The parity rule also imposes entirely new, ambiguous requirements that are so burdensome and unworkable that they will discourage employers from offering mental health/substance use disorder benefits at all,” the plaintiffs said.
The Association for Behavioral Health and Wellness, an organization representing national payers managing behavioral health benefits, said they agree (PDF) with ERIC’s position in the lawsuit.
“We are in a post-Loper world, where the departments will not have the benefit [of] judicial deference to their rulemaking,” said Alden Bianchi, an employee benefits lawyer for McDermott+, in a LinkedIn post referring to the Supreme Court overturning Chevron deference last summer. “So far, Loper has not played a critical role in benefits-related litigation. Whether it will make a difference here remains to be seen."
Massachusetts to UnitedHealth Group: Pay $165M
UnitedHealth companies in Massachusetts were ordered by the state to pay more than $165 million after a court said it knowingly tricked vulnerable customers into buying supplemental health insurance.
It is the largest penalty imposed under the Massachusetts Consumer Protection Act in history, the state’s attorney general office said. The companies, based in Texas but operating in the state, are HealthMarkets, HealthMarkets Insurance Agency and The Chesapeake Life Insurance Company.
“For years, the defendants preyed on financially vulnerable individuals, deceiving them into buying products they didn’t need or couldn’t afford,” said Attorney General Andrea Campbell in a statement.
The defendants were found “intentionally engaging in bundling of major medical and supplemental insurance to deceive consumers into unknowingly buying supplemental policies, the state said.
Scripps Health, Anthem Blue Cross cut ties
San Diego-based Scripps Health is no longer in network with Anthem Blue Cross, impacting all commercial insurance and Covered California plans. Medicare supplemental plans are not impacted.
In a news release, Scripps said Anthem issued an “unacceptable” ultimatum, causing negotiations to end. Scripps said high healthcare costs are driven by a new healthcare minimum wage, rising drug costs and other government policies.
“Throughout the negotiation, Scripps’ focus was to change Anthem’s bureaucratic policies that cause unnecessary delays, burdens and barriers to patient care, while ensuring Scripps will receive fair and accurate payments for the high-quality care provided,” the heath system said. “It is disappointing Anthem was unwilling to reduce those barriers and offered rates below health care inflationary costs.”
Anthem told Fierce Healthcare a different telling of events.
"Despite our good faith efforts to reach a new agreement, Scripps chose to leave Anthem’s local care provider network effective Jan. 1," said an Anthem Blue Cross spokesperson. "Scripps demanded drastically increased prices for patients covered by Anthem—increases that would have led to higher out of pocket costs for our members and would have hit area employers particularly hard. More than 80% of Anthem Blue Cross members are insured by employers that pay their employees’ healthcare costs directly."
Industry
Humana opens primary care clinics with Mercy
Humana and health system Mercy Health are opening primary care clinics for seniors aged 65 years and older, expanding on an initiative Mercy launched in 2023.
The partnership will add to Mercy’s footprint of 65 clinics in Missouri, and clinics could be established in other states like Arkansas and Oklahoma, a news release said.
Arkansas BCBS eye merger: report
Arkansas Blue Cross Blue Shield is in talks to merge with Cambia Health Solutions in Portland, Oregon, Arkansas Business reported.
Regence BlueShield is the parent company of Cambia. Arkansas BCBS lost more than $100 million during the first three quarters of 2024 and laid off dozens of employees.
New reproductive health partnership by Aetna
Aetna Better Health of Illinois members can now take advantage of TwentyHealth, a reproductive telehealth platform, to meet with providers and receive prescription deliveries.
Members can access services including planning care, birth control prescriptions, treatments, pregnancy care and more, according to a news release.
"We're committed to ensuring our members can engage in their reproductive healthcare in a way that's convenient for them,” said Lakshmi Emory, chief medical officer at Aetna. “By removing barriers and prioritizing culturally competent, accessible care, we're empowering our members to take control of their health while driving better care outcomes.”
eHealth launches ICHRA platform
Iris, an individual coverage health reimbursement account (ICHRA) platform, is now offered by private insurance marketplace eHealth.
"Like a fingerprint, every person's iris is unique, and so are their health needs," said eHealth CEO Fran Soistman, emphasizing the ability for members to customize a health plans under an ICHRA.
eHealth says IRIS has no hidden fees and an employer will at least partially fund a worker’s premiums through contribution funds.
CMS allows Cigna members special election period
After reviewing a Medicare Advantage (MA) contract termination between Cigna and Bayhealth health system in Delaware, Cigna members are eligible for a special election period lasting two months.
