Below is a roundup of payer-centric news headlines you may have missed during the month of August 2024.
Leading stories
Devoted Health completes $287M series E funding round
Medicare Advantage startup Devoted Health has raised $112 million more in its series E funding round, bringing the total raised to $287 million.
Investors include The Space Between, Cox Enterprises and White Road Capital.
Devoted serves more than 227,000 members, up from 142,000 in December. The company boasts a weighted average star rating of 4.6.
In December, the company served 299 counties across 13 states, Fierce Healthcare reported. Now, Devoted has filed to expand into seven new states and 307 additional counties, Endpoints reported.
L.A. Care Health Plan slashes prior auth requirements
The largest publicly operated health plan is reducing the amount of prior authorization required by members.
L.A. Care Health Plan removed 24% of existing codes after a review of past utilization approvals, the company announced. Prior auth is no longer necessary for many cardiology, nephrology, dermatology, lab test and radiology codes. Other equipment like crutches, walkers, wheelchairs and catheter supplies will also be exempt from prior auth.
“There is a place for Prior Authorization,” said CEO John Baackes in a statement. “It provides crucial timely information, ensures patient safety and minimizes fraud. But L.A. Care understands that it shouldn’t be used as a cost-control mechanism, or as a way to delay or deny appropriate care.”
Clinical trials and transplant surgery will still require prior auth.
Legislation
Illinois signs colonoscopy, inhaler, cancer screening laws
Democratic Illinois Gov. J.B. Pritzker was again busy signing healthcare bills into law.
In a flurry of activity resulting in 270 new laws, the state is now requiring private insurance and Medicaid to cover genetic cancer screening for high-risk patients and stopping insurers from denying coverage for inhalers. They are now capped at $25 for a 30-day supply.
Insurers are also required to cover medically necessary mobile integrated healthcare services for individuals who use the emergency room often, and health plans must cover all medically necessary colonoscopies starting January 2026.
Private insurance and Medicaid will be forced to cover at-home, urine-based pregnancy tests, effective in January.
Dental plans will be unable to retroactively deny procedure claims once prior auth is approved.
Insurers must show that every in-network hospital has at least one radiologist, pathologist, anesthesiologist and ER physician on staff. Some health plans must begin to cover mental health counseling for first responders.
Last month, he signed laws mandating insurers cover pregnancy and postpartum services while banning step therapy, prior auth for mental health crises and junk insurance.
Health plans support Medicaid continuous eligibility
Insurers across the country are expressing support for legislation applying 12-month continuous eligibility for adults in Medicaid and the Children’s Health Insurance Program (CHIP).
The bills are backed by the Association for Community Affiliated Plans, the Alliance of Community Health Plans, L.A. Care Health Plan and Blue Cross Blue Shield of Michigan, among others.
“A nationwide policy of 12-month continuous eligibility for all adults in Medicaid and CHIP will allow for continuous and stable enrollment and for these programs to operate more like private coverage and Medicare,” they wrote in a letter. “Stability in Medicaid and CHIP coverage will reduce bureaucracy for states that currently conduct repeated eligibility determinations for enrollees, and will relieve excessive burden on providers that strive to ensure their patients retain coverage and access to care.”
Legal
DOJ introduces whistleblower program
The Department of Justice is starting a new pilot program to thwart healthcare fraud by encouraging whistleblowers to come forward.
The program began Aug. 1 and is modeled on programs within other federal agencies. One of its primary targets will be private insurers not subject to recovery under the False Claims Act, a fact sheet said.
Whistleblowers will be compensated if the recoveries exceed $1 million. They could earn up to 30% of the first $100 million recovered and up to 5% of any recoveries between $100 million and $500 million.
Arkansas penalizes PBMs
CVS Caremark, Magellan, Express Scripts and MedImpact were penalized by Arkansas in the largest pharmaceutical enforcement action in state history.
The PBMs are accused of paying below the national average drug acquisition cost. The state is looking for $5,000 per violation. Caremark committed 217 violations, the most of any PBM, the state alleges.
“PBMs have been allowed to skirt the law for too long, today my administration is taking an important step to holding Big Pharma accountable,” said Gov. Sarah Huckabee Sanders. “We must make sure that our most vulnerable populations are protected and that starts with enforcing the law.”
Studies
Covering GLP-1s for weight loss could increase spending by $6.1B
If anti-obesity medications were covered in 2025, Part D costs would increase anywhere from $3 billion to $6 billion, a study in Health Affairs revealed.
That assumes 5% to 10% of newly eligible patients were prescribed GLP-1 drugs.
“Longer-term estimates come with significant uncertainty about utilization and price changes, but these results are consistent with this policy change likely increasing Medicare costs by the low to middle tens of billions of dollars over ten years,” the study said. “The costs of this policy will be mediated by likely price reductions in coming years.
Notably, covering anti-obesity medications in Medicare would’ve counteracted the $6 billion in estimated savings had drug price negotiations gone into effect this year.
MA enrollees in poor health more likely to use plan’s customer service
Medicare Advantage (MA) enrollees in poor general health or poor mental health were more likely to use an insurer’s customer service offerings, a study in the American Journal of Managed Care found.
Customer service is defined as call center agents and automated systems.
The study showed enrollees using customer service usually had less income and education, or English was not their first language. Customer service utilization was more common among enrollees with three or more chronic conditions than no chronic conditions.
“MA customer service should be designed and staffed to effectively serve complex, high-need patients,” the study summarized.
Uninsurance would jump if enhanced subsidies expire
If enhanced subsidies are not extended beyond 2025, the uninsurance rate for white, Black and Hispanic individuals is expected to increase, a study from the Robert Wood Johnson Foundation shows.
It expects the uninsurance rate would jump approximately 2% for Black and Hispanic individuals and 1% for white individuals.
The uninsurance rate jump would be more pronounced in states that have not yet expanded Medicaid under the Affordable Care Act. Black uninsurance could climb to 15.9%, and Hispanic uninsurance could reach 28.4%.
“If the enhanced premiums are allowed to expire at the end of 2025, premiums in 2026 would be expected to increase,” according to a brief (PDF) by the American Academy of Actuaries. “Reduced subsidies would be expected to lower enrollment, especially among healthy individuals, thereby worsening the risk pool.
Quick Hits
- California fined Anthem Blue Cross in California for limiting gender dysphoria treatment to members. Anthem Blue Cross will pay a $450,000 fine.
- The North Carolina State Health Plan, which covers state employees and retirees, posted a $106 million loss last year and has spent its reserves to cover costs. By 2026, the plan could be insolvent, WRAL reported.
- UnitedHealthcare is suing the Minnesota Department of Health on procedural grounds. The insurer argues a recently passed omnibus bill that prevents for-profit HMOs from contracting with the state is unconstitutional, reports the Star Tribune.
- Talkspace inked a new in-network agreement with Humana Military (Tricare East) to make its virtual mental health services available to 6 million active active-duty and retired military personnel, along with partners and dependents, reported Fierce Healthcare. Humana is also pledging to hire at least 2,000 military-connected employees by 2032.
- Blue Cross and Blue Shield of Louisiana is rebranding to Louisiana Blue.