Below is a roundup of payer-centric news headlines you may have missed during the month of July 2024.
Updated: Wednesday, July 31 at 5:20 p.m. ET
Legal
AIDS Healthcare Foundation sues Express Scripts
The AIDS Healthcare Foundation (AHF) has filed a lawsuit against Express Scripts and its subsidiary Accredo Health Group, alleging the PBM engages in unfair practices through anticompetitive behavior aimed at destroyed specialty pharmacies.
In Louisiana, Express Scripts controls more than 70% of individuals covered by health plans in the state, the plaintiffs said.
“Express Scripts unilaterally imposes arbitrary contract terms on specialty pharmacies like AHF and, by extension, our patients,” said Laura Boudreau**,** chief of operations, risk management and quality improvement, for AHF in a statement. “Yet, because Express Scripts is the dominant PBM by far in Louisiana, AHF and other specialty pharmacies have no choice but to accept Express Scripts’ terms there. As a result, the PBM hinders independent specialty pharmacies from being able to compete long-term.”
Legislation/Regulation
North Carolina eliminating billions in medical debt
CMS has approved North Carolina to use the state’s Medicaid program to entice hospitals to relieve medical debt, the state announced.
Up to $4 billion in existing medical debt could be wiped away. The program is voluntary for hospitals, but hospitals that participate will receive more Medicaid reimbursement. Participating hospitals must also offer substantial discounts on bills for patients at certain income thresholds.
Outstanding debt will be eliminated dating back to 2014. Families not enrolled in Medicaid but with income less than 350% of the federal poverty level may also be eligible.
“The goal of the program is for eligible North Carolinians to begin to see relief for existing medical debt over the next two years,” the state said in a news release.
New PBM reform law signed in Pennsylvania
Pennsylvania joins the ranks of the states reforming pharmacy benefit managers, having signed into a law designed to increase accountability and transparency.
Under House Bill 1993, PBMs can no longer require members to purchase drugs through a pharmacy owned by the PBM. Other banned practices include clawbacks, changing the terms of contracts and charging more for prescription drugs than the cash price.
“Local independent pharmacies are being forced out of business, primarily due to the greed and conduct of PBMs – the unseen middlemen – who manipulate and profit off of the pharmaceutical system, screwing over consumers and our community pharmacies along the way,” said Gov. Josh Shapiro, a potential vice presidential candidate to current Vice President Kamala Harris, in a news release.
The law will begin to take effect Nov. 14, 2024.
ACA insurance brokers
Led by Senate Finance Committee Chair Ron Wyden, D-Oregon, five senators have introduced a bill that would institute criminal penalties against insurance brokers that change Affordable Care Act plans.
In certain cases, these brokers switch plans without the individuals’ consent, as Wyden has commented on before.
“Predatory health insurance brokers are stealing money out of families’ pockets by leaving them with uncovered medical expenses, unexpected tax liabilities and more by fraudulently changing or enrolling Americans in health insurance plans in the federal marketplace,” said Wyden. “My bill will crack down on fraudulent tactics that cheat hard working Americans out of getting the health care they need.”
The bill, called the Insurance Fraud Accountability Act, is supported by Sherrod Brown, D-Ohio; Tammy Duckworth, D-Illinois; Patty Murray, D-Washington; Brian Schatz, D-Hawaii; and Chris Van Hollen, D-Maryland. It is endorsed by AHIP, the Blue Cross Blue Shield Association and Centene.
Warren leads Chevron Doctrine codification charge
Another group of Democratic lawmakers wants to codify the federal agency protections that were once available under Chevron deference.
A recent Supreme Court ruling overrules Chevron, meaning courts agencies will have less power to fill in legislative gaps for ambiguous law. Liberal lawmakers and judges have worried this will ruling will have serious consequences for healthcare and environmental protections.
Led by Elizabeth Warren, D-Massachusetts, the Stop Corporate Capture Act intends to codify Chevron protections while ensuring lobbyists don’t have outsized influence on rulemaking procedures that go against the interest of the public.
The bill would create an Office of the Public Advocate to help individuals participate in regulatory proceedings, better inform the public of rulemaking, require agencies to respond to petitions with more than 100,000 signatures and make it easier for the public to hold agencies accountable for long delays in completing rules, Warren’s office said in a news release.
Lobbyists would be required to disclose industry-funded research and conflicts of interest and establishes financial penalties for corporate lobbyists that submit false information during rulemaking.