The news was relayed by the Delaware Department of Insurance and Medicare Assistance Bureau. Though the state saw other contract changes between MA plans and hospital systems, the Centers for Medicare & Medicaid Services is only designating a special election period for these circumstances at this time.
Molina Healthcare teams up with Innovive Health in Iowa
Molina Healthcare of Iowa is partnering with home healthcare agency Innovive Health to reduce emergency room visits and inpatient readmissions.
Innovive Health helps patients with comorbidities and behavioral illness. Out of all 50 states, Iowa is ranked fourth for most hospital stays by people with depressive disorders, according to the Agency for Healthcare Research and Quality.
“It is important that we meet our members where they are and this partnership with Innovive Health helps Molina address the many factors that impact their health,” said Jennifer Vermeer, plan president of Molina Healthcare of Iowa. “This comprehensive approach provides our members the care they need to improve their quality of life.”
Clover’s Counterpart Health partners with Duke ACO
Counterpart Health, a physician enablement platform, will be used within Duke Connected Care (DCC), an accountable care organization part of the Duke University Health System.
DCC will integrate Counterpart within the ACO’s electronic health records to improve chronic disease management outcomes, Clover Health said in a news release.
“DCC’s reputation as a global leader in academic medicine and healthcare innovation makes this partnership especially meaningful,” said Counterpart Health CEO Conrad Wai. “Our technology is purpose-built to support clinicians by delivering personalized, data-driven insights, and we’re excited to see the transformative impact it is already having across Duke’s broad and diverse network of clinicians.”
CareSource acquires ACA co-op
Private insurer CareSource has acquired Common Ground Healthcare Cooperative, one of three remaining co-ops formed out of the Affordable Care Act, effective Jan. 1.
The transaction was approved by the Wisconsin Office of the Commissioner of Insurance. CGHC CEO Cathy Mahaffey will serve CareSource Market President in Wisconsin.
Just Mountain Health CO-OP and Community Health Options remain as the last standing co-ops.
Curai Health, Priority Health extend partnership
Nonprofit health plan Priority Health and virtual care provider Curai Health are extending their program to give free virtual health visits for uninsured residents in Michigan.
This option will be available to 400,000 eligible Michigan residents until June 30. The partnership was reported by Fierce Healthcare in August.
“With the success of this initiative and more residents learning about it each day, extending free virtual visits for an additional six months will give more people the opportunity to access the care they need,” said Praveen Thadani, president and CEO of Priority Health, in a statement. “This initiative seeks to address delayed care and poor health outcomes that can result from the lack of health coverage, promote access to care and remove some of the barriers that prevent people who are uninsured from getting the care they deserve.”
Legal
Oklahoma sues CVS in PBM court
In the first ever case filed in a PBM administrative court, the state of Oklahoma is suing CVS Caremark, alleging the insurer reimbursed below acquisition cost for 15 pharmacies.
The pharmacies appealed unsuccessfully.
“Collectively, these pharmacies lost thousands of dollars to fill these prescriptions and help patients get the medications they needed,” said Attorney General Gentner Drummond in a statement. “It is critical that we have a safe and fair marketplace for pharmaceuticals in Oklahoma. My office will be working diligently to hold pharmacy benefit managers accountable to the law.”
States to defend DACA health insurance
A lawsuit challenging a CMS final rule allowing DACA recipients to enroll in an ACA exchange health plan will now be defended by eight state attorneys general.
These states don’t believe the federal government will continue to advocate on behalf of these individuals or the ACA, so they will assume the mantle. They said rescinding the final rule will result in higher healthcare costs for people, state revenue from ACA exchanges would decrease and states would have to spend money to implement changes.
Point32 sued by ABA Centers of America in ghost network suit
Harvard Pilgrim and parent company Point32Health in Massachusetts were sued (PDF) by the ABA Centers of America, a behavior analysis therapy provider for children with autism.
The lawsuit, filed in a trial court, claims Point32 did not pay for medically necessary treatment. ABA argues Point32 has a ghost network, meaning its in-network provider directory is limited and not accepting new patients.
ABA also said Point32 stopped paying for medical claims “without significant justification.”
“We believe this lawsuit is necessary to attempt to halt the irresponsible and unreasonable behavior by Point32,” said Christopher Barnett, founder of ABA Centers, in a statement. “We have tried for months and months to partner with Point32 in order to provide adequate care to their subscribers.”
Studies
Drug prices
If you take 25 branded drugs with the highest Part D spending from 2022 not selected for the Biden administration’s drug price negotiation program, those drugs have increase by 98% since entering the market, reports the AARP.
These drugs include Ozempic and Trulicity for diabetes, Xtandi for cancer and Biktarvy for HIV.
“Brand-name drug prices have been increasing faster than the rate of general inflation for decades, putting life-saving medications out of reach for millions of patients who need them,” said Leigh Purvis, prescription drug policy principal at the AARP Public Policy Institute, in a news release. “Meanwhile, the median price of a new brand name prescription drug is now approximately $300,000 per year, so even a small price change could increase a drug’s price by thousands of dollars.”
Site-neutral payment reform
A new paper from conservative think tank Paragon Health Institute reiterates the organization’s support for site-neutral payment in Medicare.
The paper says it would “reduce wasteful spending, patient expenses and health care consolidation” by lowering the cost of services in hospitals. It also says any future legislation should not include price controls in the private market.
Savings from this policy could be used to reduce spending in Medicare Part B.
Per-capita Medicaid spending
If states had implemented per capita caps on Medicaid in 2018, almost every state would have lost federal funding over the next four years, a report from liberal think tank Center on Budget and Policy Priorities found.
A per capita cap means the federal government would pay states a fixed amount of funding per enrollee, shifting the rest of the costs to states. This cap compounds over time, meaning the cuts are more severe each year. These type of cuts would slash spending by at least $588 billion (PDF), according to the Congressional Budget Office. The report shows a block grant has a similar impact.
This could cause states to roll back Medicaid expansion under the Affordable Care Act, reducing benefits and lead to higher levels of medical debt for individuals.
In case you missed it …
- HCSC co-led an investment round for Solera Health, reported Heather Landi.
- Vermont can use Medicaid funds in new ways to help homeless people after CMS approved an amended (PDF) section 1115 waiver. People can use the funds on rent or medical respite for six months, and nearly $11 million will be spent “building capacity” with housing providers. More details by VTDigger here.
- Rep. Greg Murphy, R-NC, advocated for breaking up UnitedHealthcare.
- Governor Sarah Huckabee Sanders, R-AL, said she supports keeping Medicaid expansion in her state.
- Former Rep. Larry Bucshon, R-IN, has joined Holland & Knight as a senior policy advisor. He was a member of the GOP Doctors Caucus and vice chair of the health subcommittee on the House Energy & Commerce committee.
- Public option health plans will be available to Nevadans in 2026, reports Nevada Current.
- The Purchaser Business Group on Health, a coalition of employers and public entities, has created a healthcare data project consisting of payer and hospital transparency datasets to help employers meet fiduciary requirements.
- Medicare will cover Zepbound for sleep apnea, CMS told CNBC.
- A new strategic outlook (PDF) for health plans was released by HealthScape, a Chartis company.
Other legal quick hits
- Lost in the shuffle over the holidays, Aetna sued (PDF) a network of private equity-owned radiology practices for defrauding the insurers for tens of millions of dollars through fraudulent medical claims. Aetna also said Radiology Partners wrongfully started thousands of arbitrations under the No Surprises Act.
- Additionally, Blue Cross and Blue Shield of Florida is suing (PDF) the federal government for giving the insurer unfair star ratings scores for the 2025 benefit year during extreme environmental circumstances. The Blues plan said flooding in the state, which led to FEMA disaster relief and a state of emergency, resulted in weakened care for members. But because Department of Health and Human Services Secretary Xavier Becerra didn’t declare a public health emergency, the Blues plan wasn’t eligible to receive a minimized impact on its ratings. The insurer felt this is unfair.
- The ERISA Industry Committee, National Labor Alliance of Health Care Coalitions and Cigna sued (PDF) the Minnesota Department of Commerce for its design of in-network pharmacies, the lawsuit reads. The plaintiffs say the state’s Pharmacy Benefit Manager Licensure and Regulation Act of 2019 requires them to hand over too much control determining which pharmacies must be in-network, as well as “micromanages” coverage terms for drug purchases.
- The Kaiser Foundation Health Plan was sued (PDF) by SpecialtyCare for failing to pay nearly $75,000 awarded to the company after winning an arbitration decision under the No Surprises Act. SpecialtyCare is a national provider of neuromonitoring services.
More miscellaneous items from December
- A new paper (PDF) in the American Bar Association Antitrust Law Section evaluates the impacts of vertical integration for payers and providers. It predicts vertical integration will represent the “next wave” of healthcare consolidation because of the Centers for Medicare & Medicaid Services' value-based care policy supporting risk-adjusted, capitated models. The paper suggests new guidelines on how antitrust agencies should view payer-provider transactions.
- CVS Health and Aetna Better Health of Illinois will issue $750,000 in grants toward maternal and behavioral health services.