“Many Americans are taught in civics classes that Congress passes a law and that’s it, but the reality is that any major legislation enacted must also be implemented and enforced by the dedicated, nonpartisan experts at our public agencies to become a reality,” said Rep. Pramila Jayapal, D-Washington, in a statement. “Too often, this process is driven by corporate lobbyists and special interests who know exactly how to make these processes benefit their bottom lines at the cost of public interest.”
Illinois signs law banning step therapy, requiring midwife services
Gov. J.B. Pritzker, D-Illinois, signed a law (PDF) this month banning step therapy, prior authorization for mental health crises and junk insurance, the AP reported.
Junk insurance is when plans offer only limited coverage, but, now, plans will need to meet the Affordable Care Act requirements. It will take effect Jan. 1.
Mental health parity has been a priority in the Biden administration, often drawing criticism from insurers.
On July 29, Pritzker signed a law mandating insurers cover pregnancy and post-partum services, such as midwife services, doula visits and lactation consultants. Midwifes must be covered starting in 2025, ABC Chicago and other media outlets reported.
Louisiana to soon require menopause treatment coverage
Starting Aug. 1, Louisiana will require insurers and Medicaid to cover menopause and perimenopause treatment, reports the Louisiana Illuminator.
Under House Bill 392, the legislation will make it easier for residents to obtain hormone replacement therapy.
Transactions
Molina Healthcare buys ConnectiCare in $350M deal
EmblemHealth will sell ConnectiCare, Connecticut’s health plan serving 140,000 members, for $350 million to Molina Healthcare.
The purchase signifies 25% of expected 2024 premium revenue, Molina said in a news release. The purchase will be made with cash on hand.
“The addition of ConnectiCare to Molina brings a well-rounded government sponsored healthcare plan, and a new state, to our portfolio,” said Joe Zubretsky, president and CEO of Molina, in a statement. “Today’s announcement demonstrates the continuing success of our strategy of acquiring stable revenue streams, deploying capital efficiently and delivering value through the application of the standard Molina playbook.”
“We believe Molina's commitment to delivering on the promise of the Affordable Care Act, bringing coverage to so many Americans through the federal and state exchanges, makes it the ideal partner to take on ConnectiCare's mission,” said Karen Ignagni, EmblemHealth CEO, in a news release.
Molina Healthcare recorded earnings per share of $5.17 and premium revenue of $9.4 billion during its second-quarter earnings. Its consolidated medical cost ratio was 88.6%.
Centene sells Florida subsidiary
Astrana Health is buying Centene’s Collaborative Health Systems (CHS), a management services organizations across 17 states, for an undisclosed fee.
The transaction will close at the end of the year. Astrana is a provider-centric health tech company helping providers participate in value-based care arrangements.
"With this acquisition, we believe Astrana will be even better positioned to deliver accessible, high-quality, and high-value care to more patients across the nation," said president and CEO of Astrana Health Brandon Sim in a news release. "CHS has built a scaled and impactful value-based care ecosystem in markets spanning the South and East Coast.”
State Medicaid contracts
Florida’s big Medicaid losers are no longer big losers
In April, UnitedHealthcare, Aetna and Molina Healthcare were not awarded Medicaid contracts from the state of Florida. Instead, just Humana, Centene and Elevance Health were selected to administer the program.
This month, the three insurers left out of the initial awards agreed to contracts with the state after all. All three insurers expressed desire to challenge the initial losses.
The insurers were given HIV/AIDS and serious mental illness specialty awards. Aetna and UnitedHealthcare will help manage three regions, while Molina will manage just one region. Florida Community Care and Community Care Plan were also given additional contracts.
Tufts Public Health Plan loses out on Rhode Island Medicaid contract
Rhode Island will have just two health plans manage its Medicaid program: UnitedHealthcare and Neighborhood Health Plan.
Tufts Public Health Plans, the state’s other managed care plan currently contracted, did not earn an award for the next five year cycle, starting next year.
UnitedHealthcare has enjoyed an ongoing contract with Rhode Island since 1993, the company said in a news release.
Aetna fails in Kansas Medicaid complaints
Kansas is denying the attempts of Aetna Better Health and CareSource Kansas to administer the state’s Medicaid program, reports the Kansas Reflector.
This means Healthy Blue, a Blue Cross Blue Shield member will likely retain its contract with the state, in addition to UnitedHealthcare and Centene. Fierce Healthcare previously reported on the KanCare contract award announcement.
BCBSNC losing 700,000 members to Aetna in North Carolina
Blue Cross Blue Shield of North Carolina has opted not to appeal a loss in court that will see the health plan lose more than 700,000 state workers switch to Aetna in January 2025, WRAL reported.
The state determined Aetna scored better on certain questions. Blue Cross subsequently sued, but the court said the insurer did not have enough evidence it was scored unfairly.
Medicaid Section 1115 waivers
Illinois, New Hampshire launching incarceration support program
Under a Section 1115 Medicaid extension (PDF), Illinois is creating a new program to give services to eligible incarcerated individuals.
Services covered, as approved by CMS, include: case management to address behavioral health needs, medication-assisted treatment for substance use disorder, a 30-day supply for prescription medications, diagnostic and treatment services and medical equipment.
“The pre-release benefit package is designed to improve care transitions of such individuals back to the community, including by promoting continuity of coverage, service receipt, and quality of care, as well as the proactive identification of both physical and behavioral health needs and HRSN,” the waiver reads.
A similar program (PDF) has been approved in New Hampshire, providing pre-release services for eligible individuals that include substance use disorder or other behavioral health conditions.
Colorado adds doula services under Medicaid
Colorado has added coverage for doula services for pregnant members in Medicaid, the state announced this month.
The state’s Medicaid program covers 40% of births in Colorado, a news release said.
“There is a wealth of research that shows doula support can help reduce epidural use, labor duration, low-birthweight and premature deliveries, and postpartum depression rates,” said Adela Flores-Brennan in a statement. “There’s also evidence doula support leads to reduced c-section rates, which is higher in the BIPOC population and contributes to morbidity and mortality.”
Doulas are professionals that provide guidance before, during and after childbirth.
Miscellaneous
Gradient AI raises $56 million
Gradient AI, a company helping insurers better predict underwriting and claims risk more accurately, has secured $56 million in funding during a Series C funding round.
The software-as-a-service platform received funding from Centana Growth Partners, MassMutual Ventures, Sandbox Insurtech Ventures and Forte Ventures.
"While we are gratified to secure this significant investment from both Centana and our existing investors, this is just the first step," said Stan Smith, CEO of Gradient AI, in a statement. "Now it’s up to us to use this funding wisely, enhancing our platform and delivering unparalleled value to our customers. Insurers are becoming increasingly sophisticated in their risk assessment and are focused on improving their operational efficiencies. We are helping them achieve these goals by automating processes, reducing costs and significantly improving results.”
The company said capital will be spent on new features, products and research.
New app for Blue Shield of CA’s Wellvolution
Blue Shield of California members can now download the Blue Zones Challenges app to lead healthier lives.
The app, based on author Dan Buettner’s research describing regions of the world where people live extraordinarily long lives, builds off a Blue Shield of CA pilot program where 99% of participants reported well-being improvements within four weeks.
It will be offered through the Wellvolution platform.
“With the Blue Zones Challenge app, members can not only build sustainable habits relating to healthy eating and natural movement, but also build personal connections and community,” said Angie Kalousek Ebrahimi, senior director of lifestyle medicine at Blue Shield. “We are in the midst of a nationwide loneliness crisis, which effects both the mind and the body, so we are thrilled to provide a solution that emphasizes healthy living, including community building.”
Users will be prompted to complete tasks, including eating a cup of beans, going on a walk and spending time on a hobby. Tasks are assigned point values, evidence-based and members should strive to hit the points goal each week, according to a news release.
Insurer customer experience crashes to five-year low
A recent analysis from consulting firm Forrester Research found that health insurers’ customer experience has declined significantly.
Ten brands scored their lowest ratings in five years, while five brands had their first statistically significant declines. Nearly one-third of the industry earned poor ratings.
Insurers that had rating decreases included Kaiser Permanente, Humana, Florida Blue, Blue Cross and Blue Shield of Texas, Anthem Blue Cross and Blue Shield.
Optum, Caron Treatment Centers team up on substance use disorder
A substance use disorder residential program for teenagers is now in-network with Optum in Pennsylvania.
The agreement covers various lengths of stay. Programming also includes gender-affirming care and other gender-specific programming.
“As a mission-driven organization, we strive to help as many individuals as possible who struggle with addiction—and their families—thrive in recovery,” said John Driscoll, CEO of Caron Treatment Centers. in a news release. “However, access to quality addiction treatment remains a barrier for many, which is why we’re committed to expanding access to treatment and recovery services across our continuum.